Sheppard AJA (at 450) said:
"The word 'cost' in the context in which it appears in s 60 can have no meaning other than one which involves a financial liability on the part of a worker to pay for the services provided".
9 The employer submitted that the findings referred to in para 6 above were wrongly made. In particular, the employer challenged the lynchpin of the findings, namely, that Mrs Lloyd intended to hold Kim liable to pay for the services she rendered. Mr Hall QC, who together with Mr Priestley represented the employer, submitted that Walker CCJ failed to apply the correct legal test for determining contractual intent and had taken irrelevant material into account in so doing.
10 The employer also challenged the award of interest, asserting that the judge had erred in making such an award when Kim had not actually paid any monies in respect of the services that had been rendered.
11 Although the Protective Commissioner was represented at the appeal, senior counsel representing him took the position that there was little to be said on his behalf. That is because, were the appeal to succeed, Kim would have no obligation to make payments to Mrs Lloyd and, were it to fail, Kim's obligations to Mrs Lloyd would be met by the employer's insurer (to whom I shall refer as "the GIO"). Accordingly, Mrs Lloyd presented the main opposition to the employer's arguments.
12 Mrs Lloyd contended that the challenge to the award requiring the employer to indemnify Kim did not raise grounds that constituted a question of law essential to the appellate jurisdiction of this Court under the Workers Compensation Act (Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139). In my opinion, however, for the reasons set out below, Walker CCJ was correct in the findings he made and it is unnecessary to determine whether questions of law in the Azzopardi sense are raised by the employer's contentions.
13 At the outset it is necessary to observe that there is a fundamental difference between New South Wales Sugar Milling Co-operative Limited v Manning and this case. In Manning it appears to have been common ground that the nursing services afforded to the injured worker in that case were provided voluntarily. Mrs Lloyd, on the other hand, did not concede that the services she provided were voluntary. Her case was that the services were not gratuitous in any respect; she argued that she intended that her daughter, Kim, be liable to pay for her services.
14 By reason of the serious brain damage sustained by Kim, she did not have the requisite mental capacity to enter into an express contract: Gibbons v Wright (1953 -1954) 91 CLR 423.
15 It was not in dispute that the services provided by Mrs Lloyd were "necessaries" under the general law. Therefore, Mrs Lloyd was a supplier of necessary services to someone in need who lacked legal capacity to contract for them. In such circumstances an obligation may be implied on the part of the incapacitated person to pay the person who supplied the necessaries: Re Rhodes (1890) 44 Ch D 94. The obligation, however, only arises if the necessaries are supplied under circumstances that justify the implication: Re Rhodes (at 105).
16 The preponderance of authority is that such an implied term is quasi-contractual or restitutionary in nature (see Restitution Law in Australia, (1995) Mason and Carter at para 1040, The Law of Quasi-Contract, Stoljar, (1989) 2nd ed, at 197). It has long been accepted that the obligation is to pay a reasonable price for the necessaries so provided: see Mason and Carter op cit at paras 914 and 1040 and Stoljar op cit at 197.
17 In Re Rhodes Cotton LJ warned against the use of the expression "implied contract" in this context. He said (at 105):
"Now the term 'implied contract' is a most unfortunate expression, because there cannot be a contract by a lunatic. But whenever necessaries are supplied to a person who by reason of disability cannot himself contract, the law implies an obligation on the part of such person to pay for such necessaries out of his own property. It is asked, can there be an implied contract by a person who cannot himself contract in express terms? The answer is, that what the law implies on the part of such a person is an obligation, which has been improperly termed a contract, to repay money spent in supplying necessaries. I think that the expression 'implied contract' is erroneous and very unfortunate".
18 Despite these earnest admonitions, the claim by Mrs Lloyd was put on the basis that there was an implied contract between her and Kim for the provision of the nursing services. She contended that Kim was obliged under that implied contract to pay for the services. The employer appears to have agreed that this was the appropriate inquiry and Walker CCJ, too, accepted that Kim's claim rested on whether there was an implied contract for the provision of services.
19 During the course of argument on appeal, the parties continued to adopt this approach. In my opinion, however, the expression "implied contract" should be eschewed in relation to the supply of necessaries to an incapacitated person as it is inappropriate and can be misleading. In the present case, for example, it is not possible readily to say when such a contract was made, what was its duration, how it was to come to an end, what terms were implicit in it, and, was there only one such contract or were a series of contracts arrived at.
20 As mentioned, Mrs Lloyd provided services to Kim from 28 October 1993 to 13 October 1998. In these circumstances, it is difficult to comprehend how a single implied contract governing the supply of those services could have arisen. It would have been appropriate to determine, without reference to any implied contract, if and when obligations to pay for the services arose. It may have been possible to separate each obligation by reference to times - after all, the services were supplied on a daily basis. This approach would cater for the fact that circumstances may change from day to day and such changes may cause intentions to alter.
21 In any event, the parties and the learned judge regarded the inquiry as being whether there was some kind of single and general implied contract covering the supply of all the services that were provided, or whether those services, generally, were supplied on a gratuitous and voluntary basis. The approach so adopted assumed that the case was analogous to Manning, but plainly it was not. I have previously noted that there is a fundamental difference between the admittedly voluntary services supplied to the worker in Manning, who had full capacity to contract, and the services supplied to the incapacitated worker in this case, which were said by the provider to be supplied on the basis that they would be paid for by the worker, which proposition was disputed by the employer.
22 All the parties involved desired that the appeal be dealt with on the same basis as that on which the trial was conducted. I shall accede to their wishes. I should say that I do not think, in the particular circumstances, that the result of the case would otherwise be any different. That is because Walker CCJ rightly treated the cardinal issue before him as being whether, in providing the services, Mrs Lloyd intended to charge Kim for those services on the basis that Kim would be legally bound to pay for them. The question whether Kim impliedly became obliged to pay for the services turns on that issue: Re Rhodes.
23 In determining whether there was such an intention on the part of Mrs Lloyd, the relationship of mother and daughter between Mrs Lloyd and Kim is of considerable importance. Mutual promises made in the ordinary course of domestic relationships do not ordinarily give cause for action on a contract: Balfour v Balfour [1919] 2 KB 571.
24 In Re Rhodes a woman of unsound mind was confined in an asylum for more than 20 years at a cost of 140 pounds per year. Her private income was no more than 96 pounds per year and her brother paid the deficiency out of his own pocket. After his death, his son, who was his executor, did likewise, and the deficiency was made up partly by him and partly by his brother and sisters. After the woman's death, the executor of the woman's brother, on behalf of himself and his brother and sisters, claimed repayment of the monies that had been paid over the years to make up the deficiency. The claim failed, the Court of Appeal presuming that the brother had paid for his sister for many years out of affection, and so had the executor and his brother and sisters. None of them had given any indication that he or she wished to be repaid. Thus, the deficiency had been provided under circumstances from which no implied obligation could arise. The employer, in the present case, placed much reliance on Re Rhodes.
25 But the presumption referred to in Balfour v Balfour and applied in Re Rhodes is rebuttable and in this case there was much evidence to rebut the presumption.
26 Before going to the evidence in question I would note that Walker CCJ correctly accepted, as did the parties, that the intention of Mrs Lloyd to charge for her services was to be determined objectively. This is consistent with the general law and also cases relating to the intention to contract: see Taylor v Johnson (1983) 151 CLR 422.
27 On 28 October 1993 Kim was discharged from hospital and Mrs Lloyd began to care for her. Shortly thereafter, communications ensued between Mrs Lloyd and the GIO. This was long before the decision in Manning (handed down on 27 August 1998). Prior to Manning, the GIO was under the erroneous impression that amounts representing the cost of voluntary services were recoverable as compensation under s 60 of the Workers Compensation Act.
28 A note appeared in the GIO file dated 3 November 1993 to the effect that Mrs Lloyd had asked whether the GIO would pay for "someone to look after" Kim when Mrs Lloyd "has to go out". On 4 November 1993 a further file note recorded a recommendation that GIO offer Mrs Lloyd $100 per week. On 23 November 1993 the GIO commenced paying Mrs Lloyd $100 per week as a "carer's allowance" retrospective to 28 October 1993. Walker CCJ found that Mrs Lloyd asked the GIO "for a carer's allowance for herself" and this led to the $100 being paid.
29 On 8 December 1994 the GIO increased Mrs Lloyd's allowance to $300 per week, backdated to 21 October 1994. Walker CCJ found that this increase resulted from Mrs Lloyd communicating to the GIO that she was in financial difficulties and needed an increase in her allowance.
30 Early in 1995 Mrs Lloyd communicated to the GIO her dissatisfaction with the allowance of $300 per week that she was receiving. She proceeded to retain solicitors who, on 21 September 1995, claimed, in effect, an increase in Mrs Lloyd's cost of care. Her solicitors contended that the allowance that had been paid to her was less than the reasonable cost of providing the care.
31 On 21 September 1998, after Manning had been handed down, the GIO ceased paying a weekly allowance to Mrs Lloyd. Mrs Lloyd then ceased to provide nursing services to Kim.
32 Mr Hall submitted that the evidence relating to the communications between Mrs Lloyd and the GIO and to the payment of the weekly allowance by the GIO was irrelevant to the question whether Mrs Lloyd intended to charge her daughter for her services. He argued that while these communications might show that Mrs Lloyd wished to be recompensed for her services, they did not show that she intended that she be paid by Kim and they did not show that she intended to hold Kim liable for her services. He submitted, in effect, that whatever was done by the GIO was entirely irrelevant to the position of Kim and the Protective Commissioner who represented her. He said that the arrangements between Mrs Lloyd and the GIO were separate and did not focus on the relationship between mother and daughter, this being critical in establishing whether there was an intention on the part of Mrs Lloyd to charge Kim.
33 For the reasons set out below, I do not agree with the submissions so made.
34 An inference is capable of arising from the challenged evidence to the effect that the GIO paid Mrs Lloyd her weekly allowances of $100 and $300 because it believed that it was liable to indemnify the employer against its liability either to pay Kim compensation in respect of the services provided by Mrs Lloyd (under s 60 (1)) or Mrs Lloyd herself (under s 61(8)). The fact that that this belief was based on an erroneous understanding of the state of the law prior to Manning is immaterial.
35 A further inference is capable of arising to the effect that Mrs Lloyd believed that she was entitled to be paid for the services she rendered, either by Kim (who - she believed - was entitled to an indemnity in respect of such payments from the GIO) or from the GIO direct.
36 Further, it was open to his Honour to find that the challenged evidence supported an inference that Mrs Lloyd intended to hold Kim liable for her services (inasmuch as she believed that Kim had a right to an indemnity from the GIO and would recover from the GIO whatever she charged Kim - the weekly allowances paid to her by the GIO being confirmatory of this). In other words, it was open to the judge to find that, because Mrs Lloyd believed that the GIO would compensate Kim for payments she was obliged to make to Mrs Lloyd, Mrs Lloyd decided to charge Kim for her services. Such a reaction on the part of Mrs Lloyd would not be unusual.
37 Thus, in my opinion, the evidence that Mrs Lloyd sought to be compensated by the GIO for her services, claimed weekly allowances from it and claimed an increase in those weekly allowances, was relevant to whether Mrs Lloyd intended to charge her daughter for the services she provided, and Walker CCJ was entitled to rely thereon.
38 In summary, the Protective Commissioner - as I have mentioned - was not appointed tutor to Kim until 6 June 1996. He was appointed manager of her estate on 26 June 1998. Mrs Lloyd could not make an express contract with Kim by reason of her disability. Within a week of Kim being discharged from hospital on 28 October 1993, however, Mrs Lloyd made it clear to the GIO that she desired payment for her services. The GIO acquiesced. This took place in the context that I have described above. In my view, these are sufficient circumstances to give rise to the implication that Mrs Lloyd intended to charge Kim for her services and that there was an implied obligation upon Kim to pay Mrs Lloyd for her services.
39 After the decision in Manning had been handed down, Mrs Lloyd took advice from a solicitor who was in a position to represent her interests separately from those of Kim. In consequence the solicitor drafted an invoice in which was set out Mrs Lloyd's charges for the services she had rendered. On 25 September 1998 this invoice was sent to the Protective Commissioner and, apparently, also to the employer or the GIO.
40 His Honour took the invoice into account in determining that Mrs Lloyd intended to charge Kim. The employer submitted that this evidence was irrelevant. I agree that the evidence of the invoice was of doubtful weight, but I do not accept that it was irrelevant. The fact that the invoice was sent was objective evidence of an intention on the part of Mrs Lloyd to hold her daughter liable for her services. The fact that such an invoice was sent so long after Mrs Lloyd commenced providing her services detracts significantly from the probative weight of the invoice (on the accepted basis that there was a single, general contract). But the invoice is relevant to the issue.
41 Mr Hall submitted that, had Mrs Lloyd intended to charge Kim, she would have claimed for those charges from the Protective Commissioner. In fact, by sending the Protective Commissioner the invoice of 25 September 1998, she did make such a claim. In consequence of the sending of that invoice, the Protective Commissioner made a part payment of $15,000 to Mrs Lloyd. Again, the claim was made late in the day. This fact had to be taken into account by his Honour in assessing the weight to be attached to the invoice. It is not suggested that the learned judge made any error in this respect.
42 Mr Hall submitted that Walker CCJ erred in taking account of Mrs Lloyd's personal circumstances. Mrs Lloyd was not a wealthy woman. She had seven children apart from Kim. Her 81 year old mother was an epileptic. She had 14 grandchildren to whom she wished to devote more attention. Her own health was suffering from the stress brought about in caring for Kim. She had had to give up her job as a cook to look after Kim.
43 Mr Hall's argument, in effect, was that while Mrs Lloyd's personal circumstances might indicate a need for compensation, they did not support an inference that she intended to seek compensation from Kim.