Assessment of Damages – consideration of criteria for paid care

Coles Supermarkets Australia Pty Limited v Haleluka [2012] NSWCA 343

In Brief

• No requirement for a buffer approach to future economic loss when the facts are sufficiently clear to merit a more precise assessment as mandated by s 13 of the Civil Liability Act, 2002 (CLA).
• No requirement for an objective standard when assessing past domestic care, and no assumption that domestic care is to be provided efficiently. All that is required is that the services must be in response to a reasonable need.
• Future paid care may be appropriate where there has been an element of economic sacrifice in providing past gratuitous assistance.

Background

On 19 August 2008, Mrs Haleluka (plaintiff) was bending to examine products on display in the Coles Supermarket (defendant) when she was struck by a flat top trolley laden with boxes, pushed by the defendant's employee.

Section 13 of the CLA provides as follows:

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.

District Court

The District Court hearing was before Elkaim SC DCJ who found the defendant to be liable in negligence and found the plaintiff had not been contributorily negligent.

He assessed damages in the sum of $497,353.44 including non-economic loss of $115,000 being 30% of a most extreme case, future economic loss in the sum of $111,992.80, past care of $22,540 and future care of $177,826.40.

Court of Appeal

The defendant appealed the quantum decision. The three central points of appeal were:

1. The primary judge's assessment of non-economic loss was erroneous, and should have been 22% of a most extreme case rather than his assessment of 30%.
2. Future economic loss should have been awarded with a buffer of $40,000.
3. There should have been no award of damages for past or future care.

Non-economic loss

Allsop P delivered the unanimous judgment of the Court and noted the defendant had not appealed on the grounds of any specific error in the primary judge's findings, but rather submitted the findings regarding the percentage of the plaintiff's non-economic loss was outside any legitimate or reasonable range, and therefore so excessively high as to reflect a wrongful exercise of discretion.

Allsop P found that the plaintiff was 50 years old, and since her accident had lived with varying levels of pain every day. She had difficulty playing with her young, long-term foster child, and lived with a degree of immobility. The plaintiff's medical experts reported that the plaintiff experienced muscle spasms, chronic pain in her hip and back, and reduction on mobility of the right hip. It was unlikely that her hip pain would completely resolve. Allsop P considered when the medical evidence was examined, there was a sufficient basis upon which to support a finding of 30% of a most extreme case.

Future economic loss

The plaintiff agreed that she was capable of many of the lighter jobs that she had done in the past, but claimed she would be an unreliable worker, and may have days when she would not be able to attend work because her hip was particularly bad. The plaintiff intended to work part time due to her wish to care for her son until he was school aged. She planned to return to employment gradually, working one or two days per week until her son, who had special needs, was settled into school.

The defendant argued that on the plaintiff's evidence and the medical evidence, the plaintiff had economic ability and could return to previous jobs. The defendant submitted that a buffer was the correct approach to the plaintiff's future economic loss, rather than the primary judge's approach of creating an estimate specific to the plaintiff's intended return to nursing.

Allsop P noted the primary judge attempted to follow the mandate of the legislature applying s 13(1) and (2) of the CLA in calculating future economic loss. In this regard the primary judge assessed future economic loss at an average of $300 net per week for 13 years, being 50% of the plaintiff's assessed residual earning capacity, deferred for 18 years, reduced by 20% for vicissitudes.

Allsop P found the underlying facts were not so imprecise as to require a buffer. He accepted that the plaintiff was skilled and resourceful and she had undertaken a variety of roles in the past which she might do again. The primary judge was able to assess that the plaintiff was likely to occupy a certain number of days per week performing child care, and have a further number of days where she would be unable to work due to pain. On this basis Allsop P confirmed the primary judge's finding for future economic loss.

Allsop P also found in accepting the plaintiff's evidence and the medical evidence available, the primary judge's approach to calculating impairment of earning capacity based on the plaintiff's part time employment as a nurse was legitimate. There was no sufficient uncertainty about the impairment of the plaintiff's earning capacity to require the application of a buffer, and no evidence to support the conclusion that an assessment of the plaintiff's earning capacity as a nurse was misleading grounds for calculating her future economic loss.

Domestic assistance

The primary judge accepted the plaintiff's evidence that the plaintiff's husband provided 7 days a week care. As to future care the primary judge allowed 5 hours a week for the rest of the plaintiff's life expectancy on a paid basis.

Allsop P noted that s 15 of the CLA made no reference to a requirement that domestic assistance services were assessed as though the gratuitous care was performed professionally or to a specific standard. Section 15 requires a reasonable need for the services; how long those services take to perform becomes a question of fact. The section therefore takes into account the common circumstance where a family member performs tasks they would not normally do, and has no regard for how efficiently those tasks were performed. In this instance, the plaintiff's husband made economic sacrifices by way of reducing his working hours in order to perform domestic duties, which the Court observed a paid professional could be relied upon to do more quickly. Allsop P therefore considered that a provision for commercial rates of domestic assistance would enable the plaintiff's husband to cease sacrificing the economic benefits of full employment to perform his gratuitous care.

Implications

This case demonstrates that an appellate court is unlikely to overturn a decision where a primary judge substantiates his or her findings for non-economic loss with specific evidence from the plaintiff and medical experts, unless a specific error or wrongful exercise of discretion is found.

In calculating future economic loss, where the court is reasonably certain about the plaintiff's profession, the plaintiff's intentions with regards to returning to work and the remuneration which the plaintiff would receive should they return to work, it is appropriate for the court to assess their future loss on that specific basis rather than to rely upon a buffer applying the principles in s 13 of the CLA.

This decision confirms that an allowance for past or future domestic assistance is calculated based on need and time spent or to be spent, and that the level of efficiency of a person providing gratuitous domestic care is not a relevant consideration.

In assessing whether future paid care is appropriate a court will have regard to whether there has been an element of economic sacrifice in providing past gratuitous assistance.

Footnotes

¹ Allsop P, Campbell, Meagher JJA

Ranked No 1 - Australia's fastest growing law firm' (Legal Partnership Survey, The Australian July 2010)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.