Defendants beware: Reasonable care costs redefined in landmark High Court decision

The recent High Court decision of Stewart v Metro North Hospital and Health Service [2025] HCA 34 has redefined how courts approach damages for future care in personal injury claims, marking an end to the longstanding “costs versus benefit” test. In this article we consider how this decision will impact future care assessments and provide practical guidance for parties involved in personal injuries proceedings.

Background

In March and April 2016, Mr Stewart (the appellant) suffered a range of catastrophic injuries due to negligent treatment he received at the respondent’s hospital. He was subsequently transferred to live at an aged care facility where he could receive extensive and specialised care as required, following his injuries. Before his injury, Mr. Stewart lived in his own home with his brother, where his adult son and dog were able to stay. He was 63 years old at the time.

Supreme Court decision

The matter was originally heard in the Queensland Supreme Court. At this time, three future care options were put to the Supreme Court as follows:

1. an allowance for Mr Stewart to receive care for the remainder of his projected life at the aged care facility (assessed at $304,650.46);
2. an allowance as above, supplemented by a sum for additional external care, including for more frequent therapy and exercise (assessed at $1,081,895.56); and
3. an allowance for Mr Stewart to be cared for in his own rented home for the remainder of his projected life, including provision of all required at-home care (assessed at $4,910,342.52).

Whilst Mr Stewart’s aphasia impacted his cognition and ability to express himself, the courts accepted there was substantial evidence that he was not happy living in the aged care facility and that he wished to live in his own home.

Mr Stewart was awarded $2,190,505.48, including $1,081,895.56 for future care in accordance with option 2 above. In its decision, the Supreme Court relied on the oft-cited principle from Sharman v Evans (1977) 138 CLR 563, weighing the benefits of each future care option against the cost when assessing reasonableness. It found the benefits of care at the aged care facility and supplemented by further care was reasonable, however, whilst there were benefits to the appellant living at home, these benefits were outweighed by the significant cost of that option. As such, the Supreme Court declined to opt for option 3.

The matter was subsequently appealed to the High Court, disputing the future care allowance.

High Court decision

The High Court considered the decision in Sharman v Evans (1977) 138 CLR 563 in detail, providing critique and additional context. It pointed out that the majority’s approach in Sharman had sometimes been misapplied by later courts applying a “costs versus benefits” analysis, noting that this approach fails to appropriately consider plaintiffs’ reasonable preferences for future care and the broader compensatory principle – to restore the plaintiff to the position they would otherwise have been in if the tort had not been committed, as far as money can do so. The High Court emphasised that decisions should be approached from the perspective of this broader principle.

The High Court established two potential limits to reasonable costs as follows:

1. the plaintiff must prove the reasonable cost of steps they have taken or will take, which is “reasonably required to repair the consequences of the defendant’s tort”; and
2. following the above, the defendant must establish that the plaintiff failed to avoid or mitigate that cost by adopting some other course which was reasonable for the plaintiff to take.

The High Court noted that the at-home care considered in Sharman came with considerable health risk, however, that is not ordinarily the case in modern times, including in the appellant’s case. The facts and context of Sharman (being a 1977 case) should therefore be considered carefully.

The court also noted reasonableness should be assessed taking account of the plaintiff’s ordinary pre-injury life, their wishes, the mental and social benefits, and not solely the financial cost or immediate physical health effects. The High Court found that the appellant’s desire to return to a home setting (mirroring his life prior to injury) was reasonable as it would restore important elements of his life, and provide real mental and physical health benefits (as supported by medical opinions, including from a psychiatrist and occupational therapist). This included allowing the appellant’s son to stay over and allowing to share care of a dog as he previously could.

Applying the above, the High Court found that it was reasonable to make an allowance of $4,753,241.47 for future at-home care for the appellant.

The High Court decision cements the decision in McNeilly v Imbree (2007) 47 MVR 536 (not in issue in (2008) 236 CLR 510) that there are significant benefits where modifications allow people to live at home rather than in an institution. Conversely, the High Court stated that the high cost of providing at-home care is not usually justifiable in the absence of “particular and special needs”.

Implications

The decision in Stewart v Metro North Hospital and Health Service [2025] HCA 34 is likely to have a significant impact on future personal injuries matters and will likely result in higher damages awards. The decision also highlights the importance of considering the modern context of matters and whether this may impact longstanding or outdated legal decisions.