Chen v Kmart Australia Ltd – Assessment of Damages for Personal Injury of a Young Child

May 18, 2023 | Publication

The NSW Court of Appeal has dismissed an appeal brought by an injured child after the NSW District Court awarded her following an injury to her right eyelid, $45,825 for non-economic loss (pain and suffering) and $5,000 for future economic loss.

In January 2020, a six-year-old girl, Cecilia Si Chen, was injured while shopping with her family at a Kmart store in Australia. She collided with a clothing rack upon which Kmart’s employees displayed children’s clothing, resulting in a laceration of her right eyelid. The girl underwent two remedial ophthalmic surgeries. Kmart accepted that the injury was caused by the negligence of its employees. Cecilia commenced proceedings against Kmart in September 2021 through her tutor. She claimed compensation under a number of particularised heads of damages. Those included damages for non-economic loss and damages for future economic loss in the form of loss of earning capacity. Cecilia suffered mild facial scarring and a slight droop in her right eye as a result of the injury. Expert psychiatric evidence adduced at trial varied on whether Cecilia had developed an adjustment disorder or somatic symptom disorder consequent upon the injury.

The primary judge awarded $59,929.36 to Cecilia, which included a sum of $45,825 for non-economic loss and a buffer sum of $5,000 for future economic loss in the form of loss of earning capacity. Cecilia argued that each of those components was insufficient. Kmart’s position was that no sum should have been awarded for loss of earning capacity. The evidence did not establish, on the balance of probabilities, that Cecilia would suffer a diminution in earning capacity attributable to the physical and psychological sequelae of her injury.

On Cecilia’s application for leave to appeal, and Kmart’s application for leave to cross-appeal, the Court refused leave to cross-appeal, granted leave to appeal, but dismissed the appeal with costs. The issues before the court were:

(i) Whether the primary judge had failed to have regard to certain aspects of the physical and emotional trauma occasioned by the injury, including the shock and pain of the injury itself and the continuing discomfort in which Cecilia was left while receiving remedial surgery, such that the award of damages for non-economic loss was too low.

(ii) Whether the primary judge had underestimated the potential impact of possible psychological sequelae to affect Cecilia’s future earning capacity, including by way of social inhibition and self-consciousness, such that the award of damages for future economic loss in the form of loss of earning capacity was too low.

(iii) Whether the primary judge had awarded a sum for loss of earning capacity in the absence of proof on the balance of probabilities that Cecilia had suffered a loss of earning capacity, and that loss of earning capacity would be productive of financial loss.

The Court held that the primary judge had not made any error. The primary judge had factored in the physical and emotional trauma when awarding damages for non-economic loss. As for the damages for future economic loss in the form of loss of earning capacity, the primary judge’s assessment of the possibilities that might affect Cecilia’s earning capacity, including development of social inhibition and rejection from others in the workplace, was based in part on the expert psychiatric evidence adduced by the applicant. While the buffer sum awarded was low, it was not so low as to fall outside the reasonable range open to the primary judge. The Court also held that the primary judge did not award a sum for loss of earning capacity in the absence of proof on the balance of probabilities that Cecilia had suffered a loss of earning capacity.

The case illustrates well the reluctance of appellate courts to intervene with assessment of damages made by judges at first instance.

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