Clement v Backo & Suncorp Metway Insurance Ltd [2007] QCA 81

DAMAGES - MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR TORT - MEASURE OF DAMAGES - PERSONAL INJURIES - LOSS OF EARNINGS AND EARNING CAPACITY - EXPENSE FLOWING FROM PLAINTIFF'S INABILITY TO WORK - PARTICULAR CASES - where respondent maintained timber plantation prior to injury - where the respondent could not maintain the plantation after accident - where the costs of the gratuitous services provided for maintaining the timber plantation were classed as damages for gratuitous services under s 59 Civil Liability Act 2003 (Qld) - whether the principle established in Griffiths v Kerkemeyer applied

Civil Liability Act 2003 (Qld), s 59(1), s 59(1)(a), s 59(1)(b)

Blundell v Musgrave [1956] HCA 66; (1956) 96 CLR 73, cited

Cockshell v Australian National Railway Commission (1986) Aust Torts Reports [80-024], considered

CSR Ltd v Eddy [2005] HCA 64; (2005) 80 ALJR 59, followed

Graham v Baker [1961] HCA 48; (1961) 106 CLR 340, considered

Griffiths v Kerkemeyer [1977] HCA 45; (1977) 139 CLR 161, applied

Kriz v King [2006] QCA 351, followed

Medlin v State Government Insurance Commission [1995] HCA 5; (1995) 182 CLR 1, followed

O'Keefe v Schluter [1979] Qd R 224, considered

Randall v Dul (1994) 13 WAR 205, considered

The National Insurance Co of New Zealand Ltd v Espagne [1961] HCA 15; (1961) 105 CLR 569, cited

Thomas v Eyles (1998) 28 MVR 240, considered

Trigwell v Trigwell (1997) 18 WAR 83, cited

Van Gervan v Fenton [1992] HCA 54; (1992) 175 CLR 327, considered

R J Douglas SC, with S J Williams, for the appellant

[1] McMURDO P: The plaintiff respondent Mr Clement was injured on 4 February 2004 when a vehicle driven by the first defendant Mr Backo rolled over after hitting water in a gully across the roadway. Mr Clement was a passenger in the car. He brought an action in negligence for damages against Mr Backo and his insurer, the second defendant appellant, Suncorp Metway Insurance Ltd. The appellant admitted liability prior to trial. Mr Clement's damages were assessed by the learned primary judge in the sum of $549,944.08. The appellant contends that the primary judge erred in assessing $40,000 of those damages for the costs of gratuitous services provided and to be provided to Mr Clement by his wife, Ms Andrea Clement, in maintaining a commercial timber plantation. The appellant contends that Ms Clement's services were not gratuitous services under s 59(1) Civil Liability Act 2003 (Qld) ("the Act") and that this Court should allow the appeal and reduce the judgment sum to $509,944.08.

[2] In a notice of contention Mr Clement argues that if the primary judge was wrong in finding that those damages were for gratuitous services under s 59 of the Act, the damages award of $40,000 was nevertheless correct because Ms Clement's services on the commercial timber plantation arose out of an impairment of Mr Clement's earning capacity for which the appellant was responsible. Mr Clement contends that as the damages awarded by his Honour were properly calculated on this alternative basis the appeal should be refused.

[3] Mr Clement gave evidence by way of a written statement and oral evidence at trial. In his written statement he explained that before he was injured he tended 600 mahogany trees which he had planted between 2000 and 2004 on the six hectare property at Gargett where he lives. His work on the plantation involved driving between the trees in a tractor pulling a slasher, fertilizing and pruning. He still worked on the property but he could no longer plant trees. Ms Clement now does the planting work previously done by him. He and Ms Clement also pay Alison Smith, a neighbour, $15 per hour to perform the work that he would have done but for the accident. He can no longer drive the tractor and slasher because the rough ride exacerbates his symptoms. He purchased a ride-on mower which Ms Clement now uses to mow between the trees. Since he has returned to his main employment Ms Clement and Ms Smith do the mowing between the trees, the whipper-snippering and other physical work that he previously did on his rostered days off from his main employment.

[4] In his oral evidence-in-chief he added that he planted the mahogany trees using a crowbar and mattock each week to dig holes and to remove the weeds and grass; he then fertilized and watered the trees for a few months to ensure they were established. Since the accident Ms Clement has continued the planting programme with help from Ms Smith so that now there are between 1,500 to 2,000 mahogany trees planted. Before the accident he would work for one and a half days on the mahogany trees on the property. He was unable to carry out that work since the accident because it was too painful. His wife now did this work.

[5] The issue was not canvassed in cross-examination.

[6] A summary of his tax returns for 2001 - 2005 showed that he had accumulated losses totalling $56,418 in respect of the plantation which was run as a commercial undertaking.

[7] Ms Andrea Clement in her tendered statement explained that she married Mr Clement in November 1999 and since then they have lived on his rural property which he purchased before their marriage. They began growing American mahogany trees intending them to provide a long-term investment for the future. They imported the seeds, grew seedlings and then prepared and planted areas on the property. Before the accident Mr Clement spent a day or two each week planting and maintaining the mahogany trees. He dug holes with a shovel and crowbar, planted the trees and then slashed around, fertilized, sprayed and watered them. After his accident Ms Clement attempted to care for the trees as he had previously done. She was unable to drive the tractor. They sold it and bought a ride-on mower so that she could mow between the trees, a task which takes her about 12 hours every two weeks in the growing season. Some areas cannot be mown and require whipper-snippering. This takes an additional 12 hours or so every two weeks. She did not have time to do all this work and in 2005 she hired Alison Smith to assist. She pays Ms Smith $15 per hour. During the winter months Ms Clement can manage the mowing and whipper-snippering without assistance. There is a continuous need to replant trees which die or do not grow satisfactorily. The Clements are also trying to increase the number of trees on the plantation. She estimates that she has spent not less than 12 hours per week tree-planting and managing the mahogany plantation, work which Mr Clement would have done but for the accident.

[8] This issue was not canvassed in her oral evidence.

[9] In an exchange with the judge during oral submissions, Mr Clement's counsel contended that this part of the claim, although relating to a commercial operation, was made, at least by way of analogy, under the principle established in Griffiths v Kerkemeyer. [1] Mr Clement's counsel assured the trial judge that he had successfully claimed such damages on behalf of clients in the past. The judge queried whether the claim, if allowed, should take into account the fact that the plantation had now been increased from 600 trees at the time of the accident to about 1,500 trees at the time of trial.

[10] Mr Clement's counsel handed the judge a quantum schedule during his submissions which relevantly included under the heading "Past Home Help":

"Tree planting and tree management duties (as per Paragraph 86 of Andrea Clement's Statement)

He claimed under the heading "Future Paid Assistance":

$180.00 per week x 10 years (multiplier 413) = $74,340.00."

[11] In subsequent written submissions at trial Mr Clement's counsel submitted that the services provided by Ms Clement in tending the mahogany plantation after the accident were compensable as gratuitous services by an extension of the rule in Griffiths v Kerkemeyer. In support of that contention he cited Thomas v Eyles,[2] O'Keefe v Schluter,[3] Randall v Dul[4] and Cockshell v Australian National Railway Commission.[5] He submitted that the claim was an aspect of Mr Clement's impaired capacity to perform manual labour which would have resulted in an economic benefit to him, either when he sold the property or when the trees reached maturity and were harvested. Ms Clement was required to carry out the work which he would have done and he is entitled to be compensated for her gratuitous work. On the unchallenged evidence Mr Clement was prevented from working a day and a half a week. The commercial rate paid to Ms Smith was $15 per hour; this loss would continue for the rest of his life; a global allowance of $40,000 was appropriate.

Section 59 of the Act

[12] It is useful to next set out s 59(1) of the Act which relevantly provides:

(1) Damages for gratuitous services are not to be awarded unless -

(b) the need for the services arises solely out of the injury in relation to which damages are awarded; and

(c) the services are provided, or are to be provided -

[13] The primary judge made the following findings of fact. Prior to the accident Mr Clement was establishing a mahogany plantation on his property. Although he continues to do some work on the project he no longer plants trees or drives the tractor or slasher. This work is done by his wife or a neighbour who is paid $15 per hour for her labour. Since the respondent was injured the plantation has increased from about 600 trees to between 1,500 and 2,000 trees.[6] Mr Clement operated the plantation as a commercial enterprise, as was clear from his tax returns. Prior to his injury he had worked a day and a half a week in the plantation, spending the bulk of his recreational time there. He could not have spent more time on the plantation without affecting his principal employment.[7] The need for the services now provided in the plantation by Ms Clement and a neighbour, at least to the extent that Mr Clement had previously done the work himself, arose solely from the accident. The services were provided for at least six hours a week and for at least six months[8] and, taking an approach which merged both past and future gratuitous assistance, should be calculated on the basis of one and a half days work per week for five years at $15 per hour rounded to $40,000. His Honour drew the inference that after five years the plantation would be established and the work necessary to maintain it significantly reduced.[9]

[14] His Honour noted the submission of Mr Clement's counsel that under common law principles it makes no difference whether the gratuitous services claimed are personal or commercial, footnoting the cases on which counsel relied.[10] His Honour observed that the payments to Ms Smith for her services would be recoverable as economic loss occasioned by the accident under another head of damage.[11] The paid services represented only a small part of the necessary work done on the plantation. The claim for damages under s 59 of the Act, if allowed, must depend on the gratuitous portion of the services provided by Ms Clement.[12] The plantation was already partly established when Mr Clement was injured and a failure to maintain it would have created a financial loss, namely the future commercial profit from the mature trees. Had Mr Clement lost the ability to pursue that venture because of the accident he would have been entitled to damages for loss of that opportunity, subject to the consideration of the vagaries associated with any agricultural enterprise.[13] Ms Clement voluntarily provided the services necessary to avoid that loss so that her services were "necessary" within the meaning of that term in s 59(1)(a) of the Act: they were necessary to avoid another and potentially greater loss.[14]

[15] The appellant primarily contends that the services provided by Ms Clement were not gratuitous services, nor were they necessary within the meaning of those terms in s 59(1) of the Act. That section allows for damages to be awarded only for gratuitous services needed by a plaintiff personally for the plaintiff's care, consistent with the common law principles of damage established by Griffiths v Kerkemeyer as interpreted in CSR Ltd v Eddy.[15] Damages of this kind are not awarded to mitigate commercial losses, so that the services rendered were not "necessary" within s 59(1)(a) of the Act. The appellant further contends that the damages were awarded for services provided which did not arise solely out of the plaintiff's injury as required by s 59(1)(b) of the Act: a proportion of the damages were awarded in respect of the labour involved in increasing by 150 per cent the size of the plantation and maintaining the increased plantation from the existing 600 trees at the time of the accident to the 1,500 or 2,000 trees at the time of trial. The appellant also contends that the primary judge did not make an allowance as he should have for the commercial benefit which Mr Clement and perhaps Ms Clement would derive from the work done by Ms Clement on the plantation. The appellant contends that the judge erred in finding the appellant liable for any part of this $40,000 damages award, the appeal should be allowed and the judgment sum should be reduced by $40,000.

[16] Despite the primary judge's reasons, Mr Clement's counsel does not now submit that Ms Clement's gratuitous work done on his behalf on the mahogany plantation amounted to gratuitous services within the meaning of that term in s 59 of the Act. Instead he contended that the need for these services arose out of Mr Clement's impaired earning capacity caused by his accident-related injuries and he was properly entitled to compensation for the cost of Ms Clement's services at a commercial rate. It could be inferred from the evidence that had Ms Clement not done this work Mr Clement would have suffered economic loss.

Does s 59 of the Act apply to allow an award of damages for Ms Clement's gratuitous services?

[17] Despite the concession made by Mr Clement's counsel at the appeal hearing that s 59 of the Act has no application to the $40,000 damages award the subject of this appeal, it is necessary to determine that issue because it was central to the primary judge's reasoning on this aspect of the damages award.

[18] This Court in Kriz v King[16] determined that the term "gratuitous services" as used in s 59 of the Act has its meaning at common law in accordance with the principle established in Griffiths v Kerkemeyer as most recently interpreted by the High Court in CSR Ltd v Eddy.[17]

[19] In CSR Ltd v Eddy Gleeson CJ, Gummow and Heydon JJ, in a joint judgment with which Callinan J also agreed, observed that in Griffiths v Kerkemeyer Gibbs, Stephen and Mason JJ held that a plaintiff in a claim for personal injury was entitled to recover the commercial cost of nursing and domestic services provided gratuitously in the past and to be provided in the future by the family or friends of the plaintiff.[18] Their Honours noted that in Van Gervan v Fenton[19] Mason CJ, Brennan, Toohey and McHugh JJ affirmed the view of Stephen and Mason JJ in Griffiths v Kerkemeyer that the basis of the claim was the plaintiff's need for the services; it was unnecessary to show that the need was or might be productive of financial loss; the damages were to be determined not by reference to the actual cost but by reference to the market cost of the services.[20] Their Honours rejected the plaintiff's claim for damages for the inability to provide domestic assistance to others because of personal injury, overturning a contrary line of authority from intermediate Courts of Appeal including Sullivan v Gordon[21] and Sturch v Willmott.[22] In doing so their Honours made the following observations about the principle established in Griffiths v Kerkemeyer. The principle is controversial; it can produce what some consider to be disproportionately large awards compared to the sums payable under traditional heads of loss.[23] It is also anomalous in that it departs from the usual rule that damages other than damages payable for loss not measurable in money are not recoverable for an injury unless the injury produces actual financial loss.[24] Their Honours observed that ordinarily a plaintiff who has suffered negligently-caused personal injury is able to recover three types of loss. The first is non-pecuniary losses such as pain and suffering, even where there is no actual financial loss caused and even if the damage caused cannot be measured in money.[25] The second is loss of earning capacity before and after trial, awardable only to the extent that the loss has been or may be productive of financial loss.[26] The third is actual financial loss, for example, ambulance and medical charges, special clothing, special equipment and the like. Damages under the principle established in Griffiths v Kerkemeyer relate to a plaintiff's need for personal care or services. Griffiths v Kerkemeyer should not be used by way of analogy to extend an award of damages in any case where its use is not covered by authority. A plaintiff's lost amenity to care for others has long been recognized as compensable as part of a general damages award.

[20] McHugh J in CSR also considered that the principle established by Griffiths v Kerkemeyer was exceptional in that it unsettled the long-established rule in Blundell v Musgrave[31] that an item of special damages could only be recovered as compensation in respect of a liability actually paid or incurred. Griffiths v Kerkemeyer has also unsettled the distinction between general and special damages.[32] McHugh J, too, expressed the view that the plaintiff's lost capacity to care for his wife was compensable under the heading of loss of amenity or loss of enjoyment of life.[33]

[21] I turn now to the cases relied on by Mr Clement and the primary judge as supporting the damages award under s 59 of the Act. In O'Keefe v Schluter Wanstall CJ sitting as a trial judge awarded a plaintiff special damages for his lost ability to work on his farm during which time he received assistance from his father and brother even though he had no legal obligation to pay them for their services; the damages were calculated on the hours worked at the then commercial rate for a farm labourer. Wanstall CJ considered it was an appropriate case in which to extend the principle justifying damages for gratuitous services in Griffiths v Kerkemeyer.

[22] Zelling J in Cockshell v Australian National Railway Commission followed a South Australian Full Court decision, Beck v Farrelly,[34] which predated Griffiths v Kerkemeyer, followed Donnelly v Joyce[35] and allowed a plaintiff to claim damages for gratuitous services provided by his brothers in running the plaintiff's businesses when he was unable to attend to them because of his accident-related injuries. In Cockshell, the plaintiff's wife provided gratuitous services to her injured husband plaintiff in their joint business. Zelling J awarded Mr Cockshell damages for Ms Cockshell's gratuitous services provided to him in the business as a result of his inability to work there because of his accident-related injuries.

[23] In Randall v Dul the West Australian Full Court allowed a plaintiff to claim damages for her mother-in-law's assistance in carrying out unpaid work previously done by the healthy plaintiff in her husband's hairdressing business; no actual economic loss was established.[36]

[24] In Thomas v Eyles the New South Wales Court of Appeal upheld a plaintiff's entitlement to $130,216, an amount he received from five fellow abalone divers who harvested half of his quota under his licence to dive for and harvest abalone after he was rendered a quadriplegic in a motor vehicle accident. The court considered that these damages fell within or were analogous to the Griffiths v Kerkemeyer rule.[37]

[25] In addition to the cases referred to by the primary judge, counsel for the appellant has fairly referred us to Harold Luntz's Assessment of Damages for Personal Injury and Death[38] where the learned author cites the above authorities and states:

"The principle of Griffiths v Kerkemeyer [(1977) [1977] HCA 45; 139 CLR 161] is not confined to nursing and domestic assistance, but extends to other forms of voluntary assistance, so long as similar criteria are satisfied. Thus it has been held to apply to voluntary assistance rendered in the business of an incapacitated plaintiff."

[26] It must first be noted that none of these authorities nor the latest edition of Luntz's text postdated the High Court's decision in CSR Ltd v Eddy which placed limitations on the principle in Griffiths v Kerkemeyer.

[27] It must also be noted that Randall v Dul was not subsequently followed by the West Australian Full Court in Trigwell v Trigwell.[39] There the Full Court by majority held that a plaintiff was not entitled to claim the cost of substitute labour necessary to fill the need created by her incapacity in her husband's farming business, considering that the High Court's decision in Medlin v State Government Insurance Commission[40] had the effect that Randal v Dul should not be followed.[41] The plaintiff to succeed in her claim for lost earning capacity needed (but failed) to show that her diminished capacity for general farm work was or might be productive of financial loss to her.[42]

[28] In Medlin the plaintiff retired earlier than otherwise because of his accident-related injuries. The High Court found that he was entitled to damages for loss of earning capacity because his injuries were a causative influence in his early retirement. Deane, Dawson, Toohey and Gaudron JJ noted that a plaintiff in an action in negligence is entitled to recover damages for loss of earning capacity only if it is established first that the plaintiff's earning capacity has in fact been diminished by reason of the negligence-caused injury and second that the diminution of earning capacity is or may be productive of financial loss,[43] citing for that proposition Graham v Baker.[44] The principle established in Griffiths v Kerkemeyer as explained in Van Gervan v Fenton,[45] which provides that compensation for a plaintiff's increased needs should not be reduced to take account of the extent that those needs have been or will be satisfied by gratuitous services, is applicable to preclude the reduction of damages for loss or impairment of earning capacity by reason of the financial or other support provided by relatives or friends to reduce the deprivations of unemployment. But that does not entitle a plaintiff to be compensated for diminution of earning capacity as a distinct additional head of economic loss in circumstances where the diminution has had and will have had no adverse effect on actual earnings and will be productive of no economic loss. McHugh J stated that he saw no conflict between the principles stated in Graham v Baker and those laid down in Griffiths v Kerkemeyer. The former formulates a principle for compensation for a loss. Griffiths v Kerkemeyer and Van Gervan formulate a principle for compensation for a need.[46]

[29] In a similar vein, in Husher v Husher[47] when the High Court considered a plaintiff husband's inability to contribute to a business partnership with his wife because of accident-related injuries, Gleeson CJ, Gummow, Kirby and Hayne JJ reaffirmed that since at least Graham v Baker, an injured plaintiff's economic loss has been assessed by reference to the actual loss up until trial which can be more or less precisely ascertained and then, having regard to the plaintiff's proved condition at the time of trial, an assessment of future loss. Damages for both past loss and future loss are based on a diminution of a plaintiff's earning capacity which is or may be productive of financial loss. It is necessary to identify both what capacity has been lost and what economic consequences will probably flow from that loss in order to assess what sum will put the plaintiff in the same position as he or she would have been in if the injury had not been sustained. See also Luntz at [5.1.4].[48] Sometimes it will not be possible to adduce precise arithmetic evidence of the economic loss: Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd.[49]

[30] It has long been accepted that assistance given by friends and philanthropists to ameliorate the lot of a sufferer ought not be taken into account to diminish an assessment of damages, especially damages for personal injuries: The National Insurance Co of New Zealand Ltd v Espagne.[50] Thomas v Eyles appears to be an uncontroversial application of the principle established in Espagne that the benefit of a gift should not be deducted from an economic loss award.

[31] The answer to the question whether Ms Clement's gratuitous services come within the principle in Griffiths v Kerkemeyer and so within the meaning of gratuitous services in s 59 of the Act is not entirely straightforward. The High Court's recent interpretation in CSR Ltd v Eddy of the principle in Griffiths v Kerkemeyer strongly emphasizes the anomalous character of such an award of damages and that the principle should not be extended in the absence of clear authority.[51] The decisions upon which the respondent relies and to which his Honour referred and the reference to Luntz's text set out earlier in these reasons all predated CSR Ltd v Eddy. Randall v Dul was not followed by the West Australian Full Court in Trigwell in the light of Medlin, although Luntz suggests that the doubts expressed about Randall v Dul in Trigwell have been allayed by Husher.[52] The remaining decisions are of single trial judges.

[32] Mr Clement's claim for Ms Clement's gratuitous services in the mahogany plantation can be allowed only if there is clear authority supporting the extension of the Griffiths v Kerkemeyer principle to the facts of the present case. The judge found the following. Mr Clement's need for Ms Clement's gratuitous services in establishing the plantation before and after trial for a total of five years arose solely from the accident. The plantation was already partly established when Mr Clement was injured and a failure to maintain it would have created a financial loss, namely the future commercial profit from the mature trees. Had Mr Clement lost the ability to pursue that venture because of the accident he would have been entitled to damages for loss of that opportunity, subject to the consideration of the vagaries associated with any agricultural enterprise.[53]

[33] It is instructive to apply Medlin and the analysis by Gleeson CJ, Gummow and Heydon JJ in CSR with which Callinan J also agreed to those facts. Apart from damages within the Griffiths v Kerkemeyer principle, a plaintiff may recover damages for loss first for non-pecuniary losses such as pain and suffering even where there is no actual financial loss caused.[54] The third type of loss recoverable as damages referred to in CSR is actual financial loss.[55] The second type of loss recoverable as damages referred to in CSR is loss of earning capacity to the extent that the loss has been or may be productive of financial loss. Through Mr Backo's negligence Mr Clement lost the ability to work in his plantation for profit. The judge found that this produced a diminution of earning capacity productive of economic loss, namely the future commercial profit from the mature trees, but for Ms Clement's gratuitous services. Consistently with Medlin,[56] Mr Clement's entitlement to damages for his diminution of earning capacity which may be productive of financial loss should not be reduced because the prospect of that financial loss was diminished through gratuitous services provided because of Mr Clement's need arising out of his accident-related injuries. The statements of the High Court in Medlin to which I have referred[57] when applied to the facts here provide clear authority for supporting the extension of the principle in Griffiths v Kerkemeyer to Mr Clement's claim for Ms Clement's gratuitous services in the commercially operated plantation. They are also consistent with the cases referred to by his Honour and the approach taken by Luntz in Assessment of Damages for Personal Injury and Death.

[34] This aspect of his Honour's damages award was unquestionably for gratuitous services within the meaning of that term at common law and therefore also within the meaning of that term in s 59 of the Act: Kriz v King. It follows that the judge did not err in awarding damages for Ms Clement's gratuitously provided services in the mahogany plantation under s 59 of the Act unless the appellant is successful in one of its secondary submissions.

[35] The remaining grounds of appeal were not pursued with vigour at the hearing and can be disposed of shortly.

[36] The appellant contends that the services were not "necessary" within the meaning of that term in s 59(1)(a) of the Act. His Honour's finding that Mr Clement's need for the services arose solely from the accident was plainly open on the evidence. For the reasons I have given, the common law principle established in Griffiths v Kerkemeyer was extended in a limited way in Medlin, so that a plaintiff's increased need for gratuitous services provided to preclude economic loss resulting from an accident is reflected in an entitlement to damages which does not abate simply because the services were provided gratuitously. The services were "necessary" within the meaning of that word in s 59(1)(a) of the Act.

[37] The appellant next contends that the damages did not arise solely out of the accident-related injury so that s 59(1)(b) of the Act has not been satisfied. This contention is based on the fact that the plantation was increased by at least 150 per cent through the labours of Ms Clement and Ms Smith after the accident. It is clear from his Honour's reasons that he found that but for Mr Clement's accident-related injuries he would have increased the size of the plantation through his own labours in much the same way as Ms Clement and Ms Smith did for him when he became incapacitated through his accident-related injuries. This inference was well open on the evidence set out earlier in these reasons. Ms Clement's evidence was that she had spent 12 hours per week tree-planting and managing the mahogany plantation, work which Mr Clement would have done but for the accident. His inability to do this himself was an economic loss arising from the accident for which the appellant is liable and which should not be reduced simply because Ms Clement provided her gratuitous services to prevent the loss. This contention is without substance.

[38] The appellant's final contention is that the judge should have made an allowance for the profit which would have been derived in the future by Mr and Mrs Clement in respect of the plantation. No authority was placed before the Court to support that contention which, in the absence of clear authority, seems plainly unmeritorious.

[39] As the appellant has been unsuccessful in all of its submissions it is unnecessary to consider Mr Clement's notice of contention.

[40] The learned primary judge did not err in categorising and assessing the damages for Ms Clement's gratuitous services to Mr Clement in the commercially operated mahogany plantation as damages under s 59 of the Act. The appeal should be dismissed with costs.

[41] MACKENZIE J: This appeal raises issues relating to the character and sufficiency of quantification of damages where the following are the basic facts. On 4 February 2004, the respondent was injured in a motor vehicle accident as a passenger and suffered injuries, principally orthopaedic in nature. Liability was not in issue at the trial.

[42] The respondent's principal occupation prior to the accident was as a trades assistant/rigger in the coal mining industry. However, he was, at the time of the accident, also establishing a mahogany plantation which was run as a commercial enterprise, and commercial mango trees on a rural property on which he lived. The enterprise was his; it was not suggested that his wife was in partnership with him in it. Planting began in 2000 and involved a process whereby a crowbar and a mattock were used; weeds and grass had to be removed, holes dug and the plants watered over a period of a few months to promote their growth. He spent the bulk of his recreational time amounting to about one and a half days per week tending it.

[43] According to the quantum statement, at the time of the accident there were about 600 mahogany plants and 200 mango trees. Tending the mahogany trees involved using a tractor to slash between the trees, fertilisation and pruning. By the time of the trial, the size of the mahogany plantation had been increased to 1,500 to 2,000 as a result of further plantings by his wife. The other work that he could no longer do was done gratuitously by his wife (albeit with a ride-on mower and a whipper snipper where the terrain made the mower's use impracticable). On occasions she was assisted by a neighbour who was paid $15 per hour. There was no evidence whether there was always a plan to expand the size of the plantation, or whether it was conceived after the accident that caused the lack of capacity on the part of the respondent to do the work he had been able to do before the accident. That might have a bearing on the number of hours work necessarily substituted for the respondent's former contribution.

[44] As originally pleaded, there were pleadings that the respondent may require future "domestic care" and had sustained special damages. Particulars of the special damages included the paid work done by the neighbour but there was no particularisation of a claim for gratuitous services performed by his wife in regard to the plantation. There was particularisation for future economic loss, the quantum of which merely reflected the loss of wages in his principal occupation. There was an admission in the defence of a need for future "domestic care". It was also pleaded that s 59 of the Civil Liability Act 2003 (Qld) applied to the claim. Presumably in response to this, and with the restrictions on the right of recovery imposed by it in mind, the reply and answer pleaded that the respondent received gratuitous services of not less than 12 hours per week from his wife consisting of "back and neck massage and mowing, whipper snipping, tree planting and maintenance duties which he normally performed with respect to their Mahogany tree and Mango plantation".

[45] The record shows that the learned trial judge raised the question of the character of the damages and the methodology for calculating them, focusing on their nature as business expenses, and initially asking whether the hypothetical cost of the respondent's wife's exertions should be reflected not as a loss calculated by reference to their commercial cost but by reference to the impact of the costs on the profits of the enterprise. Senior counsel for the respondent maintained that the principle in Griffiths v Kerkemeyer [1977] HCA 45; (1977) 139 CLR 161 was not confined to accident-created need for personal services in the narrow sense. In further written submissions he relied on several cases in support of that proposition (O'Keefe v Schluter [1979] Qd R 224; Cockshell v Australian National Railway Commission [1986] Aust Torts Reports 80-024; Randall v Dul (1994) 13 WAR 205), and Thomas v Eyles (1998) 28 MVR 240.

[46] The learned trial judge ultimately resolved the issue in the following passage from his reasons:

"It was submitted by Mr McMeekin SC that under common law principles it makes no difference whether the gratuitous services claimed are personal or commercial. ...

In this case the plantation was already partly established at the time of injury. A failure to maintain the plantation thereafter would have created a financial loss being the commercial profit from the mature trees. Of course, any such loss was subject to the vagaries of any agricultural enterprise. The inability of Mr Clement to pursue the venture because of the accident would have resulted in an entitlement to damages for loss of the opportunity to make that profit. The loss in this case was more than mere speculation. The plantation was already partly established when Mr Clement was injured.

In order to avoid that loss Mrs Clement has voluntarily provided the services that Mr Clement would otherwise have provided. It seems to me that in that sense the services gratuitously provided were 'necessary'. Whether services are necessary will depend on the facts of the particular case. Necessary in this case means necessary to avoid another and potentially greater loss. ...

It follows, therefore, that I allow the claimed $40,000 for gratuitous services. As I understand the supplementary submissions this amount is claimed to represent the value of services provided by Mrs Clement in relation to the plantation both in the past and for the future."

There is nothing in the record to indicate that there was any reference to CSR Ltd v Eddy [2005] HCA 64; (2005) 226 CLR 1.

[47] Section 59 of the Civil Liability Act provides as follows:

"(1) Damages for gratuitous services are not to be awarded unless -

(b) the need for the services arises solely out of the injury in relation to which damages are awarded; and

(c) the services are provided, or are to be provided -

[48] Its effect is to regulate the awarding of damages for gratuitous services under the common law concept of gratuitous services in respect of which Griffiths v Kerkemeyer is the first reference point and CSR Ltd v Eddy the latest review of the concept in the High Court. The effect of s 59 is not to create a statutory entitlement to damages for gratuitous services, but to restrict and modify common law entitlements (Kriz v King [2006] QCA 351; [2007] 1 Qd.R. 327). Kriz v King also settled that, in using the term "gratuitous services", the legislature intended it to mean the common law concept as it was determined from time to time rather than intending it to mean the concept as understood at the time the Act became law. It was, in part, concerned with whether some of the damages awarded as Griffiths v Kerkemeyer damages were of a kind that was held in CSR Ltd v Eddy to have been wrongly awarded under that category. It was not concerned with the critical issue in the present case, whether the damages awarded fell outside the common law classification of gratuitous services compensable under the principle in Griffiths v Kerkemeyer on the ground that they were to compensate for work done gratuitously in aid of a commercial enterprise where the injured person cannot now perform the functions.

[49] Subject to considerations raised by CSR Ltd v Eddy, the authorities cited and relied on by the learned trial judge in awarding damages for gratuitous services in the sum of $40,000 for labour on the plantation supported the conclusion that services of a commercial nature as well as gratuitous services of a personal nature may be claimed by reference to the commercial cost of supplying the accident-caused need.

[50] Despite the trial having been conducted on that basis, the appellant appealed on the ground that the learned trial judge erred in making an award of damages for gratuitous services provided to the respondent for the cost of maintaining a timber plantation, when to do so was contrary to law, and contrary to s 59(1) of the Civil Liability Act. Further, the respondent plaintiff did not seek to support the classification of the component awarded as damages for gratuitous services but supported the award in accordance with the following notice of contention:

"1. On hearing of the appeal the respondent will contend that the decision of the Supreme Court should be affirmed on a ground other than a ground relied on by the Supreme Court.

1. The learned Trial Judge erred in law in finding that Section 59 of the Civil Liability Act 2003 had application to the award of $40,000.00 compensation for the Respondent's incapacity to continue to care for and maintain a commercial plantation when in fact the damages concerned were not damages for gratuitous services.
2. The damages were properly characterised as being for an impairment of the Respondent's earning capacity."

[51] Notwithstanding the concessions in paras 2 and 3 of the notice of contention, the need for the Court to be persuaded that they were correct was adverted to by the President early in the hearing.

[52] Despite the way the respondent's submissions were constructed at trial and the description of the damages in the learned trial judge's reasons, the written submissions of senior counsel on behalf of the respondent asserted as follows:

(a) The damages allowed were not "damages for gratuitous services". They are properly characterised as damages for an impairment of the plaintiff's earning capacity. Neither s.59 CLA nor CSR Ltd v. Eddy has any relevance. The true question is whether that undoubted impairment is not to be compensated because of the provision of gratuitous assistance by the plaintiff's wife.

(b) If the CLA does apply then its conditions were met.

(c) As to the quantum of the damages ... the amount allowed was in the form of general damages for an impaired capacity. On any view there must be an allowance for the prospect that the services would not be continued to be provided gratuitously by the wife, the work being arduous and the services being rendered by reason of the marital relationship.

(d) ... No deduction is ever made for the eventual profit that might ensue from the provision of assistance in a commercial enterprise. That is because, but for the Defendants' negligence, the profits would have accrued to the Plaintiff anyway, provided he put in the same effort as the substitute labour, which fundamental assumption underlies the award."

[53] To compound the complications, by the time supplementary written submissions were delivered, principally with regard to Diamond v Simpson (No 1) [2003] Aust. Torts Reports 80-024, the respondent relied on Griffiths v Kerkemeyer, at least in support of the proposition that the tortfeasor should not have the benefit of the value of the respondent's wife's contribution of labour because of the charitable disposition inherent in its performance.

[54] The case involves an unusual set of circumstances. What is involved is a long term enterprise that is loss making in the early years, but is expected to generate a profitable outcome either by harvesting the timber when it reaches an optimum stage of growth or by selling the enterprise as a going concern. It is therefore unlike businesses that, from the outset are expected to generate an income so that there are pre-accident trading figures that can be used as a guide for assessing loss of future earning capacity.

[55] The respondent provided an extract from the business' tax returns which show net losses in each of the years from 2001 to 2005, generally a small amount less than expenses. Ordinarily, the expenses shown would not reflect the provision by the respondent's wife of gratuitous labour in substitution for what he would have done but for the accident.

[56] Damages for future economic loss are allowed to an injured plaintiff because diminution of earning capacity is or may be productive of financial loss. It is therefore necessary to identify both what capacity has been lost and what economic consequences will probably flow from that loss (Graham v Baker [1961] HCA 48; (1961) 106 CLR 340; Medlin v State Government Insurance Commission [1995] HCA 5; (1995) 182 CLR 1; Husher v Husher [1999] HCA 47; (1999) 197 CLR 138). As Husher says (at 143), important as evidence of past events may be, the inquiry is about the likely course of future events, and evidence about the past is not determinative of the issue of future earning capacity. The complications then addressed in Husher due to the existence of a partnership do not arise in this case.

[57] Essentially, the claim has its genesis in the proposition that the respondent cannot himself perform activities he previously performed in a commercial enterprise. In principle, leaving aside the issue of the application of Griffiths v Kerkemeyer to the facts, the exercise of assessing loss of future earning capacity in this case should, in principle, involve assessing the diminution of what the respondent would have made from the plantation by reason of the accident happening. In a case involving a business of this kind, which involves the uncertainties of primary production over an extended period, it is not surprising that a methodology that avoided the complexities of predicting the future outcome of the project was attractive. If the case is properly characterised as one involving general damages for loss of future earning capacity or economic loss, the question is whether it is a valid approach to assess the damages merely by discounting the cost of substitute labour over whatever period is found to be appropriate.

[58] It is desirable to start with some analysis of CSR Ltd v Eddy. That case was concerned with the legitimacy as a common law principle of "Sullivan v Gordon damages", expounded in the eponymous case ((1999) 47 NSWLR 319). Section 59 of the Civil Liability Act assumes such damages to be legitimate and then places a limit on circumstances in which they may be recovered. It was held unanimously by the High Court that, at common law, a plaintiff who is prevented by personal injuries from providing gratuitous personal or domestic services to another or others cannot recover damages calculated by reference to the commercial value of those services.

[59] In the course of analysing a number of propositions which were propounded in support of the legitimacy of the principle, especially by way of analogy with Griffiths v Kerkemeyer, all judges accepted that the principle in Griffiths v Kerkemeyer itself has anomalous features. However, Gleeson CJ, Gummow and Heydon JJ said (at p.18) in their joint judgment with which Callinan J agreed:

"Griffiths v Kerkemeyer is well-established, no challenge was made to it in this case, and nothing in this judgment is intended to encourage any future challenge. But to borrow the words of Lord Reid in another context, it is in some ways an 'undesirable anomaly', and it should not be applied to 'any class of case where its use [is] not covered by authority.'"

"Numerous Australian courts have recognised that the principle established by Griffiths v Kerkemeyer was exceptional in permitting the plaintiff to claim special damages for the loss of capacity to care for him or herself and the resultant need for services from another. But, as members of this Court have pointed out, it is now too late to reverse it by judicial decision.

In holding that a plaintiff could recover the value of gratuitous services, Griffiths v Kerkemeyer was bound to unsettle the long-established rule that an item of special damages could only be recovered as compensation in respect of a liability paid or incurred. Stephen J recognised this in Griffiths v Kerkemeyer when he noted that 'in this particular area of the law [the principle] deprives of all substantive significance the distinction between special and general damages'. As a result, Australian courts have extended the Griffiths v Kerkemeyer principle to other cases of gratuitous services which previously would not have been the subject of compensation. They have extended it:

• to care provided by a plaintiff-mother to her children;
• to cleaning work performed by a plaintiff-wife in her husband's hairdressing salon; and
• to the cost of care for a plaintiff-mother's children for the period of time after her injury-caused death until they no longer required such care."

[61] The references to the cases where extensions of Griffiths v Kerkemeyer have occurred are to Sullivan v Gordon [1999] NSWCA 338; (1999) 47 NSWLR 319; Randall v Dul and Sturch v Willmott [1997] 2 Qd R 310. McHugh J continued, at p. 46:

"The critical difference between Griffiths v Kerkemeyer and the cases that have extended it is that Griffiths v Kerkemeyer damages arise as a direct result of the creation of a need in the plaintiff of the provision of the particular services. It is therefore inherently limited. By contrast, no inherent limit exists for Sullivan v Gordon-type damages."

[62] CSR Ltd v Eddy therefore establishes that it is impermissible at common law to calculate damages for a plaintiff who is prevented, by negligently caused personal injuries, from providing gratuitous personal or domestic services to another person by reference to the commercial value of those services. The capacity to assist others is an amenity. Loss or impairment of that amenity is to be treated as part of general damages. Cases where such damages are calculated by the same methodology as in Griffiths v Kerkemeyer are no longer good law, if common law principles apply in the particular jurisdiction in which the matter is determined.

[63] What is not expressly clarified in any of the reasons in CSR Ltd v Eddy is the fundamental question in the present case, whether the principle in Griffiths v Kerkemeyer applies to cases where the services gratuitously performed are services relating to a commercial enterprise that were, before the injury, carried out by the plaintiff but which the plaintiff can no longer perform, as opposed to purely domestic or personal services with no commercial content.

[64] Because of the respondent's concession that it was incorrect to treat the damages in this case as damages for gratuitous services assessable on the same basis as Griffiths v Kerkemeyer but that they were properly characterised as damages for loss of future earning capacity or future economic loss, there was, on the face of it, no issue in the appeal between the parties on that question. The issues were how the component of damages should be assessed and whether the evidence supported an award that equated to the commercial cost of providing the services performed gratuitously by the respondent's wife. There was also an issue as to whether the services were "necessary" within the meaning of s 59 of the Civil Liability Act which I will put aside for the moment.

[65] The absence of any reference in CSR Ltd v Eddy to the line of authority relied on by the judge of the trial division in this case may be explained on the basis that it was unnecessary to do so to decide the appeal then before the High Court. However there was equally no indication in any of the reasons for judgment that the High Court might be disposed to overrule cases where gratuitous services were provided in connection with a commercial enterprise where the plaintiff was unable to perform work done gratuitously, on the basis that they, too, were an impermissible extension of the Griffiths v Kerkemeyer principle. Recognition in the joint judgment, quoted above in [59], of the principle as an anomaly that should not be applied to any class of case where its use was not covered by authority may suggest that it can extend to those kinds of cases as well as to services performed in respect of accident-created needs of a plaintiff of a purely domestic or personal nature. What McHugh J described as "cases of gratuitous services which previously would not have been the subject of compensation" do not include the line of authority on which the award in the present case rests. The cases specifically overruled do not include them.

[66] In my view there are insufficient indications in CSR Ltd v Eddy to conclude that, where common law principles apply, it was clearly intended to retreat from compensating the kind of loss involved in this case by the methodology in Griffiths v Kerkemeyer. In the absence of more precise exposition of the precise point by the High Court, I am not persuaded that the respondent's concession is well founded. If that is not correct, the inability to perform work in maintaining the plantation should have been treated as general damages for future loss of earning capacity. Because of my conclusion that the damages were correctly calculated at trial, it is unnecessary to consider what is the proper methodology for such an exercise, or whether there would be sufficient difference between possible outcomes to justify interference with quantum on appeal.

[67] The Civil Liability Act modifies the common law in some respects. It was submitted by the applicant that, if services were to be treated as gratuitous services within the meaning of s 59, the services were not "necessary". The learned trial judge found that they were. There was evidence that, if the work of the kind gratuitously done was not performed, the respondent's plantation would be at risk of becoming less productive and therefore less profitable. In the circumstances it was open to find that the work was "necessary" if it falls within the description "gratuitous services" in s 59.

[68] For the reasons given above, the appeal should be dismissed with costs.

[69] FRYBERG J: The facts of this case are set out in the reasons for judgment of the President.

[70] The trial judge (Dutney J) included the following items in the award of $539,044.08 as damages:

Gratuitous services in relation to the plantation $40,000.00

The appellant, Suncorp Metway Insurance Limited, did not challenge the award of the $2,112; it is unnecessary to consider it further. The nomenclature of the list reflected the manner in which the evidence and submissions of the parties, particularly the respondent, had been placed before his Honour. It should not be allowed to obscure the fact that in legal theory, his Honour's award included $42,112 under the doctrine in Griffiths v Kerkemeyer[58] and $296,490 for loss of earning capacity.[59]

[71] His Honour gave careful consideration to s 59 of the Civil Liability Act 2003, as the submissions placed before him required. However he did not award damages under that Act. As the President has observed elsewhere, "Section 59 does not provide a statutory entitlement to damages for gratuitous services separate to the common law but rather modifies and restricts the common law entitlement to them."[60] Dutney J was plainly aware that the award of $40,000 was made under Griffiths v Kerkemeyer, as his citation of the cases referred to by the President shows.[61] He did not consider whether that amount could be claimed as an element of the award for loss of earning capacity.

[72] His Honour proceeded on that basis because that was how the respondent presented his case at first instance. That is understandable; it is how the topic of voluntary assistance in business operations is dealt with in the current edition of the leading Australian text book on damages.[62] In the appeal, however, the respondent submitted in his written outline:

"The [$40,000] damages allowed were not damages for gratuitous services. They are properly characterised as damages for an impairment of the plaintiff's earning capacity. Neither s 59 CLA nor CSR Ltd v Eddy has any relevance."

In oral submissions it was argued that the claim was one for loss of earning capacity. On this theory, the total award included $2,112 under the doctrine in Griffiths v Kerkemeyer and $336,490 for loss of earning capacity.

[73] That somewhat remarkable change of tack was not met with the outraged protestations which one might have expected. On the contrary, the appellant embraced it, and sought to press the Court with what it described as "a matter of principle" in relation to loss of earning capacity. In addition, it assured the Court that it could not sensibly submit that it had suffered any prejudice by the change of characterisation.

[74] I am content to decide the appeal on the basis propounded by the parties. There is in my judgment no occasion for this Court to comment upon the trial judge's reasons. They are no longer in issue between the parties. They are not embodied in the formal judgment of the Court. The question remains whether the damages awarded to the respondent were too high. The respondent submits that they were properly awarded as damages for loss of earning capacity. The appellant challenges the award on the basis that any diminution in earning capacity, in the events which happened, did not and was not likely to produce financial loss in relation to the plantation. As counsel summarised the principle upon which the appellant relied:

"Now the positive characterisation emasculates the plaintiff's ability to recoup damages, we say by way of summary, because it fails to surmount the immutable requirement in respect of a claim for impairment of earning capacity that the plaintiff proves, not just incapacity per se, but rather that the incapacity was productive of financial loss. That's the kernel of the submission in relation to that matter ...."

[75] The principle upon which the appellant founded its submission was stated by the High Court 45 years ago in Graham v Baker.[63] It has been reaffirmed on numerous occasions since then, most recently in CSR Ltd v Eddy.[64] In Medlin v State Government Insurance Commission it was expressed in these terms:

"A plaintiff in an action in negligence is not entitled to recover damages for loss of earning capacity unless he or she establishes that two distinct but related requirements are satisfied. The first of those requirements is the predictable one that the plaintiff's earning capacity has in fact been diminished by reason of the negligence-caused injury. The second requirement is also predictable once it is appreciated that damages for loss of earning capacity constitute a head of damages for economic loss awarded in addition to general damages for pain, suffering and loss of enjoyment of life. It is that 'the diminution of ... earning capacity is or may be productive of financial loss' (Graham v Baker [1961] HCA 48; (1961) 106 C.L.R. 340, at p 347, per Dixon CJ, Kitto and Taylor JJ)."[65]

In Husher v Husher,[66] those two requirements were described as basic principles. The respondent did not challenge them in the present appeal.

[76] The nature of the financial loss referred to in the second requirement was described in Husher:

"The financial loss occasioned by impairment of earning capacity is the loss of what (if there had been no accident) the injured plaintiff would (as opposed to could) have expected to have had under his or her control and at his or her disposal by exercising that capacity. We refer to 'control' and 'disposal' because what the plaintiff has lost are the financial rewards from work that are rewards the plaintiff would have been able to direct to whatever purpose or destination he or she chose."[67]

[77] There was no doubt that in the present case the respondent suffered a diminution in his earning capacity as a result of the defendant's negligence and that the diminution had been and would be productive of financial loss. Amongst the elements of that loss were what Dutney J described as "Past economic loss" and "Future loss of income".[68] The amount awarded against those headings is not now challenged. However his Honour also found, "A failure to maintain the mahogany plantation after the respondent was injured would have created a financial loss, being the commercial profit from the mature trees."[69] He further found that the respondent was unable to pursue the venture (ie maintain the plantation by himself) because of the accident. The appellant did not challenge these findings. Nor did it challenge his Honour's calculation of $40,000 as the amount of the award in respect of the plantation. It submitted that because there was no failure to maintain the plantation (by reason of the gratuitous work performed by the respondent's wife), there was in fact no financial loss.

[78] His Honour's finding was couched in the past tense ("would have created"). Nonetheless there was no suggestion that, had Mrs Clement not performed the work, the loss (profit from the mature trees) would have been sustained by the time of trial. The trees were planted between 2000 and the time of the accident in 2004 and were far from maturity. The respondent's claim cannot succeed on the basis that the diminution in earning capacity has already been "productive of financial loss" (to use the words cited above). It can only succeed on the basis that the diminution "may be productive of financial loss" in the future.

[79] The appellant advanced an alternative submission that, even if as a matter of principle Mr Clement might have been entitled to damages for loss of earning capacity in respect of the plantation, the judge failed to make necessary findings, and there was insufficient evidence to support such a claim. In effect the submission challenged the methodology of the calculation as applied to a claim for loss of earning capacity. I shall revert to this submission later. For the purpose of considering the appellant's principal submission I shall assume that the evidence supported a properly calculated claim in the amount found by the trial judge.

[80] Mr Baker was a fireman. He was 55 years of age when injured as a result of Mr Graham's negligence. His injuries impaired his earning capacity and he was unable to continue his previous work. For 178 days immediately succeeding that of the injury he was on sick leave and during that period he continued to receive his normal wages in accordance with the terms of his employment. In the ordinary course of events he would have retired some 5½ years after the date of the injury. As it happened, he was compulsorily retired a little under 2½ years from that date. Thereupon he became entitled to and did receive a pension under a statutory contributing superannuation scheme. Mr Graham contended that both the amount of the pension between the date of actual retirement and the date when Mr Baker would have retired in the ordinary course and the amount received while on sick leave should be taken into account (to the former's benefit) in the computation of damages.

[81] The High Court held that the pension was not to be taken into account, citing its decision some four months earlier in National Insurance Co of New Zealand Ltd v Espagne.[70] I shall return to that decision shortly. For the moment it is enough to note that it postulates a test for determining whether benefits which "... alleviate the consequences of many tortious injuries" (to use the words of Windeyer J) [71] should be disregarded in the calculation of damages. The court made the opposite finding in relation to the amount received by Mr Baker while on sick leave. Most importantly, it made that finding without reference to its decision in Espagne.

[82] The reasons for judgment began by emphasising the importance of identifying the precise character of what had been referred to as "sick pay".[72] In Mr Baker's case, the terms of employment included an entitlement "to three weeks' sick leave 'on full pay in any one year accumulative to a maximum of twenty-four weeks'".[73] The Court observed that he was entitled thereby "to absent himself on sick leave and, subject to specified limits, to receive 'full pay' whilst on leave".[74] It wrote:

"In those circumstances he is to be entitled to absent himself on sick leave and, subject to specified limits, to receive "full pay" whilst on leave. In our view the respondent's contract says no more and no less than that, if he becomes unable by reason of sickness or other specified causes to perform his ordinary duties, nevertheless his right to 'full pay' or, in other words, his ordinary wages, shall continue to be payable, subject to the limits specified, during the period of his absence. If, therefore, the claim be made, as it was, that the respondent lost the whole of his wages between the date of the accident and the date of trial then the appellant was entitled to answer it by showing that for a period of 178 days he received his full wages."[75]

The court then noted a suggestion, based on the proposition that the cause of action was complete at the time of injury, that the subsequent receipt of ordinary wages during the period of incapacity was not to be taken into consideration. It responded to that suggestion in these terms:

"To be more precise, however, an injured plaintiff recovers not merely because his earning capacity has been diminished but because the diminution of his earning capacity is or may be productive of financial loss. And if, notwithstanding such impairment, both his contract of employment and his right to ordinary wages continue, how can it be said that his impairment has resulted in any loss so far as his earning capacity is concerned?"[76]

"In the present case the sick leave credit or entitlement is not such that it can be converted into cash if the employee does not otherwise find it necessary to avail himself of it. It is the measure, no more and no less, of the employee's right to receive ordinary pay notwithstanding his absence on sick leave. If received pursuant to such a right it is, in our view, impossible to say that, pro tanto, there has been any loss of wages."[77]

[83] Graham v Baker was therefore a case where for the period in question, there simply was no loss. Mr Baker continued to receive his ordinary wage throughout the period of his leave. He was entitled under his contract of employment to do so without performing work. He did not receive a payment or benefit in substitution for that wage. Had he done so it would have been necessary to decide the case in accordance with the test in Espagne. The court distinguished the wages from ex gratia payments and payments made pursuant to some provident or social welfare scheme.

[84] The present case is quite different. Mr Clement has not yet suffered the relevant loss as a result of his diminished earning capacity. However it is implicit in his Honour's finding that he will do so in the future unless the plantation is maintained and expanded by work carried out in substitution for the maintenance and planting which he would have carried out but for his injuries. There was evidence that for all but the first three months of the two years or so between the accident and the trial, Mrs Clement did work on the plantation which the respondent would have done had he not been injured; but there was no direct evidence that she would continue to do so for the forthcoming decades until the trees should reach maturity. There was no evidence of how long this would take, but I would take judicial notice of the fact that it would be much longer than the five years adopted by his Honour for calculating this item. (That period was obviously chosen to take into account what his Honour described as "the vagaries of any agricultural enterprise".) It is not reasonable to infer that she will continue to provide gratuitous labour until the trees reach maturity. It follows that the respondent has shown that his impaired earning capacity may be productive of financial loss.

[85] However that may be, there is a more fundamental reason for distinguishing the present case from Graham v Baker. It was critical to the decision in that case not only that Mr Baker continued to receive his wages, but also that he had a right to do so under his contract of employment. It was the existence of that right, which predated the accident, which meant that for the relevant period, Mr Baker's earning capacity was unimpaired. Thus, as Mason and Dawson JJ subsequently put it, "[T]he receipt of sick leave payments, when it is the measure of the employee's right to receive ordinary pay, though absent on sick leave, demonstrates that the plaintiff has not pro tanto suffered financial loss."[78] The same amount of money paid by a benevolent employer in the absence of any right in the plaintiff to it would have been differently characterized, probably as charity. In that situation there would be no doubt that the plaintiff sustained a loss; the question would be whether the amount of the payments should be deducted from the amount of that loss in the assessment of the plaintiff's damages. In the words of Fullagar J in a slightly different type of case, the question would then be whether the plaintiff "ought to be debited with the amount or value of a subvention of which he has had the benefit".[79] That question would be resolved by considering Espagne's case.

[86] In the present case there was no suggestion that Mr Clement had a right to demand his wife's services. They were a third-party benefit gratuitously conferred on him subsequent to the accident and not referable to any pre-existing contract. Even if Mrs Clement should continue to provide those services until the trees are mature, she will not do so in satisfaction of any right enjoyed by the respondent. For this reason also, the respondent's diminution in earning capacity may be productive of loss.

National Insurance Co of New Zealand Ltd v Espagne

[87] That does not necessarily mean that the benefit of any work done or to be done by Mrs Clement must be disregarded in assessing the respondent's damages. It means that the question must be considered in the light of Espagne's case. There the plaintiff had been awarded a Commonwealth disability pension on account of total blindness; the blindness was the result of a motor vehicle accident caused by the negligence of the defendant. The defendant's insurer, which had elected to be joined as a party, argued that the pension ought to have been considered as a factor mitigating damages.

[88] Dixon CJ held that there was no legal rule which could be applied to every case where an advantage accrued to an injured person which, but for the injuries, he would not have obtained. However his reasoning in that case was at a level of generality sufficient to be of assistance in the present. In a frequently-cited passage his Honour wrote:

"The reasoning begins with a distinction which I think is clear enough in general conception. There are certain special services, aids, benefits, subventions and the like which in most communities are available to injured people. Simple examples are hospital and pharmaceutical benefits which lighten the monetary burden of illness. If the injured plaintiff has availed himself of these, he cannot establish or calculate his damages on the footing that he did not do so. On the other hand there may be advantages which accrue to the injured plaintiff, whether as a result of legislation or of contract or of benevolence, which have an additional characteristic. It may be true that they are conferred because he is intended to enjoy them in the events which have happened. Yet they have this distinguishing characteristic, namely they are conferred on him not only independently of the existence in him of a right of redress against others but so that they may be enjoyed by him although he may enforce that right: they are the product of a disposition in his favour intended for his enjoyment and not provided in relief of any liability in others fully to compensate him. This is readily seen in the case of benevolence. If a fund is raised by subscription for the benefit of a badly injured neighbour obviously this cannot operate in relief of the liability of a man who negligently caused the injury."[80]

His Honour considered that the pension in that case was "entirely for the [plaintiff's] use and benefit and not in relief of any person antecedently liable to him to compensate him in any way for his loss of vision."[81] It was therefore to be disregarded in the assessment of damages. His Honour further agreed generally with the reasons of Windeyer J.

[89] Windeyer J found no help in the "signposts in Latin" - res inter alios and causa causans - referred to in a number of the cases. He examined another approach:

"It is generally accepted that aid given by friends and philanthropic persons to ameliorate the lot of a sufferer ought not to be taken into account in assessing damages. ...

The benefits of benevolence do not reduce damages recoverable. That may be accepted. Why is this? ...

The most satisfying of the reasons that have been given for refusing to diminish damages because of voluntary gifts is that they are given for the benefit of the sufferer and not for the benefit of the wrongdoer. That, it may be said, cuts across the principle that damages for negligence are compensatory and not punitive. It may be that, at all events since Bradburn's Case [1854] EngR 538; (1874) LR 10 Ex 1, there are some limits to strictly logical applications of that principle. But I do not think the two propositions necessarily come into collision. A donor can say who is to benefit by his generosity. If, out of sympathy for a man unfortunately responsible for a motor accident, someone gives money to the victim, stating that he does so in the interest of the tortfeasor and to diminish the damages he must pay, effect must be given to his intention. If, on the other hand, the donor's expressed intention is that the injured man shall enjoy his bounty in addition to whatever rights he may have to recover damages from the tortfeasor, effect must in my opinion, be given to that intention. And if nothing be said, the intention of the giver may be inferred from the circumstances."[82]

"In assessing damages for personal injuries, benefits that a plaintiff has received or is to receive from any source other than the defendant are not to be regarded as mitigating his loss, if: (a) ...; or (b) they were given or promised to him by way of bounty, to the intent that he should enjoy them in addition to and not in diminution of any claim for damages. .... The second description covers a variety of public charitable aid and some forms of relief given by the State as well as the produce of private benevolence. In both cases the decisive consideration is, not whether the benefit was received in consequence of, or as a result of the injury, but what was its character: and that is determined ... by the intent of the person conferring the benefit. The test is by purpose rather than by cause."[83]

[90] Fullagar J agreed with both Dixon CJ and Windeyer J. There can be no doubt that those judgments now represent the law in Australia.

[91] In the present case I would infer that Mrs Clement provided her labour to benefit the respondent (and perhaps indirectly herself) and not in relief of any liability of the appellant. I did not understand the appellant to submit otherwise. In any event, no other inference is open.

[92] It follows that the appellant is not entitled to have the value of the gratuitous services brought to account in its favour.

[93] In oral argument the appellant initially submitted that Espagne's case was confined to cash benefits. Pressed for some ground of principle for so confining the reasoning, and thereby excluding donations of goods or services, counsel resiled from the argument. No such ground of principle appears. It is also inconsistent with the approach of the New South Wales Court of Appeal:

"Claims for gratuitous services rendered by a publicly or privately funded charitable institution will not be payable by the wrongdoer merely on the ground that the injured person has established a need for the services in question. The injured person's entitlement to such claims will depend upon an application of the principles expressed in National Insurance Company of New Zealand Limited v Espagne (1961) 105 CLR 569."[84]

[94] Despite the parties' readiness to embrace it, the change of characterisation between trial and appeal produces difficulties in relation to the evidence. That is hardly surprising. The trial judge did not calculate the amount of the financial loss which he found the respondent would suffer if the plantation had not been expanded and did not continue to be maintained by voluntary labour. The $40,000 which his Honour awarded was based on the rounded down present value of 1½ days' work per week for five years at a rate of $15 per hour (agreed by the parties as reasonable). Such a method of calculation is appropriate when one is compensating for needs created by an injury, as is the case with damages awarded under Griffiths v Kerkemeyer.[85] It is not ordinarily the proper method for calculating the amount of financial loss resulting from a loss of earning capacity where that earning capacity would have been employed in a profit-making business. However an exception to the ordinary case arises where the financial loss can be avoided by employing a substitute worker for an amount less than the putative loss. In that situation not only may the cost of employing the substitute properly be claimed; but that is the limit of the claim. The injured person must take all reasonable steps to mitigate the loss.[86]

[95] It must be said at once that the pleadings were pathetically inadequate to support a case framed in this way, and that the evidence, such as it was (and it was not much), was unsatisfactory. It had been adduced in relation to other issues and was not subjected to cross-examination from the point of view of damages for loss of earning capacity. One might have expected the appellant to protest the change of approach in such circumstances, but as noted above, senior counsel explicitly assured the court that the appellant could not sensibly submit that it had or might have suffered any prejudice from the change of characterisation. We must accept that assurance. In accordance with it, counsel did not seek to sustain objections to the notice of contention contained in the appellant's written submissions in reply.

[96] The appellant did not submit that the $40,000 could not represent a component of loss of earning capacity. It submitted that before the method of calculation adopted by the judge could be applied, it was necessary to identify the ultimate economic loss which would ensue and relate the out-of-pocket costs to it. That is not strictly correct. It is sufficient if the conclusion may be drawn that the cost of labour to avoid the ultimate economic loss is less than that loss. The appellant accepted that the continued maintenance and expansion of the plantation were the work of the respondent's wife and a neighbour. There was evidence from which it could be inferred that this was work which the appellant would have performed had he not been injured.[87] The neighbour's services had been and continued to be provided for payment. It was not suggested in cross-examination that the two women were wasting their time or were expending more effort on the plantation than it would be worth. Before us counsel for the appellant accepted that the work that the respondent previously did himself in relation to the plantation is now done either by his wife or with the assistance of the neighbour. Most importantly, the appellant conceded that, in the circumstances of this case, had the respondent made a contract to pay his wife for the performance of the work at fair market rates, he could have claimed the payments as part of his damages.[88] That implies that this is a case where the method of calculation adopted by the trial judge was appropriate for a claim for loss of earning capacity.

[97] In the circumstances, I would infer that had the respondent not been injured, he would have brought the plantation to the same state as have his wife and the neighbour and that the amount of $40,000 is less than the loss which the respondent would suffer were the work not performed. It therefore represents an appropriate amount to be included in the respondent's damages for loss of earning capacity.

[1] [1977] HCA 45; (1977) 139 CLR 161.

[2] (1998) 28 MVR 240.

[3] [ 1979] Qd R 224.

[4] (1994) 13 WAR 205.

[5] [1986] Aust Torts Reports, 80-024.

[6] Clement v Backo & Anor [2006] QSC 129; S92 of 2005, 26 April 2006, [25].

[10] Above, [53], footnoting counsel's reference to Thomas v Eyles (1998) 28 MVR 240; O'Keefe v Schluter [1979] Qd R 224, 224 - 225; Randall v Dul (1994) 13 WAR 205 and Cockshell v Australian National Railway Commission [1986] Aust Torts Reports, 80-024.

[11] Ms Smith's wages were allowed as past economic loss at [57] and [64] of his Honour's reasons.

[15] [2005] HCA 64; (2005) 226 CLR 1.

[16] [2006] QCA 351; [2007] 1 Qd R 327.

[17] [2005] HCA 64; (2005) 226 CLR 1.

[19] [1992] HCA 54; (1992) 175 CLR 327, 332 - 333, 340 and 347.

[21] [1999] NSWCA 338; (1999) 47 NSWLR 319.

[22] [1997] 2 Qd R 310.

[26] Above, [30], citing Graham v Baker [1961] HCA 48; (1961) 106 CLR 340, Dixon CJ, Kitto and Taylor JJ, 346 - 347 and Medlin v State Government Insurance Commission [1995] HCA 5; (1995) 182 CLR 1, Deane, Dawson, Toohey, Gaudron and McHugh JJ, 5 and 18.

[31] [1956] HCA 66; (1956) 96 CLR 73.

[34] (1975) 13 SASR 17.

[35] [1973] EWCA Civ 2; [1974] QB 454.

[36] (1994) 13 WAR 205, 215.

[37] (1998) 28 MVR 240, 256 - 258.

[38] 4th ed, LexisNexis Butterworths, Chatswood, NSW, 2002 at par [4.6.6].

[39] (1997) 18 WAR 83.

[40] [1995] HCA 5; (1995) 182 CLR 1, Deane, Dawson, Toohey and Gaudron JJ, 3 - 5.

[44] [1961] HCA 48; (1961) 106 CLR 340, 346 - 347.

[45] [1992] HCA 54; (1992) 175 CLR 327.

[47] [1999] HCA 47; (1999) 197 CLR 138, 143.

[48] Assessment of Damages for Personal Injury and Death, (4th ed, LexisNexis Butterworths, Chatswood, NSW, 2002) 303-304.

[49] (2003) 77 ALJR 768, Hayne J, [38].

[50] [1961] HCA 15; (1961) 105 CLR 569, 597 - 598.

[51] CSR Ltd v Eddy [2005] HCA 64; (2005) 226 CLR 1, 18 [35].

[53] Clement v Backo & Anor [2006] QSC 129; S92 of 2005, 26 April 2006, [54].

[54] Mr Clement's loss of the amenity to work on his mahogany plantation was plainly compensable under the heading of general damages, subject to the provisions of the Act. The award of general damages in this case was limited by Ch 3 of the Act and in particular s 61 and s 62 and Sch 4 of the Civil Liability Regulation 2003 (Qld).

[55] It is not contentious that Mr Clement was entitled to damages for the wages paid to Ms Smith for her assistance on the plantation. Had the evidence established that Mr Clement entered into a legally enforceable obligation to pay Ms Clement for her work at a similar rate to Ms Smith, the cost of Ms Clement's services would have been incorporated in an award of damages of this type but that was not the evidence at trial.

[56] [1995] HCA 5; (1995) 182 CLR 1, Deane, Dawson, Toohey, Gaudron and McHugh JJ, 3 and 18.

[57] See these Reasons, [28]; Medlin, 3 - 5, 18.

[58] [1977] HCA 45; (1977) 139 CLR 161.

[59] There were also amounts for loss of superannuation benefits, but it is unnecessary to complicate the discussion by including them.

[60] Kriz v King [2006] QCA 351; [2007] 1 Qd.R. 327 at 331 [12].

[61] See note 10 above.

[62] Harold Luntz, Assessment of Damages for Personal Injury and Death, (4th ed, 2002), 295.

[63] [1961] HCA 48; (1961) 106 CLR 340.

[64] [2005] HCA 64; (2005) 226 C.L.R. 1.

[65] [1995] HCA 5; (1995) 182 CLR 1 at 3.

[66] [1999] HCA 47; (1999) 197 CLR 138 at 146.

[67] [1999] HCA 47; (1999) 197 C.L.R. 138 at 147.

[68] See para [70] above.

[70] [1961] HCA 15; (1961) 105 CLR 569.

[71] [1961] HCA 15; (1961) 105 C.L.R. 569 at 584.

[72] [1961] HCA 48; (1961) 106 C.L.R. 340 at 343-344.

[73] [1961] HCA 48; (1961) 106 C.L.R. 340 at 344.

[74] [1961] HCA 48; (1961) 106 C.L.R. 340 at 345.

[75] [1961] HCA 48; (1961) 106 C.L.R. 340 at 345-346.

[76] [1961] HCA 48; (1961) 106 C.L.R. 340 at 347.

[77] [1961] HCA 48; (1961) 106 C.L.R. 340 at 349.

[78] Redding v Lee [1983] HCA 16; (1983) 151 CLR 117 at 137.

[79] Blundell v Musgrave [1956] HCA 66; (1956) 96 CLR 73 at 93.

[80] [1961] HCA 15; (1961) 105 C.L.R. 569 at 573.

[81] [1961] HCA 15; (1961) 105 C.L.R. 569 at 574.

[82] [1961] HCA 15; (1961) 105 C.L.R. 569 at 597, 598-599.

[83] [1961] HCA 15; (1961) 105 C.L.R. 569 at 599-600.

[84] Diamond v Simpson (No 1) [2003] NSWCA 67 at para [232]; [2003] NSWCA 67; [2003] Aust Torts Reports 81-695 at 63,815.

[85] Van Gervan v Fenton [1992] HCA 54; (1992) 175 CLR 327.

[86] Tuncel v Renown Plate Co Pty Ltd [1976] VicRp 50; [1976] V.R. 501 at 503-504.

[88] The trial judge made no separate award in respect of the payments to the neighbour, finding that "the paid services represent only a small part of the necessary work". Despite the appellant's concession, the respondent did not submit that he was in any event entitled to so much of the $40,000 as represented payments to the neighbour.