Sharman v Evans
High Court of Australia · 1977
Sharman v Evans (1977) 138 CLR 563
A young quadriplegic was awarded $300,547.50. Three High Court Justices held it too high, by two different routes. How does a court test a figure for injuries it cannot really measure?
In Stewart v Metro North Hospital and Health Service [2025] HCA 34, the joint reasons of Gageler CJ, Gordon, Edelman, Jagot and Beech-Jones JJ say that Sharman's outcome should be seen as concerning no "more than propositions of fact which were relevant to the case in hand" ([41]). For a claim for care at home, the inquiry starts from the plaintiff's entitlement to be put, so far as money can do, in the position they would have been in without the tort, and asks whether the choice to incur the cost of home care is a reasonable response to repair the consequences of the tort, considering all the circumstances and the position before the tort ([44]). The assessment "is not confined to balancing only the health benefits against the cost" ([44]), and decisions that read Sharman as requiring that balance independently of the plaintiff's choice were described as not correct ([43]). Once the choice is shown to be reasonable, it is for the defendant to establish that an alternative was unreasonably refused ([28], [51]). So take the reasonable-expense limit from Sharman, but state its application to home care through Stewart. The same reasons describe Gibbs and Stephen JJ's step of fixing care costs before general damages as an approach that properly reduces the possibility of double counting ([53]).
What happened?
June Evans was twenty when, in December 1971, she was seriously injured in a motor car accident. She was left a quadriplegic, with epilepsy caused by the trauma, badly impaired breathing and an almost total loss of speech, and Gibbs and Stephen JJ record that she was fully aware of her plight. Before the accident she was trained for and experienced in secretarial work, and had just completed the first year of a two-year course at a Bible college in Brisbane, which she had saved for by working. Had she resumed secretarial work after the course, they say, she could have earned at least $70 per week net.
At the trial in November 1973 Sheppard J assessed general damages at $275,000. With agreed special damages of some $25,500, the verdict in her favour was $300,547.50. His Honour gave a range of $150,000 to $175,000 for the future cost of nursing and medical care and a sum of $6,000 for the shortening of her life expectancy, and the care figure assumed that she would spend periods being cared for at home, not the rest of her life in hospital (Gibbs and Stephen JJ). The New South Wales Court of Appeal, Reynolds and Glass JJA in the majority and Mahoney JA dissenting, dismissed an appeal by the defendant, Dennis Sharman, on the ground that the damages were excessive (Murphy J; Barwick CJ). In the High Court he repeated that ground, attacked the trial judge's method of assessment and, for the first time, attacked the assumption that she would be cared for out of hospital for part of her life (Gibbs and Stephen JJ). Barwick CJ records that the appellant's counsel had been prepared throughout to agree that it was reasonable to provide for periods of residence at her mother's house.
What did the Court decide?
The High Court allowed the appeal by three Justices to two. Barwick CJ and Gibbs and Stephen JJ would allow it; Jacobs and Murphy JJ would dismiss it. The Court set aside the order of the Court of Appeal, allowed the appeal to that court, and varied the judgment from $300,547.50 to $270,547.50, with the respondent to pay one half of the appellant's costs of both appeals. $270,547.50 is the figure Gibbs and Stephen JJ reached. Barwick CJ gave separate reasons and would have reduced the award by $25,000 and made no order for the costs of the High Court appeal.
Proposition
What is the principle?
1. The heads are assessed separately, and the figures are a means of testing the total. In the joint reasons of Gibbs and Stephen JJ, a trial judge may examine each conventional head of damage separately, value it, and apply discounts or deductions to it. They called criticism of that method "misconceived" so long as courts "are careful to avoid the risk, inherent in such a procedure, of compensating twice over for the one detriment". They add that, where a judge sits without a jury, it is most desirable that the judgment describe the main components of the award, or the approach to each, so that the parties can see the process and seek correction of error. The head-by-head figures help an appeal court test an award but do not settle it: the maximum figures "cannot of themselves lead to a conclusion on the amount proper to be substituted".
Jacobs J agreed with their analysis, and with the balance it strikes between computation and the point that computation alone does not give the final answer. Murphy J, dissenting, called the trial judge's examination of the conventional elements "a convenient and proper approach". Barwick CJ's reasons are separate: he did not discuss the elements in detail and said that "the danger of undue elaboration is evident".
2. The earning-capacity award is reduced for what another head already pays. The joint reasons of Gibbs and Stephen JJ hold that where the care award includes the plaintiff's whole cost of board and lodging, awarding lost earning capacity in full would compensate twice. A proportion of the present value of the hospital expenses attributable to board and lodging is therefore deducted from the earning-capacity award. The deduction does not depend on how she would actually have lived: it is a matter of "her already having been compensated for future board and lodging as a component of hospital expenses". Compensation is for net, not gross, loss, so the outgoings of earning the income (fares and special clothing are their examples) are also allowed for. The savings in pleasure-giving expenditure that her injuries had closed off do not reduce the award: "They may be left out of reckoning". Jacobs J agreed with the principles stated on loss of earning capacity. Barwick CJ, for his own reasons, found an overlap between any substantial economic loss allowance and the care award; Murphy J, dissenting, would set board and lodging against hospital expenses if at all.
3. Future care is recoverable as reasonable expense. The joint reasons of Gibbs and Stephen JJ say that "such expenses as the plaintiff may reasonably incur should be recoverable from the defendant", the touchstone being "cost matched against health benefits to the plaintiff". On the evidence the cost of care at her mother's home was about $390,000 on a present-value basis against about $108,500 in hospital, and the benefit of the dearer course was entirely one of amenity. So care was assessed on the basis of a lifetime substantially in hospital, at about $128,000 over thirty years; the greater loss of amenity was reflected in the head for loss of enjoyment of life, together with a separate $20,000 for the cost of occasional outings. Barwick CJ agreed that the home transfers had not been reasonably necessary but would not interfere because the appellant had conceded the point. Jacobs J would not have reduced the trial judge's estimate, and Murphy J thought the allocation for hospital and medical costs quite inadequate.
Why does this case matter?
Students tend to reach for this case as a source of dollar figures, and the figures are its least transferable part: they belong to 1973 to 1977 and to this plaintiff's evidence, so they are no guide to the quantum of a claim today.
Exam and application relevance
Use the case for how a damages figure for serious injury is built and tested. Attribute the method, the deduction for board and lodging and the reasonable-expense test to Gibbs and Stephen JJ, with Jacobs J's agreement on the analysis. The other two sets of reasons differ from theirs, so say whose reasons carry each point.
For a claim for the cost of care at home, give the reasonable-expense limit as the Court later framed it in Stewart v Metro North Hospital and Health Service [2025] HCA 34: whether the plaintiff's choice is a reasonable response to repair the consequences of the tort, with all the circumstances weighed and not only health benefit against cost.
Gibbs and Stephen JJ say that they took "the maximum figures which on the evidence in this case could be accepted under each head" and that "It does not follow that these amounts are those which we would have adopted in the first instance". Their figures show the method at work on one plaintiff's evidence.
This was a common-law assessment on appeal from a trial by judge alone, in New South Wales. The reasons use the six per cent tables of the day to reach present values, and discuss no legislative cap or threshold on the amount of damages, so the case does not itself say how one fits with its method.
Check your understanding
1. Whose reasons contain the statement that criticism of the head-by-head method was "misconceived", and what condition did those Justices attach to it? 2. In what way did Jacobs J agree with Gibbs and Stephen JJ, and on what did he differ from them? 3. Why did Gibbs and Stephen JJ deduct part of the hospital expense from the award for lost earning capacity, and why did they not deduct the money the plaintiff would have spent on pleasure? 4. What did Barwick CJ say about the appellant's agreement that the plaintiff might spend periods at her mother's house, and what effect did it have on his reasoning? 5. Gibbs and Stephen JJ valued each head at the maximum the evidence allowed and found the total still too high. Why did they say those figures could not simply be added to give the sum to substitute? 6. What did the Court say in Stewart v Metro North Hospital and Health Service about how the reasonableness of a choice of care at home is assessed, and what did it say about reading Sharman as requiring a balance of health benefit against cost?