Sharman v Evans

The plaintiff needs constant nursing attention. Three particular matters make this essential. Firstly, she has difficulty in breathing and this difficulty may be aggravated by an accumulation of mucus in her breathing passages which must be aspirated as soon as possible. Secondly, there is a continuing risk of the development of an infection in the urinary tract. Her urine, which drains into a bag, must be watched continuously for signs of infection. Thirdly, there is a strong likelihood that one or more pressure sores will develop if she is not regularly turned. Additionally to the matters I have mentioned there is a risk that she will have an epileptic fit or some other, and unexpected, problem which will require more or less immediate attention. It must be remembered that she lacks the ability readily to make herself understood, particularly to strangers, and this circumstance necessitates a greater degree of watchfulness on the part of those in whose charge she is than would be the case if she had her voice.

The many operative procedures to which she has been subjected are fully detailed in the careful exposition by the trial judge who awarded her the sum of $300,547.50. The appeal by the present appellant to the Court of Appeal Division of the Supreme Court of New South Wales against this award was, by majority, dismissed. The ground of appeal was that the damages were excessive. In this Court, the appellant maintains his submission that the award of damages is excessive: in that connexion, the appellant points to particular matters on which he says the trial judge erred in point of law. To these I shall refer later.

I have found the resolution of the appeal a matter of considerable difficulty. In the first place, the fundamental principle is that the exercise of discretion by the trial judge in the estimation of damages ought not to be interfered with by an appellate court unless the trial judge has erred in point of law or in his approach to the assessment or unless the assessment itself, by its disproportion to the injuries received, demonstrates error on the part of the trial judge. Notwithstanding some views which have been expressed, the function of a court of appeal, in my opinion, is not to offer what in connexion with another discipline would be called "a second opinion". Such a court is strictly confined to the remedy of error in the trial or in the assessment of the trial judge. It cannot be too strongly said that a mere difference of opinion as to what ought to have been the proper award of damages does not indicate error on the part of the trial judge. This distinction between mere difference of opinion and error has been variously expressed, perhaps not always with satisfaction to the mind. But there is a radical distinction between the two situations whether the error be styled demonstrable or otherwise described. Suffice it for present purposes that mere difference of opinion on a matter of fact or assessment does not warrant a conclusion that the trial judge's view was mistaken or erroneous calling for remedy by a court of appeal.

I think it is relevant to the decision of this appeal to remember that our system by which differences between citizens and, for that matter, between the state and the citizen are resolved is one of trial. It is not a system of resolution by appeal. Further, the trial itself is an adversary process where each side of the record is free to choose the ground and manner upon and in which it will fight the case and contest its issues. By that choice each is bound, unless for special reasons a court of appeal allows a deviation to be made from that course. Adherence to these basic principles places great responsibility on the trial judge in deciding the case: and also upon advocates who decide for their clients exactly how and upon what grounds the issues will be fought. I have said elsewhere, and I venture to repeat, that resolution of difference by trial rather than by appeal is of great public benefit. It tends to earlier finality and greater certainty than would be the case if cases were chiefly decided on appeal.

Holding these views, it is apparent that my own deep inclination is not to interfere with the assessment made in this case by the trial judge. I have elsewhere stated what I believe to be the proper approach to the assessment of damages and have been reminded recently of what I said in Arthur Robinson (Grafton) Pty. Ltd. v. Carter [1] and other cases. I adhere to the stated principles which I have thought to be proper.

However, after considering the reasons which the trial judge has clearly expressed for making his award of damages, I have been driven to the conclusion that his Honour fell into error in four respects in making that award.

The first ground of error, in my opinion, was that his Honour allowed the cost of providing premises at the respondent's mother's house and of nursing attention during those periods in which the respondent might choose to sojourn in that house as part of the award. It seems to me that it was not reasonable to make the appellant pay for these costs. They were not reasonably necessary in any real sense for the treatment and care of the respondent. True it may be that the transfer of the respondent to her mother's house from time to time would give the respondent personal satisfaction and may have some psychological effect on her outlook of life. I can well understand the desirability from the respondent's personal point of view of being able from time to time to change from her hospital to her mother's house. But the expense of that course would be, to my mind, quite disproportionate to any causal connexion which might possibly be found between that transfer and the appellant's negligence. Further, I think there were practical reasons which would make this transfer undesirable in itself. The task of finding nurses of the right disposition and capacity to co-operate with other nurses in caring for the respondent at her mother's house on what must, at best, be a casual basis has not been sufficiently regarded. Of necessity the transfer to her mother's house would be exceptional rather than the rule for her care and maintenance. Periods of her stay at that house would necessarily be relatively few. To my mind, the practical difficulties of organizing these transfers and of providing a very considerable nursing capacity would prove nigh insuperable. For all that the medical advisers might think that there was some psychological benefit in allowing the respondent to have the satisfaction of being in her mother's house for some periods, I think the disturbance and the upset both of the initial transfer of the respondent and particularly of her re-transfer could far outweigh any other advantage which has been supposed. The reasonableness of the proposed course and its practicality or impracticality do not appear to me to have been given sufficient prominence. They could not be resolved by the medical witnesses but rather are matters for close consideration and decision by the court.

However, the appellant's counsel throughout has been prepared to agree that it was reasonable to provide for periods of residence of the respondent at her mother's house including provision for the actual construction of premises in which she might thus sojourn. In consequence, I would not be prepared to interfere with the amount of the award of damages on the ground that the award ought not to have reflected any provision for the respondent to be transferred from time to time to her mother's residence. I do this not because I think that was a reasonable or proper course to take but simply because the appellant chose to concede the point. He should not be allowed now to resile from the attitude which he has taken throughout.

The second ground of error, in my opinion, is that his Honour allowed what must have been a substantial amount in the composition of his award for economic loss. In this respect I agree with the analysis made by Mahoney J.A. in his reasons for judgment in the Court of Appeal. I have no need to restate them but can shortly state my own expression of what I conceive to be the error. The respondent had a prospect of earning a net sum of not less than $70 per week. Out of this she had to provide herself with food, clothing and perhaps residence. I should have thought that there was little scope for saving or making any accumulation of capital out of such an earning capacity. Such need as she has in these respects is now substantially embraced in the considerable award made for her institutional care, along with the periods of transfer to her mother's house. It seems to me right to say that to allow any substantial ingredient in the total award to represent economic loss in the circumstances is to double up and fail to perceive the overlap which would exist between any allowance for economic loss and the allowance for institutional and other care and attention.

Thirdly, his Honour evidently included a substantial sum in his award for the shortening of the life expectancy of the respondent. I am of opinion that this loss calls only for compensation by the inclusion of a nominal sum. Nothing in the case, bearing in mind other items to be the subject of compensation, calls for that nominal sum to exceed the sum of $1,250.

Fourthly, I feel his Honour failed to look closely at what his proposed award was capable of producing when reasonably invested and in not comparing that yield with what the necessities of the respondent's condition required. Leaving aside that part of the general award which it may be thought relates to compensation for loss of amenities in life, I think that the yield of the resultant sum is very considerably in excess of what the respondent's requirements are. Even if one were to take the respondent's maintenance and care to require a sum of $175 per week, that sum would be provided without entrenching on the capital by an award of less than the sum of $200,000. To award such a sum would more than provide for institutional care and occasional therapy and professional advice, and for residence in the mother's house for some periods of time, leaving the capital, albeit possibly affected by changes in the value of money, untouched. It seems to me that such a result in the assessment of damages is unreasonable. It neglects the considerable scope of investment and possible accretion which a large verdict provides.

I am of the opinion that the amount awarded by the trial judge is excessive and that it ought to be reduced. If I felt free to give effect to my views as to the first ground of error to which I have referred, I would be inclined to make a much more substantial reduction than I now propose. However, it seems to me that the least sum by which the award should be reduced, having regard only to grounds other than the first to which I referred, is the amount of $25,000. This sum would minimize but perhaps not eliminate the effect of including too great an allowance for economic loss and for loss of life expectancy. The reduced sum still represents, in my opinion, a not ungenerous award which, being wisely invested, will fully provide the reasonable needs of the respondent in her injured condition. I have not thought it necessary in this case to enter into any detailed discussion of all the elements of the compensation by award of damages for the respondent's injuries. The danger of undue elaboration is evident and needs no emphasis. The endeavour must be to make a fair and reasonable compensation as between the parties. I have felt in this case that it is sufficient, having found error in the assessment, to determine a sum, somewhat in the broad, by which the judge's award should be reduced in order to bring it within the range of a fair and reasonable compensation. Accordingly, I would reduce the award by the amount of $25,000.

I would not make any order for the costs of this appeal. I think that the appellant has brought on himself the major difficulties. He has failed to persuade me that there should be a reduction in respect of the amount allowed for the transfer of the respondent to her mother's house from time to time. Each side has had some success and some failure and I would propose that there be no order for costs. I would vary the order of the Court of Appeal as to costs so as to allow the appellant to that Court only one half of his costs of that appeal.

The defendant, Dennis Sharman, appeals against the dismissal, by a majority of the New South Wales Court of Appeal, of his appeal from a verdict for $300,547.50 in favour of the plaintiff, June Marilyn Evans.

Miss Evans, then aged twenty, was injured in a motor car accident in December 1971. She suffered very serious injuries including brain stem damage; she was unconscious for almost a month and is now a quadriplegic. This condition, disastrous enough in itself, is in her case aggravated by trauma-caused epilepsy, by unusually severe impairment to her respiratory function as a consequence of the brain injury and by an almost total loss of the ability to speak because of the injury to the larynx. She is fully aware of her plight.

By the time of the trial, in November 1973, Miss Evans had undergone a great number of operations and had endured much pain; her condition had become stabilized and her disabilities could then be summarized, in the reasons for judgment of the learned trial judge (Sheppard J.) in the following terms:

1. She suffers from quadriplegia with the problems to which I have already referred. She has more movement in her right arm than her left but the movement is nevertheless restricted and she cannot make anything like full use of her right hand. She is able to eat, paint and operate a typewriter as well as point to the card to which I have referred but she cannot do up buttons, brush her teeth, or her hair or use a pen. She can be sat in a wheel chair but if she is not propped up she will collapse to one side. She is able to operate, with the use of her right hand, the mechanism of an electric chair but, according to Dr. Griffiths, she is not a good driver. She has no hope, as do some quadriplegics, of ever driving a motor vehicle however it may be adapted.

2. She has the inability to speak which I have mentioned.

3. She is an epileptic but her epilepsy is controlled, for the time being, by drugs.

1. She has lost some intellectual capacity but is still intelligent, capable of reading and painting, and is well aware of her predicament.

2. She has continuing pain in her right shoulder which is relieved by the taking of analgesics.

Before the accident the prospects for Miss Evans' future were bright; she was a healthy, out-going and intelligent girl who was trained for and was experienced in secretarial work; by taking two jobs in her home State of Western Australia she had saved enough money to undertake a two-year full-time course as a resident student at the Commonwealth Bible College in Brisbane. At the time of the accident, she had just completed her first year there, coming dux of her year. She had an understanding with a young man, a fellow student, that they would marry in due course. After the accident their engagement was announced and but for her ultimate decision that she could not permit him to take as his wife a quadriplegic she would by the time of the trial have been married to him; he has a good position and a secure future in the Department of Civil Aviation. Had she resumed her secretarial work after finishing her two-year college course she could have earned at least $70 per week net.

In these circumstances the learned trial judge, in a most carefully reasoned judgment, assessed general damages at $275,000, the agreed special damages of some $25,500 making a total of just over $300,000.

Three consequences of her injuries account in large measure for the size of the award of general damages; her need for intensive nursing and medical attention in the future, her total loss of earning capacity and the gross impairment of the future enjoyment and amenities of her life. She has, in addition, experienced particularly severe pain and suffering and her life expectancy has been substantially reduced.

The learned trial judge did not essay any exact quantification of damages for every item of detriment suffered by the plaintiff. He arrived at a range of from $150,000 to $175,000 for the future cost of her nursing and medical care and at a sum of $6,000 for the shortened life expectancy of the plaintiff. He explained with clarity and in detail his approach to the assessment of damages for each other item but concluded that they did not lend themselves to any precise individual quantification. In arriving at the total of $275,000 for general damages his Honour expressed his keen awareness of the need to guard against overlap in undertaking that process of separate consideration of components of the award which he had felt obliged to engage upon.

The range of damages assessed in respect of future nursing and medical attention involved an assumption that the plaintiff would not spend all of the rest of her life in hospital but would instead be able to spend periods being cared for at home. Before the Court of Appeal the appellant contended that those periods spent at home would involve the plaintiff in additional health risks and that the learned trial judge had therefore erred in taking so long a period as twenty or more years as the plaintiff's life expectancy. This the majority rejected, concluding that there was ample evidence upon which the learned trial judge could find that, notwithstanding periods at home, the plaintiff might nevertheless live so long; nor did Mahoney J.A. in his dissenting judgment take issue with the verdict on this specific point. The other main attack made before the Court of Appeal concerned the amount of damages awarded for loss of earning capacity and for pain and suffering and loss of the amenities of life. In the view of the majority of the Court no fault was to be found with these items. Mahoney J.A., on the other hand, not only regarded the assessment of compensation for lost earning capacity as excessive and as involving incorrect principles but also discerned more fundamental errors affecting the verdict as a whole.

On the appeal to this Court the grounds raised before the Court of Appeal were again relied upon. In addition the method of assessment which the learned trial judge had adopted was also attacked; so too, for the first time, was the assumption that the plaintiff should be compensated on the footing that she would spend part at least of her future life being cared for out of hospital.

A variety of difficulties, both of principle and of fact, surround the assessment of damages in this case. They stem from at least three distinct sources: the great increase in the cost of future nursing care should the plaintiff be cared for at home rather than in hospital; a variety of problems involved in assessing compensation for the plaintiff's loss of future earning capacity and, finally, the doubts as to the plaintiff's present life expectancy.

That the learned trial judge should have engaged in a close scrutiny of each head of detriment was, we think, inevitable; that in doing so he should seek to evaluate that detriment in money terms was a necessary consequence of the fact that it is only by recourse to those terms that the plaintiff can be compensated for the wrong done to her. Criticism was directed both to this separate examination of the conventional heads of damage and also to the ascertainment of a sum appropriate as a starting point for compensation under a particular head of damages, followed by a process of discounting or deduction from it. We regard this criticism as misconceived; so long as courts are careful to avoid the risk, inherent in such a procedure, of compensating twice over for the one detriment there seems no better way of applying processes of reasoning and the realistic and methodical evaluation of probabilities to the task of assessing compensation. In cases of any complexity any other approach is open to serious objection, especially in times of rapid inflation. In such times what Salmon L.J. described in Fletcher v. Autocar & Transporters Ltd. [2] as the "uncertain role" of instinct, and what this Court has described as a "general awareness", a knowledge of "current general ideas of fairness and moderation" (Planet Fisheries Pty. Ltd. v. La Rosa [3] ), while still of use in determining, as a matter of first impression, the general level of appropriateness of an award, tends to become blurred by the constant shift of money values. Moreover where the assessment of damages is undertaken by a judge sitting without a jury it is, we think, most desirable that the process of assessment should be described in the reasons for judgment. As was pointed out by Sachs L.J. in George v. Pinnock [4] it is only by the setting out in a judgment of the main components of an award of damages, or at least of the approach taken to each component, that the parties may obtain a proper insight into the process of assessment and an adequate opportunity of seeking the correction of error on appeal. In the particular circumstances of this case Sheppard J. found himself unable to assign anything like precise money sums to the different heads of damages; he did however very clearly explain his approach to each head of damages, a course which has lightened the task of appellate courts.

1. [1968] 2 Q.B. 322, at p. 362. 2. (1968) 119 C.L.R. 118, at p. 125. 3. [1973] 1 W.L.R. 118, at p. 126; [1973] 1 All E.R. 926, at p. 934.

In view of the attack made upon various aspects of his Honour's assessment of damages it is appropriate to examine the various heads of damage which presented themselves for assessment so as to appreciate and deal with the various criticisms raised by the appellant. First are those costs which the plaintiff will be obliged to incur in consequence of her injuries, principally although not exclusively, the cost of nursing and medical care. It is clear that she will require such care for the rest of her life. It can be provided either in a hospital in Perth devoted to the care of persons incapacitated as she is or, at very much greater cost, in her own home. The plaintiff would much prefer the latter but the question is whether the defendant should be required to make compensation upon this much more expensive basis. The learned trial judge's award of damages contemplated that the plaintiff, while spending the greater part of her life in hospital, would spend some part of it being cared for at home.

Where the plaintiff is to be cared for in the future will not only directly affect the extent of nursing and medical expenses which are to be compensated for; it will also bear upon the extent of her loss of the amenities and enjoyment of life, a lifetime substantially spent in hospital will greatly aggravate that loss. In our view the medical evidence in this case does not justify the conclusion that the defendant should be required to compensate for future nursing and medical expenses on any basis other than that the plaintiff's future will be one substantially spent in hospital.

The appropriate criterion must be that such expenses as the plaintiff may reasonably incur should be recoverable from the defendant; as Barwick C.J. put it in Arthur Robinson (Grafton) Pty. Ltd. v. Carter [5] "The question here is not what are the ideal requirements but what are the reasonable requirements of the respondent", and see Chulcough v. Holley, per Windeyer J. [6] . The touchstone of reasonableness in the case of the cost of providing nursing and medical care for the plaintiff in the future is, no doubt, cost matched against health benefits to the plaintiff. If cost is very great and benefits to health slight or speculative the cost-involving treatment will clearly be unreasonable, the more so if there is available an alternative and relatively inexpensive mode of treatment, affording equal or only slightly lesser benefits. When the factors are more evenly balanced no intuitive answer presents itself and the real difficulty of attempting to weigh against each other two incomparables, financial cost against relative health benefits to the plaintiff, becomes manifest. The present case is however one which does to our minds allow of a definite answer; it is a case of alternatives in which the difference in relative costs is great whereas the benefit to the plaintiff of the more expensive alternative is entirely one of amenity, in no way involving physical or mental well-being. This may be demonstrated from the evidence.

1. (1968) 122 C.L.R. 649, at p. 661. 2. (1968) 41 A.L.J.R. 336, at p. 338.

Assuming, for convenience of comparison, a life expectancy of twenty years, the future expenses of the plaintiff if confined to hospital would be of the order of a present value, computed on six per cent tables, of $108,500, inclusive of nursing, medical and physiotherapy services and cost of special beds etc. The provision to her of like services at her mother's home over that period would amount to a present value of about $390,000, to which would have to be added a weekly cost for medicaments etc. of about $23 per week and a capital cost of some $11,750 for suitable alterations to her mother's home; moreover this is exclusive of the cost of food and of the cost of providing another home should her mother die during the period and the present home cease to be available to the plaintiff. The benefit to the plaintiff of being cared for at home rather than in hospital is not any benefit to her health but rather to her future enjoyment of life which would be enhanced by a home atmosphere; her life would not thereby be prolonged nor would her physical condition be at all improved; indeed she would be somewhat more at risk physically at home than in hospital. There is no evidence suggesting any likely psychiatric benefits, probable though these might appear to the layman.

In these circumstances the future cost of reasonable nursing and medical attention must, we think, be assessed on the basis of a lifetime substantially spent in hospital. We have, to date, for convenience of comparison, quoted costs based upon a post-accident life expectancy of twenty years. Assuming a lifetime of hospital care, devoid of the extra risks involved in nursing care at home, the medical evidence suggests that this is too conservative an estimate. His Honour, without specifically nominating any precise period as that selected by him as appropriate, clearly contemplated that if the plaintiff spent part of her life at home something in excess of twenty years was nevertheless an appropriate assumption as to life expectancy. For the purpose of our present examination of the award, and since we would regard the plaintiff's future as one involving permanent hospitalization in conditions of maximum nursing and medical care, we adopt thirty years as the appropriate period. For that period the present value, on six per cent tables, of the cost of hospital care, medical and physiotherapy treatment and the provision of a special bed and the like will amount to about $128,000.

There is another item of future expense which must enter into the assessment process. Because we conclude that the defendant should not be required to compensate the plaintiff on any basis other than that of a lifetime in hospital it follows that the plaintiff's loss of the enjoyment and amenities of life will be the greater. She must be regarded as wholly deprived of the everyday pleasures of living in the environment of her own home. Instead she will be exposed to a lifetime of institutional life. Not only must this be reflected in the damages to be awarded under the conventional head of pain, suffering and the loss of enjoyment and amenities of life. In the present case it is also appropriate to reflect rather more positively one particular aspect of this situation of permanent hospitalization. The effect of the latter upon the plaintiff can clearly be somewhat mitigated if she is able to vary the monotony of the hospital ward by occasional day visits to her home and by other outings, possibly even by occasional weekends away from hospital. The medical evidence discloses that these would be possible provided that constant nursing attention was provided. Applying again the criterion of reasonableness but now weighing the expense of such attention against the clear benefits in amenity and enjoyment of life that such breaks in a lifetime in hospital would provide we are in no doubt that the plaintiff is entitled to compensation for the cost of such outings. That their cost will be high is apparent from the data as to nursing costs already referred to, to which must be added transportation either by ambulance or by chauffeur-driven car. If enjoyed as frequently as, say, once every few weeks over thirty years that cost would not be overstated by the adoption of a present value figure of about $20,000. We accordingly adopt that sum as a second item of future cost to be compensated for by the defendant.

In dealing in this way with these two items of future expenditure we have departed in principle from the method of assessment adopted by the learned trial judge but have endeavoured to reflect, as do his reasons for judgment, the need for damages to be more liberal than they would be were the plaintiff to be restricted to recovery only of the present value of the cost of thirty years of hospitalization. Our approach conduces, we believe, to clarity of analysis while emphasizing the extent to which damages for loss of amenity must interact with other heads of damages, including that concerned with the defraying of future expenditure reasonably incurred by the plaintiff and attributable to her injuries.

We turn next to the question of compensation for lost earning capacity and in particular to an examination of the deductions which should be made in assessing that compensation. In doing so we leave aside, for the present, the question of compensation for loss of earning capacity during the years by which the plaintiff's life expectancy has been shortened, the "lost years".

Both principle and authority (Skelton v. Collins [7] ) establish that where, as here, there is included in the award of damages for future nursing and medical care the plaintiff's entire cost of future board and lodging, there will be overcompensation if damages for loss of earning capacity are awarded in full without regard for the fact that the plaintiff is already to receive as compensation the cost of her future board and lodging, a cost which but for her injuries she would otherwise have to meet out of future earnings. If the true concept be that it is lost earning capacity to the extent to which it is likely to be exercised in the future, rather than loss of future earnings, that is to be compensated it may seem inelegant to speak of deducting from damages for that lost capacity an amount for some saving in outgoings. It would better accord with principle if the savings in board and lodging could be isolated from, and excluded from the damages to be awarded in respect of, hospital expenses. However so long as the true nature of the adjustment is understood no harm is done by making an appropriate deduction from the damages for lost earning capacity. What is to be avoided is double compensation and, as is apparent from what was said by their Lordships in Shearman v. Folland [8] , it is not a question of estimating the plaintiff's likely future costs for board and lodging and treating them as an outgoing which the consequences of the defendant's tortious act have now spared her from making; that is a notion which is as distasteful as it is misconceived. Rather is it a matter of her already having been compensated for future board and lodging as a component of hospital expenses, so that to disregard this and award the full sum for lost earning capacity, part of which would be used to provide the very item of board and lodging already compensated for, would be to award compensation twice over. Accordingly some no doubt fairly arbitrary proportion of the present value of future hospital expenses regarded as attributable to board and lodging must be taken and deducted from the present value of lost earning capacity; it will be quite irrelevant how expensively or how frugally the plaintiff might in fact have lived had she not been injured.

1. (1966) 115 C.L.R. 94, at p. 106. 2. [1950] 2 K.B. 43.

Although it is only the cost of board and lodging which, unless subject to deduction in this way, will lead to actual double compensation there are other items which require consideration as possible deductions when assessing damages for loss of earning capacity. This is because, quite apart from double compensation, that is, the payment twice over in respect of one and the same item of loss, it is also necessary to avoid compensating for gross rather than for net losses. This becomes of particular importance not only when assessing compensation for ordinary loss of earning capacity but also when that process of assessment must be undertaken in the context of a plaintiff's "lost years", his life expectancy having been reduced as a result of the injuries he has received.

Again we ignore for the moment the question of "lost years". Where, as here, a plaintiff suffers a total loss of earning capacity he will not normally continue to incur all of the outgoings necessary for the realization of that capacity which would have been incurred had his capacity been unaffected; items such as the cost of clothing suitable to his particular employment and of transportation to and from work provide examples, no doubt there are others. Compensation for loss of earning capacity is paid only because it is or may be productive of financial loss (Graham v. Baker [9] ) and to compensate for total loss of earning capacity without making allowance for the cessation of these outgoings is to compensate for a gross loss when it is only the net loss that is in fact suffered.

On the other hand there are other types of saved expenditure upon which a defendant cannot rely in diminution of damages. It is now well established that no reduction is to be made, when awarding damages for loss of earning capacity, for the cost of maintaining oneself and one's dependants unless an element of double compensation would otherwise intrude, as in the case of hospitalization as a non-fee paying patient or where the cost of future hospital expenses is also awarded and necessarily includes, as in the present case, the patient's board and lodging - Fletcher v. Autocar & Transporters Ltd. [10] ; Daish v. Wauton [11] ; Taylor v. Bristol Omnibus Co. Ltd., per Lord Denning [12] . The dissenting judgment of Windeyer J. in Chulcough v. Holley [13] refers to an award for diminished earning capacity being reduced in respect of the "ordinary costs of maintenance of a plaintiff as a person", citing what had earlier been said by Taylor J. in Skelton v. Collins [14] ; however we would understand Taylor J. to have been there concerned with compensation for lost earning capacity during "lost years", in respect of which rather different considerations apply.

1. [1968] 2 Q.B. 322. 2. [1972] 2 Q.B. 262. 3. [1975] 1 W.L.R. 1054, at p. 1060; [1975] 2 All E.R. 1107, at p. 1113. 4. (1968) 41 A.L.J.R., at p. 338. 5. (1966) 115 C.L.R., at p. 121.

The present plaintiff is now denied many of the opportunities for pleasure-giving expenditure, as distinct from what may be regarded as expenditure on maintenance, which our society affords. Are the savings in expenditure, thus involuntarily thrust upon her by reason of the state to which her injuries have reduced her, to have the effect of reducing the damages awarded for her loss of earning capacity? We think not. They may be left out of reckoning, they neither produce double compensation nor compensate for gross rather than net loss. Indeed to treat them as items going to reduce damages is unjustifiably to assume that because pre-accident avenues of expenditure are now foreclosed to a plaintiff the necessary consequence is a corresponding non-expenditure.

We leave aside the case of the plaintiff who by the nature of his injuries is made wholly incapable of experiencing pleasure. This was the position in Fletcher v. Autocar & Transporters Ltd. [15] but the majority judgments in that case go much further, they contemplate reduction of damages for lost earning capacity because a plaintiff is "saved" expenditure on those pleasurable pursuits which he formerly enjoyed but which the consequences of his injuries now deny him. A somewhat similar concept underlies Smith v. Central Asbestos Co. Ltd. [16] and both cases reflect a concern lest there should be duplication of damages as between loss of earning capacity and loss of the amenities of life. We find much of what was said by the majority in Fletcher's Case difficult to reconcile with what was said by the majority of their Lordships in West & Son Ltd. v. Shephard [17] , especially by Lord Morris [18] and by Lord Pearce [19] ; in the dissenting judgment of Lord Devlin the making of fair compensation is said to involve that the defendant has made good "all the expenses to which the plaintiff has been put and he has replaced all the income which she has lost" [20] .

1. [1968] 2 Q.B. 322. 2. [1972] 1 Q.B. 244. 3. [1964] A.C. 326. 4. [1964] A.C., at pp. 349-350. 5. [1964] A.C., at p. 364. 6. [1964] A.C., at p. 357.

Of course, when damages for the loss of amenities come to be considered regard must be had to such pleasures as the plaintiff is capable of enjoying and which are made possible by the total damages which she receives; but it is in this way, rather than by any reduction in the assessment for lost earning capacity, that we consider that the general task of assessment should proceed.

The present plaintiff still possesses powers of enjoyment through the use of her senses; her sight, her hearing and her taste are unaffected and in place of sport, entertainment, cosmetics and clothes she may find pleasure in recorded music, in a movie projector and the hire of films, in days spent on drives in a chauffeured car, perhaps in special foods. She can thus experience pleasure and ward off melancholia by such distractions as may be to her taste and within her means. Many of her former modes of enjoyment are closed to her but some new ones remain to be explored and from which she will be capable of deriving pleasure. It follows that, still disregarding "lost years", it will be appropriate in any assessment of the plaintiff's damages for lost earning capacity to reduce those damages only in respect of the cost of board and lodging actually provided for in the award of damages for future hospital expenses and in respect of those "saved" outgoings associated with the exercise of earning capacity, that is, fares and the like.

As to "lost years", the plaintiff is to be compensated in respect of lost earning capacity during those years by which her life expectancy has been shortened, at least to the extent that they are years when she would otherwise have been earning income (Skelton v. Collins, per Taylor J. [21] ). But, unlike the thirty years of her actual post-accident life expectancy, no outgoings whatever will be involved in respect of that period since it is assumed that the plaintiff will then be dead. What adjustments are, then, to be made on that account in assessing damages for loss of earning capacity in respect of those lost years? This is not a question giving rise to considerations of double compensation; the only element involving any possibility of double compensation, the component of board and lodging contained in the award of future hospital expenses, will have ceased to operate by the time that the "lost years" are reached. It is rather a question of confining an award of damages to no more than compensation, ensuring that the plaintiff is merely compensated for loss and is not positively enriched, at the defendant's expense, by the damages awarded.

It is well established in Australia that there should be taken into account in reduction of damages for the lost earning capacity of "lost years" at least the amount that the plaintiff would have expended on his own maintenance during those lost years (Skelton v. Collins, per Taylor J. [22] , applied in Jackson v. Jackson, per Sugerman P. [23] and per Jacobs J.A. [24] , by Williams J. in Gannon v. Gray [25] and by Sheppard J. in Jackson v. Stothard [26] ). It is noteworthy that such a solution to the problem of compensation for economic loss in respect of "lost years" finds support from recent text writers in England, who deplore the consequences of the decision in Oliver v. Ashman [27] with its exclusion of any compensation for the economic loss of "lost years"; they urge instead the adoption of what they would regard as the result attained in Australia as a consequence of Skelton v. Collins [28] : Kemp, Quantum of Damages, 4th ed., (1975), vol. 1, pp. 408-413, Ogus, Law of Damages (1973), pp. 185-188, and see Street, Principles of the Law of Damages (1962), p. 52. It is this result which also represents the method of reforming the present state of the law in England preferred by the Law Commission in its 1973 Report on Personal Injury Litigation - Assessment of Damages (Law. Com. No. 56, par. 87). In par. 58 of the Report the desired reform is described as "the adoption of the formula accepted in the Australian case of Skelton v. Collins i.e. compensation for loss of earnings in the so-called "lost years" should be based upon the amount of such earnings less what the plaintiff would have spent on his own maintenance".

1. (1966) 115 C.L.R., at pp. 121, 122. 2. [1970] 2 N.S.W.R. 454, at p. 460. 3. [1970] 2 N.S.W.R., at p. 464. 4. [1973] Qd R. 411. 5. [1973] 1 N.S.W.L.R. 292. 6. [1962] 2 Q.B. 210. 7. (1966) 115 C.L.R. 94.

But is this in fact what was decided in Skelton v. Collins ? In that case Taylor J. described the proper measure of compensation for a plaintiff's loss of earning capacity in the lost years as "a balance of what his future income and expenditure on maintenance would have been" [29] , having earlier said that there should be taken into account "the fact that if the plaintiff had survived for the full period it would have been necessary for him to maintain himself out of his earnings and, no doubt, his expenditure on his own maintenance would have increased as his earnings increased" [30] . Somewhat earlier again, however, his Honour had adverted to the possibility, also discussed in Oliver v. Ashman [31] , of portion of the damages awarded for lost earning capacity in lost years being capable of being recovered twice over, once by a personal representative on behalf of the estate of the injured party and a second in an action brought under Lord Campbell's Act. He observed that in the first of such actions the relevant damages would be assessed having regard to whatever gain the deceased might have had "from his future probable earnings after taking into account the expenditure which he would have incurred, if he had survived, in maintaining himself and his dependants, if any" [32] . This passage has been understood in Gannon v. Gray [33] and in Jackson v. Stothard [34] , and no doubt in numerous unreported cases, as requiring that not merely a plaintiff's own expenses of maintenance but also whatever he might have spent on the maintenance of his dependants should, even in the ordinary case of a claim for lost earning capacity of lost years made by a plaintiff during his lifetime, go in reduction of damages. In consequence it is only the loss of surplus income, whether in the form of cash savings or of acquired assets, which might have been derived during lost years that is to be compensated for - and see Luntz, Assessment of Damages (1974), pp. 146-150.

1. (1966) 115 C.L.R., at p. 122. 2. (1966) 115 C.L.R., at p. 121. 3. [1962] 2 Q.B. 210. 4. (1966) 115 C.L.R., at p. 114. 5. [1973] Qd R. 411. 6. [1973] 1 N.S.W.L.R. 292.

This result of course departs from the understanding of the effect of Skelton v. Collins [35] expressed in the English texts and in the Law Commission's Report; perhaps more importantly it appears to ill accord with any rational principle of compensation. This Sheppard J. recognized when, understanding Skelton v. Collins to require this result and recognizing the binding effect of the decision, he said in Jackson v. Stothard [36] :

It seems to me, however, to be an odd thing that damages up to the date of death are given without any deduction, whereas damages thereafter are given after the deduction, not only of moneys which would have been spent by the deceased in the maintenance of himself, but of moneys which would have been spent by him in the maintenance of dependants. I can understand, damages being compensatory, that they ought to be reduced by the amount necessary to maintain the deceased during the lost years because, ex hypothesi, he is no longer in need of the amount in question, and if he had lived the money would have been expended on him. But the reason why earnings which would in the normal course have been spent on the maintenance of dependants must be excluded is not clear to me. 1. (1966) 115 C.L.R. 94. 2. [1973] 1 N.S.W.L.R., at p. 298.

We share the difficulty felt by Sheppard J. and have concluded that, properly regarded, Skelton v. Collins [35] does not require that anything, other than the cost of a plaintiff's own maintenance, should go in reduction of damages for lost earning capacity for "lost years". Taylor J. spoke in terms not inconsistent with that view [7] . It is important to bear in mind that the circumstances of Skelton v. Collins were not such as to focus attention upon the point here in question; the important issues central to that decision were not at all concerned with it. Indeed of so little significance was it that in his review of earlier English cases Taylor J. was able to regardPhillips v. London and South Western Railway Co. [8] ; Roach v. Yates [9] ; Pope v. D. Murphy & Son [10] , and Oliver v. Ashman [11] (at first instance) as decisions which had adopted the same approach as that which his own reasoning pointed to; and so they did in the essential aspects which were of immediate concern to his Honour, yet in each no deduction at all appears to have been made from the calculated economic loss due to shortening of life expectancy to take account of any costs of maintenance, whether of the plaintiff or of his dependants. Indeed until Oliver v. Ashman [12] went on appeal and this whole discussion became, in consequence, irrelevant for the purposes of English law this remained the preferred English view - see Kemp, op. cit., 1st ed. (1954), p. 92.

1. (1966) 115 C.L.R. 94. 2. (1966) 115 C.L.R., at pp. 121, 122. 3. (1879) 5 Q.B.D. 78. 4. [1938] 1 K.B. 256. 5. [1961] 1 Q.B. 222. 6. [1961] 1 Q.B. 337. 7. [1962] 2 Q.B. 210.

There is an alternative explanation of what was said by Taylor J. in Skelton v. Collins [13] , that it is to be understood as confined to the particular circumstance with which his Honour was dealing at that point in his judgment, namely an action brought not by an injured plaintiff suffering loss of life expectancy but by a personal representative for the benefit of the estate of one who had suffered injury and loss of life expectancy and later died before proceedings were instituted. If so, it is enough to say that this is not such a case and that what may be a special rule applicable to such cases is inapplicable here. We leave to another day the whole question of such actions and of the possible risk to a defendant of double liability should an action for the benefit of the estate be followed by an action under Lord Campbell's Act, a matter which his Honour had occasion to discuss in Skelton v. Collins.

In these circumstances it would, we think, be wrong to treat Skelton v. Collins as any authority for the proposition that only surplus income, in effect savings, are to be taken into account in assessing economic loss in the "lost years". It is well enough to take into account in reduction of damages the likely expenditure on the plaintiff's own maintenance and this for the reason stated by Sheppard J. in Jackson v. Stothard [14] . As Jolowicz observed in a note in the Cambridge Law Journal (1960), at p. 163, "a dead man has no personal expenses", hence there should be a deduction of "the plaintiff's personal living expenses" - and see J. G. Fleming's article in California Law Review, vol. 50 (1962), p. 598, esp. at p. 605. However no further deduction is, we think, called for in order to ensure that no more than proper compensation is made to the plaintiff. The making of this one deduction will accord recognition to the curious feature of this head of damages; that the plaintiff receives compensation for lost earning capacity in respect of a period which he will not live to see and during which he will have no expenses to be defrayed out of the fruits of the exercise of that capacity. Because in the ordinary case a plaintiff must maintain himself in the future out of his damages, the cost of doing so is not to go in reduction of an award for lost earning capacity during his remaining years of life; the converse of that proposition may well be, in the special case of lost earning capacity in "lost years", that because those years can involve him in no cost of maintenance the cost thus avoided must go in reduction of damages. Like reasoning does not apply to the cost of maintaining others. It is for a quite different reason that, in the ordinary case, that cost does not go in reduction of damages, that reason being that the courts do not concern themselves with the manner in which the plaintiff expends his income or damages.

The outcome of this all too lengthy discussion of Skelton v. Collins [15] is, then, that if the learned trial judge, consistently with his judgment in Jackson v. Stothard [16] , regarded himself as bound, in assessing the damages to which the plaintiff is entitled in respect of the lost years, to make a deduction in respect of money that she might have spent on her dependants, he would in our opinion have taken somewhat too restricted a view. However this can have had little, if any, effect on the award. The fact that the first of those years lies thirty years in the future itself results in a drastic reduction in the present value of any economic loss which may thus be suffered, and it was so uncertain whether she would then have had any dependants that it is unlikely that this consideration significantly affected the learned judge in the making of his assessment.

1. (1966) 115 C.L.R. 94. 2. [1973] 1 N.S.W.L.R., at pp. 298-299.

There remains one future aspect of the assessment of damages for loss of earning capacity. Loss must depend upon the likelihood that there would have been a future exercise of that earning capacity, but what of a female plaintiff likely to marry and who may cease to exercise her earning capacity on, or at some time after, marriage? Despite recent changes in patterns of employment of married women this remains a not unusual situation, the woman in effect exchanging the exercise of her earning capacity for such financial security as her marriage may provide. The measure of the one of course bears no necessary relationship to the other and the whole situation must be full of critical uncertainties such as whether the plaintiff marries, the extent if any of her employment after marriage, the success of that marriage and the extent to which it in fact provides her with economic security. Perhaps the only relatively certain factor will be her pre-injury possession of earning capacity and this in itself may be sufficient reason, absent any clear evidence pointing in a contrary direction, for the adoption of the expedient course of simply disregarding the prospect of marriage as a relevant factor in the assessment of such a plaintiff's future economic loss; this course at least recognizes the plaintiff's retention of capacity, which would have been available to her for exercise, in case of need, despite her marriage.

The last two heads of damages which call for particular mention are those conventionally described as pain, suffering and loss of the enjoyment and amenities of life and damages for shortening of life expectancy. As to the latter it bears no relationship to lost earning capacity during "lost years" but is rather the loss of a measure of prospective happiness (Skelton v. Collins, per Taylor J. [17] ); it is not compensation for "the mental distress due to the realization of the loss" (per Kitto J. [18] ). That forms instead a part of the general damages for pain and suffering [19] : compare Windeyer J. [20] . In the present case a figure "of the order of" $6,000 was allowed for this item in reliance upon the views expressed by Windeyer J. in Skelton v. Collins [21] . If it be correct that compensation under this head is not to take into account the anguish of mind which any appreciation of the loss may cause, that being compensated for under another head, then Windeyer J.'s suggested maximum figure of $6,000, which reflected this very factor, may be thought to have been excessive at the time and to depart from the general standard of the "conventional sum" which the courts have quite arbitrarily fixed upon ever since Benham v. Gambling [22] . The amount awarded may properly take into account a fall in the value of money (Yorkshire Electricity Board v. Naylor [23] ) but is to be no more than a quite conventional sum, very moderate in amount. In our view, despite the fall in the value of money, $6,000 departs from previous notions of what is appropriate under this curious and unsatisfactory head of damages. We would have thought that the sum of $2,000 is about the amount now appropriate as the conventional award under this head.

1. (1966) 115 C.L.R., at p. 121. 2. (1966) 115 C.L.R., at p. 98. 3. (1966) 115 C.L.R., at p. 100. 4. (1966) 115 C.L.R., at pp. 131-132. 5. (1966) 115 C.L.R., at p. 132. 6. [1941] A.C. 157. 7. [1968] A.C. 529.

It remains only to say something about damages for loss of the enjoyment and amenities of life. It is in this field that there exists the need to recall what has often been said about fairness, moderation and the undesirability of striving to provide an injured plaintiff with "perfect" compensation. The warning against attempting perfectly to compensate means, we think, in the case of pecuniary loss, no more than the need to make allowance for contingencies, for the vicissitudes of life, compensating for probable rather than for merely speculative detriments. But when a non-pecuniary detriment is in question the injunction against "perfect" compensation means rather more. It cannot refer to the exclusion of all question of punishment of the wrongdoer; the word "compensation" standing on its own would be sufficient to do this; rather is it designed to remind that the maiming of a plaintiff and its consequences cannot wholly be made good by an award of damages and that the recognition of this fact is to be no occasion for any instinctive response that no amount is too large to atone for the plaintiff's suffering. Such a response will be unfair to the defendant and may be of little advantage to the plaintiff; many consequences of injury are not capable of remedy by the receipt of damages, particularly those of the most personal character - the loss of the opportunity of a fulfilling marriage, of parenthood, of sexual satisfaction, of the realization of ambitions. It is very much at these detriments that the warning against any attempt at "perfect" compensation must be aimed. The authorities also require, as does good sense, that to the extent that damages awarded under other heads produce freedom from economic uncertainty and the availability of funds for pleasurable activities, the less will be the loss to be compensated under this head. This will be of particular relevance when a considerable sum is assessed for lost earning capacity.

Having made these general observations concerning the award of damages in a case such as the present it remains only to look more specifically at the damages in fact awarded. The total award is said to be the largest yet made for personal injuries in Australia, although it is modest indeed compared with that in the very recent case of a young Canadian quadriplegic, Thornton v. Board of School Trustees [24] . The award includes two components with a stated money value or range: the cost of nursing and medical attention, a "figure of the order of $150,000 to $175,000", and the amount for loss of expectation of life, $6,000. Each we regard on the approach we would adopt as excessive for reasons already stated; the former we would assess as of the order of $128,000, made up, in round figures, of $103,000 for hospital expenses, $15,500 for medical and physiotherapy services and $10,000 for special beds and the like, the latter at not more than $2,000. To these two must be added the sum of $20,000 which we have assessed in respect of the cost of constant nursing attention and transportation during periodic visits to the world outside the hospital ward.

The learned trial judge specified no precise amounts for lost earning capacity or for pain, suffering and loss of the amenities of life. The former will, in the case of the thirty years of life expectancy, necessarily be considerable, representing as it does a loss of earning capacity the exercise of which would have produced net earnings of $70 per week over those years. There must, however, be brought to account the minor expenses, such as fares and special clothing, which would have been incurred in earning that income, also some allowance for sickness, early death, a measure of unemployment and the like. In all we would deduct $2 per week, a figure which is necessarily arbitrary, in respect of these matters. In addition some allowance, again an arbitrary one, must also be made because of the inclusion in the hospital costs of the element of board and lodging. To take about twelve per cent of these hospital costs, say $16 per week, may not be inappropriate; that this percentage represents much less than actual costs of board and lodging is to be accounted for by the surprisingly low total charges, of only $20 per day, made for the all-inclusive hospital services, due perhaps to some element of government subsidy. The present value, on six per cent tables, of, say $52 per week, being $70 - ($16 + $2), is about $38,500 and an award somewhere in the range of $34,000 to $43,000 could not be regarded as erroneous. For the twenty-four lost years quite different considerations apply both because of the need to take into account maintenance "saved" and because for part at least of that period the plaintiff, if regarded as having a working life, would have ceased to work or, if regarded as enjoying the security provided by her likely husband, would be the wife or widow of a retired breadwinner. To award more than a quite small sum for the present value of this long deferred and greatly to be discounted loss of earning capacity would be wrong; to take these "lost years" into account it is enough to increase the above range to one of from $37,000 to $45,000. Reviewing all these sums they come to a minimum total of $187,000 and to a maximum total of $195,000.

There remains the question of damages for pain and suffering and the loss of the enjoyment and amenities of life. As to the last item in this category we need say very little, what has already been said of the plaintiff's present state (not least her constant hospitalization) and a comparison between it and her former prospects of a happy and rewarding life is enough to establish entitlement to substantial damages under this head. Although she is a quadriplegic, the very numerous operations and other treatments which have been necessary, and in particular those involving her larynx, an area in which she retains full feeling, have caused her long periods of great pain and discomfort. She has suffered and will continue to suffer pain for the rest of her life in her left shoulder, another of her few remaining sensory areas. In addition there is her mental suffering, including the anguish which knowledge that her life expectancy has been substantially reduced must entail. Proper allowance must of course be made for such of the remaining pleasures life as money can now afford her. There is no doubt that, as we have already pointed out, her lot can be made much more enjoyable by the expenditure of money and will be materially improved by her financial ability to enjoy periodic outings from hospital. There nevertheless remains a great area for the award of damages under this head.

The learned trial judge awarded a total of $275,000 for general damages, or $80,000 more than what we would regard as the maximum for heads of damage other than pain, suffering and loss of the amenities of life. Of course our analysis of the total award of damages is not intended as an accurate estimate of the amount attributed by the learned trial judge to this particular head of damages, if indeed his Honour formed any view at all of an appropriate sum under this distinct head. We are not, therefore, to be taken as attributing to his Honour the view that a sum of $80,000 represented appropriate compensation for damages under this head, a head of damages which is peculiarly difficult to assess and the assessment of which must always be especially responsive to factors of which a trial judge will be more aware than can be any appellate court. Before we express our conclusion on the question whether the amount of general damages awarded was excessive, there are two matters to which brief reference should be made. The first concerns what is commonly described as the vicissitudes of life. Once a probable life expectancy is determined these enter not at all into the assessment of future hospital expenses or the conventional amount for shortening of life expectancy but are significant in the case of loss of earning capacity. However their significance is less in the case of an adult such as the present plaintiff, trained for and experienced in work of a character which is largely immune from industrial disturbances and which is not as exposed to the effects of economic depression as are many other occupations. Similar considerations applied to the plaintiff's intended spouse. Other hazards of life, including illness and disablement, remain but all have, we think, been adequately accounted for. Whatever effect should be given to vicissitudes of life in the case of the non-pecuniary head of damages, and there is nothing to suggest that the plaintiff's prospects for a happy married life were in this case other than good, they cannot affect what we have said concerning the amount which might have been assessed under this head of damages.

The second question is the degree of usefulness of a final testing of the appropriateness of the total amount of the award of general damages by seeing what annual income that amount, whether or not after deduction of damages for non-pecuniary loss, would produce year by year if invested at interest. In the present case it will be very large indeed, especially if thought of as invested in, say, first mortgages at current rates of interest; even if regarded somewhat more conservatively it will amount to more than $20,000 per annum before tax. Of this, on the view we take of the future of the plaintiff, a lifetime spent in hospital, less than half will be absorbed in nursing and hospital expenses, including food and shelter. In addition the capital sum would, on this basis, remain to her estate at her death. The latter fact we regard as of relatively little account in the present case because, when any period as long as thirty years in the future is in question, the difference in amount is small as between a fund to which only the income is resorted and one producing a like annual amount by recourse both to income and to capital, the total fund being thus used up by the end of that period.

Such a means of testing an award is, in present circumstances and when applied to a case like the present, likely to prove misleading, and this for three reasons. It presupposes investment at what, some years ago, would have seemed very high rates of interest. Those high rates are in part a reflection of anticipated future inflation; yet the essence of the process of assessment the result of which is to be tested by this means is that the effect of future inflation is to be ignored. So the high yield from the award should, to be consistent, be regarded as received year by year over a long period in which rapidly progressing inflation has its effect upon costs; so regarded the apparently very large future disposable income of the plaintiff may be seen in proper perspective. Further, if amounts awarded for pain, suffering and loss of amenities of life be included in the interest-bearing capital sum, greatly inflating it, the process of looking at the resultant income involves to a degree the subjection to purely economic terms of a head of detriment which cannot be expressed in those terms. Nor is it a complete answer to that proposition to recall that those are the only terms in which any award of damages can speak. Finally since loss of earning capacity has been estimated on the basis of probable net loss it is most relevant that the plaintiff's quite substantial annual income will attract tax at high rates, even if large deductions are allowed for hospital and medical expenses. This tax effect need not be elaborated upon for its considerable impact to be appreciated.

We have carried out the detailed examination of the factors constituting an appropriate award of damages in order to equip ourselves to determine whether the judge erred in his conclusion on the total amount of damages appropriate to be awarded. We bear in mind that this is the ultimate question to be decided and that the trial judge had a wide discretion. We have therefore adopted in the process the maximum figures which on the evidence in this case could be accepted under each head of damages. It does not follow that these amounts are those which we would have adopted in the first instance. When the approach which we have thought appropriate in the circumstances of this case is adopted in order to test the award and when consequently maximum figures under each head are taken there is of course no room for a further allowance whereby the verdict could be sustained as one within permissible limits. It would be otherwise if less than maximum figures were taken under each head, that is to say, if a court on appeal were to form its own estimate of the appropriate, rather than the maximum, amount of damages under each head.

The result of this approach which leaves a sum of $80,000 in respect of pain, suffering and loss of the amenities of life demonstrates that the total amount of the verdict is too high. Pain and suffering and loss of the amenities of life is a head of damages which is peculiarly difficult to assess but when full compensation has been determined in respect of all other heads of damages, it appears to us that an additional sum of $80,000 exceeds what could properly be awarded under this last head.

We conclude, therefore, that the amount awarded cannot stand. It is necessary therefore for us to determine what was a proper amount. We make this determination wholly on the basis of the findings of fact made by the trial judge. It must, however, be made clear that, while the process which we have followed of analysing the separate maximum amounts possible under the various heads of damage will be of assistance in a re-assessment, they cannot of themselves lead to a conclusion on the amount proper to be substituted. In all the circumstances we are of the opinion that a proper amount is $270,547.50.

We would accordingly allow this appeal and substitute for the present award an amount of $270,547.50.

Although I conclude that this appeal should be dismissed I fully concur in the analysis which has been made by Gibbs J. and Stephen J. of the approach which a court should take to the assessment of damages in such a case as the present one. I entirely agree with the balance which is struck in their approach between the process of computation and the recognition that mere computation does not of itself, useful and indeed essential though it is, provide a final answer to the proper amount of damages which should be awarded. I agree also with the principles which are enunciated in respect of loss of earning capacity both during the period of life expectancy and the so-called "lost years".

I differ only on two items in the assessment but the difference leads to a different result on the appeal. First, I would not alter the figure "of the order of" $6,000 for the shortening of life expectancy. It is a small difference. I agree that the sum is necessarily a conventional one, when the element of suffering from the consciousness of the shortening of life expectancy is excluded. Nevertheless, I think that a figure of $6,000 is an appropriate one at the present time. It is a head of damage which the law recognizes. In the case of injury which does not cause immediate or close to immediate death, it is an aspect of the damages which a plaintiff is entitled to recover for the injury itself, considered apart from the suffering and loss of amenities which are its consequence.

My second point of difference is more substantial. I would not alter the trial judge's estimate of "a figure of the order of $150,000 to $175,000" for hospital and nursing care and services, including costs incurred in spending periods at home. The trial judge upon making this finding added, "I think it likely that a greater sum is needed, but having done my best to allow for the risks and contingencies which are involved in an appreciation of the total problem, that is the range which I consider appropriate". I have come to the conclusion that nothing less than the top of this range was appropriate. The amount payable by the respondent for hospital care was, at the time of the trial, $20 per day. It did not require evidence in order to establish that a hospitalization cost of $20 per day could only be maintained in the future if the costs were subsidized or further subsidized. A judge, like a jury, can bring to his task his knowledge of the community and, although it would be wrong for judge or jury to attempt a precise estimate of hospital costs without evidence to support the estimate, the fact is that no member of the Australian community could at the end of 1973 or at the time of the appeal by way of rehearing in mid-1975 be unaware that hospitalization costs without subsidy substantially exceeded $20 per day and were rising rapidly. It could not be assumed that government subsidy would be, or would continue indefinitely to be, paid in relief of a defendant found liable in negligence for the injuries which required hospitalization. Therefore, the trial judge, on finding that a greater sum for hospital and medical expenses was likely to be needed than one in the range which he expressed, was at least entitled, I should say bound, to take the figure at the top of this projected range.

When this allowance is made, the figure which remains on the computation for the injury itself and for the pain and suffering and loss of the amenities of life becomes one which cannot in my opinion be regarded as disproportionate. I would therefore dismiss the appeal.

On 6th December 1971 the respondent, June Evans, was severely injured when she was thrown out of a car which ran off a straight road in Western New South Wales and hit a tree. Sheppard J. awarded Miss Evans $300,547.50 and the Court of Appeal (Reynolds and Glass JJ.A., Mahoney J.A. dissenting) rejected an appeal against the alleged excessiveness of the award.

Miss Evans was born on 18th November 1951. The trial judge found (on undisputed evidence) that before the motor accident she was a bright, intelligent young woman who enjoyed life thoroughly. She was a talented singer and was often a soloist at religious gatherings. She attended primary and secondary schools in Perth, won a scholarship to a business college and after completing this course, worked as a secretary with a television station in Perth for two years. She then worked as a breadcarter's assistant for twelve months to earn enough money to take a full time course at the Commonwealth Bible College in Brisbane. In 1971 she studied at the College, became dux of her year, and intended to spend 1972 at the College. She was unofficially engaged to a young man, a public servant with good prospects. Whether she would have continued to work after marriage was not settled, but she would have had little difficulty in obtaining employment. By the time of the trial she would have been earning at least $70 per week net.

Miss Evans was taken by ambulance from the accident to Narrabri District Hospital, deeply unconscious, barely breathing, without pulse and near death. Her legs were completely paralysed and she had fractures of two cervical vertebrae, a number of ribs, the right shoulder blade, the left upper arm and left forearm. One of the ligaments supporting her liver had been torn from it causing internal bleeding which threatened her life. She needed continuous artifical respiration and a tube in her trachea. The next day, she was taken by air ambulance and, still deeply unconscious, admitted to Royal North Shore Hospital, Sydney. During her admission, she had a grand mal epileptic fit. Her right lung and part of her left had collapsed. She remained unconscious for weeks with a tube in her trachea, intravenous injection of fluids and no response to stimuli. She developed a very large bed sore, eight by four inches (perhaps initiated by the injury), a posterior ulcerated area completely raw almost down to the bone for which at first no treatment was possible.

Towards the end of December, she regained consciousness. She had persistent fever and could only manage ten minutes every hour without artifical respiration; the bed sore did not heal. She still had a nasal tube to remove mucous from her breathing passages and lungs, the tube in her trachea to breathe, and intravenous feeding. On 5th January 1972 she was flown to her home city and admitted to the Spinal Unit at Royal Perth Rehabilitation Hospital where she still is. She is expected to live at least twenty years and may live thirty or forty. Only a detailed consideration of her condition can show the seriousness of it.

Quadriplegia. This is a permanent condition from a broken spine causing the complete loss of nerves controlling movement and sensation and paralysis below the lower part of the neck, except for some feeling and movement in her shoulders and right arm. She has movement at the right elbow and can bring her hand up to her mouth with a splint. She has a little movement backward and forwards of the right wrist and flicker in one or two of the fingers. On the left side there is even less; she has some elbow function, but practically none in the wrist or hand. She cannot brush her teeth or her hair, or do up buttons. Her trunk and legs are completely paralysed.

Left Shoulder. Although the fracture of the left upper arm and shoulder blade were united, she has suffered persistent pain and stiffness. To relieve this, part of the shoulder blade was removed in June 1973. The treatment was only partially successful and she requires pain relieving drugs many times during an average day.

Bowels and Bladder. She has no control. Her bowels are emptied by use of suppositories introduced into the rectum. She must have a catheter permanently inserted which drains continuously into a urine bag and which causes an unavoidable continuous low grade infection of the bladder. Her paralysis is of such a high degree that the intermittent catheterization or bladder draining carried out on less disabled persons is not possible.

Kidneys. To avoid the constant problem of ascending infection and inflamation of the kidneys with secondary and irreversible destruction of tissue, she must have more fluid intake than ordinary persons and a constant regime of intravenous pyelograms. The catheter is also necessary to prevent distention of the bladder damaging the kidneys.

Pressure sores. She must be nursed on a regular programme to prevent pressure sores in the areas of the sacrum, the protuberances over the upper thigh bone and the heels. These sores are very hard to shift and may require major surgery. She must be turned regularly day and night and the areas rubbed or massaged with spirits and powder. She suffers from inflammation and skin peeling in her groin and the cleft of her buttocks which must be treated with mercurichrome. Dr. Griffiths, the eminent and very experienced specialist who treated her, regarded this as a major problem and said her large bedsore was nearly the worst he had ever encountered. It was ultimately cured by a most substantial graft from the flesh of the buttocks.

Spasms. She has an uncoordinated involuntary contraction of the muscles of the abdomen and lower limbs. The part of the spinal cord which controls them is disconnected from her brain. The leg muscles go into twitching contractions which either extend from the knee upwards, bringing the legs very tightly together, or force the ankles into a downward position. The abdominal and spinal muscles may also spasm. She is treated with anti-convulsants and valium tablets four times daily to prevent the spasms from becoming too severe.

Brain Damage and Epilepsy. She sustained injury to the brain or brain stem which has resulted in a series of epileptic fits which are quite separate from the spasms. In May 1972, she had a full grand mal which lasted for a few minutes followed by a further four attacks in the next thirty minutes.

Eating and Drinking. She initially had to be fed by using a tube through the nose, and later had difficulty in swallowing and making food go down the correct passage apparently because the brain damage had caused a deviation in her tongue.

Deterioration of Intellectual Capacity. Her intellectual capacity has deteriorated and, although it may recover, it had not at the time of the trial. Except for her initial weeks of unconsciousness, she has been able to co-operate and has answered questions to the best of her ability. She is perfectly aware of where she is and what she is doing, and understands what has happened to her. However, her concentration is not good, her memory fails and she tends to forget requests she has made a few minutes before.

Depression. Understandably she is depressed. Dr. Griffiths has often seen tears, which she can not mop away, trickling down her face.

Horner Syndrome. On one side of her face, sweating has ceased, the eyelid droops and the pupil of the eye is dilated. This may be due to brain damage, damage to the sympathetic nervous system in the neck, or psychosomatic depression. It is not clear whether this is a continuing condition.

Temperature Regulating Mechanism. She must live in air conditioning as she has lost control of her heat and sweating mechanisms. If air temperature rises, either her body temperature rises or she will come out in a bath of sweat all over, depending upon the reaction of her bladder or bowels (which is beyond her control).

Breathing. She has had a complete collapse of one lung and since then partial lung collapses. She had a tube in her trachea for a year. She cannot cough and to avoid further collapses, requires frequent daily physiotherapy and suction through her mouth to control bronchial secretions.

Speech. Her damaged right vocal chord was removed. Cartilage on the right side of the larynx was fractured, and an inflamed growth of cartilage (on and around the vocal chord) was removed in an open operation through the neck. A skin graft was taken from the right arm to line the raw part of the vocal chords where the growth had been and pressure to enable the graft to take was achieved by putting it into a pack in the larynx and keeping it there for fourteen days by two large needles through the throat. This was a most unusual, uncomfortable and painful procedure. She was fed by nasal tube by-passing the throat.

Although her left vocal chord moves well and can practically meet continuously with the scar tissue on the right, vocalization has been very difficult. As her breathing and articulation are not co-ordinated, air escapes through the mouth and nose before a sound is produced, leaving only enough for one syllable (rarely two) per breath. Her inability to coordinate breathing is related to her inability to get rid of mucous which affects her exhalation. As she tries to speak, her tongue swivels to the left and protrudes. The best result, which she manages infrequently, is a strained slurred sound which she cannot maintain for long. She tires quickly after a few words. Despite her co-operation, the speech therapist decided against further speech therapy because of her physical defects, tiredness and accompanying periodic bouts of depression.

She is, however, able to communicate by pointing to a card containing the letters of the alphabet and by using an electric typewriter with the aid of a splint.

Assessment. The trial judge adopted a convenient and proper approach to such an assessment by examining the conventional elements of damage individually, taking care to avoid any overlap of allocations.

Physical injury, pain and suffering, loss of enjoyment of life. Sheppard J. chose not to fix a separate amount in respect of this element but analysis of this award shows that it was less than $100,000. Miss Evans had the experience of the accident and operations and will not be free of the daily ordeal of suffering and discomfort until she dies. Her ability to breathe, eat, speak, move, control her excretions, have social and sexual intercourse, bear or look after children is either greatly impaired or destroyed. She also went through the ordeal of deciding to release the young man from his promise to marry her, although after the accident, he visited her constantly both in Sydney and Perth and proposed to her.

Allocation of less than $100,000 for the shocking injuries, pain and suffering and loss of enjoyment that Miss Evans has suffered and will suffer would not reflect community standards. Higher sums would be reasonable. I agree with Evatt C.J.'s statements that "the estimate in respect of pain and suffering is seldom adequate" (Cucinotta v. Nominal Defendant [25] ) and that "the tendency is for this head of compensation to be understated" (Polley v. O'Donnell [26] ).

1. [1961] S.R. (N.S.W.) 23, at p. 30. 2. [1961] S.R. (N.S.W.) 18, at p. 21.

2. Shortened Life Expectancy. I see no reason for dealing with this separately from the element of physical injury, pain and suffering and loss of enjoyment of life (apart from its effect on earning capacity which is properly dealt with under economic loss). Pain and suffering includes that arising from knowledge that life is shortened. Loss of enjoyment of life includes not only the impaired (or loss) enjoyment during the shortened years, but also that of the lost years. Physical injury covers breakdown, not only of some functions but the premature cessation of all functions (i.e. death).

1. [1961] S.R. (N.S.W.) 23, at p. 30. 2. [1961] S.R. (N.S.W.) 18, at p. 21.

1. Special Damages. These were agreed at $25,547.50.

Hospital and Medical Care. These are not covered by the National Health Scheme or insurance under it. At the time of the trial, the charges for Miss Evans' hospital and nursing care were $20 per day and the trial judge treated them as if they would be frozen at this rate during Miss Evans' life. He then discounted the future payments (at six per cent) to arrive at a figure of $86,000 (if she lived twenty years) or $103,000 (if she lived thirty years). He also treated the cost of the additional medical services and physiotherapy for which she will be liable in the same way and arrived at an amount of about $15,000. He thus allocated $100,000-$118,000 for institutional medical and hospital care. He considered this was the appropriate range having done his best to allow for risks and contingencies, although thought it was likely that a greater sum would be needed.

The assumption that the daily cost of hospital care for Miss Evans would remain at $20 throughout her life is unrealistic. It was obvious at the time of the trial that the cost of hospital and nursing care (as a labour-intensive service) would increase substantially and probably at a higher rate than the general level of costs. The trial judge referred to this:

How long fees at the Royal Perth Hospital will remain at their present level or salaries payable to nurses in Western Australia will remain at the figures given in evidence I do not know but I should not think it would be for very long. However, I am not permitted to take that matter into account, and I have not, but the fact that I am prevented from doing so in a case such as this leaves me with a sense of uneasiness. It is common knowledge that minimum charges (even in a government subsidized hospital such as the one in which Miss Evans is) have already risen from $20 a day to $40 a day ($60 a day for a private room). The costs of the extra medical services and physiotherapy have also risen greatly.

The question whether Miss Evans should spend some time at home arose at the trial. The appellant agreed and the trial judge's assessment was made on that basis. The appellant should not be allowed to renege on the agreement and this Court should not consider it unreasonable for the appellant to pay for part-time care at home. The trial judge estimated that the costs of treatment (including special nursing equipment and some alteration to her mother's home) would total $150,000-$175,000. The hospital charges (which are subsidized) of course represent only a fraction of the real cost, so the social cost of keeping her in hospital may well exceed the costs of keeping her at home. Leaving aside any extra costs of her spending some time at home, the allocation for medical and hospital costs is quite inadequate and it is obvious (and was at the trial) that the amount allocated is much too small to pay the charges if she lives the expected period.

3. Loss of Earning Capacity. Before the accident, Miss Evans' mental and physical capacity was unimpaired. The trial judge accepted that the plaintiff, if uninjured, would have been able to earn $70 net per week as a secretary at the time of the trial, and then felt bound to calculate her loss of earning capacity on the assumption that her earnings would have continued at $70 per week throughout her working life. This assumption is contrary to ordinary experience. Apart from the effects of inflation, the tendency has been for wages (measured at constant values) to increase, mainly because of general increases in productivity. The statement issued by the Australian Bureau of Statistics show that average weekly earnings per male unit (this being a composite of male and female earnings) were $119.90 gross at the time of the trial (May 1973), and by 1976 they had increased to $180.30 gross in the June quarter.

Any estimate of loss of earning capacity based on probable earnings should take into account:

(a) Increase in earnings because of normal age progression and promotion.

(b) General increases in earnings due to national increases in productivity. These average about three per cent per year and are distributed through the work force by our system of wage fixing. The wage earner can expect (apart from inflation) an annual increase of about three per cent (Report of the Working Party on the Measurement of Labour Productivity, Department of Employment and Industrial Relations, November 1975).

(c) Inflation (see Lord Reid's observation in Taylor v. O'Connor [27] ; Cavanagh v. Ulster Weaving Co. Ltd. [28] ; and my reasons in Jacobs v. Varley [29] ).

J. H. Prevett's view in "Actuarial Assessment of Damages: The Thalidomide Case - I" (Modern Law Review, vol. 35 (1972), p. 141) is that "a direct allowance for future increases in earnings attributable to general economic forces, including both increased productivity and wages inflation, should be made on a conservative basis" (p. 153). He suggested (for England) a compound rate of increase of four per cent to six per cent per annum. Even this conservative approach would roughly offset the usual discount rates.

(d) The necessity when calculating present values to allow for taxation on the notional interest component of any sum equivalent to lost earnings. If the loss is to be assessed on the pre-accident net earnings position (as adjusted to trial), then the compensation should be assessed on post-trial net return to the plaintiff. Because of the respondent's income from other components of the award, the rate of taxation will be much higher than that on her probable earnings if uninjured. The calculation must of course take into account using up the capital over the period. Although the trial judge mentioned taxation on earnings on the investment of the award (and referred to reduction by concessional deductions), he seems to have discarded it except for treating it as a reason to adopt a six per cent discount rate rather than a higher one.

1. [1971] A.C. 115, at p. 130. 2. [1960] A.C. 145. 3. (1976) 50 A.L.J.R. 519, at p. 527.

Effect of former prospects of marriage on Loss of Earning Capacity. The expression "loss of earning capacity" does not precisely describe this element of loss in its modern application. What is measured is the impairment or destruction of the capacity to engage in work that is economically valuable, whether it would be paid for in money or not. It is a loss of working capacity sometimes referred to as loss of economic capacity. There is a discernible factor of economic loss in loss of ability to do non-earning work of economic value. The allocation for loss of earning capacity should not be reduced because of Miss Evans' former prospects of marriage. A woman who loses her capacity to make the usual contributions of a wife and mother in a household suffers great economic deprivation. Actions for loss of services correctly treat this as economic injury, but as a loss to the husband on the archaic view of the husband as master or owner of his wife. The economic loss is one to the wife or mother. It is her capacity to work, either in the household or outside, which is affected. In any event, the notion underlying earlier cases that women retired automatically from the work force on marriage is no longer correct. The most important social change recently is that women now form a large part, almost half, of the workforce.

Lost Years. In the context of this case, the question of loss of earning capacity because of premature death is a minor aspect. The approach in Oliver v. Ashman [30] is not the law in New South Wales (see Skelton v. Collins [31] ). If a reasonable application of the principle of restitution is to deduct from assessment of lost earning capacity what would have been maintenance of the respondent during the lost years, it should be the bare amount necessary to enable her to use the earning capacity. Her spending for enjoyment or maintenance of others is irrelevant. Obviously, one has to be alive to use earning or other economic capacity, but the expenses of being alive are properly regarded as private expenses, not to be set off as a deductible expense against income.

Board and lodging in hospital should not be set off against loss of economic capacity. If set off at all, it should be against hospital expenses.

Conclusion. The award by the trial judge reflects a substantial under-assessment of the major economic elements of Miss Evans' damages (loss of earning capacity, and medical and hospital expenses) as well as non-economic elements (physical injury, pain and suffering and loss of enjoyment of life). If she continues to be liable for the rapidly increasing costs of her hospital and medical care, it is highly probable that she will suffer severe hardship. The allocation for hospital and medical expenses will be exhausted long before the expected end of her life and she will have to resort to damages allocated to other elements of her loss to pay her hospital and medical bills. The reduced award to be ordered by this Court will, even more than the original award, destine Miss Evans to be a charity case, primarily because of persistence with judicial approaches which have not been adapted to the circumstances of present and prospective inflation.

Sheppard J. referred to the increasing social costs of deaths and injuries in road accidents. The judicial practice of depressing damages, especially in catastrophic personal injury cases (see Arthur Robinson (Grafton) Pty. Ltd. v. Carter [32] ; Chulcough v. Holley [33] ) conceals the social costs of negligent driving, unsafe vehicles and unsafe roads and transfers much of the burden to injured persons. The award is far from excessive.

1. (1968) 122 C.L.R. 649. 2. (1968) 41 A.L.J.R. 336.