Tian Zhen Zheng v Deju Cai

• Jurisdiction: Australia Federal only
• Judge: French CJ,Gummow,Crennan,Kiefel,Bell JJ.
• Judgment Date: 09 December 2009
• Neutral Citation: [2009] HCA 52,2009-1209 HCA B
• Court: High Court
• Docket Number: S67/2009
• Date: 09 December 2009

Tian Zhen Zheng

Applicant

and

Deju Cai

Respondent

[2009] HCA 52

French CJ, Gummow, Crennan, Kiefel and Bell JJ.

S67/2009

HIGH COURT OF AUSTRALIA

Zheng v Cai

Tort — Negligence — Damages — Motor vehicle accident — Personal injury — Assessment — Economic loss — Regular payments made by church to applicant following motor vehicle accident — Whether benevolent payments should be taken into account when calculating damages — Whether intention of giver of benevolent payments determinative — Where collateral benefit exists for giving benevolent payments — Relevance of public policy in disregarding benevolent payments in assessment of damages.

Appeal — Issue not raised at trial — Motor vehicle accident — Personal injury–Economic loss — Issue at trial whether plaintiff an employee — Issue on appeal concerned real intent behind benevolent payments — Where applicant would have objected to admissibility of evidence or called further witnesses if issue raised at trial — Whether party bound by presentation of case at trial — Prejudice.

Words and phrases — ‘assessment of damages’, ‘benevolent payment’, ‘gift’, ‘intention’, ‘public policy’, ‘volunteer work’.

Representation

S Norton SC with M Fraser for the applicant (instructed by Brydens Law Office)

S G Campbell SC with S E McCarthy for the respondent (instructed by McLachlan Chilton Solicitors)

1. Special leave to appeal granted.

2. Appeal treated as instituted and heard instanter and allowed with costs.

3. Set aside orders 1, 2, 3 and 4 of the orders of the Court of Appeal of the Supreme Court of New South Wales made on 25 February 2009 and in place thereof order that:

(a) the judgment at trial in favour of the appellant be set aside and in place thereof judgment be entered in favour of the appellant in the sum agreed pursuant to order 4 of these orders and with costs in her favour calculated accordingly;

(b) the respondent pay the costs of the appellant of the appeal in the Court of Appeal; and

(c) otherwise the appeal to the Court of Appeal be dismissed.

4. Within 28 days of the date of these orders the parties file agreed proposed orders implementing order 3(a) of these orders.

1 French CJ, Gummow, Crennan, Kiefel and Bell JJ. On 4 September 2009, Gummow and Bell JJ referred for hearing by an enlarged Bench two grounds upon which special leave is sought to appeal from the decision of the New South Wales Court of Appeal (Giles and Basten JJA and Hoeben J), and dismissed the balance of the special leave application.

2 At trial in the District Court, Judge Garling entered a verdict for the applicant for $300,681 in damages for the injuries she suffered on 11 May 2000 in an accident at Chatswood between a taxi and the car driven by the respondent and in which she was a passenger. She suffered significant injuries to her back and neck and experienced chronic depression. The respondent had admitted breach of his duty of care. The Court of Appeal set aside that verdict and entered judgment for the applicant in the sum of $17,447.91. For reasons not presently material, the applicant accepts that the verdict should have been reduced to $144,886 plus interest.

3 The difference between the parties which remains as to the recovery of $144,886 rather than $17,447.91, is encapsulated in the first of the two grounds argued before the enlarged Bench of this Court. These grounds are that the Court of Appeal erred: (a) in reducing the damages by taking into account certain payments of a benevolent nature made to the applicant; and (b) by making for itself findings of fact in response to a new argument raised by the respondent.

4 For the reasons which follow, special leave should be granted and the appeal allowed with costs.

The facts

5 The applicant was born in China in 1956. She arrived in Australia in 1990 and has limited proficiency in the English language. Her evidence at the trial was given through an interpreter. The applicant's accountancy qualifications were not recognised in Australia and she worked in Sydney as a sewing machine operator for a cushion manufacturer. She is a member of the Christian Assembly of Sydney (‘the Assembly’), which has a church at Roseville (‘the Church’). The Assembly was incorporated on 1 November 2001 as a not-for-profit association and is accepted by the Australian Taxation Office as a charitable institution. The Church has a congregation of about 200. There are no employees and all offices and functions are performed by volunteers.

6 Some time before the accident the applicant had applied to attend a bible college in Singapore to obtain the degree of Bachelor of Theology. She left Sydney and attended the college between July 2001 and June 2005 and, after graduating, returned to Sydney.

7 In his reasons for judgment, the primary judge remarked that what seemed a straight forward assessment of damages became complicated when, in a lengthy cross-examination, the respondent's counsel put to the applicant that she was not telling the truth and challenged her credibility. Counsel for the respondent had told his Honour that one of the precious few issues was whether the applicant was an employee of the Assembly and that her reliability and honesty was ‘a central theme in the case’.

8 However, the primary judge found that the applicant was a satisfactory and acceptable witness. His Honour found that the applicant cannot do work which requires a lot of sitting or standing or heavy lifting and cannot work as a seamstress. Her limited English is a handicap to employment in a clerical capacity.

9 Following her return to Sydney in June 2005, the applicant performed voluntary work for the Church for about 20 hours per week. She worked on most days but without set times. The volunteer work, which was continuing at the time of the trial, included answering the telephone, speaking to people interested in the Church and, at times, the applicant did some preaching. Her efforts were limited by her disabilities.

10 Between 26 June 2005 and 24 April 2006 the applicant received fortnightly payments into her bank account at an average of $580 per week. The payments were continuing at a slightly increased rate at the date of trial in August 2007. The primary judge found that the payments were made by the Assembly from donations to the Assembly, to assist the applicant with her rent and living expenses. His Honour held that the applicant was not an employee and, in so doing, rejected the case put by the respondent that moneys were received on account of the applicant's employment.

The decision of the Court of Appeal

11 In his grounds of appeal to the Court of Appeal, the respondent submitted that the primary judge erred in failing to characterise ‘the exertions of the [applicant] within [the Assembly] from July 2005 to the date of trial as employment’ and the receipts as income gained through her personal exertion.

12 However, that was not the basis upon which the Court of Appeal allowed the appeal. The Court of Appeal accepted the respondent's submission that the ‘real intent behind the payments was to enable the [applicant] to perform volunteer work more effectively for the Church’. The applicant submits to this Court that in so concluding the Court of Appeal allowed the respondent to succeed upon a new case.

13 The Court of Appeal referred to a letter signed by the Public Officer and Treasurer of the Assembly, under its common seal, dated 1 May 2006, in response to a subpoena to produce documents at the trial. The text of the subpoena is not in evidence but it appears to have been seeking documents to support the respondent's case that the applicant was an employee of the Assembly. The letter included the statement that the Assembly had ‘provided financial support to [the applicant] for her daily living and accommodation expenses to allow her to function more effectively as a volunteer worker’. (emphasis added)

14 The Court of Appeal set out a passage from the reasons of Windeyer J in The National Insurance Co of New Zealand Ltd v Espagne1:

‘In assessing damages for personal injuries, benefits that a plaintiff has received or is to receive from any source other than the defendant are not to be regarded as mitigating his loss, if: (a) they were received or are to be received by him as a result of a contract he had made before the loss occurred and by the express or implied terms of that contract they were to be provided notwithstanding any rights of action he might have; or (b) they were given or promised to him by way of bounty, to the intent that he should enjoy them in addition to and not in diminution of any claim for damages. The first description covers accident insurances and also many forms of pensions and similar benefits provided by employers: in those cases it is immaterial that, by subrogation or otherwise, the contract may require a refund of moneys paid, or an adjustment of future benefits, to be made after the recovery of damages. The second description covers a variety of public charitable aid and some forms of relief given by the State as well as the produce of private benevolence. In both cases the decisive consideration is, not whether the benefit was received in consequence of, or as a result of the injury, but what was its character: and that is determined, in the one case by what under his contract the plaintiff had

paid for, and in the other by the intent of the person conferring the benefit. The test is by purpose rather than by cause.’ (emphasis added)

15 The Court of Appeal referred to the words from the letter of 1 May 2006, emphasised above, as indicative of ‘the real intent’ of enabling the applicant to perform more effectively her volunteer work, thereby taking the payments outside the second category identified in Espagne and rendering them more analogous to payments for...