Waller v Suncorp Metway Insurance Limited

SUPREME COURT OF QUEENSLAND

CITATION: Waller v Suncorp Metway Insurance Limited [2010] QCA 17

PARTIES: LUKE STEVEN WALLER a person under a legal incapacity, by his litigation guardian VICKI CATHERINE WALLER (plaintiff/appellant) v ADRIAN GLEN MCGRATH (first defendant/not a party to the appeal) SUNCORP METWAY INSURANCE LIMITED ABN 83 075 695 966 (second defendant/respondent)

FILE NO/S: Appeal No 7513 of 2009 / SC No 5562 of 2007

DIVISION: Court of Appeal

PROCEEDING: General Civil Appeal

ORIGINATING COURT: Supreme Court at Brisbane

DELIVERED ON: 16 February 2010

DELIVERED AT: Brisbane

HEARING DATE: 14 October 2009

JUDGES: Chief Justice and Chesterman JA and A Lyons J / Separate reasons for judgment of each member of the Court, Chief Justice and Chesterman JA concurring as to the orders made, A Lyons J dissenting in part

ORDERS: Appeal allowed;Vary the judgment by increasing the amount of the judgment in favour of the appellant by $110,000 from $5,785,612 to $5,895,612;Respondent to pay half the appellant’s costs of the appeal

CATCHWORDS: DAMAGES – MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR TORT – MEASURE OF DAMAGES – PERSONAL INJURIES – the appellant suffered severe injuries in a car accident – the primary judge awarded judgment for the plaintiff in the sum of $5,785,612 – whether the primary judge erred in the assessment of damages for past care and assistance – whether the primary judge erred in the amount allowed for future care – whether the primary judge erred in rejecting a claim to cover the cost of the appellant taking holidays – whether the primary judge erred in the allowance made for case management – whether the primary judge erred in rejecting a claim for the cost of modifying a motor vehicle – whether the primary judge erred in calculating the amount allowed for administration and management fees by reference to “straight line amortisation” / Motor Accident Insurance Act 1994 (Qld), s 55B(b), s 55D(4)(b) / Goode v Thompson [2002] 2 Qd R 572; [2002] QCA 138, distinguished / Van Gervan v Fenton (1992) 175 CLR 327; [1992] HCA 54, applied

COUNSEL: M H Grant-Taylor SC, with P B de Plater, for the appellant / S C Williams QC, with S J Williams, for the respondent

SOLICITORS: Neilson Stanton & Parkinson for the appellant / Jensen McConaghy Solicitors for the respondent

CHIEF JUSTICE: I have had the advantage of reading the reasons for judgment of Chesterman JA. I agree with the orders proposed by his Honour, and with his reasons.

CHESTERMAN JA: On 19 June 2009 Martin J gave judgment for the appellant against the respondent in the sum of $5,785,612. The appellant complains that the award is inadequate compensation for his injuries.

The appellant who is now 21 years of age was a 12 year old boy when he suffered appalling injuries in a motor car accident. He has very severe brain damage and is left unemployable and in need of constant care. He has some insight into his plight but can barely communicate and is ambulatory only with assistance. He will not improve.

The appellant challenges discrete components of the award of damages. The first challenge is to the assessment of damages for care and assistance provided to the plaintiff between accident and trial. The learned trial judge approached the assessment in this way:

“[61]The claim for the plaintiff is based on his asserted need for round-the-clock care. That need is not in dispute – what is in dispute is its extent and content.

[62]The principles to be applied when assessing damages under this head are well known:

(a) The defendant must pay for the services reasonably required to satisfy the need created by the plaintiff’s disability – Griffiths v Kerkemeyer (1977) 139 CLR 161;

(b) Whether or not the plaintiff has paid or will have to pay for those services is irrelevant – Nguyen v Nguyen (1990) 169 CLR 245;

(c)Whether the care is provided on a gratuitous basis or a commercial basis, it is to be assessed at its market cost – Van Gervan v Fenton (1992) 175 CLR 327.

…

[70] The problem with the approach taken by the plaintiff is that both methods used to justify the claim are flawed. First, Ms Noble’s report was, as I have earlier observed, not one upon which a court could place total reliance. Secondly, the check proposed to be constituted by the other method only compounds the error because it assumes that there was a need for gratuitous care for all hours other than those provided commercially during any 24 hour period. This was not consistent with the evidence given by the plaintiff’s mother, nor with the events which occurred in the life of the plaintiff’s family which included the plaintiff’s mother attending upon the needs of the balance of the family and having another child.

[71]The approach taken by the defendants is one which better reflects the recognition of the need which the plaintiff had for care and the manner in which it was provided gratuitously. I do not accept, though, that it would be appropriate to only allow eight hours per day from the date of discharge to June 2002 when the plaintiff went to Canberra. It was clear from the evidence that the care needed to be provided by the plaintiff’s mother was very substantial in the early part of that period and that, allowing for a reduction in the amount of care needed over that period of time, an allowance of 12 hours a day on average would be a better reflection of the need. Thus, for that period the amount of care should be recorded at 2,352 hours.

[72]A similar broad brush approach should be taken to the period representing the time since the insurer commenced funding care in 2006. The proposal of only two hours a day for six days a week does not adequately allow for those needs which a person in the plaintiff’s position has and which were referred to by Mrs Waller in her evidence. I prefer an allowance of four hours a day for six days of the week, with 9.5 hours on Saturday remaining as the allowance for that day. That equates to a total of 33.5 hours per week which is a total of 4,355 hours. That results in a total hours of care of 15,079.

[73] The evidence supported a rate of approximately $18 an hour for a permanent employee which, given the length of time and number of hours involved, is more appropriate than a casual rate.

[74] In order to allow for increasing wages over the relevant period, I will allow half the period of time at $16 an hour and the balance at $18 an hour. That amounts to a sum of $256,343. I will allow $260,000.”

The appellant makes three complaints about the assessment. The first is that nothing was allowed for the provision of care during the period in which the plaintiff was in hospital following the accident, between 2 June 2001 and 16 December 2001. The second complaint concerns the hourly rate by reference to which the cost of the services provided was calculated. The third complaint is of an error in computation: there was an underestimation of the number of weeks for which the costs of providing care should have been allowed.

The trial judge allowed nothing for care provided to the plaintiff by his mother during his hospitalisation because his Honour understood that the plaintiff’s counsel did not seek damages for that period. The appellant’s counsel in this Court submitted that the learned trial judge had misunderstood the concession made, but its terms appear plain enough. Paragraph [41] of the plaintiff’s written submissions at trial said:

“If one allows the plaintiff nothing at all by way of care in respect of the period of seven months immediately following the … accident (when for the most part he was hospitalized), the following calculation can be arrived at …”

The calculation which followed, did not, I understand, consonant with the text, include anything for that period.

In oral argument to the trial judge the appellant’s senior counsel submitted:

“What we have then done at paragraph 40 and onwards … is this exercise. We have worked out what the cost of care would have been … from 1 January 2002. We have selected 1 January 2002 so that there will be no dispute on account of the fact that over much of the previous seven months Mr Waller was cared for in hospital where … some substantial measure of his care would have been attended by the nursing staff; and … in the relevant section of the Motor Accident Insurance Act, that is a factor which your Honour is bound to take into account in quantifying compensable care”.

I understand those passages, as the learned trial judge did, as an express assertion that the plaintiff sought nothing by way of damages for past care in respect of the period of his hospitalisation. A concession in those terms would have been appropriate given the facts and the law. Section 55D(4) of the Motor Accident Insurance Act 1994 applied to the assessment of damages. It provided that:

“In assessing damages for gratuitous services, a court must take into account –

periods for which the injured person has not required or is not likely to require the services because the person has been … in a hospital”.

There is no doubt that Mrs Waller, the appellant’s mother, was a concerned and assiduous provider of comfort and affection for the plaintiff during his hospitalisation. When, however, it comes to putting a value on what she did it must be borne in mind that she voluntarily supplanted hospital staff in the provision of services to her gravely injured son. This was her evidence:

“During that time you took it upon yourself to assist with his care? – Yes

…

… If you weren’t there, those things would have been done by hospital staff, would they not? – I don’t know.

Well, it was a rehabilitation regime that the hospital had put in place. You were, in effect, the orderly who was taking him to his various appointments, weren’t you …? – Yes, I suppose you could put it like that.

… If you weren’t there and the same plan was in place, there would be an orderly or a nurse to take him to those various appointments? – I suppose so.

…

You see, it is very easy for staff, when they have got a concerned parent there, to allow the parent to do the more mundane work? – Well, it was my choice to do it.

I appreciate that. And I suggest that because you were prepared to do it, staff didn’t intervene. They were quite happy to let you do it and relieve their own workload? – Most likely.”

In the absence of evidence that the appellant’s mother did more than would have been done for the appellant by hospital staff there was no basis on which an award of damages could be predicated upon the provision of her services.

There are, of course, cases in which the presence of a close family member may have some therapeutic benefit upon a patient, or may provide helpful emotional support during convalescence. In this case there was no evidence that the appellant derived any therapeutic benefit from his mother’s presence or that his recovery benefited from it. He was at the time severely disabled and suffering from extensive brain damage.

The combination of the operation of s 55D(4)(b) and the evidence made the absence of an award of damages for care provided during the appellant’s hospitalisation reasonable.

The second complaint concerned the hourly cost by reference to which the services provided to the appellant by his family, chiefly his mother, were valued. The same point arises with respect to the appellant’s attack on the amount awarded for future care and it is appropriate to defer discussion of the point.

The third ground of attack on the award for past care was the miscalculation. It is pointed out that his Honour calculated that there were 2,380 days between 17 December 2001 and 19 June 2009 when there were, in reality, 2,742 days. The respondent accepts the observation but answers it by pointing out that the trial judge made another error which has the effect of cancelling out the first. His Honour was led into the second error by the respondent’s submission. Properly calculated, adjusting for both errors, the numbers of hours between the appellant’s discharge from hospital and judgment was 14,985. The trial judge allowed 15,079. The discrepancy which is explicable by the imprecision in the evidence, worked in the appellant’s favour.

There is no substance in these attacks upon this component in the assessment.

The next challenge was to the amount allowed for future care, $4,420,530 discounted by 15 per cent to $3,780,000. His Honour’s reasons for that assessment appear from the judgment:

“[86]That leads to the conclusion advanced by the plaintiff, namely, that the current regime should be continued save that Mrs Waller would be removed from her role as a carer and replacing her with a paid carer. Each of the plaintiff’s current carers gave evidence. Each of them was impressive in their own way, demonstrating determination, knowledge and compassion when it came to looking after the plaintiff. To continue his care in their hands and to allow for him to be cared in the future by persons of similar ability is not anything but reasonable.

[87] The proposal that the plaintiff remain in the same type of care is one which has been accepted in a number of cases and there are no factors which take this plaintiff outside the precedents established for other similarly injured persons.

[88] The plaintiff argues that an appropriate award should be based on a weekly rate of care of $5,468.00, which is the amount that would be charged by the firm ‘Open Minds’, the entity currently supplying carers. That amount is based upon a modification of the current charge being made which, as set out earlier, is not a 24/7 basis. In other words, the plaintiff argues that the current system should be changed so that his mother is no longer involved in any formal way in the care regime and that she should be replaced by a full-time carer.

[89] The defendants submit that the current model of care is the most reasonably practical and realistic model for the plaintiff’s needs and that a regime involving a mix of both the family members and paid commercial carers should be maintained. The defendants calculate the current cost of that model, on a weekly basis at $3,467.00. That is based on the current commercial care cost of $3,037.00 plus an amount of $430.00 for the gratuitous care afforded by the plaintiff’s mother. Consistent with what I have said earlier, that amount is inadequate and, if this proposal was accepted, it should be increased to $670.00 a week, being four hours a day except for Saturday at 9.5 hours, all at a rate of $20.00 an hour. The defendants then propose that that regime would cease after 30 years when the plaintiff would move into shared accommodation. As I have said above, I do not accept that shared accommodation is appropriate in the plaintiff’s circumstances.

[90]Mrs Waller’s evidence was that it was likely that the plaintiff would remain living with his family for the foreseeable future. That is a matter of some significance in the calculation of an appropriate award for future care. I consider it likely given the current age of the plaintiff and of his mother and the domestic relationships which presently exist that he would remain living under the arrangement which currently exists for the next 20 years. After that, I expect that he will require round-the-clock professional care with his mother playing a minor role in accordance with her age by then.

[91] I proceed on the basis that he will remain in the current type of arrangement for 20 years and after that time there will be an arrangement similar to that referred to by Ms Williams in her evidence at a cost of the order set out in Exhibit 20. On that basis I make the following calculation:

The next 20 years

Commercial care $3,037 per week (5% discount ) $2,022,642.00

Gratuitous care $670 per week (3% discount) $527,960.00

$2,550,602.00

From the period 20 years from now until 60 years from now

Commercial care $5,468 per week (5% discount) $1,891,928.00

TOTAL $4,420,530.00

I consider it appropriate to apply a discount to that figure, not to allow for the vicissitudes of life, but to allow for the possibility that a different regime might have to be put in place and, of those different regimes which were considered, they were all of a lower cost. Both parties applied a discount of 15% at this point and I consider that appropriate. That results in a reduction of the amount to $3,776,150. I will allow $3,780,000.”

The appellant argued that the weekly amount which should have been allowed for the provision of services to care for him from trial onwards should be $5,468 which was the sum assessed for the period from the year 2029 to the end of the appellant’s expected lifespan. The trial judge assessed the weekly value of providing services for the next 20 years at $3,707. The difference is explained by the fact that Mrs Waller’s services were valued by the trial judge at $20 per hour rather than the rate which the appellant contends should have been allowed, $34 per hour for weekdays and $59.50 per hour for weekends and public holidays.

The trial judge assessed the number of hours of care which Mrs Waller would provide at 33 and one half per week. He valued the services at $20 per hour and applied a three per cent discount to arrive at the present value of the future expense. The discount rate should instead have been five per cent as required by s 55B(2) of the Motor Accident Insurance Act 1994. If the discount rate allowed was altered to five per cent the Court was informed that the notional hourly rate at which Mrs Waller’s services were valued rises to a little over $23.

The arguments centred on whether the value of the services required to fulfil the appellant’s needs should be assessed by reference to what a carer would be paid or to what an employment agency who engages carers and makes them available to persons such as the appellant would charge. The higher hourly rates I mentioned are those charged by an agency. The second approach was favoured by the appellant who described the amounts charged by the agency as the “full commercial rate”. The difference in amount is explained by the agency’s profit margin and by its obligation as employer to fund the ordinary on-costs of employment: holiday, long service and sickness entitlements, superannuation contributions and the like.

There was evidence that carers who provided the sorts of services which the appellant needed could be engaged pursuant to an industrial award at the rate of $18.92 for permanent employees and $22.70 for casual employees.

This point arises in the assessment of damages for both past and future care. The trial judge assessed past care by valuing Mrs Waller’s services as though she were an employed carer. His Honour did not regard the higher rate which would have been paid to an employment agency as appropriate because Mrs Waller’s services had not been engaged in that way and she had provided her services on a long term, permanent basis.

The starting point is, as the appellant’s counsel submitted, the principle established by Van Gervan v Fenton (1992) 175 CLR 327 that, as a general rule, the market cost of services provided to an injured person is the proper method of assessing the reasonable value of those services. The appellant submitted however that the point is precluded in his favour by a decision of this Court, Goode v Thompson [2002] 2 Qd R 572. Goode was a severely disabled plaintiff very similar in that respect to the appellant. Much of his need for services and care was provided by his parents, but in calculating the value of the services he needed the trial judge “used rates which incorporated an agency fee payable to a commercial organisation in the business of providing the necessary carers”.¹

The appellant in that case argued that the amount of the agency fee should not have been allowed for the period in which the plaintiff’s care would be provided by family members. After a review of the authorities the Court concluded (at 578-579):

“[24]Although the issue of whether an administrative charge such as an agency fee charged by a commercial organisation which provides carers was not expressly considered by the High Court in either Van Gervan v Fenton or Grincelis v House, if the administrative charge is part of the market cost of the services required by an injured plaintiff, it must, subject to the qualifications expressed in Van Gervan v Fenton be included as part of the damages in respect of those services. This is illustrated by the manner in which the live-in allowance payable to a carer was included as part of the commercial cost of the care under consideration by the Full Court of the Federal Court in Grincelis v House.

[25]What is the market cost of the services which are required by a plaintiff in any particular case is a question of fact which will be affected by the nature of the services required by that plaintiff and the capacity of the plaintiff to engage and organise those services. By way of example, the plaintiff in Kars v Kars did not need to pay an agency for obtaining or organising the services which that plaintiff required, as the necessary carers were apparently readily available and she was capable of engaging and organising them.

[26]The respondent in this matter is incapable of engaging or organising the kind of care which he requires. The commercial cost of the care which he needs for the first period must therefore be calculated on the basis of the care being provided by and through a commercial organisation. Consistently with Van Gervan v Fenton, the market cost of that care must include the agency fee, even though for the first period it was anticipated by the trial judge that the care would be provided by the respondent’s parents.”

The critical passage in the judgment is that the market cost of services required by a plaintiff in any particular case is a question of fact. The trial judge had found that the administrative charge was part of a market cost of the services required by the injured Goode and the damages were assessed accordingly.

In Grincelis v House (1998) 84 FCR 190, considered at some length in Goode, the “commercial” cost of providing care to a severely injured plaintiff included a “living in” allowance. The care was in fact provided by his parents who lived in their own house, with the plaintiff. The Full Federal Court concluded that (207):

“The appellant’s need was for full-time care and the commercial value of it, which is the exercise to be undertaken, includes a live-in allowance.”

The appellant submits that because the facts of the two cases are indistinguishable the authority of Goode constrained the trial judge to assess this head of damage by reference to the “full commercial rate”. The relevant identity was submitted to be that neither the appellant nor Goode could engage carers themselves because of their profound disabilities. Both required the services of an employment agency to provide their carers so that the rate payable to the agency rather than to the carer was appropriate in assessing damages.

There is, I think, a fallacy in the submission, which is that it equates “the agency rate” per hour of providing a carer with the cost of hiring a carer. The appellant urges the Court to adopt what would be in practice an arbitrary rule. In those cases in which a plaintiff, by reason of his injuries, cannot himself engage the carers he needs the market cost of providing the services will be that which an employment agency would charge; in other cases where a plaintiff can engage the carers the market cost will be the amount paid to the carers. Such a basis for distinction is not, I think, realistic and is too inflexible to allow for assessments to be made in particular cases. It is unrealistic because the appellant is incapable of engaging carers on either basis, either by himself or by engaging an employment agency to provide him with carers. Both tasks must be performed by someone on his behalf. If that person can reasonably engage carers directly and so avoid the “agency fee” there is no reason I can see in fact or principle why damages should be assessed by reference to the higher rate.

Van Gervan stressed that it was the reasonable value of an injured plaintiff’s need for services that should be allowed. That value will usually be the market cost of providing those services, but only where market cost is reasonable. Mason CJ, Toohey and McHugh JJ (at 334) pointed out that it is the reasonable cost of services which a defendant must pay, and said, (at 335):

“… fairness to the provider as well as to the plaintiff requires that the plaintiff should have the ability to pay the provider a sum equivalent to what the provider would earn if he or she was supplying those services in the marketplace.”

The evidence established that a carer engaged to satisfy the appellant’s needs would earn $18.92 per hour if employed on a permanent basis and $22.70 per hour if employed on a casual basis. The carer’s services could be provided at a higher cost if she were engaged via an employment agency but the higher rate is not necessarily reasonable, or an appropriate figure to adopt for the assessment of damages. The monetary value of the appellant’s loss is the market cost of the services he requires by reason of his injuries. By “market cost” is meant what it would cost to buy the services of a carer on the open labour market.

In this case two rates were advanced as being the market rate, or cost, of providing the requisite services. There is the rate at which a carer would be paid, preferred by the trial judge, and the higher rate, advanced by the appellant, which the employer of the carer would charge for her services. Both are “market costs”. They differ because they reflect the supply of different services.

The appellant submitted that the quantification of the value of the past care provided to the plaintiff must be undertaken “at full market rates”. Goode was referred to as authority for the proposition that the appellant’s future care needs must be compensated for at “full commercial rates”. The significance of the adjective “full” was not discussed. The term seems more pejorative than explanatory, and is apt to distract attention from the relevant inquiry, which is the ascertainment of the market cost of providing an injured plaintiff with the services he needs.

The appellant is entitled to the reasonable market costs of the services he needs. He is not to be awarded damages to pay for services he does not need: nor, if the same services can be provided in a competitive market at differential rates, to the higher rate.

The point at issue is whether it was wrong for the trial judge to find that the market cost of providing the needed services to the appellant was what the service provider would earn, what it would cost to employ her, rather than what the agency would charge in addition for its provision of the carer’s services. The appellant’s submission was that Goode determined the point in his favour. But what the court said in Goode (at 578 ][24]) was that:

“… if the administrative charge is part of the market cost of the services required … it must … be included as part of the damages ….” (emphasis added)

The question to be answered is one of fact: what is the market cost of providing the needed services? In particular does it, in this case, include the add on costs of employment charged by the agency? The answer requires an analysis of what services the appellant needs. The appellant’s contention is that at all times and in all places an injured plaintiff is entitled, as a principle of law, to have his need for services valued by reference to engaging an agency to provide carers regardless of the circumstance that a carer could be engaged directly, by someone on his behalf, at a lower cost. The contention is untenable.

There will, of course, be cases in which a plaintiff’s particular needs will be reasonably met by paying an employment agency to supply carers. In such cases the market cost of meeting that particular plaintiff’s needs will be the amount which includes the “agency fee”. In this case however, the learned trial judge found that only part of the appellant’s needs for care is reasonably met by the purchase of an employment agency’s services. The other part can, for the next two decades, be met by the purchase of services on behalf of the appellant without the intermediation of an employment agency. Unless this finding of fact can be successfully challenged the monetary conclusion must stand.

The appellant did not seek to assail the finding of fact upon which the assessment was made. Rather the submission was that, as a matter of law, the trial judge was bound to assess the value of the appellant’s need for future care at the agency charge out rate. The authorities do not compel that result. The market costs of providing services is a question of fact. The evidence at trial supported the trial judge’s assessment. It established that carers could be engaged and paid at the award rate and that it was not necessary to purchase their services through an employment agency. Given that the services had been in the past, and will continue to be provided by Mrs Waller on a continuous basis the award rate represented the reasonable and appropriate market cost.

In my opinion the assessment should have been made by reference to the casual rate not the permanent rate. If one assumes, for the purposes of the assessment, that a permanent carer was to be employed then the appellant, in addition to paying the carer’s hourly rate of $18.92 would have to make provision for those costs that an employer must pay to provide the employee with superannuation, sick leave etc. This cost must be included in the rate taken as the basis for assessment. Alternatively the higher casual rate should be paid on the assumption that the casual employee would make her own provision for her entitlements. The trial judge made his assessment by reference to an hourly rate of $20 not, as I think it should have been, $22.70. However the adjustment I mentioned which flows from the alteration in the discount rate means that, in effect, the trial judge’s assessment has as its reference point an hourly rate of a little over $23.

There remains the point that the appellant himself cannot organise the engagement of carers. Someone must do that for him. In the past the role has been taken by his mother. The appellant’s need for someone to provide that service, in addition to caring for him, is another need which sounds in damages. It was not recognised in the award but can be dealt with in the appellant’s challenge to the assessment of damages under the head of case management.

It should perhaps be noted that the only complaint against the assessment for this head of damages was the choice of market rate to determine the value of the plaintiff’s need for services. As I have pointed out the appellant’s challenge did not attack any of the facts found by the trial judge. There was no criticism of the number of hours per week for which the trial judge concluded the services of a carer would be needed. The appellant’s only point was one of law, which I have described.

I would reject the appellant’s argument as to the market cost of carers.

The trial judge next considered and rejected a claim for $181,830 to cover the cost of taking the appellant on holidays. The judge said:

“[98] The plaintiff claims $181,830. Dr Noble was asked about the concept of the additional costs, which would be incurred were holidays to be taken away from home, and her view was that the concept would be reasonable. The defendants, though, say that the argument is fallacious. There was no evidence that he would be taken on holidays by his mother, the reliance on a mere statistical likelihood of taking holidays must be considered against the background of the plaintiff’s life. There was no evidence that the plaintiff would benefit from being taken on holidays in the manner sought by the claim made and given his level of injury and neurological impairment, I think it unlikely that he would be taken on holidays. I am supported in that view by the fact that since the date of the accident, apart from a family camping trip, he has not been taken on any holidays. I make no award under this heading.”

The appellant’s argument was that Ms Noble, an occupational therapist, had testified to the appropriateness of the appellant going on holiday and to the extra cost to him of vacationing. Ms Noble’s evidence was that:

“Statistical evidence indicates that but for his disabilities (the appellant) would have spent, from the age of 15 years, an average of 18 nights a year away on holidays in Australia.”

The statistics referred to indicate what the average able bodied man does by way of taking vacations. Dr Powell, a specialist medical practitioner in rehabilitation and geriatrics, was also said to support the concept. In fact Dr Powell was only asked to comment upon Ms Noble’s assessment of what additional assistance the appellant would need in the event that he went on holidays. Dr Powell was not asked about, and did not express an opinion on, the reasonableness of the appellant holidaying.

The respondent submits that Ms Noble’s statistic is irrelevant and the question which had to be addressed was whether the appellant will in fact holiday away from his family and whether it would be reasonable for him to do so. No evidence was led on these points. There was no expert medical opinion given on the point whether the appellant might benefit from such activities.

Given this state of the evidence and the profound nature of the appellant’s disability and his need for constant attention there is no basis for criticising the trial judge’s rejection of the claim.

The appellant also complains about the assessment made for case management. The need for such management was advanced by Ms Noble in her report:

“(The appellant) requires a Case Manager to assist with and co-ordinate the following:

Coordination and monitoring of therapy and medical appointments

Selection, education and training of carers

Liaision with financial management providers regarding ongoing needs

Intervention … in the event of unexpected events, for example … illness or hospitalisation

Support person to (the appellant) and his family

Coordination of holidays away

Emergency equipment, repairs, pick up and delivery …

Due to the nature of his disabilities a Case Manager with therapy or rehabilitation nursing qualifications is recommended for 4 hours every month for the remainder of his life. The current average fee for case management is $120 per hour … . A monthly travel allowance (… $180/month at $90 per hour) may also be required to fund a Case Manager with appropriate experience to travel to the Gympie area.”

Dr Powell supported the notion that case management was appropriate.

The trial judge allowed part of the claim. His Honour said:

“[101] This is an area which is of some concern. The argument for the plaintiff is that notwithstanding that the commercial carers have built into their fees an amount for case management there should be some independent oversight for the benefit of the plaintiff. The plaintiff argued that for the case manager to have any association whatsoever with the care provider rendered nugatory the case manager’s role as an advocate for the plaintiff.

[102] On my assessment of his future care needs, his mother will be in the role of a ‘case manager’ for at least 20 years. Dr Powell’s view was that the absence of an independent case manager did not compromise the care which would be available to the plaintiff and there was no evidence that such a situation has arisen in the past or would be likely to arise in the future. The defendants argued that an award of this nature would constitute a double counting because the agency fees which will be administered include amounts which are specifically allocated to case management functions.

…

[104] … When, as is inevitable, his mother will not be able to provide the same extent of care which she currently offers, there will be a need for someone to ensure that the plaintiff’s reasonable care requirements are being met. It is no slight upon those who are caring for him to say that someone needs to be in place to ‘to take up his cause if he feels that something is awry’. That role cannot be filled by a provider of care services. It may be that such a provider could honestly, but mistakenly, believe that there is no need to take certain steps in the regime of care. It is in those circumstances that an independent case manager is needed to consider and, if appropriate, take such steps as are necessary to take up the plaintiff’s cause.

[105] I intend, therefore, to make an allowance for this in the following manner. I accept the hourly figures and number of hours suggested by Ms Noble of $135 and (sic) hour for four hours a month plus a travel allowance of $180 a month. I will delay the payment of those amounts for twenty years in accordance with my finding about Mrs Waller’s role. That results in an amount of $57,335. I will allow $58,000.”

The appellant challenges the finding that Mrs Waller is an appropriate person to undertake the role of his case manager. He argues that a professionally qualified manager is required who would be paid at the rates given by Ms Noble. The respondent points to evidence that Dr Powell thought that Mrs Waller was an entirely suitable manager. Dr Powell noted that the appellant’s mother was doing “an extremely good job” and had cared for her son for many years and was quite capable of fulfilling the role. Ms Coles, another occupational therapist, described Mrs Waller as being, effectively, the appellant’s “case manager” who had “organised and facilitated all of his activities which (have) improved him”.

There is no cause to doubt the trial judge’s finding that Mrs Waller is an appropriate case manager and will continue to perform that role for the next 20 years. It was, however, an error not to allow as a component in the damages the costs of providing the service of a case manager during those 20 years. The point is covered by Van Gervan. The plaintiff’s injuries have created in him a need for a case manager to perform the functions described in the evidence. The value of that need is the market cost of providing the services of a case manager. It is irrelevant that the service will be provided gratuitously by a family member, as the reasons in Van Gervan explain. There was a further point mentioned earlier that the appellant needs someone to arrange carers for him. He himself is incapable of engaging carers or an employment agency to engage them for him. That task will appropriately be performed by someone like a case manager.

The respondent objected that if damages were to be allowed on this basis the computation should not include the component in the cost referable to a travelling allowance because Mrs Waller is the case manager and does not have to travel to perform the function. The argument cannot, I think, be accepted. What is to be allowed is the cost of meeting the need by the provision of the service. The fact that the service is being met at no or reduced cost is irrelevant to the assessment. A rationale for the principle is that should Mrs Waller be unwilling or unable to perform the role and fulfil the appellant’s need in that regard an outsider must be engaged at a cost which will include a travel allowance. This was the result in Grincelis where commercial costs included a “live in” allowance which was awarded despite the fact that the care was provided by parents who lived in their own house.

There was no claim for the past cost of case management, either at trial or on appeal. The amount calculated does not appear to exactly accord with the evidence but was not disputed by the respondent. Accordingly the amount which should have been allowed under this head is ($124.28 + $41.43 = $165.71 x 1,012.2) = $167,732 which I would round up to $168,000.

The result is an increase in the award of $110,000.

The appellant next complains that nothing was allowed for the cost of modifying a motor vehicle for his special needs after he turns 60. Ms Noble had suggested that the plaintiff would need a large vehicle offering inter alia unhindered wheelchair access via a ramp and a superior air conditioner. The appellant submits that this evidence was unchallenged and that the trial judge was wrong to reject it.

The respondent points out that Ms Noble’s assessment was directly challenged and that she conceded that she lacked the expertise to assess whether, with age, the appellant would deteriorate to the point where a specially adapted vehicle would be necessary. No evidence was adduced from any witness who had such specialist knowledge.

In the circumstances the finding cannot be assailed.

The last head of damages which attracted criticism was the amount allowed for administration and management fees which, following Willett v Futcher (2005) 221 CLR 627 should be awarded to allow for the remuneration and expenditure properly charged or incurred by the administrator of the fund which will be established for the appellant from the damages because of his incapacity to manage his own finances. The difference between the parties on this point is whether the commission to be charged by the administrator should be calculated by reference to the assumption that monies would be drawn from the fund to support the appellant at a constant rate from inception so that it diminished to zero over the appellant’s life expectancy; a concept called “straight line amortisation”: or whether the assumption should be that the fund would initially increase as it generated income from investments in excess of expenditure, and then decline.

The appellant relied upon the reasoning of the Court in Goode in which “straight line amortisation” was rejected. The Court said:

“[35] The challenge made to this calculation is in respect of the second stage for income commission on the basis that it fails to recognise that, over time, the total sum available for investment will progressively diminish, resulting in a corresponding diminution in the income generated by the fund and the commission chargeable in respect of that income. The appellant therefore seeks to calculate the commission on the basis of a straight line reduction in the fund over time. This would result in the commission being reduced by one-half to $69,599 which reduces the future management fees to $119,323.

[36]The respondent argues that the appellant’s approach ignores the reality that with an investment sum of $3.4m and a return at 3.53 per cent per annum, the capital sum will increase initially and substantially during the first period of 20 years, when the respondent’s parents are caring for the respondent and not incurring the cost of commercial care. The respondent submits that, in combination with a likely rise in returns for the fund over time, there will be a substantially higher level of annual income, a substantially higher level of annual fees and the fund increasing in amount in the foreseeable future, but depleting in the respondent’s later years.

[37] The appellant’s approach of a straight line reduction in the fund over time makes assumptions which are unrelated to what is likely to be the actual progress of the investment fund. In the circumstances the basis on which the learned trial judge assessed the income commission as part of the future management costs was not unreasonable.”

The learned trial judge thought the reasoning inappropriate noting that:

“In Goode … the Court referred to the fact that the plaintiff would not, in the first 20 years, incur the cost of commercial care. The (appellant) … will.”

The appellant’s particular complaint is that the assessment made for future care will mean that:

“… for the first period of 20 years immediately post judgment there will be $670 per week of the total weekly allowance of $3,707 unexpended”.

To that extent, the argument runs, the fund will not be depleted at a “straight line” rate over its expected life and the mechanism employed by the trial judge to compute the quantum of the administrator’s commission assumes a constant rate of depletion, thereby underestimating the amount of commission payable to the fund administrator.

The short, and complete, answer to the point is that given by the respondent in argument. The appellant’s mother has been paid $670 per week for her services in the past at the commercial rate for carers from monies paid on account of damages by the respondent. It is anticipated that she will continue to be paid for her services in future from the fund. It will therefore decrease from inception, and “straight line amortisation” was appropriate.

There would be, in any event, a marked inconsistency if damages for future care were to be assessed on the understanding that they would be paid for at commercial rates while giving the appellant the benefit of a fund which increased in its initial years because the services were being provided to him gratuitously.

The respondent sought to support the award in the event that any of the appellant’s submissions succeeded by citing three instances where the award erred on the high side. None was pressed with any vigour and none has any substance. The first ground of contention was that the learned trial judge erred by choosing 12 per cent as an appropriate discount for the appellant’s future loss of earning capacity for contingencies. A discount figure of 15 per cent is contended for. This is a debate on which it is impossible for an appeal court to enter. The appropriate discount was entirely a matter for the trial judge’s assessment. In the absence of any egregious error of principle or misunderstanding of fact, neither of which is relied upon here, the assessment should stand.

Grounds 2 and 3 are little more than quibbles about details of relatively minor parts of the assessment. There was evidence to support his Honour’s computations which should not be disturbed.

In the result the appellant has succeeded in showing an inadequate allowance was made for case management. I would allow the appeal and vary the judgment by substituting the figure of $5,895,612 for that of $5,785,612. The appellant has succeeded but only as to one part of his challenge to the judgment. The respondent should pay half the appellant’s costs of the appeal.

ANN LYONS J: Chesterman JA has very clearly and succinctly outlined the facts and issues raised in this appeal. It is clear that the appellant challenges the learned trial judge’s assessment of the damages awarded on a number of different bases and I adopt Chesterman JA’s characterisation of the issues raised in the appeal. I also agree with his Honour’s reasons in many respects. In my view however, the assessment of damages was manifestly inadequate on additional grounds to that allowed by his Honour.

The first issue relates to the assessment of damages for care and assistance provided to the plaintiff between accident and trial.

Past gratuitous care and services

The three issues raised on the appeal in relation to the assessment for past care are:

There is no assessment for gratuitous care for the six and a half months the plaintiff was in hospital;

The hourly rate is incorrect; and

There is an underestimation as to the number of weeks in the calculation.

(a)From injury to discharge from hospital

Should there have been an assessment of damages for the care provided by the plaintiff’s mother during his hospitalisation? I agree with the submission of counsel for the appellant that the assessment of damages can include compensation for gratuitous care which was provided during hospitalisation and that the relevant section of the Motor Accident Insurance Act 1994 s 55D(4)(b) (now repealed) does not preclude compensation when those services were in fact needed, despite the hospitalisation. This was recently discussed in Williams v Partridge & Anor² where it was apparent that it is only where someone is hospitalised and “has not required” the services claimed that there is to be no allowance. In the circumstances of this case however, I agree with Chesterman JA that there was simply insufficient evidence to make a finding and it is not clear to me compensation for this aspect of the past care was in fact sought.

The area in which I take a different view to that of Chesterman JA relates to the assessment of damages for care and assistance provided to the plaintiff. This relates to the appropriate rate for the cost of gratuitous services provided to the plaintiff between discharge from hospital and trial, as well as the appropriate rate for future care and services to be provided to him. In my respectful opinion, the market cost of the services to be provided, requires that the “full commercial rate” be paid and I consider that the Goode v Thompson³ approach should be strictly followed. Accordingly, I consider that the current assessment of damages in relation to this aspect of the award is inadequate.

(b)The cost of past gratuitous care

Turning to the question of the assessment of damages for past gratuitous care. As the appellant argues, the critical aspect of the calculation of this part of the award involves the identification of the correct hourly rate. That assessment necessarily involves an understanding of the nature of the care the plaintiff requires.

In assessing the cost of services, it is important to consider the extent of the plaintiff Luke Waller’s injuries. It is undisputed that Luke suffered catastrophic injuries in a motor vehicle accident in June 2001 when he was 12 years old. He will shortly celebrate his twenty first birthday. In the accident he sustained traumatic brain injuries which included a fracture of the right frontal bone and contusions to the right temporal and right frontal region. He also had lung contusions and fractures of the tibia and fibula. He was hospitalised for six and a half months and he has been left with an uncontested whole person impairment of 95 per cent.

In my view, the starting point in considering an assessment of the quantification of Luke’s care needs is Dr Glenda Powell’s 2004 Report where she states that Luke requires:⁴

“24 hour care and assistance and could not be left alone. He requires assistance in all activities of daily living and personal care as well as in feeding, supervision of medication and administration of appropriate fluids.

It is extremely difficult to estimate life expectancy in severely disabled people but he is at risk of complications from his diabetes insipidus if his fluid intake is not appropriately managed, renal complications from hypercalcaemia secondary to his immobility if he is not kept as mobile as possible and of falls from his chair if not seated appropriately since he does have a tonic lumbar reflex which causes him to extend his body and slide out from beneath the restraint. However with appropriate 24 hour care his life expectancy is minimally compromised.”(my emphasis)

Dr Powell’s most recent report indicates that he can now use a spoon. He is still doubly incontinent but can now indicate when his pads need changing. He can also give simple “yes” and “no” answers. In this report, Dr Powell also highlighted the fact that aspiration pneumonia is always a possibility in people with poor swallowing and that it was also important that he be kept mobile to limit the threat of “a deep venous thrombosis or pulmonary embolus”.⁵ Neurosurgeon, Dr Scott Campbell also refers to the fact that there could be deteriorations due to “complications such as aspiration/further contractions, pressure area damage to skin”.⁶ I consider that the significance of this evidence is that it highlights the extent of the plaintiff’s care needs and indicates the importance of the provision of “appropriate” care to ensure his continued health and wellbeing. It also indicates the severe consequences if his needs are not appropriately met. The evidence indicates that Luke had an incident with a possible obstructed airway in 2006 and in March 2009 he fell out of bed after apparently rolling over.⁷ He is unable to get back into bed by himself.

It is undisputed that someone needs to be in attendance 24 hours per day. The starting point in the assessment of damages is, therefore, that there has to be someone present 24 hours a day. Even if the plaintiff was asleep, someone would need to be vigilant and alert to his calls for help, given his total dependence. Even at night he needs to have someone essentially within listening distance who can give him the required help if he should need it.

The learned trial judge accepted that there was a need for round the clock care, but stated that the issue was the “extent and content of the care”. Under the current model of care which is in place, three carers are employed by “Open Minds” to facilitate care to Luke. A full commercial rate is paid for this care. It is clear that the rest of the care which is required to be provided in the 24 hour period is supplied by his mother or other family members. In his findings however, the learned trial judge considered that the assumption that “there was a need for gratuitous care for all hours other than those provided commercially during any 24 hour period” was not consistent with the evidence of Mrs Waller or the events which had occurred in the life of the family “which included the plaintiff’s mother attending upon the needs of the balance of the family and having another child”.

His Honour’s view was therefore, that even though 24 hour care was required, compensation should not be assessed for all the hours the family were in attendance because their services were not fully engaged by the plaintiff during that period. In my view, it matters not whether the person in attendance is able to perform other activities whilst they are supervising or monitoring Luke. That person is the person who is responsible and answerable for his care. What they are otherwise able to achieve whilst in attendance is, in my view, an irrelevant consideration. The fact that Mrs Waller is able to attend upon the needs of the other members of the family during the time she needs to be in attendance for Luke, does not mean that she is not “required” to be in attendance for him. Someone actually needs to be in attendance on the plaintiff 24 hours a day, even if at times a person attending on the plaintiff could do other tasks or even sleep. The fact that this occurs does not diminish the fact that 24 hour care is what is actually required. Someone needs to be in attendance as he cannot be left without supervision at any time.

In this regard, I take the same view as P D McMurdo J in Hills v State of Queensland⁸;

“[67] The other issue raised by this submission is whether it is appropriate to compensate Christopher by reference to commercial care rates where the care would be provided by his parents whilst at the same time they did other things around the house. Christopher needs the full time attendance of carers but not their personal exertion for every minute they are there. The description of “occasional snippets of care” understates what is required, but I accept that whilst Mr and Mrs Hills are looking after Christopher, they will be able to do other things to some extent. The argument then is that as “gratuitous carers in their own home going about their own business” they should be “compensated for those occasional snippets, not being for 24 hours”. That argument is inconsistent with principle, and in particular with Van Gervan v Fenton. This is not an assessment of compensation for the parent’s efforts, but of Christopher’s loss which is his need for care which he would not need but for the defendant’s wrong. He needs the presence of someone, 24 hours a day, who is able to immediately respond to his various requirements.

[68] In the assessment of that loss, it is irrelevant to inquire whether he is likely to pay anything for that service or what would be paid. The assessment is one of the “reasonable and objective value of the need for those services” for which, as a general rule, the market cost is the measure. But in some cases the market cost may be too high to be the reasonable value of the services and in Van Gervan, Mason CJ, Toohey and McHugh JJ instanced the cost of providing services at a remote location where the cost is much greater than the equivalent in a densely populated area or where there was so little competition that, judged objectively, the market cost was not the reasonable value of the services. But nevertheless the exercise is one of valuing the service which is needed by the plaintiff. There is no difference between the required services according to whether it is Christopher’s parents or a paid carer who there is to provide them. And there is no difference, for example under Mr Hart’s first model, between the required care on a Saturday afternoon (to be provided by the parents) to that required on a Sunday afternoon (to be provided by the carers). This is not a case where it can be said the market cost is an inappropriate measure of the value of the care, because as the defendant indeed argues, the value is to be measured by the market cost evidenced by Mr Hart’s rates. So the assessment of the value of the required care must be by the consistent application of market cost whether the care is likely to be provided by the market or not. The fact that Christopher’s parents will be able to do some other things in the house whilst caring for Christopher does not diminish the value of the care they are providing.”

The evidence indicates that whilst Mrs Waller is not a trained carer, she is highly skilled and during her daily attendance throughout Luke’s stay in hospital and during his rehabilitation, she learnt many strategies to cope with his care needs. She capably attends to his needs when required and Dr Powell indicated that Luke was “very well cared for both physically and emotionally”⁹ and that Mrs Waller was doing an “extremely good job”.¹⁰ She clearly provides appropriate care and ensures that Luke’s needs are met, as required, on a 24 hour basis when commercial carers are not in attendance.

This aspect of what is the appropriate compensation for care which is provided on an “as required” or “on call” basis was also discussed by Ambrose J in the decision at first instance in Goode v Thompson:¹¹

“[85] One matter that requires consideration is the fact that, although the plaintiff’s mother seems to be constantly on call during both the waking and sleeping hours of the plaintiff, in fact, she manages to look after the rest of the family and the house and pursue her own interests and sleep most nights without undue disturbance. It is contended for the defendant that it would be ridiculous to assess damages for past Griffiths v Kerkemeyer care on the basis of the costs of a commercially provided carer or carers in attendance upon the plaintiff (and particularly during the night time), in case their services are required from time to time, at the commercial rates to which I have referred. Further, it is contended that on the facts of the present case with respect to past care – whatever the future may hold in this regard – agent’s fees have not been paid or incurred. It is said that it would be quite unfair to the defendant to require it to pay damages assessed on the basis that gratuitous care provided by the plaintiff’s mother and other members of his family should be valued on what it would have cost had it been provided through an agent charging fees of the sort indicated above to provide carers whose hourly rates include ‘sleep’ ‘weekend’ and ‘Public Holiday’ rates.

[86] In my view, however, while the principle in Griffiths v Kerkemeyer and Van Gervan v Fenton remains applicable, it is difficult to see how such ‘unfairness’ may be avoided.”

This approach was confirmed on appeal.

Therefore, it is clear that the full commercial rate must be paid for the hours that a carer is in attendance, even if their services are only required from time to time or they are simply “on call.” As I have indicated, the learned trial judge in the present case considered that the assumption that there was a need for gratuitous care for all hours other than those provided commercially during the 24 hour period was not valid. In my view, the assumption of 24 hour care is necessitated by the authorities once there is clear evidence that 24 hour care is required. The calculations must be made on this basis. Therefore, the award for damages for gratuitous care must include a component for 24 hour care and at the full commercial or “market rates”.

What is the market rate?

The question of the market rate of care is relevant to an analysis of past gratuitous care as well as the calculation of damages for future care and services. The underlying principles in relation to an assessment of the market rate of care were enunciated by Ambrose J in Goode v Thompson¹² at first instance:

“[77]In Van Gervan v Fenton (1992) 175 CLR 327 it was held that damages payable under a Griffiths v Kerkemeyer claim are to be assessed not by reference to the actual costs that would be payable by the plaintiff but by reference to the market cost of providing those services. At page 335 in the judgment of Mason CJ, Toohey and McHugh JJ it was observed -

‘It does not seem reasonable that the defendant's liability to pay damages should be reduced at the indirect expense of the provider by invoking notions of marital or family obligation to provide the services free of charge or at less than market rates. Yet post-Griffiths awards have been reduced on this or similar theories. Moreover, a plaintiff should be entitled to arrange his or her affairs in the way in which that person pleases and should not be constrained by monetary considerations from dispensing with gratuitous services and obtaining outside services if they are desired. Indeed, the relationship between the provider and the plaintiff may continue to exist in some cases only because outside help is able to be obtained. Secondly, since there is no binding agreement with the provider to continue to provide the services, the Court would have to make a finding as to whether the care would continue to be provided and, if so, for how long. The task of reliably determining whether a person will continue to provide personal services on a voluntary basis is much more difficult than the task of determining the traditional types of hypotheticals which come before the courts in damages cases, such as whether a plaintiff is likely to obtain employment or whether a medical condition is likely to improve or worsen…

The use of the market cost criterion enables the plaintiff to be properly compensated by the award of a reasonable sum whether or not the gratuitous care provider continues to provide that care.’

[78]In Marsland v Andjelic (1993) 31 NSWLR 162 Kirby P and Meagher JA observed at 174 –

‘However, in light of the decision in Van Gervan, it would appear that what is nowadays to be taken as a reasonable objective measure of damages will invariably be the commercial market cost.’

[79]They went on to observe that it is wrong to reduce the quantum of damages for support which would ‘commonly be expected from a member of the family’; to do so was to proceed contrary to the principle laid down in Van Gervan.

[80]In Grincelis v House (1998) 84 FCR 190 the Federal Court of Australia held that satisfaction of the appellant’s need for full time care was the commercial value of that care which included a live-in allowance for a commercial care-giver. The care had in fact been rendered by the plaintiff’s parents and a live-in allowance initially had not been included. Hill and Kiefel JJ at 207 observed –

‘In our respectful view the only basis apparent from the Master’s reasons for what is a very substantial reduction in the award for this head was a concern that the cost of the parent’s services appeared to be too much. The evidence however required such a conclusion, it follows in our view that the award must be increased…’”

It is therefore clear that damages are assessed not by reference to the actual costs that would be payable by the plaintiff, but by reference to the market cost of providing those services. The Court of Appeal in Goode v Thompson¹³ comprehensively analysed the principles and authorities and confirmed the approach that the relevant cost is the market cost. The Court also analysed the interrelated issue of whether “market rate” included an agency fee.

“Future care

[12]The appellant submits that the award for future care is manifestly excessive. In calculating this award the learned trial judge divided the future into two periods. The first period was the period of 20 years following the trial which was the period which the learned trial judge assessed as that during which the capacity of the respondent’s parents to continue to provide the sort of gratuitous care which they had provided for the past five years would continue. The second period of the next 40 years to follow that first period was when the learned trial judge found that gratuitous future care would cease and be replaced by professional care which in all likelihood would be procured through a commercial organisation.

[13]After referring to the decision of the Court of Appeal in Mott v Fire and All Risks Insurance Co Ltd [2000] 2 Qd R 34 where it was held that an award for damages for future gratuitous care must be assessed by reference to the three per cent discount tables, but when the future care ceases to be gratuitous, it is necessary to use the five per cent discount tables pursuant to s 16(1) of the Supreme Court Act 1995, the learned trial judge stated at para [115] of his reasons for judgment: ‘Accepting that the plaintiff has a present life expectancy of about 60 years, the extraordinary result of this latest requirement in the assessment of Griffiths v Kerkemeyer damages is that an award of damages for gratuitous care will be significantly greater than one for non-gratuitous care over the same period albeit having regard to the principle in Van Gervan v Fenton as applied in Grincelis v House. Indeed, the market cost of procuring those services used to assess the Griffiths v Kerkemeyer claim should be precisely the same. The consequence, which might seem extraordinary to some, is that with respect to precisely the same future period during which Griffiths v Kerkemeyer type services will be provided to an injured plaintiff, the plaintiff will receive a significantly larger award of damages if those services are to be gratuitously provided than will another plaintiff requiring the same services at the same commercial cost who in fact must pay for those services at market rates.’

[14]The learned trial judge accepted the evidence of Ms Susan De Campo of Lifecare, an organisation which provides care services and medico-legal assessments. Ms De Campo was previously employed by Domicare which was in the business of providing in-home care. The award for future care assessed by the learned trial judge was based on Ms De Campo’s evidence.

[15]In calculating the commercial costs of the gratuitous care for each of the first and second periods, the learned trial judge used rates which incorporated an agency fee payable to a commercial organisation in the business of providing the necessary carers. The appellant did not dispute that process for the second period, but submits that no agency fee should be included in the calculation of the future care for the first period of 20 years, when it was likely that the care would be provided by the respondent’s family. The learned trial judge calculated the damages for future care for the first period at the rate of $2,949.24 per week. The comparable rate, but exclusive of the average agency fee of $7.73 per hour, was $2,191.70 per week.

[16]The total amount for future care assessed by the learned trial judge was $3,344,421. If the agency fees were excluded from the calculation of future care for the first period, the appellant has calculated that the total assessment for future care would be $2,746,687.50 which results in a significantly lesser figure for future care than that assessed by the learned trial judge.

[17]The appellant submits that the issue of whether an administrative charge should be included in the calculation of future gratuitous care in respect of a period for which there was a finding that the gratuitous care would be provided by family members was not something which had been the subject of express finding in Van Gervan v Fenton (1992) 175 CLR 327 or Grincelis v House (2000) 201 CLR 321.

[18]On this basis the appellant sought to rely on statements made in two decisions of the Court of Appeal to support its argument. There was a challenge to the rate allowed for past and future care in Buckland v Biggenden Shire Council (unreported, Appeal No 11 of 1993, 4 May 1993). The trial judge had relied on a Domicare rate which included an administrative fee related to the work done by the agency to organise the assistance. Because the assistance in the past had been rendered by relatives and was likely to continue to be so, it was submitted on appeal that that component of the fee should not be included. The assessment of past care of $77,515 included an administrative fee of $13,475. The assessment for future care of $123,125 included an administrative fee of $29,550. Although the joint judgment of the Court referred to the applicability of such a component in applying the commercial rate not having been considered by the High Court in Van Gervan v Fenton and that there were grounds for arguing that where services were rendered by family members and the related administration was of small compass, such a component should not automatically apply, it had been found in that case, however, that some organisation had been necessary in the past and would continue to be necessary. In any case the Court found that a reduction of the award by the sum of $13,475 in respect of the past care did not warrant interference with what was otherwise a substantial award. The appeal against the inclusion of the administration fee was therefore unsuccessful.

[19]The other decision of this Court relied on by the appellant is Kars v Kars [1995] Aust Torts Reports 81-369. Damages for past gratuitous care had been assessed on the basis of $9.50 per hour where the evidence was that the market cost of the services was $12.50 per hour which allowed for $3 as an administration fee. Davies JA (with whom McPherson JA agreed) stated at 62,817:

‘Notwithstanding the absence of other evidence it is most unlikely that, in a labour market such as the present one in which there is a high level of unemployment, particularly in unskilled labour, unskilled services such as this could not be obtained at the price charged by the commercial care giver before adding its administration charge. I would not therefore be prepared to say that in this case the learned trial judge was wrong in accepting $9.50 per hour as the reasonable rate for the services which will be provided to the plaintiff in the future.’

[20]The injury sustained by the plaintiff in Kars v Kars was to her back, leaving her with a 35 per cent permanent disability which prevented her from working full-time and required services such as assistance with shopping which were provided by her husband, other relatives and her neighbours. There was no finding that the plaintiff was disabled from organising such services.

[21]The respondent relies on the decision of the Full Court of the Federal Court in Grincelis v House (1998) 84 FCR 190. The plaintiff in that case suffered significant brain damage in a motor vehicle accident and required extensive daily care and supervision. The issue in respect of past gratuitous care was that it was calculated at $670,088 by reference to commercial rates, but had been allowed at only $250,000 on the basis that the care had been provided by the plaintiff’s parents with whom he resided and that the evidence did not justify allowing the full amount calculated at commercial rates. The appeal to the Full Court was heard by five members of the Court. In the joint judgment of Hill and Kiefel JJ (with whom the other members of the Court agreed on this issue) it was stated at 207:

‘It is clear from Van Gervan v Fenton (1992) 175 CLR 327 that the process to be undertaken is an assessment of the injured person’s need for care and services, which is then valued by reference to commercial rates charged for its provision, regardless as to whether they were in fact provided gratuitously, by relatives or partners: see also Kars v Kars (1996) 187 CLR 354. It follows that, unless there be shown some basis for differentiating between the extent of the need, or what was necessary to fulfil it, the calculation for past and present care must be the same. In this case once the appellant’s injuries stabilised the need remained the same, save that in the future it may increase somewhat should his intellectual processes further deteriorate. The cost of care likewise remains the same. It has however been calculated to include, with respect to both the past and future costs, live-in components referrable to carers. One would not think this ought to be applied to the cost of the parents’ care, since they resided with the appellant in any event. Such an approach would not however be consistent with Van Gervan. The appellant’s need was for full-time care and the commercial value of it, which is the exercise to be undertaken, includes a live-in allowance. In our respectful view the only basis apparent from the Master’s reasons for what is a very substantial reduction in the award for this head was a concern that the cost of the parents’ services appeared to be too much. The evidence however required such a conclusion. It follows, in our view, that the award must be increased by the sum of $420,088 ($670,088 less the $250,000 awarded).’

[22]The issue in Van Gervan v Fenton was how to calculate damages for gratuitous care where there had been an assessment in the judgment under appeal of those damages by reference to the income foregone by the plaintiff’s wife who provided the care for the plaintiff on a full-time basis. The majority in the High Court held that the damages were to be assessed by the market cost of providing those services. It was stated in the joint judgment of Mason CJ and Toohey and McHugh JJ at 333-334:

‘Once it is recognised that it is the need for the services which gives the plaintiff the right to an award of damages, it follows that the damages which he or she receives are not determined by reference to the actual cost to the plaintiff of having them provided or by reference to the income forgone by the provider of the services. As Stephen J pointed out in Griffiths, the principle laid down in Donnelly “is concerned not with what outlays of money the plaintiff will in fact incur as a consequence of his injuries but with the objective monetary ‘value’ of his loss”. Because the market cost of services is ordinarily the reasonable and objective value of the need for those services, the market cost, as a general rule, is the amount which the defendant must pay as damages. But in some cases the market cost may be too high to be the reasonable value of the services. Where, for example, the cost of providing the services at a remote location is much greater than providing those services in a densely populated area, it might be necessary to discount the market cost or value of the services needed by the plaintiff on the ground that the market cost or value was unreasonable in the circumstances. In other cases, there may be so little competition to provide the services that, judged objectively, the market cost is not the reasonable value of the services. No doubt the circumstances of particular plaintiffs may reveal other cases where the market cost of the services provided is not the reasonable value of the services reasonably needed. But the case will be rare indeed where the income forgone by the care provider is ever an appropriate guide to the fair value of the services required by the injured person. Whether the income forgone is below or above or equivalent to the market cost, the income forgone will usually be irrelevant, for the market cost will ordinarily represent the objective value of the services. Where there is no relevant market for the services or the market cost is objectively too high to be reasonable, the income forgone may be a starting point in cases where the nature and duration of the services provided and the previous work and hours of the care provider are roughly comparable, but such cases are likely to be rare.’

[23]Van Gervan v Fenton is therefore authority for the principle that, as a general rule, the market cost or value of services provided gratuitously to an injured person is the method of assessing the reasonable value of those services.

[24]Although the issue of whether an administrative charge such as an agency fee charged by a commercial organisation which provides carers was not expressly considered by the High Court in either Van Gervan v Fenton or Grincelis v House, if the administrative charge is part of the market cost of the services required by an injured plaintiff, it must, subject to the qualifications expressed in Van Gervan v Fenton be included as part of the damages in respect of those services. This is illustrated by the manner in which the live-in allowance payable to a carer was included as part of the commercial cost of the care under consideration by the Full Court of the Federal Court in Grincelis v House.

[25]What is the market cost of the services which are required by a plaintiff in any particular case is a question of fact which will be affected by the nature of the services required by that plaintiff and the capacity of the plaintiff to engage and organise those services. By way of example, the plaintiff in Kars v Kars did not need to pay an agency for obtaining or organising the services which that plaintiff required, as the necessary carers were apparently readily available and she was capable of engaging and organising them.”

Accordingly, in Van Gervan v Fenton,¹⁴ the principle was clearly established that in relation to the provision of services which are provided gratuitously, the market cost is the method to be adopted in assessing the reasonable value of those services. This principle was expressly relied upon in Goode v Thompson¹⁵ where it was stated that, if an administrative charge was part of the market cost, then generally that was the cost to be recovered.

The Court also considered that the question of what the market cost was, was a question which was affected by the nature of the services required and the capacity of the plaintiff to organise those services himself. Furthermore, it is necessary to examine whether in a particular case, “the market cost may be too high to be the reasonable value of the services. ... it might be necessary to discount the market cost or value of the services needed by the plaintiff on the ground that the market cost or value was unreasonable in the circumstances”.

In the present case, there is no dispute that the plaintiff cannot organise the services himself. He also requires appropriate care which would generally be provided by trained family members or by qualified staff from care agencies. I consider that caring for a person with significant disabilities, to be a service which is a skilled service. Accordingly, it is necessary to examine how those services are organised if a person is unable to organise those services themselves.

An agency such as “Quality Lifestyle Support” or “Open Minds”, which is an acquired brain injury support service, provides skilled and trained carers. The service agreement offered by “Open Minds” is in evidence and it specifically states that the agreement operates in accordance with the Service Principles set out in the Disability Services Act 2006 and the Disability Service Standards. That service agreement specifically provides that the organisation will employ “appropriately skilled staff” and provide “on-going and necessary client specific training” for staff as well as “supervising and appraising” staff. The agreement also states that the service also covers plans and support which cover “emergency and crisis” matters, as well as providing all bookkeeping and administration. The cost of the service provided by Open Minds or a similar agency covers the delivery of this standard of care.

The next question which needs to be determined is whether the care required is readily available and accessible. On my review of the evidence, there was no evidence that appropriate care is readily or easily available outside of the provision of such care by an agency such as “Open Minds” or “Quality Lifestyle Support”. The report of Ms Coles,¹⁶ the occupational therapist, indicates that the previous carers, Daniel Toohey and Ms Kathy Dupuy, were employed by Open Minds and both received specific training to care for Luke. Currently, the three carers outside of the family are all employed by Open Minds.

Dr Powell also stated that, “carers are often difficult to find in that area where Mr Waller was living”.¹⁷ She also said, “there will always be difficulty in finding appropriate carers in a country area”.¹⁸

Mr John Hart, who is a director of “Quality Lifestyle Support” based in Toowoomba, gave evidence (he also gave evidence in Hills v State of Queensland).¹⁹ He stated that all his support workers have at least a Certificate 3 qualification. He also stated that at times, they have had to “advertise and do additional work in recruiting” but that they had never been in a situation where they had not been able to fulfil an agreement. He also agreed that a location which is remote from a major town or city adds another level of difficulty.

Mr Hart also gave an indication of the type of care required by the plaintiff, when he indicated that within the models of care his service offers, two and a half hours per week of co-ordination is incorporated. He outlined the role of these co-ordinators as follows:²⁰

“The co-ordinators within the coordination role, they are to liaise with staff, develop rosters, work with the relevant stakeholders around the care plan or support plan for an individual, negotiate with any third parties that may be involved. Their duties include things like liaising with doctors, ensuring that regimes established by medical professionals are actually in place and are monitored and supervised, working with the client individually around their own plans and where they choose to have their support going, also certainly providing the necessary supervision to staff or to the support model to ensure that we’re compliant with the relevant governing legislation that we operate under and ensuring that our services are provided in, you know, a quality manner, professional manner.”

In my view, it is important to note that organisations such as “Open Minds” and “Quality Lifestyle Support” are not employment agencies, but rather support services for people with disabilities. The emphasis of the organisation is not in finding employment for staff on their books, but rather in providing appropriate care to their clients with disabilities. Indeed, the evidence is that “Open Minds” was previously known as the “Queensland Wattle League”, a well-known organisation involved in care and advocacy for people with disabilities.

The next question to examine is whether there was any evidence that the market rate sought to be paid was unreasonable. There was, in fact, no objective evidence that it was a rate that was artificially inflated because it was a country rate or for any reason. The rate sought by the plaintiff was the current going rate for the provision of that type of service by that type of agency. In my view, this is the market rate in this case. I consider that the market rate is the commercial rate that an agency charges at the relevant period in time. The fact that someone can be employed at a lower rate does not mean that that level of payment actually provides the appropriate level of care to the plaintiff, given the plaintiff’s care needs. In my view, the standard of care for which compensation is required is care which is supplied by a professional organisation. I agree with the view of Jones J in Castro v Hillery²¹

“[62] In the present state of authority I am compelled to assess the cost of past and future care by reference to market rates. Market rates are dictated by the necessity to have available a supply of reliable competent carers on demand. Such a situation in market terms would usually be achieved only by the engagement of a reputable agency and with that, the inevitable administration costs.”

Clearly on the basis of the principles articulated in Van Gervan v Fenton,²² the period of care provided by family members for past and future care is to be compensated for at the market rate. Accordingly, if the agency fee is part of the market cost of the services, it must be included in the calculation.

In my view, this rate for the relevant period is established on the basis of the rates set out in ex 8.

In terms of the quantification of compensable past care, the calculation should be achieved using full market rates and be based on a total of 2,742 days as follows. I consider that the calculation of the hourly rate should be based on schedules 3.1 to 3.5 in the report of Mr Roland Sykes²³ as set out in the appellant’s submissions as follows:

________________________________________________________________________________________________

PeriodBasis of CalculationValue of

Care

________________________________________________________________________________________________

17.12.01 to 25.07.02221 days @ 12 hrs per day @ $26.89 per hr71,312.28

26.07.02 to 30.06.03340 days @ 4 hours per day @ $26.89 per hr36,570.40

01.07.03 to 30.09.0392 days @ 4 hours per day @ $28.63 per hr10,535.84

01.10.03 to 22.08.04327 days @ 8 hours per day @ $28.63 per hr74,896.08

23.08.04 to 31.08.05374 days @ 8 hours per day @ $30.88 per hr92,392.96

01.09.05 to 27.12.05118 days @ 8 hours per day @ $33.35 per hr31,482.40

28.12.05 to 28.02.07427 days = 61.14 weeks @ 331/2 hours per

week @ $33.35 per hr68,307.14

01.03.07 to 19.06.09842 days = 120.29 weeks @ 331/2 hours per

week @ $35.04 per hr141,201.21

$526,698.31

________________________________________________________________________________________________

Accordingly, the figure for past gratuitous care should be $526,698.31. There must correspondingly be an increase in the interest allowed for past care at a rate of 1.98 per cent of the total sum from injury to the present which is $90,429.05 to 31 January 2010.

Future Care

In relation to the calculation of future care, I consider that the calculation was appropriately based by his Honour on a calculation that there should be a continuation of the current regime, whereby there would be a continuation of the current care regime in which the services of the three paid carers are supplemented by Mrs Waller. Consistent with my views outlined above, I consider that the figure which should be accepted as the basis for the calculation of the award for damages for future care is the amount that would be charged by “Open Minds” if that organisation provided all of the care required by the plaintiff. This rate includes an agency fee. I consider that an amount of $5,468 is the figure established by the evidence as the appropriate weekly figure.

I also consider that the calculation should proceed on the basis that it is accepted that this arrangement will remain in place for 20 years. Accordingly, this case is indeed indistinguishable from Goode v Thompson and the entirety of the plaintiff’s future care needs to be compensated at full commercial rates, even though that care will continue to be provided by the family for the next 20 years. The calculation of future care therefore is as follows. The weekly rate of $5,468 discounted over the remainder of his expected life of another 60 years (5 per cent multiplier 1,012.2) gives a figure of $5,534,709.60. I consider that the discount applied by his Honour is appropriate and accordingly applying the appropriate discount of 15 per cent in accordance with Winterton v Mercantile Mutual,²⁴ yields a figure of $4,704,503.

Case management

I concur that there is clearly a need for the plaintiff to have an independent case manager and that it is indeed desirable that such an arrangement be put in place. Such a person would objectively assess his care needs on an ongoing and evolving basis and ensure that appropriate care arrangements are in place. Such an arrangement would ensure the suitability and the quality of care to be provided. It also affords a level of protection to the plaintiff, as well as ensuring he has someone independent who can assess and advocate for his care needs as they change with his age and as the circumstances around him change. It was suggested by the respondent that this role could be fulfilled by the administrator who has been appointed to manage the fund.

Such a case management role is not an appropriate role for an administrator. It is clear that under the Guardianship and Administration Act 2000, an administrator can be appointed to make financial decisions. On 19 June 2009, Martin J appointed Trust Company Limited as the administrator. Financial matters are defined in sch 2 of the Act and include decisions relating to the adult’s financial or property matters, including matters relating to paying maintenance and accommodation expenses. An administrator therefore, is responsible to ensure that the bills are paid for the care services which are charged and other financial decisions which relate to the costs of Luke’s care. The decisions, however, which an administrator is authorised to make, do not include “care” decisions. An administrator makes financial decisions, not care decisions. Decisions about the care Luke is to receive, is a decision which is properly characterised as a personal decision. Personal decisions are defined in the Act as including decisions about a person’s care, including the adult’s health care or welfare, and includes decisions about where the adult lives; with whom the adult lives; day-to-day issues, including, for example, diet and dress and health care, as well as decisions about legal matters not relating to the adult’s financial or property matters.

If there is a guardian appointed, a guardian makes these personal decisions. If there is no formal appointment of a guardian, then those decisions would be made primarily on an informal basis by his family, most commonly by his mother. Accordingly, recommendations by a case manager as to what care arrangements should be made are recommendations made to the personal decision maker for that decision maker to make. Such a decision would be tempered by many practical matters, including advice from the administrator as to whether the cost of the provision of the service is an appropriate cost and whether the fund managed by the administrator can afford such a cost. The ultimate decision would, therefore, need to be made after consultation with a number of different parties, including the administrator and the case manager.

Case management fees are also clearly quite distinct and different from agency or administration fees, which are charged by the agency for other services which it provides but which are, in fact, not independent case management services.

Clearly, my view is that such an independent case manager is required and should be appointed to fulfil this independent function of oversight and objective advocacy on Luke’s behalf.

The value of that need is the market cost of providing those services. I concur that this would lead to an increase in the award of $110,000.

Provision for holidays

As to whether a figure should be included for holidays, a figure of $181,830 is sought. The issue is whether such provision is “reasonable”. His Honour declined to award such a figure on the basis that it had not been established that the plaintiff would, in fact, be taken on holidays and that the reliance of a statistical likelihood of taking holidays had to be considered against the background of his life.

In this regard there was evidence that he had been taken camping by one of his carers and had greatly enjoyed it. There was also evidence that when his father was killed in a cyclone in Western Australia his father’s employers had paid for him to travel to Western Australia for the funeral. It is also clear that there is considerable cost and effort involved in taking the plaintiff on a holiday. In my view, the issue of whether or not he will be taken on holidays depends on the reality of whether funds and carers will be provided to permit such an activity. There was no evidence that he would not be taken on a holiday if provision was made in the award for these types of expenses. Mrs Waller’s very clear evidence was that she would have liked many activities to have continued for the plaintiff prior to trial but that once the funding was withdrawn by the insurer she was unable to pay for these services herself. I consider that the plaintiff would be taken on holidays if funds were provided for this purpose.

In terms of whether he would benefit from a holiday and have the neurological capacity to enjoy such a holiday the evidence was clear that he did benefit from participation in many activities. In terms of these activities, one of his carers, Justin McDonald, outlined the regular activities he was involved in with Luke including surfing, sailing, drama lessons, as well as going to the movies and markets on weekends. He also stated in his evidence that Luke had a girlfriend. He also indicated that he had taken him to a night club, which he enjoyed, and that he had tried alcohol. In my view the plaintiff would benefit from holidays and he would enjoy holidays.

The Disability Services Act 2006, which contains the Human Rights Principles in pt 2 of the Act, sets out very clearly at s 19 that people with a disability have the right to “respect for their human worth and dignity” and that the focus at s 23 is that “services should be designed and implemented to ensure that the conditions of everyday life of people with a disability are (a) the same as, or as close as possible to, the conditions of everyday life valued by the general community and (b) appropriate to their chronological age”. In my view the provision of an appropriate amount for holidays is an important component in any award for damages as it recognises these key values in the Human Rights Principles which as s 18 of the Act provides are principles which everyone is “ encouraged to have regard to” in matters relating to people with a disability.

I would allow the figure of $181,830, which I consider is reasonable in the circumstances.

In all other respects, I agree with the conclusions of Chesterman JA.

Accordingly, I would allow the appeal and increase the following components as follows:

Past gratuitous care $526,698.31

Interest at 1.98 per cent$90,429.05

Future Care$4,704,503

Holiday Costs $181,830

Case management$110,000

On my calculations this would result in an increase to the award in an amount of $1,573,460.36.

Footnotes

1. [2002] 2 Qd R 572 at 575. ↩

2. [2009] QSC 278. ↩

3. [2002] 2 Qd R 572. ↩

4. Dr G Powell ARB at 668. ↩

5. ARB at 677. ↩

6. ARB at 540. ↩

7. ARB at 588. ↩

8. [2006] QSC 244. ↩

9. ARB at 676. ↩

10. ARB at 261 l 18. ↩

11. [2001] Aust Torts Reports 81-617. ↩

12. [2001] Aust torts Reports 81-617 at 67,167-8. ↩

13. [2002] 2 Qd R 572. ↩

14. (1992) 175 CLR 327. ↩

15. [2002] 2 Qd R 572. ↩