Griffiths v Kerkemeyer

Griffiths v Kerkemeyer - [1977] HCA 45 - HCA 1977 case summary — Zoe

[12]

It is trite to say that in the assessment of damages for personal injuries a distinction may be drawn between damage which can be measured in money and that which cannot. On the one hand it is impossible to establish by any process of calculation or estimation what amount of money represents such matters as pain, disfigurement or loss of a limb. The plaintiff recovers damages for injury of that kind even if it does not result in any financial loss. On the other hand, where the injury has destroyed or diminished the plaintiff's earning capacity, or has created needs for services that would not otherwise have existed, it is possible (although often difficult) to calculate or estimate what pecuniary loss has already resulted or is likely to result from the damage. It has been held in this Court that where the plaintiff has suffered a diminution of earning capacity he recovers damages "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": Graham v. Baker [11] . Accordingly if the plaintiff is rendered incapable of working but his employer continues to pay his ordinary wages in full, the impairment of his earning capacity does not result in any loss. Difficulty has arisen, in some cases, in deciding which of the benefits that a plaintiff has received should be regarded as mitigating his loss, and which should not. However the discussion in cases such as National Insurance Co. of New Zealand Ltd. v. Espagne [12] and Parry v. Cleaver [13] would have been pointless if damages could have been recovered for impairment of earning capacity without any resulting pecuniary loss. Why then should a plaintiff recover damages because he now has a need for nursing services, if that need is not likely to be productive of financial loss? In Beck v. Farrelly [14] , Bray C.J. pointed out the difficulty of reconciling the principle laid down in Graham v. Baker [15] with Donnelly v. Joyce [16] . 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 financial loss. If, for example, the state will provide the necessary services free, the plaintiff will suffer no loss and can recover no damages. Indeed it was so held in England inCunningham v. Harrison [17] , a decision which in other respects supports Donnelly v. Joyce.

[55]

What may be thought of as a defect, of the law generally rather than of this particular principle, namely that instead of allowing recovery by the charitable provider of gratuitous services, he must instead rely upon the injured party to effect reimbursement out of the damages he recovers, is not, perhaps, entirely inappropriate. The provider's subvention, representing the charitable act of a friend or relative, is rewarded in kind by a payment voluntarily made by the injured person, who has been put in funds for that purpose rather than somewhat incongrously giving rise to a right of direct recovery from the wrongdoer. Admittedly this becomes less appropriate when what the provider gives is perhaps many years of care of an injured person, the provider acting out of a sense of duty and suffering great hardship in consequence. However in the present state of the law there seems to be little offering by way of alternative. In Cunningham v. Harrison [15] , Lord Denning expressed the view that a plaintiff husband would hold the damages awarded to him but attributable to the services rendered to him by his wife on trust to pay them over to her. No such view was stated in Donnelly v. Joyce and it may be that the observation by Megaw L.J. in that case [16] that the Court's conclusion "on the issue of principle, although not necessarily on matters mentioned obiter, is the same as that stated in Cunningham v. Harrison " [15] , was directed to this aspect. In Taylor v. Bristol Omnibus Co. Ltd. Lord Denning [17] , again made reference to how such damages, once recovered, should be dealt with but was less specific than he had been in Cunningham v. Harrison. Stamp L.J. concurred in the judgemnt of Orr L.J., who said nothing to suggest that the plaintiff would take the damages other than beneficially. No other members of the Court of Appeal have, I think, in the cases decided since Cunningham v. Harrison, said anything by way of adoption of the views of Lord Denning. I have already referred both to the rejection by Taylor J. in Wilson v. McLeay [18] of the imposition of restrictions upon what a plaintiff may do with damages which he recovers and to what Fullagar J. has said in this regard in Blundell v. Musgrave [19] . There is, I think, some difficulty in the concept of a trust in favour of a provider attaching to some perhaps wholly unquantified part of an award of damages and this will be the greater if the provider's services lie wholly or partly in the future. However, quite apart from difficulties of this sort, and from those additionally mentioned by Bray C.J. in Beck v. Farrelly [20] , the plaintiff should, I think, be regarded as beneficially entitled to the judgment he obtains without question of the imposition of any trust in respect of some part of his damages in favour of one who has rendered, or may in the future render, gratuitous services to him.

[57]

In some cases, by recourse to what Megaw L.J. has called anomalous or anachronistic rules (Donnelly v. Joyce [21] ), the relationship of the parties and the circumstances of the case may enable recovery directly by the provider in an action for loss of consortium (Toohey v. Hollier [22] ), or in an action per quod servitium amisit (per Windeyer J. in Commissioner for Railways (N.S.W.) v. Scott [23] and see generally the observations of Pape J. in Lloyd v. Lewis [24] ) or even, according to Fullagar J. both in Blundell v. Musgrave [25] and in Commissioner of Railways (N.S.W.) v. Scott [26] , wherever the provider is under a legal obligation to provide or pay for services to the injured person. A prospect of direct recovery by the provider of his economic loss might, by reliance upon some sufficient degree of proximity, also be found in the principle discussed in the judgments of Caltex Oil (Australia) Pty. Ltd. v. Decca Survey Australia Ltd. [27] . However, in the majority of cases it is the principle in Donnelly v. Joyce that appears most likely to provide a relatively satisfactory remedy where charitable subventions are in question. How a right of direct recovery by a provider, where it exists but has not been availed of at the time the injured person's action comes to trial, may affect the latter's right to damages for the loss represented by his accident-caused need may prove troublesome; clearly the wrongdoer should not be exposed to liability twice over, nor should the injured person recover damages if the services he receives are "paid for" by damages recovered by the provider from the wrongdoer. Perhaps the existing criterion for deductibility or otherwise of subventions, the intention of the provider, will require to have added to it a further factor: whether the provider has a right of direct recourse against the wrongdoer. Such a consideration would not be out of keeping in the context since the possession of the right might be regarded as overcoming any intention by the provider to confer a gratuitous benefit upon the injured person.

[119]

In Beck v. Farrelly [47] , the Full Court of the Supreme Court of South Australia adopted and applied the recent English decisions and the fomulation of the relevant principle by the Court of Appeal in Donnelly v. Joyce [48] . It was correct in so doing, for in my opinion the passages from the judgment of Megaw L.J. which I have quoted accurately express the law on the question. 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 those services. The fact that a relative or stranger to the proceedings is or may be prepared to provide the services gratuitously is not a circumstance which accrues to the advantage of the appellant. If a relative or stranger moved by charity or goodwill towards the respondent does him a favour as a disabled person then it is only right that the respondent should reap the benefit rather than the wrongdoer whose negligence has occasioned the need for the nursing service to be provided. Enough has been said in the cases which have been decided more recently to indicate that the old view based on the proposition that a plaintiff is not entitled to recover from the defendant the services provided to him unless he can show that he is under a legal liability to pay for them, is no longer acceptable. That view proceeded upon the footing that the relevant loss was the legal liability to pay for the service. It is now recognized that the true loss is the loss of capacity which occasions the need for the service. In consequence the existence of a legal liability to pay is not the dominant consideration. Furthermore, the old view, by insisting upon the existence of a legal liability to pay as a condition of recovery in respect of the provision of the service, threw up issues of fact which were not susceptible of accurate determination. In relation to the provision of voluntary services there is the inevitable and intractable question: For how long will the voluntary service be provided? Although the new approach does not entirely eliminate this question, it descends to the level of a less critical consideration.

At a glance

Court

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Before

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Judgment (126 paragraphs)

Parties