MARINKO v MASRI

Court of Appeal (NSW)|1999-03-24|Before: Priestley JA, Handley JA, Rolfe J

Reported Decision : (1999) Aust Torts Reports 81-581

New South Wales Court of Appeal CITATION : MARINKO v MASRI [1999] NSWCA 364 FILE NUMBER(S) : CA 40460/98 HEARING DATE(S) : 24 March 1999 JUDGMENT DATE : 5 October 1999

PARTIES : NEVILLE MARINKO & ANOR v ISSAM MASRI JUDGMENT OF : Priestley JA at 1; Handley JA at 4; Sheppard AJA at 60

COUNSEL : A J Sullivan QC (appellants) A J Leslie QC (respondent) SOLICITORS : Blake Dawson Waldron (appellants) Paul A Curtis & Co (respondent) CATCHWORDS : DAMAGES - wife suffers permanent brain injury during abortion - nervous shock of husband - wife's "estate" managed by Protective Commissioner under Protected Estates Act 1983 - wife awarded amounts for past gratuitous care and future care and management - husband principal carer - whether husband should claim payment from Protective Commissioner for amount awarded to wife for past voluntary services provided by the husband - whether failure to mitigate - whether "double dipping" in awards for past gratuitous care to wife and past economic loss to husband; DAMAGES - apportionment of past and future economic loss for nervous shock consequent on serious injury to wife - whether should have been made to reflect husband's non compensable grief and depression; DAMAGES - whether carer's benefit under Social Security Act and maintenance payments by Protective Commissioner should have been deducted from award for economic loss Protected Estates Act 1983 ACTS CITED : Compensation to Relatives Act 1897 Mental Health Act 1958 Social Security Act 1991 TCN Channel 9 v Hayden Enterprises Pty Limited (1989) 16 NSWLR 130 Driver v War Services Home Commissioner (1923) 44 ALT 130, 134 Re DJR & The Mental Health Act 1958 [1983] 1 NSWLR 557 CSR Limited v D'Arcy (1995) 40 NSWLR 721 Fazlic v Milingimbi Community Inc (1982) 150 CLR 345, 350 Rogers v Whittaker (1992) 175 CLR 479, 487, 488 The Liverpool [No 2] [1963] P 64, 82-3 Hodges v Frost (1984) 53 ALR 373 Griffiths v Kerkemeyer (1977) 139 CLR 161 O'Brien v Komesaroff (1982) 150 CLR 310, 319 CASES CITED: The National Insurance Co of New Zealand v Espagne (1961) 105 CLR 569 Redding v Lee (1983) 151 CLR 117 Manser v Spry (1994) 181 CLR 428 Harris v Commercial Minerals Ltd (1996) 186 CLR 1 Commonwealth v McLean (1996) 41 NSWLR 389, 408-11 Schneider v Eisovitch [1960] 2 QB 430, 442 Hinz v Berry [1970] 2 QB 40 CA , 42-3, 44-5 Swan v Williams (Demoliton) Pty Ltd (1987) 9 NSWLR 172, 193-4 De Francheschi v Storrier (1998) 90 FLR 95, 101-2 Alcock v Chief Constable of South Yorkshire [1992] 1 AC 310, 413, 416 Pham v Lawson (1997) 68 SASR 124, 152-3 Malec v J C Hutton Pty Ltd (1990) 169 CLR 638 DECISION : Appeal allowed in part - cross-appeal dismissed

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40460/98 CLD 12383/93 PRIESTLEY JA HANDLEY JA HEPPARD AJA

Tuesday 5 October 1999 NEVILLE MARINKO & ANOR v ISSAM MASRI

DAMAGES - wife suffers permanent brain injury during abortion - nervous shock of husband - wife's "estate" managed by Protective Commissioner under Protected Estates Act 1983 - wife awarded amounts for past gratuitous care and future care and management - husband principal carer - whether husband should claim payment from Protective Commissioner for amount awarded to wife for past voluntary services provided by the husband - whether failure to mitigate - whether "double dipping" in awards for past gratuitous care to wife and past economic loss to husband DAMAGES - apportionment of past and future economic loss for nervous shock consequent on serious injury to wife - whether should have been made to reflect husband's non compensable grief and depression DAMAGES - whether carer's benefit under Social Security Act and maintenance payments by Protective Commissioner should have been deducted from award for economic loss

The respondent's wife collapsed during an abortion at the appellants' surgery and suffered severe and permanent brain damage and required full time care. The respondent husband suffered nervous shock, grief and depression as a result of his wife's accident. He left his employment and devoted himself to the care of his wife and their two children. The wife, through her tutor the Protective Commissioner, settled her claim for $3.7 million which included amounts for past gratuitous care and future care and management. The respondent claimed for his nervous shock, grief and depression, and for past and future economic loss. He refused to claim payment from the Protective Commissioner for the gratuitous care he had provided. The appellants claimed that this was a failure to mitigate which led to "double dipping". The trial Judge rejected the appellant's arguments on mitigation and double dipping and declined to apportion for past and future economic loss. The respondent was awarded $455,170. The appellants alleged error in finding that there had been no failure to mitigate the loss, an excessive award for general damages, errors in failing to apportion for past and future economic loss, and error in failing to deduct the carer's benefit paid to the husband, and the weekly maintenance benefit paid by the Protective Commissioner for the family. The respondent cross-appealed claiming that the awards for general damages and future economic loss were inadequate. HELD: allowing the appeal in part and dismissing the cross-appeal: (1) The respondent had not failed to mitigate his loss. The respondent feared that if he died first and full time care had to be provided at commercial rates, his wife's estate might be exhausted within 15 years. The appellants, who had the onus of proof, failed to prove that this fear was groundless. (2) There was no "double dipping" in having an award to the wife for past gratuitous care and to the husband for past economic loss. The two awards were separate and distinct. (3) Since carer benefits can be characterised as a partial substitute for lost income, the appellants' claim that the carer's benefit should be deducted from the award to the husband for past economic loss succeeded. (4) Since the maintenance payments could be characterised as both remuneration for the husband's care and compensation for his unemployment, the appellants' claim that part of the maintenance payments should be deducted from the award for past economic loss succeeded. (5) The methods by which the trial Judge calculated the husband's non-economic loss led to an assessment that was appealably excessive. The award for general damages should be reduced. (6) There was no basis for apportioning the awards for economic loss as they were directly attributable to the husband's injury. (7) The respondent's challenge to the awards for non-economic loss and future economic loss were inadequate failed. ORDERS

(1) Appeal allowed in part, cross-appeal dismissed; (2) Judgment of the Supreme Court, Common Law Division, set aside except as to costs; (3) Substitute, with effect from 4 June 1998, judgment for the plaintiff comprising: (a) general damages including interest $ 62,223.33 (b) past wage loss including interest $258,700.00 to be reduced by amounts of $200 and $300 a week from the Family Allowances of $500 and $800 a week paid by the Protective Commissioner to the respondent up to 4 June 1998, with the pre judgment interest to be adjusted accordingly (c) loss of earning capacity $ 61,837.00 (4) Parties to file a consent order with the Registrar recording the amount of the substituted judgment in accordance with Order 3 within 14 days; (5) In default the appeal is to be listed for mention before Handley JA on Wednesday 20 October 1999 at 9.30 am; (6) Respondent to pay appellants' costs of the appeal and cross-appeal but to have a certificate under the Suitors Fund Act in respect of the costs of the appeal. THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40460/98 CLD 12383/93 PRIESTLEY JA HANDLEY JA HEPPARD AJA

Tuesday 5 October 1999 NEVILLE MARINKO & ANOR v ISSAM MASRI JUDGMENT

1 PRIESTLEY JA: I have had the benefit of reading in draft form the reasons and proposed orders of Handley JA.

2 I agree with his conclusions and reasons subject only to this, that I would reach the same conclusion under his heading "Failure to mitigate loss", as he does, but without reliance on the onus of proof. It seems to me that the husband established the relevant head of loss on the balance of probabilities.

4 HANDLEY JA: This is an appeal by the defendants in a nervous shock case. The plaintiff, Mr Masri (the husband), and his wife already had two children, and in 1991 they decided to have no more so that Mrs Masri (the wife) could return to the workforce. However, shortly before 21 February that year, she was confirmed to be pregnant. She and her husband discussed what should be done and decided that the pregnancy should be terminated.

5 This led to their attendance on the first and second defendants at their surgery on 21 February. The husband was told that he needed more money to pay for a contraceptive device for his wife, and he left the surgery to obtain it. On his return he was told by an extremely agitated secretary that the wife had collapsed during her treatment because of her propensity to epilepsy and had been admitted to Sydney Hospital in a coma. He went to the hospital and saw his wife. There was no dispute that the husband suffered nervous shock as a result of what he was told and then saw. The wife had suffered a severe global hypoxic brain injury which left her in a pitiful physical and mental condition requiring full time care. Her condition is permanent. The husband has since devoted himself to his wife's care and the care of their two children.

6 The wife sued the defendants through her tutor, the Protective Commissioner (the Commissioner), and her action was settled for $3.7 million. Evidence in support of the application for approval showed that it included $317,200 for past gratuitous care at the rate of $1,000 per week and $2,726,850 for future care and management at the rate of $300 per day.

7 There was no dispute at the trial that the husband suffered from a psychiatric illness as a result of his nervous shock and was entitled to damages. The principal issues concerned the extent of his illness, and its effect upon him having regard to his grief and the depressing effect of caring for his wife and children.

8 These issues led to submissions from the defendants before Rolfe J, the trial Judge, that the husband's damages should be apportioned to reflect the relative importance of his nervous shock, grief and depression. The nervous shock was compensable but, as the Judge correctly held, the husband was not entitled to be compensated for his grief and depression as such. These consequences, however foreseeable, were outside the scope of the law's protection.

9 The husband left his employment when the wife was injured and took up the role of full time carer when his wife was discharged from hospital. Her damages, as agreed for the settlement, included over $3 million for past and future care. The past care was gratuitous having been provided by the husband, and he continued to be her principal carer until the trial of his action in May 1998.

10 The husband claimed for past and future economic loss on the basis that he had not worked, and would not work again, because of his injury and because he had cared, and would continue to care, for his wife. This state of affairs led to a submission by the defendants that the husband and his wife were "double dipping". If his claim for economic loss were allowed in full, it was said that the defendants would be paying twice, once for the wife's need for care, and again for its provision by the husband.

11 An associated question related to the husband's refusal to claim payment from the Commissioner for the gratuitous care he had provided for his wife. This, it was said, was a failure on his part to mitigate his damages which should be reflected in a reduced award.

12 The Judge assessed the husband's general damages at $85,250 to reflect 55 percent of his total non economic loss from all causes, the balance being referable to so much of his grief, guilt and depression as was not compensable. The Judge declined to apportion his awards for past and future economic loss, and he rejected the argument based on alleged double dipping. His Honour awarded the husband $455,170 comprising:

(a) General damages including interest $ 93,335 (b) Past wage loss including interest 299,998 (c) Loss of earning capacity 61,837 $455,170 13 The defendants appealed, alleging error in finding that there had been no failure by the husband to mitigate his loss, an excessive award for general damages, error in failing to apportion for past and future economic loss, error in failing to deduct the carer's benefit paid to the husband and the weekly maintenance being paid by the Commissioner for the benefit of the family. The last two submissions had not been made at the trial. The husband cross-appealed claiming that the awards for general damages and future economic loss were inadequate.

Failure to mitigate loss 14 It is established law that a plaintiff with a cause of action for damages in tort or contract must act reasonably to mitigate his loss, and damages will be assessed on the basis that he has done so. In TCN Channel 9 v Hayden Enterprises Pty Limited (1989) 16 NSWLR 130 this Court approved the test for mitigation stated by Irvine CJ in Driver v War Services Home Commissioner (1923) 44 ALT 130, 134: "… what would such a man do to avoid such a further loss to himself, supposing that, from insolvency of the other party, or for some other reason, he could not get any damages". 15 The wife's estate, including her damages, is being managed by the Commissioner under the Protected Estates Act 1983. The powers of the Court and the Commissioner under this Act, like its predecessor the Mental Health Act 1958, do not in terms authorise the making of voluntary payments, but the power to make such payments, derived from the Court's inherent jurisdiction under the Royal Prerogative, was recognised in Re DJR & The Mental Health Act 1958 [1983] 1 NSWLR 557. The damages recovered for that patient included an amount for services gratuitously provided by his mother. Powell J concluded at 564-5: "… where … there have been rendered, albeit gratuitously, to a(n) incapable person, services … reasonably necessary for … his welfare, … the value of which … has been incorporated in an award of damages made to that person, then the Court or the Protective Commissioner, when supervising the administration of, or when administering, that person's estate has power … to recognise the moral claim of the person or persons who provided those services by authorising the payment, or by paying … an appropriate sum of money". 16 He continued at 567-8: "In a case in which the relevant verdict has been found by a Judge … the sum allowed for the services gratuitously supplied not only provides a convenient starting point, but in many, if not all cases, will be the sum appropriate to be allowed". 17 There is therefore no doubt that the husband had every prospect of receiving most of the $317,200 awarded to his wife for his past gratuitous services if he made an application to the Commissioner for such payment. Mr Brian White, who was handling the wife's estate in the Commissioner's office, told the husband, according to the latter's evidence, that he was entitled to receive a substantial payment, "maybe we agree, say $100,000, $200,000". An internal document in the office signed by Mr White, dated 9 March 1998, stated: "Mr Masri in the past has been reluctant to make a claim for care provided to our client however, during his current visit in Australia, I suggested that he seek some legal advice regarding this matter, as he may well be able to justify a claim in the $200,000-$300,000 range". 18 Despite this encouragement the husband refused to make such a claim on his wife's estate. He said that he felt "it is wrong to ask for this money for myself … why should I ask, that's my wife's money". He added that Mr White had said: "… if anything happened to you, we have to provide her 24 hours care: it is going to cost her over $150,000 a year … if we provide her 24 hours care, the money, it will go after 15 years of time, wanting the money, it is gone. Why should I ask for her money if anything happened to me?" 19 The husband's evidence that he had been told that if he died, and care for his wife had to be provided at commercial rates, her estate would be exhausted within 15 years, was not contradicted. As at 1 December 1997 the Commissioner held as part of the wife's estate $315,390 in his trust account and a term deposit for $3 million. The annual income of the estate was then $224,000 and, after providing an allowance for the family at the rate of $800 per week and other expenses, there was a projected annual surplus of $123,960. On 9 March 1998 the term deposit was $3.2 million and the sum in the trust account was $211,823. The memorandum of that date dealt with the sale of the family property at Cabramatta and the purchase of land and construction of a house in Lebanon for a total cost of $460,000. It continued: "Working on a return of 6.8% and with a withholding tax payment of only 10% on Trust Funds held, I expect client to nett approximately $180,000 per year on the remaining Trust Funds held if the sale and purchase of properties proceeds. This figure would equate to $3,460 per week and, even with the higher cost of food, schooling and the unknown factor regarding house outgoings, it appears sufficient to meet client's future needs". 20 This suggests that the husband's fears that the estate would be exhausted after 15 years if he died first and his wife needed care provided at commercial rates may have been unfounded. 21 The husband gave evidence on 22 May 1998. The Court does not know whether Mr White gave his warning before or after 9 March 1998. Information in his memorandum of that date would establish a probable annual surplus of $80,000 increasing after the house in Lebanon was occupied and the children had left school. Moreover one suspects, but there is no evidence on the point, that full time care in Lebanon may not be as expensive as in Australia. However the estate income was based on an interest rate of 6.8% and there was no evidence that the rate would remain at that level in the future. The evidence leaves open the possibility that the critical conversation took place after 9 March, and that Mr White had learned in the meantime that the rate of interest on the fixed deposit was going to fall. 22 The onus of proving that a plaintiff has unreasonably failed to mitigate his damages is on the defendant. The Judge found that the defendants had failed to establish that the husband acted unreasonably in refusing to claim payment from his wife's estate. 23 The ordinary legal test of what is reasonable in the circumstances is objective and most of the cases dealing with mitigation of damage have considered that issue objectively, on the evidence before the court. See generally CSR Limited v D'Arcy (1995) 40 NSWLR 721. However where the mitigation issue concerns medical treatment which the plaintiff has declined to undertake, the test applied is subjective. In Fazlic v Milingimbi Community Inc (1982) 150 CLR 345, 350 the High Court said: "Any assessment of the reasonableness or otherwise of a worker's refusal of treatment must depend upon the worker's state of knowledge at the relevant time. This accords both with good sense and with authority. A worker's choice cannot be said to be unreasonable because he has failed to give effect to factors unknown to him. And in the case of complex medical or surgical procedures he will know little except what he is told". 24 This exception, if that is what it is, to any general rule that issues of mitigation are determined objectively is amply justified by Rogers v Whittaker (1992) 175 CLR 479, 487, 488 where the Court referred to "the paramount consideration that a person is entitled to make his own decisions about his life" and has a "right to know what risks are involved in undergoing or foregoing certain surgery or other treatment". 25 The present case is not directly covered by Fazlic v Milingimbi Community Inc and it is possible that this mitigation issue should be decided objectively on the evidence before the Court. However, even if that is so, the evidence does not support a finding that it was unreasonable for the husband to refuse to make this claim against his wife's estate. A reasonable person in the position of this husband could properly decline to make such a claim when told that there was a risk, if he died first, that her money would have gone in 15 years. The evidence did not establish that this fear was groundless and the appellants must therefore fail as they had the onus of proof. 26 The decision of the Court of Appeal in The Liverpool [No 2] [1963] P. 64, 82-3 which was not cited to us, may have led to the same conclusion on legal grounds but, in view of the lack of argument on the point, the question need not be pursued. 27 The appellants relied on the possibility that the husband, having recovered damages without this deduction, may subsequently claim against his wife's estate and be paid twice for the same work. I am not prepared to assume that a second payment could be obtained from the estate in the circumstances of this case. The appropriate response to such a claim was not dealt with in argument but the Commissioner, and the Court, could well take the view that the husband should not recover twice for the same work, and that there was no longer any moral obligation on the estate to make such a payment. An application to the Court for such a payment may even be viewed as an abuse of process. 28 The appellant's final submission on this point was that the award to the wife for past gratuitous care, and the award to the husband for past economic loss, involved double dipping and an impermissible overlap in the awards. In support of this submission Mr Sullivan cited the decision of the Federal Court in Hodges v Frost (1984) 53 ALR 373. A wife who had been injured in a motor vehicle accident sued for her personal injuries, and her uninjured husband sued for loss of consortium. As a result of his wife's injuries, the husband spent some 15 hours a week doing housework, the wife having previously done all this work. His employment was not affected because he was able to do housework outside his normal working hours. 29 The two actions were heard together in the Supreme Court of the Australian Capital Territory. The trial Judge made an award in favour of the wife which included an amount, based on Griffiths v Kerkemeyer (1977) 139 CLR 161, to reflect her inability to perform household services for her own benefit. The Judge also awarded damages in favour of the husband for loss of consortium, which included the loss of the benefit of the household services his wife had previously provided. The defendant appealed against the award for the wife, and the husband appealed against his award. Both appeals were dismissed. 30 Kirby J, who delivered the principal judgment, noted that the trial Judge had taken care "to avoid double compensation for the efforts of the husband both in the wife's claim and in the husband's own claim for loss of consortium" (ibid 387). At 389-90 he said: "Kelly J was careful not to compensate (the husband) in his action for the work he had done for his wife, and for which allowance had already been made in the wife's case … Whether the husband's efforts merely provide the means to measure the wife's need amounting to her loss of capacity compensable in her case or (provide) a separate head of loss compensable in his case for loss of consortium is not a matter that it is necessary to determine in this appeal. There is no overlap or double counting between the two verdicts".

31 In that case the wife's loss of capacity, and the husband's loss of consortium, were different aspects of the same injury, one direct and the other consequential. The husband was not injured and had not suffered economic loss. In the present case the wife's loss flows from her injuries, and the husband's loss from his injuries. This husband suffered economic loss because he was unable to work at his old job, and the wife suffered loss because of her need for total care. 32 The two claims are separate and distinct, and there is no necessary overlap. The position would have been different if the husband had not been disabled, but gave up paid employment to look after the wife where there would be only one cause of action. In this case there are two causes of action and two losses and I have not been persuaded that there is any double dipping or overlap in the two awards.

Carer's benefit 33 The husband was paid a carer's benefit of $290 per fortnight by the Department of Social Security for looking after his wife. Payment ceased when the wife's case was settled and the Commonwealth was reimbursed from her damages for the $41,298 he had received. The Judge recorded that senior counsel for the defendants did not contend that the carer's benefit should be deducted from the husband's award for past economic loss, but he upheld his submission that it should be allowed for in calculating interest on that loss. However the appellants submitted in this Court that the amount should be deducted from the award for past economic loss. 34 The relevant facts were established at the trial or were not in dispute. The new point taken by Mr Sullivan QC for the appellants is a pure question of law, which arises on facts which are admitted or fully found. It can therefore be taken for the first time on appeal. See O'Brien v Komesaroff (1982) 150 CLR 310, 319. 35 The appellants' claim that these payments should be deducted from the husband's award for past economic loss is connected with their claim advanced at the trial and on appeal that he should have claimed the full amount from the estate that had been awarded to his wife for past gratuitous care. If such a claim had been made, the Commissioner may well have decided that it should be reduced by the carer's benefits retained by the husband. Since these payments had been refunded from the wife's estate, there was no reason for it to pay again. 36 The appellant's claim that the carer's benefits mitigated part of the husband's economic loss is closely associated with, and really falls within, their larger claim at the trial that he should mitigate by claiming payment for his past care from his wife's estate. There is therefore no reason in justice or in law why this narrower point cannot be raised on appeal. 37 The principles to be applied in determining whether a statutory benefit should be deducted when assessing damages have been established by the decisions in The National Insurance Co of New Zealand v Espagne (1961) 105 CLR 569, Redding v Lee (1983) 151 CLR 117, Manser v Spry (1994) 181 CLR 428 and Harris v Commercial Minerals Ltd (1996) 186 CLR 1. 38 In such cases "the Court must endeavour to discover the intention of the legislature" (Manser v Spry, 436). Three possible indicia of a relevant legislative intent have been identified; the financial source of the benefit, the existence of a statutory obligation to repay the benefit from any damages recovered, and the nature of the benefit (Manser v Spry, 436). The financial source of the carer's benefit, Commonwealth consolidated revenue, is neutral on the present question. The Social Security Act 1991 imposed an obligation on the wife's estate, having received compensation for lost earnings and lost capacity to earn, to repay the carer's benefits received by the husband. See s 1174(6) read with the definitions of "compensation affected payment" and "periodic payments period" in s 17(1), and of "compensation" in s 17(2). 39 The result of these provisions is that the carer's benefits must be disregarded when assessing the wife's damages, but they disclose no intention which is relevant to the assessment in the husband's case. He is under no obligation to repay these benefits from his damages. 40 The remaining indicium identified by the High Court is "the nature of the benefit". In Redding v Lee, ibid at 125, Gibbs CJ said in a passage cited with approval in Manser v Spry at 437: "The conclusion that the benefit is intended for the plaintiff personally and not in reduction of the damages may more readily be drawn when it is seen that the receipt of the benefit is not dependent on the loss of wages or earning capacity … for which the plaintiff claims damages and is not intended to replace the lost wages or remedy the loss of earning capacity".

41 In that case Mason and Dawson JJ, with the approval of Deane J, said that "benefits provided to the plaintiff which are a substitute, or partial substitute, for wages" (ibid 138-9) must ordinarily be brought to account. Unemployment benefits were of this character and had to be deducted because "payment of unemployment benefits is made to depend on the condition of unemployment" (ibid 145). 42 The preconditions for payment of a carer benefit, in respect of a severely handicapped person such as the wife, are contained in s 198(1) of the Social Security Act. They include the fact that the carer "personally provides constant care" in the home of the handicapped person. This, standing alone, would prevent the carer from earning income elsewhere and in most cases would prevent the carer earning income in the home. Where the carer would otherwise be earning income, the benefit is therefore a substitute or partial substitute for that lost income. This conclusion is strengthened by s 198(2AA) which provides: "If: (a) a person is personally providing constant care for a severely handicapped person … and (b) the person ceases to provide that care in order to undertake training, education, unpaid voluntary work or paid employment; and (c) the cessation does not exceed 20 hours per week; the person does not cease to be qualified for a carer payment merely because of that cessation". 43 The carer's benefit, as a partial substitute for the husband's lost income, should therefore be deducted from the award for past economic loss. The interest on this amount is not affected because that adjustment was made by the trial Judge.

Maintenance payments by Commissioner 44 After the wife's damages were received the Commissioner began paying a family allowance of $800 per week to the husband which was reduced to $500 when the family moved to Lebanon, but increased to $800 again in December 1997. These payments were the sole source of income for the family apart from possible child support or any invalid pension received by the husband. The receipt of such a pension was not referred to in the evidence, perhaps because it would be refundable from the husband's damages, or because the payments ceased when the family returned to Lebanon. 45 Mr Sullivan QC submitted that the family allowance paid by the Commissioner was received by the husband as income which replaced his lost wages wholly or in part. In his submission they were in the nature of unemployment benefits, and should be deducted from the husband's damages for economic loss. 46 The evidence does not reveal the basis on which the Commissioner decided that these amounts were appropriate and this makes the Court's task more difficult. However the wife's damages included awards for past and future economic loss at the rate of $300 per week. It would be entirely appropriate for the Commissioner to include that amount in the weekly payments and I see no reason why these amounts should be deducted from the husband's damages. The payments of $800 after 1 December 1997 included $180 a week for an additional carer for the wife. I see no reason why this amount should be deducted from the husband's damages. The balance of $320 a week does appear to represent both a living allowance for the husband and the children and remuneration for his care of his wife. He could only provide substantial care while remaining out of the workforce, and to this extent the payments can be viewed as compensation for his unemployment. 47 These payments are not properly characterised as gifts made from motives of charity or benevolence. The Courts have held that such gifts are normally intended to benefit the recipient and not the tortfeasor. See The National Insurance Co of New Zealand Ltd v Espagne (1961) 105 CLR 569, 573, 597-9. These payments were made pursuant to the powers of the Commissioner to apply the wife's estate for her benefit and the benefit of her family. See Protected Estates Act 1983 s 28(1)(b) and (c). Their discretionary nature does not require past payments to be disregarded in the calculation of the husband's damages. See Redding v Lee (1983) 151 CLR 117, 127. Since these payments, to the extent of the residue of $320, or $200 as the case may be, may not have been made if the husband was in full time paid employment I would characterise them as both remuneration for his care for the wife and compensation for his unemployment. To this extent they should be treated as reducing his economic loss. I would therefore allow the appeal to the extent of deducting from the husband's past economic loss $200 per week when the allowance was $500 and $300 a week when it was $800. There is no evidence which would enable a Court to determine whether such payments would continue, and if so, at what rate, after judgment in the husband's action. In these circumstances I would not make any deduction from the husband's award for future economic loss.

Apportionment of general damages 48 The appellants contended that the pre-apportionment figure of $155,000 for the husband's non economic loss from all causes was appealably excessive so that the $85,250 awarded for general damages was also excessive. They did not challenge the apportionment of 55% for the nervous shock. The husband cross-appealed contending that there should be no apportionment, and in the alternative that there should be a variation of the apportionment in his favour. 49 A tortfeasor is generally liable if his tort caused or materially contributed to the plaintiff's injury. See Commonwealth v McLean (1996) 41 NSWLR 389, 408-11. Mr Leslie QC for the husband invoked this principle to support his submission that since the nervous shock made a material contribution to the husband's condition, he was entitled to general damages for the whole of his non economic loss. 50 The courts have recognised the difficulty, indeed artificiality, involved in making an apportionment in cases such as this between the compensable and non compensable components of the consequences of nervous shock at the loss of a loved one. Nevertheless the decisions here and in England have established a settled principle, at least for this Court, that such an apportionment must be made. See Schneider v Eisovitch [1960] 2 QB 430, 442; Hinz v Berry [1970] 2 QB 40 CA, 42-3, 44-5; Swan v Williams (Demolition) Pty Ltd (1987) 9 NSWLR 172, 193-4; De Francheschi v Storrier (1998) 90 FLR 95, 101-2; Alcock v Chief Constable of South Yorkshire [1992] 1 AC 310, 413, 416; Pham v Lawson (1997) 68 SASR 124, 152-3. 51 Swan v Williams (Demolition) Pty Ltd (above) establishes that grief and anguish, which are the result of injury by nervous shock, are compensable, although "ordinary" grief and anguish are not, even when their degree and duration are excessive by normal standards. The reason for this distinction is clear however difficult its application may be in practice. Grief and anguish at the death of a loved one are not merely foreseeable, they are inevitable, but at common law there was no right of action for the death of another, and the Compensation to Relatives Act only compensates for economic loss. Normal grief and anguish following the death of a loved one are not compensable at all in ordinary cases, and there is no reason why they should become compensable for the victims of nervous shock. The Judge was therefore correct in awarding general damages for part only of the husband's non economic loss. 52 The appellants challenged the method used by the Judge to arrive at his pre-apportionment figure of $155,000, in support of their submission that it was appealably excessive. The Judge assessed the husband's loss at $15,000 a year for 7 years for the past, and $10,000 a year for the next 5 years. The figures for the future should have been discounted, but there is nothing to indicate that this was done although one would not hastily conclude that such a point had been overlooked by this experienced Judge. Presumably the annual figure for the future represents an average intended to reflect the husband's progressive recovery over that period. The Judge found that the husband was recovering gradually, which was consistent with his finding that he would be able to return to work at the end of this period. 53 If these findings mean that the husband would make steady progress towards that recovery, his damages would reduce by $3,000 a year from $15,000 at the start of the first year to zero at the end of the fifth year. On that basis the mathematical result, undiscounted, would be $40,000, not $50,000. Of course such calculations, by themselves, can never be determinative when reviewing a Judge's findings as to the future. 54 Notwithstanding the sad and difficult life the husband has led since the wife's injury, and the reality of his feelings of loss, guilt and grief, he has not been damaged physically. He has benefited from counselling. His prospects of recovery are real, and as the Judge said, "he is recovering". He had two healthy children and was only 45 at the date of trial. The assessment in respect of the husband's non economic loss, based in part on a finding that he would substantially recover within 5 years, seems disproportionately high in relation to the $200,000 included in the wife's settlement as general damages for her catastrophic and permanent injuries. Although this figure was not determined judicially, it received judicial approval, and there is no reason for rejecting it as a basis for comparison. These circumstances have led me to conclude that the pre apportionment assessment of $155,000 was appealably excessive, and this conclusion has been reinforced by misgivings about the method used to assess the past and future components. If the Judge had found that the husband was not likely to recover this method would have produced a quite unsustainable figure when extended over the husband's probable life expectancy at the date of trial. 55 I would therefore set aside the award of general damages and substitute an award based on the husband's total non economic loss assessed at $100,000. There is no basis for disturbing his Honour's apportionment of 55% in order to determine general damages. I would reduce the award for general damages and pre judgment interest thereon accordingly.

Apportionment of economic loss 56 The Judge awarded $226,200 for the husband's past economic loss, and $61,837.50 for the future and he declined to apportion these awards. The appellants submitted that these awards should also have been apportioned. However there is no necessary flow on from the apportionment for non economic loss because part of that loss was due to factors for which compensation was not legally payable. 57 The Judge found that the husband's economic loss was "directly attributable to the injury". There was ample evidence to support this finding and it cannot be disturbed. It was a single and inseverable loss because the husband could not continue with his former job. This is not a case where the tort would have allowed the plaintiff to work part time but other cumulative and co-operating causes made him unemployable. He could not continue in his job because of his psychiatric illness, and it does not matter that other factors were also operating. There was therefore no basis for apportioning the awards for economic loss and this ground of appeal fails.

Award for future economic loss 58 The Judge awarded $61,837.50 for future economic loss on the basis of his finding that the husband would be able to resume work within 5 years. The husband has cross-appealed from this award contending that it is appealably inadequate. In support of the cross-appeal Mr Leslie QC challenged the Judge's findings as excessively optimistic, and also submitted that he should have awarded an additional amount as a cushion against the risk or chance that the husband would suffer one or more relapses which made him unemployable. 59 These submissions can only succeed if the cross-appellant can displace the Judge's primary findings. These however were well supported by evidence and depended on the Judge's assessment of the husband whom he saw in the witness box. This part of the award was intended to compensate the husband for losses which would be suffered in the future, and as such depended on the Judge's assessment of the husband's chances of future remunerative employment (Malec v J C Hutton Pty Ltd (1990) 169 CLR 638). The Judge obviously considered that the chance that the husband would recover and be able to return to the workforce within 5 years was very good, indeed in the nature of a practical certainty. He based his awards for future economic and non economic loss on this view. To emphasise the point, in assessing the husband's future economic loss the Judge applied a 15% discount for normal vicissitudes and made no allowance for adverse chances. This Court cannot disturb the primary findings and in my judgment it cannot disturb the inferences drawn by the Judge or his assessment of the husband's future economic loss based thereon.

The following orders should be made: (1) Appeal allowed in part, cross-appeal dismissed; (2) Judgment of the Supreme Court, Common Law Division, set aside except as to costs; (3) Substitute, with effect from 4 June 1998, judgment for the plaintiff comprising: (a) general damages including interest $ 62,223.33 (b) past wage loss including interest $258,700.00 to be reduced by amounts of $200 and $300 a week from the Family Allowances of $500 and $800 a week paid by the Protective Commissioner to the respondent up to 4 June 1998, with the pre judgment interest to be adjusted accordingly

(c) loss of earning capacity $ 61,837.00 (4) Parties to file a consent order with the Registrar recording the amount of the substituted judgment in accordance with Order 3 within 14 days; (5) In default the appeal is to be listed for mention before Handley JA on Wednesday 20 October 1999 at 9.30 am; (6) Respondent to pay appellants' costs of the appeal and cross-appeal but to have a certificate under the Suitors Fund Act in respect of the costs of the appeal. 60 SHEPPARD AJA: In this matter I have had the advantage of reading the judgment to be delivered by Handley JA. I am in agreement with his reasons and conclusions and with the orders which he proposes.

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Judgment (34 paragraphs)

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Cases Cited (16)