Sharman v Evans

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Citation: Sharman v Evans (1977) 138 CLR 563

This information can be found in the Textbook: Sappideen, Vines, Grant & Watson, Torts: Commentary and Materials (Lawbook Co, 10th ed, 2009), pp. 547-551 [14.100] or here

Contents

Background facts

  • Plaintiff [Evans] was injured in a car accident by the Defendant [Sharman].
  • She became fully incapacitated after the accident.
  • At the time of the accident, she was 20 years old and had an extremely bright future ahead of her.

Legal issues

Judgment

Double compensation

  • The court must be careful not to double compensate. A common matter of double compensation is where both loss of future income and future medical care account for boarding and lodging expenses.

Deductions

  • Similarly, "it is necessary to avoid compensating for gross rather than for net losses."[1]
  • This means the court accounts for 'outgoing expenses' - these expenses that are usually incurred in the process of holding a job (transport, clothing etc) and that will now not be incurred. It is 'saved expenditure'.
    • "Where, as here, a plaintiff suffers a total loss of earning capacity he will not normally continue to incur all of the outgoings necessary for the realization of that capacity which would have been incurred had his capacity been unaffected; items such as the cost of clothing suitable to his particular employment and of transportation to and from work provide examples, no doubt there are others. Compensation for loss of earning capacity is paid only because it is or may be productive of financial loss...and to compensate for total loss of earning capacity without making allowance for the cessation of these outgoings is to compensate for a gross loss when it is only the net loss that is in fact suffered."[2]
  • However, there is no deduction for saving expenses which were incurred due to pastime activities, or maintenance of oneself or one's dependents.

'Lost years'

  • A plaintiff is also compensated for money he would have made during his 'lost years' (this is when an injury is likely to shorten a person's lifespan and he will 'miss out' on years).
  • When accounting for 'lost years', the court deducts the amount that the person would have expended on himself during those years.
    • "It is well established in Australia that there should be taken into account in reduction of damages for the lost earning capacity of 'lost years' at least the amount that the plaintiff would have expended on his own maintenance during those lost years."[3]

New economic needs

  • Question of whether the Defendant must compensate for the Plaintiff's medical costs if she remains in the hospital for the rest of her life or whether for the costs of providing such services at home (much more)
    • "Where the plaintiff is to be cared for in the future will not only directly affect the extent of nursing and medical expenses which are to be compensated for; it will also bear upon the extent of her loss of the amenities and enjoyment of life, a lifetime substantially spent in hospital will greatly aggravate that loss. In our view the medical evidence in this case does not justify the conclusion that the defendant should be required to compensate for future nursing and medical expenses on any basis other than that the plaintiff's future will be one substantially spent in hospital."[4]
  • This decision is reached on a normal standard of reasonableness - costs v benefit.
  • In this case, the benefit is simply one of amenity, and there is not actual physical benefit of going home. The cost is huge.
  • Therefore, the Defendant compensates the Plaintiff for the costs of future medical treatment at the hospital.
  • However, this also means that the 'loss of enjoyment/amenities' damage will be greater.
  • The Defendant will pay extra to allow the Plaintiff to visit her home every now and then in order to alleviate the loss of enjoyment.

References

  1. (1977) 138 CLR 563, 577
  2. (1977) 138 CLR 563, 577
  3. (1977) 138 CLR 563, 580
  4. (1977) 138 CLR 563, 573
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