In Stewart (by his Litigation Guardian Schwarzman) v Metro North Hospital and Health Service[1] – in a judgment handed down 3 September 2025 – the High Court of Australia concluded that the catastrophically injured plaintiff – who before injury had a history of living in a rented home with his family and domestic animals, but who by trial was institutionalised and miserable, and with deteriorating health – was entitled to an assessment of damages on the footing of home, not institutional care.
This outcome departed from the trial court and intermediate appellate decisions which – in purported application of the previous decision of the High Court in Sharman v Evans[2] – engaged in a balancing exercise between home and institutional care, concluding that the (more expensive) home care was an unreasonable option to adopt, despite that being the plaintiff’s strong preference.
The assessed cost of the plaintiff’s future institutional care, but with more frequent therapy, was $1,081,895.56, while the alterative cost of home care was $4,910,342.52 (each after discount, with the plaintiff enjoying a life expectancy of 5 years from trial).
The High Court decision – being unanimous on the part of the members of the court, Gageler CJ, Gordon, Edelman, Jagot and Beech-Jones JJ – predicated the following essential reasoning:
[44] The proper approach to the assessment of the reasonableness of a person’s choice to be cared for at home or in a home setting, rather than in an institution or an institutional setting, starts from the premise that the plaintiff is entitled to compensation in a sum which, so far as money can do, will put them in the same position as they would have been in had the defendant not acted negligently. In a case such as this, that proper approach requires an assessment of whether the choice to incur the expense of care at home is a reasonable response to repair the consequences of the tort. In assessing the reasonableness of that choice, all the circumstances should be considered and compared with those circumstances that existed prior to the tort. The assessment of reasonableness is not confined to balancing only the health benefits against the cost. The assessment of reasonableness will be significantly affected by what is ordinary in those circumstances. The same is true for the question of whether it was unreasonable for a person not to take alternative action which could have mitigated the loss.[3]
[45] Where a person lived in their own home or in a home setting prior to the tort, and the restoration of that position, or a similar position, will be beneficial or at least not worsen their physical or mental health, it would be unusual to find that the choice by that person to receive treatment at home or in a home setting is unreasonable. Of course, there will be cases where living at home or in a home setting might not be chosen: “[t]o one person being permanently in the best of institutions might be as unpleasant as being permanently in a prison, while to another the same institution might be the most desirable of safe havens”.[4] But, as Lord Burrows has observed, “private treatment may offer advantages which are more than merely medical in nature (eg speed and comfort) and it is hard to see how it can ever be unreasonable for a claimant to opt for it”.[5]
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[48] For the reasons explained above, the approach to reasonableness taken by the trial judge and the Court of Appeal, which reflected the approach adopted by some of the authorities decided after Sharman v Evans,[6] was in error. The inquiry should have started from the premise that Mr Stewart was entitled to compensation in a sum which, as far as money can do, would put him in the same position as he would have been in had MNHHS not acted negligently. The inquiry should not have been reduced to a simple balancing of the costs to MNHHS and the health benefits to Mr Stewart of care at (a rented) home. In this case, the question was whether his choice to be cared for at home was a reasonable response to repair the consequences of the tort by MNHHS.
[49] In addressing that question, this assessment of Mr Stewart’s choice of home care is that prior to the negligence by MNHHS, Mr Stewart lived in a home with his brother where Jesse and his dog would visit regularly. The option of living with care at Ozanam did not restore, and would not have restored, that position because of the restrictions on Jesse or a dog staying at Ozanam. It can be accepted that, as MNHHS submitted in this Court, care in a rented home without Mr Stewart’s brother would not precisely restore Mr Stewart’s prior position. But the fact that a precise level of correspondence cannot be achieved is beside the point. For Mr Stewart to be cared for in a rented home is a degree of restoration that is far closer to his prior position than his circumstances at the time of trial of living at Ozanam.
[50] The reasonableness of Mr Stewart’s choice of home care is reinforced by the conclusions of the trial judge about the effect of living at home on Mr Stewart’s physical and mental health. Mr Stewart’s quality of life and mental health would be enhanced by receiving care at home rather than at Ozanam and the real physical health benefits were, as the trial judge found,[7] not slight or speculative. Further, whatever might have been the position in 1977 when Sharman v Evans was decided, a choice by a severely injured plaintiff to receive care at home is, today, one that is not unusual, especially given the improvement in levels of care that can be provided at home or in a home setting.
[51] The effect of the conclusion that Mr Stewart acted reasonably in seeking to restore his position to that prior to the tort by his choice to live in a rented home of his own with care that was not suggested to be other than at reasonable rates is that the onus then fell upon MNHHS to establish that part or all of that claimed cost of home care could be avoided by an alternative that was unreasonably refused. MNHHS attempted to discharge that onus by suggesting the second option, which was much cheaper (staying at Ozanam with enhanced care from an external care assistant and the provision of more frequent therapy and exercise).
[52] MNHHS failed to discharge its onus of establishing that Mr Stewart acted unreasonably in refusing the second option despite that option being much cheaper. Although it was possible that Mr Stewart might be equally motivated under the second care option at Ozanam to achieve physical health improvements that were not significantly worse than those that could be achieved at home, MNHHS did not establish any likelihood that the external care assistant would develop the necessary rapport required to motivate Mr Stewart. In other words, unlike the improvement in his physical health that would likely result from Mr Stewart’s care at home, MNHHS did not establish the extent of any likelihood that the second option would improve Mr Stewart’s physical health when compared with his then present arrangements at Ozanam. The better quality of life and the mental health improvements that would also result from Mr Stewart living in his own (rented) home, and the ordinary nature of such arrangements for a person in Mr Stewart’s position, reinforce the lack of unreasonableness in Mr Stewart declining the second option despite the substantially lower cost of that option.
(footnotes incorporated herein; emphasis added)
In consequence the appeal was allowed. The court remitted the assessment of damages for final assessment in accordance with the reasons.
The gravamen of the decision is that the plaintiff’s persuasive onus of proof is discharged by proving the election for home care and the reasonable cost thereof, with the onus then shifting to the defendant tortfeasor to prove a failure by the plaintiff to mitigate his damage, namely that part or all of the cost of home care could be avoided but for an unreasonable decision by the plaintiff to refuse a proffered alternative option of institutional or like care.
In this regard, while Stewart is a personal injury damage case, such approach to proof of loss by tortiously caused damage arguably transcends the personal injury space, and indeed the law of negligence.
In Knott Investments Pty Ltd v Fulcher,[8] the defendants were found liable for contravention of quality warranties as to goods implied by s 71 of the Trade Practices Act 1974 (Cth) and s 17 of the Sale of Goods Act 1896 (Qld), resulting in a fire breaking out and destroying the plaintiffs’ packing shed and packing plant on land owned by it, and which they used historically to conduct a profitable tomato farming business. Due to uncertainty in rebuilding and re-establishing the business, the plaintiffs sold the land and the business, but claimed loss of profits extending beyond such sale.
It was found there was no proven failure to mitigate due to the land and business sale, in lieu of re-establishing the business. The Court of Appeal – by Muir JA – wrote (the plaintiffs being “the Fulchers” and also “the respondents”, and the defendants being “the appellants”):
[39] Although I acknowledge that the appellants’ argument on causation and mitigation are substantial, I am unable to accept them. As a consequence of the fire, the company not only lost its packing shed and plant, its tomato farming business was effectively destroyed. There is no suggestion that it could have conducted a profitable business pending rebuilding by continuing to grow tomatoes and having someone else pack them.
[40] It was apparent to the Fulchers that it would take approximately 18 months for the farm to be operational and another six months before any monetary returns were likely. It was also apparent to the Fulchers that, until the business could be re-established, the buyers on whom the company had previously relied would meet their requirements from other tomato growers. There could be no guarantee that the lost markets could be recaptured or that generally favourable market conditions would exist when the company returned to production. The business was volatile and Mr Fulcher had seen “many growers go broke” over the period of 20 years or so that he had been in the industry. A reason for financial failure was “borrowing too much money”. Consequently, any prudent decision to recommence the business required recognition that it was a realistic possibility that the business might not be able to regain its former volume of production or profitability for an unascertainable period.
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[45] In considering the reasonableness of the respondents’ conduct, principles applicable to mitigation of damages may be thought to have relevance.[9] In that regard it has been held that a plaintiff is not under “any obligation to do anything other than in the ordinary course of business [to mitigate his loss] … [and that] the plaintiff is not required to sacrifice or risk any of his property or rights”.[10] In Metal Fabrications (Vic) Pty Ltd v Kelcey,[11] Murphy J, Brooking and Nicholson JJ agreeing, relevantly observed:
The respondents were under a duty only to act reasonably to mitigate their loss. This did not require them to chance their arm further, to risk any capital they might borrow too far or to take steps which would cause their financial ruin, if they failed: see Payzu v Saunders [1919] 2 KB 581; Lesters Leather & Skin Co v Home and Overseas BrokersClippens Oil Co Ltd v Edinburgh & District Water Trustees [1907] AC 291, and Banco de Portugal v Waterlow & Sons Ltd [1932] AC 452, at p 506; [1932] All ER Rep. 181, at p 204.
As Lord Macmillan remarked in the lastmentioned case, the measures which the sufferer from a breach of contract may be driven to adopt “ought not to be weighed in nice scales”. So long as the respondents can be seen to have acted reasonably and justifiably in the circumstances, they should not be debarred from recovering the actual loss flowing to them simply because it is asserted that, by taking some other course, the loss might well have been lower.
[46] The primary judge took the matters discussed above into consideration as well as the difficulties in obtaining the necessary reasonably competent work force. No error has been shown in the reasoning which led to the primary judge’s conclusion that a failure to mitigate loss was not established.
(footnotes incorporated herein, emphasis added)
Thus, in that case, the plaintiffs – as innocent parties to the conduct of the defendants – were entitled to be put back into the position they would have been in but for the breach. The defendants bore the persuasive onus of proving that the plaintiffs failed to mitigate their loss, but failed to discharge such onus. That is, the plaintiffs were not obliged to take on a “second best” position despite the fact that would have reduced the damages payable by the defendants.
Suffice it to say, however, that each case must turn on its own facts. The trial findings are critical. The critical findings of fact in Stewart, it is submitted, is that prior to injury the plaintiff was living happily in his own home with his family, and but for injury would have continued to so do, and that he was miserable and his health was deteriorating when in institutional care at the time of trial.
A link to the decision in Stewart is here.
[1] [2025] HCA 34.
[2] (1977) 138 CLR 563.
[3] British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673 at 689. See also Summers, Mitigation in the Law of Damages (2025) at 31.
[4] Wieben v Wain (1990) Aust Torts Reports ¶81–051 at 68,189
[5] Burrows, Remedies for Torts, Breach of Contract, and Equitable Wrongs, 4th ed (2019) at 240.
[6] See above at [43].
[7] Stewart v Metro North Hospital and Health Service [2024] QSC 41 at [140].
[8] [2014] 1 QdR 21.
[9] Henville v Walker (2001) 206 CLR 459 per McHugh J at [130].
[10] Sacher Investments Pty Ltd v Forma Stereo Consultants Pty Ltd [1976] 1 NSWLR 5 at 9.
[11] [1986] VR 507 at 513; see also Hoad v Scone Motors Pty Ltd [1977] 1 NSWLR 88 at 100 per Samuels JA.
