Insight Vacations Pty Limited v Young [2010] NSWCAA 137

Summary

The NSW Court of Appeal ('the Court of Appeal') was required to consider the breadth of the limitations contained in the Civil Liability Act 2002 (NSW) ('the Act') concerning the award of damages for noneconomic loss arising from personal injuries.

This case involved a claim for non-economic loss for injuries sustained whilst on holiday due to the negligence of a travel agent. The trial judge had awarded damages for pain and suffering under the Act and additional damages for 'disappointment' on the basis that the latter was allowable for breach of contract to provide a holiday and therefore outside the scope of the Act, which was directed at tortious damages.

The Court of Appeal has ruled that the caps set out in a table under the Act apply to all awards of damages for non-economic loss arising from personal injuries regardless of whether the claim is founded in contract or tort, including damages for disappointment.

Background

Stephanie Young ('Young') successfully sued her travel agent, Insight Vacations Pty Limited ('Insight Vacations') in the District Court of New South Wales ('DC') for injuries sustained while on holiday in Europe. She was injured on a motorcoach in Slovakia due to the negligence of the driver.

The trial judge found that Insight Vacations had breached an implied warranty in the contract to exercise due care and skill in organising the tour and proceeded to assess damages.

Young claimed damages for 'pain and suffering' arising from the injury and 'distress and disappointment' arising from loss of enjoyment and relaxation for the remainder of the holiday.

Section 16 of the Act limits liability for personal injuries damages. Section 16 contains a table specifying a proportion of a maximum amount, depending upon an assessment of the suffering as a proportion of an extreme case. The Act defines noneconomic loss to include pain and suffering and loss of amenities.

First instance decision

The trial judge assessed the suffering as a percentage of a most extreme case. He was minded to award additional damages for the disappointment but found himself bound by the limitations of the Act.

However, the trial judge drew a distinction between damages for distress and damages for disappointment. He found that distress fell within the meaning of 'pain and suffering' and therefore non economic loss (as defined by the Act) but 'disappointment' was something else. His Honour proceeded on the basis that disappointment was a kind of a loss that may be awarded for breach of contract where there is a failure of contractual purpose to provide holiday, pleasure, and relaxation. On that basis, his Honour awarded Young additional damages for disappointment. Insight Vacations appealed.

Decision of the Court of Appeal

On appeal, the Court of Appeal held that grief, anxiety, distress, and disappointment were all elements of pain and suffering. There was no separate head of damage for disappointment.

Accordingly, it was found the award for disappointment made by the trial judge constituted personal injury damages within the meaning of the Act. The Act contemplated that damages for noneconomic loss can be awarded for claims brought in contract rather than tort.

It made no difference that the damages were for breach of contract rather than for breach of tortious duties.

The Court of Appeal was of the view that the trial judge erred in making a distinction between distress and disappointment. The two were closely related concepts and each was concerned with the loss of enjoyment or opportunity for recreation and relaxation. To excise disappointment in order to escape the limitations of the Act was an artificial exercise that did not accord with the definition of non-economic loss under the Act.

The Court concluded by stating that the trial judge should have included the element of disappointment in the assessment of severity of the suffering instead of awarding additional damages exceeding the maximum amounts set out in the table under s16. The award of damages for disappointment was set aside.

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