Black v Walden

LEGISLATION CITED: Compensation to Relatives Act 1897 (NSW) Fatal Accidents Act 1846 (UK)

Budget Rent-a-Car Systems Pty Ltd v Van Der Kemp (1984) Aust Torts Rep 90-688 Cape Distribution Ltd v O'Loughlin [2001] EWCA Civ 178 Carroll v Purcell (1961) 107 CLR 73 Daniels v Jones [1961] 1 WLR 1103 De Sales v Ingrilli [2002] HCA 52; 212 CLR 338 Franklin v South Eastern Railway Company (1858) 3 H&N 211 Geaghan v D'Aubert [2002] NSWCA 260; 36 MVR 542 CASES CITED: Griffiths v Kerkemeyer (1977) 139 CLR 161 Gullifer v Pohto [1978] 2 NSWLR 353 Lewis v Dalton (1986) Aust Torts Rep 80-069 Nguyen v Nguyen (1990) 169 CLR 245 Parker v The Commonwealth of Australia (1965) 112 CLR 295 Public Trustee v Zoanetti (1945) 70 CLR 266 Walden v Black [2006] NSWCA 170 Zordan v Metropolitan (Perth) Passenger Transport Trust (1963) 37 ALJR 159

TEXTS CITED: Fleming, The Law of Torts, (Sydney, The Law Book Company Limited, 9th ed)

PARTIES: Barry Gordon Black (Appellant) Edwin Peter Walden (Respondent)

COUNSEL: Mr K Rewell SC / Mr B Smith (Appellant) Mr B Gross QC / Mr T Boyd (Respondent)

SOLICITORS: Curwoods Lawyers (Appellant) Andrew Warren Associates (Respondent)

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40334/07 DC 5690/06

MASON P McCOLL JA BELL JA

Thursday 29 May 2008 Barry Gordon BLACK v Edwin Peter WALDEN Judgment 1 MASON P: I agree with Bell JA. 2 McCOLL JA: I agree with Bell JA. 3 BELL JA: Introduction The respondent's wife, Janet, was killed in a motor vehicle accident on 27 August 1997. The respondent brought an action under the Compensation to Relatives Act 1897 (NSW) (the Act) against the appellant, the driver of the vehicle in which the deceased was travelling, claiming damages for the injury suffered by him and his son, Matthew, arising out of her death. Liability was admitted and the trial proceeded as an assessment of damages. It was a re-trial, following an earlier appeal to this Court: Walden v Black [2006] NSWCA 170.

4 The family income was derived from several sources to which the deceased contributed by her services. At the time of her death they were living on a dairy farm, which the deceased and the respondent operated in partnership. The deceased worked part-time on the farm. Matthew worked fulltime on the farm. The respondent was employed as a carpenter with Bega Joinery Pty Limited (Bega Joinery), a company which he and the deceased jointly owned and for which the deceased also worked on a part-time basis. A family trust, the Edwin Walden family trust, was the beneficial owner of six units at Tathra. The deceased and the respondent jointly controlled the trustee, Pynwatch Pty Limited. The deceased managed the units. 5 The primary judge assessed damages in the amount of $1,305,306.00. The judgment sum was not apportioned between the respondent and Matthew, save in the respect noted below. The award comprised the following components: (i) (On behalf of Matthew) loss of the benefit of the deceased's wages from the joinery, $16,369.00; (ii) Loss of benefit of the deceased's services in relation to the Tathra units, $3,800.00; (iii) Loss of benefit of the deceased's services to the dairy farm, $895,853.00; (iv) Loss of domestic services, $429,284.00.

The judgment was reduced by $40,000 to take account of the acceleration of benefits to the respondent from the death of the deceased. 6 The Notice of Appeal contains 22 grounds. On the hearing of the appeal these were distilled into three, which were (i) to the award of any amount for the loss of the deceased's services to the dairy farm; (ii) the failure to deduct a greater sum on account of the acceleration in the benefits to the respondent from the death of the deceased; and (iii) to the extent of the allowance for the loss of the deceased's domestic services.

7 The respondent was aged 62 years at the date of the accident and 69 years at the date of trial. The deceased was aged 53 years when she died. She and the respondent were married in February 1968, when he was aged 30 and she was aged 22. There are three children of the marriage: Matthew, the eldest, who was aged 28 at the date of the deceased's death (36 at the date of the trial) and two daughters who were living and working in Sydney and who were not included in the dependency claim. 8 The deceased and the respondent lived for almost the whole of their married life on a dairy farm, known as "Parkview" which is located just north of Bega. It had been in the deceased's family since 1896. She had grown up on it and she was an accomplished dairy farmer. The respondent and the deceased purchased "Parkview" from the deceased's father, Ralph Hetherington, in 1987. The original Hetherington homestead, a smaller cottage and the dairy sheds formed part of the "Parkview" property, which comprises around 66 hectares (approximately 163 acres). A small lot had been subdivided from the "Parkview" title and the deceased and the respondent built their home on this lot, which they also jointly owned: 14338 Princes Highway, Brogo. 9 In 1993 Matthew undertook an apprenticeship as a dairyman with a neighbouring dairy farmer. In 1996 the deceased and the respondent commenced operating the dairy farm, trading in partnership under the name EP & JM Walden. Matthew was employed on a fulltime basis as a dairyman by the partnership. In 1997 Matthew acquired a 100-acre property from Ralph Hetherington, "the Rixon", which is around 5 kms from "Parkview". The dairy farm used the two properties and a property at Cobargo which was owned by the respondent's uncle, Peter Webber. After the death of the deceased the respondent purchased a further property, consisting of 18 acres of alluvial flat land, which was acquired to provide lucerne as feed for the dairy herd. 10 The deceased spent an average of 27 hours a week working on the dairy farm. She was a skilled horsewoman who was able to inspect the property and round up stock on horseback. The dairy farm was a registered Holstein stud. Each calf was photographed and registered with the Friesian-Holstein Society. At the time of her death the farm had approximately 200 dairy cattle. The deceased was responsible for maintaining the herd records. She ensured that samples of milk from each cow were regularly analysed and the results of the analysis recorded. Breeding decisions depend on the information of this type.

11 The respondent and Matthew continued to operate the dairy farm after the death of the deceased. Matthew obtained some paid assistance from time to time, but the specialised services provided by the deceased were not replaced. His hours of work increased from an average of nine to 12 hours per day. He was not able to maintain the deceased's regimen for herd recording. Over time this led to deterioration in the quality of the herd and problems with milk quality. Generally, Matthew had difficulty coping with the farm without the deceased's assistance. 12 In November 2004 the respondent ceased operating the dairy farm, which he leased to a couple named Russell. The lease was for a term of three years with a three-year option. The terms of the lease provided for a base annual rent of $24,000, payable monthly, with adjustments that were dependent on the price of milk. 13 The herd was sold as a general dairy herd and not as a pedigree-breeding herd, which it had been at the time of the deceased's death. The respondent said that it had been sold for just under $100,000. There was no evidence from which it was possible to determine the amount of the loss occasioned by the downgrade in the quality of the herd. 14 In June 2000 the Tathra units were sold and the proceeds of the sale were applied substantially in reduction of partnership debts owed to Ralph Hetherington and the Commonwealth Bank. The respondent also purchased (and leased) some items of heavy farm equipment at this time. The lease of the dairy farm did not include certain of the sheds on "Parkview", which Matthew used to store the farm equipment. After the lease took effect Matthew continued to work for his father as a farm contractor. 15 The financial results of the dairy business were summarised in the report of Mr Kellaway, a chartered accountant (exhibit 2, Blue 599), as follows: Financial year ended 30 June Surplus / (Deficit) Distribution to E P Walden - Plaintiff Distribution to J M Walden - Deceased 1996 (43,713) (21,857) (21,856) 1997 (19,953) (9,977) (9,976) 1998 (19,824) (9,912) (9,912) 1999 (19,728) (9,864) (9,864) 2000 21,953 16,741 5,212 2001 INP INP NIL 2002 12,125 12,125 NIL 2003 (12,254) (12,254) NIL 2004 (8,526) (8,526) NIL 2005 (35,020) (35,020) NIL

Mr Ivey, an agricultural management consultant and accountant, who was qualified on the respondent's behalf, said in his report that an hourly rate of $37.50 was a reasonable basis to calculate the value of the deceased's services because she was a partner in the business and had a managerial role. (Blue 574.H-I) Mr Ivey considered that it would be appropriate to calculate the loss from the date the deceased would have turned 61 (the date of trial) at the lower rate of $30 per hour; which is the average farm manager's base salary quoted in Holmes, Sackett & Associates' Farm Staff 2006 . Mr Ivey proposed the reduced rate in order to take into account a lesser working capacity due to age and "possible lifestyle changes". (Blue 574.J)

16 The deceased worked approximately 20 hours per week for Bega Joinery performing secretarial and office management duties. She and the respondent were recorded in the books of Bega Joinery drawing combined salaries of $795 per week. In practice the respondent drew a cheque weekly on the Bega Joinery account which was used to cover the family's living expenses. After the death of the deceased, the respondent increased his salary to $700 per week. 17 The Bega Joinery operated from premises in West Street, Bega, which were jointly owned by the respondent and the deceased. It is not clear whether they were joint tenants or tenants in common. If the latter, they held their interests in equal shares. The Bega Joinery owned premises in Carp Street, Bega, which were let, and returned around $36,000 per annum in rent.

18 The deceased travelled weekly from Bega to Tathra to clean the units and attend to the changeover of tenants. She was an exceptionally hardworking woman. In addition to her work on the dairy farm, for Bega Joinery and at the units, she was the sole housekeeper and cook for the family. 19 After the death of the deceased the respondent engaged two women to assist with the housekeeping. Each worked for four hours per week. Joan Smith did the household cleaning and Carol Wiley did the cooking. The respondent paid each $10 per hour until 2006 when, of his own volition, he increased the rate to $20 per hour.

The Judge's reasons 20 The primary judge approached the respondent's claim for the loss of the deceased's services to the farm on the basis that it was likely that the deceased would devote more time to the dairy farm in her retirement. His Honour found that her attachment to the dairy was such that her working hours would not have fallen below 27 hours per week throughout the remainder of the respondent's life. He calculated the value of the loss by reference to an hourly rate of $37 for the past and the future. The sum for the past amounted to $424,575. The allowance for the future, which was discounted by 15 per cent for vicissitudes, amounted to $471,278. 21 His Honour found that the domestic services provided by Ms Smith and Ms Wiley were far less than those that the deceased had provided to the respondent and Matthew. He allowed 21 hours per week for the loss of these services, after excluding the time spent by the deceased on services that were for her own benefit. His Honour allowed a further four hours per week for the loss of the deceased's gardening services. The value of the loss was calculated by reference to commercial rates. Neither the allowance for the gardening services nor the rates were challenged on the appeal. 22 The respondent was the sole beneficiary under the deceased's will. He was eight years older than the deceased and actuarially had no expectation of surviving her and benefiting under the will. The primary judge took into account the fact that the respondent had acquired the whole of the deceased's estate in two ways. He reduced the award by $40,000 to reflect the saving of interest (assumed to be at a rate of 10 percent per annum) on joint loans, which the respondent repaid using the proceeds of the sale of the Tathra units, and he rejected the respondent's claim to $13,338 for the loss of the benefit of the deceased's wages from the Bega Joinery. (Red 47.D) 23 The primary judge dealt with the balance of the appellant's claims that the award be off-set by bringing the accelerated benefits into account in this way: "[112] An accelerated benefit, for the purposes of this case, is a benefit which a beneficiary has received because of the death of a person, and which the beneficiary would not otherwise have received. The defendant here says that, although the home is excluded from the principle that any accelerated benefit must be set off against the loss caused by the death, the farm property is not. I reject this submission. In Horton v Byrne (1956) 30 ALJR 583, 584, the High Court said, 'It must … be borne in mind that, had her husband lived, she would have continued to enjoy the use of the house, as well as of the furniture, with him, or of any residence by which it might be replaced, throughout her married life. So that her gain is not very real and certainly is not equal to anything like half the value of full ownership. In Nguyen's case, the High Court appears to have affirmed this principle. In Peipman v Turner [1961] NSWR 252, 257, the Full Court of the Supreme Court of New South Wales applied the same principle. Where the surviving spouse and children continue to enjoy the benefit of something they enjoyed jointly with the deceased up to the time of death, they do not gain a benefit because of the death. Cape Distribution Ltd v O'Loughlin [2001] EWCA Civ 178 is consistent with this. [113] In this case the defendant argues that the land used for the dairy farm, which was on a separate title to the matrimonial home, should be regarded as a business asset, and that when Janet died, Peter gained a benefit (which he would not otherwise have enjoyed) by virtue of being the survivor. It is not suggested that Matthew has received any accelerated benefit. It is not clear from the evidence before me whether the land was held as tenants in common or as joint tenants. I do not consider that it makes a difference, because what Peter had after Janet's death, in terms of enjoyment or occupation, was exactly the same as what he enjoyed before her death. The business was certainly operated as a partnership, which works in much the same way as the joint tenancy. Each tenant, or partner, as the case may be, has an interest in the whole of the property. When the other tenant or partner dies, that interest becomes more valuable, but does not change in character. In that sense it cannot be an accelerated benefit. Before Janet died, and after it, Peter enjoyed the dairy farm property just as much as he enjoyed the home. It follows that the increase in the value of his share in the dairy farming land should be regarded in the same way as the increase in the value of his interest in the matrimonial home, and not as an accelerated benefit. [114] The plaintiff concedes that the expense of maintaining Janet prior to her death which is no longer required, might be set off, but such expenses must be seen as coming out of Janet's salary, so that there is no net gain to Peter and Matthew for which the Defendant can fairly claim any set-off as a collateral benefit. Peter's wages were not increased by the sum equivalent to Janet's wages, but by a smaller amount. This may be accidental, but it recognises the fact that Janet's maintenance is no longer necessary. The question of expenses incurred on Janet herself essentially disappears because her salary more probably than not funded most or all of her living expenses. [115] The sale of the Tathra units merely produced funds that were used for the farm. Matthew's interests have not changed, as he was merely a discretionary beneficiary of the trust, and had no vested interest. Nor did he gain as a result of his mother's death. Peter has gained a benefit, in that he no longer is obliged to pay interest on the mortgage debt to the bank on the farm, which was paid off with the proceeds of the sale. The evidence was that this debt was $206,000 when Janet died. The debt was a joint debt of Janet and Peter. If Janet had survived, presumably she would have paid half the interest. Assuming interest rates of 10 %, Peter has saved a sum of about $10 000 per year. I make some allowance for this benefit and will set-off a sum of $40 000 on this account. [116] Otherwise I reject the defendant's arguments regarding set-off of accelerated benefits, as I find that, with the one exception I have noted, neither Peter nor Matthew has received any such benefit.

An admitted error in calculation by the Judge 24 In the written submissions filed on the respondent's behalf it was acknowledged that the primary judge had made an error in his favour, which required correction by this court. The respondent conceded at the trial that the deceased's keep would only be met from her wages at the Bega Joinery until 30 June 2004, and that the sum of $104,700 ($150 per week from 1 July 2004 for the 15.1 years of the respondent's residual life expectancy) on this account was to be deducted from his loss. The primary judge overlooked this concession in determining the amount of the loss.

Grounds of appeal - the dairy farm business 25 Grounds 1 to 5 assert error in the allowance for the loss of the deceased's services to the dairy farm. The appellant submitted that compensation under the Act is confined to the loss of financial benefits that the dependents would have enjoyed but for the death of the deceased (compensation for the loss of domestic services was said to constitute a special rule). The dairy farm had not operated in profit during the life of the deceased and had by and large run at a loss thereafter. It was said that there was no reasonable expectation that the dairy farm would have yielded a financial benefit to the respondent or Matthew (apart from his wages) in the absence of a dramatic increase in its scale. 26 The rationale for compensating for the loss of domestic services was said to be because they constitute a tangible benefit to the dependents. By contrast, the loss of services to a commercial venture, including a family run business, was said to be only a loss to the dependents if they had a reasonable expectation of financial return from the venture had the deceased lived.

27 The appellant pointed to the award of $424,575 for the past loss of services to the dairy farm as illustrative of the asserted error: the respondent and Matthew had received a financial benefit that demonstrably would not have eventuated had the deceased lived. The submission assumes that the loss of the services to the dairy farm was not a pecuniary loss to the respondent, the surviving proprietor of the business. The authority cited by senior counsel in support of the submission was De Sales v Ingrilli [2002] HCA 52; 212 CLR 338. The Court was not taken to any part of the decision in support of the proposition. De Sales considered the approach in Lord Campbell's Act claims to the contingency of re-marriage. There was no departure from the principles explained by the Court in Nguyen v Nguyen (1990) 169 CLR 245. 28 In Nguyen in the joint reasons, Dawson, Toohey and McHugh JJ said (at 260): "But as Gibbs J pointed out in dissent [in Seymour v British Paints (Australia) Pty Ltd [1967] Qd R 227], domestic services have a pecuniary value which is capable of assessment and deprivation of those services 'is just as much a pecuniary loss as the deprivation of income or of contributions of and food and clothing'. He went on to make it clear that the fact that a husband does 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'". (Footnotes omitted)

Their Honours distinguished the claim in Griffiths v Kerkemeyer (1977) 139 CLR 161, which was a claim for damages for personal injury involving the assessment of the loss occasioned by physical disability, and a Lord Campbell's Act claim, which was described as being "for recompense for some tangible advantage which has been lost by reason of the death of the deceased" at 263. They continued: "In this type of claim the loss can be identified directly and it is unnecessary to point to some need by which it is represented. Commonly the claim is based upon the loss of the financial contribution made by the deceased to the household and is referred to as a claim for the loss of a breadwinner. But the deceased may have made a contribution in services rather than money in which case damages are recoverable for their loss, whether or not they are, or are to be, replaced, provided that a pecuniary value can be placed upon them. And as Gibbs J pointed out in Seymour , if the services are housekeeping services there is no reason why a pecuniary value should not be placed upon them." (Citations omitted) 29 Nguyen does not support the appellant's contention that compensation for the loss of domestic services under Lord Campbell's Act represents a special rule but rather that the loss of the wife's services was the loss of a tangible benefit, which was susceptible of valuation in money terms.

30 Section 4(1) of the Act, relevantly, provides: "… the jury may give such damages as they may think proportioned to the injury resulting from such death to the parties respectively for whom and for whose benefit such action is brought … ". 31 The meaning of these words as they originally appeared in the Fatal Accidents Act 1846 (UK) was explained by Pollock CB in Franklin v South Eastern Railway Company (1858) 3 H&N 211 at 214: "Now it is clear that damage must be shewn, for the jury are to 'give such damages as they think proportioned to the injury'. It has been held that these damages are not to be given as a solatium; but are to be given in reference to a pecuniary loss. That was so decided for the first time in banc in Blake v The Midland Railway Company 18 QB 93. That case was tried before Parke B, who told the jury that the Lord Chief Baron had frequently ruled at Nisi Prius, and without objection, that the claim for damage must be founded on pecuniary loss, actual or expected, and that mere injury to feelings could not be considered." 32 The confinement of Lord Campbell's Act claims to pecuniary loss, as distinct from by way of a solatium, is explained in this way in Fleming, The Law of Torts, (Sydney, The Law Book Company Limited, 1998, 9th ed) at 734-735: " Lord Campbell's Act has been read down to allow recovery for loss only of economic or material advantages to the survivors. Damages in the nature of a solatium for grief or bereavement (unless amounting to psychiatric illness), for loss of consortium or allowance for the gravity of the injury preceding death are rigorously excluded. Dependants are protected in their interests of substance, not of personality. Even funeral and medical expenses occasioned by the fatal injury are disallowed except by amendment in some States and under survival legislation which universally ensures reimbursement to the estate ." (Emphasis in original. Footnotes omitted)

33 The primary judge referred to the decision of the Court of Appeal in Cape Distribution Ltd v O'Loughlin [2001] EWCA Civ 178. In that case compensation was sought for the loss of the deceased husband's entrepreneurial skill in the management of the family's property portfolio. The Court rejected the contention that, since the dependents had the full value of the capital assets, they had suffered no compensable loss. Latham LJ observed (at [13]): "… I can see no difference in principle between the loss of services of that domestic nature, and the loss of services which have a positive financial value to the family. For example, a husband may be so skilled and successful in dealing with the family's investments that he has no need of a stockbroker or other financial advisor. His death, whatever other loss may result, will mean that the family will have to replace that expertise and advice at the appropriate market cost. That cost is as much a loss to the family as could be the cost of a gardener. And, clearly, the position cannot be different, indeed it is a fortiori, if the family's sole source of support is the investment portfolio managed by such a husband. [14] It follows, it seems to me, that the court's task in any case is to examine the particular facts of the case to determine whether or not any loss in money or in monies worth has been occasioned to the dependents and if it determines that it has, it must then use whatever material appears best to fit the facts of the particular case in order to determine the extent of that loss." 34 The appellant submitted that the primary judge's reliance on Cape Distribution was misplaced. The deceased husband's services in that case were reasonably expected to yield financial benefit to the dependents, whereas the deceased's services here were unlikely to have produced an economic benefit and were characterised as being "almost recreational". (Orange 18.N-O) By analogy with the reasoning in Geaghan v D'Aubert [2002] NSWCA 260; 36 MVR 542 the appellant submitted this component of the claim should be rejected. Geaghan was a claim for damages for personal injury and concerned a claim for compensation for the gratuitous care of the plaintiff's pet dogs and horses. In Nguyen (at 262-263) Dawson, Toohey and McHugh JJ in their joint reasons drew attention to the distinction between compensating an injured plaintiff in respect of need and compensating dependents for their loss. The decision in Geaghan does not assist in the resolution of the appeal. 35 In any event, it is not correct to characterise the operation of the dairy farm business as being "almost recreational". The dairy farm was a business that provided employment for Matthew and which was expected to pass to him on the death of the survivor of the partnership and to continue to provide for his support. The farm had not returned a profit in the three years of its operation before the death of the deceased. The respondent's evidence was that these were "debt reduction years". The partnership had been indebted to Ralph Hetherington and the Commonwealth Bank. The proceeds of the sale of the Tathra units were applied to reduce the debt burden. As the appellant submitted, this may explain the profit in the financial year ending June 2000. In succeeding years the business again returned losses. The primary judge found that had the deceased not died, the family would have continued to operate the dairy farm. He found the loss of her services to it to be a significant, if not the dominant, factor in the decision to lease it. (Red 51.L - Q) The respondent and Matthew gave evidence that it was their intention to resume the conduct of the business at the expiration of the lease and the option period, should that be exercised. The primary judge appears to have accepted this evidence. He found that the respondent and Matthew intended to invest in the farm and expand it so that it could be economically viable. (Red 51.T). Ultimately, His Honour considered the profitability of the business to be irrelevant to the determination. (Red 52.F) In my opinion, this was not an error.

36 In Budget Rent-a-Car Systems Pty Ltd v Van Der Kemp (1984) Aust Torts Rep ¶80-688, McHugh JA, with whose judgment Samuels and Mahoney JJA agreed, rejected the contention that the loss of the deceased wife's services to the family business were not compensable in circumstances in which the business traded at a loss before and after her death. His Honour considered that the deprivation of the services was a loss to the family, "whether they did the extra work themselves or got somebody else to do it" (at 68,931).

37 The loss of material benefit to the respondent was the loss of the deceased's services to the partnership business, which they had intended would be maintained, and would ultimately pass to Matthew. It was a loss that was suffered whether the respondent engaged another person to provide the same services for the business or not.

38 The appellant's position was that if, contrary to his principal submission, it was appropriate to make some allowance for the loss of the deceased's services to the dairy farm, the amount of the loss was not to be determined by a calculation based on the number of hours worked by the deceased over the remainder of the respondent's life because it produced an amount that was disproportionate. There was no challenge to the primary judge's finding of the average number of hours worked by the deceased on the farm. There was no issue that the deceased's services were specialised and that the rate of $37 was an appropriate rate for a person performing the services. There was no error in awarding damages for loss of the deceased's services to the dairy farm to the date of trial on the basis that the primary judge adopted. 39 In dealing with the loss, both as to the past and the future, his Honour said: "It is difficult to quantify this loss. The best I can do is to award a sum based on the loss of Janet's services and their replacement by a skilled farm worker at the rate suggested by Mr Ivey ($37 per hour). He is an accountant with great experience in rural valuation, and I accept that he is in the best position of all the experts to state the going rate for rural workers/managers." (Red 52.P-S) 40 His Honour did not refer to the lower rate (the average farm manager's base salary) proposed by Mr Ivey in calculating the future loss. His Honour applied a rate of $37 per hour for the expected life of the respondent reduced by 15 percent for contingencies. (Mr Ivey quoted the rate as $37.50. The calculations were based on a rate of $37.00 but nothing turns on this.) As I read his reasons, the primary judge considered that any diminution in the deceased's working capacity as the result of age would be balanced by the fact that she would have more time to devote to work on the farm after she retired from the Bega Joinery. It is apparent that his Honour accepted that the deceased was a healthy, energetic woman with a strong attachment to the farm. The provision for future loss assumed that the deceased would continue to provide the same skilled services, justifying payment at the higher rate, until she was aged 76 years. It was an assessment that did not take into account the likelihood that Matthew would acquire greater skill and assume a more prominent role in the management of the farm as the deceased aged and he came closer to assuming sole responsibility for it. 41 I have concluded that it was an error to assess the value of the loss of the deceased's services in the future by applying the higher rate with no more than a conventional discount for contingencies. The lower hourly rate that Mr Ivey nominated for the future takes into account both some reduction in working capacity with age and the expected shift in responsibilities over the years with Matthew assuming the managerial role. Allowing for future loss calculated at the lower rate is an appropriate means of taking into account some reduction in the value of the deceased's services with age. In addition to this, in my opinion it is necessary that some greater allowance should be made for the contingency that the deceased would not be able to provide 27 hours per week of services to the age of 76. 42 The loss of the deceased's services to the farm from the date of trial for the expected balance of the respondent's life was calculated using the 555 multiplier (Luntz, Assessment of Damages for Personal Injury and Death (Australia: Butterworths, 2002, 4th ed) Appendix, Table 2, 5% Table over 15 years). Applying the hourly rate ($30) and allowing 20 per cent for contingencies, this amounts to $359,640. The loss of the deceased's domestic services 43 Grounds six to nine challenge the amount awarded for the loss of the deceased's domestic services, which was submitted to be manifestly excessive. The principal complaint was that the judge failed to give weight to the evidence that the replacement services of Ms Smith and Ms Wiley were performed in eight hours per week. The appellant acknowledged that the primary judge found that the replacement services were not a complete substitute for those provided by the deceased. The appellant's point was that the evidence of the hours worked by the two women was one objective indicator of the extent of the services provided by the deceased for the benefit of the respondent and Matthew as distinct from domestic services carried out by the deceased for her own satisfaction and benefit. In the appellant's submission, a proper estimate of the hours devoted to domestic services for the respondent and Matthew was 11 hours per week. 44 The primary judge allowed 21 hours per week for this item. The evidence was that the family home is a large one, comprising two lounge rooms, two dining rooms, a sitting room, four bedrooms, one main bathroom, a large laundry with separate shower and toilet, three patios and two offices. The floors are of polished timber, which the deceased swept or vacuumed "virtually every morning". The respondent and Matthew both worked in occupations involving manual labour. The deceased did all the laundry. She did all of the cooking, which included the preparation of a hot meal every night. There was no suggestion that the deceased pursued particular domestic activities purely for her own benefit. In my view, it was open to the judge to conclude that after excluding such domestic labour as was for her own needs, the deceased provided domestic services for the benefit of the respondent and Matthew for three hours each day.

Accelerated benefits 45 Grounds 10 to 22 challenge the primary judge's rejection of the appellant's claim as to the amount by which the respondent's damages should be reduced to bring into account the acceleration of benefits to him arising from the death of the deceased. The appellant contends that the amount of each accelerated benefit should have been converted to present value, by increasing the value of each as at the date of death by five per cent per annum (the discount rate for motor accident claims). The benefits identified by the appellant in these grounds are the respondent's acquisition of the deceased's interest in the Tathra units, the Bega joinery, "Parkview" and the property in West Street, Bega. The value at death and the claimed present value are set out in a table in ground 22. It is reproduced below: Asset Value at Death Present Value Units at Tathra $131,000 $184,000 Shares in Bega Joinery P/L $160,000 $225,000 Property at West Street, Bega $90,000 $126,000 "Parkview" property at Bega $115,000 $161,000 Total $496,000 Total $696,000

46 The value at the date of death of the shares in the Bega Joinery, and the interest in "Parkview" and West Street, are taken from the valuation in the inventory that is annexed to the respondent's probate affidavit. The value at the date of death of the deceased's interest in the Tathra units is taken as being one half of the distribution made to the respondent following the sale.

47 The appellant contends that the Tathra units were sold shortly after the death of the deceased for $262,000 and that the respondent received the whole of the benefit of this sum, whereas, had the deceased survived, he would have been entitled to only one half of the sum. It is noted that the primary judge reduced the respondent's damages by $40,000 for the "additional benefit received by the respondent upon the sale of the Tathra units" on the basis of an assumed interest saving of $20,000 per annum, of which a saving of $10,000 per annum for four years was attributable to the benefit received as the result of the death of the deceased (ground 11). However, the appellant submits that his Honour erred in ignoring the fact of the receipt of $131,000 as a continuing financial advantage. The basis of the calculation of the $40,000 reduction in the award is the subject of separate complaint. (Ground 12) 48 The Tathra units were acquired in 1979 for the sum of $115,000. They were sold on 23 June 2000 for $319,052. They were the only trust asset and following the sale the surplus available for distribution was $262,260, which was paid to the respondent. 49 The respondent submitted that, "the existence of a discretionary trust in relation to Tathra makes it inappropriate to treat any payments made from the proceeds of the Tathra sale (which were used to reduce debt on the farm) as being of any benefit to either the Respondent or Matthew which the Appellant is entitled to claim a credit for, even on the basis of acceleration only". (Orange 47.X-48-F) This submission was not further developed on the hearing of the appeal. Given the control exercised jointly by the deceased and the respondent over the trustee, Pynwatch, I do not agree that the primary judge was wrong to take into account the distribution of the whole of the net proceeds of sale of the trust assets to the respondent as amounting to a benefit to him flowing from the death of the deceased. 50 The respondent's principal contention was that the whole of the proceeds of sale of the units were applied in reduction of the mortgage debt for the benefit of the dairy farm business. It had been the intention of the deceased and the respondent to sell the units and use the proceeds in this way. In these circumstances, it was said to be artificial to characterise the distribution of the whole of the proceeds to the respondent as a material benefit arising from the deceased's death. In written submissions filed on the respondent's behalf, an application for leave to file a notice of contention alleging that the primary judge erred in the deduction of $40,000 from the judgment sum was foreshadowed. No notice of contention was filed in the course of the hearing.

51 Turning to the deceased's shares in the Bega Joinery and interest in the premises in West Street, the appellant contends error in the failure to reduce the respondent's damages by at least $160,000 for the former and $90,000 for the latter. The primary judge's reasons with respect to the acceleration of benefits to the respondent are set out in paragraph [23] above. His Honour did not, in terms, deal with the deceased's shares in the Bega Joinery or the interest in the West Street premises. The shares were touched on earlier in the judgment at [74]: "Peter has lost the benefit of wages, but as the result of her death he has inherited her shares in the company, and has also taken advantage of the situation to increase his own wage to an amount roughly twice the amount it was before Janet died. When such advancement is taken into account, Peter has suffered no compensable loss in relation to her earnings from Bega Joinery as a result of Janet's death."

The amount of the discount allowed in this respect was $13,338.

52 The appellant contends error in the failure to reduce the respondent's damages by $115,000 to take into account his acquisition of the deceased's interest in "Parkview". It will be recalled that the matrimonial home is on a separate title. The appellant acknowledged that the matrimonial home and furnishings should not be brought into account as pecuniary benefit for the purposes of the award: Carroll v Purcell (1961) 107 CLR 73; Zordan v Metropolitan (Perth) Passenger Transport Trust (1963) 37 ALJR 159 at 161. 53 The respondent submitted that he had as much enjoyment of the assets forming the estate of the deceased - her shares in the Bega Joinery, her half interest in the West Street premises, her half interest in "Parkview" and the dairy farm business - as he had enjoyed before her death, and that the primary judge had been correct in declining to treat the acquisition of these as benefits to be brought into account. 54 The principle is stated by Dixon J in Public Trustee v Zoanetti (1945) 70 CLR 266 Dixon J (at 276-277): "… [I]n ascertaining the pecuniary loss resulting from his death there must be taken into consideration, on the one side, the reasonable expectations of benefit upon which the claimant would have been entitled to rely, had his life not been brought to an end, and, on the other side, the pecuniary benefits, arising on his death, to which the claimant had a reasonable expectation, whether as of right or otherwise. For example, if the deceased leaves property in which under his will or on intestacy the widow takes a share or interest, the effect upon her financial position of her so taking that share or interest must be taken into account as against her loss of those material benefits which depended upon the continuance of her husband's life." 55 The market value of the deceased's interest in jointly owned assets (apart from the matrimonial home and furnishings) may not readily translate into the value of the benefit to the surviving spouse. In Lewis v Dalton (1986) Aust Torts Rep ¶80-069 the Full Court of the Supreme Court of Queensland dismissed an appeal from the decision of McPherson J declining to reduce the plaintiff wife's damages by her inheritance of certain jointly owned assets. Kelly SPJ (with whom Carter and Dowsett JJ agreed) observed, with respect to monies held in joint names in bank and building society accounts and over which the surviving wife had sole control, that there was much to be said for the view that in the circumstances the change was of form rather than substance (at 68,226). His Honour referred with approval to the observations of Holroyd Pearce LJ in Daniels v Jones [1961] 1 WLR 1103 at 1114 in this respect.

56 In Daniels v Jones Holroyd Pearce LJ said (at 1114): "On the facts of this case I would not myself accept that the whole of the estate that came to the wife was a benefit, less the 12 ½ per cent chance which she had of inheriting had the accident not occurred. The judge did not take into account the benefit which the wife had during her husband's life from the capital which was invested in his name. In some cases, of course, a wife derives little benefit from capital invested in her husband's name. But in such a case as the present the wife could clearly call on it if it were needed almost to the same extent as if it stood in her own name. It may be said that there must always in theory be some material benefit in a wife having capital actually under her control instead of under the control of a husband, even when he is clearly prepared to use it for family purposes, and if need arises to spend it on his wife (for example, if an expensive illness so required). But in this case that benefit was small in real fact. There was but little profit to the wife in having the capital (shorn by death duties) in her own hands instead of having a larger sum (not so shorn) in her husband's hands." 57 In Gullifer v Pohto [1978] 2 NSWLR 353 at 365 this Court referred to Daniels v Jones, noting that the Court of Appeal had pointed out the need to bring to account many considerations that were not comprised within arithmetical calculations and of the need to apply them with common sense. In Gullifer the Court was concerned with the approach to bringing into account the inheritance by the child claimants of substantial sums as the result of the premature death of their mother. In this context the Court said (at 364-365): "The utility of calculations as a guide will vary, but to discard them completely, particularly in a case such as the present, is likely to lead to judicial guessing or a practice substantially to disregard benefits from inheritances or to put upon them nominal sums. A substantial early inheritance, particularly from a mother where a home and supporting father remains, falls into a somewhat different category from the early acquisition by the widow of the title to the family home in which she would have lived in any event. So long as the law remains that benefits, such as estate benefits, are to be brought to account, their value must be assessed and, in proper cases, by the guide of any relevant calculation". 58 Bryson JA gave consideration to the principles to be applied with respect to property passing between spouses (apart from the matrimonial home) in Walden v Black [2006] NSWCA 170. The principles although expressed in dissent were not affected by the majority's reasons. His Honour noted at [143] that the judgment of Windeyer J in Parker v The Commonwealth of Australia (1965) 112 CLR 295 is inconsistent with a rule to the effect that the passage of ownership of property is to be disregarded in a claim under the Act. 59 His Honour's reference was to the passage in the judgment of Windeyer J at (at 311-312): "I turn then to the personal property left by the deceased. The reported cases seem to show that, speaking generally, personalty in the form of savings and investments by a husband to which his wife succeeds on his death is not be regarded in the same way as her succession to the matrimonial home. I do not think that there is any 'strictly proper approach' to this question." 60 Bryson JA went on to observe (at [152]): "In cases other than the passage of the matrimonial home and furniture to the widow, the facts imponderable as they often are, must be examined as closely as they can in the circumstances to see whether there are reasons why the prima facie advantage of inheritance to property rights should be brought into account, or should not be brought into account, or should be subjected to some analysis to ascertain the value of the acceleration". 61 In my opinion, it was an error for the primary judge to treat the respondent's acquisition of the deceased's interest in their jointly owned assets (with the exception of the Tathra units) as conferring no benefit on him. 62 His Honour held that the respondent's enjoyment of "Parkview" was exactly the same after the death of the deceased as it was before it. (Red 64.D) This was not so. Had the deceased lived, she would not have consented to the lease of the property. In the event, the respondent let "Parkview" and obtained a commercial rent for it. It was necessary to make allowance to reflect the acquisition of the deceased's interest in the property with the freedom that gave him to deal with it. 63 It was equally necessary to make allowance for the inheritance of the deceased's shares in the Bega Joinery and her interest in the West Street premises. These were assets of value over which the respondent now has sole control and which he did not have any realistic expectation of inheriting. In considering the value of the benefit of the inheritance of the deceased's shares, senior counsel for the appellant acknowledged in the course of oral submissions, that it would be appropriate to take into account the degree of control the respondent had over the company before the death of the deceased and to discount the value of the shares accordingly. (T'cpt 37.17-20)

64 In placing a value on the benefit to the respondent of the distribution of the whole of the proceeds of sale of the Tathra units it was appropriate for the primary judge to have regard to the stability of the marriage and the likelihood that had the deceased lived they would have been applied in the same way in reduction of the partnership debt. Senior counsel for the appellant did not submit to the contrary. His contention was that it was a matter for discount rather than excluding the value of the deceased's interest in the proceeds altogether (save for the allowance for the saving in interest). (T'cpt 34.29)

65 Assigning a value to the benefit to the respondent of having the sole ownership of assets, which in the ordinary course he would not have acquired, but which on the primary judge's findings, is of limited practical benefit to him given that his enjoyment is not likely to materially differ from the enjoyment that he would have had should the deceased have survived, is an imprecise exercise. The starting point is the value of the assets. The only evidence to which the Court was directed in this respect was the valuations that are set out in the inventory and the amount of the distribution following the sale of the Tathra units. The figures given for present value in the appellant's submissions do not appear to have been the subject of the accounting or other evidence. I approach the matter by reference to the valuations at the date of the death of the deceased. 66 The proceeds of the sale of the Tathra units were applied in reduction of the partnership debt, which was consistent with the intentions of the respondent and the deceased prior to her death. Rather than reducing the respondent's damages by the assumed interest saving over a four-year period, I would discount the value of the asset by 66.6%, which happens to produce a similar sum, namely, $43,754. I would discount the value of the shares in the Bega Joinery and "Parkview" by 50 percent to take account of the matters to which I have referred. This yields the sums of $80,000 and $57,500 respectively. In the case of the jointly owned real estate in West Street, I see no reason to discount the full value of the deceased's interest, which is the amount of $90,000. This was jointly owned real estate, which the respondent is free to deal with at such time as he choses to cease operating the joinery business. The sum of these figures is $271,254. Since I have approached the benefit from the proceeds of sale of the Tathra units by discounting the value of the deceased's interest it will be necessary to restore the $40,000 deduction that the primary judge allowed for this benefit. In the result the amount by which I propose the respondent's award is to be reduced to take into account the benefits to him arising from the death of the deceased is $231,254.

67 The reduction in the award on account of acceleration in benefits affects only the respondent's claim. Senior counsel for the respondent made no submissions concerning apportionment at trial or on the appeal. Matthew is an adult and in the circumstances this Court is not called on to embark on apportionment of the award. 68 The respondent concedes that it is necessary for this Court to correct the error relating to the acknowledged cost of the deceased's keep. In addition to this error, the appellant has made good two of his challenges to the amount of the award. It will be necessary to set aside the judgment below and to substitute judgment in a reduced sum. In summary, I propose the award be reduced by $104,700 (the deceased's keep from 1 July 2004); $111,638 (the reduction in the calculation of the future loss of services to the farm) and $231,254 (the reduction for the acceleration of the benefits to the respondent after off-setting the $40,000 allowed by the primary judge on this account). In total, this is a reduction of $447,592 and will result in an award of $857,714.

69 In the written submissions filed on the appellant's behalf liberty was sought to make further submissions with respect to the costs of the District Court hearing. On the hearing of the appeal the parties consented to questions of costs being resolved by two members of the Court. (T'cpt 60.18-24)

1. Allow the appeal and set aside the verdict and judgment in the District Court and in lieu thereof substitute verdict and judgment for the respondent in the sum of $857,714. 2. In the event that the parties are unable to agree on the order for costs, written submissions on the form of the order (of not more than 10 pages in length) may be delivered to the Associate to McColl JA by 4.00pm on Friday 14 June 2008. The matter will be dealt with on the papers unless sufficient reason is identified in the written submissions for the proceedings to be listed for further hearing. **********

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.