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ZAB v ZWM – Tasmanian Supreme Court provides detailed analysis on the assessment of damages in historical abuse cases

ZAB v ZWM – Tasmanian Supreme Court provides detailed analysis on the assessment of damages in historical abuse cases

Published on September 21, 2022 by Lucinda GunningLucinda Gunning

On 22 December 2021 his Honour Chief Justice Blow handed down his decision in the matter of ZAB v ZWM [2021] TASSC 64 [1], awarding the Plaintiff over $5 million in damages. At the time of writing, this is one of the highest awards ever granted by the Courts in Australia for historical sexual abuse.

The Plaintiff (ZAB) was sexually abused by his father (ZJM) between the ages of 10 and 15, approximately 30 years earlier. The father was in prison for the sexual abuse offences at the time the matter was heard, and did not appear at hearing to defend the matter.

As there was no Defence advanced by the father, the Court accepted the Plaintiff’s evidence that he had developed complex PTSD and major depression as a result of the subject sexual abuse, and that he had suffered loss and damage as a result of these injuries. The judgement therefore was primarily concerned with the assessment of damages.

Assessment of Economic Loss

The Court heard that the Plaintiff had completed a law degree and in 1999 had commenced employment as an articled clerk with a large commercial law firm in Melbourne when he decided to confront his father about the abuse he had suffered. In response to the Plaintiff raising the allegations of abuse with his father, he was ostracised by his family, subjected to frequent and harassing calls at his workplace by his father (in an office that he shared with his supervisor), and on one occasion, was confronted by his father outside of his workplace. As a result of this behaviour, the Plaintiff began to suffer mental health symptoms, and soon found he had to reduce his working hours to 3 days per week to cope with his mental health condition. Across the following 20 years the Plaintiff suffered fluctuating symptoms associated with his mental health, resulting in his employment fluctuating between 3 days per week in high level legal roles to periods of unemployment.

When assessing what damages to award the Plaintiff for his injuries, the Court awarded a significant sum for past and future economic loss. The Plaintiff had submitted evidence from a legal recruiter of significant experience about the Plaintiff’s likely work trajectory in the corporate legal profession had he not suffered an injury, as well as evidence from a forensic accountant setting out the Plaintiff’s likely earnings based on a number of different scenarios which may have applied to the Plaintiff in terms of his career progression.

The Court elected to adopt the most modest of the scenarios calculated by the forensic accountant, which was that, had it not been for his injury, the Plaintiff would have been earning at least $300,000 gross per annum as of 2021. The Court considered that the Plaintiff’s actual earnings from 1999 to date were the extent of his residual earning capacity post injury during that period. This made the calculation of the Plaintiff’s past loss of earnings a fairly straightforward exercise of a deduction of his actual earnings from the assessment provided on the most modest calculation by the forensic account, to total $1.563 million. Lost superannuation was added to this amount at $257,000.

The Court had a discretion as to whether or not to apply a discount for contingencies (vicissitudes) to the assessment of past economic loss, however elected not to make any adjustment. The Court considered there were unlikely to have been adverse contingencies such as illness, injury or unemployment, but accepted the Plaintiff may have left the law for a period of time to pursue travel overseas or creative endeavours. However, the Court weighed these negative contingencies up with the potential positive contingencies, and gave significant weight to the forensic accountant report. This had suggested that, had the plaintiff followed a more lucrative career path, he would have been earning significantly more. Overall, the Court considered that a zero adjustment for past contingencies would be appropriate in this case.

The Court also had a discretion to award prejudgement interest on past economic loss, at a maximum amount of the RBA cash rate plus 4% (this equated to a maximum of 4.1% at the time of Judgement). The Court felt it was appropriate that prejudgment interest be awarded for the purpose of restoring the Plaintiff, to the extent possible, to the position that he would have been in if his earning capacity had not been impaired. Prejudgement interest was awarded at the discretion of the Court at the simple rate of 4%, equating to a further sum of $577,000.

Future economic loss was also awarded to the Plaintiff based on his estimated earning capacity of approximately $300,000 gross per year (the most modest scenario), less his residual earning capacity, which the Court determined was likely to be 25% of his estimated earning capacity. Noting that the Civil Liability Act 2002 (Tas) does not apply to the assessment of historical abuse claims, a discount rate of 3% was applied, rather than the standard 5% required under the Civil Liability Act. A further $2.022 million was awarded for future loss of income, with an additional $378,000 for lost superannuation.

Once again, the Court considered that a zero adjustment for contingencies was appropriate, noting the adoption of the most modest earning scenario had incorporated a number of contingencies essentially by default.

Medical expenses

The claim for past medical expenses was straightforward, with interest awarded by the Court on a discretionary basis at 4%.

Future medical expenses as claimed by the Plaintiff included a claim for psychological treatment at a cost of $350 per session, at least 9 times per year, for the remainder of his life expectancy. The Court calculated this sum to be just shy of $70,000, however overall considered this claim to be exceptionally modest, and elected to award a buffer of $150,000.

Non Economic Loss and General Damages

The Court acknowledged that awards for damages for non-economic loss were for many years significantly lower in Tasmania than in most other mainland jurisdictions, but considered there was no reason for that difference to continue. Unlike other jurisdictions, general damages are uncapped in Tasmania. As a result, a combined sum of $300,000 for general damages and aggravated damages was awarded by the Court, with pre-judgement interest being applied at a discretionary rate of 30% of the component for past general damages, for a further $67,500. Aggravated damages were considered appropriate having regard to the conduct of the father which not only included the harassing behaviour towards ZAB at his workplace from 1999, but also included the father publishing numerous pieces disparaging ZAB (and subsequently identifying him as a sexual abuse survivor) on social media after the father had plead guilty to the subject offences. In addition, the Court considered that the behaviour of the father and his instructed solicitors during the progress of the Plaintiff’s civil claim, which included instructing a number of medico-legal psychologists to ask invasive and distressing questions of the Plaintiff which were likely to re-traumatise him, warranted an award of aggravated damages.

Lessons for practitioners

The assessment of damages in this case provides a helpful roadmap for practitioners in this area, as well as highlighting the significant discretion the Court holds in terms of its ability to apply awards for prejudgement interest, determine appropriate interest rates, and award aggravated damages in claims of this nature. The above case illustrates the significant impact an award for past interest can have on the total damages awarded in a claim for historical abuse, noting that over $600,000 of the damages awarded in this case were for interest alone. Practitioners should be aware of the impact that a Court exercising its discretion may have on final damages amounts and approach any negotiations with this in mind.  Plaintiffs should also note that a well formulated economic loss claim backed up by evidence based factual scenarios can dramatically increase the overall value of a historical claim. Finally, this case has shown that Tasmanian Courts are making strides to match the mainland jurisdictions in awards of general damages, and the Tasmanian tradition of low general damages awards may now be at its end.

[1] [2021] TASSC 64

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