Time to review reserves in respect of domestic assistance: NSW Court of Appeal warns urgent legislative attention required to address ambiguities in s 15(3) of the Civil Liability Act 2002
Judgment date: 10 November 2010
Hill v Forrester [2010] NSWCA 170
New South Wales Court of Appeal1
In Brief
- The six hour per week "intensity requirement" contained in s 15(3)(a) of the Civil Liability Act 2002 (the CLA) is a continuing one. A plaintiff can only recover damages for gratuitous care for periods where it can be established that the services were provided (or are to be provided) for at least six hours per week.
- Where a plaintiff satisfies the six month "duration requirement" contained in s 15(3)(b) of the CLA they are permitted to recover damages for gratuitous care provided during earlier broken periods of less than six months in duration.
Background
The plaintiff was awarded damages for personal injuries when he was attacked by the defendant's dog. The plaintiff was awarded damages for gratuitous services for the following periods:
- 15 September 2005 to 12 October 2005 (27 days) for 35 hours per week;
- 27 October 2005 to 11 November 2005 (15 days) for 35 hours per week;
- 29 December 2005 to 31 December 2006 (52 weeks) for between 10 and 24 hours per week; and
- 1 January 2007 to date of trial and continuing for less than 6 hours per week.
Leave was granted for the defendant to challenge the plaintiff's award for damages for domestic assistance in relation to the periods set out in (1), (2) and (4) above. Section 15(3) of the CLA relevantly provides:
- for at least 6 hours per week, and
- for a period of at least 6 consecutive months."
Court of Appeal Decision
The Court unanimously agreed that s 15(3)(a) of the CLA provides that damages can only be awarded to a plaintiff for gratuitous services if the services have been provided in the past, or will be provided in the future, for at least six hours per week. Consequently, it was agreed that the plaintiff was not entitled to damages in respect of period (4) above. The damages in respect of this period amounted to $8,000.
The Court then had to determine whether the plaintiff could recover for periods (1) and (2) above. In doing so the Court had to consider whether a plaintiff who has satisfied the six month duration requirement set out in s 15(3)(b) is entitled to damages for earlier broken periods when gratuitous services were provided for at least six hours per week but not for six consecutive months. This issue divided the Court of Appeal.
The defendant argued that a distributive construction should be applied to s 15(3)(b) which would bar the recovery of damages for gratuitous services except for periods of six consecutive months or more.
The plaintiff argued that s 15(3)(b) should be construed as a "once and for all" or threshold provision which would allow a plaintiff to recover for multiple periods where services were provided for at least six hours per week as long as it could be established that services had been provided for at least six consecutive months.
Sackville AJA (Tobias JA agreeing) held that the duration requirement contained in s 15(3)(b) of the CLA does not impose a continuing obligation and only needs to be satisfied once. In adopting this construction his Honour relied on the words "for a period of" as being strongly suggestive that the duration requirement is limited to a single qualifying period. In this way his Honour held that 15(3)(b) was a threshold requirement rather than a continuing one.
Although Sackville AJA did not have to determine this issue, his Honour was inclined to the view that as s 15(3)(a) and 15(3)(b) are independent provisions, s 15(3)(b) can be satisfied if gratuitous services are provided for a period of six consecutive months even if the services are provided for fewer than six hours per week during that period. On such a construction a plaintiff would not be able to recover damages during that six month period, however the fact that the intensity requirement was not satisfied would not preclude a plaintiff from relying on that period to satisfy the duration requirement.
Although preferring the view that s 15(3)(b) does not impose a continuing obligation on a plaintiff, Tobias JA considered that the duration requirement can only be satisfied when the intensity requirement is satisfied because the latter is a continuous obligation. Thus the requirements contained in s 15(3)(a) and s 15(3)(b) operate independently in that once the duration requirement is satisfied for one period of at least six consecutive months, although the duration requirement no longer needs to be satisfied, the intensity requirement continues to operate as a qualifying condition for the recovery of damages. However, his Honour did not express a concluded view on the issue, but noted that the construction endorsed by Sackville AJA conflicted with dicta of the Court of Appeal in Pacific Steel Constructions Pty Ltd v Barahona2 and that Handley AJA did not comment on the issue.
Sackville AJA then considered whether a plaintiff can recover damages for gratuitous care for periods of less than six months where care was provided at least six hours per week. His Honour held that as 15(3)(b) imposes a threshold requirement and that there was no compelling reason why a plaintiff could not recover damages for services for all other periods where such services are provided (as long as the intensity requirement is satisfied). Sackville AJA held that 15(3)(b) does not require that the entitlement to damages for gratuitous services be determined at the conclusion of each closed period. His Honour therefore reasoned that once the duration requirement is satisfied a plaintiff can recover in respect of all earlier and later periods during which he or she was provided with gratuitous services for six hours per week. Tobias JA agreed with his Honour's construction in this regard. This meant that the plaintiff was entitled to damages for the two earlier closed periods during which services were provided for less than six months in periods (1) and (2) above.
In his dissenting judgment, Handley AJA construed s 15(3)(b) to mean that no damages can be awarded for gratuitous services unless the services were provided for the minimum consecutive period. His Honour did not think that there was anything in the statutory language to indicate that satisfaction of the duration requirement operates retrospectively to allow damages to be awarded for closed periods in the past when services were provided for less than six consecutive months. His Honour therefore disagreed with Sackville AJA and Tobias JA that the plaintiff was entitled to recover for the broken periods in (1) and (2) above because the minimum duration requirement was not satisfied before or during the provision of the care.
His Honour declined to comment on whether satisfaction of the six month duration requirement would allow for the award of damages for gratuitous care provided thereafter for broken periods of less than six consecutive months.
Implications
Where a plaintiff satisfies the six month duration requirement contained in s 15(3)(b) of the CLA he or she is entitled to recover damages for gratuitous care provided during earlier broken periods of less than six months in duration as long as services during those periods were provided for at least six hours per week. A plaintiff can therefore only ever recover damages for gratuitous care for periods where the services are provided for at least six hours per week.
The duration requirement need only be satisfied once so that damages may be awarded for periods of less than 6 consecutive months both before and after the duration requirement has been satisfied.
The principles in this case apply equally to claims for gratuitous care under s 128 of the Motor Accidents Compensation Act 1999 which mirrors the provisions in relation to the recovery of damages for domestic assistance contained in s 15 of the CLA.
This case is a timely reminder that when preparing matters for hearing, vigilance will continue to be required in putting plaintiffs to proof regarding the number of hours of attendant care services claimed per week.
Reminiscent of the upheaval caused by Harrison v Melhem3 in 2008, this decision will have an impact on the number and value of claims for gratuitous services in public liability and motor vehicle accident claims. Insurers and claims managers are advised to review reserves in respect of gratuitous care to take into account this decision.
However, in the same way that the legislature intervened to limit the eligibility to the recovery of damages for gratuitous services created by Harrison v Melhem4 through the Civil Liability Amendment Act 2008, it is likely that we will see legislative reform in this area. In this regard Tobias JA stated that the construction of s 15(3)(b)
It remains to be seen whether such legislative intervention will clarify whether 15(3)(b) can be satisfied if a six month period is interrupted by reason of a period in respite, institutionalised or hospital care, noting that the plaintiff was not entitled to damages for gratuitous care during the period of hospitalisation in Nicholson v Nicholson5.
1. Tobias JA, Handley AJA and Sackville AJA
2. [2009] NSWCA 406
3. [2008] NSWCA 67
4. [2008] NSWCA 67
5. (1994) 35 NSWLR 308
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.
