The Court of Appeal upholds $2.7 million award in damages The Court of Appeal upholds $2.7 million award in damages


The Court of Appeal upholds $2.7 million award in damages

23 January 2017 | General Insurance

A decision to award a seriously injured man in excess of $2.7 million for general damages and gratuitous services damages has been upheld by the Queensland Court of Appeal.

In Issue

  • What hourly rate ought to be adopted when calculating damages for gratuitous services.
  • Whether damages for past gratuitous services ought to be awarded for care required or care actually received.

The Background

On 28 August 2003, Mr Tai McQuitty (Mr McQuitty) suffered serious injuries, including a severe brain injury, when he was involved in a high speed motor vehicle accident. He was 20 years of age at the time of the accident.

The Decision at Trial

Mr McQuitty issued proceedings against the relevant CTP insurer and its insured driver. A quantum only trial was heard by the Supreme Court in Brisbane in April 2015.

At first instance, Mr McQuitty was awarded damages of $2,719,500.05 comprising $121,400 for general damages, $1,049,412 for past gratuitous services and $1,548,688.05 for future gratuitous services. Although the trial judge found that Mr McQuitty had actually only received in the vicinity of 5 to 6 hours of care per day, the award was based on 6.5 hours of care per day.

The Issues on Appeal   

The CTP insurer appealed the trial judge’s assessment of damages for past gratuitous services on the basis that the award should have been for care actually received.The second significant issue for determination on appeal concerned the trial judge’s adoption of a commercial hourly rate in assessing damages for gratuitous services. The CTP insurer submitted that a lower rate, such as that paid by care agencies to its carers ought to have been adopted.

The Decision on Appeal   

The Court of Appeal opted not to interfere with the trial judge’s assessment of damages for past care on the basis that any discrepancy was a small one and, in any event, the trial judge’s findings as to Mr McQuitty’s requirement for care was an estimate, not a precise calculation. The Court of Appeal otherwise confirmed that the applicable rate for gratuitous services is to be determined based on the market value of the required services. That rate, in every individual case, will be a question of fact.

The Court of Appeal held that the trial judge’s decision to adopt the proposed commercial rate was correct. It was noted that evidence was presented at trial on the amount paid by care agencies to its carers but the Court of Appeal determined that such evidence did not establish that Mr McQuitty could have regularly employed carers at that particular rate and therefore the trial judge was correct to adopt a commercial rate when assessing damages for past care.

In terms of future care, the CTP insurer argued that the evidence at trial that Mr McQuitty intended to purchase a home with his damages award and arrange for a friend to care for and live with him warranted an award for future gratuitous services based on an hourly rate that was less than the agency rate. The argument was rejected based on the uncertainty of the proposed plan and also the general premise that the manner in which Mr McQuitty intended to spend his compensation payment was entirely a matter for him and not a factor that ought to determine the measure of his loss.

Implications for you

It is likely that this decision will be relied upon by claimants to support a submission that an hourly rate in excess of $50 ought to be allowed when calculating awards for gratuitous services. However, the Court of Appeal expressly stated that the appropriate hourly rate for gratuitous services damages will be a question of fact to be determined on the evidence in each individual case.

In addition, while the Court of Appeal found it unnecessary to determine whether damages for past gratuitous services ought to be calculated based on care required or care actually received, it gave some indication that its preferred interpretation of the High Court’s remarks in CSR Ltd v Eddy [2005] HCA 64, is that compensation ought to be limited to services in fact provided to a plaintiff.

AAI Limited v McQuitty [2016] QCA 326

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Kingsley Grimshaw

Kingsley Grimshaw

Senior Associate