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Tort Compensation

Tort Compensation
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Table of Contents


Thus, in order to achieve compensatory damages in tort the courts must find that:

  1. The plaintiff has a tortious cause of action against the defendant
  2. The defendants tort has in fact caused the plaintiff’s loss (economic loss or physical injury)
  3. The plaintiff’s loss is not too remote
  4. The plaintiff has not breached his or her duty to mitigate unnecessary loss
  5. Assessment

Failure to establish one of these elements will be fatal to the case

Step 1: Cause of actions

  • Assault
  • Abuse of process
  • Defamation
  • Duress
  • False imprisonment
  • Conspiracy
  • Breach of contract
  • Negligence
  • Trespass to lands/goods
  • Invasion of privacy

There is a primary right in tort that has been breached that gives rise to a secondary right subject to satisfying the required elements.

Step 2: Damages

The object of awarding damages for the loss is to put the plaintiff back to the position they would have been in if the tort had not been committed: Livingstone v Rawyards Coal Co. (1880) 5 App Cas 25 at 39

Step 3: Causation

  1. The ‘but for’ or causa sine qua non test; and
  2. The ‘common sense’ test.
  3. Novus Actus Interveniens?
  4. Contributory Negligence?


On the balance of probabilities, it must be proven the loss was caused by the tort. The test should be determined by reference to the ‘common sense approach’ with the ‘but for’ test being used as the threshold criteria test: March v E & MH Stramare Pty Ltd (1991) 171 CLR 506, 533; Alexander v Cambridge Credit Corp Ltd (1987) 9 NSWLR 310.


  1. But for Test

The ‘but for’ test asks the question but for the defendant’s tortious act would the plaintiff’s loss not have occurred?   If the answer is yes then causation is said to have been established: March v Stramare

The role of the ‘but for’ test is really a threshold criteria.   If the ‘but for’ test produces a negative response then normally there will be no causation but an affirmative answer does not mean that causation is always established.


  1. Common Sense Test

The test which is to be applied is that of the ‘common sense’ test.   This means that the tribunal of fact must assess all the surrounding circumstances and make a value judgement as to the cause of the plaintiff’s loss: March v Stramare

  1. Novus Actus Interveniens?

Was there an intervening act/cause which breaks the ‘chain of causation’? : Bennett v Minister of Community Welfare

In determining whether there has been an act which removes the operating effect of the initial cause and thereby supplants it as the true cause is one which must be determined according to the ‘common sense’ test: Bennett v Minister of Community Welfare (1992)

A distinction must be draw between an intervening cause which breaks the ‘chain of causation’ and two or more separate and independent causes of the one loss (Bennett v Minister of Community Welfare (1992)

  1. Contributory Negligence?

Where the question of causation is between the plaintiff’s and the defendant’s negligence the court will have to determine firstly whether the defendant was causally responsible for that loss and secondly whether the plaintiff was also a cause of that loss by way of contributory negligence.

Damages are apportioned between the parties:  Law Reform (Miscellaneous Provisions) Act 1965, s.10 and Statutory Duties (Contributory Negligence) Act 1945.

Assessment of what is just and equitable having regard to the respective fault of both parties, as follows:

  1. An assessment of the extent to which each party failed to comply with the standard of care; and
  2. An assessment of the gravity or causative potency of the failure in each case.

The criterion for responsibility is the degree of ‘culpability’ of the parties, that is, the respective degrees of departure from the standard of care of the reasonable person: Pennington v Norris

 The court compares the culpability of each party, their whole conduct and the relative importance of their contribution in causing the damage: Wynbergen v Hoyts Corporation Pty Ltd

 In Pennington v Norris, Court held that the D’s conduct was:

…more culpable, more gross than that of the P. The P’s conduct was ex hypothesi careless and unreasonable but, after all, it was the sort of thing that is very commonly done: he simply did not look when a reasonably careful man would have looked. We think too that in this case the very fact that his conduct did not endanger the D or anybody else is a material consideration.

Section 9 Law Reform (Miscellaneous Provisions) Act 1965 – Apportionment of liability in cases of contributory negligence

(1) If a person (the “claimant”) suffers damage as the result partly of the claimant’s failure to take reasonable care (“contributory negligence”) and partly of the wrong of any other person:

(a) a claim in respect of the damage is not defeated by reason of the contributory negligence of the claimant, and

(b) the damages recoverable in respect of the wrong are to be reduced to such extent as the court thinks just and equitable having regard to the claimant’s share in the responsibility for the damage.

Section 5R Civil Liability ActStandard of contributory negligence


(1) The principles that are applicable in determining whether a person has been negligent also apply in determining whether the person who suffered harm has been contributorily negligent in failing to take precautions against the risk of that harm.

(2) For that purpose:

(a)  the standard of care required of the person who suffered harm is that of a reasonable person in the position of that person, and

(b)  the matter is to be determined on the basis of what that person knew or ought to have known at the time.

  • This section applies the law with respect to liability as altered by the Act to contributory negligence. Section 5S permits a court to reduce damages by 100% so as to defeat the claim provided this is just and equitable.


5S CLA – Contributory negligence can defeat claim

In determining the extent of a reduction in damages by reason of contributory negligence, a court may determine a reduction of 100% if the court thinks it just and equitable to do so, with the result that the claim for damages is defeated.

Step 4: Remoteness (page 18)

Even if damage was in fact caused by the D, the damage must not be too remote.

Test in case of negligence focuses on whether the loss is reasonably foreseeable: Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co Ltd (Wagon Mound) (No.1)

Whether something is reasonably foreseeable is determined by whether a reasonable person would foresee that there is a real risk of injury rather than one which is far-fetched or fanciful: Overseas Tankship (UK) Ltd v The Miller Steamship Co. (Wagon Mound) (No.2)

In order for a loss to be reasonably foreseeable the precise manner of occurrence or the extent of the loss does not have to be predicted.   All that is required is that damage of a kind should have been foreseen: Hughes v Lord Advocate


Egg Shell Rule

As a general rule a defendant must take the plaintiff as they find him or her.   Thus if damage of a kind occurs it does not matter that the plaintiff was susceptible to that kind of loss.   This is the “egg shell skull” rule: Smith v Leach Brain & Co

The interaction of the concepts of causation and remoteness can often be seen in cases where unusual injuries result and the plaintiff has a particular susceptibility to injury: Nader v Urban Transit Authority of NSW


Cases such as Hughes and Nader show that the court allows for a very expansive interpretation of what is reasonably foreseeable.


“Many of the problems that now beset negligence law and extend the liability of Defendants to unreal levels stem from weakening test of reasonable foreseeability…Given the undemanding nature of the current foreseeability standard, an affirmative answer to the question whether damage was reasonably foreseeable is usually a near certaintyTame v NSW; Annetts v Australian Stations Pty Ltd (Tame and Annetts) per McHugh J.


Under the CLA, a D cannot be held to be negligent for non-foreseeable and insignificant risks – reasonable foreseeability is a requirement.

5B CLA – General principles

(1) A person is not negligent in failing to take precautions against a risk of harm unless:

(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and

(b) the risk was not insignificant, and

(c) in the circumstances, a reasonable person in the person’s position would have taken those precautions.

(2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things):

(a) the probability that the harm would occur if care were not taken,

(b) the likely seriousness of the harm,

(c) the burden of taking precautions to avoid the risk of harm,

(d) the social utility of the activity that creates the risk of harm.


5D CLA – General principles

(1) A determination that negligence caused particular harm comprises the following elements:

(a) that the negligence was a necessary condition of the occurrence of the harm (“factual causation” ), and

(b) that it is appropriate for the scope of the negligent person’s liability to extend to the harm so caused (“scope of liability” ).


(4) For the purpose of determining the scope of liability, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.

Applicability of the remoteness tests – USE THIS ONLY IF IT APPLIES

Reasonable foreseeability test is subject to three qualifications.

  1. The egg-shell skull rule


  • This is not effected by the reasonable foreseeability test of remoteness: Smith v Lee Brain & Co
  • Havenaar v Havenaar per Glass JA: …it does no more than recognise that the possession by the P of special proclivities capable of enlarging the lesser harm which would be suffered by others is always foreseeable as a possibility notwithstanding that the particular proclivity and the way in which it has worked itself out in producing special harm may not be foreseeable even as possibilities.


  1. Pure psychiatric harm (pg 47); and
  2. Pure economic loss (pg 53)


  • In these cases, the reasonable foresight test of remoteness is necessary but not sufficient.
  • …Just as it would place an unreasonable burden upon human activity to require people to anticipate and guard against all kinds of foreseeable financial harm to others that might be a consequence of their acts or omissions, so also it would be unreasonable to require people to anticipate and guard against all kinds of foreseeable psychiatric injury to others that might be a consequence of their acts or omissions: Gilfford v Strang Patrick Stevedoring Pty Ltd per Gleeson CJ


Step 5: Mitigation

In assessing reasonable mitigation, the court considers what a reasonable person in the plaintiff’s circumstances would have done:  Glavonjic v Foster [1979] VR 536.

The plaintiff has a duty to act reasonably in its own interest and to mitigate its loss and damage.  Failure to do so will render the loss, which reasonably could have been avoided, irrecoverable even though it was caused by the wrong and is not too remote.

It is up to the defendant to establish that the plaintiff has failed in its duty to mitigate its loss: Watts v Rake (1960)

In assessing reasonable mitigation, the court considers what a reasonable person in the circumstances of the P would have done.


In Glavonjic v Foster [1979] VR 536 the P suffered a brain injury in a car accident and refused to have surgery. Gobbo J said:

It is appropriate to adopt a test that asks whether a reasonable man in the circumstances as they existed for the P and subject to various factors such as difficulty of understanding and the P’s medical history and condition that affected the P, would have refused treatment.

Step 6: Assessment

Special and General Damages

  • Special damages are those damages which have to be specifically proved and normally relate to past events. In an action for damages for personal injury these include loss of income up to the date of trial and the recovery of money spent on medical services etc. up to the date of trial. Special damages, therefore, can be quantified/computed precisely
  • General damages are those damages which are awarded either for past or future losses or both. General damages cannot be quantified. In an action for damages for personal injury these include pain and suffering, future economic loss and future medical expenses.

Date of Assessment

The traditional rule at common law is that damages are assessed as at the date the cause of action arose.

The courts will normally assess damages based on the date the cause of action accrues but will depart from this date whenever the interests of justice dictate another date should be used; see Rentokil v Channon (1990) – that is to achieve the overriding aim of placing the plaintiff in the position they would have been in if the wrong had not been committed.

Once and for all rule

Damages at common law are only awarded as a single one off lump sum and after all avenues of appeal have been exhausted the award is final and cannot be revisited.   A plaintiff can only recover once in respect of one cause of action and cannot make a further claim even if his or her condition is worse than first thought.

Exceptions – where there are separate injuries of different character arising from the one incident (Brunsden v Humphrey (1844) 14 QBD 141) or where tort is a continuing one.

Statute provides in some instances for instalment awards of damages:  s143, Motor Accidents Compensation Act 1999 (NSW); Workers Compensation Act 1987 (NSW) s151Q.

Plaintiff can recover for past and future economic loss, non- economic loss, pure economic loss, pure psychiatric harm (nervous shock). See from page 25.






In assessing future economic loss a court will normally [Norris v Blake (No. 2)]:

  1. Calculate how long the plaintiff would have continued working but for the injury;
  2. Assess the plaintiff’s net loss of earning capacity on a weekly basis;
  3. Calculate the amount of the lump sum necessary to make up the plaintiff’s lost earning capacity allowing for the appropriate discount rate. This is usually done using a table of multipliers which looks at what the lump sum equates with the present value of a weekly payment over a specified period; and
  4. Make a deduction for the vicissitudes of life -15%

Vicissitudes of life are not matters that can be the subject of proof and are absent any unusual factors normally assessed as a 15% deduction; Wynn v NSW Insurance Ministerial Corporation (1995)


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