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An end to institutionalisation? A recent Queensland case provides a unique opportunity for the court to adjust the test for recoverability of damages for tortiously created future needs, writes Travis Schultz.
For almost 50 years, the High Court decision in Sharman v Evans has been cited as authority for the proposition that in assessing whether claimed future needs were recoverable as damages in a personal injuries action, a “cost versus benefit” calculus needs to be undertaken to assess whether it is reasonable that a defendant should meet the cost in an award of damages. Frequently, defendants and their representatives argue that this 1977 decision of the High Court makes it clear that courts are not to award a “perfect compensation”, but rather only what is (financially) reasonable in the circumstances. But in the shifting sands of time, community standards and expectations change with evolving societal norms. The High Court has in the past demonstrated its preparedness to adopt contemporary expectations in its evaluation of civil disputes. In that context, the High Court’s eagerly anticipated decision in Stewart v Metro North Hospital and Health Service provides a unique opportunity to realign the “compensation principle” with contemporary standards.
The Stewart matter involves a sad set of circumstances in which Mr Stewart suffered a significant brain injury because of the admitted negligence of the defendant. At trial, the plaintiff was awarded damages of $2,190,505.48 on the basis that his future accommodation and care regime ought more appropriately to be an institutionalised one, supplemented by some additional further therapy, rather than the claimed cost of living independently in his own home with external carers to provide the care he would require. An appeal to the Queensland Court of Appeal was unsuccessful. Mr Stewart obtained a grant of special leave from the High Court, and the matter was the subject of a hearing by the Full Court on 11 June 2025.
In his submissions, Mr Stewart highlights the amenity that would be enjoyed by him if he were to live in his own home as he would be able to have his son, Jesse, stay with him regularly and share care of a dog – something that was said to be very important to this animal-loving plaintiff. The plaintiff’s circumstances were complex as his aphasia seemingly rendered him incapable of consequential or abstract thinking, but on the evidence, he had indicated some unhappiness at the facility where he was living and a desire to live in his own home.
The cost of the alternate arrangement sought by the plaintiff was significant – such that on appeal, the parties agreed that if the appeal were allowed in the Court of Appeal, damages should have been assessed in the sum of $5,883,688.85 before damages for fund management fees.
In his submission, Mr Stewart urged that the reasonableness of his choice to live in his own home:
“As was identified in Rialis [1994] SJ 704, the issue to be determined was whether the choice by the appellant to live in his own home with family was a reasonable choice in the circumstances. The issue is not whether other treatment, or less expensive treatment, was reasonable.”
Mr Stewart submitted that “the value of being at home with family was an important amenity to the appellant. For a person to choose where they live, who they live with and the environment in which they live, are important features in recognising the dignity of the individual”. In support of this proposition, reference was made to the International Covenant on Civil and Political Rights – a point which should not be understated given that the covenant was also referenced by Brennan J in his seminal judgment in Mabo!
The respondent hospital authority in Stewart identified the primacy of the “compensatory principle” but submitted that:
“The ‘choice’ as to where a plaintiff would like to live is centrally relevant to the identification task outlined above; and it is relevant to identifying the claimed restorative living arrangement against which reasonableness is to be measured.”
In support, the respondent cited the oft-quoted passage from the judgment of Gibbs & Stephen JJ in Sharman v Evans:
“The touchstone of reasonableness in the case of the cost of providing nursing and medical care for the plaintiff in the future is, no doubt, cost matched against health benefits to the plaintiff. If cost is very great and benefits to health slight or speculative, the cost-involving treatment will clearly be unreasonable, the more so if there is available an alternative and relatively inexpensive mode of treatment, affording equal or only slightly lesser benefits. When the factors are more evenly balanced, no intuitive answer presents itself and the real difficulty of attempting to weigh against each other two incomparables, financial cost against relative health benefits to the plaintiff, becomes manifest.”
What of changed community standards?
In the High Court’s 1977 decision in Sharman v Evans, a majority of the High Court found that in the circumstances in which a 20-year-old plaintiff suffered catastrophic brain damage and was rendered a quadriplegic because of a car accident, an award of damages for future nursing care at her mother’s home was considered excessive. But in 2025, our world is a very different place.
As Mr Stewart observes in his submissions, “the living, care and therapy arrangements sought by the appellant were of a kind commonly undertaken in the community, particularly for persons receiving benefits under the National Disability Insurance Scheme. These were not extravagant claims beyond what would ordinarily be provided in the community for persons in a similar situation.”
The High Court itself has, of course, recognised long ago that the law of damages is one in which ongoing developments and refinements of the compensation principle are ongoing (see Skelton v Collins). And numerous examples of the court’s preparedness to contemporise the common law can be seen throughout its judgments. By way of example, in Mabo, the court rejected the common law fiction that disregarded the rights and interests of the Indigenous people. Brennan J considered that to be inconsistent with contemporary values of the Australian people. More recently in Elisha v Vision Australia Limited, the High Court recognised that an employee ought to be able to recover damages for psychiatric injury resulting from a breach of their employment contract – leaving open the question as to whether a tortious duty might co-exist. In Kozarov v State of Victoria, Edelman J equated psychological injury with physical injury, saying that it “is just as really damage to the sufferer as a broken limb ... [and] equally ascertainable by the physician”. The types of decisions demonstrate the preparedness of the court to adapt the law to changing values and expectations.
The year 1977 saw the launch of the Concorde aeroplane, the death of Elvis Presley, the first of the Star Wars movies and plenty of flared jeans. But that was a very different time. As Edelman J even commented during oral argument on 11 June 2025 in Stewart:
“The amount of the cost might sometimes tell you whether the response is a usual or normal response, and if it’s an unusual or abnormal response, then that may be a very significant factor in determining reasonableness … but that may be why in 1977 responses may not be the same as in 2025.”
Against this background, Stewart provides a unique opportunity for the court to adjust the test for the recoverability of damages for tortiously created future needs. How could it be that the cost of in-home care to a tortiously injured plaintiff would be considered so expensive that it was unreasonable to expect a defendant to fund the cost, when our community already funds the costs of those same arrangements for hundreds if not thousands of our community members who are supported by the NDIS, statutory CTP schemes or other insurance arrangements? Of course, decisions must involve value judgements based on the proven facts in any given case, but a choice taken in mitigation by a plaintiff to live in their own home, surely couldn’t be seen as an unreasonable one in 2025? Might institutionalised care be relegated to a historical moment in time?
Travis Schultz is the managing partner of Travis Schultz & Partners.
