Hintz v Illawarra Shoalhaven Local Health District

Supreme Court of NSW|2021-08-10|Before: Adamson J

Introduction

By statement of claim filed on 10 September 2019, Tegan, Jayson and Wade Hintz (the plaintiffs) commenced proceedings 2019/282470 pursuant to the Compensation to Relatives Act 1897 (NSW) against the Illawarra Shoalhaven Local Health District (the defendant). Tegan has also commenced proceedings 2019/282370 for damages for nervous shock (the nervous shock claim). The plaintiffs allege that the defendant's negligence caused the death of their father, Paul Hintz (the deceased), who died in Wollongong Hospital on 17 January 2014, after having been an in-patient at the hospital since his admission on 3 January 2014.
All proceedings have been resolved by agreement, subject to the Court's approval, which is required pursuant to s 76 of the Civil Procedure Act 2005 (NSW) in respect of Tegan, who is a person under legal incapacity. Jayson (who was born in 1996) and Wade (who was born in 1998) were both over 18 years when the proceedings were commenced. Tegan has severe physical and intellectual disabilities and is incapable of managing her own affairs. She is presently being looked after by her maternal grandmother. Wayne Hintz (the tutor), the plaintiffs' paternal uncle, is Tegan's tutor for the purpose of the proceedings

The background facts and the issues in the proceedings

The mother of the plaintiffs and of their older brother, Ryan (who was born in 1988), died on 10 October 2010. From that time, they were looked after by the deceased. At the time of the deceased's death on 17 January 2014, the plaintiffs lived with him and were financially dependent on him. Jayson had just finished his Higher School Certificate and was intending to continue to live at home while he studied at Wollongong University. Wade had finished the School Certificate and intended to remain living at home while he completed school and obtained an apprenticeship as a carpenter. Tegan, who requires help with all aspects of daily living, was cared for by the deceased, with some assistance with showering from Catholic Care. Tegan worked as a packer in a supported environment for four days a week at Greenacres. The uncontroverted evidence was that Jayson and Wade would live at home for a few more years but that Tegan would continue to live with the deceased as long as he was able to look after her.

Consideration

If the proceedings were to run to their conclusion, the issues which would need to be determined would include the following: 1. whether the defendant was negligent in the deceased's care; whether its negligence caused his death and, accordingly, whether it is liable under the Act to the plaintiffs; 2. if so, whether the damages for which the defendant is liable extend to damages for the services which the deceased would have provided for the plaintiffs, but for his death; and 3. the deceased's life expectancy, but for the defendant's negligence; and for what period the deceased would have been able to continue to provide the services to the plaintiffs, and, in particular, Tegan.

Whether the defendant will be liable to the plaintiffs

If the first issues were answered in the negative, the plaintiffs would not be awarded any damages. If the second issue were decided in the negative, the plaintiffs' damages would be relatively modest. If the third issue gave rise to a finding that the deceased's life expectancy could be measured in a few years, this, too, would substantially affect the award of damages.
As to the first issue, the plaintiffs rely on expert reports, including those of Dr Jones, a consultant colorectal surgeon who opined that the deceased was suffering from bowel obstruction and was in need of surgery which, had it been performed earlier, would have relieved his bowel obstruction and prevented bowel perforation and peritonitis which caused septic shock and cardiac arrest and led to his death. The defendant relies on s 5O, which provides for a defence to liability when a professional proves that the professional acted in a manner that, at the relevant time, was accepted in Australia by peer professional opinion as competent professional practice. The opinion of Dr Meagher, a colorectal surgeon, whose reports have been served by the defendant, supports this defence.

Whether loss of services is compensable

As to the second issue, the parties have referred me to the decision of Davies J in Coote v Kelly; Northam v Kelly [2016] NSWSC 1447 (Coote) in which his Honour held that damages were not available for loss of services provided by the injured party in an action brought pursuant to the Compensation to Relatives Act because of the exclusion in s 15(2).
In order to appreciate the effect of Coote, it is necessary to give some background to the genesis of a claim for loss of services, such as that which is included in the plaintiffs' claim for damages. In Nguyen v Nguyen (1990) 169 CLR 245; [1990] HCA 9 (Nguyen), the High Court held that compensation may be recovered in a claim under the Compensation to Relatives Act for lost domestic services, the value of which is to be assessed in accordance with the principles in Griffith v Kerkemeyer (1977) 139 CLR 161; [1977] HCA 45.
The question arose whether the dependants' right to damages in accordance with Nguyen was altered by the Civil Liability Act. Sections 15 and 15B are relevant to this question and provide as follows: "15 Damages for gratuitous attendant care services: general (1) In this section - attendant care services means any of the following - (a) services of a domestic nature, (b) services relating to nursing, (c) services that aim to alleviate the consequences of an injury. gratuitous attendant care services means attendant care services - (a) that have been or are to be provided by another person to a claimant, and (b) for which the claimant has not paid or is not liable to pay. (2) No damages may be awarded to a claimant for gratuitous attendant care services unless the court is satisfied that - (a) there is (or was) a reasonable need for the services to be provided, and (b) the need has arisen (or arose) solely because of the injury to which the damages relate, and (c) the services would not be (or would not have been) provided to the claimant but for the injury. …" [Emphasis added.]
Section 15B relevantly provides: "(2) When damages may be awarded Damages may be awarded to a claimant for any loss of the claimant's capacity to provide gratuitous domestic services to the claimant's dependants, but only if the court is satisfied that - (a) in the case of any dependants of the claimant of the kind referred to in paragraph (a) of the definition of dependants in subsection (1) - the claimant provided the services to those dependants before the time that the liability in respect of which the claim is made arose, and (b) the claimant's dependants were not (or will not be) capable of performing the services themselves by reason of their age or physical or mental incapacity, and (c) there is a reasonable expectation that, but for the injury to which the damages relate, the claimant would have provided the services to the claimant's dependants - (i) for at least 6 hours per week, and (ii) for a period of at least 6 consecutive months, and (d) there will be a need for the services to be provided for those hours per week and that consecutive period of time and that need is reasonable in all the circumstances."
The general prohibition in s 15(2) would appear to apply in the present case as the need for the services did not arise solely because of the injury (sustained by the deceased) and they would have been provided anyway. Further, s 15B would not appear to apply since the claimant in that section is the provider of the services, not the recipient. The statutory scheme is anomalous in that it is difficult to discern a reason why, if the deceased had survived and yet been unable to look after his children, he would have been entitled to damages referable to the care which he was no longer able to provide for them, but that, as he died, his children are not entitled to such damages in a claim under the Compensation to Relatives Act.
Nonetheless, this may reflect a policy choice made by the New South Wales legislature. As the High Court said in Taylor v Owners-Strata Plan 11564 (2014) 253 CLR 531; [2014] HCA 9 in a related context at [43] (French CJ, Crennan and Bell JJ): "There is no warrant for the conclusion that the s 12(2) limitation has the same purpose as the limitation in s 125 of the MAC Act. Relatives Act claims arising from motor accidents, by reason of their number or otherwise, may have called for a different legislative response to Relatives Act claims arising from other wrongful acts."
In Goddard v Central Coast Health Network [2013] NSWSC 1932 (Goddard), which was decided before Coote, I considered the effect of s 15 on a claim by dependants for damages for the loss of the services which had been performed by their mother and said (to the same effect as Coote): "197 If s 15 applies, the various limitations imposed by s 15 on the award of damages for gratuitous attendant care services apply. 198 The first relevant limitation is that the need for such services arises solely because of the injury to which the damages relate: s 15(2)(b). This limitation excludes the claims by the three children since their need arises from their infancy and therefore does not arise solely from their mother's death. 199 The second relevant limitation is that the services would not be (or would not have been) provided to the claimant but for the injury: s 15(2)(c). In my view, this limitation, too, excludes the children's claims for damages in respect of such services. 200 Review of the Law of Negligence (2002) (commonly referred to as the Ipp Report) did not identify any problems that needed to be resolved by limiting damages in respect of so-called fatal accident claims: [13.116]. The effect of this reading of s 15(2)(b) and s 15(2)(c) is to preclude all claims under the Compensation to Relatives Act by children, or at least infant children, for loss of gratuitous attendant care services. That these provisions have such a substantial effect in circumstances where the Ipp Report did not identify any need for reform might seem surprising. Nonetheless the Ipp Report did recommend that the recommendations made by the Panel in regard to damages generally should be adapted and applied to dependants' claims: [13.119] and Recommendation 55. This recommendation is consistent with s 15 applying both to claims for damages for tort and claims under the Compensation to Relatives Act claims."
Of s 15B, I said, at [205]: "I do not consider that, as a matter of construction, s 15B applies since it relates to a claim by a claimant for loss of the claimant's capacity to provide gratuitous domestic services to the claimant's dependants. In my view, the claimant must be either the person injured or the legal personal representative of the injured (now deceased) person."
However, in Lee v Carlton Crest Hotel (Sydney) Pty Ltd [2014] NSWSC 1280, Beech-Jones J awarded damages to dependants in a claim under the Compensation to Relatives Act for loss of a husband's services: [535]-[537]. It is evident from the reasons for judgment, that no point was taken about whether the plaintiff was entitled to such damages. His Honour was not referred to Goddard. The question has not yet arisen for determination in the Court of Appeal.
I note that other jurisdictions in Australia have expressly provided for the loss of such services to be compensable in an action by dependants: see, for example, s 58(1)(a) of the Civil Liability Act 1936 (SA) and s 19A of the Wrongs Act 1958 (Vic).
At best for the plaintiffs, the situation is uncertain. At worst, the law is clearly against them. This is a matter which tends to make it very much in their interests to discount their damages to take account of the nigh inevitability that the approach in Goddard and Coote will be followed by the trial judge and the prospect that this construction of ss 15 and 15B will not be disturbed on appeal.

The deceased's life expectancy but for the defendant's negligence

The defendant has served a report of a geriatrician, Associate Professor Caplan, dated 24 April 2020 in which he opined that the deceased's life expectancy, had he survived the operation (which ex hypothesi would have been performed non-negligently) conducted in January 2014 would have been between one and two years. Associate Professor Caplan also opined that the deceased's physical condition would have been so compromised that he would have been "unable to assist Tegan, except in the most perfunctory manner" and would have "required carers of his own".
In response to Associate Professor Caplan's report, the plaintiffs served a report of Dr Jenny Downes-Brydon dated 23 April 2021, whose opinion was as follows: "It is my opinion that, had appropriate medical care been provided to [the deceased] with laparotomy undertaken earlier (say on or about 14 January 2014 or earlier) the extent of the abdominal surgery would have been considerably less aggressive and more like the surgery undertaken in December 2012 from which he made an excellent recovery and resumed a fairly normal lifestyle, including caring for Tegan and undertaking some employment."
If the opinion of Associate Professor Caplan was accepted, in whole or in part, then the plaintiffs may have been unable to establish that, but for the defendant's negligence, the deceased would have been able to render services to them in any event.

The resolution of the Compensation to Relatives Act Claim

The defendant served an offer of compromise dated 22 April 2021 in respect of the Compensation to Relatives Act claim in the sum of $[REDACTED] plus costs. The agreed settlement provides for the payment of an amount of $[REDACTED], inclusive of an allowance of $[REDACTED] for funds management, plus costs. The deductions from this sum will comprise: funeral expenses of $[REDACTED]; funds management of $[REDACTED]; and solicitor/client costs and disbursements, which the plaintiffs' solicitor, Kellie Wells, has undertaken will be no more than $[REDACTED].
Ms Wells has deposed that she has spoken to an employee of the National Disability Insurance Scheme (NDIS), who confirmed that any settlement or judgment pursuant to the Compensation to Relatives Act is not treated as compensation for the purposes of the National Disability Insurance Scheme Act 2013 (Cth). The employee informed Ms Wells that this means that, even if Tegan had received funding through the NDIS, there will be neither a requirement for repayment nor a compensation recovery amount applied to the settlement for any future NDIS plan.
The plaintiffs' counsel, D Toomey SC and G Smith, and their solicitor, Ms Wells, recommend the settlement of the Compensation to Relatives Act claim on the basis of their opinion that it is in the best interests of the plaintiffs. They suggest the following apportionment: Plaintiff Total Past loss of financial benefit Past care Wade $[REDACTED] $[REDACTED] $[REDACTED] Jayson $[REDACTED] $[REDACTED] $[REDACTED] Tegan $[REDACTED]

I consider this apportionment to be just. As Wade is older than Jayson, it is appropriate that the amount for past care be less than that for his brother. It is also appropriate that Tegan, who has by far the greatest need, receive the lion's share of the total damages.

The resolution of Tegan's nervous shock claim

As referred to above, Tegan claims damages for nervous shock against the defendant. Damages are claimed for non-economic loss and future treatment expenses. Her solicitors obtained a report from Dr Phillips, a psychiatrist, which was based on a history provided by Tegan's maternal grandmother, with whom Tegan has lived since not long after the deceased's death. Dr Phillips took a history that the plaintiff struggled with grief following the death of her father and that she had an "anhedonic mood state", preferred not to get out of bed, was "episodically belligerent" and "trashed her room". Dr Phillips recommended that Tegan be given 30-40 therapy sessions, to take place fortnightly over a period of approximately two years.
Ms Wells deposed, in an affidavit sworn 2 August 2021, that the defendant, by letter dated 23 June 2021, served an offer of compromise in the sum of $[REDACTED] plus costs and disbursements.
The nervous shock claim has been resolved, subject to this Court's approval for the sum of $[REDACTED] plus costs, as agreed or assessed. This figure must be seen in the context that the value of a finding that Tegan's psychiatric illness as a result of nervous shock is 30% of a most extreme case would lead to an award of damages for non-economic loss of up to $[REDACTED], which Tegan's solicitor and counsel regard as her "best case". Tegan's legal representatives have discounted the best case figure to take account of the prospect that the Court would not be satisfied that she had suffered a recognisable psychiatric illness, as required by s 31; the difficulty in assessing the damages, having regard to Tegan's substantial pre-existing disabilities; and the risk that the Court would not consider future treatment to be warranted, having regard to the difficulties of counselling someone with such profound disabilities.
Ms Wells deposed that an amount of $[REDACTED] (Medicare) would need to be deducted from the settlement sum. She also undertook that the solicitor/client costs would be no more than $[REDACTED]. She deposed having spoken to a representative of NDIS, who informed her that there may be a Compensation Recovery Amount applied to Tegan's future NDIS plans based on the settlement but it would only be applied against any allowance in that plan for psychiatric or psychological treatment. Ms Wells deposed that she recommended the settlement to the tutor who instructed her to proceed with the application for approval. Tegan's counsel have also recommended the settlement.
I consider the sum of $[REDACTED] plus costs to be just, fair and reasonable and in the interests of Tegan.

Conclusion

For the reasons given above, I am satisfied that the settlement of the Compensation to Relatives Act claim and the nervous shock claim are in the interests of the plaintiffs and ought be approved by the Court.

Orders

Accordingly, I make the following orders: Proceeding 2019/282470 (1) Approve the settlement of these proceedings pursuant to s 76 of the Civil Procedure Act 2005 (NSW) and make orders in accordance with the parties' agreement, by consent and without admission of liability, as follows. (2) Judgment for the plaintiff against the defendant in the sum of $[REDACTED] (Judgment Sum). (3) Defendant to pay the plaintiffs' costs as agreed or assessed. (4) The Judgment Sum is to be paid to the plaintiffs' solicitors and is to be paid to, or on behalf of, the plaintiffs on the basis of the following apportionment: (a) $[REDACTED] to Wade Hintz; (b) $[REDACTED] to Jayson Hintz; (c) $[REDACTED] for the benefit of Tegan Hintz; and (d) $[REDACTED] to the estate of the late Peter Hintz, for funeral expenses met by the estate. (5) No interest is payable in respect of the balance of the settlement sum if the balance of the settlement sum is paid to the plaintiffs' solicitors within 28 days from: (a) 10 August 2021, being the date of approval of this judgment by the Court; or (b) within 28 days after the defendant received a satisfactory authority to receive; whichever is the later. (6) Order that any apportionment of unrecoverable costs is to be borne by the plaintiffs in accordance with the apportionment in order (4). (7) Note the undertaking given by the plaintiffs' solicitor, Ms Wells, that the solicitor/client costs will not exceed $[REDACTED]. Proceeding 2019/282370 (1) Approve the settlement of these proceedings pursuant to s 76 of the Civil Procedure Act 2005 (NSW) and make orders in accordance with the parties' agreement, by consent and without admission of liability, as follows. (2) Judgment for the plaintiff against the defendant for $[REDACTED] (Judgment Sum). (3) The Judgment Sum is to be paid to the plaintiff's solicitors. (4) Defendant to pay the plaintiff's costs as agreed or assessed. (5) The defendant and its insurer are authorised to pay from the settlement sum any money repayable by the plaintiff to any person or body in respect of social services or otherwise and whether in respect of any statute, regulation, award or agreement or otherwise if a demand or notice is served on or given to the defendant, its solicitor or insurer at any time. (6) The plaintiff undertakes to pay out of the settlement sum any money repayable by the plaintiff to any person or body in respect of social services or otherwise which may not have been deducted by the defendant or its insurer under order (5) and pay the parties entitled all outstanding medical, hospital, ambulance and other out of pocket expenses. (7) The defendant may deduct and pay any money payable by the plaintiff to: (a) Services Australia including Centrelink; (b) The Commonwealth under the Health and Other Services (Compensation) Act 1995 (Cth) or the Health and Other Services Compensation Care Charges Act 1995 (Cth); or (c) The National Disability Insurance Scheme; and the plaintiff's solicitor undertakes to sign any documents that are required to give effect to the above. (8) The plaintiff's tutor acknowledges that before agreeing to this settlement, the defendant informed the plaintiff's tutor that the plaintiff may be liable to pay out of the settlement sum amounts under the Health and Other Services (Compensation) Act 1995 (Cth) and the Health and Other Services Compensation Care Charges Act 1995 (Cth). (9) The defendant will deduct monies from the settlement sum and forward that amount to Medicare Australia, being the amount pursuant to the current Notice of Past Benefits (Notice of Charge) or in the alternative 10% of the settlement sum by way of advanced payment under ss 23 and 24 of the Health and Other Services (Compensation) Act 1995 (Cth). (10) Where any payment under orders (5), (6), (7) or (9) is made, no interest is payable in respect of the balance of the settlement sum if the balance of the settlement is paid within 28 days from the date of this judgment, 10 August 2021, or within 28 days after the defendant receives a satisfactory authority to receive, or a copy of the sealed judgment, or a notice of any deduction referred to in orders (5), (6), (7) or (9) above, whichever is the latest. (11) The plaintiff cannot recover interest on any amount deducted from the settlement sum under orders (5), (6), (7) or (9). (12) Enforcement of this judgment is stayed until 28 days after the first day on which the defendant could pay the amount under order (2) without committing an offence under s 32 of the Health and Other Services (Compensation) Act 1995 (Cth). (13) These terms are not to be disclosed except as required by law or for the purpose of the deductions referred to in orders (5), (6), (7) or (9). (14) Note the undertaking given by the plaintiff's solicitor, Ms Wells, that the solicitor/client costs will not exceed $[REDACTED].

Amendments 19 August 2021 - paragraph numbering updated - [32] DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 August 2021

Health and Other Services Compensation Care Charges Act 1995(Cth)

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