Hintz v Illawarra Shoalhaven Local Health District

By statement of claim filed on 10 September 2019, Tegan, Jayson and Wade Hintz (the plaintiffs) commenced proceedings 2019/282470 pursuant to the Compensation to Relatives Act 1897 (NSW) against the Illawarra Shoalhaven Local Health District (the defendant). Tegan has also commenced proceedings 2019/282370 for damages for nervous shock (the nervous shock claim). The plaintiffs allege that the defendant’s negligence caused the death of their father, Paul Hintz (the deceased), who died in Wollongong Hospital on 17 January 2014, after having been an in-patient at the hospital since his admission on 3 January 2014.

All proceedings have been resolved by agreement, subject to the Court’s approval, which is required pursuant to s 76 of the Civil Procedure Act 2005 (NSW) in respect of Tegan, who is a person under legal incapacity. Jayson (who was born in 1996) and Wade (who was born in 1998) were both over 18 years when the proceedings were commenced. Tegan has severe physical and intellectual disabilities and is incapable of managing her own affairs. She is presently being looked after by her maternal grandmother. Wayne Hintz (the tutor), the plaintiffs’ paternal uncle, is Tegan’s tutor for the purpose of the proceedings

Unless otherwise indicated, all references to legislation in these reasons are references to the Civil Liability Act 2002 (NSW).

The mother of the plaintiffs and of their older brother, Ryan (who was born in 1988), died on 10 October 2010. From that time, they were looked after by the deceased. At the time of the deceased’s death on 17 January 2014, the plaintiffs lived with him and were financially dependent on him. Jayson had just finished his Higher School Certificate and was intending to continue to live at home while he studied at Wollongong University. Wade had finished the School Certificate and intended to remain living at home while he completed school and obtained an apprenticeship as a carpenter. Tegan, who requires help with all aspects of daily living, was cared for by the deceased, with some assistance with showering from Catholic Care. Tegan worked as a packer in a supported environment for four days a week at Greenacres. The uncontroverted evidence was that Jayson and Wade would live at home for a few more years but that Tegan would continue to live with the deceased as long as he was able to look after her.

If the proceedings were to run to their conclusion, the issues which would need to be determined would include the following:

If the first issues were answered in the negative, the plaintiffs would not be awarded any damages. If the second issue were decided in the negative, the plaintiffs’ damages would be relatively modest. If the third issue gave rise to a finding that the deceased’s life expectancy could be measured in a few years, this, too, would substantially affect the award of damages.

As to the first issue, the plaintiffs rely on expert reports, including those of Dr Jones, a consultant colorectal surgeon who opined that the deceased was suffering from bowel obstruction and was in need of surgery which, had it been performed earlier, would have relieved his bowel obstruction and prevented bowel perforation and peritonitis which caused septic shock and cardiac arrest and led to his death. The defendant relies on s 5O, which provides for a defence to liability when a professional proves that the professional acted in a manner that, at the relevant time, was accepted in Australia by peer professional opinion as competent professional practice. The opinion of Dr Meagher, a colorectal surgeon, whose reports have been served by the defendant, supports this defence.

As to the second issue, the parties have referred me to the decision of Davies J in Coote v Kelly; Northam v Kelly [2016] NSWSC 1447 (Coote) in which his Honour held that damages were not available for loss of services provided by the injured party in an action brought pursuant to the Compensation to Relatives Act because of the exclusion in s 15(2).

In order to appreciate the effect of Coote, it is necessary to give some background to the genesis of a claim for loss of services, such as that which is included in the plaintiffs’ claim for damages. In Nguyen v Nguyen (1990) 169 CLR 245; [1990] HCA 9 (Nguyen), the High Court held that compensation may be recovered in a claim under the Compensation to Relatives Act for lost domestic services, the value of which is to be assessed in accordance with the principles in Griffith v Kerkemeyer (1977) 139 CLR 161; [1977] HCA 45.

The question arose whether the dependants’ right to damages in accordance with Nguyen was altered by the Civil Liability Act. Sections 15 and 15B are relevant to this question and provide as follows:

Section 15B relevantly provides:

The general prohibition in s 15(2) would appear to apply in the present case as the need for the services did not arise solely because of the injury (sustained by the deceased) and they would have been provided anyway. Further, s 15B would not appear to apply since the claimant in that section is the provider of the services, not the recipient. The statutory scheme is anomalous in that it is difficult to discern a reason why, if the deceased had survived and yet been unable to look after his children, he would have been entitled to damages referable to the care which he was no longer able to provide for them, but that, as he died, his children are not entitled to such damages in a claim under the Compensation to Relatives Act.

Nonetheless, this may reflect a policy choice made by the New South Wales legislature. As the High Court said in Taylor v Owners–Strata Plan 11564 (2014) 253 CLR 531; [2014] HCA 9 in a related context at [43] (French CJ, Crennan and Bell JJ):

In Goddard v Central Coast Health Network [2013] NSWSC 1932 (Goddard), which was decided before Coote, I considered the effect of s 15 on a claim by dependants for damages for the loss of the services which had been performed by their mother and said (to the same effect as Coote):

Of s 15B, I said, at [205]:

However, in Lee v Carlton Crest Hotel (Sydney) Pty Ltd [2014] NSWSC 1280, Beech-Jones J awarded damages to dependants in a claim under the Compensation to Relatives Act for loss of a husband’s services: [535]-[537]. It is evident from the reasons for judgment, that no point was taken about whether the plaintiff was entitled to such damages. His Honour was not referred to Goddard. The question has not yet arisen for determination in the Court of Appeal.

I note that other jurisdictions in Australia have expressly provided for the loss of such services to be compensable in an action by dependants: see, for example, s 58(1)(a) of the Civil Liability Act 1936 (SA) and s 19A of the Wrongs Act 1958 (Vic).

At best for the plaintiffs, the situation is uncertain. At worst, the law is clearly against them. This is a matter which tends to make it very much in their interests to discount their damages to take account of the nigh inevitability that the approach in Goddard and Coote will be followed by the trial judge and the prospect that this construction of ss 15 and 15B will not be disturbed on appeal.

The defendant has served a report of a geriatrician, Associate Professor Caplan, dated 24 April 2020 in which he opined that the deceased’s life expectancy, had he survived the operation (which ex hypothesi would have been performed non-negligently) conducted in January 2014 would have been between one and two years. Associate Professor Caplan also opined that the deceased’s physical condition would have been so compromised that he would have been “unable to assist Tegan, except in the most perfunctory manner” and would have “required carers of his own”.

In response to Associate Professor Caplan’s report, the plaintiffs served a report of Dr Jenny Downes-Brydon dated 23 April 2021, whose opinion was as follows:

If the opinion of Associate Professor Caplan was accepted, in whole or in part, then the plaintiffs may have been unable to establish that, but for the defendant’s negligence, the deceased would have been able to render services to them in any event.

The defendant served an offer of compromise dated 22 April 2021 in respect of the Compensation to Relatives Act claim in the sum of $[REDACTED] plus costs. The agreed settlement provides for the payment of an amount of $[REDACTED], inclusive of an allowance of $[REDACTED] for funds management, plus costs. The deductions from this sum will comprise: funeral expenses of $[REDACTED]; funds management of $[REDACTED]; and solicitor/client costs and disbursements, which the plaintiffs’ solicitor, Kellie Wells, has undertaken will be no more than $[REDACTED].

Ms Wells has deposed that she has spoken to an employee of the National Disability Insurance Scheme (NDIS), who confirmed that any settlement or judgment pursuant to the Compensation to Relatives Act is not treated as compensation for the purposes of the National Disability Insurance Scheme Act 2013 (Cth). The employee informed Ms Wells that this means that, even if Tegan had received funding through the NDIS, there will be neither a requirement for repayment nor a compensation recovery amount applied to the settlement for any future NDIS plan.

The plaintiffs’ counsel, D Toomey SC and G Smith, and their solicitor, Ms Wells, recommend the settlement of the Compensation to Relatives Act claim on the basis of their opinion that it is in the best interests of the plaintiffs. They suggest the following apportionment:

I consider this apportionment to be just. As Wade is older than Jayson, it is appropriate that the amount for past care be less than that for his brother. It is also appropriate that Tegan, who has by far the greatest need, receive the lion’s share of the total damages.

As referred to above, Tegan claims damages for nervous shock against the defendant. Damages are claimed for non-economic loss and future treatment expenses. Her solicitors obtained a report from Dr Phillips, a psychiatrist, which was based on a history provided by Tegan’s maternal grandmother, with whom Tegan has lived since not long after the deceased’s death. Dr Phillips took a history that the plaintiff struggled with grief following the death of her father and that she had an “anhedonic mood state”, preferred not to get out of bed, was “episodically belligerent” and “trashed her room”. Dr Phillips recommended that Tegan be given 30-40 therapy sessions, to take place fortnightly over a period of approximately two years.

Ms Wells deposed, in an affidavit sworn 2 August 2021, that the defendant, by letter dated 23 June 2021, served an offer of compromise in the sum of $[REDACTED] plus costs and disbursements.

The nervous shock claim has been resolved, subject to this Court’s approval for the sum of $[REDACTED] plus costs, as agreed or assessed. This figure must be seen in the context that the value of a finding that Tegan’s psychiatric illness as a result of nervous shock is 30% of a most extreme case would lead to an award of damages for non-economic loss of up to $[REDACTED], which Tegan’s solicitor and counsel regard as her “best case”. Tegan’s legal representatives have discounted the best case figure to take account of the prospect that the Court would not be satisfied that she had suffered a recognisable psychiatric illness, as required by s 31; the difficulty in assessing the damages, having regard to Tegan’s substantial pre-existing disabilities; and the risk that the Court would not consider future treatment to be warranted, having regard to the difficulties of counselling someone with such profound disabilities.

Ms Wells deposed that an amount of $[REDACTED] (Medicare) would need to be deducted from the settlement sum. She also undertook that the solicitor/client costs would be no more than $[REDACTED]. She deposed having spoken to a representative of NDIS, who informed her that there may be a Compensation Recovery Amount applied to Tegan’s future NDIS plans based on the settlement but it would only be applied against any allowance in that plan for psychiatric or psychological treatment. Ms Wells deposed that she recommended the settlement to the tutor who instructed her to proceed with the application for approval. Tegan’s counsel have also recommended the settlement.

I consider the sum of $[REDACTED] plus costs to be just, fair and reasonable and in the interests of Tegan.

For the reasons given above, I am satisfied that the settlement of the Compensation to Relatives Act claim and the nervous shock claim are in the interests of the plaintiffs and ought be approved by the Court.

Accordingly, I make the following orders: