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Supreme Court of the ACT Decisions |
COURT
IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
GALLOP, HIGGINS AND RYAN JJ
CATCHWORDS
Appeal - Award by the Master of damages for personal injuries - Serious brain damage - Appeal against various components of the award.
Damages - Whether interest payable on component for past care.
Motor Accidents Act 1988 (NSW)
Andjelic v Marsland (1996) 135 ALR 543
Edwards v The ACT Schools Authority (unreported decision of Master Hogan at ACT Supreme Court delivered 18 March 1993)
Malec v J C Hutton Pty Ltd [1990] HCA 20; [1990] 169 CLR 638.
Mallett v McMonagle [1970] AC 166
Edwards v ACT Schools Authority (unreported 18 March 1993).
Burnicle v Cutelli (1982) 2 NSWLR 26
Settree v Roberts (1982) 1 NSWLR 649
Hodges v Frost [1984] FCA 98; (1984) 53 ALR 373
Richardson v Schultz (1980) 25 SASR 1
Masinovic v Motor Vehicle Insurance Trust (1986) 42 SASR 161
Torrent v Lancaster (1991) Aust Tort Reports 81-089.
Arvind v Greco (1995) Aust Torts Reports 81-357.
Marsland v Andjelic (No. 2) (1993) 32 NSWLR 649
HEARING
CANBERRA, 10 July 1996 (hearing), 11 July 1997 (decision)
11:7:1997
Counsel for the Appellant: Mr M Neill QC with Mr H Marshall
Instructing solicitors: R J Walters by his Canberra Agents,
Barker Gosling
Counsel for the Respondent: Mr LM Morris QC with Ms CE Adamson
Instructing solicitors: Abbott Tout Harper & Blain
ORDER
THE COURT ORDERS THAT:
1. T he appeal be allowed.2. The judgment amount awarded by the Master be varied from $4,240,646.60 to $3,867,097.00
3. The cross-appeal be dismissed.
4. The plaintiff pay the defendant's costs of the appeal and cross-appeal.
DECISION
GALLOP and RYAN JJ
This is an appeal by the defendant against the quantum of damages awarded by the Master on 8 December 1995 in respect of an action for damages for personal injuries sustained by the plaintiff in a motor vehicle accident on 15 February 1989. The award of damages was itemised by the Master on 1 December 1995 as follows:
General Damages
|
240,000
|
|
Interest
|
13,550
|
| Past
treatment
|
181,501
|
| Future
treatment
|
52,000
|
| Past
income loss
|
250,000
|
|
Interest
|
100,000
|
| Future
income loss
|
500,000
|
| Superannuation
benefits
|
75,000
|
| Past
services
|
250,000
|
| Additional
carer's accommodation
|
90,000
|
| Cost
of future care
|
2,000,000
|
| Worker's
compensation insurance
|
120,000
|
| Nursing
supervision
|
47,000
|
| Handyman
|
23,000
|
| Holidays
|
50,000
|
| Taxis
|
75,000
|
| 4,067,051
|
In his written reasons the Master stated that provision would have to be made for the cost of administering the fund representing the award of damages. After a further hearing he delivered supplementary reasons for judgment on 8 December 1995 and finally entered judgment for the plaintiff for $4,240,646.60.
The components in respect of which the defendant seeks a review on appeal are general damages, past and future economic loss, superannuation, future care, holidays and travelling expenses, nursing supervision and handyman expenses. The appellant also alleges a failure to reconcile the oral and written evidence at the trial, resulting in an award of damages so excessive that there must have been an error. By his cross appeal the plaintiff seeks a review of the award for the cost of past services and claims interest thereon.
We shall refer to the appellant/defendant as the defendant and to the respondent/plaintiff as the plaintiff.
The Facts
The plaintiff who was born on 3 January 1950 formerly practised as a solicitor. Before the accident on 15 February 1989, the plaintiff had suffered from diabetes which he had contracted at about nine years of age. The evidence accepted by the Master was that the plaintiff's condition could be controlled by low dosages of insulin and the plaintiff had successfully applied the necessary control with the assistance of supervision and advice from the diabetes clinic at the Woden Valley Hospital.
As a result of the accident, the plaintiff sustained a closed head injury and multiple fractures affecting the spine, left shoulder, right forearm, right ankle and right lower leg. He was in a coma from the time of the accident until late March 1989. He then underwent extensive rehabilitation during which he began to suffer from what were eventually diagnosed as epileptic seizures. His orthopaedic injuries gradually resolved to the point where his residual disabilities in respect of them consisted of instability of the right knee with a slight to moderate prospect of arthritic degeneration over the next 5 to 15 years.
The plaintiff's most significant disabilities stemmed from brain damage, which he suffered as a result of the accident, leading to severe and general cognitive deterioration and a serious decline in his memory and intellectual performance. It is accepted on both sides that he was incapable of returning to practice as a solicitor and effectively suffered a complete loss of earning capacity. The Master also found that the plaintiff, as a result of the accident, had suffered an identifiable loss of hearing greater in the left ear than the right.
The Master found as a fact that the plaintiff's epilepsy was attributable to the head injury. He also referred to the evidence of Dr Smith a psychiatrist who had examined the plaintiff for the defendant and expressed the opinion that the plaintiff was capable of managing this diabetes but was being overprotected by his parents. However, Dr Smith concluded that the plaintiff would not be capable of managing large sums of money.
There was conflicting evidence about the plaintiff's life expectancy. Dr Greenaway a consultant physician who had examined him for the defendant doubted whether he would live much beyond the age of 60. Dr Wilson, the plaintiff's treating endocrinologist, expressed the view, on the other hand, that he is likely to live to at least 70 and further indicated that at his present level of intellectual functioning he would need to have his routine supervised by another adult. The Master also accepted the unchallenged assessment of Dr Sutton, a clinical psychologist, which included expression of the view that the plaintiff "may not be emotionally capable as his level of acceptance of his disabilities and insight remain poor."
General Damages
The Master reviewed the evidence of the plaintiff's personal circumstances and the injuries and treatment as a result of the subject accident. He concluded by finding that the plaintiff sustained the injuries as pleaded in the plaintiff's statement of particulars with the exception that he had not suffered and was not then suffering from clinical depression as a psychiatric illness.
The Master noted that the appellant was, at the time of judgment, 45 years of age and that the accident had happened 6.75 years earlier. He found that the plaintiff's statistical life expectancy was 32 years though there must be some reduction on account of the possibility of adverse effects if the proper regime for his medication and diet were not adhered to. The Master did not think that possibility was very great. He awarded the plaintiff the sum of $240,000 for general damages of which he attributed $100,000 to the past and awarded interest on the past component in the sum of $13,550.00
The defendant submitted that the award of $240,000 was manifestly excessive, contending that the orthopaedic injuries, though serious, were not grossly severe and that the plaintiff had made a good recovery from them. It was conceded that the brain damage was moderately severe but, fortunately for the plaintiff, his insight that he does not function as he had previously, is tempered with optimism. It was submitted that the award of $240,000 was more appropriate to a severe paraplegic with brain damage and is within the range of a quadriplegic with brain damage. It was submitted that a reasonable range for general damages in the present case is $150,000 to $180,000.
The injuries which the Master found the plaintiff had sustained and as pleaded in the particulars were as follows:
(a) Severe closed head injury(b) Multiple fractures including: (I) fracture of lamina of C5 vertebra (ii) fracture of left scapula (iii) fracture of seventh rib (iv) fracture of right radius (v) fracture right medial malleolus (vi) fracture of tibial spine
(c) Multiple contusions
(d) Multiple abrasions
The extent of the plaintiff's injuries was not contested before the Master. The main area of dispute was about the economic consequences.
In response the plaintiff contended that the defendant's submissions may be appropriate in a jurisdiction where there is an upper limit imposed by statute and a proviso that an award at or close to the upper limit is only to be made in the most serious case. No such statutory impairment of judicial discretion, so it was submitted, obtains in the Australian Capital Territory. Shortly put, the plaintiff's submission was that the Master's award was well within his discretion. He had the advantage of seeing the plaintiff and other witnesses give evidence and undergo cross examination. There is no basis, so it was submitted, on which it can be found that the Master in any way misused the advantage he enjoyed. Reference was made to Andjelic v Marsland (1996) 135 ALR 543; Edwards v The ACT Schools Authority (unreported decision of the Master delivered 18 March 1993).
The defendant's response to the submission about the appropriateness of its arguments directed to the extravagance of the award for general damages was that this court is not precluded from taking account of the New South Wales position and reference was made to the following passage in the judgment of Brennan CJ, Dawson, Toohey and Gaudron JJ in Andjelic v Marsland (supra) at page 545:
"To the extent that damages payable under the Act (Motor Accidents Act 1988 (NSW)) can fairly be equated with damages at common law or some head of common law damages, s73 (5) is apt to pick up and apply the law as it relates to interest on common law damages. At least that is so in the absence of some other or more specific provision in the Act. There are, however, difficulties in equating common law damages for non-economic loss with damages awarded under s79 of the Act."
We read that passage as stating that damages awarded under s79 of the Motor Accidents Act 1988 (NSW) ("the Act") are not equivalent or comparable to damages at common law. However, the position is made perfectly clear in the separate judgment of McHugh and Gummow JJ where their Honours trace the history of the Act and refer to the abolition of common law rights and their restoration in later amendments to the Act. Furthermore, in dealing with the calculation of interest on past non-economic loss under the Act, their Honours refer to and distinguish the common law rules governing interest with the method of calculation of interest prescribed by the Act. At p.554 their Honours say:
"But at common law there is no power to make an order for the payment of interest to compensate for the delay in obtaining payment of what the court determines to be the appropriate measure of damages in tort or for breach of contract."
The assessment of damages for personal injuries sustained in a motor vehicle accident in the Supreme Court of the Australian Capital Territory is an assessment of damages at common law. In our opinion the appellant's argument that the court could have regard to the New South Wales position in respect of a cause of action which arose in the Australian Capital Territory should be rejected. Accordingly, we accept that the approach in this Court to an assessment of damages clearly involves a different process of reasoning from that required in New South Wales and awards of damages pursuant to the Motor Accidents Act 1988 (NSW) are of no assistance because in this jurisdiction damages are at large.
Approaching the matter that way and having regard to all the findings of fact made by the Master, we are of the view that the award for general damages was excessive in all the circumstances. The plaintiff is not a paraplegic or quadriplegic. Admittedly he has serious brain damage but, in our opinion, his disability cannot be regarded as being in the most serious category of case. It is apparent from the transcript that the plaintiff answered questions responsively and cogently both in evidence in chief and cross-examination which lasted from 10.30am to 3.46 pm less adjournments. Indeed it is difficult to discern any intellectual disability from the transcript of his evidence.
We agree with Higgins J that brain damage with multiple consequence may well be perceived as being serious, but are unable to agree with his conclusion that the discretion of the Master did not miscarry in awarding the sum of $240,000.00. We would reduce the award for general damages to $180,000.00. We apportion $80,000.00 of that figure to the past and award $10,000.00 on that portion by way of interest.
Past and Future Economic Loss
The Master awarded $250,000.00 for past economic loss and interest thereon of $100,000.00.
The Master's approach to the assessment of damages for past loss was to note that at the time of the accident the plaintiff was a partner in the firm of Alan R Nelson & Co earning $402.00 net per week. There was no evidence of his potential earnings in that employment. The Master observed that a calculation based on that figure gave $142,400.00 as the measure of past economic loss and said that such a figure effectively marked out the bottom of the range of awards. He thought it probable however, that the plaintiff would not have remained in partnership with Mr Nelson, as a time when Mrs Nelson would be admitted to practise was not far off. Her entry into partnership would have become an issue and the Master thought that the evidence did not suggest that the practice could have supported three partners. He then had recourse to calculations in an actuaries' report called the Towers Perrin Report made to 9 October 1995. The report assessed the plaintiff's likely future earnings but for his injury on the basis of two alternative assumptions:
"A) was that he would continue as a partner in a legal firm not necessarily the firm of which he was a member of the date of accident,B) was that he would obtain employment as a legal officer in the Attorney-General's Department."
The report gave results of $236,053.00 and $250,609.00 for past loss of income depending on which alternative was adopted. We note that for the purposes of the calculations under assumption B) the actuaries made a further assumption that the plaintiff would have been employed in the Commonwealth Attorney-General's Department commencing on 16 February 1989, that is the day after the accident, with a position of "Legal 2" and would have progressed through the pay increments in that position.
The Master did not adopt either assumption for the purpose of calculating past economic loss. For some reason which is not entirely apparent he adopted a figure of $750.00 per week net, which gave a figure of $265,714.00. It was from that point that the Master awarded $250,000.00 without further discounting as a fair measure of the plaintiff's past loss of earning capacity.
The premiss upon which the Master apparently adopted $750.00 per week net was his assessment that the plaintiff's earning capacity was more truly indicated by the evidence of Mr Bell, a former employer of the plaintiff, than by his earnings in partnership with Mr Nelson. Mr Bell's evidence was to the effect that he had employed the plaintiff in his legal firm from about 1972 or 1973 for a period of 2 years. He produced an employed solicitors' award operative between February 1989 and June 1995.
The submission on behalf of the defendant was that the Master's approach to the calculation of past loss of earning capacity was not one which had been advanced by the plaintiff and was not supported by the evidence. The plaintiff's case was based upon the alternative assumptions in the actuaries' report. It is doubtful, in our view, whether the assumptions were appropriate anyway because at the date of accident the plaintiff was a partner in Alan R Nelson & Co and his earning capacity at that date was known, namely $402.00 per week net.
The ascertainment of earning capacity involves an evaluation of possibilities, not establishing a fact as a matter of history. As Brennan and Dawson JJ observed in Malec v J C Hutton Pty Ltd [1990] HCA 20; [1990] 169 CLR 638 at 639.
"Hypothetical situations of the past are analogous to future possibilities: in one case the court must form an estimate of the likelihood that the hypothetical situation would have occurred, in the other the court must form an estimate of the likelihood that the possibility will occur."
Their Honours referred to the following passage from Lord Diplock in Mallett v McMonagle [1970] AC 166 at 176:
"The role of the court in making an assessment of damages which depends upon its view as to what will be and what would have been is to be contrasted with its ordinary function in civil actions of determining what was. In determining what did happen in the past a court decides on the balance of probabilities. Anything that is more probable than not it treats as certain. But in assessing damages which depend upon its view as to what will happen in the future or would have happened in the future if something had not happened in the past, the court must make an estimate as to what are the chances that a particular thing will or would have happened and reflect those chances, whether they are more or less than even, in the amount of damages which it awards."
In our opinion the assumption made by the Master that the plaintiff would have earned in the order of $750.00 per week from the date of accident to the date of trial is not borne out by the evidence.
The assumption that his partnership with Alan R Nelson & Co would have terminated on account of the likelihood that Mrs Nelson's admission to practise in the not too distant future and the further assumptions that the plaintiff would have obtained employment in another firm of solicitors and would have earned the salary set out in the employed solicitors' award tendered through Mr Bell are, in our opinion, far too speculative viewed in the light of his established actual earnings of $402.00 per week net at the date of the accident.
We are not persuaded to adopt the approach urged on behalf of the defendant that an appropriate assessment would be $400.00 net per week for 6.75 years rendering a figure of $140,400.00. However, starting with the plaintiff's known weekly salary and allowing for some modest increases over that period we think it is appropriate to award an amount of $150,000.00 for past economic loss. Allowing for the pension that the plaintiff had been receiving in the order of $33,000.00 the interest for past economic loss should be calculated on a figure of $117,000.00. We would allow the sum of $60,000.00 for interest on past economic loss.
The same approach is appropriate in relation to calculation of future economic loss. In accordance with principle, the court must make an estimate of what the plaintiff would have earned but for the accident. For that purpose we adopt the prognostication of the Master that private practice was more likely, at least for the greater part of his working life, than a career in the Public Service. But we cannot accept the Master's approach of adopting a figure of $800.00 per week, which, as he found, for 20 years at 3 percent gives a present value of $630,119.00. The Master took the plaintiff's health into account in addition to the normal discounting factors and awarded $500,000.00 for loss of future income earning capacity. Doing the best we can, we regard that as a highly erroneous estimate of the likely earnings of the plaintiff but for the accident.
It was submitted on behalf of the defendant that, for the purposes of calculating the loss of future income earning capacity, a figure of $400.00 per week net would be appropriate. We do not accept this submission. We think it is much more likely that there would have been some modest increase in the plaintiff's earnings whether he remained in partnership with Mr Nelson or was engaged as an employed solicitor in private practice or in the public service. Making an assumption that he would have earned, say, $500.00 per week, the amount for loss of future earning capacity should be in the order of $300,000.00. Even $600.00 per week would render a figure of $360,000.00.
Taking into account the plaintiff's health in addition to the normal discounting factors which is what the Master did, we think a reasonable award for loss of future earning capacity is $360,000.00
Superannuation
The Master's award under this heading was based upon his assessment of past and future earning capacity. Consistently with our conclusions about those matters, the figure of $75,000.00 awarded by the Master should be reduced to $45,000.00.
Future Care
The defendant did not press any ground of appeal directed to past care, but, in order to understand the Master's decision in relation to future care, it is necessary to refer to his award in respect of past care.
Since his discharge from hospital the plaintiff had been living at home with his parents aged 72 and 69 years respectively. Basically he has been able to manage his two medical conditions of diabetes and epilepsy, but at all times has been supervised in that management by his parents. The evidence was that the plaintiff has needed guidance to take the right food at the right time. He resented the supervision by his parents but acknowledged in evidence that he could not live satisfactorily without their monitoring his management of his medical conditions. It was against that background that, in respect of past care, the Master, without making any arithmetical calculation, as a matter of discretionary judgment awarded the plaintiff $250,000.00 for past care. It is not apparent from the Master's reasons how he arrived at that sum but it was not challenged on appeal. As to the future, there was no evidence of when the plaintiff would move to separate accommodation after judgment. The Master made no assessment of when he would do so; he simply referred to the fact that he would do so "at some time in the future".
It was submitted on behalf of the defendant that in the assessment for future care the Master assumed that the parents would cause their care of the plaintiff to cease from the date of judgment. Whether that is correct or not, there would obviously be some period after judgment when the plaintiff would continue to reside with his parents and receive the sort of supervision referred to. It was submitted on behalf of the defendant that a reasonable time would have been five years. We are not prepared to adopt that estimate of time. Obviously, the plaintiff after judgment would be able to afford to move to alternative accommodation and the reasonable inference from the whole of the evidence, particularly his own evidence, is that he would have done so as soon as possible.
It was against that background that the Master adopted the method of providing future care proposed by Ms Chamberlain and Dr Wilson as the most reasonable in the circumstances. It is necessary to examine what that method was before considering the defendant's submission that the Master should have proceeded on the basis that the plaintiff needed a companion and someone to assist if he had difficulties at night. He needed someone to remind him of his medical responsibilities during the day and, so it was submitted, this would have been reasonably satisfied by a companion or housekeeper who would have acted "in loco parentis". Any provision for a level of care beyond that would amount to unnecessary over-servicing of the plaintiff at the unwarranted expense of the defendant. It was submitted that a broad allocation of, say, $1000 to $1200 per week would have been reasonably sufficient to meet the needs of the plaintiff and, allowing for some reduction of life expectancy eg. 20 years to age 65 and applying a 15% discount for the vicissitudes of life, the range of damages which could, and should, have been awarded is $669,715.00 to $803,658.00. It was further submitted on behalf of the defendant that on the totality of the evidence the plaintiff could have been adequately assisted by an evening companion with two daily visits for assistance with diet and medication and that this could reasonably have been achieved at a cost of $750.00 per week. Accordingly, so it was submitted, future care should have been assessed in the sum of $590,925.00.
Based on his findings as to the necessary level of care, the Master calculated a value of $2418.00 per week for 30 years which rendered a figure of $2,509,145.00. He went on to say that in his later years the plaintiff may find it necessary to live in some other type of accommodation and might have done so even if he had not been injured. Accordingly, he allowed $2,000,000.00 for the cost of future care.
In our opinion the Master was entitled to adopt as the most reasonable method of providing future care the proposals of Ms Chamberlain and Dr Wilson. Dealing with Dr Wilson's evidence first, he said in cross -examination that the plaintiff required someone as a substitute for the parents to ensure that he gets his medication at the proper time and the proper dose, that he gets his meals in the proper amounts and at reasonably proper times and that his blood sugars are measured so that if these go wildly up or down, appropriate corrective responses are made. He said the plaintiff basically needs a parent equivalent to look after him. Later, in answer to a question from the Master, Dr Wilson said it is reasonable for the plaintiff to have supervised administration of his medication, supervised measurement of his blood sugars and some supervision in terms of shopping and cooking so that his diet is half reasonable.
In her report of 23 December 1992 which was in evidence, Diana E. Chamberlain consultant occupational therapist, expressed her opinion about the best arrangement for the management of the plaintiff's medical conditions. Her first preference was for him to live with one companion who was familiar with his daily movements and his requirements. The next preferred arrangement would be a paid companion to reside with him. In her evidence she expanded upon her report and said as to the first option that she had in mind somebody who would be willing to live-in in exchange for the accommodation itself, such as a friend or a relative, someone who did it because he or she cared.
Dr Farnbach gave evidence that the level of care would be variable with the time of the day or the time within the 24 hours, and because of the likelihood or possibility of epileptic fits or the diabetic management being not ideal, there would need to be somebody around or available during the night. Although he said actual hands-on care would probably not be necessary very often, he regarded the option of a single live-in carer as important. Later he said the companion would not need to be face to face with the plaintiff during the daylight hours for every minute. The companion could do other things provided another appropriate companion or carer was available to look after the medications. In Dr Farnbach's opinion, a number of people needed to be involved to prevent "carer burn-out".
Dr A T. Wright also gave evidence. He was asked in cross-examination to consider a regime whereby, in return for accommodation, a companion would live with the plaintiff, do his housekeeping, go to work during the day and be there at night to attend to untoward occurrences, such as a fit. He was asked whether a combination of live-in companion together with community nurses attending to give medication twice a day would be sufficient. He said that he would still be worried about convulsions during the day.
Admittedly, there was evidence that the plaintiff had difficulties before the accident in controlling his condition of diabetes. The Master does not mention those pre-existing problems. Nevertheless, we think he was entitled to assess damages for future care on the basis of the evidence which he preferred and no ground exists for interfering with his assessment for this component.
Holidays and travelling expenses
The Master awarded $50,000.00 for the additional costs of holidays and $75,000.00 for additional costs of future travel. It was submitted on behalf of the defendant that these allowances were excessive and half the amounts awarded would have been reasonable. Counsel for the defendant did not expand upon that submission. In the circumstances we are not prepared to interfere with these awards.
Nursing Supervision and Handyman Assistance
The Master allowed the sum of $47,000.00 for the cost of future attendance by a nurse to supervise and advise on the plaintiff's care and $23,000.00 for handyman assistance. It was submitted on behalf of the defendant that these services could and would be provided by an appropriate companion/assistant and that there was an unwarranted doubling up by the award of these amounts. We agree with Higgins J that the award for future care did not contemplate a housekeeper/companion being required to undertake, as the defendant suggested, supervisory nursing duties or home and garden handyman activities. We do not think there has been any overlapping and would not interfere with the awards under these heads.
Cross Appeal
The plaintiff has cross-appealed against the award for past care and the Master's refusal to award interest under this head of damages.
In dealing with past care, the Master found that the care and services that had been provided by the plaintiff's parents had been gratuitous and the very type of services that were in point in Griffiths v Kerkemeyer. Had his parents not been there to provide them, it would have been necessary for them to have been obtained at cost from professional service providers. He found that the services would have been particularly intensive in the early part of the time after the plaintiff came out of hospital. He went on to say that it may well be true that as a result of that experience and of their emotional involvement with their son's well-being, the parents had been in recent times more solicitous than hired help would have been. Nevertheless, the Master said it would be wrong to make calculations based on the provision of expert nursing care for 24 hours a day. On the other hand it would be just as wrong to suggest that the parents had been involved for only three hours a day, seven days a week. The Master said that he did not propose to attempt a calculation based on the detailed award rates. He said the past was different from the future. Even if the parents had played no part in the plaintiff's actual care, the care would have been provided to him while he was living in their home with them and that would not be the situation in the future.
At the trial the plaintiff's figures were calculated on the basis of full time care from the date of discharge from hospital to the date of trial, namely 5.8 years, rendering a figure at commercial rates of $733,719.00.
On the hearing of the appeal the submission on behalf of the plaintiff was that in the 5.8 years since the accident he had required care for at least twenty hours per day rendering a figure of $670,088.00. The care had been provided gratuitously by the plaintiff's parents who were elderly and in poor health. It was submitted that the only basis which appeared in the decision of the Master for distinguishing between damages for past care and damages for future care is that in the past the care had been provided gratuitously by the plaintiff's parents, whereas in the future it was unlikely that his parents would continue to be able to provide the care.
In our opinion that submission cannot be accepted. The Master expressly distinguished the care which had been provided between the plaintiff's discharge from hospital and the date of trial from the care that would be necessary when he was living in his own alternative accommodation with a companion, whether that person was to be paid at commercial rates or otherwise. It is not correct, in our view, that the only basis for distinguishing between damages for past care and damages for future care as found by the Master, is that, in the past, care had been provided gratuitously by the plaintiff's parents. That submission overlooks the distinction which has to be drawn between the levels of care provided by the parents and that which will be required after the plaintiff begins living independently of them.
We agree with the submission on behalf of the defendant that, having noted the claim as set out in the plaintiff's particulars, the Master made a factual finding that the figures therein, which provided for more that $100,000.00 per year, could not be justified on the evidence and that his discretionary finding of $250,000.00 involved a finding of a level of need in commercial cost terms which was $37,037.00 average per annum. That evaluation was within the permissible range and it would not be appropriate for this court to assess the past care on a different basis from that which the Master adopted in relation to the future.
The Master dismissed an award of interest on the value of past services "for the reasons that I set out in Edwards v ACT Schools Authority (unreported 18 March 1993)". In that matter the Master adverted to the authorities in favour of the proposition that interest is not payable at all on the component calculated under this head of damages and referred to Burnicle v Cutelli (1982) 2 NSWLR 26 per Glass JA at 30, Settree v Roberts (1982) 1 NSWLR 649, Hodges v Frost [1984] FCA 98; (1984) 53 ALR 373 per Kirby J at 381, 382; Richardson v Schultz (1980) 25 SASR 1, Masinovic v Motor Vehicle Insurance Trust (1986) 42 SASR 161 and Torrent v Lancaster (1991) Aust Tort Reports 81-089. He considered himself bound by the Federal Court decision of Hodges v Frost .
It was submitted on behalf of the plaintiff that in Hodges v Frost the question whether interest was payable under the common law was a moot point since no interest was payable by reason of statutory provisions. The cases relied upon by the Federal Court in Hodges v Frost have themselves been overruled or disapproved and are no longer good law. See Marsland v Andjelic (No.2) (1993) 32 NSWLR 649 at 653-654.
On the other hand it was submitted by the defendant that the Master was correct to consider himself bound by Hodges v Frost. It was submitted that Marsland v Andjelic (No 2) was a decision on the New South Wales hybrid common law/statutory system which had no application to the ACT. It was further submitted that the High Court did not grant special leave on this point in Marsland v Andjelic (No 2) thus preserving the position in the ACT. In our view, the defendant's submission should prevail. In Marsland v Andjelic (No 2) the Court of Appeal of New South Wales held that interest was to be allowed upon a Griffiths v Kerkemeyer component of a judgment given in respect of an accident to which the Motor Accidents Act 1988 applied. The case should not be given any wider interpretation. See also Arvind v Greco (1995) Aust Torts Reports 81-357.
The question whether interest on past gratuitous services should be awarded was authoritatively resolved in Hodges v Frost and there is no reason why this court should follow, in preference to Hodges v Frost, the majority decision in Marsland v Andjelic (No 2) because it turns upon the statutory provisions of the Motor Traffic Act 1988 (NSW). In our opinion no interest is payable on the $250,000.00 awarded for past domestic services.
In summary therefore, the award of damages by the Master should be assessed as follows:
General Damages
|
$180,000.00
|
|
Interest thereon
|
$10,000.00
|
| Past
income loss
|
$150,000.00
|
|
Interest
|
$60,000.00
|
| Future
Income Loss
|
$360,000.00
|
| Superannuation
|
$45,000.00
|
| Future
treatment
|
$52,000.00
|
| Holidays
|
$50,000.00
|
| Taxis
|
$75,000.00
|
| Past
Services
|
$250,000.00
|
| Addition
carer's accommodation
|
$90,000.00
|
| Worker's
compensation insurance
|
$120,000.00
|
| Nursing
supervision
|
$47,000.00
|
| Past
treatment
|
$181,501.00
|
| Cost
of future care
|
$2,000,000.00
|
| Handyman |
$23,000.00
|
| Fees
for administration
|
$173,596.00
|
| TOTAL
|
$3,867,097.00
|
In the result, we would make the following orders:
1. The appeal be allowed.2. The judgment amount awarded by the Master be varied from $4,240,646.60 to $3,867,097.00
3. The cross-appeal be dismissed.
4. The plaintiff pay the defendant's costs of the appeal and cross-appeal.
HIGGINS J
This is an appeal against the quantum of damages awarded on 8 December 1995 by Master Hogan.
The sum awarded was, in total, $4,240,646.00. The appellant/defendant did not dispute liability.
The grounds of appeal challenge certain aspects of the damages awarded.
Before turning to those matters, it is important to note that the injuries of which the respondent/plaintiff complained were both serious and tragic in their consequences.
Up to the date of the accident in which he was involved on 15 February 1989, the plaintiff had been a solicitor in private practice in Canberra. His prior history, injuries and disabilities have been set forth in detail by Master Hogan and it is unnecessary to set them out again. They were not, and are not now, disputed.
The most serious aspect of the plaintiff's disabilities was a head injury which so impaired his intellectual functioning that he is now incapable of pursuing his former, or, indeed, any other occupation. He was found also to be in constant need of a companion to avoid possibly lethal consequences. Supervision of medication and diet is essential.
I turn to the disputed aspects of the damages awarded.
Master Hogan awarded $240,000.00. The defendant does not complain of any erroneous finding of fact or any reliance on irrelevant matter to challenge this award. The submission is simply that it is manifestly excessive.
It is said to be so because $240,000.00 would be as much as a brain damaged quadriplegic or paraplegic might expect to receive.
To some extent, this argument depended on an analogy with damages awarded for personal injury in the state of New South Wales. It is necessary to pursue such an analogy with caution. Damages for personal injury, awarded pursuant to or subject to the provisions of the Motor Accidents Act 1988 (NSW) are artificially "capped" to a percentage of the statutory maximum. The approach to such an assessment was considered by the Court of Appeal (NSW) in Southgate v Waterford (1990) 21 NSWLR 427. It is clearly a different process of reasoning which is only of limited assistance where, as here, damages are at large.
It is true that, in 1991, in John Fairfax and Sons Ltd v Carson (1991) 24 NSWLR 259, 274, the appropriateness of the level of an award of damages in a defamation case was considered. Comparison was made with the general damages component of an award for serious personal injury. Kirby P referred to an award of general damages for total blindness of $250,000.00 made in an unreported decision of Canterbury Hospital v Cappelletto (Court of Appeal, 17 May 1991) as "appealably excessive".
Mahoney JA noted, at 296,
... the experience in this Court is, for example, that $180,000.00 for general damages has not been seen as excessive for serious though not paraplegic type injuries.
Kirby P, with whom Priestley JA agreed, considered the total award to Carson, whilst a substantial sum was warranted, to be so disproportionate to sums usually awarded for serious bodily impairment that, even allowing for the different objectives to be served by damages in defamation cases, it was excessive. Mahoney JA, in dissent, did not agree that any analogy was appropriate.
On appeal to the High Court, in Carson v John Fairfax and Sons Ltd [1993] HCA 31; (1993) 178 CLR 44, the majority agreed that there should be a rational proportionality between general damages for defamation and general damages for personal injury. They referred by way of analogy, at 63, to an award to a quadriplegic in 1990 of $275,000.00 for general damages. They also noted that a serious injury, spastic quadriplegic cerebral palsy, had in 1991, attracted an award of $250,000.00 for general damages.
Even to do no more than adjust these figures for the change since the June quarter of 1992 in the true value of money by reference to the Consumer Price Index, yields an appreciation factor of 11.65% up to the June quarter of 1996, see Australian Bureau of Statistics, CPI June Quarter 1996, Catalogue 6401.0, at 14 and Table 1.
More recent awards referred to in Britts "Comparable Verdicts" indicate verdicts including a component for general damages of $350,000.00 for a seriously disabled plaintiff, see Rosecrance v Rosecrance, unreported, Northern Territory Supreme Court, Mildren J, 4 January 1996.
In this case, the plaintiff's injuries and disabilities were severe. They warranted an award approaching, though not necessarily reaching, the range which would be represented by the most severe category of disability imaginable. For example, an award of $404,568.00 was upheld by the NSW Court of Appeal in MacDaimid Industrial Services Pty Ltd v Lemon, unreported, 2 April 1996. That was an extreme case. It is clear that brain damage, even without quadriplegia or paraplegia, may be seen as deserving of inclusion in the most serious category of case. Brain damage with multiple consequences may well be perceived as being as serious, and, in some cases, even more so, than paraplegia or even quadriplegia without such further consequences.
Master Hogan was entitled to evaluate the plaintiff's injuries and disabilities and their effect on him in all the circumstances, including his awareness of his loss, albeit greater than he, that is the plaintiff, appreciates, as approaching the most serious case.
I, therefore, consider $240,000.00 to be within the range so identified. I would not reduce this item.
There was an actuarial report from Towers Perrin Actuaries, in evidence. The defendant does not dispute the accuracy of the calculations made by Towers Perrin. However, there is a dispute as to whether the assumptions made as to the plaintiff's likely employment following the date of the accident, had he not been injured, were valid.
The report assessed the plaintiff's likely future earnings, but for his injury, on the basis of two alternative assumptions. "A" was that he would continue as a partner in a legal firm, not necessarily the firm of which he was then a member. The second, "B", was that he would obtain employment as a legal officer in the Attorney-General's Department.
In support of the latter assumption, there was evidence, that, then at least, the Attorney-General's Department was remodelling its business along private practice lines. Thus a competent legal practitioner with private practice experience would be quite attractive as a recruit at a reasonably senior level.
It may well be, as the Master assumed, that a partner in a small to medium sized legal firm would not earn or be content with less than an experienced employee solicitor would be paid. That is an assumption which seems reasonable to me. The Master was, therefore, entitled to assume present earning capacity would not be less than $402.00 net per week.
However, that was not an end to the matter. Whilst there was no evidence, due to loss of records, of the partnership earnings of members of the plaintiff's legal firm following his injury, the Master was entitled to assume that the plaintiff might well have become a senior legal officer in the Attorney-General's Department. It was certainly within his capacity and he had expressed interest in that option before his accident. It was open to conclude, therefore, that, as at the trial date, the plaintiff would, but for his injuries, have been capable of producing gross earnings, as an employee of the Attorney-General's Department, of about $69,652.00 per annum. That would support the Master's assumption of an earning capacity at that date of $800.00 per week net. It is fair to assume that he would not have been content with less in the private sector.
In my view, it has not been shown that the assumptions made by the Master were erroneous. Nor does it seem to me that he gave insufficient weight to possible adverse contingencies. The only additional matter referred to as adverse to the plaintiff's prospects was a pre-existing diabetic condition from which he suffered.
Whilst the plaintiff's current disabilities make control of this condition more difficult, there seems to me no basis for suggesting that, but for the accident, the diabetes would not have been satisfactorily controlled.
The evaluation of earning capacity is a valuation of an asset. It is not an estimate of what the plaintiff could earn but of what he would be capable of earning. Reference was made to the plaintiff's pre-accident custom of indulging in an overseas trip of about one month's duration, on average, each year. That is not to say the plaintiff travelled overseas each year. Of course, a trip of some months duration could have been difficult if the plaintiff had become a Legal Officer or an employed senior solicitor in private practice. However, there was nothing to suggest that he would not adjust his work patterns to take account of those exigencies. In any event, an average of one month per annum does not seem to me to be so disproportionate to usual leave entitlements as to devalue the plaintiff's earning capacity, past or future.
I would not reduce the awards based on the Master's findings as to past and future earning capacity.
The award under this heading followed from the assessment of earning capacity, past and future, and should, consistently with my finding thereon, remain undisturbed.
The defendant did not press these grounds of appeal.
The decision of the High Court in Van Gervan v Fenton [1992] HCA 54; (1992) 175 CLR 327 makes it plain that, if there is a need for domestic assistance or care, then the plaintiff is entitled to be awarded as damages, the sum necessary, on commercial rates, to satisfy that need by engaging such professional assistance as may be required. The defendant gains no credit for the fact that, as has here occurred, those services have been provided gratuitously by family members.
The evidence was capable of supporting a finding that the minimum number of carers needed by the plaintiff is one. That person would need to be available to assist the plaintiff as a parent would assist a child or a spouse assist their partner. Twenty-four hour surveillance is not required but availability morning and evening and overnight seems essential. There is an industrial award for a "companion/housekeeper" and it seems to me that the cost of providing such a person on the terms of that award is appropriate for both past and future care.
The Master concluded that this was the appropriate standard to be applied in relation to future care. That conclusion is supportable both on principle and on the factual evidence.
For reasons which were not explained, it was submitted that the allowances made by the Master should be halved.
The sum awarded equates to approximately $120.00 per week. A little over $70.00 per week for taxis or other transport and nearly $50.00 per week for holidays over and above that contained in usual earnings for which the plaintiff was compensated does not seem unreasonable. There would, after all, need to be provision for the fares and accommodation of a companion.
I would not interfere with this award.
The Master considered and rejected any other option for care provision than a single carer with appropriate relief. He did not consider it sufficient for the plaintiff's needs that there be "an evening companion with two daily visits for assistance with diet and medication" as the defendant had submitted. Nor, on the evidence, could that option be achieved for only $750.00 per week at commercial rates and on award conditions.
The award does not contemplate a housekeeper/companion being required to undertake, as the defendant suggested the person should, supervisory nursing duties or home and garden handy-person activities. The sums allowed for those items on a whole of life basis seem modest enough to me. I would not reduce them.
The plaintiff has cross-appealed complaining that the Master had not awarded compensation for past care on the same basis as for the future.
The Master declined to apply award rates to ascertain the value of the services provided up to trial by the plaintiff's parents. In the light of Van Gervan (supra) that was an error. Insofar as Hodges v Frost [1984] FCA 98; (1984) 53 ALR 373 holds to the contrary, it must be regarded as overruled.
The Master was obliged to award a sum based on the award rates assuming they represented the real commercial cost of past services. There was evidence that a commercially available supplier would provide services at above award rates. He found that, depending on the supplier of services, there was a result between $670,088.00 and $839,961.00. The lesser sum was a calculation based on award entitlements only. The greater sum was that which the care agency in question would have charged to provide such services on a full fee paying basis. That assessment has not been challenged as a matter of calculation. The plaintiff does not seek to be awarded more than the lower figure of that range, though more could be supported. That is justified by the lack of any allowance for vicissitudes, if, indeed, any was required. I would increase the allowance for past care to $670,088.00.
I would therefore allow the cross-appeal as to this aspect of damages and increase the sum awarded for past care by $420,088.00.
A second and related point was as to interest to be allowed on that sum. In Hodges' case (supra), a contention that such an award should attract pre-judgment interest was rejected.
In so ruling, Kirby J, with whom Gallop and Morling JJ concurred, stated, at 381-2,
It now seems clear that interest is not payable on the component of the verdict calculated under this head of damages. Glass JA has explained this rule on the ground that the plaintiff, not being out of pocket, cannot claim interest any more than he could claim such interest on unpaid medical accounts ...
However, that comment was obiter. No claim for such interest was included in the action. The commencement of the action pre-dated the insertion of s53A into the Australian Capital Territory Supreme Court Act 1933. Thus no claim for pre-judgment interest was possible. In that context, the refusal of special leave to appeal by the High Court is not to be viewed as supportive of the correctness of the view expressed.
Further consideration was given to the question in Marsland v Andjelic (No. 2) (1993) 32 NSWLR 649. At 53, Kirby P (formerly Kirby J), in a joint judgment with Meagher JA, completely recanted his prior, albeit obiter, opinion.
Their Honours, at 653-4, opined,
If the plaintiff is to be enabled to reimburse, in full, the provider of services which have an economic value to the plaintiff, then interest computed in the ordinary way must be allowed on the amount awarded. The distinction from medical (and other) out-of-pockets is readily drawn. The cost, the sum to be paid to a medical practitioner, is fixed at the time the services were provided. It does not increase with time. However, in respect of voluntary domestic services, if, as the High Court [in MBP (SA) Pty Ltd v Gogic [1991] HCA 3; (1991) 171 CLR 657] mandates, compensation is to be given at full commercial rates then payment to the provider of the services, if it is to be made, would be made at present rates and not at the rate which prevailed when the service was provided. Compensation is, however, usually awarded at the commercial rate.Logically therefore, the plaintiff, in respect of past voluntary services, should be entitled to either (a) compensation at the rate prevailing when the service was provided, together with interest in full from the time of provision whether the service was paid for or not; or (b) such compensation at the present gross cost of each service, whether paid for or not.
Mahoney JA dissented.
The principle adopted by the majority was confirmed and explained more recently in Arvind and Anor v Greco (1995) Aust Torts Reports para 81-357.
In the latter case, the Court of Appeal was asked to define the basis upon which interest was to be awarded. Mahoney JA and Clarke JA agreed with Meagher JA that interest was payable at full commercial rates on the liability notionally incurred from time to time as the need for care was experienced and met.
Appendix B1, to which the Master refers in his judgment, is based on the progressive accumulation of notional costs at award rates for a carer, with relief carers, to the extent found to be the minimum required satisfactorily to meet the plaintiff's need for such care.
It seems to me that the considered and repeated view of the NSW Court of Appeal is to be preferred to the obiter, since recanted, of Kirby J (as he then was and now is again) in Hodges' case. In any event, that obiter must now be seen as inconsistent with MBP (SA) Pty Ltd v Gogic [1991] HCA 3; (1991) 171 CLR 657. The reasoning behind and the application of that principle has no dependency upon any provision of the Motor Accidents Act 1988 (NSW). It is of general application.
It follows that the amount awarded should be further increased to allow for interest at commercial rates on the sum of $670,088.00. The plaintiff's calculation was not challenged as being appropriate if interest was to be so allowed. The sum referred to up to trial is $233,190.00.
I would further allow the cross-appeal by adding that figure to the judgment sum.
I would, therefore, uphold the cross-appeal and increase the judgment sum by $653,278.00 to $4,893,924.00. The plaintiff should have the costs of this appeal.
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