High Court revisits the 'touchstone of reasonableness'

In 1977, the High Court’s decision in Sharman v Evans (1977) 138 CLR 563 established that a plaintiff’s entitlement to damages for future medical care was to be guided by the ‘touchstone of reasonableness’.

Almost 50 years later, the High Court’s decision in Stewart v Metro North Hospital and Health Service [2025] HCA 34 confirmed the legal test for assessing the reasonableness of damages for future care, rejecting a cost-benefit approach in favour of a return to the fundamental tort law compensatory principle that an injured party is entitled to compensation for the sum that, so far as money can do, will put the plaintiff in the same position as they would have been if the tort had not been committed.

Background

Michael Stewart was aged 63 when he sustained catastrophic injuries due to negligent medical treatment provided at Redcliffe Hospital in 2016 after presenting with nausea and generalised abdominal pain. Metro North Hospital and Health Service (MNHHS) admitted liability for Mr Stewart’s injuries that included bowel perforations, sepsis, cardiac arrest, stroke, and permanent brain damage.

Mr Stewart lived in a rented home with his brother before the injury. He shared custody of his son with his ex-wife and kept family dogs. Post-injury, he was placed in institutional care at Ozanam Villa Aged Care Facility where he was unable to live with his son or dog. His physical condition deteriorated due to limited therapy and exercise.

Mr Stewart sought damages (via his ex-wife as litigation guardian) for future medical expenses for the costs of independent living in a rented private home, supported by medical and nursing care.

Supreme Court rial

Three options for Mr Stewart’s future care for five years (his life expectancy) were considered by his Honour Justice Cooper at trial:

1. The cost of Mr Stewart’s current care at Ozanam ($304,605.46).
2. The cost of care at Ozanam with an external case assistant and the provision of more frequent therapy and exercise ($1,081,895.56).
3. The cost for Mr Stewart to be cared for in his own rented home for the remainder of his life ($4,910,342.52).

The trial judge accepted that Mr Stewart had clearly communicated his desire to live in his own home rather than at Ozanam and that additional care and therapy would result in improvements in Mr Stewart’s physical and mental health and then weighed the health benefits to Mr Stewart under the second and third options against the difference in their cost. Cooper J concluded that the likely health benefits of the third option were not 'significantly better' than the second option and concluded it was not reasonable to require MNHHS to pay the significant additional costs involved in Mr Stewart moving into his own home.

Court of Appeal

Mr Stewart appealed the trial judge’s decision on the quantum of future care damages.

The Court of Appeal upheld the trial judge’s reasoning and conclusion. It took a similar cost-benefit approach in determining whether the expenses for future care would be reasonably incurred and considered the difference in physical health benefits between the second and third options would be 'practically removed' by an increased level of engagement from Mr Stewart with the additional care and assistance provided by an external care assistant.

High Court decision

The High Court found that the lower courts had erred in their interpretation of ‘reasonableness’ by focusing too narrowly on a cost-to-benefit analysis of the Mr Stewart’s ultimate health outcomes when assessing damages. In that regard, the Judges stated:

[insert italics]

The High Court reaffirmed that damages ought to aim to return a plaintiff to the position they would have been in ‘but for’ the defendant’s negligence. The Court articulated a two-stage framework for assessing ‘reasonableness’ of the home-based care sought by Mr Stewart:

• First, the plaintiff must show that their chosen course of action was reasonably required to address the consequences of the injury.
• Second, if that threshold is met, the defendant must prove that the plaintiff acted unreasonably in declining a materially similar, less expensive alternative.

Applying this framework, the Court concluded that Mr Stewart’s preference for home care was reasonable in the circumstances. Additionally, the Court held that MNHHS had failed to discharge its burden of proving that Mr Stewart’s rejection of institutional care was unreasonable. 

Key points

This decision marks a return to the fundamental principle of tort law that underpins compensatory damages: restitutio in integrum – restoration of the plaintiff’s original condition as far as money or legal means allow.

Defendants and their insurers will need to be alive to the potential for significantly increased awards of future care in personal injury claims that have circumstances permitting a reasonable argument for in-home care that will benefit a plaintiff both physically and mentally.

This case highlights the importance of obtaining adequate evidence to understand a plaintiff’s pre-injury lifestyle (upon which any future care argument may be based) and obtaining appropriate expert medical and care evidence that may assist in proving a plaintiff’s preferred care model is objectively unreasonable or that a cheaper alternative was unreasonably refused. The High Court has made it clear that cost comparisons alone will be inadequate.

Note:  You can read an extended analysis of Stewart in the November 2025 edition of our Sparkebeat publication.