Carroll v Purcell [1961] HCA 81; (1961) 107 CLR 73 (7 December 1961)

HIGH COURT OF AUSTRALIA

CARROLL v. PURCELL [1961] HCA 81; (1961) 107 CLR 73

Damages

High Court of Australia
Dixon C.J.(1), McTiernan(2), Kitto(1), Taylor(1) and Windeyer(1) JJ.

CATCHWORDS

Damages - Assessment - Action by widow in respect of death of husband - Matters to be taken into account - Rent received for former matrimonial home - Earnings of widow - Compensation to Relatives Act, 1897-1953 (N.S.W.).

HEARING

Sydney, 1961, August 30, 31; December 7. 7:12:1961
APPEAL from the Supreme Court of New South Wales.

DECISION

December 7.
The following written judgments were delivered-
DIXON C.J., KITTO, TAYLOR AND WINDEYER JJ. The appellant's husband, who was 16th October 1955. There were two children of the marriage - Valerie and Jeanette - who were, respectively, eleven and six years of age at the time of their father's death. The plaintiff, herself, was then nearly thirty-three years of age. In an action subsequently brought pursuant to the Compensation to Relatives Act (N.S.W.) for the benefit of herself and the two children the jury returned a verdict of 6,770 pounds. This sum was apportioned, as to 4,520 pounds thereof, to the widow and as to 1,000 pounds and 1,250 pounds, respectively, to the children. Upon appeal to the Full Court of the Supreme Court of New South Wales it was urged that the amount of the verdict was inadequate, that certain evidence relating (1) to the earnings of the appellant after the death of her husband and, (2) to certain rents which she had thereafter received, had been wrongly admitted and that, in relation to these matters, the jury had been misdirected. The appeal was dismissed and this appeal is now brought from the order of the Full Court. (at p75)

2. It appears, though the evidence on the point is far from satisfactory, that upon the death of her husband the appellant succeeded to the cottage at Lambton near Newcastle in which the family had lived up to the time of his death. This cottage, it seems, had been purchased by the deceased with the assistance of a loan from a Starr-Bowkett Society and the deceased was obliged to make monthly repayments to this Society. According to the plaintiff she had "finished the payments" at the time of trial but how much was owing at and paid after the death of the deceased does not appear. The unencumbered value of the cottage was said to be about 2,500 pounds. But after the death of her husband the appellant let the cottage at a rental of 8 pounds a week and came to Sydney. There she arranged for her two children to be admitted to the Masonic School at Baulkham Hills and took up residence with her father and mother in their flat. Then she obtained a situation at the Masonic Hospital at Ashfield where she worked for about 14 months. Since then she has worked as a telephonist. She says that she has undertaken these activities in order "to make ends meet". Cross-examination of the plaintiff elicited, first of all, that her wages whilst she was employed were about 12 pounds per week and, secondly, that she has paid approximately 4 pounds a week for the accommodation provided for her in her father's flat. This evidence was admitted in spite of objection and the submission is now made that its admission was erroneous. Further, it is said, the learned trial judge misdirected the jury in relation to these matters. It should be added that although the general ground was taken that the damages awarded were inadequate it is not contended that this ground can be made out independently of the two particular objections which have been raised. (at p76)

3. Apparently, it was the contention of the respondent at the trial that the jury were entitled to conclude that the difference (4 pounds per week) between the rental at which the appellant's cottage was let and the amount which she paid to her father for accommodation in his flat was a profit which resulted to her from her husband's death. Having instructed the jury as to the manner in which they should assess the total family loss his Honour went on to say that the defendant was entitled to a deduction in respect of any benefit which had accrued or might accrue to the plaintiff and the children as the result of the death of the deceased. They were required, he said, as a matter of law, to "deduct from what would be their award of damages", the value of any benefits gained or received by her or the children as a result of the death of the deceased. Then his Honour proceeded: "In the first instance, evidence has been given by the plaintiff that the home which has come to her under her husband's will is now let at an amount of 8 pounds per week. She is not living in it but is paying for board and lodging an amount of 4 pounds per week plus some additional provision that she makes by way of occasional expenses in her mother's and father's home. To that extent you may think that she is making a profit and has for some period since the death of the deceased made a profit by reason of the letting of her house. For the period up to date that is so, and if you are satisfied that there has been such a profit on the evidence, then you should properly deduct that amount from any award of damages that you make, for to that extent the plaintiff has gained by her husband's death and not lost. If you thought that that was a permanent arrangement, then it would be open to you to say that that profit would continue into the future and might even be permanent, and insofar as you came to such a conclusion, you would total up in the same way - not merely multiply a number of weeks by the weekly profit, and treat that as a deduction from the figure you would otherwise be awarding to the plaintiff". This was an erroneous direction for there was no ground upon which the "profit" so obtained by the plaintiff could be taken into account in assessing her damages. First of all, it was not a profit in any real sense; if the plaintiff chose to let her cottage and live with her parents it by no means followed that the difference between what she paid her parents for accommodation and what she received in rent was a profit in any sense of the word. Secondly, the rent which she received for the cottage was not a profit which resulted from the death of her husband; as a result of his death she succeeded to his interest in the cottage and the benefit which thereby accrued to her was her accelerated succession to that interest. The value of this was, of course, precisely the same whether she lived in the cottage herself, or whether she let it or sold it and invested the proceeds. The rent was no more than a quid pro quo for the letting of her own property and was quite irrelevant in assessing damages. It may, of course, be that the rental value of premises may afford some clue to their capital value but the evidence was not used for this purpose. Indeed in the present case it could not have been so used for the critical question was the value of the deceased's interest in it at the time of his death and, having regard to that, the benefit which accrued to the plaintiff by her succession to that interest when her husband died. (at p77)

4. These observations make it impossible to pass by earlier passages in the summing-up. Earlier the learned trial judge had instructed the jury how they should assess what may be called a gross lump sum by way of damages. They were to take into account the deceased's wages at the time of his death, his prospects of advancement, to what extent his contributions to the family purse exclusively conferred a benefit on the family and they were suitably instructed how they might arrive at a gross lump sum. We have not attempted to mention all of the factors to which his Honour referred, but it is noticeable that no mention was made of the fact that the deceased in his lifetime also provided the family with a home in which to live. This was a most material omission in detailed directions concerning the plaintiff's losses and gains and particularly so when the issue concerning the extent to which the appellant had benefited by succeeding to her husband's interest in the cottage had assumed some prominence in the case. No point, however, was made of this omission but that is of no consequence since, in our view, the direction on the issue in question was erroneous. (at p78)

5. The matter of the appellant's earnings subsequently to the death of her husband was dealt with in the summing-up in the following manner: "Secondly, it has been said that by reason of the fact that the plaintiff was a working girl at the time that she met the deceased and married him, and has returned to work since his death, in that sense, being freed from the responsibility of maintaining a domestic establishment, she has made some gain from her own working capacity. If you think that being relieved of the obligations of running a household by the death of her husband was in the nature of an advantage which enabled her to earn money in this fashion, then it would be open to you to treat that amount also as a deduction from the damages you would otherwise award to the plaintiff. You may, of course, as to these items - that is, the profits from renting the house and the income from her own efforts - take the view that the plaintiff let the house and went to work only as an interim arrangement to maintain herself and her children until this case could be disposed of, and that in normal circumstances she would not have left the Newcastle district, let the house and gone to work - the onus is on the defendant to satisfy you that the position is otherwise, and to show that the plaintiff, as a result of her husband's death, has really gained some advantage or benefit in the respects I have mentioned. Insofar as you think that to be the position, then it would be proper for you to make deductions from the award of damages you would otherwise give to the plaintiff". It may be open to argument that this passage indicated to the jury that they were entitled to deduct from any gross assessment of damages the wages which the plaintiff had, in fact, received since the death of her husband and any wages which it was probable she might earn in the future. That notion might be thought to be implicit in the direction that "it would be open to you to treat that amount also as a deduction from the damages you would otherwise award the plaintiff". Such a direction would clearly have been erroneous and could not be supported for the wages which the plaintiff earned and received were no more and no less than the reward for her labour. But it may not be unreasonable - and it is sufficient for the purposes of the case - to treat the passage as meaning, on the whole, that the jury might think it proper to place a value upon the plaintiff's newly found freedom to seek gainful employment. This they could do if they thought "that being relieved of the obligations of running a household by the death of her husband was in the nature of an advantage which enabled her to earn money". A majority of the Full Court were of the opinion that this issue was properly left to the jury and they declined to intervene. They found it "difficult to appreciate how it can be said logically that the death of her husband will free the wife from her marital obligations and thus enable her to marry again . . . yet the fact that she is freed from the obligation of managing her late husband's domestic establishment (if, in fact, she be freed from this task) may not be taken into account". In our view there is a clear distinction between the two propositions. The death of one spouse inevitably results in a revived capacity in the other to marry. This, for what it is worth in any particular case, has so long been regarded as having some value in the assessment of damages in fatal accident cases that it is profitless to debate how far the established rule is justified. But the death of one spouse does not result in a revived capacity in the other to undertake gainful employment. As Wolff J. said in Usher v. Williams (1955) 60 WALR 69 "the plaintiff's ability to earn is not a gain resulting from the death of her husband within the principle established by Davies v. Powell Duffryn (1942) AC 601 . The widow's ability to work was always there and she could perhaps, as many women do - particularly in professions - have preferred to work after marriage (1955) 60 WALR, at p 81 " But the respondent contends that, in the case of a widow who is capable of engaging in gainful employment, widowhood brings with it an advantage of pecuniary value in as much as it affords an increased opportunity to engage in such employment. This may be of some interest as a theoretical proposition but of what importance or relevance is it in everyday affairs? Many wives, either with or without children, engage in employment during the subsistence of the marriage. Is no deduction to be made where the plaintiff widow is to be found in this category and yet a deduction is to be made where the plaintiff, during her marriage, chooses to do no more than attend to the requirements of her household? The proposition is that some deduction should be made in the latter case because the death of her husband has placed the plaintiff in a position in which she is free to seek employment. It assumes, of course, that, in such a case, she was not free during the marriage to engage in employment. But this is to confuse choice with lack of freedom. On the other hand it may, perhaps, be thought that the demands of a young family may constitute an obstacle in the way of a mother seeking employment for herself. But if this be so, how can it be said that the death of ther husband relieves her from the obligations of running the household? An attempt to assert that this may be said was made in Horton v. Byrne (1956) 30 ALJ 583 but the contention was rejected. But in rejecting it the Court observed that "No doubt if she had no child she might have been regarded as liberated from the task of housekeeping and thus enabled freely to earn her living, and that might be considered" (1956) 30 ALJ, at p 584 . The view suggested in this passage had not been debated in that case, and upon consideration, we do not adhere to it. It is, perhaps, possible that some exceptional cases may arise in which the proposition contended for will assume some materiality but it is difficult, at the very least, to see how and we forbear to anticipate them; they may be safely left till they arise. So far as the present case is concerned it is obvious that nothing more appeared than, that "in order to make ends meet", the plaintiff placed her children in a boarding school and then sought and obtained employment. These things might have been done during her married life and there was no basis upon which it was legitimate to submit to the jury the question whether the plaintiff obtained any advantage of the character in question as the result of her husband's death. (at p80)

6. For these reasons the appeal should be allowed, the order of the Supreme Court discharged and a new trial directed on the issue of damages. (at p80)

McTIERNAN J. The appellant brought an action under the Compensation to Relatives Act, 1897-1953 (N.S.W.) to recover damages from the respondent in respect of the death of her husband whom she alleged was killed in consequence of the negligence of the respondent. The appellant brought the action for the benefit of herself and two children: her husband was their father. In an action under the Act to recover damages in respect of death caused by a tortious act, the rule as to the assessment of damages is expressed by s. 4. This section provides that "the jury may give such damages as they may think proportioned to the injury resulting from such death to the parties respectively for whom and for whose benefit such action is brought". Injury in this section means material injury only, that is pecuniary damage. Speaking of the assessment of damages under similar provisions, Lord Russell of Killowen said in Davies v. Powell Duffryn Associated Collieries Ltd. (1942) AC 601 : "The general rule which has always prevailed in regard to the assessment of damages under the Fatal Accidents Acts is well settled, namely, that any benefit accruing to a dependant by reason of the relevant death must be taken into account. Under those Acts the balance of loss and gain to a dependant by the death must be ascertained, the position of each dependant being considered separately" (1942) AC, at p 606 . In the present case the appellant recovered by the verdict of the jury 6,770 pounds which pursuant to s. 4 was divided as follows: 4,520 pounds to the appellant and 1,000 pounds to the elder child and 1,250 pounds to the younger. The appellant complains of the inadequacy of the verdict in her favour. (at p81)

2. The evidence upon which the appellant relied at the trial to prove the amount of pecuniary loss resulting from the death of her husband consisted of proof of payments which her husband regularly made to her out of his earnings and of the propsect of his wages being increased in the future with the consequence that as his earnings increased so would the amounts which he would pay to the appellant from week to week. Evidence was given by the appellant that the family lived in a home which her husband was building and paying for through his membership of a Starr-Bowkett Society but it was not finished when he died: that under his will, the appellant succeeded to his interest in the Society and she completed the home and finished payment for it. (at p81)

3. It was proved by questions which the appellant was asked in cross-examination that after her husband's death she let the house at 8 pounds per week and received the rent. Counsel for the appellant objected to the reception of this evidence as being irrelevant to the issue of damages. It was admitted by the trial judge. It appears from the appellant's evidence that after her husband's death she sent the two children to a boarding school where they were maintained and educated free of charge and she went to live with her parents to whom she paid 4 pounds per week for her board and lodging and occasionally bought commodities for them and herself. It was proved by other questions which the appellant was asked in cross-examination that after her husband's death she took a position as a nurse for which she received remuneration and later changed her employment to that of a telephonist for which the wages were 12 pounds per week. Counsel for the appellant also objected to these questions on the ground that they were irrelevant to the issue of damages. They also were allowed by the trial judge. (at p82)

4. It appears from the evidence that the appellant trained before marriage to be a nurse and that during her marriage she did not engage in any employment for wages. She said that economic necessity caused her to let the home, put the children in the boarding school, and to go out to work. The trial judge directed the jury on the basis that the letting of the house and the employment into which the appellant entered could be taken into account as pecuniary benefits accruing to the appellant from her husband's death by which it would be correct to diminish the damages assessed in respect of the loss of the payments which she could expect to receive from her husband in the future. (at p81)

5. The first question is whether the receipt of rent from the letting of the house was relevant to the question whether by reason of the death of the appellant's husband a gain accrued to her. The house became the property of the appellant under the will as from the time of his death. It may be that because the untimely death of the appellant's husband by the accident made her succession to the house certain and accelerated it, there was some financial improvement resulting to her from the death. There is no evidence here upon which the jury could estimate what that was worth to her in cash. However, this appeal is concerned with the question whether the appellant should suffer a diminution of damages for pecuniary loss because she began using the house as an income-producing asset. It is clear that if she put the house to an unprofitable use any loss sustained could not be said to be a result of her husband's death. By parity of reasoning a gain derived from the letting is not one accruing from the death and is not therefore a legitimate deduction which the jury could take in account in assessing the amount of damages in accordance with the rule prescribed by s. 4. (at p82)

6. The next question is whether the remunerative employment of the appellant since her husband's death afforded a gain by which the jury could diminish damages. it would be a harsh result if a tortfeasor whose fault caused the fatal accident was entitled to have the widow's earnings taken into account in his favour in assessing damages for the loss of support resulting from the death of the breadwinner. However in every case the simple issue is whether the remuneration which the widow earns is a benefit accruing to her by reason of the death of her husband. (at p82)

7. On this question there is a conflict of judicial opinion. The cases are cited in the judgments given in this case by the judges of the Supreme Court. One of these cases is Horton v. Byrne (1956) 30 ALJ 583 . The judgment of this Court contains this passage: "She (the widow) has resumed her employment as a machinist and, of course, her earnings are substantial. But that fact does not operate to reduce pro tanto the damages which should be awarded. For it means that because she has lost her husband's support she is forced again to become a wage-earner. No doubt if she had no child she might have been regarded as liberated from the task of housekeeping and thus enabled freely to earn her living, and that might be considered. But it is a consideration outweighed by the care of the child and the need later of keeping house for him" (1956) 30 ALJ, at pp 584, 585 . This statement appears to accept by implication that the earnings of a widow after the death of her husband may be set off against damages assessed for the pecuniary loss she sustains by reason of his death. In my opinion that proposition is not based upon satisfactory grounds. On reconsideration I think it is not correct to regard the result of the death of a husband as involving financial benefit to his wife because she is thereby free, if circumstances permit, to engage in remunerative employment. The question which has to be considered is whether a widow gets a pecuniary gain from her husband's death because she thereafter takes a position and earns money thereby. It is true, of course, that the death does not actualize a widow's earning capacity: her earning capacity is the same as it was before her husband's death. Nor is it a distinction between a wife and a widow that the former has not freedom to earn whereas the latter has. Each class includes both women who earn and those who do not do so. Surely it is not a distinction contemplated by s. 4 of the Act that if a widow earns after her husband's death, although her only occupation beforehand was domestic work in the household, that should be taken into account as a pecuniary gain accruing from his death. The view that what she earns accrues from the death of her husband is one that I feel unable to accept. (at p83)

8. I agree with the reasoning of Kinsella J. in the Supreme Court on this question. He said: "In the present case the evidence of the plaintiff widow, which was not challenged, is that while she would not have gone to work and separated herself from her children if her husband had not been killed, she had done so in order to make ends meet. In the light of this evidence and, indeed, independently of it, I am quite unable to accept the contention of the defendant that the widow's wages result from the husband's death. Her going to work did not arise from the relationship of husband and wife, and the severance of that relationship by death did not create for her a right or obligation to work. Her employment followed after her husband's death but did not follow from it. The source of her wage income is not the death of her husband, but the contract of employment by which she exchanges her labour and services for wages. She went to work entirely of her own volition, even though her will was forced - as she herself said - by pressure of economic necessity which arose by reason of his death. She clearly had, among other possible courses, the alternatives of throwing herself and her children upon public charity and awaiting the provision by a jury of proper compensation for the financial loss resulting to the family from the death of her husband. It is not to the point to say that if her husband had lived she would not have gone to work. The essential question is whether her employment was the result of his death" (1961) SR (NSW), at pp 937, 938; 78 WN, at p 754 . His Honour went on to refer to a number of cases including Goodger v. Knapman (1924) SALR 347 and Usher v. Williams (1955) 60 WALR 69 from which he quotes passages to support his reasoning. I think that what is said in these passages is to be preferred to what is said in the other cases in which the conclusion was reached that a widow's earnings after her husband's death accrue to her by reason of his death. It follows, in my opinion, that the jury should not have been directed to take into account either that the appellant received rent from letting the house or engaged in remunerative employment after her husband's death. (at p84)

9. As regards the question whether a widow who is a claimant in such a case as the present is likely to remarry, it is settled law that the jury might be invited to consider this probability. That direction, as I understand it, is not given on the basis that the wife is made free by the death of her husband to remarry and that might be for her pecuniary advantage. The direction is rationalized because the period of the expectation by the wife of the financial support of her husband, adopted as the basis upon which damages for pecuniary loss resulting from his death are assessed, would be shortened if the probability of remarriage is taken into account. Therefore the considerations upon which a direction regarding remarriage is justified do not apply to the question whether earnings by a widow after her husband's death, or the probability of her earning her own living, should be taken into account by the jury. Kinsella J. aptly said: "Remarriage, generally speaking, terminates the widow's dependency on her first husband's support and is relevant on the footing that if and when it takes place there comes a substitution of the second husband's financial support for that which she would have received from the first had he lived, so that she is no longer losing that support. It is on the same footing as evidence of ill-health and short expectation of life of a plaintiff is admissible - that it is relevant to the span of time for which she is left without the financial contribution of the husband. But in respect of employment, though the widow is earning wages by her labour, she is still left without the financial support which her husband afforded her while he lived" (1961) SR (NSW), at p 942; 78 WN, at p 757 . (at p85)

10. In view of the evidence of the amount of moneys which the appellant had received from her husband, and of the prospects of this amount being increased in the future, the jury's verdict in her favour appears to be much less than generous and there is ground for believing that they were influenced by the directions which have been discussed. I think therefore that there should be a new trial of the issue of damages. I would allow the appeal. (at p85)

ORDER

Appeal allowed with costs. Order of the Full Court of the Supreme Court discharged. In lieu thereof order that the appeal to that Court be allowed with costs. Order that a new trial be had limited to the question of damages.