Waller v Suncorp Metway Insurance Limited & Anor [2010] HCATrans 163 (24 June 2010)

Last Updated: 28 June 2010

[2010] HCATrans 163

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Brisbane No B7 of 2010

B e t w e e n -

LUKE STEVEN WALLER A PERSON UNDER A LEGAL INCAPACITY, BY HIS LITIGATION GUARDIAN VICKI CATHERINE WALLER

Applicant

and

SUNCORP METWAY INSURANCE LIMITED (ABN 83 075 695 966)

First Respondent

ADRIAN GLEN McGRATH

Second Respondent

Application for special leave to appeal

FRENCH CJ
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON THURSDAY, 24 JUNE 2010, AT 11.11 AM

Copyright in the High Court of Australia

MR M. GRANT-TAYLOR, SC: May it please your Honours, I appear for the applicant with my learned friend, MR P.B. DE PLATER. (instructed by Neilson Stanton & Parkinson Solicitors)

MR S.C. WILLIAMS, QC: May it please your Honours, I appear for the respondent, second defendant, with my learned friend, MR S.J. WILLIAMS. (instructed by Jensen McConaghy Solicitors)

FRENCH CJ: Yes, Mr Grant-Taylor.

MR GRANT-TAYLOR: By this application, the applicant asked for the opportunity to argue that both the judgment at first instance and the judgment in the Court of Appeal expose a breach of the principle of stare decisis in the form of their declining to acknowledge the force of binding precedent of this Court. The point in issue is a narrow one. Should some part of the applicant’s future accident-related care needs have been compensated by a quantification at other than commercial agency rates, inclusive of what has been termed the agency fee. The affirmative answer to that question in the Court of Appeal, we contend, warrants appellate interference by this Court.

Your Honours, the starting point of the analysis involves recognition of the fact that there were no disputes, either at the trial or before the Court of Appeal, that the applicant needed round-the-clock care and would always do so. His Honour Justice Martin, at first instance, however, arrived at a forecast that for the next 20 years beyond judgment, some 33 and a half hours per week of the applicant’s care needs would be met, not by commercial carers, but by the applicant’s mother, with the balance of the care needs over any given week being met by the commercial carers.

That finding, your Honours, was then used to quantify the worth of the care and services over those same 20 years, not at what the evidence demonstrated to be the full commercial rate of $5,468 per week, but only at some $3,707 per week – that figure being comprised of a combination of commercial care of $3,037 per week and the mother’s gratuitous care which his Honour valued at $670 per week.

Central to the proposed appeal is this Court’s expressed recognition in Van Gervan v Fenton of the inappropriateness and, indeed, the impermissibility of that approach. The passage of particular importance from Van Gervan v Fenton is set out in full in paragraph 17 of our summary of argument, and we will not rehearse what is said there.

KIEFEL J: You say this turns on the direct application of Van Gervan v Fenton. Can you identify the sentences that you rely upon in that passage?

MR GRANT-TAYLOR: Yes. Can we take your Honours to the passages that begin, if your Honours please, at page 335 of the Commonwealth Law Report in the joint judgment of the Chief Justice and Justices Toohey and McHugh at a passage beginning about point seven down the page and the sentence that begins “It does not seem reasonable”.

KIEFEL J: I am sorry, which page are you at, Mr Grant-Taylor?

MR GRANT-TAYLOR: Page 335 of the Commonwealth Law Report, your Honour.

KIEFEL J: Thank you.

MR GRANT-TAYLOR: I was pointing to a point about three-quarters of the way down the page, the sentence that begins “It does not seem reasonable” over to and including a sentence, perhaps two-thirds of the way down page 336, that ends “whether or not the gratuitous care provider continues to provide that care”.

KIEFEL J: How do these observations relate to this case?

MR GRANT-TAYLOR: They relate to this case because of what their Honours said was the unreasonableness of compensating what was found would, in all likelihood, be future gratuitous care, on the basis that because of the uncertainty about whatever would happen in the future, for example, the prospect that the care provider, despite what he or she may have said in evidence, abandoned those ambitions at some point after judgment, or perhaps because the care provider gave birth to, and therefore, had to care for another child herself or perhaps on account of the care provider dying, that the forecast at which his Honour arrived simply was not a sufficient basis to quantify the care in the way that he did.

FRENCH CJ: That is looking to the future option, that the gratuitous services might become, for example, unavailable and you would need to resort to an agency but that, in this case, seems to be taken care of by the allowance of the case manager, is it not?

MR GRANT-TAYLOR: No, your Honour. The problem with that is that the observation, both of his Honour at first instance and of Justice Lyons on appeal, was that the two roles are completely distinct, one cannot have - - -

FRENCH CJ: Yes. They may be distinct, but the question is is that an inappropriate basis for calculating compensation? I am looking at 3.5 and 3.6 of the respondent’s submissions.

MR GRANT-TAYLOR: Yes. Your Honour, that submission, with respect, carries with it the fallacy that because the judgment makes provision for a case manager that somehow the additional compensation obviates the need for the actual care, as distinct from the case management, to be compensated for at other than commercial rates. That is simply not so, because of the completely distinct roles that the two individuals fill, that is, the case manager on the one hand, and the care provider on the other.

KIEFEL J: The essential question here is what is the cost of care by reference to the market? That is the question, is it not?

MR GRANT-TAYLOR: Your Honour, before the Court of Appeal the whole issue seemed to revolve around an issue of definition. The point that we tried to make in our outline is that certainly the evidence will always dictate what market costs will be in any particular case. But before you get to that point, you must have a definition of market cost. The only way you have a definition of market cost is by going back through the authorities to determine what the authorities have said is meant by the term “market cost” and that is precisely what was done in Van Gervan v Fenton.

KIEFEL J: Is it not just a practical factual question about how much it would cost if I went out and tried to find a carer, what would I have to pay to find a carer?

MR GRANT-TAYLOR: Yes.

KIEFEL J: Your point is that you have to pay an additional cost because you have to go through an employment agency and they say “No, you do not, you can interview yourself because you have a case manager”. That is really what it comes down to.

MR GRANT-TAYLOR: Yes, unless you die, of course.

KIEFEL J: But they are factual issues.

MR GRANT-TAYLOR: They are factual issues. However, the problem for the respondent in this case was that the finding at first instance was, in effect, that there were only these two options, that is, care provided by a combination of commercial care providers and Mrs Waller on the one hand, and on the other, care which was provided round the clock exclusively by a commercial agency. There were three or four other options that the evidence exposed, but all of those were dismissed by his Honour. So, as a practical consequence, that must mean that if it be, for whatever reason, and we have recited three possible reasons to your Honours, that is, a confinement, death or simply disinclination, the person whom it is found will be the care provider gratuitously over the next 20 years ceases to be able or willing to fulfil that role, where does that leave the injured party? In a very dire position because the judgment sum simply does not make allowance for that eventuality.

Your Honours, under other circumstances, it might be tempted to argue that this would give rise to the application of the principles in Malec v Hutton about allowing possibilities and probabilities. But, so far as this particular case is concerned, the way in which the issue should be dealt with has been already adjudicated upon by this Court’s decision in Van Gervan v Fenton. In other words, in a case such as this, you allow the commercial rate, including the agency fee, because it is unreasonable and unfair to expose the injured party to the prospect that, for whatever reason, the rosy prediction that the injured party’s mother is going to remain at the helm of providing gratuitous care over two decades is unfulfilled.

Your Honours, the most recent pronouncement from this Court on care issues is found in CSR Limited v Eddy which is the third of the cases in our bundle. May we simply and briefly take your Honours to what was said in the joint judgment of the Chief Justice and Justices Gummow and Heydon at paragraph 32 in a sentence beginning right at the very end of the page beginning “In applying” over to the fourth line on the next page, the sentence ending “by paid professionals”.

In similar terms was what fell from his Honour Justice McHugh at paragraph 83 where, in line four, we ask that your Honours note the use of the term, in unqualified terms, “commercial cost”. Your Honours it is perfectly true that CSR Limited v Eddy did have the effect of affirming a narrowing of the scope of Griffiths v Kerkemeyer damages in one respect, which is totally unrelated to this case. However, there was no watering down at all of the central principle of quantification of the relevant loss at commercial rates.

Your Honours, the case is a curious one because in terms of its practical application one would have thought that the issue in this State would have been well and truly bedded down by the Court of Appeal’s earlier decision in Goode v Thompson, which is the second of the cases in our bundle. Before the Court of Appeal in this matter, we submitted that there was no relevant distinction whatsoever between the two sets of circumstances, that is, the circumstances as they emerged in Goode and the circumstances as they emerged in Mr Waller’s case and, indeed, they were eerily similar.

Once again, in Goode, the finding at first instance was that over a period of 20 years subsequent to judgment the plaintiff’s full-time care needs would be met by his parents. Yet, in that case, the calculation of the loss was quantified as market rates inclusive of the relevant agency fee or administration cost, or whatever one wants to term it. Despite the insurer’s protestations about that on appeal, the approach of the trial judge was proved and the rationale for doing that is found at paragraphs [24] to [26] of the judgment of the Court.

KIEFEL J: But the conclusion of the Court at paragraph [24] was predicated upon the notion that the administrative charge is part of the market cost.

MR GRANT-TAYLOR: Yes.

KIEFEL J: I do not think that is conclusive for all purposes for every case that follows.

MR GRANT-TAYLOR: No. The issue, however, in this case is that at least so far as concerns the case of a plaintiff as grievously injured as this one, market costs, as a matter of definition, must include the administration fee, again, because of what fell from this Court in Van Gervan v Fenton. Now, one may well be able to imagine other circumstances in which it is inappropriate to adopt that approach.

KIEFEL J: Well, it is a question of the evidence though, is it not? If the evidence shows that you can go out into the market and find people without paying it, then you have a different conclusion.

MR GRANT-TAYLOR: Your Honour, the evidence did not show that. The finding was, as I say, that there were just the two alternatives. Either full commercial people on board providing all of the care, round the clock, 24/7, or a combination of commercial care and just Mrs Waller. That was the finding. There was no finding that it was appropriate to go out and dig up other carers on some basis which would obviate the need to include the agency fee. That, with respect, should have been the touchstone which guided the way in which the assessment was carried out. In other words, if Mrs Waller dies, the full-time commercial care agency regime must be that which applies.

Your Honours, the attempt, with respect, by the respondent in paragraphs 3.4 and 3.5 of its summary to distinguish Goode is misplaced, we would contend. First, the respondent seeks to suggest that the court in Goode, and we are quoting from the summary:

was presented with no alternate source of care and no market cost other than that which would be charged by an agency.

But, your Honours, the fact is that before the court in Goode was precisely the same sort of evidence that was before the court in this instance, in that there was a report before the court in first instance which was tendered, which clearly identified on the one hand the agency’s charge-out rate and on the other, the hourly gross wage which was paid to the carer. Your Honours, we do not have a copy of Goode at first instance in our bundle and we apologise for that, but we have brought copies of the case along in the event that reference was - - -

KIEFEL J: But the model here involved a case manager who could take a particular role.

MR GRANT-TAYLOR: Yes, and that is the second point. The respondent suggests that the fact that the services of the case manager were compensated for in this case, and that similar services were not allowed, or even sought in Goode, provides a point of distinction. But that, your Honour, ignores the observation of both Justice Martin at first instance, and Justice Lyons on appeal, that the two roles are completely different. It is quite inappropriate for the latter, that is the care provider, to discharge the role of the former, that is the case manager. They are two completely different roles, and there is no comfort for the respondent in drawing that distinction.

Your Honours, we also take issue with the respondent’s contention that the evidence established, or at least that it should be inferred somehow, that Mrs Waller will be paid henceforth for the care services that she provides. Justice Chesterman, with respect, fell into a similar error as emerges from a reading of paragraphs [34] and [58] of his reasons.

Your Honours, perfectly true it is that at trial, the litigation guardian, that is, the plaintiff’s mother, sought from the trial judge and, indeed, recovered a sum to compensate her for her past services and, in fact, precisely the same thing happened in Goode, that is, the litigation guardian in Goode applied for a grant or an order from his Honour that she be compensated by paying out to her of some part of the judgment sum and that application was granted. But, your Honours, that is not a circumstance at all that warrants a forecast that she will continue to be paid in the future.

First of all, she was never asked in cross-examination whether she seeks such a payment in the future. A representative of the applicant’s prospective fund manager, who gave evidence, was not asked if the administrator or fund manager would be prepared henceforth to pay Mrs Waller for what she might do. In short, there was no evidence at all on the point as to what the future might hold and there was no such inference to be drawn.

Your Honours, that is especially so having regard to the statement of principle from this Court in Kars v Kars, which we see is on our learned friend’s list of cases. May we take your Honours to page 360 of the Commonwealth Law Report.

KIEFEL J: We seem to have the Australian Torts Reports in the copy that we have been provided.

MR GRANT-TAYLOR: Yes, your Honour. The list we were given had both reports and we thought our friends were being enthusiastic in giving your Honours both. Perhaps we were mistaken in that. Certainly the decision in this Court was reported at (1996) 187 CLR.

FRENCH CJ: I think we have the Queensland Court of Appeal on Kars v Kars.

MR GRANT-TAYLOR: I am sorry. It may be that we misread them and simply assumed that the Kars v Kars reference was to be the decision for this Court. For that, we apologise.

FRENCH CJ: Anyway, what do you want to take us to?

MR GRANT-TAYLOR: Simply this, at page 360 Justice Dawson says:

it cannot be said in Australia that the underlying rationale of awarding damages for services provided gratuitously is to enable the carer to receive proper recompense for his or her services. The damages are recoverable to compensate the plaintiff for the loss which is evidenced by the need for the services and it is a matter for the plaintiff whether they are used to recompense the person providing the services.

Your Honours, it would be surprising if we were not to commend to you the reasoning and conclusions found in the dissenting judgment in the Court of Appeal of Justice Lyons. In our submission, her Honour’s detailed and carefully crafted reasons embrace an insightful analysis of the authorities and explain in a compelling fashion why, in a case like this, the market rates or the market costs, must be regarded as a concept inclusive of the agency fees. Importantly, too, her Honour notes that this is not a case where there was any evidence of the sort of features identified in Van Gervan v Fenton, which would take the relevant market cost beyond the bounds of what was reasonable and hence, compensable. May we take your Honours to paragraph [91] of the judgment in the Court of Appeal?

FRENCH CJ: I think we have just about run out of time. Perhaps you can just take us quickly to that reference.

MR GRANT-TAYLOR: Yes. I will do no more than refer your Honours to paragraph [91] where her Honour says there were none of these features which would mean that the amount sought to be compensated for was unreasonable, such as a surcharge being charged in the country, or something of that sort.

FRENCH CJ: Yes, all right.

MR GRANT-TAYLOR: Your Honours, those are our submissions.

FRENCH CJ: Thank you very much. Mr Williams, we will not need to trouble you.

MR WILLIAMS: If your Honour pleases.

FRENCH CJ: We are not satisfied that there was error in principle in the approach taken by the Court of Appeal. The contested assessment turned on questions of fact as to arrangements that could be made for the future care of the applicant. Special leave will be refused with costs.

The Court will now adjourn briefly to reconstitute for the next matter.

AT 11.34 AM THE MATTER WAS CONCLUDED