Tort & Contract topics for the Final Exam INTRODUCTION TO DAMAGES

Transcription

1 Tort & Contract topics for the Final Exam INTRODUCTION TO DAMAGES There are five broad types of damages: Nominal: where the plaintiff proves the wrong but fails to establish a claim for any other type of damages), o Available for common law wrongs actionable per se (without proof of damage) o Available in trespass actions in tort and actions for breach of contract o Should be a TOKEN AMOUNT - Tend to vary between $1 and $25 o Damages not available in any tort actions where proof damage is an element of the action e.g. negligence Compensatory: reflecting the plaintiff s proved injury, and including aggravated damages) o a distinction is usually made between common law damages and equitable compensation for legal and equitable wrongs respectively, as both are based on the same notion of compensation but the common law limiting devices (intervening causes, remoteness, mitigation, contributory negligence) have no role to play in compensating equitable wrongs; o The amount or "quantam" is "assessed" o Two inquiries Is P worse off than he/she would have been if wrong wasn t committed (essentially but for causation) e.g. Cattanach v Melchior (2003) (4:3 yes), Harriton v Stephens (2006) (6:1 no) Principles for measuring loss depend mainly on nature of injury And, if so, what is the monetary equivalent of worse-offness (Limiting devices) should damages be adjusted (usually downward) for intervening causes, remoteness, failure to mitigate and/or contributory negligence Depends mainly on nature of cause of action Contributory negligence important in personal injury, often the difference between a reasonable and an unreasonable offer

2 Restitutionary or gain-based (reflecting defendant s gain) o A distinction is usually made between a: Licence/user fee (tort), An account of profits (equity and some statutory actions) and Restitutionary damages for unjust enrichment (a common law action which is neither tort nor contract, but sometimes referred to as quasi-contract ) o If the defendant s conduct is also wrongful, and the plaintiff has an alternative cause of action at law, the plaintiff can generally only recover under one of the actions: Baltic Shipping Co v Dillon (1993). E.g. where the defendant steals the plaintiff s car and sells it to an innocent third party; the plaintiff may proceed under the tort of conversion (for the market value of the car) or under the unjust enrichment action of money had and received (to recover the amount the defendant sold the car for). Lord Cairns Act damages (or equitable damages ), only available in lieu of, or in addition to, an injunction or specific performance; o (under Lord Cairns Act) are a statutory remedy, available where court has power to grant an injunction or specific performance. Exemplary or punitive (to punish the defendant and to deter others).

3 DAMAGES FOR PERSONAL INJURY: Part 2 of the Civil Liability Act 2002 (NSW); Sharman v Evans (1977) 138 CLR 563; Griffiths v Kerkemeyer (1977) 139 CLR 161; Malec v JC Hutton Pty Ltd (1990) 169 CLR 638; Wynn v NSW Insurance Ministerial Corporation (1995) 184 CLR 485; Medlin v State Government Insurance Commission (1995) 182 CLR 1; Norris v Blake (No 2) (1997) 41 NSWLR 49;Hill v Forrester (2010) 79 NSWLR 47) Damages for personal injury modified by Civil Liability Act 2002 (NSW) Which may be excluded where D s conduct is intentional: And/or by NSW motor accidents and workers compensation legislation and, in statutory defective products actions, by Competition and Consumer Act 2010 (Cth) If plaintiff has died, damages recoverable by estate limited by survival legislation (generally to period between injury and death), and restrictions differ depending on whether death was or was not related to injury Heads of Damage: The Civil Liability Act fundamentally distinguishes between injury-caused economic and non- economic losses: Economic loss comprising Loss of earning capacity; Medical and related needs; and Inability to provide services to others, or the loss of parenting or domestic capacity (whilst the common law regarded this as a non-economic loss of amenity, statutory reforms place it in the economic category), AND Non-economic loss comprising Physical pain and suffering; Loss of the amenities or enjoyment of life; Loss of expectation of life; and Disfigurement.

4 ECONOMIC LOSSES: 1. Loss of Earning Capacity Awarded for lost capacity to earn rather than lost earnings, depends on extent to which P would have exercised capacity and extent to which P can exercise any residual capacity: Medlin v SGIC (1995) HCA Pre-injury earning capacity reduced for expenses necessarily incurred in earning (eg travel): Sharman v Evans (1977) o But not child care: Wynn v NSW (1995) HCA CLA caps pre-injury earnings at 3 times average weekly earnings, but adds employer superannuation contributions Damages usually reduced for contingencies/vicissitudes (uncertainties of life), generally future component but sometimes also pre-trial: Malec v Hutton (1990) HCA o Standard NSW reduction is 15% for general contingencies, may be adjusted up or down having regard to specific circumstances: Wynn v NSW (1995) HCA o or not applied at all eg if short period is involved, P close to retirement, in good health with secure employment o may be increased where evidence is that positive contingencies outweigh negatives: Norris v Blake (No 2) (1997) But collateral benefits conferred by benefactors ignored: (Zheng v Cai (2009) HCA 2. Medical and Related Needs Damages awarded for "needs" - To extend what would be "reasonable" to satisfy Not Restricted by CLA Reasonable cost of expenses recoverable (incl vehicle, home modifications). Test - Sharman v Evans: the touchstone of reasonableness is cost matched against health benefits if cost if very great and benefits to health slight or speculative clearly be unreasonable

5 3. Gratuitous Assistance Damages awarded where care is free to Plaintiff from family/friends Griffiths v Kerkemeyer: P (quadriplegic) got sum for nursing etc and other services gratuitously provided for him by fiancée and family. Held: whether or not later events means services are provided gratuitously does not change nature of loss. P entitled to market value of services provided: Griffiths v Kerkemeyer (1977) Even if care provider also defendant: Kars v Kars (1996) Policy reasons explained in Van Gervan v Fenton (1992) Weekly award (40 hours) and hourly award (1/40 average weekly earnings) now capped by CLA S 15 CLA: restrict claims for gratuitous services: (2) No damages may be awarded to a claimant for gratuitous attendant care services unless the court is satisfied that: a) There is (or was) a reasonable need for the services to be provided, and b) The need has arisen (or arose) solely because of the injury to which the damages relate, and c) The services would not be (or would not have been) provided to the claimant but for the injury. (3) Further, no damages may be awarded to a claimant for gratuitous attendant care services if the services are provided, or are to be provided: a) For less than 6 hours per week, and b) For less than 6 months. S 18(1)(b) CLA: no interest on gratuitous attendant care services Hills v Forrester (2010) NSWCA - no damages unless services (a) for at least 6 hours per week, and (b) for a period of at least 6 consecutive months (a) Is continuing requirement, damages can only be awarded for 6-hour weeks (3:0) (b) Is threshold requirement, once 6-month period satisfied, P can recover for prior period of less than 6 months (2:1)

6 4. Inability to Care for Dependents CSR v Eddy (2005) HCA held that this was a non-economic loss of amenity, and not a need CLA responded by substituting statutory claim for restricted economic damages Dependants must be physically, mentally or by age unable to care for themselves Similar restrictions to gratuitous services (6-month threshold, 6-hour minimum, 40-hour maximum) NON-ECONOMIC LOSS: Physical pain and suffering; Loss of the amenities or enjoyment of life; Loss of expectation of life; and Disfigurement. Generally: awards overall sum for: Loss of amenity: compensate P for continuing disability. Objective: lost ability. Subjective: actual deprivation the P is suffering and will suffer from not being able to participate in life as before. Skelton v Collins: small amount for loss of amenity as P had no subjective feelings of being P must experience pain and suffering Skelton) Loss of expectation of life: loss of a measure of prospective happiness. P s life expectancy reduced by D s neg. Amount is small and similar across factual situations judges do not like to value human life. Does not include mental distress due to realization of loss : Skelton v Collins. Difficult to allocate monetary amounts for loss of what is essentially human condition. Thus: courts provide reasonable compensation (will be reduced as damages under other heads) for P rather than perfect compensation (Sharman v Evans).

7 CLA: S 16 Determination of damages for non-economic loss (1) No damages may be awarded for non-economic loss unless the severity of the noneconomic loss is at least 15% of a most extreme case. (2) The maximum amount of damages that may be awarded for non-economic loss is $350,000, but the maximum amount is to be awarded only in a most extreme case. S 17A Tariffs for damages for non-economic loss (1) In determining damages for non-economic loss, a court may refer to earlier decisions of that or other courts for the purpose of establishing the appropriate award in the proceedings. S 18 Interest on damages (1) A court cannot order the payment of interest on damages awarded for any of the following: (a) non-economic loss Considered collectively and mostly subjectively Capped by CLA at (currently) $572,200 for a most extreme case No award if less than 15% of most extreme case Percentage of maximum above 32% Something less than percentage (increasing) from 15% to 32%)

8 DAMAGES FOR PROPERTY TORTS O Grady v Westminster Scaffolding Ltd [1962] 2 Lloyd s Rep 238; Harbutt s Plasticine Ltd v Wayne s Tank and Pump Co Ltd [1970] 1 All ER 225; Hoad v Scone Motors P/L [1970] 1 NSWLR 88; Evans v Balog [1976] 1 NSWLR 36; Pantalone v Alaouie (1989) 18 NSWLR 119) Compensatory Damages: Recap Two steps: Monetary equivalent of putting P into position as if tort had not been committed (ie but for causation) Then consider limiting devices o Remoteness & intervening causes (concerned with type, not extent) do not permit apportionment of indivisible losses, no liability for any severable loss which is too remote or results from an intervening cause o Mitigation & contributory negligence (concerned with extent) allow apportionment of otherwise indivisible losses, by permitting hypothetical assessment (failure to mitigate), percentage reduction (contributory negligence) o Indivisible loss example: Henville v Walker (2001) HCA - Home unit development loss: agent overestimated market value of units, architect underestimated building costs PHYSICAL PROPERTY DAMAGE Property Damage Where property (real or personal) is damaged, it can usually be repaired or restored, hence the cost of repairs or restoration, along with any damages relating to the loss of use of the property in the meantime, will usually put the plaintiff into the position he/she would have been in if the property had not been damaged. The market value of damaged property, which has been repaired, may sometimes be less than that of similar property, which has never been damaged, so full compensation may sometimes also include any residual reduction in value.

9 Diminution in Value: Where D damages particular property of P: Damaged property worth less than undamaged Diminution = pre-damage value minus post-damage value Usually reflected in cost of repair Occasionally repair cost will exceed diminution in value, eg Mass-produced goods, cheaper to buy new than repair damage Property unique, eg O Grady v Westminster Scaffolding (1962) QBD, classic car Land rezoned, purchaser would demolish house and erect units, eg Evans v Balog (1976) NSWCA - land with undamaged home same value as land with no home Compensation & Mitigation COMPENSATION: Object of compensation to restore P, provide undamaged property, cost of repair Tabcorp Holdings v Bowen Investments (2009) HCA (contract) Same position does not necessarily mean same financial position, eg where P s interest in property is not sale P must act reasonably to minimise loss (mitigation) E.g. toaster worth $20, buy new for $25, repair for $100 cf O Grady v Westminster Scaffolding Ltd (1962) QBD Lovingly restored classic car ( Hortensia ) repair 250, buy same model , and diminution in value 170 max Evans v Balog (1976) NSWCA (land) Diminution in value award unless desire to rebuild is reasonable

10 MITIGATION: Point #1: P has a duty to act reasonably to minimize compensable loss Onus on D to prove P s action/inaction was unreasonable May act reasonably by doing nothing, eg Knott Investments P/L v Fulcher (2014) Tomato growing business (husband ran farming, wife ran packing/marketing) destroyed by fire Decision to cease trading reasonable Re-establishing business required big loan, much time May not have recaptured lost market due to competition Wife s mental harm may have prevented her from returning Awarded profits company would have made to trial Avoidable loss: Where P acts unreasonably, D not liable for any loss reasonable action would have avoided, or any loss caused by unreasonable action (cf scope of liability causation) Henjo Investments v Collins Marrickville (1987, 1989) FCA/FC Misleading conduct induced purchase of unprofitable business, and lease of premises, mid-1985 Problems first arose 6 weeks later, proceedings commenced more than a year later Trading losses awarded to mid-1986, when reasonable person would have ceased trading (P had kept trading to trial) Rental to end 1986, would reasonably have then taken 6 months to assign lease (P didn t attempt until trial) Avoided loss: Where P acts reasonably, D not liable for avoided loss (even if reasonable for P to have done nothing), eg Hoad v Scone Motors Pty Ltd (1977) NSWCA Farmer would replace tractor and mower every five years but had older equipment upon waiting for the end of his lease but as this would result in an operation loss, the farmer had bought a new tractor and mower to continue his business.