Compensation based on a "Live at Home Model" - is it reasonable? High Court says YES
Whether you are formulating a potential claim or reserving (or have reserved) a claim for a catastrophically injured claimant, the recent High Court Decision in Michael Stewart by his litigation guardian Carol Schwarzman v Metro North Hospital & Health Service [1] should cause you to review your approach.
Background
“The appellant, Mr Stewart, was catastrophically injured as a result of the negligence of the respondent (“MNHHS”). Prior to his injury he lived at his own home with his brother. His son and dogs would often stay at home with him. At the time of trial, he was being cared for in an institution without his son and dog. He was miserable at the institution and his physical health was deteriorating, in part due to lack of engagement with therapy. He sought compensation for his losses, including the cost of nursing and medical care in a (rented) home of his own where his son and dog could stay.”[2]
This action was originally the subject of a Trial before a single Judge of the Supreme Court of Queensland.
The Trial Judge considered three options for Mr Stewart’s care (based on a five-year life expectancy). These were:-
- Nursing home care, equating to $304,650.46;
- Nursing home care, with the provision of some additional extended external care, equating to $1,081,895.56; or
- Care in his own home, equating to $4,910,342.52.
His Honour found that the second option would “be likely to provide health benefits similar to those which he would receive if he was to be cared for in his own home”.[3]
The Court of Appeal upheld the Trial Judge’s Decision. Special leave was given by the High Court on the discreet issue of “reasonableness” in the proof and assessment of loss.
The Compensatory Principle
In a unanimous Judgment, the High Court stated:-
“The compensatory principle in tort entitles an injured party to compensation in a sum which, so far as money can do, will put that party in the same position as they would have been in if the tort had not been committed. In Sharman v Evans; Gibbs and Stephen JJ referred to the “touchstone of reasonableness” when assessing compensation for a plaintiff’s nursing and medical care following the negligence of a defendant. This appeal concerns reasonableness in the proof and assessment of loss where an injured party claims damages on the basis that they will or wish to live in their own home or in a home setting rather than in an institution or in an institutional setting.” [4]
This fundamental principle of tort law was repeated throughout the High Court’s Judgment in its assessment of the appropriate care model to adopt. The Court went on to identify two ways in which the concept of reasonableness might limit this concept. It said:-
“The first is concerned with proof of consequential loss. In order to recover compensation for consequential losses that have been or will be incurred by some action of the plaintiff, the plaintiff must prove those losses by proving the reasonable cost of steps that the plaintiff has taken, or will take, which are reasonably required to repair the consequences of a defendant’s tort. The second is that once the plaintiff proves the reasonable cost of those steps, it is for the defendant to establish that the plaintiff failed to avoid or mitigate that cost “by adopting some [other] course which it was reasonable for [the plaintiff] to take”.”[5]
Sharman v Evans
Up to this point, the leading Decision in this area was the High Court’s 1977 decision in Sharman v Evans [6] which rejected a claim for compensation based on a “live at home model”.
After considering this Decision in some detail, the High Court held that it was capable of being distinguished on the basis that the outcome in Sharman’s case was no “more than propositions of fact which were relevant to the case in hand”. [7]
The High Court overturned the decisions of both the trial Judge and the Court of Appeal and awarded Mr Stewart compensation based on the “live at home model”.
The Outcome for Mr Stewart
The High Court formulated the test for Mr Stewart as follows:-
“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”. [8]
Contextual factors were considered, including the fact that Mr Stewart was not permitted to keep his dog at the residential nursing home where he resided following the subject events, and it was also very difficult for his 14-year-old son to stay at the nursing home. The medical evidence also suggested that there would be a tangible health benefit for Mr Stewart if he resided at (a rented) home, as compared to residing at the nursing home. These factors were ultimately important considerations which the High Court had regard to in its application of the compensatory principle of reasonableness in damages for tort.
The High Court ultimately found that Mr Stewart had acted reasonably in his choice of home care and that the Health Service had not discharged its onus of establishing that he had acted unreasonably in refusing the second option (set out above).
Takeaway
This decision reflects the advances that have been made in the ability to provide sustainable “home care” for the catastrophically injured. When this is superimposed on the “compensatory principle” it is not unreasonable for a claimant to seek compensation based on the “home care” model.
The reasonableness of a home care model will still need to be assessed on a case by case basis, but it cannot be dismissed merely because it is the “most expensive” model or the cost is disproportionate to the other options.
This article has been authored by members of the Finlaysons Insurance and Health teams: Ralph Bönig, Special Counsel, Steven Ellis, Senior Associate; and Kahlia Steinert, Lawyer.
Please don’t hesitate to contact us for tailored advice.
[1] (2025) HCA 34 delivered on 3 September 2025
[2] Paragraph 2
[3] Paragraph 15
[4] Paragraph 1
[5] Paragraph 25
[6] (1977) 138 CLR 563
[7] Paragraph 41
[8] Paragraph 48
