The High Court has delivered a significant judgment concerning the compensatory principle as it applies to the assessment of damages in tort.
In issue
- The application of the compensatory principle in assessing damages for care and treatment to a catastrophically injured person who wishes to live in a rented house.
The background
The plaintiff, Mr Stewart, received treatment at a hospital administered by the defendant health service (the service). As a result of the service’s admitted negligence, Mr Stewart suffered catastrophic injuries including brain damage.
Prior to the incident, the plaintiff lived in a coastal property that he shared with his brother. He was separated from his wife, but they had an amicable relationship. The plaintiff and his wife shared custody of a 14-year-old son. He loved animals and particularly the family dogs.
Following discharge from hospital, the plaintiff was moved to a nursing home, Ozanam. His wife and son had a dog which they would bring with them when they visited, but the plaintiff was not allowed a dog at Ozanam. The plaintiff’s son wished to stay overnight but it was very difficult if not impossible for him to do so. While at Ozanam, the plaintiff’s physical condition deteriorated due to lack of therapy and exercise. The plaintiff communicated to his family members that he wanted to live in a private home and spend more time with his son and the family dog. There was evidence from various medical experts including a rehabilitation physician, psychiatrist and occupational therapist to the effect that the plaintiff’s physical and mental health would improve from such an arrangement.
The key issue confronting the various Courts was whether damages ought to be assessed on the basis of Mr Stewart:
- remaining at Ozanam under the current arrangements (option 1). The total cost was assessed to be approximately $300,000 by the trial judge,
- remaining at Ozanam but being provided with an external care assistant and extra therapy and exercise (option 2). The total cost was assessed to be approximately $1.1 million, or
- living in a rented home and receiving treatment, medical care and nursing there, as Mr Stewart wished to do (option 3). The assessed total cost was approximately $4.9 million.
The decision at trial
The matter was tried in the Supreme Court of Queensland. Liability was not in issue, and the essential issues were (A) the plaintiff’s likely life expectancy (which is outside the scope of this note); and (B) which of the above options should be used to assess damages.
The trial judge’s fundamental approach was to consider what level of care was 'reasonably necessary' in all the circumstances. His Honour found that option 3 would result in health benefits (not merely slight or speculative ones) to the plaintiff. However, his Honour was not persuaded that this option would result in health benefits that were significantly better than those that could be achieved through option 2. Having regard to the significant additional costs of option 3, his Honour considered it would not be reasonable to require the Service to pay for it. Accordingly, damages for future care and therapy were assessed in accordance with option 2.
His Honour approached the issue as an exercise in reasonableness. This involved weighing the health benefits of option 3 versus the additional costs it imposed. In that regard, his Honour relied on the decision of the High Court in Sharman v Evans (1977) 138 CLR 563 (Sharman) as supporting that approach. His Honour interpreted the decision as requiring that where an option for care involves great cost and only slight or speculative benefits to health comparted to a less costly alternative, the Court likely ought to assess damages in accordance with the less costly option.
Decision of the Court of Appeal
Mr Stewart appealed to the Court of Appeal, with the service filing a cross-appeal (this was dismissed subject to some calculation errors in the primary judgment being corrected). Again, the key issue was what option should be used to assess the plaintiff’s damages.
Boddice JA gave the leading judgment in the appeal and indicated that there was no error in the trial judge’s approach in preferring option 2. As the trial judge had found that the health benefits of options 2 and 3 were substantially the same, regard could be had to the additional costs imposed by option 3 in assessing reasonableness.
Decision of the High Court
The plaintiff’s appeal was heard before Gageler CJ, and Gordon, Edelman, Jagot and Beech-Jones JJ. All five justices allowed the plaintiff’s appeal and gave joint reasons for judgment.
The Court affirmed that the starting point for assessing damages in tort is to consider what sum of compensation is required to put the plaintiff back in the position they would have been in had the tort not been committed (so far as money can do that). This principle is subject to considerations of reasonableness: first, the plaintiff is required to prove consequential losses by proving the reasonable cost of actions that are reasonably required to mitigate the effects of the tort. Second, if assuming the plaintiff discharges its onus, if the defendant wishes to argue that the plaintiff ought to have taken some alternative approach to avoid or mitigate that cost, the defendant must prove that.
In addressing Sharman, the Court considered that the decision largely turned on its facts. Further, in the present day, a choice by a severely injured plaintiff to live at home was not unusual, considering the improvements in care that can be provided in a home setting that have occurred since the 1970s.
The Court concluded that the lower Courts had addressed the wrong question in assessing the reasonableness of option 3. What they should have done was decide whether the plaintiff’s choice to live at home was a reasonable response to repair the consequences of the tort. If it was, then the service bore the onus of proving that the plaintiff had acted unreasonably by refusing to take an alternative course that would have avoided the additional costs imposed by option 3.
The Court explained that deciding whether home care is a reasonable response involves a comparison between the plaintiff’s current circumstances versus those prior to the tort. This exercise did not involve merely balancing health benefits against their cost. It also involves considering what is reasonable in the circumstances. The Court explained that if an injured person living in a home setting may physically or mentally benefit from restoration to that position or a similar one, recovering the cost of treatment in a home setting would generally be reasonable.
In applying its endorsed approach to the plaintiff’s situation, the Court considered that option 3 was substantially the same as his pre-injury living arrangements. Options 1 or 2 did not restore the plaintiff to that position. The benefits to physical and mental health and quality of life that the plaintiff would achieve through option 3 further supported its reasonableness. Given the findings of the trial judge, the Court concluded that option 3 was reasonable.
The Court then addressed whether the service had discharged its onus of proving that the plaintiff acted unreasonably in refusing to take up option 2. In the Court’s view, the service failed to discharge that onus. Its evidence did not show that option 2 was likely to improve the plaintiff’s health compared to his current living arrangements. Further, the Court noted that the improvements to the plaintiff’s quality of life and mental health that would be brought about by option 3 'reinforce[d] the lack of unreasonableness' in him insisting upon it.
A further issue the Court commented on was the assessment of general damages under the Civil Liability Act 2003 (CLA). Although the CLA-enacted scheme allows courts to consider 'other matters' including loss of amenities of life, the trial judge had assessed damages with reference to functional issues. The Court considered it would be appropriate to first find what a plaintiff’s living arrangements would be, and then use that information to assess general damages, as that method avoids double counting the lost amenities. The Court seemingly suggested that if a different approach such as options 1 or 2 had been used, the plaintiff might have been entitled to greater general damages for his lost amenities.
Rather than re-assess quantum, the Court ordered that the matter be remitted to the Supreme Court of Queensland for further assessment of damages. It should be noted that the parties had agreed that if the plaintiff’s methodology for assessment was adopted, he would receive approximately $5.9 million in damages, including circa $285,000 for general damages and $4.75 million for future care in a rented home.
Implications for you
This case has significant and varied implications for personal injury litigants, their legal representatives and insurers.
The most obvious implication of this case is that the Court has confirmed that assessing reasonableness of home care is not to be done as a simple cost–benefit analysis, and the injured plaintiff’s wishes will be afforded significant weight. However, we suspect the reasoning can and will be adapted to claims for other expenses. Therefore, plaintiffs in serious injury claims, may be able to recover greater damages than might have previously been understood to be the case.
The decision also indicates that defendants have a heavy evidentiary onus to discharge where they wish to argue that a plaintiff’s refusal to take up a particular option of care or treatment is unreasonable. In order to run an 'unreasonableness' argument, defendants will need to obtain appropriate expert evidence that assesses the likelihood that their suggested approach would improve the plaintiff’s health versus the alternatives.
Stewart v Metro North Hospital and Health Service [2025] HCA 34
