Stewart v Metro North Hospital and Health Service [2025] HCA 34

The High Court has handed down an important decision on the assessment of future care damages in catastrophic injury claims, with potentially significant implications for insurers and defendants.

Background

Mr Stewart underwent treatment at Redcliffe Hospital (Metro North Hospital and Health Service) for complications associated with bowel surgery. During his admission, there was a failure to appropriately diagnose and manage spinal infection complication, resulting in an epidural abscess causing irreversible spinal cord injury and paraplegia. Liability was admitted. Injuries included severe brain injury and profound functional impairment requiring 24-hour care.

Prior to the injury, Mr Stewart lived independently in his own home.

Following injury, he was placed in institutional care. Evidence accepted at trial was that he experienced a deterioration in physical and psychological condition in that setting, including reduced engagement with therapy and loss of stimulation.

The crux of the dispute concerned whether damages for future care should be assessed on the basis of Institutional care costs, or Higher home-based care costs.

Trial and Court of Appeal

The trial Judge accepted that home care would provide welfare benefits, including improved emotional wellbeing and family connection, but concluded that those benefits did not justify the substantial additional cost compared with institutional care. The Court of Appeal upheld that approach.

The reasoning at first instance treated “reasonableness” as involving a comparative evaluation of:

• Therapeutic or welfare benefits of home care; against
• The significantly lower cost of institutional care.

High Court Decision

The High Court unanimously allowed the appeal and held that the lower courts had applied an incorrect approach to “reasonableness”. At [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 High Court reaffirmed that damages are compensatory and must, so far as money can, place the plaintiff in the position they would have been in but for the tort. Crucially, the Court rejected the proposition that reasonableness is confined to a balancing exercise between health benefits and financial costs. At [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, 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.  

Instead, the High Court held that the proper inquiry is whether the proposed care arrangement is a reasonable means of responding to the consequences of the injury, having regard to the plaintiff’s pre-injury circumstances and the compensatory objective.

The High Court emphasised that matters such as autonomy, dignity and family relationships, social interaction and ordinary domestic life are not merely “amenity” in a narrow sense, but part of what may be required to restore a plaintiff to their pre-injury position.

Revisiting Sharman v Evans

A central feature of the judgment is the clarification of Sharman v Evans (1977) 138 CLR 563.

The High Court explained that Sharman has often been misunderstood as establishing a general restriction on recovery for home-based care unless “special circumstances” exist.

The High Court rejected that interpretation and clarified that Sharman turned on its facts, including the absence of evidence that home care would improve the plaintiff’s condition and the risks associated with the proposed arrangement. It was not authority for a rigid rule limiting recovering for home care based on proportionality between cost and benefit.

The High Court further explained that references in Sharman to “amenity” were used in a narrow sense, distinguishing mere preference from matters affecting physical or mental wellbeing.

Importantly, the Court stated that it is incorrect to treat reasonableness as requiring a plaintiff to justify a more expensive care option only in exceptional cases. The focus remains whether the claimed response is reasonable to restore the plaintiff to their pre-injury position.

Why this matters for insurers and defendants

Courts must now consider whether home care is a reasonable way to restore the person’s pre‑injury life, with proper regard to their prior lifestyle, level of independence, family circumstances and psychosocial factors.

There is now more emphasis on the functional, psychological and social effects of different care models, with less attention to the long‑term cost projections. This is likely to result in higher present value assessments for lifetime care. Courts may also allow broader claims for future care, especially in serious injury cases, by accepting a wider range of care as reasonably necessary to compensate a plaintiff.

Contributors

Ren Li, Senior Associate

Anna Sweeney, Lawyer