Melchior v Cattanach & Anor [2001] QCA 246

SUPREME COURT OF QUEENSLAND

CITATION: Melchior v Cattanach & Anor [2001] QCA 246

PARTIES: KERRY ANNE MELCHIOR / (first plaintiff/first respondent) / CRAIG MELCHIOR / (second plaintiff/second respondent) / v / STEPHEN ALFRED CATTANACH / (first defendant/first appellant) / THE STATE OF QUEENSLAND / (second defendant/second appellant)

FILE NO/S: Appeal No 7868 of 2000 / SC No 1272 of 1997 / SC No 466 of 2000

DIVISION: Court of Appeal

PROCEEDING: General Civil Appeal

ORIGINATING COURT: Supreme Court at Brisbane

DELIVERED ON: 26 June 2001

DELIVERED AT: Brisbane

HEARING DATE: 9 February 2001

JUDGES: McMurdo P, Davies and Thomas JJA / Separate reasons for judgment of each member of the Court; McMurdo P and Davies JA concurring as to the orders made, Thomas JA dissenting

ORDER: Appeal dismissed with costs

CATCHWORDS: TORTS – NEGLIGENCE – MEDICAL NEGLIGENCE –ECONOMIC LOSS – CARELESS ADVICE, STATEMENTS AND NON DISCLOSURE – FAILURE TO ADVISE OF RISK– where female plaintiff requested defendant doctor to perform sterilisation procedure – where the defendant doctor failed to inform her of the risk or possibility that further investigation might reveal that further steps were necessary – where female plaintiff subsequently gave birth to a healthy baby / DAMAGES – MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR TORT – WRONGFUL PREGNANCY – METHOD OF ASSESSMENT – female plaintiff entitled to recover damages for pain and suffering in respect of the pregnancy and birth and depression which followed, lost earning capacity (past and future) and various medical expenses and also loss of consortium – whether the damages should also include cost of raising the child – survey of authority and discussion of the major views respecting such claims – whether such claims by mother and father are for pure economic loss – relevance of Perre v Apand –whether damages should take into account the benefit of having a healthy child – relevance of public policy in principles applicable to assessment of damages / Family Law Act 1975 (Cth), ss 60 B, 66 C / Criminal Code, ss 286, 324 / Administrator Natal v Edouard (1990) (3) SA 581, considered / CES v Super Clinics (Aust) P/L (1995) 38 NSWLR 47, considered / Dahl v Purnell (1993) 15 QLR 33, considered / Hartke v McKellway 707 F2d 1544 (1983), considered / Heydon v NRMA Ltd & Ors [2000] NSWCA 374, considered / Kealey v Berezowski (1996) 136 DLR (4th) 708, considered / Lovelace Medical Centre v Mendez 805 P2d 603 (NM 1991) / McFarlane v Tayside Health Board [2000] 2 AC 59, considered / McKernan v Aasheim 687 P2d 850 (Wash 1984), considered / Perre v Apand (1999) 198 CLR 180, considered / Rogers v Whitaker (1992) 175 CLR 479, considered / Sherlock v Stillwater Clinic 260 NW 2d 169 (Minn 1977), considered / Thake v Maurice [1986] QB 644, considered / Udale v Bloomsbury Area Health Authority [1983] 2 All ER 522, considered / Veivers v Connolly [1995] 2 Qd R 326, considered

COUNSEL: J A Griffin QC, with C Newton for the appellants / D O J North SC, with C Meek for the respondents

SOLICITORS: Deacons for the appellants / Shine Roche McGowan for the respondents

McMURDO P: I have had the advantage of reading the thoughtful reasons for judgment of Thomas JA in which the relevant facts are fully set out.

Liability

Mr & Mrs Melchior brought an action for damages in negligence against Dr Cattanach, the first appellant, following a failed sterilisation procedure performed on Mrs Melchior at the Redland Hospital as a public patient. The second appellant, the State of Queensland denied negligence but admitted liability for any negligence established on the part of Dr Cattanach. The learned trial judge found that Dr Cattanach was negligent in failing to inform Mrs Melchior after the sterilisation procedure of the following factors. First, the oral history she gave of removal of the right fallopian tube had not been positively confirmed during the sterilisation procedure. Second, if the fallopian tube were present, she faced a significantly increased prospect of becoming pregnant than was usual after sterilisation.¹ Third, an available procedure, an hysterosalpingogram, was likely to disclose the existence of a functioning fallopian tube.

Although there was a body of medical evidence to the contrary,² the primary judge's finding of liability was supported by Dr Pfanner's evidence. Mrs Melchior recounted to Dr Cattanach what she was told of an appendectomy performed upon her 25 years earlier when she was 15. She later became an enrolled nurse and acquired some limited medical knowledge but she did not have that knowledge when she was 15. Because of Mrs Melchior's age at the time of the appendectomy and the passage of time since, I am satisfied the learned primary judge was entitled to prefer Dr Pfanner's evidence and to conclude that Dr Cattanach was negligent. Mrs Melchior was entitled to be warned of the additional material risk of pregnancy and of the availability of the hysterosalpingogram to detect a patent fallopian tube because the 25 year old history of a patient recalling what she was told about a procedure, when she was 15 years old, had not been positively confirmed by Dr Cattanach during the sterilisation procedure: see Rogers v Whitaker.³

Causation of the pregnancy

I agree with Thomas JA that it was open to the primary judge on the evidence to find that had Mrs Melchior been aware of the increased risk of pregnancy she would have had the hysterosalpingogram so as to do all she could to ensure the sterilisation had been effective. This procedure was likely to disclose the patent right fallopian tube. It can be inferred that Mrs Melchior would have been likely to adopt other means of contraception. Consequently the appellants' negligence was the probable cause of Mrs Melchior's pregnancy.

Damages other than economic loss

There is no appeal from the learned primary judge's findings as to damages for Mrs Melchior's personal injuries for pain suffering and loss of amenities nor Mr Melchior's damages for loss of consortium. I agree with all that Thomas JA has said in his reasons as to these heads of damages. What is in contention is the damages award to the Melchiors for economic loss for the costs of rearing the child conceived as a result of Dr Cattanach's negligence.

The claim for the costs of rearing a child born after medical negligence in a failed sterilisation procedure.

As Thomas JA points out in his reasons, Mr & Mrs Melchior's claim is for economic loss and is discrete from Mrs Melchior's claim for damages for personal injury.⁴

This question is difficult and has vexed many judges in diverse jurisdictions and with divergent results.

the position in the United Kingdom

The appellants place particular reliance on the recent decision of the House of Lords in McFarlane v Tayside Health Board.⁵

Lord Slynn of Hadley rejected the plaintiffs' claim for economic loss for raising the child born after a negligently performed sterilisation because although the loss was foreseeable, foreseeability did not provide a sufficiently close link between the act and damage to create liability; there should be a relationship of neighbourhood or proximity between the person owing the duty and the person to whom the duty is owed which turns on a consideration of whether it is "fair, just and reasonable" for the law to impose the duty, following Caparo Industries Plc v Dickman.⁶ As it is not "fair, just or reasonable" to impose on the doctor or his employer liability for the consequential responsibilities imposed on or accepted by the parents to bring up a child, the claim for the costs of child rearing must fail.

Lord Steyn saw the case as one of distributive justice. Replacing the man on the Clapham omnibus with commuters on the London Underground,⁷ he formed the view that an overwhelming number of ordinary men and women would conclude that the parents of an unwanted but healthy child should not be able to sue the doctor or hospital for compensation for the cost of raising the child. If it were necessary, he would also conclude that the claim does not satisfy the requirement of "fair, just and reasonable",⁸ referring, apparently, to the Caparo requirements for a successful pure economic loss claim.

Lord Hope of Craighead after carefully considering the divergent authorities in various jurisdictions, concluded that the question for the court is ultimately one of law not of social policy; if the law is unsatisfactory the remedy lies with the legislature. Damages for the cost of rearing the child are not remote in the sense that they are reasonably foreseeable consequences of the negligence. But in the field of economic loss, proximity between the negligence and the loss which is said to have been caused by it and the attachment of liability for harm must be "fair, just and reasonable". After referring to the benefits brought by the birth of the child, Lord Hope concluded that it would not be "fair, just or reasonable" in assessing the loss caused by the birth of a child to disregard these incalculable benefits which in fairness cannot be set off against the economic loss, effectively adopting the Caparo approach to economic loss:

"The logical conclusion, as a matter of law, is that the costs to the pursuers of meeting their obligations to the child during her childhood are not recoverable as damages. It cannot be established that, overall and in the long run, these costs will exceed the value of the benefits. This is economic loss of a kind which must be held to fall outside the ambit of the duty of care which was owed."⁹

Lord Clyde observed that if the defendants were responsible for the economic loss of raising the child then the plaintiffs would have the benefit of the child maintained in their custody free of any cost which is not in accordance with principles of restitution or with an award of damages which does justice between both parties.¹⁰ The claim was for economic loss following negligent advice; even if sufficient causal connection were established, the cost of maintaining the child goes far beyond any liability which the defendants could reasonably have thought they were undertaking. Reasonableness involves a consideration of proportionality between the wrongdoing and the loss suffered and although the likely level of award in McFarlane was modest, that may not always be so. The solution of allowing limited damages only and rejecting costs of child rearing provides the proper measure of restitution.¹¹

Lord Millett, dissenting, concluded that the birth of a normal healthy baby is a blessing, not a detriment; it is morally offensive to regard it as more trouble and expense than it is worth; the advantages and disadvantages of parenthood are inextricably bound together and parents cannot enjoy the advantages and dispense with the disadvantages:

"In other contexts the law adopts the same principle. It insists that he who takes the benefit must take the burden. In the mundane transactions of commercial life, the common law does not allow a man to keep goods delivered to him and refuse to pay for them on the grounds that he did not order them. It would be far more subversive of the mores of society for parents to enjoy the advantages of parenthood while transferring to others the responsibility which it entails."¹²

Lord Millett refused not only the costs of rearing the child but also Mrs McFarlane's claim for the pain and distress of pregnancy and delivery but would have allowed the McFarlanes a modest sum for the loss of the freedom to limit the size of their family.¹³

Whilst McFarlane clarifies the position in the United Kingdom, overturning Emeh v Kensington & Chelsea & Westminster Area Health Authority,¹⁴it is not binding on this Court.

The position in other jurisdictions outside Australia

In Canada the matter does not appear to have been directly considered at appellate level, but Lax J in the Ontario Court (General Division) in a carefully considered judgment held in a case of failed sterilisation that child rearing costs were pure economic loss and were not generally compensible¹⁵ because the birth of the child was not an injury and brought this family many benefits; the parents were not prevented from fulfilling their parental responsibilities or compromising the relationship of mutual support and dependency which arose on the birth of the child: see Kealey v Berezowski.¹⁶

By contrast, in South Africa, a husband, as administrator of his joint estate with his wife, brought an action for damages for breach of contract arising out of the performance of a failed sterilisation procedure on his wife. The Appellate Division of five judges, allowed the claim for the financial cost of rearing the child, but limited it to cases where the sterilisation procedure was performed for socio-economic reasons: see Administrator, Natal v Edouard.¹⁷

In the United States, the issue is a state, not a federal concern and different states have taken different approaches. The majority of jurisdictions have taken an approach consistent with that of the House of Lords, disallowing claims for damages for the costs of rearing and educating children born after a negligent sterilisation procedure because of the public policy consideration that parents cannot be said to have been damaged by the birth of a healthy, normal child: see, for example, Terrell v Garcia,¹⁸ Rieck v Medical Protective Co of Fort Wayne, Ind,¹⁹ Wilbur v Kerr,²⁰ Cockrum v Baumgartner,²¹ McKernan v Aasheim²² and Girdley v Coats.²³

The respondents place reliance on the following three decisions. In Hartke v McKelway,²⁴ a case of wrongful conception following the negligent and failed sterilisation of Ms Hartke, the United States Court of Appeals, District of Colombia Circuit, noted, without finally deciding the question, that:

"… when a couple has chosen not to have children, or not to have any more children, the suggestion arises that for them, at least, the birth of a child would not be a net benefit. That is their choice and the courts are required to respect it."²⁵

In other instances where a couple chooses sterilisation for therapeutic or eugenic reasons the birth of a healthy child though unplanned would be a great benefit and a court may feel it is unjust to impose on a defendant doctor the costs of raising the child.²⁶

"Generally, however, the plaintiff's recovery will most accurately reflect the amount of injury incurred if it is limited to paying for those risks that the plaintiff specifically sought to avoid and that came to pass."²⁷

Ms Hartke had undertaken the sterilisation procedure because she feared that serious complications from a pregnancy could lead to her death; once those dangers passed, having a child was a positive experience; the birth of the child was not an injury and to award her child-rearing expenses would be a windfall which should not be allowed.

The respondents contend that Hartke supports their award of damages for rearing the child in that the Melchiors sought to avoid the risk of conceiving and raising another child for socio-economic reasons; this was the very thing that came to pass because of the appellants' negligence; the appellants should be liable for that damage.

In Lovelace Medical Center v Mendez,²⁸ the Supreme Court of New Mexico upheld the right of parents of a healthy baby conceived after a negligently performed sterilisation procedure to recover the reasonable costs of raising the baby to adulthood. For the public policy reasons of "the unseemly spectacle of the parents' attempting to prove how slight or non-existent was the psychological benefit they derived from their additional child in order to minimise the offset to their non-pecuniary interests", the court declined to set off an amount representing the emotional benefits from having an additional healthy child against the economic costs of rearing the child. This approach supports that taken by the learned primary judge here.

In Sherlock v Stillwater Clinic,²⁹ the Supreme Court of Minnesota considered a claim brought by Mr & Mrs Sherlock, who had seven children and wanted no more, for the reasonable costs of rearing a child born after a negligently performed sterilisation procedure. The court held in a 3-2 decision that public policy considerations cannot properly be used to deny the recovery of all damages proximately caused by a negligently performed sterilisation which was indistinguishable from ordinary medical negligence:

"Where the purpose of the physician's actions is to prevent conception or birth, elementary justice requires that he be held legally responsible for the consequences which have in fact occurred. While other courts have referred to a negligent sterilisation case as a 'wrongful birth' action, we believe that this type of case is more properly denominated an action for 'wrongful conception', for it is at the point of conception that the injury claimed by the parents originates."³⁰

After considering the disadvantages and assessing their role as "a mortal attempt to do justice in an imperfect world", the court, by majority, concluded that the reasonably foreseeable costs of rearing the child are a direct financial injury to the parents and should be allowed, subject to an offset for the value of the benefits conferred to them by the child. There should be strict judicial scrutiny of verdicts to prevent excessive awards.

To these cases can be added the following. In Custodio v Bauer³¹ the Californian Court of Appeal allowed Mr & Mrs Custodio to claim damages under the Californian Civil Code³² for child raising resulting from a failed sterilisation. The matter was remitted to the Trial Court for determination.

In Betancourt v Gaylor,³³ the Betancourts brought an action for damages for raising the child born after an allegedly negligently performed sterilisation. On a motion brought by the defendants to dismiss the action, Loftus JCC refused summary judgment noting that "any other loss or damage proximately resulting from" the negligent sterilisation operation, including the costs, emotional upset and physical inconvenience of rearing a child may be recovered at law."³⁴

In Burke v Rivo,³⁵ the Supreme Judicial Court of Massachusetts in a 4-3 decision, held that the parents of a child born after a failed sterilisation procedure could recover damages for the cost of rearing a normal healthy but, at least initially, unwanted child, if the reason for seeking sterilisation was founded on economic or financial considerations. The benefit, if any, the parents receive from having the child should be offset against the cost of rearing the child. There was no reason founded on sound public policy to immunise a physician from having to pay for a reasonably foreseeable consequence of his negligence or from a natural and probable consequence of a breach of his guarantee, namely the parents expenses in rearing the child to adulthood.

Similarly, in Ochs v Borrelli,³⁶ the Supreme Court of Connecticut, in a unanimous decision of five judges, allowed the Ochs to claim the costs of raising a child with some orthopaedic disabilities born after a negligent sterilisation procedure performed upon the mother. The jury was entitled to award damages for child rearing expenses, reduced by the value of the benefits conferred on the parents by having and raising the child. The court concluded that this can be dealt with on a case by case basis and involves the balancing test of the Restatement (Second) of Torts.³⁷

The position in Australia

The High Court has not yet considered whether the costs of rearing a child conceived as a result of medical negligence in a failed sterilisation are recoverable damages. The question has not been directly considered by any other Australian intermediate Court of Appeal although like issues were raised before the New South Wales Court of Appeal in CES v Superclinics (Australia) Pty Ltd.³⁸ It seems to have received little attention in Australian courts other than in the following three cases, all decided prior to McFarlane.

In Dahl v Purnell,³⁹ Judge Pratt QC allowed damages for the moderate reasonable costs of raising a healthy child born after a negligently performed vasectomy, rejecting public policy arguments and following the reasoning of Emeh v Kensington & Chelsea & Westminster Area Health Authority,⁴⁰ since overruled by McFarlane. His Honour made a 25 per cent deduction only to the modest damages awarded for future services (Griffiths v Kerkemeyer⁴¹) as a set-off for the intangible benefit of a healthy child; he did not set off the benefits of the child against the damages awarded for raising the child.

Veivers v Connolly⁴² was an action for damages against a medical practitioner brought by a woman who lost the opportunity to lawfully terminate her pregnancy because of the negligent mis-diagnosis that she was not suffering from rubella. As a result, the child was born severely handicapped. de Jersey J (as he then was) found the defendant doctor should have appreciated that this plaintiff was a responsible person who would not abandon a disabled child suffering from rubella embryopathy and would undertake normal maternal responsibility for her upbringing which would necessarily involve substantial additional cost and personal loss; this was sufficient to be characterised as one of the exceptional cases to which Gibbs J (as he then was) referred in Caltex Oil (Australia) Pty Ltd v The Dredge "Willemstad";⁴³ the "sufficient degree of proximity" was established; the costs of caring for the child were a foreseeable loss within the meaning of The Council of The Shire of Sutherland v Heyman.⁴⁴

The appellants contend that Veivers should be distinguished from the present case because it involved the birth of a severely disabled child and that therefore the "benefits" argument does not apply. I find such a distinction unattractive. It will encourage litigation in the courts as to whether a particular child comes within the nomenclature "normal, healthy child". In any case, it is offensive and wrong to suggest that children born with disabilities, even severe disabilities, cannot enrich the lives of their parents, family and the wider community in diverse ways.⁴⁵ If the benefits argument is valid it must apply to all children whether or not born with disabilities or the respect to which all human life is entitled will be devalued.⁴⁶ Of course, the reasonable costs of raising a disabled child may be demonstrably higher than otherwise.

In CES v Superclinics (Aust) P/L,⁴⁷ the plaintiff claimed damages for the loss of the opportunity to terminate a pregnancy after repeated failure by a number of doctors to diagnose her pregnancy. Each member of the court reached a different conclusion. Kirby ACJ (as he then was) rejected the argument that public policy forbids the awarding of damages. As to the benefits of the child argument, he noted that each case will depend on its own facts but in this case:

"… any such enjoyment derived is not a factor which should be considered to reduce significantly the damages to which the appellants are entitled. …

… As a termination procedure would have been sought, precisely to avoid the 'benefits' for which the respondents now assert the appellants must allow, I see no other reason, grounded in public policy, to prevent a full recovery by the appellants of the damages which were claimed to compensate the appellants for the damage incurred, physical, psychological and economic."⁴⁸

Priestley JA would have allowed damages for the loss of the chance to have a lawful abortion but rejected the plaintiffs' claim for the costs of raising the child from the time when the child could have been adopted with reasonable expedition following the birth;⁴⁹ keeping the child beyond that point was the mother's choice and the subsequent costs were not caused by the defendants' breach of duty.

The flaw in this argument is that any choice, if it can be described as such, was forced on the plaintiff by the negligence of the doctor; in CES the mother's real choice was whether or not to have a lawful abortion and that choice was taken away from her by the negligent mis-diagnosis of the doctors. It would be unreasonable to limit the right to damages by contending that a mother in such a case has a free choice to adopt the child she has carried and borne.⁵⁰ As the learned trial judge in this case pointed out, any failure to adopt did not interrupt the chain of causation; on the contrary, it left the chain of causation uninterrupted. I do not understand that the appellants place any reliance on this reasoning of Priestley JA.

Priestley JA, alternatively rejected the damages claim for the costs of rearing the child because such costs were not caused by the defendant's negligence in a commonsense way: March v E & M H Stramare Pty Ltd.⁵¹

Meagher JA (dissenting) rejected the plaintiff's claim outright. To achieve an outcome, Kirby ACJ, whilst maintaining the view set out in his reasons, accepted that the judge conducting the re-trial should follow the approach taken by Priestley JA but noted it would be wise to also estimate damages on the alternative basis favoured by him in case, at the end of the litigation, that view prevailed. Although special leave to appeal to the High Court was granted, the case settled before the hearing was completed.

The primary judge's approach

The learned primary judge rejected the view taken in McFarlane largely because it was based on the Caparo approach to pure economic loss, an approach not adopted by the majority of the High Court in Perre v Apand Pty Ltd.⁵² Her Honour also rejected the argument that for public policy or other grounds the benefit of the birth of a healthy, normal child was fatal to or required mitigation of the claim for the costs of child-rearing in this case.

Are the foreseeable costs of child-rearing recoverable on legal principles, excluding public policy or related considerations?

In answering the complex problems raised in this case, I find it helpful to first consider whether the moderate and reasonable costs of raising the child are recoverable on legal principles, excluding public policy or related considerations, and, if so, to then consider whether these damages should be moderated or extinguished for reasons of public policy or other like considerations.

Despite the personal injury to Mrs Melchior, the respondents' case for the damages for child-rearing is a claim for pure economic loss.⁵³ Some assistance is gained from Perre v Apand Pty Ltd⁵⁴ despite the obvious differences between this case and Perre. The doctor/patient relationship here is quite different to the commercial relationship between the parties in Perre; here, unlike Perre, there is no question the appellants owed the respondents a duty of care; the question was whether that duty extended to the costs of rearing the child.

In Perre, Gaudron J recognised that:

"… where a person knows or ought to know that his or her acts or omissions may cause the loss or impairment of legal rights possessed, enjoyed or exercised by another, whether as an individual or as a member of a class, and that that latter person is in no position to protect his or her own interests, there is a relationship such that the law should impose a duty of care on the former to take reasonable steps to avoid a foreseeable risk of economic loss resulting from the loss or impairment of those rights."⁵⁵

McHugh J noted⁵⁶ that in cases where the resultant loss is not merely purely economic but involves an element of personal injury, courts tend to be prepared to treat knowledge or reasonable foresight of harm as enough to impose a duty of care on the defendant.⁵⁷ McHugh J rejected the three stage approach for determining duty in cases of economic loss adopted by the House of Lords in Caparo, noting:

"If negligence doctrine is to escape the charge of being riddled with indeterminacy, ideas of justice and morality should be invoked only as a criteria of last resort when more concrete reasons, rules or principles fail to provide a persuasive answer to the problem."⁵⁸

McHugh J acknowledged that:

"…in an area of law such as awarding damages for negligently inflicted economic loss, which is still developing and which has been recently cast adrift from any unifying principle, there is no alternative to a cautious development of the law on a case by case basis."⁵⁹

Gummow J, with whom Gleeson CJ⁶⁰ agreed, saw the question as whether

"… the salient features of the matter gave rise to a duty of care … . In determining whether the relationship is so close that the duty of care arises, attention is to be paid to the particular connections between the parties. Hence what McHugh J has called the 'inherent indeterminacy' of the law of negligence in relation to the recovery of damages for purely economic loss. There is no simple formula which can mask the necessity for examination of the particular facts."⁶¹

Gummow J, without directly considering Caparo preferred:

"… the approach taken by Stephen J in Caltex Oil. His Honour isolated a number of 'salient features' which combined to constitute a sufficiently close relationship to give rise to a duty of care owed to Caltex for breach of which it might recover its purely economic loss. In Hill v van Erp and Pyrenees Shire Council v Day I favoured a similar approach which allowed for the operation of appropriate 'control mechanisms'. In those two cases, the result was to sustain the existence of a duty of care.

In Esanda Finance Corporation Ltd v Peat Marwick Hungerfords there had been no trial and thus no facts found. The pleading was bad because it did not allege facts adequate to carry the auditors into a sufficiently close relationship with the creditors or financiers of the company so as to found the element necessary to constitute a duty of care to the appellant. There, the potential for foreseeable but indeterminate and possibly ruinous loss by a large class of plaintiffs and other circumstances pertaining to the relationships between auditors, company and investors or creditors made it appropriate to take into account various 'control mechanisms'."⁶²

Kirby J preferred the approach taken in Caparo and expressed by him in Pyrenees Shire Council v Day.⁶³

Hayne J rejected the approach taken in Caparo but recognised the need for a control mechanism in relation to claims for economic loss in addition to foreseeability because of the desire to avoid indeterminate liability and out of concern not to establish a rule that will render ordinary business conduct tortious.⁶⁴

Callinan J also preferred the path taken by the High Court in Caltex, so that it was unnecessary for him to consider Caparo.⁶⁵ He recognised that:

"… the courts should move incrementally and very cautiously indeed. It is not yet possible to identify a bright line of demarcation between those cases of pure economic loss in which damages are recoverable and those in which they are not."⁶⁶

Callinan J accepted that to establish recoverable damage "a sufficient degree of proximity, foreseeability, a special relationship, determinacy of a relatively small class, a large measure of control on the part of the [defendant], and special circumstances justifying the compensation of the [plaintiffs] for their losses" was required.⁶⁷

I agree with the primary judge that the principles established in Perre provide support for the Melchiors' claim for economic loss. It has already been established that the appellants breached their duty of care to the respondents and that this breach⁶⁸ was the cause of Mrs Melchior's pregnancy.⁶⁹ Dr Cattanach knew that Mrs Melchoir strongly wished to be sterilised because she and her husband did not wish to have more children and that if the sterilisation procedure failed the family would incur expenses in caring for and raising any child conceived. Dr Cattanach was the expert medical practitioner to whom the Melchiors turned to achieve that end. As such, Dr Cattanach was in control, the Melchiors were entirely reliant, and reasonably so, on his professional acts, omissions and advice in making any relevant decisions; they were in no real position to protect their own interests; to this extent they were vulnerable. Dr Cattanach should reasonably have known that Mrs Melchior would be likely to rely on his expert advice as to the sterilisation and related issues. The relationship of proximity or neighbourhood between doctor and patient is one which the law recognises imposes liability upon the doctor for negligent acts, omissions or advice. Although the claim was one purely for economic loss it involved in Mrs Melchior's pregnancy an element of personal injury; the courts will more readily impose a duty where personal injury is involved.⁷⁰ It was reasonably foreseeable that if Dr Cattanach were negligent, the result would be a pregnancy, the very consequence sought to be avoided by the sterilisation. It was also reasonably foreseeable that the Melchiors would be likely to keep any child conceived and to incur expenses rearing the child. Not every unsuccessful sterilisation will result in damages, only those where negligence has caused the pregnancy; this will involve a relatively small and determinate class of people, and is a discrete determinate risk. Questions of ordinary business conduct do not seem to have relevance to this case.

In those circumstances, it is a cautious and incremental extension to the category of cases where the law allows damages for economic loss to conclude, as I do, that the law imposes a duty of care upon a medical practitioner to avoid the foreseeable risk of the costs of raising a child raising conceived through negligence in the context of a failed sterilisation performed for socio-economic reasons, subject to any appropriate limiting control mechanisms.

Further support for this result is gained from the fundamental principle underlying the law of damages, compensation. In an ideal world Mr & Mrs Melchior are entitled to be compensated by damages so that they are as nearly as possible placed in the position they would have been in had they not received negligent advice from Dr Cattanach: Todrovic v Waller.⁷¹The pregnancy was caused by the appellants' negligence. It was reasonably foreseeable that the Melchiors would accept their responsibilities as parents and that this would result in them incurring the expenses of raising the child. Why should not Dr Cattanach in performing a sterilisation be held to the same standards as any other medical practitioner performing a different form of surgery and be responsible for the economic loss reasonably flowing from his negligence?

The respondent's negligence was certainly a commonsense cause of the loss incurred by the Melchiors in rearing the child: March v Stramare⁷²and see also Naxakis v Western General Hospital.⁷³

In reaching this conclusion, I am conscious of the cautious incremental approach required by Perre. I can see no control mechanisms which require the rejection of the claim for economic loss⁷⁴ other than public policy considerations, treated as distributive justice issues by Lord Steyn in McFarlane.

Public policy considerations

The principal argument against awarding such damages is that the birth of a normal healthy child is a blessing and a benefit to both parents and society, not a matter for compensation. Sometimes that argument is used to extinguish the claim for the costs of raising the child as in McFarlane and sometimes as a set off to moderate the damages claim as in Burke v Rivo⁷⁵ and Ochs v Borrelli.⁷⁶ Whilst recognising that only the crustiest of curmudgeons is not warmed by the miracle of new life, I am far from persuaded that the blessing of parenthood should prohibit or even limit a claim for the modest reasonable costs of rearing to majority the baby conceived as a result of medical negligence following a failed sterilisation performed for socio-economic reasons. The free choice of the individual or couple not to be blessed with a child has been taken away from them through negligence and they will consequently suffer economic loss. The benefit argument appeals to some for religious or moral reasons. It has its origins in a past society where children, especially males, were regarded as an economic asset; the larger the family the more likely that enough children would survive to care for the parents in poverty, old age or illness. Such attitudes still prevail today in some developing countries without the aged pension schemes and public medical services which are available in Australia.

Perhaps this is why some would limit the benefit argument to the birth of a normal healthy child, but, as I have earlier noted, this offends the respect and value the law places on every life and undervalues the benefit from and the valuable contribution of those born with disabilities. To draw a distinction between the benefit of a healthy normal child and those with disabilities invites the distasteful spectacle of litigating this question in public.⁷⁷

By contrast, in today's Australian society children are not regarded as an economic asset; indeed at least for many years, they are a financial liability,⁷⁸ which is the very reason for this claim. Children are not universally regarded as a blessing. Contraception and sterilisation are readily available to individuals and couples wishing to control their fertility and society accepts these measures as a responsible exercise of free choice. This was recognised by the US courts 30 years ago in Troppi v Scarf⁷⁹ and more recently by Kirby ACJ in CES v Superclinics.⁸⁰ A growing number of young women and couples choose not to have any children for personal, economic, career and lifestyle reasons. Many more choose to limit the size of their families for similar reasons; some others may do so for health or eugenic considerations. Children are no longer universally regarded as a blessing.⁸¹ This is not to diminish the importance of the modern family in our society but rather to recognise its ongoing evolution.

It is self-evident that it is in society's interests to encourage the nurturing of children within families but I do not see that this is achieved by refusing moderate and reasonable economic loss caused by professional negligence. Once the child is born, the parents have a legal and moral obligation to support and nurture the child and it is generally in society's interest to raise the child within the family unit.⁸² The award of such damages in cases where the sterilisation procedure was sought for socio-economic reasons will benefit society by encouraging the raising of the child within the family unit.

The damages in this case are for the conception of the child caused by the appellants' medical negligence rather than for the wrongful birth or new life of the child; the damages are compensation not for the birth of the child or new life but for the additional financial burden that will be placed on the family through the respondent's negligence.⁸³ The free choice of the respondents to limit the number of their children, to not be blessed with a child, was taken from them by the appellants.

Luntz's Assessment of Damages for Personal Injury and Death⁸⁴ refers to the benefit argument as having "little merit" as "the plaintiffs in these actions have chosen to adopt measures to prevent the birth of children or would have prevented the birth of a particular child if they had been properly advised".⁸⁵

In discussing the benefit argument, J E Bickenbach⁸⁶ validly points out that:

"No court would be moved by the argument coming from a putative father that he should not be required to provide financial support for the child he has fathered on the grounds that he has bestowed on the mother a priceless blessing."

The benefit argument sets off the joys and pleasures of parenthood against the economic loss of raising the child to moderate or extinguish the loss. It compares financial considerations with unconditional love and parental duty, not like with like. In this case, there has been no claim for damages for the anxiety and sleepless nights suffered by all parents through childhood illnesses and injuries, teething, classroom and schoolyard traumas, adolescence and so on. Were such a claim made, as one seems to have in, for example, Betancourt v Gaylor,⁸⁷ then there would be merit in the benefit argument, comparing like with like. Every child brings both joy and heartache to its parents; usually over time one balances the other; a parent may feel one child tips the scales one way and another child the other but it is impossible and undesirable to predict where a child will fall on the blessings scales.

It would be unseemly and against public policy to litigate in public the potential benefit or otherwise of the birth of a child into a family.⁸⁸ It is impossible to know whether a child will on balance over a lifetime bring a parent more joy or more heartache. It is impossible to compare such joy or heartache with the relatively easily calculated reasonable costs of child rearing. Although a token attempt was made in Dahl v Purnell,⁸⁹ no attempt was made in Veivers v Connolly.⁹⁰

I am not persuaded the benefits argument fully or partially excuses those found to have negligently caused a pregnancy following a failed sterilisation from damages for the costs of raising the child, at least in cases where, as here, the sterilisation was sought for socio-economic reasons.⁹¹ The sensible solution is to allow in full the moderate reasonable costs of child rearing in this case, without attempting the impossible task of setting off any benefits.

The second significant public policy argument against allowing damages for raising the child is that it places children the subject of such an action at risk of discovering that they were unwanted and that their upbringing was paid for by another; this is undesirable and could cause the child psychological trauma when they realise they are "emotional bastards".⁹² There are, I think, two sound answers to that argument. First, an unwanted or unplanned pregnancy does not mean that the child when born is not cherished by the family. Such births are a common enough occurrence, although most are not caused by established medical negligence. It is only the financial and social burden arising from the negligence that was unwanted, not the child that is consequently born: see Natal.⁹³ The fact that a child born in such circumstances is regarded by parents and family as a blessing is no reason to exclude the moderate and reasonable economic loss caused to the family.

Second, in Australian society, we have become accustomed to claimants pursuing tortious claims against insured friends and relatives; we are no longer shocked when a husband sues his wife in a motor vehicle accident case for damages for personal injuries, children sue parents for whom they work when injured in the work place or students sue their school for damages arising from negligence. What then is wrong with a parent or parents claiming damages for raising a child conceived because of medical negligence; this is no criticism of the blameless child but is a recognition of the parents' entitlement to economic loss suffered through the appellants' negligence. This argument does not provide any proper basis for rejecting the respondents' claim.

The only compelling public policy reason against awarding damages for the reasonable cost of child-rearing seems to me to be that the costs of such claims could make insurance for medical practitioners so expensive that some doctors, especially in poor or rural areas, may not be prepared to undertake such work.⁹⁴ If the award of this category of damages increases medical fees, the medicare levy and taxes, then these damages will almost certainly appear unattractive to the public. The paucity of such cases so far determined by Australian courts does not suggest that floodgate arguments are apposite: damages will only be awarded in the comparatively few cases of failed sterilisation where medical negligence has caused the loss. These are not considerations which were raised in any detail before this Court; nor are they relevant to the judicial determination of the appropriate award of damages according to law. If there is proven to be substance in these matters, the remedy is with the legislature.

It follows that I am not persuaded that there are public policy reasons requiring control measures to extinguish or limit the damages awarded for the reasonable costs of child rearing.

Additional matters

I mention two other matters as to the assessment of damages in cases such as this, neither of which were raised on appeal. First, it is not clear on the material before this Court whether consideration was given in calculating the child rearing costs to the moderating factor of any applicable social security benefits such as family allowance.⁹⁵

The second matter is whether this category of damages should be limited to the modest reasonable costs of rearing a child. As Angus Stewart QC points out,⁹⁶ child rearing costs have included the costs of a bigger car, a bigger house or house extension and private school fees. In this case, there were no such claims but the modest claim made included $1,200 for private school fees and $200 as the child's apportioned share of a holiday in the USA. The learned primary judge considered the respondents' claim for child raising as: " … on the whole … a reasonable representation of the costs of raising a child" but discounted the claim by 12 per cent because of some matters of overcharging, specifically mentioning a claim for GST on food; the primary judge gave no direct consideration to the luxury items of an overseas holiday and the rather curious claim of $1,200 for 1.5 semesters of private school tuition; nor were these items raised in argument before this Court. Although every case will turn on its own facts, there is much to commend a modest approach to damages for the reasonable costs of child raising; the need for control measures of the type referred to in Perre; the duty to mitigate and causation issues are all factors in favour of moderation of damages in this category.

Summary

The appellants are liable for Dr Cattanach's negligence in failing to tell Mrs Melchior of the additional risk of pregnancy which flowed from his inability to confirm, during the sterilisation, Mrs Melchior's oral account of what she was told of the removal, 25 years earlier when she was 15, of her right fallopian tube, and of the availability of the hysterosalpingogram, which would be likely to disclose the existence of any functioning fallopian tube.

Dr Cattanach's negligence was the probable cause of the pregnancy.

In the circumstances of this case, the respondents are entitled to the moderate reasonable costs of child rearing which were caused by the appellants' negligence.

There are no prohibiting public policy considerations which require the extinguishment or moderation by set off of such a claim.

It follows that I would dismiss the appeal with costs to be assessed.

DAVIES JA: I have had the advantage of reading the reasons for judgment of Thomas JA. His Honour's careful and thorough statement of the relevant facts, findings of the learned trial judge and issues in this appeal and his survey of the relevant authorities relieves me of the need to discuss any of these in detail.

There are a number of issues upon which I agree with his Honour. It is desirable that I mention these first.

I agree with his Honour's conclusion not to disturb the trial judge's judgment that the first appellant owed duties of care to each of the respondents breach of which resulted in pain, suffering and loss of amenities by the first respondent and loss of consortium by the second respondent. I agree with his Honour's reasons for that conclusion. However in view of the doubts which his Honour expressed as to the trial judge's finding of negligence I should add why I think the factual findings of her Honour were justified and, in turn, justified her conclusion that the first appellant was negligent in failing to warn the first respondent that he could not confirm the absence of the right Fallopian tube, that there was a procedure by which it could be confirmed and that, if the tube was present, there was an increased risk of pregnancy.

The first of these is that the first appellant's only source of information, before he performed the operation, that the first respondent's right ovary and Fallopian tube had been removed in an earlier appendectomy was the first respondent herself. He did not and could have sought the records of the Balmain Hospital where, as he was told, that operation had been performed. These may have been available and may have verified, one way or the other, whether the information which the first respondent gave him was correct.

Secondly the appendectomy operation was more than 25 years before the first appellant spoke to the first respondent and, when it occurred, the first respondent was only 15. This should have caused him to have some doubt about the accuracy of the information he was given. Thirdly her Honour inferred from the evidence of the first appellant and the first respondent, not unreasonably I think, that further questioning of the first respondent by the first appellant would probably have revealed, as she said in evidence, that her source of information was her mother and that her mother told her only that her right ovary had been removed.

Fourthly during the course of the operation which he performed the first appellant was unable to confirm the accuracy of the first respondent's information that the right ovary and Fallopian tube had been removed.

And fifthly, of course, there was undoubtedly a significantly increased risk of pregnancy if, even though the right ovary had been removed, the right Fallopian tube was still there.

The most difficult questions in this appeal are undoubtedly whether the first appellant's duty of care extended to the prevention of economic loss to the respondents and, as well, whether they suffered any loss in maintaining the child to which the first respondent gave birth. I agree with Thomas JA and with the House of Lords in McFarlane v Tayside Health Board⁹⁷ that the respondents' claim for maintenance of Jordan is a claim for purely economic loss. However it is, in each case, one which is both an immediate consequence of and closely related to the invasion by the conception and birth of the first respondent's right to bodily integrity, a matter which is relevant when considering whether, as a matter of policy, recovery thereof should be denied.⁹⁸

These two questions may together be put in the following way. Should the parents of a healthy child, born in consequence either of a negligently performed sterilization operation or of negligent advice or of a negligent omission to advise as to the consequences of that operation be entitled to recover from the negligent doctor the costs of reasonable maintenance of the child during his or her minority?

As the cases referred to by Thomas JA illustrate, there has been considerable disagreement among judges and courts about the answer to that question. The received view in the United Kingdom is now that they should not.⁹⁹ But from 1985¹⁰⁰ until 2000 it was that they should. As Thomas JA has pointed out there has been a large number of cases and considerable disagreement on this question in the United States but the majority view there appears to be that parents cannot recover. In the only Australian authority, CES & Anor v Superclinics (Australia) Pty Ltd & Ors¹⁰¹ Kirby ACJ would have allowed recovery and so presumably would Priestley JA had he not thought that the chain of causation was broken by the parents' choice not to adopt out the child soon after its birth.¹⁰² Recovery has been allowed in South Africa¹⁰³ whilst in Canada there is still no authoritative decision though the most recent single judge decision is against recovery.¹⁰⁴

There is an obvious reason why this question has caused so much disagreement and, as well, a good deal of emotive language. It is that the question is one of policy in the sense that it involves notions of justice and fairness and that opinions on that question often have moral and even religious overtones. Underlying most of the decisions against recovery appears to be the view that the birth of a child, or at least of a normal healthy child, will always be a blessing, that is, that its benefit will invariably outweigh its burden, including the financial burden, a view which, it seems to me, has a religious basis. But community views on this have, I think, changed as I shall endeavour to explain.

Adherence to the religious belief which underpinned that view has I think declined. There is now a broad and, I think, reasonable body of opinion that, for some, the birth of a child, or of a further child, will not always be a blessing and that there may be a variety of reasons for this. In McFarlane v Tayside Health Board¹⁰⁵ Lord McCluskey gave one example. "There are" he said "some for whom an unwanted and unplanned pregnancy is a financial disaster and may bring an end to a chosen way of life with financial and personal losses".

Associated with that view has grown a community acceptance and even encouragement of family planning by means not only of contraception but also of male and female sterilization and an improvement in and reduction of the costs of sterilization procedures. In some jurisdictions, not greatly different from our own, abortion also has become more widely available.¹⁰⁶ I think it is correct to say that the community now recognizes that unlimited child bearing is not necessarily a blessing and that heterosexual couples may choose to limit the size of their family permanently by undergoing a sterilization procedure on one or other of them.

Here the first appellant doctor was engaged, for reasons which were neither therapeutic (to avoid risk of damage to the first respondent's health) or eugenic (to avoid the risk of birth of a defective child), to exercise reasonable care and skill to prevent the conception and birth of a further child. His failure to do so resulted in the very consequence he was engaged to prevent; the conception and birth of a child and with it, obviously, the financial consequence of maintaining the child. Prima facie the respondents were entitled to be put, as far as money could reasonably do so, in the same position in which they would have been if the child had not been conceived.

The position might be otherwise if the purpose of the first appellant's act, omission or advice had been therapeutic or eugenic. In the first of those cases the loss which he was engaged to prevent would have been damage to the health of the first respondent; and in the second it would have been birth of a defective child. If in the first case there was no damage to the mother's health and if, in either case a normal healthy child was born it may be that there would be no loss and consequently no tort. But if in the second case a defective child was born the respondents would be entitled to be put, as far as money could reasonably do so, in the same position as if no child had been conceived.

The principle is, in my opinion, the same in cases of wrongful failure to terminate a pregnancy or to advise thereon. Where termination of a pregnancy is lawfully sought because of the risk of damage to the mother's health, the negligent failure may not cause loss if there is no such damage. And if it is lawfully sought because of the risk of birth of a defective child there may be no loss if a normal healthy child is born. But where in the second case a defective child is born the parents are entitled to be put, as far as money can reasonably do, in the same position as if no child had been born.

It is unnecessary to embark on further refinements of this principle in cases other than those which I have chosen to exemplify it. Policy considerations aside, the question is what is the measure of damages which will best give effect to this principle in the present case. Prima facie, it seems to me, those damages should include the cost of maintaining the child during his minority.

Moreover given that, for those who choose sterilization, the birth of a child or a further child is not a blessing, "that the economic or other realities of life far outweigh the benefits of parenthood",¹⁰⁷ there is a lack of common sense and fairness, it seems to me, in a conclusion that a negligent doctor who has, by his negligence, imposed the emotional benefits and burdens of childraising upon persons who engaged him to prevent that from occurring, should be entitled to a set-off for the first of these against the cost which he otherwise ought to bear. After all, even if the emotional benefits, in the end, outweigh the emotional burdens, that is largely of the parents own making, because they have made the best of the consequences of the doctor's negligence. There are, in addition, in my opinion, legal, practical and policy reasons against permitting a set-off of this kind.

In the first place, even if the emotional benefits and burdens of childraising are ultimately capable of assessment in monetary terms, it will be impossible to say, at the time when such damages would ordinarily come to be assessed, that is, shortly after the birth of the child or, indeed for many years after that, whether the value of the emotional benefits of raising that child is likely to exceed that of the emotional burdens thereof. The evidentiary burden of proving that the value of the emotional benefits will exceed that of the emotional burdens, which would be on the defendant, would be impossible to discharge. Secondly, it is, from a policy point of view, undesirable that courts should have to make an assessment of damages which includes weighing the likely prospective good and bad qualities of a child. That would be morally offensive. It would, as Thomas JA has noted, tend to encourage parents to disparage their children, it would be likely to harm the relationship between the parents and the child and it would be likely to harm the psychological well-being of the child. And thirdly, even if it is possible to set-off, one against the other, the emotional benefits and burdens of childraising, it is not possible, in my opinion, to set-off the nett value of emotional benefits against the economic cost of childraising. It does not seem to me to be a benefit to the same interest. The loss is one to the parents' economic interest; the nett benefit, if there is one, is to their emotional wellbeing.¹⁰⁸

The reasons of several of the members of the House of Lords in McFarlane v Tayside Health Board,¹⁰⁹ in my opinion, evidence a refusal to accept the logical consequence of community acceptance of a legitimate choice by a couple that, for them, the birth of a child, or of a further child, will not be a blessing. And the reason for this appears to be that their Lordships found that consequence morally distasteful.¹¹⁰ In the result they pay lip service to the right to make the choice¹¹¹ but fail to protect its exercise. Let me start with the reasons of Lord Steyn which Lord Hope of Craighead thought were very similar to his own.¹¹²

Lord Steyn applied what he said was the notion of distributive justice by concluding that commuters on the Underground would answer the question:

"Should the parents of an unwanted but healthy child be able to sue the doctor or hospital for compensation equivalent to the cost of bringing up the child for the years of his or her minority, ie until about 18 years?"

With an emphatic "No".¹¹³

Perhaps his Lordship is right. But would that be a fair question? Should they not also know, before they answer, that the parents had chosen not to have another child; that they had engaged the doctor who had undertaken to exercise reasonable care to secure that end permanently by sterilization; and that his negligence had resulted in the conception of that child? I am inclined to think that, if those facts were added, the answer would be "Yes". That is because they would accept the moral justifiability of the choice of the parents to limit the size of their family; they would think that those parents were reasonably entitled to rely on the care and skill of the doctor to secure that result; and they would think that his negligent failure to secure that result should result in his bearing the cost which they unexpectedly have to bear.

That underlying his Lordship's conclusion is a moral distaste for the consequences of a right of a couple to decide that, for them, the birth of a child or a further child will not be a blessing can be seen from his statement that such commuters "will have in mind that many couples cannot have children and others have the sorrow and burden of looking after a disabled child" (by contrast, what have these people to complain about?) and that such commuters "would consider that the law of tort has no business to provide legal remedies consequent upon the birth of a healthy child, which all of us regard as a valuable and good thing."¹¹⁴

Lord Millett also accepted that "the law must take the birth of a normal healthy child to be a blessing, not a detriment"¹¹⁵ to its parents. Otherwise, he implied, that would be to regard a normal healthy baby as more trouble and expense than it is worth, which would be morally offensive.¹¹⁶

However it is not morally offensive, in my opinion, to recognize and give effect by civil remedy to the choice which the law permits couples and single women to make to prevent conception permanently by sterilization. To so give effect to that choice by permitting recovery, from a doctor who negligently fails to sterilize, the costs of maintaining the child born in consequence of that failure does not mean, in my opinion, that the child will be any the less loved, cared for or valued; and he or she is likely to be afforded a better living than if recovery is denied. Nor is the value of a human life or of the value of that child to society in issue. The question is rather who should pay for the undoubted economic consequences of the doctor's negligence.

Lord Slynn was not prepared to assume that the benefits of a child must always outweigh the burdens¹¹⁷ but thought that the cost was beyond that for which the doctor assumed responsibility¹¹⁸ and Lord Clyde thought it beyond that which he could reasonably have thought he was undertaking.¹¹⁹ But the cost of raising a child or a further child would almost invariably be an obvious reason for undergoing a sterilization procedure, as it was in this case, in cases where sterilization is sought otherwise than for eugenic or therapeutic reasons.

The decision in McFarlane has, for the United Kingdom, also limited the damages which can be recovered where, in consequence of a negligent failure to sterilize to prevent the risk of birth of a defective child, a defective child is born. Consistently with McFarlane, in such a case the damages for maintenance must be limited to the extra cost of maintaining a defective child.¹²⁰ And the same should also be the result in cases in which a wrongful failure to terminate a pregnancy for that risk resulted in such a birth.¹²¹ It seems to me not only illogical but particularly unfair in such cases that recovery of the full cost of maintenance should be denied. I would have little doubt that if the Australian equivalent of the Underground commuter were asked if parents in this situation should be entitled to recover the reasonable cost of maintaining such a child from the negligent doctor he or she would answer "Yes".

There is one further policy factor, said in some of the cases to be a reason for rejecting a claim of this kind. That is, it is said that the bringing of such a claim may detrimentally affect the relationship between the parents and the child and may detrimentally affect the psychological well-being of the child. On the assumption that the bringing of such a claim does not involve any assessment of the non-financial benefits and burdens of bringing up the child, I do not see how it can have any such effect. The bringing of any claim for damages by the parents, here the claims for pain, suffering and loss of amenities by the first respondent and the second respondent's claim for loss of consortium, disclose the fact that the conception was unwanted. In any event an unwanted conception is not uncommon and I think it unlikely that the disclosure of that fact would be likely to harm the relationship or the well-being of the child. Moreover the addition of a financial claim for the support of the child with its attendant financial benefit to the family and the child is, if successful, more likely to be something for which the child will be grateful than a matter which he or she will regret.

There are, of course, other factors in economic loss claims which tend to circumscribe the damages which may be awarded. Many of these are referred to in the various judgments in Perre & Ors v Apand Pty Limited¹²² and it is unnecessary here to attempt to enumerate them all. Here the first appellant knew that the respondents were reliant on him, as the expert in a complex field, both for the successful completion of the operation and to give any necessary consequent advice. He alone knew that he was unable to confirm the absence of the right Fallopian tube and that, if it was present, there was a substantially increased risk of pregnancy. The prevention of conception and its obvious consequences which, in a case of this kind, must include the cost of raising a further child, was the very purpose of the operation and advice. And, as mentioned earlier, the loss claimed is an immediate consequence of and closely related to the physical damage inflicted on the first respondent. There was not, as there is in some economic loss claims, any serious risk of indeterminate liability.

I do not think that there are any policy factors which ought to preclude recovery of a loss which, policy factors aside, ought to be reasonable.

For the reasons which I have given I would dismiss the appeal with costs.

THOMAS JA:

INDEX

Paragraph

Issues [102]

Facts and findings [104]

Negligence [120]

Causation [134]

Damages [138]

Damages for personal injuries [141]

Damages for loss of consortium [142]

Damages for economic injury [143]

Quantification of claim [147]

Survey of authority respecting such claims [148]

Short overview [148]

Solution 1 – No recovery at all [152]

Solution 2 – "Total recovery" [153]

Solution 3 – "The benefits rule" [156]

Solution 4 – "Limited damages rule" [161]

Relevance of Perre v Apand [170]

Some notable US decisions [175]

Discussion [192]

Conclusions [201]

Orders

Issues

This is an appeal against a judgment for damages for medical negligence. Despite a sterilisation operation performed by the appellant gynaecologist on the respondent in 1992, she gave birth to a son in 1997. The learned trial judge, Holmes J, characterised the action as one for "damages for wrongful conception".¹²³

The appeal challenges the learned trial judge's findings of negligence, causation and damages. The point raised in relation to damages is whether they should have included the assessed cost of rearing and maintaining the child.

Facts and findings

The following statement of facts is a paraphrase which includes some direct extracts from the learned trial judge's extensive findings of fact.

Mrs Melchior married in 1984. In 1985 and again in 1988 she gave birth to a daughter, each time by caesarean section. In 1991 she and her husband agreed that steps should be taken to ensure that they would have no more children. Their reasons included financial considerations and the fact that Mrs Melchior did not wish to continue taking oral contraceptives.

In 1992, in the face of what she described as her husband's procrastination, Mrs Melchior approached her general practitioner for assistance and was referred to Dr Cattanach for a sterilisation procedure. During the first consultation with Dr Cattanach he took a history which included information from Mrs Melchior that in December 1967, when she was 15 years old, she was admitted to Balmain Hospital for an appendectomy. Dr Cattanach believed from what Mrs Melchior told him that this surgery had involved the removal of her right ovary and right fallopian tube. In point of fact there had been an appendectomy operation in which her right ovary had been found to be filled with a blood clot. The ovary had been removed but the fallopian tube had been left intact. That, however, was not known until post-natal investigations.

There was a considerable conflict of evidence between Mrs Melchior and Dr Cattanach as to the terms of their consultation. It seems clear that her Honour was prepared to act substantially, although not entirely, upon Dr Cattanach's recollection of events, which was to some extent supported by his notes and other documents. Mrs Melchior denied informing the gynaecologist that her right fallopian tube had been removed, but this denial does not appear to have been accepted by her Honour.

Another conflict of evidence, also resolved in Dr Cattanach's favour, concerns Mrs Melchior's claim that she had not been told that the surgery was proposed to effect the sterilisation by means of attachment of a Filshie clip to the left fallopian tube. She claimed to have expected that a tubal ligation would be performed in which her fallopian tubes would be cut and cauterised, but that claim was not accepted.

In due course on 12 March 1992 the relevant operation, a tubal ligation by means of attachment of a clip to the left fallopian tube, was performed laparoscopically in a hospital. The procedure which was performed entailed the insertion of two instruments into the body, one just below the navel and the other just above the pubic bone. The purpose of the first was to introduce a laparoscope to enable the organs to be viewed. The second was a cannula, through which a clip applicator was passed to enable the clip to be placed across the left fallopian tube. Dr Cattanach's surgical notes, as explained, read as follows:

"Good view small bowel associated with right adnexal area – extensive adhesions. No right tube or ovary visible. Consistent with patient's history of right salpingo-oophorectomy. Left tube and ovary normal. One Filshie clip applied to tube and application checked."

(A salpingo-oophorectomy involves removal of both the ovary and its associated fallopian tube).

As the notes indicate, Dr Cattanach was unable to discern any right ovary or right fallopian tube. This was consistent with the history he believed he had been given as to the removal of both. In fact there was a right fallopian tube present, obscured by bowel adhesions which were undoubtedly the product of the 1967 surgery. Since, however, Dr Cattanach was unaware of its existence, he applied a clip to the left fallopian tube only.

Dr Cattanach did not see Mrs Melchior again but wrote a letter to her general practitioner. However, she did not return to any of the doctors for review or follow-up advice after the surgery.

In November 1996, at the age of 44, Mrs Melchior discovered that she was pregnant. She rejected any thought of abortion. In due course her son, Jordan, was born by caesarean section on 29 May 1997. The thought of adoption never entered the minds of the parents and they had no hesitation in deciding to keep the baby. The evidence describes him as "much loved". He is now a healthy, active three year old.

The birth was attended by experts on behalf of both plaintiffs and defendants in the hope of ascertaining how the pregnancy had come about. After the delivery of the baby, the uterus was moved outside the abdominal cavity. At first all that could be seen was the small bowel adhered to the uterus, but after dissection it was seen that the right fallopian tube was present. It was convoluted and compressed, and turned almost 180 degrees back upon itself. It was attached by adhesions to its own supporting structures and to the uterus itself, and was displaced towards the uterus from its normal position. In the same procedure the left fallopian tube was viewed. It was observed to be effectively ligated by a properly placed Filshie clip.

In September 1997, four months after Jordan's birth, Mrs Melchior underwent a hysterosalpingogram, a procedure in which dye is inserted into the uterus under pressure and the results are observed on x-ray. It demonstrated that the right fallopian tube was patent. The consensus of opinion among the medical experts giving evidence in the case was that Mrs Melchior had conceived by transmigration of an ovum from the left ovary to the right fallopian tube.

When he performed the laparoscopy in 1992, Dr Cattanach's observations of right-sided bowel adhesions which obscured the right fallopian tube were entirely consistent with the history that he had taken, but of course were not conclusive of the non-existence of the tube.

Mrs Melchior's case was based upon 10 particulars of negligence. The learned trial judge held that negligence was not made out on any of them except the first namely:

"Failing to inform or alternatively adequately inform the first plaintiff of the risk or possibility that the procedure would fail and that she may not be rendered sterile".

Significantly her Honour did not regard the gynaecologist as having been negligent in failing to perform a hysterosalpingogram before, at or after the operation or in failing to discern at operation the existence of the right fallopian tube. Her Honour was also of the view that it was not negligent of Dr Cattanach to fail to obtain the Balmain Hospital notes of the 1967 operation. However, her Honour stated that by reason of his not having had the benefit of such records, "it was incumbent on Dr Cattanach to proceed with considerable caution."

The critical findings in favour of Mrs Melchior's claim appear in the following passage:

"Given that there was no unequivocal evidence of the removal of the tube by way, for example, of a sighting of its stump; and given her clearly expressed desire for sterilisation – reflected in Dr Cattanach's letter to the Redland Hospital which refer to Mrs Melchior's 'strong request' – I consider that it was incumbent on Dr Cattanach to ensure that Mrs Melchior was informed, firstly, that the absence of the tube had not been positively confirmed; secondly, that if it should prove to be present she faced significantly higher prospects of becoming pregnant than was usually the case after sterilisation (between 2 and 4 per cent according to Dr Molloy, as opposed to a change of between 2 and 4 per thousand, a ten-fold increase in risk); and thirdly, that there was available a procedure in the form of the hysterosalpingogram which was likely to disclose the existence of a functioning fallopian tube."

Her Honour emphasised the difference between the warning which was given as to the "general" risk of failure in a sterilisation operation (of which Mrs Melchior had been advised) and the risk in the case of a patent fallopian tube which was not ligated. Her Honour concluded that Mrs Melchior's desire to avoid further pregnancy was strong enough that, had she been aware of the added risk of pregnancy she would have had any tests necessary to ensure that the sterilisation had been effective. In those circumstances her Honour concluded that Dr Cattanach was negligent in failing adequately to inform Mrs Melchior of the risk that the procedure would fail to be effective because of the possibility of the continuing existence of the right fallopian tube. In this way, Mrs Melchior was not given the option of considering further investigation in the form of a hysterosalpingogram.

Negligence

Mr Griffin QC on behalf of Dr Cattanach submitted that the finding of negligence was not open on the facts as found. The gynaecologist's duty, shortly stated, was to exercise reasonable care and skill in the provision of professional advice and treatment.¹²⁴ Mr Griffin submitted that as the observations at operation were consistent with the history that had been given, and as it was not considered that the gynaecologist should have conducted further invasive surgery by uncovering the bowel adhesions, nothing was changed by the observations of the gynaecologist at surgery, and he came under no greater duty to give further advice then than before.

There was conflicting evidence that touches this question. On the one hand there was evidence given by Dr Pfanner that "if you haven't seen the tube and have not confirmed to yourself that it's blocked or absent, it is your responsibility to do something to warn the patient that until it is confirmed, there is a possibility of becoming pregnant." He added that he thought it would be the gynaecologist's "duty to do a hysterosalpingogram shortly after the operation". Dr Pfanner conceded, however, that many gynaecologists, if given a positive history by the patient that the right tube was not present, and having seen nothing inconsistent with that history at operation, would not then put her through the pain and discomfort of a hysterosalpingogram.

On the other hand, Dr Molloy, President of the Australian Gynaecological and Endoscopy Society, said that if he had been presented with a patient who gave a history of having had a tube removed, and had found damage in the area which prevented him from easily and safely confirming its absence, he would have had accepted the patient's history and made the "same error". He further believed that many gynaecologists would have acted in the same way.

No particular preference was expressed by her Honour for the evidence of Dr Pfanner or Dr Molloy, or indeed other specialists who gave evidence, although mention of their views appears in discussion of other relevant issues. It is noted that the experts stated what they individually would have done in a given situation rather than the standard generally observed in practice at the relevant time¹²⁵. There is no direct finding as to what a reasonably prudent gynaecologist would have done in the circumstances. But the critical finding is that Dr Cattanach should have offered more advice than he did.

Underlying this area of the evidence is the question of the extent to which it is reasonable for a gynaecologist to accept a surgical history as described by a patient, and the extent to which the gynaecologist should seek confirmation of such a history. On this point Dr Molloy agreed that if the history had been "at all vague or uncertain" it should have been appreciated that the patient was at some risk of pregnancy.

The circumstances of the giving by Mrs Melchior of her history to Dr Cattanach are therefore of critical importance. The learned trial judge, confronted with two quite different versions, engaged in some rationalisation. Plainly Mrs Melchior's version has been rejected, but her Honour does not appear to have fully accepted Dr Cattanach's evidence that Mrs Melchior had volunteered in clear, positive terms the information that her right ovary and tube had been removed. Her Honour considered this information "much more likely to have been elicited on questioning in circumstances in which Mrs Melchior displayed an apparent, but misleading, confidence." Her Honour considered Mrs Melchior to have "a measured, careful style of speech which might well suggest a degree of precision and conviction she did not in fact possess", adding "I doubt that the history Dr Cattanach obtained could be described as definite in any more than a superficial sense, although he clearly perceived it as so. A little more probing may well have revealed its dubious quality".

Her Honour's ultimate view on this question was:

"I do not consider that the history could have been given by Mrs Melchior with more than a superficial appearance of confidence, or with any real exploration by Dr Cattanach of its accuracy. Although, as I have already indicated, I accept that it was not negligent of him to seek to obtain the Balmain Hospital notes, I do consider that, without such records and in the circumstances I have already described, it was incumbent on him to proceed with considerable caution."

It is noted that her Honour at no stage expressed a positive finding that the gynaecologist should have probed further at interview. There is uncontradicted (and hardly surprising) evidence supporting the importance in medical administration of a gynaecologist being able to rely on the history that is furnished. Doctor McDonnell considered this to be so and observed "if they say that they have had a procedure done, I will accept that." The only positive finding that arises from the circumstances of Dr Cattenach's taking of this particular history is that "it was incumbent on him to proceed with considerable caution". But her Honour (for adequate reasons that are not challenged) did not think that this required him to check the hospital notes, to perform more invasive surgery than he did so as to discover the hidden tube, or to arrange for a hysterosalpingogram before or after surgery.

Mr Griffin submitted that before finding a defendant guilty of negligence based on failure to tender proper advice, it is necessary that the failure be in respect of a real and significant risk. Reference was made to Heydon v NRMA Ltd & Ors.¹²⁶ That case concerned alleged negligence of a barrister in failing to foresee and advise a client of the risk that an appeal to the High Court (in a case called Gambotto) might change the law as it was then generally understood. Malcolm CJ concluded¹²⁷:

"I do not consider that, at the time he gave his advice, there was any want of due care, skill or diligence on the part of Mr Heydon in failing to foresee as a real or significant risk that the decision in Gambotto would have any adverse consequences for what was proposed …"

Ormiston JA concluded¹²⁸:

"In the end advice must be given based upon a fair appreciation of principle and statute and a reasonable understanding of the facts put in front of the legal adviser."

The present circumstances, however, would seem to reveal an easier foreseeability of risk of undesired consequences than that which was ultimately perceived by the Court of Appeal in Heydon's case.

The finding of negligence is based entirely upon a failure of the gynaecologist to tender further advice to Mrs Melchior after the sterilisation procedure had been performed. The absence of confirmation of the history during surgery may be seen essentially as a neutral feature, and is a fragile basis for the activation of a duty to advise which had not arisen before the operation. The question is whether the failure of confirmation of the oral history at operation can properly be regarded as tipping the scales in favour of a duty to advise the patient of an additional basis of risk of pregnancy and the options available to her to minimise it.

The critical point seems to be whether the initial consultation was such that Dr Cattanach ought to have held real reservations about the stated history. Her Honour's findings touched the subject but do not express a clear conclusion. The finding that the history could not have been given by Mrs Melchior with more than a superficial appearance of confidence "or with any real exploration by Dr Cattanach of its accuracy" is consistent with the view that the gynaecologist should have perceived the superficiality and failed to do so, although her Honour did not articulate it in this way, and again it is a fragile basis for a finding of liability. It is dangerously close to founding liability upon breach of a duty to possess and exercise sufficient intuition. That would not in my view be a good particular of negligence. However, if it is accepted that the gynaecologist should have perceived the superficiality, then some level of suspicion ought to have been entertained by him, and the subsequent absence of confirmation of the history might activate a duty to advise in the terms expressed by her Honour.

With some hesitation I have concluded that the view taken by the learned trial judge was open, although it is not a view that her Honour was bound to take or that I think I would have taken. Her Honour's view may be supported on the basis that the gynaecologist should at least have entertained some suspicion in relation to the history (the patient having been only 15 when the operation had occurred), and in the absence of some confirmation of the history at operation or by some other means there was a duty to see that the patient was given advice that would allow her to make an informed decision as to whether she desired further investigation, and if necessary to require further protective steps to be taken.

Accordingly, and with some reservation, I am not be prepared to disturb her Honour's finding of negligence.

Causation

It was submitted that there was insufficient evidence of nexus between Dr Cattanach's failure to give further advice and the plaintiff's pregnancy. It was further submitted that in view of Mrs Melchior's belief that her right fallopian tube had previously been removed it was unlikely that she would have regarded information from Dr Cattanach as to his obscured view of the relevant area as significant information that would have induced her to do anything in particular. The submission, however, does not fully address the likely effect upon Mrs Melchior of the three points of advice that her Honour considered ought to have been given at that time.

The following portion of Mrs Melchior's evidence is central to the question of causation:

"Q: If you had been told there was a risk you could have fallen pregnant if you didn't have some form of other contraception, what would you have done about that?

A: Well, I would have certainly have gone to make sure that I was sterilised or that I would not have conceived.

Q: So you would have had what other tests were necessary to-----?

A: Yes.

Q: ----- prove that you were sterilised?

A: Yes.

Q: Do you recall at any time were you told, either before or after, that there was some risk you were not sterilised by either Dr Cattanach or any other doctor at the hospital?

A: No."

Mr Griffin submitted that such evidence should not be conclusive of the question as it is hypothetical, self-serving and retrospectant. Whilst those observations are apt in a situation such as this, and whilst it is desirable that trial judges treat such evidence with circumspection, the present evidence must be measured against a background of Mrs Melchior's strong desire to avoid any further pregnancy, and of a willingness to undergo a sterilisation operation to achieve it. This was the very reason she submitted to a surgical procedure, and there is every reason to believe Mrs Melchior when she says that she would have done whatever was necessary to avoid pregnancy if advised that some significant level of risk remained. Mr Griffin referred to the evidence that she did not bother to go back to her general practitioner for follow-up advice, and to other evidence which reveals her as a strong-minded woman who often rejected gynaecologists' advice. However, on the whole of the evidence it was clearly open to her Honour to take the view that Mrs Melchior would have done whatever was necessary to increase her chances of avoiding pregnancy, and that if the necessary advice had been given she would have submitted to further procedures and thereby have avoided the pregnancy.

I therefore do not consider there is any merit in the appeal against the finding of causation.

Damages

This case concerns damages for the tort of negligence. No contractual relationship was suggested between the plaintiff and the defendant gynaecologist who acted upon referral from a general practitioner for an operation in a public hospital. The case against the defendant hospital was limited to vicarious liability for the negligence of Dr Cattanach.

The judgment for damages consists of three separate components –

Damages for Mrs Melchior for $103,672-39 consisting of damages for her pain and suffering in respect of the pregnancy and birth, the effect on her health (including a supervening depression), lost earning capacity (past and future), various hospital, medical, pharmaceutical and travel expenses (both past and future), the cost of maternity clothes and damages described as Griffiths v Kirkemeyer damages for care that she might need;

Damages for Mr Melchior of $3,000 for loss of consortium;

Damages for Mr and Mrs Melchior of $105,249-33 for the past and future costs associated with raising and maintaining their child.

In my view each of these awards is in respect of a separate cause of action.

Damages for personal injuries

The first component of the judgment is in respect of the familiar claim for damages for personal injury caused by the defendant's negligence. None of the heads of the damage allowed under that claim were too remote. The pregnancy, birth and depression that followed may be regarded as a form of personal injury¹²⁹, and some expenses and loss of income flowed from these events. The other items which were allowed (including Griffiths v Kerkemeyer¹³⁰ damages) fall under well known heads of damage based upon personal injury. No further discussion is required of item (1).

Damages for loss of consortium

The second component of the judgment is in respect of the husband's cause of action for loss of consortium. He was not the gynaecologist's patient, and any damage suffered by him was the result of a chain of events. Nevertheless a claim of this particular kind is well known to the law. It originated in times when a husband was regarded as having a proprietary interest in his wife and her services, the impairment of which was considered to amount to a trespass, and later to give him a right of action on the case. In time the lost "servitium" was transformed into lost "consortium". The surviving modern action allows for "all practical domestic disadvantages suffered by a husband in consequence of his wife's impaired health or bodily condition".¹³¹ A claim for damages for loss of consortium could only justify damages for expenses and inconvenience incurred by a husband through the absence or inability of his wife to render usual services. It could never justify a claim such as the cost of rearing his child which has been allowed in component (3).

Damages for economic injury

The third component of the judgment is in respect of a claim by the mother and father for pure economic loss in relation to the bringing up of a child who would not have been born but for the negligent failure of the gynaecologist to give certain advice. Was the gynaecologist under a duty to avoid such loss, and is he liable to pay damages of this kind to the mother and father of the child?

It is desirable that the essential nature of the cause of action be identified, even though the distinction between claims for damages for personal injuries and claims for pure economic loss does not appear to have loomed large in many of the cases that have dealt with such claims. This is not a claim for personal injury or damage to tangible property. It might of course be argued that such a claim may be included in a mother's claim for damages for personal injury, but no such argument would be available in relation to a father's claim. The present claim as brought and as allowed is a joint one. It is difficult to think that different considerations should attach to the right to bring and maintain such a claim according to whether it is brought on behalf of the mother or the father, although such claims could be made severally, and quantified differently. For example, if parents were separated or divorced, the father's claim might be quantified as the cost of the maintenance he would otherwise be obliged to pay, and the mother's claim might be quantified as the sum that would cover the balance of the child's needs. But those are matters of quantification, not of the right to make such a claim, or whether such claims should be allowed at all. The present claim seems to have been presented and decided as a joint claim for economic loss. I will therefore proceed initially to examine it on that footing, and will in due course return to the question whether a separate claim might be permitted in favour of the mother as an adjunct to her claim for damages for personal injury, and whether any different considerations ought to attach to a claim so brought.¹³²

On the footing that this is a claim for pure economic loss Mr and Mrs Melchior do not have the benefit of a well recognised fact situation which gives rise to a duty of care and an obligation to pay damages for such loss. In order to justify damages of the present kind the plaintiffs must be able to fulfil the criteria that are necessary in actions described as pure economic loss cases. In cases ranging from MLC v Evatt¹³³ to Perre v Apand Pty Ltd¹³⁴, Australian courts have recognised the need for some mechanism to control what would otherwise be too heavy and unpredictable a burden upon the community from the bringing of unrestricted claims for economic loss. There is little doubt that the existence of some means of control over this potentially explosive source of liability depends to some extent upon public policy considerations although the mechanisms are decided upon by a process of legal reasoning.¹³⁵

The question whether to allow or not a claim for economic loss occasioned by a child's existence in a family can best be answered by considering the many cases that have already been decided in such claims throughout the common law world, in the context of principles applicable to the allowance of claims for pure economic loss. It is unavoidable that perceptions of public benefit or detriment will play a part in answering this question as they have in the cases so far decided.

Quantification of claim

This judgment allows the mother and father of the child to recover from the defendant the cost of the food that the child will consume, his clothing, his entertainment and all other ordinary outgoings including some cost of childcare and in due course the cost of his schooling. The quantification of the claim contains some discounting for uncertainties and for early payment and the actual assessment is a moderate one. However, in principle it embodies the cost of the child's future care and maintenance during his dependent years.

Survey of authority respecting such claims

Short overview

For a time there was a view that no damages at all should be awarded in consequence of the birth of a healthy child. But the weight of authority now favours the recovery of damages for pain and suffering, and medical costs associated therewith. There is some authority that such damages may include the cost of maintaining the child; but there is more extensive authority that they may not. There is a wide divergence of view upon the subject within the common law world.

The recent decision of the House of Lords in McFarlane v Tayside Health Board¹³⁶ has settled the controversy in the United Kingdom with the result that damages may not now be recovered for the cost of rearing a healthy child. In the United States a considerable number of cases have yielded helpful judgments and reflections upon the human and forensic problems that are exposed by the allowance of damages for the cost of keeping a child. It is fair to say that the great majority of the United States decisions hold that damages for the cost of rearing a healthy child should not be allowed. In Canada the leading case¹³⁷ also denies recovery of damages for child-rearing, at least in the case of parents financially able to assume the responsibilities and benefits of rearing such a child. The Canadian decision, however, leaves open the possibility of successful claims according to the facts of the particular case, as for example where the birth of the child should be regarded as "an injury". In South Africa the leading decision¹³⁸ holds that where parents have good socio-economic reasons for choosing sterilisation, the negligent surgeon is liable for the claim for maintenance and support of the child. Curiously that decision (which was based upon breach of contract) held that general damages for the discomfort, pain, suffering and loss of amenities of life suffered by the mother could not be allowed.

In Australia only a limited number of decisions are available, and none of them provides authority or consensus capable of providing satisfactory guidance for trial courts. The wide variety of views that have been expressed underlines the need for an authoritative decision on this question.

It is convenient to consider the solutions that have been offered by the various courts of the common law world. These will be discussed under four principal headings, namely:

No recovery;

Full recovery;

Benefits rule;

Limited Damages rule

These are by no means exhaustive of the available solutions, but they will permit discussion of the major views on the subject.

Solution 1 - No recovery at all

This was the view of Meagher JA in CES v Super Clinics (Aust) P/L¹³⁹. His Honour was of the view that the law had strayed into an area in which it had no business.¹⁴⁰ That view was not shared by the other members of the court (Kirby P and Priestley JA). Mr Griffin submitted that the only support currently extant in the common law world for such a view is in the Supreme Court of Nevada, although it had for a time held sway in some other state courts.¹⁴¹ It was not submitted that this court should take such an approach and it is not necessary to discuss it further.

Solution 2 - Recovery of all reasonably foreseeable loss including cost of rearing and maintaining child ("full recovery" or "total recovery")

Such damages were allowed by a District Court judge in Queensland (Pratt DCJ) in Dahl v Purnell.¹⁴² His Honour rejected the argument based on public policy that damages should not be awarded in respect of the birth of a healthy child, but seems to have made a minor deduction from the cost of future care for what he described as a "benefit of child set-off".

In Veivers v Connolly¹⁴³ de Jersey J (as he then was) granted what might be termed full recovery without deduction or set-off in the case of a child born with severe physical and mental deficiencies consequent upon his mother suffering from rubella during pregnancy. Had it been known that she was suffering from rubella (as the medical practitioner should have known) a termination of pregnancy would have been recommended and probably obtained. No submission was made in that case that any limit should be placed by reason of public policy on any of the heads of damage claimed or the period in respect of which they could be awarded. Further it plainly fits into the category of case described as "wrongful birth"¹⁴⁴ as the pregnancy was initially planned. It is clearly distinguishable from the type of case with which we are concerned.

There are some decisions in the United States in which this approach has been taken, and in which the cost of maintaining the initially unwanted child has been included in the damages. Mr North SC for the respondents urged this court to adopt the reasoning in these cases, with particular reliance on Hartke v McKellway¹⁴⁵, Lovelace Medical Centre v Mendez¹⁴⁶ and Sherlock v Stillwater Clinic¹⁴⁷. Those decisions, and the additional South African decision of Administrator Natal v Edouard¹⁴⁸ uphold the allowance of the costs of rearing a child as part of the damages that should be allowed in favour of a plaintiff in a wrongful conception claim. Some of the reasoning underlying that conclusion will be later discussed when the various conflicting views are evaluated. It is conveniently summarised in the following statement:

"Courts allowing recovery of child-rearing costs strictly adhere to the tort principle requiring a tortfeasor to assume liability for all the damages proximately caused, refusing to make exceptions based on public policy. These courts hold physicians legally responsible for the consequences they caused."¹⁴⁹

Solution 3 - Recovery of all reasonably foreseeable loss with some off-set for benefit as parents – ("benefits rule")

This approach has considerable support, but differing approaches are apparent in relation to the manner in which a non-pecuniary benefit of this kind may effectively be set off against other damages. The allowance of such a set-off is sometimes referred to as the "benefits rule".¹⁵⁰ Some of its proponents confine the set-off to pecuniary benefits and others to non-pecuniary benefits. Support for such an approach may be found in U.S. decisions such as Jones v Malinowski.¹⁵¹ It has sometimes been described as an application of a principle in the American Restatement of the Law¹⁵² that where a defendant's tortious conduct confers a special benefit to the interest of the plaintiff that was harmed, "the value of the benefit conferred is considered in mitigation of damages, to the extent that this is equitable". The "benefits rule" is usefully discussed in Johnson v University Hospitals of Cleveland¹⁵³ and in Kealey v Berezowski¹⁵⁴, although it was not adopted in those cases.

In CES v Super Clinics (Aust) P/L (above) Meagher JA whilst primarily of the view that a claim of the present kind should be completely disallowed on public policy grounds, considered that if such a claim were to be entertained a discount or set-off should be allowed:

"What is of great importance is that no allowance or discount is suggested for the joy, comfort and happiness which the child might bring to its mother. Every child is a cause of happiness to its parents … It would be unreal not to take account of such a factor."¹⁵⁵

On this point Kirby ACJ was of a similar view. His Honour considered that the quantification of such matters was a matter for the fact-finding tribunal to assess from case to case.

"a setting-off of net benefits is something to be assessed by the fact finder in a case against the net injury incurred. Each case will depend upon its own facts. Such questions can be safely committed to trial judges or juries."¹⁵⁶

Such a solution, however, presents difficulties. The problems associated with a legal system in which plaintiff parents have a strong economic incentive to denigrate the value of their child tends to make litigation a time bomb and truth a casualty. This and the difficulty of quantification of such a set-off will need to be discussed in due course.

The view that there should be a set-off of some kind was taken by a number of judges in the United Kingdom, as for example in Emeh v Kensington and Chelsea and Westminster Area Health Authority¹⁵⁷, Thake v Maurice¹⁵⁸ and Allen v Bloomsbury Health Authority¹⁵⁹. Those authorities, however, cannot stand with the House of Lords decision in McFarlane & Anor v Tayside Health Board¹⁶⁰ which firmly supports the fourth solution soon to be discussed hereunder of simple disallowance of the costs of rearing the child. Relevantly for present purposes some of their Lordships rejected the notion that the emotional benefits of having a child can effectively be set-off against the damages.¹⁶¹ But in one sense it seems to me that the disallowance of child-rearing expenses may itself be seen as a set-off, albeit an arbitrary one, and that the two approaches (ie those in Solution 3 and 4) are not necessarily inconsistent in principle. Other commentators have seen a similar connection.

"Courts adhering to the limited damages rule … offset child-rearing costs, and economic interest, with the non-economic benefits of the child's companionship, comfort, and aid to the parent.¹⁶² Among reasons advanced for this arbitrary set-off is the recognition that the task of assessing non-economic benefits of child-rearing is "incalculable" and "too speculative."¹⁶³

Solution 4 - Recovery of reasonably foreseeable loss but excluding costs of rearing the child ("limited damages rule")

In McFarlane v Tayside Health Board¹⁶⁴ their Lordships were unanimously of the view that damages for the cost of rearing a healthy normal child should not be included in damages awarded in a wrongful conception case. The damages were ordered against a surgeon who wrongly advised a couple that following a vasectomy the husband's sperm counts were negative. A minority of their Lordships would also have restricted the damages that could be recovered by the mother in her own right after the time of the birth, but the majority held the mother was entitled to general damages for the pain, suffering and inconvenience of pregnancy and childbirth, and to special damages for extra medical expenses, clothing and associated loss of earnings. However, it is to the decision excluding damages for the cost of rearing the child that attention should now be directed.

Some variation is to be found in the reasons advanced by their Lordships, three of whom relied upon the principle of distributive justice,¹⁶⁵ and two of whom considered that the allowance of such liability was not fair, just or reasonable.¹⁶⁶

There is little purpose in engaging in a point by point dissection of the separate reasons of their Lordships in this brief survey of the judicial solutions that have been offered on the subject. Suffice it to say that some commonality may be seen in factors such as the weight given to the fact that the child had been voluntarily accepted by the parents into the family, the recognition of the benefits of parenthood, and the perception of unacceptable unfairness of making a tortfeasor liable for the cost of bringing up a child (and conversely of the parents bringing up their own child with someone else paying for it). Whilst all of their Lordships disclaimed the use of perceptions of public policy, the decision is plainly based upon broad notions of morality and justice, and in my view the borderline of such notions with judicial perception of public policy is by no means clear.

Three of their Lordships adverted to the distinction between "distributive justice" and "corrective justice". The former requires a focus on the just distribution of burdens and losses among members of society whilst the latter requires that if someone has harmed someone else without justification the first person must compensate the second.¹⁶⁷ Their Lordships recognised the tension between these concepts and the need to strike a balance between them. With respect, the striking of such a balance involves notions of public policy, and I see no reason why perception of public policy (which was disavowed by their Lordships) ought not to play an important part in the determination of the present issue. The decision has been criticised by Davies JA (whose reasons I have now read) as having a religious basis.¹⁶⁸ I cannot tell whether that is so or not. In any event not all religious or cultural influences are necessarily wrong. In my respectful view the decision in the McFarlane v Tayside Health Board might equally well have been based on notions of public policy.

In the Australian decision of CES v Super Clinics (Aust) P/L¹⁶⁹ Priestley JA held that no damages should be allowed for the cost of bringing up a child after the time when the child could have been "adopted out". His Honour's conclusion was based upon absence of causation.

"Since … keeping the child after that time was something which [the plaintiff] chose to do, any expense of rearing the child thereafter was not relevantly caused by the breach of duty, but by the plaintiff's own choice, and no defendant is legally responsible for it."

Without in any way criticising the mother's choice his Honour emphasised that it was a voluntary act and that it was the cause of the subsequent cost of rearing the child. Applying the test stated in March v E & M H Stramare Pty Ltd¹⁷⁰his Honour thought that the defendant's negligence should not "as a matter of ordinary commonsense and experience be regarded as a cause of the ordinary expenses of rearing a child that his parent has chosen to bring up".¹⁷¹

It is difficult to justify this conclusion on the basis of a break in the chain of causation. A mother's decision to keep the child would plainly be reasonably foreseeable by the tortfeasor. Neither in my view could such a conclusion be justified on recognised principles concerning the duty of a plaintiff to mitigate his or her damages. If such damages are to be disallowed it must be on the grounds of public policy. I see no valid reason why a court, faced with the present contentious problem should not confront such issues and admit that it is doing so. I agree, with respect, with Kirby ACJ's characterisation of the problem in CES v Super Clinics as one involving consideration of whether there are reasons of public policy which should deny the plaintiffs' recovery.¹⁷²

In an earlier case, Udale v Bloomsbury Area Health Authority¹⁷³, Jupp J had also reached the conclusion that whilst ordinary damages flowing from a pregnancy and birth might be awarded to the parents, a claim for the future cost of the child's upbringing to age 16 should be rejected. The conclusion was reached on grounds of public policy. Jupp J took into account that it is undesirable that a child should learn that a court had declared its life to be a mistake. Reference was also made to other public policy considerations such as the risk that gynaecologists might be led to encourage abortion in order to avoid claims of such damages against them, and to the difficulty of setting-off the joy of having a child against the cost of rearing the child.

The vast majority of jurisdictions in the United States deny recovery of damages for the cost of rearing an initially unwanted child who has been "wrongfully conceived".

"Turning to cases from other jurisdictions, we discover the vast majority of courts have held that no damages may be recovered for the cost of rearing and educating a healthy, normal child born as the result of medical malpractice."¹⁷⁴

Reference is commonly made to the "limited damages rule" in this context.¹⁷⁵

"The 'limited damages' approach is followed in the vast majority of American jurisdictions and damages are awarded only for the pain and suffering associated with labour and delivery and a second sterilization procedure."¹⁷⁶

Reasons for such a rule are varied and extensive.¹⁷⁷ They include the sanctity of life; the benefits of a healthy child being regarded as outweighing any economic loss; protection of the mental and emotional health of the child; the notion that it is unreasonable to shift the cost of maintenance to the negligent physician thereby creating a windfall for parents for that is disproportionate to the physician's culpability; the view that such damages are too speculative or remote; the undesirability of a child learning that the court has declared its birth to be a mistake; the prospect that little or no damages would be awarded for loving mothers and fathers while generous compensation would be obtained by those who disparage and reject their child; the general view that the birth of a child is a blessing and an occasion for rejoicing; and the crassness of a court making the child's existence the subject of a contest in value. Perhaps not all of these considerations are persuasive, although in my view most of them are. Considered as a whole they provide a strongly persuasive and rational basis in favour of recognising a rule such as the "limited damages rule".

Relevance of Perre v Apand

In reaching her decision to include the cost of rearing the child in the present award the learned trial judge made extensive reference to Perre v Apand Pty Ltd.¹⁷⁸ Her Honour stated:

"A consideration of matters identified by members of the court in Perre v Apand as relevant in determining the existence and scope of a duty of care in pure economic loss cases leads me to the conclusion that I should not follow McFarlane v Tayside."

Her Honour then dealt with those factors identified in the judgments in Perre v Apand that she identified as relevant, including reliance, vulnerability, control, the defendant's knowledge of the risk and its magnitude, the avoidance of interference with established freedoms and controls, the avoidance of indeterminate liability, and whether the case belongs to an established category,¹⁷⁹ and concluded:

"Those are matters pointing to the conclusion that the Melchiors' economic loss should be made good; and one can, with regard to the same considerations, arrive at the conclusion that recovery is fair, just and reasonable."

However, it seems to me that a different analysis is possible by reference to the criteria mentioned in Perre v Apand.

As to the question whether the case belongs to an established category, I do not think that liability to economic loss of this kind is currently established in Australian law. To the above factors there might be added others including the conduct of the claimant, the nature of the loss-causing activity¹⁸⁰, and (arguably) the degree of departure from standards of reasonableness.¹⁸¹ It seems to me that the unacceptability of the defendant's conduct (as for example, its deliberation or cynicism) is capable of influencing the determination of liability, especially in a commercial context,¹⁸² at least through its effect on the claimant's dependence, reliance and vulnerability to loss compared with the control exercisable by the other party.

The earlier discussion in these reasons upholding the learned trial judge's finding of negligence¹⁸³ reveals at best a liability on the part of a gynaecologist who placed too much store by the history that his patient gave him. I do not for a moment suggest that the case should turn on this point, but consider that it is capable of having at least an indirect bearing when considering some of the factors identified as potentially relevant in Perre v Apand. It is true that the harm, should sterilisation fail, was foreseeable, indeed obvious. But it is well established that foreseeability of economic loss as a consequence of lack of care does not establish a duty to avoid it. Dr Cattanach was in control in the sense that he was the expert who was expected to recommend appropriate procedures. But his duty to do so proceeded from a doctor/patient relationship which was a bilateral affair. Doctors must to a considerable extent act on the histories that they are given. The corresponding factor of vulnerability falls to be assessed in the context of such a relationship. Having considered all relevant factors I am far from satisfied that application of the principles recognised in Perre v Apand necessarily leads to a finding of legal liability.

In any event, with all respect I do not think that the present problem is satisfactorily answered by recourse solely to the rather broad criteria adverted to in Perre v Apand, or that her Honour's analysis in para 61 of the reasons for judgment provides any convincing basis for a finding of liability for such economic loss. This is a particular issue that needs to be examined with the reference to the considerations that have occupied the minds of many common law judges in relation to claims of this nature. The factors mentioned in Perre v Apand can be better addressed with those factors in mind, having particular regard to the consequences, societal and otherwise, of the allowance of such claims.

Some notable U.S. decisions

One of the cases particularly relied on by Mr North was Sherlock v Stillwater Clinic. The majority in that case held that the parents were entitled to the reasonable cost of rearing the unplanned child, subject to offsetting the value of the child's aid, comfort and society for the duration of the parents' lives.¹⁸⁴ The majority view was that parents would choose to make such a claim for the maintenance of the child ("hopefully after being advised of the psychological consequences which could result from litigating such claim")¹⁸⁵ and concluded with the expectation that parents would, by reason of the limitations imposed on recovery, be dissuaded from regarding that item of damages as the primary and most significant basis for instituting suit. The majority concluded with the sentiment:

"It is therefore our hope that future parents and attorneys would give serious reflection to the silent interests of the child and, in particular, the parent-child relationships that must be sustained long after legal controversies have been laid to rest."

The concluding sentiment appears to be something of a pious hope. With respect, it would be unrealistic to rely on litigants to hold back. It may be better from the public point of view that the right to bring such claims be held back by legal principle rather than upon reliance upon the restraint of litigants. The minority view expressed by Sheran CJ¹⁸⁶ included the following comments:

"I dissent upon the ground that the worth of a healthy child to his parents will always exceed these costs … Insofar as the majority decision permits parents to recover damages by proving their healthy child a net burden to them, it is contrary to public policy, in my judgment. We should not permit the courts to be used for this purpose."

In McKernan v Aasheim¹⁸⁷ the Supreme Court of Washington en banc referred to a number of reasons for denying recovery of child-rearing costs. These included:

That the benefits of joy, companionship and affection which a healthy child can provide outweigh the costs of rearing the child¹⁸⁸;

Recovery of child-rearing costs would be a windfall to the parents and an unreasonable burden on the negligent healthcare provider;

To permit the parents to keep their child and shift the entire cost of its upbringing to a physician would be to create a new category of surrogate parent. The natural parents would continue to get the benefit of "every child's smile, every bond of love and affection, every reason for parental pride in a child's achievements, every contribution by the child to the welfare and wellbeing of the family, without payment of maintenance. By contrast every financial cost including food, clothing and education would be shifted to the physician who failed to diagnose appropriately." The court further stated:

"We hold that such result would be wholly out of proportion to the culpability involved, and that the allowance of recovery would place too unreasonable a burden upon physicians."¹⁸⁹

To protect the psyche of the child. One day the child will learn that he or she not only was not wanted by his or her parents, but was reared by funds supplied by another person;

Possibility of fraudulent or exaggerated claims.

The court did not find all the above points persuasive, particularly those stated in paras (1), (2) and (5) above. Nevertheless it was convinced that recovery of child-rearing costs should be denied unless it could be held that the child is no more than an economic liability. It considered that allowance of the full cost of rearing and educating the child without any offset for the benefits of parenthood went too far. The court rejected the "benefits" rule, which would lead to an assessment of fact in each case, observing that:

"It is impossible to establish with reasonable certainty whether the birth of a particular healthy normal child damaged its parents … The child may turn out to be loving, obedient and attentive, or hostile, unruly and callous. … It is impossible to tell, at an early stage in the child's life, whether its parents have sustained a net loss or net gain."¹⁹⁰

The court also found the "benefits" rule objectionable because of the consequence that parents may become obliged to prove that their child was more trouble than it was worth. Reference was made to the following statement in Public Health Trust v Brown¹⁹¹:

"an unhandsome, colicky or otherwise 'undesirable' child would provide fewer offsetting benefits, and would therefore presumably be worth more monetarily in a 'wrongful birth' case. The adoption of that rule would thus engender the unseemly spectacle of parents disparaging the 'value' of their children or the degree of their affection for them in open court. It is obvious, whether the conclusion is phrased in terms of 'public policy', or otherwise, that such a result cannot be countenanced.

The court further observed:

"Moreover, even if the 'benefits' rule were not applied, and parents allowed to sue for the full cost of rearing their unplanned child, the simple fact that the parents saw fit to allege their child as a 'damage' to them would carry with it the possibility of emotional harm to the child. We are not willing to sweep this ugly possibility under the rug by stating that the parents must be the ones to decide whether to risk the emotional well being of their unplanned child."¹⁹²

The court concurred with the reasoning of another Supreme Court¹⁹³:

"It is a question which meddles with the concept of life and the stability of the family unit. Litigation cannot answer every question; every question cannot be answered in terms of dollars and cents. We are also convinced that the damage to the child will be significant; that being an unwanted or 'emotional bastard', who will some day learn that its parents did not want it and, in fact, went to court to force someone else to pay for its raising, will be harmful to that child. It will undermine society's need for a strong and healthy family relationship. We have not become so sophisticated a society to dismiss that emotional trauma as nonsense."

Contrary views were referred to by Mr North, notably in the cases of Hartke v McKelway¹⁹⁴ and Lovelace Medical Center v Mendez¹⁹⁵. In both cases, the courts placed considerable importance upon the motivation of the couple who sought sterilisation. In Hartke the court observed:

"Usually, of course, it is true that the birth of a healthy child confers so substantial a benefit on its parents as to outweigh the physical, emotional, and financial burdens of bearing the raising it; 'else, presumably, people would not choose to multiply so freely'. But when a couple has chosen not to have children, or not to have any more children, the suggestion arises that for them, at least, the birth of a child would not be a net benefit. That is their choice and the courts are required to respect it."

The question of course is whether the courts should adopt a rule which permits or encourages contests of this kind to occur. As the court pointed out in Hartke:

"The parents may in fact have ended up with a child that they adore and that they privately consider to be, on balance, an overwhelming benefit to their lives. This is because the parents may have sought to avoid conception for any of a number of reasons. They may have done so for socio-economic reasons, seeking to avoid disruption of their careers or lifestyle, or to conserve family resources, see, eg Troppi, (after seven children, parents decided to limit size of family); Betancourt v Gaylor (parents sought to avoid expense of additional child); for eugenic reasons, seeking to avoid the birth of a handicapped child, see Ochs v Borelli (prior two children born with orthopedic defects); or for therapeutic reasons, seeking to avoid the dangers to the mother's health of pregnancy and childbirth, see eg Wilczynski v Goodman (therapeutic abortion); Christensen v Thornby (vasectomy sought because wife had been told another birth would be dangerous to her health)." (References and footnotes not included).

Despite the variety and the complexity of such situations the court in Hartke was not discouraged by the difficulty of drawing the line, and concluded:

"We tend to agree that a fact finder should place great weight on a couple's reason for undergoing sterilisation in deciding whether the subsequent birth of a child, on balance, constitutes damage to the parents."¹⁹⁶

The court suggested that this be decided by a series of presumptions, the first of which was that the usual expenses of raising a child would be outweighed by the benefits derived. That presumption, however, might be rebutted by change of circumstances such as sudden increase in wealth or sudden poverty. In Hartke's case the plaintiff failed because the mother's motivation for sterilisation was described as "eugenic reasons" (ie fear of a defective child) and because that fear proved unfounded when a healthy child was born.

The use of a test such as whether the birth of a child is in fact an injury to its parents as the determining factor as to whether such damages might be obtained was also suggested in Kealey v Berezowski¹⁹⁷. It is apparent that such a test would present a fertile field for forensic contests, with a great deal of uncertainty unless an artificial series of presumptions were recognised. At this point it is enough to say that I do not find such a solution attractive, or the solution offered in Hartke to be persuasive or attractive.

In Mendez the court treated the wrong as the invasion of the parents' interest in the financial security of their family.¹⁹⁸ The majority considered such an interest to be worthy of legal protection and adopted the following statement from Marciniak v Lundborg¹⁹⁹:

"Individuals often seek sterilization precisely because the burdens of raising a child are substantial and they are not in a position to incur them … The love, affection, and emotional support they [the parents] are prepared to give do not bring with them the economic means that are also necessary to feed, clothe, educate and otherwise raise the child. That is what this suit is about … Relieving the family of the economic costs of raising the child may well add to the emotional well-being of the entire family, including this child, rather than bring damage to it."

In contrast to the reasoning in Hartke, the court in Mendez thought the parents' motives for seeking sterilisation to be an unsatisfactory test:

"We are reluctant to hold that child-rearing expenses are recoverable only when the parents' sole, or even primary, motivation is economic. A person's original reasons for seeking sterilisation should not be conclusive as to whether an economic interest has been injured."²⁰⁰

The court added:

"On a practical note, the motivation rule entails difficult tasks for the jury in sorting out the parents' differing motivations and encourages after-the-fact reformulations of the parents' actual intentions."

Having noted that a "powerful, if not the only, motive for Maria Mendez's seeking sterilisation was to conserve family resources" the court concluded:

"We hold, therefore, that the Mendezes' interest in the financial security of their family was a legally protected interest which was invaded by Lovelace's negligent failure properly to perform Maria's sterilization operation."²⁰¹

The court in Mendez would therefore seem to have regarded the parents' motivation as a relevant although not decisive factor in the determination of the primary question whether an economic interest had been invaded. The court further supported its conclusion by referring to what is in the United States a constitutionally protected interest of parents to employ contraceptive techniques to limit the size of their family, referring to a statement in an earlier case that "the choice not to procreate, as part of one's right to privacy, has become (subject to certain limitations) a constitutional guarantee".²⁰²

Having determined that Mr and Mrs Mendez's legally protected interests had been invaded, the court confessed to "far less certainty as to the measure of the damages that flow from such an injury".²⁰³ It considered that the "offsetting benefits" principle should only be applied in reduction of damages for invasion of the same interests. To permit the offsetting of positive emotional and psychological benefits would result in trials with –

"The unseemly spectacle of the parents' attempting to prove how slight or nonexistent was the psychological benefit they derived from their additional child in order to minimize the offset to their nonpecuniary interests. We hold that permitting such a dispute to be litigated would be contrary to public policy."²⁰⁴

I respectfully agree that the solution does not lie in allowing litigation in respect of offsetting benefits. But I do not accept that the best solution lies as Mendez suggests, in opening the door to "full recovery", notwithstanding that instances may be cited where such a solution sounds attractive. Perhaps one of the strongest statements that can be found in favour of that solution is in a decision delivered by Alarid J which was to some extent relied on in Mendez. This was included as an appendix to the judgment*.*

"We cannot understand why the sanctity of human life justifies denying recovery of the expense of raising the child. The harsh irony of this position is apparent: two people who have already decided that they cannot afford to raise another child will be left to find a way to do so. Our philosophical respect for human life should not be allowed to obscure the fact that children need to be fed, clothed, housed, educated, and provided with medical care and other necessities. A growing number of people in this country decide whether or not to become parents, or how many children to have, based in part on their financial resources. We do not understand why a proper respect for human life would require us to reach a result that is, at best, callously indifferent to the needs of these parents and their children."²⁰⁵

This is perhaps the high point of the "full recovery" theory. The only threshold seems to be the existence of an interest in the financial security of one's family – an interest that seemingly would always exist.

Discussion

The approaches suggested in the United States decisions relied on by Mr North for the respondents necessarily involve distasteful weighing processes. In the present case this would involve consideration of evidence which shows that Mr and Mrs Melchior were neither poor nor rich. Mr Melchior had been employed by QANTAS as a freight agent for the past 20 years and his earnings at time of trial were said to be between $55,000 and $60,000 per annum before tax, or $765 net per week on average. The family depended substantially upon his income although Mrs Melchior sometimes provided some minor supplement through employment. Mrs Melchior stated her family planning concern as based on the fact that they had two healthy children and were quite happy with the size of their family. She said that "we wanted to give them quality of life instead of quantity". Although the evidence also shows that the existence of an additional family member has to some extent resulted in other family members losing material benefits that they would otherwise have had, this is not a case in which it can be said that the decision was a product of stringent economic necessity or hardship. Nor can it be said that the Melchiors have been rendered unable to care properly for their children. Plainly theirs was a convenient, reasonable and responsible decision. But why should this be relevant? Why should courts find it necessary to exercise value judgments in such matters? These reflections only serve to reinforce my conviction that the courts should not undertake analyses of these kinds in determining the availability of damages for the costs of rearing a child.

The allowance of damages to Mrs Melchior for pain, suffering, lost earning capacity and other associated damages²⁰⁶ is uncontentious. So too is the allowance of damages to Mr Melchior for loss of consortium.²⁰⁷ It is to be remembered, however, that the assessment of those damages involves no reduction or set-off for the undoubted benefit of parenthood. The question then is whether Dr Cattanach should be ordered to pay for all the detriments, including the cost of bringing up the child, without anything being brought into account for the parents' benefits. I have no doubt that such a judgment would be unfair to the defendant .

The object of an award of damages is to give the plaintiff compensation for damage, loss or injury he or she has suffered.²⁰⁸ We are concerned with compensation, not punishment. The compensation is to be fair, and it is recognised that it cannot be "perfect".²⁰⁹ Its measure, according to the celebrated speech of Lord Blackburn in Livingstone v Rawyards Coal Co²¹⁰ is "that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been if he had not sustained the wrong for which he is now getting his compensation or reparation". However, his Lordship acknowledged that such a principle "must be qualified by a great many things which may arise".²¹¹ The pursuit of this objective through focusing solely upon pecuniary burdens to the exclusion of corresponding non-pecuniary benefits may lead to injustice. To answer "what has the plaintiff lost?" without regard to what the plaintiff has by the same token gained introduces an imbalance. It is true, as Professor Luntz observes²¹² "where … the plaintiff clearly establishes his loss, it is 'fair' to both parties to award the full amount of such loss".²¹³ However, the enigma remains – what is the overall loss?

Principles concerning the allowance and assessment of damages have evolved in a pragmatic way, and their development has often been influenced by policy considerations. Thus, for a long time the common law refused to allow damages resulting from the death of a human being. The evolution of the law of damages progressed through a period of lump sum jury assessments, in which summings-up more commonly urged caution than sanguinity. In the 20th century jury assessments tended to be supplanted by lump sum assessments by trial judges.²¹⁴ Recognition of the desirability of lump sum assessments survived until the 1970s, finally to be supplanted by recognition that, in general, assessment ought to be through the identification of separate heads of damage and the allocation of identifiable damages to each.²¹⁵ Damages for the cost of rearing an initially unwanted child are not at this point of time a recognised head of damage, and of course the ultimate issue is whether it ought to be. The fundamental question arising in this case is how to determine what the plaintiff has lost, and whether and how the plaintiff's undoubted benefit is to be brought into account. The gaining of a healthy child may in one sense be regarded as the receipt of a collateral benefit, a subject which the courts have not solved in any comprehensive or logically satisfactory way.²¹⁶ But once again in this area recourse has been had to "justice, reasonableness and public policy".²¹⁷

The benefit of parenthood of a healthy child who becomes a welcome member of a family is substantial. Families are important units in a community. It is in the interest of the community that parental responsibility, love and trust between parent and child and strong family units be maintained.²¹⁸ There is also a widely perceived sense of continuity (which some see as potential immortality) in the procreation of one's own children. In this case Mr and Mrs Melchior are both the natural parents and the custodians of their child. I do not consider it fair or desirable that someone else be required to maintain the child in addition to compensating Mrs Melchior for the injury that has been done to her and compensating Mr Melchior for the injury done to his rights.

The "full recovery" solution should be rejected. Broadly speaking, the remaining options are the benefits rule and the limited damages rule, recognising that each contains a number of variants. For reasons already stated, I consider the solution of assessing in each case the value of the benefit of the child in order to set it off against economic loss is unworkable and invidious. But can it be said that a limited damages rule affords a better solution?

Mr and Mrs Melchior have accepted this parenthood, and had no hesitation in deciding to keep their baby. I do not think that this of itself justifies the withholding of damages, or that Priestley JA's view in CES v Superclinics²¹⁹ can be justified upon any principle of causation or of obligation to mitigate damages. At the same time the tests of causation currently applied at common law are extremely loose and are well adapted to widen the exposure to liability in an increasingly litigious society.²²⁰ This is not the occasion to do other than recognise that the current law concerning causation affords cold comfort to a defendant who seeks insulation from damages of this kind. However, it is not inappropriate that the law should deny parents in such a situation the right to elect to keep and raise their child at someone else's expense. Allowance of the present claim imposes upon Dr Cattanach the burden of maintaining the child thereby paying the assessed equivalent of the financial responsibility of both parents for rearing costs. In financial terms Mr and Mrs Melchior would be placed in a position similar to that of foster parents of Dr Cattanach's child. It is difficult to see why a negligent gynaecologist, in addition to compensating the parents for all other recognised forms of damage should be liable for this additional responsibility. The benefits of paternity, maternity and benefit of custody are undeniable, and are ignored if "full recovery" damages are awarded without deduction.

It is accepted in our society that natural parents are liable to contribute to the succour and maintenance of their children. Under the Family Law Act parents have a duty to maintain their children even when the child is in the care of others, and children have the right to be cared for by both their parents regardless of whether their parents are married, separated or have never lived together.²²¹ The criminal law also imposes a legal duty upon persons having the care of a child under 16 to provide the "necessaries of life".²²²

These obligations are cornerstones of our society and apply to all parents whether they become parents with enthusiasm, surprise or reluctance. This is not to say that someone else could not be ordered to indemnify parents against the financial burden of parenthood. But in my view to do so under circumstances such as the present would create an unfair and inappropriate obligation upon a defendant.

Conclusions

A claim for pure economic loss of this kind should not be recognised as the consequence of a breach of duty entitling parents to damages, either as a recognised additional cause of action, or as an additional head of damage in a mother's personal injury claim.²²³ The learned trial judge recognised the distinction between such claims in the following passage:

"The fact that I conclude that Dr Cattanach was under a duty to avoid the physical harm to Mrs Melchior occasioned by Jordan's conception and birth does not of course determine whether he is liable for different and more remote damage by way of economic loss; and in this case the real issue in respect of damages is whether loss beyond that immediately connected with that physical harm is recoverable."

This identification of such a claim as one founded on pure economic loss is consistent with the approach taken by Brennan J (as he then was) in Sutherland Shire Council v Heyman.²²⁴

I would, however, go further than this. Whenever such a claim is based on negligence a limited damages rule should be applied in the assessment of such damages. I have also concluded that, at least prima facie, a similar rule should apply when such a claim is based on breach of contractual duty to exercise reasonable care in advising and treating a patient. Despite the difference in underlying legal principle in assessment of damages in tort and contract, in a case of the present kind the assessment is the same. Where a medical practitioner acts in breach of such a duty, as for example by failing to give advice that a reasonably prudent practitioner would give, or in failing to administer treatment with due care, the tortious measure of damages which is aimed at restoring the plaintiff to her position as if there had been no negligence, is the same as the contractual measure which is aimed at putting the plaintiff in the same position as if there had been no breach of contract, that is to say as if there had been no negligence. In such cases the consequences of observance of the duty and of the absence of negligence coincide. Different legal consequences are, of course, possible according to whether the plaintiff sues in contract or in tort. These include the absence of a defence of contributory negligence if the action is based in contract,²²⁵ and the effect of special terms of the contract. However, it would be unfortunate if a different rule were applied in the assessment of damages according to whether the action was brought in contract or in tort.²²⁶ In principle if there is to be a limited damages rule it should prima facie apply across the spectrum of damages that are held to flow from breach of the duty to exercise reasonable care and skill in the provision of medical advice and treatment. The public policy is the same.

The courts of the United States and Canada are not renowned for undue timidity in recognising the boundaries of legitimate claims for damages, and the great majority of jurisdictions in those countries recognise the wisdom of some such limitation. The United Kingdom has now adopted a similar rule.²²⁷ Throughout the common law world very few judges have suggested that there should be no set-off of benefits against detriments, and those who have ruled against such set-offs have done so on the ground of excessive difficulty in quantifying the respective benefits and detriments. In my view it is possible to regard the limited damages rule as a necessarily arbitrary legal rule which notionally sets-off the benefits of parenthood against damages for the cost of rearing the child. It has been observed that there is a difference of degree only between the views of the courts and judges which apply the so-called benefits rule and those who hold that the benefits automatically cancel out the "patrimonial loss" involved in childraising expenses.²²⁸ The legal responsibilities of parents following the birth of their child include the primary duty to maintain the child, the burden of which bears a close resemblance to the additional head of damages here claimed. In my view it is not unreasonable to treat those responsibilities and rewards as cancelling each other out.²²⁹

The limitation I propose has been described as one against the recovery of "the cost of rearing and educating a healthy, normal child born as the result of medical malpractice".²³⁰ Of course, the identification of a child as "a healthy normal child" may present difficulties, as the learned trial judge noted. However, these are not in my view of the kind that courts cannot satisfactorily resolve. The difficulty of identifying such a child is certainly less than that of assessing and setting-off perceived benefits against perceived burdens. There is, for example, no difficulty in the present case in identifying the respondents' child as a normal, healthy child notwithstanding that there is a remote chance that he may inherit a condition from which his father suffers. McFarlane has, rightly in my view, been distinguished in a case where a health authority omitted to inform a pregnant woman of the results of a pregnancy scan revealing the likelihood that she was carrying a Downs Syndrome baby. Had she been so informed, the mother would have terminated the pregnancy.²³¹ There were several points of distinction in that case, but it is enough to observe that quite plainly McFarlane applies only to wrongful pregnancy cases where a normal healthy child is delivered. It does not in my view purport to lay down any rule denying damages in respect of the conception of children who cannot be so identified.

It is hardly surprising that cases have arisen where the inclusion of such damages might seem desirable, and some courts have searched for criteria that would open the door to such damages. The suggested criteria include the existence of an interest in the financial security of one's family,²³² prejudice to the economic stability of the family,²³³ the existence of a relationship between the parent's reasons for the intended sterilisation and the consequences of the failed sterilisation,²³⁴ whether good socio-economic reasons exist for choosing sterilisation,²³⁵ and whether the birth of the child should be regarded as "an injury".²³⁶ In the last-mentioned case (Kealey v Berezowski) it was suggested by Her Honour Lax J that an "injury" would not be established unless the child's parents were prevented by the medical practitioner's negligence from fulfilling their responsibilities of support which as a matter of law arose from the child's birth.²³⁷ Her Honour, however, was prepared to leave open the possibility of such a claim in "a case of economic necessity, imposing unreasonable financial burdens on an impoverished family".²³⁸ Whilst the desire to leave open the door to higher damages in hard cases is understandable, in principle, it cuts across the rationale, public policy and certainty of what I have described as the limited damages rule, and such exceptions ought not to be admitted.

The present case does not in any event fall into any of the types of case suggested by Lax J as possible exceptions justifying the inclusion of such damages. Further, in my view none of the other suggestions in cases canvassed in the previous paragraph presents a workable or desirable legal solution.

Wherever a line is drawn there will be arguable cases near its edge. The limited damages rule is the one that I consider best fits the standards and expectations of our society.

Costs

So far as costs of the appeal are concerned, the appellant failed on the issues of liability and causation which had an effect upon the costs of the appeal. Moreover, the issue of damages is one upon which those representing the defendant may be thought to have a greater interest than the outcome of this particular case and therefore a wider interest than the respondent plaintiffs. In all the circumstances although the appellants have succeeded on an important issue I would make no order as to the costs of the appeal.

The learned trial judge ordered the appellant defendants to pay the plaintiffs' costs of the action assessed on the District Court scale under rule 698(3) of the Uniform Civil Procedure Rules. In the event of their succeeding upon the damages issue on appeal the appellants sought orders for trial costs according to the issues upon which the respective parties had succeeded. However, in all the circumstances I think that an order of the kind which was originally made remains an appropriate one notwithstanding the reduction that will be made to the damages.

Orders

The only part of the judgment below that should be set aside is paragraph 3 under which the first and second defendants were ordered to pay the first and second plaintiffs the amount of $105,249-33. The appeal should be allowed, and the judgment of Holmes J dated 23 August 2000 should be varied by the deletion of paragraph 3 thereof.

Footnotes

1. Between 2% and 4% compared to between 2 and 4 per 1,000, a tenfold increase in risk: Melchior v Cattanach SC 466 of 2000, [31]. ↩

2. See Rogers v Whitaker (1992) 175 CLR 479, 491. ↩

3. Ibid, 490. ↩

4. cf Devereux, J, "Medical Reporter" Journal of Law and Medicine 8(3) February 2001, 248-249; Lavery, J, in "Rearing Expenses after Unwanted Pregnancy: Australia versus The United Kingdom", Australian Health Law Bulletin 9(2) October 2000 19-20 argues that rearing expenses are consequential upon the personal injury of pregnancy and there is no need to characterise rearing expenses as a loss which is purely economic in nature. They should merely be characterised as another loss flowing directly from the physical injury of the pregnancy. This approach dissolves the artificial distinction between economic and non-economic loss associated with negligently caused unwanted pregnancies. ↩

5. [2000] 2 AC 59. ↩

6. [1990] 2 AC 605. ↩

7. Max Charlesworth in "Bioethics in a Liberal Society" (1993), 27, argues that "In a liberal society, where a pluralism of values is not only tolerated but actively encouraged, there is no such thing as 'the community' view which has some kind of special normative status and which provides a basis for a public morality or that nebulous entity which judges are fond of calling 'public policy'." I am not so confident of the view of commuters on the Ipswich-Sandgate line. ↩

8. McFarlane v Tayside Health Board [2000] 2 AC 59, 82- 83. ↩

9. Ibid, 97.