Part 2 - Personal injury damages

Division 2 - Fixing damages for economic loss

12 - Damages for past or future economic loss of earnings etc

(1) This section applies to an award of damages:

(a) for past economic loss due to loss of earnings or the deprivation or impairment of earning capacity, or

(b) for future economic loss due to the deprivation or impairment of earning capacity, or

(2) In the case of any such award, the court is to disregard the amount (if any) by which the claimant’s gross weekly earnings would (but for the injury or death) have exceeded an amount that is 3 times the amount of average weekly earnings at the date of the award.

(3) For the purposes of this section, the amount of average weekly earnings at the date of an award is

(a) the amount per week comprising the amount estimated by the Australian Statistician as the average weekly total earnings of all employees in New South Wales for the most recent quarter occurring before the date of the award for which such an amount has been estimated by the Australian Statistician and that is, at that date, available to the court making the award, or

(b) if the Australian Statistician fails or ceases to estimate the amount referred to in paragraph (a), the prescribed amount or the amount determined in such manner or by reference to such matters, or both, as may be prescribed.

Taylor v The Owners – Strata Plan 11564 [2014] HCA 9

The appellant’s husband was killed when a shop awning collapsed on him. His widow claimed damages under the Compensation to Relatives Act 1897. The trial judge found that an award of damages pursuant to ss 3 and 4 of the Compensation to Relatives Act would be limited by the operation of s 12(2) of the Act. An appeal to the Court of Appeal was dismissed.

Section 12(2) directs a court, when awarding damages relating to the death of or injury to a person, to disregard the amount by which the “claimant’s gross weekly earnings would (but for the injury or death) have exceeded an amount that is three times the amount of average weekly earnings”. Despite the repeal of the definition of “claimant” within the Act, nothing evidences an intention to change the meaning from its ordinary meaning as “the person who makes or is entitled to make a claim”. To read s 12 as applying the s 12(2) limitation to the deceased’s gross weekly earnings cannot be reconciled with the language that Parliament has enacted. The phrase “the claimant’s gross weekly earnings” cannot identify the gross weekly earnings of the deceased. [1], [9], [41]-[44]

13 - Future economic loss - claimant's prospects and adjustments

(1) A court cannot make an award of damages for future economic loss unless the claimant first satisfies the court that the assumptions about future earning capacity or other events on which the award is to be based accord with the claimant’s most likely future circumstances but for the injury.

(2) When a court determines the amount of any such award of damages for future economic loss it is required to adjust the amount of damages for future economic loss that would have been sustained on those assumptions by reference to the percentage possibility that the events might have occurred but for the injury.

(3) If the court makes an award for future economic loss, it is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted.

Chen by her tutor Huang v Kmart Australia Ltd [2023] NSWCA 96

Miss Chen, who was six years old, was injured while shopping with a family member at a store operated by Kmart. Kmart did not dispute that Miss Chen’s injury had been caused by the negligence of its employees. By her tutor, Miss Chen commenced proceedings against Kmart in September 2021, seeking compensation. The primary judge awarded, relevantly, $45,825 for non- economic loss and a buffer sum of $5,000 for future economic loss in the form of loss of earning capacity. The Court of Appeal dismissed the appeal.

On s 13

Where a party seeks to challenge an award of damages for non-economic loss, determined in accordance with s 16 of the Civil Liability Act, that party must demonstrate a House v The King error: [12]. As the primary judge had regard to the matters alleged to have been overlooked by Miss Chen, and factored those matters into the award for non-economic loss, no such error had been identified: [13]-[17].

In s 13, the reference to what is “most likely” refers to the most likely of possibilities, not to probabilities: [43]. Assessing the loss of earning capacity caused by personal injury in the case of a very young child is an exercise in intuition, for which no reasoned explanation generally can be given as to why one figure, rather than another, has been selected as a fair reflection of the loss suffered. While the buffer sum awarded was low, it did not fall outside the reasonable range: [51].

Court of Appeal decisions referred to in discussion:

White v Redding (2019) 99 NSWLR 605; [2019] NSWCA 152

New South Wales v Moss (2000) 54 NSWLR 536; [2000] NSWCA 133

Loxton v New South Wales [2002] NSWCA 194; (2002) Aust Torts Reports 81-667

Pollard v Baulderstone Hornibrook Engineering Pty Ltd [2008] NSWCA 99;

(2008) Aust Torts Reports 81-949

High Court decisions referred to in discussion:

House v The King (1936) 55 CLR 499; [1936] HCA 40

Clancy v Plaintiffs A, B, C and D; Bird v Plaintiffs A, B, C and D [2022] NSWCA 119

Plaintiffs A, B, C and D (the respondents) alleged that B and D, whose mothers were A and C respectively, were assaulted by Mr Bird while attending Footprints Childcare Centre (Footprints), owned by Little Pigeon Pty Ltd, between 2008 and 2010. A further two children made disclosures to the police. The primary judge admitted the four children’s disclosures to the police as tendency evidence in B and D’s claims.

Admissions by Mr Bird made to the police in 2010 and A and C’s perceptions of their children’s behaviour were similarly admitted. The primary judge found Mr Bird, Little Pigeon and its director, Ms Clancy, liable for breach of duty of care and breach of contract to A and C. Ms Clancy, Footprints and Mr Bird appealed this decision. The Court of Appeal allowed the appeal, dismissed A and B’s proceedings and remitted C and D’s proceedings to the Common Law Division.

On s 13: The primary judge’s awarded C

$110,000 as a buffer against possible future economic loss. This award could not be sustained on the evidence. It was non- compliant with s 13, which expressly requires the statement of the assumptions on which the buffer is based, and did not take proper account of C’s particular circumstances: [273]-[277].

The primary judge’s assessment of D’s damages for non-economic loss was out of proportion to the injury she apparently suffered and should be reassessed during any re-trial. As to damages for future economic loss, D’s buffer was assessed on a basis which did not accord with s 13 of the CLA, nor did it readily reflect the evidence of her particular circumstances. The assumptions upon which the buffer was assessed were not specified and resulted in a global figure that did not readily reflect D’s circumstances. In particular, D’s susceptibility to further injury was assessed differently to B’s, meaning it was problematic to award an identical buffer.: [293]-[297]

NSWCA decisions referred to in discussion:

Allianz Australia Insurance Ltd v Cervantes [2012] NSWCA 244

Burton v Brooks [2011] NSWCA 175

Penrith City Council v Parks [2004] NSWCA 201

Sretenovic v Reed [2009] NSWCA 280

14 - Damages for future economic loss - discount rate

(1) If an award of damages is to include any component, assessed as a lump sum, for future economic loss of any kind, the present value of that future economic loss is to be determined by adopting the prescribed discount rate.

(2) The “prescribed discount rate” is:

(a) a discount rate of the percentage prescribed by the regulations, or

(b) if no percentage is so prescribed–a discount rate of 5%.

(3) Except as provided by this section, nothing in this section affects any other law relating to the discounting of sums awarded as damages.

15 - Damages for gratuitous attendant care services: general

(1) In this section:

“attendant care services” means any of the following:

(a) services of a domestic nature,

(b) services relating to nursing,

“gratuitous attendant care services” means attendant care services:

(a) that have been or are to be provided by another person to a claimant, and

(b) for which the claimant has not paid or is not liable to pay.

(2) No damages may be awarded to a claimant for gratuitous attendant care services unless the court is satisfied that:

(a) there is (or was) a reasonable need for the services to be provided, and

(b) the need has arisen (or arose) solely because of the injury to which the damages relate, and

(3) Further, no damages may be awarded to a claimant for gratuitous attendant care services unless the services are provided (or to be provided):

(a) for at least 6 hours per week, and

(b) for a period of at least 6 consecutive months.

(4) If the services are provided or are to be provided for not less than 40 hours per week, the amount of damages that may be awarded for gratuitous attendant care services must not exceed:

(a) the amount per week comprising the amount estimated by the Australian Statistician as the average weekly total earnings of all employees in New South Wales for:

(i) in respect of the whole or any part of a quarter occurring between the date of the injury in relation to which the award is made and the date of the award, being a quarter for which such an amount has been estimated by the Australian Statistician and is, at the date of the award, available to the court making the award–that quarter, or

(ii) in respect of the whole or any part of any other quarter–the most recent quarter occurring before the date of the award for which such an amount has been estimated by the Australian Statistician and is, at that date, available to the court making the award, or

(5) If the services are provided or are to be provided for less than 40 hours per week, the amount of those damages must not exceed the amount calculated at an hourly rate of one- fortieth of the amount determined in accordance with subsection (4) (a) or (b), as the case requires.

(6) Except as provided by this section, nothing in this section affects any other law relating to the value of attendant care services.

Note:

By reason of the operation of section 3B (1) (b), this section does not apply to the determination of civil liability in proceedings of the kind referred to in section 11 (Claims for damages for dust diseases etc to be brought under this Act) of the Dust Diseases Tribunal Act 1989.

Section 15A makes provision with respect to the determination of damages for gratuitous attendant care services in proceedings of the kind referred to in section 11 of the Dust Diseases Tribunal Act 1989.

Hintz v Illawarra Shoalhaven Local Health District [2021] NSWSC 999

The plaintiffs commenced proceedings under the Compensation to Relatives Act 1897 (NSW) alleging that the defendant’s negligence had caused the death of their father. A significant element of the damages claimed represented the loss of services that the deceased would have provided for the plaintiffs but for his death. The proceedings were resolved by agreement, subject to the Court’s approval by reason of the fact that one of the plaintiffs was a person under legal incapacity. Uncertainty as to the application of s 15 of the Civil Liability Act to the claimed loss of services was factored into the settlement by discounting the claimed damages. The Court approved the settlement of the proceedings on the basis that loss of gratuitous services provided by the deceased would likely not be compensable.

On s 15: Before the introduction of the Civil Liability Act, the High Court in Nguyen v Nguyen (1990) 169 CLR 245; [1990] HCA 9 that compensation could be awarded in a Compensation to Relatives Act claim for lost domestic services. That position is potentially affected by ss 15 and 15B of the Civil Liability Act. Though the question has not yet arisen for determination by the Court of Appeal, the decisions in Coote v Kelly; Northam v Kelly [2016] NSWSC 1447 and Goddard v Central Coast Health Network [2013] NSWSC 1932 suggest the following:

(i) s 15B would not apply, as it relates to loss of a claimant’s capacity to provide gratuitous domestic services, which claimant must be either the person injured or that person’s legal personal representative; (ii) the prohibition on recovery in s 15(2) would apply, as the need for domestic services did not arise solely because of the injury (sustained by the deceased), and the services in question would have been provided to the claimants but for the injury: [8]-[18].

15A - Damages for gratuitous attendant care services: dust-related conditions

(1) This section applies to the determination of civil liability for damages for gratuitous attendant care services in proceedings of the kind referred to in section 11 (Claims for damages for dust diseases etc to be brought under this Act) of the Dust Diseases Tribunal Act 1989.

(2) The amount of damages that may be awarded for gratuitous attendant care services in proceedings referred to in subsection (1) must not exceed the amount calculated at the same hourly rate as that provided by section 15 (5) regardless of the number of hours involved.

(3) Except as provided by this section, nothing in this section affects any other law relating to the value of attendant care services.

(4) In this section, “attendant care services” and “gratuitous attendant care services” have the same meanings as they have in section 15.

15B - Damages for loss of capacity to provide domestic services

(1) Definitions In this section:

“assisted care”, in relation to a dependant of a claimant, means any of the following kinds of care (whether or not the care is provided gratuitously):

(a) any respite care (being care that includes

accommodation that is provided by a person other than the claimant to a dependant who is aged or frail, or who suffers from a physical or mental disability, with the primary purpose of giving the dependant or claimant, or both, a break from their usual care arrangements),

(b) if the dependant is a minor (but without limiting paragraph (a))–any care that is provided to the dependant by a person other than the claimant where:

(i) the person is a parent of the dependant (whether derived through paragraph (a) (i) or (ii) of the definition of “dependants” in this subsection, adoption or otherwise), and

(i) the care includes the provision of accommodation to the dependant.

“dependants”, in relation to a claimant, means:

(a) such of the following persons as are wholly or partly dependent on the claimant at the time that the liability in respect of which the claim is made arises:

(i) the person to whom the claimant is legally married (including a husband or wife of the claimant),

(ii) a de facto partner of the claimant, “De facto partner” is defined in section 21C of the Interpretation Act 1987.

(iii) a child, grandchild, sibling, uncle, aunt, niece, nephew, parent or grandparent of the claimant (whether derived through subparagraph (i) or (ii), adoption or otherwise),

(iv) any other person who is a member of the claimant’s household, and

(b) any unborn child of the claimant (whether derived through paragraph (a) (i) or (ii), adoption or otherwise) at the time that the liability in respect of which the claim is made arises and who is born after that time.

“gratuitous domestic services” means services of a domestic nature for which the person providing the service has not been paid or is not liable to be paid.

(2) When damages may be awarded Damages may be awarded to a claimant for any loss of the claimant’s capacity to provide gratuitous domestic services to the claimant’s dependants, but only if the court is satisfied that:

(a) in the case of any dependants of the claimant of the kind referred to in paragraph

(a) of the definition of “dependants” in subsection (1)–the claimant provided the services to those dependants before the time that the liability in respect of which the claim is made arose, and

(b) the claimant’s dependants were not (or will not be) capable of performing the services themselves by reason of their age or physical or mental incapacity, and

(c) there is a reasonable expectation that, but for the injury to which the damages relate, the claimant would have provided the services to the claimant’s dependants:

(i) for at least 6 hours per week, and

(ii) for a period of at least 6 consecutive months, and

(d) there will be a need for the services to be provided for those hours per week and that consecutive period of time and that need is reasonable in all the circumstances.

Note: Section 18 provides that a court cannot order the payment of interest on damages awarded for any loss of capacity of a claimant to provide gratuitous domestic services to the claimant’s dependants.

(3) If a dependant of the claimant received (or will receive) assisted care during the 6-month period referred to in subsection (2) (c) (ii) and the court is satisfied that the periods of that care were (or will be) short-term and occasional, the court may:

(a) in determining whether the claimant would have provided gratuitous domestic services to the dependant during a particular week for at least the 6 hours referred to in subsection (2) (c) (i), disregard the week if assisted care was (or will be) provided during that week, and

(b) in determining whether the claimant would have provided gratuitous domestic services to the dependant during the 6- month period referred to in subsection (2)

(c) (ii), disregard any periods during which the assisted care was (or will be) provided in that 6-month period, but only if the total number of weeks in which the care was (or will be) provided during the 6- month period does not exceed 4 weeks in total.

(4) Determination of amount of damages The amount of damages that may be awarded for any loss of the claimant’s capacity to provide gratuitous domestic services must not exceed the amount calculated at the same hourly rate as that provided by section 15 (5) regardless of the number of hours involved.

(5) In determining the amount of damages (if any) to be awarded to a claimant for any loss of the claimant’s capacity to provide gratuitous domestic services to the claimant’s dependants, a court:

(a) may only award damages for that loss in accordance with the provisions of this section, and

(b) must not include in any damages awarded to the claimant for non-economic loss a component that compensates the claimant for the loss of that capacity.

(6) Circumstances when damages may not be awarded The claimant (or the legal personal representative of a deceased claimant) may not be awarded damages for any loss of the claimant’s capacity to provide gratuitous domestic services to any dependant of the claimant if the dependant has previously recovered damages in respect of that loss of capacity.

(7) A person (including a dependant of a claimant) may not be awarded damages for a loss sustained by the person by reason of the claimant’s loss of capacity to provide gratuitous domestic services if the claimant (or the legal personal representative of a deceased claimant) has previously recovered damages in respect of that loss of capacity.

(8) If a claimant is a participant in the Scheme under the Motor Accidents (Lifetime Care and Support) Act 2006, damages may not be awarded to the claimant under this section in respect of any loss of the claimant’s capacity to provide gratuitous domestic services to the claimant’s dependants while the claimant is a participant in the Scheme if (and to the extent that):

(a) the loss resulted from the motor accident injury (within the meaning of that Act) in respect of which the claimant is a participant in that Scheme, and

(b) the treatment and care needs (within the meaning of that Act) of the claimant that are provided for or are to be provided under the Scheme include the provision of such domestic services to the claimant’s dependants.

(9) Damages may not be awarded to a claimant under this section in respect of any loss of the claimant’s capacity to provide gratuitous domestic services to the claimant’s dependants if (and to the extent that):

(a) the loss resulted from an injury caused by a motor accident (within the meaning of the Motor Accidents Compensation Act 1999), and

(b) an insurer has made, or is liable to make, payments to or on behalf of the claimant for such services under section 83 (Duty of insurer to make hospital, medical and other payments) of that Act.

(10) Damages may not be awarded if they can be recovered as damages for attendant care services Damages may not be awarded to a claimant under this section in respect of any loss of the claimant’s capacity to provide gratuitous domestic services to the claimant’s dependants if (and to the extent that):

(a) the claimant could recover damages for gratuitous attendant care services (within the meaning of section 15) in respect of the same injury that caused the loss, and

(b) the provision of such attendant care services to the claimant also resulted (or would also result) in the claimant’s dependants being provided with the domestic services that the claimant has lost the capacity to provide.

(11) Determining value of gratuitous domestic services In determining the value of any gratuitous domestic services that a claimant has lost the capacity to provide, the court must take into account:

(a) the extent of the claimant’s capacity to provide the services before the claimant sustained the injury that is the subject of the claim, and

(b) the extent to which provision of the services would, but for the injury sustained by the claimant, have also benefited persons in respect of whom damages could not be awarded under subsection (2), and

Piatti v ACN 000 246 542 Pty Ltd [2020] NSWCA 168

Charles Rene Abegglen had brought proceedings seeking damages for negligence against the Respondents in the Dust Diseases Tribunal. A large component of the damages awarded were for the loss of his ability to care for his long-term partner, Mrs Piatti, who suffered from Alzheimer’s and dementia. The trial judge considered damages for the loss of capacity to provide domestic services (calculated under s 15B of the CLA) to be limited to the level of services provided at the time liability for the disease arose, rather than at the time of judgment. The Appellant challenged this finding on behalf of Mr Abegglen’s estate

On s 15B: In accordance with ordinary principles of assessment of damages, loss of capacity is to be assess by the court at the time of judgment, and extends to both past and future loss as at that time. There is nothing in the language of s 15B to suggest that this particular head of damages was intended to be frozen at an earlier point in time: [45]-[46], [53]-[54]. The proper construction of s 15B(2) is that, provided the court is satisfied that the four conditions in pars (a)-(d) are met, a claimant is entitled to an award of damages for the entire loss of capacity, as at the date of assessment of damages: [64].

Damages for loss of capacity to provide domestic services are also recoverable for a period after a claimant’s death: [72]-[75].

15C - Damages for loss of superannuation entitlements

(1) The maximum amount of damages that may be awarded for economic loss due to the loss of employer superannuation contributions is the relevant percentage of damages payable (in accordance with this Part) for the deprivation or impairment of the earning capacity on which the entitlement to those contributions is based.

(2) The relevant percentage is the percentage of earnings that is the minimum percentage required by law to be paid as employer superannuation contributions.

Last updated:

23 Nov 2024