Damages

[7-0000] General principles

Many of general principles referred to in this chapter have been drawn from H Luntz, Assessment of Damages for Personal Injury and Death, 4th edn, Butterworths, Sydney, 2002. This is an excellent general text that deals in detail with the assessment of damages in personal injury cases and provides examples of the practical application of these principles. Other texts used for reference purposes in the preparation of this chapter were D Villa, Annotated Civil Liability Act 2002, 2nd edn, Thomson Reuters, Sydney, 2013; and J A McSpedden and R Pincus, Personal Injury Litigation in NSW, LexisNexis, Sydney, 1995.

The application of the principles discussed below is subject to any relevant statutory provisions. One such provision is the Motor Accident Injuries Act 2017 which applies to motor accidents that occur after 1 December 2017: see [7-0085].

The first basic principle requires that a distinction be recognised between the term damage and damages. Damage is an essential element of a claim in most tortious actions. It is only if a plaintiff is able to establish that he or she has suffered damage that a cause of action becomes available. The position is different with intentional torts, see [7-0130].

Damages are the sums assessed in monetary terms that are paid to a successful plaintiff. Damages may be awarded as compensatory damages for damage sustained, or as aggravated or exemplary damages, although in State of NSW v Corby (2009) 76 NSWLR 439 aggravated damages were described as a form of compensatory damages.

The fundamental principle is that of restitutio in integrum, meaning that damages should be assessed so that they represent no more and no less than a plaintiff’s actual loss: Livingstone v Rawyards Coal Co (1880) 5 App Cas 25, Lord Blackburn at 39.

In personal injury matters, it has been recognised that in most cases it is not possible to measure accurately that part of the award that deals with non-economic loss so as to restore a plaintiff to the health enjoyed pre-injury. The principle has been qualified by the term “so far as money can do so”: Robinson v Harman [1848] All ER Rep 383.

The law recognises that an award will not necessarily be perfect. In Lee Transport Co Ltd v Watson (1940) 64 CLR 1 at 13–14, Dixon J said:

No doubt it is right to remember that the purpose of damages for personal injuries is not to give a perfect compensation in money for physical suffering. Bodily injury and pain and suffering are not the subject of commercial dealing and cannot be calculated like some other forms of damage in terms of money.

The amount awarded is, however, required to be fair to both parties, although fairness to the defendant does not require that the award be less than full or adequate.

There are some qualifications that may have the result that the plaintiff recovers less than his or her actual loss. They arise out of the principles that govern remoteness of damage, the requirement to mitigate and the modifications to common law made by the Workers Compensation Act 1987, Motor Accidents Compensation Act 1999, Civil Liability Act 2002 and Motor Accident Injuries Act 2017. In addition, claims arising out of the death of a relative are limited to the recovery of pecuniary loss.

Conversely, principles relating to aggravated or exemplary damages allow the recovery of greater than actual loss in appropriate circumstances.

In Todorovic v Waller (1981) 150 CLR 402 at 412 Gibbs CJ and Wilson J identified the following four basic principles that they said were so well established that it was unnecessary to cite authority to support them.

1. 

Damages are compensatory in character.

2. 

Damages for one cause of action must be recovered once and forever and in a lump sum, there being no power to order a defendant to make periodic payments.

3. 

The plaintiff is free to do what he or she wishes with the sum awarded; the court is not concerned to see how it is applied.

4. 

The onus is on the plaintiff to prove the injury or loss for which damages are sought.

The plaintiff bears the onus of proving that the defendant’s conduct caused the losses claimed. At common law, the defendant bears the onus of proving:

  • failure to mitigate on the plaintiff’s behalf

  • contributory negligence.

The onus is on the plaintiff throughout to quantify damages. This does not necessarily require proof of the loss in actual monetary terms. Evidence in the form of comparable wages is commonly provided to establish loss of wages. Medical expenses and care costs for the past are rarely disputed and those expected in the future are normally capable of reasonable estimation.

Once a loss is proved, the court is required to do its best to put a value on that loss even if the evidence is less than satisfactory. In the absence of evidence, a plaintiff cannot complain that inadequate damages have been awarded: Dessent v Commonwealth (1977) 51 ALJR 482. See Ashford v Ashford (1970) 44 ALJR 195, where the court dealt with the assessment of income loss in the absence of evidence of likely earnings from planned pre- and post-accident careers. See also Layton v Walsh (1978) 19 ALR 594 (FC) where the court drew inferences concerning the cost of medical treatment.

It is standard practice to itemise amounts awarded to a plaintiff under various heads of damage and to give reasons for arriving at each of the stated figures. Care needs to be taken to avoid the possibility that the amounts assessed under the various heads of damage might be duplicated. For instance, a court must balance, in assessing general damages, the effect on a plaintiff of any incapacity to undertake domestic responsibilities for his or her family against making allowance for the provision of voluntary or commercial carers.

The recognised heads of damage are:

1. 

General damages: this is the term applied to non-pecuniary damages or non-economic loss suffered as a result of pain, disability, loss of enjoyment of life, disfigurement or loss of expectation of life.

2. 

Pecuniary loss: this term covers out-of-pocket expenses involved in medical and other treatment expenses; aids and appliances, domestic and personal care.

3. 

Income loss: covering actual income loss to the date of trial and loss of income-earning capacity thereafter.

4. 

Aggravated damages: awarded to a plaintiff who suffers increased distress as a result of the manner in which a defendant behaves when committing the wrong or thereafter.

5. 

Exemplary damages: awarded to mark the court’s disapproval of the conduct of the defendant and to deter its repetition by the defendant or others.

6. 

Nominal or contemptuous damages: this head of damage is of little relevance to claims in tort involving personal injury where actual damage is a necessary part of the cause of action. It commonly arises in cases of trespass to the person where the options available to the court range between nominal damages and a more substantial award depending on the circumstances.

Exceptions to these basic principles are found both in the common law and in legislation.

As noted in [2-6330] the generally accepted practice is that the court determine all issues in question. This extends to the assessment of damages notwithstanding that the case on liability fails. The purpose of the practice is to avoid the costs of a further hearing in the event that the decision on liability is overturned. In Gulic v Boral Transport Ltd [2016] NSWCA 269, the court expressed concern that the trial judge had not adopted this practice and confirmed that a judge should decide all issues to avoid the need for a new trial. On the question of exceptions to the general rule Macfarlan J said at [8]:

There may of course be good reasons for not dealing contingently with issues that the judge does not consider decisive. One reason might be that the judge considers that because the outcome is so clear or there is so little at stake that there is no reasonable prospect of an appeal. Alternatively, the judge might consider that the expenditure of judicial time and effort required to determine other issues is not justified when balanced against the likely costs of a retrial and the likelihood of a retrial being necessary. Another reason might be that determination of an issue whose resolution is considered not to be decisive might require assumptions as to a party’s credit diametrically opposed to the judge’s findings. It might be difficult to give effect to this assumption.

[7-0010] The once-and-forever principle

Interim payments

Part 5, Div 2 Supreme Court Act 1970 and Pt 3, Div 3 and 4 District Court Act 1973 make provision for the awarding of interim damages when:

  • the defendant admits liability or the plaintiff has judgment against the defendant for damages to be assessed, or

  • the court is satisfied, if the action proceeded to trial, that the plaintiff would secure judgment against the defendant for substantial damages.

Orders of this nature may only be made against insured defendants, public authorities or persons of sufficient means: s 76E(4) SCA, s 58(4) DCA. These provisions do not apply to claims that are dealt with under the Motor Accidents legislation.

The legislation sets out the considerations to be taken into account, makes provision for amounts to be reserved in the event of a finding of contributory negligence, and for powers to review, revoke, vary or order repayment of amounts.

In Frellson v Crosswood Pty Ltd (1992) 15 MVR 343, Sully J held:

  • the civil onus of balance of probabilities applies in establishing the plaintiff will recover substantial damages at trial

  • caution must be exercised, and it is necessary to take into account the difficulty a defendant might encounter if required to recover from an unsuccessful plaintiff

  • if there is more than one defendant, the court can order payment of interim damages against one or more defendants if satisfied the plaintiff will succeed against those defendants.

Section 83 of the Motor Accidents Compensation Act imposes on a third party insurer the obligation to pay for reasonable, necessary and properly verified medical, rehabilitation, respite care and attendant care expenses where liability is admitted or determined, wholly or in part, to meet the care needs generated by injuries resulting from the motor accident.

As to the Motor Accident Injuries Act 2017, see Pt 3.

Court structured settlements

Section 143 of the Motor Accidents Compensation Act permits the parties to apply to the court for approval of a structured settlement agreement that provides for the payment of all or part of an award of damages in the form of periodic payments funded by an annuity or other agreed means.

Similarly, s 151Q of the Workers Compensation Act permits the court, at the request of a plaintiff and having considered the views of the defendant, to make orders for payment of damages by means of a structured settlement rather than a lump sum award.

Lifetime care and support

The Motor Accidents (Lifetime Care and Support) Act 2006 provides for support for victim of motor accidents who are catastrophically and permanently injured. It imposes on the Lifetime Care and Support Authority the obligation of paying for the expenses incurred in meeting the plaintiff’s treatment and care needs.

[7-0020] Actual loss

Once the defendant’s liability to the plaintiff is proved, the assessment of the plaintiff’s loss and damage must take into account issues that may increase or reduce the amounts awarded under all heads of damages. Considerations to be addressed include: the prospective consequences of the injury; conduct of the plaintiff in failing to mitigate or in aggravating his or her condition; contributory negligence; unrelated conditions that affect the plaintiff before or after injury; causation and aggravated or exemplary damages.

Prospective consequences

Proof of damage and assessment of damages requires calculation of the consequence of events from the date of injury to the date of trial and of the chance that events will or will not occur. In Malec v JC Hutton Pty Ltd (1990) 169 CLR 638, Deane, Gaudron and McHugh JJ held at [7]:

A common law court determines on the balance of probabilities whether an event has occurred. If the probability of the event having occurred is greater than it not having occurred, the occurrence of the event is treated as certain; if the probability of it having occurred is less than it not having occurred, it is treated as not having occurred. Hence, in respect of events which have or have not occurred, damages are assessed on an all or nothing approach. But in the case of an event which it is alleged would or would not have occurred, or might or might not yet occur, the approach of the court is different. The future may be predicted and the hypothetical may be conjectured. But questions as to the future or hypothetical effect of physical injury or degeneration are not commonly susceptible of scientific demonstration or proof. If the law is to take account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. The probability may be very high – 99% – or very low – 0.1%. But unless the chance is so low as to be regarded as speculative – say less than 1% – or so high as to be practically certain – say over 99% – the court will take that chance into account in assessing the damages. Where proof is necessarily unattainable, it would be unfair to treat as certain the prediction which has a 51% probability of occurring, but to ignore altogether a prediction which has a 49% probability of occurring. Thus, the court assesses the degree of probability that an event would have occurred, or might occur, and adjusts its award of damages to reflect the degree of probability. The adjustment may increase or decrease the amount of damages otherwise to be awarded.

Examples

1. 

Loss of opportunity: As noted in the Malec decision, damage and loss suffered to the date of the hearing are reasonably simple to prove and assess. There are, however, occasions when it becomes necessary to assess the effects of injury on, for instance, the opportunity to undertake a particular career path or succeed in a particular business. Commonwealth v Amann Aviation Pty Ltd (1992) 174 CLR 54 dealt with the recovery of the value of a lost opportunity in circumstances where it was a known fact that the opportunity was lost but there was no certainty that availability of the opportunity would have resulted in a successful outcome. Deane J at [8] said it might be necessary to modify the conventional approach, when assessing damages for past income loss, of deciding an issue on the balance of probabilities and then proceeding on the basis of a certainty where none in fact existed. The Amann Aviation case involved a breach of contract claim but it was made clear that the same principles applied to claims in tort.

2. 

Assessment of long-term risk: This problem arises where exposure to risk has been established but there is uncertainty concerning the long-term consequence of that exposure. In such cases a plaintiff may be under-compensated or, in cases where thresholds apply, not compensated at all if serious damage is suffered after the date of assessment.

Extras and discounts

Damages may also be reduced for a number of reasons. The common law principle is that a defendant, who asserts that a reduction in damages is warranted, must provide evidence to support the claim. This principle has been modified in some circumstances by legislation.

Mitigation

The courts have accepted the following principles, as set out in H McGregor, McGregor on Damages, 16th edn, Sweet & Maxwell Ltd, UK, 1997 at [283]–[288], as an accurate statement of the law concerning mitigation.

1. 

The law disallows recovery of damages in respect of any loss that could have been avoided but which the plaintiff has failed to avoid through unreasonable action or inaction.

2. 

The plaintiff may recover loss or expense incurred in a reasonable attempt to mitigate.

3. 

The plaintiff may not recover loss in fact avoided, even though damages for that loss would have been recoverable because the efforts that went to mitigation went beyond what was required of the plaintiff under the first principle.

At common law, the failure of a plaintiff to take steps to mitigate a claimed loss may be raised as a defence to the claim. The onus of proof of an allegation of failure to mitigate rests with the defendant. This principle has been varied by s 136 Motor Accidents Compensation Act and s 151L Workers Compensation Act that transfer an element of the onus of proof to plaintiffs.

If the defendant succeeds, damages are reduced to take account of the failure to mitigate. The extent of the reduction is assessed by calculating the value of the plaintiff’s loss on the basis of the condition that he or she would be in, had reasonable steps to mitigate been taken.

In NSW, in respect of motor vehicle accidents, s 136 imposes a positive duty on the plaintiff to mitigate but maintains the onus of proving failure to mitigate on the person making the allegation: s 136(4). In Brogan v McGeary (1995) ATR ¶81-342, the Court of Appeal held that the plaintiff need do no more than was reasonable in order to comply with the requirements of this provision.

The Nominal Defendant v Aychahawchar [2015] NSWCA 58 dealt with aspects of the onus of proof of mitigation in the light of the provisions of s 136 of the Motor Accidents Compensation Act. Basten JA noted that s 136 imposed a burden on the plaintiff to prove that all reasonable steps to mitigate damages have been taken and designated certain areas in which such steps must be taken. He said the provision left open the question of whether the onus of proving that reasonable steps were not taken would impose at least an evidentiary burden on the defendant. At [8] and [9] Basten JA discussed the tension between the requirement at common law and under s 136(1) that the plaintiff prove his or her loss and the requirement both at common law and under s 136(4) that the defendant provide evidence to support an allegation of failure to take reasonable steps in mitigation of the loss. He considered whether the solution might be found in Adams v Ascot Iron Foundry Pty Ltd (1968) 72 SR (NSW) 120 at 139. There it was suggested the onus was on the plaintiff to establish that he or she was unfit for a particular type of employment, whereas if fitness were established, the defendant bore (the “somewhat exceptional”) onus of showing that refusal to accept an offer of this type of employment was unreasonable.

Section 151L Workers Compensation Act imposes a burden on the claimant to establish that all reasonable steps to mitigate have been taken, except where it is established that the claimant was not told by his or her employer or the insurer that it was necessary to take steps to mitigate before it could reasonably be expected that any of those steps would be taken: ACN 096 712 337 Pty Ltd v Javor [2013] NSWCA 352, per Meagher JA.

The obligations imposed by both statutes, in addition to taking reasonable steps in relation to medical treatment, require a plaintiff to undergo appropriate rehabilitation, pursue alternative employment opportunities and give early notice of claims.

Medical treatment and mitigation

The issue of mitigation frequently arises from a plaintiff’s reluctance or refusal to undergo medical treatment. The defendant must show that, having regard to the prospect that treatment will alleviate the plaintiff’s condition, refusal was unreasonable. The defendant must show how and to what extent the loss would have been diminished and that the plaintiff’s refusal of treatment was unreasonable.

Factors that are relevant in determining whether the refusal is reasonable include the prospect of improving the plaintiff’s condition versus the risk of death or aggravation, inconvenience, discomfort, cost to the plaintiff in actual expenditure and income loss.

The test of whether refusal is reasonable is objective but factors particular to the plaintiff must be considered. Factors considered include anxiety states, language difficulties, prior experience of medical treatment and cultural background. It is questionable whether religious beliefs would be regarded as a reasonable basis for refusing treatment.

It is not necessary to prove that the treatment would have been successful. What the defendant must establish is that, having regard to the prospects of success, a reasonable person in the plaintiff’s position would have attempted to mitigate his or her damage by accepting treatment.

If failure to mitigate is established, a discount is normally applied to take account of any improvement that might reasonably be expected in the plaintiff’s condition as a result of that treatment.

Aggravation

The defendant also bears the evidentiary onus of establishing that the plaintiff’s conduct positively exacerbated his or her condition. In this respect, it is necessary to consider the following.

1. 

Whether there has in fact been a failure to mitigate. In Munce v Vinidext Tubemakers Pty Ltd [1974] 2 NSWLR 235 the court left open the question of whether refusal of a blood transfusion amounted to a failure to mitigate.

2. 

Whether the plaintiff’s conduct that positively exacerbates the condition is itself the result of injuries caused by the defendant’s tortious conduct.

Pre- and post-injury conditions

Damages may be denied or reduced where the symptoms of which a plaintiff complains are the result of a pre-existing condition. In Watts v Rake (1960) 108 CLR 158, prior to the accident, the plaintiff suffered from a commonly occurring degenerative spinal condition that might have produced the symptoms suffered after the accident. The High Court settled the issue of onus of proof, deciding that it was for the plaintiff to prove on a prima facie basis the difference between his or her pre- and post-accident condition; once the change in condition was satisfactorily established, the evidentiary onus was then on the defendant “to exclude the operation of the accident as a contributory cause”: Dixon CJ at [160].

Purkess v Crittenden (1965) 114 CLR 164 confirmed Watts v Rake, above, and its reference to the evidential onus necessary to rebut the prima facie case made by the plaintiff. Barwick CJ, Kitto and Taylor JJ, at 168, said it was insufficient for the defendant merely to suggest that the plaintiff suffered from a progressive pre-existing condition or that there was a relationship between any condition and the plaintiff’s present incapacity and that:

On the contrary it was stressed that both the pre-existing condition and its future probable effects or its actual relationship to that incapacity must be the subject of evidence (ie substantive evidence in the defendant’s case or evidence extracted by cross-examination in the plaintiff’s case) which, if accepted, would establish with some reasonable measure of precision, what the pre-existing condition was and what its future effects, both as to their nature and their future development and progress, were likely to be. That being done, it is for the plaintiff upon the whole of the evidence to satisfy the tribunal of fact of the extent of the injury caused by the defendant’s negligence.

Ipp JA delivered the majority decision in Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208, a decision that involved consideration of the plaintiff’s pre-existing health and the circumstances in which the evidentiary onus transfers to the defendant in accordance with the principles of Watts v Rake and Purkess v Crittenden. Ipp JA was concerned to emphasise that those principles in no way transferred to the defendant the primary onus of proof, namely the causal connection between the plaintiff’s injury and the defendant’s default. He said Dixon CJ in Watts v Rake at 160 dealt with the following contentions:

  • the plaintiff’s post-injury condition was traceable to causes other than the accident

  • part of the plaintiff’s post-injury condition was traceable to causes other than the accident

  • if there had been no accident, the plaintiff would have been incapacitated by the pre-existing condition.

Ipp JA noted that Dixon CJ said that the evidentiary onus passed to the defendant only in respect of the second and third of these contentions. Further, in discharging the evidentiary onus, the defendant must produce more than a scintilla of evidence concerning a prior condition or the likely consequences thereof. If the evidence establishes a real chance that the prior condition will affect the plaintiff’s quality of life and income-earning capacity, it must be assessed and allowed for.

In Sampco Pty Ltd v Wurth [2015] NSWCA 117 the Court of Appeal emphasised that the requirement in s 5D(1)(a) Civil Liability Act 2002, that factual causation be established, applies both to the issue of liability and injury.

The apportionment of damages where the plaintiff suffered injury in successive motor vehicle accidents was considered in Falco v Aiyaz [2015] NSWCA 202. Emmett JA at [13] set out the principles of State Government Insurance Commission v Oakley (1990) 10 MVR 570:

where the negligence of a defendant causes injury and the plaintiff subsequently suffers further injury, the principles for determining the causal connection between the negligence of the defendant and the subsequent injury are as follows:

  • where the further injury results from a subsequent accident that would not have occurred had the plaintiff not been in the physical condition caused by the defendant’s negligence, the added damage should be treated as caused by the negligence of the defendant;

  • where the further injury results from a subsequent accident that would have occurred had the plaintiff been in normal health, but the damage sustained is greater because of aggravation of the earlier injury, the additional damage resulting from the aggravated injury should be treated as caused by the negligence of the defendant;

  • where the further injury results from a subsequent accident that would have occurred had the plaintiff been in normal health and the damage sustained includes no element of aggravation of the earlier injury, the subsequent accident and further injury should not be treated as caused by the negligence of the defendant.

Material contribution

Where it is not possible to apportion damages to take account of other causes of damage, the plaintiff is required to establish that the defendant’s negligence materially contributed to the loss or damage. The evidentiary onus is then on the defendant and, if the defendant is unable to establish an alternative cause, he or she may be held fully liable.

A commonly occurring scenario arises in cases of injuries suffered as a result of more than one accident or exposure to disease-causing dusts. Again, the plaintiff is required to prove that the defendant’s conduct contributed materially to the injury. If this is done and it is not possible to apportion responsibility between one or more potential causes of damage, the plaintiff will recover in full. The onus is on the defendant to establish and quantify the extent of damage caused by another tortfeasor: Bonnington Castings Ltd v Wardlaw (1956) AC 613 (House of Lords); Middleton v Melbourne Tramway & Omnibus Co Ltd (1913) 16 CLR 572.

Where it is possible to divide the harm, the court must do its best to apportion the loss between tortious and non-tortious causes: Adams v Ascot Iron Foundry Pty Ltd (1968) 72 SR(NSW) 120, per Sugerman AP at 125–126.

Life expectancy

The defendant bears the evidential onus of establishing that the plaintiff’s life expectancy is likely to be shorter than that estimated in standard life-expectancy tables: Thurston v Todd [1966] 1 NSWR 321; Proctor v Shum [1962] SR (NSW) 511. In Golden Eagle International Trading Pty Ltd v Zhang (2007) 81 ALJR 919, Gummow, Callinan and Crennan JJ at [4], and Kirby and Hayne JJ at [68]–[70], held “the Court of Appeal was right to conclude that, despite the then prevailing practice in the courts of New South Wales, the primary judge should have used the prospective rather than the historical tables”.

The standard life expectancy was reduced by 10% in the case of a plaintiff who, although only 21 years old at the time of assessment, continued to be a heavy smoker and the nature of his injuries and their effect on his psychological condition suggested that he would not give up the habit: Egan v Mangarelli [2013] NSWCA 413.

Where the plaintiff’s life expectancy is reduced as a result of injury, loss of income during those years is to be assessed by deducting the probable living expenses that would be incurred in maintaining the plaintiff if she or he had survived: Commonwealth of Australia v McLean (1996) 41 NSWLR 389. This principle was adopted by Sheller JA in James Hardie & Co Pty Ltd v Roberts [1999] NSWCA 314 where he confirmed that compensation was directed at loss of income-earning capacity not wages. Damages of this nature were therefore not a windfall but compensation for the destruction of the asset.

[7-0030] Contributory negligence

At common law a defence of contributory negligence, if successful, defeated a claim, regardless of the extent of any negligence on the part of the defendant. This situation was remedied in NSW by the Law Reform (Miscellaneous Provisions) Act 1965 where provision was made to apportion liability between the parties and to reduce the plaintiff’s damages in accordance with this apportionment.

Contributory negligence must be specifically pleaded as a defence to a claim and, since it is raised by way of defence, the onus is on the defendant to prove that the plaintiff failed to use reasonable care, that had care been taken the plaintiff’s damage would have been diminished, and the extent of that diminution.

The principles that apply to the determination of whether the plaintiff was negligent are the same as those that determine the question of the defendant’s negligence. This involves the application of the general principles set out in s 5B Civil Liability Act. Further s 5R specifically provides that the standard to be applied in determining the issue of contributory negligence is that of a reasonable person in the position of the plaintiff on the basis of what he or she knew or ought to have known at the time. In other words, an objective test is applied without regard to the subjective situation of the plaintiff.

The Motor Accidents Act ss 74, 76, Motor Accidents Compensation Act ss 138, 140 and Motor Accident Injuries Act 2017 ss 4.17 and 4.18 compel a finding of negligence by a plaintiff where drugs or alcohol were involved or the plaintiff failed, contrary to the requirements of the law, to use a seatbelt or use other protective equipment. Some of these provisions do not apply to minors. The provisions concerning drugs and alcohol apply not only to an injured passenger’s condition at the time of an accident; they encompass the situation where the plaintiff, as a passenger in a vehicle at the time of the accident, knew or ought to have known that the driver’s capacity to drive was affected by alcohol.

As to the Motor Accident Injuries Act 2017, see [7-0085] under the subheading Contributory negligence.

The Civil Liability Act goes further in relation to drugs or alcohol. Pt 6 deals with intoxication, defined in s 48 as:

a reference to a person being under the influence of alcohol or a drug (whether or not taken for a medicinal purpose and whether or not lawfully taken).

These provisions apply to civil liability for personal injury or damage to property, except where excluded by s 3B. Section 49 replaces s 74 Motor Accidents Act and s 138 Motor Accidents Compensation Act to the extent of any inconsistency.

Section 50 applies where the capacity of a plaintiff to exercise reasonable care and skill is impaired by intoxication. No damages are to be awarded where damage is unlikely to have occurred if the injured party had not been intoxicated. Otherwise, unless intoxication was not self-induced, the provision mandates a finding of a minimum 25% for contributory negligence on the part of the plaintiff. This provision applies to under-age drinkers. Russell v Edwards [2006] NSWCA 19 held that inexperience concerning the intoxicating effects of alcohol did not lead to the conclusion that intoxication was not self-induced. Ipp JA stating that “self-induced” equated to “voluntary”: [21].

Apportionment

Once a finding is made that the plaintiff was guilty of contributory negligence, it is necessary to determine the proportions in which each of the parties is to be held liable for the damage suffered by the plaintiff.

The leading authorities on this issue are Pennington v Norris (1956) 96 CLR 10 and Podrebersek v Australian Iron & Steel Pty Ltd (1985) 59 ALR 529. In Podrebersek, above, at [10] it was said:

The making of an apportionment as between a plaintiff and a defendant of their respective shares in the responsibility for the damage involves a comparison both of culpability, ie of the degree of departure from the standard of care of the reasonable man (Pennington v Norris, above, at 16) and of the relative importance of the acts of the parties in causing the damage: Stapley v Gypsum Mines Ltd (1953) AC 663, at p 682; Smith v McIntyre (1958) Tas SR 36, at pp 42–49 and Broadhurst v Millman (1976) VR 208, at p 219 and cases there cited. It is the whole conduct of each negligent party in relation to the circumstances of the accident which must be subjected to comparative examination. The significance of the various elements involved in such an examination will vary from case to case; for example, the circumstances of some cases may be such that a comparison of the relative importance of the acts of the parties in causing the damage will be of little, if any, importance.

In Wynbergen v Hoyts Corporation (1997) 149 ALR 25, the High Court decided that it was not possible, where a finding of contributory negligence is made, to conclude that damages recoverable by the injured party should be reduced to nothing because the effect of such a conclusion would be to hold the claimant wholly responsible. Section 5S Civil Liability Act now provides for a finding of contributory negligence of 100% with the result that no damages are to be awarded. The claim that a finding of 100% contributory negligence should be made is often coupled with a pleading that the defendant owed no duty of care and is most frequently encountered in motor accident cases where joint illegal purpose or intoxication of both passenger and driver are involved. To date the courts have shown great reluctance to reduce damages by 100% or, except where illegality is concerned, to find no duty of care.

In Gala v Preston (1991) 172 CLR 243 at 254, the High Court noted that there might be special and exceptional circumstances where participants could not have had any reasonable basis for expecting that a driver of a vehicle would drive it according to ordinary standards of competence and care. In Joslyn v Berryman (2003) 214 CLR 552, McHugh J at [29] accepted that the plea of no breach of duty or a plea of no duty in an extreme case remained open in the case of a passenger who accepted a lift with a driver known to the passenger to be seriously intoxicated.

Similarly in Imbree v McNeilly (2008) 236 CLR 510, Gummow, Hayne and Kiefel JJ said at [82]:

The conclusion that the defendant owed a plaintiff no duty of care is open in a case like Joyce if, as Latham CJ said, “[in] the case of the drunken driver, all standards of care are ignored [because the] drunken driver cannot even be expected to act sensibly”. And as indicated earlier in these reasons, it is that same idea which would underpin a conclusion that the plaintiff voluntarily assumed the risk of being driven by a drunken driver.

In Miller v Miller (2011) 242 CLR 446, the High Court confirmed that no duty of care to a co-offender is owed by a person committing a crime unless one party withdraws from the joint illegal enterprise and is no longer complicit in the crime. The duty of care is owed from the point of withdrawal. In deciding the issues in that case, the High Court considered in detail prior authority on issues of duty of care in circumstances of illegal conduct: Henwood v Municipal Tramways Trust (SA) (1938) 60 CLR 438; Smith v Jenkins (1970) 119 CLR 397; Jackson v Harrison (1978) 138 CLR 438; Gala v Preston (1991) 172 CLR 243; Cook v Cook (1986) 162 CLR 376; Imbree v McNeilly (2008) 236 CLR 510; Insurance Commissioner v Joyce (1948) 77 CLR 39.

The issues in Zanner v Zanner (2010) 79 NSWLR 702 concerned the extent to which the defendant, at 11 years of age, should be held liable to the plaintiff, his mother, who allowed him to drive his father’s car. The defendant raised three issues in defence: the duty of care owed by the defendant when he was too inexperienced and incompetent to be expected to control the vehicle; causation, in circumstances where the plaintiff brought about the risk that eventuated; and whether, that if liability were established, contributory negligence should be assessed at 100%.

Tobias AJA rejected all of these defences. He did, however, reassess the plaintiff’s contributory negligence, increasing it from 50% to 80%, a result he considered to be warranted by two aspects of the plaintiff’s conduct. The first was allowing the defendant to drive the vehicle; the second was to stand in front of it while directing the defendant.

The NSW Court of Appeal has considered the issue of how the apportionment of liability is to be undertaken having regard to the provisions of the Civil Liability Act.

In Joslyn v Berryman (2003) 214 CLR 552, the High Court was concerned with the provisions of s 74 Motor Accidents Act (subsequently re-enacted as s 138 Motor Accidents Compensation Act and now dealt with in s 49 Civil Liability Act). Although these provisions differed from those of the Law Reform (Miscellaneous Provisions) Act in that they provided for damages in respect of a motor accident to be reduced by such percentage as the court thinks just and equitable in the circumstances of the case, Kirby J at [127] said that they supplemented common law and enacted law. He noted that the Law Reform (Miscellaneous Provisions) Act did not address the extent to which the plaintiff’s neglect caused the accident and that the responsibility for which it provided:

is that which is “just and equitable having regard to the claimant’s share in the responsibility for the damage”. Such “damage”, as the opening words of s 10(1) make clear, is the damage which the person has suffered as a “result partly of his own fault and partly of the fault of any other person or persons”. [Emphasis in original.]

Doubt on whether these principles continue to apply has arisen from the decisions of the Court of Appeal in Gordon v Truong [2014] NSWCA 97 and T & X Company Pty Ltd v Chivas [2014] NSWCA 235. Both cases involved collisions between vehicles and pedestrians and both involved findings of breach of duty and contributory negligence. Basten JA proposed that s 5R Civil Liability Act, in its application of the general principles of negligence described in s 5B of the Act, altered the approach to be taken to apportioning liability. He took the view that the apportionment is now to be made having regard to the causative contributions of the lack of care of each party and not by reference to the extent to which each act of neglect contributed to the damage suffered by the plaintiff. See also his discussion of the inter-relationship between ss 5R and 49 Civil Liability Act and their application to motor vehicle accidents in Nominal Defendant v Green [2013] NSWCA 219.

Further clarification of the approach to be taken to apportionment was provided in the reasons of Meagher JA, with whom Gleeson JA and Sackville AJA agreed, in Verryt v Schoupp [2015] NSWCA 128. The appeal dealt, amongst other things with the trial judge’s finding that, although there was negligence on the part of a 12-year-old skateboarder who “skitched” a ride uphill by holding onto the back of the appellant’s motor vehicle, the appellant was overwhelmingly responsible and that there should therefore be no reduction in damages for contributory negligence.

Meagher JA noted the difference between the requirement of s 9(1) of the Law Reform (Miscellaneous Provisions) Act 1965 that responsibility be apportioned according to what is just and equitable having regard to the claimant’s share in the responsibility for the damage and that of s 138(3) of the Motor Accidents Compensation Act that damages recoverable be reduced by such percentage as the court thinks just and equitable in the circumstances of the case. This did not involve reference to s 5D to determine a causal connection between the contributory negligence and the injury. It involved, first, as required by s 5R(1) of the Civil Liability Act, the application of the principles of s 5B in determining whether the person who suffered harm has been contributorily negligent.

It was in the apportionment of responsibility that the issue of the extent to which each party was responsible for the accident and the injuries sustained became relevant. In this case, the Court of Appeal accepted that there was no evidence to support the contention that the respondent’s failure to wear a protective helmet caused his brain injury, an element where the onus of proof rested with the appellant. There was, however, evidence that the 12-year-old respondent appreciated that the skitching exercise was dangerous and Meagher JA considered that his lack of care for his own safety was adequately reflected by reducing his damages by 10%.

This approach has been adopted in a number of decisions, including Grills v Leighton Contractors Pty Ltd [2015] NSWCA 72 and Nominal Defendant v Cooper [2017] NSWCA 280. In the latter case, McColl JA noted that the parties did not suggest that there was any significance in the differences between s 9(1) of the Law Reform (Miscellaneous Provisions) Act 1965 and s 138(1) of the Motor Accidents Compensation Act 1999. Her Honour said, using the principles derived from Podrebersek and Pennington, that both provisions required the court to arrive at an apportionment of the parties’ respective shares in the responsibility for the damage by comparing the degree to which they had each departed from the standard of care of the reasonable person and the relative importance of their acts in causing the damage.

Appellate courts consistently note that the facts of earlier cases are rarely of assistance when determining an appropriate apportionment. They also maintain a degree of reluctance to interfere in the first instance determination: Mobbs v Kain [2009] NSWCA 301; Harmer v Hare [2011] NSWCA 229.

Section 5T Civil Liability Act requires the court to take account of the contributory negligence of the deceased in claims under the Compensation to Relatives Act 1897. Section 30 Civil Liability Act extends this requirement to the contributory negligence of a victim killed, injured or endangered by an act or omission of the defendant when assessing claims for nervous shock.

Blameless accidents

The application of the principles of contributory negligence to blameless accidents was considered by the Court of Appeal in Axiak v Ingram (2012) 82 NSWLR 36. A blameless accident is defined in s 7A Motor Accidents Compensation Act as follows:

“blameless motor accident” means a motor accident not caused by the fault of the owner or driver of any motor vehicle involved in the accident in the use or operation of the vehicle and not caused by the fault of any other person.

Section 7F of the Act provides for the reduction of damages by reason of contributory negligence on the part of a deceased or injured person.

In Axiak, the Court of Appeal held that the words “and not caused by the fault of any other person” referred to tortious conduct of persons other than the plaintiff. In those circumstances the principles of Podrebersek had no application where, because of the provisions of the Act, the driver was not at fault so that comparisons of culpability and contributions to the damage suffered were inappropriate. Tobias JA said that contributory negligence was therefore to be assessed by reference to the extent to which the plaintiff departed from the standard of care imposed in taking care for his or her own safety. He rejected, as contrary to the intention of the legislature, the proposition that a plaintiff, guilty of contributory negligence in a blameless accident must always be the sole cause of his or her injuries and therefore guilty of negligence to the degree of 100%.

This decision was not challenged in Davis v Swift [2014] NSWCA 458 but the Court of Appeal was unanimous in the view that it required reconsideration. The court was divided on the question of whether, it being accepted that the plaintiff’s conduct was the sole cause of the accident, contributory negligence should be assessed at 100%. Meagher and Leeming JJA, held that, since the defendant was, by s 7B(1), deemed to have been at fault, the assessment of culpability for the accident should be 20% to the defendant and 80% to the plaintiff. Adamson J agreed with the trial judge that the plaintiff’s contributory negligence should be assessed at 100%. She suggested that the contributory negligence addressed by s 7F related to conduct, such as failure to wear a seatbelt, that aggravated damage but was not causative of the accident.

The approach taken in Axiak was adopted in Nominal Defendant v Dowedeit [2016] NSWCA 332.

Heads of Damage

[7-0040] Non-economic loss

This head of damage is also referred to as general damages or non-pecuniary loss. It covers the elements of pain, suffering, disability and loss of amenity of life, past and future. As already noted, in respect of the future, an element of hypothesis is involved.

There are few remaining areas in personal injury claims where damages remain at large. The Motor Accidents Compensation Act and the Civil Liability Act impose thresholds to the recovery of non-economic loss and an upper limit on the amounts that may be awarded. Common law damages for non-economic loss are no longer recoverable under the Workers Compensation Act.

The maximum sums recoverable for non-economic loss are adjusted annually by reference to fluctuations in the average weekly earnings of full-time adults as measured by the Australian Statistician: s 146 Motor Accidents Compensation Act; s 16 Civil Liability Act. The adjustment takes effect on 1 October in each year. The maximum sum to be awarded is that which is prescribed at the date of the order awarding damages.

Section 3 Civil Liability Act contains the following definition:

“non-economic loss” means any one or more of the following:

(a) 

pain and suffering

(b) 

loss of amenities of life

(c) 

loss of expectation of life

(d) 

disfigurement.

The same definition is found in s 3 Motor Accidents Compensation Act.

Assessing non-economic loss

The Motor Accidents Compensation Act applies to injuries suffered in accidents occurring after midnight on 26 September 1995. Sections 131–135 deal with non-economic loss. To qualify for an award the plaintiff’s level of whole-person impairment must be assessed at greater than 10%. If the parties disagree on this question, a medical assessor, whose determination is binding on the parties and the courts, is appointed by the Motor Accidents Authority. Unlike the Motor Accidents Act and the Civil Liability Act, s 134 does not require that the court assess damages as a proportion of the maximum sum fixed for an award of non-economic loss. Damages are assessed with the application of common law principles up to the maximum provided for in s 134. This was explained by Heydon JA in Hodgson v Crane (2002) 55 NSWLR 199 when he said it was not possible to construe the concept of proportionality out of the language of ss 131–134. When the threshold of 10% permanent impairment was passed, the court was required to assess non-economic loss without statutory restraint except for the maximum that may be awarded: at [39].

The Motor Accidents Act first introduced the concept of significant impairment to an injured person’s ability to lead a normal life as the basis for assessment of non-economic loss and the assessment of the percentage of that impairment against a most extreme case.

As to the Motor Accident Injuries Act 2017, see [7-0085] under the subheading Non-economic loss.

The Civil Liability Act contains provisions similar to those of the Motor Accidents Act. The threshold for recovery of non-economic loss is an injury assessed by the court to be at least 15% of a most extreme case: s 16(1). Where the severity of the plaintiff’s injuries is assessed to be less than 33% of a most extreme case, the amount to be awarded is to be calculated by reference to the deductibles set out in s 16(3). If the assessment exceeds 33%, the plaintiff is entitled to receive in full the proportion of the maximum sum applicable.

A note appended to s 16 Civil Liability Act describes the following method of assessing damages in accordance with the table of deductibles:

The following are the steps required in the assessment of non-economic loss in accordance with this section:

Step 1:

Determine the severity of the claimant’s non-economic loss as a proportion of a most extreme case. The proportion should be expressed as a percentage.

Step 2:

Confirm the maximum amount that may be awarded under this section for non-economic loss in a most extreme case. This amount is indexed each year under s 17.

Step 3:

Use the Table to determine the percentage of the maximum amount payable in respect of the claim. The amount payable under this section for non-economic loss is then determined by multiplying the maximum amount that may be awarded in a most extreme case by the percentage set out in the Table.

Where the proportion of a most extreme case is greater than 33%, the amount payable will be the same proportion of the maximum amount.

The issue of what constitutes a most extreme case has been considered in a number of decisions arising out of provisions of the Motor Accidents Act that are identical to those now in the Civil Liability Act: Matthews v Dean (1990) 11 MVR 455; Dell v Dalton (1991) 23 NSWLR 528; Kurrie v Azouri (1998) 28 MVR 406. In each case, the courts involved confirmed that the use of the indefinite article “a” allowed for questions of fact and degree to be taken into account in determining whether the severity of injury was such that the maximum sum was to be awarded.

In Dell v Dalton, above, Handley JA said at 533:

In my opinion the definition of non-economic loss and the bench mark in s 79(3) do not enact a statutory table of maims which reduces all human beings to some common denominator and require the impact of particular injuries on a given individual to be ignored.

Another issue that has been dealt with on several occasions is the manner in which damages as a proportion of the maximum are to be assessed. Cautions have been expressed against having regard to the consequences in monetary terms of deciding on a particular percentage, where assessments below 33% may have significant consequences. In Clifton v Lewis [2012] NSWCA 229 Basten JA said at [57]:

It is true that a small variation in the assessment may have significant consequences for the amount of damages to be awarded. In the present case, according to the table provided in s 16 of the Civil Liability Act, a 25% assessment as a proportion of a most extreme case will permit an award of 6.5% of the maximum amount fixed by statute; a 33% assessment will result in 33% of the maximum amount. In rough terms, an increase of one-third in the assessment results in an increase of 500% in the award. However, the fact that a small change in the assessment can have a large consequence in monetary terms does not mean that the nature of the assessment changes or can be assumed to be a more precise exercise than it is. The relationship between the assessment and the consequence is fixed by Parliament. To assess the proportion of a most extreme case by reference to the consequence in monetary terms would be to adopt a legally erroneous course.

Consistent with the Dell approach, a trial judge, assessing the proportion of a most extreme case, is not required to arrive at an unrealistic level of precision provided the percentage falls within a reasonable range of assessment: Berkeley Challenge Pty Ltd v Howarth [2013] NSWCA 370, Basten JA.

The age of a plaintiff may have an effect on the assessment of non-economic loss under the Civil Liability Act. In Reece v Reece (1994) 19 MVR 103, the Court of Appeal remarked upon the need, when assessing, on a proportionate basis, the severity of injury, to consider the age of a plaintiff and the likely length of the period over which the pain and suffering of progressive disability would be suffered. The court held that the consequence of particular injuries were likely to be more severe in the case of a younger person than that of an elderly plaintiff who had a much shorter period of life expectancy.

The requirement to consider the age of the plaintiff was confirmed in Marshall v Clarke (unrep, 5/7/94, NSWCA) and Christalli v Cassar [1994] NSWCA 48 at [3]. In Varga v Galea [2011] NSWCA 76, McColl J noted at [72] that age was only one of numerous matters to be taken into account in assessing non-economic loss by reference to the definition of that term in s 3 Civil Liability Act.

The principles adopted in Reece v Reece and Varga, above, did not apply to claims under the Motor Accidents Compensation Act or the Motor Accident Injuries Act 2017 where damages are not assessed by reference to a proportion of a most extreme case: RACQ Insurance Ltd v Motor Accidents Authority (NSW) (No 2) (2014) 67 MVR 551 per Campbell J.

The court is required to assess the totality of the plaintiff’s injuries rather than assessing each injury on an individual basis: Holbrook v Beresford (2003) 38 MVR 285. However, where the plaintiff suffered injury in multiple accidents, the assessment is to be made by reference to the injuries suffered in each individual accident: Muller v Sanders (1995) 21 MVR 309.

The plaintiff in Alameddine v Glenworth Valley Horse Riding Pty Ltd [2015] NSWCA 219 claimed for damages both under the Civil Liability Act and the Australian Consumer Law. The issue to be determined was whether her claim for non-economic loss should be calculated according to the more generous provisions of s 16 of the Civil Liability Act or in accordance with s 87M of the Competition and Consumer Act 2010. Macfarlan JA, with whom Simpson JA and Campbell AJA agreed, rejected the argument that the Commonwealth legislation prevailed. He said the Competition and Consumer Act did not purport to, nor did it, have the effect of excluding recovery of non-economic loss under the Civil Liability Act notwithstanding that causes of action were available to the plaintiff under both Acts.

The Court of Appeal dealt with the principles to be applied in the assessment of damages for false imprisonment in State of NSW v Smith [2017] NSWCA 194. The court referred to texts and authorities that emphasised that “[e]ven apparently minor deprivations of liberty are viewed seriously by the common law” (see Minister for Immigration and Multicultural and Indigenous Affairs v Al Masri (2003) 128 FCR 54; [2003] FCAFC 70 at [88]). Damages in such a case, therefore, are intended to take account of, in addition to the deprivation of liberty, the shock of the arrest and injury to feelings, dignity and reputation.

[7-0050] Pecuniary losses

This head of damage includes income loss, superannuation losses and out-of-pocket expenses such as voluntary and commercially provided care expenses.

Income loss

The authorities make it clear that damages for lost income, past and present, are awarded for impairment to income-earning capacity when the impairment is productive of income loss: Graham v Baker (1961) 106 CLR 340; Medlin v SGIO (1995) 182 CLR 1. There are therefore three questions to be answered in assessing income.

1. 

What was the plaintiff’s income-earning capacity at the time of injury?

2. 

To what extent was it impaired by the injury?

3. 

To what extent was the impairment productive of income loss?

A very useful summary of the applicable principles, with reference to authority, was provided by McColl JA and Hall J in Kallouf v Middis [2008] NSWCA 61 at [44]–[61].

1. 

Damages for past and future loss of income are allowed because diminution of earning capacity is or may be productive of financial loss: Graham v Baker, above. An alternative way of expressing the principle is that the plaintiff is compensated for the effect of an accident on the plaintiff’s ability to earn income: Medlin v SGIO, above, McHugh J at [16].

2. 

Although the exercise involves assessment of lost earning capacity and not loss of earnings, evidence of wage rates, known for the past and likely in the future, provides a basis for assessment.

3. 

Both the lost capacity and the economic consequences of that loss must be identified before it will be possible to assess the sum that will restore the plaintiff to his or her position but for injury.

4. 

What was earned in the past may be a useful guide to what might be earned in the future but it does not always provide certain guidance.

5. 

Assessment of future income loss necessarily involves the consideration of future possibilities or hypothetical events. The exercise is imprecise and carried out within broad parameters.

6. 

Evaluation of the extent to which a plaintiff may in future lose time from work and of the proper compensation to be allowed depends on the evidence.

7. 

An error of principle would be involved in concluding, in the absence of evidence, as a matter of certainty that a plaintiff will suffer future income loss.

8. 

The onus is on the plaintiff to provide evidence in support of the claimed diminution in earning capacity. Past income is relevant to this consideration but is not always determinative.

9. 

The onus is on the defendant who contends that the plaintiff has a residual earning capacity to provide evidence of the extent of that capacity and of the availability of employment.

10. 

In both cases the evidence must establish more than a mere suggestion of loss or capacity.

11. 

Where it is clear that income-earning capacity has been reduced but its extent is difficult to assess, the absence of precise evidence will not necessarily result in non-recovery of damages. The task is to consider a range of what may be possibilities only that a particular outcome might be achieved to arrive at an award that is fair and reasonable.

Tax treatment of a plaintiff’s income may be relevant to the assessment of his or her income-earning capacity. There are cases where tax returns do not reflect the full amount of that capacity. For example, the case of a husband and wife partnership, where income is divided equally although one partner performs the work necessary to generate the income while the other undertakes the administrative tasks associated with the operation of the business.

Husher v Husher (1999) 197 CLR 138 was an example of such a case. The plurality of the High Court noted:

  • all of the income of the partnership was the result of exploitation of the plaintiff’s earning capacity

  • the partnership continued at will; it was a matter for the plaintiff if he chose to continue it

  • the plaintiff therefore had under his control and at his disposal the whole of the fruits of his skill and labour.

These principles were applied by the Court of Appeal in Conley v Minehan [1999] NSWCA 432.

In Morvatjou v Moradkhani [2013] NSWCA 157, it was said that it was glaringly improbable that the plaintiff earned only the income disclosed in his tax returns at a time when he was supporting himself, his wife and two children. McColl JA referred to reasons of von Doussa J in Giorginis v Kastrati [1988] 49 SASR 371 in which he said that, while such a discrepancy reflected on a plaintiff’s credit so that his or her evidence generally needed to be scrutinised with special care, it did not necessarily disqualify him or her from recovering damages based on evidence of actual earnings. McColl JA did not endorse the proposition that a plaintiff must admit failure to disclose income to tax authorities but she continued the Court of Appeal’s emphasis on the need to assess diminution of income-earning capacity, acknowledging that evidence of actual income was the most useful guide when undertaking this exercise.

Malec v Hutton and Medlin v SGIO, above, were High Court decisions, the result of which was that, where a plaintiff demonstrates some loss of earning capacity extending beyond the date of trial, although difficult to assess, the courts are bound to award something unless, on the material before the court, it can be seen confidently that the damage suffered by the plaintiff will not in fact be productive of income loss.

The task of assessment of future loss, particularly where there is little or no evidence of loss to the date of hearing, was clarified in State of NSW v Moss (2002) 54 NSWLR 536 where the plaintiff’s injuries clearly pointed to an effect on his capacity to earn and there was therefore evidence of impaired earning capacity. Heydon JA said it was wrong to conclude that damages to compensate for this loss should be minimal. He referred at [69] to authorities that he said contained two uncontroversial themes.

1. 

In general it was desirable for precise evidence to be called of pre-injury income and likely post-injury income.

2. 

Absence of that evidence will not necessarily result in an award of no or nominal damages for impaired earning capacity.

His Honour’s summary at [89] was:

In short, where earning capacity has unquestionably been reduced but its extent is difficult to assess, even though no precise evidence of relevant earning rates is tendered, it is not open to the court to abandon the task and the want of evidence does not necessarily result in non-recovery of damages. Statements to the contrary such as those made in Allen v Loadsman [1975] 2 NSWLR 787 at 792 are not correct: Baird v Roberts [1977] 2 NSWLR 389 at 397–8 per Mahoney JA; J K Keally v Jones [1979] 1 NSWLR 723 at 732–735 per Moffitt P; Yammine v Kalwy [1979] 2 NSWLR 151 at 154–5 and 156–7 per Reynolds JA and Mahoney JA; Thiess Properties Pty Ltd v Page (1980) 31 ALR 430; see also Radakovic v R G Cram & Sons Pty Ltd [1975] 2 NSWLR 751 at 761 where Samuels JA criticised the “meagre facts” provided but did not say it was not open to the jury to find a substantial sum for diminished earning capacity by the “application of their own knowledge and experience”. The task of the trier of fact is to form a discretionary judgment by reference to not wholly determinate criteria within fairly wide parameters. Though the trier of fact in arriving at the discretionary judgment must achieve satisfaction that a fair award is being made, since what is involved is not the finding of historical facts on a balance of probabilities, but the assessment of the value of a chance, it is appropriate to take into account a range of possible outcomes even though the likelihood of any particular outcome being achieved may be no more than a real possibility.

In Cupac v Cannone [2015] NSWCA 114 the Court of Appeal noted the extremely difficult task of assessment of income loss facing the trial judge when dealing with wildly differing medical opinion and the failure to call any medical expert for cross examination. The court rejected the contention that the award for past income loss should be increased to take account of inflation from the date of the plaintiff’s injury. This was because the trial judge was required to estimate loss when precise calculation was not possible and the figure arrived at took into account a range of factors, including the changing value of money.

In Jopling v Isaac [2006] NSWCA 299 the Court of Appeal confirmed that, notwithstanding the requirement of s 13(1) Civil Liability Act that the plaintiff’s most likely future circumstances, but for injury, be taken into account, the principles of State of NSW v Moss, above, continued to apply when the evidence was deficient and that the option of awarding a cushion or buffer as compensation for future economic loss remained available. This was confirmed in Black v Young [2015] NSWCA 71, where the court also confirmed the need to address specifically the provisions of Motor Accidents Compensation Act 1999 s 126 to the circumstances of each particular case.

A similar problem arose in Younie v Martini (unrep, 21/3/95, NSWCA) when the plaintiff suffered no income loss to the date of trial. The court held, however, that an assessment that the plaintiff suffered significant impairment to the extent of 18% should have resulted in a finding of impaired income capacity. In this case, given the nature of the plaintiff’s duties as a nursing assistant, having found that the injury continued to the date of trial, some award ought to have been made for future economic loss.

Nevertheless, as pointed out by Young AJA at [111] in Perisher Blue Pty Ltd v Harris [2013] NSWCA 38, there can be no compensation for loss of income-earning capacity unless it is also established that diminished capacity is productive or is likely to be productive of actual loss.

In Sharman v Evans (1977) 138 CLR 563 the High Court dealt with the question of the adjustment to be made to the award for income loss where the plaintiff’s injuries were such that she was not expected to live to retirement age. The court held that she was entitled to recover income loss during the lost years subject to the deduction of an amount to account for the expenses that she would have incurred in self maintenance. No deduction was required for the expense of maintaining dependants.

Wynn v NSW Insurance Ministerial Corporation (1995) 184 CLR 485 set aside any suggestion that a working mother’s income should be reduced to account for expenses of providing childcare or domestic help or for the prospect that she “would at some stage (choose) or (be) forced to accept a less demanding job” because she “would be unable or unwilling to remain in her job which placed such heavy demands on her time, energy and health and the love and patience of her husband”: Dawson, Toohey, Gaudron, Gummow JJ at [9]. They pointed out that it was necessary to call evidence that suggested a plaintiff was less able than any other career-oriented person, whether male or female, to combine successfully a demanding career and family responsibilities. Childcare and domestic-care responsibilities, they said, did not always involve expenditure. This was a matter of choice for the family and the expense involved was of a private or domestic nature.

White v Benjamin [2015] NSWCA 75 also rejected the proposition that a wife’s future income loss should be discounted because her husband’s secure employment in a flourishing business might persuade her to abandon her own career ambitions.

Specific evidence is required if a plaintiff proposes to work beyond retirement age: Roads and Traffic Authority v Cremona [2001] NSWCA 338. In that case the court accepted a general practitioner’s evidence that he would continue to work to the age of 70 years but the assessment of his income loss beyond retirement age was reduced to take account of the likelihood that, as he advanced in age, he would earn less.

A certificate of assessment of whole person impairment issued under Motor Accidents Compensation Act 1999 s 61 is not conclusive in respect of economic loss: Pham v Shui [2006] NSWCA 373, Brown v Lewis (2006) NSWLR 587; [2006] NSWCA 87, Motor Accidents Authority of NSW v Mills (2010) 78 NSWLR 125; [2010] NSWCA 82, El-Mohamad v Celenk [2017] NSWCA 242. While the content of the certificate may have some relevance, extreme caution was required in relying on the content of the certificate in assessing damages for economic loss: Brown v Lewis, above, Mason P at [23].

Vicissitudes

It is an acknowledged principle that life is not always certain and that unpredictable events can affect future income. These events or vicissitudes are dealt with by of the application of a discount to the sum assessed as compensation for future income losses.

In State of NSW v Moss, above, Mason P at [33], referring to Wynn v NSW Insurance Ministerial Corporation, above, at 497, said that the negative consequences or vicissitudes that are normally taken into account are sickness, accident, unemployment and industrial disputes.

In Norris v Blake (No 2) (1997) 41 NSWLR 49 Clarke JA confirmed that it was in order to add a sum against the positive contingency of success or income-earning capacity beyond pension age.

The generally accepted discount is 15%, although this figure may be varied to take account of particular circumstances. For instance, where the plaintiff is of advanced age with a relatively short period over which the assessment of future income loss is to be made, the percentage applied for vicissitudes may be reduced. It is more common, however, that the percentage is increased, particularly where there is evidence of a pre-existing condition, unrelated to the injury that is the subject of the claim, that is likely to affect the plaintiff’s capacity to continue to earn income: Berkley Challenge Pty Ltd v Howarth [2013] NSWCA 370.

In Taupau v HVAC Constructions (Qld) Pty Ltd [2012] NSWCA 293, Beazley JA at [190]–[192] said that the plaintiff’s past record of imprisonment should not have altered the principles on which his past and future income loss was assessed in any way differently from the principles applied to law abiding members of the community. However, it would have been appropriate to take the plaintiff’s propensity to crime and imprisonment into account by way of the discount for vicissitudes.

Care should be exercised to avoid double counting. In Smith v Alone [2017] NSWCA 287, the plaintiff’s pre-accident income had been limited by his pre-existing alcohol dependency. The trial judge took account of this factor in assessing the sum to be awarded for income loss and further decreased the award by 35% for vicissitudes. Macfarlan JA, with whom Meagher and White JJA agreed, said at [58]:

Both parties accepted that the usual discount to damages for future economic loss that is made for contingencies or “vicissitudes” is 15%. As the plurality said in Wynn v NSW Insurance Ministerial Corporation (1995) 184 CLR 485 at 497; [1995] HCA 53, this discount is to “take account of matters which might otherwise adversely affect earning capacity” and “death apart, ‘sickness, accident, unemployment and industrial disputes are the four major contingencies which expose employees to the risk of the loss of income’” (ibid, citing Harold Luntz, Assessment of Damages for Personal Injury and Death, (3rd ed 1990, Butterworths) at 285).

In re-assessing the deduction at 25%, Macfarlan JA at [63] said:

After all, the average person can hardly be regarded as a paragon of virtue when it comes to heavy drinking.

Statutory provisions

The Workers Compensation Act places stringent limits on the recovery of common law damages from an employer, except where the claim is the result of a motor accident. Section 151G disallows any award of common law damages except that which arises out of past and future losses from impairment to income-earning capacity. In order to qualify for any right to claim, the plaintiff must have been assessed with a degree of permanent impairment of at least 15%: s 151H.

Any amount by which the plaintiff’s net weekly earnings exceed or are likely to exceed the amount of gross weekly compensation payments payable under s 34 of the Act is to be disregarded: s 151I. Damages are payable only to pension age as defined by the Social Security Act 1991: s 151IA.

No damages for pure mental harm, or nervous shock, may be claimed where the injury was not a work injury: s 151AD. This provision disallows any claim for nervous shock by, for instance, a relative of an injured worker.

Damages are not to be reduced on account of contributory negligence to the extent that the amount awarded is less than the court’s estimate of the value of the plaintiff’s entitlements by way of commutation of weekly payments of compensation: s 151N.

The defence of voluntary assumption of risk is not available to a claim under the Act but damages are to be adjusted to take account of the plaintiff’s negligence: s 151O.

The Civil Liability Act limits an award of damages for past or future income loss by providing that the court must disregard any amount by which the plaintiff’s gross weekly earnings exceed average weekly total earnings of all employees in NSW in the most recent quarter prior to the date of the award as published by the Australian Statistician: s 12.

In respect of future income loss, s 13 requires a plaintiff to establish assumptions about earning capacity that accord with his or her most likely future circumstances but for the injury. The calculation based on those assumptions must be discounted against the possibility that those circumstances might not eventuate. The court is required to state the assumptions on which the award is based and the percentage by which it has been adjusted. The same provision appears in s 126 Motor Accidents Compensation Act.

In Coles Supermarkets Australia Pty Ltd v Fardous [2015] NSWCA 82 Macfarlan JA said that the requirements of s 13 of the Civil Liability Act were in accordance with the principles established in Purkess v Crittenden (1965) 114 CLR 164 and Morvatjou v Moradkhani [2013] NSWCA 157, namely that a plaintiff at all times bears the onus of proof of the extent of injury and of consequential loss of income-earning capacity. They accorded also with the two-stage process of assessment described in Malec v J C Hutton Pty Ltd (1990) 169 CLR 638 that required a plaintiff to establish his or her theoretical earning capacity but for injury and the extent to which that earning capacity would, but for injury, have been productive of income.

Notwithstanding these requirements, common law principles relating to the assessment of income loss, vicissitudes or contingencies continue to apply: Taupau v HVAC Constructions (Qld) Pty Ltd, above, where Beazley JA said ss 12 and 13 made no change to the common law principles, established in Graham v Baker and Medlin v SGIO, that damages for economic loss, past and future, are awarded for impairment to economic capacity resulting from the injury, provided the impairment is productive of income loss.

The Motor Accidents Compensation Act provides in s 125 for a limit on the weekly amount that may be awarded for income losses. The amount of the cap is indexed annually with effect from 1 October in each year. Section 130 requires the court to deduct from payments on account of income loss expenses paid to the plaintiff under the Victims Compensation Act 1996 (repealed, now Victims Rights and Support Act 2013) or by the insurer or Nominal Defendant.

As to the Motor Accident Injuries Act 2017, see [7-0085] under the subheading Economic loss.

The problems presented to a court in meeting the requirements of s 13 Civil Liability Act have been the subject of judicial comment in many decisions. In MacArthur Districts Motor Cycle Sportsmen Inc v Ardizzone [2004] NSWCA 145, Hodgson J noted that s 13 appeared to make no provision for the contingency that a plaintiff’s income might increase significantly. He said it was doubtful that the court could make allowance as in Norris v Blake (No 2), above, for the prospect of superstardom.

Hodgson J also expressed doubt about the power to award a lump sum or buffer when assessing income loss under s 13. This concern was put to rest in Dunbar v Brown [2004] NSWCA 103 where the court held that a buffer could be allowed to account for absences from work from time to time to allow for periods of respite or treatment. This principle has been applied in a number of subsequent decisions, including Allianz Australia Insurance Ltd v Kerr (2012) 83 NSWLR 302 where McColl JA said at [30]:

there is a point (which may be differently assessed by different courts) beyond which the selection of a figure for economic loss is so fraught with uncertainty that the preferred course is to award a lump sum as a “buffer”, without engaging in an artificial exercise of commencing with a precise figure, and reducing it by a precise percentage.

Each statute provides for the net present value of any lump sums paid on account of future income loss to be discounted at a prescribed rate, currently 5%: Workers Compensation Act, s 151J; Civil Liability Act, s 14; Motor Accidents Compensation Act, s 127.

Superannuation

The maximum recoverable for the loss of employer contributed superannuation is that required by law to be paid by the employer: Civil Liability Act, s 15C.

In general terms, where a claimant is injured during their working life, what is awarded in relation to superannuation benefits is the net present value of the court’s best estimate of the fund that the claimant would have had at the date of retirement but for the injury; namely, a fund which would have generated the “lost” superannuation benefits. The capital asset that is being valued (because it is lost) is the present value of the future rights: Amaca Pty Ltd v Latz (2018) 92 ALJR 579 at [97] applying Zorom Enterprises Pty Ltd v Zabow (2007) 71 NSWLR 354 at [54], [59], [66]–[67]. The loss suffered is the diminution in value of the asset: Amaca Pty Ltd v Latz at [97].

In Amaca Pty Ltd v Latz, the respondent, who had retired, was in receipt of a superannuation pension and the Commonwealth age pension when diagnosed with terminal malignant mesothelioma. The Full Court of the Supreme Court of South Australia held the value of both pensions were compensable losses, but reduced the award to take into account a reversionary pension payable to his partner after death under the Superannuation Act 1988 (SA), s 38(1)(a). The High Court by majority held that the Full Court was correct to include in the damages award an allowance for the superannuation pension that he would have received for the remainder of his pre-illness life expectancy, less the reversionary pension. The majority held that that his superannuation benefits are a “capital asset”, which has a present value, and which can be quantified: at [101]. As a result of the respondent’s injury caused by the appellant, he would suffer an economic loss in respect of his superannuation pension, which is a capital asset and intrinsically connected to earning capacity. That loss was both certain and measurable by reference to the terms of the Superannuation Act — the net present value of the superannuation pension for the remainder of his pre-illness life expectancy, a further 16 years, and he should be entitled to recover that loss: at [109]. The age pension however is neither a part of remuneration, nor a capital asset. It is not a result of, or intrinsically connected to, a person’s capacity to earn and no sum should be allowed on account of the age pension in the calculation of damages for the respondent’s personal injuries: at [115].

In Nadjdovski v Cinojlovic (2008) 72 NSWLR 728 the court, by majority, confirmed the adopted practice of awarding 9% if the calculation is based on a gross earning figure or 11% if calculated on earning, net of tax.

The Fox v Wood component

This element of income loss arises in situations where a plaintiff has received weekly payments for loss of income under the workers compensation legislation upon which tax has been paid. The plaintiff when recovering common law damages is required to repay to the workers compensation insurer the gross amount of weekly payments received. The tax paid on those weekly payment was held to be recoverable in Fox v Wood (1981) 148 CLR 438 at 441.

[7-0060] Out-of-pocket expenses

Medical care and aids

Out-of-pocket expenses incurred by a plaintiff are recoverable to the extent that they are:

  • reasonably incurred, and

  • expended in the treatment of injuries arising out of the accident that is the basis for the claim.

In many cases where liability is not in issue, the insurer will pay for or reimburse out-of-pocket expenses that meet these requirements. Section 83 Motor Accidents Compensation Act obliges an insurer, when liability is admitted in whole or in part, to meet the plaintiff’s reasonable expenses of medical care, rehabilitation and certain respite and attendant care services. Payment of these expenses is commonly raised as a defence to a claim.

In general, claims for out-of-pocket expenses centre on needs for treatment, past and future, rehabilitation and aids to assist a plaintiff in overcoming disability arising from injury. As with income loss, in determining the amount to be awarded, it is often necessary to take account of future requirements for treatment, particularly in the case of orthopaedic injuries that may involve ongoing degeneration and the need for surgery for fusion or replacement of joints.

The assessment for future needs involves consideration of the following:

  • has the requirement been established as a probability?

  • when is the expense likely to be incurred?

  • the extent to which treatment will affect income-earning capacity, so that loss of income may have to be taken into account

  • in a plaintiff of relative youth, the extent to which surgery may need to be repeated.

Aids to assist in overcoming disability include items such as artificial limbs, crutches, wheelchairs and special footwear as well as the costs of providing or modifying accommodation to meet the plaintiff’s needs. In addition, allowance may be made for the cost of providing special beds, tools or equipment designed to assist an impaired plaintiff in the functions of everyday living.

Section 3 Motor Accidents Compensation Act includes in the definition of “injury” damage to artificial members, eyes or teeth, crutches and other aids or spectacle glasses. Thus, the cost of repair or replacement of these items is compensable. Other items held to be compensable include clothing damaged in the course of the accident or treatment.

As to the Motor Accident Injuries Act 2017, see [7-0085].

The fact that the treatment fails or is ineffective does not preclude recovery (Lamb v Winston (No 1) [1962] QWN 18) but the cost of experimental treatment that offers no cure will not be recoverable. Neal v CSR Ltd (1990) ATR ¶81-052 held that the cost of a treatment that remained at trial stage was disallowed.

The issue of whether an expense could be regarded as reasonable was discussed in Egan v Mangarelli [2013] NSWCA 413. The plaintiff claimed the considerable cost of a C-leg prosthesis, a specialised computerised device. He explained that he did not, prior to trial, use his conventional prosthesis regularly or for extended periods because it caused him pain. The cost of the C-leg prosthesis was held to be reasonable because, properly fitted, it would reduce the plaintiff’s pain, lead to greater use and improve his mobility.

McKenzie v Wood [2015] NSWCA 142 dealt with the issue of whether the plaintiff should recover the cost of a hip replacement. The evidence established that prior to his accident, the plaintiff suffered from symptoms of osteoarthritis and it was inevitable that he would at some stage require hip replacement that could have been undertaken in a public hospital at no expense to him. The Court of Appeal accepted that the replacement that would have been required as a result of the pre-accident progressive condition was unlikely to involve the urgent intervention necessitated by the injury suffered in the accident. Accordingly the plaintiff was entitled to recover the cost.

The capital costs of modifications to accommodation to meet the needs of a disabled plaintiff are recognised as recoverable out-of-pocket expenses and no allowance is to be made for the increase in the capital value of a property modified for that purpose: Marsland v Andjelic (1993) 31 NSWLR 162. In most cases, the cost of the basic accommodation itself is not recoverable. In Weideck v Williams [1991] NSWCA 346, the court said this was not a strict rule and that, in accordance with the principles of Todorvic v Waller (1981) 150 CLR 402, each case was to be decided on its facts. In Weideck, the injured plaintiff could no longer live in the caravan he occupied prior to his injury. He was allowed the full capital costs of modifications required to deal with his disability. In addition, he was allowed the costs of land and a basic house, heavily discounted to set off the rent he otherwise would have continued to pay and the income that ordinarily would have been diverted to the provision of a capital asset, such as a house.

The majority in the High Court in Cattanach v Melchior (2003) 215 CLR 1 awarded damages for the cost of raising and maintaining a child born as the result of medical negligence. The right to damages of this nature has since been withdrawn by s 71(1) Civil Liability Act, except where the child suffers from a disability. In such circumstances, the additional costs of rearing and maintaining the child are recoverable.

Attendant care

There are two varieties of attendant care: those that are provided by friends or family on a gratuitous basis and those that are commercially provided and paid for. As with all heads of damage, a plaintiff may recover compensation for the loss of capacity for self and domestic care only if the need for the care arises out of injuries suffered as a result of the defendant’s negligence and provided that the amount claimed is reasonable.

The issue that has been most productive of judicial and legislative scrutiny is that arising out of claims for services provided on a gratuitous basis.

The High Court in Griffiths v Kerkemeyer (1977) 139 CLR 161 dealt with the issue of whether a plaintiff could be said to have suffered a compensable loss when her attendant care needs of a domestic and nursing nature were met by an unpaid third party and to whom she owed no obligation of payment. The argument was that the loss was in truth suffered by the person who provided the services. Gibbs CJ at [12], discarding prior authority, said that damages for gratuitously provided services were payable if three conditions were met.

1. 

It was reasonably necessary to provide the services.

2. 

It would be reasonably necessary to do so at a cost.

3. 

The character of the benefit that the plaintiff received by the gratuitous provision of services was such that it ought to be brought to the account of the wrongdoer.

Mason J at [30] set out the principle upon which compensation was payable to the plaintiff rather than the volunteer as follows:

The respondent’s relevant loss is his incapacity to look after himself as demonstrated by the need for nursing services and this loss is to be quantified by reference to the value or cost of providing those services. The fact that a relative or stranger to the proceedings is or may be prepared to provide the services gratuitously is not a circumstance which accrues to the advantage of the appellant. If a relative or stranger moved by charity or goodwill towards the respondent does him a favour as a disabled person then it is only right that the respondent should reap the benefit rather than the wrongdoer whose negligence has occasioned the need for the nursing service to be provided.

The issue in Van Gervan v Fenton (1992) 175 CLR 327 was the basis upon which this element of compensation was to be valued. In a majority decision, the High Court rejected the argument that the plaintiff’s loss of capacity was to be valued by reference to the income lost by the person providing gratuitous services. Mason CJ, Toohey and McHugh JJ said at [16] that the true basis of a claim was the need of the plaintiff for gratuitous services and the plaintiff did not have to establish that the need was or might be productive of income loss. The value of the plaintiff’s loss, they said, was the ordinary market cost of providing the services.

Kars v Kars (1996) 187 CLR 354, where the defendant was the plaintiff’s husband and provided attendant care services, involved the argument that the defendant thereby met his obligations as a tortfeasor and no further compensation could be recovered. In rejecting the argument, the High Court confirmed that Griffiths v Kerkemeyer principles are directed at the loss of capacity suffered by a plaintiff and that, although the resulting need for care is quantified by reference to what the care provider does, the focus remains on the plaintiff’s needs.

Justices Toohey, McHugh, Gummow and Kirby said:

The plaintiff might, or might not, reimburse the provider. According to the repeated authority of this Court, contractual or other legal liability apart, whether the plaintiff actually reimburses the provider is entirely a matter between the injured plaintiff and the provider.

The starting point to explain our conclusion is a clear recollection of the principle that the Court is not concerned, as such, to quantify a plaintiff’s loss or even to explore the moral or legal obligations to a care provider. It is, as has been repeatedly stated, to provide the injured plaintiff with damages as compensation for his or her need, as established by the evidence. The fact that a defendant fulfils the function of providing services does not, as such, decrease in the slightest the plaintiff’s need.

In CSR v Eddy (2005) 226 CLR 1, the High Court noted at [26] that the Griffiths v Kerkemeyer principles were anomalous and controversial. The anomaly arose from the departure from the general rule that damages, other than damages for loss not measurable in money, were not recoverable unless the injury involved resulted in actual financial loss. The controversy arose because the result could be disproportionately large awards when compared to sums payable under traditional heads of damage.

These principles were confirmed in Hornsby Shire Council v Viscardi [2015] NSWCA 417 and Smith v Alone [2017] NSWCA 287. In Smith Macfarlan JA at [75]–[77] referred to authority that supported the proposition that consideration must be given to a plaintiff’s family circumstances in deciding whether the provider of gratuitous care will continue to do so in the future. He also accepted that in appropriate circumstances a deduction for vicissitudes might be appropriate when assessing a claim for attendant care costs.

Legislative provisions

The legislation that attempts to address the concerns expressed by the High Court appears in ss 15, 15A and 15B Civil Liability Act at and in ss 141B, 141C and 142 Motor Accidents Compensation Act. There are some substantial differences between these provisions. The Civil Liability Act sets out in s 15(1) definitions of attendant care services and gratuitous attendant care services and, in s 15(2) specifies the conditions to be satisfied to qualify for compensation, namely: a reasonable need for the services, a need created solely because of the injury to which the damages relate, and services that would not be provided but for the injury.

Both statutes impose a threshold on the recovery of damages that requires that not less than six hours per week be provided for a period of at least six consecutive months: s 15(3) Civil Liability Act; s 141B(3) Motor Accidents Compensation Act. In each case the maximum amount recoverable is set, where services are provided for more than 40 hours per week at the weekly sum that is the Australian Statistician’s estimate of the average weekly total earnings of all employees in NSW, and where the weekly requirement is less than 40 hours, at the hourly rate that is one-fortieth of this figure: s 15(4) Civil Liability Act, s 141B(4) Motor Accidents Compensation Act.

As to the Motor Accident Injuries Act 2017, see [7-0085].

In Hill v Forrester (2010) 79 NSWLR 470, the Court of Appeal confirmed that both requirements of s 15(3), as amended following the decision in Harrison v Melham (2008) 72 NSWLR 380, must be met in order to qualify for compensation. The issue in Hill v Forrester was whether the right to compensation applied to services provided before the threshold of six hours per week of care over a period of six consecutive months was met. Sackville AJA held that only one six-month qualifying period was involved and it was not a continuing requirement. The result was that compensation was payable for services provided both before and after the threshold requirements were met.

The Civil Liability Act contains no equivalent provision to s 141C Motor Accidents Compensation Act where specific provision is made for the cost of reasonable and necessary respite care for a seriously injured plaintiff who is in need of constant care. It is probable however that these services would be covered within the definitions of attendant care services in s 15(1).

As to services that would have been provided in any event, the High Court in Van Gervan v Fenton, above, recognised that in the ordinary course of a marriage there is an element of give and take in the provision of mutually beneficial services. Deane and Dawson JJ at [4] said:

The qualification is that such services will be taken out of the area of the ordinary give-and-take of marriage to the extent that the injuries to the wife or husband preclude her or him from providing any countervailing services. To that extent, the continuing gratuitous services provided by the spouse assume a different character and should be treated as additional services which have been or will be provided by that spouse to look after the accident-caused needs of the injured plaintiff.

Ipp JA in Teuma v CP & PK Judd Pty Ltd [2007] NSWCA 166 at [64] noted that this part of the minority judgment supported the majority in Van Gervan to the effect that no reduction should be made to attendant care damages to take account of the mutual obligations of family life.

White v Benjamin [2015] NSWCA 75 involved issues of the extent to which the time required to meet the need for attendant services could be determined separately from the needs of a household as a whole. The principle accepted by both Beazley ACJ and Basten JA was that where the elements of the claim were severable as between a plaintiff and those who also benefit from those services, no aspects of those services may be commingled for the purpose of determining whether the thresholds of six hours per week for a continuous period of six months have been met. Where those elements are not severable, the element of mutuality referred to in Van Gervan v Fenton, CSR v Eddy, above, Hodges v Frost (1984) 53 ALR 373 and Coles Supermarkets Australia Pty Ltd v Haleluka [2012] NSWCA 343, applied so that the commingled needs of a plaintiff remained the plaintiff’s needs even if they were of mutual benefit.

Basten JA pointed out that s 15 of the Civil Liability Act did not apply to claims made under the Motor Accidents Compensation Act where they were dealt with in s 141B which did not mirror exactly the provisions of s 15. However, s 15B of the Civil Liability Act applied to motor accident claims so that it was necessary to distinguish between damages awarded for the plaintiff’s personal loss and those awarded for the loss of capacity to provide services to dependents and to apply the six hour/six month thresholds separately to each claim.

Nor is it permissible to aggregate the needs created by successive breaches of duty, for example, where those needs are generated by successive accidents, in order to meet the threshold requirements of the legislation: Muller v Sanders (1995) 21 MVR 309; Falco v Aiyaz [2015] NSWCA 202.

The question of whether the need for services was generated solely by the relevant injury was dealt with in Woolworths Ltd v Lawlor [2004] NSWCA 209 where it was argued that the plaintiff had a pre-existing asymptomatic degenerative condition that might at some later stage produce symptoms and generate the need for services. Thus, it was argued, the need for services did not arise solely out of the aggravation of the condition for which the defendant was responsible. Beazley JA, although she said the section was not without difficulty, preferred a construction that was based on the definition of injury. This included impairment of a person’s physical or mental condition so that gratuitous services provided solely as a result of such an injury, although an aggravation, were compensable. The same approach to this requirement was taken in Basha v Vocational Capacity Centre Pty Ltd [2009] NSWCA 409; Angel v Hawkesbury City Council [2008] NSWCA 130 and Westfield Shoppingtown Liverpool v Jevtich [2008] NSWCA 139.

Daly v Thiering (2013) 249 CLR 381 dealt with the issue of whether the plaintiff, a participant in the scheme established by the Motor Accidents (Lifetime Care and Support) Act 2006, was entitled to compensation for the gratuitous services provided by his mother. The plaintiff’s mother agreed with the Lifetime Care and Support Authority to provide domestic services for the plaintiff without pay. Although recovery of damages for gratuitously provided services is regarded as compensation for the plaintiff’s loss of capacity, the High Court held that the claim was for economic loss and was precluded by s 130A Motor Accidents Compensation Act (now repealed) for so long as the services were provided for under the scheme. It was irrelevant that the services provided by the plaintiff’s mother without expense might result in a windfall to the Authority.

Commercially provided services

Where care is not provided on a gratuitous basis, the reasonable cost of reasonably required commercially provided services is recoverable both for the past and future: Matcham v Lyons [2004] NSWCA 384. The issue of what was reasonable was dealt with in Dang v Chea [2013] NSWCA 80, where Garling J dealt with competing arguments concerning the services to be provided to the plaintiff who required 24-hour care. There was a considerable difference between the cost of 24-hour care in a rented apartment, as claimed by the plaintiff, and the cost of nursing-home care that the defendant argued would meet her reasonable requirements. Garling J rejected the plaintiff’s contention after consideration of authority, including:

1. 

The test established by Barwick CJ in Arthur Robinson (Grafton) Pty Ltd v Carter (1968) 122 CLR 649 that the aim of an award of damages was not to meet the ideal requirements for an injured plaintiff but rather his or her reasonable requirements.

2. 

The following extract from the reasons of Windeyer J in Chulcough v Holley (1968) 41 ALJR 336 at 338:

A plaintiff is only entitled to be recouped for such reasonable expenses as will reasonably be incurred as a result of the accident. What these are must depend upon all the circumstances of the case — including the particular plaintiff’s way of life, prospects in life, family circumstances and so forth. It does not follow that every expenditure which might be advantageous for a plaintiff as an alleviation of his or her situation or which could give him or her happiness or satisfaction must be provided for by the tortfeasor.

3. 

The following extract from the reasons of Gibbs and Stephen JJ at 573 in Sharman v Evans (1977) 138 CLR 563:

The touchstone of reasonableness in the case of the cost of providing nursing and medical care for the plaintiff in the future is, no doubt, cost matched against health benefits to the plaintiff. If cost is very great and benefits to health slight or speculative the cost-involving treatment will clearly be unreasonable, the more so if there is available an alternative and relatively inexpensive mode of treatment, affording equal or only slightly lesser benefits. When the factors are more evenly balanced no intuitive answer presents itself and the real difficulty of attempting to weigh against each other two incomparables, financial cost against relative health benefits to the plaintiff, becomes manifest.

Accepting that the need for care was demonstrated because, although the plaintiff continued to perform domestic tasks, he did so with difficulty, the court in Berkeley Challenge Pty Ltd v Howarth [2013] NSWCA 370 also accepted that his needs should be assessed on the basis that commercial services would be required after the plaintiff’s family would no longer be available to care for him gratuitously. Tobias AJA rejected the argument, as without legal basis, that the court must be satisfied that the amount awarded would actually be spent. It was contrary to the authority of Todorovic v Waller (1981) CLR 402 at 412 that the court has no concern as to the manner in which a plaintiff uses the amount awarded.

In Perisher Blue Pty Ltd v Nair-Smith (2015) 320 ALR 235 the Court of Appeal accepted that the plaintiff was entitled to recover damages for the cost of commercially provided services at the established market rate rather than at the lower rate she paid for domestic assistance at the time of trial. The court continued its practice of preferring the commercial rate on the basis that it was not known how much longer the current service provider would continue to work at the lower rate.

Loss of capacity to care for others

In Sullivan v Gordon (1999) 47 NSWLR 319, the Court of Appeal held that the injured plaintiff was entitled to compensation for the lost capacity to care for a child on the same basis as that established in Griffiths v Kerkemeyer. This approach was set aside by the High Court in CSR v Eddy (2005) 226 CLR 1. The court reinstated the principles of Burnicle v Cutelli (1982) 2 NSWLR 26 that damages for loss of capacity to care for family members was compensable but as a component of general damages and not on Griffiths v Kerkemeyer principles.

Damages for the loss of capacity to provide domestic services are now dealt with in s 15B Civil Liability Act, a provision that applies also to claims brought under the Motor Accidents Compensation Act, unless the care needs have been met through the Motor Accidents (Lifetime Care and Support) Act or payments made by the insurer under s 83 Motor Accidents Compensation Act: s 15B(8), (9).

The section provides definitions of assisted care and dependants and in s 15B(2) lists four preconditions to the award of damages:

(a)

in the case of any dependants of the claimant of the kind referred to in paragraph (a) of the definition of “dependants” in subsection (1) — the claimant provided the services to those dependants before the time that the liability in respect of which the claim is made arose, and

(b)

the claimant’s dependants were not (or will not be) capable of performing the services themselves by reason of their age or physical or mental incapacity, and

(c)

there is a reasonable expectation that, but for the injury to which the damages relate, the claimant would have provided the services to the claimant’s dependants:

(i)

for at least 6 hours per week, and

(ii)

for a period of at least 6 consecutive months, and

(d)

there will be a need for the services to be provided for those hours per week and that consecutive period of time and that need is reasonable in all the circumstances.

These requirements received scrutiny in State of NSW v Perez (2013) 84 NSWLR 570. Recognising the ambiguities of s 15B(2)(b), Basten JA said that the activities of a plaintiff prior to the date at which the liability arose set the upper limit of what can be claimed, provided the other requirements of the section are met. On the question of what was reasonable in all the circumstances (s 15B(2)(d)), he said the qualification did not apply to the word “need” in isolation. It qualified and required that a need for six hours of care per week for six consecutive months be reasonable. It was therefore necessary to consider the particular needs of the dependants involved.

Macfarlan JA at [39] said it was irrelevant that other family members took over the role of providing care because that care would always have to be provided by some alternative means. The right to damages addressed the needs of the dependants that would, but for injury, have been satisfied by the claimant and the question of whether those needs were reasonable in the circumstances.

The thresholds of six hours per week for six consecutive months apply and damages are quantified by reference to the limits imposed by s 15(5). The balance of s 15B is directed at avoiding duplication in the award of compensation so that:

1. 

If damages are awarded under the section, the assessment of non-economic loss must not include an element to compensate for loss of capacity to provide services to others: s 15B(5).

2. 

Damages are not recoverable:

  • by the plaintiff, if the dependant has previously received compensation for the loss of capacity for self-care: s 15B(6), or

  • by a dependant for loss of capacity for self-care, if a plaintiff has previously recovered compensation for loss of capacity to provide those services: s 15B(7)

  • to the extent that gratuitous attendant care services, for which the plaintiff is compensated under s 15, also extend to the care of dependants: s 15B(10).

3. 

A plaintiff who participates in the Motor Accidents (Lifetime Care and Support) Scheme cannot recover under s 15B if services provided under the scheme include those provided to dependants: s 15B(8).

4. 

In respect of a claim under the Motor Accidents Compensation Act, the plaintiff may not recover if payments in respect of services to dependants are made under s 83 of that Act: s 15B(9).

5. 

Other matters to be taken into account in the assessment of compensation are: the extent of the plaintiff’s pre-injury capacity to provide services to dependants; the extent to which services provided pre-injury also benefited non-dependants; and vicissitudes: s 15B(11).

In Amaca Pty Ltd v Novek [2009] NSWCA 50, the plaintiff lived with her daughter and partner and cared for their two children while they worked. The defendant challenged the claim that the children were the plaintiff’s dependants, arguing that the parents had partially delegated to her some of the moral and legal obligations for their care. Campbell JA, after reference to extensive authority dealing with the many aspects of dependency, said that the nature and extent of the care provided by the claimant to the children were such that a finding of dependence was open. On the same basis, he rejected the claim that the services were in fact provided to the parents and not to the children. Rejecting the claim that it was not reasonable nor within the intention of the legislation to compensate parents for the expense of providing childcare, Campbell JA said it was not clear that Parliament did not have this intention.

Liverpool City Council v Laskar (2010) 77 NSWLR 666 dealt with the situation where, prior to his injury, the plaintiff and his wife provided services in the nature of therapy for his profoundly disabled daughter. The defendant argued that these services were not services of a domestic nature so that they were not compensable. The defendant contrasted the definitions “attendant care services” contained in s 15 Civil Liability Act with the term “domestic services” appearing in the heading to s 15B. Whealy J rejected this argument. He said ss 15 and 15B addressed different objectives. Section 15B was directed, not at the care needs of an injured party, but the loss of capacity of a plaintiff to attend to the needs of dependants. Those needs, he said, should not be subjected to a restricted or narrow interpretation, they extended beyond cooking and cleaning to incorporate the very considerable personal care needs of young children and, as in this case, the needs of the plaintiff’s daughter.

In contrast to ss 15, 15B does not cap the number of hours for which compensation may be provided. It caps only the hourly rate by which compensation is to be assessed. The plaintiff in Amaca Pty Ltd v Phillips [2014] NSWCA 249 provided 18 hours per day of care for his wife, who was suffering from dementia. Following his diagnosis with mesothelioma, he lost the capacity to provide this care, and his wife was admitted to a nursing home. The Court of Appeal upheld the award of compensation for 18 hours per day at the statutory hourly rate, rejecting the defendant’s claim that the lesser cost of nursing home care should be adopted as the measure of damage and pointing out that compensation was awarded for the plaintiff’s loss of capacity to provide services, not the value of those services to the recipient. Ward JA, delivering the judgment of the court, said the partial reinstatement of Sullivan v Gordon damages created a new statutory entitlement that did not require the plaintiff’s loss of capacity to be measured by reference to the cost of providing alternative services, nor did it require account to be taken of how the plaintiff would spend the damages recovered in accordance with that entitlement.

The six hour/six month threshold must be separately assessed in respect of both the claim for the plaintiff’s personal loss of capacity and to the claim of lost capacity to care for others: White v Benjamin [2015] NSWCA 75.

[7-0070] Compensation to relatives

The Compensation to Relatives Act provides for actions to be brought on behalf of dependants of deceased victims of compensable injury to recover for loss of financial support and funeral expenses. Only one such action may be brought so that all potential beneficiaries should be nominated as plaintiffs. Insurance, superannuation, payments from provident funds or statutory benefits are not to be taken into account in assessing an award of compensation: s 3(3). The definition of dependants appears in s 4.

De Sales v Ingrilli (2002) 212 CLR 338 involved the very similar provisions of the Fatal Accidents Act 1959 (WA) and concerned the extent to which a widow’s prospects of remarriage were to be taken into account in the assessment of compensation. Although unanimously recognising changing social circumstances that cast doubt on prior authority, the High Court was divided on the issue. The majority, Gaudron, Gummow, Hayne JJ and Kirby J decided that the prospect of remarriage should not be considered separately from the general, and similarly unpredictable, vicissitudes of life unless at the time of the trial there was evidence of an established new relationship. Kirby J referred to the uncertainty, distaste, cause of humiliation and judicial inconsistency likely to arise in determining the claimant’s prospects of remarriage.

Gleeson CJ, McHugh and Callinan JJ said that the prospects of remarriage should be taken into account. Gleeson CJ accepted that this contingency should be dealt with when determining an appropriate adjustment for vicissitudes. He questioned the continued use of the term dependency to describe the right to compensation when, in modern society, it was common for both parties to a relationship to earn income and to have the capacity for financial self-support. He accepted, however, that each party to the relationship might have expectations of direct financial support. He also said that all elements involved in the calculation of compensation involved some speculation, including the benefits the deceased would be expected to bring to the family, the share that might be enjoyed by each dependent during the deceased’s lifetime and the period of support reasonably expected by each claimant. Allowances for contingencies, he said, might take into account the deceased’s health or evidence of a failing marriage.

McHugh J thought that failing to take into account the prospects of remarriage presented a danger of providing a windfall to the surviving spouse. He pointed to the anomaly involved in taking into account an established new relationship at the time of trial while making no allowance for repartnering when there was none.

In Taylor v Owners – SP No 11564 (2014) 306 ALR 547, the High Court rejected the claim that the loss of financial support occasioned by the death of the principal income earner should be limited by the cap provided for in s 12(2) Civil Liability Act. They pointed out that s 125(2) Motor Accidents Compensation Act and the Workers Compensation Act referred to the deceased person’s earnings and the deceased worker’s earnings, terms that were not used in the Civil Liability Act and therefore could not be read into that Act.

The Court of Appeal, in Norris v Routley [2016] NSWCA 367, considered the question of an adjustment of the personal consumption figures set out in Table 9.1 “Percentage of dependency of surviving parent and children” in H Luntz, Assessment of Damages for Personal Injury and Death, 4th edn, Butterworths, Sydney, 2002, at [9.3.3] on the basis that the appellant’s deceased husband lived frugally. Having reviewed the principles involved the court concluded that there was no legal rule that prescribed the way in which the proportion of the deceased’s consumption of the household income was to be proved. This was a factor to be proved in the usual way and there was no special legal or evidentiary status attaching to the Luntz tables.

[7-0080] Servitium

The cause of action actio per quod servitium amisit was abolished in claims arising out of motor accidents by s 142 Motor Accidents Compensation Act. The Civil Liability Act makes no reference to actions of this nature. The question of whether, nevertheless, the Act applied to claims of this nature was considered by Howie J in Chaina v The Presbyterian Church (NSW) Property Trust (2007) 69 NSWLR 533. He held that the limits on recovery of lost income provided for in s 12 did not apply.

The High Court was asked, in Barclay v Penberthy (2012) 246 CLR 258, to consider whether the per quod claims had been absorbed into the law of negligence and no longer existed as separate causes of action. They answered in the negative, the plurality pointing out:

1. 

The action was available when:

  • the injury to an employee was wrongful, that is when injury was inflicted intentionally or through a breach of the duty of care to the employee, not to the employer, and

  • the result was that the employer was deprived of the services of the employee.

2. 

It was not an exception or variation to the law of negligence but remained a distinct cause of action.

See also Chaina v Presbyterian Church (NSW) Property Trust (No 25) [2014] NSWSC 518 Davies J at [623]–[632].

On the issue of the measure of damages available in per quod actions, the court in Barclay v Penberthy, above, at [57] adopted the following from H McGregor, McGregor on Damages, 13th edn, Sweet & Maxwell Ltd, UK, 1972 at [1167]:

the market value of the services, which will generally be calculated by the price of the substitute less the wages the master is no longer required to pay the servant.

The court indicated that caution should be exercised in expanding the scope of recoverable damages in such actions and confirmed that they did not extend to loss of profits or recovery of sick pay, pension or medical expenses payable to the employee.

[7-0085] Motor Accident Injuries Act 2017

The Motor Accident Injuries Act 2017 applies to motor accidents that occur after 1 December 2017 and provides for compensation by way of statutory benefits and damages defined in s 1.4(1) as:

“statutory benefits” means statutory benefits payable under Pt 3.

“damages” means damages (within the meaning of the Civil Liability Act 2002) in respect of the death of or injury to a person caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle, but does not include statutory benefits.

Statutory benefits provide for compensation in the form of income loss; medical and other treatment expenses and attendant care services. The regime for the payment of statutory benefits for medical expenses and attendant care services applies to all claims. The statutory benefits payable for income loss extend to those claims that do not proceed to claims assessment or court.

Part 4 of the Motor Accident Injuries Act deals with awards of damages by a court and the assessment of damages by a claims assessor in respect of motor accidents. It provides for modified common law damages.

Court proceedings may only be commenced in the circumstances provided for in s 6.31; namely when the Principal Claims Assessor certifies that the claim is exempt from assessment. A certificate may be issued when:

1. 

it is exempted from assessment by regulation: s 7.34(1)(a)

2. 

a claims assessor with the approval of the Principal Claims Assessor determines that the claim is not suitable for assessment: s 7.34(1)(b)

3. 

in the case of a finding on liability by a claims assessor, any party does not accept the assessment: s 7.38(1) or,

4. 

where liability is not in issue, a claimant fails to accept the assessment of quantum within 21 days of the issue of the claims assessor’s certificate: s 7.38(2).

The only damages that may be awarded are those that compensate for economic loss as permitted by Div 4.2 and for non-economic loss as permitted by Div 4.3.

Courts and claims assessors are no longer concerned with assessment of damages for minor injuries defined in s 1.6 as:

(1) 

For the purposes of this Act, a “minor injury” is any one or more of the following:

(a) 

a soft tissue injury,

(b) 

a minor psychological or psychiatric injury.

(2) 

A “soft tissue injury” is (subject to this section) an injury to tissue that connects, supports or surrounds other structures or organs of the body (such as muscles, tendons, ligaments, menisci, cartilage, fascia, fibrous tissues, fat, blood vessels and synovial membranes), but not an injury to nerves or a complete or partial rupture of tendons, ligaments, menisci or cartilage.

(3) 

A “minor psychological or psychiatric injury” is (subject to this section) a psychological or psychiatric injury that is not a recognised psychiatric illness.

This definition is amplified in cl 4 of the Motor Accident Injuries Regulation 2017 as follows:

Meaning of “minor injury” (section 1.6(4) of the Act)

(1) 

An injury to a spinal nerve root that manifests in neurological signs (other than radiculopathy) is included as a soft tissue injury for the purposes of the Act.

(2) 

Each of the following injuries is included as a minor psychological or psychiatric injury for the purposes of the Act:

(a) 

acute stress disorder,

(b) 

adjustment disorder.

(3) 

In this clause “acute stress disorder” and “adjustment disorder” have the same meanings as in the document entitled Diagnostic and Statistical Manual of Mental Disorders (DSM-5), published by the American Psychiatric Association in May 2013.

Nor are they concerned with expenses incurred for “treatment and care” or “attendant care services”. In s 1.4(1) of the Motor Accident Injuries Act, “treatment and care” is defined as:

(a)

medical treatment (including pharmaceuticals),

(b)

dental treatment,

(c)

rehabilitation,

(d)

ambulance transportation,

(e)

respite care,

(f)

attendant care services,

(g)

aids and appliances,

(h)

prostheses,

(i)

education and vocational training,

(j)

home and transport modification,

(k)

workplace and educational facility modifications,

(l)

such other kinds of treatment, care, support or services as may be prescribed by the regulations for the purposes of this definition,

but does not include any treatment, care, support or services of a kind declared by the regulations to be excluded from this definition.

“Attendant care services” are defined in s 1.4(1) as:

… services that aim to provide assistance to people with everyday tasks, and includes (for example) personal assistance, nursing, home maintenance and domestic services.

These expenses are dealt with through the statutory benefits regime. The Act expressly provides that no compensation is payable for gratuitous attendant care, leaving open the question of whether the loss of capacity to provide these services remains for assessment under the umbrella of non-economic loss: see discussion in Griffiths v Kerkemeyer (1977) 139 CLR 161; Kars v Kars (1996) 187 CLR 354.

Economic loss

There is little change to the parameters for the assessment of loss of capacity to earn income: see [7-0050]. Section 4.5 limits awards for economic loss as follows:

(1)

The only damages that may be awarded for economic loss are (subject to this Division [Div 4.2]):

(a)

damages for past or future economic loss due to loss of earnings or the deprivation or impairment of earning capacity, and

(b)

damages for costs relating to accommodation or travel (not being the cost of treatment and care) of a kind prescribed by the regulations, and

(c)

damages for the cost of the financial management of damages that are awarded, and

(d)

damages by way of reimbursement for income tax paid or payable on statutory benefits or workers compensation benefits arising from the injury that are required to be repaid on an award of damages to which this Part [Pt 4] applies.

These limits do not apply to awards of damages in claims brought under the Compensation to Relatives Act 1897. Those claims are effectively unchanged by the Motor Accident Injuries Act.

Income loss is permitted only up to the maximum weekly statutory benefits amount, notwithstanding that this is a gross earnings amount: s 4.6(2). This amount is adjusted annually on 1 October: see Motor Accident Injuries (Indexation) Order 2017. Credit must be given for any weekly payments made under the statutory benefits provisions: see s 3.40 for the effect of recovery of damages on statutory benefits.

Superannuation contributions are recoverable at the minimum percentages required by law to be paid as employer superannuation contributions s 4.6(3).

Section 4.7 mirrors s 126 of the Motor Accidents Compensation Act 1999 in requiring that the claimant satisfy the court or claims assessor of assumptions on which future losses may be calculated (s 4.7(1)); that the court state the assumptions that form the basis for the award (s 4.7(2)); and, the relevant percentage by which economic loss damages have been adjusted (s 4.7(3)).

The discount rate continues to be 5%, unless adjusted by the regulations: see s 4.9(2)(b).

Non-economic loss

Assessment of non-economic loss remains essentially unchanged: see [7-0020].

The threshold of 10% as the degree of permanent impairment continues to apply: see s 1.7(1). The assessment is made by a medical assessor and remains binding on the court or claims assessor, except in the limited circumstances provided for s 7.23. They are the same as those set out in s 61 of the Motor Accidents Compensation Act.

A maximum amount continues to apply, adjusted annually on 1 October: s 4.13 of the Motor Accident Injuries Act.

The provisions relating to mitigation in s 4.15 are the same as those in s 136 of the Motor Accidents Compensation Act. Those relating to the payment of interest in s 4.16 of the Motor Accident Injuries Act are essentially the same as s 137 of the Motor Accidents Compensation Act.

Contributory negligence

Section 4.17 of the Motor Accident Injuries Act repeats the provisions of s 138 of the Motor Accidents Compensation Act when dealing with the circumstances in which a finding of contributory negligence must be made with the addition of a provision to include other conduct as prescribed by regulation: see [7-0030]. Section 4.17(3) leaves the assessment of the percentage reduction for contributory negligence to the discretion of the court of claims assessor, except where the regulations fix a percentage in respect of specified conduct. At this stage this aspect remains unregulated.

Miscellaneous

Provisions concerning voluntary assumption of risk (s 4.18) (see [7-0030]) and exemplary and punitive damages (s 4.20) (see [7-0110]) are unchanged.

Blameless accidents are now referred to as no-fault motor accidents. They are dealt with in the same way under Pt 5 of the Motor Accident Injuries Act: see [7-0030].

[7-0090] Funds management

In Gray v Richards (2014) 88 ALJR 968 the High Court, dealing with a claim under the Motor Accidents Compensation Act, confirmed that, in ordinary circumstances, a plaintiff is not entitled to recover the cost of managing the fund comprised by a lump sum award of damages. This was because those costs are not the consequence of the plaintiff’s injury. The court also confirmed the principles of Nominal Defendant v Gardikiotis (1996) 186 CLR 49 and Willett v Futcher (2005) 221 CLR 627, namely, that damages of this nature may be recovered where the plaintiff’s intellectual capacity was impaired by injury to the point of putting the plaintiff in need of assistance in managing the fund.

The issues in Gray v Richards, above, were whether the right of recovery extended to the cost of managing the sum awarded for management of the fund (the fund management damages issue) and whether it extended to the cost of managing the predicted future income of the managed fund (the fund management on fund income issue).

In dealing with the fund management damages issue, the court referred to s 127(1)(d) of the Act entitling a plaintiff, without imposing a limit, to compensation for loss that was referable to a liability to incur expense in the future. The court held that s 127(1)(d) invited assessment of the present value of all future outgoings based on evidence that established likely future expenditure. Expenses of fund management by whatever trust company was appointed were to be included in this assessment.

The court rejected the claim for the costs of fund management on fund income. They said s 127 did not alter the principles expressed in Todorovic v Waller (1981) CLR 402.

1. 

Having applied the discount rate to damages awarded to cover future loss no further allowance should be made. It was inconsistent with this comprehensive dismissal of any further allowance to suggest that the cost of managing the income generated by the fund to ensure that it maintains a net income at a given rate was a compensable loss.

2. 

The capital and income of the lump sum award for future economic loss would be exhausted at the end of the period over which that loss was expected to be incurred.

3. 

The cost of managing the income generated by the fund was not an integral part of the plaintiff’s loss arising out of injury. It would be contrary to the principles of Todorovic v Waller, above, to assume that the fund would generate income that would be reinvested and swell the corpus under management, an assumption that could not be made when drawings from the fund might exceed its income.

[7-0100] The Workers Compensation Act 1987, s 151Z

The provisions of s 151Z are somewhat complex. They relate to situations in which a party other than an injured worker’s employer is wholly or partly responsible for the injury suffered by the worker.

It deals with the mechanism by which an employer (effectively the workers compensation insurer) is able to recover from a third party workers compensation paid to a worker, either out of damages awarded to the worker in common law proceedings brought against the third party, or by a separate action in the employer’s own right. The employer’s action arises under the indemnity provided for in s 151Z(1)(d).

It also deals in s 151Z(2) with situations where a worker brings a claim at common law against a third party in circumstances where the third party and the employer are joint tortfeasors. In such actions, the worker may or may not join the employer. The provision applies where the worker takes or is entitled to take proceedings against both the third person and the employer: ss 151Z(2)(a) and (b).

Campbell JA described the circumstances in which it became necessary to provide for adjustment as provided for in s 151Z(2) in J Blackwood & Son v Skilled Engineering [2008] NSWCA 142. The need arose because, upon the introduction of the scheme for modification of the common law rights of a worker against an employer, it was no longer possible to determine the respective liabilities of an employer and a third party by reference simply to the proportions in which they were held to be responsible for the damage suffered by the employee.

The provisions of the section have generated discussion concerning the circumstances in which a worker becomes entitled to bring proceedings; the process for determination of the employer’s contribution; and the manner in which the third party’s proportion of damages is to be calculated.

Entitlement

The right of a worker to recover common law damages against an employer has been increasingly limited to the point where, commonly, no rights exist. Under the current scheme a worker must be assessed as having suffered a degree of impairment of at least 15%: s 151H. If that threshold is met, the worker’s right to recover damages is limited to loss of income-earning capacity. If the threshold is not met, there is no right of recovery of any common law damages against the employer. This outcome has prompted the argument that there is no entitlement to take proceedings against the employer.

The Court of Appeal has consistently rejected this argument. The construction adopted in Grljak v Trivan Pty Ltd (In liq) (1994) 35 NSWLR 82 at 88 held that the term entitlement in s 151Z(2)(b) referred to the right to take proceedings and not to a right to recover damages. Once established that an employer owed a duty of care that was breached, causing loss to the plaintiff, the entitlement was established. The right to recover damages was irrelevant: Izzard v Dunbier Marine Products (NSW) Pty Ltd [2012] NSWCA 132.

Calculation of the employer’s contribution

To determine the amount of an employer’s contribution, it is necessary to calculate what the worker would recover against the employer under the modified common law provisions of the Workers Compensation Act. In J Blackwood & Son v Skilled Engineering, above, at [40] Campbell JA pointed out that ss 151Z(1)(d) and 151Z(2)(d) required that a contribution be calculated in accordance with the modified common law provisions of the Act and not that damages be assessed in accordance with those provisions.

A worker who takes action against the employer must undergo medical assessment to determine if the threshold of impairment of at least 15% is met and the process of calculation is relatively simple. A worker who does not join the employer cannot be compelled to undergo assessment. In those circumstances the calculation of the employer’s contribution involves a hypothetical exercise analogous to that involved in dealing with professional negligence cases as outlined in Johnson v Perez (1988) 166 CLR 351: Izzard v Dunbier Marine Products (NSW) Pty Ltd, above, Macfarlan J at [117].

The court is required to undertake that exercise in accordance with the principles established by Pt 7 Workplace Injury Management and Workers Compensation Act. In so doing, it may rely on an assessment provided by a medical expert who has not been appointed under those provisions as an approved medical specialist, provided the assessment is made in accordance with WorkCover Guidelines as required by s 322(1) of the Act: Berkeley Challenge Pty Ltd v Howarth [2013] NSWCA 370.

The third party’s contribution

The provisions of s 151Z(2) are designed to avoid the recovery by a worker, whose rights to recover damages from an employer are restricted, of the shortfall from a non-employer third party.

Having determined that the third party and the employer are jointly liable to the worker in damages (for example, in the sum of $100,000) and the appropriate percentage of responsibility to each of them is allocated (for example, 70% third party, 30% employer), the section therefore requires that the following steps be taken.

1. 

Calculate the contribution the third party would recover from the employer but for the modified common law provisions of the Act (the common law sum), in the example — $30,000.

2. 

Calculate the amount the worker would recover from the employer under the modified common law provisions of the Act, say — $15,000.

3. 

Apply to this amount the percentage representing the employer’s share of responsibility (the modified common law sum), — $5,000.

4. 

Reduce the amount that the worker can recover from the third party by deducting from the modified common law sum the common law sum, $30,000–$5,000 = reduction of $25,000.

[7-0110] Punitive damages

No compensation in the nature of aggravated or exemplary damages is recoverable through claims made under the statutory schemes: Workers Compensation Act, s 151R; Motor Accidents Compensation Act, s 144; Motor Accident Injuries Act 2017 s 4.20; Civil Liability Act, ss 21, 26X. Damages under these heads remain available in the limited categories of personal injury claims that are not dealt with under these schemes.

It is very important to distinguish between aggravated and exemplary damages. In the past, courts have tended to award a single sum to account for both types of damage but it is now accepted that the better practice is to distinguish between amounts awarded under these heads and to provide reasons in each case.

In Lamb v Cotogno (1987) 164 CLR 1 the High Court drew the distinction between the compensatory nature of aggravated damages and the punitive and deterrent nature of exemplary damages.

A further explanation of the distinction is found in the judgment of Spigelman CJ in State of NSW v Ibbett (2005) 65 NSWLR 168 where he said at [83]:

In this regard it is relevant to note that the matters to which I have referred as justifying an award of exemplary damages are also pertinent, as is often the case, to an award of aggravated damages. The difference is that in the case of aggravated damages the assessment is made from the point of view of the Plaintiff and in the case of exemplary damages the focus is on the conduct of the Defendant. Nevertheless, it is necessary, as I have noted above, to determine both heads of compensatory damages before deciding whether or not the quantum is such that a further award is necessary to serve the objectives of punishment or deterrence or, if it be a separate purpose, condemnation.

The award of damages under these heads is discretionary and caution is required to ensure that the circumstances in which they awarded are appropriate. In Day v The Ocean Beach Hotel Shellharbour Pty Ltd (2013) 85 NSWLR 335, Leeming JA noted that this discretionary quality conferred considerable leeway in the assessment of both aggravated and exemplary damages, although the assessment must bear some proportion to the circumstances to which it relates.

The extent to which the plaintiff provoked the assault by one of the defendants was the subject of consideration in Tilden v Gregg [2015] NSWCA 164 in the context of whether it was appropriate to award aggravated or exemplary damages. Meagher JA quoted from Salmon LJ in Lane v Holloway [1968] 1 QB 379 at 391 as follows:

There is no doubt that if a plaintiff is saying: “This man has behaved absolutely disgracefully and I want exemplary damages because of his disgraceful conduct,” when the court is considering how disgraceful the conduct was or whether it was disgraceful at all, it is material to see what provoked it. This is relevant to the question of whether or not exemplary damages should be awarded, and, if so, how much.

Meagher JA also noted that the defendant’s assault on the plaintiff resulted in a criminal charge to which he entered a guilty plea. He referred to Gray v Motor Accidents Commission (1998) 196 CLR 1 at [46] in noting the principle that a civil court, when considering whether it was appropriate to award aggravated or exemplary damages, would ordinarily proceed on the basis that the criminal conviction and sentence of the assailant had adequately dealt with the elements of punishment and deterrence.

This principle was applied in Cheng v Farjudi (2016) 93 NSWLR 95; [2016] NSWCA 316 where Beazley P, with whom Ward JA and Harrison J agreed, having reviewed Gray v Motor Accidents Commission, above, and the many authorities in which these principles have been applied said at [87]:

Accordingly, the position in Australia is that exemplary damages may not be awarded where substantial criminal punishment has been imposed. However, the High Court in Gray did not preclude an award of exemplary damages where something other than substantial punishment was imposed, and in accordance with the authorities in this Court exemplary damages may be awarded in some circumstances notwithstanding that a criminal sanction has been imposed.

Her Honour concluded that conviction for assault and the imposition of a bond was a substantial punishment such that exemplary damages were not warranted on this basis. Her Honour did, however, accept at [105] the other basis for the award of exemplary damages, namely, that the manner in which the appellant defended the claim for damages was unusual in the sense used in Gray v Motor Accidents Commission.

Aggravated damages

Damages under this heading may be awarded to a plaintiff who suffers increased distress as a result of the manner in which a defendant behaves when committing the wrong or thereafter. The qualification for their award is that the conduct of the defendant is of the type that increased the plaintiff’s suffering. In Lamb v Cotogno, above, at 8, aggravated damages were described as compensatory in nature, being awarded for injury to the plaintiff’s feelings caused by insult, humiliation and the like.

The leading case in this area is Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118 where Windeyer J at 152 described the necessary conduct as insulting or reprehensible or capable of causing the plaintiff to suffer indignity or outrage to his or her feelings.

A plaintiff’s own conduct may be relevant to determining whether damages of this nature should be awarded or the amount to be awarded, for instance, where a plaintiff retaliates in the case of an assault or is of bad repute.

In Kralj v McGrath [1986] 1 All ER 54 Woolf J rejected a claim for aggravated damages in a case based on medical negligence but said that compensatory damages could be increased to take account of consequences that made it difficult to overcome the distress caused by the negligent medical treatment.

The availability of aggravated damages in negligence clams was debated in Hunter Area Health Service v Marchlewski (2000) 51 NSWLR 268 where Mason P listed the torts for which damages under this head might be claimed including defamation, intimidation, trespass to the person and malicious prosecution. He expressed serious doubt about when they might be claimed in negligence actions or about the need for such damages when elements such as injured feelings and distress could be dealt with in an award for general damages.

These concerns were dealt with in State of NSW v Riley (2003) 57 NSWLR 496; [2003] NSWCA 208, and in MacDougal v Mitchell [2015] NSWCA 389. In MacDougal, an appeal challenging the trial judge’s decision against the award of both aggravated and exemplary damages, Tobias AJA, with whom Meagher JA, Bergin CJ in Eq agreed, cited at length passages from the reasons of Hodgson JA in State of NSW v Riley, above, where he addressed the issue of how, in a personal injury case, having assessed the appropriate level of damages, the compensatory nature of aggravated damages leaves room for the award of further compensation without incurring the risk of double counting.

Justice Hodgson’s answer was reasoned at [131] as follows:

In my opinion, the only principled explanation must be along the following lines. It is extremely difficult to quantify damages for hurt feelings. In cases of hurt feelings caused by ordinary wrong-doing, of a kind consistent with ordinary human fallibility, the court must assess damages for hurt damages neutrally, and aim towards the centre of the wide range of damages that might conceivably be justified. However, in cases of hurt to feelings caused by wrong-doing that goes beyond ordinary human fallibility, serious misconduct by the defendant has given rise to a situation where it is difficult to quantify appropriate damages and thus where the court should be astute to avoid the risk of under-compensating the plaintiff, so the court is justified in aiming towards the upper limit of the wide range of damages which might conceivably be justified.

He added further at [133] that there must be a justification for this approach, which he acknowledged was one of degree so that “the worse the defendant’s conduct, the further from the centre of the range and towards the upper limit of the range the court may be justified in going”.

Exemplary damages

Exemplary damages are awarded as a form of punishment: to deter repetition of reprehensible conduct by the defendant or by others, or to act as a mark of the court’s disapproval of that conduct. They may be awarded for a tort committed in circumstances involving a deliberate, intentional or reckless disregard for the plaintiff and his or her interests. The objects of the award may include condemnation, admonition, making an example of the defendant, appeasement of the plaintiff in order to temper an urge to exact revenge, or the expression of strong disapproval.

The term repeatedly relied upon as the basis for the award of exemplary damages, first expressed by Knox CJ in Whitford v De Lauret & Co Ltd (1920) 29 CLR 71 at 77, is conscious wrongdoing in contumelious disregard of another’s rights. The defendant’s conduct must be such that punishment is warranted. It may include elements of malice, violence, cruelty, high-handedness or abuse of power. In Uren v John Fairfax & Sons Pty Ltd, above, Windeyer J said at [11] that an award of exemplary damages should be based on something more substantial than mere disapproval of the defendant’s conduct.

In Lamb v Cotogno (1987) 164 CLR 1 the defendant left the plaintiff in agony at the side of a road after attacking him by driving his car at him. This was considered to be conduct that was cruel or demonstrating reckless disregard or indifference towards the plaintiff’s welfare.

In Adams v Kennedy [2000] NSWCA 152 the court awarded one aggregate figure for exemplary damages where different causes of action arose out of a series of closely connected events. Priestley JA stated at [36]:

That figure should indicate my view that the conduct of the defendants was reprehensible, mark the court’s disapproval of it. The amount should also be such as to bring home to those officials of the State who are responsible for the overseeing of the police force that police officers must be trained and disciplined so that abuses of the kind that occurred in the present case do not happen.

The High Court in State of NSW v Ibbett (2006) 229 CLR 638 at [38]–[40] similarly noted in particular the function served by exemplary damages as a tool to discourage and condemn the arbitrary and outrageous use of executive power: Rookes v Barnard [1964] AC 1129, Lord Devlin at 1226.

As a general principle, the power to award exemplary damages should be exercised with restraint and only when compensatory damages are insufficient to punish, deter or mark the court’s disapproval of the defendant’s conduct. There is a question mark over whether the defendant’s means should be taken into account in deciding whether to award exemplary damages.

The award of exemplary damages is rare in actions for negligent conduct. There must be conscious wrongdoing in contumelious disregard of another’s rights: Gray v Motor Accidents Commission (1998) 196 CLR 1.

This decision was referred to in Dean v Phung (2012) NSWCA 223 but ultimately the outcome of the plaintiff’s claim was not based on negligence. The dentist’s misrepresentations as to the need for and nature of treatment were held to negate the plaintiff’s consent so that claim of trespass to the person was made out and the Civil Liability Act exclusion of the right to exemplary damages did not apply. In deciding that a substantial award of exemplary damages was warranted, the court noted that the dentist’s conduct was carefully planned and executed over a period of more than 12 months with the purpose of self-enrichment. Damages were assessed by reference to the sum paid for the dental services and interest.

Although required to be proportionate to the circumstances, in an appropriate case, exemplary damages may exceed compensatory damages: Day v The Ocean Beach Hotel Shellharbour Pty Ltd (2013) 85 NSWLR 335 Leeming JA at [43].

State of NSW v Smith [2017] NSWCA 194 involved a claim of false imprisonment. The court regarded the police officer’s conduct, in being unaware of provisions of the relevant statute, as the product of ordinary human fallibility and not a conscious wrongdoing in contumelious disregard of the respondent’s rights, with the result that an award of exemplary damages was not warranted.

[7-0120] Offender damages

The Civil Liability Act makes special provision in Pt 2A to deal with claims by offenders in custody, including the application of the Act to claims that involve intentional torts. The legislation introduces a regime for assessment of claims that is similar to that provided for in relation to common law claims for workplace accidents.

In State of NSW v Corby (2009) 76 NSWLR 439, the Court of Appeal noted that Pt 2A of the Act, dealing with offender damages, had been extended by amendment to intentional torts and that nothing in the amending legislation indicated that claims for exemplary damages were to be excluded. The court was not prepared to accept that this was an oversight stating at [56]:

The Parliament may well not have been prepared to exclude liability for exemplary damages, even in cases of relatively minor physical or mental impairment, where the conduct of its officers, for which it accepts vicarious liability, demonstrates egregious disregard of the civil rights of its citizens.

The court concluded, however, that aggravated damages were not available to an offender in custody. This was because s 26C defined damages as including any form of monetary compensation. Aggravated damages were designed to deal with matters such as humiliation and injury to feelings and provided compensation for mental suffering that fell short of a recognised psychiatric illness. In that sense, in contrast to exemplary damages they were compensatory.

[7-0130] Intentional torts

An intentional tort is described as the intentional infliction of harm without just cause or excuse. The presence of an intention to cause harm is central to the imposition of liability. The tort frequently involves conduct that results in criminal as well as civil liability, although it extends to conduct that causes harm to reputation, trade or business activity.

The American Law Institute, Restatement of the Law — Torts 2d, § 870, American Law Institute Publishers, St Paul, Minn,1979 describes intentional torts in the following terms:

One who intentionally causes injury to another is subject to liability to the other for that injury, if his conduct is generally culpable and not justifiable under the circumstances. This liability may be imposed although the actor’s conduct does not come within a traditional category of tort liability.

The concept of an intention to cause harm, in the context of the law of negligence, has been the subject of a degree of judicial consideration and much academic consternation concerning the extent to which intentional conduct can be described or pleaded as negligent.

The exclusion of intentional torts from the strictures of the Civil Liability Act 2002 has also generated judicial scrutiny of this class of tort. Section 3B(1)(a) provides:

 

1. 

The provisions of this Act do not apply to or in respect of civil liability (and awards of damages in those proceedings) as follows:

(a)

civil liability of a person in respect of an intentional act that is done by the person with intent to cause injury or death or that is sexual assault or other sexual misconduct committed by the person—the whole Act except:

(i)

section 15B and section 18(1) (in its application to damages for any loss of the kind referred to in section 18(1)(c)), and

(ii)

Part 7 (Self-defence and recovery by criminals) in respect of civil liability in respect of an intentional act that is done with intent to cause injury or death, and

(iii)

Part 2A (Special provisions for offenders in custody).

The attraction of this provision is that, if the wrong of which a plaintiff complains can be brought within its scope, the constraints on damages contained within the Act can be avoided, with the exception of those relating to the recovery for gratuitously provided care services. Damages in claims of intentional torts are at large, with the exception of those claimed for voluntarily provided care. They may therefore range from a nominal amount, where a plaintiff is unable to establish actual damage, to substantial damages on all heads for personal injury. Aggravated and exemplary damages are also available in appropriate cases. Application of the provisions of the section has not been straightforward, issues to date encompassing the following.

Pleadings

It is in this area that incongruity arises in the context of the law of negligence. In New South Wales v Lepore (2003) 212 CLR 511, a claim of vicarious liability against an employer, views diverged on the question of whether a claim of intentional infliction of harm could be pleaded in negligence. McHugh J at [162] took the view that the plaintiff was entitled to elect to plead negligence or trespass to the person. He said an action for the negligent infliction of harm was not barred because of the intentional act of the person causing the harm. Gummow and Hayne JJ took a different view. They said at [270], that while negligently inflicted injury to the person could sometimes be pleaded in trespass to the person, the intentional infliction of harm cannot be pleaded as negligence.

Consent

Barrett JA in White v Johnston (2015) 87 NSWLR 779 made it clear that the absence of consent was an essential element of the tort of assault and battery. He said it was meaningless at least in the civil sphere to speak of an assault that was consensual.

The difficulty created by the failure to plead separately the allegations of negligence and assault is most clearly demonstrated in claims of medical negligence where the question of consent to treatment arises.

In White v Johnston, above, Leeming JA pointed to the distinction between consent to medical treatment that is procured through negligence in explaining the risks of treatment and that which is fraudulently obtained. He referred to the reasons of Mason CJ, Brennan, Dawson, Toohey and McHugh JJ in Rogers v Whittaker (1992) 175 CLR 479 where they said at [15]:

Anglo-Australian law has rightly taken the view that an allegation that the risks inherent in a medical procedure have not been disclosed to the patient can only found an action in negligence and not in trespass; the consent necessary to negative the offence of battery is satisfied by the patient being advised in broad terms of the nature of the procedure to be performed.

Leeming JA noted the following principles on the issue of consent to medical treatment:

1. 

Consent may be vitiated by fraud, misrepresentation, treatment that materially differs from that to which the consent was given or the improper purpose for the provision of the treatment.

2. 

The motive for the provision of medical treatment is relevant to the issue of whether consent was obtained through fraud or misrepresentation or for an improper purpose. In Dean v Phung [2012] NSWCA 223, the practitioner’s purpose, being solely non-therapeutic, was sufficient to vitiate consent. The majority view in that case was that it was therefore unnecessary to consider further whether the practitioner acted fraudulently.

3. 

There may be circumstances where more than motive exists for misconduct. A person who enters land within the scope of his or her authority does not necessarily become a trespasser because he or she has some other purpose in mind.

4. 

Thus improper purpose, even if it falls short of fraud is relevant to the issue of whether medical treatment was outside the terms of any consent.

5. 

The withholding of information in bad faith is sufficient to vitiate consent.

It is not necessary that the plea of trespass to the person or assault contain a specific allegation of absence of consent. The plea itself is sufficient under the rules of common law pleading to amount to an allegation of non-consensual conduct: White v Johnston, Barrett JA.

Intent

The prerequisites to the operation of s 3B(1)(a) are:

  • an intentional act; and

  • an intentional act committed with intent to cause injury.

It is the second of these requirements that presents the greatest challenge to litigants. In White v Johnston Leeming JA at [132] noted that these requirements took matters further than the tort of assault and battery where it was unnecessary to establish that a defendant intended to cause harm. Even if a plaintiff was able to prove an intentional tort, he said, the action would be excluded from the Civil Liability Act only if it was also established that the defendant’s conduct was carried out with intent to cause injury.

It is not necessary that the intended injury be physical. In State of NSW v Ibbett (2005) 65 NSWLR 168, a police officer pointed a gun at the plaintiff at the same time as threatening her. Spigelman CJ thought this was sufficient to establish that the officer acted with the intent to cause injury namely an apprehension of physical violence. Ipp JA agreed that it was intended to cause in the plaintiff’s mind an apprehension of immediate personal violence.

It is not necessary that the intentional act be criminal in character. RS Hulme J in McCracken v Melbourne Storm Rugby League Football Club [2005] NSWSC 107 rejected the proposition that the s 3B exception was directed at criminal conduct and sexual misconduct. The spear tackle that resulted in the plaintiff’s injury, although not a crime, was undertaken intentionally and with intent to cause injury.

In Drinkwater v Howarth [2006] NSWCA 222 Basten JA asked, hypothetically, whether an intentional act directed at someone other than a plaintiff might allow for the application of s 3B.

In Hayer v Kam [2014] NSWSC 126 Hoeben CJ at CL said it was unclear whether a defendant who is reckless as to the consequences of an intentional act has the requisite intention to cause injury. He noted, however, that in Dean v Phung, above, whilst the primary intention was that of monetary gain, the dentist was found to have the intention to cause harm sufficient to meet the requirements of the section because at the time of giving the relevant advice he knew that the treatment proposed was unnecessary.

Causation

Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388 involved a claim of injurious falsehood in the course of which the High Court considered whether the principles of reasonable foreseeability applied to intentional torts. Gleeson CJ, agreeing with Gummow J, said at [13] there was no reason for foreseeability to operate as an independent factor in limiting liability for damage if the relevant harm was intended or was the natural and probable consequence of the wrongdoer’s conduct.

Gummow J, dealing with the role of intention in the context of intentional torts, said at [81]:

That role is that, where the other elements of the tort are made out, a finding that the defendant intended the consequences which came to pass will be sufficient to support an award of damages against the defendant in respect of that consequence.

After reference to authority to the effect that the intention to injure a plaintiff disposes of any question of remoteness of damage, he said at [81]:

It will not necessarily be sufficient that the wrongdoer intended damage different in kind from that which occurred … That is to say, it will depend upon the relation of that which the wrongdoer intended to the consequences which actually resulted. This relation will generally be assessed by asking whether the damage was the “direct and natural” result of the publication of falsehood.

These principles were referred to in TCN Channel Nine Pty Ltd v Anning (2002) 54 NSWLR 333, where it was stated that damages may be awarded for personal injury, in a claim alleging trespass to land, if the injury was a natural and probable consequence of the trespass.

Injury

The issue of whether the intended injury must be physical so that it did not extend to psychological injury has been disposed of by the principle that the wrongdoer intends the harm that is the natural and probable consequence of the conduct.

In TCN Channel Nine Pty Ltd v Anning, above, however, the Court of Appeal rejected the claim in the absence of evidence that the mental trauma claimed by the plaintiff amounted to a recognised psychiatric disorder. Humiliation, injured feelings and affront to dignity resulting from trespass, the court said, were compensable through the means of aggravated damages.

A different approach was taken in Houda v State of New South Wales [2005] NSWSC 1053, where the plaintiff recovered damages in claims for malicious prosecution, wrongful imprisonment, wrongful arrest and assault, all conduct that found to have been intentional with intent to cause injury. The defendant argued that the claimed injuries of deprivation of liberty, humiliation, damage to reputation, emotional upset and trauma were not injuries within the scope of s 3B(1)(a) because they were not physical injuries. Cooper AJ held that the section extended to all forms of injury, including those of the class that resulted from the actions of the defendant’s police officers.

Onus

The issue of where the onus lies to establish the elements of s 3B(1)(a) was dealt with comprehensively by Leeming JA in White v Johnston. He approached the issue from two perspectives.

He said the onus was at all times on the plaintiff to prove that consent was vitiated by fraud because:

  • in general principle, a party who asserts must prove

  • there would be inherent injustice in requiring a defendant to disprove a fraud, and

  • if the plaintiff produced evidence that provided a basis for a finding a fraud, the evidentiary onus shifted to the defendant.

After examining competing views he rejected the argument that the onus of proof was on a defendant who pleaded consent to a claim of assault and battery or trespass to the person. His major reason for doing so was to provide coherence between the criminal and civil law. He noted that a prosecutor bears the onus of negating consent in sexual assault cases and said at [128]:

It does not strike me as jarringly wrong for a civil plaintiff to be obliged to discharge the same burden (albeit, only to the civil standard) in order to establish a tortious assault and battery.

Vicarious liability

The decision in Zorom Enterprises Pty Ltd v Zabow (2007) 71 NSWLR 354 established the extent to which an employer might be held liable for the intentional torts of an employee. The Court of Appeal held that an employer was vicariously liable in damages, including exemplary damages, where the intentional tort was committed:

  • in the intended or ostensible pursuit of the employer’s interest

  • in the intended performance of a contract of employment, or

  • in the apparent execution of ostensible authority.

Basten JA pointed out that liability of an employer was derivative in form from that of the employee and was not substantially different from the liability of the employee. He said the employer could not escape liability under the general law by demonstrating that it did not have the intention of its employee.

Legislation

  • Civil Liability Act 2002, Pts 2A, 6, ss 3B, 5B, 5R, 5T, 7B(rep), 7F(rep), 12, 12(2), 13(1), 14, 15, 15(1), (2), (3), (5), 15A, 15B, (2)(b), (2)(d), (5), (6), (7), (8), (9), (10), (11), 15C, 16, (1), (3), 17, 21, 26X, 26C, 34, 48, 49, 50, 71(1)

  • Compensation to Relatives Act 1897, s 3(3)

  • District Court Act 1973, Pt 3, Div 3, 4(rep), s 58(4)(rep)

  • Fatal Accidents Act 1959 (WA)

  • Law Reform (Miscellaneous Provisions) Act 1965

  • Motor Accidents Act 1974

  • Motor Accidents Act 1988, ss 49, 74, 76, 79(3)

  • Motor Accidents Compensation Act 1999, ss 3, 7A, 7B(1), 7F, 83, 125, (2), 126, 127, (1)(d), 130, 130A(rep), 134, 131–135, 136, 138, 140, 141B, 141C, 142, 143, 144, 146

  • Motor Accidents (Lifetime Care and Support) Act 2006

  • Workers Compensation Act 1987, ss 151H, 151I, 151IA, 151AD, 151J, 151L, 151N, 151O 151Q, 151R, 151Z, (1)(d), (2), (2)(a), (b), (d)

  • Workplace Injury Management and Workers Compensation Act 1998, Pt 7, s  322(1)

  • Social Security Act 1991

  • Supreme Court Act 1970, Pt 5, Div 2(rep), s 76E(4)(rep)

  • Victims Compensation Act 1996 (rep, now Victims Rights and Support Act 2013)

Further references

  • The American Law Institute, Restatement of the Law — Torts 2d, § 870, American Law Institute Publishers, St Paul, Minn,1979

  • H Luntz, Assessment of Damages for Personal Injury and Death, 4th edn, Butterworths, Sydney, 2002

  • D Villa, Annotated Civil Liability Act 2002, 2nd edn, Thomson Reuters, Sydney, 2013

  • J A McSpedden and R Pincus, Personal Injury Litigation in NSW, LexisNexis, Sydney, 1995

  • H McGregor, McGregor on Damages, 16th edn, Sweet & Maxwell Ltd, UK, 1997

  • H McGregor, McGregor on Damages, 13th edn, Sweet & Maxwell Ltd, UK, 1972