Amaca Pty Ltd v Phillips [2014] NSWCA 249

The decision involved the application of s.15B of the Civil Liability Act 2002 (NSW) in respect of what was at common law known as Sullivan v Gordon damages ([1999] NSWCA 338; (1999) 47 NSWLR 319). The section was enacted after the decision of CSR Ltd v Eddy [2005] HCA 64; (2005) 226 CLR 1, which overruled Sullivan v Gordon.

Mr Phillips was diagnosed with mesothelioma and made a claim for damages, which included an award under s.15B (supra) in respect of the gratuitous care he provided to his wife who suffered from Alzheimer’s dementia and has various other co-morbidities. Following his death from mesothelioma he would no longer be able to provide such care.

On appeal the number of hours or the threshold requirements under s.15B were not in dispute.

Amaca Pty Ltd argued the trial judged erred in finding that the Mrs Phillips would require nursing home care, but failed to assess the cost of care by reference to the commercial cost of nursing home costs.

Section15B of the Civil Liability Act 2002 (NSW) provides that:

Damages may be awarded to a claimant for any loss of a claimant’s capacity to provide gratuitous domestic services to the claimant’s dependants, but only if the court is satisfied:

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

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

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

(i) for at least 6 hours per week, and

(ii) for a period of at least 6 consecutive months, and

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

 

 

Ward JA with whom Barrett JA and Tobias AJA concurred:

32 As to the history leading up to the enactment of s 15B, as already noted, it followed the decision in CSR v Eddy. There, the plurality (Gleeson CJ, Gummow and Heydon JJ) summarised (from [5]-[11]) the legal background against which the submissions for the parties were to be evaluated, referring inter alia to the decisions in Griffiths v Kerkemeyer [1977] HCA 45; (1977) 139 CLR 161; Van Gervan v Fenton [1992] HCA 54; (1992) 175 CLR 327; Burnicle v Cutelli [1982] 2 NSWLR 26; Cummings v Canberra Theatre Trust[1980] FCA 209; and Hodges v Frost [1984] FCA 98; (1984) 53 ALR 373 – to each of which Amaca referred in the present case.

33Their Honours concluded (at [23]) that a Sullivan v Gordon claim, where the injured plaintiff was seeking to recover for loss of capacity to provide services to another, rested on a different basis from a Griffiths v Kerkemeyer claim, where the injured plaintiff was seeking to recover the monetary value of services for which he or she has a need as a result of the injury, and (at [25]) that no analogy should be drawn between the two types of claim. At [32], the plurality said:

… Thirdly, there is an important difference between the field in which Griffiths v Kerkemeyer applies and the field in whichSullivan v Gordon applies. In applying Griffiths v Kerkemeyer it is relatively easy to estimate the extent of the plaintiff’s need for personal care or services, and to calculate, by reference to the costs of professionals providing that care or those services, what the damages should be (even if it is possible or likely that the care will not be provided, either at all or by paid professionals). But the “need” of the plaintiff to care for others is much harder to evaluate. To examine it by reference to what care the plaintiff ought to have provided in the past would trigger invidious inquiries. To examine it by reference to what care the plaintiff in fact provided in the past would require investigation as to whether the intensity of the plaintiff’s interests in providing the services might have been likely to change after the tort because of possible future events like divorce or the birth of new children, or for other reasons. The Sullivan v Gordon problem is not the practical one of calculating costs. It is the legal problem of deciding what test should be employed in deciding what costs need to be calculated. To that Sullivan v Gordon problem there is no Griffiths v Kerkemeyer parallel.

 

Conclusion

50 Whether or not his Honour erred in regarding as irrelevant the finding that Mrs Phillips will be placed in a nursing home after her husband’s death, I am not persuaded that the proper construction of s 15B requires that damages could only properly be assessed by reference to the commercial cost of provision of those services in a nursing home or by way of other institutional care.

51 The second reading speech is not in my opinion of any real assistance in this regard (see the discussion in Amaca v Novek [2009] NSWCA 50; (2009) 9 DDCR 199; [2009] Aust Torts Reports 82-001 at [72]-[81]).

52 Nor is the common law background against which s 15B was enacted of great assistance in answering this question. Had the legislature chosen to limit the damages available under s 15B to the commercial cost of care in a nursing home or institution (or otherwise) it could have done so. Instead, the legislation is silent on the proper measure of s 15B damages – other than to set a cap which is to be calculated by reference to an hourly rate and which at least to that extent might be said to be consistent with reference being made to the hours of care that would have been provided by the claimant.

53 What Griffiths v Kerkemeyer and the line of cases following it in relation to the question of compensation for hitherto gratuitously provided domestic services show is that, when placing a monetary value on the loss of gratuitous domestic services, it is appropriate to have regard to the objective commercial cost of those services. That cost is not necessarily determinative of the measure of the loss in a particular case. What was being compensated for by way of the ill-fated Sullivan v Gordon damages, however, was the plaintiff’s loss of capacity to provide the services, not the value to the recipient of those services.

54 The partial reinstatement of Sullivan v Gordon damages by way of the creation of a new statutory entitlement to claim s 15B damages does not require that the claimant’s loss of capacity be valued by reference to what it will cost commercially for the same services to be provided in the future; nor does it require that account be taken of how those damages will be expended by the plaintiff or, as is likely in this case given Mr Phillips’ illness, by the executor or administrator of the deceased plaintiff’s estate.

55 It was not argued before his Honour that the hourly rate calculation was unreasonable, having regard to Mrs Phillips’ admitted need for care; simply that the reasonableness of the “need” enquiry under s 15B(2)(d) should inform the measure of damages.

56 In my opinion, it cannot be said that the approach adopted by his Honour was incorrect as a matter of law. Nothing in the legislation required his Honour to use objective commercial cost as a starting point; nor was his Honour required to take into account what it is known will actually happen on Mr Phillips’ death for the purpose of assessing the appropriate compensation for Mr Phillips for the loss of his capacity to care for his wife at home. Indeed, on one view, if the commercial cost of care were the sole appropriate measure of damages the more appropriate measure might be to assess the cost of what home care would be, as opposed to institutional care, since that is what Mr Phillips has lost the capacity to provide.

57 Amaca’s real complaint seems to have been that the award should have been made to compensate the family for the cost that it is known will be incurred when Mrs Phillips is placed in a nursing home. That ignores the fact that it is Mr Phillips’ loss that is the subject of the award of s 15B damages.

58 The appeal should be dismissed.

 In Queensland compare s.59A of the Civil liability Act 2003 (QLD):

(1) Subject to section 59B, damages (section 59A damages) may be awarded to an injured person for any loss of the person’s capacity to provide gratuitous domestic services to someone else (the recipient) if subsection (2) or (4) applies.

(2) Generally, the court may award section 59A damages only if it is satisfied of all of the following—

(a) either—

(i) the injured person died as a result of the injuries suffered; or

(ii) general damages for the injured person are assessed (before allowing for contributory negligence) at the amount prescribed under section 58, or more;

(b) at the relevant time the recipient was—

(i) a person who resided at the injured person’s usual residence; or

(ii) an unborn child of the injured person;

(c) before the relevant time, the injured person—

(i) provided the services to the recipient; or

(ii) if the recipient was then an unborn child—would have provided services to the recipient had the recipient been born;

(d) the recipient was, or will be, incapable of performing the services personally because of the recipient’s age or physical or mental incapacity;

(e) there is a reasonable expectation that, if not for the relevant injury, the injured person would have provided the services to the recipient—

(i) for at least 6 hours a week; and

(ii) for a period of at least 6 months;

(f) there will be a need for the services for the hours and the period mentioned in paragraph (e), and the need is reasonable in all the circumstances.

(3) Subsection (4) applies if—

(a) the court is satisfied, as required under subsection (2), in all respects other than that the injured person would have provided the services for the hours and the period mentioned in subsection (2)(e) and (f); and

(b) the recipient was provided with accommodation by a parent other than the injured person or with other care to which all of the following apply—

(i) it included accommodation provided other than by the injured person;

(ii) it was provided because the recipient is aged, frail or suffers from a mental or physical disability;

(iii) its primary purpose was to give the recipient or the injured person a break from their usual care arrangements.

(4) The court may award section 59A damages if it considers that—

(a) the injured person would not have provided the services for the hours and the period because of the provision of the accommodation or the other care; and

(b) awarding the damages is reasonable in all the circumstances.

Examples of circumstances that may make the award reasonable—

1 The injured person would have had custody of the recipient each alternate week for a full week at a time.

2 The recipient would have spent part of their school holidays with a non-custodial parent.

3 The recipient is an elderly parent and is placed in short-term or occasional respite care at a nursing home.

(5) In this section—

gratuitous domestic services means services of a domestic nature for which there has been, and will be, no payment or liability to pay.

parent includes a person who stands in the place of a parent.

relevant time means—

(a) generally, when the relevant injury happened; or

(b) if the symptoms of the relevant injury were not immediately apparent when it happened, when the nature and extent of the injury becomes known.

 

David Cormack – Brisbane Barrister & Mediator

Related Posts

Recent Comments

    Categories