Mott v Fire & All Risks Insurance Co Ltd
[1999] QCA 220
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- Unreported Judgment
- Appeal Determined (QCA)
- Mott v Fire & All Risks Insurance Co Ltd[1999] QCA 220
- Add to List
Mott v Fire & All Risks Insurance Co Ltd[1999] QCA 220
Reported at [2000] 2 Qd R 34
Mott v Fire & All Risks Insurance Co Ltd[1999] QCA 220
Reported at [2000] 2 Qd R 34
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Appeal No 11904 of 1998
Brisbane
BETWEEN:
FIRE AND ALL RISKS INSURANCE CO LTD
A.C.N. 000 327 855
(Defendant by Election)
Appellant
AND:
ANTHONY MOTT by his next friend KATHLEEN MAY MOTT
(Plaintiff)
Respondent
McMurdo P
Pincus JA
Chesterman J
Judgment delivered 15 June 1999
Separate reasons for judgment of each member of the Court, McMurdo P dissenting.
APPEAL ALLOWED AND THE FOLLOWING ORDERS MADE:
(1)SUBJECT TO ORDER (2) THE JUDGMENT ENTERED BELOW IS REDUCED FROM $1,246,314.30 TO $796,314.30;
(2)ACTION REMITTED TO THE TRIAL DIVISION FOR THE PURPOSE OF A REASSESSMENT OF DAMAGES FOR FUTURE CARE AND ASSISTANCE, THE AMOUNT OF WHICH IS, WHEN ASSESSED, TO BE ADDED TO THE SUM OF $796,314.30, THE TOTAL BEING THE FINAL JUDGMENT IN THE ACTION;
(3)NO ORDER AS TO APPELLANT’S COSTS OF THE APPEAL;
(4)INDEMNITY CERTIFICATE PURSUANT TO THE APPEAL COSTS FUND ACT 1973 BE GRANTED TO THE RESPONDENT IN RESPECT OF THE APPEAL.
| CATCHWORDS: | DAMAGES - GENERAL PRINCIPLES - negligence - personal injuries - whether the 3% or 5% discount tables should be applied to the plaintiff's award of damages for future care. Gaudry v Pacific Coal Pty Ltd (unreported, Supreme Court of Queensland, Helman J, 9 November 1995), considered. PROCEDURE - COSTS - whether respondent entitled to an indemnity certificate - whether appellant insurer has interest in clarification of the law. STATUTES - ACTS OF PARLIAMENT - INTERPRETATION - meaning of “damage ... referable ... to a liability to incur expenditure” - Supreme Court Act s 16(1) Supreme Court Act 1995, s 16(1) Common Law Practice Act 1867, s 5 Acts Interpretation Act 1954, s 14A Appeal Costs Fund Act 1973, s 15 Griffiths v Kerkemeyer (1977) 139 CLR 161, referred to. Kars v Kars (1996) 187 CLR 354, considered. Nguyen v Nguyen (1990) 169 CLR 245, considered. Todorovic v Waller (1981) 150 CLR 402, considered. Van Gervan v Fenton (1992) 175 CLR 327), considered. Cole v Director-General of Department of Youth and Community Services (1987) 7 NSWLR 541, considered. Cooper Brookes (Woollongong) Pty Ltd v FCT (1981) 147 CLR 297, considered. Dallikavak v Minister for Immigration in Ethnic Affairs (1985) 61 ALR 471, referred to. Hall v Bonnet [1956] SASR 10, considered. Re Chapman [1896] 1 Ch 323, considered. Thompson v Goold & Co [1910] AC 409, considered. |
| Counsel: | Mr GW Crooke QC with Mr C Newton for the appellant Mr R Morton for the respondent |
| Solicitors: | Clayton Utz for the appellant Murphy Schmidt Solicitors for the respondent |
| Hearing date: | 21 May 1999 |
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Appeal No 11904 of 1998
Brisbane
BETWEEN:
FIRE AND ALL RISKS INSURANCE CO LTD
A.C.N. 000 327 855
(Defendant by Election)
Appellant
AND:
ANTHONY MOTT by his next friend KATHLEEN MAY MOTT
(Plaintiff)
Respondent
REASONS FOR JUDGMENT - McMURDO P
Judgment delivered 15 June 1999
- I have had the advantage of reading the reasons for judgment of Chesterman J who has set out the relevant facts and issues.
- The question for consideration here is whether an award of damages for the need for future services and assistance should be:
- discounted at five percent pursuant to s 16(1) Supreme Court Act 1995; or
- discounted at a rate of three percent consistent with Gaudry v Pacific Coal Pty Ltd.[1] and Todorovic v Waller;[2] or
- that portion of the award of damages which is likely to be provided gratuitously is to be discounted at three percent consistent with Gaudry and Todorovic and that portion which is likely to be paid for in the future is to be discounted at five percent pursuant to s 16(1) Supreme Court Act 1995.
- Section 16 Supreme Court Act 1995 relevantly provides:
"Compensation for future loss to be discounted.
16 (1)Where an award of damages is to include compensation, assessed as a lump sum, in respect of damage that is referable ... to a liability to incur expenditure in the future the amount of that compensation shall be the present value of that sum calculated ... at a discount rate of five percent."
- An award of damages of the type discussed in this appeal arises from the need for future services and assistance caused by the disability to a plaintiff resulting from a tortfeasor's negligence. See Nguyen v Nguyen,[3] Van Gervan v Fenton[4] and Kars v Kars[5] where Toohey, McHugh, Gummow and Kirby JJ noted
"It is enough to remember what Stephen J said in Griffiths v Kerkemeyer:
'[T]he plaintiff should, I think, be regarded as beneficially entitled to the judgment he obtains without question of the imposition of any trust in respect of some part of his damages in favour of one who has rendered, or may in the future render, gratuitous services to him.'
This conclusion is now too deeply entrenched in this part of the law in Australia for this Court to reopen it. It is an accepted principle in Australia that the damages for past and future gratuitous services constitute a sum designed to provide for the injured plaintiff's established needs. That sum may be calculated by reference to what the provider does and even what the commercial costs of doing it would entail. But the focus is upon the plaintiff's needs. The plaintiff might, or might not, reimburse the provider. According to the repeated authority of this Court, contractual or other legal liability apart, whether the plaintiff actually reimburses the provider is entirely a matter between the injured plaintiff and the provider."
- An award of damages for the need for future services and assistance is usually quantified by applying commercial rates. The appellant/defendant by election submits that therefore any such award of damages is "in respect of damage that is referable ... to a liability to incur expenditure in the future". "Liability" is defined in the Compact Oxford Dictionary[6] as: "1. Law. The condition of being liable or answerable by law or equity". "Liability to incur expenditure in the future" here relates to the plaintiff's obligation to pay for future services and assistance. The meaning of s 16(1) Supreme Court Act 1995 as it affects this case hinges on the meaning of "referable" which has included in its definition in the Compact Oxford Dictionary "... 2. To trace (back), assign, attribute, impute (something) to a person or thing as the ultimate cause, origin, (author,) or source". Is an award of damages for the need for future services and assistance referable, that is, able to be traced back, has its origins in, or is sourced to, the plaintiff's obligation to pay for these future services and assistance? The source of the award of damages is the need for the services and assistance, not their method of calculation. It therefore matters not whether all, some, or none of the future services and assistance will be paid for by a plaintiff. The relevance of the cost of future services is only to calculate the quantum of the award of damages and is not the origin or source of the award of damages.
- Had the legislation intended that damages for future services and assistance should be discounted at five percent it would have been a simple matter to specify it, just as s 16(1) now specifies that "damage that is referable to deprivation or impairment of earning capacity" is to be discounted at five percent. This interpretation does not leave the section without meaning: "damage that is referable ... to a liability to incur expenditure in the future" has, for example, application to future medical or pharmaceutical expenses. The plain meaning of the statute, bearing in mind that the right to damages for future services and assistance is referable to need and not the method of calculation of the damages, supports the interpretation I have suggested.
- It follows that I am in agreement with the approach taken by Helman J in Gaudry and that s 16(1) Supreme Court Act 1995 has no applicability to awards of damage for future services and assistance. Her Honour was correct in discounting the award of damages under this heading at three percent rather than five percent.
- I would dismiss the appeal with costs.
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Appeal No. 11904 of 1998
Brisbane
Before McMurdo P
Pincus JA
Chesterman J
BETWEEN:
FIRE AND ALL RISKS INSURANCE CO LTD
A.C.N. 000 327 855
(Defendant by Election)
Appellant
AND:
ANTHONY MOTT by his next friend
KATHLEEN MAY MOTT
(Plaintiff)
Respondent
REASONS FOR JUDGMENT - PINCUS JA
Judgment delivered 15 June 1999
- I have had the advantage of reading the reasons of Chesterman J and, subject to the following observations, agree with them. The essential question is whether the expression "damage that is referable . . . to a liability to incur expenditure in the future" in s. 16(1) of the Supreme Court Act 1995 can cover the Van Gervan component of damages (see Van Gervan v Fenton (1992) 175 CLR 327). In that case it was held that an injured plaintiff could recover the market cost or value of care or services provided without cost to the plaintiff, the need for such care or services having been due to the plaintiff's injury. The expression "liability to incur expenditure in the future" is capable of covering instances in which the plaintiff is neither subject to a present legal obligation to pay money, nor likely to be subject to such an obligation in the future; this is so because the word "liable" can mean "likely". Although the contrary view is open, I prefer the broader construction, reading "liability" as meaning "likelihood". A reason is that the liability Parliament had in mind appears to be one presently existing, at the time the award is made; the expression "in the future" refers to the incurring of expenditure, not to the liability. Further, one would expect that damages related to expected expenditure, without any prior liability, were to be covered - for example, medicine bought for cash. Therefore, in my opinion, the fact that in the Van Gervan situation there is no "liability", in the sense of a legal obligation to pay, does not defeat the appellant's argument.
What does so, in my view, is that the liability must be one to incur expenditure; the plaintiff making a Van Gervan claim does not assert that he or she is likely to incur expenditure but merely that it will be necessary for people to give assistance in the future, for no pay. Like Chesterman J , I am of the view that it would be unorthodox for this Court to read the relevant statutory language in such a strained way as to cover circumstances which appear, on any ordinary reading of that language, not to be within its scope. In addition to the reasons his Honour gives for unwillingness to attribute to the words chosen by the legislature the meaning advanced by the appellant, I am influenced by considering the general effect of s 16(1) of the Supreme Court Act 1995. It is to require the relevant part of an injured plaintiff's loss to be assessed on the basis that investment of the sum awarded will ordinarily produce a nett return of five per cent after taking into account income tax, and any decline in the value of money due to inflation. I note that the long term bond rate is presently about six per cent and that investing in that way would not be likely to produce five per cent nett. To accede to the appellant's argument would, as it seems to me, be to treat the respondent as able to make a higher return on investment than is in reality likely to be achieved; of course, if the statute clearly so requires, that must be done.
I agree that the orders proposed by Chesterman J should be made.
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Appeal No. 11904 of 1998
Brisbane
Before McMurdo P
Pincus JA
Chesterman J
BETWEEN:
FIRE AND ALL RISKS INSURANCE CO LTD
A.C.N. 000 327 855
(Defendant by Election)
Appellant
AND:
ANTHONY MOTT by his next friend
KATHLEEN MAY MOTT
(Plaintiff)
Respondent
REASONS FOR JUDGMENT - CHESTERMAN J
Judgment delivered 15 June 1999
- The respondent was struck by a motor car and suffered brain damage when he was three years old. He sued for damages and obtained a judgment for $1,246,314.30. The defendant by election appeals against one component in the award of damages, that being the sum of $450,000.00 assessed in respect of the cost of future care and assistance.
- In discussing this aspect of the plaintiff’s claim the trial judge said:
“The plaintiff will require care for the rest of his life, which is expected to be another 55 years. His father is aged 50 years and his mother 40 years. It is inevitable that the time will come when they are no longer there to provide support and assistance, and his sisters may be unwilling or unable to do so. A number of options were canvassed ‑ care provided by a spouse or girlfriend, independent living in a flat with care being provided by an outsider, hostel accommodation or a group‑living situation in which several people with disabilities have common carers. I accept that it would be in the plaintiff's interests to lead as normal a life as possible and so far as possible to be integrated into the community, rather than being placed in institutional or hostel‑type care.”
Her Honour then referred to evidence relevant to the cost of providing the sort of care which the plaintiff will need and the availability of the services which would fulfill his needs, and continued:
“I am not satisfied that the plaintiff will obtain the services he needs from a disability organization ... for all of his life. It is more likely that the services will be provided gratuitously for some of the time ...
In all the circumstances I allow future care at the rate of $16 per hour for 20 hours per week over 55 years. Applying the 3% tables, I arrive at a present value of $453,760, which I round down to $450,000.”
- The appellant complains only of the trial judge’s choice of discount rate to arrive at the present value of the cost of providing care in the future. It submits that section 16(1) of the Supreme Court Act 1995 required the present value of that loss to be determined by discounting at five per cent. The difference is about $130,000.00.
- The statutory provision first appeared in 1981 when it was inserted in the Common Law Practice Act 1867 as section 5. It was relocated into the Supreme Court Act as part of the consolidation it effected. The section is in these terms:
“Compensation for future loss to be discounted
16(1)Where an award of damages is to include compensation, assessed as a lump sum, in respect of damage that is referable to deprivation or impairment of earning capacity or to a liability to incur expenditure in the future the amount of that compensation shall be the present value of that sum calculated in accordance with actuarial tables at a discount rate fixed by the Governor in Council under a regulation as at the time of making the award or, in the absence of a rate so fixed, at a discount rate of 5%.”
No rate has been fixed by the Governor-in-Council.
- Until the decision in Gaudry v. Pacific Coal Pty Ltd (unreported, Supreme Court of Queensland, Helman J, 9 November 1995) it appears to have been assumed by plaintiffs and insurers alike that the provision applied to the assessment of damages for the so called Griffiths v. Kerkemeyer component of damages when it was appropriate to allow that head of loss in respect of the period following the trial. Helman J drew attention to the terms of the section and expressed the view that such a claim did not come within it. His Honour said that the plaintiff’s claim for a sum for his future needs for voluntary assistance and services:
“is not a claim in respect of deprivation or impairment of earning capacity or of a liability to incur expenditure in the future. It is in respect of the need for voluntary assistance and services, and not in respect of any liability the plaintiff may incur for that assistance and those services.”
His Honour then discounted the future cost of the provision of those services by applying the three per cent rate.
- Other judges of the Court have since adopted the same approach though it should be observed that some assessments for the same component have been made on the earlier assumption without explicit reference to the terms of the section or of the decisions which have questioned the assumption.
- The submissions of both parties focussed on the reasons for, and nature of, an award of damages for future care. The effect of Griffiths v. Kerkemeyer (1977) 139 CLR 161 was summarised by Dawson, Toohey and McHugh JJ in Nguyen v. Nguyen (1990) 169 CLR 245 at 261-3:
“In Griffiths v. Kerkemeyer it was held that the plaintiff ... was entitled to recover by way of damages a sum representing the value of nursing and other services gratuitously provided ... and to be provided in the future by his fiancee and members of his family. In reaching its conclusion the Court followed the decision of the Court of Appeal in Donnelly v. Joyce [1974] QB 454 and viewed the damages in question as damages for one component of the plaintiff’s loss occasioned by his physical disability. The disability gave rise to the need for nursing and other care. The need was met by the services gratuitously provided. The value or cost of those services was, in the circumstances, an appropriate means of quantifying that aspect of the plaintiff’s loss which was represented by the need ... The plaintiff’s loss in Griffiths v. Kirkemeyer was caused by his physical disability. It was in accordance with accepted principle to assess part of that loss by reference to the cost of the services which were required to satisfy the need to which the disability gave rise. What was novel about the decision was the application of that principle even though the plaintiff had not borne and would not bear the cost of the services ... The novelty lay in giving the plaintiff the cost of those services even though he had not paid, and would not pay, for them ...”
- In Van Gervan v. Fenton (1992) 175 CLR 327 the High Court decided that damages for this component of loss should be assessed by reference to the market cost of providing the services which the plaintiff needs, not to the actual cost of having the services provided. In their joint judgment, Mason CJ, Toohey and McHugh JJ said (at 332-3):
“Yet the Griffiths v. Kerkemeyer doctrine was only made possible by rejecting the established common law rule that, in an action for damages for tort, the reasonable cost of services required as the result of the tort is a claim for special damages and can only be recovered if the plaintiff has a legal (or perhaps a moral or social) obligation to pay for them ... Consequently, it should now be accepted that the true basis of a Griffiths v. Kerkemeyer claim is the need of the plaintiff for those services provided for him or her and that the plaintiff does not have to show, as Gibbs J held, that the need ‘is or may be productive of financial loss’.
Once it is recognized 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 ... 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’.”
- These concepts were reaffirmed in Kars v. Kars (1996) 187 CLR 354 which established that this head of damage is awarded to compensate the plaintiff and does not depend upon an obligation or intention to reward the care giver. Dawson J said at 360:
“... 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.”
The joint judgment of Toohey, McHugh, Gummow and Kirby JJ expressed the same opinion at 372:
“It is an accepted principle in Australia that the damages for past and future gratuitous services constitute a sum designed to provide for the injured plaintiff’s established needs. That sum may be calculated by reference to what the provider does and even what the commercial costs of doing it would entail. But the focus is upon the plaintiff’s needs. The plaintiff might, or might not, reimburse the provider. According to the repeated authority of this court, contractual or other legal liability apart, whether the plaintiff actually reimburses the provider is entirely a matter between the injured plaintiff and the provider.”
- The appellant’s argument was that once it was understood that damages of the kind in question are assessed by reference to the monetary cost of buying those services, “it is a comfortable step to describe the damages as referrable to a liability to incur expenditure in the future”. On the other hand the respondent relies upon the exposition appearing in the cases to submit that whether or not a plaintiff becomes liable to incur expenditure to procure the services needed is irrelevant to the assessment of the damages so that the section does not apply.
- The respondent is clearly correct in his submission that damages of the type in question are recoverable whether or not the plaintiff’s need for services will or may be productive of financial loss so that the assessment is the same whether the services are bought or are provided gratuitously. It is true that damages are recoverable in the absence of a legal, or even moral, obligation to pay for the services. In Kars at 358 Dawson J, speaking of Griffiths, said:
“In upholding the award, this Court departed from its previous view that expenses in an action for damages for personal injuries could only be recovered where there was, or would be, a legal obligation to pay them.”
Toohey, McHugh, Gummow and Kirby JJ made the same point at 369.
- The relevant words of section 16(1) are:
“Where an award of damages is to include ... a lump sum in respect of damage that is referable ... to a liability to incur expenditure in the future ...”
These words do not encompass an assessment of damages calculated by reference to the cost of services which will be provided free to the plaintiff. “Liable” ordinarily means “under a legally enforceable obligation”: see for example Re Chapman [1896] 1 Ch 323 at 327.
“A person ‘liable’ is one ‘who can be compelled to pay by using the due process of law’ ”
per Napier CJ and Abbott J in Hall v. Bonnett [1956] SASR 10 at 15.
The concept described is the familiar one whereby a person who obtains goods or services can be compelled by legal process to pay for them. It is a different concept to that of valuing services which are not bought. An obligation or liability to pay for services is irrelevant to the valuation.
- The appellant recognises that, read literally, section 16 does not apply to a case where the plaintiff will not pay for services. However, it submits that the section should be read as though it extended to such cases because of the inconvenient and perhaps inconsistent consequences that would otherwise follow.
The appellant’s argument proceeds -
- that section 16 applies at least to that part of the assessment which is predicated upon the plaintiff paying for the services to which his need gives rise;
- that it is necessary to avoid absurdity or extreme inconvenience to construe the section so that all Griffiths damages are assessed by using the same discount rate.
- It may be accepted that if the appellant’s submission fails there will be an anomaly. A premium will be put on astuteness to the disadvantage of candour when this part of the claim for damages is addressed. Plaintiffs will be tempted to organise their affairs, or to say they have organised their affairs, so that their needs will be met by voluntarily provided services. The cost of the services will be assessed and discounted at three per cent. In those cases where the plaintiff is more seriously injured so that the need for services is greater and the capacity of family to provide them inadequate a finding that the services will be bought is likely with the result that the assessment will be made by discounting at five per cent. The appellant suggests, I think with some force, that in many cases once money is made available by an award of damages the plaintiff will in fact pay for the services.
- The difficulty which the appellant foresees has the support of authority. Mason CJ, Toohey and McHugh JJ said in Van Gervan at 336:
“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 relationship between the parties may end for any of the myriad reasons which bring about the end of relationships. But the predictability of a relationship continuing in this class of case is made more difficult than usual by the effect that the plaintiff’s condition and needs have or may have on the emotional needs of those involved in caring for him or her. There is also the prospect that the care provider will not reveal to the court his or her true feelings about continuing to provide the services even in cases where the provider is conscious of those feelings. It is true that any assessment of damages may be falsified by the occurrence of what the courts have called ‘the vicissitudes of life’. ”
- The respondent sought to answer the appellant’s gloomy prediction by asserting that section 16 does not apply to any part of damages awarded to compensate a plaintiff for the need for future care. The submission focuses on the words “damage referrable” rather than the balance of the phrase “... to a liability to incur expenditure in the future ...”. The argument is that the damage is the plaintiff’s injury which gives rise to needs. This compensable injury does not require, as a condition precedent to an award of damages, that the plaintiff be liable to pay for the services. Therefore the section is inapplicable. This submission does not answer the point that section 16 applies to an assessment of damages in respect of damage referable to a liability to incur expenditure in the future. If a finding is made that a plaintiff will spend money to buy services to satisfy an injury-caused need the section will operate. It is concerned with the means by which damages are assessed not the jurisprudential basis for the award of damages. Damages may be recoverable whether or not a plaintiff’s injury which gives rise to a need for services is, or may be, productive of financial loss, but the section applies in those cases where the injury-caused needs will be productive of financial loss.
- To avoid the anomaly and its consequences the court is urged to adopt a “purposive construction” of the section. The appellant did not suggest what changes should notionally be made to achieve its desired construction or how the words “liability to incur expenditure” should be understood.
- Section 14B of the Acts Interpretation Act 1954 allows the court to have regard to extrinsic material “capable of assisting in the interpretation of the section if it is ambiguous or obscure: or if its ordinary meaning leads to a result that is manifestly absurd or unreasonable or to confirm the interpretation conveyed by the ordinary meaning of the section”. The appellant submitted the purpose of the section could be ascertained from the parliamentary debates which preceded the insertion of section 5 into the Common Law Practice Act. However, they seem only to establish that the amendment was made to prevent the escalation of awards of damages, in the interest of the public who pay insurance premiums for workers’ compensation and motor vehicle insurance policies as well as non-compulsory liability policies.
- I have not found the contents of the debates of assistance in construing the section. The general intention of the provision may be gathered from its terms as easily as from the parliamentary explanation for its enactment. Obviously the section was designed to restrain awards of damages. What was said in the debates is of no assistance in determining the circumstances in which, or the means by which, that restraint is to be achieved. That understanding can only come from an examination of the words chosen by parliament to give effect to its general desire.
- Section 14A of the Acts Interpretation Act 1954 which requires the court to prefer “the interpretation that will best achieve the purpose of the Act” over any other interpretation does not apply, section 16 having been enacted prior to 30 June 1991 and merely moved without re-enactment to the Supreme Court Act 1995 - see sections 2(2) and (3) of the Supreme Court Act. Despite the inapplicability of section 14A the appellant urges the court to adopt a similar approach relying upon such authorities as Cole v. Director-General of Department of Youth and Community Services (1987) 7 NSWLR 541 at 549 per McHugh JA:
“... the importance of interpreting legislation with the general purpose of the statute in mind rather than by simply relying on the literal meaning approach to statutory construction ...”
- There are two problems in accepting the appellant’s invitation. The first is that it is only where there is some ambiguity in a statutory provision that the court may have regard to the “purpose” of the legislation to determine what the true meaning is. If the language offers no choice between competing constructions it is neither necessary nor appropriate to have recourse to the purpose of the Act to determine the meaning which ex hypothesi is apparent from the words themselves. It is only where it is clear that Parliament did not intend a provision to have its ordinary meaning or grammatical sense that the court may depart from that meaning: see Cooper Brookes (Wollongong) Pty Ltd v. FCT (1981) 147 CLR 297 at 321 per Mason and Wilson JJ.
- The second is that there is no “statutory purpose” which exists to elucidate the meaning of the section. It was one of a number of miscellaneous provisions each enacted to deal with specific circumstances. There is no wider statutory context to give it meaning.
- For the same reason the heading to the section offers no assistance in its construction. The title “Compensation for Future Loss to be Discounted” throws no light on the rate at which the discount is to occur nor on the loss which is to be discounted. The latter emerges from the terms of the section itself. The loss is damage referrable to a liability to incur expenditure in the future.
- The appellant’s real difficulty is that the meaning of section 16 is plain. It is unnecessary to have recourse to legislative “purpose” or extrinsic materials to understand what it is. The sums which are to be ascertained by discounting future costs are those referable to a liability to incur expenditure. There is no difficulty in determining which components of an award of damages meet the description “referable to a liability to incur expenditure”. The appellant in reality desires the court not to construe the section but to extend its operation by altering the meaning. For section 16 to encompass the concept of valuing services a new phrase would have to be added. It would be a “strong thing” to add words into the section so that it read “liability to incur expenditure or to the cost of services” and it would be wrong to do so “in the absence of clear necessity”: per Lord Mersey in Thompson v. Goold & Co [1910] AC 409 at 420. A Full Federal Court (Northrop and Pincus JJ) expressed the same view in Dallikavak v. Minister for Immigration and Ethnic Affairs (1985) 61 ALR 471 at 475-6.
- The section leads in cases like the present to an illogical distinction but the result cannot be described as “absurd”. The task of assessing damages will be more difficult. The court will lack in many cases a sure foundation for its prediction of what services will be bought. The difficulties which the appellant identifies may, with respect, be admitted and the need for having to make the distinction may be regretted but these are not sufficient grounds for re-writing section 16. “Mere inconvenience of result” does not justify a departure from the plain meaning of a statute: Cooper Brookes at 320. Moreover, it cannot be said that the means by which the section restrains awards of damages was unintended. Even if it were, the wording does not allow any other meaning to be sensibly ascribed to the section. The appellant’s complaint is that the section does not apply to some kinds of loss. That is not a gap which judicial construction can fill.
- It should, perhaps, be mentioned that when section 16 speaks of a liability to incur expenditure in the future it must be understood as referring to a present or future liability.
- Where damages for future care are awarded and not all of the amount is referable to a liability to incur expenditure in the future the present value of that part of the future loss is to be ascertained by reference to the three per cent discount tables. This follows from Todorovic v. Waller (1981) 150 CLR 402 per Gibbs CJ and Wilson J at 423-4; per Mason J at 451 and Aickin J at 460.
- It follows that in the present case the trial judge ought to have essayed the intricate task of assessing the cost of those services which will be provided gratuitously in the future and those which will be bought. In relation to the latter a discount rate of five per cent should be applied. The materials included in the record do not allow that assessment to be made. The matter should therefore be remitted to the trial judge for further findings.
- In the event that the appeal succeeds the respondent has asked for an indemnity certificate pursuant to section 15 of the Appeal Costs Fund Act 1973. The appeal has succeeded but only in part, the appellant being unsuccessful on its primary submission as to the construction of section 16. The appellant as a licensed insurer has an interest in the clarification of the law for other cases in which the respondent will not be involved. Because of that fact and its only partial success I would propose that no order be made as to the costs of the appeal but that the respondent be granted an indemnity certificate in respect of his own costs.
- The orders I propose are:
- the appeal is allowed and subject to order (b) the judgment entered below is reduced from $1,246,314.30 to $796,314.30;
- the action is remitted to the Trial Division for the purpose of a reassessment of damages for future care and assistance, the amount of which is when assessed to be added to the sum of $796,314.30, the total being the final judgment in the action;
- there is to be no order as to the appellant’s costs of the appeal;
- order that an indemnity certificate pursuant to the Appeal Costs Fund Act 1973 be granted to the respondent in respect of the appeal.