Vicarious LiabilityNegligence – Remedies (or

“Damages”)

Lecturer: Greg Younggreg.young@lawyer.com

TORTS - Lecture 11

VICARIOUS RELATIONS AND AGENCY

• An agent acts for the principal; but the liability of the principal for the act of the agent is not based on vicarious liability

• The liability of the principal is based on the maxim: qui facit per alium, facit per se

• The agent acts in a representative capacity and has the authority to act for the principal but is not necessarily a servant

VICARIOUS LIABILITY

• Vicarious liability makes D (usually the master/employer) liable for the torts of another (usually his or her servant/employee) although the master is without any blame or fault.

• Vicarious liability arises only in respect of the torts of the servant

• The master/employer is therefore responsible only for the torts of the servant and not the independent contractor: Hollis –v- Vabu

• For the master/employer to be held liable, the tortfeasor must:– be a servant– commit the tort in the course of his or her

employment

SERVANTS AND INDEPENDENT CONTRACTORS

Non-delegable duties and vicarious liability

Vicarious liability arises in circumstances “when the law holds one person responsible for the misconduct of another, although he is himself free from blameworthiness or fault” (Fleming J, Law of Torts (9th edition) at 409)

Non-delegable duty arises in circumstances where a person cannot be excused from liability even if reasonable care is exercised in entrusting responsibility to another person

Civil Liability Act: Non-delegable duties and vicarious liability

5Q Liability based on non-delegable duty (1) The extent of liability in tort of a person ("the defendant")

for breach of a non-delegable duty to ensure that reasonable care is taken by a person in the carrying out of any work or task delegated or otherwise entrusted to the person by the defendant is to be determined as if the liability were the vicarious liability of the defendant for the negligence of the person in connection with the performance of the work or task.

(2) This section applies to an action in tort whether or not it is an action in negligence, despite anything to the contrary in section 5A.

Non-delegable duties and Vicarious duties

• New South Wales v Lepore ; Samin v Queensland; Rich v Queensland [2003] HCA 4 (6 February 2003)

- Liability of school authority - Alleged sexual assault on pupil by teacher - Whether school authority in breach of non-delegable duty of care - Concept of non-delegable duty - Whether school authority vicariously liable

- Test for imposition of vicarious liability.

WHO IS A SERVANT?

• A servant is one who is under a contract of service to another an independent contractor is under a contract for services

• The contractor is paid for the job by results rather than for time spent, receives a fee or commission, the servant receives wages

• The contractor is usually employed on a casual basis, the servant on a permanent basis

• The contractor usually specifies his/her work schedule and supplies his/her own tools

• The master may select the servant for the task

WHO IS A SERVANT?: THE CONTROL TEST

• If the Master controls what the employee does and how it is done, then the employee is a servant. The relationship will give rise to Vicarious Liability.

• Zuijs v Wirth Bros: The case of the trapeze artist• What is essential is whether there is lawful authority to

command or give directives if there is scope for it.• Stevens v Brodribb Sawmilling

‘IN THE COURSE OF EMPLOYMENT’

• D is liable only if the servant committed the tort in the course of his or her employment– Deaton v Flew– Morris v Martin

Negligence – Remedies (or “Damages”)

RECOVERABLE HEADS OF LOSS: PERSONAL INJURY

• Windeyer J in: Teubner v Humble (1963) 108 CLR 491 (P was head photographer for Adelaide newspaper “The News”; 12/5/60 a violent storm occurred and P sent to take photos; P took a taxi & told the driver to stop near the Hindmarsh Bridge so he could take photos of a sheet of water and the effect on cars/traffic; after ¼ hr P was returning to the taxi when the D’s car struck him)

– Three ways in which personal injury can give rise to damages:• destruction or reduction (of existing mental or physical capacity)• new needs (which did not exist prior to the injury)• production of pain (and suffering)

• These categories include:– loss of earning capacity– the cost of medical and nursing care (past and future)– physical pain– mental anguish

DAMAGES: PERSONAL INJURY

• SPECIAL DAMAGES– out of pocket expenses– loss of income up to the

date of verdict less any deductions* (This may be included in loss of earning capacity)

• GENERAL DAMAGES– future medical and hospital

expenses– future economic loss– loss of amenities and

enjoyment of life– Pain and suffering– loss of expectation of life

OUT-OF-POCKET EXPENSES

• In general this includes all expenses incurred by the plaintiff on account of the breach up to the date of verdict (Paff v Speed (1961) 105 CLR 549, 558-9)– medical expenses– surgical fees– Transportation – Special needs etc

LOSS OF INCOME

• [See ss.12 & 14 Civil Liability Act]

• Loss of past & future superannuation

• Nett loss of pay plus overtime:– less any savings to be made as a result of the injury (eg cost

of transport to work)– less any boarding and lodging savings eg for being in

hospital (Sharman v Evans (1977) 138 CLR 563– less allowance for income tax deductions (Cullen v Trappell

(1980) 146 CLR 1)

FUTURE (HOSPITAL AND MEDICAL/CARE) EXPENSES

• P is entitled to recover the future cost of hospital, medical, nursing and home care.

• P is entitled to recovery of such cost even where the care (nursing/home care) is provided gratuitously by a spouse or relative Griffiths v Kerkemeyer (1977) 139 CLR 161

• The damages for such expenses are calculated by reference to the market cost of the services

LOSS OF EARNING CAPACITY

• The onus is on P to provide evidence of real possibility of the potential/capacity yet unexploited that would have been exploited in the future but for the injury suffered (Mann v Ellborn (1973) 8 SASR 298 ( police officer who was aspiring to be a lawyer)

• Where D maintains that P retains the capacity to earn, the onus is on D to provide the relevant evidence and the range of work open to P

NON-ECONOMIC LOSS

• Non-economic loss is traditionally claimed under three main heads of damage:– Pain and suffering– loss of amenities– loss of expectation of life

• "is not the prospect of length of days, but the prospect of a predominantly happy life . . . The ups and downs of life, its pains and sorrows as well as its joys and pleasures . . . have to be allowed for in the estimate" Benham v. Gambling (1941) AC 157: (p 166 )

ASSESSMENT OF NON-ECONOMIC LOSS

• There is no acceptable criteria for assessing what is fair compensation for a particular non-economic loss

• (Sharman v Evans – P at age 20 yrs became a quad due to MVA; lost power of speech, ltd use of arms, developed epilepsy...):– Her ability to breathe, eat, speak, move, control her excretions,

have social and sexual intercourse, bear or look after children is either greatly impaired or destroyed. She also went through the ordeal of releasing the young man from his promise to marry her…The estimate in respect of pain and suffering is seldom adequate( Murphy J)

– She has suffered and will continue to suffer for the rest of her life in her left shoulder, another of her few remaining sensory areas…Pain and suffering and loss of amenities of life is a head of damages which is particularly difficult to assess (Gibbs and Stephen JJ)

Civil Liability Act 2002

Part 2 Personal Injury Damages• Received assent on 18 June 2002• Section 11A:

(1) does not apply to claims excluded by Section 3B (eg. Damages for dust diseases, use of tobacco products, workers’ compensation…)(2) Part 2 applies regardless of whether the claim is brought in tort, contract, statute or otherwise(3) A court cannot award damages, or interest on damages, contrary to Part 2.

Civil Liability Act 2002• Pt 2 Non-economic loss:

- No damages for non-economic loss unless assessed at 15% of a most extreme case (eg. 15% = 1% or $3,500, 16% = 1.5% or $5,250, …26% = 8% or $28,000, …33% = $115,500…100% = $350,000): Section 16(1) & (3)

- Maximum non-economic loss = $350,000: Section 16(2)

- Maximum for non-economic loss indexed: Section 17

- Courts/parties may refer to other awards of non-economic loss in earlier court decisions: Section 17A

Civil Liability Act 2002

Exemplary, punitive & aggravated damages:

• A court cannot award exemplary, punitive or aggravated damages in an action for personal injury resulting from negligence : s21

Civil Liability Act 2002

• Pre-judgment Interest:- No interest payable on damages for non-economic

loss or gratuitous attendant care: s18(1)- If interest is awarded (eg. Past economic loss), the

“relevant interest rate” is the Commonwealth Govt 10-year benchmark bond rate: s18(4)

Civil Liability Act 2002• Economic Loss:- Maximum for gross loss loss of earnings = 3 times

average weekly earnings: s12- 5% actuarial tables for future economic loss: s14• Gratuitous Attendant Care:- No damages awarded if services provided:

(a) for less than 6 hours per week, and(b) for less than 6 months: s15(3)Geaghan v D’Aubert [2002] NSWCA 260Harrison v Melhem [2008] NSWCA 67

Negligence - Remedies

INJURY TO RELATIONAL INTERESTS

THE SCOPE OF THE ACTIONS

Parent/master may sue for wrongful deprivation of the Services of a child/servant

An action that permitted

the husband to sue for wrongful deprivation of the

wife’s consortium

Dependents may sue for loss actual or expected benefits

Loss of services Loss of consortium

Death

COMMON LAW AND THE SURVIVAL OF ACTIONS

• In the event of death from a wrongful act there are two potential defendants:– the estate; and– dependants

• Traditionally in Common Law, a personal action ‘died’ with the victim

The Estate: Lord Campbell’s Act (1846)

• The Act modified the Common Law rule in England. – The effect of the legislation was to give to the

estate the action which the deceased would have had she or he survived

• Australian States and Territories have adopted similar statutes with modifications

SURVIVAL OF ACTIONS: NSW

• Law Reform (Miscellaneous Provisions) Act (NSW) 1944 Part 2 Survival of causes of Action After Death– Subject to the provisions of this section, on death of any

person …all causes of action subsisting against or vested in him shall survive against, or, as the case may be, for the benefit of, his estate;...

QUALIFICATIONS

• Section 2(2) of the Law Reform (Miscellaneous Provisions) Act (NSW) 1944 does not allow for recovery of the following types of damages:– exemplary damages– loss of earning capacity/loss of future probable earnings– loss of expectation of life– pain and suffering

• Incidental losses or gains except for funeral expenses will not affect the quantum of damages

HEADS OF DAMAGES

• ALLOWABLE DAMAGES– Needs created; reasonable

expenses incurred before death

– Reasonable funeral expenses

• NON-ALLOWABLE– loss of earning capacity– Non-economic loss

DEPENDENTS’ CLAIMS

• Compensation to Relatives Act 1897 (NSW)– 3(1) Whenever the death of a person is caused by a

wrongful act, neglect, or default, and the act , neglect or default is such as would ( if death had not ensued) have entitled the party injured to maintain an action and recover damages in respect thereof , then and in every such case the person who would have been liable if death had not ensued shall be liable to an action for damages

PLAINTIFF: STANDING

• Compensation to Relatives Act 1897 (NSW) S4:– spouses– parents (including those in loco parentis)– de factos Compensation to Relatives Act (De facto

Relationships )Amendment Act 1984– children (including step children)– siblings (half and full)

SCOPE OF LOSS

• Public Trustee v Zoanetti (1945) 70 CLR 266 (Zoanetti unlawfully killed by Reid (deceased); Public Trustee was executor of Reid’s will; action taken by Zoanetti’s widow against Pub Trustee as legal personal representative of Reid)

– ‘The basis for the action is not what has been called solatium, that is to say, damages given for injured feelings or on the ground of sentiment, but damages based on compensation for pecuniary loss’

– What must be ascertained is whether any and what loss has been sustained by the relatives of the deceased … (Dixon J , 279)

HEADS OF DAMAGES

• Loss of economic support/loss of reasonable expectation of financial benefit[see Luntz on Damages for a formula used to assess loss of economic support]

• Loss of domestic services

LOSS OF REASONABLE EXPECTATION OF FINANCIAL BENEFIT

• The benefit is a ‘chance’ that is lost. P must therefore establish such ‘chance’ in accordance with the principles of reasonable certainty. (Taff Vale Railway Co v Jenkins (1913)AC 1, 7– All that is necessary is that a reasonable expectation of pecuniary

benefit should be entertained by the person who sues. It is quite true that the existence of this expectation is an inference of fact from which the inference can be reasonably drawn...

• It may be immaterial that the deceased was unemployed prior to his/her death

• In the case of a young child, there has to be evidence sufficient to establish the potential to provide the benefit (McDonald v Hillier [1967] WAR 65)

• In circumstances where maintenance obligations are transferred to a third party this may not necessarily preclude a claim because of future contingencies (Thomson v Mandler [1976] 2 NSWLR 307

DOMESTIC SERVICES

• Nguyen v Nguyen (1990) CLR 245 (Deceased wife/mother killed due to D’s neg driving; Ps were husband & 2 children; inter alia, claim for lost housekeeping etc.)– The claim: ‘loss of the deceased’s domestic capacity being the

value of services such as child care, cooking, washing, ironing and cleaning’

• The definition of ‘services’ is broad:– ‘There is no reason why ‘services’ in this context should be given

an unduly narrow construction, as if a wife is no more than a house keeper’ Per Dawson, Toohey and McHugh JJ in Nguyen v Nguyen)

– Where the services are likely to to be replaced as a result of remarriage, the reasonable prospect of that remarriage will serve to reduce the compensation to which the plaintiff will be entitled … because the P’s loss is thereby directly reduced ( Per Dawson, Toohey and McHugh JJ in Nguyen v Nguyen)

LOSS OF CONSORTIUM

• The traditional common position permitted a husband to maintain an action under three heads for loss of consortium (actio per quod consortium amisit)– Loss of the wife’s company including sexual companionship– Loss of her domestic services– Medical and other expenses incurred as a result of the injury to

the wife• In Qld & SA the action is available to both spouses; in NSW,

Tas and WA, the action has been abolished

LOSS OF SERVICES

• Traditionally the common law allowed a cause of action (actio per quod servitium amisit) for the loss of services of:– Children– Servants

• While the action for loss of services in the case of the child is rare today, action for loss of services from a servant remain a feature of the common law

LOSS OF SERVICES: SERVANTS

• The action was traditionally restricted to menial services offered by the servant. In Australia there is no restriction based on the types of services as such

• Heads of damage:– Loss of profits – Payment to the servant of sick-pay or pension– Out of pocket expenses such as Workers Comp or medical

expenses.• The Motor Accidents Comp. Act 1999 excludes

compensation for loss of services s 142• The Employees Liability Act 1991 excludes against

employees by employers• P cannot claim for the death of a servant (Sawn v Williams)

Cattanach v Melchior [2003] HCA 38 (16 July 2003)

Facts• Dec ’67 – Mrs M underwent an appendectomy at

Balmain Hospital, Sydney as a 15 year old. Her right ovary was filled with a blood clot and removed. However, her left and right fallopian tubes were unaffected.

• 1984 – Mr & Mrs M married• 1985 & 88 – Two daughters were born• Nov ’91- Mrs M 1st saw Dr C (gynaecologist), who

formed the view that the right ovary and fallopian tube were removed in 1967

Cattanach v Melchior [2003] HCA 38 (16 July 2003)

Facts• Mar ‘92 – Dr C performed a laparoscopic tubal ligation at

Redland Hospital, Brisbane. He found “…No right tube or ovary visible. Consistent with patient’s history of right salpingo-oophorectomy...” - In fact, the right fallopian tube was obscured by bowel adhesions so only the left fallopian tube was clipped. - Dr C did not see Mrs M again.

• Nov ’96 – Mrs M fell pregnant at age 44 years.• May ‘97 – Healthy son, Jordan, was born

- Experts representatives of the parties were present at the birth and found the right fallopian tube was present

Cattanach v Melchior [2003] HCA 38 (16 July 2003)

Facts• Sept ‘97 – Mrs M underwent an hysterosalpingogram, a

procedure in which dye is inserted into the uterus and the results are observed on x-ray. - The results showed the right fallopian tube was patent.- Consensus of medical opinion was that conception occurred as an ovum transmigrated from the left ovary to the right fallopian tube

• Trial judge (Holmes J) found Dr C was negligent in failing to adequately inform Mrs M of the possibility that the procedure would fail so as to give her the option of considering further investigation by way of hysterosalpingogram

Trial Judge’s Award (unchallenged on appeal) Mrs M’s Damages:

Pain & Suffering and loss of amenities $30,000.00

Interest on $20,000 for 3.5 yrs @ 2% 1,500.00

Past eco loss 3,003.00

Interest for 3.5 yrs @ 5% 525.52

Future eco loss 10,000.00

Past Griffiths v Kerkemeyer 13,300.00

Interest for 3 yrs @ 2% 851.12

Future G v K 28,476.00

Past special damages 15,473.06

Interest on special damages 543.69

$103,672.39

Trial Judge’s Award (unchallenged on appeal) Mr M’s Damages:

At paragraph 15, Gleeson CJ noted that Holmes J applied the “blessing argument” to reduce the claim for loss of consortium but no reduction was made for the subject of

the appeal.

Loss of consortium (not available in NSW)

$3,000.00

$3,000.00

Trial Judge’s Award (subject of appeal) Mrs & Mr M’s Damages:At paragraph 20, Gleeson CJ noted Holmes J accepted a schedule prepared by Mr M setting out past and anticipated costs of raising Jordan to age 18 years. “For the eary years, about half of the estimated expenditure was on food. In the later years, that proportion dropped to about one third. Other items included clothing, medical and pharmaceutical expenses, child care, travelling to and from school, birthday and Christmas presents each year, and entertainment... It included items of reasonable discretionary expenditure...”

All Justices of the High Court considered the sums claimed by Mr M were relatively low but Hayne and Heydon JJ in separate judgments posed the question at paragraphs 208 and 306 respectively whether the wealthy should awarded higher compensation.

Past cost of raising Jordan $17,698.80

Interest for 3 yrs @ 5% 2,655.00

Future costs of raising Jordan to age 18 yrs

84,895.53

$105,249.33

Cattanach v Melchior [2003] HCA 38 (16 July 2003)

Appeal – Limited to the costs of raising and maintaining Jordan

• Qld Court of Appeal – Dr C’s appeal dismissed (McMurdo P and Davies JA, Thomas JA dissenting)

• High Court of Australia – Dr C’s appeal dismissed (majority of McHugh & Gummow JJ, Kirby J and Callinan J, with Gleeson CJ, Hayne J and Heydon J dissenting)

Cattanach v Melchior [2003] HCA 38 (16 July 2003)

High Court – Summary of dissenting views• Gleeson CJ – claim involves moral, natural and legal obligations so there is no clear

reason why such a claim should cease at 18 years

- [para 38] “…It is a human relationship, regarded by domestic law and by international standards as fundamental to society. To seek to assign an economic value to the relationship, either positive or

negative, in the ordinary case, is neither reasonable nor possible. ” • Hayne J – [para 258] “...what is seen to be the desirable paradigm of family relationships in

which the child and parent are of mutual support of each other. In that sense, and only in that sense, the law might be seen as concluding that every child is a blessing.”

- [para 261] “...the law should not permit the commodification of the child...”

• Heydon J – [para 356] “Human life is invaluable in the sense that it is incapable of valuation. It has no financial worth which is capable of estimation... To calculate them in money terms and then permit their recovery in relation to the performance of the duty is to engage in an activity lacking any meaningful correspondence with the duty...”

Cattanach v Melchior [2003] HCA 38 (16 July 2003)

High Court – Summary of dissenting views• Gleeson CJ – claim involves moral, natural and legal obligations so there is no clear

reason why such a claim should cease at 18 years

- [para 38] “…It is a human relationship, regarded by domestic law and by international standards as fundamental to society. To seek to assign an economic value to the relationship, either positive or

negative, in the ordinary case, is neither reasonable nor possible. ” • Hayne J – [para 258] “...what is seen to be the desirable paradigm of family relationships in

which the child and parent are of mutual support of each other. In that sense, and only in that sense, the law might be seen as concluding that every child is a blessing.”

- [para 261] “...the law should not permit the commodification of the child...”

• Heydon J – [para 356] “Human life is invaluable in the sense that it is incapable of valuation. It has no financial worth which is capable of estimation... To calculate them in money terms and then permit their recovery in relation to the performance of the duty is to engage in an activity lacking any meaningful correspondence with the duty...”

Cattanach v Melchior [2003] HCA 38 (16 July 2003)

High Court – Summary of the majority• McHugh & Gummow JJ – [para 68] “The unplanned child is not the harm for

which recompense is sought…it is the burden of the legal and moral responsibilities which arise by reason of the birth of the child that is in contention… What was wrongful in this case was not the birth of the third child to Mr & Mrs M but the negligence of Dr C. ” Kirby J – [para 144] “...for a very long time judges and juries have been obliged to put money values on equally nebulous items such as pain and suffering and loss of reputation. Calculation of the cost of rearing a child is, by comparison, relatively straightforward.”

- [para 145] “The notion that a child might be hurt emotionally following the later discovery that parents had sought sterilisation and had gone to court... Is unconvincing... In the real world, cases of this kind are about who must bear the economic costs of the upkeep of the child. Money, not love or the preservation of the family unit, is what is in issue.”

Callinan J – [para 295] “One strong contrary argument against the appellants which I accept, is that a holding for them here would be tantamount to the conferral of a new form of immunity upon doctors and hospital authorities.”

CIVIL LIABILITY AMENDMENT ACT 2003

Part 11 - Damages for the birth of a child

Section 70 Application of Part (1) This Part applies to any claim for damages in civil proceedings

for the birth of a child, regardless of whether that claim is made in tort, in contract, under statute or otherwise.

(2) This Part does not apply to any claim for damages by a child in civil proceedings for personal injury (within the meaning of Part 1A) sustained by the child pre-natally or during birth.

(3) This Part does not apply to civil liability that is excluded from the operation of this Part by section 3B but, despite that section, does apply to liability of the kind referred to in section 3B (1) (a).

CIVIL LIABILITY AMENDMENT ACT 2003

• 71 Limitation of the award of damages for the birth of a child

(1) In any proceedings involving a claim for the birth of a child to which this Part applies, the court cannot award damages for economic loss for: (a) the costs associated with rearing or maintaining the child that the claimant has incurred or will incur in the future, or (b) any loss of earnings by the claimant while the claimant rears or maintains the child.

(2) Subsection (1) (a) does not preclude the recovery of any additional costs associated with rearing or maintaining a child who suffers from a disability that arise by reason of the disability.