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ASSESSMENT OF DAMAGES PROBLEM

Using chapter 15 of Torts: Commentary by Sappideen, analyse the following


problems. You will have a problem much like PART TWO in your final exam.

PART ONE

P has lost both arms in a work accident. P is a 20 year old male. He was at the time
an electrical apprentice. He was highly skilled and is of excellent character and was
being trained by his employer (SPARK) for a leading role in its developing business
of installing wiring and security systems in high rise buildings around the world.
Subsequent psychological testing indicates that P has a rigid and determined
personality, and that once he makes up his mind about what he considers to be the
correct course of action, he will pursue it regardless of advice to the contrary. This
was regarded as making him potentially excellent management material. Apprentice
wages on such projects are very high. In the twelve months prior to the accident P
had been paid $3,000 per week net, and in addition, had his travel costs and full living
expenses met, for his work on a SPARKS project in Saudi Arabia, wiring what is now
the world’s tallest building. P’s partner accompanied him to Saudi Arabia, and she
was expecting their child. On P’s return he commenced work for his employer
SPARK on JIMCRACK’S retail development site with other independent contractors,
including a crane hire company owned and operated by a South African company
(SAC). In a previous incident, five years prior to the accident, the company, SAC,
had been found guilty on five counts brought by Work Cover under the Occupational
Health and Safety Act 2000, after the driver had “bounced a load” just missing three
workers. A New South Wales Industrial Relations Commissioner subsequently found
that the crane had an inherent defect making it prone to collapse. It is established that
SAC made no changes to its use of the crane and practices following these findings.
P was parking his car in the partly developed car park within the site, prior to
commencing work. The car park was also open to customers of shops in
JIMCRACK’S partially completed retail complex on which P, SPARKS and SAC
were all engaged. SAC’s crane driver “bounced” a load in the same manner of the
incident five years previously. The load fell on P, causing him to lose both arms
above the elbow. The crane driver held a licence, but it had been five years since he
had driven the crane, and he had never previously driven a crane of the type in
question. It is now twelve months after the accident. P is still recovering and is living
in a rehabilitation hospital. He has terminated his relationship with his partner and
will not see her or his child, for reasons he will not disclose. He says that he will
return to live with his parents. He was a highly skilled amateur photographer and
excellent golfer before the accident.

On the limited facts available: Will P be entitled to a lump sum award of common law
damages based upon negligence? From whom? What body would hear his claim and
assess his damages? How will damages be calculated? According to what limitations
on the common law (if any) will this assessment be made? What total sum is he likely
to receive?
PART TWO

Essentially the same situation as in ONE, except that P suffered the injuries on his day
off, as he is walking through the complex car park having parked there prior to going
shopping with his partner. Customers are encouraged by JIMCRACK to continue to
gain access to those parts of the area that remain open for business, and to use
underground car parks, which also remain open, in part under redevelopment and
construction.

On the limited facts available: Will P be entitled to a lump sum award of common law
damages from JIMCRACK based upon negligence? Whose negligence? What body
would hear his claim and assess his damages? By reference to what legal principles
will damages be calculated? According to what statutory limitations on the common
law (if any) will this assessment be made? What total sum is he likely to receive?

PART THREE

Essentially the same situation as in ONE, except that P suffered the injuries when his
vehicle was crushed by the crane which was being driven on the public road between
workplaces as a NSW registered motor vehicle under the Road Transport (Vehicle
Registration) Act 1997. At the time P was simply driving to the retail complex to do
the super market shopping on his day off. The accident was caused when the crane
qua vehicle toppled due to the negligent steering of its driver.

On the limited facts available: Will P be entitled to a lump sum award of common law
damages from SAC based upon its driver’s negligence? What body would hear his
claim and assess his damages? How will damages be calculated? According to what
statutory limitations on the common law (if any) will this assessment be made? What
total sum is he likely to receive?

PART FOUR

Essentially the same situation as in ONE except that the events occur in a territory to
which only the common law of New South Wales applies, and where no statutory law
is operative. The matter will be heard in the Supreme Court of New South Wales
applying only principles developed at common law. How will damages be calculated?
What total sum is he likely to receive?

TORTS MAP
Section 1 – Torts generally
Meaning of a tort
An act or omission by the defendant in breach of a duty imposed by law which
infringes an interest of the plaintiff giving rise to a right of civil action for
unliquidated damages.

Not a particularly helpful definition, but must be unspecific because torts can cover
almost any form of human activity.

Aim of the law of torts

• To provide compensation to the plaintiff for the damage they suffered as a


result of the tort; in some cases, to provide additional damages as a
punishment to deter future potential offenders.

Systems to achieve compensation

• Other than tort law through the courts, there are a range of statutory
schemes and insurance products which have their basis in tort law, e.g.

o Compulsory insurance
Motor Accidents Compensation Act 1999 (NSW)

o Workers Compensation
Workers Compensation Act 1987 (NSW)

o Criminal Injuries Compensation Schemes


Victims Support and Rehabilitation Act 1996 (NSW)

• Such schemes have a number of advantages over court-based civil law:


o Reduced legal costs; no litigation costs;
o Lesser need to prove injury;
o Compensation paid regardless of the defendant's financial means
o Less delays
o Compensation may be paid periodically rather than as a lump some
once and for all.

Tort vs Criminal Law

Tort Criminal Law


A civil action A criminal action
Brought by the victim Brought by the Crown
To provide a remedy To punish the perpetrator
Remedy: compensation Remedy: punishment
Proof: balance of probabilities Proof: beyond reasonable doubt
Tort vs Contract Law

Tort Contract
Duty owed generally Duty to other contracting party
Duty imposed by law Duty arises from parties'
promises or agreement
Protects what is already owned Protects expectation of future
or possessed benefits
Damages unliquidated Damages often liquidated

Interests protected by Tort

Interest Tort
Personal Security • Trespass
• Negligence
Reputation • Defamation
Property • Trespass
• Conversion
Liberty • False Imprisonment
Avoiding un-necessary legal • Malicious prosecution
process

Liability in Tort

• Two types of liability: liability based on fault, or strict liability.

Strict Liability

• No fault element is required. If the tortious act or omission has occurred,


liability is incurred.
• Strict liability has fallen into decline over the years
Rylands v Fletcher
Burnie Port Authority v General Jones

Fault Liability

1. Failure to live up to a standard through an act or omission


2. 2 main types: intention and negligence

Intention
o Deliberate or willful conduct;
o "Constructive" intent – where the consequences of your action are almost
certain;
o "Reckless" intent – where you do not pay sufficient regard to risks
o "Transferred" intent – where you intend to affront one party but miss your
target, affronting another.

Section 2 – Intentional Torts


Trespass

• The elements of trespass are:

o An intentional or negligent act


o which causes a direct injury (including breach of right)
o to the plaintiff or their property
o without lawful justification

• Trespass, at this level, is more of a "pattern" than a tort. You take the basic
pattern for trespass, and add an x factor, to produce a specific trespass.

Trespass to the person - Battery

• The x factor is physical interference

• The elements of Battery are:

o An act, not an omission


Holmes v Mather
Fagan v Metropolitan Police Commissioner

o that directly
Hutchins v Maughan

o and intentionally or carelessly


Williams v Milotin

o causes physical interference with the plaintiff


Collins v Wilcock

o without lawful justification


In re F (Consent)
Collins v Wilcock (Police officer in course of duty)
• Normal, everyday touching souch as jostling on a bus or touching someone to
obtain their attention is not battery, as there is an "implied consent".
Rixon v Star City

• Hostility is not necessary, the least touch will do if the other elements are met.
Collins v Wilcock

Trespass to the person - Assault

• The x factor in assault is reasonable apprehension of imminent physical


interference

• The elements of Assault are:

o An act, not an omission


Holmes v Mather

o that directly
Hall v Foneca

o and intentionally or carelessly


Williams v Milotin

o places the plaintiff in reasonable apprehension [objective test]


Barton v Armstrong

o of imminent physical interference


Rozsa v Samuels
Barton v Armstrong
Hall v Foneca
Zanker v Vartzokas

• The requirement of "immediacy" turns on the circunstances and may be longer


if the fear is continuing, especially where V is imprisoned falsely.
Zanker v Vartzokas
Barton v Armstrong

• Conditional threats are not usually unlawful, but may be so if (a) the condition
is unlawful, or (b) the act threatened, if carried into effect, would be unlawful.
Tuberville v Savage
Police v Greaves
Rozsa v Samuels

• In self-defence, threatened force must be reasonable.


Rozsa v Samuels
Hall v Foneca

• Generally, mere words are not actionable. Words alone may constitute assault
when they raise the necessary condition in the mind of the victim.
Barton v Armstrong

• A threat made by telephone may be an assault if it results in the required fear


of immediate physical interference
Barton v Armstrong

12. Trespass to the person - False Imprisonment

• The x factor is total restraint.

• The elements of false imprisonment are:

o An act, not an omission


Holmes v Mather

o that directly
Hall v Foneca

o and intentionally or carelessly


Williams v Milotin

o causes the total restraint of the plaintiff, and thereby confines him to a
limited area
Bird v Jones
Balmain New Ferry v Robertson

o without lawful justification


Symes v Mahon

• Restraint must be total. The boundary of the restraint must be fully around the
plaintiff.
Bird v Jones
Balmain New Ferry v Robertson

• Total restraint implies the absence of a reasonable means of escape.


Burton v Davies

• Restraint may be total where the defendant subjects the plaintiff to his or her
authority with no option to leave.
Symes v Mahon
Myers v Soo
• There is generally no false imprisonment when one voluntarily submits to a
form of restraint.
Herd v Weardale
Robinson v Balmain New Ferry
Lippl v Haines

• Words alone can constitute false imprisonment.

• Knowledge of false imprisonment (by the plaintiff) is not necessary for false
imprisonment to occur.
Meering v Graham White Aviation

Trespass to property – trespass to land

• The x factor is exclusive possession of land.

• The elements of trespass to land are:

o An act, not an omission


Holmes v Mather

o that directly
Hall v Foneca

o and intentionally or carelessly


Williams v Milotin

o physically interferes with the plaintiff's exclusive possession of land


Victoria Racing Co v Taylor
Bathurst City Council v Saban
Lincoln Hunt v Willesee

• Land includes the soil or dirt, the structures upon it, and so much of the land
above it as is required for reasonable enjoyment of the land.
Bernstein of Leigh v Skyways & General
Kelson v Imperial Tobacco

• Even the slightest trespass is actionable.


Entick v Carrington

• This tort protects exclusive possession


Newington v Windeyer

o Exclusive possession is distinct from ownership


o Ownership refers to title in land; Possession refers to the physical
holding of the land.
o Possession may be immediate or constructive.

• Preventing the possessor's access to the land is a trespassory act


Waters v Maynard

• Continuation of the initial trespass is an act of "continuing trespass"


Konskier v Goodman

• A licensee is a person who is on the premises by permission.


o Licensees have no possession and cannot sue
o Licensees for value may be entitled to sue
ER Investments v Hugh

• Trespass ab initio: If D enters under a licence from P, and D enters with a


purpose different from that which was licensed, D will be held to have been a
trespasser ab initio.
Barker v the Queen

• Police may obtain access if they have lawful justification to do so. In any
other case the entry would still be a trespass.
Halliday v Neville
Plenty v Dillon

• Remedies for trespass include:


o Ejectment of the trespasser
Horkin v North Melbourne Social Club Football Club

o Injunctions to prevent the trespass (or further trespass)


Lincoln Hunt v Willesee

o Recovery of possession; and

o Award of damages
Parramatta CC v Lutz
XL Petroleum v Caltex Oil

Trespass to property – Tresspass to chattels

• The x factor is possession of a chattel.


• The elements of trespass to chattels are:

o An act, not an omission


Holmes v Mather
o that directly
Hall v Foneca

o and intentionally or carelessly


Williams v Milotin

o interferes with the plaintiff's possession of a chattel


(See particular types for cases)

Trespass to chattels – Conversion

• Conversion is a trespass to a chattel which constitutes an unjustifiable denial


of the possessor's title.
Penfolds Wines v Elliott

• Conversion is ALWAYS intentional

• Conversion may not be actionable per se


Everitt v Martin

• Who can sue in conversion?

o Owners
o Those in possession or entitled to immediate possession
o Bailors (at will, or where the Bailee has acted in a manner repugnant to
the bailment)
Lotan v Cross
Wilson v Lombank
Gordon v Harper

o Bailees
o Mortgagees and Mortgagors
o Finders (except as against the true owner)
Parker v British Airways
Armory v Delmirie

• Taking possession of goods is conversion


Rendell v Associated Finance

• Disposal of goods (e.g. by auctioneers) can be conversion


Consolidated Co v Curtis & Son
Willis v British Car Auctions

• Destruction of goods is conversion


Simmons v Lillystone
• Mere asportation is no conversion
Fouldes v Willoughby

• Denial of the right of possession is conversion


Howard Perry v British Railways Board

• Delivery to the wrong address is conversion


Youl v Harbottle
Ashby v Tolhurst
Sydney City Council v West

• Damages in conversion are usually pecuniary, and are calculated at the time of
conversion.

Trespass to Chattels – Detinue

• Detinue is the wrongful refusal to tender goods on demand by a person who is


entitled to possession
General and Finance Facilities v Cooks Cars (Romford)

• Detinue requires a demand …


Timewell v Virgoe

• … followed by a subsequent refusal.


Nelson v Nelson

• Detinue need not necessarily be intentional

• In detinue, the court may order the return of the chattel.


General and Finance Facilities v Cooks Cars (Romford)

• If damages are awarded, the damages are calculated at the time of the
judgment.
The Mediana
Butler v Egg and Pulp Marketing Board
The Winkfield

Action on the Case

• Case is largely an antique tort (it has mainly been overtaken by negligence)
but in Australia it may still have substance.
• Case refers to actions which intentionally but indirectly cause damage.

• The elements of an action on the case are:


o An intentional act
Bird v Holbrook

o Calculated to harm or cause damage


Bird v Holbrook

o Which does actually cause harm or damage


Wilkinson v Downton

• Case is not actionable per se. You must show damage.

• The relevant intention may be either towards a specific victim or a class of


victim
Wilkinson v Downton – specific
Bird v Holbrook - class

• Intention may be demonstrated constructively, by reference to the probability


that the relevant harm would eventuate. The test here is objective.
Wilkinson v Downton
Javier v Sweeny

• Where the damage claimed for is mental distress, the act must be reasonably
capable of causing mental distress to a normal person.
Bunyan v Jordan
Stevenson v Basham

• Damages are not available for "pure" mental stress or mere fright.

Onus of proof

• The basic principle in common law is that he who asserts must prove.

• In HIGHWAY trespass cases, the plaintiff is requried to prove all elements of


the tort.
Venning v Chin

• In OFF HIGHWAY trespass cases, once the plaintiff has proved the injury.
Hackshaw v Shaw
Platt v Nutt

• In NEGLIGENCE, the onus of proof is always on the plaintiff.

Defences to intentional torts – Mistake

• A mistake is intentional conduct performed under a misapprehension.


• Mistake is generally not a defence in tort law
Rendell v Associated Finance
Symes v Mahon

Defences to intentional torts – Consent

• Consent is not strictly a defence, because "without lawful justification" is part


of each trespass. Consent is therefore just a form of lawful justification.

• Consent must be informed, and procured without fraud or coercion.


R v Williams

• Fraud invalidating consent musst relate directly to the agreement itself, not to
any antecedent factor
Papadimitropoulos v R

• In contact sports, consent is not always a defence, especially to foul play


McNamara v Duncan
Hilton v Wallace

• Since the absence of consent is a definitional element in trespass, it is for the


plaintiff to prove the absence of consent, not for the defendant to prove the
presence of consent.

Defences to intentional torts – Self Defence

• A person who is attacked or threatened with an attack is entitled to use


reasonable force to defend himself or herself.
Fontin v Katapodis

• D may use reasonable force to defend a third party when D reaosnably believe
the third party is being attacked.

• D may use reasonable force to defend D's property if D reasonably believes


the property is under attack or threat.

• "Reasonable" force is a question of fact but in some circumstances deadly


force is excluded.

• statutory aspects of self defence are set out in ss. 52-54 of the Civil Liability
Act. Section 52, the main section, is set out below:

52 No civil liability for acts in self-defence


(1) A person does not incur a liability to which this part applies arising from any
conduct which the person carried out in self-defence, but only if the conduct
to which the person was responding:
(a) was unlawful …

(2) A person carries out conduct in self-defence if and only if the person believes
the conduct is necessary:
(a) to defend himself or herself or another person, or
(b) to prevent or terminate the unlawful deprivate of his or her liberty or the
liberty of another person, or
(c) to protect property fom unlawful taking, destruction, damage or
interference, or
(d) to prevent criminal trespass to any land or premises or to remove a
person committing any such criminal trespass.

(3) This section does not apply if the person involves force that involves the
intentional or reckless infliction of death only:
(a) to protect property; or
(b) to prevent criminal trespass or to remove a person committing criminal
trespass.

• Section 53 decreases damages in the event that the force used in self defence is
found to be unreasonable; and section 54 removes damages for torts
committed against criminals during criminal activity.

Defences to intentional torts – Provocation

• Provocation is not a defence in tort.

• Provoking circumstances could reduce or remoce exemplary damages.


Fontin v Katapodis
Downham Ballet & Others

• Provocation may suggest contributory negligence.


Lane v Holloway
Murphy v Culhane

Defences to intentional torts – Necessity

• Necessity may be a defence where the trespass is committed to save life or


property in an urgent situation of imminent peril.

• The situation must pose an imminent threat to life or property.


Southwark London BC v Williams

• The defence is only available in very strict circumstances.


R v Dudley & Stephens

• The act must be reasonably necessary and not just convenient.


Murray v McMurchy
In re F
Cope v Sharp

Defences to intentional torts – Insanity

• Insanity is not a defence but may negative the intent to commit the tort.
White v Pile
Morris v Masden

Defences to intentional torts – Infancy

• Minority is no defence if D understood the nature of his or her conduct.


Smith v Leurs
Hart v A-G of Tasmania

Defences to intentional torts – Discipline

• A parent may use reasonable and moderate force to discipline a child.

• Reasonableness will depend on the age, mentality and physique of the child,
and of the means and instruments used.
R v Terry

Defences to intentional torts – Illegality

• Ex turpi causa non oritur actio – No action arises out of an immoral


consideration.

• Persons who join in an illegal act have no legal rights inter se in relation to
torts arising directly from that act.
Smith v Jenkins
Jackson v Harrison
Gala v Preston

• The Civil Liability Act goes somewhat further:

54 Criminals not to be awarded damages

(1) A court is not to award damages in respect of liability to which this part
applies if the court is satisfied that:
(a) the death of, or the injjury or damage to, the person … occurred at the
time of, or following, conduct … that, on the balance of probabilities,
constitues a serious offence, and
(b) that conduct contributed materially to the death, injury or damage or to the
risk of death, injury or damage.

(2) This section does not apply to an award of damages against a defendant if
the conduct of the defendant that caused the death, injury or damage concerned
constituted an offence (whether or not a serious offence).

Negligent Trespass

• While trespass is usually intentional, it can be framed on the basis of


negligence.
Williams v Milotin

• Such an action is an action in trespass not in negligence.

• Elements: The intentional or negligent act of D which directly causes an


injury to P or his/her property without lawful justification.

• Negligence is the neglect of a legal duty: duty + breach + resultant damage.

• Negligent trespass seems mainly to be an issue because of differing limitation


of actions.

Section 3 – Negligence

Elements of negligence

• Negligence is the product of three elements:


o The existence of a duty of care
o Some breach of that duty
o Some damage resulting from that breach

Early formulations of negligence

• Whenever one person is by circumstances placed in such a position with


regard to another, that every one of ordinary sense who did think would at
once recognise that if he did not use ordinary care and skill in his own conduct
with regard to those circumstances he would cause danger or injury to the
person or property of the other (person) a duty arises to use ordinary care and
skill to avoid such danger.
Heaven v Pender per Brett MR

• Negligence is "a moral duty that should be converted into a legal obligation"
Derry v Peek per Lord Herschell
• The duty of care is the obligation to avoid acts or omissions which are
reasonably foreseeable to cause damage to another.

• One owes a duty of care whenever one is engaged in an act which he or she
can reasonably foresee would be likely to injure another person; one owes a
duty of care to that other person.
Donoghue v Stevenson
Grant v Australian knitting mills

Modern requirements of duty of care

• Duty of care is the obligation to avoid acts or omissions which are reaosnably
foreseeable to cause damage to another.

• There are three elements:


o A reasonable foreseeability of real risk to P either as an identifiable
individual or as a member of a class of persons;
o The existence of proximity between the parties with respect to the act
or omission;
o Absence of any rule that precludes such a duty.
Jaensch v Coffey

Reasonable Foreseeability

• Reasonable foreseeability is tested using an objective "reasonable person"


standard.

• The reasonable person is the embodiment of community values and what the
community expects of a respnosible citizen.

• We evaluate D's conduct not from his or her particular position, but from that
of a reasonable person similarly placed.

• Reasonable foreseeability is a question of law.

Nova Mink v Trans Canada Airlines


Palsgraf v Long Island RR Co
Chaman v Hearse
United Novelty Co v Daniels
Jaensch v Coffey

Proximity

• There are 3 types of proximity: physical, circumstantial and causal


• Proximity is based on an evaluation of the legal and policy considerations of
what is fair and reasonable.
Jaensch v Coffey
Gala v Preston
Nagle v Rottnest Island Authority

• High Court has expressed doubts about the role of proximity.


Hill v Van Erp
Perre v Appand
Annetts v Australian Stations

Duty categories – general

• One owes a duty to those so closely and directly affected by one's conduct that
one ought reasonably to have them in contemplation as being so affected when
undertaking the conduct in question.

• Product liability
Donoghue v Stevenson
Voli v Inglewood Shire Council
Bryan v Maloney

• Use of premises (even by a trespasser)


Australian Safeway Stores v Zaluzna

Duty categories – the unborn child

• You can have a duty to an unborn child.


Lynch v Lynch

• Wrongful life – as a result of D's negligence, a child is born with a deformity.


Waller v James
Harriton v Stephens
Edwards v Blomely

• Wrongful birth – failed sterilisations


McFarlane v Tayside Health Board [2000] 2 AC 59
Edwards v Blomely

• Civil Liability Act has reduced the damages applicable for wrongful birth

71 Limitation of the award of damages for the birth of a child

(1) In any proceedings involving a claim for the birth of a child to which this Part
applies, the court cannot award damages for economic loss for:
(a) the costs associated with rearing or maintaining the child that the claimant
has incurred or will incur in the future, or
(b) any loss of earnings by the claimant while the claimant rears or maintains
the child.

Duty categories – rescuers

• One generally owes a duty of care to rescuers


Chapman v Hearse
Videan v British Transport Commission

• Rescuers may recover for both physical injuries and nervous shock.
Mount Isa Mines v Pussey

• The volenti non fit injuria rule does not apply to rescuers.

Duty categories – unforeseeable plaintiffs

• In general a duty of care is only owed to foreseeable and not to abnormal


plaintiffs.
Bourhill v Young
Levi v Colgate-Palmolive
Haley v London Electricity Board

The Civil Liability Act and duty of care.

• General principles:
compare Wyong Shire Council v Shirt

5B General Principles

(1) A person is not negligent in failing to take precautions against a risk of harm
unless:
(a) the risk was foreseeable (that is, it is a risk of which the person knew or
ought to have known), and
(b) the risk was not insignificant, and
(c) in the circumstances, a reasonable person in the person's position would
have taken those precautions.

(2) In determining whether a reasonable person would have taken precautions


against a risk of harm, the court is to consider the following (amongst other relevant
things):
(a) the probability that the harm would occur if care were not taken,
(b) the likely seriousness of the harm,
(c) the burden of taking precautions to avoid the risk of harm,
(d) the social utility of the activity that creates the risk of harm.
• No proactive duty to warn of obvious risks

5F Meaning of "obvious risk"

(1) … an obvious risk to a person who suffers harm is a risk that, in the
circumstances, would have been obvious to a reasonable person.

(2) Obvious risks include risks that are patent or a matter of common knowledge.

(3) A risk of something occurring can be an obvious risk even though it has a low
probability of occurring.

(4) A risk can be an obvious risk even if the risk (or a condition or circumstance that
gives rise to the risk) is not prominent, conspicuous or physically observable.

5G Injured persons presumed to be aware of obvious risks

(1) In determining liability for negligence, a person who suffers harm is presumed to
have been aware of the risk of harm if it was an obvious risk, unless the person
proves on the balance of probabilities that he or she was not aware of the risk.

5H No proactive duty to warn of obvious risk

(1) A person (the defendant) does not owe a duty of care to another person (the
plaintiff) to warn of an obvious risk to the plaintiff.

(2) This section does not apply if:


(a) the plaintiff has requested advice or information about the risk from the
defendant, or
(b) the defendant is required by a written law to warn the plaintiff of the risk, or
(c) the defendant is a professional and the risk is a risk of the death of or
personal injury to the plaintiff from the provision of a professional service by the
defendant.

• No duty of care for recreational activities where risk is warned

5M No duty of care for recreational activity where risk warning

(1) A person (the defendant) does not owe a duty of care to another person who
engages in a recreational activity (the plaintiff) to take care in respect of a risk of the
activity if the risk was the subject of a risk warning to the plaintiff.

(10) The fact that a risk is the subject of a risk warning does not of itself mean:
(a) that the risk is not an obvious or inherent risk of an activity, or
(b) that a person who gives the risk warning owes a duty of care to a person who
engages in an activity to take precautions to avoid the risk of harm from the
activity.

• Professional negligence

5O Standard of care for professionals

(1) A person practicing a profession (a professional) does not incur a liability in


negligence arising from the provision of a professional service if it is established that
the professional acted in a manner that (at the time the service was provided) was
widely accepted in Austraila by peer professional opinion as competent professional
practice.
(2) However, peer professional opinion cannot be relied on for the purposes of this
section if the court considers that the opinion is irrational.

• Mental harm

32 Mental harm – duty of care

(1) A person (the defendant) does not owe a duty of care to another person (the
plaintiff) to take care not to cause the plaintiff mental harm unless the defendant
ought to have foreseen that a person of normal fortitude might, in the circumstances
of the case, suffer a recognised psychiatric illness if reasonable care were not taken.

39. Civil Liability Act – Duty of Care for public authorities

• Limitations on duty of care

42 Principles concerning resources, responsibilities etc of public or other


authorities

(a) the functions required to be exercised by the authority are limited by … financial
and other resources that are reasonably available …
(b) the general allocation of those resources … is not open to challenge
(c) …
(d) the authority may rely on evidence of compliance with the general procedures
and applicable standards for the exercise of its functions as evidence of the
proper exercise of its functions …

43 Proceedings against public or other authorities based on breach of


statutory duty

(2) … an act or omission of the authority does not cnostitute a breach of


statutory duty unless the act or omission was in the circumstances so
unreasonable that no authority having the functions of the authority in question
could properly consider the act or omission to be a reasonable exercise of its
functions

• Nonfeasance protection restored. Non-feasance protection for highway


authorities had been removed, but the CLA restores it.
Brodie v Singleton Shire Council; Ghantous v Hawkesbury City Council
(removal)
Civil Liability Act 2002 s.45 (restoration)

40. Intoxication

• Intoxication is defined broadly to include both alcohol and drugs, whether


taken lawfully or not
Civil Liability Act 2002 s.48

• A person is not owed a duty of care, or a higher duty of care, just because they
are intoxicated
Civil Liability Act 2002 s.49
• A court cannot award damages to an intoxicated person unless the court is
satisfied that the same harm would have come to them even in the absence of
the impairment; and even then a presumption os 25 percent contributory
negligence will be made against them.
Civil Liability Act 2002 s.50

41. Self defence and recovery by criminals

• A person is not liable for acts committed in self defence (including defence of
others or property) provided:
o The act of self defence is a reasonable response (objective test)
o To the circumstances as the defendant perceived them (subjective test)
o But you can't use death to protect property or protect against trespass.
Civil Liability Act 2002 s.52

• Even if the defendant fails to meet the test above, damages may still not be
awarded unless:
o The circumstances of the case are exceptional; and
o Failure to award damages would be harsh and unjust
Civil Liability Act 2002 s.53

• If the plaintiff was engaged in a serious offence (punishable by prison for 6


months or more) and the offence contributed to the risk of injury, they cannot
recover damages.
Civil Liability Act 2002 s.54

Good samaritans and volunteers

• Generally speaking good samaritans are protected from liability except:


o If they are intoxicated
o If they are impersonating a police officer
o If they falsely represent that they have particular skills or expertise
Civil Liability Act 2002 ss.56-58

• Volunteers in community organisations are protected unless:


o Committing a criminal act (s.62)
o Intoxicated (s.63)
o Acting contrary to instructions (s.64) or
o Acting without required insurance (s.65)
Civil Liability Act 2002 ss.62-66

43. Breach of duty – general principles

• It is important to know both the common law principles for breach of duty and
their CLA equivalents.
• The common law principles for breach of duty are set out in Wyong v Shirt
and are:
o Would a reasonable person in the position of the defendant have
foreseen their conduct involved risk to the plaintiff?
o What would a reasonable person do, given:
 The magnitude of the risk;
Adelaide Chemical & Fertilizer v Carlyle
Paris v Stepney Borough Council
 The probability of its occurrence;
Bolton v Stone
 The expense, difficulty and inconvenience of taking the
required precautions; and
Caledonian Collieries v Spiers
 Any other conflicting responsibilities

• The CLA provisions bear a distinct similarity to the Wyong v Shirt formula:

o The court is to consider the following:


 The probability that the harm would occur if care were not
taken;
 The likely seriousness of the harm;
 The burden of taking precautions to avoid the risk of harm;
 The social utility of the activity that creates the harm
Civil Liability Act 2002 s.5B(2)

44. Damage

• From basic principles, negligence requires some injury or damage to the


plaintiff, caused by the defendant's negligence.

• The plaintiff bears the onus of proof for causation. They must show that the
defendant's negligence caused their injury.
Holloway v McFeeters

• The plaintiff may argue res ipsa loquitor – "the thing speaks for itself". But
this is risky if the defence can adduce vidence of other possible causes.
Nominal Defendant v Haslbauer

• There are four broad categories of damage:


o Damage to property
o Personal injury
o Mental harm
o Pure economic loss

• The cause of damage accrues when the damage occurs. Consequently


limitation periods only commence once the damage occurs.
• There are two types of causation:
o "causation-in-fact", the factual question of whether the defendant's
action caused the plaintiff's injury; and
o "legal causation", the question of whether and to what extent the law
should intervene to hold the defendant liable. In the CLA this is called
"scope of liability"
Civil Liability Act 2002 s.5D(1)

45. Causation in fact

• For causation in fact to be present, the condition alleged to have caused the
damage must be a necessary condition for the occurrence of the damage
(causa sine qua non)

• The traditional test is the "but for" test, which asks whether the injury would
have occurred but for the conduct of the defendant.
Fitzgerald v Penn
Bennett v Minister for Community Welfare

• The "but for" test is not particularly useful where there are multiple causes of
the injury.
March v Stramare

• Where there are concurrent or successive sufficient causes, the defendant is


usually only responsible for as much of the damage as they caused, taking into
account the position of the defendant prior to the incident.
Baker v Willougby
Faulkner v Keffalinos

• The eggshell skull principle applies, but not for future damage likely to be
hastened or made worse by the defendant's actions.
Jobling v Associated Dairies (eggshell skull)
Malec v Hutton (hastening future injury)

46. Legal causation

• Legal causation considers the question of whether D's conduct is sufficiently


proximate as a cause of P's injury. P's harm must not be too remote from D's
conduct.

• Similar to the issue of remoteness in contract law, though the "net" is cast
wider in tort.
• The main test of causation is reasonable foreseeability. It the damage was
reasonably foreseeable as a consequence of the breach, then legal causation is
established. The classic cases are the two Wagon Mound cases.
Wagon Mound No. 1 – damage not foreseeable – no liability
Wagon Mound No. 2 – damage foreseeable – liability

• A novus actus interveniens may break the chain of causation.


Smith J Haber v Walker

• A foreseeable intervening act does not break the chain of causation.


Chapman v Hearse

• Negligent medical treatment does not break the chain of causation unless it
was inexcusably bad.
Mahony v Kruschich Demolitions

47. Particular duty areas – product liability

• The manufacturer of a product is liable to the ultimate consumer for any


negligence in relation to that product, if the product remains unchanged after it
leaves their custody.
Donoghue v Stevenson
Grant v Australian Knitting Mills

• These rights are now substantially affected by statutes providing consumer


protection both in tort and in contract law.
Sale of Goods Act 1923 (NSW)
Fair Trading Act 1987 (NSW)
Trade Practices Act 1974 (Cth)

48. Particular duty areas – professional negligence

• Professional negligence is substantially affected by the Civil Liability Act. In


particular, it applies the test of whether the defendant was acting in accordance
with accepted professional opinion.
Civil Liability Act 2002 s.5O
Bolam

• Professionals do however retain a duty to warn of risks.


Civil Liability Act 2002 s.5P
Rogers v Whittaker

• Builders have a duty to future owners of a defectively built structure, not just
to the initial purchaser.
Bryan v Maloney
• Architects have an ongoing duty to users of a defectively-designed structure
Voli v Inglewood Shire Council

• Councils and statutory authorities have a duty not to be professionaly


negligent in the performance of their duties and in the issue of advice.
However the CLA has substantially reduced the scope of their liability as
noted earlier.
Civil Liability Act 2002, Pt 5.
Heyman v Sutherland Shire Council
Shaddock v Parramatta CC
Parramatta CC v Lutz

Particular duty areas – nervous shock

• Nervous shock requires an identifiable mental illness, plus a shock (a


sudden sensory perception) which has so affronted the mind that is causes the
mental harm.

• Liability depends on:


o The existence of a recognised psychiatric illness
o A shock which causes it
o Reasonable foreseeability of both elements

• For liability to be established, it is necessary that the negligent act could


have caused the mental harm in a person of normal mental fortitude
Tame v State of NSW; Annetts v Australian Stations
Civil Liability Act 2002 s.32

• Primary victims are victims whose damage arises directly from the
negligent act.
Page v Smith

• Secondary victims are those whose damage arises from either having a
close relationship to the victim, or viewing the negligent act as it causes the
damage to the primary victim.
Jaensch v Coffey
Civil Liability Act 2002 s.30

• Also note the distinction between "pure" mental harm arising directly from
the negligent act, and "consequential" mental harm arising from other forms of
personal injury.
Civil Liability Act 2002 s.27

Particular duty areas – pure economic loss


• Pure econmic loss is econmic loss which does not flow from damage to
person or property
• The courts were slow to recognise pure economic loss, but eventually did
so in Hedley Byrne v Heller, where the plaintiffs suffered a pure economic loss
as a result of reliance on advice from the defendant. The advice turned out to
be a negligent mis-statement. The duty of care was limited to someone
possessed of a special skill, who gives advice knowing it will be relied on by
the recipient of the advice.
Hedley Byrne v Heller

• In Australia the High Court has set out a number of conditions for pure
economic loss arising from negligent mis-statement
o The defendant must have foresight of the likelihood of harm;
o The defendant must have knowledge or the means of obtaining
knowledge of an ascertainable class of persons unable to protect
themselves from the harm;
o The impication of a duty must not impede the legitimate
commercial interests of the defendant; and
o The damage must flow from actions within the control of defendant
Perre v Apand

• Other situations of pure economic loss include:


o Damage to a third party
Caltex Oil v The Dredge Willemstad
o Builders liability to subsequent owners
Bryan v Moloney
o Improper preparation of wills
Hawkins v Clayton
Van Erp v Hill

Vicarious liability

• Vicarious liability makes the defendant (usually the employer) liable for
the torts of another (usually the employee) although the defendant themselves
is without fault.

• Vicarious liability only arises with respect to theactions of an employee,


not of an independent contractor.
Zujis v Wirth Bros
Stevens v Brodribb

• Factors setting out the difference between a contractor and an employee


were set out in Stevens v Brodribb:

Employee Contractor
Wage/salary Paid per job
Gets given equipment Supplies own equipment
Obligation to work Works own hours
PAYG Company tax
Controlled work method Decides own method

50. Defences to negligence – Contributory Negligence

• Contributory negligence occurs when the plaintiff has, through their own
negligence, contributed to their own injury. Conditions for contributory
negligence are:
o The plaintiff has failed to take the precautions a reasonable person
would take for their own protection; and
o The damage was reasonable foreseeable, and contributed to by the
plaintiff's act.
Wynbergen v Hoyts

• The corut is usually more lenient towards the plaintiff when considering
contributory negligence.

• The defendant bears the onus of proof


Hercules Textile Mills v K&H Textile Engineers

• If contributory negligence is found, then the court may apportion blame


(and therefore damages) between the parties
Law Reform (Miscellaneous Provisions) Act 1965 (NSW) s.10

• If the plaintiff was intoxicated at the time of the tort there will be a
rebuttable presumption of 25% contributory negligence made against them.
Civil Liability Act 2002 s.50(4)

• The court may assess contributory negligence at 100%, effectively


defeating the claim.
Civil Liability Act 2002 s.5T

Defences to negligence – voluntary assumption of risk

• If the plaintiff voluntarily assumed the risk which caused the injury, they
cannot be compensated for it. The factors which must be met are:
o P must have perceived the danger
o P must have fully appreciated the danger
o P must have voluntarily accepted the risk
Josslyn v Berryman

• The reach of this defence has been extended to situations where the
defendant "ought to have known" of the risk.
Scanlan v American Cigarette Coy (No. 2)
• Mere acquiescence to the risk is not enough, there must be voluntary
agreement.
Smith v Baker & Sons

• The Civil Liability Act contains a number of sections which relate to


voluntary assumption of risk:
o S.5F – defines obvious risk
o S.5G – plaintiffs are presumed to be aware og obvious risks
o S.5H – there is no duty to warn of obvious risks
o S.5I – no liability for the materialisation of inherent risks

Defences to negligence – illegality

• A person, by participating in an illegal act, does not immediately disentitle


themselves from actions under negligence.
Henwood v Municipal Tramways Trust

• The real question is whether it is appropriate to fix an appropriate standard


of care, taking into account the purpose of whatever law is broken.
Italiano v Barbaro

• Under the Civil Liability Act, criminals are not to be awarded damages if
they are undertaking a serious offence and the conduct of the offence
contributes materially to the risk of death, injury or damage.
Civil Liability Act 2002 s.54(1)

Remedies for negligence – Personal injury

• Personal injury can give rise to damages in three ways:


o Destruction or reduction of existing physical or mental capacity
o New needs which did not exist prior to the injury
o Production of pain and suffering
Teubner v Humble

• Damages are categorised in two ways:


o Special damages – out of pocket expenses, and loss of income up
to the day of the verdict. These are know, auditable costs.
o General damages – future medical and hospital expenses, future
economic loss, loss of amenities and enjoyment, pain and suffering, loss
of expectations of life. These are future losses and cannot be quanitifably
audited.

• Out of pocket expenses include all expenses incurred by the plaintiff on


account of the breach up to the date of the verdict
Paff v Speed

• Loss of income is compensation for the loss of pay plus any overtime but:
o Less any savings as a result of the injury (e.g. cost of transport to
work)
o Less board and lodging savings during hospital stay
Sharman v Evans
o Less allowance for tax deductions
Cullen v Trappell
o The amount of lost income is limited to three times average weekly
earnings; and
Civil Liability Act 2002 s.12
o A 5% discount rate is applied.
Civil Liability Act 2002 s.14

• Future medical care. The plaintiff can be compensated for the costs of
future medical care. These costs are recoverable even if the care is provided
gratuitously.
Griffith v Kerkemeyer

• However, Griffith v Kerkemeyer damages have been removed unless the


care goes for at least 6 hours a week, and for at least 6 months.
Civil Liability Act 2002 s.15
Geaghan v D'Aubert

• Loss of earning capacity can be compensated, but:


o The plaintiff must show evidence of a real but unexploited possibility
or capacity
Mann v Elbourn
Morris v Blake
o Damages are often reduced by about 15% for the vicissitudes of life

• Non-economic loss is generally claimed under three heads of damage:


o Pain and suffering
o Loss of amenities
o Loss of expectation of life
Benham v Gambling

• The courts have acknowledged that there is no true formula for


working out a value for non-economic loss, and that they don't necessarily do
it very well.
Sharman v Evans

• A number of provisions of the Civil Liability Act also affect the


award of personal injury damages:
o The CLA covers all personal injury damage under tort,
contract and statute
Civil Liability Act 2002 s.11A
o There is no payment for non-economic loss unless the non-
economic loss is at least 15% of the most extreme case. Compensation is
on a sliding scale from there.
Civil Liability Act 2002 s.16
o There is no exemplary, punitive or aggrvated damages for
personal injury arising from negligence
Civil Liability Act 2002 s.21
o Interest will not be paid on gratuitous care
Civil Liability Act 2002 s.18(1)
o Interest on past economic loss is tied to the Commonwealth
government 10 year benchmark bond
Civil Liability Act 2002 s.18(4)

Remedies for negligence – relational interests

• Compensation for relational interests arises under three categories:


death, loss of services, and loss of consortium.

• In the case of death from a wrongful act, the action now survives
the death of the injured party.
Law Reform (Miscellaneous provisions) Act 1944 (NSW) Pt 2

• Compensation is available for:


o Reasonable expenses incurred before the death of the injured
party; and
o Reasonable funeral expenses

• Compensation is not available for:


o Exemplary damages
o Loss of earning capacity/future earnings
o Loss of expectations of life
o Pain and suffering
Law Reform (Miscellaneous provisions) Act 1944 (NSW) s.2(2)

• Under the Compensation to Relatives Act, dependents can obtain


compensation for the loss of a reasonable expectation of a financial benefit
(i.e. loss of chance)
Compensation to Relatives Act 1987 (NSW) s.3(1)
Public Trustee v Zoanetti

• Loss of domestic services – a plaintiff may be compensated for the loss of the
injured (dead) person's domestic services. However this amount may be
reduced based on the plaintiff's prospects of remarriage.
Nguyen v Nguyen
• Employers can also claim compensation for the loss of the services of an
employee.

• There is no compensation for loss of consortium in NSW.

Section 4 – Defamation
Defamation generally

• Defamation is the publication of any statement designed to reduce the victim


in the eyes of others, to bring them "into hatred, contempt or ridicule"
Parmiter v Coupland
• At common law, there was a difference between slander (an oral statement
actionable on proof of damage) and libel (a written statement actionable per
se) but this distinction has been abolished.
Defamation Act 1974 s.8

• Defamation actions are tried by judge and jury, with the judge determining the
meaning of the statement and the jury deciding whether the statement is
defamatory.

• Living persons, local government bodies, professional bodies and trade unions
are all capable of being defamed. Small corporations (less than 10 people, no
subsidiaries) are also capable of being defamed. The dead cannot be defamed.

Elements of Defamation

• The elements of defamation are:


o The matter must be capable of bearing a defamatory meaning
o The matter must be published
o The matter must relate to the plaintiff
o There must be no lawful justification or defence

• Defamatory meaning is a question of interpretation depending on the


circumstances, the mode and the context of publication
Charleston v News Group Ltd

• Publication means communication to a third party – can be utterance to a


single other party.
Defamation Act 1974 s.9

• Publication does not include the innocent republication (such as by selling a


newspaper containing defamatory material
Defamation Act 1974 s.36

• For the matter to relate to the plaintiff, the test is would a sensible reader
reasonably identify the plaintiff as the person defamed?
Justifications for defamation

• Triviality – would a reasonable person impute a defamatory meaning?


Defamation Act 1974 s.13

• Truth – truth is only a defence if the publication is also in the public interest.
Truth is not a justification on its own.
Defamation Act 1974 ss.15-16
o The defendant need only prove the substantial truth of the statement
Alexander v NE Rys

o The plaintiff may success if the defendant is unable to prove the whole
of the statement
Becker v Smith's Newspapers

• Public interest comes down to two categories:


o Government and the conduct of public institutions; and
o Matters submitted to the public for its attention
Mutch v Sleeman

• Absolute privilege. Three categories:


o Parliamentary papers and proceedings
Defamation Act 1974 s.17
o Statements in the course of judicial proceedings, inquiries etc
Defamation Act 1974 ss.17A-17KA
o Communications between high ranking officers of state

• Qualified privilege - a limited form of privilege where


information is made available to a party and where the conduct of the
publisher "is reasonable in the circumstances"
Defamation Act 1974 s.22(1)

• Protected reports – a publication in good faith of statements made under


absolute privilege.
Defamation Act 1974 s.24(1)

• Court notices and official notices


Defamation Act 1974 ss.27-28

• Comment – honest expression of opinion on a matter of public interest


Gardner v Fairfax Newspapers
Kemsley v Foot

Remedies for defamation

• Offer of amends: Must meet a number of conditions:


o Offer must be in writing
o Must include an offer to publish a reasonable correction
o Must include an offer to publish a reasonable apology
o Must include an offer to pay reasonable expenses
o MAY include an offer to pay for economic/non-economic loss
Defamation Act 1974 s.9D

• Injunctions: only issued when the defendant's case is hopeless (or else
freedom of speech might be compromised)
Chappell v TCN Channel 9

• Damages: a rational amount to compensate for the harm caused. No


exemplary damages.
Defamation Act 1974 Part 4

Section 5 – Nuisance
Private nuisance

• Private nuisance is unlawful interference with the plaintiff's interest in [the


enjoyment of their] land.
Victoria Park Racing v Taylor
Thomson – Schwab v Costaki
Raciti v Hughes

• The conduct must be something emanating from the defendant's land (e.g.
noise, dirt, fumes, smell, vibrations)

• The plaintiff must have a proprietary interest in the land, in order to have title
to sue.

• The defendant's conduct must be unreasonable (i.e. not reasonably necessary


for the normal use of the land). Consequently normal use of land will not give
rise to liability just because the plaintiff has an abnormal sensitivity UNLESS
the defendant is deliberately and maliciously taking advantage of that
sensitivity
Munro v Southern Dairies
Robinson v Kilvert
Hollywod Silver Fox Farm v Emmett

• The creators of the nuisance may be sued, and the occupiers of the land may
be sued (even if they are not the ones creating the nuisance)
Fennell v Robson Excavations (creator of nuisance)
De Jager v Payneham & Magill Lodges (occupier of land)
Hargrave v Goldman (occupier of land)
Public nuisance

• Public nuisance is any nuisance that materially affects the reasonable comfort
and convenience of a class of people.

• The plaintiff can only sue if they can establish special damage above and
beyond that suffered by other members of the affected class.
Walsh v Ervin

• Queues obstructing roads, footpaths etc are not in themselves actionable


unless they arise from some unreasonable circumstance (e.g. D's premises
unsuitably small, D attracting them for some purpose other than business, D
neglecting some more reasonable measure for crowd control.
Silservice v Supreme Bread

• The interference must be substantial and material in order to be actionable.


York Bros v Commissioner of Main Roads

• Public benefits associated with the nuisance are not in themselves a defence
but may be used to support the justification of the inconvenience cased to the
plaintiff.

• Abatement (self-help) is one remedy. The abater will generally incur the costs
though it is possible the defendant may be required to contribute.
Proprietors – Strata Plan 14198 v Cowell

• Injunctions and damages may also be sued for.


Torts Lecture Notes
WHAT IS A TORT?
• A tort is a civil wrong
• That (wrong) is based a breach of a duty imposed by law
• Which (breach) gives rise to a (personal) civil right of action for a remedy
not exclusive to another area of law

THE DIFFERENCE BETWEEN A TORT AND A CRIME


• A crime is public /community wrong that gives rise to sanctions usually
designated in a specified code. A tort is a civil ‘private’ wrong.
• Action in criminal law is usually brought by the state or the Crown. Tort
actions are usually brought by the victims of the tort.
• The principal objective in criminal law is punishment. In torts, it is
compensation
• Differences in Procedure:
 Standard of Proof
 Criminal law: beyond reasonable doubt
 Torts: on the balance of probabilities

SIMILARITIES BETWEEN TORTS AND CRIME


• They both arise from wrongs imposed by law
• Certain crimes are also actionable torts; eg trespass: assault
• In some cases the damages in torts may be punitive
• In some instances criminal law may award compensation under criminal
injuries compensation legislation.

TORTS DISTINGUISHED FROM BREACH OF CONTRACT


• A breach of contract arises from promises made by the parties
themselves.
• In contract, the amount of damages is usually liquidated or
predetermined. Torts damages are usually unliquidated.

SIMILARITIES BETWEEN TORT AND CONTRACT


• Both tort and breach of contract give rise to civil suits
• In some instances, a breach of contract may also be a tort: eg an
employer’s failure to provide safe working conditions

THE AIMS OF TORT LAW


• Loss distribution/adjustment: shifting losses from victims to perpetrators
• Compensation: Through the award of (pecuniary) damages
• The object of compensation is to place the victim in the position he/she
was before the tort was committed.
• Punishment: through exemplary or punitive damages. This is a secondary
aim.

INTERESTS PROTECTED IN TORT LAW


• Personal security
 Trespass
 Negligence
• Reputation
 Defamation
• Property
 Trespass
 Conversion
• Economic and financial interests

Sources of Tort Law

 Common Law
 Statute (NSW)
o Civil Liability Act 2002
o Motor Accidents Compensation Act 1999
o Law Reform (Miscellaneous Provisions) Act
o Sale of Goods Act 1923
o Fair Trading Act
o Trade Practices Act 1974 (Cth)
o Compensation to Relatives Act 1897

LIABILITY IN TORT LAW


• Liability = responsibility
• Liability may be based on fault or it may be strict
• Fault liability: the failure to live up to a standard through an act or
omission.

Venning v Chin (1974) 10 SASR 299


A woman was injured when struck by a car on a suburban street. On trial, the
judge found that evidence was equivocal, preventing him from determining
the defendant’s negligence. The plaintiff then sued in trespass. It was held
that the onus of proof on the issue of fault in non-highway trespass actions
rests upon the defendant.

Platt v Nutt (1988) 12 NSWLR 231


The plaintiff was the defendant’s mother-in-law. Her daughter and grand
daughter were moving out of the house they had shared with the defendant.
The plaintiff stood at the front door, keeping a wire gauze door open while her
daughter carried luggage to the plaintiff’s car. When the daughter and grand
daughter finally left the house, the defendant made a parting remark and
slammed the front door. The plaintiff thrust her arm out and her hand went
through a glass panel of the door as it was closing. She was injured. It was
held (on trial) that the defendant did not intend to strike the plaintiff, BUT,
that the defendant had failed to discharge the burden of proving an absence
of negligence and gave judgment for the plaintiff. On appeal however, it could
not be determined whether the plaintiff’s thrusting out of her arm was a reflex
action or an independent act, so the plaintiff failed to prove that the
defendant had caused her injury.

• Types of fault liability:


FAULT

NEGLIGENCE INTENTION

Intention in Torts
• Deliberate or wilful conduct
• ‘Constructive’ intent: where the consequences of an act are substantially
certain: the consequences are intended
• Where conduct is reckless
• Transferred intent: where D intends to hit ‘B’ but misses and hits ‘P’

Negligence in Torts
• When D is careless in his/her conduct
• When D fails to take reasonable care to avoid a reasonably foreseeable
injury to another.

STRICT LIABILITY
• No fault is required for strict liability

ACTIONS IN TORT LAW


• Trespass
 Direct injuries
 Requires no proof of damage
• Action on the Case/Negligence
 Indirect injuries
 Requires proof of damage

INTENTIONAL TORTS
INTENTIONAL TORTS

Trespa Conversio
Detinue
ss n

WHAT IS TRESPASS?
• Intentional or negligent act of D which directly causes an injury to the P or
his /her property without lawful justification
• The Elements of Trespass:
 fault: intentional or negligent act
 injury* must be direct
 injury* may be to the P or to his/her property
 No lawful justification

*INJURY IN TRESPASS
• Injury = a breach of right, not necessarily actual damage
• Trespass requires only proof of injury not actual damage

THE GENERAL ELEMENTS OF TRESPASS

Intention Direct Absence of


al/
+ +
interference lawful
negligent with person or justification
act property

+ A
specific
“x” form of
eleme trespas
nt = s

A specific
form of
trespass
SPECIFIC FORMS OF TRESPASS

Trespass

Person Property

Battery

Assault

False Imprisonment

BATTERY

• The intentional or negligent act of D which directly causes a physical


interference with the body of P without lawful justification
• The distinguishing element: physical interference with P’s body

THE INTENTIONAL ACT IN BATTERY


• No liability without intention
• The intentional act = basic wilful act + the consequences.

CAPACITY TO FORM THE INTENT


• D is deemed capable of forming intent if he/she understands the nature of
(‘intended’) his/her act
 Lunatics

Morris v Marsden
The defendant, a catatonic schizophrenic, violently attacked the plaintiff. He was
charged with criminal assault but found unfit to plead. His defence to the
plaintiff’s action for damages for assault and battery required consideration of the
circumstance in which mental illness can constitute a defence to an action in tort.
Having found that the defendant knew of the nature and quality of his act, but,
because of his illness, did not know that what he was doing was wrong, his
lordship proceeded:
I have come to the conclusion that knowledge of wrongdoing is an
immaterial averment, and that, where there is the capacity to know the
nature and quality of the act, that is sufficient although the mind directing
the hand that did the wrong was diseased.

 Infants
 Hart v A. G. of Tasmania (infant cutting another infant with razor
blade)

THE ACT MUST CAUSE PHYSICAL INTERFERENCE


• The essence of the tort is the protection of the person of P. D’s act short
of physical contact is therefore not a battery
• The least touching of another could be battery
 Cole v Turner (dicta per Holt CJ)
• ‘The fundamental principle, plain and incontestable, is that every person’s
body is inviolate’
 ( per Goff LJ, Collins v Wilcock)

The Nature of the Physical Interference

Rixon v Star City Pty Ltd [2001] NSWCA 265


The defendant placed his hand on the plaintiff’s shoulder to attract his attention;
the court held that this did not constitute battery because the act was generally
acceptable in the ordinary conduct of daily life.

• Collins v Wilcock (Police officer holds D’s arm with a view to restraining
her when D declines to answer questions and begins to walk away;
battery)
 Platt v Nutt

SHOULD THE PHYSICAL INTERFERENCE BE HOSTILE?


• Hostility may establish a presumption of battery; but
• Hostility is not material to proving battery
 Wilson v Pringle ( The ratio in this case is questionable)
• The issue may revolve on how one defines ‘hostility’

THE INJURY MUST BE CAUSED DIRECTLY


• Injury should be the immediate The Case Law:
 Scott v Shepherd (Lit squib/fireworks in market place)
 Hutchins v Maughan (poisoned bait left for dog)
 Southport v Esso Petroleum (Spilt oil on P’s beach)

THE ACT MUST BE WITHOUT LAWFUL JUSTIFICATION


• Consent is Lawful justification
• Consent must be freely given by the P if P is able to understand the nature
of the act
 Allen v New Mount Sinai Hospital
• Lawful justification includes the lawful act of law enforcement officers
 Wilson v. Marshall (D accused of assaulting police officer, held
officer’s conduct not lawful)

TRESPASS: ASSAULT
• The intentional/negligent act or threat of D which directly places P in
reasonable apprehension of an imminent physical interference with his or
her person or of someone under his or her control

THE ELEMENTS OF ASSAULT


• There must be a direct threat:
 Hall v Fonceca (Threat by P who shook hand in front of D’s face in
an argument)

Rozsa v Samuels [1969] SASR 205


A queue jumping taxi driver was approached and threatened to be punched in the
head by another taxi driver. In response, he threatened the driver that he would
‘cut him to bits if he tried’ while holding up a table knife. It was held that the use
of a knife to defend himself from the sort of force offered by Drummond went
beyond what was reasonably necessary as a means of self defence and was
therefore an assault.

• In general, mere words are not actionable

Barton v Armstrong [1969] 2 NSWLR 451


The plaintiff pleaded that the defendant, a person of authority of whom he was
generally in fear, rang him and threatened him with serious violence. It was held
that threats uttered over a telephone in such circumstances are not properly
categorised as mere words. Threats over the phone can induce fear of physical
violence and it is immaterial that the plaintiff need know when the violence may
be applied.

• In general, conditional threats are not actionable


 Tuberville v Savage
 Police v Greaves
 Rozsa v Samuels

THE ELEMENTS OF ASSAULT


• The apprehension must be reasonable; the test is objective
• The interference must be imminent Police v Greaves
 Rozsa v Samuels
 Barton v Armstrong
 Hall v Fonceca
 Zanker v Vartzokas (P jumps out of a moving van to escape from
D’s unwanted lift)

FALSE IMPRISONMENT
• The intentional or negligent act of D which directly causes the total
restraint of P and thereby confines him/her to a delimited area without
lawful justification
• The essential distinctive element is the total restraint.

THE ELEMENTS OF THE TORT


• It requires all the basic elements of trespass:
 Intentional/negligent act
 Directness
 absence of lawful justification/consent , and
• total restraint

RESTRAINT IN FALSE IMPRISONMENT


The restraint must be total

Bird v Jones (1845) 7 QB 724


The plaintiff was trying to cross a bridge on a footpath. The defendant blocked
the plaintiff’s passage across the bridge. The court held that this was not false
imprisonment because the plaintiff had the option of using the foot path on the
other side of the bridge; therefore the restraint was not total.

The Balmain New Ferry Co v Robertson (1906) 4 CLR 379


The plaintiff intended to catch the ferry from Circular Quay to Manly. The
payment facilities for the trip were at Circular Quay for both ways. So passengers
to Manly paid before the ride, while passengers to the Quay paid getting off the
ferry. The plaintiff paid his fare at the Quay but missed the ferry. He then decided
to use another method of transport but couldn’t leave without paying again. The
court held that this was not false imprisonment because he was not totally
restrained. He had the option of leaving on the next ferry.

Total restraint implies the absence of a reasonable means of escape

Burton v Davies [1953] St Rep. Qd 26


The plaintiff wanted to get out of a car but the defendant kept driving. The only
way out was to jump. It was held that this was in fact false imprisonment
because it was not a reasonable option.

Restraint may be total where D subjects P to his/her authority with no


option to leave

Symes v Mahon [1922] SASR 447


A police office arrested the plaintiff in country SA. The officer took the plaintiff to
Adelaide by train, all the while being ‘nice’ to the plaintiff. (No handcuffs,
separate compartments etc) It was held that the train ride was total restraint
because the plaintiff felt compelled to abide by the officers instruction. (Police
authority threatening)

Myer Stores v Soo


Mrs Soo, a customer, was apprehended by store detectives under the suspicion
that she had done something wrong. She was detained in an office for 1 hour
before they realised that she had done nothing wrong and they let her go. It was
held to be false imprisonment because she lost 1 hour of her time while she was
totally restrained.

FORMS OF FALSE IMPRISONMENT

Cowell v Corrective Services Commissioner of NSW (1988)


The Prisons Act made provisions for the calculation of gaol terms. While the
plaintiff was incarcerated the High Court was discussing the calculations of gaol
sentences and decided that the Prisons Act had overstated some calculations. The
plaintiff was in gaol for too long and successfully sued for false imprisonment as
he was restrained (totally) unlawfully.

Louis v The Commonwealth of Australia 87 FLR 277


The plaintiff was forcibly carried from Hong Kong by authorities who informally
requested Qantas to carry the plaintiff to Australia. This was false imprisonment
because the request was informal and lacked lawful justification.

Lippl v Haines & Another (1989)


Lippl was a criminal on the run. Lippl’s parents had a visitor from Qld (where Lippl
was presumed to be hiding). The police saw the car with Qld plates and stormed
the house taking into custody Lippl’s father (thinking it was Lippl). After taking
him to the station they realised they had the wrong man. This was held to be
false imprisonment as it lacked lawful justification.

VOLUNTARY CASES

In general, there is no False Imprisonment where one voluntarily


submits to a form of restraint

Herd v Weardale Steel Coke and Cole Co [1915] AC 67


Minors, who were working underground decided to go on strike. The boss decided
not to let them out of the shaft until they were finished work. This was not held to
be false imprisonment because they consented to be there during those work
hours. (May be a different result today?)

Where there is no volition for restraint, the confinement may be FI

Bahner v Marwest Hotels Co)


A customer was detained at a restaurant by the manager who suspected the
customer of not paying for a bottle of wine. The plaintiff had in fact paid. The
police were called and instructed to press charges. The police, down at the
station, realised that the allegations were unfounded, however decided that the
plaintiff was intoxicated so they put him in lock up. This was also unfounded. The
restraint manager was held liable for the false imprisonment regarding the wine,
and the police were held liable for the false imprisonment regarding the
intoxication. Both detainments were without lawful justification.

WORDS AND FALSE IMPRISONMENT


• In general, words can constitute FI

“restraint… even by mere threat of force which intimidates a person into


compliance without laying on of hands”

KNOWLEDGE IN FALSE IMPRISONMENT

The knowledge of the P at the moment of restraint is not essential.

Merring v Graham White Aviation


The plaintiff was required by works police to go into an office for investigation.
Behind closed doors stood works police guarding the exits to ensure the plaintiff
could not escape. Even though the plaintiff was unaware of this at the time, this
was held to be false imprisonment.

Murray v Ministry of Defence [1988] 1 WLR 692


The military police in Northern Ireland were advised that Murray was an IRA
bomber. They burst into his house at 7amand searched the place wile detaining
him until 7.30am. It was held on this occasion that there was no false
imprisonment due to the extreme circumstances of the case.

WHO IS LIABLE? THE AGGRIEVED CITIZEN OR THE POLICE OFFICER?


In each case, the issue is whether the police in making the arrest acted
independently or as the agent of the citizen who promoted and caused the arrest.

Dickenson v Waters Ltd (1931) 31 SR (NSW) 593


The plaintiff was accused by store detectives for stealing. The plaintiff was
detained in the office until police arrived. The attending police officer knew the
plaintiff and checked with the manager about pressing charges. The manager
insisted. The allegations were unfounded and the store manager was liable for
false imprisonment.

THE ‘MENTALLY ILL’ AND FALSE IMPRISONMENT


In Common Law, the lawfulness of an act of detention of a person must depend
on "overriding necessity for the protection of himself and others’ per Harvey J in

re Hawke (1923) 40 WN (NSW) 58


The plaintiff was sent to a mental hospital by a doctor. It was held to be false
imprisonment because it was not sufficient that the doctor alone thought it was
good for the plaintiff. The true test is whether there is an overriding necessity for
the protection of the plaintiff and others.

The situation under statute:

Watson v Marshall and Cade (1971) 124 CLR 621


A police/doctor told the plaintiff that he needed hospitalisation. He was taken to
hospital and filled out the necessary forms. It was held to be false imprisonment
because the plaintiff felt compelled because of the doctor’s police authority. It
was also held that the re Hawke was not satisfied.

• The Vic Mental Health Act 1959:Any person may be admitted into and
detained in a psychiatric hospital upon the production of
 (a) a request under the hand of some person in the prescribed form;
 (b) a statement of the prescribed particulars; and
 (c) a recommendation in the prescribed form of a medical practitioner
based upon a personal examination of such person made not more than seven
clear days before the admission of such person.

DAMAGES
o False imprisonment is actionable per se
o The failure to prove any actual financial loss does not mean that
the plaintiff should recover nothing. The damages are at large. An
interference with personal liberty even for a short period is not a trivial
wrong. The injury to the plaintiff's dignity and to his feelings can be taken
into account in assessing damages (Watson v Marshall and Cade )

TRESPASS TO PROPERTY

TRESPASS TO PROPERTY

LAND GOODS/CHATTELS
TRESPASS TO LAND
• The intentional or negligent act of D which directly interferes with the
plaintiff’s exclusive possession of land

THE NATURE OF THE TORT


• Land includes the actual soil/dirt, the structures/plants on it and the
airspace above it.
• Cujus est solum ejus est usque ad coelum et inferos (The rights of the soil
extend to heaven and hell)

Bernstein of Leigh v Skyways & General Ltd [1978] QB 479


Skyways flew over Bernstein’s property and took a photo of it hoping to sell it him
in some form. Bernstein sued for trespass. It was held that there was no trespass
because there was no support that land owners rights are unlimited in height.
They are restricted to the height of ordinary use and enjoyment of the land.

Kelson v Imperial Tobacco


One commercial premises hung a sign which encroached it neighbours premises
by 20cm. It was held that this was trespass because it interfered with the
ordinary use and enjoyment of the neighbouring property.

STATUTORY EASEMENTS
• Conveyancing Act 1999 s 88K (NSW)
– 1. The Court may make an order imposing an easement over land if
the easement is reasonably necessary for the effective use or
development of other land that will have the benefit of the
easement.
– 2. Such an order may be made only if the Court is satisfied that:
» (a) use of the land having the benefit of the easement will
not be inconsistent with the public interest, and
» (b) the owner of the land to be burdened by the easement
and each other person having an estate or interest in that
land …can be adequately compensated for any loss or other
disadvantage that will arise from imposition of the easement
» all reasonable attempts have been made by the applicant for
the order to obtain the easement or an easement having the
same effect but have been unsuccessful

RESTRICTIONS ON STATUTORY EASEMENTS


• ‘Property rights are valuable rights and the court should not lightly
interfere with [such] property rights… [the section] does not exist for
people build right up to the boundary of their property [or] build without
adequate access and then expect others to make their land available for
access’ per Young J Hanny v Lewis (1999) NSW Conv. R 55-879 at 56-875
• ‘Developers have a responsibility to act reasonably as do the proprietors of
adjoining land and the developers should not just proceed as if they would
automatically get what they seek without negotiations’ (per Windeyer J
Goodwin v Yee Holdings Pty Ltd (1997) 8 BPR)

The Conditions
• Note that under s88K the ‘Court may make an order imposing an
easement over land if the easement is reasonably necessary for the
effective use or development of other land’
• What is reasonably necessary and what constitutes effective use or
development is a question of fact and would depend on the circumstances
of each case
• The applicant need not prove absolute necessity but the easement must
be more than ‘merely desirable’

117 York Street Pty Ltd v Proprietors of SP 16123 (1998) 43 NSWLR 504
An easement was sought through a strata property for the use of a crane. The tail
end of the crane would interfere with part of the property. The easement was
granted because it was deemed to be reasonably necessary to get the job done.

Hanny v Lewis (1998) 9 BPR 16,205


The plaintiff sought in on an existing easement for the use of an inclinator. The
easement was declined due to the existing terms prohibiting the use of vehicles.
The easement also serviced many properties and there were other options for the
plaintiff so it was deemed unnecessary.

• The applicant must have made all reasonable attempts to obtain the
easement Coles Myer Ltd v Dymocks Book Arcade Ltd (1995) 7 BPR
97,585

The Issue of Compensation

• 88K (2) Such an order may be made only if the Court is satisfied that: the
owner of the land to be burdened by the easement and each other person
having an estate or interest in that land …can be adequately compensated
for any loss or other disadvantage that will arise from imposition of the
easement
• Adequate compensation:(Wengarin Pty Ltd v Byron Shire Council [1999]
NSWSC 485)
– the diminished market value of the servient land
– associated costs that would be caused to the owner
– loss of amenities such as peace and quite
– where assessment proves difficult, the court may assess
compensation on a percentage of the profits that would be made
from the use of the easement

Neighbouring land Access and Utility Service Orders

• The Access to Neighbouring Land Act 2000 ss11 and 13


– (1) A Local Court may make a neighbouring land access /utility
service access order if it is satisfied that access to land is required
for the purpose of carrying out work on or in connection with a
utility service situated on the land and it is satisfied that it is
appropriate to make the order in the circumstances of the case
– (2) The Court must not make a utility service access order
unless it is satisfied:
– (a) that the applicant has made a reasonable effort to reach
agreement with every person whose consent to access is required
as to the access and carrying out of the work, and
– (b) if the requirement to give notice has not been waived, that the
applicant has given notice of the application in accordance with [the
Act]

The Nature of D’s Act: A General Note

• ...[E]very invasion of private property, be it ever so minute, is a trespass.


No man can set his foot upon my ground without my license, but he is liable to
an action, though the damage be nothing.... If he admits the fact, he is bound to
show by way of justification, that some positive law has empowered or excused
him ( Entick v Carrington (1765) 16 St Tr 1029, 1066)

THE NATURE OF D’S ACT

• The act must constitute some physical interference which disturbs P’s
exclusive possession of the land.

Victoria Racing Co. v Taylor

The defendant was a race caller who did not obtain permission to call the races at
the track from the management of the track. He proceeded to set up facilities on
a neighbouring property where he could see the race and called it from there. It
was held that he did not trespass because he did not disturb the exclusive
possession of the land. He interfered with the business, but not the land.

Lincoln Hunt Australia v Willesse (1986) 4 NSW LR 457


An investor was targeted by the Willesse program. Willesse went to the
companies premise and began filming without consent. The airing of the footage
would harm the company so they sought an injunction. The injunction was not
granted because it was deemed that damages would be an adequate remedy.

THE NATURE OF THE PLAINTIFF’S INTEREST IN THE LAND


• P must have exclusive possession of the land at the time of the
interference exclusion of all others

THE NATURE OF EXCLUSIVE POSSESSION


• Exclusive possession is distinct from ownership.
• Ownership refers to title in the land. Exclusive possession refers to
physical holding of the land
• Possession may be immediate or constructive
• The nature of possession depends on the material possessed

EXCLUSIVE POSSESSION: CO-OWNERS


• In general, a co-owner cannot be liable in trespass in respect of the land
he/she owns; but this is debatable where the ’trespassing’ co-owner is not
in possession.

Greig v Greig
A property was owned by two brothers jointly. Only one of the brothers lived on
the property. The other brother suspected that the brother living on the property
was infatuated with the housekeeper so he went onto the property and placed a
microphone in the chimney to find out. This was held to be trespass because the
brother who lived in the house had exclusive possession.

• A co-possessor can maintain an action against a trespasser

Coles Smith v Smith [1965]Qd R 494


A married couple jointly owned a property and had joint possession. The wife was
having an affair. The wife and her lover decided that the lover should enter the
married couple’s house at night and wake up the husband and accuse him of
adultery. (This was designed to give the wife reason for divorce and shift blame)
This was held to be trespass, even though one of the co-owners and co-
possessors consented to the entry.

THE POSITION OF TRESPASSERS AND SQUATTERS


• A trespasser/squatter in exclusive possession can maintain an action
against any other trespasser

THE POSITION OF LICENSEES


• A licensee is one who has the permission of P to enter or use land
(belonging to P)
• A licensee is a party not in possession, and can therefore not sue in
trespass
• A licensee for value however may be entitled to sue(E.R. Investments v
Hugh)

THE TRESPASSORY ACT


• Preventing P’s access

Waters v Maynard
A sheriff obtained a court order to possess goods from the plaintiff’s property.
While doing so, the sheriff locked the doors and prevented people coming and
going from the premises. While the initial act had lawful justification, the act of
locking the doors was deemed not to be lawfully justified. Trespass was
committed.

• The continuation of the initial trespassory act is a continuing trespass


• Where D enters land for purposes different from that for which P gave a
license, D’s conduct may constitute trespass ab initio

Barker v R
A man asked his neighbour to enter his place and check it periodically while he
was away for a couple of weeks. The neighbour did this, but while doing so stole
some goods from the house. The stealing of the goods exceeded the consent of
the neighbour and was held to be trespass.

THE POSITION OF POLICE OFFICERS

• Unless authorized by law, police officers have no special right of entry into
any premises without consent of P.

Halliday v Neville (1984) 155 CLR 1


In a small town, a disqualified driver was seen driving by police. Under pursuit,
the driver pulled into the driveway of a property owned by a third party. He was
arrested. It was held that this was no trespass to property as there is an implied
licence which extends to driveways and footpaths.
• A police officer charged with the duty of serving a summons must obtain
the consent of the party in possession

Plenty v. Dillon (1991) 171 CLR 635


The plaintiff in this case was expecting a summons; however he wrote to the
police and refused consent of having the summons delivered to his property.
Police entered the plaintiff’s driveway and issued the summons. This was held to
be trespass because the implied licence to driveways and footpaths does not
include something coercive.

Police Officers; The Common Law Position

• The poorest man may in his cottage bid defiance to all forces of the
Crown. It may be frail- its roof may shake- the wind may blow through it-
the rain may enter- but the King of England cannot enter- all his force
dares not cross the threshold of the ruined tenement. So be it- unless he
has justification by law’. (Southam v Smout [1964] 1QB 308, 320.

REMEDIES

• Ejectment
• Recovery of Possession
• Award of damages
• Injunction

Parramatta CC v Lutz (1988) 12 NSWLR 293


Mrs Lutz was in an apartment which adjoined another apartment which was
deteriorating after a failed company had left the premises. Mrs Lutz called the
council and expressed concern about the mess creating a fire hazard. Nothing
was done and there was a fire. Damages were awarded.
Campbelltown CC v Mackay (1989) 15 NSWLR 501
After a builder had completed a house, it was inspected the council. The council
approved the building; however the footings were not ok. The house proceeded to
crack. Damages were awarded both for the shoddy work and subsequent nervous
shock suffered by the plaintiff.

XL Petroleum (NSW) v Caltex Oil (Australia) (1985) 155 CLR 448


XL signed a lease with Caltex for the use of their premises (exclusive possession).
Because XL was dealing with budget fuel, Caltex decided that they didn’t want XL
to use their underground tanks. Subsequently they filled the tanks with water, so
that they could not be used for petrol. It was held that this was trespass because
Caltex had interrupted the ordinary use and enjoyment of the land. Punitive
damages were also awarded due to the spiteful nature of Caltex’s act.

TRESPASS TO GOODS/CHATTEL
• The intentional/negligent act of D which directly interferes with the
plaintiff’s possession of a chattel without lawful justification
• The P must have actual or constructive possession

DAMAGES
• It may not be actionable per se (Everitt v Martin)

CONVERSION
• The act of D in relation to another’s chattel which constitutes an
unjustifiable denial of his/her title
CONVERSION: Who Can Sue?
• Owners
• Those in possession or entitled to immediate possession
– Bailees*
– Bailors*
– Mortgagors* and Mortgagees*(Citicorp Australia v B.S. Stillwell)
– Finders

Parker v British Airways Board [1982] QB 1004


Parker found a gold bracelet in the airport terminal. British Airways said that
because the item was found in an area which they leased, it was their property.
Parker sued for conversion and was successful. The court held that such cases
depend on the circumstances. I.e. Property found in a public park is different to
property found in a private safe. The airport terminal is somewhere in between,
but closer to the park.

Armory v Delmirie
A young chimney sweep found a ring with jewels in a chimney while working. The
occupiers of the house did not know whose ring it was. The sweep kept the ring
and took it to a jeweler for evaluation. While in possession, the jeweler removed
the jewels from the ring and returned the ring only to the boy. The boy sued for
conversion. The suit was successful because the court held that the sweep had
possession of the ring and that he had rights against all but the true owner of the
ring. (Which the jeweler was not)

ACTS OF CONVERSION
• Mere aspiration is no conversion

Fouldes v Willoughby (1841) 151 ER 1153


The plaintiff boarded a ferry with two horses. The ferry owner did not want the
horses on the boat. The horses were taken to a hotel while the plaintiff went on
the boat. When the plaintiff returned for his horses, the hotel owner demanded
payment for keeping the horses. The plaintiff refused this so the hotel owner sold
the horses. The plaintiff tried to sue the ferry owner but failed because the ferry
owner did not convert the goods, the hotel owner did.

• The D’s conduct must constitute an unjustifiable denial of P’s rights to the
property

Howard E Perry v British Railways Board [1980] 1 WLR 1375


Railways refused to deliver the plaintiff’s steel due to support of industrial action.
The plaintiff sued for conversion and was successful because the railway denied
the plaintiff’s right of possession.

• Finders of lost property


– Parker v British Airways
• The position of the auctioneer

Willis v British Car Auctions [1978] 1 WLR 438


Mr Croucher purchased a mustang from Willis. It was a hire lease so Croucher did
not own the car until he had repaid the full amount to Willis. Croucher was in
financial trouble so he sold the car to British Car Auctions who then sold on to a
third party. Willis tried to recover but could not find Croucher or the purchaser.
He sued British Car Auctions and was successful. The court held that both the
purchaser and the auctioneer were liable. The auctioneer should have made the
appropriate enquiries.
• Destruction of the chattel is conversion
– Atkinson v Richardson;)
• Taking possession
• Withholding possession

Clayton v Le Roy
Refusal to return goods must be where the return is unqualified. E.g. Upon ticket
etc.

• Misdelivery (Ashby v Tolhurst (1937 2KB); Sydney City Council v West)


• Unauthorized dispositions in any manner that interferes with P’s title
constitutes conversion

Penfolds Wines v Elliott (1946) 74 CLR 204


Penfolds bottles were embossed with ‘property of Penfolds’. They sold the wine
not the bottle. Elliot kept the bottles and used them for his own purposes.
Penfolds sought an injunction and were successful because Elliot’s use of the
bottles was unjustified.

DETINUE

• Detinue: The wrongful refusal to tender goods upon demand by P, who is


entitled to possession. It requires a demand coupled with subsequent
refusal.

General and Finance Facilities v Cooks Cars (Romford) [1963] 1 WLR 644
The plaintiffs demanded the return of their mobile cranes. This was refused by
the defendant and held to be at the time of refusal detinue.

DAMAGES IN CONVERSION AND DETINUE


• In conversion, damages usually take the form of pecuniary compensation
• In detinue, the court may in appropriate circumstances order the return
of the chattel
• Damages in conversion are calculated as at the time of conversion; in
detinue it is as at the time of judgment

The Mediana [1900] AC 113


The Mediana was a light boat that was damaged. It was a spare boat and unused.
Damages were awarded for the loss of services. It was held to be irrespective of
whether the boat would have been used or not.

Butler v The Egg and Pulp Marketing Board (1966) 114 CLR 185
Butler was an egg producer. Victorian legislation stated that all eggs produced
must go through the egg board. Butler sold his eggs to a third party for a better
price. This was held to be conversion as the Act made the eggs the property of
the board. Damages for the difference.

The Winkfield [1902] P 42


The Winkfield collided with The Mexican. The Mexican lost mail which it was
carrying. The mail was the property of the post master general. He sued
successfully for the full value of the mail in conversion.

– General and Finance Facilities v Cooks Cars (Romford)


CONVERSION, TRESPASS AND DETINUE

Conversion
Trover
Detinue Trespass

Action on the Case for Indirect Injuries

INDIRECT INTENTIONAL INJURIES

• ACTION ON THE CASE FOR PHYSICAL INJURIES OR NERVOUS SHOCK


• ACTION ON THE CASE REFERS TO ACTIONS BASED ON INJURIES THAT
ARE CAUSED INDIRECTLY OR CONSEQUENTIALLY

INDIRECT INTENTIONAL INJURIES: CASE LAW

D is liable in an action on the case for damages for intentional acts which are
meant to cause damage to P and which in fact cause damage (to P)

Bird v Holbrook (1828) 130 ER 911


The plaintiff was chasing a pea hen which had escaped. The hen jumped a
neighbouring fence and went into the neighbour’s garden. The garden had
expensive tulips which the neighbour wanted to protect, so he had a spring
loaded gun set up. The gun shot the boy who was injured. The defendant was
held to be liable for an action on the case as the act was intentional albeit that it
may not have been intentional to hit that boy.

THE INTENTIONAL ACT

• The intentional may be deliberate and preconceived(Bird v Holbrook )


• It may also be inferred or implied; the test for the inference is objective.

Wilkinson v Downton [1897] 2 QB 57


The defendant told the plaintiff that her husband was in a serious car crash. This
was a practical joke, however the plaintiff suffered nervous shock and the
defendant was liable because the intention was to inflict shock.
• Janvier v Sweeney

Action on the Case for Indirect Intentional Harm: Elements


• D is liable in an action on the case for damages for intentional acts which
are meant to cause damage to P and which in fact cause damage to P
• The elements of this tort:
– The act must be intentional
– It must be one calculated to cause harm/damage
– It must in fact cause harm/actual damage
• Where D intends no harm from his act but the harm caused is one that is
reasonably foreseeable, D’s intention to cause the resulting harm can be
imputed/implied

THE SCOPE OF THE RULE

• The rule does not cover ‘pure’ mental stress or mere fright
• The act must be reasonably capable of causing mental distress to a
normal* person:

Bunyan v Jordan (1936) 57 CLR 1


A drunken employer told some employees that he was going to shoot himself.
While the employer was out of the room, an employee heard two gun shots. The
employee suffered shock. The employer did not shoot himself. The court held that
the situation would not cause shock to the normal person and the employer was
not liable.

Stevenson v Basham
A landlord was yelling at the plaintiff’s husband “I’ll have you out in 24 hours…if I
can’t get you out, I’ll burn you out.” The plaintiff, who was pregnant, was in bed
and heard this. She suffered nervous shock and subsequently a miscarriage. The
defendant was liable because the act was intentional and the plaintiff suffered as
that of a normal person.

IS THERE ROOM FOR EXTENDING THE SCOPE

• The normal person in Wilkinson v Downton


• The normal/reasonable person: The gender/race debate

The Scope of Intentional Torts to the Person

• Trespass:
– Battery,
– False Imprisonment
– Assault
• Action on the case (Wilkinson v Downton)

Prospects for Development in the Common Law

• Rape Cases
• Sexual harassment Cases
• Racial/Ethnic harassment Cases

ONUS OF PROOF

• In Common Law, he who asserts proves


• Traditionally, in trespass D was required to disprove fault once P proved
injury. Depending on whether the injury occurred on or off the highway
( McHale v Watson; Venning v Chin)
• The current Australian position is contentious but seems to support the
view that in off highway cases D is required to prove all the elements of
the tort once P proves injury
– Hackshaw v Shaw
– Platt v Nutt
– See Blay; ‘Onus of Proof of Consent in an Action for Trespass to the
Person’ Vol. 61 ALJ (1987) 25
– But see McHugh J in See Secretary DHCS v JWB and SMB (Marion’s
Case) 1992 175 CLR 218

IMPACT OF THE CIVIL LIABILITY ACT

• Section 3B Civil liability excluded from Act


(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 in respect of an intentional act that is done with
intent to cause injury or death or that is sexual assault or other sexual
misconduct – the whole Act except 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

Defences to Intentional Torts

INTRODUCTION: The Concept of Defence


• Broader Concept: The content of the Statement of Defence- The response
to the P’s Statement of Claim-The basis for non-liability
• Statement of Defence may contain:
– Denial
– Objection to a point of law
– Confession and avoidance:

MISTAKE

• An intentional conduct done under a misapprehension


• Mistake is thus not the same as inevitable accident
• Mistake is generally not a defence in tort law ( Rendell v Associated
Finance Ltd, Symes v Mahon)
• ‘Mistake’ may go to prove

CONSENT

• In a strict sense, consent is not a defence as such because in trespass, the


absence of consent is an element of the tort
– See: Blay; ‘Onus of Proof of Consent in an Action for Trespass to
the Person’ Vol. 61 ALJ (1987) 25

Secretary DHCS v JWB and SMB (Marion’s Case) 1992 175 CLR 218
Parents can give consent to the sterilization of mentally handicapped children
only where absolutely necessary for the child’s welfare. They have no consent if
harm can be avoided by less drastic means.

VALID CONSENT
• To be valid, consent must be informed and procured without fraud or
coercion: ( R vWilliams;)
• To invalidate consent, fraud must relate directly to the agreement itself,
and not to an incidental issue:

Papadimitropoulos v R (1957) 98 CLR 249


A man met a woman from overseas. He set up a fake marriage ceremony and
pretended to marry her. Thinking she was married, she consented to sex. It was
held that the consent was valid because the consent was to the act itself.

CONSENT IN SPORTS
• In contact sports, consent is not necessarily a defence to foul play
(McNamara v Duncan; Hilton v Wallace)
• To succeed in an action for trespass in contact sports however, the P
must of course prove the relevant elements of the tort.
– Giumelli v Johnston

THE BURDEN OF PROOF


• Since the absence of consent is a definitional element in trespass, it is for
the P to prove absence of consent and not for the D to prove consent

STATUTORY PROVISIONS ON CONSENT


• Minors (Property and Contracts) Act 1970 (NSW) ss 14, 49
• Children and Young Peoples (Care and Protection Act) 1998 (NSW)
s174/175

SELF DEFENCE, DEFENCE OF OTHERS


• A P who is attacked or threatened with an attack, is allowed to use
reasonable force to defend him/herself
• In each case, the force used must be proportional to the threat; it must
not be excessive.

Fontin v Katapodis
After an exchange of words, the plaintiff picked up a wooded T-square and hit the
defendant twice. Before hitting him a third time the defendant grabbed a shard of
glass and threw it at the plaintiff. It slit his wrist. It was held that the self defence
was out of proportion and thus excessive.

• D may also use reasonable force to defend a third party where he/she
reasonably believes that the party is being attacked or being threatened

THE DEFENCE OF PROPERTY

• D may use reasonable force to defend his/her property if he/she


reasonably believes that the property is under attack or threatened
• What is reasonable force will depend on the facts of each case, but it is
debatable whether reasonable force includes ‘deadly force’

PROVOCATION

• Provocation is not a defence in tort law.


• It can only be used to avoid the award of exemplary damages: Fontin v
Katapodis; Downham Ballet and Others

A Critique of the Current Position on Provocation

• To discourage vengeance and retributive justice


• The compensation theory argument
• The gender based thesis

The Case for Allowing the Defence of Provocation

• The relationship between provocation and contributory negligence


• The implication of counterclaims
• Note possible qualifications Fontin v Katapodis to:

Lane v Holloway
The plaintiff was returning home from the pub when he saw the wife of the
defendant. (The two disliked each other) The plaintiff yelled out “shut up you
monkey face tart!” The defendant comes out of the house, and claims that the
plaintiff was about to hit him so he hit the plaintiff. The defendant was liable for
assault however damages were reduced due to the plaintiff’s provocation.
– Murphy v Culhane
– See Blay: ‘Provocation in Tort Liability: A Time for
Reassessment’,QUT Law Journal, Vol. 4 (1988) pp. 151-159.

NECESSITY

• The defence is allowed where an act which is otherwise a tort is done to


save life or property: urgent situations of imminent peril

Urgent Situations of Imminent Peril

• The situation must pose a threat to life or property to warrant the act:

Southwark London B. Council v Williams [1971] 1 Ch 734


A homeless family was squatting in a council owned house. The council wanted to
regain possession of the house however the squatters claimed that the council
had a duty to provide housing, and that it was necessary because everyone needs
shelter. The court held that it was not an urgent situation of imminent peril.

• The defence is available in very strict circumstances

R v Dudley and Stephens


3 shipwrecked sailors killed and ate their cabin boy to save their lives. It was held
that the killing was not justified by necessity as there were other means of
obtaining food.

• D’s act must be reasonably necessary and not just convenient

Murray v McMurchy [1949] 2 DLR 442


A doctor performing surgery discovered another problem with a patient so he
fixed it while he was there. It was held that there was no consent and because
the 2nd condition was not life threatening it was not necessary, merely a
convenience.
– In re F

Cope v Sharp
The plaintiff leased out shooting rights to his land to Mr Chase, who employed the
defendant to look after his game. There was a fire on the property so the
defendant set another fire to back-burn a safety zone so the out of control fire
wouldn’t harm his master’s game. This was held to be necessary and the plaintiff
was unsuccessful.

INSANITY

• Insanity is not a defence as such to an intentional tort.


• What is essential is whether D by reason of insanity was capable of
forming the intent to commit the tort. (White v Pile; Morris v Masden)

INFANTS

• Minority is not a defence as such in torts.


• What is essential is whether the D understood the nature of his/her
conduct (Smith v Leurs; Hart v AG of Tasmania)

DISCIPLINE

• PARENTS
– A parent may use reasonable and moderate force to discipline a
child. What is reasonable will depend on the age, mentality, and
physique of the child and on the means and instrument used. (R v
Terry)
• TEACHERS
• CAPTAINS OF VESSELS
• SPOUSES

ILLEGALITY: Ex turpi causa non oritur actio


• Persons who join in committing an illegal act have no legal rights inter se
in relation to torts arising directly from that act.
– Hegarty v Shine
– Smith v Jenkins
– Jackson v Harrison

Gala v Preston
A group of youths spent the afternoon drinking and playing pool. They then stole
a car and decided to do a break and enter. While driving there, the plaintiff was
asleep in the car. The defendant drove into a tree. The minority of the court said
that there is no duty of care between accomplices in the course of conducting an
illegal act. The majority found that there was no proximity to create a duty of
care. In the circumstances, there was no reasonable basis to believe the driver
(who was drunk) would have an ordinary standard of competence or care.

NEGLIGENT TRESPASS – NEGLIGENCE (DUTY OF CARE)


NEGLI
NEGLIGENT TRESPASS
• Intentional or negligent act of D which directly causes an injury to the P
or his /her property without lawful justification
• The Elements of Trespass:
– fault: intentional or negligent act
– injury must be direct
– injury may be to the P or to his/her property
– No lawful justification
• While trespass is always a direct tort, it is not necessarily an intentional
act in every instance. It may be committed negligently
• Negligent trespass is an action in trespass not in negligence:
• Where the facts of a case permit, it is possible to frame an action in both
trespass and negligence on the same facts

Williams v. Milotin (1957) 97 CLR. 465.


A cyclist was struck by a truck. The action was taken up over three years after
the incident. The limitation period for trespass was three years, so the suit for
battery could not operate. An alternate action was launched on the case. The
limitation period for action on the case was six years. It was held that because
the damage was caused directly and unintentionally that the plaintiff could bring
the action in either form.

What is Negligence?
• It is the neglect of a legal duty
• It involves the three elements of
• duty
• breach;
• resultant damage

Negligence: The Elements

INTEN
Duty of
care

Negl
igen Breach
ce

Damage
Negligence: The Early Cases
• Heaven v. Pender
• (Defective equipment supplied to plaintiff painter)
• The dicta of Brett MR:
• whenever one person is by circumstances placed in such a position with
regard to another, that every one of ordinary sense who did think would at
once recognise that if he did not use ordinary care and skill in his own
conduct with regard to those circumstances he would cause danger or
injury to the person or property of the other (person) a duty arises to use
ordinary care and skill to avoid such danger.
• Derry v. Peek
• (Steam power-prospectus-misstatement)
• Dicta of Lord Herschell:
• A moral duty that should be converted into a legal obligation
• Le Lievre v. Gould
• (Surveyor-incorrect certificates-mortgage payments-losses)

Donoghue v. Stevenson
• Ginger beer-decomposing snail-P has shock-gastroenteritis
• No privity of contract between P and D. Issue was whether D owed P a
duty
• Dicta of Lord Atkin
• You must take reasonable care to avoid acts or omissions which
you can reasonably foresee would be likely to injure your
neighbour. Who then in law is my neighbour? The answer seems to
be persons who are closely and directly affected by my act that I
ought reasonably to have them in mind to the acts or omissions

NEGLIGENCE
• Grant v Australian Knitting Mills (1936)
• The application of the rule in D v S
• a manufacturer of products, which he sells in such a form as to
show that he intends them to reach the ultimate consumer in the
form in which they left him with no reasonable possibility of
intermediate examination, and with the knowledge that the
absence of reasonable care in the preparation or putting up of the
products will result in an injury to the consumer’s life or property,
owes a duty to the consumer to take that reasonable care
NEGLIGENCE: THE DUTY OF CARE
• The dicta of Lord Atkin in Donoghue v Stevenson:
– whenever one person is by circumstances placed in such a position
with regard to another, that every one of ordinary sense who did
think would at once recognise that if he did not use ordinary care
and skill in his own conduct with regard to those circumstances he
would cause danger or injury to the person or property of the other
(person) a duty arises to use ordinary care and skill to avoid such
danger.
– You must take reasonable care to avoid acts or omissions which
you can reasonably foresee would be likely to injure your
neighbour/another

Negligence: (Duty of Care)


• The Duty of care is the obligation to avoid acts or omissions which are
reasonably foreseeable to cause damage to another.
• When does one owe a duty of care?
• Whenever one is engaged in an act which he or she can reasonably
foresee would be likely to injure another person, one owes a duty of care
to that other person

The Modern Requirements for the Duty of Care

Jaensch v. Coffey (1984) per Dean J. p587-8


The plaintiff had an unhappy upbringing and found security in a police officer
whom she married. One evening the plaintiff was at home with her young child
when two police officers came to her house and told her that her husband had
been in a serious car accident and was fighting for his life in hospital. The
husband under went two operations and it was thought he would die. He was in
intensive care for 3 or 4 weeks with tubes sticking out of him everywhere. He
lived, but the wife suffered from anxiety and suffered physical distress which
resulted in her having a hysterectomy.
It was held:
• A duty situation would arise from the following combination of factors
• A reasonable foreseeability of real risk of injury to P either as an
identifiable individual or a member of a class of persons
• The existence of proximity between the parties with respect to the act or
omission
• Absence of any rule that precludes such a duty

What is Reasonable Foreseeability?


• Reasonable foreseeability presupposes an objective or a reasonable
person’s standard
• The reasonable person is an embodiment of community values and what
the community expects of a responsible citizen
• The concept allows us to evaluate D’s conduct not from his or her peculiar
position, but from that of a reasonable person similarly placed
• Reasonable foreseeability is a question of law

Reasonable Foreseeability: Case Law


• Nova Mink v. Trans Canada Airlines [1951] (Air traffic noise causing
minks to eat their young ones-No foreseeability)
• Palsgraf v. Long Island R.R. Co. (1928) (Railway guards helping falling
passenger-fireworks explosion causing injury to plaintiff.-No foreseeability)
• Chapman v. Hearse (1961) (Car accident-Dr. stops to help-gets killed by
another vehicle-action against D who caused initial accident-
Foreseeability upheld)

The Scope of Reasonable Foreseeability


• United Novelty Co. v. Daniels (1949) (Workers cleaning coin operated
machine with flammable substance-rat in machine runs into fire place
causing fire damage and death-Foreseeability upheld)
• Jaensch v. Coffey (1984) (Car accident-spouse goes to hospital to see
injured partner-suffers shock from what she sees and hears of husband’s
condition-action against D who caused accident-Proximity-Duty)

Proximity
• Jaensch v. Coffey (1984) (Car accident-spouse goes to hospital to see
injured partner-suffers shock from what she sees and hears of husband’s
condition-action against D who caused accident-Proximity-Duty)
• Gala v. Preston (1991) (Duty relationship between parties engaged in an
illegal enterprise-No proximity-No duty)
• Nagle v. Rottnest Island Authority (1993) (P injured while diving into a
rocky pool- pool promoted and operated by D-Proximity, Duty upheld)
• Held: the board, by encouraging persons to engage in an activity, came
under a duty to take reasonable care to avoid injury to them and the
discharge of that duty... require that they be warned of any foreseeable
risks of injury associated with the activity so encouraged
The Main Features of Proximity

Proximity

Degree of Proximity

Evaluation
Physical

Circumstantial Evaluation of legal and policy


considerations of what is fair
and reasonable
Causal

Recent Developments on Proximity:


• The High Court has expressed reservations about the usefulness of the
notion of proximity in recent times
– Hill v Van Erp
– Perre v Appand
– Annetts v Australian Stations Pty Ltd

DUTY CATEGORIES: To whom is duty owed?


• One owes a duty to those so closely and directly affected by his/her
conduct that she ought reasonably to have them in contemplation as being
so affected when undertaking the conduct in question.
• Examples:
– Consumers, users of products and structures
» Donoghue v Stevenson
» Voli v Inglewood Shire Council (stage collapse)
» Bryan v Maloney (house footings wrong)
– users of premises etc.
» Australian Safeway Stores v Zaluzna (no longer does it
matter what identity the person has…ie trespasser, invitee,
employee etc)

DUTY CATEGORIES
• The unborn child:
– The duty is not simply to take reasonable care in the abstract but
to take reasonable care not to injure a person whom it should
reasonably be foreseen may be injured by the act or neglect if
such care is not taken (Winneke CJ/ Pape J)
– There can be no justification for distinguishing between the rights…
of a newly born infant returning home with his /her mother from
hospital in a bassinet hidden from view on the back of a motor car
being driven by his proud father and of a child en ventre sa mere
whose mother is being driven by her anxious husband to the
hospital on way to the labour ward to deliver such a child ( Per
Gillard J in Watt v Rama)

– Lynch v Lynch (1991) (Pregnant mother is negligent and has a car


accident. The child is born with severe disabilities. The child
successfully sued the mother.)

• Wrongful life cases


– Waller v James 2002 (IVF – omission – AT3 – child born with AT3)
– Harriton v Stephens [2002] NSWSC 461 (Doctor – omission to
rubella – spastic kid)
– Edwards v Blomeley 2002 (vasectomy – sperm test (high 19m) –
retest 2 weeks (lower 5m) wait 1 month – no test – child born –
mentally disabled)
The issue in the above cases was whether children could in fact sue for
themselves being born. It was held on all occasions that they couldn’t because
only the living can sue, and had the breach of duty not occurred, then they would
not exist.

RESCUERS
• There are two separate issues in rescue:
– The ‘duty’ to rescue
– The duty of care owed to the rescuer
• There is no positive legal obligation in the common law to rescue
– The law does not ‘cast a duty upon a man to go to the aid of
another who is in peril or distress, not caused by him
• There may however exist a duty to rescue in master servant relationships
or boat owner and guest relationships for instance

Horsley v Macleran (The Ogopogo) (1971) 22 DLR


On a ship, a passenger fell over board. Another passenger jumped in the icy
water to rescue him. The ship attempted to circle back around to pick them up
but it took too long and they both died in the icy water. It was held that there
was a duty of care owed to the rescuer by the ship owner, and that it had been
fulfilled.

• One is only required to use reasonable care and skill in the rescue

THE DUTY OWED TO RESCUERS


• The rescuer is generally protected : torts recognizes the existence of a
duty of care owed to the rescuer
• The issue of volenti-non fit injuria: This principle does not seem to apply
in modern tort law to rescue situations
– Note however the case of Sylvester v GB Chapman Ltd (1935)
:attack by leopard while attempting to put out a smoldering
cigarette in straw
• ‘The cry of danger is the summons to relief. The law does not ignore
these reactions of the mind.. It recognizes them as normal… and places
their effects within the range of the natural and the probable [and for that
matter the foreseeable] per Cardozo J in Wagner v International Railway
Co. (1921)
– Chapman v Hearse
– Videan v British Transport Commission (1963) (rescue attempt to
get a child trespassing on railway line)
• Rescuers may recover for both physical injuries and nervous shock
– Mount Isa Mines v Pussey (1970) (rescue of two badly burnt men)
• The US fire-fighter’s Rule does not apply in Australia and the UK
– Ogwo v Taylor (1988) AC 431 (fire fighter successfully sued
defendant)

Unforeseeable Plaintiffs
• In general the duty is owed to only the foreseeable plaintiff and not
abnormal Plaintiffs.

Bourhill v Young [1943] AC 92


A fishwife gets off a tram and walks around to the other side to collect her
basket. As she walks around she sees a motor bike speed past and then she
hears the crash which was out of her sight. The rider died but she could not see
him. She sued the rider’s estate. It was held that no duty of care was owed to her
because her involvement was not foreseeable.

– Levi v Colgate-Palmolive Ltd (1941) (bath salts – rash)

Haley v L.E.B. [1965] AC 778


The defendant was excavating a trench in the footpath. At the ends of the trench
he placed inter alia shovels and picks etc. The plaintiff, who was walking down
the path tripped over one of the tools and fell into the trench. The plaintiff was
blind. It was held that the event was foreseeable because blind people are
allowed to walk on footpaths.

The Rationale for Reform


• [I]t's my view that this country is tying itself up in tape because of over
litigation, a long-term trend to see us litigate for everything, to try to
settle every problem in our lives...by getting a big cash payment from the
courts....a country as small as ours can't afford to have the American-style
culture of litigation". (Bob Carr)
• ‘We need to restore personal responsibility and diminish the culture of
blame. That means a fundamental re-think of the law of negligence, a
complex task of legislative drafting.
There is no precedent for what we are doing, either in health care or
motor accident law, or in the legislation of other States and Territories.
We are changing a body of law that has taken the courts 70 years to
develop’ (Bob Carr)

The Approach to Reform: Government’s View


• We propose to change the law to exclude claims that should never be
brought and provide defences to ensure that people who have done the
right thing are not made to pay just because they have access to
insurance (Bob Carr)
• We want to protect good Samaritans who help in emergencies. As a
community, we should be reluctant to expose people who help others to
the risk of being judged after the event to have not helped well enough
(Bob Carr)

IMPACT OF THE CIVIL LIABILITY ACT ON THE DUTY OF CARE

• The Civil Liability Act 2002 together with the Civil Liability Amendment
(Personal Responsibility) Act 2002 govern the law of negligence in NSW.
– The Civil Liability Act 2002 was enacted 28th May 2002 and
received assent on 18 June 2002
• Rationale behind the legislation:
– to limit the quantum of damages for personal injury and death in
public liability instances; resultantly lowering insurance premiums.
– to discourage ‘over litigation’, by the imposition of restrictions and
obligations and responsibilities upon plaintiffs and counsel

Torts Law Reform: Stage 1


• The 1st stage aimed both at the number of claims as well as at the cost of
claims
– restriction of legal advertising, minimising the promotion of claims
and a restriction on the amount recoverable for legal costs
– capping damages, applying a higher discount rate to the final lump
sum figure, and the abolition of punitive damages

Torts Law Reform: Stage 2


• The 2nd Stage: reforms include a range of broad-based tort reform
measures, including a fundamental re-assessment of the law of negligence
– addressing the concept of reasonable foreseeability in the law of
negligence;
– protection of good samaritans who assist in emergencies;
– waivers for risky activities;
– statutory immunity for local government; public authorities which
fail to exercise their powers will not breach any duty;
– changing the test for professional negligence to one of 'peer
acceptance';
– abolishing reliance by plaintiffs on their own intoxication;
preventing people from making claims where they were injured in
the course of committing a crime;
– provide a wider range of options for damages; creating a
presumption in favour of structured settlements.

Claims excluded from operation of the Civil Liability Act: s3B(1)


• a) an intentional act that is done with intent to cause injury or death or
that is sexual assault or other sexual misconduct. Note Part 7 does not
apply to intentional torts done with intent to injure.
• (b) dust diseases under the Dust Diseases Tribunal Act 1989
• (c) personal injury damages where the injury or death concerned resulted
from smoking or other use of tobacco products
• (d) actions governed by Part 6 of the Motor Accidents Act 1988 and
Chapter 5 of the Motor Accidents Compensation Act 1999 except the
provisions that subsection (2) provides apply to motor accidents
• (e) Workers Compensation Act 1987, Workers Compensation (Bush Fire,
Emergency and Rescue Services) Act 1987, Workers Compensation (Dust
Diseases) 1942, Victims Support and Rehabilitation Act 1996 or Anti-
Discrimination Act 1977 or a benefit payable under the Sporting Injuries
Insurance Act 1978

THE CIVIL LIABILITY AMENDMENT (PERSONAL RESPONSIBILITY) ACT


• Part 1A Division incorporates statutory reform to the law of negligence in
Sections 5A to 5T
• Commenced 6/12/02, except Section 5N applies to breaches of warranties
which occur after 10/1/03
• 5A scope of application
– The part applies to any claims in negligence regardless of whether
the claim is brought in tort, contract, under statute or otherwise
Duty of Care
• S 5B:(1) A person is not negligent in failing to take precautions against a
risk of harm unless:
– (a) the risk was foreseeable (that is, it is a risk of which the person
knew or ought to have known), and
– (b) the risk was not insignificant, and
– (c) in the circumstances, a reasonable person in the person’s
position would have taken those precautions.
• (2) In determining whether a reasonable person would have taken
precautions against a risk of harm, the court is to consider the following
(amongst other relevant things):
– (a) the probability that the harm would occur if care were not
taken,
– (b) the likely seriousness of the harm,
– (c) the burden of taking precautions to avoid the risk of harm,
– (d) the social utility of the activity that creates the risk of harm.

Duty of Care – commentary


• Section 5B(1) provides a person is not negligent unless… (b) the risk was
not insignificant.
- Wyong Shire Council v Shirt (1980) 146 CLR 40: risk must be “real” in the
sense that a reasonable person would not “brush it aside as far-fetched or
fanciful.”
- It is unclear whether “not insignificant” in Section 5B(1)(b) is more
restrictive than “not far-fetched or fanciful” in Wyong Shire Council v Shirt

Duty of Care
5C Other principles
In proceedings relating to liability for negligence:
(a) the burden of taking precautions to avoid a risk of harm includes the
burden of taking precautions to avoid similar risks of harm for which the
person may be responsible, and
(b) the fact that a risk of harm could have been avoided by doing something
in a different way does not of itself give rise to or affect liability for the
way in which the thing was done, and
(c) the subsequent taking of action that would (had the action been taken
earlier) have avoided a risk of harm does not of itself give rise to or affect
liability in respect of the risk and does not of itself constitute an admission
of liability in connection with the risk.

Causation
2 stage process is adopted.

5D General principles
(1) A determination that negligence caused particular harm comprises the
following elements:
(a) that the negligence was a necessary condition of the occurrence of
the harm ( "factual causation" ), and
(b) that it is appropriate for the scope of the negligent person’s liability
to extend to the harm so caused ( "scope of liability" ).

Compare with March v E&MH Stramare Pty Ltd (1991) 171 CLR 506
Failure to warn cases

5D General principles

(3) If it is relevant to the determination of factual causation to determine what


the person who suffered harm would have done if the negligent person had not
been negligent:
• the matter is to be determined subjectively in the light of all
relevant circumstances, subject to paragraph (b), and
• any statement made by the person after suffering the harm about
what he or she would have done is inadmissible except to the
extent (if any) that the statement is against his or her interest

Assumption of risk
5G Injured persons presumed to be aware of obvious risks
(1) In determining liability for negligence, a person who suffers harm is
presumed to have been aware of the risk of harm if it was an obvious risk,
unless the person proves on the balance of probabilities that he or she was
not aware of the risk.
(2) For the purposes of this section, a person is aware of a risk if the person is
aware of the type or kind of risk, even if the person is not aware of the
precise nature, extent or manner of occurrence of the risk.

5H No proactive duty to warn of obvious risk


(1) A person ( "the defendant" ) does not owe a duty of care to another
person ( "the plaintiff" ) to warn of an obvious risk to the plaintiff.
(2) This section does not apply if:
(a) the plaintiff has requested advice or information about the risk from
the defendant, or
(b) the defendant is required by a written law to warn the plaintiff of the
risk, or
(c) the defendant is a professional and the risk is a risk of the death of or
personal injury to the plaintiff from the provision of a professional service by the
defendant.
(3) Subsection (2) does not give rise to a presumption of a duty to warn of a risk
in the circumstances referred to in that subsection.

5I No liability for materialisation of inherent risk


(1) A person is not liable in negligence for harm suffered by another person as
a result of the materialisation of an inherent risk.
(2) An "inherent risk" is a risk of something occurring that cannot be avoided
by the exercise of reasonable care and skill.
(3) This section does not operate to exclude liability in connection with a duty
to warn of a risk.

Recreational activities
5M No duty of care for recreational activity where risk warning
(1) A person ( "the defendant" ) does not owe a duty of care to another
person who engages in a recreational activity ( "the plaintiff" ) to take care
in respect of a risk of the activity if the risk was the subject of a risk
warning to the plaintiff.
(2) If the plaintiff is an “incapable person”, the defendant may rely on a risk
warning only if:
(a) the incapable person was under the control of or accompanied by
another person (who is not an incapable person and not the defendant) and the
risk was the subject of a risk warning to that other person, or
(b) the risk was the subject of a risk warning to a parent of the incapable
person (whether or not the incapable person was under the control of or
accompanied by the parent).

5M No duty of care for recreational activity where risk warning


(10) The fact that a risk is the subject of a risk warning does not of itself
mean:
(a) that the risk is not an obvious or inherent risk of an activity, or
(b) that a person who gives the risk warning owes a duty of care to a
person who engages in an activity to take precautions to avoid the risk of harm
from the activity.

5N Waiver of contractual duty of care for recreational activities


(1) Despite any other written or unwritten law, a term of a contract for the
supply of recreation services may exclude, restrict or modify any liability
to which this Division applies that results from breach of an express or
implied warranty that the services will be rendered with reasonable care
and skill.
(2) Nothing in the written law of New South Wales renders such a term of a
contract void or unenforceable or authorises any court to refuse to enforce
the term, to declare the term void or to vary the term.

5L No liability for harm suffered from obvious risks of dangerous


recreational activities
(1) A person ( "the defendant" ) is not liable in negligence for harm suffered by
another person ( "the plaintiff" ) as a result of the materialisation of an obvious
risk of a dangerous recreational activity engaged in by the plaintiff. (2) This
section applies whether or not the plaintiff was aware of the risk.

• At present, there are no authorities to assist us in interpreting Sections 5M


to L.
• However, it is clear that the judicial approach to liability was affected in
cases decided in and around the public debate and introduction of the Civil
Liability Act.
• For example, compare the approach to liability in Beck v State of NSW &
Anor [2001] NSWSC 278
with
Waverley Municipal Council v Swain [2003] NSWCA 61
Mulligan v Coffs Harbour City Council & Ors [2003] NSWSC 49

Professional negligence
Sections 5O & 5P
• “Peer professional opinion” (or Bolam) test for determining the appropriate
standard of care
• Rogers v Whitaker (1992) 175 CLR 479
– Cases involving a risk of injury or death arising from a professional
service, community standards and other considerations may be
applied by the court in determining the appropriate standard of
care to be exercised.

5O Standard of care for professionals


(1) A person practising a profession ( "a professional" ) does not incur a
liability in negligence arising from the provision of a professional service if
it is established that the professional acted in a manner that (at the time
the service was provided) was widely accepted in Australia by peer
professional opinion as competent professional practice.
(2) However, peer professional opinion cannot be relied on for the purposes of
this section if the court considers that the opinion is irrational

Non-delegable duties and vicarious liability


Vicarious liability arises in circumstances “when the law holds one person
responsible for the misconduct of another, although he is himself free from
blameworthiness or fault” (Fleming J, Law of Torts (9th edition) at 409)
Non-delegable duty arises in circumstances where a person cannot be excused
from liability even if reasonable care is exercised in entrusting responsibility to
another person

5Q Liability based on non-delegable duty


(1) The extent of liability in tort of a person ("the defendant") for breach of a
non-delegable duty to ensure that reasonable care is taken by a person in
the carrying out of any work or task delegated or otherwise entrusted to
the person by the defendant is to be determined as if the liability were the
vicarious liability of the defendant for the negligence of the person in
connection with the performance of the work or task.
(2) This section applies to an action in tort whether or not it is an action in
negligence, despite anything to the contrary in section 5A.

Non-delegable duties and Vicarious duties


• New South Wales v Lepore ; Samin v Queensland; Rich v Queensland
[2003] HCA 4 (6 February 2003)

- Liability of school authority


- Alleged sexual assault on pupil by teacher
- Whether school authority in breach of non-delegable duty of care
- Concept of non-delegable duty
- Whether school authority vicariously liable
- Test for imposition of vicarious liability.

Contributory negligence
5S Contributory negligence can defeat claim
In determining the extent of a reduction in damages by reason of contributory
negligence, a court may determine a reduction of 100% if the court thinks it just
and equitable to do so, with the result that the claim for damages is defeated.
Compare: Wynbergen v Hoyts Corporation Pty Ltd (1997) 149 ALR 25

5T Contributory negligence—claims under the Compensation to Relatives


Act 1897
(1) In a claim for damages brought under the Compensation to Relatives Act
1897 , the court is entitled to have regard to the contributory negligence
of the deceased person.
(2) Section 13 of the Law Reform (Miscellaneous Provisions) Act 1965 does
not apply so as to prevent the reduction of damages by the contributory
negligence of a deceased person in respect of a claim for damages brought
under the Compensation to Relatives Act 1897 .

Mental harm
27 Definitions
In this Part:
"consequential mental harm" means mental harm that is a consequence of a
personal injury of any other kind.
"mental harm" means impairment of a person’s mental condition.
"negligence" means failure to exercise reasonable care and skill.
"personal injury" includes:
(a) pre-natal injury,
(b) impairment of a person’s physical or mental condition, and
(c) disease.
"pure mental harm" means mental harm other than consequential mental harm.

• 30 Limitation on recovery for pure mental harm arising from shock


(1) This section applies to the liability of a person ("the defendant”) for pure
mental harm to a person ("the plaintiff") arising wholly or partly from mental or
nervous shock in connection with another person ("the victim") being killed,
injured or put in peril by the act or omission of the defendant.
(2) The plaintiff is not entitled to recover damages for pure mental harm unless:
(a) the plaintiff witnessed, at the scene, the victim being killed, injured or put
in peril, or
(b) the plaintiff is a close member of the family of the victim.

32 Mental harm—duty of care


(1) A person ("the defendant") does not owe a duty of care to another person
("the plaintiff") to take care not to cause the plaintiff mental harm unless
the defendant ought to have foreseen that a person of normal fortitude
might, in the circumstances of the case, suffer a recognised psychiatric
illness if reasonable care were not taken.

Codifies the common law test for foreseeability of risk of mental harm in Tame v
NSW; Annetts v Australian Stations Pty Ltd [2002] HCA 35

33 Liability for economic loss for consequential mental harm


A court cannot make an award of damages for economic loss for consequential
mental harm resulting from negligence unless the harm consists of a recognised
psychiatric illness.

Wyong Shire Council v Shirt (1980) 146 CLR 40


Shirt was waterskiing in a canal dredged by the council. The spot was known for
waterskiing and the council displayed signs saying deep water along the middle of
the canal. The signage was unclear as to which side of the signs was deep water.
The plaintiff while skiing came off in shallow water and became a paraplegic. It
was held that because the local council knew that the lakes were used for water
skiing, they had a duty of care of sign the lakes without ambiguity. The signage
they provided was ambiguous and therefore breached their duty.

Part 1A Duty of Care – more commentary


• Section 5B(1) provides a person is not negligent unless… (b) the risk was
not insignificant.
- Wyong Shire Council v Shirt (1980) 146 CLR 40: risk must be “real” in the
sense that a reasonable person would not “brush it aside as far-fetched or
fanciful.”
- Is “not insignificant” in Section 5B(1)(b) more restrictive than “not far-
fetched or fanciful” in Wyong Shire Council v Shirt ?
- Recreational Activities – Sections 5J to N
- The NSW Govt could not exclude the operation of the Trade Practices Act 1974,
although the Federal Govt has done so by passing The Trade Practices
Amendment (Liability for Recreational Services) Act 2002 proclaimed on 19/12/02

Part 2 Personal Injury Damages


• Received assent on 18 June 2002
• Section 11A:
(1) does not apply to claims excluded by Section 3B (eg. Damages for
dust diseases, use of tobacco products, worker’s compensation…)
(2) Part 2 applies regardless of whether the claim is brought in tort,
contract, statute or otherwise
(3) A court cannot award damages, or interest on damages, contrary to
Part 2.
• Economic Loss:
- Maximum for gross loss of earnings = 3 times average weekly earnings:
Section 12
- 5% discount rate for future economic loss: Section 14
• Gratuitous Attendant Care:
- No damages awarded if the services are provided:
(a) for less than 6 hours per week, and
(b) for less than 6 months: Section 15(3)
Geaghan v D’Aubert [2002] NSWCA 260
• Non-economic loss (general damages): (UNLIMITED BEFORE CLA!)
- No damages for non-economic loss unless assessed at 15% of a most
extreme case (eg. 15% = 1% or $3,500, 16% = 1.5% or $5,250, …26%
= 8% or $28,000, …33% = $115,500, 34-100% = $350,000): Section
16(1) & (3)
- Maximum non-economic loss = $350,000: Section 16(2)
- Maximum for non-economic loss indexed: Section 17
- Courts/parties may refer to other awards of non-economic loss in earlier
court decisions: Section 17A
• Pre-judgment Interest:
- No interest payable on damages for non-economic loss or gratuitous
attendant care: Section 18(1)
- If interest is awarded (eg. Past economic loss), the “relevant interest rate”
is the Commonwealth Govt 10-year benchmark bond rate: Section 18(4)
• 3rd Party Contributions:
- Where the award against the 3rd Party is not subject to Part 2 (eg. Dust
disease, tobacco use, workers’ compensation…): Section 19
Step 1 Assess percentage of liability between the defendant and 3rd party (eg.
50/50)
Step 2 Assess damages against the defendant’s under Part 2 (say, $200,000),
then apply percentage of liability to that assessment (50% of $200,000 =
$100,000)
Step 3 Assess the non-Part 2 damages against the 3rd party (say, $100,000),
then apply percentage of liability to that assessment (eg. 50% of $100,000 =
$50,000)
Exemplary, punitive & aggravated damages:
• A court cannot award exemplary, punitive or aggravated damages:
Section 21

Structured settlements:
• Agreement that provides for the payment of all or part of an award of
damages in the form of periodic payments: Section 22

Part 4 Proportionate Liability


• Part 4 – Sections 34 to 39 remains unproclaimed.
• Claims for pure economic loss or damage to property (whether in tort,
contract or otherwise) are no longer to be jointly & severally assessed
against multiple Defendants.
• The Act uses the term “wrongdoer” and provides that liability is limited to
an amount reflecting the proportion of the damage or loss that is the
responsibility of that Defendant.
• Part 4 applies even where the concurrent wrongdoer is not a party to the
proceedings, no longer exists or where the concurrent wrongdoer is joined
as a Cross Defendant but not as Defendant.
• For example, if 4 parties are equally liable (25% each) for an economic
loss and 2 of the Defendants are not sued or are insolvent or otherwise
not able to meet the claim, a Plaintiff can only recover from the solvent
Defendants their respective share. [Note that this provision does not apply
to personal injury claims].

Part 5 Liability of Public & Other Authorities


• Proclaimed on 6/12/03: Sections 40 to 46
• Provides specific additional protection for public authorities including:
- the Crown
- Government departments
- Local councils
- Other prescribed bodies
• Section 42 sets out the principles to apply in determining whether a public
or other authority has a duty of care or has breached a duty of care
including:
(a) the functions required to be exercised by the authority are limited by the
financial and other resources that are reasonably available to the authority
for the purpose of exercising those functions,
(b) the general allocation of those resources by the authority is not open to
challenge,
(c) the functions required to be exercised by the authority are to be
determined by reference to the broad range of its activities (and not
merely by reference to the matter to which the proceedings relate),
(d) the authority may rely on evidence of its compliance with the general
procedures and applicable standards for the exercise of its functions as
evidence of the proper exercise of its functions in the matter to which the
proceedings relate.
(e) Section 43: an act or omission by an authority does not constitute a
breach of a statutory duty, unless the act or omission so was unreasonable
in the circumstances that no authority having the functions in question
could properly consider the act or omission to be a reasonable exercise of
it function.
(f) Section 44: Removes the liability of public authorities for failure to
exercise a regulatory function if the authority could not have been
compelled to exercise the function under proceedings instituted by the
Plaintiff.
(g) Section 45: Restores the non-feasance protection for highway authorities
taken away by the High Court in Brodie v Singleton Shire Council;
Ghantous v Hawkesbury City Council (2001) 206 CLR 512

Part 6 Intoxication
• Proclaimed on 6/12/03: Sections 47 to 50
• Section 48: Broadly defines as any person under the influence of alcohol
or drugs, whether or not taken for medicinal purposes and whether or not
lawfully taken.
• Section 49: a court is not to consider intoxication as giving rise to any
higher standard of care on the part of the Defendant.
• Section 50: a court is not to award damages for harm where the Plaintiff’s
capacity to exercise reasonable care and skill for their own safety was
impaired as a consequence of intoxication and unless the Court is satisfied
that the same harm would have occurred even if the person had not been
intoxicated
: Where an intoxicated Plaintiff overcomes the hurdle of demonstrating that their
intoxication did not contribute to their harm, there is a presumption of at least
25% contributory negligence unless the court is satisfied otherwise. (DID NOT
EXIST BEFORE CLA)
Issues:
- Definition of intoxication extends to prescription drugs. Is a hospital
exempt from taking special care for a patient when it knows that the side
effects of the prescribed drug are drowsiness or aggression?
- Why should hoteliers not have a special duty of care to patrons?
- Why has judicial discretion been removed to assess contributory
negligence?

Part 7 Self-Defence in Recovery by Criminals


• Proclaimed on 6/12/03: Sections 51 to 54
• Section 52(1) & (2): No civil liability for acts in self-defence of self,
another or property, provided the act of defence is a reasonable response
to the circumstances as subjectively perceived.
• Section 52(3): This section does not apply if the person uses force that
involves the intentional or reckless infliction of death only to protect
property, to prevent criminal trespass or to remove a person committing
criminal trespass.

53 Damages limitations apply even if self-defence not reasonable


response
(1) If section 52 would operate to prevent a person incurring a liability to
which this Part applies in respect of any conduct but for the fact that the
conduct was not a reasonable response in the circumstances as he or she
perceived them, a court is nevertheless not to award damages against the
person in respect of the conduct unless the court is satisfied that:
(a) the circumstances of the case are exceptional, and
(b) in the circumstances of the case, a failure to award damages would be
harsh and unjust.
• Section 54: A court is not to award damages in respect of liability where at
the time of death, injury or damage the Plaintiff was engaged in conduct
that (on the balance of probabilities) constitutes a serious offence.
- A "serious offence" is an offence punishable by imprisonment for 6 months
or more.
- This section operates whether or not the offence has been prosecuted and
proved.
- The criminal conduct must have contributed materially to the risk of death,
injury or damage.

Parts 8 & 9 Good Samaritans & Volunteers


• Proclaimed on 6/12/03: Sections 55 to 66
• Parts 8 & 9 operate to protect Good Samaritans and volunteers.
• Section 58: no protection if the Good Samaritan is under the influence of
alcohol, impersonating a police officer or falsely representing that they
have skills or expertise in providing emergency assistance.
• Section 60: Defines community work to mean work that is not for private
financial gain and that is done for a charitable, benevolent, philanthropic,
sporting, educational or cultural purpose. It excludes community service
orders imposed by a court.
• Section 61: No civil liability for a volunteer doing community work but
does not extend to criminal acts, acts whilst intoxicated, a volunteer failing
to exercise reasonable care and skill, actions outside the scope of the
charitable organisation or contrary to instructions, where the volunteer is
required by State law to be insured or motor vehicle accidents.

Part 10 Apologies
• Proclaimed on 6/12/03: Sections 67 to 69
• Section 68: Defined as an expression of sympathy or regret, or of a
general sense of benevolence or compassion, in connection with any
matter whether or not the apology admits or implies an admission of fault
in connection with the matter.
• Section 69(1): An apology …
(a) does not constitute an express or implied admission of fault or liability
by the person in connection with that matter, and
(b) is not relevant to the determination of fault or liability in connection
with that matter.

Breach of Duty – General Principles


• Wyong Shire Council v Shirt (1980) 146 CLR 40 per Mason J:
“In deciding whether there has been a breach of the duty of care the
tribunal of fact must first ask itself whether a reasonable man in the defendant’s
position would have foreseen that his conduct involved a risk of injury to the
plaintiff… If the answer is in the affirmative, it is then for the tribunal of fact to
determine what a reasonable man would do… The perception of the reasonable
man’s response calls for a consideration of the magnitude of the risk and the
degree of the probability of its occurrence, along with the expense, difficulty and
inconvenience of taking alleviating action and any other conflicting responsibilities
which the defendant may have.”

Breach of Duty – Civil Liability Act


• Civil Liability Act does not apply to claims excluded by Section 3B (eg. dust
diseases, use of tobacco products, worker’s compensation…)
• Section 5B(2) In determining whether a reasonable person would have
taken precautions against a risk of harm, the court is to consider the
following (amongst other relevant things):
– (a) the probability that the harm would occur if care were not
taken,
– (b) the likely seriousness of the harm,
– (c) the burden of taking precautions to avoid the risk of harm,
– (d) the social utility of the activity that creates the risk of harm.

Breach of Duty – Likelihood of Injury


• Section 5B(2)(a) the probability that the harm would occur if care were
not taken

Bolton v Stone [1951] AC 850


A batsmen at a cricket match hit six which travelled 70 yards and over Miss
Stone’s back fence into her garden and hit her. She sued the cricket club. It was
held that although the event was foreseeable, the possibility was so slight that a
reasonable man could not be called upon to abandon the game nor make a higher
fence. Not every foreseeable event gives rise to a duty of care.

Breach of Duty – Seriousness of Risk


• Section 5B(2)(b) the likely seriousness of the harm

Adelaide Chemical & Fertilizer Co. v Carlyle (1940) 64 CLR 514


This company supplied sulphuric acid in earthenware jars. On one jar, the handle
broke and spilled over a man who later died. The wife sued and it was held that
the jars were unfit for the purpose and were therefore unsafe and dangerous.
This risk was both foreseeable and very likely.

Paris v Stepney Borough Council [1951] AC 367


The victim was blind in one eye as a result of an injury in war time. His other eye
was damaged at work one day while working on a car without safety glasses. It
was held that the employer owed the employee a greater duty of care in the
circumstances than they would have owed a person with two good eyes.

Breach of Duty – Cost of Avoiding Harm


• Section 5B(2)(c) the burden of taking precautions to avoid the risk of
harm

Caledonian Collieries Ltd v Speirs (1957) 97 CLR 202


Mr Spears was in his car on a level crossing. His car was crashed by out of control
rail trucks. It was found that there were no catchpoints installed because it wasn’t
practical for trains on a gradient. It was held that the defendant owed a duty of
care because the runaway train was a likely occurrence. The burden to install
catch points was not so high as to excuse the duty of care.

Breach of Duty – Utility of the Act of the Defendant


• Section 5B(2)(d) the social utility of the activity that creates the risk of
harm.

South Australian Ambulance Transport Inc. v Walhdeim (1948) 77 CLR 215


A collision between a car and an ambulance. The driver of the car was held to be
negligent because the ambulance had its siren on.

Proof of Negligence - General


• CIVIL LIABILITY ACT 2002 - SECT 5E: Onus of proof
- In determining liability for negligence, the plaintiff always bears the onus
of proving, on the balance of probabilities, any fact relevant to the issue of
causation.

Holloway v McFeeters (1956) 94 CLR 470


There was a hit and run with no witnesses. The only evidence was a 14 metre
skid mark which ended near the body. The nominal defendant was held negligent
because of the positive inference.

Proof of Negligence – Res Ipsa Loquitor


• “The action/thing speaks for itself”

Nominal Defendant v Haslbauer (1967) 117 CLR 448


Mrs Haslbauer stopped at a children’s crossing. She was hit from behind by a car
with faulty brakes. The brake line was proved to be fractured. This evidence
displaced any positive inference that may have been relied upon. Evidence
displaces inferences.

Damage in Negligence

Duty of care

Negligence Breach

Damage
• Damage is the gist of the action in Negligence
• The scope of actionable damage:
– property
– personal
– mental
– pure economic loss
• Damage must be actual for compensation; no cause of action accrues until
damage
• Limitations period therefore begin from the time of the injurious
consequences of a conduct not from when the conduct first occurred
• For P to be successful in an action in Negligence, D’s breach of duty must
cause damage to P or his/her property
CAUSATION

Duty of Care

breach
causation
damage = Negligence

There must be a causal link between D’s breach of duty and


damage to P or P’s property
CAUSATION: THE ELEMENTS
• Causation involves two fundamental questions:
– the factual question whether D’s act in fact caused P’s damage:
causation-in-fact
– Whether, and to what extent D should be held responsible for the
consequences of his conduct: legal causation

CAUSATION-IN-FACT
• Causation in fact relates to the factor(s) or conditions which were causally
relevant in producing the consequences
• Whether a particular condition is sufficient to be causally relevant depends
on whether it was a necessary condition for the occurrence of the damage
• The necessary condition: causa sine qua non

CAUSATION
• To be successful in a claim for a remedy, P needs to prove that the loss for
which he/she seeks compensation was caused in fact by the D’s wrongful
act
• Traditionally, the test whether D’s wrongful act did in fact cause the loss is
the ‘but for’ test

THE ‘BUT FOR’ TEST


• But for the D’s conduct, the injury to P would not have happened:

– Waller v James (Wrongful life)

Alexander v Cambridge Credit Corp Ltd


In 1971 P’s auditors failed to note in their audit certain failed investments and
debts of P company. If they had so noted, P would have been put into
receivership. However P went into receivership in 1974 and sued the D auditors
for breach of contract. The essence of P’s case was that but for the breach they
would have been forced into receivership earlier than 1974 and would have
avoided the losses. Their action was to recover the losses from 1971 – 1974. It
was held that there was no causal link between the breach and the losses
suffered. The company would have gone into receivership in any case. Arguments
that the company would have gone into receivership earlier and thus avoided
losses were not accepted on the basis that P knew of its own financial position.
They did not have to rely on D auditor’s certificate to continue trading.

Hoston v Berkshire Area health Authority


P injured hip in fall. D failed to diagnose the extent of injury until 5 days later.
The nature of the injury was such that there was a 75% chance of permanent
disability. P developed the disability and brought action against D on the basis
that but for the negligent failure to diagnose, the disability could have been
avoided. It was held that there was no causation because the cause of the
disability was the fall, not the failure to diagnose.

THE FUNCTION OF THE ‘BUT FOR’ TEST


• Two functions:
– The primary (negative) function is to assist in eliminating factors
which made no difference to the outcome
– The second (positive) function: it helps to identify a condition or a
factor which may itself then be subject to a test of legal causation

THE ‘BUT FOR’ TEST IN THE HIGH COURT


• Fitzgerald v Penn ( 1954) 91 CLR 268
– ‘Causation is all ultimately a matter of common sense….[It] is not
susceptible of reduction to a satisfactory formula’(per Dixon,
Fullagar and Kitto JJ)

March v E& MH Stramare (1991) 171 CLR 506*


A delivery truck parked in the middle island of a busy highway. Part of the truck
protruded onto one of the lanes of the highway. P was driving his car in a straight
line within the lane and smashed into the truck. The police found P to be under
the influence of alcohol. This is where the but for test gets scrutinized. There are
two causes of the damage (drunk driver & truck on road). High Court says that in
these cases you need to look at the primary liability. But for the truck being on
the highway the accident would not have happened. The primary liability was
against the truck owner. Once you have primary liability you then determine if
there is any contributory negligence. (In this case there was about 70%
contributory negligence)
The but for test gives rise to a well known difficulty in cases where there are two
or more acts or events which would each be sufficient to bring about the plaintiffs
injury. The application of the tests gives the results, contrary to common sense,
that neither is a cause. The application of the tests proves to be either
inadequate or troublesome in various situations in which there are multiple acts
or events leading to the plaintiff's injury (per Mason J)
While Dean and Mason JJ favoured a common sense approach, McHugh J doubted
whether there is any ‘consistent’ common sense approach as such. He took the
view that in general, rules of causation allow the tribunal of fact to make a policy
choice based on broad grounds of moral responsibility.

THE ‘BUT FOR’ TEST: IMPLICATIONS OF A COMMON SENSE APPROACH

Bennett v Minister of Community Welfare (1992) 176 408


16 year old lost his fingers in a workshop due to an unguarded saw. There was a
duty of care owed to the individual, but there was also a duty of care to obtain
independent legal advice because he was a 16 year old ward of the state. D
briefed a barrister to advise P of his rights as to whether or not he could sue. The
barrister advised him that he could not sue. The reason for this incorrect advice
was because the department did not give the barrister a full briefing, and it was
quite reasonable that on the deficient material they gave the barrister to reap
such a conclusion (so there was no negligence on the barrister’s part) Based on
the advice given to P, he went on his merry way and reached a certain age and
after the statutory provision had expired he sought further advice and was
properly advised that he did in fact have a claim against the department.
(Limitation period expired) The court said that the initial advice from the barrister
who advised incorrectly all those years ago did not amount to a ‘second event
that would supercede the initial negligence by the department’. What they then
found was that D’s negligence continued, not only from the unguarded saw, but
also to the provision or in the attempt to supply an independent legal adviser to
give advice to the P. The court extended the limitation period for the plaintiff…
‘if the but for ‘test is applied in a practical common sense way, it enables the
tribunal of fact, consciously or unconsciously, to give effect to value judgments
concerning responsibility for the damage. If the test is applied in that way, it
gives the tribunal an unfettered discretion to ignore a condition or relation which
was in fact a precondition of the occurrence of the damages’

THE ‘BUT FOR’ TEST IS NOT EXHAUSTIVE


• Bennett: ‘ causation is essentially a question of fact to be resolved as a
matter of common sense. In resolving that question, the ‘but for’ test ,
applied as a negative criterion of causation, has an important role to play
but it is not a comprehensive and exhaustive test of causation; value
judgments and policy considerations necessarily intrude (per Mason CJ ,
Deane and Toohey JJ)

MULTIPLE CAUSES
• Where the injury or damage of which the plaintiff complains is caused by
D’s act combined with some other act or event, D is liable for the whole of
the loss where it is indivisible; where it is divisible, D is liable for the
proportion that is attributable to him/her

MULTIPLE CAUSES: TYPES


• Concurrent sufficient causes
– where two or more independent events cause the damage/loss to D
( eg, two separate fires destroy P’s property)
• Successive sufficient causes

Baker v Willoughby
D’s negligent driving caused the P to suffer an injury to left leg. Three years after
this accident, P was shot in the same lag in an armed robbery. As a result, his leg
had to be amputated. It was held that the second accident did not decrease the
problems the P had – the 1st incident had not been obliterated by the second
accident. Pearson L said the D1 should pay up until the time of the 2nd accident,
so in this case the problem/damage is divisible.

Faulkner v Keffalinos
2 MVA’s. Held by the court that the 2nd MVA must be taken into account when
attempting to assess damages. Circumstances of the 2nd MVA were unknown (so
no one was able to be sued) The 2nd accident still had to be taken into account so
in this case damage was still divisible.

Jobling v Associated Dairies Ltd (dormant spondylotic myelopathy activated)


Degenerative changes in the spine which were part of the normal ageing process.
In this case there was a back injury at work which decreased the earning capacity
of the worker by 50%. Spontaneously prior to the trial this age related
degenerative change in the spine was activated (or ‘awoken’ by the injury at
work) rendering P totally incapacitated. Court held D 100% liable because back
disease really linked to initial injury. (egg-shell skull principle)
Malec v Hutton (possible future spinal condition)

– D2 is entitled to take P (the victim) as he finds him/her


– Where D2 exacerbates a pre-existing loss/injury (such as hasten
the death of P) D2 is liable only for the part of the damage that is
attributable to him

THE ELEMENTS OF CAUSATION


Causation

Factual
Lega
(Causation in l
fact)

LEGAL CAUSATION
• Factual causation in itself is not necessarily sufficient as a basis for D’s
liability
• To be liable, D’s conduct must be the proximate cause of P’s injury
• P’s harm must not be too remote from D’s conduct

REMOTENESS

Liebosch Dredger v SS Edison [1933] AC 449


P is a dredger. The dredge itself sank due to D’s negligence. P had to hire another
dredge and claimed the cost of the new hire. The House of Lords held damages to
be limited to the purchase of a replacement dredger and the consequential loss
until the time of replacement. P was not able to reclaim the cost of hire as the
lack of money operated as a new cause insulating D from further financial loss.
This case has been criticized for not applying egg-shell skull principle… these
people had egg-shell skull bank account…
The law cannot take account of everything that follows a wrongful act; it regards
some matters as outside the scope of its selection. In the varied wave of affairs,
the law must abstract some consequences as relevant, not perhaps on grounds of
pure logic but simply for practical reasons Per Lord Wright Liebosch Dredger v SS
Edison [1933] AC 449

Case Law on Remoteness


• Earlier position in Common Law

Re Polemis:- the ‘directness element’


Ship totally destroyed by fire when a heavy plank was dislodged by wharfies.
Court held D liable because the fire was a direct result even though it was not
foreseeable.
• The current position:

The Wagon Mound (No. 1)


Employer of D carelessly discharged furnace oil into a bay which spread to P’s
wharf where weldoing operations were being done. P suspended welding until
advice from D was obtained as to safety. It was advised that the oil had a very
high ignition point, so it was not too dangerous. P started welding again on this
advice. There was some cotton waste in and around the water that was amongst
the oil which caught fire. The cotton acted like a wick which created enough heat
for the oil itself to ignite. The privy council said that because the trial judge found
the damage not to be foreseeable, the P had no claim. They found that damage
must be foreseeable. Overturns re Polemis

The Wagon Mound (No. 2)


2 vessels moored at wharf damaged in the same fire as above. It was held that a
reasonable man having the knowledge and experience of the chief engineer of the
Wagon Mound (D) would have known that there was a real risk of the oil catching
fire. The fact that it was a small risk did not justify the D taking no steps…

INTERVENING ACT
• An intervening act breaks the chain of causation and may relieve D of
liability. To be sufficient to break the chain, it must either be a:
– human action that is properly to be regarded as voluntary or
a causally independent event the conjunction of which with
the wrongful act in or omission is by ordinary standards so
extremely unlikely as to be turned a coincidence

Smith J Haber v Walker [1963] VR 339


18 months after MVA P’s husband commits suicide due to mental depression
suffered due to the MVA. The wrongs act required the P to prove that the death
was immediately due to the MVA. Jury found that death was caused by the MVA
but suicide was not reasonably foreseeable. Supreme court said reasonable
foreseeability was not required in this case and that there was a maintenance of
the chain of causation. (P won)

• A foreseeable ‘intervening act’ does not break the chain of causation


– Chapman v Hearse
• Negligent medical treatment subsequent to negligent injury would not
necessarily remove liability for D1 unless the subsequent injury was
‘inexcusably bad’, so obviously unnecessary or improper that it fell outside
the bounds of reputable medical practice

Mahony v J Kruschich Demolitions


D1 suffered a back injury requiring treatment from doctor (D2). Assuming that
the doctor is negligent in performing surgery, it leaves P worse off. It is because
of D1 that the surgery was needed, but anything flowing from the negligent
surgery will hold D2 liable as well. D2 may be liable 100% or only 50% depending
on the outcome of the surgery.

PRODUCT LIABILITY
• Common law:

- Donohue v Stevenson [1932] AC 562


- Grant v Australian Knitting Mills [1936] AC 85

• Relevant Statutes:
Sale of Goods Act 1923 (NSW)
Pt 4 Performance of the Contract (ss.30 to 40)
Pt 5 Rights of the Unpaid Seller against the Goods
(ss.41 to 50)
Pt 6 Actions for Breach of the Contract (ss.51 to 56)
- Fair Trading Act (NSW)
Pt 4 Consumer Protection (ss.38 to 40)
Pt 5 Fair Trading (ss.41 to 60, including s.42 Misleading or
deceptive conduct and s.44 False representations)
- Trade Practices Act 1974 (Cth)
Pt V Div 1 Consumer Protection (ss.51AF to 65A, including s.52
Misleading and deceptive conduct)
Pt V Div 2A Actions against manufacturers and importers of goods
(ss.74A to 74L)
Pt VA Liability of manufacturers and importers for defective goods

DEFECTIVE STRUCTURES
• Professional negligence:
- s.5O Civil Liability Act 2002 “Peer professional opinion” (i.e. The UK
“Bolam” test)
- S.5P Civil Liability Act 2002 “Duty to warn” remains

• Builders:
Bryan v Maloney (1995) ATR 81- 320

• Architects:
Voli v Inglewood Shire Council (1963) 110 CLR 74

• Councils & Statutory Authorities:

- Pt 5 Civil Liability Act 2002 - s.42 determining duty of care and breach of
duty in relation to functions, allocation of resources, range of activities and
reliance on general procedures/applicable standards; s.43 act or omission
not a breach unless unreasonable; s.44; s.45 Restoration of the non-
feasance protection for highway authorities

- Common law:
Heyman v Sutherland Shire Council (1985) 157 CLR 424
Shaddock v Parramatta CC [No.1] (1981) 150 CLR 424

Parramatta CC v Lutz (1988) 12 NSWLR 293


P purchased property for redevelopment and would have not have done so if they
had known that it was subject to road widening. Prior to purchase, P called
Parramatta Council and spoke with an unidentified person and was told that there
was no road widening plan. The next day P lodged a standard application which
asked about the road widening plan. Although the council not obliged to tell P, P
relied on this information so there was held to be negligence on the part of the
council.

Brodie v Singleton Shire Council; Ghantous v Hawkesbury City Council (2001)


206 CLR 512

NERVOUS SHOCK
• What is nervous shock
– An identifiable mental injury recognised in medical terms as a
genuine psychiatric illness.
– The sudden sensory perception that , by seeing hearing or touching
– of a person, thing or event, which is so distressing that the
perception of the phenomenon affronts or insults the plaintiff’s
mind and causes a recognizable psychiatric illness
– It is a question of fact whether it is reasonably foreseeable that the
sudden perception of that phenomenon might induce psychiatric.

Pt 3 Civil Liability Act 2002 “Mental harm” (ss.27 to 33), especially:


– S.30 Limitation on recovery for pure mental harm arising from
shock i.e. Witness at the scene the victim being killed, injured or
put in peril, or the plaintiff is a close family member of the victim
– S.32 Duty of care i.e. Defendant ought to have foreseen that a
person of normal fortitude might… suffer a recognisable psychiatric
illness if reasonable care were not taken.

Nervous Shock: The Nature of the Harm


• The notion of psychiatric illness induced by shock is a compound, not a
simple, idea. Its elements are, on the one hand, psychiatric illness and, on
the other, shock which causes it. Liability in negligence for nervous shock
depends upon the reasonable foreseeability of both elements and of the
causal relationship between them
• Post-Traumatic Stress Disorder
• Pathological grief disorder

THE VICTIMS
• Primary victims
– What needs to be reasonably foreseeable? Some personal injury,
physical or psychiatric, to the primary victim
• Page v Smith [1996] 1 AC 155 (HL) a victim of a road
accident caused by another's negligence claimed damages
solely for psychiatric illness
• Motor Accidents Compensation Act 1999, s 141 bars claims
to all except primary victims as drivers, relatives or those
who were present at the scene at the time of the accident
• Secondary Victims
– Close relationship
• Jaensch v Coffey
• S.30 Civil Liability Act “Close member of the family” and
“spouse or partner” defined
– proximity/nearness to accident or aftermath
• Bourhill v Young
• Mount Isa Mines v Pusey

PURE ECONOMIC LOSS

• What is pure economic loss?


– It is generally understood to deal with matters of tortious liability
for loss that is neither consequential upon death and personal
injury of the claiming victim nor upon the infringement of the
victim's property.
• Pure economic loss related to damage to objects or persons (other than P)
• 'Pure' economic loss by reliance (on the conduct of D)

PURE ECONOMIC LOSS: EARLY DEVELOPMENTS


• Earlier cases restricted claims for pure economic loss to instances where
misrepresentation was fraudulent or where a duty arose from breach of
statute, contract or fiduciary obligation
– Palsey v Freeman (1789); Norton v Asburton [1914] AC 932
• The policy basis: the fear of imposing liability "in an indeterminate amount
for an indeterminate time to an indeterminate class"
• 1963: Limited recognition of a duty of care for negligent advice leading to
economic loss:
– Hedley Byrne Co Ltd v Heller Partners Ltd
– ‘If someone possessed of a special skill undertakes quite
irrespective of contract to apply that skill for the assistance of
another person who relies on such skill, a duty of care will arise’
per Lord Morris
• 1970: Mutual Life & Citizens' Assurance Co. Ltd. v. Evatt (1970) 122 CLR
628 (The emphasis seemed to be on advice provided by someone
possessed of the a special skill)

NEGLIGENT MISSTATEMENT
• In general D is liable for negligent advise/information that is provided to P
which P relies and suffers economic loss
– Shaddock v Parramatta CC (House affected by road widening
program)
– San Sabatian Pty Ltd v Minister Administering Environmental
Planning (Whether Minister and the Sydney City Council liable for
the negligent preparation by the State Planning Authority and
publication by the Council of a redevelopment plan containing
representations in reliance upon which developer had acquired land
and sustained a loss.)
What emerges is that in Australian law, the duty of care in relation to statements
has been extended beyond statements made to a particular person for a
particular purpose and even beyond statements made to a third person for the
known purpose of communication to the person who sustains the loss. There are
circumstances in which the maker of a statement owes a duty of care to a person
who reasonably relies on the statement although the statement was not made to
that person either directly or purposely through a third person.

Esanda Finance v Peat Marwick: (in reliance upon the audited accounts, the
plaintiff entered into transactions whereby it lent money to companies associated
with Excel, accepting a guarantee from Excel, and purchased debts from Excel.
The transactions resulted in loss to the plaintiff by reason of Excel's financial
position.)

THE ISSUE OF SKILL


• With all respect I find it difficult to see why in principle the duty should be
limited to persons whose business or profession includes giving the sort of
advice or information sought and to persons claiming to have the same
skill and competence as those carrying on such a business or profession,
and why it should not extend to persons who, on a serious occasion, give
considered advice or information concerning a business or professional
transaction. (Gibbs J in Shaddock)

THE CONDITIONS
• Special relationship between P and D: such a relationship would not be
found to exist unless, at least, the maker of the statement was, or ought
to have been, aware that his advice or information would in fact be made
available to and be relied on by a particular person or class of persons for
the purposes of a particular transaction or type of transaction.
• If the representor realizes or ought to realize that the representee will
trust in his special competence to give that information or advice;
• If it would be reasonable for the representee to accept and rely on that
information or advice;
• If it is reasonably foreseeable that the representee is likely to suffer loss
should the information turn out to be incorrect or the advice turn out to be
unsound."

ADVICE versus INFORMATION


• Although the giving of advice must always necessarily require an exercise
of skill or judgment, and the giving of information may not necessarily do
so, a person giving information may be so placed that others can
reasonably rely on his ability carefully to ascertain and impart the
information.

THE ‘CALTEX PRINCIPLE’


• Property damage may constitute the basis for the claim in pure economic
loss: before Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. it appeared
to have been established that a plaintiff who sustained economic loss
which resulted from loss or damage negligently caused to the property of
a third person was not entitled to recover damages
– Caltex Oil v The Dredge Willemstad
Perre v Apand (1999) (HC) D introduced plant disease onto land of
one farmer in SA by supplying infected seeds for planting; WA regs
prohibited import into WA of potatoes grown within 20 km of land
affected last 5 years
– Christopher v MV ‘Fiji Gas’

OTHER SITUATIONS OF PURE ECONOMIC LOSS


• Bryan v Maloney
– It was not open to the trial judge or the Full Court to find that the
owner relied on the builder, or to infer reliance. There was no
evidence that she knew the identity of the builder before deciding
to purchase. Nor was there evidence that she inquired whether the
house had been built by a qualified builder
– The owner can recover damages for pure economic loss only if she
establishes a sufficient relationship of proximity between the
builder and the owner so as to give rise to a duty of care on the
part of the builder not to cause such economic loss
– It is difficult to see why, as a matter of principle, policy or common
sense, a negligent builder should be liable for ordinary physical
injury caused to any person or to other property by reason of the
collapse of a building by reason of the inadequacy of the
foundations but be not liable to the owner of the building for the
cost of remedial work necessary to remedy that inadequacy and to
avert such damage

• Hawkins v Clayton (Failure to notify executor of the death of testatrix


substantial fine imposed as a result of death duties)
• Van Erp v Hill (Failure of solicitor to ensure that spouse of beneficiary did
not witness execution of will with resultant economic loss to P)

SUPERVISION & CONTROL OF OTHERS


This involves 2 duty situations:
1. Duty to control others to prevent damage to 3rd parties.
2. Duty to protect others under D’s control.
• In general the common law does not impose a duty to control the actions
of others: No duty arises simply because one can foresee the likely risk of
injury from conduct of another
• Parents cannot be generally held liable for the conduct of their children.
However where D is shown to have parental control D has a duty to
exercise reasonable care to prevent the child from inflicting damage on
others. Whether D has exercised the appropriate level of care is a question
of fact (Smith v Leurs)
• Teachers and school authorities may also have a duty of care with respect
to the activities of the children in their care
• Police and Government authorities:
- Hill v Chief Constable of West Yorkshire (Failure to control criminal
behaviour; No duty on the grounds of policy)

The duty to control others: Children


⇒ Geyer v Downs (school kid hit with softball bat before school – school
guilty because they were there)
⇒ No recognition of a parents duty as such to look after a child.
⇒ Robertson v Swincer (4 year old hit by car while parents talking to
friends – contributory negligence? Parents owe duty of care?
⇒ ”The prospects of a parents assets being at risk because of a
momentary failure of supervision judged by a court against an
objective standard of reasonable care has alarming personal
implications for parents and disturbing implications for society
generally”
⇒ Depends on facts  Circumstances  Reasonably Foreseeable

Supervision of Others: The Issue of Liability


• Liability may arise where there is a relationship between the custodian and
the victim “which exposes that person to a particular risk of damage in
consequence of that escape which is different in its incidence from the
general risk of damage from criminal acts… which he/she shares with all
members of the public”
- But see Swan v South Australia: The parol board was under a duty once
informed about the conduct of the prisoner on parol

PUBLIC AUTHORITIES
Part 5 of the Civil Liability Act (Sections 40 to 46)

• Section 42 sets out the principles to determine duty of care exists or has
been breached (ie. financial and other resources reasonably available,
allocation of resources, broad range of its activities, and compliance with
the general procedures and applicable standards)
• Section 43: act or omission not a breach of duty, unless it so was
unreasonable that no authority having the functions in question could
properly consider it as reasonable.
• Section 44: Removes the liability of public authorities for failure to
exercise a regulatory function if the authority could not have been
compelled to exercise the function under proceedings instituted by the
Plaintiff.
• Section 45: Restores the non-feasance protection for highway authorities
taken away by the High Court in Brodie v Singleton Shire Council;
Ghantous v Hawkesbury City Council (2001) 206 CLR 512

PUBLIC AUTHORITIES
• “When a statute sets up a public authority, the statute prescribes its
functions so as to arm it with appropriate powers for the attainment of
certain objects in the public interest. The authority is thereby given a
capacity which it would otherwise lack, rather than a legal immunity in
relation to what it does, though a grant of power may have this effect
when the infliction of damage on others is the inevitable result of its
exercise… There is, accordingly, no reason why a public authority should
not be subject to a common law duty of care in appropriate circumstances
in relation to performing, or failing to perform, its functions, except in so
far as its policy-making and, perhaps, its discretionary decisions are
concerned” (per Mason J in Sutherland Shire Council v Heyman)

PUBLIC AUTHORITIES & RULE OF LAW


Applying the same rules of civil liability to the actions of public authorities or
corporations.
⇒ The rationale: No legal or natural person is above the law.
⇒ The difficulties: The rationalisation and provision of public utilities and
community facilities necessarily distinguish public corporations from
ordinary citizens.

Basic concepts:  Breach of duty  Breach may be act (misfeasance) or


omission (non-feasance)
*Not every non-feasance provides basis for liability.
⇒ Negligent omissions are actionable
⇒ Mere/neutral omissions are not actionable unless the D is under a pre-
existing duty to act.

Powers and Duties


Duty  Obligation to act. The statutory provision/function is cast in mandatory
terms.
⇒ Once content of duty is determined, the question of breach is a
question of fact.
⇒ Breach duty attracts liability.

Power  Statutory function cast in permissive terms.


⇒ Confers on the power holder a choice to act in a particular way.
⇒ Failure to exercise choice may not be illegal.

Power = Choice (Statute use of the word “may”)


Duty = Obligation (Statute use of the word “shall”)

PUBLIC AUTHORITIES: The Planning & Operational Dichotomy


• Planning decisions of public authorities as based on the exercise of policy
options or discretions and involving or dictated by social or economic
considerations are in general non-reviewable and would not provide the
basis for a duty
• The distinction between policy and operational factors is not easy to
formulate, but the dividing line between them will be observed if we
recognise that a public authority is under no duty of care in relation to
decisions which involve or are dictated by financial, economic, social or
political factors or constraints
• Operational decisions by which policy decisions are implemented are
however subject to the duty of care
- L v Commonwealth (sexual abuse in prison, D held liable for operational
failures)
- Parramatta CC v Lutz (failure to order the demolition of building P’s
property catches fire)
Intra Vires + Policy = Not actionable
Ultra Vires + Policy = Actionable
Not Policy but operational = Actionable

VICARIOUS RELATIONS AND AGENCY


• An agent acts for the principal; but the liability of the principal for the act
of the agent is not based on vicarious liability
• The liability of the principal is based on the maxim: qui facit per alium,
facit per se
• The agent acts in a representative capacity and has the authority to act for
the principal but is not necessarily a servant

VICARIOUS LIABILITY
Vicarious liability makes D (usually the master/employer) liable for the torts of
another (usually his or her servant/employee) although the master is without any
blame or fault.

SERVANTS AND INDEPENDENT CONTRACTORS


• Vicarious liability arises only in respect of the torts of the servant
• The master/employer is therefore responsible only for the torts of the
servant and not the independent contractor
• For the master/employer to be held liable, the tortfeasor must:
– be a servant
– commit the tort in the course of his or her employment

Non-delegable duties and vicarious liability


Vicarious liability arises in circumstances “when the law holds one person
responsible for the misconduct of another, although he is himself free from
blameworthiness or fault” (Fleming J, Law of Torts (9th edition) at 409)
Non-delegable duty arises in circumstances where a person cannot be excused
from liability even if reasonable care is exercised in entrusting responsibility to
another person

5Q Liability based on non-delegable duty


(1) The extent of liability in tort of a person ("the defendant") for breach of a
non-delegable duty to ensure that reasonable care is taken by a person in
the carrying out of any work or task delegated or otherwise entrusted to
the person by the defendant is to be determined as if the liability were the
vicarious liability of the defendant for the negligence of the person in
connection with the performance of the work or task.
(2) This section applies to an action in tort whether or not it is an action in
negligence, despite anything to the contrary in section 5A.

• New South Wales v Lepore ; Samin v Queensland; Rich v Queensland


[2003] HCA 4 (6 February 2003)

- Liability of school authority


- Alleged sexual assault on pupil by teacher
- Whether school authority in breach of non-delegable duty of care
- Concept of non-delegable duty
- Whether school authority vicariously liable
- Test for imposition of vicarious liability.

WHO IS A SERVANT?
• A servant is one who is under a contract of service to another an
independent contractor is under a contract for services
• The contractor is paid for the job by results rather than for time spent,
receives a fee or commission, the servant receives wages
• The contractor is usually employed on a casual basis, the servant on a
permanent basis
• The contractor usually specifies his/her work schedule and supplies his/her
own tools
• The master may select the servant for the task

WHO IS A SERVANT?:
THE CONTROL TEST
• If the Master controls what the employee does and how it is done, then
the employee is a servant. The relationship will give rise to Vicarious
Liability.
• Zuijs v Wirth Bros: The case of the trapeze artist
• What is essential is whether there is lawful authority to command or give
directives if there is scope for it.
• Stevens v Brodribb Sawmilling

‘IN THE COURSE OF EMPLOYMENT’


• D is liable only if the servant committed the tort in the course of his or her
employment
– Deaton v Flew
– Morris v Martin

VICARIOUS LIABILITY
Vicarious liability makes D (usually the master/employer) liable for the torts of
another (usually his or her servant/employee) although the master is without any
blame or fault.
This area of tort law is not conceptually challenging - there are only two areas
that would come up for students to answer - normally at least one exam question
is in this area.

VICARIOUS RELATIONS AND AGENCY


An agent acts for the principal; but the liability of the principal for the act of the
agent is not based on vicarious liability. The liability of the principal is based on
the maxim: qui facit per alium facit per se
The agent acts in a representative capacity and has the authority to act for the
principal but is not necessarily a servant.
The employer or the master will have committed no tort at all.
It is an interesting tort because we are able to hold a person liable even though
they themselves have committed no tort of any kind.
There is a strict difference between an agency relationship and a vicarious
relationship - in the case of vicarious relations, what we are concerned with is
that we are holding this person liable for the torts I have committed because
there is a “master/servant” relationship between you and them.
Historically the reason for doing this was that the master was the master of the
household - the master was held responsible for the activities of those who lived
in the household - including the children and the spouse…in fact up until recently
in Australia there was even a time when if you were female, you could not get a
loan without the approval of your husband etc… (now times have changed)…so
historically the master was held liable for the activities of those within his
domain…the logic was that the master took the benefits of the services of those
who lived in that domain so it was a case that they took the burden that went
with those services…
In an agency relationship the logic is that you “get someone” - you employ
someone to do that which you yourself wanted to do - so if you act through an
agent, its as if you have acted yourself…
In a vicarious relationship it is not like that - the logic is not that what a servant
does, you do yourself - no - we are saying that we don’t care whether you do it
yourself or not - that person normally - its your responsibility - and so what they
do, you must be held liable for it - in the case of an agency relationship it is not
like that -
The latin maxim: “qui facit per alium, facit per se” - he who does something
through another, does it himself…
There is a difference between an agency/vicarious relationship - however it
depends on the relationship you have with your agent.
At what point in time do you hold a master liable for a servant’s behaviour?
Vicarious liability arises only in respect of the torts of the servant. The
master/employer is therefore responsible only for the torts of the servant and not
the independent contractor.
For the master/employer to be held liable, the tortfeasor must:
⇒ be a servant
⇒ commit the tort in the course of his or
her employment

SERVANTS AND INDEPENDENT CONTRACTORS


Are they a servant or an independent contractor? Most questions you get will be
in this area…
The prospective plaintiff may not be aware whether XX is an independent
contractor or a servant, but does it really matter?
You need to look at the totality of a relationship - the fact that a document says a
relationship is or is not an independent contractor relationship is negligible - you
need to look at the relationship as a whole.
When you have a problem on vicarious liability it will relate almost entirely on
these two issues (be a servant
AND commit the tort in the course of his or her employment..)

WHO IS A SERVANT?

A servant is one who is under a contract of service to another.

An independent contractor is under a contract for services.


The contractor is paid for the job by results rather
The contractor is paid for the job by results rather than for time spent, receives a
fee or commission, the servant receives wages.

The contractor is usually employed on a casual basis, the servant on a permanent


basis.

The contractor usually specifies his/her work schedule and supplies his/her own
tools.

The master may select the servant for the task.

Contract of service - you have got them in your service - the contract ties them
to you for the period of service.
In the case of an independent contractor you hire them as and when you need
them for specific services.
If an individual comes with independent insurance - this normally means they are
an independent contractor – because as an independent contractor, if you break
something you must pay for it yourself - this often says more then if they get a
fee or commission etc…
We can put all the points together to try to create some kind of crude formula for
determining whether or not they are a servant or contractor.
Approach the question of “who is a servant” with a certain degree of caution and
check out the facts - the basis for employment, what were the wages
arrangements etc…
One exam problem once was: there was a major company - they needed people
to deliver items brought from the store (tv’s, lounges etc…) - but the company
had looked for people with vans and with a licence - they employed them – on a
contract saying they are an independent contractor - in this scenario it was also
the case that they had to bring their own van, and painted with the logo of this
major company - so people knew where you were coming from etc… - the major
company gave you so much work you couldn’t work anywhere else (even though
they said “sure you can work for other employers) - in the event here is the van
owner a servant or an independent contractor?
It doesn’t matter what the contract says - look at the relationship and determine
your own conclusions… you can go either way here - you have reasons going for
either side.
The point to be made here is that it doesn’t matter what the conclusion was - in
the legal world someone will always will be coming to a different conclusion on
the other side of the courtroom etc… it is just how you get to your conclusion -
there was no right answer.

WHO IS A SERVANT? THE CONTROL TEST


If the Master controls what the employee does and how it is done then the
employee is a servant. The relationship will give rise to Vicarious Liability.
Zuijs v Wirth Bros: The case of the trapeze artist.
What is essential is whether there is lawful authority to command or give
directives if there is scope for it.
Stevens v Brodribb Sawmilling
Is there a measure of control over the employee? If the employer exercises a
certain measure of control over the employee then that is most likely a
master/servant relationship.
Does the employer dictate when and how a particular job is to be done? Again a
master/servant relationship…
You can begin with this control test to determine where you sit in relation to the
case…
The measure of control is very much determined by the nature of job being done
- it’s as simple as that…

Steven’s case - had to do with a logging company - the company had hired
people to bring their own trucks to move stuff (timber) back and forth - one of
Stevens’ colleagues caused a terrible injury to Stevens – so who was responsible?
The argument put forth was that all of the people with their own trucks were
hired as independent contractors…the high court disagreed eventually on the
basis that there was a very comprehensive protocol for safety…safety was an
issue which was very much under control and command of the sawmilling
company itself…you do not simply get out of your obligations by writing down on
a piece of paper that everyone is an independent contractor…it doesn’t work like
that. At the end of the day what matters is not so much the written document
between the parties, but in actual fact the substance of what they are doing.

Limits of the Control Test


The nature of the service to be performed is essential in determining the
relationship.
(Stevens v Brodribb Sawmilling)
Uncontrollability of a person
Uncontrollability of a person forming part of an organization as to the manner in
which work is performed does not preclude a relationship of master & servant”
(Albrighton v PRA Hospital):
P injured due to negligence of doctors in the hospital, issue who is liable. Held
because the patient went to the hospital – the D hospital owed her a NON-
DELEGABLE duty – not because they were the employer.

The Evidence of ‘‘Control’’

Master-servant relationship:
Right to have the particular person do the work
Right to suspend or dismiss
Right to exclusive services of person engaged
Right to dictate place of work, hours etc
Independent contractors:
Independent contractors:
A profession or trade or distinct calling of the contractor
Provision of own place of work or equipment
Creation of contractor of goodwill, saleable assets
Payment of own business expenses
No deduction from remuneration for income tax

These factors are not conclusive.

If you are faced with a problem how do you determine the control test? What
evidence do you look for to establish control?
Money is NOT the critical issue…
If you deal with an independent contractor they normally give you an ABN and
they take out their own tax

The Totality of the Relationship


Hollis v Vabu: (bicycle couriers)
Gleeson CJ, Gaudron, Gummow, Kirby & Hayne JJ (McHugh & Callinan dissenting)
In present case relationship bet. Parties is to be found not only in the contractual
terms but in the system which was operated there under and the work practices
imposed. CONTROL is not now the only relevant factor. The totality of the
relationship between the parties must be considered. The couriers were
employees because:
They did not provide skilled labour
had little control over manner of work
were presented to the public as “emanations” of D
⇒ Policy consideration to support vicarious liability is deterrence of
harm - encourages employer to reduce risk of future harm
⇒ D “superintended” couriers’’ finances
⇒ supplied own bicycles but capital outlay relatively small – simply
indicates employment conditions favourable to employer
was considerable scope for control by D - allocation & direction of deliveries

Hollis case - bicycle courier working for Vabu (company) ran down the P - the P
fell - the courier stopped and tried to help the P - P looked ok at the time so the
courier rode off - later on the P’s back started hurting - anyway eventually
tracked down the courier company - company says the bicycle courier was an
independent contractor etc… - this became the issue - are the couriers servants
or independent contractors?
Normally when you bring your own equipment you are an independent
contractor…however in present case relationship between parties is to be found
not only in the contractual terms but in the system which was operated there
under and the work practices imposed.

‘IN THE COURSE OF EMPLOYMENT’’


D is liable only if the servant committed the tort in the course of his or her
employment
Whether the tort is committed in the course of employment or not turns on:
What tasks are authorized
Whether the employee’s tortuous act so connected to authorized tasks that it can
be seen as a mode of carrying out the task albeit wrongful

Deaton v Flew (Barmaid claimed the plaintiff abused her and she threw a glass of
beer at him with the glass – the plaintiff lost an eye – sued the bar not the
employee ) (barmaid was employed to serve drinks so her act of throwing the
beer bottle was outside the course of her employment)

Canterbury Bankstown RLFC v Rogers: P (Rogers) was the victim of a tackle done
by Mr Bugnan who was employed by Canterbury. Canterbury argued that it was
not responsible for Mr. B’s actions. Mr. B argued that he was allowed to tackle.
The NSW Court of Appeal said the tackle occurred in the course of Mr. B’s
employment even though it was by improper means (contrary to the rules of the
game but not outside the scope of the game)
This issue will usually come up in a question - did the tortfeasor come up in the
course of his or her employment or not? (eg's above)

‘A Frolic of his/her Own’’


In general the employer is not liable where the employee commits a tort while on
a ‘‘frolic of his or her own’’
Harvey v O
Harvey v O’Dell
Detour to get more tools & lunch was in scope of employment. Not a frolic of their
own because employees were paid subsistence money & not required to take
lunch with them.

Petrou v Hatzigeorgiou:H
Horseplay / practical jokes by employees may be within the course of
employment. P worked as an apprentice at a panel beater. He was doused in
paint thinner and set alight – the issue was whether the business partner was
vicariously liable for the actions of the other partners? Yes… Fact that act went
outside permitted level of horseplay did not take it outside the course of the
business

If you are out there doing things that are not in the course of employment then
you are out there ‘frolicking on your own’ or having a ‘frolic of his/her own’ What
constitutes a frolic is always debatable..

Prohibitions on the Employee


Where the employer expressly prohibits a particular conduct, the employee’s act
in breach of the prohibition is generally considered to be outside the scope of the
employee’s services - employer not liable
•• However, an act in defiance of a prohibition which deals with CONDUCT
WITHIN SPHERE (ie: how, when, where etc tasks are performed) OF
EMPLOYMENT will not be outside the scope of employment - the employee would
be doing the right services but in the wrong way: employer is liable
Bugge v Brown
A prohibition as to manner… time… or place… or as to the very act itself… will not
necessarily limit the sphere of employment
To limit the sphere of employment the prohibition “must be such that its violation
makes the servant’s conduct so distinctly remote and disconnected from his
employment…”

Non-delegable duties and vicarious liability


Vicarious liability arises in circumstances “when the law holds one person
responsible for the misconduct of another, although he is himself free from
blameworthiness or fault” (Fleming J, Law of Torts (9th edition) at 409)

Non-delegable duty arises in circumstances where a person cannot be excused


from liability even if reasonable care is exercised in entrusting responsibility to
another person

Non-delegable duties and vicarious liability s5Q CLA


5Q Liability based on
New South Wales v Lepore; Samin v Queensland; Rich v Queensland [2003] HCA
4 (6 February 2003)
- Liability of school authority
- Alleged sexual assault on pupil by teacher
- Whether school authority in breach of non-delegable duty of care
- Concept of non-delegable duty
- Whether school authority vicariously liable
- Test for imposition of vicarious liability.
Gleeson CJ: One cannot dismiss the possibility of a school authority’s vicarious
liability for sexual abuse merely by pointing out that it constitutes serious
misconduct on the part of a teacher
Teaching may simply involve care for the academic development… However
where the teacher – student relationship is invested with a high degree of power
and intimacy, the use of that power and intimacy to commit sexual abuse may
provide a sufficient connection between the sexual assault and the employment
Gummow & Hayne JJ: Policy considerations: Fair & efficient loss-distribution; Just
to attribute responsibility to those from whose enterprise the risk and damage
emerges; Deterrent effect of holding employer responsible
Kirby J: “With the House of Lords and the Supreme Court of Canada, I am of the
view that more recent expositions of the law of vicarious liability require the
application of a broader formulation to describe those cases where an employer
assumes…liability for the wrongs committed by an employee …on work
premises...in work hours against vulnerable people put at risk by the employer’s
enterprise although such wrongs were deliberate and even…criminal…”

DEFAMATION

What is defamatory?
“A defamatory statement may be defined as one which tends to lower a person in
the estimation of his fellow men by making them think the less of him.
Frequently, it takes the form of an imputation calculated to bring the plaintiff ‘into
hatred, contempt or ridicule’ (Parke’s B definition in Parmiter v Coupland((1840)
6 M&W 105, 108), whether by direct statement, irony, caricature or any other
means; but it is not necessary that the words have the tendency to excite
feelings of disapprobation, provided they cause him to be shunned and avoided
by his fellows.” J.G. Fleming
Slander and Libel
Slander – A defamatory statement in oral or transient form actionable upon proof
of damage.
Libel – A defamatory statement in written form or other permanent form
actionable per se.

In NSW, Section 8 Defamation Act 1974 has removed the distinction between
slander and libel.

Defamation can broadly be defined as the unlawful publication by one person of a


matter that is defamatory of another. What do these things mean? What is a
matter? A matter consists of anything that is conveyed - where a meaning is
conveyed - includes written words, spoken words, signs, gestures, photographs
etc…
When is a matter defamatory of another? A matter defames another if it tends to
injure that other person’s reputation and/or lead to their social ostracisation.

Procedure
Defamation actions are heard by a judge and jury.
Judge – tribunal of law determines the meaning and linguistics.
Jury – tribunal of fact determines whether the matter is defamatory

The common law states - VIC/SA/WA - these states are entirely common law…
you then have the code states - QLD/TAS - both of these have their defamation
laws modelled on Samuel Griffiths reworking of the indian penal code and then
you have the common law states that are modified by statute (NSW/ACT/NT) - in
NSW defamation actions are heard by a judge and a jury - amendments that
were brought in in 1995 mainly to tackle the problem of overly sympathetic juries
defined the role of the judge and the jury strictly - under s7A the trial judge
determines whether any of the defences raised are established and the amount of
damages that are rewarded to a successful plaintiff…the jury determines whether
the matter is in fact defamatory - so you have the court - the judge sitting alone
determining whether the imputations of a publication are capable of being
defamatory, then you have a jury determining whether they are in fact
defamatory - and once that is established the matter then moves back to the
judge for determination of the defences and ultimately awarding of damages…

Who May Be Defamed?


Living persons – the dead cannot be defamed no matter how distressing to the
relatives and friends
Corporations – although in NSW, only if the corporation employs fewer than 10
persons at the time of publication of the matter, and the corporation has no
subsidiaries (within the meaning of the Corporations Act 2001of the
Commonwealth) at that time [see Section 20 Defamation Act 1974].
Local Government Body, Professional Association and Trade Union - The
person must be identifiable - if you mention a large group then there may be no
chance of identifying the individual - however if you identify a small group, it may
be quite easy to identify the individual being mentioned in the article for example.
Local government bodies cannot sue for defamation - individual members of the
council may take action where their reputation is harmed by a publication…
Ballina shire council v Ringland(?) - defamation law was being used to silence
critics over a development application etc.. court of appeal upheld the house of
lords in an early case
(Derbyshire v Times ) which established at common law that there is a right to
free speech (limited) when it is a question of democracy…

Elements of Defamation
Matter must be capable of bearing a defamatory meaning (tarnish reputation).
Matter must be published.
Matter must relate to the plaintiff (cannot sue for someone else).
Absence of lawful justification (or Defences).

What is a defamatory meaning? What would the ordinary reasonable person


understand of the meaning complained of? What would they make of it? The
intention is irrelevant - it is about the meaning received from the words published
– not what was meant - rather it is what was understood by the person receiving
that information. Need to consider what the average member of society would
consider to be defamatory…

Elements – Defamatory Meaning


A question of interpretation, depending on the circumstances, the mode and the
context of publication:

Charleston v News Group Limited (1995) 2A 11 ER. - Plaintiffs complained about


photos of their heads and shoulders displayed above semi-naked models, the
whole portraying sexual activity. No liability as the accompanying article made it
clear the matter was lifted from another publication and criticised it as a form of
pornography

False Innuendo
Section 9(1) Defamation Act 1974
(1) Where a person publishes any report, article, letter, note, picture, oral
utterance or other thing, by means of which or by means of any part of which,
and its publication, the publisher makes an imputation defamatory of another
person, whether by innuendo or otherwise, then for the purposes of this section:
(a) (a) that report, article, letter, note, picture, oral utterance or thing
is a "matter", and
(b) the imputation is made by means of the publication of that matter.
Lewis v Daily Telegraph Ltd [1964] AC 234
Lewis v Daily Telegraph Ltd [1964] AC 234 –Articles published in the Daily
Telegraph and Daily Mail with headlines ‘Enquiry on Firm by City Police’ and
‘Fraud Squad Probe Firm’ which stated the police were inquiring into affairs of a
company of which the plaintiff was chairman. Plaintiff alleged the words meant he
was guilty of dishonesty or fraud. Held on appeal the words in question were not
capable of inferring guilt of fraud in their ordinary meaning

Random House Pty Ltd v Abbott (1999) ATR 81- 533 – Defendants had published
a statement indicating that two politicians had changed party immediately after
having sex with an unnamed female, who later married one of the Ministers. The
innuendo that each politician was prepared to abandon his political principles in
exchange for sexual favours was readily drawn.

Elements – Publication
Matter must have been communicated (or “published”) to a person other than the
plaintiff or there is no injury to reputation – Section 9 Defamation Act 1974.
Publication need not be to a large audience. “Utterance” to a single individual is
enough, provided he/she is other than the plaintiff himself/herself.
Old common law rule that communication between spouses cannot constitute
publication remains the law.
Multiple distribution and republication – Section 20 Defamation Act 1974.
Innocent republication, newsagent reselling paper – Section 36 Defamation Act
1974.
Reseller - do they have knowledge of the contents or control over the contents of
the publications that they sell? No…so there is an exception for
resellers/newsagents etc..

Elements – Relate to the Plaintiff


A defamatory statement is not actionable unless published of and concerning the
plaintiff. The plaintiff need not be specifically mentioned.
Test – Would a sensible reader reasonably identify the plaintiff as the person
defamed?
Group defamation – the plaintiff may prove himself or herself specifically
identified, either the group is so small that the accusation can reasonably be
understood to refer to each and every one of its members, or because the
circumstances of publication permit the conclusion that it was he/she who was
aimed at amongst the group

Elements – Absence of Lawful Justification (or Defences)


1. 1. Triviality or Unlikelihood of Harm (Section 13 Defamation Act 1974).
2. 2. Truth (Sections 14 to 16).
3. 3. Absolute privilege (Sections 17 to 17KA).
4. 4. Qualified privilege (Sections 20 to 22).
5. 5. Protected reports (Sections 24 to 26).
6. 6. Court notices, official notices (Sections 27 & 28).
7. 7. Comment (Sections 29 to 35).

Triviality (or Unlikelihood of Harm)


Test - Would a reasonable person impute a defamatory meaning?
Section 13 Defamation Act 1974: It is a defence that the circumstances of the
publication of the matter complained of were such that the person defamed was
not likely to suffer harm.
Context in which the matter is delivered is a vital factor (ie putting your hand
around someone and joking with them or walking up and shouting it in their face
instead...two totally different contexts...)

Truth - General
Section 15 Defamation Act 1974
(1) ... the truth of any imputation complained of is not a defence as to that
imputation except as mentioned in this section.
(2) It is a defence as to any imputation complained of that:
(a) imp(a) the imputation is a matter of substantial truth, and
of (b) the imputation either relates to a matter of public interest or is
published under qualified privilege..

In NSW the question of truth is irrelevant - it does not matter. Truth is relevant to
the defence of justification but unlike the common law - truth and truth alone has
never been an entire defence.

Truth – Contextual Imputations


Section 16 Defamation Act 1974
(1) Where an imputation complained of is made by the publication of any report,
article, letter, note, picture, oral utterance or other thing and another imputation
is made by the same publication, the latter imputation is, for the purposes of this
section, contextual to the imputation complained of.
(2) It is a defence to any imputation complained of that:
(a) It or is (a) the imputation relates to a matter of public interest or is published
under qualified privilege,
(b) One or (b) one or more imputations contextual to the imputation complained
of:
(i) Relate to a matter (i) relate to a matter of public interest or are published
under qualified privilege, and
(ii) Are matters of substantial truth, and
(c) By reason that those contextual imputations are matters of substantial truth,
the imputation complained of does not further injure the reputation of the
plaintiff.

How do you determine what is true and in what circumstances will truth be
relevant? S15 said that the truth of any imputation complained of is not a defence
as to that imputation except it is a defence to any imputation complained of that
it is a matter of substantial truth and that it is a matter of public interest or
qualified privilege.
Contextual imputations - idea behind this is that the question of damage to
reputation should be determined in light of the entire factual situation in which
the imputation arose - for example – a newspaper publishes two stories - 1
accuses a person of larceny - another story carries an imputation that the same
person has been convicted of fraudulently converting property for their own use
etc.. now if the first imputation that the individual the person had been convicted
of larceny is false - but the second is true (converting property) - the second true
imputation would prevent the plaintiff suing on the first imputation. Why?
The courts have come to find it quite difficult to accept that one’s reputation is
damaged by the secondary article - ie a convicted murderer article is shown in a
newspaper (true) and in the same paper they falsely claim that he is also a thief -
has he really suffered any damage after already being truthfully called a
murderer by falsely being called a thief? I don’t think so…

Truth – Substantial Truth


The defendant need only prove the substantial truth of the statement

Alexander v NE Rys (1865) 122 ER 1221 – statement that the plaintiff had been
sentenced to a fine or three weeks imprisonment was justified by showing that he
had been given the alternative of two weeks imprisonment.

Plaintiff may succeed where the defendant is unable to justify all of the statement

Becker v Smith’s Newspapers [1929] SASR 469 – defendant published the


plaintiff was a blackmailer, liar, swindling share pusher and illegal immigrant.
Plaintiff succeeded as the defendant was unable to justify the last allegation.

Truth – Public Interest


JG Fleming proposes two broad divisions of matters:
1. 1. Government (national and local, including behaviour of members of those
governments), and the conduct of public institutions and services; and
2. 2. Matters submitted to the public for its attention, whether for its edification,
instruction, instruction or persuasion.

Mutch v Sleeman (1928) 29 SR (NSW) 125 – statement that a member of


parliament was a wife-beater in relation to an incident that occurred four years
previously was found to have no relevance to the public interest and was
therefore defamatory.

Absolute Privilege
Three established occasions of absolute privilege:
1. 1. Parliamentary papers – Section 17 Defamation Act 1974.
2. 2. Statements in the course of judicial proceedings
Other statutory bases - Sections17A- 17KA.
Section 18 - Proceedings of inquiry
There is a defence of absolute privilege for a publication in the course of an
inquiry made under the authority of an Act or Imperial Act or under the authority
of Her Majesty, of the Governor, or of either House or both Houses of Parliament.
Section 19 - Report of inquiry
Where a person is appointed under the authority of an Act or Imperial Act or
under the authority of Her Majesty, of the Governor or of either House or both
Houses of Parliament to hold an inquiry, there is a defence of absolute privilege
for a publication by the person in an official report of the result of the inquiry.
Common Law bases in judicial proceedings..
3. 3. Communications between high-ranking officers of State.

Qualified Privilege
The publication of defamatory statements is in some instances protected by
qualified privilege, in recognition of certain necessities of social intercourse.
Section 22 (1) – Defamation Act 1974:
Where, in respect of matter published to any person:
in having (a) the recipient has an interest or apparent interest in having
information on some subject,
(b) the m(b) the matter is published to the recipient in the course of giving to the
recipient information on that subject, and
matter is (c) the conduct of the publisher in publishing that matter is reasonable
in the circumstances, there is a defence of qualified privilege for that publication.

Despite initially appearing to offer some relief to the media - it has not been
pursued by the media that much over the last 10-15 years - this was partly
rectified by Lange's case The high court said that in NSW without s22 there would
be an unreasonable burden on the freedom of communication - the main
substance of the reasoning there was that the law as it stood provided no defence
where there had been an honest but mistaken belief in the information published
where it had dealt with government or political matters…

Qualified Privilege
Section 22 (2A) Defamation Act 1974
In determining for the purposes of subsection (1) whether the conduct of the
publisher in publishing matter concerning a person is reasonable in the
circumstances, a court may take into account the following matters and such
other matters as the court considers relevant:
(a) (a) the extent to which the matter published is of public concern,
(b) (b) the extent to which the matter published concerns the performance of the
public functions or activities of the person,
the (c) the seriousness of any defamatory imputation carried by the matter
published,
ma (d) the extent to which the matter published distinguishes between
suspicions, allegations and proven facts,
(e) (e) whether it was necessary in the circumstances for the matter published to
be published expeditiously,
(f) t(f) the sources of the information in the matter published and the integrity of
those sources, (g) whether the mat(g) whether the matter published contained
the substance of the person’s side of the story and, if not, whether a reasonable
attempt was made by the publisher to obtain and publish a response from the
person,
(h) (h) any other steps taken to verify the information in the matter published.

The two things that act as a hurdle there are the extent to which the matter is of
public concern, and the extent to which the matter published distinguishes
between suspicions, allegations and proven facts.
Qualified Privilege
Principle categories of Qualified Privilege:
Freedom of political communication
Theophanos v Herald Weekly (1994) 182 CLR 104
Defamation law and the Constitution
Lange v ABC (1997) 71 ALJR 818..
Mistaken character of recipient
s21 Defamation Act 1974.

Remember that it is not a general freedom of speech - governmental matters of


political concern only etc…
What comes under political concern though? … What is political? There have not
really been any cases that have conclusively answered these questions…

Protected Reports
Section 24(1) of the Defamation Act 1974
"protected report" means a report of proceedings specified in clause 2 of
Schedule 2 (for example, inquiry held under the legislation or authority of the
government of any country ).
Section 24(2) defence of publication of a fair public report
Requirement of good faith for public information or the advancement of education
– Section 26.

Court Notices and Official Notices


Section 27 Defamation Act
(1) (1) There is a defence for the publication of a notice in accordance with the
direction of a court of any country.
(2) (2) Where a defence is established under subsection (1), the defence is
defeated if, but only if, it is shown that the publication complained of was not in
good faith for the purpose of giving effect to the direction.
Section 28
(1) (1) There is a defence for the publication of any notice or report in accordance
with an official request.
(2) (2) Where a defence is established under subsection (1), the defence is
defeated if, but only if, it is shown that the publication complained of was not in
good faith for the purpose of giving effect to the request.
(3) (3) Where there is an official request that any notice or report be published to
the public generally or to any section of the public, and the notice or report is or
relates to a matter of public interest, there is a defence for a publication of the
notice or report, or a fair extract or fair abstract from, or a fair report or
summary of, the notice or report.
(4) (4) Where a defence is established under subsection (3), the defence is
defeated if, but only if, it is shown that the publication complained of was not in
good faith for the information of the public.
(5) (5) This section does not affect the liability (if any) in defamation of a person
making an official request.
6) I(6) In this section, "official request" means a request by: (a) an officer of the
government (including a member of a police force) of any Australian State, or of
the Commonwealth, or of any Territory of the Commonwealth, or (b) a council,
board or other authority or person constituted or appointed for public purposes
under the legislation of any Australian State, or of the Commonwealth, or of any
Territory of the Commonwealth.

Comment
The defence of comment protects honest expressions of opinion on matters of
public interest. The rationale is that the truth of opinions cannot be objectively
tested.
Like the defence of Truth, Comment must relate to a matter of public interest:
Section 31 Defamation Act 1974:
The defences under this Division are not available to any comment unless the
comment relates to a matter of public interest.

Gardner v Fairfax Newspapers (1942) SR(NSW) 171 at 174 per Jordan CJ “A critic
is entitled to dip his pen in f A critic is entitled to dip his pen in gall for the
purpose of legitimate criticism, and no one need be mealy-mouthed in
denouncing what he regards as twaddle, daub or discord”..

Comment
Opinion or fact:
Kemsley v Foot [1952] AC 345 – Foot published an article headed “Lower than
Kemsley” criticising the conduct of a newspaper, Beaverbrook Press, unrelated to
newspapers owned by the plaintiff, Kemsley. The House of Lords held that a
sufficient factual basis existed for the headline to be comment as Kemsley was a
proprietor of a number of newspapers, whose standards of journalism were being
unfavourably commented on by Foot. Kemsley’s ownership of newspapers and
their content was public knowledge.

Remedies – Offer of Amends


Section 9D Defamation Act 1974:
(1) (1) The publisher may make an offer to make amends to the aggrieved
person.
(3) (3) An offer to make amends :
(a) must (a) must be in writing, and
an offer t(b) must be readily identifiable as an offer to make amends under this
section, and
(c) must i(c) must include an offer to publish, or join in publishing, a reasonable
correction (if appropriate in the circumstances) of the matter in question, and
(d) must i(d) must include an offer to publish, or join in publishing, a reasonable
apology (if appropriate in the circumstances) in relation to the matter in question,
and
(e) if mate(e) if material containing the matter has been given to someone else
by the publisher or with the publisher’s knowledge— must include an offer to
take, or join in taking, reasonable steps to tell the other person that the matter is
or may be defamatory of the aggrieved person, and
f so, set o (f) must state whether it is a qualified offer and, if so, set out the
defamatory imputation in relation to which it is made, and
he (g) must include an offer to pay the expenses reasonably incurred by
the aggrieved person before the offer was made and the expenses reasonably
incurred by the aggrieved person in considering the offer,
(h) may in(h) may include particulars of any correction or apology made, or
action taken, before the date of the offer, and
n for any (i) may include an offer to pay compensation for any economic or non-
economic loss of the aggrieved person.

There is no real incentive for a D to offer to make amends - rather if you do that
and later on the matter ends up going to court anyway then you are immediately
doing away with a few possible defences…

Remedies - Injunction
Courts are generally unwilling to grant an injunction at an interlocutory level as it
may infringe freedom of speech and amount to a usurpation by the judge of the
function of the jury. However, in cases where the defendant’s case is hopeless,
the courts will issue an injunction: Chappell v TCN Channel 9 (1988) 14 NSWLR
153

Remedies - Damages
Part 4 Defamation Act 1974 (Sections 46 to 48).
Relevant harm defined in s46(1) as harm suffered by the person defamed.
Exemplary damages are not available in NSW
– Section 46(3)(a).
Relevant factors s46A – there must be an appropriate and rational relationship
between relevant harm and the amount of damages awarded.

INTRODUCTION: The Concept of Defence


 Broader Concept: The content of the Statement of Defense- The response
to the P’s Statement of Claim-The basis for non-liability
 Statement of Defence may contain:
– Denial
– Objection to a point of law
– Confession and avoidance:

Liability in Negligence
 Tame v New South Wales; Annetts v Australian Stations Pty Ltd (2002) 76
ALJR 1348
– In Negligence the criterion of liability is failure to take reasonable
care

DEFENCES TO ACTIONS IN NEGLIGENCE


 Diminished Standard of Care
– (This is technically not a defence. It seeks to undermine the
existence of a duty)
 Contributory negligence
 Voluntary assumption of risk
 Illegality
– (Self-defence)

Cases
 Insurance Commission v Joyce (1948) 77 CLR 39 (The case for the plaintiff
was that while he was being driven in D's car as a gratuitous passenger D
drove so negligently that the car first ran into a stationary truck and then
into a fence and P was seriously injured. Both parties were found drunk)
– the three categories [of defence] should not be regarded as
mutually exclusive. The same evidence may establish a defence
under each heading. Per Latham CJ

 South Tweed Heads Rugby League Football Club Ltd v Rosellie Jonnell Cole
& Or [2002] NSWCA 205 (12 July 2002) (‘Spumante Case’)
– First Respondent (Ms Cole) was seriously injured when struck by a
motor vehicle driven by the Second Respondent (Mrs Lawrence).
The First Respondent had been drinking at the premises operated
by the Appellant (Club) and had consumed a large quantity of
alcohol throughout the day

 Per Santow JA:


– (2) The result in the case follows whether the reasoning is
expressed in terms of the existence or absence of the duty of care,
or the chain of causation being broken by the deliberate act of the
plaintiff, or the principles of volenti non fit injuria or novus actus
interveniens.

 Robert Allan Moore v Reece Gordon Woodforth [2003 NSWCA 9]


– On 3 January 1998 P the appellant was injured when struck by the
propeller of a motor boat owned and driven by D the respondent.
The appellant was snorkelling in the Swansea Channel at the
entrance to Lake Macquarie. A defence of volenti non fit injuria was
rejected, but damages were reduced by 40% for contributory
negligence

 The Contributory Negligence of P


– (1) not taking a diver's flag,
– (2) spearfishing near a navigational buoy,
– (3) relying only on the plaintiff's hearing to warn him of
approaching boats,
– (4) not wearing a fluorescent wet suit and
– (5) "flaunting of the prohibition against spearfishing".

Volenti and Contributory Negligence


 "[T]he law of torts has never established a firm line identifying when the
principle of the volenti ceases to operate and questions on contributory
negligence cut in." per Spigelman CJ in Desmond v Cullen [2001] NSWCA
238,

CONTRIBUTORY NEGLIGENCE
 Traditionally contributory negligence was a complete defence in Common
Law.
– Where an accident was caused by the combined negligence of the P
and the D, then however slight the negligence of P might have
been in comparison to D, P could not recover unless D was found to
have had the last opportunity to avoid the harm
 The development of apportionment legislation

Contributory Negligence: The nature of the P’s conduct


 The defence is established if the defendant proves the plaintiff guilty of
conduct which amounts to a failure to take care for his/her own safety

 To plead the defence, D bears the onus of proof and must prove the
requisite standard of care that has been breached by P.

The Substance of Apportionment Legislation


 Where any person suffers damage as the result partly of his/her own fault
and partly of the fault of any other persons, a claim in respect of that
damage shall not be defeated by reason of the fault of the person
suffering damage, but damages recoverable in respect thereof shall be
reduced to such extent as the court thinks just and equitable having
regard to the claimants share in the responsibility for the damage (Law
Reform (Miscellaneous) Act 1965 (NSW) s10

Motor Accidents Compensation Act 1999 s 138


 A finding of contributory negligence must be made in the following cases:
– where the injured person or deceased person has been convicted of
an alcohol or other drug-related offence in relation to the motor
accident…
– Where the driver’s ability to control vehicle was impaired by alcohol
and the P as an adult voluntary passenger was/ought to have been
aware of this…
– Where the injured party (not being a minor) was not wearing set
belt/protective helmet, and was required by law to wear such
belt/helmet

CIVIL LIABILITY ACT Part 8


 The principles that are applicable in determining whether a person has
been negligent also apply in determining whether the person who suffered
harm has been contributorily negligent in failing to take precautions
against the risk of that harm.
 s5S:In determining the extent of a reduction in damages by reason of
contributory negligence, a court may determine a reduction of 100% if the
court thinks it just and equitable to do so, with the result that the claim for
damages is defeated.

Voluntary Assumption of Risk


 In general where P voluntarily assumes the risk of a particular situation,
she/he may not be able to maintain an action against D for negligence in
relation to that situation
 The elements
– P knew or perceived the danger
– P must have fully appreciated the risk of injury created by the
danger
– P must have voluntarily accepted the risk

 Scanlon v American Cigarette Company Overseas Pty Ltd (No 3) [1987]


VR 289
– If it is to be the case that the smoking of the said cigarettes
involved risk of injury as alleged… the P knew or ought to have
known that the smoking of the said cigarettes involved such risk
and the P accepted, consented to and voluntarily assumed the
same ( extract from D’s statement of defence)
– Issue: whether VAR is based on subjective knowledge or an
objective/constructive knowledge is sufficient

 What constitutes acceptance of the risk?


RISKS UNDER THE CIVIL LIABILITY ACT
RISKS

OBVIOUS INHERENT
VAR IN THE CIVIL LIABILITY ACT (Division 4, S5F)
 (1)an obvious risk to a person who suffers harm is a risk that, in the
circumstances, would have been obvious to a reasonable person in the
position of that person.
 (2) Obvious risks include risks that are patent or a matter of
common knowledge.
 (3) A risk of something occurring can be an obvious risk even though it
has a low probability of occurring.
 (4) A risk can be an obvious risk even if the risk (or a condition or
circumstance that gives rise to the risk) is not prominent, conspicuous or
physically observable.
 S 5I(2) An inherent risk is a risk of something occurring that cannot be
avoided by the exercise of reasonable care and skill.

Qualifications
 Under s5G(1) ’[i]n determining liability for negligence, a person who
suffers harm is presumed to have been aware of the risk of harm if it was
an obvious risk, unless the person proves on the balance of probabilities
that he or she was not aware of the risk’

 under s5H(1) the defendant ‘does not owe a duty of care to another
person ( "the plaintiff" ) to warn of an obvious risk to the plaintiff. The
defendant retains the duty to warn of obvious risks in the following cases:
– a) the plaintiff has requested advice or information about the risk
from the defendant, or
– (b) the defendant is required by a written law to warn the plaintiff
of the risk, or
– (c) the defendant is a professional and the risk is a risk of the
death of or personal injury to the plaintiff from the provision of a
professional service by the defendant

Recreational Activities: Obvious Risks


 As a matter of law, there is a point at which those who indulge in
pleasurable but risky pastimes must take personal responsibility for what
they do. That point is reached when the risks are so well known and
obvious that it can reasonably be assumed that the individuals concerned
will take reasonable care for their safety (Prast v The Town of Cottesloe
Ipp J )

CLA
 S5L provides that the defendant ‘is not liable in negligence for harm
suffered by another person ("the plaintiff") as a result of the
materialisation of an obvious risk of a dangerous recreational activity
engaged in by the plaintiff’
 s5L(2) specifically stipulates that the s5L(1) exclusion of liability for harm
suffered as a result of obvious risk associated with recreational activities
‘applies whether or not the plaintiff was aware of the risk’.

INHERENT RISK
 S5I(1) A person is not liable in negligence for harm suffered by another
person as a result of the materialisation of an inherent risk.

NO PROACTIVE DUTY TO WARN OF RISKS


 Under the legislation D has no duty to warn P of an obvious risks except
where:
– (a) the plaintiff has requested advice or information about the risk
from the defendant, or
– (b) the defendant is required by a written law to warn the plaintiff
of the risk, or
– (c) the defendant is a professional and the risk is a risk of the
death of or personal injury to the plaintiff from the provision of a
professional service by the defendant.

ILLEGALITY
 The traditional Common Law position on illegality is usually summed up in
the Latin maxim ex turpi causa non oritur action which means that “no
cause of action may be founded on an illegal act”

What is Illegality?
 There are three possible interpretations of ‘illegal act’ in this context: (a)
action in breach of the criminal law; (b) criminal action and also conduct in
breach of the civil law; (3) a criminal wrong, or civil wrong, or immoral
behaviour.

Illegality: The Traditional Position in Common Law


 There is no general principle of law that a person who is engaged in some
unlawful act is to be disabled from complaining of injury done to him by
other persons, either deliberately or accidentally he does not become a
caput lupinum (an outlaw) ( per Latham CJ: Henwood v Municipal
Tramways Trust

Illegality under the Civil Liability Act


 Section 54
– (1) A court is not to award damages in respect of liability… if the
court is satisfied that:
– (a) the person whose death, injury or damage is the subject of the
proceedings was, at the time of the incident that resulted in death,
injury or damage, engaged in conduct that (on the balance of
probabilities) constitutes a serious offence, and
– (b) that conduct contributed materially to the risk of death, injury
or damage

The Scope of the section


 The section applies ‘whether or not a person whose conduct is alleged to
constitute an offence has been, will be or is capable of being proceeded
against or convicted of any offence concerned’

Self-Defence against Unlawful Conduct II


 S52: ‘a person does not incur a liability … arising from any conduct of the
person carried out in self-defence, but only if the conduct to which the
person was responding: (a) was unlawful’…
 This section does not apply if the person uses force that involves the
intentional or reckless infliction of death only: (a) to protect property, or
(b) to prevent criminal trespass or to remove a person committing criminal
trespass.

Self-Defence: The Scope


 S52(2)The defence is only available ‘if and only if’ at the time of the
relevant act, the defendant believed the conduct was necessary:
– (a) to defend himself or herself or another person, or
– (b) to prevent or terminate the unlawful deprivation of his or her
liberty or the liberty of another person, or
– (c) to protect property from unlawful taking, destruction, damage
or interference, or
– (d) to prevent criminal trespass to any land or premises or to
remove a person committing any such criminal trespass,
and the conduct is a reasonable response in the circumstances as he or she
perceives them

 S54: Where D’s conduct is judged to be an unreasonable response ‘a court


is nevertheless not to award damages against the person in respect of the
conduct unless the court is satisfied that:
 (a) the circumstances of the case are exceptional, and
 (b) in the circumstances of the case, a failure to award damages would be
harsh and unjust

The Test to Disentitle the Defence


 In each case the question must be whether it is part of the purpose of the
law against which the P has offended to disentitle a person doing the
prohibited act from complaining of the other party’s act or default
 Italiano v Barbaro (injury sustained while parties were in the process of
looking for a spot to stage accident)

Negligence – Remedies (or “Damages”)


RECOVERABLE HEADS OF LOSS: PERSONAL INJURY
• Windeyer J in: Teubner v Humble (1963) 108 CLR 491
– Three ways in which personal injury can give rise to damages:
• destruction or reduction (of existing mental or physical
capacity)
• new needs (which did not exist prior to the injury)
• production of pain (and suffering)
• These categories include:
– loss of earning capacity
– the cost of medical and nursing care (past and future)
– physical pain
– mental anguish

DAMAGES: PERSONAL INJURY


• SPECIAL DAMAGES
– out of pocket expenses
– loss of income up to the date of verdict less any deductions* (This
may be included in loss of earning capacity)
• GENERAL DAMAGES
– future medical and hospital expenses
– future economic loss
– loss of amenities and enjoyment of life
– Pain and suffering
– loss of expectation of life

OUT-OF-POCKET EXPENSES
• In general this includes all expenses incurred by the plaintiff on account of
the breach up to the date of verdict (Paff v Speed (1961) 105 CLR 549,
558-9)
– medical expenses
– surgical fees
– Transportation
– Special needs etc

LOSS OF INCOME
• Loss of actual pay plus any overtime
– less any savings to be made as a result of the injury (eg cost of
transport to work)
– less any boarding and lodging savings eg for being in hospital
(Sharman v Evans (1977) 138 CLR 563
– less allowance for income tax deductions (Cullen v Trappell (1980)
146 CLR 1)

FUTURE (HOSPITAL AND MEDICAL/CARE) EXPENSES


• P is entitled to recover the future cost of hospital, medical, nursing and
home care.
• P is entitled to recovery of such cost even where the care (nursing/home
care) is provided gratuitously by a spouse or relative Griffiths v
Kerkemeyer (1977) 139 CLR 161
• The damages for such expenses are calculated by reference to the market
cost of the services

LOSS OF EARNING CAPACITY


• The onus is on P to provide evidence of real possibility of the
potential/capacity yet unexploited that would have been exploited in the
future but for the injury suffered (Mann v Ellborn (1973) 8 SASR 298
( police officer who was aspiring to be a lawyer)
• Where D maintains that P retains the capacity to earn, the onus is on D to
provide the relevant evidence and the range of work open to P

NON-ECONOMIC LOSS
• Non-economic loss is traditionally claimed under three main heads of
damage:
– Pain and suffering
– loss of amenities
– loss of expectation of life
• "is not the prospect of length of days, but the prospect of a
predominantly happy life . . . The ups and downs of life, its
pains and sorrows as well as its joys and pleasures . . . have
to be allowed for in the estimate" Benham v. Gambling
(1941) AC 157: (p 166 )

ASSESSMENT OF NON-ECONOMIC LOSS


• There is no acceptable criteria for assessing what is fair compensation for
a particular non-economic loss
• (Sharman v Evans):
– Her ability to breathe, eat, speak, move, control her excretions,
have social and sexual intercourse, bear or look after children is
either greatly impaired or destroyed. She also went through the
ordeal of releasing the young man from his promise to marry her…
The estimate in respect of pain and suffering is seldom
adequate( Murphy J)
– She has suffered and will continue to suffer for the rest of her life in
her left shoulder, another of her few remaining sensory areas…Pain
and suffering and loss of amenities of life is a head of damages
which is particularly difficult to assess (Gibbs and Stephen JJ)

Civil Liability Act 2002


Part 2 Personal Injury Damages
• Received assent on 18 June 2002
• Section 11A:
(1) does not apply to claims excluded by Section 3B (eg. Damages for
dust diseases, use of tobacco products, workers’ compensation…)
(2) Part 2 applies regardless of whether the claim is brought in tort,
contract, statute or otherwise
(3) A court cannot award damages, or interest on damages, contrary to
Part 2.

• Pt 2 Non-economic loss:

- No damages for non-economic loss unless assessed at 15% of a most


extreme case (eg. 15% = 1% or $3,500, 16% = 1.5% or $5,250, …26%
= 8% or $28,000, …33% = $115,500…100% = $350,000): Section 16(1)
& (3)

- Maximum non-economic loss = $350,000: Section 16(2)

- Maximum for non-economic loss indexed: Section 17

- Courts/parties may refer to other awards of non-economic loss in earlier


court decisions: Section 17A

Exemplary, punitive & aggravated damages:

• A court cannot award exemplary, punitive or aggravated damages in an


action for personal injury resulting from negligence : s21

• Pre-judgment Interest:
- No interest payable on damages for non-economic loss or gratuitous
attendant care: s18(1)
- If interest is awarded (eg. Past economic loss), the “relevant interest rate”
is the Commonwealth Govt 10-year benchmark bond rate: s18(4)

• Economic Loss:
- Maximum for gross loss loss of earnings = 3 times average weekly
earnings: s12
- 5% discount rate for future economic loss: s14
• Gratuitous Attendant Care:
- No damages awarded if services provided:
(a) for less than 6 hours per week, and
(b) for less than 6 months: s15(3)
Geaghan v D’Aubert [2002] NSWCA 260

Negligence - Remedies
INJURY TO RELATIONAL INTERESTS
THE SCOPE OF THE ACTIONS

DEATH
Dependents may sue for loss
actual or expected benefits

Loss of Consortium
Loss of Services An action that permitted
Parent/master may sue for the husband to sue
wrongful deprivation of the for wrongful deprivation of the
Services of a child/servant
wife’s consortium

COMMON LAW AND THE SURVIVAL OF ACTIONS


• In the event of death from a wrongful act there are two potential
plaintiffs:
– the estate; and
– dependants
• Traditionally in Common Law, a personal action ‘died’ with the victim

The Estate: Lord Campbell’s Act (1846)


• The Act modified the Common Law rule in England.
– The effect of the legislation was to give to the estate the action
which the deceased would have had she or he survived
• Australian States and Territories have adopted similar statutes with
modifications

SURVIVAL OF ACTIONS: NSW


• Law Reform (Miscellaneous) Provisions Act (NSW) 1944 Part 2 Survival of
causes of Action After Death
– Subject to the provisions of this section, on death of any person …
all causes of action subsisting against or vested in him shall survive
against, or, as the case may be, for the benefit of, his estate;...

QUALIFICATIONS
• Section 2(2) of the Law Reform (Miscellaneous) Provisions Act (NSW)
1944 does not allow for recovery of the following types of damages:
– exemplary damages
– loss of earning capacity/loss of future probable earnings
– loss of expectation of life
– pain and suffering
• Incidental losses or gains except for funeral expenses will not affect the
quantum of damages
HEADS OF DAMAGES
• ALLOWABLE DAMAGES
– Needs created; reasonable expenses incurred before death
– Reasonable funeral expenses
• NON-ALLOWABLE
– loss of earning capacity
– Non-economic loss

DEPENDENTS’ CLAIMS
• Compensation to Relatives Act 1897 (NSW)
– 3(1) Whenever the death of a person is caused by a wrongful act,
neglect, or default, and the act , neglect or default is such as would
( if death had not ensued) have entitled the party injured to
maintain an action and recover damages in respect thereof , then
and in every such case the person who would have been liable if
death had not ensued shall be liable to an action for damages

DEPENDANTS: STANDING
• Compensation to Relatives Act 1897 (NSW) S4:
– spouses
– parents (including those in loco parentis)
– de factos Compensation to Relatives Act (De facto Relationships )
Amendment Act 1984
– children (including step children)
– siblings (half and full)

SCOPE OF LOSS
• Public Trustee v Zoanetti (1945) 70 CLR 266
– ‘The basis for the action is not what has been called solatium, that
is to say, damages given for injured feelings or on the ground of
sentiment, but damages based on compensation for pecuniary
loss’
– What must be ascertained is whether any and what loss has been
sustained by the relatives of the deceased … (Dixon J , 279)

HEADS OF DAMAGES
• Loss of economic support/loss of reasonable expectation of financial
benefit
[see Luntz on Damages for a formula used to assess loss of economic
support]
• Loss of domestic services

LOSS OF REASONABLE EXPECTATION OF FINANCIAL BENEFIT


• The benefit is a ‘chance’ that is lost. P must therefore establish such
‘chance’ in accordance with the principles of reasonable certainty. (Taff
Vale Railway Co v Jenkins (1913)AC 1, 7
– All that is necessary is that a reasonable expectation of pecuniary
benefit should be entertained by the person who sues. It is quite
true that the existence of this expectation is an inference of fact
from which the inference can be reasonably drawn...
• It may be immaterial that the deceased was unemployed prior to his/her
death
• In the case of a young child, there has to be evidence sufficient to
establish the potential to provide the benefit (McDonald v Hillier [1967]
WAR 65)
• In circumstances where maintenance obligations are transferred to a third
party this may not necessarily preclude a claim because of future
contingencies (Thomson v Mandler [1976] 2 NSWLR 307

DOMESTIC SERVICES
• Nguyen v Nguyen (1990) CLR 245
– The claim: ‘loss of the deceased’s domestic capacity being the
value of services such as child care, cooking, washing, ironing and
cleaning’
• The definition of ‘services’ is broad:
– ‘There is no reason why ‘services’ in this context should be given an
unduly narrow construction, as if a wife is no more than a house
keeper’ Per Dawson, Toohey and McHugh JJ in Nguyen v Nguyen)
– Where the services are likely to to be replaced as a result of
remarriage, the reasonable prospect of that remarriage will serve
to reduce the compensation to which the plaintiff will be entitled …
because the P’s loss is thereby directly reduced ( Per Dawson,
Toohey and McHugh JJ in Nguyen v Nguyen)

LOSS OF CONSORTIUM
• The traditional common position permitted a husband to maintain an
action under three heads for loss of consortium (actio per quod consortium
amisit)
– Loss of the wife’s company including sexual companionship
– Loss of her domestic services
– Medical and other expenses incurred as a result of the injury to the
wife
• In Qld & SA the action is available to both spouses; in NSW, Tas and WA,
the action has been abolished

LOSS OF SERVICES
• Traditionally the common law allowed a cause of action (actio per quod
servitium amisit) for the loss of services of:
– Children
– Servants
• While the action for loss of services in the case of the child is rare today,
action for loss of services from a servant remain a feature of the common
law

LOSS OF SERVICES: SERVANTS


• The action was traditionally restricted to menial services offered by the
servant. In Australia there is no restriction based on the types of services
as such
• Heads of damage:
– Loss of profits
– Payment to the servant of sick-pay or pension
– Out of pocket expenses such as Workers Comp or medical
expenses.
• The Motor Accidents Comp. Act 1999 excludes compensation for loss of
services s 142
• The Employees Liability Act 1991 excludes against employees by
employers
• P cannot claim for the death of a servant (Sawn v Williams)

CIVIL LIABILITY AMENDMENT ACT 2003


Part 11 - Damages for the birth of a child
Section 70 Application of Part
(1) This Part applies to any claim for damages in civil proceedings for the birth of
a child, regardless of whether that claim is made in tort, in contract, under
statute or otherwise.
(2) This Part does not apply to any claim for damages by a child in civil
proceedings for personal injury (within the meaning of Part 1A) sustained by the
child pre-natally or during birth.
(3) This Part does not apply to civil liability that is excluded from the operation of
this Part by section 3B but, despite that section, does apply to liability of the kind
referred to in section 3B (1) (a).
• 71 Limitation of the award of damages for the birth of a child
(1) In any proceedings involving a claim for the birth of a child to which this Part
applies, the court cannot award damages for economic loss for:
(a) the costs associated with rearing or maintaining the child that the
claimant has incurred or will incur in the future, or
(b) any loss of earnings by the claimant while the claimant rears or
maintains the child.
(2) Subsection (1) (a) does not preclude the recovery of any additional costs
associated with rearing or maintaining a child who suffers from a disability that
arise by reason of the disability.

NUISANCE
WHAT IS NUISANCE?
 An unreasonable conduct that materially interferes with the ordinary
comfort of human existence

THE TWO ‘SIDES’ OF NUISANCE

NUISANCE

PRIVATE PUBLIC NUISANCE

PRIVATE NUISANCE
 Unlawful interference with P’s interest in land
 The tort protects against interferences with the enjoyment of land

THE NATURE OF THE TORT


 Conduct or something that emanates from D’s land
– Noise
– Dirt
– Fumes
– Noxious smell
– Vibrations etc
– (interference with TV signals)?

INTERESTS PROTECTED
 The tort centers on interest in the land that is affected
 D’s conduct must impact on P’s land as a form of interference to the
enjoyment of the land in question
– Victoria Park Racing v Taylor (D constructs a platform on his land to
view and comment on races taking place on P’s land)
– Thomson v-Schwab v Costaki (prostitutes in the neighbourhood)
– Raciti v Hughes (1995) (flood lights and camera equipment
overlooking P’s backyard)

NUISANCE AND THE PROTECTION OF PRIVACY


 Victoria Park does not stand in the path of the development of such a
cause of action [in privacy] (per Gummow, Hayne JJ with Gaudron in
agreement in ABC v Lenah Games Meats Pty Ltd (2001) 185 ALR 1)

TITLE TO SUE
 P must have proprietary interest in the affected land to be able to sue
– Oldham v Lawson
– Hunter v Canary Wharf
– Blay, ‘The House of Lords and the Lord of the House: Making New
sense of Nuisance’ ALJ ( 1999) Vol. 73, 275

THE NATURE OF D’S CONDUCT


 D’s conduct must be unreasonable.
– In general act/conduct that is reasonably necessary for the normal
user of land would not be considered unreasonable

 "A balance has to be maintained between the right of the occupier to do


what he likes with his own, and the right of his neighbour not to be
interfered with. It is impossible to give any precise or universal formula,
but it may broadly be said that a useful test is perhaps what is reasonable
according to the ordinary usages of mankind living in society, or more
correctly in a particular society." (per Lord Wright in Sedleigh-Denfield v.
O'Callaghan (1940) AC, at p 903 )

ABNOMAL PLANTIFFS
 Where D’s conduct is neither unreasonable nor excessive P cannot claim
– Robinson v Kilvert (27 degree heat generated as a result of D’s
work in lower floor causing damage to P’s sensitive paper)
 But where D’s conduct even though slight, but is malicious, P can claim
– Hollywood Silver Fox Farm Ltd v Emmett (gunshots to frighten P’s
vixen and to discourage P from setting up- farm. Pretext that the
shooting was to keep rabbits off the property was not accepted)

WHO MAY BE SUED?


 The creators of the nuisance
– Fennell v Robson Excavations (1977)
 Occupiers
– De Jager v Payneham & Magill Lodges (1984) 36 SASR Occupier
may be liable for the acts of a party who resides on the property
with occupiers permission
– Hargrave v Goldman ( an occupier may be held liable where he or
she allows the continuation of a nuisance from the land even
though they may not have created it initially)
 The creators of the nuisance
– Fennell v Robson Excavations (1977)
 Occupiers
– De Jager v Payneham & Magill Lodges (1984) 36 SASR Occupier
may be liable for the acts of a party who resides on the property
with occupiers permission
– Hargrave v Goldman ( an occupier may be held liable where he or
she allows the continuation of a nuisance from the land even
though they may not have created it initially)

PUBLIC NUISANCE
 Any nuisance that materially affects the reasonable comfort and
convenience of a class of people
 P may sue in public nuisance only if he/she can establish special damage
above and beyond that suffered by other members of the affected public
– Walsh v Ervin ( D ploughs up part of highway obstructing access to
P to the highway, D held liable)

QUEUES OBSTRUCTING PUBLIC HIGHWAYS AND ROADS


 Silservice Pty Ltd v Supreme Bread Pty Ltd (queues to buy bread on
George Street)
– Queues do not necessarily provide a basis for an action even where
they seem to obstruct a public access way that affects the P
– However D may be liable if
• the crowd is attracted by something done by D which is not
bona fide necessary for the conduct of his/her business
• the facility for the purpose of D’s trade is inadequate or not
suitable to hold or control the crowd
• D could employ some other reasonable means within his
control to minimize or prevent the damage to P

THE DEGREE OF INTERFERENCE


 It is not every interference however slight that constitutes an actionable
nuisance; the interference must be substantial and material( York Bros v
Commissioner of main Roads: construction of a bridge across a river
obstructs navigation by P, held nuisance)

PUBLIC BENEFIT AND PUBLIC NUISANCE


 In general public benefit is not a defence that can defeat P’s objections to
D’s conduct
 Where the interference to P is not substantial, the public benefit argument
may be used to reinforce the justification to the inconvenience caused to P

REMEDIES
 Abatement of nuisance
– Who bears the cost of abatement?
– Normally the abater does, but see Proprietors-Strata Plan No
14198 v Cowell where it was held that D may be required to bear
cost if the steps taken by P to abate were in reasonable mitigation
 Injunction to prevent the continuation
 Damages

DAMAGES
1. Damage
1.1 Some torts require proof that the otherwise tortious conduct caused some form
of defined damage or harm before they will become actionable. An example is
negligence. Injury to feelings, such as humiliation, is not damage such as will ground
an action for negligence. Personal injury, a recognised psychiatric illness (Civil
Liability Act 2002, s31), damage to property, and pure economic loss, constitute
actionable damage for the purposes of grounding an action for negligence. The
unwanted birth of a healthy child is not damage for the purposes of an action in
negligence (CLA, Part 11, abrogating Cattanach v Melchior (2003) 77 ALR 1312 at
1333).

1.2 Other torts, such as trespass to the person (assault and battery), are actionable
per se, that is, without proof of damage in the sense as required to ground an action
for negligence. In the case of such torts, damage is presumed to flow from the
commission of the wrong, which in the case of assault is causing the plaintiff
immediately to apprehend contact with his or her person. In such instances, the court
may award damages merely because of the insult or injury to feelings. Aggravated
(Droga v Coluzzi [2000] NSWSC at [79]; McDonald v NSW [1999] NSWSC350 at
[42] ff) and exemplary (Lamb v Cotogno (1987) 164 CLR 1; 74 ALR 188) damages
may be awarded.

Example. P is in a large crowd about to enter a racecourse for the gala day of its
racing carnival. It had been pouring with rain, and the gutters are flooded with water.
D recklessly tries to barge through the throng in his vehicle at high speed, and in the
process, precipitates a shower of water from the overflowing gutter in P’s direction. P
is able to avoid a dowsing by jumping out of the way, but in the process, he falls flat
on his back, and his elaborate race day hat is dislodged to the great amusement of the
crowd. D lets fly with a stream of abuse as he departs the scene at high speed. P
suffers no personal injury, and no damage is done to his property. But he is so
humiliated and distressed that he feels that she has no option but to go straight home.
His race day plans are ruined.

Note. P might in theory be entitled to general damages, which would be “at large”,
and which might be awarded to compensate P for D’s aggravating behavior, and
supplemented by an additional amount if this were necessary to deter D from similar
behavior in the future (aggravated and exemplary damages). If D’s vehicle had for
example made slight contact with P, breaking his arm, this slight physical injury
would ground an action based on negligence. It would also constitute a “negligent
battery”. D’s contumelious behavior both before and after the battery might warrant
aggravated and even exemplary damages, in an action based on battery. At common
law, such damages would also be available in an action based on negligence (Trend
Management Limited v Borg (1996) 40 NSWLR 500 (CA)). But it is now the case
that exemplary and aggravated damages may not be awarded in personal injury or
death cases based on negligence (CLA, s21).
2. Damages
2.1 Definition. Damages is the sum of money awarded by process of law to a
person legally wronged by another.

2.2 Scope of chapter. The following discussion is limited to assessment of


compensatory damages for negligently caused personal injury. Aggravated and
exemplary damages have been abolished in negligence (CLA, s21).

5. Damages for personal injuries at common law

5.1 Basic principle of compensation. At common law, the fundamental principle


for assessment of damages is restitutio in integrum that is, restoring the injured person
as near as possible to the position that he or she would have been in had the breach of
duty not occurred. In Norris v Blake [No 2] (1997) 41 NSWLR 49 at 63 – 64,
Handley JA elaborated upon this principle in the case of a budding movie star.

In assessing damages for personal injuries suffered as a result of the


negligence of a tortfeasor there are certain fundamental principles which are
well-established. In the first place, a plaintiff who has been injured by the
negligence of the defendant should be awarded such a sum of money as will, as
nearly as possible, put him in the same position as if he had not sustained the
injury. Secondly, damages for one cause of action must be recovered once and
forever, and (in the absence of any statutory exception) must be awarded as a
lump sum - the court cannot order a defendant to make periodic payments to
the plaintiff. Thirdly, the court has no concern with the manner in which the
plaintiff uses the sum awarded to him - the plaintiff is free to do what he likes
with it. Fourthly, the burden lies on the plaintiff to prove the injury or loss for
which he seeks damages: Todorovic v Waller (1981) 150 CLR 402 at 412.

It is also clear, as the particulars of his Honour's award demonstrate, that in


assessing damages for personal injuries a court is required to consider a number
of heads of damage. In times when most claims for damages for personal injury
were heard by juries there was a view that it was not appropriate to assess sums
of money as compensation for each of the various heads: see Arthur Robinso(Grafton)
Pty Ltd v Carter (1968) 122 CLR 649 at 660. Now it is well-accepted
that the courts should carry out the exercise, conducted by his Honour in this
case, of examining the claim under the respective relevant heads of damage:
Gamser v Nominal Defendant (1977) 136 CLR 145; Sharman v Evans (1977)
138 CLR 563; Griffiths v Kerkemeyer (1977) 139 CLR 161. The relevant head
of damage for present purposes is the loss of earning capacity, not past or
future lost earnings: Arthur Robinson (at 658); O'Brien v McKean (1968) 118
CLR 540 at 546; Medlin v State Government Insurance Commission (1995) 182
CLR 1 at 4 and 16. A plaintiff will be entitled to damages under this head if he
or she can prove a diminution in earning capacity which has been or may be
productive of financial loss: Graham v Baker (1961) 106 CLR 340 at 347.

None of this is controversial. Nor is there any doubt that the respondent
established that he had suffered a loss of earning capacity which sounded in
damages. The question which has arisen is how to assess the value of that lost
capacity where the respondent was injured at an early stage of a promising
career as a film actor with real prospects of much greater success in his career
with concomitant earnings increases. The appellant submits that, using the
earnings actually achieved by the respondent as well as those of other broadly
comparable actors since the accident, it is possible to derive the earnings which
it is likely, or probable, that the respondent would have achieved and that,
subject to the addition of a further amount to accommodate the real possibility
that the respondent might have earned much more than the comparable actors,
the resulting figure should provide the basis of the award. The respondent
submits that such an approach is inexact in the extreme and that it would lead
to an unjust assessment of the relevant loss suffered by the respondent. It
contends that the weighted average approach achieves a result which is likely to
be far more accurate.

In my respectful opinion the approach advocated by the appellant is


consistent with authority extending over a great many years. In Phillips v
London & South Western Railway Co (1879) 5 QBD 78, James LJ said (at 87):

"... you are to consider what his income would probably have been, how long
that income would probably have lasted, and you are to take into consideration
all the other contingencies to which a practice is liable."

Although it may not have been recognised by his Lordship that the relevant
head of damage was the impairment of earning capacity, rather than loss of
wages, that approach has in my experience been followed to the present time.
An interesting example of the application of that principle is to be found in
Mann v Ellbourn (1974) 8 SASR 298. In that case the plaintiff had been in
employment prior to the accident in which she sustained injuries which totally
disabled her from further work. She had not worked full-time. She had
commitments which made her choose not to work longer hours. The following
point was reserved for determination by the Full Supreme Court of South
Australia (at 301):

"Is the plaintiff to receive damages for economic loss


(subject to the ordinary contingencies of this life) based on a total loss of
earning capacity or on a two-thirds loss of earning capacity."

Bright J, with whom Zelling J concurred, examined the separate cases of a


person who fully exploited his or her earning capacity, a person who partially
exploited it and one who did not do so at all. His Honour said (at 307-309):

"... True they have all lost a capacity and must be compensated for that
loss, but when one looks at the damages flowing from the loss one must surely
ask what the likelihood is for the future. I do not think it cuts across
Arthur Robinson (Grafton) Pty Ltd v Carter at all to say that one first of
all determines that there has been a loss of capacity, and then having
regard to the established facts of the past and the probabilities of the future
one determines the damages that flow from the loss of capacity ....
In Thomas v Eyles (unreported, 10 September 1998 at 15) per Priestley JA referred to
a well established qualification to the compensation principle in a case bringing
together both a very severe example of one of the worst kinds of injury a person
can suffer together with circumstances personal to the plaintiff which are unlikely
to be repeated: his occupation, a
high standard of home dwelling, his connection with commercial diving for abalone
in the eastern zone of Victoria (in the town of Kiah) with the singular opportunities
provided to licence holders there of earning very large sums of money by
comparatively short bursts of skilled work, with the prospect of that opportunity
stretching forward into the indefinite future, and his providing for his family at Kiah
and the particular circumstances of living there.

Priestley JA:… At the time of his accident the plaintiff and his wife were in the
course of completing the building of their home at Kiah. The house was on a
twenty-two acre block of land and was built to a high standard. It stood at the
top of a hill overlooking a river. At the bottom of the hill there was a small beach
at the river’s edge. The property is bounded on one side by the Princes Highway.
There is an unsealed road from the highway to the house. Since the accident a
room, used by the plaintiff as his day room, has been built close to the main
house. Much of the land is uncleared. There is another unsealed road to the day
room building.

At the trial there were issues concerning claims made by the plaintiff for the
cost of: the day room; modifications to the house; changes to the surrounding
land; future modifications, equipment and facilities to enhance what the trial
judge called, in an understated way, “the plaintiff’s severely reduced amenity of
life”; and a care regime to permit him to continue to live in his home.

The questions involved in quantifying the total amount to be awarded to the


plaintiff were difficult at the trial, and, even in regard to the reduced

area of dispute, for this court. The difficulty in regard to the matters I am
about to come to led the judge to discuss the approach to be adopted and the
general problem of balancing the competing interests of the plaintiff and the
defendant. She said:

"Because of the magnitude of the claims made under the various


heads, I have found it necessary to return to the fundamental principles
on which damages in personal injury cases are awarded. These were re-
stated by Clarke JA, with whom Handley and Sheller JJA agreed in Blake v
Norris (unreported, Court of Appeal, 11 February 1997). The starting point
is that a plaintiff who has been injured by the negligence of the defendant
should be awarded such a sum of money as will, as nearly as possible, put
him in the same position as he would have been in if he had not sustained
an injury. It does not appear to me that this principle is confined to the
award of damages for loss of earning capacity which was there under
consideration, but applies generally, so far as it can, to the various heads
under which damages may be awarded. A second principle is that
expressed in Sharman v Evans (1977) 138 CLR 563. The plaintiff is
entitled to compensation for those expenses he has reasonably incurred or
will reasonably incur in the future as a consequence of the defendant’s
negligence: Sharman v Evans (1977) 138 CLR 563. The plaintiff’s claims in
many respects demand a close analysis of the reasonableness test. What
is ideal is not necessarily reasonable; Arthur Robinson (Grafton) Pty Ltd v
Carter (1968) 122 CLR 649. In weighing the reasonableness of a particular
claim, a court, may balance the cost against the potential benefit to the
plaintiff. The two principles may not always sit easily together. Had the
plaintiff not been injured he would for example, have been in the position
to enjoy the benefits of his property; he would have had ready access to
all of it, including the grassy slope, the animal sanctuary, and the beach
area, as well as locations more distant from his house.

He is not necessarily permanently deprived of these pleasures, but the


costs of restoring them to him, it was argued by the defendant, are
beyond what is reasonable on the Sharman test. In weighing the
competing claims of the parties, I have endeavoured to balance
reasonableness with such restoration of his former amenity of life as is
possible. It has not always been an easy task.”
This seems to me to be a well stated recognition by the trial judge of the
considerations she had to bear in mind in making her assessments. …

General experience is of little help in trying to assess what is just and fair
compensation in such a case. All that can be done is to do what the trial judge did
here, that is to assess the claims presented for the plaintiff and contested for the
defendant and to bring to the assessment a mind doing its best to achieve
fairness between the parties.

3.2 Large awards in extreme cases. The principles to be applied by the judge in
making an assessment of damages for negligently inflicted personal injury, and for
determination of an appeal from the assessment by an appellate court, are examined in
Diamond v Simpson [ ]. In that case, the trial judge awarded the plaintiff
$14,202,042. The largest personal injury award thus remained that in Norris v Blake
(1997) 41 NSWLR 49, of $44,329,664.88. In Diamond, the Court of Appeal reduced
the award to $10,998,692. The case is used throughout the discussion to illustrate
common law principles for assessing economic loss. Norris and Diamond illustrate
the capacity of the courts to make large awards in extreme cases.

3.3 Principles limiting recovery at common law. The quotations from Norris [ ]
and Thomas [ ] emphasise some inherent limitations on the compensatory principle.
Compensation must be “fair”, not “perfect”. As Dixon J said in Lee Transport Co Ltd
v Watson (1940) 64 CLR 1 at 13 – 14:

“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.”

Other limiting principles include:

 The control device of the rule relating to remoteness of damage [ ].


 The duty of the plaintiff to take all reasonable steps to mitigate the loss caused by
the breach of duty [ ].

3.4 Exemplary or punitive damages or damages in the nature of “aggravated


damages”. Such damages may no longer be awarded in an action for personal injuries
based on negligence (CLA, s21). However, their availability at common law
highlights was a further departure from the compensatory principle.

3.5 Benefits derived from accidents. A plaintiff might for example have taken out
insurance against the possibility of accidentally inflicted personal injury, and might
commence thereby to receive benefits under that policy following the negligent
infliction of personal injury by the defendant. Is the plaintiff entitled to keep the
insurance payment as a “collateral benefit”? Four kinds of collateral benefit are
touched upon in the following discussion:

 accident insurance [ ]
 social security and other statutory benefits [ ]
 employment benefits [ ]
 voluntary services and other gratuitous benefits [ ]

3.6 Once and for all in a single sum. See Norris v Blake [ ]. In New South Wales,
the Motor Accident Compensation Act 1999 (MACA), the Workers Compensation
Act 1987(WCA) s151Q, and the CLA, Part 2, Division 7, allow for structured
settlements. In addition, there is provision for interim damages under New South
Wales law. (Supreme Court Act 1970 (NSW), Part 5, Division 2; District Court Act
1973 (NSW), Part 3, Division 3, Sub-Division 4.)

3.7 General and special damages. For convenience, part of the award might be
described as special damages, for example, medical and other out-of-pocket expenses
actually incurred. In contrast, damages for non-economic losses are described (see
CLA, Part 2, Div 3) as general damages.

3.8 Economic and non-economic loss. Damages may be awarded for economic [ ]
and non-economic [ ] loss. The award for economic loss is typically separated into
amounts for economic loss to the date of trial and future economic loss. Under each of
these broad headings, there are various heads under which damages are traditionally
awarded, as detailed respectively at [ ] and [ ].

3.9 Interest on damages. This is beyond the scope of the discussion. Interest on
damages is addressed in Division 4, of Part 2, of the Civil Liability Act, under which
no interest may be awarded on damages for non-economic loss (general damages)
[ ] or gratuitous attendant care services [ ]. For comparable provisions in the
MAA and WCA see
3.10 Deconstruction of common law. In Chapter One an examination began of the
deconstruction by government of the common law system for compensating accident
victims. The CLA, MACA, and WCA significantly modify common law principles
for assessment of damages. Under the MACA and the WCA, the processes of
adjudication and assessment have effectively been removed from the courts and
brought into bureaucratic structures ultimately answerable to government.

3.11 Legislative concepts of “a most extreme case” and “percentage of whole


person impairment”. The concepts of “a most extreme case” and “percentage of whole
person impairment” are employed in the schemes provided by the Civil Liability Act,
the Motor Accident Compensation Act, and the Workers Compensation Act, as part of
their formulae to impose thresholds for and caps on recovery of damages. They are
explored at [ ].

4. Non-economic loss

4.1 Non-economic loss. Under s3 of the CLA:

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.

Damages for pain and suffering, loss of amenities, loss of expectation of life, and
disfigurement may make up the component of what at common law was described as
“general damages” for non-economic loss. While assessments may be made by the
judge under each of these separate sub-heads, normally, a global sum is awarded
without any reference to the size of its various components.

4.2 Tariff for non-economic loss. The CLA, s17A, abrogates High Court authority
prohibiting reference to comparable cases determining the general level of damages
for the kind of injury in issue.

4.3 Unconscious plaintiffs

SKELTON v. COLLINS [1966] HCA 14; (1966) 115 CLR 94 (7


March 1966)
High Court of Australia

TAYLOR J. … The plaintiff, who was seventeen years of age at the


time when his injuries were sustained, suffered severe brain damage
which rendered him unconscious… He suffered other comparatively minor
injuries but the evidence at the trial showed that he had remained
unconscious since the accident and that he would remain unconscious
for the rest of his life which would, as a result of his injuries,
probably terminate in the second half of 1965 and, certainly, by the
middle
of 1966. At the trial counsel agreed that it would be
proper to assume that death would occur within six months from the
date of
the
trial, i.e. by the 11th September 1965, and the learned trial judge
assessed
damages upon this assumption. …

In assessing [$3000] as general damages excluding future economic


loss the learned trial judge
proceeded upon the basis that he should award
compensation "for what the plaintiff consciously suffers" ….
In the present case two main complaints are
made. The first is that
general damages for the plaintiff's injuries, excluding those
assessed for
physical pain and suffering, should
have been assessed without regard to the
fact that he had remained unconscious since the accident. They
should, it is
said, have
been assessed on what has, somewhat unhappily, been called an
"objective" basis. The second is that in assessing damages for the
plaintiff's
lost earning capacity regard should have been had to the probable
period of
the plaintiff's working life immediately
before he sustained his injuries and
not merely to the period of life which remained to him after that
event….

It was, of course, said that if a plaintiff's condition, as a result


of his
injuries, is such that he is insensible to physical pain and
suffering it
would be inappropriate to award damages under this
head, the reason for this
being simply that a plaintiff in such a condition does not experience
pain
and, consequently, does not
suffer on that account. This latter proposition is
unassailable….
In West's Case (1964) AC
326 Lord Reid and Lord Devlin were
the dissentients. I quote from the speech
of the former: "There are two views about the true basis for this
kind of
compensation.
One is that the man is simply being compensated for the loss of
his leg or the impairment of his digestion. The other is that his
real loss is
not so much his physical injury as the loss of those opportunities to
lead a
full and normal life which are now denied
to him by his physical condition -
for the multitude of deprivations and even petty annoyances which he
must
tolerate. Unless I am
prevented by authority I would think that the ordinary
man is, at least after the first few months, far less concerned about
his
physical injury than about the dislocation of his normal life. So I
would
think that compensation should be based much less on the
nature of the
injuries than on the extent of the injured man's consequential
difficulties in
his daily life. It is true that in practice
one tends to look at the matter
objectively and to regard the physical loss of an eye or a limb as
the subject
for compensation.
But I think that is because the consequences of such a loss
are very much the same for all normal people. If one takes the case
of
injury
to an internal organ, I think the true view becomes apparent. It is
more
difficult to say there that the plaintiff is being
paid for the physical
damage done to his liver or stomach or even his brain, and much more
reasonable to say that he is being paid
for the extent to which that injury
will prevent him from living a full and normal life and for what he
will
suffer from being unable
to do so. If that is so, then I think it must follow
that if a man's injuries make him wholly unconscious so that he
suffers none
of those daily frustrations or inconveniences, he ought to get less
than the
man who is every day acutely conscious of what he suffers
and what he has
lost. I do not say that he should get nothing. This is not a question
that can
be decided logically. I think that
there are two elements, what he has lost
and what he must feel about it, and of the two I think the latter is
generally
the more
important to the injured man. To my mind there is something unreal in
saying that a man who knows and feels nothing should get the
same as a man who
has to live with and put up with his disabilities, merely because
they have
sustained comparable physical injuries"
(1964) AC, at p 341 . …
Lord
Devlin also thought that in
assessing damages for the loss of amenities of life two factors
should be
taken into consideration, one
"objective" and the other "subjective". He said:
"There are two ways in which this loss of enjoyment can be
considered. It can
be
said that from beginning to end it is really all mental suffering.
Loss of
enjoyment is experienced in the mind and nowhere else.
It may start with acute
distress at the inability to use a limb in games or exercise as
before or just
in getting about, and may
end with a nagging sense of frustration. If this is
the true view, then total unconsciousness …relieves all mental
suffering and nothing can be recovered for a deprivation
which is not being experienced. The other way to look
upon the deprivation of
a limb is as the loss of a personal asset, something in the nature of
property. A limb can be put both to
profitable use and to pleasurable use. In
so far as it is put to profitable use, the loss is compensated for by
calculating loss
of earnings and not by assessing mental pain. On the same
principle, it can be said, a sum must be assessed for loss of
pleasurable
use
irrespective of whether there is mental suffering or not" (1964) AC,
at p 355
. Later he proceeded: "My Lords, as might be expected,
English law has not
come down firmly in favour of either of these two ways to the
exclusion of the
other. It favours a compound of
both, as was agreed in argument and as I shall
show later by reference to the authorities. The elements to be
compounded have
been
called the objective and the subjective. The loss of property element
is
objective; it requires some sort of valuation that is in
no way dependent on
the victim's sense of loss. The other element is subjective because
it depends
entirely on mental suffering actually
experienced" (1964) AC, at p 355 .
Finally he concluded: "What has to be compensated for in this
assessment is a
total loss of enjoyment
of all the faculties, a complete loss of the pleasure
of living. When the victim knows his fate, he will suffer from the
distress
which, except in the most saintly or philosophical, is caused by the
prospect
of death; and for that clearly he must be compensated.
But what if he never
knows his fate? It has been decided that he still must have some
compensation,
which should be moderate. The
doctrine, I think, originated in Scotland, and
Lord Sands took the view that the objective element grew out of the
subjective. In
Reid v. Lanarkshire Traction Co. (1934) SC 79, at p 84 he said
that 'while the doctrine of an award in respect of the shortening
of life may
have originated in the theory of mental disquiet about the prospect
or the
possibility of death . . . that doctrine is
now a matter positivi juris
irrespective of the presence or absence of evidence as to the
sufferer's state
of mind in the particular
case'. But, he said, he should warn the jury that
the weight to be given to this element must be moderate and they must
not
consider1
what price the man would have put upon his life. …
[I] find the reasons appearing in the speeches of Lord Reid and Lord
Devlin
compelling. …[I]n assessing damages
for a loss of the amenities of life resulting
from the physical destruction or
impairment of some part of the body, I find it impossible to ignore,
or, to
regard merely as a minimal
factor, what has been referred to as the subjective
element. The expression "loss of the amenities of life" is a loose
expression
but as a head of damages in personal injury cases it is intended to
denote a
loss of the capacity of the injured person consciously
to enjoy life to the
full as, apart from his injury, he might have done. It may be said,
of course,
that a person who is completely
incapacitated as a result of his injuries
suffers such a loss whether or not his injuries are of such a
character to
render him insensible
to his loss. But, in my view, a proper assessment can be
made only upon a comparison of the condition which has been
substituted
for
the victim's previously existing capacity to enjoy life and where the
mind is,
as it were, willing and the body incapable there
is, in my view, a much higher
degree of loss than where the victim is completely insensible to his
lost
capacity. Perhaps, in other
words, it may be said that a person who is obliged
for the rest of his life to live with his incapacity, fully conscious
of the
limitations
which it imposes upon his enjoyment of life, is entitled to
greater compensation than one who, although deprived of his former
capacity
is
spared, by insensibility, from the realization of his loss and the
trials and
tribulations consequent upon it. In the result I
am left with a firm view that
the plaintiff's general damages in this case were assessed on a
proper basis….
The further question arises whether in assessing
damages for the
destroyed earning capacity of the appellant it was proper to have
regard only
to the period of life which remained
to him after receipt of his injuries….[No doubt there are
considerable difficulties in assessing]damages resulting from a
diminished or lost earning capacity….
But in the main they are difficulties which must be
faced and overcome
as far as possible every day. They arise in some degree or
other in every case where a plaintiff is incapacitated at the date of
the
trial of his action and, indeed, where a plaintiff has been
permanently
incapacitated though his life expectation has not been
diminished by his
injuries they must, not infrequently, be faced to the fullest
extent….

[T]he the recognition which has been accorded to the right of an


injured plaintiff
to recover
damages for "the loss of a measure of prospective happiness" in no
way operates to displace or destroy his right to recover damages
for economic
loss resulting from his diminished earning capacity. Accordingly in
my view
damages in the present case should have
been assessed under this head having
regard to the plaintiff's pre-accident expectancy and not only to the
expectancy of life remaining
to him after the receipt of his injuries. Any
assessment should, of course, take into account the vicissitudes and
uncertainties
of life and also the fact that if the plaintiff had survived for
the full period it would have been necessary for him to maintain
himself out
of his earnings and, no doubt, his expenditure on his own maintenance
would
have increased as his earnings increased.

In considering what he called the plaintiff's economic loss the


learned
trial judge in the present case did not have
regard to the plaintiff's
pre-accident expectancy of life ….[H]e proceeded
"on the basis that in assessing damages for personal injuries beyond
economic
loss the primary, although not the sole,
ground for awarding damages is to be
for what the plaintiff consciously suffers"….[T]he question is
whether the
sum
of [$2000] is manifestly inadequate to compensate him on an objective
basis for his injuries and his loss of amenities of
life during the residue of
his life. In the circumstances I am not disposed to think that it is
and,
accordingly, that we should
not interfere. …

[Kitto, Menzies,Windeyer and Owen JJ all agreed with Taylor J that damages for loss
of earning capacity are to be calculated by reference to the plaintiff’s pre accident
lifespan. Menzies J disagreed on the issues relating to non-economic loss.]
4.4 Pain and suffering. Assessment for pain and suffering addresses the subjective
feelings of the plaintiff. An unconscious plaintiff will receive no damages under this
head: Skelton v Collins (1966) 115 CLR 94. A young person facing unmitigated
pain over a nevertheless predictably long remaining lifespan, who suffered horrible
injuries in horrifying circumstances, would be expected to receive a significant sum
under this head. Gradations and variations within the conceptual tariff (CLA, 17A)
and all of the variations and permutations of conceivable pain engendering accidents,
are beyond the scope of this discussion. However, the difficulties of discovering how
judges have previously treated like plaintiffs in like situations are compounded
because of the practice of the courts in not isolating the amount for pain and suffering
within the global award which they generally make with respect to non-economic
loss.

4.5 Loss of amenities. In Teubner v Humble (1963) 108 CLR 491 at 506, Windeyer J
considered the assessment of damages for loss of amenities

TEUBNER v. HUMBLE [1963] HCA 11; (1963) 108 CLR 491 (10 April 1963)

High Court of Australia

Windeyer J:…
Turning to the damages. The consequences of the accident for the
appellant
are sufficiently described by the learned trial judge
as follows: "The
accident has deprived him of everything that made his life worth
living. He
has had a leg amputated and is partially
paralysed so that he has no prospect
of living elsewhere than in bed or a wheel chair. He requires
constant nursing
attention. His
intellectual processes have been damaged so that he cannot
properly take in the meaning of a printed page, and he talks with
some
difficulty. He has no possibility of future employment of any sort.
The pain
and misery which he has suffered and will suffer in
the future are
incalculable…,. Apparently he derives
some pleasure from the wireless and television and can carry on a
reasonably
intelligent conversation. He has been an inmate of the Home for
Incurables at
Fullarton since April of 1961 …Two of the three medical men whose
opinions are available think that his expectation of life has been
reduced,
and I would feel no
doubt that this is so, although no-one has attempted to
estimate to what extent. It must, however, clearly be substantial"
…. So-called principles of assessment of
damages for personal injuries can
be made the subject of almost endless
discussion. The consequences of such injuries are not all susceptible
of
evaluation in money,
and seeming logic can be pushed too far. Some
"principles" are much a matter of an individual approach to a
particular case.
The
conventional headings, economic loss, deprivation of amenities, and
pain
and suffering, provide a convenient reminder of matters
that ought not to be
forgotten. But it is not always appropriate, I think, to consider
them as if
they were distinct items in a balance
sheet; for one may overlap and impinge
upon another. (at p505)

Broadly speaking there are, it seems to me, three ways in which


a
personal injury can give rise to damage: First, it may destroy or
diminish,
permanently or for a time, an existing capacity, mental
or physical: Secondly,
it may create needs that would not otherwise exist: Thirdly, it may
produce
physical pain and suffering. …

In the first category there is usually one element that is, up to a


point, calculable by conventional means, namely the
economic loss that a
permanent or temporary destruction or diminution of earning capacity
causes.
This is commonly called "loss of
earnings", sometimes "loss of working time".
There has recently been a good deal of discussion of these
descriptions in
text books
and articles. I think that the damage arises really from the
destruction of a faculty or skill, and that this is the best way in
which to
consider its assessment. The sum that might have been earned by the
exercise
of a faculty or skill then becomes the measure
of the economic value to the
individual of the faculty or skill in respect of which he has been
damaged.
The destruction or diminution
of a faculty has another, and non-economic,
result because of the deprivation of the ability to participate in
normal
activities
and thus to enjoy life to the full and to take full advantage of
the opportunities that otherwise it might offer. This element is
commonly and
conveniently (but not, I think, very happily) called a "loss of
amenities". It
results from the destruction or impairment
of a faculty, just as does "loss of
wages". But a man's labour and skill have a market value. He can sell
them. So
that compensation
for loss of capacity to earn money is susceptible of
pecuniary assessment, although it is not precisely determinable
because of the
uncertainties of the future. But a man cannot sell his capacity for
enjoyment.
It has no calculable monetary value. The destruction
of the one is thus not, I
think, to be compensated on the same principles as the destruction of
the
other. An injured man is entitled,
it seems to me, to have monetary
compensation for whatever is the monetary loss attributable to his
incapacity
to work for what,
apart from the accident, would have been the period of his
working life. It matters not that he may have been so injured that
money
has
no use for him. How he may use, and whether he himself can use at
all, the
money he gets as damages for loss of what he might
have earned is immaterial.
But suppose a person deprived of all his powers of mental or physical
activity: Is he to have as damages
for loss of enjoyments and amenities a sum
that exceeds the utmost that can be used to provide for his nursing,
and his
comfort,
that is to have money that he can never use, which can not be used
for his benefit, and which he cannot even dispose of by will for
ex hypothesi
he has been deprived of testamentary capacity? I have considered what
has been
said in the reported cases about "objective"
as against "subjective" tests in
this connexion. But, until the matter be definitely concluded by a
considered
judgment of this Court
or by some authority binding on us, I am not prepared
to accept the view that damages for loss of enjoyment, loss of
amenities, can
properly exceed any sum that the injured person can in any way enjoy
or which
can be used to provide him with comforts or amenities.
Damages are given as
compensation to the injured man for his injuries. So far as his
injuries
consist of loss of enjoyment, I do
not see that money that he cannot use and
which cannot be used for him, and the possession of which can mean
nothing to
him, is compensation.
This case is, of course, not of that kind. I mention the
matter, however, because of some things that were said in the course
of
the
argument, and to emphasize that, in my opinion, there is a clear
distinction
between damages given because money that might have
been earned cannot be
earned and damages given because life cannot be enjoyed as previously
it was.
The former should, I consider,
be based upon what it is considered would have
been the probable duration of the injured man's working life if the
accident
had not
destroyed or impaired his capacity for work. The latter are often
considered in relation to the time for which after the accident
he is likely
to live and the ways in which money can actually be used by him or
used for
his benefit. It is perhaps natural to think
that when cases of personal injury
are set alongside one another the more serious physical injuries
should always
attract the highest
damages. I do not think this is necessarily so. Damages
are to be awarded as fair compensation to a particular individual.
What is
fair in his case is what has to be considered.

[ In Teubner v Hunble the Court held that….]

4.7. General principles for assessing damages for loss of amenities.


The weight to be given to objective elements, in the case, for example, of an
unconscious plaintiff, is as set out in Skelton v Collins (1966) 115 CLR 94; [1966]
ALR 449.The fact that the plaintiff, due for example, to permanent unconsciousness,
will be unable to use the damages is irrelevant to their assessment: Todorovic v
Waller (1981) 150 CLR 402 at 412.The award to an unconscious plaintiff under this
head will vary according to the plaintiff’s remaining lifespan: Skelton v
Collins.When the plaintiff suffers serious brain damage, any awareness of their plight
may be compensated with damages: Skelton v Collins.
For a conscious plaintiff, issues may include additional compensation for loss of a
special skill, length of the period of suffering, and loss of sexual functioning.

4.8 Loss of expectation of life. A nominal sum may be awarded for loss of
expectation of life of around $15,000: CSR Limited v Young (1998) Australian Torts
Reports 81 – 468.

4.9 Disfigurement. A sum may be included in the calculation of damages for non-
economic loss for “cosmetic disfigurement”: Shepherd v McGivern [1966] 1 NSWR
55 (CA).

4.10 llustration of principles for assessing non-


economic loss at common law.

SULLIVAN v MICALLEF and ORS; MACQUARIE


PATHOLOGY SERVICES PTY LTD v MICALLEF and
ORS — BC9404951

In 1988 the plaintiff Rhonda O’Shea developed a cervical


cancer.The defendants were found negligent in failing to detect
it.She died in 1994. The trial judge awarded her $442,318
damages. The defendants appealed with respect to the general
damages component of $185,000.

The matters for which general damages are awarded may be viewed in
different ways: the award may, in one sense, be seen as a sum for a seamless
aggregate of disabilities from which a plaintiff suffers; in other cases it may
involve an aggregation of compensation for separate and different things. In this
case it is convenient, as Mr Jackson QC has done, to refer separately to the
different aspects of what has happened to the plaintiff.

Because of the progress of the plaintiff’s condition, she had to undergo a


large number of serious surgical procedures which had she been operated on in
October-November 1988, she would not have had to undergo. In addition she
has been involved in diagnostic and other procedures which though not surgically
intrusive, no doubt affected her substantially’. ‘The number of major surgical
procedures is. depending upon one’s assessment of what has taken place, of the
order of six or seven. …

In addition to the distress and inconvenience ordinarily to be expected from


such procedures the plaintiff suffered great pain. In assessing the damages to be
awarded for pain and suffering there is sometimes a tendency - more accurately
a temptation - to treat pain as homogeneous. It is of course not so. 1n assessing
the plaintiff’s position in this case it is proper to recall that it may range across a
spectrum from minor aching to pain which bites. The plaintiff’s condition was bad
enough to warrant for a not insubstantial time the use of morphine to dull the
pain. It is I difficult for an appellate court to assess from the written material the
precise nature and extent of what the present plaintiff suffered. A judge who
sees and hears the witnesses is in a position of advantage in assessing matters
of this kind. It was in my opinion peculiarly for the trial judge to assess what
part of the spectrum of pain was

referred to by the plaintiff and the medical witnesses in their description of


what she had to undergo and to place in the order of intensity descriptions such
as “pretty bad” and the like. It is, in my opinion, proper to act upon the basis
that that for which his Honour saw the compensation to be assessed in this
regard was in the upper level of the spectrum.

Mr Jackson QC referred also to, as it was described, the plaintiffs depression.


By the end of 1988, she feared she had cancer. Following the operation of 7
March 1989 she was reassured but, I would infer, not completely.
Notwithstanding that, in March 1992, Professor Cardoon thought she was free of
the disease, by, at the latest, August 1992 she knew it was not so and she lived
under the cloud of the disease until she died.

There was in addition the effect upon her of the radical hysterectomy
performed in March 1989 and of the fact that she would never have children.
She referred to this in her evidence. The extent of the effect of this upon a
woman may, of course, vary greatly. It was for the trial judge, having seen and
heard her in evidence, to determine to what extent this affected her. From the
text of what she said and what, in the documented evidence, she wrote, I think
the effect of her condition generally upon her was greater rather than less.
Again, this was a matter to be taken into account by the judge who had the
advantage of seeing and hearing her in evidence: see generally …

There was, in addition, the effect of her loss of expectation of life. She was
born on 31 October 1964. She would ordinarily have expected, subject to the
ordinary contingencies, to live for a considerable time beyond 1994. The
compensation which in accordance with existing law, may be given for this is not
great: Mr Jackson QC submitted to the Court that the range of compensation
was of the order of $5-20,000. Neither counsel for the defendants took issue
with this.
What damages should be awarded to the plaintiff for these matters? The trial
judge awarded $185,000 and divided its award, in the conventional manner,
between damages to the date of trial $120,000 and damages thereafter
$65,000. This award of general damages is very high in the conventional scale.
It is necessary to determine whether, in this case, it is appealably excessive.

There are no tables which prescribe the quantum of general damages. They
are arrived at by the process of discretionary assessment referred to in, eg,
Miller v Jennings (1954) 92 CLR 190 at 195 (“almost entirely matter of
impression and of common sense”). The discretion which a trial judge exercises
is a principled and not a merely arbitrary discretion. Three things at least may be
said about what is done. First, the level of damages in a particular case derives
from the assessment of what is fair compensation in a particular society. This is
so whether the damages are for economic loss or for more general aspects of the
loss. In Pamment v Pawelski (1949) 79 CLR 406 at 410-411, Dixon J referred to
“the standards which generally prevail and a reasonable conception of what is
adequate to the occasion”. See generally Paul v Rendell (1981) 55 ALJR 371 at
376-367; Selvanayagam v University of West Indies [1983] 1 WLR 585 at 590;
Jamil bin Harun v Yang Kamsiah [1984] AC 529 at 538; Lai Wee Lian v
Singapore Bus Service (1978) Ltd [1984] AC 729 at 741. Particularly is this so in
relation to general damages. There is no market price for pain. In damages
assessed according to the common law, there are no sums fixed to measure
compensation for the loss of a limb or a faculty….

But this does not mean, of course, that on each occasion the trial judge may
follow his own intuitions as to the level of what is fair compensation in the
existing society. The concept of fairness and justice involves two things: that the
award in the particular case be in proper proportion to the awards for other
losses; and that like losses are compensated by like awards. These principles of
proportionality and equality have, to an extent, been adopted in the law of
damages.

The arguments for the defendants suggested, in effect, that in the present
case the award is out of proportion. Reference was made by Mr Sullivan QC to,
{for example, the level of general damages conventionally awarded in cases of
paraplegia and the like. It is, I accept, proper to ensure that’ within the range of
what, in this community, has been accepted as proper compensation for physical
loss, an appropriate sense of proportion is to be maintained. But in the end,
damages must be assessed, not according to categories, but by reference to the
facts of the individual case.

I am conscious also that it is not every case in which damages are awarded
for the results of cancer that the damages will be of the present order. It is
important that there be a measure of consistency in the award of damages. In
other branches of the law, equal treatment for equal default has been seen as
relevant to the concept of justice. Consistency in sentencing derives in part from
this: see Lowe v The Queen (1984) 154 CLR 606. See also R v Visconti [1982] 2
NSWLR 104 at 107 et seq. And equality has been seen as equity in other
branches of the law: see Meagher, Gummow & Lehane, Equity - Doctrines and
Remedies (3rd ed), para[329] and para[330]. But here again, it is necessary to
recognise individual cases.

I regard the present as a special case. I do not mean that what the plaintiff
has suffered is without precedent: there may be other cases. But they, if they
exist, would, in my opinion, be equally special. The nature and the degree of
what the plaintiff suffered in the present case is, in my opinion, such that the
damages to be awarded must be significantly higher than in more conventional
cases.

But the question remains whether this award, being as it is high indeed in the
scale of awards of general damages, should be set aside by this Court. The
nature of an award of general damages and of the process of judgment involved
in the making of it was referred to in the much cited case of Miller v Jennings. In
that case Dixon CJ and Kitto J (at 195) approved of the comments of Lord Wright
in Davies v Powell Duffryn Associated Collieries Ltd [1942] AC 601 at 616. His
Lordship said:

"The damages in some cases may be objective and depend on definite facts
and established rules of law, as for instance, in general damages for breach of
contract for the sale of goods. In these cases the finding as to amount of
damages differs little from any other finding of fact, and can equally be reviewed
if there is error in law or in fact. At the other end of the scale would come
damages for pain and suffering or wrongs such as slander. These latter cases are
almost entirely matter of impression and of common sense, and are subject to
review in very special circumstances.”

(3) This Court Ifhas,


the in many of
severity cases, applied to theloss
the non-economic process of to
is equal assessment of
or greater than
damages the term “discretionary”: see Moran v McMahon (1985) 3 NSWLR 700.
15% of a most extreme case, the damages for non-economic loss are to be
It has, upon this basis, indicated the restrictions or restraints upon appellate
determined inwith
interference accordance withof
judgments thethis
following
kind. ItTable:
has not been suggested in this case
that those principles should be departed from.

In the circumstances, I do not think that the quantum of the award of


general damages warrants the intervention by this Court….

[Powell.JA agreed with Mahoney AP


[
4.11 Civil Liability Act: processes and principles
for fixing damages for non-economic loss under Part
2, Division 3.

Division 3 Fixing damages for non-economic loss


(general damages)

16 Determination of damages for non-economic loss


(1) No damages may be awarded for non-economic loss unless the severity of the non-economic
loss is at least 15% of a most extreme case.
(2) The maximum amount of damages that may be awarded for non-
economic loss is $350,000, but the maximum amount is to be awarded only
in a most extreme case.

(4) An amount determined in accordance with subsection (3) is to be


rounded to the nearest $500.
Note. 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 section 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.

17 Indexation of maximum amount relating to non-economic loss


(1) The Minister is, on or before 1 October 2002 and on or before 1 October in each
succeeding year, to declare, by order published in the Gazette, the amount that is to apply,
as from the date specified in the order, for the purposes of section 16 (2).
Editorial note. For orders under this section, see Gazettes No 160 of
1.10.2002, p 8495; No 132 of 29.8.2003, p 9005 and No 137 of 5.9.2003,
p 9202.
(2) The amount declared is to be the amount applicable under
section 16 (2) (or that amount as last adjusted under this section)
adjusted by the percentage change in the amount estimated by the
Australian Statistician of the average weekly total earnings of full-
time adults in New South Wales over the 4 quarters preceding the
date of the declaration for which those estimates are, at that date,
available.
(3) An amount declared for the time being under this section
applies to the exclusion of the amount under section 16 (2).
(4) If the Australian Statistician fails or ceases to estimate the
amount referred to in subsection (2), the amount declared is to be
determined in accordance with the regulations.
(5) In adjusting an amount to be declared for the purposes of
section 16 (2), the amount determined in accordance with
subsection (2) is to be rounded to the nearest $500.
(6) A declaration made or published in the Gazette after 1 October
in a year and specifying a date that is before the date it is made or
published as the date from which the amount declared by the order
is to apply has effect as from that specified date.
17A Tariffs for damages for non-economic loss
(1) In determining damages for non-economic loss, a court may refer to earlier decisions
of that or other courts for the purpose of establishing the appropriate award in the
proceedings.
(2) For that purpose, the parties to the proceedings or their counsel
may bring the court’s attention to awards of damages for non-
economic loss in those earlier decisions.
(3) This section does not alter the rules for the determination of
other damages.

5 Economic (pecuniary) loss

5.1 General principles


SHARMAN v EVANS — 13 ALR 57

HIGH COURT OF
AUSTRALIA

Gibbs and Stephen


JJ.

The defendant, Dennis Sharman, appeals against the dismissal, by a majority


of the New South Wales Court of Appeal, of his appeal from a verdict for
$300,547.50 in favour of the plaintiff, June Marilyn Evans.

Miss Evans, then aged 20, was injured in a motor car accident in December
1971. She suffered very serious injuries including brain stem damage; she was
unconscious for almost a month and is now a quadriplegic. This condition,
disastrous enough in itself, is in her case aggravated by trauma-caused epilepsy,
by unusually severe impairment to her respiratory function as a consequence of
the brain injury and by an almost total loss of the ability to speak because of the
injury to the larynx. She is fully aware of her plight.

By the time of the trial, in November 1973, Miss Evans had undergone a
great number of operations and had endured much pain; her condition had
become stabilized and her disabilities could then be summarized, in the reasons
for judgment of the learned trial judge, Sheppard J, in the following terms:—

1. She suffers from quadriplegia with the problems to which I have already referred. She has
more movement in her right arm than her left but the movement is nevertheless restricted and she
cannot make anything like full use of her right hand. She is able to eat, paint and operate a
typewriter as well as point to the card to which I have referred, but she cannot do up buttons, brush
her teeth, or her hair or use a pen. She can be sat in a wheel chair but if she is not propped up she
will collapse to one side. She is able to operate, with the use of her right hand, the mechanism of an
electric chair but, according to Dr Griffiths, she is not a good driver. She has no hope, as do some
quadriplegics, of ever driving a motor vehicle, however it may be adapted.
2. She has the inability to speak which I have
mentioned.

3. She is an epileptic but her epilepsy is controlled, for the time being, by
drugs.

4. She has lost some intellectual capacity but is still intelligent, capable of reading and painting,
and is well aware of her predicament.

5. She has continuing pain in her right shoulder which is relieved by the taking of
analgesics.

Before the accident the prospects for Miss Evans’ future were bright; she was
a healthy, out-going and intelligent girl who was trained for and was experienced
in secretarial work; by taking two jobs in her home State of Western Australia
she had saved enough money to undertake a two-year full-time course as a
resident student at the Commonwealth Bible College in Brisbane. At the time of
the accident, she had just completed her first year there, coming dux of her
year. She had an understanding with a young man, a fellow student, that they
would marry in due course. After the accident their engagement was announced
and, but for her ultimate decision that she could not permit him to take as his
wife a quadriplegic, she would by the time of the trial have been married to him;
he has a good position and a secure future in the Department of Civil Aviation.
Had she resumed her secretarial work after finishing her two-year college course
she could have earned at least $70 per week net.

In these circumstances the learned trial judge, in a most carefully reasoned


judgment, assessed general damages at $275,000, the agreed special damages
of some $25,500 making a total of just over $300,000.

Three consequences of her injuries account in large measure for the size of
the award of general damages; her need for intensive nursing and medical
attention in the future, her total loss of earning capacity and the gross
impairment of the future enjoyment and amenities of her life. She has, in
addition, experienced particularly severe pain and suffering and her life
expectancy has been substantially reduced.

The learned trial judge did not essay any exact quantification of damages for
every item of detriment suffered by the plaintiff. He arrived at a range of from
$150,000 to $175,000 for the future cost of her nursing and medical care and at
a sum of $6000 for the shortened life expectancy of the plaintiff. He explained
with clarity and in detail his approach to the assessment of damages for each
other item but concluded that they did not lend themselves to any precise
individual

quantification. In arriving at the total of $275,000 for general damages his


Honour expressed his keen awareness of the need to guard against overlap in
undertaking that process of separate consideration of components of the award
which he had felt obliged to engage upon.

The range of damages assessed in respect of future nursing and medical


attention involved an assumption that the plaintiff would not spend all of the rest
of her life in hospital but would instead be able to spend periods being cared for
at home. Before the Court of Appeal the appellant contended that those periods
spent at home would involve the plaintiff in additional health risks and that the
learned trial judge had therefore erred in taking so long a period as 20 or more
years as the plaintiff’s life expectancy. This the majority rejected, concluding
that there was ample evidence upon which the learned trial judge could find
that, notwithstanding periods at home, the plaintiff might nevertheless live so
long; nor did Mahoney JA in his dissenting judgment take issue with the verdict
on this specific point. The other main attack made before the Court of Appeal
concerned the amount of damages awarded for loss of earning capacity and for
pain and suffering and loss of the amenities of life. In the view of the majority of
the court no fault was to be found with these items. Mahoney JA, on the other
hand, not only regarded the assessment of compensation for lost earning
capacity as excessive and as involving incorrect principles but also discerned
more fundamental errors affecting the verdict as a whole.

On the appeal to this court the grounds raised before the Court of Appeal
were again relied upon. In addition the method of assessment which the learned
trial judge had adopted was also attacked; so too, for the first time, was the
assumption that the plaintiff should be compensated on the footing that she
would spend part at least of her future life being cared for out of hospital.

A variety of difficulties, both of principle and of fact, surround the assessment


of damages in this case. They stem from at least three distinct sources: the
great increase in the cost of future nursing care should the plaintiff be cared for
at home rather than in hospital; a variety of problems involved in assessing
compensation for the plaintiff’s loss of future earning capacity and, finally, the
doubts as to the plaintiff’s present life expectancy.
That the learned trial judge should have engaged in a close scrutiny of each
head of detriment was, we think, inevitable; that in doing so he should seek to
evaluate that detriment in money terms was a necessary consequence of the
fact that it is only by recourse to those terms that the plaintiff can be
compensated for the wrong done to her. Criticism was directed both to this
separate examination of the conventional heads of damage and also to the
ascertainment of a sum appropriate as a starting point for compensation under a
particular head of damages, followed by a process of discounting or deduction
from it. We regard this criticism as misconceived; so long as courts are careful to
avoid the risk, inherent in such a procedure, of compensating twice over for the
one detriment there seems no better way of applying processes of reasoning and
the realistic and methodical evaluation of probabilities to the task of assessing

compensation. In cases of any complexity any other approach is open to serious


objection, especially in times of rapid inflation. In such times what Salmon LJ
described in Fletcher v Autocar & Transporters Ltd [1968] 2 QB 322 at 362;
[1968] 1 All ER 726 at 749, as the “uncertain role” of instinct, and what this
court has described as a “general awareness”, a knowledge of “current general
ideas of fairness and moderation”, Planet Fisheries Pty Ltd v La Rosa (1968) 119
CLR 118 at 125, while still of use in determining, as a matter of first impression,
the general level of appropriateness of an award, tends to become blurred by the
constant shift of money values. Moreover, where the assessment of damages is
undertaken by a judge sitting without a jury it is, we think, most desirable that
the process of assessment should be described in the reasons for judgment. As
was pointed out by Sachs LJ in George v Pinnock [1973] 1 WLR 118 at 126;
[1973] 1 All ER 926 at 934, it is only by the setting out in a judgment of the
main components of an award of damages, or at least of the approach taken to
each component, that the parties may obtain a proper insight into the process of
assessment and an adequate opportunity of seeking the correction of error on
appeal. In the particular circumstances of this case Sheppard J found himself
unable to assign anything like precise money sums to the different heads of
damages; he did however very clearly explain his approach to each head of
damages, a course which has lightened the task of appellate courts.

In view of the attack made upon various aspects of his Honour’s assessment
of damages it is appropriate to examine the various heads of damage which
presented themselves for assessment so as to appreciate and deal with the
various criticisms raised by the appellant. First are those costs which the plaintiff
will be obliged to incur in consequence of her injuries, principally although not
exclusively, the cost of nursing and medical care. It is clear that she will require
such care for the rest of her life. It can be provided either in a hospital in Perth
devoted to the care of persons incapacitated as she is or, at very much greater
cost, in her own home. The plaintiff would much prefer the latter but the
question is whether the defendant should be required to make compensation
upon this much more expensive basis. The learned trial judge’s award of
damages contemplated that the plaintiff, while spending the greater part of her
life in hospital, would spend some part of it being cared for at home.

Where the plaintiff is to be cared for in the future will not only directly affect
the extent of nursing and medical expenses which are to be compensated for; it
will also bear upon the extent of her loss of the amenities and enjoyment of life,
a lifetime substantially spent in hospital will greatly aggravate that loss. In our
view the medical evidence in this case does not justify the conclusion that the
defendant should be required to compensate for future nursing and medical
expenses on any basis other than that the plaintiff’s future will be one
substantially spent in hospital.

The appropriate criterion must be that such expenses as the plaintiff may
reasonably incur should be recoverable from the defendant; as

Barwick CJ put it in Arthur Robinson (Grafton) Pty Ltd v Carier (1968) 122 CLR
649 at 661; [1968] ALR 257 at 267: “The question here is not what are the ideal
requirements but what are the reasonable requirements of the respondent” and
see Chulcough v Holley (1968) 41 ALJR 336 per Windeyer J, at 338; [1968] ALR
274 at 279–80. 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. The present case is, however, one which does to our minds
allow of a definite answer; it is a case of alternatives in which the difference in
relative costs is great whereas the benefit to the plaintiff of the more expensive
alternative is entirely one of amenity, in no way involving physical or mental
well-being. This may be demonstrated from the evidence.

Assuming, for convenience of comparison, a life expectancy of 20 years, the


future expenses of the plaintiff if confined to hospital would be of the order of a
present value, computed on 6 per cent tables, of $108,500, inclusive of nursing,
medical and physiotherapy services and cost of special beds etc. The provision to
her of like services at her mother’s home over that period would amount to a
present value of about $390,000, to which would have to be added a weekly cost
for medicaments etc of about $23 per week and a capital cost of some $11,750
for suitable alterations to her mother’s home; moreover this is exclusive of the
cost of food and of the cost of providing another home should her mother die
during the period and the present home cease to be available to the plaintiff. The
benefit to the plaintiff of being cared for at home rather than in hospital is not
any benefit to her health but rather to her future enjoyment of life which would
be enhanced by a home atmosphere; her life would not thereby be prolonged
nor would her physical condition be at all improved; indeed she would be
somewhat more at risk physically at home than in hospital. There is no evidence
suggesting any likely psychiatric benefits, probable though these might appear
to the layman.

In these circumstances the future cost of reasonable nursing and medical


attention must, we think, be assessed on the basis of a lifetime substantially
spent in hospital. We have, to date, for convenience of comparison, quoted costs
based upon a post-accident life expectancy of 20 years. Assuming a lifetime of
hospital care, devoid of the extra risks involved in nursing care at home, the
medical evidence suggests that this is too conservative an estimate. His Honour,
without specifically nominating any precise period as that selected by him as
appropriate, clearly contemplated that if the plaintiff spent part of her life at
home something in excess of 20 years was nevertheless an appropriate
assumption as to life expectancy. For

the purpose of our present examination of the award, and since we would regard
the plaintiff’s future as one involving permanent hospitalization in conditions of
maximum nursing and medical care, we adopt 30 years as the appropriate
period. For that period the present value, on 6 per cent tables, of the cost of
hospital care, medical and physiotherapy treatment and the provision of a
special bed and the like will amount to about $128,000.

There is another item of future expense which must enter into the
assessment process. Because we conclude that the defendant should not be
required to compensate the plaintiff on any basis other than that of a lifetime in
hospital it follows that the plaintiff’s loss of the enjoyment and amenities of life
will be the greater. She must be regarded as wholly deprived of the everyday
pleasures of living in the environment of her own home; instead she will be
exposed to a lifetime of institutional life. Not only must this be reflected in the
damages to be awarded under the conventional head of pain, suffering and the
loss of enjoyment and amenities of life; in the present case it is also appropriate
to reflect rather more positively one particular aspect of this situation of
permanent hospitalization. The effect of the latter upon the plaintiff can clearly
be somewhat mitigated if she is able to vary the monotony of the hospital ward
by occasional day visits to her home and by other outings, possibly even by
occasional weekends away from hospital. The medical evidence discloses that
these would be possible, provided that constant nursing attention was provided.
Applying again the criterion of reasonableness, but now weighing the expense of
such attention against the clear benefits in amenity and enjoyment of life that
such breaks in a lifetime in hospital would provide, we are in no doubt that the
plaintiff is entitled to compensation for the cost of such outings. That their cost
will be high is apparent from the data as to nursing costs already referred to, to
which must be added transportation either by ambulance or by chauffeur-driven
car. If enjoyed as frequently as, say, once every few weeks over 30 years, that
cost would not be overstated by the adoption of a present value figure of about
$20,000. We accordingly adopt that sum as a second item of future cost to be
compensated for by the defendant.

In dealing in this way with these two items of future expenditure we have
departed in principle from the method of assessment adopted by the learned
trial judge but have endeavoured to reflect, as do his reasons for judgment, the
need for damages to be more liberal than they would be were the plaintiff to be
restricted to recovery only of the present value of the cost of 30 years of
hospitalization. Our approach conduces, we believe, to clarity of analysis while
emphasizing the extent to which damages for loss of amenity must interact with
other heads of damages, including that concerned with the defraying of future
expenditure reasonably incurred by the plaintiff and attributable to her injuries.

We turn next to the question of compensation for lost earning capacity and in
particular to an examination of the deductions which should be made in
assessing that compensation. In doing so we leave aside, for the present, the
question of compensation for loss of earning

capacity during the years by which the plaintiff’s life expectancy has been
shortened, the “lost years”.

Both principle and authority — Skelton v Collins (1966) 115 CLR 94 at 106;
[1966] ALR 449 at 458 — establish that where, as here, there is included in the
award of damages for future nursing and medical care the plaintiff’s entire cost
of future board and lodging, there will be over-compensation if damages for loss
of earning capacity are awarded in full without regard for the fact that the
plaintiff is already to receive as compensation the cost of her future board and
lodging, a cost which but for her injuries she would otherwise have to meet out
of future earnings. If the true concept be that it is lost earning capacity to the
extent to which it is likely to be exercised in the future, rather than loss of future
earnings, that is to be compensated it may seem inelegant to speak of deducting
from damages for that lost capacity an amount for some saving in outgoings. It
would better accord with principle if the savings in board and lodging could be
isolated from, and excluded from the damages to be awarded in respect of,
hospital expenses. However, so long as the true nature of the adjustment is
understood no harm is done by making an appropriate deduction from the
damages for lost earning capacity. What is to be avoided is double compensation
and, as is apparent from what was said by their Lordships in Shearman v Folland
[1950] 2 KB 43; [1950] 1 All ER 976, it is not a question of estimating the
plaintiff’s likely future costs for board and lodging and treating them as an
outgoing which the consequences of the defendant’s tortious act have now
spared her from making; that is a notion which is as distasteful as it is
misconceived. Rather is it a matter of her already having been compensated for
future board and lodging as a component of hospital expenses, so that to
disregard this and award the full sum for lost earning capacity, part of which
would be used to provide the very item of board and lodging already
compensated for, would be to award compensation twice over. Accordingly some
no doubt fairly arbitrary proportion of the present value of future hospital
expenses regarded as attributable to board and lodging must be taken and
deducted from the present value of lost earning capacity; it will be quite
irrelevant how expensively or how frugally the plaintiff might in fact have lived
had she not been injured.

Although it is only the cost of board and lodging which, unless subject to
deduction in this way, will lead to actual double compensation there are other
items which require consideration as possible deductions when assessing
damages for loss of earning capacity. This is because, quite apart from double
compensation, that is, the payment twice over in respect of one and the same
item of loss, it is also necessary to avoid compensating for gross rather than for
net losses. This becomes of particular importance not only when assessing
compensation for ordinary loss of earning capacity but also when that process of
assessment must be undertaken in the context of a plaintiff’s “lost years”, his life
expectancy having been reduced as a result of the injuries he has received.

Again we ignore for the moment the question of “lost years”. Where, as here,
a plaintiff suffers a total loss of earning capacity he

will not normally continue to incur all of the outgoings necessary for the
realization of that capacity which would have been incurred had his capacity
been unaffected; items such as the cost of clothing suitable to his particular
employment and of transportation to and from work provide examples, no doubt
there are others. Compensation for loss of earning capacity is paid only because
it is or may be productive of financial loss — Graham v Baker (1961) 106 CLR
340 at 347; [1962] ALR 331 at 335 — and to compensate for total loss of
earning capacity without making allowance for the cessation of these outgoings
is to compensate for a gross loss when it is only the net loss that is in fact
suffered.

On the other hand there are other types of saved expenditure upon which a
defendant cannot rely in diminution of damages. It is now well established that
no reduction is to be made, when awarding damages for loss of earning capacity,
for the cost of maintaining oneself and one’s dependants unless an element of
double compensation would otherwise intrude, as in the case of hospitalization
as a non-fee paying patient or where the cost of future hospital expenses is also
awarded and necessarily includes, as in the present case, the patient’s board and
lodging — Fletcher v Autocar & Transporters Ltd [1968] 2 QB 322; [1968] 1 All
ER 726; Daish v Wauton [1972] 2 QB 262; [1972] 1 All ER 25; Taylor v Bristol
Omnibus Co Ltd [1975] 1 WLR 1054 per Lord Denning at 1060; [1975] 2 All ER
1107 at 1113.

The dissenting judgment of Windeyer J in Chulcough v Holley (41 ALJR at


338; [1968] ALR at 279–80, refers to an award for diminished earning capacity
being reduced in respect of the “ordinary costs of maintenance of a plaintiff as a
person”, citing what had earlier been said by Taylor J in Skelton v Collins, supra;
however, we would understand Taylor J to have been there concerned with
compensation for lost earning capacity during “lost years”, in respect of which
rather different considerations apply.

The present plaintiff is now denied many of the opportunities for pleasure-
giving expenditure, as distinct from what may be regarded as expenditure on
maintenance, which our society affords. Are the savings in expenditure, thus
involuntarily thrust upon her by reason of the state to which her injuries have
reduced her, to have the effect of reducing the damages awarded for her loss of
earning capacity? We think not; they may be left out of reckoning, they neither
produce double compensation nor compensate for gross rather than net loss.
Indeed to treat them as items going to reduce damages is unjustifiably to
assume that because pre-accident avenues of expenditure are now foreclosed to
a plaintiff the necessary consequence is a corresponding non-expenditure.

We leave aside the case of the plaintiff who by the nature of his injuries is
made wholly incapable of experiencing pleasure. This was the position in
Fletcher v Autocar & Transporters Ltd, but the majority judgments in that case
go much further, they contemplate reduction of damages for lost earning
capacity because a plaintiff is “saved” expenditure on those pleasurable pursuits
which he formerly enjoyed but which the consequences of his injuries now deny
him. A
somewhat similar concept underlies Smith v Central Asbestos Co Ltd [1972] 1
QB 244; [1971] 3 All ER 204, and both cases reflect a concern lest there should
be duplication of damages as between loss of earning capacity and loss of the
amenities of life. We find much of what was said by the majority in Fletcher’s
Case difficult to reconcile with what was said by the majority of their Lordships in
West & Son v Shephard [1963] 2 All ER 625; [1964] AC 326, especially at 349–
50 per Lord Morris and at 364 per Lord Pearce; in the dissenting judgment of
Lord Devlin the making of fair compensation is said to involve that the defendant
has made good “all the expenses to which the plaintiff has been put and he has
replaced all the income which she has lost” (at 357).

Of course, when damages for the loss of amenities comes to be considered,


regard must be had to such pleasures as the plaintiff is capable of enjoying and
which are made possible by the total damages which she receives; but it is in
this way, rather than by any reduction in the assessment for lost earning
capacity, that we consider that the general task of assessment should proceed.

The present plaintiff still possesses powers of enjoyment through the use of
her senses; her sight, her hearing and her taste are unaffected and in place of
sport, entertainment, cosmetics and clothes she may find pleasure in recorded
music, in a movie projector and the hire of films, in days spent on drives in a
chauffeured car, perhaps in special foods. She can thus experience pleasure and
ward off melancholia by such distractions as may be to her taste and within her
means. Many of her former modes of enjoyment are closed to her but some new
ones remain to be explored and from which she will be capable of deriving
pleasure. It follows that, still disregarding “lost years”, it will be appropriate in
any assessment of the plaintiff’s damages for lost earning capacity to reduce
those damages only in respect of the cost of board and lodging actually provided
for in the award of damages for future hospital expenses and in respect of those
“saved” outgoings associated with the exercise of earning capacity, that is, fares
and the like.

As to “lost years”, the plaintiff is to be compensated in respect of lost earning


capacity during those years by which her life expectancy has been shortened, at
least to the extent that they are years when she would otherwise have been
earning income — Skelton v Collins (115 CLR at 121) per Taylor J. But, unlike
the 30 years of her actual post-accident life expectancy, no outgoings whatever
will be involved in respect of that period since it is assumed that the plaintiff will
then be dead. What adjustments are, then, to be made on that account in
assessing damages for loss of earning capacity in respect of those lost years?
This is not a question giving rise to considerations of double compensation; the
only element involving any possibility of double compensation, the component of
board and lodging contained in the award of future hospital expenses, will have
ceased to operate by the time that the “lost years” are reached. It is rather a
question of confining an award of damages to no more than compensation,
ensuring that the plaintiff is merely compensated for loss and is not

positively enriched, at the defendant’s expense, by the damages


awarded.

It is well established in Australia that there should be taken into account in


reduction of damages for the lost earning capacity of “lost years” at least the
amount that the plaintiff would have expended on his own maintenance during
those lost years: Skelton v Collins (115 CLR at 121 and again at 122) per Taylor
J, applied in Jackson v Jackson [1970] 2 NSWR 454 per Sugerman P at 460 and
per Jacobs JA at 464, by Williams J in Gannon v Gray [1973] Qd R 411 and by
Sheppard J in Jackson v Stothard [1973] 1 NSWLR 292. It is noteworthy that
such a solution to the problem of compensation for economic loss in respect of
“lost years” finds support from recent text writers in England, who deplore the
consequences of the decision in Oliver v Ashman [1962] 2 QB 210; [1961] 3 All
ER 323, with its exclusion of any compensation for the economic loss of “lost
years”; they urge instead the adoption of what they would regard as the result
attained in Australia as a consequence of Skelton v Collins — Kemp & Kemp, The
Quantum of Damages 4th ed, vol 1, pp 408–13, Ogus, The Law of Damages
(1973) pp 185–8 and see Street, Principles of the Law of Damages (1962) p 52.
It is this result which also represents the method of reforming the present state
of the law in England preferred by the Law Commission in its 1973 Report on
Personal Injury Litigation — Assessment of Damages (Law Com No 56, par 87).
In par 58 of the Report the desired reform is described as “the adoption of the
formula accepted in the Australian case of Skelton v Collins, ie compensation for
loss of earnings in the so-called ‘lost years’ should be based upon the amount of
such earnings less what the plaintiff would have spent on his own
maintenance;”.

But is this in fact what was decided in Skelton v Collins? In that case Taylor J
described the proper measure of compensation for a plaintiff’s loss of earning
capacity in the lost years as “a balance of what his future income and
expenditure on maintenance would have been” — 115 CLR at 122, having earlier
said, at 121, that there should be taken into account “the fact that if the plaintiff
had survived for the full period it would have been necessary for him to maintain
himself out of his earnings and, no doubt, his expenditure on his own
maintenance would have increased as his earnings increased”. Somewhat earlier
again, however, his Honour had adverted to the possibility, also discussed in
Oliver v Ashman, of portion of the damages awarded for lost earning capacity in
lost years being capable of being recovered twice over, once by a personal
representative on behalf of the estate of the injured party and a second in an
action brought under Lord Campbell’s Act. He observed, at 114, that in the first
of such actions the relevant damages would be assessed having regard to
whatever gain the deceased might have had “from his future probable earnings
after taking into account the expenditure which he would have incurred, if he
had survived, in maintaining himself and his dependants, if any”. This passage
has been understood in Gannon v Gray and in Jackson v Stothard, and no doubt
numerous unreported cases, as requiring that not merely a plaintiff’s own
expenses of maintenance but also whatever he might have spent on the

maintenance of his dependants should, even in the ordinary case of a claim for
lost earning capacity of lost years made by a plaintiff during his lifetime, go in
reduction of damages. In consequence it is only the loss of surplus income,
whether in the form of cash savings or of acquired assets, which might have
been derived during lost years that is to be compensated for — and see Luntz,
Assessment of Damages (1974) pp 146–150.

This result, of course, departs from the understanding of the effect of Skelton
v Collins expressed in the English texts and in the Law Commission’s Report;
perhaps more importantly it appears to ill accord with any rational principle of
compensation. This Sheppard J recognized when, understanding Skelton v
Collins to require this result and recognizing the binding effect of the decision, he
said in Jackson v Stothard [1973] 1 NSWLR at 298: “It seems to me, however,
to be an odd thing that damages up to the date of death are given without any
deduction, whereas damages thereafter are given after the deduction, not only
of moneys which would have been spent by the deceased in the maintenance of
himself, but of moneys which would have been spent by him in the maintenance
of dependants. I can understand, damages being compensatory, that they ought
to be reduced by the amount necessary to maintain the deceased during the lost
years because ex hypothesi, he is no longer in need of the amount in question,
and if he had lived the money would have been expended on him. But the
reason why earnings which would in the normal course have been spent on the
maintenance of dependants must be excluded is not clear to me.”

We share the difficulty felt by Sheppard J and have concluded that, properly
regarded, Skelton v Collins does not require that anything, other than the cost of
a plaintiff’s own maintenance, should go in reduction of damages for lost earning
capacity for “lost years”. Taylor J spoke in terms not inconsistent with that view
at pp 121 and 122 of his judgment. It is important to bear in mind that the
circumstances of Skelton v Collins were not such as to focus attention upon the
point here in question; the important issues central to that decision were not at
all concerned with it. Indeed of so little significance was it that in his review of
earlier English cases Taylor J was able to regard Phillips v London and South
Western Railway Co [1879] 5 QBD 78; [1874–80] All ER Rep 1176; Roach v
Yates [1938] 1 KB 256; [1937] 3 All ER 442 Pope v D Murphy & Son [1961] 1
QB 222; [1960] 2 All ER 873, and Oliver v Ashman [1960] 3 All ER 677, as
decisions which had adopted the same approach as that which his own reasoning
pointed to; and so they did in the essential aspects which were of immediate
concern to his Honour, yet in each no deduction at all appears to have been
made from the calculated economic loss due to shortening of life expectancy to
take account of any costs of maintenance, whether of the plaintiff or of his
dependants. Indeed until Oliver v Ashman went on appeal and this whole
discussion became, in consequence, irrelevant for the purposes of English law
this remained the preferred English view — see Kemp and Kemp 1st ed (1954) p
92.

There is an alternative explanation of what was said by Taylor J in Skelton v


Collins at 114, that it is to be understood as confined to the

particular circumstance with which his Honour was dealing at that point in his
judgment, namely an action brought not by an injured plaintiff suffering loss of
life expectancy but by a personal representative for the benefit of the estate of
one who had suffered injury and loss of life expectancy and later died before
proceedings were instituted. If so, it is enough to say that this is not such a case
and inat what may be a special rule applicable to such cases is inapplicable here.
We leave to another day the whole question of such actions and of the possible
risk to a defendant of double liability should an action for the benefit of the
estate be followed by an action under Lord Campbell’s Act, a matter which his
Honour had occasion to discuss in Skeletn v Collins.

In these circumstances it would, we think, be wrong to treat Skelton v Collins


as any authority for the proposition that only surplus income, in effect savings,
are to be taken into account in assessing economic loss in the “lost years”. It is
well enough to take into account in reduction of damages the likely expenditure
on the plaintiff’s own maintenance and this for the reason stated by Sheppard J
in Jackson v Stothard. As Jolowicz observed in a note in [1960] CLJ at 163, “a
dead man has no personal expenses”, hence there should be a deduction of “the
plaintiff’s personal living expenses” — and see J G Fleming’s article in 50 Cal L
Rev (1962) p 598, especially at 605. However, no further deduction is, we think,
called for in order to ensure that no more than proper compensation is made to
the plaintiff. The making of this one deduction will accord recognition to the
curious feature of this head of damages; that the plaintiff receives compensation
for lost earning capacity in respect of a period which he will not live to see and
during which he will have no expenses to be defrayed out of the fruits of the
exercise of that apacity. Because in the ordinary case a plaintiff must maintain
himself in the future out of his damages, the cost of doing so is not to go in
reduction of an award for lost earning capacity during his remaining years of life;
the converse of that proposition may well be, in the special case of lost earning
capacity in “lost years”, that because those years can involve him in no cost of
maintenance the cost thus avoided must go in reduction of damages. Like
reasoning does not apply to the cost of maintaining others; it is for a quite
different reason that, in the ordinary case, that cost does not go in reduction of
damages, that reason being that the courts do not concern themselves with the
manner in which the plaintiff expends his income or damages.

The outcome of this all too lengthy discussion of Skelton v Collins is, then,
that if the learned trial judge, consistently with his judgment in Jackson v
Stothard ([1973] 1 NSWLR at 298–9), regarded himself as bound, in assessing
the damages to which the plaintiff is entitled in respect of the lost years, to
make a deduction in respect of money that she might have spent on her
dependants, he would in our opinion have taken somewhat too restricted a view.
However, this can have had little, if any, effect on the award. The fact that the
first of those years lies 30 years in the future itself results in a drastic reduction
in the present value of any economic loss which may thus be suffered, and it was
so uncertain whether she would then have had any

dependants that it is unlikely that this consideration significantly affected the


learned judge in the making of his assessment.

There remains one future aspect of the assessment of damages for loss of
earning capacity. Loss must depend upon the likelihood that there would have
been a future exercise of that earning capacity, but what of a female plaintiff
likely to marry and who may cease to exercise her earning capacity on, or at
some time after, marriage? Despite recent changes in patterns of employment of
married women this remains a not unusual situation, the woman in effect
exchanging the exercise of her earning capacity for such financial security as her
marriage may provide. The measure of the one of course bears no necessary
relationship to the other and the whole situation must be full of critical
uncertainties such as whether the plaintiff marries, the extent if any of her
employment after marriage, the success of that marriage and the extent to
which it in fact provides her with economic security. Perhaps the only relatively
certain factor will be her pre-injury possession of earning capacity and this in
itself may be sufficient reason, absent any clear evidence pointing in a contrary
direction, for the adoption of the expedient course of simply disregarding the
prospect of marriage as a relevant factor in the assessment of such a plaintiff’s
future economic loss; this course at least recognizes the plaintiff’s retention of
capacity, which would have been available to her for exercise, in case of need,
despite her marriage.
The last two heads of damages which call for particular mention are those
conventionally described as pain, suffering and loss of hhe enjoyment and
amenities of life and damages for shortening of life expectancy. As to the latter it
bears no relationship to lost earning capacity during “lost years” but is rather the
loss of a measure of prospective happiness — Skelton v Collins (1966) 115 CLR
94, per Taylor J at 121; it is not compensation for “the mental distress due to
the realization of the loss” per Kitto J at 98. That forms instead a part of the
general damages for pain and suffering — at p 100, compare per Windeyer J at
131–2. In the present case a figure “of the order of” $6000 was allowed for this
item in reliance upon the views expressed by Windeyer J in Skelton v Collins at
132. If it be correct that compensation under this head is not to take into
account the anguish of mind which any appreciation of the loss may cause, that
being compensated for under another head, then Windeyer J’s suggested
maximum figure of $6000, which reflected this very factor, may be thought to
have been excessive at the time and to depart from the general standard of the
“conventional sum” which the courts have quite arbitrarily fixed upon ever since
Benham v Gambling [1941] AC 157; [1941] 1 All ER 7. The amount awarded
may properly take into account a fall in the value of money — Yorkshire
Electricity Board v Naylor [1968] AC 529; [1967] 2 All ER 1, but is to be no more
than a quite conventional sum, very moderate in amount. In our view, despite
the fall in the value of money, $6000 departs from previous notions of what is
appropriate under this curious and unsatisfactory head of damages. We would
have thought that the sum of $2000 is

about the amount now appropriate as the conventional award under this
head.

It remains only to say something about damages for loss of the enjoyment
and amenities of life. It is in this field that there exists the need to recall what
has often been said about fairness, moderation and the undesirability of striving
to provide an injured plaintiff with “perfect” compensation. The warning against
attempting perfectly to compensate means, we think, in the case of pecuniary
loss, no more than the need to make allowance for contingencies, for the
vicissitudes of life, compensating for probable rather than for merely speculative
detriments. But when a non-pecuniary detriment is in question the injunction
against “perfect” compensation means rather more. It cannot refer to the
exclusion of all question of punishment of the wrongdoer; the word
“compensation” standing on its own would be sufficient to do this; rather is it
designed to remind that the maiming of a plaintiff and its consequences cannot
wholly be made good by an award of damages and that the recognition of this
fact is to be no occasion for any instinctive response that no amount is too large
to atone for the plaintiff’s suffering. Such a response will be unfair to the
defendant and may of lf little advantage of the plaintiff; many consequences of
injury are not capable of remedy by the receipt of damages, particularly those of
the most personal character — the loss of the opportunity of a fulfilling marriage,
of parenthood, of sexual satisfaction, of the realization of ambitions. It is very
much at these detriments that the warning against any attempt at “perfect”
compensation must be aimed. The authorities also require, as does good sense,
that to the extent that damages awarded under other heads produce freedom
from economic uncertainty and the availability of funds for pleasurable activities,
the less will be the loss to be compensated under this head. This will be of
particular relevance when a considerable sum is assessed for lost earning
capacity.

Having made these general observations concerning the award of damages in


a case such as the present it remains only to look more specifically at the
damages in fact awarded. The total award is said to be the largest yet made for
personal injuries in Australia, although it is modest indeed compared with that in
the very recent case of a young Canadian quadriplegic: Thornton v Board of
School Trustees (1975) 57 DLR (3d) 438. The award includes two components
with a stated money value or range: the cost of nursing and medical attention, a
“figure of the order of $150,000 to $175,000”, and the amount for loss of
expectation of life, $6000. Each we regard on the approach we would adopt as
excessive for reasons already stated; the former we would assess as of the order
of $128,000, made up, in round figures, of $103,000 for hospital expenses,
$15,500 for medical and physiotherapy services and $20,000 for special beds
and the like, the latter at not more than $2000. To these two must be added the
sum of $20,000 which we have assessed in respect of the cost of constant
nursing attention and transportation during periodic visits to the world outside
the hospital ward.

The learned trial judge specified no precise amounts for lost earning capacity
or for pain, suffering and loss of the amenities of life. The former will, in the case
of the 30 years of life expectancy, necessarily be considerable, representing as it
does a loss of earning capacity the exercise of which would have produced net
earnings of $70 per week over those years. There must, however, be brought to
account the minor expenses, such as fares and special clothing, which would
have been incurred in earning that income, also some allowance for sickness,
early death, a measure of unemployment and the like. In all we would deduct $2
per week, a figure which is necessarily arbitrary, in respect of these matters. In
addition some allowance, again an arbitrary one, must also be made because of
the inclusion in the hospital costs of the element of board and lodging. To take
about 12 per cent of these hospital costs, say $16 per week, may not be
inappropriate; that this percentage represents much less than actual costs of
board and lodging is to be accounted for by the surprisingly low total charges, of
only $20 per day, made for the all-inclusive hospital services, due perhaps to
some element of government subsidy. The present value, on 6 per cent tables,
of, say, $52 per week, being $70 — ($16 + $2), is about $38,500 and an award
somewhere in the range of $34,000 to $43,000 could not be regarded as
erroneous. For the 24 lost years quite different considerations apply both
because of the need to take into account maintenance “saved” and because for
part at least of that period the plaintiff, if regarded as having a working life,
would have ceased to work or, if regarded as enjoying the security provided by
her likely husband, would be the wife or widow of a retired breadwinner. To
award more than a quite small sum for the present value of this long deferred
and greatly to be discounted loss of earning capacity would be wrong; to take
these “lost years” into account it is enough to increase the above range to one of
from $37,000 to $45,000. Reviewing all these sums they come to a minimum
total of $187,000 and to a maximum total of $195,000.

There remains the question of damages for pain and suffering and the loss of
the enjoyment and amenities of life. As to the last item in this category we need
say very little, what has already been said of the plaintiff’s present state (not
least her constant hospitalization) and a comparison between it and her former
prospects of a happy and rewarding life is enough to establish entitlement to
substantial damages under this head. Although she is a quadriplegic, the very
numerous operations and other treatments which have been necessary, and in
particular those involving her larynx, an area in which she retains full feeling,
have caused her long periods of great pain and discomfort. She has suffered and
will continue to suffer pain for the rest of her life in her left shoulder, another of
her few remaining sensory areas. In addition there is her mental suffering,
including the anguish which knowledge that her life expectancy has been
substantially reduced must entail. Proper allowance must of course be made for
such of the remaining pleasures of life as money can now afford her; there is no
doubt that, as we have already pointed out, her lot can be made much more
enjoyable by the expenditure of money and will be materially improved by her

financial ability to enjoy periodic outings from hospital. There nevertheless


remains a great area for the award of damages under this head.

The learned trial judge awarded a total of $275,000 for general damages, or
$80,000 more than what we would regard as the maximum for heads of damage
other than pain, suffering and loss of the amenities of life. Of course our analysis
of the total award of damages is not intended as an accurate estimate of the
amount attributed by the learned trial judge to this particular head of damages,
if indeed his Honour formed any view at all of an appropriate sum under this
distinct head. We are not, therefore, to be taken as attributing to his Honour the
view that a sum of $80,000 represented appropriate compensation for damages
under this head, a head of damages which is peculiarly difficult to assess and the
assessment of which must always be especially responsive to factors of which a
trial judge will be more aware than can be any appellate court. Before we
express our conclusion on the question whether the amount of general damages
awarded was excessive, there are two matters to which brief reference should be
made. The first concerns what is commonly described as the vicissitudes of life.
Once a probable life expectancy is determined these enter not at all into the
assessment of future hospital expenses or the conventional amount for
shortening of life expectancy but are significant in the case of loss of earning
capacity. However, their significance is less in the case of an adult such as the
present plaintiff, trained for and experienced in work of a character which is
largely immune from industrial disturbances and which is not as exposed to the
effects of economic depression as are many other occupations; similar
considerations applied to the plaintiff’s intended spouse. Other hazards of life,
including illness and disablement, remain, but all have, we think, been
adequately accounted for. Whatever effect should be given to vicissitudes of life
in the case of the non-pecuniary head of damages, and there is nothing to
suggest that the plaintiff’s prospects for a happy married life were in this case
other than good, they cannot affect what we have said concerning the amount
which might have been assessed under this head of damages.

The second question is the degree of usefulness of a final testing of the


appropriateness of the total amount of the award of general damages by seeing
what annual income that amount, whether or not after deduction of damages for
non-pecuniary loss, would produce year by year if invested at interest. In the
present case it will be very large indeed, espcially if thought of as invested in,
say, first mortgages at current rates of interest; even if regarded somewhat
more conservatively it will amount to more than $20,000 per annum before tax.
Of this, on the view we take of the future of the plaintiff, a lifetime spent in
hospital, less than half will be absorbed in nursing and hospital expenses,
including food and shelter. In addition the capital sum would, on this basis,
remain to her estate at her death. The latter fact we regard as of relatively little
account in the present case because, when any period as long as 30 years in the
future is in question, the difference in amount is small as between a fund to

which only the income is resorted and one producing a like annual amount by
recourse both to income and to capital, the total fund being thus used up by the
end of that period.

Such a means of testing an award is, in present circumstances and when


applied to a case like the present, likely to prove misleading and this for three
reasons. It presupposes investment at what, some years ago, would have
seemed very high rates of interest. Those high rates are in part a reflection of
anticipated future inflation; yet the essence of the process of assessment the
result of which is to be tested by this means is that the effect of future inflation
is to be ignored. So the high yield from the award should, to be consistent, be
regarded as received year by year over a long period in which rapidly
progressing inflation has its effect upon costs; so regarded the apparently very
large future disposable income of the plaintiff may be seen in proper perspective.
Further, if amounts awarded for pain, suffering and loss of amenities of life be
included in the interest-bearing capital sum, greatly inflating it, the process of
looking at the resultant income involves to a degree the subjection to purely
economic terms of a head of detriment which cannot be expressed in those
terms; nor is it a complete answer to that proposition to recall that those are the
only terms in which any award of damages can speak. Finally since loss of
earning capacity has been estimated on the basis of probable net loss it is most
relevant that the plaintiff’s quite substantial annual income will attract tax at
high rates, even if large deductions are allowed for hospital and medical
expenses. This tax effect need not be elaborated upon for its considerable impact
to be appreciated.

We have carried out the detailed examination of the factors constituting an


appropriate award of damages in order to equip ourselves to determine whether
the judge erred in his conclusion on the total amount of damages appropriate to
be awarded. We bear in mind that this is the ultimate question to be decided and
that the trial judge had a wide discretion. We have therefore adopted in the
process the maximum figures which on the evidence in this case could be
accepted under each head of damages. It does not follow that these amounts are
those which we would have adopted in the first instance. When the approach
which we have thought appropriate in the circumstances of this case is adopted
in order to test the award and when consequently maximum figures under each
head are taken there is of course no room for a further allowance whereby the
verdict could be sustained as one within permissible limits. It would be otherwise
if less than maximum figures were taken under each head, that is to say, if a
court on appeal were to form its own estimate of the appropriate, rather than
the maximum, amount of damages under each head.

The result of this approach which leaves a sum of $80,000 in respect of pain,
suffering and loss of the amenities of life demonstrates that the total amount of
the verdict is too high. Pain and suffering and loss of the amenities of life is a
head of damages which is peculiarly difficult to assess but when full
compensation has been determined in respect of all other heads of damages, it
appears to us that an

additional sum of $80,000 exceeds what could properly be awarded under this
last head.

We conclude, therefore, that the amount awarded cannot stand. It is


necessary therefore for us to determine what was a proper amount. We make
this determination wholly on the basis of the findings of fact made by the trial
judge. It must, however, be made clear that, while the process which we have
followed of analysing the separate maximum amounts possible under the the
various heads of damage will be of assistance in a re-assessment, they cannot of
themselves lead to a conclusion on the amount proper to be substituted. In all
the circumstances we are of the opinion that a proper amount is $270,547.50.

We would accordingly allow this appeal and substitute for the present award
an amount of $270,547.50.

[Barwick CJ in a separate judgment, agreed that the amount awarded by the trial
judge was excessive.Jacobs J agreed with the reasons but not the conclusion of Gibbs
and Stephen JJ. Murphy J considered that the award of the trial judge reflected a
substantial under-assessment.]

5.2 Application of general principles.


In Diamond v Simpson the Court of Appeal considered the general approach to be
taken at common law in assessing damages for personal injuries, then applied those
principles to a number of specific heads under which the trial judge had made awards
which were challenged on appeal. It also reviewed the principles to be applied by an
appellate court in reviewing the trial judge’s assessment [ ].

Diamond v Simpson (No 1) [2003] NSWCA 67 (7 April 2003)

CA 40962/01

Court of Appeal

STEIN JA, IPP JA , and YOUNG CJ IN EQ

Calandre Simpson was born on 5 July 1979. She was injured during the birth process.
The appellant) was the attending obstetrician. Prior to the trial, the appellant admitted:
that Ms Simpson’s cerebral palsy was caused by his negligence in the manner, timing
and circumstances of his use of forceps.4 On 5 November 2001 Whealy J gave
judgment in favour of the first respondent against the appellant. Whealy J assessed
damages in the sum of $14,202,042. Ms Simpson’s cerebral palsy is characterised by
changing tone and abnormal movements induced by attempts at normal movement or
maintaining posture. The change in muscle tone and the uncontrolled movements
affect all physical activities and severely impair all physical function. Whealy J
observed that apart from her inability to control her physical movements "she is
unable to speak, is confined to a wheelchair and is totally dependent on others for all
her needs." The damages of $14,202,042 awarded by his Honour were made up as
follows:

Head of Damages Trial Judge Appellant's contention

1 General damages 390,000 390,000

2 Interest on past general damages ($100,000) 87,087 87,087

3 Past loss of earnings 50,880 46,995

4 Interest on past lost earnings 15,860 14,408


5 Future loss of earning capacity 720,169 569,200

6 Past loss of employer-funded superannuation 2,100 2,100

7 Future loss of employer-funded 84,700 73,641


superannuation

8 Long service leave 5,000 NIL

9 Past gratuitous services 119,730 119,730

10 Interest on past gratuitous services 310,880 310,880

11 Future gratuitous services 25,000 NIL

12 Future attendant care 6,518,098 4,111,500

13 Home building and architectural costs 502,322 300,000

14 Hydrotherapy pool 95,467 95,467

15 Home maintenance and running costs 390,606 294,205

16 Therapeutic aids, appliances and equipment 427,980 343,640

17 Maintenance on aids, appliances and 25,916 25,916


equipment

18 Computer 292,679 231,928

19 Educational tutoring 171,628 NIL

20 Motor vehicle 161,623 161,623

21 Future medical treatment 125,564 125,564

22 Future paramedical costs 476,625 476,625

23 Future pharmaceutical costs 16,569 16,569

24 Additional vacation costs 330,000 80,338


27 Case manager 361,812 361,812

29 Out-of-pocket expenses 1,103,452 488,700

30 Interest on paid out-of-pocket expenses 1,335,296 510,411

31 Funds management charges 55,000 55,000

TOTAL 14,202,042 9,293,339

The heads of damage challenged in the appeal were past loss of earnings, interest on
past lost earnings, future loss of earning capacity, future loss of employer-funded
superannuation, long service leave, future gratuitous services, future attendant care,
home building and architectural costs, home maintenance and running costs,
therapeutic aids, appliances and equipment, computer, educational tutoring, additional
vacation costs, out-of-pocket expenses (the Spastic Centre claim) and interest on paid
out-of-pocket expenses. These are items 3 to 5, 7 and 8, 11 to 13, 15 and 16, 18 and
19, 24, and 29 and 30 in the table of damages set out above. Whealy J awarded the
first respondent $55,000 in respect of funds management costs (item 31 in the table of
damages), he found that the first respondent was not entitled to damages for engaging
a funds manager at the appellant's expense.

STEIN JA, IPP JA , and YOUNG CJ IN EQ :…

Approach of an appellate court to an appeal against the assessment of damages

15 The task of an appellate court in determining an appeal from an assessment of


damages in a personal injuries action has been discussed on many occasions. In the
well-known decision of Moran v McMahon (1985) 3 NSWLR 700, Priestley JA
carefully examined the relevant High Court decisions and decisions in this State. To
the cases to which his Honour referred, we would add Government Insurance Office
of New South Wales v Cox (1976) 51 ALJR 559. Since then the issue has been
discussed in this State in Burden v Rath (1986) Aust Torts Reports 80-050, Fuller v
Galvin (unreported, NSWCA, 7 April 1995), Joyce v Geelan [2001] NSWCA 29 and
Rajcoomar v Darocha [2001] NSWCA 30. Elsewhere, consideration has been given
to the topic by the Queensland Full Court in Calder v Boyne [1991] 1 Qd R 325, the
ACT Full Court in Sherwood v Guneser (1992) 110 FLR 459 and a five judge Full
Federal Court in Fry v McGufficke (unreported, FCA, 26 November 1998). It is
unnecessary to refer in any detail to these authorities, however, as both the appellant
and the first respondent agreed (and this Court accepts) the principles are accurately
and conveniently expressed by Clarke JA in Harper v Bangalow Motors (unreported,
NSWCA, 24 July 1990).
16 In Harper v Bangalow Motors Clarke JA, after referring to remarks made by Lord
Wright in Davies v Powell Duffryn Associated Collieries Limited [1942] AC 601 and
Lord Diplock in delivering the judgment of the Privy Council in Paul v Rendell
(1981) 55 ALJR 371, said:

"What one draws from these statements is that the intuitive nature of, and the
speculation involved in, awards of damages make it inappropriate to apply the
principles applicable in an appeal from a finding of fact. Of course there may be
determinations which involve little, or no, speculation. For instance, the success of a
claim for past loss of earnings (and I use that expression as a convenient way of
describing the impairment of past earning capacity) may depend, in essence, upon the
resolution of a disputed issue of fact. Such as whether the plaintiff is truthful in his
assertion of incapacity. Similarly the resolution of a claim for damages in respect of a
permanent impairment of earning capacity may depend substantially on a finding on
incapacity. At the other end of the scale there are cases in which the trial judge will be
required to reach a conclusion based on a high degree of speculation. In these cases
the choice accorded to the trial judge must lie within a wide range and, in my opinion,
the decision which reflects that choice can only be reversed in accordance with the
test in Miller.

Obviously that test is not to be applied automatically to all elements, economic and
non-economic, of the claim for damages. Whether that test is applied in respect of
claims for economic loss will depend upon the facts of the given case. If the
assessment is based essentially on factual determinations then no reason would appear
to me why the Warren rule should not apply. Such a case would be one in which the
allowance of a particular medical expense depended upon a determination whether the
expense was payable in respect of the tortiously affected injury - the result depending
upon the factual determination whether a causal link between the tort and the medical
condition in respect of which the expense had been incurred had been established. If,
however, the decision reflects a degree of judicial prophesy or speculation then I think
that Miller must apply".

17 His Honour's reference to the approach in Miller was to the view expressed by
Dixon CJ and Kitto J in Miller v Jennings (1954) 92 CLR 190 (at 196) that:

"[T]he appellate court must be convinced that the judge acted on a wrong principle or
that the amount awarded was so extremely small as to make it, in its judgment, an
entirely erroneous estimate of the damage to which the party is entitled".

18 We shall apply the principles so expressed.

The size of the aggregate sum awarded

19 The aggregate sum awarded is undoubtedly very large. The question arises
whether its size should play any part the determination of the appropriateness of the
total sum awarded.

20 It is now settled that, although the total amount of damages appropriate to be


awarded is the ultimate question to be decided, the component items have to be
separately considered. As Lord Fraser said in delivering the judgment of the Privy
Council in Lai Wee Lian v Singapore Bus Service (1978) Ltd [1984] 1 AC 729 at
735

"They are the necessary parts which make up the whole, and the only proper way of
deciding whether the global award is too low or too high is by assessing the separate
items and arriving at a fair total".

See also Gamser v Nominal Defendant (1977) 136 CLR 145 at 149; Paul v Rendell
at 376 to 377. There have been several expressions of opinion in this Court to the
same effect. It is sufficient to refer again to the judgment of Clarke JA in Harper v
Bangalow Motors.

21 In Sharman v Evans (1977) 138 CLR 563 Gibbs and Stephen JJ at 585 noted that
the total amount awarded in that case was said to have been "the largest yet made for
personal injuries in Australia".

[T]heir] Honours determined that the total amount of the verdict was too high and that
it was necessary for them to determine a proper amount.

22 It is in this sense, at least, that the aggregate amount does become relevant. The
approach adopted by Gibbs and Stephen JJ in Sharman v Evans is one way in which
an appellate court might utilise the overall sum awarded in a process of assessing
whether there has been appealable error. That is, where the court determines the
maximum amount that could be awarded under each head and, on comparing the
aggregate sum so arrived at with the total sum in fact awarded, it appears that the
latter exceeds the former, it will be established that the total amount of the verdict is
too high.

23 It is difficult to apply this approach in the present case as several of the heads of
damage assessed by Whealy J are not under challenge and the Court is not in a
position to say whether the amounts not subject to challenge are the maximum
amounts that could have been awarded. Nevertheless, the rationale underlying the
quoted remarks of Gibbs CJ and Stephen J in Sharman v Evans has to be borne in
mind, at least as a last reality check when assessing, according to the principles
expressed in Harper v Bangalow Motors, whether error has occurred.

24 Where the damages award is particularly high, and is made up of several


components - the majority of which are based on discretionary considerations - there
is considerable room for individual choice in regard to a multitude of factors. There is
authority that in such a case the Court will only interfere in the award if the
substitution of an appropriate award for the particular item would make a substantial
alteration in the total award: Lia Wee Lian v Singapore Bus Service (1978) Ltd at
735, Elford v FAI General Insurance Company Limited [1994] 1 Qd R 258 (CA),
Mt Isa Mines Limited v Peachey (unreported, Supreme Court of Queensland (CA), 1
December 1998); State Government Insurance Commission v Hitchcock
(unreported, Full Court, Supreme Court of Western Australia, 11 March 1997);
Lawson v Flavel [2001] WASCA 272; Nunn v Hardcastle [2001] WASCA 428.

25 The mere fact, however, that the total award might be particularly high does not
warrant an appellate court interfering with it; Pettersen v Bacha (1995) 21 MVR 71 at
72 (per Handley JA) and Government Insurance Office of New South Wales v
Mackie (1990) Aust Torts Reports 81-053 at 68, 209. In the latter case Clarke JA said
that it would be "quite wrong" for the Court to award less than fair compensation
simply because the resulting judgment would be very large.

"The size of the damages may raise a question whether the community can continue
to afford to pay damages of the order assessed in this case but, if so, that is not a
question which directly concerns the Court.

As I have said the task of the Court is to apply the appropriate legal principles and to
determine the appeal upon its view of the correctness of his Honour's assessments
and, in the event of a re-assessment, what is fair and reasonable compensation in all
the circumstances".

Past and future loss of earning capacity, interest and superannuation - items 3, 4,
5 and 7

His Honour awarded the first respondent $50,880 for past loss of earning capacity
(item 3), $15,860 interest on past lost earnings (item 4), and $720,169 for future loss
of earning capacity (item 5). His Honour also awarded $2,100 for past loss of
employer-funded superannuation (item 6 and not in dispute) and $84,700 for future
loss of employer-funded superannuation (item 7). …

In approaching this issue the Court will apply the principles discussed earlier in paras
15 to 18 of the Court's reasons for judgment. This essentially means that the appellant
must convince the Court that the trial judge acted on a wrong principle or the estimate
of damage was an entirely erroneous one, see Harper v Bangalow Motors and Miller
v Jennings.

29 With regard to Calandre's loss of earning capacity, the starting point is that the
appellant accepts that her future earning capacity has been completely destroyed with
the result that she has no residual earning capacity [para 338]. His Honour concluded
that the appropriate and most proximate rate to apply was the full time adult rate and
not the AWE for full time adult females.

30 On the way to this conclusion Whealy J made a number of relevant findings of


fact. We summarise some of them by reference to the judgment.

31 Prior to the consideration of loss of earning capacity, and when considering


whether the plaintiff would have been likely to have undertaken tertiary education, his
Honour observed [at 331]:

"... there is sufficient material to satisfy me that there is a higher possibility that the
plaintiff had a capacity for, at the very least, average prospects so far as future
earnings are concerned. Indeed, she had quite probably a realistic possibility of
becoming a high earner"….

"... her father is a highly successful professional, indeed described in the evidence and
submissions as "a workaholic". Her mother, Gail Simpson, is a redoubtable woman of
significant determination, perseverance and aptitude. These aspect [sic] of the family's
situation are countervailing considerations in the context of the submissions made by
the defendant regarding the plaintiff's sisters". "Calandre's personal characteristics
certainly support the proposition that she would have become at least an average
earner, and quite possibly a higher than average earner. They do not, however, enable
me to predict with any really positive persuasion that she would probably have gone
into a legal career". "Calandre Simpson is a young lady of considerable drive and
determination. She has average intelligence. There seems no basis, in my opinion, for
excluding the possibility that she may have gone on to become a high earner in the
workforce. It is possible that she may have gone on to a tertiary education and there is
some support for that proposition in her own character and the background of her
father especially. There is, however, very little else to support the possibility and I am
not satisfied overall that any real possibility of a legal career based on tertiary
education has been established as likely". "The best I have been able to do is to
determine that she would have most likely developed into and become a person who
would have undertaken and succeeded at a business career which probably would
have put her in at least an average earning position and, quite possibly, a better than
average earning position. The mere fact that little is known, and that a degree of
guesswork is involved, is not sufficient to condemn the plaintiff to an unjustified
average category. The facts which are known about the plaintiff include the positive
personal characteristics I have already described such as her drive and determination.
There are as well her personality, intelligence and lively humour. In addition there is
her father's successful professional background as a dentist and his obvious capacity
for hard work. There are, as well, her mother's qualities of determination and
perseverance and aptitude. Contrary to the defendant's submissions, I do not see the
plaintiff's socio-economic ground [sic] as a negative factor in the circumstances of
this case. Rather given the range of other factors I have mentioned, the plaintiff's
background gives me an assurance that she was likely to have done well in her
business career. I have little doubt that she would have married and had children but I
am prepared to accept as quite a likely possibility, indeed a probability, that the
plaintiff would have maintained a business career notwithstanding marriage and the
burdens of parenthood".

35 His Honour stated emphatically that he had no hesitation in rejecting the category
of AWE for adult females suggested by the appellant. …

"Importantly, the selection of this rate enables the court to take into account the very
real possibility that the plaintiff may have become a high income earner in the pursuit
of a business career" …

It seems to us impossible to conclude that his Honour erred in principle in selecting


the higher category. After all, it includes both adult female workers, as well as adult
male workers. His Honour found that the choice before the court was between the
AWE full-time adults category and that for adult females Even if he chose the latter, it
would still be necessary to adjust it to reflect his views of the plaintiff's likely level of
earning capacity. In the end, his Honour concluded that the most proximate rate was
that for full-time adults. His Honour stated that this rate best reflected the "very real
possibility that the plaintiff may have become a high-income earner". ..
48 We are unable to conclude that in adopting the AWE for all adults, his Honour
committed an error of principle by selecting the wrong class or category of
employees. 49 As a result, these grounds of appeal must be rejected.

Long Service Leave - Item 8

50 His Honour allowed the sum of $5,000 as the value of the loss of future long
service leave (LSL) entitlements. The appellant submitted that no allowance should
have been made. …

56 It is implicit in his Honour's approach to the assessment of this aspect of the claim
that he saw LSL as a thing of value and as a legitimate chance which the plaintiff had
lost. He valued that lost chance at $5,000. It is very difficult to say that his Honour`s
ultimate figure was not within the range available and we are of the opinion that the
award should not be interfered with.

Future Gratuitous Services - Item 11

57 The plaintiff claimed $186,329.00 representing the value of probable future


gratuitous services. This claim was split into three elements, viz:

A. short term gratuitous services necessitated by the plaintiff's transition from living
at home to independent living $11,206;

B. long term gratuitous services arising from the plaintiff's inability to speak
$129,038;

C. a continuous lifelong need for family and friends to receive instructions in the use
of the plaintiff's communication equipment etc $44,284.

58 The trial judge allowed $25,000 - $10,000 under head A; nil under head B and
$15,000 under head C. The appellant argues that none of these amounts should have
been allowed. …

61 Mr Jackson replies by saying that his Honour approached the head of claim with a
considerable degree of caution and sense of moderation and, reasonableness and
allowed only $25,000 of the much larger amount claimed. …[W]e would reduce his
Honour's sum by deleting the allowance of $15,000. …65 Thus the amount allowed
under Item 11 should be brought back to $10,000 in total.

Future Attendant Care - Item 12

66 This is a much more substantial claim.

67 The plaintiff claimed $7,024.63 per week or $9,627,255.40. The learned Judge
allowed $6,518,098. This figure was reached by taking a figure of $4,756 per week at
3% over the plaintiff's remaining life expectancy of 50.67 years which gave a
multiplier of 1370.5. The $4,756 was found by the Judge as being $4,000 per week
for referred care on the basis of two 12 hour shifts for three-quarters of a year which
in effect meant $3,000 per week and $1,756 per week for the remaining quarter year
for managed care.

68 The appellant says a proper amount is $4,111,500.

69 His Honour defined the difference between referred care and managed care at
[512] of his reasons, namely that managed care entails that the agency is contracted to
supply staff so that it employs, pays, trains and cares for the staff members who form
the team charged with the client's care. On the other hand, referred care is when the
agency selects appropriate carers, charges a placement fee and a contract of
employment is drawn up between the carer and the client directly. It should be noted
that referred care costs less but there is no difference in the quality of the care. …

75 As indicated earlier, we will apply the principles expressed by Clarke JA in


Harper v Bangalow Motors and consider whether the Judge acted on wrong
principle.

[W]e… consider that the matters raised as to private arrangements being able to be
obtained at a much cheaper rate, coupled with the admitted possibility or stronger that
at some stage in those 50.67 years Calandre may elect to have some other form of
care, mean that far from adding a factor for managed care, his Honour should have
discounted the $4,000 per week by some factor for contingency. This is clearly
justified when one sees that indeed the Simpsons did in fact obtain much cheaper care
for a large number of years even though they were more than adequately taking care
of Calandre.

90 Taking a 10% figure for contingency and thus working on a figure of $3,600 per
week, this would produce a verdict figure for this item of $4,933,800. That is a
reduction of $1,584,298.

Home building costs - Item 13

91 The appellant accepted that Calandre should be allowed the reasonable cost of a
home, either purpose built or modified to enable her to live independently. His
Honour costed this at $300,000, [530]. This component of the award is not appealed.

92 In addition, the plaintiff sought $159,963 as the cost of modifications to her


parents' home in Vaucluse, where she had resided for much of her life. Also claimed
by the plaintiff was the cost of alterations to holiday accommodation owned by her
parents at Palm Beach ($42,359) and at Thredbo ($86,646). His Honour allowed the
claim with regard to Vaucluse and Palm Beach but disallowed Thredbo. …

102 With regard to the modifications to the family home it must be recalled that
Calandre has resided there for much of her life. Accepting that her accommodation is
cramped and badly designed, it is difficult to understand why at least some of the
work now proposed had not been done before. There is little doubt that the parents of
the plaintiff could afford it. If the family home were to continue to be the plaintiff's
primary residence, there is no doubt that it would be reasonable to impose the cost of
modification on the appellant. That however is not the case as the plaintiff will have
her own independent living accommodation paid for by the appellant. Moreover,
Calandre will still be able to use the Vaucluse house on her visits to her parents.

103 While there is no doubt that the modifications will increase the amenity and
accessibility of the home for Calandre, it appears to us to be plainly unreasonable that
the appellant should have to pay approximately $160,000 for the proposed
modifications when the plaintiff will only occasionally visit the house. It seems clear
to us that the benefits derived do not justify the expense being incurred by the
appellant. The cost is disproportionate.

104 We are unable to accept his Honour's conclusion that the amount involved is both
"proportional and reasonable". On the contrary, it seems obvious to the Court that it is
an unreasonably costly imposition upon the appellant, and one which cannot be
justified by the increase in amenity and convenience to the plaintiff. We would uphold
this part of the appeal.

105 As to the Palm Beach property, we have a similar concern. …

110 We are unable to agree with his Honour that the claim for Palm Beach is "close to
the line". Rather, it seems to us to be demonstrably unreasonable to impose this cost
on the appellant, given he is also paying $300,000 for independent living for the
plaintiff. The likely benefit to Calandre is out of proportion to the cost of
modifications visited upon the appellant. We are of the opinion that the Palm Beach
claim fell well below the line and should not have been allowed.

111 Accordingly, the appellant succeeds on this aspect of the appeal and the amount
of $202,322 is to be deducted from the damages awarded.

Additional home maintenance and running costs - Item 15

112 His Honour allowed the sum of $390,606 for the additional costs of home
maintenance and running costs. The appellant submitted that this was in error in
relation to four items, painting, plumbing, electrical and appliance repairs. As a result,
the appellant contends that the adjusted sum under this head is $294,205, that is, a
reduction of $96,401.

113 The argument the appellant raises before us is that the costs for painting,
plumbing, electrical and repair of appliances should not have been allowed because
the need for those services was not increased by reason of the plaintiff's disabilities.
These costs would have been incurred in any event. …

[A]dditional… additional maintenance expenses obviously arise for the plaintiff. The
issue before the trial court was to determine the extent of these expenses. …

136 The principal issue, if not the only one put to his Honour under this head of
damage, was the reasonable quantum of the additional maintenance costs. His Honour
determined this in favour of the plaintiff. It is not apparent that he erroneously
allowed as additional maintenance costs, matters which were not claimed to be
additional in the evidence. Accordingly, this ground of appeal should be rejected.
Therapeutic aids, appliances and equipment - Item 16

137 The sole dispute under this ground of appeal involves the cost of a
communication device for Calandre. There is no dispute that such a device is
absolutely necessary for her needs since she can neither speak nor write. Rather the
issue is about the cost of the available alternatives. …

138 His Honour allowed $427,980 for various therapeutic aids under this head of
damage. Only the Pathfinder and Zygo head pointer is in issue. Its cost translated into
a weekly expense of $61.54. The appellant submitted that the Mardis Eclipse
communication device and head pointer was adequate and cheaper ($28.07 per week)
and it was unreasonable for his Honour to have chosen the more expensive product. If
the appellant is successful, the sum of $84,340 is to be deducted to reduce the award
made under this head to $343,640.

139 His Honour noted the "significant price disparity" between the respective
products. He stated [at 612]:

"I agree that only one of these combinations should be allowed, and propose to accept
the recommendations of Ms French. Having considered the features of this device, as
presented in the annexure to her report (Exhibit "EE", plaintiff's bundle p 773) I am
satisfied that this device appropriately caters to the communication needs of the
plaintiff. It not only prepares synthesised speech, but also icon and word prediction,
and infared heard pointing. It can be interfaced with computers and environmental
communication units. I am not left in any certainty concerning the exact features of
the Mardis Eclipse model suggested by Mr Smith, as his report does not point to any
detail concerning this type of communication device. Moreover, Mr Smith conceded
in his report that the Mardis Eclipse model is one likely option, but that the exact
model for Calandre should be selected by an expert in this type of device (Exhibit
"NN"(2), plaintiff's bundle p 916)". …

145 Given the evidence before his Honour we are quite unable to see why he was not
entitled to accept French's recommendation. Smith was at pains to say that the exact
device should be prescribed by experts in the field. French seems to have the
necessary expertise. His Honour was entitled to accept French's recommendation
notwithstanding the disparity in cost. This ground of appeal fails.

Computer equipment and traineeship - Item 18

146 This ground of appeal involves two points. His Honour awarded $292,679 for the
provision of computer equipment and a traineeship. The appellant contends that some
of the costs of computer equipment ($51,951) should not have been allowed because
they were not additional costs arising from the plaintiff's injuries. Her need for much
of the computer hardware and software included under this head of damage was not
created by her injuries. Her peers without disabilities, eg HSC students, would have
the same requirements.

147 The second aspect concerns a six month traineeship offered to Calandre by Mr
Smith at a cost of $8,800. The appellant submitted that the evidence of the traineeship
was too speculative and, if anything, no more than a chance. Attention was drawn to
the fact that it was the first such traineeship offered by Smith. …

153 We accept that for Calandre the assistance which computer technology can
provide is not an option but a medical necessity. For her computer access and
associated communication devices are, as his Honour observed, a lifeline in a very
real sense. Indeed, they provide her only means of communication.

154 The need has plainly been created by her injuries. The computer package
comprises additional costs which were caused by the appellant's negligence. Mr
Jackson, appropriately in our view, drew attention to the joint judgment of Mason CJ,
Toohey and McHugh JJ in Van Gervan v Fenton (1992) 175 CLR 327 at 338. Their
Honours said:

"If the defendant has created the need for the services, that person is not entitled to
have the damages reduced because, before the accident, the plaintiff elected to pay for
similar services or had the benefit of having them performed gratuitously. By the tort,
the defendant has transformed the choice of the plaintiff to pay for such services or to
have them done voluntarily into the need for the plaintiff to have those services
performed for him or her".

155 In our opinion, there is no error in his Honour's conclusion or reasoning.

156 We turn to the claim for the traineeship with Mr Smith. … Bearing in mind the
relatively small cost, it cannot be said to be disproportionate to the benefits.

157 We would reject this ground of appeal.

Educational tutoring - Item 19

158 The trial judge allowed $171,628 for a special education teacher to assist
Calandre for five years, the first year with completion of her HSC and the next four
years with tertiary study. The appellant submitted that no allowance should have been
made. …

165 It is not always easy to distinguish between the questions of whether the plaintiff
would, but for the appellant's negligence, have had the ability to pursue tertiary study
and whether the plaintiff is now (with her disabilities) able to pursue such study. …

167 Whealy J gave detailed reasons …as to why he concluded, albeit with a
significant discount of 25% for vicissitudes, that the plaintiff possessed the ability to
undertake and complete some form of tertiary education. On the evidence before him,
his Honour was, in our opinion, entitled to conclude that there was a realistic
probability that the plaintiff would be able to finish her HSC and pursue some form of
tertiary education in the area she nominated. His Honour referred to non-award
courses at TAFE institutions and Professor Reid's evidence about the diploma in
welfare offered by some institutions.

168 We are unable to detect any error in principle in either his Honour's approach or
conclusion on this question. …
169 The plaintiff had argued before his Honour that a 15% discount was sufficient to
balance the possibility that she may not fully pursue the tertiary course. The Judge
concluded that a higher percentage should be allowed for vicissitudes and determined
this at 25%. The appellant submitted that a far greater percentage discount should
have been applied because it was very likely that the plaintiff would not complete her
studies.

170 This is a typical discretionary decision. Minds may well differ as to the
appropriate discount rate to apply but we are unable to conclude that his Honour made
any error of principle in arriving at a 25% discount, or that his discretion miscarried.
Having regard to the evidence the result cannot be said to be a wholly erroneous
figure. …

179 Accepting as we do, that his Honour was entitled to conclude that the plaintiff
had and has the ability to undertake tertiary study, it is reasonable to assume that she
would have worked part time during that four year period as a student. Doing the best
we can, we would assess a net loss of earnings of $7,000 per annum - a total of
$28,000. This would mean that his Honour overestimated the loss of earnings for that
period by approximately $13,000.

180 In our view, given the circumstances, the best way to deal with this situation is to
adjust the sum awarded for educational tutoring by reducing it by $13,000. As an
aside, it may be that the "problem" was caused by an over compartmentalisation of
heads of damage at the trial.

Additional vacation costs - Item 24

181 His Honour allowed the sum of $330,000 for additional vacation costs for the
plaintiff and two carers. The claim before the trial court was for $430,000. It was
based on a life expectancy of a further 51 years from the trial and provided for a two
week annual holiday somewhere in Australia and a three week overseas trip every
four years. …

188 We do not criticise his Honour's broad-brush approach. Indeed, it seems to be an


eminently sensible way to approach the claim. Notwithstanding, the guiding principle
must be one of proportion and reasonableness. The additional sum of $330,000,
representing local and overseas holidays with two carers for more than 50 years,
seems to us to have an air of unreality about it. …

192 Accordingly, we would reduce his Honour's award under this head from
$330,000 to $200,000. …

The costs of services provided by the Spastic Centre and interest thereon - Items
29 and 30

194 The Spastic Centre of New South Wales provided medical and allied professional
services to the first respondent from 1981 to the date of the trial in June 2001. There
was no dispute as to the market value of the services so provided, and the appellant
accepted that the amounts claimed by the Spastic Centre fairly represented the value
of the services provided by it. In total, the Spastic Centre claimed $655,995.30.
Whealy J allowed a slightly adjusted figure of $614,752. …

[O]n… the basis of the findings of Whealy J, the first respondent could not succeed
under this head on the ground that she had incurred an absolute contractual liability to
pay the Spastic Centre for the services it had provided.

205 A further effect of his Honour's findings J was that the case could not be
compared to Blundell v Musgrave (1956) 96 CLR 73, where liability to pay for
medical expenses was conditional on the recovery of damages. The findings preclude
such an argument being raised and, indeed, no such argument was raised.

206 In the alternative, the first respondent claimed the amounts of the invoices
submitted by the Spastic Centre on the basis of the principles in Griffiths v
Kerkemeyer (1977) 139 CLR 161.

207 Whealy J said that the true basis of a claim for damages with respect to care or
services provided gratuitously to a person who has suffered personal injury is the need
of the plaintiff for those services, not the actual financial loss suffered as a result of
their provision.

208 Accordingly, said the learned Judge, the sole question was whether despite the
fact that the services were provided by the Spastic Centre, and not by a family
member or friend, the first respondent was entitled to recover damages on a Griffiths
v Kerkemeyer basis. …

211 The appellant submitted that Whealy J erred in extending the Griffiths v
Kerkemeyer doctrine to therapeutic services provided free of charge by a charitable
organisation. The first respondent supported his Honour's judgment, contending that
once the first respondent had established her need for the services from the Spastic
Centre, she was entitled to recover damages representing the market cost of its
services (irrespective of the fact that the Spastic Centre had provided its services to
her free of charge).

212 Until now, Griffiths v Kerkemeyer has been applied only to services rendered
gratuitously to injured plaintiffs by family members or friends. The Spastic Centre,
however, falls into a different category. It is a community-based charitable institution
that provides services to a segment of the general public. Therefore, the question
raised by this ground of appeal is whether Griffiths v Kerkemeyer is to be regarded as
an anomalous doctrine confined to claims by family or friends, alone.

213 The answer to the question so posed requires an examination of the development
of the Griffiths v Kerkemeyer rule.

214 Prior to Griffiths v Kerkemeyer, Blundell v Musgrave held sway and no claim
could be made for nursing and like services that were not productive of financial loss.

215 In Griffiths v Kerkemeyer, Gibbs J stated that if a plaintiff had a need for nursing
services (brought about by the negligence of the defendant) he or she should only
recover damages for that need if the need was likely to be productive of financial loss.
His Honour referred to Blundell v Musgrave and said at 168-169:

"[T]his Court should not abandon the principle that a plaintiff whose injuries have
created a need for hospital or nursing services cannot recover damages in respect of
that need (except of course for loss of amenities or pain and suffering) unless the
satisfaction of the need is or may be productive of financial loss. However it should
no longer be held that the fact that the services have been and will be provided
gratuitously is conclusive of this question. The matter should as it were be viewed in
two stages. First, is it reasonably necessary to provide the services, and would it be
reasonably necessary to do so at a cost? If so, the fulfilment of the need is likely to be
productive of financial loss. Next, is the character of the benefit which the plaintiff
receives by the gratuitous provision of the services such that it ought to be brought
into account to relief of the wrongdoer? If not, the damages are recoverable".

216 The views so expressed by Gibbs J were later described in Van Gervan v Fenton
at 333 by Mason CJ, Toohey and McHugh JJ (with whom Brennan and Gaudron JJ
were in general agreement) as "a dissenting judgment on the point of principle."

217 In Griffiths v Kerkemeyer, Gibbs J went on to say (at 169):

"I consider that if the hospital, medical and nursing services provided by the State are
such that the plaintiff has been and will be supplied with all the services that he
reasonably requires at no charge to himself, the case will, as a general rule, be one in
which the wrongdoer should have the benefit of that circumstance. There appear to
me to be strong grounds of policy which distinguish services which the State makes
available for all persons, or for all in the certain category on the one hand, from
services provided as a result of a sacrifice made by a relative or friend of the plaintiff,
on the other hand".

These remarks have relevance to the question now under consideration as Gibbs J
accepted that policy required gratuitous public hospital and nursing services to be for
the benefit of the wrongdoer, and imposed a different rule for services provided by a
relative or friend of the injured person. His Honour thereby drew a distinction
between services made available to a general body of persons and those provided (by
reason of personal relationships) to the injured person alone.

218 Stephen J, unlike Gibbs J, approved Donnelly v Joyce [1974] QB 454. His
Honour said at 175:

"The principle in Donnelly v Joyce readily enables an injured plaintiff to recover


damages for his accident-caused needs met by third party subventions in those very
cases most calling for it. I refer to those deserving cases concerned with charitable
subventions by friends or relatives who, to benefit the plaintiff, and with no thought
of relieving the wrongdoer, gratuitously provide him with funds, services or goods. In
such cases the courts will clearly not treat the gratuitous subventions as properly to be
debited against the plaintiff ...

No hard and fast rule can or should be laid down as applicable to all of that great
variety of other types of subventions which may come before the courts. For many of
them what was said in Parry v Cleaver [1970] AC 1 and, in Australia, by Windeyer J
in Paff v Speed (1961) 105 CLR 549 at 567 and in greater detail in National
Insurance Company of New Zealand Limited v Espagne (1961) 105 CLR 569 per
Dixon CJ at 573 and per Windeyer J at pages 598 to 600 will provide the answer. As
Windeyer J, pointed out, in appropriate cases the intent of the provider will be
determinative, so that, where the intent that the injured person shall enjoy the benefits
of the subvention in addition to whatever rights he may have against the wrongdoer,
the value of the subvention will not go in diminution of damages to be awarded to the
injured person."

His Honour regarded this as a "two stage approach. First, the loss had to be identified
as the plaintiff's accident-cause need. Secondly, the deductibility or otherwise of the
third party subvention had to be examined.

219 It appears from the quoted remarks that Stephen J regarded charitable subventions
by friends or relatives who, to benefit the plaintiff, and with no thought of relieving
the wrongdoer, gratuitously provide him or her with funds, services or goods, as if
they fell into an independent category of claims to which, without question, Donnelly
v Joyce applied. Stephen J contrasted this category with "other types of subventions
which may come before the courts". He was of the view that, for many of these "other
types", the approach in National Insurance Company of New Zealand Limited v
Espagne (1961) 105 CLR 569 "will provide the answer". Hence, according to
Stephen J, in many other types of subventions, "need" may not be the sole criterion of
the plaintiff's entitlement to claim. These views are plainly of considerable relevance
to the question now being considered.

220 Before discussing the Espagne approach, for the sake of completeness we would
note that, in Griffiths v Kerkemeyer, Mason J also approved the approach in
Donnelly v Joyce, saying (at 192):

"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".

221 Turning now to Espagne, the approach to which Stephen J referred in Griffiths v
Kerkemeyer is manifest from the following remarks of Dixon CJ and Windeyer J.
Dixon CJ said at 573:

"There are certain special services, aid, benefits, subventions and the like which in
most communities are available to injured people. Simple examples are hospital and
pharmaceutical benefits which lighten the monetary burden of illness. If the injured
plaintiff has availed himself of these, he cannot establish or calculate his damages on
the footing that he did not do so. On the other hand there may be advantages which
accrue to the injured plaintiff, whether as a result of legislation or of contract or of
benevolence, which have an additional characteristic. It may be true that they are
conferred because he is intended to enjoy them in the events which have happened.
Yet they have this distinguishing characteristic, namely they are conferred on him not
only independently of the existence in him of a right of regress against others but so
that they may be enjoyed by him although he may enforce that right: they are the
product of a disposition in his favour intended for his enjoyment and not provided in
relief of any liability in others fully to compensate him".

Windeyer J said at 599 to 600:

"In assessing damages for personal injuries, benefits that a plaintiff has received or is
to receive from any source other than the defendant are not to be regarded as
mitigating his loss, if (a) they were received or are to be received by him as a result of
a contract he had made before the loss occurred and by the express or implied terms
of that contract they were to be provided notwithstanding any rights of action he
might have; or (b) they were given or promised to him by way of bounty, to the intent
that he should enjoy them in addition to and not in diminution of any claim for
damages. The first description covers accident insurances and also many forms of
pensions and similar benefits provided by employers: in those cases it is immaterial
that, by subrogation or otherwise, the contract may require a refund of moneys paid,
or an adjustment of future benefits, to be paid after the recovery of damages. The
second description covers a variety of public charitable aid and some forms of relief
given by the State as well as the produce of private benevolence. In both cases the
decisive consideration is, not whether the benefit was received in consequence of, or
as a result of the injury, but what was its character: and that is determined, in the one
case by what under his contract the plaintiff had paid for, and in the other by the intent
of the person conferring the benefit. The test is by purpose rather than by cause".

222 In Redding v Lee; Evans v Muller (1983) 151 CLR 117 Mason and Dawson JJ
(with whom Wilson and Deane JJ, in substance, agreed) explained (at 137) the
Espagne approach as follows:

"The subsequent decisions in this Court apply the principles expressed by Dixon CJ
and Windeyer J in Espagne. They make it clear that the issue turns on the character
and purpose of the particular financial benefit which the plaintiff receives: was the
benefit conferred on him independently of any right or redress against others and so
that he might enjoy the benefit even if he enforced the right?"

223 Redding v Lee concerned the question whether courts, in assessing damages
payable for personal injuries which have caused a plaintiff to suffer a loss of earning
capacity, should take into account social security benefits which the plaintiff would
not have received had it not been for his injuries. All the members of the High Court
applied the principles expressed in Espagne in concluding, by a majority, first, that
payments of invalid pensions granted for permanent incapacity to an injured plaintiff
should be disregarded in the assessment of damages and, secondly, payments of
unemployment benefits should be deducted.

224 Gibbs CJ, with whom Brennan J agreed, said (at 122):
"If a plaintiff is unable to work but nevertheless receives wages or sick pay, he cannot
claim that he has suffered a loss of wages; if he needs medical attention, but it is
provided free, he cannot claim that he should be credited with an amount for
expenditure on medical attention which it has not been necessary to make: see Paff v
Speed (1961) 105 CLR 549 at 567; Graham v Baker (1961) 106 CLR 340".

It is apparent from this observation that the Chief Justice did not regard a claim for
medical attention that is provided free of charge as falling into the Griffith v
Kerkemeyer category. His Honour was in dissent in regard to the deductibility of
unemployment benefits but the quoted remarks were part of his general discussion
relating to the applicability of the Espagne approach.

225 Mason and Dawson JJ (at 137) said that it was imperative to "continue to pursue
and apply the principles expressed in Espagne".

226 In Van Gervan v Fenton Mason CJ, Toohey and McHugh JJ (with whom
Brennan and Gaudron JJ were in general agreement) emphasised the difference
between the approach of Gibbs J in Griffiths v Kerkemeyer and that of Stephen and
Mason JJ in that case. Their Honours said (at 332):

"Thus the important difference between the judgment of Gibbs J and the judgments of
Stephen and Mason JJ in Griffiths is that, whilst Stephen and Mason JJ were of the
opinion that the plaintiff's damages are to be calculated by the need for the services,
Gibbs J thought that that was a necessary but not a sufficient condition of liability. In
the opinion of Gibbs J satisfaction of the need is not sufficient unless the need `is or
may be productive of financial loss'".

And (at 333):

"Consequently, it should now be accepted that the true basis of a Griffiths v


Kerkemeyer claim is the need of the plaintiff for those services provided for him or
her and that the plaintiff does not have to show, as Gibbs J held, that the need `is or
may be productive of financial loss'".

227 It must be observed, however, that these remarks were addressed to the category
of gratuitous services provided by a family member or friend. The question now to be
determined has not been in issue in Griffiths v Kerkemeyer and the cases that have
followed it. Although, as we have mentioned, Stephen J in Griffiths v Kerkemeyer
recognised that there could be a difference between this category of gratuitous
services claims and other subventions.

228 In Kars v Kars (1996) 187 CLR 354 Dawson J accepted (at 360) that damages for
services provided gratuitously are recoverable to compensate the plaintiff for the loss
evidenced by the need for the services. Nevertheless, he said (at 361):

"[The provision of voluntary services is] to be regarded as a benevolence which is


prompted by the ties of friendship, or familial concern or duty".

Dawson J observed (at 362) that the provision of gratuitous services to an injured
plaintiff by a friend or relative is to be characterised as an act of benevolence where
there is no intention that it should result in the reduction of damages recoverable by
the injured person. This, indeed, is the application of the Espagne approach. His
Honour referred to the remarks he and Mason J had made in Redding v Lee (referred
to in paragraph 222 above) and pointed out (at 363) that in Espagne Windeyer J had
said (at 599 to 600):

"Where personal injury was productive of private benevolence (and also some other
forms of bounty), it is the intent of the donor which is crucial in deciding whether the
benefit should be enjoyed in addition to and not in diminution of any claim for
damages. If that is the purpose of the benevolence then the law will give effect to it".

Thus, Dawson J regarded claims for gratuitous services rendered by a friend or


relative as falling into an identifiable category of claims to which, applying Espagne,
the provider intended that "the benefit should be enjoyed in addition to and not in
diminution of any claim for damages". It is implicit, on his Honour's reasoning, that
claims for gratuitous services rendered by a different category of persons also have to
be considered in accordance with Espagne, and - depending on the circumstances -
may lead to a different result.

229 In Kars, Toohey, McHugh, Gummow and Kirby JJ (at 371) referred to Griffiths
v Kerkemeyer as "an exceptional development which departed from the compensatory
principle in its pure form". Their Honours discussed damages for gratuitous services
on the basis that it was "an anomaly". The inference from these observations is that
the Griffiths v Kerkemeyer rule will not readily be extended and courts should be
reluctant to apply it to a new category of claims.

230 In Grincelis v House (2000) 201 CLR 321 Kirby J (who dissented in the result)
expressed serious doubts as to the Griffiths v Kerkemeyer doctrine. His Honour said:

"Having, in Griffiths v Kerkemeyer, embraced the principle that an injured plaintiff


is entitled to recover damages for his or her needs met by the provision of gratuitous
services by family or friends, this Court was set upon a path that has repeatedly
demonstrated the `anomalies', `artificiality' and even `absurdities' of the `novel legal
doctrine' which it adopted in substitution for its own earlier stated opinion".

The reference to "its own earlier stated opinion" was to that expressed in Blundell v
Musgrave.

Callinan J (who also dissented in the result) also expressed criticisms of Griffiths v
Kerkemeyer and indicated a clear preference for Blundell v Musgrave.

231 These remarks reinforce the observations made in Kars which, we have noted,
lead to the inference that Griffiths v Kerkemeyer should be strictly confined in its
application.

232 Drawing the foregoing together, we conclude:

(a) Griffiths v Kerkemeyer claims are anomalous and exceptional and courts should
be reluctant to extend the Griffiths v Kerkemeyer approach to new categories of
claims.
(b) Claims for gratuitous services rendered by a friend or relative fall into a separate,
identifiable, category of claims. It is only claims of this kind that can properly be
described as Griffiths v Kerkemeyer claims.

(c) Claims for gratuitous services rendered by a publicly or privately funded


charitable institution will not be payable by the wrongdoer merely on the ground that
the injured person has established a need for the services in question. The injured
person's entitlement to such claims will depend upon an application of the principles
expressed in Espagne.

233 The conclusions so expressed are consistent with the following remarks of
Professor Luntz in his work Assessment of Damages for Person Injury and Death (4th
ed) at para 4.24:

"On the principle adopted in Griffiths v Kerkemeyer the plaintiff is prima facie
entitled to damages for the reasonable cost of medical and hospital treatment once the
need for such treatment is shown; it then becomes a question of whether the defendant
is entitled to credit if the actual cost is not met by the plaintiff personally, but by
public funds. However, the courts have never looked at the question in this way and
have generally proceeded on the basis that Griffiths v Kerkemeyer is not relevant to
the issue of recovery of damages for hospital expenses".

234 It is now necessary to examine the character and purpose of the financial benefit
that the first respondent received from the Spastic Centre.

235 In our opinion, the benefit of the services was conferred on the first respondent
independently of any right of redress she might have against others. The benefit was
conferred on her irrespective of whether she intended to or did enforce any such right.
In the light of the factual findings made by Whealy J, the conduct of the Spastic
Centre in sending letters to the first respondent and her family claming various sums
for services rendered does not lead to an inference to the contrary. While it was open
to the Spastic Centre to require the first respondent to agree to pay its charges, it
simply did not do so. It provided its services entirely free of charge without imposing
even a contingent obligation on the part of the first respondent to pay for them.

236 Accordingly, on the Espagne approach, the services provided by the Spastic
Centre constitute subventions given out of benevolence with the intention that no
payment was to be made for them by the first respondent.

237 On the basis of the intention found in the preceding paragraph we do not think it
possible to say (as Whealy J found) that the Spastic Centre did not intend the market
costs of its services to reduce the first respondent's ordinary entitlement to damages.
The reality is that the Spastic Centre intended to provide the services free of charge,
irrespective of any action that the first respondent might bring against the appellant.
The Spastic Centre did not apply its mind to the question whether the costs of its
services would reduce the first respondent's ordinary entitlement to damages. It
intended to assist the first respondent by a free provision of services. Its motives were
solely charitable and benevolent. It is to be inferred that it did not intend, therefore,
that its services were to be in addition to and not in diminution of any claim for
damages that the first respondent might have.
238 There are other matters of which account must be taken.

239 In our opinion, the Spastic Centre stands in a position, as regards the community
at large, akin to that of a public hospital (see Gibbs J in Griffiths v Kerkemeyer at
169). We therefore do not agree, with respect, with Whealy J that the Spastic Centre
was not an appropriate institution to be saddled with the ultimate loss. The fact is that
it was content to provide the services free of charge without giving any thought to
"the ultimate loss". The Centre was merely fulfilling its charitable objective.

240 By inference, the Spastic Centre derives its resources from donations or other
subventions or grants (whether public or private). As such, it forms part of the
community's loss distribution mechanisms. Again, in this sense, it is an institution
bearing some similarity to a public hospital. We are unable to conclude that it would
be inappropriate for the Spastic Centre to bear the ultimate loss.

241 We differ from Whealy J in that we see no doubling up should the loss be borne
by the Spastic Centre. As the services were provided free of charge, the first
respondent did not bear that loss.

242 There are plainly differences between free or cheaper hospital, medical, nursing
and related services provided by the State (through the public hospital system) and
free or cheaper services of a like kind provided by a public or private charity.
Nevertheless, those differences are far narrower than the differences between
charitable hospital, medical, nursing and related services provided by a charitable
institution set up for that purpose and services of a like kind provided by the family or
friends of an injured person.

243 The Spastic Centre, for instance, was set up with the specific object of providing
certain medical, nursing and ancillary services. In providing those services to the first
respondent it fulfilled its raison d'etre. Thus, the position of the Spastic Centre
differed in principle from that of family or friends who provide private gratuitous
services to an injured person. Firstly, the Spastic Centre provided services as part of
its primary object. In contrast, nursing and related services provided by family or
friends usually involve a sacrifice on their part. Secondly, the Spastic Centre provided
services to the first respondent as part of its object of providing services to a wide
category of injured persons who form part of the general public. In contrast, nursing
and related services provided by family or friends are directed solely to the injured
person and not part of a function of providing assistance to a segment of the public.

244 Accordingly, we would uphold the appellant's appeal insofar as it relates to the
claim for the costs of the Spastic Centre. We would set aside the award made in this
respect. …

Funds Management Charges and Cross Appeal - Item 31

247 His Honour applied Nominal Defendant v Gardikiotis (1996) 186 CLR 49, 54-
55. If the defendant's negligence results in the plaintiff being so physically
incapacitated that she is unable to manage day to day tasks, she is entitled to the cost
of someone doing that for her, that expense being just as much a product of the
defendant's negligence as is the disability. However, where funds management is
needed merely from the size of the award of damages and the exercise of a choice as
to how to invest those damages, this is not a recoverable expense.

248 At [856], his Honour concluded that the plaintiff's "disabilities are not such as to
prevent her from managing and making decisions regarding her own financial
affairs". He continued:

"I regret to say that I am unable to accede to the plaintiff's argument that the
possibility of 'exploitation' by carers is an adequate basis for allowing funds
management. The carers are there to attend to the plaintiff's needs arising out of her
disabilities. The case manager is there to supervise the carers and to otherwise address
the plaintiff's needs."

249 However, his Honour did allow $55,000 to cover the need of tuition and training
for the plaintiff in relation to financial management, and in compensating her for the
expenses in carrying out a number of financial functions that she might otherwise
have been able to do but for the injury. …

253 It was a fine matter for judgment as to which side of the line the expense of a
fund manager fell. His Honour decided that it fell on the defendant's side of the line
and when one remembers that it was common ground that Calandre is not
intellectually incapacitated, it was well within his Honour's mandate to make the
decision. It is largely, as Wood CJ at CL pointed out in RTA v Palmer [2001]
NSWSC 846 [542], a matter of common sense. Here, unlike the plaintiff in Palmer,
there are no intellectual disabilities. Vulnerability to exploitation is always a risk for
people with a lot of money, but this risk is to a large extent covered in the instant case
by the case manager. Although there is a real distinction between the function of a
case manager and a funds manager, a case manager is in as good a position as any to
guard against exploitation.

254 Accordingly, in our view the cross appeal should be dismissed.

[The Court made adjustments to a number of the amountsset out in the table above for
reasons edited from the extract from the judgment. In summary, the following
adjustments were made:Items 3, 4, 5 and 7. No change. Item 8. No change. Item 11.
Reduce by $15,000. Item 12. Reduce by $1,584,298. Item 13. Reduce by $202,322.
Item 15. No change. Item 16. No change. Item 18. No change. Item 19. Reduce by
$13,000. Item 24. Reduce by $130,000. Item 27. Increase by $180,906. Item 29.
Reduce by $614,752. Item 30. Reduce by $824,884. Item 31. No change. ]

13. Summary of general common law principles for assessing economic loss

13.1 Loss of earning capacity.

1. Loss of earnings as the measure. See Diamond v Simpson paragraphs 26-49.


At common law, the court calculation of the value of lost earning capacity is based on
a calculation of lost earnings. The process is now controlled by the Civil Liability Act
s12-14, which provide as follows:
Division 2 Fixing damages for economic loss
12 Damages for past or future economic loss—maximum for loss of
earnings etc
(1) This section applies to an award of damages:
(a) for past economic loss due to loss of earnings or the deprivation or impairment of
earning capacity, or
(b) for future economic loss due to the deprivation or impairment of earning capacity,
or
(c) for the loss of expectation of financial support.
(2) In the case of any such award, the court is to disregard the amount (if any) by
which the claimant’s gross weekly earnings would (but for the injury or death)
have exceeded an amount that is 3 times the amount of average weekly earnings at
the date of the award.
(3) For the purposes of this section, the amount of average weekly earnings at the
date of an award is:
(a) the amount per week comprising the amount estimated by the Australian
Statistician as the average weekly total earnings of all employees in New South
Wales for the most recent quarter occurring before the date of the award for which
such an amount has been estimated by the Australian Statistician and that is, at
that date, available to the court making the award, or
(b) if the Australian Statistician fails or ceases to estimate the amount referred to in
paragraph (a), the prescribed amount or the amount determined in such manner or
by reference to such matters, or both, as may be prescribed.
13 Future economic loss—claimant’s prospects and adjustments
(1) A court cannot make an award of damages for future economic loss unless the claimant first satisfies the
court that the assumptions about future earning capacity or other events on which the award is to be based
accord with the claimant’s most likely future circumstances but for the injury.
(2) When a court determines the amount of any such award of damages for future
economic loss it is required to adjust the amount of damages for future economic
loss that would have been sustained on those assumptions by reference to the
percentage possibility that the events might have occurred but for the injury.
(3) If the court makes an award for future economic loss, it is required to state the
assumptions on which the award was based and the relevant percentage by which
damages were adjusted.
14 Damages for future economic loss—discount rate
(1) If an award of damages is to include any component, assessed as a lump sum, for future economic loss of
any kind, the present value of that future economic loss is to be determined by adopting the prescribed discount
rate.
(2) The prescribed discount rate is:
(a) a discount rate of the percentage prescribed by the regulations, or
(b) if no percentage is so prescribed—a discount rate of 5%.
(3) Except as provided by this section, nothing in this section affects any other
law relating to the discounting of sums awarded as damages.

2. Where the plaintiff was in employment at the time of injury, the process of
calculation depends on whether the plaintiff was totally or partially disabled. In either
case, separate calculations are made for the loss to the date of assessment, and for lost
future earnings.

13.2 Discounting and allowance for contingencies

13.2.1 Because the totally disabled previously fully employed person (the most
straightforward of an infinitesimal number of variations and permutations) receives all
of his or her future earnings in advance, and can invest them, the calculation in [ ]
must be discounted. At common law, the rate was 3%: Todorovic v Waller (1981)
150 CLR 402. The CLA, s14, requires a discount rate of 5%, or as otherwise
prescribed.

The assessment of pecuniary loss will be made on the basis of evidence and
assumptions that certain events may or may not occur, for example, that:

 The plaintiff might die earlier than expected.


 A future expensive medical procedure might not eventually be required.
 The plaintiff might not need eventually to be placed in a nursing home.

In calculating the loss of earnings as a means of calculating something theoretically


different, namely, lost earning capacity, “vicissitudes of life”, or contingencies which
might possibly have impacted on earnings over the predicted lifespan, must be taken
into account.

13.2.2 Contingencies at common law. At common law, the practice is to take the rate
of plaintiff’s lost earnings at the time of the accident (the “multiplicand”) multiplied
by the number of pay periods which P might have enjoyed had he or she gone on
working (the “multiplier”) then deduct 15% to allow for contingencies which could
have prevented the plaintiff from enjoying his or her pay period over the remainder of
the predicted working life See Wynn v New South Wales Ministerial Corporation
(1995) 184 CLR 185; 133 ALR 154.

13.2.3 Contingencies under the CLA. Section 13 of the


CLA controls the process to be followed by the
court in making allowance for contingencies.

13 Future economic loss—claimant’s prospects and adjustments


(1) A court cannot make an award of damages for future economic loss unless the claimant first satisfies the
court that the assumptions about future earning capacity or other events on which the award is to be based
accord with the claimant’s most likely future circumstances but for the injury.
(2) When a court determines the amount of any such award of damages for future
economic loss it is required to adjust the amount of damages for future economic
loss that would have been sustained on those assumptions by reference to the
percentage possibility that the events might have occurred but for the injury.
(3) If the court makes an award for future economic loss, it is required to state the
assumptions on which the award was based and the relevant percentage by which
damages were adjusted.
[SET OUT SECTION 13]

13.2.4 Cap on damages. Section 12 of the CLA caps damages for past and future
economic loss. See [ ]

13.3 Totally incapacitated children

13.3.1 Diamond v Simpson. See paragraphs 26 – 49.

13.3.2 In calculating damages for lost earnings in the case of a child who had not
entered the workforce, the category of average weekly earnings for all adults (male
and female) may be adopted), including in the case of a female. The essence of the
process is to endeavour to develop a picture from the evidence of the undamaged
plaintiff in adulthood and to create an earning profile which best fits that picture. This
process is now controlled by Section 13 of the Civil Liability Act, which provides as
follows:

13.4 Loss of benefits. A person with an earning capacity may lose many other
benefits, including long service leave and employer contributions to superannuation,
and sums may be awarded in respect thereof. See the awards in Diamond v Simpson
under these heads. Damages for loss of superannuation are now capped by the Civil
Liability Act, s15A.

13.5 Further variations and permutations on the difficulty of assessing damages for
loss of earning capacity on an earnings – related basis. Consider: homemakers,
persons in religious orders, casual workers, voluntary absenteeism from the
workplace, eg, early retirees, previously employed voluntary workers, hobbyists, self-
employed in business and partnerships, to name a few.

13.6 Housing, rehabilitation, education, aids, equipment and other needs. See
Diamond v Simpson at paragraphs 66 – 253.

13.7 Gratuitous attendant care services. See Diamond v Simpson at paragraphs 194
– 246.

13.7.1 At common law, a plaintiff who needs the assistance of relatives and friends is
entitled to a sum covering the reasonable cost of meeting those needs at appropriate
commercial rates: Griffiths v Kerkemeyer (1977) 139 CLR 161. The test at common
law is subjective: Morgan v Gibson (NSW CA, 6 June 1997, BC9702442). Thus, for
example, a young severely incapacitated adult with a psychological need for his
special meals to be prepared by family members is entitled to a sum representing the
cost, even though they could be provided much less expensively by outside special
needs catering service.

13.7.2 Objective test and cap under the Civil Liability


Act. Section 15 of the Civil Liability Act requires,
amongst other controls, an objective test to be
applied in assessing damages for gratuitous
attendant care services. It also imposes a cap on
the amount that may be awarded with respect to
such services.

15 Damages for gratuitous attendant care services


(1) In this section:

attendant care services means any of the following:


(a) services of a domestic nature,
(b) services relating to nursing,
(c) services that aim to alleviate the consequences of an injury.
gratuitous attendant care services means attendant care services:
(a) that have been or are to be provided by another person to a claimant, and
(b) for which the claimant has not paid or is not liable to pay.
(2) No damages may be awarded to a claimant for gratuitous attendant care services unless the court is
satisfied that:
(a) there is (or was) a reasonable need for the services to be provided, and
(b) the need has arisen (or arose) solely because of the injury to which the damages
relate, and
(c) the services would not be (or would not have been) provided to the claimant but
for the injury.
(3) Further, no damages may be awarded to a claimant for gratuitous attendant
care services if the services are provided, or are to be provided:
(a) for less than 6 hours per week, and
(b) for less than 6 months.
(4) If the services are provided or are to be provided for not less than 40 hours per
week, the amount of damages that may be awarded for gratuitous attendant care
services must not exceed:
(a) the amount per week comprising the amount estimated by the Australian
Statistician as the average weekly total earnings of all employees in New South
Wales for:
(i) in respect of the whole or any part of a quarter occurring between the date of the
injury in relation to which the award is made and the date of the award, being a
quarter for which such an amount has been estimated by the Australian Statistician
and is, at the date of the award, available to the court making the award—that
quarter, or
(ii) in respect of the whole or any part of any other quarter—the most recent quarter
occurring before the date of the award for which such an amount has been
estimated by the Australian Statistician and is, at that date, available to the court
making the award, or
(b) if the Australian Statistician fails or ceases to estimate the amount referred to in
paragraph (a), the prescribed amount or the amount determined in such manner or
by reference to such matters, or both, as may be prescribed.
(5) If the services are provided or are to be provided for less than 40 hours per
week, the amount of those damages must not exceed the amount calculated at an
hourly rate of one-fortieth of the amount determined in accordance with
subsection (4) (a) or (b), as the case requires.
(6) Except as provided by this section, nothing in this section affects any other
law relating to the value of attendant care services.
Note. Section 18 provides that a court cannot order the payment of interest on damages
awarded for gratuitous attendant care services.

[NOW SET OUT SECTION 15 OF THE CLA]

13.7.3 No interest on attendant care services. No interest may be awarded on


attendant care services (CLA s18).

13.8 Collateral Benefits

13.8.1 Gratuitous attendant care services. Griffiths v Kerkemeyer (1977) 139 CLR
161. The plaintiff is entitled to recovery a sum representing the value of services
provided by friends and relatives without charge. Such services are a collateral
benefit that does not reduce damages.

13.8.2 Charitable Bodies. No sum will be included in the award to represent the
value of services provided by charitable bodies: Diamond v Simpson.

13.9 Reduction in award for payments from collateral sources

Some collateral benefits may be such that they will be taken into account to reduce
the award to the plaintiff. The broad principle is as set out in National Insurance Co
of New Zealand Ltd v Espagne (1961) 105 CLR 569 (invalid pension is not set off
against an award), but compare Redding v Lee (1983) 151 CLR 117; 47 ALR 241
(unemployment benefit is set off) to gauge the conceptual difficulties in this area.

13.10 Interest on Damages

The CLA, part 2, 54, provides for interest on damages for economic loss only,
according to the rate and formula as set out herein. Under the CLA, the benchmark is
“the rate representing the Commonwealth Government ten-year benchmark bond rate
as published by the Reserve Bank of Australia in the “Reserve Bank of Australia
Bulletin” (s18(4)), or “such interest rate as may be determined by the regulations”.
(s18(3)(a)). No rate has as yet been determined by the regulations. The CLA rate is
considerably lower than the “commercial” rate, which was the previous benchmark
for economic loss: Bennett v Jones (1977) 2 NSWLR 355 (CA).

14. Assessment under the Civil Liability Act

The common law processes and principles to be followed “in respect of an award of
personal injury damages” (CLA, Part 2, Division 1, s11A) are considerably modified
by part 2 of the Civil Liability Act. See paragraphs [ ] - [ ] above for details of
these modifications. Part 2 has application beyond the area under discussion in this
chapter, namely, damages for negligently inflicted personal injury. See Part 2,
Division 1. However, Part 2 does not apply to the assessment of common law
damages with respect to work accidents and motor accidents covered by respectively
the Workers Compensation Act 1987, and the Motor Accidents Compensation Act
1999. See [ ] and [ ] respectively for details of modifications in these areas.
15. Motor accidents

15.1 Fault base system. New South Wales retains a fault base system for
compensating motor accident victims. It operates within the context of the Motor
Accidents Compensation Act 1999.

15.2 “Motor accidents” involving “motor vehicles”.


The Motor Accidents Compensation Act 1999
defines a “motor accident” as follows:

motor accident means an accident or incident caused by the fault of the owner or
driver of a motor vehicle in the use or operation of the vehicle which causes the death
of or injury to a person.

[SET OUT DEFINITION FROM SECTION 3]

The Act defines “motor Vehicle” as follows:

motor vehicle means a motor vehicle or trailer within the meaning of the Road
Transport (General) Act 1999.
Note.

The Road Transport (General) Act 1999 defines a motor vehicle to mean a vehicle (within the
meaning of that Act) that is built to be propelled by a motor that forms part of the vehicle. That
Act defines vehicle to mean any description of vehicle on wheels (including a light rail
vehicle) but not including other vehicles used on railways or tramways.

[NOW SET OUT DEFINITION FROM SECTION 3]

15.3 “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”. Motor accident
injuries are excluded from Civil Liability Act, and
are dealt with under the Motor Accidents
Compensation Act 1999. For the purposes of the
Act, “injury” and “injured person” are defined as
follows:

injury:
(a) means personal or bodily injury caused by the fault of the owner or driver of a motor vehicle in the use or
operation of the vehicle if, and only if, the injury is a result of and is caused during:
(i) the driving of the vehicle, or
(ii) a collision, or action taken to avoid a collision, with the vehicle, or
(iii) the vehicle’s running out of control, or
(iv) such use or operation by a defect in the vehicle, and
(b) includes:
(i) pre-natal injury, and
(ii) psychological or psychiatric injury, and
(iii) damage to artificial members, eyes or teeth, crutches or other aids or spectacle
glasses,
and injured person means a person who suffers such an injury.

[NOW SET OUT DEFINITIONS FROM SECTION 3]

15.4 Assessment of damages for motor accidents. A court cannot award damages
to a person in respect of a motor accident contrary to chapter 5 of the Motor Accidents
Compensation Act (MACA, s123). Motor accident claims with respect to personal
injuries and for compensation for wrongful death (see [ ]) are dealt with by a
statutory authority, namely, the Motor Accidents Authority of NSW, constituted
under Part 8.1 of the MACA. A claim may only proceed to court for determination of
fault and assessment of damages, in the circumstances as set out in Part 4.5 of the
MACA. In essence, the circumstances in which a claim may proceed to court are as
follows:

[SET OUT BRIEF DESCRIPTIONS]

15.5 Common law and Civil Liability Act apply in determination of fault. The Civil
Liability Act is excluded from operating in relation to an award of damages for a
motor accident. Chapter 5 of the MACA applies in relation to such an award.
However, key parts of the Civil Liability Act relating to the principle to be applied in
determination of fault apply in the motor accident context, in particular, Divisions 1 –
4 and 8 of Part 1A (Negligence) of the Civil Liability Act. See CLA, s3B(1)(e), and
(2)(a).

15.6 Award of damages under Chapter 5 of MACA.


Chapter 5 of MACA is as follows:
Chapter 5 Award of damages
Part 5.1 Application
122 Damages in respect of motor accidents

(cf s 69 (1) MAA)

(1) This Chapter applies to and in respect of an award of damages which relates to 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.
(2) This Chapter does not apply to or in respect of a motor accident occurring
before the commencement of this Act.
Note. See Motor Accidents Act 1988 for motor accidents occurring before the
commencement of this Act. See section 121 of the Transport Administration Act 1988 for
the application of this Chapter to railway, ferry and other public transport accidents.

123 General regulation of court awards

(cf s 70 MAA)

A court cannot award damages to a person in respect of a motor accident contrary to this Chapter.
Part 5.2 Damages for economic loss
124 Damages for economic loss—no compensation for first 5 days of
loss of earnings etc
No damages for economic loss due to loss of earnings or the deprivation or impairment of earning capacity is to be
awarded in respect of the first 5 days (whether or not consecutive days) during which the plaintiff suffered that
loss because of the injury.

125 Damages for past or future economic loss—maximum for loss of


earnings etc

(cf s 151I WCA)

(1) This section applies to an award of damages:


(a) for past or future economic loss due to loss of earnings or the deprivation or
impairment of earning capacity, or
(b) for the loss of expectation of financial support.
(2) In the case of any such award, the court is to disregard the amount (if any) by
which the injured or deceased person’s net weekly earnings would (but for the
injury or death) have exceeded $2,500.
Note. See section 146 for indexation of that amount.

126 Future economic loss—claimant’s prospects and adjustments

(cf s 70A MAA)

(1) A court cannot make an award of damages for future economic loss unless the claimant first satisfies the
court that the assumptions about future earning capacity or other events on which the award is to be based
accord with the claimant’s most likely future circumstances but for the injury.
(2) When a court determines the amount of any such award of damages it is
required to adjust the amount of damages for future economic loss that would have
been sustained on those assumptions by reference to the percentage possibility that
the events concerned might have occurred but for the injury.
(3) If the court makes an award for future economic loss, it is required to state the
assumptions on which the award was based and the relevant percentage by which
damages were adjusted.
127 Damages for future economic loss—discount rate

(cf s 71 MAA)

(1) Where an award of damages is to include compensation, assessed as a lump sum, in respect of damages
for future economic loss which is referable to:
(a) deprivation or impairment of earning capacity, or
(b) loss of expectation of financial support, or
(c) the value of future services of a domestic nature or services relating to nursing
and attendance, or
(d) a liability to incur expenditure in the future,
the present value of the future economic loss is to be qualified by adopting the
prescribed discount rate.
(2) The prescribed discount rate is:
(a) a discount rate of the percentage prescribed by the regulations, or
(b) if no percentage is so prescribed—a discount rate of 5%.
(3) Except as provided by this section, nothing in this section affects any other
law relating to the discounting of sums awarded as damages.
128 Damages for economic loss—maximum amount for provision of
certain attendant care services

(cf s 72 MAA)

(1) Compensation, included in an award of damages, for the value of attendant care services:
(a) which have been or are to be provided by another person to the person in whose
favour the award is made, and
(b) for which the person in whose favour the award is made has not paid and is not
liable to pay,
must not exceed the amount determined in accordance with this section.
(2) No compensation is to be awarded if the services would have been provided to
the person even if the person had not been injured by the motor accident.
(3) No compensation is to be awarded if the services are provided, or are to be
provided:
(a) for less than 6 hours per week, and
(b) for less than 6 months.
(4) If the services provided or to be provided are not less than 40 hours per week,
the amount of compensation must not exceed:
(a) the amount per week comprising the amount estimated by the Australian
Statistician as the average weekly total earnings of all employees in New South
Wales for:
(i) in respect of the whole or any part of a quarter occurring between the date of the
injury in relation to which the award is made and the date of the award, being a
quarter for which such an amount has been estimated by the Australian Statistician
and is, at the date of the award, available to the court making the award—that
quarter, or
(ii) in respect of the whole or any part of any other quarter—the most recent quarter
occurring before the date of the award for which such an amount has been
estimated by the Australian Statistician and is, at that date, available to the court
making the award, or
(b) if the Australian Statistician fails or ceases to estimate the amount referred to in
paragraph (a), the prescribed amount or the amount determined in such manner or
by reference to such matters, or both, as may be prescribed.
(5) If the services provided or to be provided are less than 40 hours per week, the
amount of compensation must not exceed the amount calculated at an hourly rate
of one-fortieth of the amount determined in accordance with subsection (4) (a) or
(b), as the case requires.
(6) Unless evidence is adduced to the contrary, the court is to assume that the
value of the services is the maximum amount determined under subsection (4) or
(5), as the case requires.
(7) Except as provided by this section, nothing in this section affects any other
law relating to the value of attendant care services.
129 Respite care

(cf s 72A MAA)

An award of damages may include compensation for reasonable and necessary respite care in respect of a claimant
who is seriously injured and in need of constant care over a long term.

130 Damages for economic loss—reduction because of other amounts


paid or payable
(cf s 78 MAA)

A court must reduce the amount of economic loss of an injured person or deceased person as a consequence of a
motor accident by:
(a) the amount of any entitlement to or payment of compensation for expenses under
the Victims Compensation Act 1996 for the injury suffered in the accident, and
(b) payments made to or on behalf of the claimant by an insurer or Nominal
Defendant in relation to a claim made by the claimant (including payments made
under Part 3.2 or Part 4.3), and
(c) any other amount of a kind prescribed by the regulations for the purposes of this
section.

Part 5.3 Damages for non-economic loss


131 Impairment thresholds for award of damages for non-economic
loss
No damages may be awarded for non-economic loss unless the degree of permanent impairment of the injured
person as a result of the injury caused by the motor accident is greater than 10%.

132 Assessment of impairment required before award of damages for


non-economic loss if dispute over impairment threshold
(1) If there is a dispute about whether the degree of permanent impairment of an injured person is sufficient for
an award of damages for non-economic loss, the court may not award any such damages unless the degree of
permanent impairment has been assessed by a medical assessor under Part 3.4 (Medical assessment).
Note. The assessment of the medical assessor under Part 3.4 is conclusive in
proceedings before the court—see section 61.
(2) The court may, at any stage in proceedings for an award of damages for non-
economic loss, refer the matter for assessment of the degree of permanent
impairment under Part 3.4.
(3) A medical assessor may decline to make an assessment under Part 3.4 of the
degree of permanent impairment of an injured person until the assessor is satisfied
that the injury has stabilised. Court proceedings with respect to any such matter
may be adjourned until the assessment is made.
(4) Nothing in this section prevents:
(a) the degree of impairment being re-assessed under Part 3.4, or
(b) a claim from being settled at any time.
133 Method of assessing degree of impairment
(1) The assessment of the degree of permanent impairment of an injured person as a result of the injury
caused by a motor accident is to be expressed as a percentage in accordance with this Part.
(2) The assessment of the degree of permanent impairment is to be made in
accordance with:
(a) MAA Medical Guidelines issued for that purpose, or
(b) if there are no such guidelines in force—the American Medical Association’s
Guides to the Evaluation of Permanent Impairment, Fourth Edition.
(3) In assessing the degree of permanent impairment under subsection (2) (b),
regard must not be had to any psychiatric or psychological injury, impairment or
symptoms, unless the assessment of the degree of permanent impairment is made
solely with respect to the result of a psychiatric or psychological injury.
Note. See Part 3.1 for MAA Medical Guidelines.

134 Maximum of amount of damages for non-economic loss


(1) The maximum amount that a court may award for non-economic loss is $284,000.
(2) If that amount is adjusted by the operation of section 146 (Indexation of
amounts relating to award of damages), the applicable maximum amount is the
amount as at the date the award is made.
135 Publication of information to assist determination of non-
economic loss

(cf s 80A MAA)

(1) The Authority may publish information, or promote the publication of information, to assist courts to
determine the appropriate level of damages for non-economic loss as a result of motor accidents.
(2) A court may have regard to any such information, but is not bound to act on it.

Part 5.4 Other matters


136 Mitigation of damages

(cf ss 37 (4), 39 MAA)

(1) An injured person is under a duty to mitigate his or her damages.


(2) Accordingly, in assessing damages in respect of a claim, the court is to give
consideration to the steps taken by the injured person to mitigate those damages
and to the reasonable steps that could have been or could be taken by the injured
person to mitigate those damages.
(3) Those steps include the following:
(a) undergoing medical treatment,
(b) undertaking rehabilitation (including the formulation and undertaking of an
appropriate rehabilitation program),
(c) pursuing alternative employment opportunities,
(d) giving the earliest practicable notice of the claim in order to enable the
assessment and implementation of the above matters.
(4) In proceedings before the court, the onus of proving that an injured person has
not mitigated his or her damages as required by this section lies with the person
who makes that allegation.
(5) In proceedings before the court, a written report by a person who provided
medical or rehabilitation services to the injured person is admissible as evidence
of any such steps taken by that person.
(6) If any dispute arises over an alleged failure by the injured person to mitigate
his or her damages, the court is to give consideration to and take into account any
evidence that an insurer failed to assist in mitigating damages.
137 Payment of interest

(cf s 73 MAA)

(1) Limited statutory entitlement


A plaintiff has only such right to interest on damages payable in relation to a motor accident as is conferred
by this section.
(2) Attendant care services
No interest is payable on damages comprising compensation under section
128. A court cannot order the payment of interest on such damages.
(3) Non-economic loss
No interest is payable on damages awarded for non-economic loss. A court
cannot order the payment of interest on such damages.
(4) Other heads of damages
The following provisions apply to damages, other than damages to which
subsection (2) or (3) applies, payable in relation to a motor accident:
(a) Interest is not payable (and a court cannot order the payment of interest) on such
damages unless:
(i) information that would enable a proper assessment of the plaintiff’s claim has
been given to the defendant and the defendant has had a reasonable opportunity to
make an offer of settlement (where it would be appropriate to do so) in respect of
the plaintiff’s full entitlement to all damages of any kind but has not made such an
offer, or
(ii) the defendant has had a reasonable opportunity to make a revised offer of
settlement (where it would be appropriate to do so) in the light of further
information given by the plaintiff that would enable a proper assessment of the
plaintiff’s full entitlement to all damages of any kind but has not made such an
offer, or
(iii) if the defendant is insured under a third-party policy or is the Nominal
Defendant, the insurer has failed to comply with its duty under section 83, or
(iv) if the defendant has made an offer of settlement, the amount of all damages of
any kind awarded by the court (without the addition of any interest) is more than
20% higher than the highest amount offered by the defendant and the highest
amount is unreasonable having regard to the information available to the
defendant when the offer was made.
(b) The highest amount offered by the defendant is not unreasonable if, when the
offer was made, the defendant was not able to make a reasonable assessment of
the plaintiff’s full entitlement to all damages of any kind.
(c) For the purposes of this subsection, an offer of settlement must be in writing.
(5) Calculation of interest
If a court is satisfied that interest is payable under subsection (4) on damages:
(a) the amount of interest is to be calculated for the period from when the loss to
which the damages relate was first incurred until the date on which the court
determines the damages, and
(b) the amount of interest is to be calculated in accordance with the principles
ordinarily applied by the court for that purpose, subject to this section.
(6) Rate of interest
The rate of interest to be used in any such calculation is three-quarters of the
rate prescribed for the purposes of section 95 of the Supreme Court Act 1970 for
the period concerned.
(7) Judgment debts
Nothing in this section affects the payment of interest on a debt under a
judgment or order of a court.

[SET OUT CHAPTER 5 IN FULL]

15.7 Caps and thresholds, assessors and impairment assessment. Key concepts
employed in Chapter 5, relating to an award of damages for a motor accident, include
the establishment of thresholds which must be met before any damages may be
awarded, and the imposition of caps on wards. For example, under section 131, “No
damages may be awarded for non-economic loss unless the degree of permanent
impairment of the injured person as a result of the injury caused by the motor accident
is greater than 10%”. Under s125, in relation to damages for past or future economic
loss due to loss of earning or impairment of earning capacity, the court is to
“disregard the amount by which the injured …. person’s net weekly earnings would,
(but for the injury or death ….) have exceeded $2,500”.

The MACA employs the concepts of “permanent impairment” and “degree of


permanent impairment” and the strategy of using “medical assessors” in the
assessment process. The assessment of a medical assessor is to be conclusive in
proceedings brought before a court in certain situations (for example, sections 61 and
132).

[GIVE EXAMPLES OF OTHER KEY CONCEPTS]

These concepts are explored at [ ].

15.8 Mitigation of damages. Section 136 of MACA provides a number of specific


requirements which must be met by a person injured in a motor accident to mitigate
their damages. Section 136 is as follows:

[NOW SET OUT SECTION 136]

These are considerably more exacting than the common law duty to mitigate [ ].

15.9 Payment of interest. In the narrow circumstances in which interest may be


ordered on damages payable in relation to a motor accident (section 137), the rate to
be used in such calculation is “three quarters of the rate prescribed for the purposes of
section 95 of the Supreme Court Act 1970 for the period concerned” (s137(6)).

15.10 Damages for loss of services (s142):

15.11 Structured settlements (s143):

15.12 No exemplary or punitive damages (s144):

15.13 Indexation (s146):

15.14 Other Special Rules:

Special rules relating to the liability of owners and drivers:

Special rules relating to findings of contributory negligence: sections 138 and 139.

See section 140 relating to the defence of voluntary assumption of risk.

See section 141 relating to liability for psychological or psychiatric injuries [ ].

16. No fault and other statutory compensation awards

16.1 There is a large number of schemes providing compensation for personal


injuries independently of proof of fault on the part of any person. Benefits from the
schemes depend upon the claimants establishing that they were a member of the
protected class and were injured in the prescribed situation. The most significant of
such schemes is that provided by the Workers Compensation Act 1987. In addition,
there are two schemes directed at compensating the victims of criminal and other
illegal conduct, for example, sexual assault, or bullying behaviour at work:

 Victim Support and Rehabilitation Act 1996.


 Anti-Discrimination Act 1997.

Procedures and claims assessment formulae for these schemes is beyond the scope of
this material.

16.2 No fault schemes additional to the Workers Compensation Act are as follows:

 Sports persons: Sporting Injuries Insurance Act 1978.


 Emergency workers: Workers Compensation (Bush Fire Emergency and Rescue
Services) Act 1987.

16.3 Advantages of claiming under statutory schemes

In many situations, a person who has been tortiously injured might find that for
practical reasons, a no fault scheme provides the best option.

 There is the difficulty and cost of proving fault.

 The Civil Liability Act, the Motor Accidents Compensation Act, and the Workers
Compensation Act (insofar as the latter, in addition to providing for a no fault
scheme, also modifies the right to common law damages for the negligence of the
employer), impose caps and thresholds for court awards of damages in civil
litigation.

 Under the Workers Compensation Act 1987, Part 5, a worker suing a negligent
employer for common law damages faces significant controls and limitations on
the process, for example, a complete bar on recovery for non-economic loss, and
loss of all right to lump sum worker’s compensation as well as continuing
worker’s compensation rights for past and future medical, pharmaceutical, and
other expenses.

Example. A volunteer firefighter is working in a team led by a senior volunteer,


under the auspices of a Fire Authority, on the control and containment of a forest fire.
The senior volunteer fails to take a certain precaution emphasised in a training
program not currently made available by the Fire Authority to the team, due to
funding cuts. The volunteer is burnt due to the failure of his leader to take the
precaution, of which, due to lack of training, the latter was unaware.

Note. The Fire Authority is a public authority under Part 5 of the Civil Liability Act [
]. Limitations imposed by the common law would make it difficult to establish
liability in such a situation. The leader might be a “volunteer” under Part 9 of the
Civil Liability Act and as such, might not be liable. Division 4 of Part 1A, relating to
assumption of risk, might also apply in the situation. The most practical and
expeditious solution might be to seek a no fault award under the Workers
Compensation (Bushfire, Emergency and Rescue Services) Act 1987.

17. No fault workers compensation scheme

17.1 The term “worker” is not specifically defined as such in the Workers
Compensation Act. However, the liability to pay workers compensation is a liability
of the injured “worker’s” employer as awarded under the Act (s9). The liability is
with respect to an injury where the employment concerned “was a substantial
contributing factor to the injury” (s9A(1)). Injury is defined as including “a disease
which is contracted by a worker in the course of employment and to which
employment was a contributing factor” (s4(b)(i)), and the “aggravation, acceleration,
exacerbation or deterioration of any disease, where the employment was a
contributing factor to the aggravation, acceleration, exacerbation or deterioration …”
(s4(b)(ii)).

17.2 Injury is defined as including “a psychological injury” … “that is a


psychological or psychiatric disorder. The term extends to include the physiological
effect of such a disorder on the nervous system” (s11A(3)).

17.3 The employer’s insurer may begin the pay weekly workers compensation
benefits within seven days of being informed of the injury by the employer, and will
decide whether to accept or deny the claim. The scheme provides benefits payable on
death, weekly payments by way of income support, compensation for medical,
hospital and rehabilitation expenses, compensation for non-economic loss, including
“permanent impairment” and “pain and suffering”, and compensation for property
damage, and it allows for commutation of compensation to a lump sum. (Part 3)

17.4 Disputes are resolved through a process of assessment by approved medical


specialists pursuant to Division 4 of the Workers Compensation Act 1987 and Part 7
of Chapter 7 of the Workplace Injury Management and Workers Compensation Act
1988, and ADR processes including Conferences and Arbitrations under 1998 Act and
the Workers Compensation Commission Rules 2003.

17.5 Non-economic losses recoverable under the no fault scheme

Under the Workers Compensation Act, restrictions are placed on the component that
may be paid with respect to what in common law terms [ ] would be described as
“non-economic loss” i.e., loss of amenity, and pain and suffering. The assessment
process requires a medical assessor to use prescribed guidelines to determine the
degree of permanent impairment (s65). Thresholds and caps are then placed on the
payments which may be made for non-economic loss by reference to the percentage
degree of impairment. For example, no compensation is payable as permanent
impairment compensation or pain and suffering compensation in respect of permanent
impairment that results from a primary psychological injury unless the degree of
permanent impairment resulting from the primary psychological injury is a least 15%.
A worker who receives an injury which causes ongoing pain and suffering may
receive no compensation in respect thereof unless the degree of permanent
impairment is 10% or more, and then, the maximum amount recoverable is capped at
$50,000 (s67). A worker who suffers greater than 75% impairment may receive an
amount capped at $200,000 (s66(e)).

18. Worker’s right to common law damages

18.1 The workers compensation scheme, even in its original conception in 1920,
did not purport to provide “full compensation” in the sense in which that term was
employed by the courts in developing the common law approach to assessment of
damages. For this reason, the no fault schemes including that of New South Wales
originally preserved the right of the worker to sue the negligent employer at common
law to receive such full compensation.

Failure by an employer to adopt a precaution or measure which the reasonable


employer would have adopted in the circumstances may notoriously cause very
serious injury resulting in permanent disability and a high degree of pain and
suffering. A fit young labourer who engaged in sport and active recreation, for
example, might through being rendered paraplegic at work, sustain relatively little in
terms of economic loss over the remainder of his predictable working life, compared
with the non-economic losses which he would forever endure. But modifications now
in place [ ] to the right of common law damages have effectively abolished common
law rights, in any practical sense.

18.2 Modified common law damages

In a common law action based on the negligence of the employer, the worker is now
only entitled to damages for past and future loss of earnings, and then, only if the
threshold, namely, that the degree of permanent impairment be at least 15%, is met
(s151H(1)). In assessing whether the 15% threshold has been met, that is, whether the
degree of permanent impairment resulting from an injury is at least 15%:
Division 3 Modified common law damages
151E Application—modified common law damages
(1) This Division applies to an award of damages in respect of:
(a) an injury to a worker, or
(b) the death of a worker resulting from or caused by an injury,
being an injury caused by the negligence or other tort of the worker’s employer.
(2) This Division does not apply to an award of damages to which Part 6 of the
Motor Accidents Act 1988 or Chapter 5 of the Motor Accidents Compensation Act
1999 applies.
(3) This Division applies to an award of damages in respect of an injury caused by
the negligence or other tort of the worker’s employer even though the damages are
recovered in an action for breach of contract or in any other action.
(4) Subsection (3) is enacted for the avoidance of doubt and has effect in respect
of actions brought before as well as after the commencement of that subsection.
151F General regulation of court awards
A court may not award damages to a person contrary to this Division.

151G Only damages for past and future loss of earnings may be
awarded
(1) The only damages that may be awarded are:
(a) damages for past economic loss due to loss of earnings, and
(b) damages for future economic loss due to the deprivation or impairment of earning
capacity.
(2) This section does not apply to an award of damages in an action under the
Compensation to Relatives Act 1897.
151H No damages unless permanent impairment of at least 15%
(1) No damages may be awarded unless the injury results in the death of the worker or in a degree of
permanent impairment of the injured worker that is at least 15%.
Note. Section 322 of the 1998 Act provides that the assessment of the degree of
permanent impairment is to be made in accordance with WorkCover Guidelines. That
section also provides that impairments that result from the same injury are to be assessed
together.
(2) In assessing whether the 15% threshold has been met (that is, whether the
degree of permanent impairment resulting from an injury is at least 15%):
(a) impairment resulting from physical injury is to be assessed separately from
impairment resulting from psychological injury, and
(b) in assessing impairment resulting from psychological injury, no regard is to be
had to impairment that results from a secondary psychological injury, and
(c) the 15% threshold is not met unless the degree of permanent impairment resulting
from physical injury is at least 15% or the degree of permanent impairment
resulting from psychological injury is at least 15%.
Note. This does not prevent an award of damages in respect of both psychological and
physical injuries together once the 15% threshold has been met for one or the other.
(3) In assessing the degree of permanent impairment that results from a physical
injury, no regard is to be had to any impairment or symptoms resulting from a
psychological injury.
(4) The degree of permanent impairment that results from an injury is to be
assessed as provided by this section and Part 7 (Medical assessment) of Chapter 7
of the 1998 Act.
(5) In this section:
psychological injury includes psychiatric injury.
secondary psychological injury means a psychological injury to the extent that it
arises as a consequence of, or secondary to, a physical injury.
151I Calculation of past and future loss of earnings
(1) In awarding damages, the court is to disregard the amount (if any) by which the injured or deceased
worker’s net weekly earnings would (but for the injury or death) have exceeded the amount that is the maximum
amount of weekly payments of compensation under section 35 (even though that maximum amount under
section 35 is a maximum gross earnings amount).
(2) The maximum amount of weekly payments of compensation under section 35
for a future period is to be the amount that the court considers is likely to be the
amount for that period having regard to the operation of Division 6 of Part 3
(Indexation of amounts of benefits).
(3) This section applies even though weekly payments of compensation to the
worker concerned are not subject to the maximum amount prescribed under
section 35.
151IA Retirement age
In awarding damages for future economic loss due to deprivation or impairment of earning capacity or (in the case of
an award of damages under the Compensation to Relatives Act 1897) loss of expectation of financial support,
the court is to disregard any earning capacity of the injured worker after age 65.

151J Damages for future economic loss—discount rate


(1) For the purposes of an award of damages, the present value of future economic loss is to be qualified by
adopting the prescribed discount rate.
(2) The prescribed discount rate is:
(a) a discount rate of the percentage prescribed by the regulations, or
(b) if no percentage is so prescribed, a discount rate of 5 per cent.
(3) Except as provided by this section, nothing in this section affects any other
law relating to the discounting of sums awarded as damages.
151K, 151KA (Repealed)
151L Mitigation of damages
(1) In assessing damages, the court must consider the steps that have been taken, and that could reasonably
have been or be taken by the injured worker to mitigate those damages.
(2) In particular, the court must consider the following matters:
(a) whether the injured worker has undergone appropriate medical treatment,
(b) whether the injured worker has promptly sought suitable employment from the
employer or, if necessary, suitable alternative employment,
(c) whether the injured worker has duly complied with the worker’s obligations under
Chapter 3 of the 1998 Act (Workplace injury management),
(d) whether the injured worker has sought appropriate rehabilitation training.
(3) In any proceedings for damages, the person claiming damages has the onus of
proving that all reasonable steps to mitigate damages have been taken by the
injured worker. However, the person claiming damages does not have the onus of
establishing that the steps referred to in paragraphs (b)–(d) of subsection (2) have
been taken, and the court assessing damages does not have to take the matters
referred to in those paragraphs into account, unless it is established that before
those steps could reasonably be expected to have been taken the worker was made
aware by the employer or insurer that the worker was required to take those steps.
(4) In any proceedings for damages, a written report by a person who provided
medical or rehabilitation services to the injured worker is admissible as evidence
of any such steps taken by that worker.
151M Payment of interest
(1) Limited statutory entitlement
A plaintiff has only such right to interest on damages as is conferred by this section.
(2), (3) (Repealed)
(4)
(a) Interest is not payable (and a court cannot order the payment of interest) on
damages unless:
(i) information that would enable a proper assessment of the plaintiff’s claim has
been given to the defendant and the defendant has had a reasonable opportunity to
make an offer of settlement (where it would be appropriate to do so) in respect of
the plaintiff’s full entitlement to all damages of any kind but has not made such an
offer, or
(ii) the defendant has had a reasonable opportunity to make a revised offer of
settlement (where it would be appropriate to do so) in the light of further
information given by the plaintiff that would enable a proper assessment of the
plaintiff’s full entitlement to all damages of any kind but has not made such an
offer, or
(iii) the defendant has made an offer of settlement, the amount of all damages of any
kind awarded by the court (without the addition of any interest) is more than 20%
higher than the highest amount offered by the defendant and the highest amount is
unreasonable having regard to the information available to the defendant when the
offer was made.
(b) The highest amount offered by the defendant is not unreasonable if, when the
offer was made, the defendant was not able to make a reasonable assessment of
the plaintiff’s full entitlement to all damages of any kind.
(c) For the purposes of this subsection, an offer of settlement must be in writing.
(5) Calculation of interest
If a court is satisfied that interest is payable under subsection (4) on damages:
(a) the amount of interest is to be calculated for the period from the date of the death
of or injury to the worker until the date on which the court determines the
damages, and
(b) the amount of interest is to be calculated in accordance with the principles
ordinarily applied by the court for that purpose, subject to this section.
(6) Rate of interest
The rate of interest to be used in any such calculation is three-quarters of the
rate prescribed for the purposes of section 95 of the Supreme Court Act 1970 for
the period concerned.
(7) Judgment debts
Nothing in this section affects the payment of interest on a debt under a
judgment or order of a court.

[NOW TAKE IN s151H(2)].

Section 151H does not prevent an award of damages in respect of both psychological
and physical injuries together once the 15% threshold has been met for one or the
other. At common law, the discount rate when assessing the present value of future
earnings is 3% [ ]. Under the WCA, it is the higher rate of 5% (WCA s151J, or
as prescribed by regulation (s151J(2)(a)).

18.3 Cap on Damages

In calculating past and future loss of earnings, the maximum amount of weekly
earnings that can be used is $1,000 (s35 and s151I), and the age at which the worker
is to be presumed to retire from work is 65 years (s151IA).

19. Damages for “mental harm” or “psychological injury” under the Civil
Liability, Motor Accident Compensation, and Workers Compensation Acts.

20. Key concepts employed in legislative schemes. Application of principles to


problems.

21. Problems

1. P has lost both arms in a work accident. P is a 20 year old male. He was at
the time an electrical apprentice. He was highly skilled and is of excellent character
and was being trained by his employer (SPARK) for a leading role in its developing
business of installing wiring and security systems in highrise buildings around the
world. Subsequent psychological testing indicates that P has a rigid and determined
personality, and that once he makes up his mind about what he considers to be the
correct course of action, he will pursue it regardless of advice to the contrary.
Apprentice wages on such projects are very high. In the twelve months prior to the
accident P had been paid $3,000 per week nett, and in addition, had his travel costs
and full living expenses met, for his work on a SPARKS project in Saudi Arabia,
wiring what is now the world’s tallest building. P’s partner accompanied him to
Saudi Arabia, and she was expecting their child. On P’s return he commenced work
for his employer on JIMCRACK’S retail development site with other independent
contractors, including a crane hire company owned and operated by a South African
company (SAC). In a previous incident, five years prior to the accident, the company,
SAC, had been found guilty on five counts brought by WorkCover under the
Occupational Health and Safety Act , after the driver had “bounced a
load” just missing three workers. A New South Wales Industrial Relations
Commissioner subsequently found that the crane had an inherent defect making it
prone to collapse. It is established that SAC made no changes to its use of the crane
and practices following these findings. P was parking his car in the partly developed
carpark within the site, prior to commencing work. The carpark was also open to
customers of shops in JIMCRACK’S partially completed retail complex on which P,
SPARKS and SACS were all engaged. The crane driver “bounced” a load in the same
manner of the incident five years previously. The load fell on P, causing him to lose
both arms above the elbow. The crane driver held a licence, but it had been five years
since he had driven the crane, and he had never previously driven a crane of the type
in question. It is now twelve months after the accident. P is still recovering and is
living in a rehabilitation hospital. He has terminated his relationship with his partner
and will not see her or his child, for reasons he will not disclose. He says that he will
return to live with his parents. He was a highly skilled amateur photographer and
excellent golfer before the accident.

On the limited facts available:

1. From whose insurer is P receiving workers compensation payments?

2. Whose insurer is paying his medical and rehabilitation costs?

3. Will no fault workers compensation extend to the refitting of P’s parents home
to accommodate an armless 20 year old?

4. Will P’s parents receive financial assistance towards their support of P?

5. P’s partner is now a single mother supporting a young child without any
assistance from P. From whom might she seek support?

6. P wants lump sum compensation. He has a fixed idea that if he has a lump
sum at his disposal, he could play the stock market from home and turn
himself into a millionaire. Whom might he sue at common law for a lump
sum award of damages?

(a) How would that sum have been calculated at common law? In what
range might recovery be expected?

(b) How would common law damages be calculated under the Workers
Compensation Act? In what range might recovery be expected?
(c) If P’s no fault workers wompensation rights under the WCA were to
be commuted to a lump sum, in what range might that sum fall?

(d) After the accident five years earlier, a prosecution was brought by
WorkCover, and SAC was fined $100,000. Its costs at the eighteen
day hearing were more than $500,000. The verdict was handed down
just prior to the accident. What powers did WorkCover have to
prevent the type of crane in question from continuing to be used, and to
ensure that only crane drivers with appropriate experience with a crane
to be used on a building site are equipped to drive that crane?

(e) On the limited facts presented in this scenario, we have numerous


interested or affected parties:

 SPARKS, the employer, and SPARK’S insurer.


 SAC, the independent contractor, and SAC’s insurer.
 JIMCRACK, the developer, and its insurer.
 The designer and manufacturer of the crane.
 The crane driver.
 P, his partner and child, and his parents.
 WorkCover.
 The Industrial Relations Commission.
 The Workers Compensation Commission.
 Workers at risk on worksites.
 The government.
 The taxpayer.

From the perspective of each, is the current system of worksite


accident prevention and accident compensation satisfactory? What
kind of research needs to be undertaken to determine whether current
outcomes are optimal? Has any such research been undertaken in
Australia? What lessons might be learned therefrom?

2. Same situation as in 1, except that P suffered the injuries on his day off, while
parking prior to going shopping with his partner. Customers are encouraged to
continue to gain access to those parts of the area that remain open for business, and to
use underground carparks, which also remain open, although in part under
redevelopment and construction. In what range might P’s damages predictably fall
now that the circumstances have slightly changed? Under what legislation would they
be assessed?

3. Same situation as in 1, except that the crane was in transit on a public road, and
was being driven at the time as a registered vehicle. P was driving on the road in his
vehicle when, due to the negligence of the crane operator qua vehicle driver, the
crane mounted a high concrete barrier and toppled onto P’s vehicle. In what range
might P’s damages predictably fall? Under what legislation would they be assessed?
Sample Exam Problem 2: from 2004 exam

Dave is a successful and wealthy property developer. He is seeking to purchase


properties that are suitable for residential re-development in the inner suburbs of
Sydney. For this purpose he retains the services of Sam, a solicitor practising in
Burwood. Dave entrusts Sam with a large sum of money and provides Sam with
written instructions to use the money and to “do whatever else you may find
necessary” to obtain title to suitable properties for Dave.

After receiving these instructions, Sam identifies the site of some run-down
warehouses in Marrickville (known to locals as “Blackacre”) as a ripe prospect for re-
development by Dave. Sam conducts a title search, and discovers that Blackacre is
land under the provisions of the Real Property Act 1900 (NSW), and that Eric is the
registered proprietor. Sam invites Eric to his offices in Burwood, and makes a
handsome cash offer for Blackacre. When Sam produces a transfer form and invites
Eric to sign, Eric informs Sam that the warehouses are currently occupied by Les
under the terms of an unregistered agreement to lease. He shows Sam a copy of a
written memorandum of agreement that provides for a lease of three years’ duration
with an option to renew for a further 2 years. Under the terms of the written
agreement, the original lease term is due to expire in twelve months, and the option is
exercisable by notice in writing at any time during the final month before expiry. The
agreement is not in registrable form. Eric explains that he will only agree to transfer
the site on condition that the terms of his earlier agreement with Les will be honoured
in their entirety by the purchaser. Sam says that he is authorized to give an
undertaking to that effect on Dave’s behalf. Eric then signs the transfer and hands
Sam the certificate of title (CT) to Blackacre. He receives in return a cheque which he
banks and clears the same day. Also on the same day, Sam lodges the transfer and CT
to Blackacre at LPI.
Within less than a week, Dave has become registered proprietor of Blackacre and the
CT has been returned to Sam. Sam then immediately writes to Les terminating his
lease and giving him notice to quit at the expiry of ninety days. Upon receipt of this
letter, Les contacts Eric to ask what is going on. When he reads Sam’s letter to Les,
Eric is furious that Sam’s promise to him has been dishonoured and lodges a caveat
over the property, claiming an unregistered interest as unpaid vendor.

A few days after these events, Sam invites a wealthy client, Mrs Rich, to attend his
offices. When Mrs Rich arrives Sam represents to her that he has instructions to
negotiate an urgent loan, and to offer a mortgage of Blackacre as security. He then
produces a standard form of mortgage dealing, on which he had forged Dave’s
signature, with himself as attesting witness, before Mrs Rich arrived. Sam tells Mrs
Rich that he has approached her directly because he knows she has a lot of cash and
his client’s need for funds is very urgent; in fact he needs the money before the bank
closes today. Mrs Rich is initially hesitant to advance funds without first searching the
register, but when Sam offers a very attractive rate of interest she writes a cheque for
$800,000 on the spot, and takes in return the signed mortgage dealing and Dave’s CT.

That night, having urgently banked and cleared Mrs Rich’s cheque, Sam absconds to
Bolivia with her money, and also with what is left of the money entrusted to him by
Dave.

A few days later Mrs Rich lodges her mortgage for registration and is horrified to
discover Eric’s caveat. Upon making inquiries of Eric and Dave, she is even more
horrified when she learns that an unregistered lease is claimed over her security, that
the dealing she has lodged for registration is a forgery, and that the whereabouts of
Sam, and of the money she gave him, are currently unknown.

Mrs Rich seeks your urgent advice as to the priorities between any interests in
Blackacre that are or may be held by herself, Dave, Eric and Les respectively, and as
to any steps she can take to protect her interests or recover her lost money.

Outline the advice you would provide, with supporting references to relevant statutes,
precedents and principles.