Toomey, Dominic --- "Compensation to relatives damages in NSW: Where are we now?" [2019] PrecedentAULA 22; (2019) 151 Precedent 29

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COMPENSATION TO RELATIVES DAMAGES IN NSW

WHERE ARE WE NOW?

By Dominic Toomey SC

On 13 October 2016 in the Supreme Court of New South Wales Justice Davies delivered his decision in Coote v Kelly; Northam v Kelly [2016] NSWSC 1447 (Coote). The case concerned an allegation of negligence on the part of a Dr Kelly, Mr Coote’s General Practitioner, for failing to diagnose a melanoma on his foot which ultimately metastasised, causing his death.

The facts of the case were relatively simple – the liability issue was whether the appearance of a lesion on Mr Coote’s foot should have prompted further investigation earlier than it did. Justice Davies concluded not and found for Dr Kelly. What is interesting about the decision from a legal viewpoint, however, is Davies J’s conclusion, in his contingent assessment of damages in the claim brought by Mr Coote’s widow under the Compensation to Relatives Act 1897 (NSW), that s15 of the Civil Liability Act 2002 (NSW) (CLA) has precluded the recovery of damages in respect of services the deceased would, but for his death, have provided to his ‘dependents’ under the principle accepted by the High Court in Nguyen v Nguyen (1990) 169 CLR 245.^[1] It is my opinion that his Honour’s conclusion in this regard is wrong. In order to explain why, it is necessary to examine, first, the text of the Compensation to Relatives Act, secondly, the relevant interpretation of that text in the Australian case law and, finally, the text of ss11 and 15 of the CLA in that context.

THE COMPENSATION TO RELATIVES ACT

Section 3 of the Compensation to Relatives Act (Lord Campbell’s Act) provides that an action is maintainable against any person causing death through neglect despite the death of the person injured. Under s4(1) a jury may award to those parties on behalf of whom the action is brought damages that are proportioned to the ‘injury’ suffered as a result of the death.

Section 4 is, therefore, directed to compensation for ‘injury’, a term which is not defined in the Act. It has been interpreted to mean the loss of a benefit that the claimant could reasonably have expected to receive from the deceased had the death not occurred. The loss must be of something more than a speculative possibility of benefit; there must have been a ‘reasonable probability of pecuniary advantage’.^[2]

As explained by Windeyer J in Parker v The Commonwealth,^[3] two points should be noted about what damages are recoverable for injury. First, damages are calculated by reference to the pecuniary benefit that could reasonably have been expected from the continuance of the life had death not occurred. Damages do not compensate for non-pecuniary injuries such as grief. Secondly, damages for injury are calculated on a balance of pecuniary gains and losses consequent upon the death.

In the case of an action brought by a spouse arising from the death of her husband, who was responsible for producing the household’s income, the injury in respect of which damages were recoverable was historically described as a loss arising from ‘dependency’. However, as Gleeson CJ remarked in De Sales v Ingrilli.^[4] injury can still occur in circumstances in which there is no dependency, observing that it is now common for both partners in a legal or de facto marriage to have salaried or income-producing occupations. Each may expect to obtain financial advantage from the other, even when both are able fully to support themselves and are financially independent. His Honour stated that it would be inaccurate and misleading to regard dependency as the basis for a claim under Lord Campbell’s Act.

Losses for which damages are recoverable

As already observed, only pecuniary loss is recoverable. There are four main categories:

(1) Loss of direct financial support from the deceased’s earnings must be calculated according to the degree of financial support and the expectation that support would continue into the future.

(2) A claimant’s loss may include the value of services the deceased would have provided around the home.^[5]

(3) Funeral expenses may be recovered.

(4) An additional category of loss – perhaps a hybrid of categories 1 and 2 – has emerged in more recent times,^[6] being economic loss suffered by a working spouse occasioned by his or her ceasing or reducing remunerative work to perform the services previously performed by the deceased, particularly those services associated with the care of children.^[7]

Whether damages may be recovered both for the loss of services in caring and providing for the needs of children, and for income lost by the surviving spouse in ceasing or curtailing his or her work in order to replace those services, is beyond the focus of this article. The answer depends on the circumstances of any given case. Where, for example, it is not realistic to expect paid carers to be engaged to provide for the children’s emotional, educational and practical needs, I see no reason in principle why damages could not be recovered for both.^[8]

NGUYEN v NGUYEN

If an assessment is to be made of the effect, if any, that s15 has upon an assessment of damages under Lord Campbell’s Act, it is necessary to have a proper understanding of the High Court’s decision in Nguyen v Nguyen.^[9]

That case was brought under the Queensland equivalent of Lord Campbell’s Act. The deceased died as a result of injuries she received as a passenger in a car which ran off the road. Negligence was admitted and the action proceeded as an assessment of damages before a Master of the Supreme Court. The plaintiffs were the husband of the deceased and their two children. Damages were awarded in an amount which included, as the major component, a sum representing the value of the housekeeping services lost to the family as a result of the death of the deceased. The evidence in the case established that the husband had not engaged, nor did he intend to engage, anyone to perform housekeeping services for the two children and him. The defendant appealed against the award of damages to the Full Court, arguing that the plaintiffs were not entitled to any compensation for the loss of the wife’s housekeeping services because those services had been and would continue to be performed by the husband at no cost. Applying its own decisions in Seymour v British Paints (Australia) Pty Ltd^[10] and Williams v Fleming,^[11] the Full Court upheld the appeal.

Justices Wanstall and Douglas (Gibbs J dissenting), had held in Seymour, applying the language of Lord Wright in Davies v Powell Duffryn Associated Collieries Limited,^[12] that, in circumstances where there was no prospect of the plaintiff’s incurring expense in employing a housekeeper, it was impossible to quantify as ‘a hard matter of pounds, shillings and pence’ the value to him or her of future domestic services which his or her spouse may have performed but for the death. Contrary to that view, Gibbs J observed that domestic services have a pecuniary value which is capable of assessment, and that deprivation of those services ‘is just as much a pecuniary loss as the deprivation of income or of contributions of food and clothing’. His Honour also remarked that the fact that the deceased’s husband did not intend to replace the services ‘does not mean that they had no value. It merely shows that he is prepared to use his own time and labour instead of expending money in replacing the services’.

On appeal to the High Court in Nguyen, Deane J observed^[13] that:

‘It has long been recognised that the loss of gratuitous domestic services, which are replaced or will be replaced at pecuniary cost, may provide a basis for compensation under Lord Campbell’s Act if the circumstances are such that “there was a reasonable prospect of [the services] being rendered freely in the future but for the death”’.

The ultimate question for the High Court in Nguyen, therefore, was whether the majority view in Seymour should be upheld or whether the dissenting view of Gibbs J ought to be preferred. The Court (Brennan, Deane, Dawson, Toohey and McHugh JJ) unanimously preferred the dissenting view of Gibbs J, holding that the payment for ‘replacement’ services was not necessary to give rise to an entitlement to damages for the value of the services lost.

In their analysis of the question, Dawson, Toohey and McHugh JJ (with whom Brennan J generally agreed) compared the differing bases in principle of a Griffiths v Kerkemeyer claim and a claim brought under Lord Campbell’s Act. The plaintiff’s loss in Griffiths v Kerkemeyer was caused by his physical disability and ‘it was in accordance with accepted principle to assess part of that loss by reference to the cost of the services which were required to satisfy the need to which the disability gave rise.’^[14] In contrast, their Honours observed that, in a claim under Lord Campbell’s Act, ‘the loss can be identified directly and it is unnecessary to point to some need by which it is represented.’^[15] They concluded:

‘Griffiths v Kerkemeyer has nothing to say about a claim under Lord Campbell’s Act for damages for the loss of domestic services. As we have said, such a claim is not related to need. A husband claiming for the loss of housekeeping services by reason of the death of his wife may have no need of those services in that he may be able to perform them himself. But if he has suffered the loss he is entitled to recover for it and, as Gibbs J pointed out in Seymour, it does not matter whether he intends to use the damages to replace the services or not.’ [Emphasis added.]

Their Honours’ emphasis on the aspect of need, which is necessary to found a claim under Griffiths v Kerkemeyer and unnecessary to found a claim under Lord Campbell’s Act, points strongly away from s15(2) of the CLA (whose language is also couched in terms of ‘need’) having anything to say about a claim for the pecuniary value of lost services under Lord Campbell’s Act. In making this observation, I do not ignore the additional comments of Brennan J (as his Honour then was), in which he appears to have equated the principles in respect of the assessment of damages under Lord Campbell’s Act and those under Griffiths v Kerkemeyer.

In his comments prior to quoting Gibbs J in Griffiths v Kerkemeyer, Brennan J made a distinction between the provision of ‘substitutionary services’ in a claim under Lord Campbell’s Act and the ‘needed services’ in a claim under Griffiths v Kerkemeyer. It is therefore doubtful, in my view, whether Brennan J’s opinion that the principles he quoted from Gibbs J’s judgment in Griffiths v Kerkemeyer are the same principles which ought to guide an assessment of damages under Lord Campbell’s Act, was a view shared by the other members of the Court. Nevertheless, as already observed, Brennan J agreed with the reasons of the plurality, generally, on the main question of principle. That must, I would argue, include agreement with the distinction made by the plurality in respect of Griffiths v Kerkemeyer claims and Lord Campbell’s Act claims.

THE CIVIL LIABILITY ACT 2002 (NSW)

Section 3 of the CLA defines ‘damages’ to include any form of monetary compensation, and makes some exceptions, which are not relevant to this discussion.

Sections 11 and 15 appear in Part 2 of the Act. Section 11 defines the terms ‘injury’ and ‘personal injury damages’ as they appear in Part 2:

‘In this Part:

injury means personal injury and includes the following:

(a) pre-natal injury,

(b) impairment of a person’s physical or mental condition,

(c) disease.

personal injury damages means damages that relate to the death of or injury to a person.’

Section 15 of the CLA provides, relevantly, as follows:

‘15 Damages for gratuitous attendant care services: general

(1) In this section:

attendant care services means any of the following:

(a) services of a domestic nature,

(b) services relating to nursing,

(c) services that aim to alleviate the consequences of an injury.

gratuitous attendant care services means attendant care services:

(a) that have been or are to be provided by another person to a claimant, and

(b) for which the claimant has not paid or is not liable to pay.

(2) No damages may be awarded to a claimant for gratuitous attendant care services unless the court is satisfied that:

(a) there is (or was) a reasonable need for the services to be provided, and

(b) the need has arisen (or arose) solely because of the injury to which the damages relate, and

(c) the services would not be (or would not have been) provided to the claimant but for the injury.’

In Coote, the defendant argued successfully that a combined reading of ss11 and 15 of the CLA supported his contention that Nguyen v Nguyen damages were no longer available. The problem with that conclusion, however, is that it relies upon a reading of the definition of the term ‘gratuitous attendant care services’ which accommodates not only attendant care services that ‘have been’ or ‘are to be provided’ but, if subsection (2) is to have the effect contended for and found, would also need to include services of a domestic nature that would have been provided but for the death of the provider. Such a reading of the definition would not only be overly broad, but would clash with the evident sphere of operation of s15 as a whole.

As this article criticises Davies J’s decision in Coote,^[16] particular notice should be given to his Honour’s reasons at [174]-[179].^[17]

First, his Honour noted that while the definition of personal injury damages includes damages that relate to the death of a person, the definition of injury does not include death.

His Honour then suggested that what the plaintiff was claiming was damages for gratuitous attendant care services as defined in s15(1) and observed that they included services of a domestic nature by virtue of sub-s(1)(a). However, Davies J reasoned, sub-s(2) excluded damages arising from the death of a person because paragraphs (b) and (c) related the need for the services to ‘injury’ which did not include death. He concluded that if it was intended that gratuitous attendant care services damages could be awarded in compensation to relatives actions, reference would need to have been made in sub-s(2) to death in addition to injury.

Moreover, his Honour concluded that the claimed head of damages was governed by s15 but that sub-s(2) had the effect of excluding it ‘because that sub-section defines the limited circumstances in which damages for gratuitous attendant care services can be provided. Those circumstances do not include a claim where the provider of the services has died.’

CONSIDERATION

The exercise Davies J was undertaking in Coote was one of statutory construction, the principles of which were summarised by Bathurst CJ in Public Service Association and Professional Officers’ Association Amalgamated Union of New South Wales v State of New South Wales,^[18] as follows:

‘In Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) [2009] HCA 41; (2009) 239 CLR 27, the plurality emphasised (at [47]) that construction must begin with a consideration of the text itself and while the language employed is the surest guide to legislative intention, the meaning of the text may require consideration of the context which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy’.

As the construction exercise in this case also involved the interpretation of the definition of ‘gratuitous attendant care services’, one should bear in mind McHugh J’s observation in Kelly v R^[19] that ‘[T]he function of a definition is not to enact substantive law ..., it is to provide aid in construing the statute, and ..., once ... the definition applies, ... the only proper ... course is to read the words of the definition into the substantive enactment and then construe the substantive enactment – in its extended or confined sense – in its context and bearing in mind its purpose and the mischief that it was designed to overcome.’

For a number of reasons, I would argue that, applying those principles, Davies J’s conclusion was reached in error.

First, his Honour’s reasons pay insufficient heed to the text of the definition of ‘gratuitous attendant care services’ in s15(1). That term is defined to mean ‘attendant care services [itself a defined term] that have been or are to be provided by another person to a claimant’,^[20] and for which the claimant has not paid or is not liable to pay. It is difficult to see how that definition could include the services with which a Lord Campbell’s Act claim are concerned – namely, services that would have been but will now never be provided. It would require an unnecessary, and I would argue intolerable, extension of the plain meaning of the words of the definition to accommodate the latter.

Secondly, subsection (2) provides that no damages may be awarded for gratuitous attendant care services unless the court is satisfied of certain matters, and importantly does not employ the language of ‘in respect of’ or ‘in relation to’. One might ask, rhetorically, how the ‘damages’ with which s15(2) is concerned could be those of a Ngyuen v Ngyuen type when such services have, by their very nature, not been provided and never will be. That is to say, how can damages be awarded ‘for’, as distinct from ‘in respect of’ or ‘in relation to’, services which have not been, and will never be, provided?

Thirdly, as already observed, the language of ‘need’ in ss15(2)(a) and (b) is that of the principle recognised in Griffiths v Kerkemeyer and not of that recognised in Ngyuen v Ngyuen. As the plurality emphasised in Ngyuen, a claim under Lord Campbell’s Act for damages for the loss of domestic services is not related to need. To the extent that Davies J relied on Brennan J’s citation of the reasons of Gibbs J in Griffiths v Kerkemeyer importing the element of need, rather than the reasons of the plurality rejecting any such element, I would argue that his Honour was led into error. The point made by the plurality in Nguyen was, rather, that damages in a Lord Campbell’s Act claim reflect a loss of anticipated benefit as opposed to compensating for a tortiously created need.

Fourthly, his Honour’s reliance on s15(2)(c), and particularly its reference to the ‘injury’ – a term not defined in s11 to include death – was, with respect, misplaced. I would argue, having regard to the common law context in which the legislation was enacted, that the evident purpose of s15(2)(c) was to overcome the High Court’s decision in Van Gervan v Fenton,^[21] a case concerned with Griffiths v Kerkemeyer damages and having nothing to say about a claim under Lord Campbell’s Act. In that case, having revisited the underlying basis for the right recognised in Griffiths v Kerkemeyer –the need for the services required by the plaintiff by reason of his or her tortiously caused disabilities – the Court held that the fact that services now needed by a plaintiff were nevertheless provided gratuitously before the need for those services arose, did not detract from its compensability under the Griffiths v Kerkemeyer principle.

Similar provision is made in the Motor Accidents Compensation Act 1999 (NSW)^[22] in respect of ‘attendant care services’, again, evidently, to overcome Van Gervan’s case.

Instead of approaching s15(2)(c) in that context, Davies J approached the subsection as a stand-alone provision and, I would suggest, somewhat circularly concluded that because the subsection referred to injury (and not death) the awarding of damages at all for ‘gratuitous attendant care services’ in the case of death was precluded. Instead, I would argue, recognising the mischief that s15(2)(c) was intended to address, the provision should have been approached on the basis that it merely placed a constraint upon the awarding of damages of a Griffiths v Kerkemeyer type (the elements of which the section describes), to which the preceding ss15(2)(a) and (b) were directed.

Finally, a reading of the whole of s15 enables one comfortably to conclude that it is concerned with Griffiths v Kerkemeyer damages, but one cannot conclude, without contorting both the language and the legislative purpose of the provision, that it is concerned with damages for loss of services under Lord Campbell’s Act.

CONCLUSION

Upon close examination of the principle espoused in Nguyen’s case, neither the text nor the context of s15 of the CLA supports the conclusion that its purpose was to preclude damages under Lord Campbell’s Act for the loss of gratuitous services that would have been provided by a deceased. The definition of ‘gratuitous attendant care services’ does not accommodate such a conclusion, and nor does the language of ‘need’ contained in s15(2). An overall reading of s15 in its proper common law context leads inexorably, I suggest, to the conclusion that it has nothing to say concerning a claim of the nature of that recognised in Nguyen.

Dominic Toomey SC is a senior counsel at Jack Shand Chambers in Sydney. He has practised for two decades as a barrister extensively in the common law field and has a particular interest in compensation to relatives matters.

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^[1] Justice Adamson reached a similar conclusion in Goddard v Central Coast Health Network [2013] NSWSC 1932 (19 December 2013). Justice Davies does not, however, appear to have relied on that decision in reaching his conclusion.

^[2] Public Trustee v Zoanetti [1945] HCA 26; (1945) 70 CLR 266, 280 per Dixon J. Query, however, whether this means that the receipt of a benefit must have been more probable than not. In Taylor v The Owners – Strata Plan No 11564 [2014] HCA 9 the basis of the action was described by the majority as the ‘loss of the chance of obtaining a financial benefit from the continuance of the life of the deceased’. The contemporary view, it would seem, therefore, is that the mere loss of that chance is sufficient to found an action and that the various contingencies are then adjusted for. An exploration of that question is, however, beyond the scope of this article.

^[3] Parker v The Commonwealth [1965] HCA 12; (1965) 112 CLR 295, 308.

^[4] [2002] HCA 52; (2002) 212 CLR 338, 347.

^[5] Nguyen v Nguyen (1990) 169 CLR 245.

^[6] Being the second half of the 20th century.

^[7] Robertson v Robin [1967] SASR 151, Bright J; Dwight v Bouchier & Ors [2003] NSWCA 3, [78]; Taylor v The Owners – Strata Plan No 11564 [2014] HCA 9, [13].

^[8] Robertson v Robin [1967] SASR 151, 156; Nistico v Fanning & Anor (1990) 54 SASR 6, 11.

^[9] (1990) 169 CLR 245.

^[10] [1967] Qd R. 227.

^[11] Unreported; 23/02/1979.

^[12] [1942] AC 601, 617.

^[13] (1990) 169 CLR 245, 254

^[14] Ibid, 262.

^[15] Ibid, 263.

^[16] An appeal from Davies J’s decision was dismissed: Coote v Kelly; Northam v Kelly [2017] NSWCA 192. The Court of Appeal did not need to consider the correctness or otherwise of his Honour’s approach to s15.

^[17] No criticism is intended as to the brevity of his Honour’s reasons. They were understandably so, having regard to the contingent nature of the assessment he was undertaking.

^[18] [2014] NSWCA 116, [45].

^[19] [2004] HCA 12; (2004) 78 ALJR 538, 559-560 [103]; [2004] HCA 12; 205 ALR 274, 302.

^[20] It may be accepted, since the High Court’s decision in Taylor v The Owners – Strata Plan No 11564 [2014] HCA 9, that ‘claimant’ means the plaintiff, as distinct from the deceased, as it was held in that case to do in s12 of the CLA.

^[21] [1992] HCA 54; (1992) 175 CLR 327.

^[22] Section 141B(2).