Chen by her tutor Huang v Kmart Australia Ltd

Chen by her tutor Huang v Kmart Australia Ltd [2023] NSWCA 96

This case was heard in the NSW Court of Appeal on 14 April 2023 before White JA, Griffiths AJA, and Weinstein JA. 

Facts

The matter concerned Miss Cecilia Si Chen. 

On 8 January 2020, the then 6-year-old, Cecilia, was shopping with a family member at Kmart. 

During her visit, she collided with a clothing rack and tore her right eyelid to the extent that her eyelid was almost torn off. Cecelia underwent multiple surgeries and this laceration caused mild scarring on her face and a slight droop in the affected eye. It was also submitted, on the basis of supportive medico-legal evidence, that Cecelia had developed an adjustment disorder, or a somatic symptoms disorder, due to her injuries (diagnoses varying according to the expert).  

The Initial Decision 

As Cecilia was a minor, she required a tutor (an appointed representative, usually a responsible parent or guardian) to commence proceedings for her in September 2021. 

Cecilia claimed compensation for non-economic loss (to compensate for the trauma arising from physical and psychiatric injuries, as well as the multiple surgeries she was required to undergo), and for future economic loss (as her injuries and disabilities would allegedly result in a loss of future earning capacity). 

Kmart admitted that Cecilia’s injuries had been caused by its negligence, noting it was liable for the acts and omissions of its employees. 

When the matter was first heard, the trial judge, Montgomery DCJ, awarded $59,929.36 to Cecilia, which included the following:

Non-Economic Loss: $45,825.00

Past Out-of-Pocket Expenses: $929.36

Future Medical Treatment: $8,000.00

Future Economic Loss: $5,000.00

The Appeal

Cecilia appealed this decision, arguing that the amounts awarded for non-economic loss and future economic loss were not enough. 

With respect to non-economic loss, it is calculated by determining injury and impairment as a percentage of a “most extreme case”. Each percentage corresponds to a dollar amount. 

Montgomery DCJ assessed Cecilia at 25% of a most extreme case; however, Cecilia’s representatives considered that her injury should have been assessed between 28 – 30% instead. 

Kmart also appealed this decision (known as a “cross-appeal”) but argued that no compensation should have been awarded for future economic loss, as it was not proved to the sufficient standard (i.e. on the balance of probabilities) that Cecilia would actually suffer any reduced earning capacity in the future as the result of her subject injuries. 

The issues for consideration in the Court of Appeal (per White JA, Griffiths AJA, and Weinstein J) were, as follows:

1. Did Montgomery DCJ fail to consider the total impact of Cecilia’s physical and emotional trauma caused by her injury to the extent that he awarded too little for non-economic loss?
2. Did Montgomery DCJ undervalue the possible impact of Cecilia’s psychological sequelae to affect her future earning capacity to the extent that he was awarded too little for future economic loss?
3. Was there sufficient proof to establish that Cecilia would suffer a reduced future earning capacity to the required standard of probabilities and therefore, should she have received compensation for future economic loss?

Issue 1: the Court considered that if Cecilia wished to dispute the amount awarded to her for damages for non-economic loss, she had to show that there was judicial error in considering all the evidence. As Montgomery DCJ had considered all arguments made by Cecilia’s representatives, there was no demonstrable error. In fact, the Court thought that assessing non-economic loss at 25% of a most extreme case was actually generous to Cecilia. Therefore, the amount awarded for non-economic loss remained the same. 

Issues 2 & 3: as to whether there was sufficient proof to establish Cecilia would suffer any reduced earning capacity in the future, the Court considered that her scarring and the droop to her right eye would make it more difficult for her to attain and/or maintain employment as a model or actress, and to obtain jobs in other public-facing positions such as receptionist or shop assistant. 

They also considered that her loss of self-confidence and avoidance of personal contact (the psychiatric sequelae) could affect her future prospects of employment. Therefore, there was sufficient evidence to establish this. 

The Court acknowledged that determining the correct amount to award a very young child for future economic loss “is an exercise in intuition, for which no reasonable explanation generally can be given as to why one figure, rather than another, has been selected as a fair reflection of the loss suffered”. 

It is very difficult to predict the future, particularly for a young child, for whom psychological symptoms may largely remain dormant until adolescence – and the consequences of these symptoms are therefore unknown. The Court considered that, while the amount awarded for future economic loss was low, it was still within a reasonable range that Montgomery DCJ could have selected. 

Accordingly, the following orders were made:

1. To refuse the Kmart’s application for leave to cross-appeal with costs;
2. To grant Cecilia leave to appeal; and
3. To dismiss the appeal with costs.