By Tina Tomaszewski, Partner and Ben Lu, Senior Associate
The High Court of Australia has recently handed down a decision which could have significant ramifications for defendants and their insurers by substantially increasing their exposure for “future care” in catastrophic injury claims.
Almost five decades ago, the High Court’s decision in Sharman v Evans (1977) 138 CLR 563 established that a plaintiff’s entitlement to damages for nursing and medical care following a defendant’s negligence was to be guided by the “touchstone of reasonableness”.
In Stewart v Metro North Hospital and Health Service [2025] HCA 34, the High Court clarified the legal test for assessing the reasonableness of damages for future care, rejecting a cost-benefit approach in favour of a return to the compensatory principle: that an injured party is entitled to compensation for the sum that, so far as money can do, will put the plaintiff in the same position as they would have been if the tort had not been committed.
Mr Michael Stewart, aged 63 at the time of injury, sustained catastrophic harm due to negligent medical treatment at Redcliffe Hospital in 2016 after presenting with nausea and generalised abdominal pain.
Metro North Hospital and Health Service (“MNHHS”) admitted liability in that its treatment of Mr Stewart caused his injuries, which included bowel perforations, sepsis, cardiac arrest, stroke, and permanent brain damage. Mr Stewart was left with severe physical impairments, including paralysis of his right arm, contractures in his right leg, and aphasia. His life expectancy was assessed at five years at the time of trial.
Mr Stewart lived in a rented home with his brother in Margate, Queensland before the injury. He shared custody of his son with his ex-wife and kept family dogs. Post-injury, he was placed in institutional care at Ozanam Villa Aged Care Facility (“Ozanam”) where he was unable to live with his son or dog. His physical condition deteriorated due to limited therapy and exercise.
Mr Stewart sought damages for future medical expenses for the costs of independent living in a rented private home, supported by medical and nursing care.
Three options for Mr Stewart’s future care for five years (his life expectancy) were considered by Cooper J at trial:
The trial judge accepted that Mr Stewart had clearly communicated his desire to live in his own home rather than at Ozanam, that additional care and therapy would result in improvements in Mr Stewart’s physical and mental health, and that the provision of care and therapy to Mr Stewart in his own home, including the “powerful motivator” of the presence of his son, would increase his willingness to get out of bed and engage in therapy.
Cooper J weighed the health benefits to Mr Stewart under the second and third options against the difference in their cost and concluded that his Honour was not satisfied that the third option would likely result in health benefits for Mr Stewart that are “significantly better than those likely to be achieved” under the second option.
His Honour concluded it was not reasonable to require MNHHS to pay the significant additional costs involved in Mr Stewart moving from Ozanam into his own home. Mr Stewart was awarded damages for institutional care with enhanced therapy (the second option) but not for home-based care.
Mr Stewart appealed the trial judge’s decision on the quantum of damages which Mr Stewart should receive.
The Court of Appeal upheld the trial judge’s reasoning and conclusion. It took a similar cost-benefit approach in determining whether the expenses for future care would be reasonably incurred and considered the difference in physical health benefits between the second and third options would be “practically removed” by an increased level of engagement from Mr Stewart with the additional care and assistance provided by an external care assistant.
The sole ground of appeal in the High Court was Mr Stewart’s assertion that the Court of Appeal erred in its consideration of “reasonableness”.
The High Court unanimously allowed Mr Stewart’s appeal, holding that both the trial judge and the Court of Appeal had erred in law. Any interpretation of Sharman as authority for the proposition that a Court is to balance the health benefits to a plaintiff against the financial costs independently of the plaintiff’s choice is erroneous.
The Court held the proper starting point is that a plaintiff is entitled to compensation in a sum that, so far as money can do, would put them in the same position as they would have been had the defendant not acted negligently. From this starting point, the plaintiff is required to prove damages for their choice of care is a reasonable form of compensation. Once that is established, the onus then shifts to the defendant to prove that part or all of the claimed care is unreasonable.
The Court reasoned that prior to his injury, Mr Stewart lived at home with his brother, where his son and dog would visit regularly. Living at Ozanam did not and would not restore Mr Stewart to his pre-injury position due to restrictions on his son or a dog staying at the facility. In addition, the trial judge had accepted Mr Stewart’s quality of life and mental health would be enhanced by receiving care at home, and the physical health benefits of living at home were not slight or speculative.
The Court concluded Mr Stewart’s choice to live in his own rented home with care was reasonable. MNHHS failed to discharge its onus by establishing Mr Stewart acted unreasonably in refusing the second option, despite it being much cheaper. Unlike the improvement to his physical health that would likely result from home-based care, MNHHS did not establish the extent of any likelihood that the second option would improve Mr Stewart’s physical health when compared to his present arrangements at Ozanam.
The High Court set aside the decisions of the Queensland Supreme Court and Court of Appeal and remitted the matter for reassessment of damages on the basis that Mr Stewart is entitled to claim for the cost of home-based care.
This decision marks a decisive return to the first principles which underpin compensatory damages: restitutio in integrum – restoration of the plaintiff’s original condition as far as money or legal means allow. It clearly rejects the cost-benefit approach of assessing reasonableness of compensation.
Defendants and insurers will need to be mindful of their potentially increased exposure in personal injury matters involving claims for future care.
Strategically, this case highlights the vital importance of obtaining adequate evidence to prove a plaintiff’s preferred care model is objectively unreasonable or that a cheaper alternative was unreasonably refused. Cost comparisons alone will be inadequate.
Practically, defendants and insurers may expect the decision in Stewart to be relied upon to justify increasing claims for home modifications, family-provided care, or private nursing.
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