Australia: The delicate balancing act: Reasonable v Ideal Care
Curwoods Case Note

Dang v Chea [2013] NSWCA 80

In Brief

• An award for damages is not to fulfil the ideal requirements for an injured person, but rather the reasonable requirements. Merely because expenditure might be advantageous for an injured person to alleviate his or her situation does not necessarily mean it is to be provided by the Insurer.
• The financial cost of proposed accommodation and care has to be weighed against the relative health benefits to the claimant as well as the overall damages awarded.

Background

On 7 September 2007, the claimant was struck by a motor vehicle as a pedestrian in a car park in Cabramatta. She was 83 years old at the time of the accident and sustained severe injuries including a left subdural haemorrhage, non-depressed skull fracture and a fracture to the right zygomatic arch. Two years later she fell and fractured her left femur. Since her fall, she has lived at Canley Gardens Aged Care Facility (Canley Gardens).

Primary Judgment

The claimant submitted that a reasonable assessment of damages would require a provision for her to live in suitable rental accommodation and be provided with nursing care and assistance 24 hours a day. The insurer submitted that a continuation of the claimant's living and caring arrangements in Canley Gardens would be reasonable. Due to her advanced age and progression to dementia, she had a future life expectancy of 3.5 years.

On 11 May 2012, the trial judge² entered judgment in the sum of $1,912,926. After a consideration of both options, Her Honour preferred 24 hour nursing care on the basis that the Claimant had many falls at Canley Gardens and these could be reduced with more intensive care. She found that the 24 hour care would provide "real and significant health benefits". The award for future accommodation and care amounted to $1,095,691.

Court of Appeal Decision

The Court of Appeal allowed the insurer's appeal. It referred to established case law for the proposition that an award for damages was not to fulfil the ideal requirements for an injured person, but rather the reasonable requirements.³ Merely because expenditure might be advantageous for an injured person to alleviate his or her situation does not necessarily mean it is to be provided by the tortfeasor. ⁴

The Court quoted the High Court decision of Sharman v Evans⁵ :

"The touchstone of reasonableness in the case of the cost of providing nursing and medical care for the claimant in the future is, no doubt, cost matched against health benefits to the claimant. 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."⁶

The evidence before the trial judge indicated that the claimant suffered three falls in January 2010, one in June 2010 and two in 2011. In five of the six falls, she suffered only minor injuries. The Court held the contemporaneous notes of Canley Gardens established that there had been a decreasing incidence in falls. Furthermore, the risk of falls in private accommodation would not be eliminated entirely.

In weighing the two options of accommodation and care, the Court stated that the test was not whether the falls would cease entirely if the claimant was placed in private accommodation, but whether the incidence of falls would be reduced by a significant extent proportionate to the additional cost of that care. The Court held that an important factor when considering the health benefits was the claimant's advanced age. As the dementia progressed, she would become less mobile and confined to bed. In these circumstances, falls would be reduced and the circumstances where she would fall unsupervised in Canley Gardens would become progressively fewer. Therefore, the trial judge had erred in valuing too highly the "real and significant health benefits" to be obtained by avoiding injuries from falls.

The Court of Appeal also stated that, in cases where the evidence did not clearly establish whether the lower cost or higher cost was more appropriate, the additional costs must be considered as a proportion of the entire assessment of damages⁷ . The cost of private accommodation was $6,092.50 per week compared to $1,680 per week at Canley Gardens. Over her life expectancy, this amounted to a difference of $781,745, a significant amount compared to the overall amount awarded.

In the circumstances, private accommodation represented the ideal circumstances rather than the reasonable one and was excessive having regard to the additional health benefits and the overall damages awarded.

Implications

When faced with competing proposals for the claimant's care or accommodation, it would be prudent for an insurer to obtain evidence regarding the extent of additional health benefits between the two options so that this may be compared to the relative costs.

The importance of contemporaneous evidence cannot be overlooked. A court's interpretation of the evidence can have significant consequences for the award of damages. In these circumstances, a finding that the claimant had a decreasing rate of falls at Canley Gardens supported the insurer's submissions that the additional health benefit of the proposed accommodation and care was outweighed by the significant cost differential.

Footnotes

¹ Garling J with McColl JA and Preseton CJ of LEC agreeing
² Balla DCJ
³ Arthur Robinson (Grafton) Pty Ltd v Carter [1968] HCA 9 ⁴ Chulcough v Holley (1968) 41 ALJR 336
⁵ Sharman v Evans (1977) 138 CLR 563
⁶ Ibid [at 573]
⁷ McNeilly v Imbree [2007] NSWCA 156

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