Appellate review of an award of non-economic loss June 26, 2019
Relevant statutes and legal principles
- At common law, general damages for pain and suffering resulting from personal injury were “almost entirely [a] matter of impression and of common sense, and [were] only subject to review in very special cases” (Miller v Jennings  HCA 65; (1954) 92 CLR 190 at 195;  HCA 65, quoting Davies v Powell Duffryn Associated Collieries Ltd  AC 601 at 616 (Lord Wright)). Thus, the verdict of a jury on a claim for such damages would only be set aside if the appellate court was satisfied that the verdict was “out of all proportion to the circumstances of the case”, the assessment of damages being “more like an exercise of discretion than an ordinary act of decision” (ibid at 616). The principles stated in House v The King (1936) 55 CLR 499 at 505;  HCA 40 concerning appeals from discretionary decisions were therefore treated as applicable to appellate review of such awards. As a result, an appellate court would intervene only if the appellant established that there had been a material error of fact or law, that irrelevant matters were taken into account, or relevant matters were not taken into account, or if the decision was “unreasonable or plainly unjust” such that it could be inferred that some error had been made in arriving at the decision (ibid).
- The award of general damages for non-economic loss is however now regulated by statute. Relevant in the present case is s 16 of the Civil Liability Act, which in sub-s 16(1), provides that “[n]o damages may be awarded for non-economic loss unless the severity of the non-economic loss is at least 15% of a most extreme case”. If the severity of the non-economic loss as determined by the court in percentage terms is equal to or greater than this percentage, the amount of damages is, by sub-s 16(3), to be ascertained by reference to the table set out in that subsection.
- As a result, assessment does not occur by the court choosing a figure falling within a range of legally permissible outcomes. The assessment occurs by the court answering a question (that is, as to the severity of the loss expressed in percentage terms) to which there is only one correct answer, albeit that arrival at the answer will involve the exercise of a value judgment. Consistently with judgment of Gageler J’s analysis in Minister for Immigration and Border Protection v SZVFW (2018) 92 ALJR 713;  HCA 30 at – , this change requires a different approach to appellate review to be adopted in the present context. Instead of the House v The King approach (which his Honour refers to at  as “the deferential standard applicable to appellate review of an exercise of judicial discretion”), the “correctness standard” of appellate review identified in Warren v Coombes (1979) 142 CLR 531;  HCA 9 is to be applied. His Honour concluded his analysis by stating (at ):
“The line [between the two standards of review] is not drawn by reference to whether the primary judge’s process of reasoning to reach a conclusion can be characterised as evaluative or is on a topic on which judicial minds might reasonably differ. The line is drawn by reference to whether the legal criterion applied or purportedly applied by the primary judge to reach the conclusion demands a unique outcome, in which case the correctness standard applies, or tolerates a range of outcomes, in which case the House v The King standard applies. The resultant line is not bright; but it is tolerably clear and workable.”
- The principles stated by Gageler J in SZVFW were recently applied by this Court in State of New South Wales v Naaman (No 2)  NSWCA 328 at – .
- Warren v Coombes was concerned with a question to which there was only one correct answer, namely, whether the defendant had driven negligently. No question arose in that case, as it did in the later decision in Fox v Percy (2003) 214 CLR 118;  HCA 22, concerning the credibility of witnesses. In Warren v Coombes at 552, the plurality stated that:
“if the judges of appeal consider that in the circumstances the trial judge was in no better position to decide the particular question than they are themselves, or if, after giving full weight to his [or her] decision, they consider that it was wrong, they must discharge their duty and give effect to their own judgment”.
- Their Honours further stated that “[t]o perpetuate error which has been demonstrated would seem to us a complete denial of the purpose of the appellate process” (ibid).
- The relevance of the Warren v Coombes standard of review in the present context was confirmed in Hall v State of New South Wales  NSWCA 154 Leeming JA (with the concurrence of Meagher JA and McDougall J) said the following (at -):
“It is true that some authorities in this Court refer to s 16 as involving an exercise of discretion … However, those authorities do not go so far as the parties to the present appeal ventured, which was to accept that House v The King error needed to be established. What those authorities do clearly establish is that the determination is “neither scientific nor normative” and is “not readily susceptible to appellate review” … That is plainly so. The key to the meaning of the description of the task as “discretionary” may be seen perhaps most clearly in the often cited proposition in Dell v Dalton (1991) 23 NSWLR 528 at 533 that the assessment involves matters of “opinion, impression, speculation, and estimation”. I respectfully agree with McDougall J’s observation that “to say that a determination of non-economic loss involves more art than science might be to overstate the degree of logic and precision with which such an assessment is performed”: Jopling v Isaac  NSWCA 299 at . Nevertheless, while fully acknowledging its inevitable imprecision, the task remains conceptually distinct from the exercise of a discretionary power, and its review on appeal is subject to different principles.
The primary judge was not called to exercise a discretionary power, but instead had to make a finding of fact, namely, the severity of non-economic loss by reference to the proportion of a most extreme case. Ordinary principles of appellate review apply to that finding. That said, the intrinsically imprecise nature of the statutory task will have the effect that in many if not most cases, nothing will turn upon the different formulation of the applicable principles of appellate review. In this respect, the position is as stated by Spigelman CJ in Perpetual Trustee Company Ltd v Khoshaba  NSWCA 41 at :
“Where, as here, the first statutory step is clearly a finding of fact, albeit one involving a broadly based value judgment, it may be that the Court should invoke the principles reflected in Warren v Coombes  HCA 9; (1979) 142 CLR 531 rather than in House v The King. Nevertheless, in most cases it is unlikely that the different tests will lead to different results.”
- Hall v State of New South Wales was followed by this Court in McKenzie v Wood  NSWCA 142. The statement in Hornsby Shire Council v Viscardi  NSWCA 417 at  that the House v The King test is applicable, should not in my view be regarded as authoritative as no issue as to the appropriate standard for appellate review appears to have been argued in Viscardi, and the decisions in Hall and McKenzie appear not to have been drawn to the Court’s attention.