Sharman v Evans

Sharman v Evans - [1977] HCA 8 - HCA 1977 case summary — Zoe

[10]

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.

[32]

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.

[43]

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.

[72]

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.

[74]

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.

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Judgment (129 paragraphs)

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