Damages
108 The draft notice of appeal contained a ground alleging error on the part of the trial judge in failing to reduce the plaintiff's damages on account of contributory negligence. With respect to a judgment based on breach of contract alone, that complaint would give rise to significant legal issues, which were not addressed either in written submissions or in the course of oral argument. Indeed, it was unclear if the ground was pressed. Further, his Honour rejected, on a factual basis, the claim that the plaintiff had caused or contributed to her own injuries by standing up from her seat: at [45]. Given these circumstances and the small amount of the damages, there should be no grant of leave to appeal in respect of that matter, if it were indeed pursued.
109 The second matter challenged in relation to damages was the inclusion of an amount of $8,000 on account of disappointment and inconvenience, in diminution of the contractual purpose, which was to provide a holiday, pleasure and relaxation, being matters compensable in accordance with Baltic Shipping Company v Dillon [1993] HCA 4; 176 CLR 344. The applicant did not seek to challenge the existence of such a head of damages; rather, it complained that the award of an additional amount for such a factor contravened s 16 of the Civil Liability Act. Section 16 provided that "the damages for non-economic loss are to be determined in accordance with the following Table", specifying a proportion of a maximum amount, depending upon an assessment of the suffering of the plaintiff as a proportion of a most extreme case.
110 On the reasoning set out above, this was a provision of State law which limited liability for a breach of the implied warranty under s 74(1) of the Trade Practices Act: it was, accordingly, applicable in assessing the extent of liability, pursuant to s 74(2A). The limited issue in dispute was whether s 16 applied in relation to that element of the award now in issue.
111 Although the amount in issue was small ($8,000), the application of the provision involves an issue of principle which can appropriately be addressed in the present context. In that respect, leave to appeal should be granted.
112 Section 16 appears in Part 2 of the Civil Liability Act, which applies "to and in respect of an award of personal injury damages": s 11A(1). The phrase "personal injury damages" is in turn defined to mean damages that "relate to the death of or injury to a person". The word "injury" is defined in s 11 to mean "personal injury" and to include:
"(a) pre-natal injury,
(b) impairment of a person's physical or mental condition,
(c) disease".
113 One question raised by the definitions in s 11 is whether injury to feelings, disappointment, inconvenience, or any other similar state of affairs, can constitute an "impairment" of a person's mental condition. Secondly, even if the injury does not fall within the terms of the definition, the definition is inclusive and not necessarily comprehensive. Thirdly, damages for a particular loss may constitute "personal injury damages" because they are damages that "relate to" an injury to a person and may relate to another injury (such as a physical impairment) which does fall within the definition. Fourthly, and to the contrary effect, some forms of monetary compensation for injury may not constitute "personal injury damages", because they are not of a kind usually recoverable on an action in negligence.
114 Other provisions give rise to two distinctions relevant in this context. First, it is clear that Part 2, dealing with the assessment of "personal injury damages" distinguishes between economic loss and non-economic loss: Part 2, Division 2 (economic loss) and Part 2, Division 3 (non-economic loss). The phrase "economic loss" is not defined, but "non-economic loss" is, for the purposes of the whole Act, in s 3:
" non-economic loss means any one or more of the following:
(a) pain and suffering,
(b) loss of amenities of life,
(c) loss of expectation of life,
(d) disfigurement."
115 The second distinction may be found in Part 3, dealing with "mental harm". In that Part, mental harm generally is distinguished from mental harm which consists of a recognised psychiatric illness: see, eg, ss 31 and 33. Relevantly for these purposes, there are definitions in s 27, to the following effect:
" 27 Definitions
In this Part:
consequential mental harm means mental harm that is a consequence of a personal injury of any other kind.
mental harm means impairment of a person's mental condition.
…
personal injury includes:
(a) pre-natal injury, and
(b) impairment of a person's physical or mental condition, and
(c) disease.
pure mental harm means mental harm other than consequential mental harm."
116 The first matter which may be derived from s 27 is that, by describing mental harm as a consequence of personal injury of "any other kind", the Act appears to treat mental harm as a form of personal injury. That is confirmed by the fact that "mental harm" means "impairment of a person's mental condition", and thus falls within the definition of personal injury, both in s 27 and in s 11. Although the definition of personal injury in s 27 is differently structured (not involving a separate reference to "injury"), it would be surprising if the definitions, being otherwise identical, meant something different in each part of the Act.
117 One effect of Part 3 is to deny an entitlement to an award of damages for economic loss for consequential mental harm not constituting a recognised psychiatric illness: s 33. If the impairment were "pure mental harm", there would be no liability to pay any damages unless the harm consisted of a recognised psychiatric illness: s 31. The present case involves consequential mental harm which, because it does not rise to the level of a recognised psychiatric illness, would not permit an award of damages for economic loss. Because none was made in the present case, this issue may be put to one side.
118 The analysis so far does not, however, answer the question whether damages for injury to feelings, disappointment and inconvenience fall within the concept of "non-economic loss" and are thus regulated by s 16. This question might be addressed by one of two approaches: on the one hand, it may be possible to distinguish different elements of harm, "distress" being an element of pain and suffering recoverable as non-economic loss, but "disappointment" being something different; that being the approach adopted by the trial judge in the present case, at [53]. On the other hand, the question may be approached at a higher level of generality, by saying that the kinds of damages which may be awarded for a breach of contract fall outside the scope of tortious damages, to which the Act was directed. The latter approach was adopted by Spigelman CJ in State of New South Wales v Ibbett [2005] NSWCA 445; 65 NSWLR 168 at [20]-[22].
119 In Ibbett, a question arose as to the application of Part 2 of the Civil Liability Act in respect of damages for an assault. Part 2 of the Act does not apply in respect of "an intentional act that is done with intent to cause injury": s 3B(1)(a). The assault was pointing a gun at the plaintiff in manner likely to cause an immediate apprehension of harm. Assuming such an intention, did the apprehension of harm constitute an "injury" for the purposes of s 3B? The Court held that it did, although there was some variation in the process of reasoning. The Chief Justice was satisfied that, in s 3B, an apprehension of physical violence was a relevant injury: at [16]. Accordingly, Part 2 of the Act did not apply and it was not necessary to determine whether the exclusion of awards of exemplary and aggravated damages in s 21 had any operation, in relation to the assault. In its terms, s 21 applied in an action for an award of "personal injury damages", as defined for the purposes of Part 2 in s 11 and including damages relating to the impairment of a person's mental condition. The Chief Justice dealt with the application of this provision in the following passage:
[21] The concept of 'personal injury' is reasonably well established in Australian legal practice. It has rarely, if ever, been used to refer to harm to reputation, deprivation of liberty, or to injured feelings such as outrage, humiliation, indignity and insult or to mental suffering, such as grief, anxiety and distress, not involving a recognised psychological condition. (See e.g. Baltic Shipping Co v Dillon ….) An award for the emotional harm involved in apprehension of personal violence would not generally be regarded as an award for 'personal injury damages'.
[22] The issue is whether such harm should be so regarded by reason of the reference, in the inclusive definition of 'injury' in s 11, to 'impairment of a person's … mental condition'. I incline to the view that the emotional reaction, often called 'injured feelings', arising from the apprehension of physical violence and the accompanying sense of outrage or indignation is not an 'impairment of a mental condition'. However, the state of the law on mental harm at the time the Act was passed would need to be carefully reviewed before reaching a concluded view. The submissions did not undertake that task. This issue need not be determined."
120 It followed that the Chief Justice was inclined to treat the term "injury" as having a different meaning in s 3B and in Part 2. Because of the different purposes of the differing provisions and because the Act identifies definitions with a degree of confinement in their operation (s 11 definitions appear in Part 2 and apply only to Part 2) such a conclusion would clearly be available. However, other members of the Court did not approach the matter on that basis. Ipp JA held that "anxiety and distress would be an 'impairment' of a person's mental condition in accordance with the ordinary meaning of 'impairment', as the word is used in s 11": at [124].
121 I was disinclined, in Ibbett, to divide the elements of s 21 so as to deal separately with the cause of the injury, required to be negligence, and the scope of "personal injury damages". Because the action was not in negligence, s 21 did not apply: at [216].
122 A similar question arose in State of New South Wales v Corby [2010] NSWCA 27, in relation to a different provision in the Civil Liability Act. Mr Corby was an offender in custody at the time of alleged assaults. Absent a condition which Mr Corby did not satisfy, s 26C of the Act precluded an award of damages for economic and non-economic loss. Mr Corby accepted that he could not obtain compensatory damages, but nevertheless maintained a claim for aggravated and exemplary damages. The Court rejected his entitlement to aggravated damages, but allowed a claim for exemplary damages to proceed. Part 2A, within which s 26C is found, applied to and in respect of an award of "personal injury damages" in respect of "an injury to a person caused by negligence": s 26B. The question was whether factors of the kind identified by the Chief Justice in Ibbett fell outside the concept of an injury in s 26B.
123 In Corby, I noted that Ipp JA in Ibbett had concluded that the word "injury", whether in its ordinary meaning or as defined in s 11, was wide enough to encompass "anxiety and stress": at [41]. I noted that I had taken a similar view in Ibbett, namely that the ordinary meaning of the term "may not reflect a distinction drawn by the law between emotional distress and a psychiatric condition": at [212]. That was because emotional distress, at least when consequent upon a medically identifiable injury, could be reflected in an award of non-economic loss for pain and suffering. I further stated (with the agreement of Beazley and Tobias JJA) in Corby at [47]:
"In the present case, the plaintiff sought to contend that even aggravated damages fell outside the concept of 'personal injury damages' in the Civil Liability Act . However, to reach that conclusion, it was necessary to adopt a definition of 'injury' which did not include matters such as humiliation and injury to feelings. That position is untenable. The general damages available for compensation for tortious conduct include damages for pain and suffering. There is no basis for limiting pain and suffering to physical suffering."
124 The present claim invoked a principle adopted in Baltic Shipping v Dillon; the significance of that decision was that it permitted recovery for disappointment and distress for breach of contract, in the absence of any physical injury. In considering whether such a claim should be allowed, Mason CJ stated at 359-360:
"Pain and suffering is a well-known common law head of damage recoverable in actions for damages for personal injury, whether awarded for tortious conduct or conduct which constitutes a breach of statutory duty. And, in some circumstances at least, a plaintiff can recover damages for injury to his or her feelings caused by tortious conduct; assault, false imprisonment, malicious prosecution and defamation are causes of action in which a plaintiff may recover damages on that score. This is not surprising. As Lord Cranworth V-C observed in Kemp v Sober [61 ER 200, at p 201], 'the feeling of anxiety is damage'. No doubt his Lordship, by that statement, intended to convey that damages could be recovered by a plaintiff for anxiety, disappointment or distress when those feelings were the consequence of conduct for which damages are recoverable and the damages recoverable for that actionable wrong include compensation for injured feelings of that kind."
125 It is undoubtedly true, as the Chief Justice noted in Ibbett at [21], that injury to reputation, deprivation of liberty and outrage, humiliation, indignity and insult are not commonly referred to as forms of personal injury; rather they usually derive from torts other than negligence, often intentional torts. Matters such as grief, anxiety, distress and disappointment, may fall into a different category. They can be elements of pain and suffering which are the subject of awards for non-economic loss. Similarly, as reflected in the definition of non-economic loss in the Civil Liability Act, an award may be made for "loss of amenities", to cover the non-economic loss resulting from "the deprivation of the ability to participate in normal activities and thus to enjoy life to the full and to take full advantage of the opportunities that otherwise it might offer": Teubner v Humble [1963] HCA 11; 108 CLR 491 at 506 (Windeyer J). This is not a different concept from that accepted in Baltic Shipping; where such damages are said to flow from a breach of contract, they are limited to the loss of the benefit to be provided under the terms of the contract. These, however, are heads of damage which fall within the general law understanding of non-economic loss and the statutory definition of that term. Accordingly, they are subject to the constraints imposed by s 16.
126 The trial judge was conscious of the fact that some at least of the elements for which the plaintiff was seeking compensation were covered by that definition. He accepted that "any distress suffered by the plaintiff" was within the concept of pain and suffering, but held that "disappointment is something different": at [53]. Thus his Honour purported to award a separate amount for damages for disappointment only, namely $8,000: at [56].
127 With respect, the distinction is not persuasive. Distress and disappointment are closely related concepts, in a practical sense, and each is concerned with the loss of enjoyment of an opportunity for recreation and relaxation. That loss falls within the scope of available compensation under general law principles for the tort of negligence. To excise one element so as to avoid the constraints imposed by s 16 of the Civil Liability Act is an artificial exercise which does not accord with the definition of "non-economic loss". Such an exercise will almost inevitably give rise to a risk of double-counting, as noted by Samuels JA in Kokl v Kablar [1989] NSWCA 127:
"… I have never in my experience encountered a suggestion that separate estimates should be made for each of the components, that is to say, for pain and suffering separately from loss of amenities and separately for loss of enjoyment, and that element itself segregated from the second of the three."
128 Because, in the reasons of the trial judge in Kokl, there had been discussion of the separate elements, his Honour noted that there could have been an appearance of double-counting. In Pascoli v Spittle [1989] 9 MVR 573, the complaint was that the trial judge had made an award for pain and suffering and general discomfort, and a separate award for what he described as "loss of enjoyment of life". In rejecting the appeal against those amounts, Hope AJA stated (Samuels and Priestley JJA agreeing):
"The problem involved in adopting such an approach is that there is almost inevitably an overlapping between the injury itself and the consequential pain, suffering and discomfort on the one hand and the interference with the enjoyment of life on the other hand, and it is very difficult to disentangle them, even though in approaching the total amount to be awarded for damages some preliminary view may be adopted by the trial judge as to the relative seriousness of each element."
129 It is sufficient for present purposes to conclude that elements of distress and disappointment resulting from the physical injury in the course of the holiday, would have warranted inclusion in an award of damages for non-economic loss under the general law in relation to negligence. Accordingly, his Honour was in error in seeking to separate out some element on account of disappointment.
130 It is, of course, possible that, had his Honour included the element of "disappointment" in his assessment of the proportion of a most extreme case under s 16, he might have reached a higher degree of severity than 18%. However, the plaintiff did not seek to justify the result in the present case on a different basis and that possibility should be put to one side. The award of damages should be reduced by the amount allowed as a separate head for "disappointment", that is a reduction of $8,000. Because interest was awarded only on that component of her damages, the final award must be reduced by the further amount of $2,871. The remaining amount is that assessed for non-economic loss, in accordance with s 16 of the Civil Liability Act, namely $11,500.