Landmark Decision on Dependency and Domestic Services By Roger Walter | March 2009 Area of Expertise | General Insurance
Summary In Amaca Pty Limited v Novek the NSW Court of Appeal was required to rule on a number of arguments raised in connection with the issue of dependency in the context of applying s15B of the Civil Liability Act 2002. This decision of 17 March 2009 is a clear pronouncement on how s15B is to be interpreted and applied. The two main aspects of the decision are the points made about dependency and the incidental benefit of services provided.
Who Does This Impact? Those involved in personal injury claims.
What Action Should Be Taken? Claims for damages under s15B of the Civil Liability Act 2002 must be handled carefully and analysed correctly in accordance with the principles laid down in this decision of the NSW Court of Appeal.
Introduction The provision of domestic care and services to an injured plaintiff often results in a substantial award of damages, whether such services are provided voluntarily or not. Less commonly, there will be a claim for special damages for the value of voluntary domestic care and services that can no longer be provided by an injured plaintiff – the availability of compensation for such a loss has been a more complicated and more recent development in the law1 and the awarding of damages for such a loss is now authorised and governed by s15B of the Civil Liability Act 2002. In Amaca Pty Limited v Novek2 the Court of Appeal was required to rule on a number of arguments raised by the defendant (as appellant on appeal) in connection with the issue of dependency in the context of applying s15B to a claim for damages that began in the Dust Diseases Tribunal. During the course of the Tribunal proceedings, the claimant (Mrs Dawson) died of the subject mesothelioma. The proceedings were then prosecuted at trial and on appeal by her daughter (Mrs Novek) as the legal personal representative of her estate. The dispute about the operation of s15B occurred in the context of Mrs Dawson moving in with her daughter’s family about seven years before her death and essentially providing voluntary services of housemaid and nanny to her daughter’s young children. The provision of these services enabled Mrs Novek and her husband to pursue remunerative business interests. The trial judge awarded damages under s15B in respect of Mrs Dawson’s inability to continue providing such services. This approach was upheld by the Court of Appeal, with the dismissal of the appeal.
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The Grounds of Appeal On appeal, the defendant as appellant submitted that the trial judge erred in construing s15B and that had he construed the section correctly he would have found that: (a) the grandchildren were not dependants of Mrs Dawson; (b) Mrs Dawson’s services were not provided to the grandchildren, but to their parents; and (c) the provision of the services was not reasonable3. It was also submitted in the alternative that any damages properly awarded under s15B should be reduced in that the trial judge
failed to take into account two benefits that provision of the services conferred on Mrs Novek and her husband; one was freeing them to work and earn money, the other was the performance of household tasks during parts of the day when childcare did not take up the whole of Mrs Dawson’s time and attention.4
Dependants or Not? Not surprisingly, after considering some old authorities, including family law cases, the Court of Appeal held that it was not sufficient for the appellant in seeking to establish that the children were not Mrs Dawson’s dependants, to show that the children were dependants of their parents and that Mrs Dawson did not provide them with financial support. In particular, the appellant failed in its submission to the effect that the cohabitation of the children and their parents prevented the necessary dependency – in effect this submission was that, in the case of a child, if there is someone who has the primary legal and moral obligation to care for the child, the child is dependent on that person, unless that person ‘wasn’t around’ and someone else took on that obligation. The Court followed established authority to the effect that it is not correct to simply examine whether at the time of the death the claimed dependants were in fact dependent on the deceased for support or that there was a legal obligation on the deceased to provide support. A more complex and oblique notion of dependency was endorsed by the Court; ‘dependency refers to a state or condition of being dependent, to having been in this relationship to the deceased’5. The Court held that the period of time over which Mrs Dawson provided care to the children, the frequency with which it was provided, and the extensive nature of the care she provided were such that there was an evidentiary base upon which it was legally open to the trial judge to conclude that the children were dependent upon Mrs Dawson.
Who Received the Services? In respect of the second ground of appeal, which was that Mrs Dawson’s services were not provided to the grandchildren, but to their parents, the Court held: The fact that several members of the household benefit provides no reason for concluding that it is erroneous in law to say that the person who performed such a service provided a service to some particular one of those household members.
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Was it Reasonable that Services were Provided? Central to the third ground of appeal is s15B(2)(d), which requires that it be reasonable in all the circumstances that there was a need for the services to be provided for at least six hours per week and for a period of at least six consecutive months. The trial judge held that this provision required a consideration of all the circumstances that brought about the need and reasons for the need. Campbell JA, who delivered the leading judgment in the Court of Appeal, noted that the appellant had not challenged this approach and observed: The Appellant’s written submissions stated: ‘ … it cannot have been the intention of Parliament that the Respondent and her husband should, in effect, receive paid childcare from the Appellant for the next 15 years.’ In my view it is not clear from the wording of the legislation that Parliament did not have that intention. … the Respondent and her husband were likely to have had their children looked after throughout their childhood, without the Respondent and her husband making any payment for the children being looked after.
Further, it was held by the Court of Appeal that the question of reasonableness was one of fact rather than one of law, that it had not been shown that the trial judge had arrived at a conclusion that was not open on the evidence and that no error had been shown in the trial judge’s interpretation of the statute.
Failure to take into Account the Benefit to the Parents The trial judge reasoned as follows on the challenge made under s15B(11)(b) – the challenge made by the appellant was to the effect that the trial judge failed to have regard to the extent to which provision of the services would, but for the injury sustained by the claimant, have also benefited persons in respect of whom damages could not be awarded: I do not think that Mr or Mrs Novek have benefited within the meaning of section 15B(11)(b) by the provision of the services. They have certainly obtained a benefit to the extent that they have both been able to work, yet that is the same benefit the husband and father obtained from his wife looking after the children in the example given in the Second Reading Speech. There is no suggestion that the damages were not available by his receiving that benefit. This is because, in my view, it is a collateral and not a direct benefit that has been received. An example of a direct benefit would be a household task, such as cooking, which is undertaken, not only for the dependant, but also for all members of the household. Such an example was given in the Second Reading Speech. Account needs to be taken of the benefit to the household members in this situation. That sort of example does not arise in this case, because the allowance I shall be making is for the necessary care of the grandchildren and not for general household chores.
The Court of Appeal ruled that the decision of the trial judge on this, which was that the benefit of being freed to go out to work is not one that needs to be taken into account, is not erroneous in law. The conclusion of Campbell JA in supporting the approach taken by the trial judge was as follows: In my view, the enquiry that the court would be compelled to carry out, if section 15B(11)(b) required it to take into account all benefits that were a causal consequence of a claimant providing gratuitous domestic services – namely benefits of all kinds to all people in respect of whom a claim could not be made, is one that could not have been intended. The meaning of section 15B(11)(b) must be one that does not have such clearly unreasonable consequences.
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Mr Russell’s submission proceeds as though the expression ‘provision of services would … have also benefited [ineligible] persons’ means the same as ‘provision of services would … have also conferred a benefit upon [ineligible] persons’. But in the statutory provision ‘benefit’ is used as a verb, not a noun. When ‘benefit’ is used as a verb it tends to focus attention on what the services themselves do, rather than what consequences they give rise to.
Implications This decision of the NSW Court of Appeal is a clear pronouncement on how s15B is to be interpreted and applied. The two main aspects of the decision are the points made about dependency and the benefit of services provided. In relation to dependency we are reminded that the question of obligation and financial support are merely parts of a more complex web of circumstance and timing, the facts of which must all be given due consideration. The issue of others benefiting from services provided to dependants must also be viewed carefully and by approaching the issue on the basis of the core questions so as not to confuse the quantification of the value of services to the dependants with the value derived by non-dependants through their incidental or indirect gaining of some benefit from services provided to dependants rather than to themselves.
Endnotes 1
The recognition of such a loss as a personal pecuniary loss (rather than as a component of general damages) occurred in New South Wales in
Sullivan v Gordon (1999) 47 NSWLR 319, but then the High Court ruled that this approach was wrong in CSR Ltd v Edd Eddy (2005) 226 CLR 1 – this being the development that saw the re-introduction of Sullivan v Gordon damages by statute in some jurisdictions including New South Wales. 2
Amaca Pty Limited v Novek [2009] NSWCA 50 (unreported decision 17 March 2009)
3
The submission as to reasonableness was made in light of s15B(2)(d), which provides: (d) there will be a need for the services to be provided for
those hours per week and that consecutive period of time and that need is reasonable in all the circumstances. 4
The appellant claimed in this regard that the judge had erred in construing s15B(11)(b). Subsection 15B(11) provides: In determining the value
of any gratuitous domestic services that a claimant has lost the capacity to provide, the court must take into account: (a) the extent of the claimant’s capacity to provide the services before the claimant sustained the injury that is the subject of the claim, and (b) the extent to which provision of the services would, but for the injury sustained by the claimant, have also benefited persons in respect of whom damages could not be awarded under subsection (2), and (c) the vicissitudes or contingencies of life for which allowance is ordinarily made in the assessment of damages. 5
The passage cited with approval is quoted in full in the judgment – it is a passage from the judgment of the court in Middleton v Kiama District
Hospital [1970] 3 NSWLR 136 at 138.
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