From: Neil Foster <neil.foster@newcastle.edu.au>

Sent: Wednesday 3 September 2025 03:50

To: obligations

Subject: ODG: HCA on medical damages, home vs institutional care

Dear Colleagues;

In Stewart v Metro North Hospital and Health Service [2025] HCA 34 (3 Sept 2025) the High Court of Australia (Gageler CJ, Gordon, Edelman, Jagot, Beech-Jones JJ) handed down a unanimous decision on one aspect of how courts should determine whether a damages award for medical negligence causing serious and long-lasting harm should be calculated. Mr Stewart, following an injury for which MNHHS was responsible, was being cared for in a residential care context, but claimed that he should receive a sufficient award of damages to allow him to receive care in his own home where he could enjoy interaction with his family and dog. Lower courts had ruled that the damages should be limited to an amount covering care in an instititution.

The High Court held that in calculating damages, the compensatory principle (that a person should be put in a position they would have been if the tort had not occurred) meant that Mr Stewart's proposal should be accepted unless the defendant could show that it was 'unreasonable' for him to choose this option.

At para [25]:

The compensatory principle thus aims, so far as money can do, to rectify wrongful acts and to repair their consequences. There are two different ways in

which the concept of "reasonableness" limits the application of the compensatory principle. The first is concerned with proof of consequential loss. In order to recover compensation for consequential losses that have been or will be incurred by some action of the plaintiff, the plaintiff must prove those losses by proving the reasonable cost of steps that the plaintiff has taken, or will take, which are reasonably required to repair the consequences of a defendant's tort. The second is that once the plaintiff proves the reasonable cost of those steps, it is for the defendant to establish that the plaintiff failed to avoid or mitigate that cost "by adopting some [other] course which it was reasonable for [the plaintiff] to take". The difference between the first reasonableness limit and the second reasonableness limit is a difference between "the issue of damages for proof by the plaintiff [and] the issue of mitigation for proof by the defendant". (footnotes omitted)

The court at [29]ff noted and distinguished Sharman v Evans (1977) 138 CLR 563 which at first seems to point away from allowing the costs of care at home- partly because the proven facts there were different, and because they accept that in contrast to 1977, currently care in the home has become more common and feasible. See [42]:

It may be that, in 2025, where a plaintiff's choice is between nursing care at home or in a home setting or in an institution or an institutional setting there will be few cases where there is any substantial increase in risk to the plaintiff's health from living full-time at home with home care.

The court held it was reasonable for Mr Stewart to choose home care:

[50] The reasonableness of Mr Stewart's choice of home care is reinforced by the conclusions of the trial judge about the effect of living at home on Mr Stewart's physical and mental health. Mr Stewart's quality of life and mental health would be enhanced by receiving care at home rather than at Ozanam and the real physical health benefits were, as the trial judge found, not slight or speculative. Further, whatever might have been the position in 1977 when Sharman v Evans was decided, a choice by a severely injured plaintiff to receive care at home is, today, one that is not unusual, especially given the improvement in levels of care that can be provided at home or in a home setting.

The onus then fell on MNHHS to prove that 'part or all of that claimed cost of home care could be avoided by an alternative that was unreasonably refused'- [51]. This they could not do. Damages covering home care would be awarded.

I note that at fn 35, as one would expect in any judgment dealing with assessment of damages, there is a reference to our colleague Harold Luntz, whose impact on the law in this area will no doubt continue well into the future despite his sad passing. Other colleagues are also mentioned.

Regards

Neil

NEIL FOSTER

Associate Professor, School of Law and Justice

College of Human and Social Futures,

 The University of Newcastle
Hunter St & Auckland St, Newcastle NSW 2300

T: +61 2 49217430

E: neil.foster@newcastle.edu.au

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