Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Grosso v Deaton [2012] NSWCA 101
• Hearing dates: 3 February 2012
• Decision date: 20 April 2012
• Before: McColl JA at [1]; Basten JA at [5]; Young JA at [48]

Decision

(1) Allow the appeal and set aside the judgment and orders in the District Court.

(2) Judgment for the appellant against the respondent in the sum of $413,670, such amount to be paid into court in the first instance, to be apportioned as to:

(a) $187,100 in favour of Joshua Grosso; and

(b) $219,200 in favour of Lachlan Davis.

(3) The respondent to pay the appellant's costs in the District Court and in this Court.

(4) The respondent to have a certificate under the Suitor's Fund Act 1951 (NSW) in respect of the costs of the appeal.

(5) Grant the parties leave to approach the duty judge in the Common Law Division on 7 days' notice for orders as to the disbursement of the fund.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: DAMAGES- Compensation to Relatives Act- single mother of two killed in motor vehicle accident- two sons subsequently resided with their respective fathers- whether the sons had suffered compensable loss- compensable loss is material loss as at the moment of death- entire family situation before and after death compared- additional care provided by a surviving parent after the death may be taken into account to offset the loss but not gratuitous services provided by other family and friends.
• Legislation Cited: Civil Procedure Act 2005, ss 56, 57, 58, 59, 60; Compensation to Relatives Act 1897, s 4; Deserted Wives and Children Act 1901; Family Law Act 1975 (Cth), ss 66B, 66C; Infants' Custody and Settlements Act 1899; Motor Accident Compensation Act 1999, ss 3, 128, 142; Uniform Civil Procedure Rules 2005, r 51.53
• Cases Cited: Axiak v Pezzano [2002] NSWCA 65; 13 MVR 424; Baker v Dalgleish Steam Shipping Co [1921] 3 KB 481; Bazeley v Forder (1868) LR 3 QB 559; Chantler v Chantler (1906) 6 SR (NSW) 412; De Sales v Ingrilli [2002] HCA 52; [2003] HCA 16; 212 CLR 338; Henderson v Oswald [1965] WAR 54; Horton v Byrne (1956) 30 ALJ 583; Houareau v Bouyer (1990) Aust Torts Reports 81-044; The King v Henrietta L Greenhill (1836) 4 Ad & El 624; 111 ER 922; Malec v JC Hutton Pty Ltd [1990] HCA 20; 169 CLR 638; Marsh v Absolum [1940] NZLR 448; Nguyen v Nguyen [1990] HCA 9; 169 CLR 245; NSW Insurance Ministerial Corporation v Willis (1995) 35 NSWLR 668; Rawlinson v Babcock & Wilcox Ltd [1967] 1 WLR 481; Re Stojanovic (1990) 99 FLR 59; 13 Fam LR 849; Ruby v Marsh [1975] HCA 32; 132 CLR 642; Thompson v Mandla [1976] 2 NSWLR 307; Tong v Purdy (No 2) [1941] VLR 147; Wilson v Rutter (1955) 73 WN (NSW) 294
• Category: Principal judgment
• Parties: Dallas Grosso as Executor of the Estate of the late Hayley Wheeler (Appellant); Matthew Deaton (Respondent)
• Representation: Counsel: B J Gross QC and T J Boyd (Appellant); R A Cavanagh SC and C Allan (Respondent); Solicitors: Herbert Weller, Solicitor (Appellant); Lee & Lyons Lawyers (Respondent)
• File Number(s): CA 2010/372086

Decision under appeal

• Date of Decision: 2010-10-15 00:00:00
• Before: Lakatos DCJ
• File Number(s): DC 2009/336244

Judgment

1 McCOLL JA: I have read the reasons in draft of Basten JA and Young JA. I agree with their Honours' respective reasons for concluding that, as a matter of principle, both Joshua and Lachlan suffered compensable loss resulting from the death of their mother Ms Hayley Wheeler notwithstanding that, at the date of her death, their respective fathers were still alive and prepared to discharge their obligations to their sons.

2 I also agree with Basten JA's reasons for concluding that the appellant established, as a matter of fact, that each boy suffered compensable loss in the circumstances.

3 Insofar as assessment of that loss is concerned, while I appreciate the difficulties to which Young JA refers, I agree for the reasons Basten JA has given (at [26] and following) that this Court can undertake that exercise.

4 I agree with the orders Basten JA proposes.

5 BASTEN JA: On 9 April 2007, Ms Hayley Wheeler died as a result of injuries sustained in a motor vehicle accident. She was succeeded by two children, Joshua and Lachlan, aged 12 years and eight years respectively at the date of their mother's death. The deceased and the boys were living separately and apart from their respective fathers. The present claims are brought by Joshua's grandmother as the executor of the estate of the deceased. The claims were brought under the Compensation to Relatives Act 1897 (NSW) ("the 1897 Act"). Liability was admitted in District Court. As a result, the trial judge (Lakatos DCJ) was required to assess the damages payable for "the injury resulting from" the death of the deceased, pursuant to s 4(1) of the 1897 Act.

6 It is accepted that the "injury" must constitute a material loss, which will not cover grief and suffering not amounting to a psychiatric condition. The executor's claim, brought on behalf of the two boys, involved two categories of damage, namely loss of domestic services and loss of an expectation of financial benefit.

Background

7 In terms of financial benefit, the evidence before the trial judge was that, in the case of a one parent family with two children, a dependency rate for the children of 63% should be adopted, meaning that 63% of the deceased's after tax income would have been spent in support of the children, divided equally between them. The income of the deceased immediately prior to her death was $370 per week, consisting of a single parent pension. If this amount were to be the subject of the dependency calculation, there would be a resulting loss of $116.55 per week per child. (The figure of $375 per week identified by the trial judge at [140] would require a net income of $1,190 per week: the reason for this figure was not explained but appears to have been calculated by reference to an annual net income of $62,000 relied on in the statement of claim.)

8 With respect to the provision of services, the parties accepted an allowance based on 30 hours per week for both sons: at [135]. Although the commercial rate was agreed to be $30 per hour, it was also accepted by the appellant in this Court that the proper figures were $23 per hour prior to the judgment in the District Court, delivered on 15 October 2010, and $25 per hour thereafter. These figures were based on the limits imposed by the Motor Accident Compensation Act 1999 (NSW) ("the 1999 Act"), ss 128 and 142. This concession was thus based upon an understanding that the services provided by the deceased constituted "attendant care services" as defined in s 3 of the 1999 Act and were subject to the constraints on the assessment of the value of those services under s 128(3)-(7), applied by s 142(3) to claims under the 1897 Act. Accordingly, these figures would allow amounts of $690 per week and $750 per week for the past and future respectively, with respect to each son.

9 The calculation of financial benefits accruing for the future, depended on an assessment of whether, and if so when, the deceased would have undertaken training for the purpose of obtaining employment. The trial judged accepted that there was "a real likelihood that the deceased would have undertaken study and work in the child care area" and would have completed the relevant training: at [145]. He was also satisfied that she would have obtained an associate diploma in teaching: at [146].

10 The finding as to the date on which she would have commenced work was less clear. The trial judge appears to have accepted that she would have commenced working on or about 1 January 2008, earning $600 per week after tax, until 1 January 2014 when her weekly net income would have increased to $755. The elements of uncertainty involved in the calculation led the trial judge to accept those figures subject to a discount of 35% for "vicissitudes": at [150].

11 The next question was the period during which the boys would have been likely to have received support from their mother. His Honour said that it was "more likely that neither of them would progress to tertiary education but that both would undertake vocations in the nature of apprenticeships, and that would allow them to earn income in the course of completing such apprenticeships": at [154]. That, his Honour concluded, would lead them to be financially independent, and leave home, thus limiting the period during which they should be compensated for loss consequent on the death of their mother until each attained 18 years of age: at [154].

12 Although the appellant contended that an age of 21 years, rather than 18 years, should have been adopted, the exercise was not one which should have been undertaken on the basis of probabilities, but on an assessment of hypothetical future events, in accordance with the principles identified in Malec v JC Hutton Pty Ltd [1990] HCA 20; 169 CLR 638. The use by the trial judge of an increased discount for vicissitudes may have been intended to reflect that approach.

13 In the end, his Honour was not required to make specific findings in respect of such matters, as a result of the following conclusion, at [157]:

"But given that in the period 9 April 2007 to the date of the hearing, the net weekly income of the deceased was exceeded in each case by the net weekly income of each of the fathers, neither Joshua nor Lachlan have suffered any past loss of financial benefits. Given that they have both been cared for by their fathers in that period, neither has been deprived of the benefit of the care which their mother would have provided."

14 The trial judge then proceeded to award amounts in respect of each boy based on the contingency that the support of their fathers would not continue until 18 years. In the case of Joshua, who was 15 years of age at the date of trial, an award of $20,000 was made; in relation to Lachlan, who was almost 12 years at the date of trial, an award of $45,000 was made.

Issues on appeal

(a) allowance for fulfilment of paternal obligations

15 The principal ground of appeal was directed to the proposition that neither boy had yet suffered compensable loss resulting from the death of his mother. That approach appears to have been based upon two premises: first, the factual premise that the fathers provided care and, secondly, the legal premise that each father had a legal duty to provide such care: at [160].

16 The conclusion cannot be wholly accepted, either on the facts or in principle. In principle, it should not be right that children who have survived through the fulfilment of a basic moral obligation by some person stepping into the shoes of the deceased mother, are thereby deprived of their right to recover compensation from the tortfeasor: see Rawlinson v Babcock & Wilcox Ltd [1967] 1 WLR 481 at 485 (Chapman J), quoted by Dawson, Toohey and McHugh JJ in Nguyen v Nguyen [1990] HCA 9; 169 CLR 245 at 267. On the other hand, it may be that such recovery is precluded where the person who stepped in had a legal obligation to do so, though not where that person failed to fulfil his or her legal obligation, a possibility reflected in the actual awards made in this case. Both of these conclusions follow from an underlying assumption that compensation is not available where there is an extant relationship of dependency. As explained (albeit in different circumstances) by Gleeson CJ in De Sales v Ingrilli [2002] HCA 52; [2003] HCA 16; 212 CLR 338 at [12], it is "erroneous to assume that injury of the kind for which the legislation compensates can only be offset or diminished by a new relationship if that relationship involves dependency". As his Honour explained, by way of example in the same passage:

"However, injury can occur in circumstances in which there is no dependency. For example, it is now common for both parties to a legal or de facto marriage to have salaried or income-producing occupations. Each may expect to obtain financial advantage from the other, even where they are both fully able to support themselves from their own income, and are therefore not 'dependent' in any sense."

17 An example of this principle may be found in Axiak v Pezzano [2002] NSWCA 65; 13 MVR 424. Ms Axiak and her former husband, who died in a motor vehicle accident, had a son. Both were skilled professionals, able to live off their own earnings. In fact, Ms Axiak's earnings exceeded those of her deceased husband: at [53]. Nevertheless, she obtained an award of approximately $1.38 million, of which more than $350,000 was apportioned for the benefit of their son: at [90] (Mathews AJA, Sheller JA agreeing). The approach adopted in that case was consistent with the principles established in Nguyen v Nguyen. Yet, if one spouse, who has a legal duty to care for a child, can recover for a loss suffered by the child as a result of the death of the other spouse, there would be no good reason why the child himself could not have recovered directly.

18 Similarly, in NSW Insurance Ministerial Corporation v Willis (1995) 35 NSWLR 668, an award of compensation for both past and future services was made in favour of two of the children of deceased mother who went to live with their father. As explained by Grove AJA at 681F-G, the children were being compensated "for the services of a domestic nature which have been provided by persons other than themselves and for which they have not paid nor are they liable to pay".

19 The true question to be considered is the loss which the boys suffered, in a material sense, from the death of their mother. To the extent that a father was providing some assistance or maintenance prior to the mother's death, allowance must be made in calculating the loss for those other contributions. If, upon death, relatives, including the father, step into the mother's role, the loss may be ameliorated or eliminated: Nguyen at 248. On the other hand, it is clear that the provision of services by "relatives or friends gratuitously or at small cost as a benevolent gesture to the family" does not preclude the recovery of the true value of those services from the tortfeasor: Nguyen at 249 (Brennan J).

20 However, the principle that recovery is not precluded by the provision of gratuitous services replacing those of the deceased, is qualified, in the case of a spouse, by the requirement that allowance be made for the possibility of remarriage. Dawson, Toohey and McHugh JJ explained in Nguyen at 265:

"Where the services are likely to be replaced as a result of remarriage, the reasonable prospect of that remarriage will serve to reduce the compensation to which a plaintiff will be entitled, not because the plaintiff's need for the services will then be satisfied, but because the plaintiff's loss is thereby directly reduced."

21 Remarriage was not the only factor which might reduce the payment of compensation. The joint judgment continued:

"In some families, the children might reasonably have been expected in the course of time to have taken up, to a greater or lesser extent, the household duties previously performed by a parent. In that event, the loss incurred by reason of the death of that parent is the less. Of course, if the children take up the household duties, not in the ordinary course of events, but only because of the death of the parent, that will not reduce the total loss and it is irrelevant that the services do not need to be replaced by someone outside the household."

22 Although the last example given by their Honours appears to have been self-evident to them, the explanation is not provided in the judgment. What follows is an analysis of why assistance provided voluntarily by "someone outside the immediate family" (at 266) or "voluntary unsolicited assistance" (at 267) does not preclude recovery. The reasoning involves concepts of reasonable expectations, legal obligations and moral revulsion against a stand which would discourage generosity or charity towards the victims of a tort. If reasonable expectation were the test with respect to a child's claim, it is not clear whether the same approach should be taken in respect of a father who lived with the mother from one who was estranged from the mother, to the extent that he did not provide assistance or maintenance prior to the mother's death. No doubt in some cases there would be a reasonable expectation that the estranged father would step in; however, there would usually be a far higher expectation that someone would step in, not necessarily the father, as it is unusual in our society for children to be left to die on the streets when a supporting parent is killed. If the test of legal duty is to be relied upon, there might be the same moral concern that the law will relieve the tortfeasor because one parent has been left alive, thereby creating a disincentive for that parent to actually fulfil his or her legal obligations. (As explained by Young JA, the nature of the legal obligations might in any event require some further analysis.)

23 In De Sales, the joint judgment noted, in relation to remarriage, that "what is involved is the prospect of the receipt of material benefit, not merely the reacquisition of marital status itself": at [61]. Thus, where remarriage had occurred prior to trial, what needed to be considered was whether it brought with it "financial advantage or disadvantage": at [78] (Gaudron, Gummow and Hayne JJ) and [101] (McHugh J). As Kirby J noted, in considering what benefits obtained following death should be taken into account in reduction of damages and what should not is a subject "full of anomalies and fine distinctions": at [130]. His Honour continued:

"Why, for example, should help given by a step-parent to a child who has lost a parent be deducted in the calculation of damages under the Act, but not similar support given by a grandparent or other volunteer? Sometimes, the only apparent justification for the lines drawn by judicial decisions in this area has been that of a policy choice."

24 Accepting that to be so, the policy of treating parents differently from non-parents is long standing and understandable. Where the parents have separated, that one parent may have had custody of a child, rather than the other, may have resulted from disinterest on the part of the other parent or from a disputed battle over custody in which the other parent was anxious to obtain custody, but failed to do so during the life of the deceased parent. In one case the sense of responsibility, and in the other the satisfaction of a strong desire, result from the death of the custodial parent. However, in both cases (and most cases will involve mixed motives) it may reasonably be said that the child has suffered no loss. The case law does not support the kind of inquiry which would allow the cases to be treated differently in deciding whether the child had suffered loss.

25 If the role of the surviving parent must be taken into account, the question is to what extent, in the case of each child, the role of the mother was taken over by the surviving parent. The respondent complained that the evidence before the Court did not allow for such an inquiry and that the trial judge was correct in stating that "each of the natural fathers undertook that responsibility [to provide for the care of the children] from shortly after the deceased died": at [160]. However, both propositions are untenable. On the one hand, the complaint that there was no evidence to support identification of the roles played by the fathers was contradicted by the findings of fact made by the trial judge, to which further reference will be made below. Secondly, the suggestion that the fathers took over the care responsibilities of the mother was manifestly erroneous. Each of the fathers is in fulltime employment: it is highly improbable that either could be described as providing the level of day-to-day care for their sons which the mother, who was a fulltime carer, provided. Indeed, it is improbable that the trial judge intended to make such a statement: his finding is better understood as indicating that each of the fathers had accepted their parental responsibilities to provide for their respective sons.

(b) assessment of loss

26 Both counsel in the course of the hearing in this Court suggested that, despite relevant material and submissions being before the Court, in the case of error in the Court below, the matter should be remitted for further hearing. That view appeared to be based on the assumption that some evaluative assessment would be required as to the roles played by the respective fathers. However, the appellant is not entitled to seek to improve her case by reopening the evidence. Thus, in circumstances where this Court is as well placed to make the relevant broad-brush assessments as the District Court on the available evidence, the expense of a further trial is not justified and should not be ordered: Civil Procedure Act 2005 (NSW) ss 56-60; Uniform Civil Procedure Rules, r 51.53.

(c) care provided by Joshua's father

27 The judgment below set out the evidence called at trial, witness by witness, rather than by topic. Accordingly, it is necessary to draw together the strands from the various witnesses. It is also unclear whether the facts set out as recounted by the witnesses were accepted by the trial judge. However, it was not suggested before us that his Honour's statements about the evidence should not be taken as findings of fact. Nor does the transcript of the cross-examination reveal any attack on the credibility of the relevant witnesses. It is convenient, for the most part, to adopt the summary provided in the judgment below.

28 At the time of the trial, Joshua lived with his father, Mr Bradley Grosso, and his paternal grandparents in the grandparents' home. His father was an excavator driver working night shifts. He would be at work when Joshua got home from school and "it was difficult for them during this night shift period to see each other": at [50]. He said that the shift work situation was subject to change, although not that it would necessarily change. Joshua's aunt helped with his homework: at [56]. His grandfather took him to school every morning: at [57]. Joshua's father accepted that "[m]uch of the burden of looking after him has fallen upon [Joshua's grandmother] when he has been doing shiftwork": at [62]. He said that he had "helped with Joshua's school fees and expenses since Year 7 and continues to do so": at [63]. He picked Joshua up from the railway station in the afternoons "from time to time": at [64]. The summary of his evidence continued at [65]:

"The Plaintiff [Joshua's grandmother] is the homemaker of the family and does the bulk of the cooking and cleaning. The presence of her son and grandson creates extra work for her. She prepares the evening meal. Joshua, however, makes his own bed and tidies his room. He stated that his mother still cleaned the house as she did before Joshua moved in."

29 The inference which may be drawn from this material is that Joshua's father provided some care and assistance to Joshua, but not a significantly greater level than he had prior to the death of Joshua's mother. The assistance he provided before the death of the deceased was not part of the loss suffered by Joshua; the assistance provided to Joshua following his mother's death is, accordingly, assistance for which he is entitled to recover compensation.

(d) care provided by Lachlan's father

30 The evidence with respect to Lachlan's circumstances was almost entirely that of his father, Mr Jamie Davis. Mr Davis said that he was not paying child support in respect of Lachlan at the time of the deceased's death, but his relationship with the deceased, which had commenced in 1996 continued until July 2006, although they appear to have been living in different premises since 2002: at [68] and [69]. Following the death of his mother, Lachlan went to live with his father, his father's new partner, Christine, and her young son: at [70]. The trial judge continued:

"[71] Mr Davis' current working hours are 7am to 4pm. His partner does not work and cares for Lachlan. Mr Davis' sister-in-law takes Lachlan to school at the local public school, which he has attended since his mother's death.

...

[77] Mr Davis looks after Lachlan after school. He keeps Greyhounds and Jack Russell dogs and it is Lachlan's task to feed the dogs. On Mondays, Wednesdays and Fridays, Lachlan learns Tae Kwon Do with his uncle and his cousin.

[78] Mr Davis lives on a 10 acre property and his brother and his wife live next door."

31 The inference to be drawn from this material is that Lachlan's father provides full financial support to him at a level which is not less than and almost certainly exceeds that provided by his mother. However, domestic care is now provided primarily, though not entirely, by his father's new partner. It is likely that, as Lachlan grows older, he will spend more time with his father, assuming that they remain together, which is likely. Doing the best one can with the evidence, and taking into account the likelihood that Christine's contribution will remain high while Lachlan is younger and reduce as Lachlan gets older, it may be accepted that on average, since the trial, she and family members other than his father will provide 75% of the domestic services which would otherwise have been provided by Lachlan's mother.

(e) period of dependency

32 The trial judge considered as alternatives whether an allowance should be made in favour of the children up to the age of 18 or 21 years. That was a not inconsiderable difference in financial terms, as he had accepted that the deceased would have obtained child care qualifications and employment once Lachlan was 10 years old: at [149]. Despite the plaintiff's argument referred to in the following paragraph, it therefore appears that the trial judge would have expected her to commence employment in early 2009. Nevertheless, allowing for the fact that she needed to obtain her qualifications and his Honour's conclusion that the plaintiff's contentions were "optimistic" (at [148]) the discount from the net rate of $600 per week, although challenged by the appellant, appears appropriate.

33 The likelihood that the boys would have ceased to be dependent upon their mother immediately upon turning 18 is remote. They may have achieved a level of independence prior to that age, assuming they would not complete Year 12 at school, but it is also unlikely that, as anticipated, they would have obtained full financial independence upon entering apprenticeships. A preferable course would have been to assume a tapering off of dependency and hence of likely financial contributions from their mother, from 17 until they were approximately 20 years of age.

Assessment of loss

(a) Joshua - financial loss

34 The claim made on behalf of the children assumed a gross income of $80,000 per annum from the date of death until each boy turned 21. Those claims were unrealistic. Based on the dependency rates, financial assistance should be calculated for each at the rate of $116.55 (being 31.5% of her actual income) from 9 April 2007 until 1 January 2009. Bearing in mind that precise figures in making such calculations are erroneous (see De Sales at [68] (Gaudron, Gummow and Hayne JJ) and [100] (McHugh J)), I would allow in the case of Joshua an amount of $10,500 for that period.

35 Joshua was born on 2 April 1995. Assuming a tapering effect between the ages of 17 and 20, financial assistance until the age of 19 years is appropriate. Adopting the same dependency rate from 1 January 2009 until 15 October 2010 (approximately 80 weeks) based on earnings of $600 per week net, gives an amount of $17,600. Mr Grosso was not directly asked whether he contributed to the family expenses involving the upkeep of Joshua. However, he did say that he met "additional expenses" to the extent of "roughly around $3,000" on a yearly basis: Tcpt, 21/04/10, p 57. Some allowance must be made for that contribution. The net amount allowed under this head should therefore $10,000.

36 Joshua will turn 19 years on 2 April 2014, a period of a further 3.5 years. His Honour was inclined to accept net income of $755 per week after the deceased would have acquired her associate diploma in 2014. It is not clear when that would have occurred, but any increase can be ignored for present purposes, allowing a lower amount than the trial judge was inclined to allow for vicissitudes (say 25%). On that basis, the following calculation would be made, namely 182 weeks x $600 x 31.5% x 75% equals $25,800. It may be assumed that Joshua's father would have made some further financial contributions during that period, as he had done in respect of the additional expenses prior to trial. Assuming they were of the same order of $3,000 annually, the amount to be allowed would be approximately $16,000. Given the fact that the calculation is effectively backdated for two years, but would carry interest on judgment from the trial, it will be appropriate to disregard any discounting for the present value of future losses and make the amount payable from the date of judgment in this Court, without additional pre-judgment interest.

(b) Joshua - domestic care

37 There remains the question of domestic services provided to Joshua. It was accepted that these would be calculated at the rate of $23 per hour, for 30 hours per week to the date of trial and thereafter at the rate of $25 per hour. It is likely that these would reduce as Joshua approached 18 years. However, they might not cease at that time. It may be assumed that allowing those figures to the age of 18, with the usual allowance for vicissitudes, will make adequate provision for those contingencies. The relevant calculation to the date of trial would therefore be $23 x 30 hours x 182 weeks equals $125,600, reduced by the usual amount for contingencies gives $106,700.

38 By the date of trial Joshua was 15 years six months. There is no reason to suppose that thereafter he required assistance at rate of 30 hours per week. Being older at the time of his mother's death, it appears that he suffered significant psychological responses, requiring greater services than would necessarily expected for a boy of his age. It appears that his security remains an important psychological consideration. Nevertheless, 15 hours per week would appear to be a reasonable allowance from trial to the age of 18 years, being a period of two years six months. At the higher rate of $25 per hour, the same calculation would result in an amount of $41,400.

39 The payment in respect of Joshua should therefore be $187,100.

(c) Lachlan - financial loss

40 Lachlan's father having had care of Lachlan from the time of the accident, he has provided financial assistance at a level which would appear to be at least as great as, if not greater than, that provided by Lachlan's mother prior to her death. There is no evidence to suggest that that calculation would have changed once his mother commenced employment. Accordingly, he is not entitled to any allowance on account of financial assistance, his loss having been expunged by his father's contribution.

(d) Lachlan - domestic care

41 With respect to domestic care, his situation is not dissimilar to that of Joshua in that the primary care giver has been someone other than his father, namely Christine. Lachlan was eight years of age at the time of his mother's death and therefore in need of the same care that was provided to his brother. Accordingly, from the date of the accident to the date of the trial judgment, an amount payable on account of Lachlan would total, in round figures, $106,700.

42 At the date of trial, Lachlan was 12 years of age. Thereafter, the calculations should be based on the finding that Mr Davis will provide 25% of the care and others the balance, which is recoverable. A further three years should be allowed as the same calculation of 30 hours per week at $25 per hour which, with the usual calculation for vicissitudes, and without discounting, 75% of which would total, in round terms, $75,000. For a further three years, at the lesser rate of 15 hours per week, he should receive 75% of a sum which, undiscounted, will amount to a further $37,500.

43 Again on the basis that these amounts will be payable from the date of judgment in this Court, discounting to allow for present value of future loss can be ignored. Accordingly, a payment in favour of Lachlan should be allowed in the amount of $219,200.

Total payable

44 The appellant recovered, without dispute, funeral expenses for the deceased in an amount of $7,370. She should have a judgment in the amount of $413,670.

45 This is a significant sum to administer. It should be paid into court to allow the parties to seek instructions as to how and to whom it should be disbursed.

Costs

46 The appellant has succeeded in obtaining a judgment in excess of that awarded in the District Court. She should have her costs of the appeal.

Orders

47 The Court should make the following orders:

(1) Allow the appeal and set aside the judgment and orders in the District Court.

(2) Judgment for the appellant against the respondent in the sum of $413,670, such amount to be paid into court in the first instance, to be apportioned as to -

(a) $187,100 in favour of Joshua Grosso, and

(b) $219,200 in favour of Lachlan Davis.

(3) The respondent to pay the appellant's costs in the District Court and in this Court.

(4) The respondent to have a certificate under the Suitor's Fund Act 1951 (NSW) in respect of the costs of the appeal.

(5) Grant the parties leave to approach the duty judge in the Common Law Division on 7 days notice for orders as to the disbursement of the fund.

48 YOUNG JA: This is an appeal from a decision of his Honour Judge Lakatos SC in an action under the Compensation to Relatives Act 1897.

49 The appellant, Dallas Grosso, was the plaintiff below, and she sued on behalf of her grandson and his half sibling, these being the children of the deceased, Hayley Wheeler, who died on 9 April 2007 following a motor vehicle accident. She was 33 years of age at the time of her death.

50 The children are Joshua born on 2 April 1995, so 12 at the date of his mother's death and now 17, and Lachlan, born on 21 August 1998, 8 at the time and now 13. The appeal is on the quantum of damages awarded.

51 The primary judge found that the damages payable were $72,370, being damages of $65,000 plus funeral expenses of $7,370. The general damages were apportioned $20,000 to Joshua and $45,000 for Lachlan.

52 The appellant says that this award was manifestly inadequate and that the reason why this is so is that the primary judge erred in setting off the benefits that the grandsons were receiving because, since the death of their mother, they have been adequately cared for by their fathers and their fathers' extended family.

53 At the date of the mother's death both children were living with her.

54 The children have different fathers. Joshua's father is Bradley Walter Grosso who is the son of the appellant. Lachlan's father is Jamie Davis. Mr Grosso, during the mother's life, often took Joshua to soccer training and to the games and paid child maintenance by deductions from his pay. Since the death, Joshua has continued at the same school and his father helps with school fees. Joshua has lived with his father and his grandmother since the death of his mother. Much of the burden of looking after him has fallen on the grandmother because his father is doing shift work.

55 Mr Davis is a builder's labourer. After his mother's death, Lachlan went to live with his father at Riverstone where his father was living with his partner and her young son. Mr Davis works from 9am to 4pm. His partner does not work and cares for Lachlan and his sister-in-law takes Lachlan to school.

56 The primary judge said there were essentially four matters in contest between the parties:

(a) the amount of loss of financial benefit of the dependant children, which in turn depends upon the question whether the deceased would have commenced a career as a child carer and/or as a child care teacher at all, and if so, when;

(b) whether the losses should be calculated until the children attain 18 years or 21 years;

(c) whether the children have suffered any loss of financial benefits and/or services at all given the fact that they are supported by and residing with their natural fathers; and

(d) whether the Motor Accidents Compensation Act 1999 precludes an award of interest on the damages awarded for past lost income and past loss of services by the dependant sons of the deceased mother.

57 The prime matters on this appeal are (b) and (c) plus consequential issues. The primary judge found that losses should be calculated only until each child attains 18 years. The appellant says he should have taken 21 years. The judge held that the children had not suffered any loss seeing as they were supported by their natural fathers, but allowed $20,000 and $45,000 for the children respectively as a buffer in case the fathers die prematurely.

58 As to whether the cut-off point should be 18 or 21, the primary judge said at [152] that children may reasonably expect to receive financial and domestic support until they reach the age when they are financially independent. He said:

That requires a prediction about the likely career path of Joshua and Lachlan, any personal characteristics which might affect their employment prospects and any decision as to when they might leave home.

59 His Honour considered the circumstances of the sons and said at [154] that:

...given the evidence of the children's history at school and their capabilities, it was more likely that neither of them would progress to tertiary education but that both would undertake vocations in the nature of apprenticeships, and that would allow them to earn income in the course of completing such apprenticeships. If that were to occur, they would not only be financially independent but there is a probability that both of them may have moved out of home.

He accordingly awarded damages until they were 18.

60 The appellant complains of this. The appellant says:

His Honour appears to have stopped the allowable claim for voluntary care at age 18, which in the circumstances was inadequate. The notion that because a school boy joins the paid workforce while he is also doing some tertiary studies at TAFE suddenly becomes independent of his mother's care and then looks after himself entirely is a conclusion by his Honour which should be rejected on the hearing of the appeal.

61 However, the submissions continue (Orange 42):

...because his Honour did not proceed to make calculations, by reason of the other errors complained of in the Grounds of Appeal, this error did not impact on the calculation of damages so as to affect adversely the ultimate award [made by the judge].

62 The primary judge followed the decisions of Yeldham J in Thompson v Mandla [1976] 2 NSWLR 307 and of the Full Court of Western Australia in Houareau v Bouyer (1990) Aust Torts Reports 81-044. In that latter case, Kennedy J put the proposition starkly at p 68,104:

Only in unusual cases, it appears, can a child recover a substantial award for his mother's death if his father is still alive and able and willing to discharge his obligations to the child.

63 The core question in this appeal is whether those words still represent the law in the society of the 21st century.

64 The traditional law as to the rights of parents with respect to children is set out in Bicknell's The Law and Practice in Relation to Infants (1928). At p 1 the learned author says:

The father at common law was regarded as the natural head of the family, and to him was confided the care and control of the persons of his children while they were under twenty-one years of age. As such head he was invested by the common law with certain legal rights over his children. The first and most important of these was his right to have the custody of the child .... The right was absolute even against the mother, however young the child might be.

65 An example given is The King v Henrietta L Greenhill (1836) 4 Ad & El 624; 111 ER 922. The facts were that Benjamin C Greenhill Esquire obtained a habeas corpus commanding his wife Henrietta L Greenhill to produce the bodies of their three children before the court. His problem was that his wife had left and gone home to her mother with the children. Lord Denman CJ said at 639 (927):

There is, in the first place, no doubt that, when a father has the custody of his children, he is not to be deprived of it except under particular circumstances; and those do not occur in this case.

The result of the case appears to be that the wife, who would not give up the children, was ordered to be attached for contempt though the attachment should lie in the office for a month.

66 The rights of the father were left intact, but legislation in England and in New South Wales (Infants' Custody and Settlements Act 1899) gave the Equity Court power to make orders upon the application of the mother of any infant for such custody as having regard to the welfare of the infant was appropriate.

67 Accordingly, when I was a junior barrister in the 1960s, if one was acting for a father, one always took out habeas corpus. If one was acting for a mother, one made an application under the Infants' Custody and Settlements Act. That was the background in which cases were decided up until perhaps 1987 when the predecessor to s 66C was added to the Family Law Act 1975 (Cth). That section probably operates so that each parent has equal rights and duties with respect to children. Thompson v Mandla was decided before this amendment to the law.

68 I think it is useful to go back to 1940 when the New Zealand Court of Appeal decided Marsh v Absolum [1940] NZLR 448. That was a Compensation to Relatives action by a father for the loss of his wife and the children's mother. The Court of Appeal consisted of Myers CJ, Blair, Kennedy and Northcroft JJ. Kennedy J said at 475 that:

...the lack of a mother's care and moral training is a great loss to a child, but it is not a pecuniary loss.

Myers CJ came to the same view at 463. The Chief Justice also said at 463:

...there is no evidence in this case of any pecuniary loss to the children. Their maintenance, support, and education, from the pecuniary point of view, remain the responsibility of the father in the future as in the past. The pecuniary loss has been his ....

69 In 1941 in Victoria the Full Court decided Tong v Purdy (No 2) [1941] VLR 147. That was a father's action under the Compensation to Relatives Act in respect of the death of his wife on behalf of himself and his daughter. At 150 the Court held that the obligation to maintain the child rests on the father and there was no pecuniary loss to the child.

70 The matter was also considered in Western Australia in Henderson v Oswald [1965] WAR 54, the judge being Negus J. That also was a father's claim under the Compensation to Relatives Act. The father found that he had to board the children out at a church home. At 58 the judge said that it was the duty of the plaintiff as a father to house, maintain, clothe and educate the children. He then said:

...my assessment of the value to the plaintiff of the services of the wife must be made on the basis that she would have continued to look after [the] plaintiff during their joint lives and - in performance of his duty - she would have continued to look after each of the children....

71 At 59 he said:

...a child is not entitled to damages for the death of his mother-housekeeper, apart from any damages recovered by the father for the loss of his wife-housekeeper, because the loss in such a case is a loss of services which although rendered to the children were rendered for the husband ....

72 He then remarked:

It seems an odd thing to suggest that the children of a mother who occasionally works and earns money and does for them the thousand and one things that a mother normally does for her children do not suffer any loss upon which a money value can be placed, if the father, after the death of the mother, discharges his duty to the children to house, maintain, clothe and educate them until they can fend for themselves ... The services of some mothers are of great value to their children and do more than discharge parental duty. But it is not generally possible to prove the value, even vaguely.

73 In Thompson, Yeldham J followed all these cases as well as a number of others. He said at 318:

I do not find, in the cases to which I have referred, any views which compel a decision that children may not recover in respect of the loss of gratuitous services rendered to them by their mother, because their father, who has provided and is likely to continue to provide for them will, by the expenditure of his funds, ensure that they are properly cared for and hence do not suffer pecuniary loss. However, in the present case it is clear that ... no such loss has been suffered by the children.

74 It is apparent from this review that the guiding principle was that when a married woman cares for her children, she does so because that is her duty to her husband. The children do not suffer a loss if that care ceases because the husband had the duty before the wife died and continues to have the same duty after she died.

75 The question is whether the change in the law with respect to parents' "rights" over children means that this basic position must be re-examined.

76 Before doing so, I should examine one other authority, and that is the Full Court's decision in Wilson v Rutter (1955) 73 WN (NSW) 294. That was a case where the executors of a mother made a claim under the Compensation to Relatives Act. The husband of the deceased had predeceased her by six months. Sugerman J said at 297 that there did not appear to be any precedent for that sort of case. Counsel for the defendant put that as the grandparents rendered the same services as the mother after the mother's death, there were no damages. Sugerman J said he did not agree with that. He said that the same principle applied as where the hat was taken around after a worker died at employment. All the judges held that the ordinary principles of assessment of damages applied to such a case.

77 I think it is necessary to consider what effect s 66C of the Family Law Act has on the authorities to which I have referred.

78 Indeed, when one looks at the family law cases, they do not show the principle as starkly as the common law cases.

79 In Bazeley v Forder (1868) LR 3 QB 559 at 565, Cockburn CJ said:

It is well established that, except under the operation of the poor laws, there is no legal obligation on the part of the father to maintain his child....

Although that was part of a dissenting judgment, the principle so stated is quite clear and has been applied in this State by the Full Court in Chantler v Chantler (1906) 6 SR (NSW) 412.

80 By statute, most recently the Deserted Wives and Children Act 1901, a statutory duty was imposed on fathers to support legitimate children, but the only person who could enforce that obligation was the mother, not the children themselves. It was only under the Family Law Act 1975 (Cth) that children had the right to claim support from their father; see s 73, now repealed. Section 66C is the revised version of the old s 73.

81 Although s 66C gives the parents of the child the primary duty to maintain the child, one has got to go to s 66B of the Family Law Act which provides that parents share equally in the support of their children, but the children have their proper needs met from reasonable and adequate shares in the income earning capacity, property and financial resources of both their parents. This has been construed as meaning that the parents do not necessarily have equal liabilities to the children. A parent's duty will depend on his or her income and resources; see eg Re Stojanovic (1990) 99 FLR 59; 13 Fam LR 849.

82 It seems to me that with all this alteration to the law, one gets little assistance from cases such as Thompson v Mandla.

83 I realise that Thompson v Mandla was cited, apparently with some approval, by Deane J in Nguyen v Nguyen [1990] HCA 9; 169 CLR 245 at 255, but just because a Justice of the High Court mentions a case with approval in his judgment, does not carry with it the full endorsement of the High Court so that the case has to be followed as if it were a decision of the High Court.

84 It seems to me that in this year 2012, one goes back to first principles when assessing damages under Lord Campbell's Act. Those principles are set out in the leading cases of Nguyen v Nguyen and De Sales v Ingrilli [2002] HCA 52; 212 CLR 338.

85 In Nguyen, Brennan J at 247 commenced by quoting with approval what the High Court had said in Horton v Byrne (1956) 30 ALJ 583 at 585. I will repeat the significant part of it:

The general nature of the measure of damages under Lord Campbell's Act has often been stated. It is compensation for material loss. The compensation should represent the balance of the loss, reduced to terms of money, which the deceased's relatives incur in consequence of his death after deducting the pecuniary gains which on the other hand accrue to them from that event.

The High Court in Horton v Byrne then quoted with approval from Greer J in Baker v Dalgleish Steam Shipping Co [1921] 3 KB 481 at 485:

It is well settled that the damages are confined to compensation for the loss of material benefits or of the reasonable prospect of such benefits occasioned by the death.

86 Brennan J in Nguyen then continued that the exercise involves the entire family situation before the death being compared with the entire family situation after the death in order to ascertain the "balance of the loss".

87 Deane J noted at 256 that compensation could be recovered for lost domestic services even though they are not replaced at pecuniary cost. However, a child is not automatically entitled to the benefit of a substantial award of damages in every case where a deceased provided and was likely to continue to provide gratuitous and substantial domestic services. Furthermore, it was not necessarily correct to compensate for such services at commercial rates.

88 The plurality (Dawson, Toohey and McHugh JJ) at 263 observed that authority provided that the loss occurs "at the moment of death" and they followed what Gibbs J had said in Ruby v Marsh [1975] HCA 32; 132 CLR 642 at 658 that:

The expectation of future benefit was destroyed by the death and no subsequent event can increase or diminish the extent of the pecuniary loss then suffered, although it is true that subsequent events may be relevant to the assessment of damages in so far as they render it unnecessary for the court to speculate about possibilities that may have existed at the date of death when the facts themselves have become known.

89 The plurality then said that:

...the deceased may have made a contribution in services rather than money in which case damages are recoverable for their loss, whether or not they are, or are to be, replaced, provided that a pecuniary value can be placed upon them.

90 At 266 they said:

Although the question must always be "what loss the claimant has in fact sustained by the death" ... courts have been reluctant to conclude that where someone outside the immediate family voluntarily takes over the care of the household, especially the care of infant children, a deduction should be made from the assessment of damages due to a plaintiff, and reluctant to recognise that the loss suffered by a plaintiff is thereby reduced.

91 The primary judge approached the assessment on the basis of principles which, in my view, have now been superseded by the Family Law legislation that came into force after they were decided and current community standards. Accordingly, his assessment cannot stand.

92 The next question is whether this Court should reassess the damages, or alternatively, send the matter back to the District Court for a new trial. Both counsel urge the latter.

93 Mr Gross QC for the appellant, said that the assessment of damages on the proper basis, is a very complicated matter

and we would respectfully suggest that the better course is that rather than the Court embarking upon that extremely difficult task, a potentially insurmountable task, that going back for a new trial doesn't necessarily mean there is a new trial, but certainly once the legal rules are clarified, one would hope the matter would get resolved by the usual mediation or settlement negotiation process.

94 Mr Cavanagh SC for the respondent said:

I agree with my friend that the task for this Court would be almost unsurmountable because the way the appellant seeks to run this appeal. ... The Court ... is not in a position on the evidence [to make the proper assessment].

95 The Court is very reluctant to accede to this request. As was put to counsel during the hearing, they ran their case in the District Court, the evidence wasn't extensive, there was no question of credibility of any of the witnesses. If the evidence is inadequate, that is the problem of the plaintiff, why should the plaintiff have a second chance of putting the proper evidence before the court? New trials are expensive processes and are to be avoided if at all possible. Mr Gross' response to this was that it might be unfair to blame the plaintiff for the state of the evidence, as until the defendant put in material to discharge the onus of showing the offsetting collateral benefits, it was not necessary to put such evidence forward.

96 As to the difficulty of this Court assessing damages, I acknowledge that my personal experience over the last 30 years in assessing damages in personal injury cases is nowhere near that of an experienced common lawyer sitting as a District Court judge. However, with the assistance of counsel, even if the task is difficult, the difficulty and any lack of experience does not dissuade this Court from fulfilling the expectations of the legislation in deciding cases as expeditiously and as cheaply as possible.

97 The primary judge found:

(a) that each child should be provided for until he attain 18, rather than 21 as claimed by the plaintiff;

(b) that the deceased would have commenced working in late 2008 when Lachlan was at least 10 years old and would have earned $600 per week net until 1 January 2014, at that time her net income would have increased to $755 per week. However, the primary judge added at [150] "accepting that a degree of speculation is involved, the appropriate way to balance the undue optimism implicit in the plaintiff's contentions, is to increase the percentage deduction attributable to the vicissitudes of life from 25% to 35%". It is not too clear whether this deduction was his Honour's final assessment of the contingency factor;

(c) the proper allowance for care for the sons was 30 hours per week for each;

(d) the proper rate for assessment was $30 per hour. However, counsel on appeal agreed that this should be $23 per hour for past loss and $25 per hour for future loss;

(e) the appropriate dependency rate was 31.5% for each child;

(f) funeral expenses were allowable at $7,370.

98 At first blush, it seemed to me that the loss could be quite readily calculated from those figures.

99 However, at [160] of the judgment, the primary judge said that he had to consider the further "contingency" that the care and financial support of the children has been undertaken by their natural fathers. The primary judge did not enter into the question as to what adjustment should be made because of the care being given by the grandmother, nor did he evaluate the deduction, if any, to be made for the fathers' care because of the view he took of the fathers' primary duty to care for the children in any event.

100 I spent some time carrying out this exercise and obtained a range of damages, but I was not so confident of my result that I would force such an assessment on the parties, particularly as both sets of counsel submitted that the re-assessment of damages should go back to the District Court.

101 Particularly in view of counsels' joint approach, I formed the reluctant view that in these circumstances it was appropriate that this matter go back for a new trial.

102 However, I have now read Basten JA's reasons. His Honour has re-assessed the damages in the same range as my rough calculations. In view of the desirability to avoid retrials, I have reached the opinion that I should concur in his result.

103 Accordingly, in my view the appeal should be allowed. The orders of the primary judge should be set aside and the orders proposed by Basten JA should be made.

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Decision last updated: 20 April 2012