Vicissitudes and life expectancy July 31, 2018
Section 13 of the Civil Liability Act 2002 (NSW) applies to damages for future economic loss both in respect of “future earning capacity” and “other events on which the award is to be based”. The latter category includes damages for future attendant care, lawn mowing, gardening and handyman services, and future medical expenses. Sub-section (2) requires an approach to the assessment of damages which is consistent with the approach in Malec v JC Hutton Pty Ltd (1990) 169 CLR 638;  HCA 20. This extends to the assessment of damages for future attendant care, lawn mowing, gardening and handyman services, and future medical expenses, consistent with principle and the weight of authority in this Court. This involves calculating the percentage possibility of a future event occurring but for the injury and then adjusting the award of damages according to that calculation: -
- The Civil Liability Act governs the award of damages in these circumstances. Section 13 of the Civil Liability Act addresses the approach to claims of “future economic loss”. That section provides:
“13 Future economic loss—claimant’s prospects and adjustments
(1) A court cannot make an award of damages for future economic loss unless the claimant first satisfies the court that the assumptions about future earning capacity or other events on which the award is to be based accord with the claimant’s most likely future circumstances but for the injury.
(2) When a court determines the amount of any such award of damages for future economic loss it is required to adjust the amount of damages for future economic loss that would have been sustained on those assumptions by reference to the percentage possibility that the events might have occurred but for the injury.
(3) If the court makes an award for future economic loss, it is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted.
- Mr Bosevski submitted that s 13 of the Civil Liability Act does not apply to an award of damages for future attendant care. Mr Bosevski submitted that s 13 should be understood as applying only to the award of damages for the future loss of earnings. That submission must be rejected. The text of s 13 makes it plain that it applies to damages for future economic loss both in respect of “future earning capacity” and “other events on which the award is to be based”. An award of damages for future attendant care is an “other” event on which the award is to be based.
- Further, in Malec v JC Hutton, which concerned the allowance of damages for future economic loss including a claim for future attendant care, the High Court rejected the traditional common law approach to the assessment of damages for future hypothetical events, which was to determine whether the event would or would not have occurred on the balance of probabilities. The Court held that this approach was inapplicable to hypothetical future events because they are not “commonly susceptible of scientific demonstration or proof” and can only be evaluated in terms of chance (per Brennan and Dawson JJ at 639 and Deane, Gaudron and McHugh JJ at 642-3). The High Court explained that the correct approach was to calculate the “degree of probability” (per Deane, Gaudron and McHugh JJ at 643) or “possibility” (per Brennan and Dawson JJ at 640) of a future event occurring and then to adjust the award of damages according to that calculation, unless the probability is so low (less than one per cent) as to be speculative or so high (more than 99 per cent) as to be practically definite (at 643). That approach is now enshrined in the calculation of all future economic loss to which the Civil Liability Act applies: s 13(2).
- Even before the introduction of the Civil Liability Act the Malec v JC Hutton approach to the assessment of damages was adopted by this Court in respect of future attendant services: Marsland v Andjelic (1993) 31 NSWLR 162 (per Kirby P and Meagher JA at 176-186, Mahoney JA at 188).
- This approach was explained in Amoud v Al Batat  NSWCA 333 per Allsop P at  and Basten JA at , Ipp JA agreeing (in relation to future economic loss in the context of the Motor Accident Compensation Act 1999 (NSW)) and subsequently in Miller v Galderisi  NSWCA 353 per Allsop P, Basten and Macfarlan JJA at  (in relation to future commercial attendant care).
- It is true that in Gordon v Truong  NSWCA 97 Simpson J (with whom Macfarlan JA agreed) approached the question of future commercial attendant care on the balance of probabilities (at -). Basten JA, who dissented on this point, adopted the Malec v JC Hutton approach (at ).
- The difference in approach in this Court was referred to in Sampco Pty Ltd v Wurth  NSWCA 117, however the Court did not need to make a finding as to the correct approach to the assessment of damages for future attendant care in that case because the parties had agreed to proceed on the basis that Malec v JC Hutton applied (per Basten JA at , Meagher JA and Adamson J agreeing).
- In White v Benjamin  NSWCA 75, the Malec v JC Hutton approach was adopted when assessing the probability that future commercial attendant care would be required: at - per Basten JA, Meagher JA agreeing. The same approach was taken in Metaxoulis v McDonald’s Australia Ltd  NSWCA 95 where the Court considered the likelihood of future commercial attendant care being required due to a pre-existing injury: at  per Basten JA, McColl and Macfarlan JJA agreeing.
- In Australia and New Zealand Banking Group Ltd v Haq  NSWCA 93, Basten JA held (at ) that, as a matter of principle, it was correct to adopt the Malec v JC Hutton approach to the possibility of whether commercial attendant care would be required in the future. His Honour further stated, however, that both the Malec v JC Hutton and the traditional approach may lead to similar results. His Honour stated that under the traditional approach (at ):
“…the trial judge must consider at what point in time commercial assistance will, on the balance of probabilities, eventuate and must make some allowance, by way of vicissitudes, against the possibility that other events will intervene.”
- Simpson JA did not need to consider the issue (at -) and Sackville AJA expressly declined to address the issue (at ).
- Section 13 of the Civil Liability Act requires an approach to future economic loss which is consistent with Malec v JC Hutton. Likewise, the weight of authority in this Court is that the Malec v JC Hutton approach applies to an award of damages for future attendant care. I agree with Basten JA in Haq that adopting the Malec v JC Hutton approach to the calculation of damages for future attendant care is correct in principle. That is because the necessarily speculative nature of future events requires this approach. The restrictive approach urged by Mr Bosevski finds no support in the text of the Civil Liability Act. The Civil Liability Act applies to the assessment of personal injury damages and a court cannot award such damages contrary to Part 2 of the Act: s 11A. Part 2 divides all damages into economic loss (Division 2), non-economic loss (Division 3), interest on damages (Division 4), third party contributions (Division 5) and exemplary and similar damages (Division 6). Section 12(1)(b) of the Civil Liability Act, which treats loss due to the deprivation of earning capacity as a sub-set of future economic loss, is directly contrary to Mr Bosevski’s submissions.
- Outside of extreme circumstances where an event is practically certain to occur or not occur, I see no reason in the subject matter, scope and purpose of the Civil Liability Act why an evaluation of future economic loss should be confined to an examination of lost wages and not extend to other aspects of future economic loss which also require consideration of future contingencies such as future attendant care.
- I accept that in assessing the allowance for future care, over the Mr Bosevski’s life, the life expectancy tables were used by the primary judge. It does not follow that there is therefore no “need for a further discount for contingencies”. Nothing in Bresatz v Przibilla or the other cases referred to by Mr Bosevski and the Workers Compensation Nominal Insurer causes me to doubt this proposition. Bresatz v Przibilla and most of the cases relied upon by the respondents were decided before Malec v JC Hutton. In Malec v JC Hutton (at 645) a majority of the High Court (Deane, Gaudron and McHugh JJ) held that the damages for future attendant care that should have been awarded in that case were to be “reduced, to take account of the chance that factors, unconnected with the defendant’s negligence, would have necessitated similar care and attention”. Further, in none of the cases referred to by Mr Bosevski did the Civil Liability Act apply.
- The primary judge’s consideration of the question of future attendant care was brief. Whilst it is tolerably clear, by his identification of the commercial rate as the appropriate rate, that he awarded damages for future attendant care on a commercial basis, it is not clear how he arrived at this result. It is, however, clear that his Honour, in adopting the calculations for damages for future attendant care, did not approach the question as he was required to do by s 13 of the Civil Liability Act.
- Error has thus been shown in two ways. On the first issue, the primary judge reasoned to a conclusion that commercial care was warranted on the basis of Ms Kennedy-Gould’s reports. As senior counsel for the appellant pointed out, those reports did not in and of themselves establish that commercial attendant care (rather than gratuitous attendant care) was warranted. Ms Kennedy-Gould’s conclusion on this issue, which was appropriately qualified, was that three hours per day of commercial care was required “in the absence of his family, for whatever reason”.
- On the second issue, as I have found, his Honour erred in failing to approach the question of damages for future attendant care as he was required to do by s 13 of the Civil Liability Act.
- Having established error, this Court, if it is in a position to do so, should determine the matter rather than order a new trial: Uniform Civil Procedure Rules 2005 (NSW), r 51.53. This is such a case. This Court is in as good a position as the primary judge to assess the damages payable, if any, for future commercial attendant care on the correct principles.
- In Van Gervan v Fenton (1992) 175 CLR 327;  HCA 54 the High Court, when explaining the reason for assessing the value of gratuitous services by reference to the market rates for such services, rather than the loss to the gratuitous provider, stated (at 336):
“The task of reliably determining whether a person will continue to provide personal services on a voluntary basis is much more difficult than the task of determining the traditional types of hypotheticals which come before the courts in damages cases, such as whether a plaintiff is likely to obtain employment or whether a medical condition is likely to improve or worsen. The relationship between the parties may end for any of the myriad reasons which bring about the end of relationships. But the predictability of a relationship continuing in this class of case is made more difficult than usual by the effect that the plaintiff’s condition and needs have or may have on the emotional needs of those involved in caring for him or her. There is also the prospect that the care provider will not reveal to the court his or her true feelings about continuing to provide the services even in cases where the provider is conscious of those feelings.”
- White v Benjamin, a case relied upon by the appellant for another purpose, provides some assistance to Mr Bosevski. In that case gratuitous domestic assistance was being provided but the injured plaintiff expressed a wish to obtain commercial assistance rather than continuing to rely on her husband. The primary judge in that case rejected the plaintiff’s evidence. On appeal, Basten JA (with whom Meagher JA agreed) held that in doing so the judge had erred. Basten JA explained that, contrary to the trial’s judge’s approach, Miller v Galderisi  NSWCA 353 should be understood as providing that (at ):
“There is no reason in principle why, if the evidence justifies it, damages may not be awarded in respect of a need for commercial domestic assistance likely to arise in the future after the availability of gratuitous assistance ceases.”
- Basten JA also explained (at ) that “it would be wrong to place too much weight on the existence or absence of direct evidence of intention” to obtain commercial attendant care. Basten JA explained further that (at ):
“What was required was consideration of the family circumstances, including the fact that Mr White was self-employed and apparently busy; that his wife was unable to do heavy cleaning and hanging out clothes; and that cleaning services are not the kind of personal domestic assistance which one spouse may prefer to obtain from another. Rather, they are services which are readily available and availed of by those who can afford them and who are otherwise engaged in remunerative employment or have a disability.”
- In analysing the evidence in this way the Court in White v Benjamin permitted the recovery of damages for future attendant care on a commercial basis, subject to a “significant chance that commercial assistance will not be obtained” (at ).
- In the present case the two reports of Ms Kennedy-Gould establish a sufficient basis to conclude that Mr Bosevski will require at least three hours per day of attendant care for the rest of his life. That conclusion is underpinned by the joint opinion of the expert psychiatrists, Drs Lewin, Jungfer and Benjamin, that there is a need for some support and supervision that is permanent and that it is reasonable that there be ongoing provision of paid support. At the time of the trial in April 2015, that level of attendant care was being provided by Mr Bosevski’s family.
- The principal submission made by Avopiling was that Mr Bosevski failed to prove the date upon which commercial care would be required in the future. It was submitted that the evidence was that Ms Bosevski would continue to provide gratuitous domestic attendant care for the whole of Mr Bosevski’s life and thereby obviate the need for commercial attendant care.
- When the Malec v JC Hutton approach is applied to the facts of this case, however, an award of damages for future attendant care on a commercial basis is warranted. When the approach explained in White v Benjamin is adopted and the family circumstances are here examined, the following matters emerge. First, Ms Bosevski had ceased living with Mr Bosevski at the time of the trial. As senior counsel for Avopiling accepted, Mr Bosevski had not been entirely successful in having the continuous attentions of his spouse. Secondly, Ms Bosevski had expressed a desire to work to Mr Bosevski. Prior to emigrating to Australia, Ms Bosevski had been employed as a salesperson and had a diploma in make-up and beauty. Thirdly, the services being provided to Mr Bosevski were not necessarily of the kind which one may prefer to obtain from one’s spouse (as was the case immediately following the accident when Mr Bosevski required assistance dressing and bathing). Rather, the required services are the kind which are readily available and which can be availed of by those who can afford them and who are otherwise engaged in remunerative employment or have a disability.
- It is true, as the appellant pointed out, that Ms Bosevski gave no viva voce evidence of her intention to work if an award for paid domestic care was obtained. To that end, I agree with Basten and Meagher JJA in White v Benjamin (at -) that it would be wrong to place too much weight on the absence of such direct evidence of intention. Accordingly, the absence of viva voce evidence from Ms Bosevski regarding her intention to work does not cause me to doubt the conclusion that, if an award of damages for future commercial care is made, Ms Bosevski will resume paid employment.
- I am satisfied in this case that the primary judge did not err in, at least implicitly, deciding that after April 2015 the required attendant care services would likely be obtained on a commercial basis, assuming that funds were available to obtain such care. This is because I am satisfied, as Basten and Meagher JJA were in White v Benjamin (at ), that the required services are readily available and likely to be availed of by Mr Bosevski. Ms Bosevski’s selfless devotion to Mr Bosevski prior to April 2015, in circumstances where funds were not available to obtain commercial care, does not alter my judgment that the evidence discloses that such services were required and likely would have been obtained after April 2015 if funds were available.
- Having made that finding, however, it is necessary to consider the extent of the “allowance, by way of vicissitudes, against the possibility that other events will intervene”: Australia and New Zealand Banking Corporation v Haq at  per Basten JA. The necessary exercise is “a form of speculation guided by knowledge of the plaintiff’s past and expectations, derived from general experience, as to the future”: Malec v JC Hutton at 640 and 643. In White v Benjamin, damages for future commercial attendant care were awarded for 30 years with a 15 per cent reduction for vicissitudes notwithstanding a finding that “there is a significant chance that commercial assistance will not be obtained” on the basis that a greater reduction would be “self-fulfilling”: at  per Basten JA. In the present case, a discount of 25 per cent should be made to reflect the various risks to which the appellant has drawn attention and the significant chance that commercial assistance will not be obtained. Any greater reduction would be self-fulfilling.
- As Mr Bosevski and the Workers Compensation Nominal Insurer submitted, the life expectancy to be assumed in the calculation should be that derived from the life expectancy tables. As I have said, it does not follow from the use of the life expectancy tables, that no further allowance for vicissitudes is warranted for future attendant care. In the circumstances of this case the appropriate award is to be calculated on the following basis:
$45.50 x 21 x 814.5 (the relevant multiplier for Mr Bosevski’s life expectancy) = $778,254.75
$778,254.75 x 0.75 (the relevant multiplier for vicissitudes) = $583,691.06
- Mr Bosevski should be awarded $583,691.06 for future commercial attendant care.