In this case the NSW Court of Appeal had to deal with the interplay between the provision of gratuitous domestic assistance and the claimed need for assistance on a commercial basis into the future. Of interest, the provision of past gratuitous assistance may not immediately convert to damages for the cost of commercial services post dating the trial.
The plaintiff had suffered a lower back injury at work in 1973 which continued to cause lower back pain up until the time of the subject accident on 24 November 2004. There were further injuries to the neck and back in motor vehicle accidents in 1989 and 1998. He suffered heart attacks in 1997 and 1999 and a stroke in 2004. The plaintiff was aged 61 at the time of the trial in 2008 and had not undertaken significant work since 1998. He was in receipt of a disability pension and his wife was in receipt of a carer's pension. The evidence established a provision of gratuitous domestic assistance at four hours per week from his wife, as well as a son who provided assistance in relation to out door maintenance and lawn mowing.
Delaney DCJ noted the prior injuries and medical conditions before finding that the plaintiff, as at the date of accident, had a significant residual disability as a consequence of those events. His Honour also held that as a result of the motor vehicle accident the plaintiff suffered soft tissue injuries to the neck, low back and left hip such that the injuries permanently aggravated degenerative changes in the cervical spine and gave rise to an anxiety state to a degree that was not present before. This sapped the plaintiff's confidence and interfered with his ability to carry on his life in a reasonable manner and reduced such capacity as he had for work to nil.
It was also found the plaintiff had a need for domestic assistance which had been increased by the accident.
He found that the increased need (presumably four hours per week) did not meet the thresholds for the provision of gratuitous domestic assistance pursuant to Section 128, Motor Accidents Compensation Act 1999.
Damages were allowed for future domestic assistance based upon commercial rates, at four hours per week permanently, to deal with the additional need created by the effects of the accident. On the basis that the plaintiff had a life expectance of a further 24 years, Judge Delaney awarded the plaintiff $103,292.00.
NSW Court of Appeal
The NSW Court of Appeal set aside the award of damages for future commercial domestic assistance. In their view the award made by Delaney DCJ could not be justified as it was made upon an erroneous assumption that the plaintiff required commercial assistance immediately and would continue to do so for the rest of his life. The Court of Appeal felt it was clear from the evidence that he did not require such assistance immediately because it was being provided gratuitously. Further there was no evidence that the gratuitous assistance would cease at sometime in the future. The NSW Court of Appeal went further to comment that "it is not appropriate...to simply pluck a figure out of the air because there is remote, although not entirely fanciful, chance of a need for commercial domestic assistance in the future".
What the Court of Appeal wished to deal with was the likelihood in the future of there being domestic assistance required on a commercial basis absent the provision of gratuitous services. The NSW Court of Appeal then made reference to four relevant variables. Three variables were particular to the plaintiff and the fourth to the circumstances of carers.
Firstly, the Court of Appeal noted that Delaney DCJ had assumed a life expectancy of 24 years. The Court of Appeal commented that the medical history demonstrated a significant possibility that he would not survive until the age of 85 years and therefore any amount awarded must be discounted.
Secondly, the greater proportion of his disabilities related to pre-existing conditions such that there was a significant possibility that further ill health would overwhelm any needs created by the accident.
Thirdly, age alone was likely to create a similar need for domestic assistance in later years to that created by the accident.
The fourth factor was the ability and willingness of family members to provide assistance. Reference was made to the fact that the primary carer was the spouse who was some 10 years younger and was fit and healthy. It was of some importance that she was in receipt of a carer's pension.
What is interesting is that the NSW Court of Appeal then acknowledged that when awarding damages for loss of earning capacity, allowance is routinely made for contingencies or vicissitudes which, absent the tortious injury, may have caused loss in any event. The reference to vicissitudes / contingencies is interesting having regard to the nature of the variables mentioned earlier in the judgment to support the view that the award for future commercial domestic services was not warranted in this case.
The four relevant variables as described by the Court of Appeal could also be characterised as contingencies or vicissitudes which may, absent the tortious injury, have caused the loss in any event. However rather than applying the conventional 15% discount for loss of earning capacity, the NSW Court of Appeal focused on specific items, which required that discounts ought to be applied. Absent specific information as to reduced life expectancy and / or onset of other debilitating conditions, the intention appears to be that the discount should follow the normal conventions.
No doubt plaintiffs will challenge reliance upon this decision as to establishing a guaranteed vicissitudes discount. Rather that the decision should be isolated to one plaintiff's failure to present materials to overcome the evidentiary onus to establish that there would be a need for commercial assistance actually incurred into the future.
Insurers should insist on applying a vicissitudes discount for future domestic assistance claims whether upon a commercial basis or gratuitous. The judgment also serves to highlight the need to obtain from claimants information as to their background medical and social circumstances to place any alleged need for care into context.
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.