Cummings, Lyn v Canberra Theatre Trust [1980] FCA 209

Federal Court of Australia|1980-06-18|Before: Fisher JJ

Negligence - Personal injuries - Appeal on quantum - Compensability of diminution of earning capacity where no loss of earnings shown - Compensability of cost of household assistance where paid for

ON APPEAL FROM THE SUPREME COURT OF THE AUSTRALIAN CAPITAL. TERRITORY

The judgment of the Supreme Court of the Australian Capital Territory be varied by deleting the amount "$31,709.97" and inserting in lieu thereof the amount "$44,329.97",

The respondent pay to the appellant her costs of the

IN THE FEDERAL COURT OF AUSTRALIA ) ) AUSTRALIAN CAPITAL TERRITORY ) : : No. F.C.25 of 1979 DISTRICT REGISTRY ) ) )

ON APPEAL FROM THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN : LYN CUMMINGS Appellant AND 3 CANBERRA THEATRE TRUST Respondent CORAM : Brennan, McGregor and Fisher JJ.

This appeal is from a judgment of Blackburn C.J. in the Supreme Court of the Australian Capital Territory awarding the appellant, the plaintiff in the Supreme Court, $31,709.97 damages for negligence causing personal injuries and costs. Liability was admitted by the defendant, the present respondent. The award was made up of $30,000 for all non-economic matters and $1,709.97 for agreed special damages. The appellant contende¢

in her notice of appeal that the trial Judge was in error in

failing to include in the award an amount for the loss of her earning capacity and, by amendment of the notice of appeal, she further contended that the trial Judge was in error in failing to include in the award an amount in respect of the appellant's inability to perform some household duties and, in particular, in failing to allow the appellant a sum to cover both past and future cost of

The primary facts were not in dispute and being fully set out in the reasons of the trial Judge can be shortly stated here. The appellant on 21 January 1975 suffered injury when a chair upon which she was preparing to sit, to view a theatrical performance in the Canberra Theatre, collapsed beneath her. In consequence she suffered severe and permanent injury to her cervical spine. The appellant is married with two children and before the accident enjoyed a very active life. Prior to her marriage she had qualified as a nursing sister, and after her marriage for about two years she was engaged in part-time nursing. Concurrently with her part-time occupation she assisted her husband on the secretarial and administrative side of his professional career as an architect. In 1972 she ceased part-time nursing and was employed full-time by her husband. He paid her full wages for her work. In

addition she ran her home and cared generally for her

children. These were her circumstances at the date of the

described are still present in a significant degree. The plaintiff's activities are very significantly affected; she does only light housework, not scrubbing, heavy cleaning, moving furniture or lifting weights. She is very careful about any physical movements; she does not play tennis, or ski; she has only recently recommenced sewing, which formerly she did freely. She reads for only short periods, since she finds difficulty in holding a book. She finds that going to concerts and theatrical performances results in a lot of back pain between her shoulders and in her neck because of the necessity to remain seated in one position and hold the head in one position for a length of time. I am satisfied on the evidence that though her present condition may improve slightly, it is improbable that it will ever improve substantially. "

On this basis he made the award of $30,000 for non-economic loss. After she had recuperated from her injuries to some extent, the appellant went back to work for her husband, but her capacity for this work was diminished and her husband paid casual and part-time typistes to do some work which the appellant might have done if she had not been injured. Nevertheless, her husband did not reduce her

"At present she is being paid in the capacity of Secretary in her husband's practice, at the rate of $200-00 a week. It is not established that the accident resulted in any loss of income to her, notwithstanding that she cannot do certain work such as typing for long periods, and walking about in partially completed buildings which she formerly did. "

His Honour was also of the opinion that it is improbable that the appellant would ever be able to perform

the ordinary duties of a nursing sister. He noted, however,

"voluntarily given up this occupation before the accident occurred, in order that she could act as a full-time secretary in her husband's professional practice. On the evidence, I think that as matters stood just before the accident, although one can imagine events which would cause her to wish to earn as a nursing sister, such events were improbable. "

contemplated going back to nursing, but only if her "livelihood depended upon it". The trial Judge was of opinion that he should not calculate damages for loss of earning capacity on the basis of her loss of capacity to earn as a nursing sister since the evidence was that her wages at the

time of the hearing were almost exactly the same as the

remuneration of a nursing sister, leaving owt of consideration

_ In considering the appellant's claim for damages for impairment of earning capacity the trial Judge had regard to her.annual earnings which actually increased in the years after the accident:

Year ending 30 June 1975 $4,570 - the year of the accident

Year ending 30 June 1978 $9,015 He concluded that it had not been established that the accident resulted in any loss of income to her, notwithstanding that she could not perform certain work. As in his Honour's opinion neither the existence nor the extent of a reduction in earning capacity had been established, he held that he could award no

damages in this respect. This was the first conclusion which

There was no challenge to the trial Judge's findings of :fact with respect to the appellant's physical condition. Coynsel for the appellant contended, however, that the trial Judge was in error in concluding that because there had been no reduction in earnings he was bound to find that there was

A diminution in earnings is a natural and frequent concomitant of a diminution in the capacity of an injured

plaintiff to earn income. But where the plaintiff has

obtained work or returned to work after an injury and has been paid during a given period the same amount as, or more than, he would have earned if he had not been injured, it does not follow that he has sustained no loss of earning Capacity. What appears from those circumstances is that any diminution in earning capacity has not been productive of diminution in earnings during that period. Whether the plaintiff has suffered or might suffer at some other time a diminution in earnings as the result of his injuries is another question, and if he shows that he has suffered in the past or might suffer in the future such a diminution, he proves his entitlement to an award of damages for diminution in earning capacity. As the majority

of the High Court (Dixon C.J., Kitto and Taylor JJ) in

Graham v. Baker (1961) 106 C.L.R.340 said at p.347:

"...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. " (underlining added)

At trial, the case does not appear to have been put in this way. It was contended that the fact that the appellant's husband engaged part-time employees established her diminished earning capacity. The learned trial Judge correctly rejected this approach and its corollary, namely,

that the extent of her diminution in earning capacity could

be gauged by the quantum of the wages paid to the casual

employee. As Mitchell J. said in Bivone v. Welfare (1971)

"Certainly wages which an employer paid for work which an incapacitated employee would otherwise have done could not be considered part of the employee's damage merely by reason of the fact that the employer still paid the employee's wages."

the Court of Appeal in New South Wales in Allan v. Loadsman,

(1975) 2 N.S.W.L.R.789, suggesting that failure by a plaintiff to quantify diminution in earnings is fatal to a claim for anything more than nominal damages for diminution of earning capacity. Such an approach to the assessment of an injured plaintiff's damages would deny compensation even if a grave risk of substantial future loss of income appeared, and that

approach is not supportable (see Gamser v. Nominal Defendant

judgments in Allan v. Loadsman, supra. If that case tended

to produce any misunderstanding of what an injured plaintiff must prove in establishing his claim for loss of or diminution in earning capacity, the misunderstanding has been removed:

see Baird v. Roberts (1977) 2 N.S.W.L.R.389 at p.397 et seq;

Kealley v. Jones (1979) 1 N.S.W.L.R.723 at pp.733-734;

Yammine v. Kalwy (1979) 2 N.S.W.L.R.151 at pp.155,157.

Where a plaintiff's injuries adversely affect his ability to engage in income-earning activity, it is necessary to assess compensation for diminution in earning capacity upon the evidentiary materials available, evaluating the risks of future losses of earnings and bearing in mind any failure on the part of the plaintiff to prove any

relevant facts which he might reasonably have been expected

to prove (Callaghan v. Wm. C. Lynch Pty.Limited (1962)

N.S.W.R.871; Ivkovic v. Australian Iron & Steel Ltd. (1963)

S.R.(N.S.W.) 598 at pp.603,604,607,608). Depending upon the evidentiary material available, the assessment may "of necessity involve what is guesswork rather than estimation"

(per Menzies J. in Jones v. Schiffman (1971) 124 C.L.R.303

at p.308). It was therefore incumbent upon the trial Judge, and it is now incumbent upon us, to consider whether the appellant's undoubted physical impairment might in the future result in reduced earnings. This consideration takes into account the fact that in many ways the appellant was in an exceptional situation, not only because her husband was and is her employer but also because he has paid her benevolently

full wages despite her disabilities. In Breska v. Lysaghts

Works Pty.Ltd. (1957) 74 W.N. (N.S.W.) 168 and Smith v.

Australian Iron & Steel Ltd. (1960) 77 W.N. (N.S.W.) 889,

where the employer companies benevolently paid full wages

to injured employees, the damages were not assessed on the footing that the benevolence eliminated the risk of future economic loss. Here the appellant is not only at risk of losing income as a secretary; she has also lost the capacity to earn income as a nursing sister - an employment which

may have been available to her but for her injuries, if her employment by her husband had terminated for any reason. Even though, fortunately, there is no present expectation that her employment will cease before the time when she would in any event have given up working, it is not difficult to bring to mind events in which an earlier termination of her

The amount of the award for diminution in earning capacity cannot be calculated with precision but the award would not be fair to the appellant if it were not increased by an amount in the order of $8,000 to satisfy this head of

The second matter of challenge was founded on the additional ground of appeal added pursuant to leave granted by this court. At the trial a claim was made by the

appellant for the cost of employing a domestic servant.

Evidence was given, which the trial Judge accepted, that one aspect of her activities which was very significantly affected was the performance of her normal household duties. She could perform at the date of the trial only light housework, and could not engage in scrubbing, heavy cleaning, moving furniture or lifting weights. Her medical adviser stated that in his view it was reasonable that she would need assistance in her housework. Such assistance was at the time of the hearing provided for the appellant on the basis of four hours a fortnight, costing $15 per fortnight which sum the trial Judge found to have been paid by the appellant out of the housekeeping allowance given to her by her husband. In these circumstances he concluded that because the burden of this expenditure fell on the appellant's husband and because there was no evidence that the provision of such assistance caused any personal loss to. her, the cost of employing domestic assistance could not

In his reasons for rejecting the claim the trial Judge stated that he was referred by counsel to Pegrem v.

The Commissioner for Government Transport (1957) 74 W.N.

(N.S.W.)417. However, before us it was common ground that he was not referred to recent relevant authorities, and in

particular to Griffiths v. Kerkemeyer (1977) 139 C.L.R.16l.

Before this Court, counsel for the appellant relied on

this authority as well as Donnelly v. Joyce [1974] Q.B.454

and Beck v. Farrelly (1975) 13 S.A.S.R.17, to support his

submission that it was nothing to the point that the appellant's husband paid the wages of the domestic servants. It was not the payments made by the husband which constituted the relevant loss, he submitted, but the loss by the appellant of her capacity to do the housework, for that was the loss which produced the need for domestic

The submission is in accordance with authority. It appears first to have been enunciated in its present

form by Megaw J. in Donnelly v. Joyce, supra, at pp.461-462,

and the effect of that passage is stated by Stephen J. in

"(T]he critical point is his Lordship's affirmation that when a plaintiff, as a result of his accident-caused injuries, becomes in need of goods or services that need is itself a loss suffered by him, for which he may recover damages against the defendant. It is then, his Lordship said, irrelevant to his entitlement to those damages that the need has been satisfied by the gratuitous supply to him of the needed goods or services. "

_" . However in my opinion this Court should not abandon the principle that a plaintiff whose injuries have created a need for hospital or nursing services cannot recover damages in respect of that need (except of course for loss of amenities or pain and suffering) unless the satisfaction of the need is or may be productive of financial loss. However it should no longer be held that the fact that the services have been -and will be provided gratuitously is conclusive of this question. The matter should, as it were, be viewed in two stages. First, is it reasonably necessary to provide the services, and would it be reasonably necessary to do so at a cost? If so, the fulfilment of the need is likely to be productive of financial loss. Next, is the character of the benefit which the plaintiff receives by the gratuitous provision of the services such that it ought to be brought into account in relief of the wrongdoer? If not, the damages are recoverable. "

Counsel for the respondent did not dispute that the services had to be procured. The point he made was that the housekeeping services were provided not merely for the benefit of the appellant but for the family as a whole. It was submitted that the case did not fall within the principles

expressed in Griffiths v. Kerkemeyer, supra. In support of

this submission he referred to the judgment of Mahoney J.-A.

in Trevor Johnson v. Kelemic, reported in (1979) F.L.C.78,487

particularly at pp.78,494 - 78,496, and to Kovacs v. Kovacs,

a recent (6 May 1980) unreported judgment of the Court of Appeal of New South Wales. In the former case, no allowance was made to the plaintiff in respect of services gratuitously provided to her by her husband who attended to her accident-

caused problems and moved her frequently during the night.

The case is distinguishable from the present case, for in the former case Mahoney J.A. was satisfied that the services were such that normally they would not have

"Where the Court is satisfied that, if the services were not supplied gratuitously, the plaintiff would have arranged to have them supplied for reward, the position is clear. But if the Court is satisfied that, if the services were not supplied gratuitously the plaintiff would not do so..., is the position the same? For example, it may be that the nature of the services is such that they are not such as may normally be obtained for reward, and are such that they are or partake of the normal incidents of family life."

was concerned with domestic assistance provided by a husband for an incapacitated wife who was the plaintiff seeking compensation. The Court was not unanimous, but the question at issue was whether the services which the husband

provided gratuitously should be reflected in the damages awarded. It was not suggested that the services provided were not needed by the plaintiff. Here the question is whether the plaintiff's accident has given rise to a need

of the same kind as the needs which attract compensation

under the principles expressed in Griffiths v. Kerkemeyer,

supra. In our judgment, there is no relevant distinction.

Where, according to the practice of a family of which the plaintiff is a member, the plaintiff performs particular domestic chores and is disabled from continuing them by the conduct of a tortfeasor, that incapacity is a loss suffered by the plaintiff, and, subject to what was said in Griffiths v. Kerkemeyer, supra, as to the benefit of subventions received from third parties, the cost of providing the services which are needed because of the incapacity should be borne by the tortfeasor. This is not a case where there was a re-arrangement of domestic chores consequent upon an injury, and the events which occurred after the accident showed that it was reasonably necessary to provide the requisite services at a cost. There was no suggestion made that the payment of the cost by the appellant's husband goes in relief of the tortfeasor. Indeed, the inference is open to be drawn that if the husband had not paid for them, the appellant would herself have paid for them

In our opinion, the trial Judge should have made an award on this aspect of the appellant's claim. Counsel for the respondent calculated a figure of $4,620 being the present capital value of $15 per fortnight for 20 years, using 6% tables, and the appropriateness of this figure was not disputed by counsel for the appellant. We are of the view

that the appellant's damages should be increased accordingly.

In the result, this Court should increase the award by an amount which, having regard to the views we have expressed, will yield fair compensation. The addition of amounts totalling $12,620 to the amount already awarded will not duplicate any matter which the learned trial Judge has already allowed for in his assessment, nor will it produce an assessment which is unfair. Accordingly, the appeal should be allowed and the appellant's damages increased to $44,329.97. The

respondent must pay the appellant's costs of this appeal.

'preceding pages are a true copy of 'the Reasons for Judgment herein of their Honours Mr. Justice Brennan and Mr. Justice Fisher.

AUSTRALIAN CAPITAL TERRITORY . or No. F.C. 25 of 1979 DISTRICT REGISTRY .

ON APPEAL FROM THE SUPREME COURT OF 'THE AUSTRALIAN CAPITAL TERRITORY BETWEEN :

As I disagree with some of the reasons they have expressed it is necessary to add something for myself.

First I do not agree there is any material from which the inference is open to be drawn that if her husband had not paid for domestic services, the appellant would have done so herself out of her own earnings. The learned trial Judge did not draw the inference. In my opinion it was not open to him or to us. Therefore I would not increase the amount of the appellant's verdict on such a basis or, it follo by any process of capitalising the sums paid or expected to be payable.

As I discern from his reasons his Honour did find a proven loss of earning capacity in the sense of a reduction

It was then shown by the evidence which was not questioned and which His Honour appeared to accept that she was not able fully to do -

These were all to some extent at least the subject of a 'measure! on the evidence. The amounts paid to secretaries was referred to in evidence. The earnings of a nurse were accepted by his Honour as "almost exactly" the same as she now earns. The worth of the third is similarly able to be estimated in that the housekeeping assistance cost $15.00 a fortnight.

Whilst his Honour did advert to the improbability of appellant having to undertake nursing he did not evaluate

the possibility. Rather, he rejected this area of her claim

that as matters stood just before the accident, although one can imagine events which would cause her to wish to earn as a nursing sister, such events were improbable. Is she entitled to damages for loss of an earning

that she would ever have wished to exercise? But whatever' be the answer to this question, it appears that on the evidence before me I should not calculate the plaintiff's damages for loss of earning capacity on the basis of her loss of her capacity to earn as a nursing sister, since she has shown that she is now employed for a remuneration which is almost exactly the same as that of a nursing sister, at any rate if no regard be had to penalty and overtime rates." So his Honour refused the claim because not presently operative and it was improbable that it ever should operate.

His Honour also rejected the claim for the cost of employing domestic assistance. If the claim was made explicitly in those terms it may be said that, with respect, he was correct.

He noted that the burden of this expense has fallen on the

husband; that no personal loss was caused to her and

The arguments and authorities referred on appeal, it seems, were not put to the learned trial Judge. Appellant seeks to have a sum added to the damages on the "needs" principle referred to in authorities to which I refer hereafter. In Griffiths v. Kerkemeyer(1976-1977)139 C.L.R. 161 Gibbs J. said at page 165 - -

"in Beck v. Farrelly, Bray C.J, pointed out the difficulty of reconciling the principle laid down in Graham v. Baker with Donnelly v. Joyce. In my opinion it is not right to

say that a plaintiff who suffers injuries that create

a need for medical or hospital treatment, nursing assistance or pharmaceutical supplies thereby necessarily suffers

a loss that calls for compensation by way of damages. (I am of course not intending to speak of damages for loss of amenities or pain and suffering).° In my opinion,

in cases of this kind also, the plaintiff is entitled to damages only to the extent that the need thus created is or may be productive of

"Tt is unnecessary to consider' all the implications of this change in approach. It should not create any difficulties so far as the provision of gratuitous services is concerned. Where necessary services have been provided gratuitously by a relative or friend, it should now, as a general rule, be held that the value of the

services so provided should not reduce the damages payable to the plaintiff." I read this quotation as if after "provided" his Honour had added - for the injured plaintiff and to imply that his Honour would add the sums in question to any verdict. But an essential is that the services, clothes or wages (or the visiting of parents as in Wilson v. McLeay (1961) 106 C.L.R. 523)werefor plaintiff personally - not as here - for the household; or the husband's business. As I read his judgment in the Griffith's case, Stephen J. treats the matter similarly. See p. 173 and 179. He said at p. 175 -

"The principle in Donnelly v. Joyce readily enables an injured plaintiff to recover damages for his accident-caused needs met by third party subventions in those very cases most calling for it. I refer to those deserving cases concerned with charitable subventions by friends or relatives who, to benefit the plaintiff, and with no thought of relieving the wrongdoer, gratuitously provide him with funds, services or goods." Underlining is mine - intended to emphasise that the provision of goods or services must be for the plaintiff. In the same case Mason J. (P. 192) also expressed the opinion that the relevant passages quoted from Megaw J - ".,...accurately expresses the law...." He continued - "The respondent's relevant loss is his incapacity to look after himself as demonstrated by the need for nursing services and this loss is to be quantified by reference to the value or cost of providing

There may well be an area of domestic service rendered to or for an injured plaintiff where even though a "need" is demonstrated money worth (or full money worth) of such services is not recoverable. Samuels J.A. refers to this subject in Kovacs v. Kovacs (N.S.W. Court of Appeal 6 May 1980). Perhaps this is particularly so in respect of some services when provided by a near relation. But I do not rely upon that for the view I express. It was not anyway the subject of close discussion at the appeal or on the evidence.

There is a distinction in the cases of Donnelly, Beck v. Farrelly and Griffiths v. Kerkemeyer from the present in that the plaintiffs in those cases by virtue of a gratuitous provision actually received something they needed personally; whereas here the appellant received nothing other than being relieved of the necessity to have carried out more secretarial and domestic services for her husband and in their household respectively. It is argued that (in the Donnelly sense) her loss is the existence of the need for those services (secretarial, domestic). Yet those services were not provided to or for her personally. Accordingly, in so far as the verdict did not provide for the additional cost of secretarial or domestic services, it cannot, in my view, be said to be deficient in the sense those authorities envisage.

It may be of some assistance, in a case where the facts are not similar, and which was decided before the Donnelly and Griffiths cases, viz. Bivone v. Welfare & Anor. (1971) 1 S.A.S.R. 431 to note what Mitchell J. said (by way of obiter) p. 433 -

"Certainly wages which an employer paid for work which an incapacitated employee would otherwise have done, could not be considered part of the employee's damages, merely by reason of the fact that the employer still paid the employee's wages." But her. finding does not dispose of the plaintiff's claim in this area.

In my view, the appellant did suffer such a physical detriment as reduced her ability to do housework or act as a secretary. There was not created thereby, in my view, a "need" which should have been reflected in the verdict in the Donnelly sense. But this does not put an end to her rights.

Her physical detriment (confirmed in part by her inability to do housework) reduced her capacity to earn both as a Secretary-stenographer and as a nursing sister. Some measurement or quantification of that detriment as a stenographer is found in the amount paid for additional secretarial assistance. Again, it has not been argued that she should recover those precise amounts, or that if uninjured she would have done this additional work thereby to earn those sums in addition to wages which were paid to he1 Some measure of the potential earning of a nursing sister

Damages are recoverable where it is proven that an established-by-evidence condition may be a possible cause of financial loss ("is or may be productive of financial loss") in the future.

Cases such as Callaghan v. Wm. C. Lynch Pty. Limited 1962 N.S.W.R. 871 (Callaghan) refers to the possible recurrence of a condition caused by defendant's tortious actions. If such recurrence is not a "mere possibility" put a "real chance" even if improbable, it should be evaluated.

In Ivkovic v. Australian Iron &.Steel Ltd. 1963 S.R. (N.S.W.) 598, 603, 604, 607, 608, there is reference to the decision in Callaghan and an acceptance that it is sufficient for a plaintiff to prove a possibility of partial economic loss. And cf. Chaplin v. Hicks 1911 2 K.B- 786 Jones v. Griffith 1969 1 W.L.R. 795. Thurston v. Todd 19661 N.S5.WR, 321 per Jacobs J.A. at 327.

The possibility that she might have to work as a secretary otherwise than for her husband, or as a nursing sister, is, in my view, not so remote nor in that category of

" .....possibilities that are slight,or shances which are nebulous."

(Callaghan p. 877) so that it should be disregarded.

In my opinion the sum awarded does not take account of and is inadequate to compensate her for these aspects of her diminished physical potential in respect of earning

Both sides request that if necessary this Court should provide its own assessment rather than order a retrial.

Speaking for myself, I should have sought to increase her damages by the sum I thought appropriate for the impairment of her earning capacity. It is so little different from the amount by which the majority have increased the award of damages to her, that I concur

in the conclusion they reached and the order proposed.

| I certify that tats anito2 ¥ Reasces for Juugment Herein Of bas seas .

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (138 paragraphs)

Cited By (1)