GOVERNMENT INSURANCE OFFICE OF NSW v RIZKALLA SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY, CLARKE and HANDLEY JJA 15 April 1993, 14 May 1993 [1993] NSWCA 118 ASSESSMENT OF DAMAGES — ALTERNATIVE BASES OF ASSESSMENT — EVIDENCE ASSESSMENT OF DAMAGES — damages assessed on the basis of home care — question as to existence of a cheaper alternative in an institution — insufficient evidence before the court to conclude that there was a real possibility that such an alternative would arise. Sharman v Evans (1976-7) 138 CLR 563, considered. Mahoney JA I agree with the judgment of Clarke JA. The argument before this Court was directed in the main to the compensation to be paid because of the plaintiff's past and future need for care. It is an issue of importance, not merely because of the amount involved, but because, since at least the time of Sharman v Evans (1976-7) 138 CLR 563, the provision of continuing care has posed issues of some difficulty. In the present case, it was proved that the plaintiff needed continuing care and that the cost of it, if given at home, was great. He could be cared for in an institution for less. I shall assume that care of him in an institution would have been reasonable, at the time of the trial or thereafter. There was no certainty that care of him in an institution could be arranged. The issue to be determined was whether, because of the possibility that institutional care might be able to be arranged subsequently, that possibility should be taken into account to reduce the compensation otherwise to be awarded to him, and by what amount. In principle this depends upon the approach to be adopted. In principle, the plaintiff is to be compensated because the defendant's negligence created in him a need for services: cf Griffiths v Kerkemeyer (1977) 139 CLR 161; Van Gervan v Fenton (1992) 66 ALJR 828. In assessing damages for that fact, it is relevant to take into account, though it may not be determinative, the amount which, as far can be determined, the plaintiff must pay to provide the needed care. I shall assume for purposes of this argument that the court's first task in the present case is to determine what that care will cost. It is, in my opinion, unlikely on the evidence that institutional care will be found for him. On that finding of fact, the proper conclusion is that his care will cost an amount calculated by reference to the cost of the home care. On that approach, it is not proper to reduce that amount to take account of the possibility that institutional care might become available. If alternatively the proper approach to the assessment of compensation be to compensate the plaintiff for the possibilities which may affect him, then conceptually it is arguable that the possibility that he may be able to be cared for more cheaply in an institution prima facie should reduce the compensation otherwise to be awarded. But even on this approach, the effect to be given to the possibility of institutional care is not merely to reduce the compensation 2 UNREPORTED JUDGMENTS calculated on the home care basis by the extent of the possibility of institutional care becoming available. There is, in my opinion, another factor which may properly be taken into account. The plaintiff's claim for the cost of his care is directed, not merely to comfort, but to his survival. Without proper care, the risk of his dying is increased. If the compensation is not fully adequate to provide for home care and if institutional care in fact does not become available, then he will have less than sufficient to provide properly for his care at home. His risk will be to that extent increased. In my opinion, a plaintiff is not required to bear that risk to take account of a possibility of the present kind. Unless it be shown with the appropriate degree of assurance that institutional care will be available or, at least, that the provision of an amount not sufficient for his proper care at home will not put him seriously at risk in this way, it is proper to compensate a plaintiff upon the basis that home care will be necessary. I agree with the orders proposed by Clarke JA. Clarke JA Daniel John Rizkalla (the respondent) suffered catastrophic personal injuries in a motor vehicle accident that occurred on 18 March 1986. He was nearly three years old at the time of his injury, having been born on 23 March 1983, and at the time of trial he was a month short of his ninth birthday. He sued the Government Insurance Office of New South Wales (the appellant) and at the commencement of the trial liability was admitted and Sully J proceeded to assess the damages. His Honour assessed those damages at $2,649,824.50 and the appellant has appealed on the ground that his Honour erred in the assessment of the compensation for the respondent's future care with the consequence that the damages awarded were excessive. The total of the element under challenge was $1,605,920 which is, on any view, a very large sum. It is unnecessary to detail the facts except to the extent that those facts concern the area of challenge. The respondent suffered severe open head injury and multiple fractures of the skull associated with gross brain damage. On admission to Westmead Hospital he was unconscious and not responding to voice or pain. At operation there was revealed gross severe and extensive damage to both frontal lobes with masceration of brain bilaterally to the spheriod wings. He remained in hospital until 2 September 1987 when he was discharged home. In a document prepared by a witness, Sister Fitzpatrick, the following appeared: "Daniel has had a frontal lobectomy and skin grafts to skull. The forehead has no skeletal structure. Care must always be taken to ensure this area is not knocked or bumped. Daniel has a helmet to wear to protect this area. Because the brain injury is so extensive Daniel has frequent fitting episodes and muscle spasming. We try to control fitting with medication, so please report any fitting or unusual behaviour so his medication is under constant review. The muscle spasming causes big problems to Daniel, so please ensure all limbs are correctly supported and exercise frequently. So far this spasming has caused several dislocations. They are (1) dislocated right hip, (2) dislocated left wrist, (3) dislocated fingers left hand. Daniel also has a lot of unstable joints that are prone to dislocation. As the front lobe controls the function of extremities we cannot expect Daniel to accomplish much with his arms and legs but Daniel is showing or attempting some tasks with his left hand so please encourage this as much as possible. URJ |= GOVERNMENT INSURANCE OFFICE OF NSW v RIZKALLA (Clarke JA) 3 Daniel has sclorosis of the thorcic (sic: but read, presumably, 'thoracic') and lumbar region which can cause reduced expansion of his left lung. This sclorosis appears and is worse when Daniel is not supported adequately. Because of the sclorosis and a hay fever problem Daniel has a maintenance dose of ventolin and intal via the nebulizer three times a day. Percussion and positional drainage is also frequently used to keep lungs clear as he becomes mucousy frequently. Feedings Currently Daniel has his fluids thickened with carabel to enable him to swallow without distress or gagging. He may be tried occasionally with a cup taking small amounts at a time as he coughs a lot. Daniel suffers with a gastric reflux problem which is currently managed with medication, diet and positioning. Daniel being the unique person he is tends to reflux more when sitting upright, so we do not sit Daniel up for long periods. Daniel is placed in the prone position for 15 minutes to 30 minutes after any feed. When his reflux is at its worst Daniel vomits blood, suffers abdominal tenderness, sore or red throat and temperature. When this happens lie flat or prone all the time apart from giving fluids. Give Gaviscon, extra milk and no meals for 24 hours, then resume diet slowly with smaller quantities. Daniel's meals are usually fairly puree in texture and tolerate small soft lumps depending on the day. Daniel will not tolerate orange, lime, tuna, spices and some vegetables. It is very important that Daniel is burped frequently otherwise the wind accumulates causing Daniel a lot of discomfort and sometimes vomiting. Do not give Daniel any feeds that are going to increase the production of acids in the stomach, so Daniel burps so much the acids cause burning of the oesophagus." His Honour accepted this evidence and concluded that the respondent was at time of trial, and will be throughout the entirety of his life, totally dependent for his care upon other people. His Honour also found, and this is important for the purposes of the appellant's argument, that the respondent had no awareness, in any meaningful sense, either of his plight or of his surroundings. What his Honour actually said was that the appellant "is not likely in the future ever to have any awareness in any meaningful sense either of his plight or of the practical consequences upon his expectation and enjoyment of life of his injuries and disabilities". He had remained at home during the period between his release from hospital and the trial and his family proposed that he continue to remain at home. The nursing care and attention given to the respondent has been intensive. At the time of trial the nursing regime was as follows: From Monday to Friday a Registered Nurse attended between 6am and 4pm, an Assistant Nurse between 4pm and 8pm and the respondent's mother slept with him in his room between 8pm and 6am. (She was required regularly to get up during the night.) On Friday night an Assistant Nurse replaced the respondent's mother in the room. On Saturday and Sunday a nurse attended between 6am and 6pm and sometimes the Assistant Nurse stayed until 8pm. Four days a week the respondent attended Holroyd Special School between 8.30am and 3.10pm (with his nurse) and, in addition, there was some domestic help at home. His Honour found that the respondent's life expectancy was 15 years and this finding has not been challenged. In the light of that evidence his Honour assessed the case on the basis of the provision of the services of a registered nurse for eight hours per day, seven days per week for 15 years, the present day cost of which 4 UNREPORTED JUDGMENTS was calculated at $745,920, and an appropriately trained ancillary carer for sixteen hours per day, seven days per week for 15 years, the cost of which was $860,000. It was plainly demonstrated that the level of nursing care which the respondent received at home was of an extraordinarily high order. Furthermore the weight of the medical evidence supported the view that care of the quality which he was receiving at the time of trial was necessary for his health and to preserve his life. The appellant did not deny that the respondent needed the level of care which he was receiving but it led evidence to demonstrate that there was available at least one institution which could supply comparable care at a much lower cost. That evidence demonstrated that if the respondent became an in-patient of Greystanes Children's Home the future care costs would total $395,715 whereas the cost of maintaining the respondent at home, including some incidental costs, was $1,745,200.00. In those circumstances, Senior Counsel submitted that, insofar as the respondent was only entitled to the cost of meeting his reasonable needs, his Honour erred in failing to assess damages upon the basis that the respondent was, or would have become, an in-patient of Greystanes. In considering a similar submission at first instance Sully J made a number of findings concerning Greystanes which it is appropriate to repeat in this judgment. He said: "(c) As such a patient (that is at Greystanes), he could not be given exactly the same virtual one-on-one care and treatment that he receives at present in his own home. Nevertheless, a plan of care and treatment crafted particularly to take account of the plaintiff's own special needs would be prepared for him; and that plan would entail that there would always be available at any hour of the day or night competent and experienced staff, either professional or non-professional or a combination of both, who would be able to deal with any perceived needs of the plaintiff. (d) In all other respects, the types of care and attention which are at present being provided for the plaintiff could be provided for him at Greystanes, but with the continuing qualification that they could not be provided for him on a virtual one-to-one basis in the way that is being done for him in his own home." Having regard to those findings and the comparable costs his Honour concluded that: "Had there been evidence that a place at Greystanes could be made available immediately for the plaintiff; or even if there had been evidence that such a place, although not immediately available, could be made available at some reasonably certain future time, then I would have thought that the exercise of matching costs with health benefits, as outlined by Gibbs and Stephen JJ in Sharman v Evans, ((1976-77) 138 CLR 563) would have required that cost to the defendant of the making of reasonable provision for the future medical and nursing needs of the plaintiff should have been a cost calculated by reference to the cost of making such provision in an institution such as Greystanes." The reason why his Honour did not assess the damages upon the basis that future care would be provided in an institution such as Greystanes was that there was no presently available place for the respondent at that institution, nor was there evidence upon which the Court could conclude that it was likely or probable that the respondent would ever be admitted as an in-patient. This was important for it was accepted by Senior Counsel for the appellant that there was no evidence that any other institution in New South Wales would be prepared to take the respondent. The case which he sought to mount depended upon a finding URJ |= GOVERNMENT INSURANCE OFFICE OF NSW v RIZKALLA (Clarke JA) 5 that in the event that the respondent's mother wished to have him admitted to Greystanes there was, at the very least, a real prospect that he would be admitted, albeit not for some years. Both at the trial and on appeal the appellant relied upon a passage in the joint judgment of Gibbs and Stephen JJ in Sharman v Evans, at 573, which was cited by Sully J in his judgment. That passage read: "The appropriate criterion must be that such expenses as the plaintiff may reasonably incur should be recoverable from the defendant; as Barwick CJ put it in Arthur Robinson (Grafton) Pty Ltd v Carter ({1968] 122 CLR 649, at 661). 'The question here is not what are the ideal requirements but what are the reasonable requirements of the respondent',... The touchstone of reasonableness in the case of the cost of providing nursing and medical care for the plaintiff in the future is, no doubt, cost matched against health benefits to the plaintiff. If cost is very great and benefits to health slight or speculative the cost-involving treatment will clearly be unreasonable, the more so if there is available an alternative and relatively inexpensive mode of treatment, affording equal or only slightly lesser benefits. When the factors are more evenly balanced no intuitive answer presents itself and the real difficulty of attempting to weigh against each other two incomparables, financial cost against relative health benefits to the plaintiff, become manifest." The appellant complained about the manner in which his Honour had interpreted the notion of availability referred to in that passage. His Honour said that "their Honours must be understood as meaning either actually available at the moment, or not so available but likely to become available at a time which can be fixed, on the probabilities, with such a sufficient degree of exactness as will permit the making of reasoned and reasonable calculations of competing cost alternatives." It was submitted that this was an unacceptably narrow interpretation of the words used by their Honours in Sharman. I do not think that it is necessary to consider whether the submission is correct. Upon any view of the evidence the respondent established a need for intensive nursing and ancillary care. There can, therefore, be no denial of the fact that he is entitled to be compensated for the appropriate cost of meeting that need. What is allowable is the reasonable cost of securing such nursing and ancillary services as the respondent requires. This is trite law, as I think is plain from Sharman. Consequently, as Windeyer J said in Chulcough v Holly 41 ALJR 336, at 338: "Tt does not follow that every expenditure which might be advantageous for a plaintiff as an alleviation of his or her situation or which could give him or her happiness or satisfaction must be provided for by the tortfeasor." But there is no question in this case that the respondent is seeking to recover in respect of the provision of services which exceed what is reasonable in the circumstances. The respondent has a genuine need for those services and unless he continues to receive them, or comparable services, his health will almost certainly be gravely affected and he may even die. There can be no question in this case of a claim for unjustified services. What is said is that, while the services are all necessary, comparable services are, or might be, available which would meet all the needs of the respondent at a far smaller cost than are involved in maintaining him at home. 6 UNREPORTED JUDGMENTS It can be accepted immediately that upon his Honour's findings of fact if the evidence had demonstrated that it had been open to the respondent to avail himself of the facilities of Greystanes at the time of trial a real question would have arisen whether it was reasonable to charge the appellant with more than the cost of meeting the respondent's nursing and ancillary needs at Greystanes. But that is not this case. The evidence went no further than demonstrating that there was an institution, Greystanes, to which the respondent may possibly be able to secure admission and which could provide adequate services to meet the respondent's needs. But the evidentiary material did not enable the court to be satisfied that the respondent may eventually be able to secure admission to Greystanes in the foreseeable future. Nor did it enable the court to do any more than speculate as to the possibility that at some uncertain time in the future he may, if application was made, secure admission. What did emerge from the evidence was that Greystanes is an institution conducted by a charitable trusteeship which is heavily subsidised by the Commonwealth Government. There are 38 beds in the institution of which 37 are available for long term care of children between the ages of birth and 18 and there is one respite bed which is available for children having a short break from home. The criteria for assessment and placement are that the children must have physical and intellectual disabilities. The majority of the present in-patients are both physically and intellectually disabled and require 24 hour care and everything being done for them. It is apparent that the respondent meets the criteria as Mrs Metcalf, the Chief Executive Officer, made plain. The Institution was, however, fully occupied at the time of the trial. Mrs Metcalf said that a vacancy may occur within one month but there was a waiting list on which there were six names. She also said that, although the person who was placed first on the waiting list would not necessarily be admitted, it was an advantage to be placed in that position. She said that sometimes they kept children beyond the age of 18 years and that there were presently (ie at the time of trial) at least two persons there over that age whom they had been unable to place elsewhere. The evidence did not disclose, for instance, when another vacancy might occur and in the light of the possible difficulty in placing gravely disabled children elsewhere when they reached 18 years of age it was impossible to be confident that vacancies would occur when in-patients reached that age. Indeed there was no evidence of the respective age of the in-patients, there was no evidence of the turn-over of in-patients during the previous year and there was no evidence upon which it was possible to form an opinion as to when another vacancy might occur. In the ultimate the evidence went no further than establishing that the respondent met the relevant criteria, would be considered for admission if his mother made application and may, possibly, be accepted to fill a vacancy at some unknown time in the future. Further, he was nearly nine at the date of trial and had, as his Honour found, a life expectancy of about 15 years. Bearing in mind the fact that persons over 18 would not be admitted into the institution it would follow that in order for the institution to be regarded as an available alternative to home nursing there would need to be evidence demonstrating, at the least, a real possibility that, if application was made, he would be accepted into it within nine years from the date of trial. In my opinion the evidence did not do that. It went no further than providing a basis for speculation. URJ GOVERNMENT INSURANCE OFFICE OF NSW v RIZKALLA (Handley JA) 7 In these circumstances I would conclude that his Honour's decision was correct. The respondent had established a particular need which could be, and was being, met at great expense. There was not put before the court any other means whereby that need could be met and in those circumstances the conclusion that the cost of meeting that need was reasonable must follow. Certainly, that conclusion is not invalidated by evidence demonstrating that there might some time in the future, as a matter of speculation, be another and cheaper means of meeting that need. I think Mr Murray recognised this but he complained of the invidious position in which the appellant found itself. The respondent's mother had made no application for his admission to Greystanes and until such an application was made no one could determine what chance he had of admission into the institution. Accordingly, while she refrained from making an application there was no basis upon which the Court could measure the cost of maintaining him at home against the cost of his being maintained at Greystanes. There may be some substance in the complaint although for my part I would require much more detailed evidence before I would regard Greystanes as an alternative which should be considered. On the other hand no one is better placed than the appellant to know the principles upon which damages are assessed and the extent of the costs involved in the maintenance of severely disabled quadriplegic children. One remedy which was, perhaps, open to it to avoid situations like the present was to construct, or become involved in, an institution of the nature of Greystanes. The fact that it has not done so does not bear on the decision in this case but it does serve to take some of the sting out of the complaint made by Mr Murray. The respondent cross-appealed against his Honour's finding that he had no appreciation of his plight or of his surroundings. It was submitted that the weight of evidence led to a contrary conclusion. I am bound to say, however, that the submission was presented more as a defensive one and was not developed to any extent during argument. Counsel simply referred to the point raised in the cross-appeal, and contented himself with a reference to the written submissions which concluded with a paragraph stating "there was insufficient evidence for the conclusion that the plaintiff had no awareness in any meaningful sense, even of his plight, or his surroundings". In particular Mr Bruce, Senior Counsel for the respondent, conceded that he could not point to any explicit error in the judgment. I have examined the evidence to which the court was referred in the written submissions but I am unable to agree with the proposition that any error has been demonstrated on the part of his Honour. In the event I would propose that both the appeal and the cross-appeal be dismissed with costs. Handley JA I agree with Clarke JA. The appeal and the cross-appeal are dismissed with costs. Counsel for the appellant: B Murray QC and L McFee Solicitors for the appellant: M Harakos Counsel for the respondent: V Bruce QC and N E Delaney Solicitors for the respondent: Coleman & Greig