In Zheng v Cai  HCA 52 the High Court held that
payments made by a church to an injured plaintiff were not to be
considered in the plaintiff's economic loss assessment.
Truly charitable donations for the benefit of a plaintiff may
not be taken into account when assessing economic loss.
If it is the intention of the benefactor to reduce the damages
payable by the tortfeasor, rather than to aid the plaintiff, only
then may payments diminish the award.
The Chinese speaking plaintiff suffered spinal injuries in a car
accident in May 2000. Subsequently she was unable to sit or stand
for long periods of time or continue her employment as a
seamstress. Lack of proficiency in English also limited her options
in non-manual work.
After the incident, she attended a bible college in Singapore
and obtained a bachelor degree in theology in 2005. On returning to
Sydney in 2005 she performed volunteer work for the Christian
Assembly of Sydney's church in Roseville. For approximately 20
hours per week the plaintiff would answer the Church phone, speak
to people interested in the Church and do some preaching.
During this time, she received payments from the Church of about
$580 per week to assist with rent and living expenses. The money
was sourced from donations made to the Church. The trial judge held
the plaintiff was not an employee of the Church and that the monies
were not received due to the volunteer services she performed.
The Court of Appeal held that the decision to characterise the
payments in this way was incorrect. The Court found that the
payments were gained through the plaintiff's employment.
In overturning the appeal decision, the High Court maintained
that damages for personal injuries are not to be calculated by
simply constructing a profit and loss account where the compassion,
kindness and sympathy of friends and the gifts of charitable
persons are weighed against pain and suffering caused by the
Voluntary gifts should not diminish damages because they are
given for the benefit of the sufferer and not to relieve the
wrongdoer of a liability. The critical question when assessing
damages with reference to charitable payments is whether it is the
intention of the donor for the monies to operate in the interest of
a tortfeasor and diminish the damages the tortfeasor would
otherwise be liable to pay, or to benefit the plaintiff in their
circumstances after an accident.
The decision makes good sense in encouraging true charity
without fear that the gesture will be negated by the compensation
process. However, there will always be a fine evidentiary line to
establish the gift is not an attempt to conceal earnings where
voluntary services are rendered. In each case this will come down
to a factual analysis of the true nature of the whole
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