Kars v Kars

Kars v Kars - [1996] HCA 37 - HCA 1996 case summary — Zoe

[17]

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. Dixon CJ went on to provide the example of a subscription taken up by neighbours to assist an injured plaintiff. Similarly, the proceeds of an accident insurance policy taken out by an injured plaintiff before he sustained the injury would not be taken into account in assessing the damages to be paid by the person who caused the injury. Of course, in the latter case, it might be said that the plaintiff purchased the benefit himself with the premiums paid for the policy [25] . And in the latter case, as in the former, there may be some qualification of the principle that damages are purely compensatory [26] . However, as Deane J pointed out in Redding v Lee [27] , "another anomaly in a field (damages for personal injury) where the existence of an anomaly is far from anomalous" should occasion no difficulty. 1. (1961) 105 CLR 569. 2. Espagne (1961) 105 CLR 569 at 573. 3. See Bradburn v Great Western Railway Co (1874) LR 10 Ex 1. 4. See Espagne (1961) 105 CLR 569 at 598, per Windeyer J. 5. (1983) 151 CLR 117 at 167.

[19]

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 [29] , 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. Windeyer J went on to say [30] that where personal injury is productive of private benevolence (and also some other forms of bounty), it is the intent of the donor which is crucial in deciding whether the benefit should be enjoyed in addition to and not in diminution of any claim for damages. If that is the purpose of the benevolence then the law will give effect to it. As Mason J and I put it in Redding v Lee [31] : The subsequent decisions in this Court apply the principles expressed by Dixon CJ and Windeyer J in Espagne. They make it clear that the issue turns on the character and purpose of the particular financial benefit which the plaintiff receives: Was the benefit conferred on him independently of any right or redress against others and so that he might enjoy the benefit even if he enforced the right? 1. Espagne (1961) 105 CLR 569 at 598-599. 2. (1874) LR 10 Ex 1. 3. Espagne (1961) 105 CLR 569 at 599-600. 4. (1983) 151 CLR 117 at 137.

[59]

The plaintiff's loss in Griffiths v Kerkemeyer was caused by his physical disability. It was in accordance with accepted principle to assess part of that loss by reference to the cost of the services which were required to satisfy the need to which the disability gave rise. What was novel about the decision was the application of that principle even though the plaintiff had not borne and would not bear the cost of the services. The novelty was not in valuing the necessary services, both retrospectively and prospectively; there was nothing new in that. The novelty lay in giving the plaintiff the cost of those services even though he had not paid, and would not pay, for them, in order that he, and not the defendant, should reap the benefit. This focus upon the "need" of the plaintiff was repeated in Van Gervan v Fenton by Mason CJ and Toohey and McHugh JJ when they said [64] : [I]t should now be accepted that the true basis of a Griffiths v Kerkemeyer claim is the need of the plaintiff for those services provided for him or her and that the plaintiff does not have to show that the need "is or may be productive of financial loss". In the light of the consistent line of authority in this Court, it would require the strongest possible reason to depart from these principles. We do not find such a reason in the House of Lords decision in Hunt v Severs [65] . It is true that Donnelly v Joyce [66] , in the passage cited, was more widely expressed than was necessary for the decision in question. It is also true that neither Griffiths v Kerkemeyer nor any of the later applications of that decision by this Court address the precise point now raised concerning recovery where the provider of gratuitous services is the tortfeasor. However, especially because Griffiths v Kerkemeyer was itself an exceptional development which departed from the compensatory principle in its pure form, and has been the subject of statutory modification in parts of Australia, we are not persuaded that this Court should now adopt a different principle. To do so would cause unnecessary confusion and instability in settled legal doctrine. 1. Nguyen (1990) 169 CLR 245 at 262-263. 2. Van Gervan (1992) 175 CLR 327 at 333. 3. [1994] 2 AC 350. 4. [1974] QB 454 at 462.

[61]

This will lead to a bare trust of the amount due to the carer for past services, but what is the position concerning the sum received in respect of future services, especially if the plaintiff dies prematurely or recovers more speedily than anticipated so that a surplus is available? Surely, it will not be held on resulting trust for the tortfeasor but will be retained by the plaintiff or his estate. Moreover, the current carer is surely not intended to have any right to insist on being the "beneficiary-carer", eg if the plaintiff prefers to replace his wife by his daughter or by some paid third party. Thus, it seems that the amount representing cover for future services is held by the plaintiff on discretionary trust for paying for such care as he wants but otherwise for himself absolutely: this is an illusory trust because in reality he is in the position of absolute beneficial owner of such money. We do not pause to further analyse the nature of that suggested trust, which would certainly be peculiar. It is enough to remember what Stephen J said in Griffiths v Kerkemeyer [69] : [T]he 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. This conclusion is now too deeply entrenched in this part of the law in Australia for this Court to reopen it. It is an accepted principle in Australia that the damages for past and future gratuitous services constitute a sum designed to provide for the injured plaintiff's established needs. That sum may be calculated by reference to what the provider does and even what the commercial costs of doing it would entail. But the focus is upon the plaintiff's needs. The plaintiff might, or might not, reimburse the provider. According to the repeated authority of this Court, contractual or other legal liability apart, whether the plaintiff actually reimburses the provider is entirely a matter between the injured plaintiff and the provider. 1. [1994] 2 AC 350. 2. Underhill and Hayton, Law of Trusts and Trustees, 15th ed (1995), p 124. 3. (1977) 139 CLR 161 at 177.

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