Issues in the determination of damages for loss of capacity to provide domestic services arose in the matter of Amaca Pty Ltd v Phillips [2014] NSWCA 249.

Ward JA (Barrett JA and Tobias AJA agreeing) noted at [52] that the legislation is silent on the proper measure of s 15B damages, other than to set a cap calculated by reference to an hourly rate.

The appellant Amaca conceded that the respondent’s wife required 24 hour care (which the respondent was providing). The trial judge had found that the respondent’s wife would likely enter a nursing home once the respondent was unable to care for her. The appellant argued that the expected cost of that nursing home care was relevant, presumably as the appropriate measure of damage. 

In rejecting the appellant’s argument argument Ward JA said:

53  What Griffiths v Kerkemeyer and the line of cases following it in relation to the question of compensation for hitherto gratuitously provided domestic services show is that, when placing a monetary value on the loss of gratuitous domestic services, it is appropriate to have regard to the objective commercial cost of those services. That cost is not necessarily determinative of the measure of the loss in a particular case. What was being compensated for by way of the ill-fated Sullivan v Gordon damages, however, was the plaintiff’s loss of capacity to provide the services, not the value to the recipient of those services.

 

54  The partial reinstatement of Sullivan v Gordon damages by way of the creation of a new statutory entitlement to claim s 15B damages does not require that the claimant’s loss of capacity be valued by reference to what it will cost commercially for the same services to be provided in the future; nor does it require that account be taken of how those damages will be expended by the plaintiff or, as is likely in this case given Mr Phillips’ illness, by the executor or administrator of the deceased plaintiff’s estate.

 

55  It was not argued before his Honour that the hourly rate calculation was unreasonable, having regard to Mrs Phillips’ admitted need for care; simply that the reasonableness of the “need” enquiry under s 15B(2)(d) should inform the measure of damages.

 

56  In my opinion, it cannot be said that the approach adopted by his Honour was incorrect as a matter of law. Nothing in the legislation required his Honour to use objective commercial cost as a starting point; nor was his Honour required to take into account what it is known will actually happen on Mr Phillips’ death for the purpose of assessing the appropriate compensation for Mr Phillips for the loss of his capacity to care for his wife at home. Indeed, on one view, if the commercial cost of care were the sole appropriate measure of damages the more appropriate measure might be to assess the cost of what home care would be, as opposed to institutional care, since that is what Mr Phillips has lost the capacity to provide.

57 Amaca’s real complaint seems to have been that the award should have been made to compensate the family for the cost that it is known will be incurred when Mrs Phillips is placed in a nursing home. That ignores the fact that it is Mr Phillips’ loss that is the subject of the award of s 15B damages.

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