Supreme Court dismisses appeal on special accommodation expenses, affirming High Court's award despite unorthodox calculation method.

THE SUPREME COURT

[Appeal No. 307/2011]

Denham C.J.

O’Donnell J.

Clarke J.

MacMenamin J.

BETWEEN:

CHARLOTTE BARRY (A MINOR)

SUING BY HER MOTHER AND NEXT FRIEND

AISLING CAMPBELL

PLAINTIFF/RESPONDENT

AND

THE NATIONAL MATERNITY HOSPITAL

AND PETER LENEHAN

DEFENDANTS/APPELLANTS

Judgment of Mr. Justice John MacMenamin dated the 13th day of July, 2016

Introduction

1. Charlotte Barry, the plaintiff/respondent in these proceedings, was born in the National Maternity Hospital on the 9th September,

2005. That hospital is the first named defendant, and is now the appellant to this Court. The second named defendant has been

struck out of the proceedings. Consequently, the only reference to a “defendant” or “appellant” herein concerns the hospital.

2. As the result of negligence during the course of her labour and delivery, the respondent sustained a severe hypoxic-ischemic insult.

She became severely asphyxiated during her birth. She required resuscitation by way of intubation and ventilation. She developed

acute hypoxic-ischemic encephalopathy. She now suffers a severe syndrome of Cerebral Palsy (Spastic Quadriplegia), with marked

neuro-developmental difficulties.

3. Many of the headings of damage were agreed and settled. They were ruled by the High Court. This appeal concerns one aspect of

the principle of compensation. At one level, it is obvious that no financial award would be adequate to put a young girl of 10 years of

age, such as Charlotte, back in the situation in life where she should have been, but for the negligence which occurred. The duty of

the courts, nonetheless, is to ensure that, without injustice to the appellant, the respondent receives full financial compensation for

what has occurred, in order to ensure that she receives the proper degree of care and amenity which her ongoing condition requires.

4. The specific issue which arises in this appeal relates to what are called special accommodation expenses. In the High Court, the

judge, (O’Neill J.), awarded €735,000 under this heading. The appellant submits that the judge failed to apply the approach on

accommodation expenses said to have been established in the case of Roberts v. Johnstone [1989] QB 878. The nature of this

approach, and how it evolved, requires some consideration. It is first necessary to deal with the factual background of the appeal.

There is no cross appeal.

The Background

5. Having agreed that the sum of €875,000 was a proper cost of acquisition of a new property, the parties to this appeal have also

agreed that a further sum of €283,000 would be the cost of necessary adaptation of the house to meet Charlotte’s needs. The total

cost of acquisition and adaptation, therefore, was €1,158,000, or, in round figures, €1.16 million. It was also agreed that the

expenditure of the sum of €283,000 would enhance the value of the new home by €135,000. The value of the respondent’s old home

at 7 O’Connell Gardens, Sandymount, was agreed in the sum of €550,000. Damages for the respondent’s future loss of earnings were

also agreed in the sum of €350,000, on the assumption that she would have commenced earning the sum of €50,000 per annum from

the age of 18 years upwards.

6. The question is what approach may a trial court adopt in calculating accommodation expenses into the future? In this case, this

subdivides into the following questions:

(a) whether the value of a family home should be deducted;

(b) whether such deduction should be gross or net of any mortgage;

(c) how to address the question of potential benefits accruing to a plaintiff’s family, thereby giving rise to a potential

windfall gain; or

(d) how to avoid creating serious detriment to a young plaintiff, because of a shortfall in the damages, making it

necessary to take part of the purchase price of new accommodation from sums awarded for damages under other

headings?

The High Court Judgment

7. In the High Court, O’Neill J. described the issue before him in this way:

“In deducting the agreed value of the existing home, the defendants say that if this is not done, in effect, an

extraordinary role reversal occurs, in the sense that instead of the plaintiff's parents providing accommodation for the

plaintiff, as would be their normal parental obligation until she reached adulthood, the plaintiff would become the

provider of accommodation for her parents and any other siblings. In arguing for a deduction of the agreed value of the

existing home, the defendants acknowledge that the plaintiff's parents will be entitled to have an interest in the property

to be acquired, commensurate with their contribution to its acquisition. The defendants further submit that the agreed

enhanced value, namely, €135,000, resulting from the adaptation of the new property, must be deducted as being extra

to the additional expense of accommodation resulting from the plaintiff's injuries, in effect, a capital bonus.”

8. The trial judge took the view that the respondent was entitled to compensation for the additional cost of accommodation beyond

that which she would, in the ordinary course, herself have incurred in the course of her life, had the capacity to provide her own

accommodation not been destroyed by the injuries suffered. In the High Court, the respondent’s case was that the extent of

compensation under this heading should be the full €1.16 million. On this proposition, O’Neill J. commented:

“Insofar as the plaintiff's claim to the entire cost of the acquisition of the new property and its adaptation fails to take

into account at all the actual cost of accommodation as distinct from the capital value of the property in which it is

provided, and the value of any accommodation provided to the plaintiff by her parents, it fundamentally departs from

the ordinary principles for the ascertainment of compensatory damages, and, in my opinion, such a fundamental change

to ancient and time-honoured legal principles would require legislative intervention.”

9. The High Court judge took the view that the assessment of compensation for future accommodation needs should exclude an

award which might leave intact an appreciating asset in the hands of the respondent at the end of the period for which compensation

was calculated. He considered his duty was, rather, to carry out an actuarial calculation as to the capital sum which, if spent at the

rate envisaged, would be fully exhausted at the expiry of the period in question. The judge concluded that the respondent was

entitled to the entirety of the additional cost of accommodation for the adult portion of her lifespan, but, insofar as the period of her

minority was concerned, credit had to go to the appellants for the value of the benefit of accommodation provided by her parents

during that period.

10. The parents’ equity in that home was €217,000. Thus, before O’Neill J., the appellant’s position was calculated as follows:

Cost of Acquisition of New House €875,000

Less: Value of 7 O’Connell Gardens €550,000

€325,000

which fell to be multiplied by 3% (the real rate of financial return)

Giving rise to the sum of €9,750.00

The Parties’ Submissions to the High Court

11. It is helpful to now briefly outline the parties’ submissions to the High Court. This makes clear how the judge approached his task.

The appellant contended at the trial that the figure of €9,750.00, (see calculation above), should be multiplied by the respondent’s

multiplier, having regard to her age expectation, which multiplier was 20.3. This produced a capital value of €197,925. To this figure

should then be added the sum of €283,000 (as cost of adaptation or conversion), which came to €480,925. The appellant contended

that this figure should be reduced by €135,000 (that is, the enhanced value of the new house), producing a final figure of €345,925,

which it was prepared to round up to €350,000, as being the claimed extent of its liability in respect of the cost of future

accommodation for the respondent.

12. Counsel for the respondent criticised this approach. He contended that this would fail adequately to compensate his client for

costs of accommodation which would be necessary for her. He submitted that the deduction of the agreed value of the parents’ home

forced the parents, effectively, to contribute their only asset to compensate their child, thereby relieving the hospital of a portion of

their liability. Counsel submitted that if the parents were compelled to do this, it would be grossly unfair to them, because their only

asset would then be irretrievably dedicated to the child’s benefit for the duration of her lifetime, thereby depriving them of the

opportunity to use the asset to benefit themselves, or for the benefit of Amelia Barry, Charlotte’s sister, born on the 30th April, 2008,

or other children who they intended to have, or possibly to use the value themselves later in life. Counsel submitted that such an

approach would act in a particularly unfair way upon the parents, in view of the fact that their mortgage on the existing family home

was in excess of €330,000, leaving their equity as only €217,000. The respondent’s case, therefore, was that the appellant’s

approach entirely failed to give just compensation for the appellants’ wrongdoing, thereby leaving Charlotte and her parents in the

invidious position of either not acquiring a suitable accommodation for her at all, or, if that accommodation was to be acquired,

making up the shortfall in purchase price by contributions in the form of dipping into the other heads of damage, or, possibly, by the

parents themselves having to contribute the gross (and not net) value of their existing home. The result of this, counsel submitted,

would be that the parents would find themselves in the position of actually indemnifying the appellant in respect of their wrongdoing.

13. It will be immediately seen, therefore, that the appellant’s position was that, rather than deducting the value of the parents’

equity in 7 O’Connell Gardens (€217,000), it wished to deduct the full market value of €550,000, which, in turn, was to be deducted

from the cost of acquisition of the new house.

14. The respondent’s case, in turn, was that to adopt the approach urged by the appellant would be to arrive at an inadequate

method of ascertaining just compensation, which had evolved as a result of a misconceived pre-occupation with avoiding a windfall

gain to the family or estate of a plaintiff, as evinced by the method of actuarial calculation chosen. Counsel for the respondent

submitted that such an approach was wholly inappropriate in achieving the correct balance of justice, bearing in mind the

catastrophic consequences which had befallen, both Charlotte and her parents, in every aspect of their lives, all of which had

resulted from the hospital’s wrongdoing.

15. One might comment here that the stance adopted by the appellants in the High Court is an apt illustration of the way in which

the Roberts v. Johnstone principle can operate. It is open to the criticism that it is not always an appropriate method for arriving at

truly just compensation, and lays too great an emphasis on seeking to avoid a windfall gain to the family or estate of a plaintiff, which

may result from the method of actuarial calculation chosen. Counsel for the respondent submitted that this method was inappropriate

in achieving a correct balance of justice, bearing in mind the catastrophic consequences, not only for the child herself, but for her

parents in every aspect of their lives.

The Trial Judge’s Reasoning

16. The trial judge concluded that the appellant was entitled to a credit commensurate with the value of the benefit to the

respondent of having accommodation provided for her during her childhood or minority. The extent of that credit was to be limited. He

concluded that the hospital was entitled to a credit commensurate with the value of the benefit to the child of having accommodation

provided for her during her childhood or minority. The extent of that credit was to be limited, in order to reflect the value of that

benefit and no more. The approach he adopted requires close consideration. He calculated that the extent of the benefit was that

Charlotte was currently one of a family of four. She lived in a house worth €550,000, provided by her parents. The parents had both

legal and moral obligations with regard to the nature of the occupation of a family home by any individual child, and having regard to

the number of adult and child occupants of the house during the child’s minority. The judge, therefore, took the view that the child’s

benefit in this regard could not be considered to exceed 1/6th of the value of the house. He considered that the existence of a

mortgage on the house was immaterial, because that was an essential ingredient in the way Charlotte’s parents discharged their legal

and moral obligations to provide accommodation for their family. What mattered, he considered, was that there was a house worth

€550,000 which the family as a whole, and individual members of it, enjoyed to a certain extent. He concluded it would be wholly

unjust to ascribe to the respondent the entire value of the property, as if this was for her exclusive benefit. He was satisfied that a

just apportionment of the value of the property, to reflect the respondent’s occupation of it during her minority, should be a 1/6th

share, for which credit was to be given to the appellant.

17. The judge took the view that the parents’ obligations to provide accommodation would, in all probability, end at the expiration of

Charlotte’s minority, or soon afterwards. This corresponded to approximately one-half of her total life expectancy of 35 years. Thus,

he concluded, it necessarily followed that, insofar as the appellant sought to have the entire value of the current family home taken

into account as representing the value of, or part of the value of, the child’s future accommodation for the duration of her life

expectancy, there must be apportionment of that value also. This would reflect the fact that, upon reaching adult status, the

respondent, but for her injuries, would no longer have had that accommodation available to her as a right, nor indeed, as a matter of

probability, would she have continued to avail of it, having assumed normal adult status. He assumed that, from then on, she would

have availed of the normal opportunities of life, including obtaining her own accommodation. Thus, the judge found that an order to

reflect the fact that the family home would, but for her injuries, only be available to the respondent for approximately half of her

current expected lifespan, the benefit to her of her share in the accommodation should be reduced by one-half. He concluded that

the benefit in that regard was equivalent to one-twelfth of the value of the house.

Legal Authorities

18. In the absence of any clear authority on this specific issue in our jurisprudence, the High Court judge is hardly to be blamed for

seeking out some legal authorities at least addressing certain principles which would assist him in the difficult task. He referred,

therefore, to the decision of Walsh J. in this Court in Doherty v. Bowaters Irish Wallboard Mills Ltd. (Doherty) [1968] I.R. 277

(“Doherty”).

19. Doherty was delivered almost half a century ago. Then, there were different assumptions regarding awards of damages to

catastrophically injured persons. The plaintiff in Doherty sustained catastrophic injuries, as a result of which it was necessary for him

to obtain accommodation. In the course of his judgment, Walsh J. did enunciate certain dicta therein on the assessment of

compensation for future accommodation needs of a disabled person. He appeared to out-rule the possibility that an award of

compensation might leave intact any enduring or appreciating asset in the hands of a plaintiff at the end of the period for which

compensation was calculated.

20. O’Neill J. decided to apply this dictum. He considered that the appropriate manner for compensating for a future loss, in a case

such as this, was by an actuarial process, operating so as to ensure that the capital sum, as spent at the rate envisaged, would be

fully exhausted at the end of the period in question.

21. I would comment here, however, that the trial judge appeared to consider himself bound by the judgment of Walsh J. in Doherty,

with which O’Dalaigh C.J. agreed. But, in fact, this judgment was in the minority on the damages issue. The majority judgment on the

question of damages was that of Lavery J., with whom Haugh J. and O’Keeffe J. agreed. Doherty does not directly address the issue

in this appeal. Consequently, the High Court judge was not obliged to follow Walsh J.’s dicta, although these might have appeared to

be consistent with the decision of the United Kingdom Court of Appeal in Roberts v. Johnstone [1989] AC 878. Prior to a consideration

of the approach to be adopted here, certain general observations may be appropriate about this appeal.

Relevant Factors

22. This is a case which stands on its own facts. Charlotte had to be accommodated in new accommodation. This is not a case where

special facilities could be installed in her existing house. It would be possible to compensate a plaintiff who owns a house for any

depreciation in value for alterations such as modifying doorways to accommodate a wheelchair, installing lifts, or lowering working

surfaces. The installation of such facilities would very likely have the effect of reducing the value of the accommodation. A

prospective purchaser might well wish to restore the accommodation to its normal condition, and if so, would reduce the purchase

offer to allow for such expenditure. If evidence established that such alterations had actually reduced the capital value of the

accommodation by a certain sum, then the special damages would be increased by that amount to compensate for this element of

loss. That is a simple case, where a plaintiff does not make a windfall gain and, therefore, there is no objection to an award of full

reasonable cost of the facilities.

How the Law Evolved: George v. Pinnock

23. A more difficult problem arises where a plaintiff has bought, or intends to buy, the accommodation needed to meet a disability.

The problem is, how to value the cost incurred as against the benefit of having a capital asset in the new accommodation? In George

v. Pinnock [1973] 1 WLR 118, Orr L.J., in the Court of Appeal of England and Wales, observed that it would be wrong to award the full

capital cost of acquiring a house. He held:

“An alternative argument advanced was, however, that as a result of the particular needs arising from her injuries, the

plaintiff has been involved in greater annual expenses of accommodation than she would have incurred if the accident

had not happened. In my judgment, this argument is well founded, and I do not think it makes any difference for this

purpose whether the matter is considered in terms of a loss of income from the capital expended on the bungalow, or in

terms of annual mortgage interest which would have been payable if capital to buy the bungalow had not been available.

The plaintiff is, in my judgment, entitled to be compensated to the extent that this loss of income or notional outlay by

way of mortgage interest exceeds what the cost of her accommodation would have been, but for the accident.” (at pp.

124/125)

24. But, as the learned authors of Kemp and Kemp, on the Quantum of Damages, (Volume I, Sweet and Maxwell, London 1992), then

pointed out, the practical difficulty with this approach was that, if one applied the appropriate multiplier to the annual expense

calculated on either of these bases, the result was often the same as the capital cost of the accommodation. The learned authors

pointed out that the court, in fact, had to make some arbitrary deduction from the amount which would have been reached by

applying the usual multiplier to the annual expense. The authors wrote:

“The end result was, in reality, a figure plucked from the air. The court struggled with this problem for years.”

Roberts v. Johnstone

25. In Roberts v. Johnstone [1989] Appeal Case 878, the Court of Appeal sought to combine the approach outlined by Orr L.J. in

George’s case, with reasoning previously adopted by Lord Diplock in Wright v. British Railways Board [1983] 2 AC 773. The court

regarded the purchase of residential property, as the equivalent of the purchase of an investment secured against the risk of

inflation, and so considered 2% an appropriate return on the net extra capital expenditure, rather than the higher net percentage

rate, which would be payable by a plaintiff on a mortgage of the property.

26. The effect of this ruling was that damages in respect of the purchase of special accommodation were to be assessed by taking

the multiplicand as being 2% of the net capital cost of the accommodation, and then applying it to the multiplier, which would be

applied to any other annual expense continuing for the rest of the plaintiff’s life.

27. The authors of Kemp and Kemp gave an illustration by way of one hypothetical example, where a plaintiff was aged 30 years and

had a normal expectation of life. The conventional multiplier to apply in such a case to expenses continuing for life would be 16. Thus,

hypothetically, the calculation would be:

Sale Price of Previous Property £60,000

Purchase Price of New Property £100,000

Cost of Modifications £10,000

These modifications, in fact, would reduce the value of the new property on the open market to £95,000. The hypothetical plaintiff

had incurred wasted capital expenditure of £15,000. This was recoverable in full, as special damages. Such a plaintiff, thereby, would

have a capital asset worth £95,000. From this should be subtracted the value of the previous capital asset of £60,000, giving rise to

a difference of £35,000. 2% of £35,000 is £700.00, to which should be applied a multiplier of 16. Thus, damages would be:

£700.00 x 16 = £11,200

Wasted Expenditure £15,000

Legal Costs of Sale and Purchase £x

Removal Costs £y

Total Damages under this heading £26,200 + £x

+ £y

28. The approach adopted in Roberts clearly constituted a re-appraisal of the approach previously adopted in George v. Pinnock. The

effect of George v. Pinnock was to allow a plaintiff to borrow in order to pay either for the required accommodation, or for adaptation

of a house. The aim in Roberts, however, was to avoid an outcome whereby, in the case of a young disabled plaintiff, with a multiplier

at the top of the range, the resulting amount would significantly exceed the capital cost upon which it was intended to be interest. In

Roberts the chosen multiplier was 16, which, when applied to a mortgage rate of 7%, actually took the figure above the cost of the

new accommodation, specifically to 112% of the cost.

29. In Roberts, Stocker L.J., in the Court of Appeal, took the view that the court could not award this amount, as this would not

accord with the principles lying behind the reasoning of the court in George v. Pinnock. The Court of Appeal, therefore, adopted a 2%

interest rate, which had previously applied in the case of non-pecuniary loss in personal injury cases by the House of Lords in Wright

v. British Railways Board [1983] 2 AC 773. However, this rate was the interest applicable to non-pecuniary losses in personal injury

claims. It is not easy to discern why there should have been such allowance for interest rates in the first place.

30. The practical result of the adoption of a 2% rate, at a time when multipliers were worked out on a 4.5% discount rate, was that a

plaintiff would, at best, obtain by way of damages in the region of one-third of the capital cost of their new accommodation; that is,

30% on a multiplier of 15; and 36% on a multiplier of 18.

31. As an unintended outcome, plaintiffs were forced to resort to monies awarded for general damages for non-pecuniary loss, and, to

the extent that they could afford, to allocate part of the award for loss of earning capacity for the remaining funding of the special

accommodation needs to which they were actually entitled.

32. O’Neill J. referred to a subsequent English High Court decision of Willett v. North Bedfordshire Health Authority [1993] PIQR, Q166.

There, the cost of alterations was regarded as part of the capital cost of the property, and included in the 2% calculations. Hobhouse

J. held in that case:

“In Roberts v. Johnstone a similar item was not included in the capital value allowance of the property. The matter does

not appear to have been the subject of argument. I consider there is no escape from the logical and proper approach of

treating appropriate capital expenditure, which is incurred after the purchase, which enhances the value of the house, in

the same way as expenditure which is incurred in the acquisition of the house itself. Any other approach produces not

only mathematically and logically inaccurate results but also an unjust result.” (Q173)

The Trial Judge’s Consideration of the Various Approaches

33. In the instant case, O’Neill J. concluded, as did the Law Commission in the United Kingdom, that the approach adopted by the

High Court in Willett to the cost of alterations was preferable to that taken in Roberts. He reasoned the approach was more

consistent with the core principle applicable to the acquisition of assets with an enduring capital value as, for example, set out in

Roberts v. Johnstone.

34. Adopting this approach, therefore, O’Neill J. identified that portion of the cost of alterations which did not produce any

enhancement of value, which is treated as a wasted or wasting asset, and then looked at the balance of the cost of alterations,

which produced an enduring capital value which was then treated in exactly the same way as the purchase cost of a new house, for

the purposes of calculating compensation to be paid by a wrongdoer. To avoid putting the full enduring capital cost in the hands of

the respondent, he decided the compensation should be calculated on an actuarial basis on the assumption of a 3% return on capital,

multiplied by the appropriate multiplier in this case, which was 20.3%. The agreed alterations were €283,000, and the enhanced value

resulting was €135,000. This meant that of the €283,000, €148,000 was to be seen as a wasted, or wasting, asset. The remaining

€135,000 was, therefore, to be considered as an enduring capital asset, and be treated accordingly.

35. The judge then took the figure of €135,000 and treated it in the same way as the purchase cost of a new house, for the purpose

of calculating compensation. Thus, he took a return on capital of €135,000 as being €4,050, and multiplied that sum by the

appropriate multiplier, which was 20.3. Taking these two figures together, then, he added the sum of €82,250, together with

€148,000, giving rise to a figure of €230,215 as the cost of alterations.

36. Accordingly, the calculation of the figure of the cost of accommodation was as follows:

Purchase Price €875,000

of House

- €45,833 (1/12th of

€550,000)

= €829,167

x 3% = €24,875.01

x 20.3 €504,962.70

Plus: Cost of €230,215.00

Alterations

Giving Rise to a €735,177.70

grand total of:

37. In engaging in this process, the trial judge adopted what can only be called a modified Roberts v. Johnstone approach. I do not

say this in a spirit of criticism, but rather merely to point out the difficulties which a trial judge can face in seeking to do justice in

circumstances where one approach, which may achieve justice, fails to achieve a just outcome in another case.

Is There One Exclusive Method?

38. In fact, there is no, one, exclusive method of assessment appropriate to every circumstance in a situation of this kind. However,

there is always one proper criterion by which the adequacy of a particular method may be judged. It is, whether or not the result of

the assessment fairly makes good the financial loss incurred. By adopting this principle, the law establishes a proper measure of

compensation for pecuniary loss. The actual process of assessment can only then be a matter for reasoned estimation and

computation. Kemp and Kemp refer to observations by Stephen J., and Australian judge, albeit in a minority judgment, in Todorovic v.

Waller, 37 ALR 481:

“Rules and practices develop in the process of assessment, and no doubt tend, by their judicial adoption in a legal

system governed by precedent, to become current orthodoxy. But since the medium of compensation is money, whose

purchasing power and income yielding qualities may change over time, a particular process of assessment, attuned to a

particular state of the medium, may come to be no longer appropriate. It follows that, since the sole function of the

process of assessment is to attain what the law has fixed as the proper measure of compensation, there can be no

place in the process for fixed rules of law; instead the process must be capable of adjustment in the face of changes in

the quality of the medium of compensation. The current acceptability at any time of a process of assessment will

depend, and depend only, upon whether or not its outcome fairly corresponds to what the law has set as a proper

measure of compensation”.

How This Appeal Evolved

39. I turn now to the evolution of this appeal. When the matter first came before the Court, one might have inferred that this was to

be a test case. A true test case, properly so called, is one where a court is asked to pronounce the law on a question of legal

principle. The outcome will have a decisive bearing on the result of a range of cases, sometimes of exceptional public importance.

Quintessentially, the issues will be well defined. The potential outcomes may significantly differ, dependent on the decision of an

appeal court. The effect or principle of the decision is to have a precedential effect.

40. But, as matters turned out, this is hardly the position here. The task of the Court has been reduced in scope, as a result of the

way in which the stances of both the parties have developed. Indeed, as will be seen, on one view, the actual difference between

the positions adopted by the appellant and respondent, have now faded into relative insignificance.

The Issue Before This Court

41. What is before the Court is one, single, case. The respondent is content with the High Court award. The question, then, is

whether the appellant can persuade this Court that the High Court judge erred in a way that it significantly altered the outcome of

the case before him, and created an injustice to either party? As we will see, one might cavil with the manner in which the High Court

judge arrived at the result. But, this is not the point. The question is, rather, whether this Court should interfere with the High Court

judgment? Arising from the various issues canvassed in this appeal, one is alert to many possible pitfalls. What is less easy is to arrive

at any principle of general application on this issue, where, plainly, the Roberts approach has imperfections and can create injustice.

Moreover, the task is made more difficult where no, one, alternative, principled approach is put up which can achieve a just balance

between plaintiffs and defendants, on a universal basis.

42. What follows, therefore, is a brief survey of case law, which follows the modest aspiration of seeking to illustrate some of the

approaches adopted in the neighbouring jurisdiction. This judgment cannot enunciate some general principle of application, therefore.

Ultimately, the question must come down to this, was the High Court judgment so wrong in its approach or outcome that this Court

should interfere with the award?

43. As indicated, the judge awarded €735,000 under the accommodation expenses heading. It is only fair to point out that the

appellant has indemnified the respondent in relation to all or any costs from the appeal, and also indicated that she will not suffer

from any deduction resulting from the outcome of this appeal.

How the Parties’ Differences Narrowed

44. The extent to which the issues have further narrowed can be aptly illustrated in this way. In the High Court, the appellant took

the view that the sum of €350,000 would amount to adequate compensation under the accommodation heading. The respondent, by

contrast, asserted the sum required was €1.16 million. These remained the positions when the matter first came before this Court on

appeal. Coincidentally, perhaps, the trial judge’s award of €735,000 fell just short of a mid-point between those two extreme polar

figures. But, as matters further developed in written submissions, and as the issues were further refined in argument, the appellant’s

position was, ultimately, that an award of €692,000 would not have been unjust, dependent upon the manner in which the decision in

Roberts v. Johnstone was applied. What lay between the parties, ultimately, therefore, was the High Court award of €735,000, and

the appellant’s final position, asserting that justice might have been done with an award of €692,000.

45. As an appendix to this judgment, there is a spreadsheet, prepared by the appellants. This sets out the manner in which a number

of different calculations were (or should have been) arrived at.

46. Viewed from the left column, Option 1, “Plaintiff’s Case”, deals with the plaintiff/respondent’s calculations, but with no actuarial

calculation whatsoever. This leads to the figure of €1,158,000. Option 2 is the plaintiff’s case calculated on an actuarial basis, which

gives rise to an award of €763,090. The third column from the left is the trial judge’s judgment, which is calculated on an actuarial

basis, but where there is a deduction of €45,133.00, being 1/12th of the total value of the house of €550,000. The fourth column

sets out the appellant’s case, if predicated on a full deduction of €550,000, i.e. the full value of the family home, without making any

deduction for the mortgage, or the respondent’s attributed share therein. This gave rise to a total figure (A + B + C) of €428,140. The

fifth column from the left takes into account two apparent miscalculations, that is, a failure to take into account the increase in value

as a result of adaptations, either on an actual, or an actuarialised, basis. This gave rise to a figure, which was that advanced in the

High Court, of €345,925. To the extreme right, is the appellants’ ultimate position, correctly making an attribution for increasing value

of the adaptations, and thereafter subjecting the same to an actuarial process. On that basis, the appellant’s total figure comes to

€692,446, which, as can be seen, is not far from O’Neill J.’s ultimate figure.

47. Obviously, there are, what might best be described as “improvised”, elements in O’Neill J.’s approach. The fundamental question is

whether justice was done? To an extent, the question now answers itself. In my view, whatever the methodology, the outcome was

correct.

The English Authorities Referred to On Appeal

48. It would not be doing justice to the case advanced by the appellant without adverting to the range of authorities which were

brought to our attention. These are largely decisions of courts of first instance in England and Wales. But, they are nonetheless of

interest for reasons of explanation in the conclusion section of this judgment.

49. Wells v. Wells [1999] 1 AC 345 is the exception. There, the Court of Appeal allowed for a discount rate reduced from 4.5% to 3%.

The position of the plaintiff there was also altered by the use, in place of the 2% rate of interest for non-pecuniary loss of the

discount rate, a revised 3%, as previously adopted by the House of Lords in Thomas v. Brighton Health Authority [1999] 1 AC. I refer

hereafter to the plaintiff or ‘claimant’ interchangeably. In Wells, the House of Lords overturned the Court of Appeal’s 2%, and restored

the 3% attributed by the trial judge, who had been prepared to derive the multiplier from a new discount rate.

50. I turn then to the illustrative judgments by Courts of First Instance. In the High Court judgment of Oxborrow v. West Sussex

Hospitals NHS Trust [2012] EWHC 1010 QB, the claimant was so catastrophically injured at birth that he was expected only to live to

the age of 21 years. Accommodation would be required only for a comparatively short time, starting from the date of trial. This led to

a small multiplier of around 13, which, when applied to the 2.5% discount rate, provided the plaintiff with a little over 30% of the

value of the property envisaged. In Oxborrow, there was, under the U.K. Rules of Court, an application for an interim payment on

account of damages, to provide suitable accommodation for the plaintiff. His counsel argued that Roberts should not apply, and there

should be adopted a solution to the effect that the plaintiff be given the full purchase price, but with a charge on the purchased

property in favour of the defendant, which would be realisable on the claimant’s death. I make no comment on this suggestion, other

than to say this is an approach which appears to have found favour in other judgments (see Clarke J.’s concerning judgment). It can,

however, give rise to a concern on the part of indemnifiers regarding a potential liability in the future, in circumstances which cannot

be foreseen.

51. Both M (A Child) v. Leeds Health Authority [2002] PIQR Q46, and Iqbal v. Whipps [2007] LS Medical 97 show nuanced approaches

to Roberts v. Johnstone. In the former, Sullivan J., then a High Court judge, had to deal with a situation where the plaintiff, her

brother and her parents lived in a detached house before the negligence occurred, but thereafter had moved into a bungalow,

purchased and adapted to meet the plaintiff’s needs. The defendants sought to deduct, during the period, for which the claimant was

expected to share the house with her family (up to the age of 25 years), the value to the claimant’s parents of having a house

provided free of charge for the whole family. On this, the judge commented:

“I come back to the basic proposition, which is that this is a compensation claim made on behalf of M. It is intended to

compensate her for the effects of her disability. While she, for the purposes of this calculation, notionally lives at home

with her parents until the age of 25, it seems to me that she is in no different position from any child who could not

reasonably be expected to go out into the market place and buy accommodation.”

52. A further deduction was sought in respect of the value of the property which, if the plaintiff had not been injured, she would have

been likely to have purchased herself when she left home. The judge accepted that such a deduction was appropriate from the time

when the claimant could have been expected to leave the family home and acquire her own accommodation.

53. In Iqbal, (cited earlier), the claimant/plaintiff and his parents had been living in rented accommodation. That rent was paid by

means of housing benefit, since the claimant’s father was unfit to work. The family moved into a suitably adapted bungalow

purchased from the claimant’s damages. The defendant contended that allowance should be made for notional rent payable by the

claimant’s parents, and equivalent to the amount previously paid by way of housing benefit. It was contended that the claimant’s

parents would still be entitled to housing benefits, if he entered into a tenancy agreement with the claimant’s representative. There

was, it was said, no reason why the claimant’s parents should not pay rent to the plaintiff, as they had previously paid it to their

previous landlord. The defendant’s counsel relied on Roberts v. Johnstone, and the deduction that had been made in that case to

reflect the value of the previous family home. He submitted that there was no reason why this should not also apply to a case where

the family’s previous property had been rented. But, Bell J., the High Court judge, held that the defendant’s argument failed for

practical reasons, in the particular circumstances of the case. The plaintiff’s parents were not actually paying rent. The arrangement

suggested by the defendant’s counsel would be cumbersome, and would merely result in money being transferred from one public body

to another. The claim was brought by the claimant himself so that the deduction of notional rent could be justified only by finding

that the failure by the plaintiff (through his receiver, or the U.K. Court of Protection), to demand rent from his parents constituted an

unreasonable failure to take steps to mitigate his loss. It could not be characterised as such.

54. Bell J. commented:

“More generally, it is not just to deprive parents of the incidental benefit of living rent free, when there are so many

sacrifices on their part, most obviously the detriment to their quality of life, which must go uncompensated under our

laws of tort, however high the award in their child's favour.”

55. In Whiten v. St. George’s Healthcare NHS Trust [2011] EWJHC 2066 (QB), counsel for the defendant suggested that the claimant

should give credit, as against the capital value of the new property for the value of the property that, had he not been injured, his

parents would have owned and the family would have lived in. Swift J. identified the problem which arose in M and Iqbal as being that

the claim was brought on behalf of the claimant and not his parents. She considered it wrong, in principle, for the value of a property

that would have been owned by the claimant’s parents to be deducted from the value of the new property to be owned by him. To

make such a deduction would also be unfair to the claimant. It would inevitably result in him being inadequately compensated for the

loss of investment income on the capital value of the new property. The judge pointed out that it was not the claimant who had been

relieved of the expense of purchasing a home, it was his parents. Yet the loss would fall on him.

56. The judge commented:

“I recognise that, in Roberts v. Johnstone, a deduction was made for the value of the claimant's parents' home.

However, as I have already said, it appears that the claimant's advisers in that case had invited the court to make the

deduction, so that the issue was not argued before the lower court or the Court of Appeal. The fact that neither court

queried the concession made by the claimant does not necessarily imply that they "approved" it.”

57. She went on to consider the possibility of the parents paying rent for occupying the accommodation, and for the sum paid by way

of rent to be deducted from the claim for his annual loss of investment income on the capital value of the new property. She pointed

out, however, that, in some cases, this would not be possible, because parents would lack the financial resources to pay rent. There

would, moreover, be a risk that the parents’ ability to pay rent might change over time. In that event, a plaintiff would end up out of

pocket, if, at trial, a deduction had been made from the annual claim for investment income on the capital value of his new property,

in order to take account of rent which was not, in fact, paid.

58. In Whiten, the court rejected a suggestion that the parents should pay rent. It was to be a matter for discussion between the

plaintiff’s parents, plaintiff’s deputy, and possibly the Court of Protection. As had been pointed out in Iqbal, if there was no agreement

that rent should be paid, the only way that a court could make a deduction of the notional amount of the rent from the claimant’s

damages, was to characterise the failure on the part of the claimant to demand rent, as a failure to mitigate his loss. The ordinary

principles of mitigation of loss would require the defendant to prove the failure by establishing that the claimant had unreasonably

failed to take certain mitigating steps. The plaintiff’s parents indicated that, because of the severity of their child’s cognitive

disabilities, they would intend that he should live with them for the rest of his life. The judge pointed out that this was a considerable

commitment on their part. It was true that there would be paid carers. Nevertheless, the child would always function at the level of a

young child, and his parents would remain, ultimately, responsible for him. His condition would mean that he would require a

considerable amount of emotional and other support from them. His disabilities would, inevitably, restrict the range of choices open to

them in the future. If they were to take holidays, their destination and mode of travel would have to be suitable for their child. If they

wanted to undertake leisure activities as a family, those activities would have to be tailored to meet his requirements. Once they are

in the new property, it would be difficult or impossible for them to move again, because of the substantial costs of adapting another

property for the claimant. The judge observed (at para. 468):

“In these and many other ways, their quality of life in the future will be adversely affected. Having regard to those

factors, I do not consider that a failure on the part of the claimant (or those acting on his behalf) to demand that his

parents pay rent to him can properly be regarded as "unreasonable"”

59. Swift J. continued, at para. 469:

“The factors I have described above will be present, to a greater or a lesser extent, in the vast majority (if not all)

cases involving children with severe disabilities, where the family has to move to alternative, disability-related

accommodation. The context and circumstances of those cases will not, in my view, be appropriate for a finding of a

failure to mitigate loss to be made. The view expressed by the judge in Iqbal - to the effect that it is not just to deprive

parents of the incidental benefit of living rent free having regard to the uncompensated effects of the defendant's

negligence on them - can perhaps be regarded as another way of expressing the same conclusion.”

60. For those reasons, the judge rejected the defendant’s contention that a deduction should be made from the annual sum,

calculated pursuant to Roberts v. Johnstone, up to the time when the claimant might have expected, had she not been injured, to

have acquired a property of her own. Much the same approach appear to have been adopted in later cases (see Ellison v. University

Hospitals of Morecambe Bay NHS Foundation Trust, The High Court, Neutral Citation [2015] EWHC 366 (QB); Warbyj; Robshaw v.

United Lincolnshire Hospitals NHS Trust, Neutral Citation No. 2015 EWHC 923 (QB)).

Conclusion

61. I have referred to these, clear and comprehensive judgments from the neighbouring jurisdiction for two reasons. First, because

they indicate the degree to which judges at all levels have sought to adopt a practical and flexible approach in order to do justice.

Second, for the reason that the judicial observations are generally to the effect that, in the event of there being an injustice, the

courts have frequently taken the view that a degree of injustice should fall more against a defendant, rather than against a plaintiff.

The judgments show the degree to which the calculation of damages in catastrophic injury cases can become a highly technical

issue.

62. Judges in appeal courts necessarily operate in a somewhat different environment from courts of first instance. On appeal, the

focus is upon identification as to whether there has been an error in principle. But, appeal courts do not, of course, lose sight of the

fact that it is the parents who, on a day by day basis, will have to take care of their child, who, through no fault of theirs, sustained

injuries.

63. It seems apposite, in this context, to repeat a further observation by Stephen J. in Todorovic, cited earlier, which accurately

summarises the choices a court must make. He said:

“While there may be no one exclusive method of assessment appropriate to every circumstance, there is but one

criterion by which the adequacy of any particular method may be judged; it is whether or not the result of the

assessment fairly makes good the financial loss incurred.”

He continued:

“The law, by insisting upon this principle, has established the proper measure of compensation for pecuniary loss; the

actual process of assessment can then only be a matter for reasoned estimation and computation.”

64. In this appeal, we are asked to conclude that the trial judge fell into error. I do not deny that the approach he adopted was

perhaps unorthodox. It may not have fully accorded with a Roberts v. Johnstone approach. Yet, it is impossible to conclude that any

injustice was done. There has been no cross-appeal. The outcome is little different from one of the calculations which the appellant

has put forward.

65. In conclusion, I would reiterate, this judgment does not, and cannot, create any new paradigm for calculation of damages in

these cases, still less does it create any further burden on indemnifiers. The Court is simply faced now with arriving at a just

adjudication on one single case. To my mind, although the approach was unusual, the outcome achieved proper compensation without

injustice to either party. I would not, therefore, interfere with the learned High Court judge’s decision. I would affirm that decision and

dismiss this appeal.

APPENDIX

Plaintiff’s O’Neill J.’s Defendant’s Defendant’s

Case Judgment Case Case

Option 1 Option 2 Option 3 Option 4 Miscalculated

No Actuarial Actuarial Actuarial Actuarial Actuarial Actuarial

€0 €0 €45,833 €550,000 €550,000 €116,000

Deduction Deduction Deduction Deduction Deduction Deduction

€ € € € € €

New Home 875,000 875,000 875,000 875,000 875,000 875,000

Deduction 0 45,833 550,000 550,000 116,000

875,000 875,000 829,167 325,000 325,000 759,000

3.00% 26,250 24,875 9,750 9,750 22,770

20.3 875,000 532,875 504,963 197,925 A 197,925 462,231

Adaptations – Increasing Value 135,000 135,000 135,000 135,000 0 135,000

3.00% 4,050 4,050 4,050 4,050

20.3 135,000 82,215 82,215 82,215 B 0 82,215

Adaptations – Wasting 148,000 148,000 148,000 148,000 C 148,000 148,000

Total 1,158,000 763,090 735,178 428,140 A+B+C 345,925 692,446