"Egg Shell Skull" Rule - Effect on Migrants - Damages
Egg Shell Skull Rule
Migrants and Visa Status, Damages
[A] "Egg Shell Skull" Principle in Tort law:
Kavanagh v Akhtar (1998) 45 NSWLR 588, 600-1 (NSWCA): "In Commonwealth v McLean (1996) 41 NSWLR 389 at 402-407, Handley JA and Beazley JA discussed the recent case law in relation to remoteness of damage. Santow A-JA concurred. I am grateful to adopt their Honours' analysis of the legal principles. The propositions which are of present relevance are: 1. The “egg shell skull” principle makes a defendant liable for damage of an unforeseeable extent, but not for unforeseeable damage of a different kind. Under this principle a defendant is liable for additional damage of a foreseeable kind suffered by a plaintiff who has some special vulnerability: Commonwealth v McLean (at 406E). 2. In personal injury cases where psychiatric injuries supervene on physical injuries the plaintiff's right to recover depends on the foreseeability of psychiatric injury, at least where the harmful consequences supervene as a result of voluntary and deliberate conduct by the plaintiff or a third party: Commonwealth v McLean (at 407), citing Mahony v J Kruschich (Demolitions) Pty Ltd (1985) 156 CLR 522 and March. 3. A wrongdoer is responsible for all damage of the same type or kind as that which was reasonably foreseeable, even if the particular damage, or its extent, were not reasonably foreseeable, or the damage occurred in an unexpected or unforeseeable manner: Commonwealth v McLean (at 403E), citing Chapman v Hearse (1961) 106 CLR 112 at 120-121. This last proposition is illustrated by Hughes. In that case injury by burning, which was foreseeable, was caused not by fire, which was also foreseeable, but by explosion, which was not. The injured plaintiff recovered nevertheless. Lord Reid said (at 847): “This accident was caused by a known source of danger, but caused in a way which could not have been foreseen, and, in my judgment affords no defence.” ... The principle that a tortfeasor takes the victim as he or she is found is not absolute and unqualified. However, I see no reason why the appellant should not take the respondent in the family and cultural setting that she lived: cf Nader (at 537). Equality before the law puts a heavy onus on the person who would argue that the “unusual” reaction of an injured plaintiff should be disregarded because a minority religious or cultural situation may not have been foreseeable: cf generally, Calabresi, Ideals, Beliefs, Attitudes and the Law (1985). Whether or not the husband's response (with its consequences) was consistent with his marital obligations (and I am not inferring a judgment either way), the unchallenged evidence showed that it was a direct response to the hair-cutting. At one stage the Imam was asked what sort of reaction he would expect from an Islamic husband if his wife cut her hair without first seeking his permission. He said: “It's quite shocking and, I mean, sometimes it can nullify their marriage or finish their married life or, as you say, sleep in another room or he can be that angry.” He said that this would be an expected, indeed well-known reaction in the Islamic community. The question whether such a reaction was actually foreseeable to a Burwood shopkeeper might ultimately depend on demographic evidence, but I shall not extend an already lengthy judgment with speculation on this account, because I consider that the matter can be determined in the respondent's favour without addressing this alternative possibility. In any event, the possibility that a person will desert a partner who has been disfigured in the eyes of the deserter is sufficiently commonplace to be foreseeable. There is older authority, noted in Luntz, Assessment of Damages, 3rd ed (1990) par 2.7.5, which would deny pain and suffering damages in respect of marriage breakdown. However the more recent case law allows recovery in those circumstances. The authorities are discussed in an enlightening judgment of Ashley J in Encev v Encev (Supreme Court of Victoria, 24 November 1997, unreported). His Honour refers to Hird v Gibson [1974] Qd R 14, Namala v Northern Territory (1996) 131 FLR 468 and Rose v Chang-Sup Kwow (Supreme Court of the Australian Capital Territory, Miles CJ, June 1996, unreported)."
Commonwealth v McLean (1996) 41 NSWLR 389 at 406E: "The “egg shell skull” principle makes a defendant liable for damage of an unforeseeable extent, but not for unforeseeable damage of a different kind. Under this principle a defendant is liable for additional damage of a foreseeable kind suffered by a plaintiff who has some special vulnerability: see Smith v Leech Brain & Co Ltd [1962] 2 QB 405 at 414 (“not unforeseeable damage of a different kind from that which was foreseen, but more extensive damage of the same kind”). This is supported by the statement in Overseas Tankship (UK) Ltd v Mort's Dock & Engineering Co Ltd (The “Wagon Mound” (No 1)) [1961] AC 388 at 415 “… the essential factor in determining liability is whether the damage is of such a kind as the reasonable man should have foreseen”; the statement in Hughes v Lord Advocate [1963] AC 837 at 845 : “But a defender … can only escape liability if the damage can be regarded as differing in kind from what was foreseen”, and the statement in Overseas Tankship (UK) Ltd v Miller Steamship Co Pty Ltd (The “Wagon Mound” (No 2)) [1967] 1 AC 617 at 636 : “… damage can only be recovered if the injury complained of was not only caused by the alleged negligence but was also an injury of a class or character foreseeable as a possible result of it.”"
"[117] ...The normal fortitude test is an issue going to liability; the egg-shell skull rule goes to quantification of damages once duty, breach and some damage are established. In White v Chief Constable of South Yorkshire Police, Lord Goff of Chieveley pointed out that the egg-shell skull rule ‘‘is a principle of compensation, not of liability’’. It operates in the field of nervous shock in the same way that it operates in other areas of the law. Once the plaintiff establishes that a person of normal fortitude would have suffered psychiatric illness as the result of the defendant’s action, the defendant must take the plaintiff as he or she is. The defendant’s liability extends to all the psychiatric damage suffered by the plaintiff even though its extent is greater than that which would be sustained by a person of normal fortitude.": cited in Anwar v Mondello Farms Pty Ltd [2014] SADC 105, [319].
Effect on damages; economic and non-economic loss; people on temporary work visas; sponsored visas; prospects of future work and residence; lost opportunity for permanent migration:
> Ekpe v Darling & SGIC [2000] SADC 50;
> Manthe v BHP Billiton Iron Ore Pty Ltd [2011] WADC 160;
> Darlaston v Risetop Construction Pty Ltd [2011] FMCA 220;
> **Victorian WorkCover Authority v Direxa Engineering Australia Pty Ltd (No 1) [2013] VCC 1039, [147]-[150]: "150. From my own experience, the obtaining of permanent resident visas is a complex process. I have not had the benefit of any expert evidence on the point. While I accept that the summary dismissal from his locksmith course is likely to have had an impact on Mr Davey’s capacity to remain permanently in Australia, I am not satisfied on the basis of the evidence, that other prospects that he might have, including to continue the course when he returns to Australia, undertake a course as a locksmith with another institution or find some other area of work in an appropriate category is not available to him. I am satisfied that the injury has had some affect upon his capacity to remain in Australia but has not excluded that possibility completely. I accept that to some extent, that loss sounds in damages, but not to a significant degree."
> Donoghue v Hussain [2013] WADC 18;
> Gulab Khan v Matthew Rathjen [2016] NSWDC 139, [304]: "However, I accept the plaintiff’s submission that he was entitled to seek work as a systems analyst or similar information technology role whilst residing in Australia on VC 485 visa until June 2013, and if he was able to obtain work within the information technology industry, while on the VC 486 visa, he could have then applied for another type of visa to reside in Australia. These were lost opportunities for which he is entitled to be compensated.".
> Min v Huang & Ors [2016] QDC 116;
-- see also, 'Student visa crash victim wins permanent residency income loss' (Carter Carpenter Law, 30 May 2016) <https://cartercapner.com.au/blog/student-visa-crash-victim-wins-income-lost-likely-permanent-residence/>, archived at <https://archive.is/ihDAw>.
> Vo v Tran [2016] NSWSC 1043, [227]; not disturbed on appeal: Tran v Vo [2017] NSWCA 134;
> Soogyung Kim v Xiaoxia Liu & Allianz [2017] QDC 167;
> Antonios Abou Antoun v Sleiman Chidiac [2017] NSWDC 208;
> Thompson v Zadlea Pty Ltd T/A Atlas Steel [2019] FWC 1687;
> Xian Qian v RACQ Insurance Limited [2019] NSWDC 57;
> Mathews v Schuler [2019] NSWDC 203;
> Smith v Moraitis Administration Pty Limited [2021] NSWPIC 268;
> Dhakal v QBE Insurance (Australia) Limited [2021] NSWPIC 296;
> Hejazin v Medical Council of New South Wales [2021] NSWCATOD 185;
> Shahid v Alpha Trading Engineering Pty Ltd [2021] VSC 551;
> Ittyerah v Infosys Technologies Pty Ltd [2022] NSWSC 1048;
> Yoo v AAI Limited t/as GIO [2022] NSWPIC 671;
> Fair Work Ombudsman v House of Hoi An Pty Ltd [2022] FedCFamC2G 133;
> **Pan v CIC Allianz Insurance Limited [2023] NSWPIC 266;
> Insurance Australia Limited t/as NRMA v Hussain [2023] NSWPIC 383;
> Bao v Haynes & Anor [2023] NSWDC 364;
> Nadeem v Bindaree Food Group Pty Ltd [2023] NSWCA 250;
> Damdinbazar v Allianz Australia Insurance Limited [2023] NSWPIC 402;
> Lin v Max Bean Pty Ltd [2023] FedCFamC2G 1127;
> Rasheduzzaman v Richmond 404 Pty Ltd trading as Smokin’ Joe’s Pizza & Grill [2023] FedCFamC2G 38;
> SYTP Block OpeC19td v Workers Compensation Nominal Insurer (iCare) & Ors [2024] NSWPIC 258;
> Fair Work Ombudsman v Melbourne Digital Pty Ltd [2024] FedCFamC2G 342, [74];
> Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (in liquidation) (No 8) [2024] FCA 483;
> Javed v Allianz Australia Insurance Limited [2024] NSWPIC 163.
> Toppo v P & J Harris & Sons (A Partnership) [2024] FCA 257, [10].
> Fair Work Ombudsman v Watch Trader Pty Ltd [2024] FedCFamC2G 162. [84].
> Rajput v TAC [2024] VCC 304: "215. As part of the consequences of his transport injury the plaintiff suffers a pecuniary disadvantage and because of the severe disorder he has I consider he would be precluded from work even if he was permitted to do so under American law but also if he was resident in Australia."
> Webb v Lightfoot [2011] QCAT 233.
> cf "[99] The Court has power to make any order it considers fit by way of compensation. The applicant seeks an order for compensation comprising the following components: (a)to rectify actual lost wages ($12,063.48 plus interest) and superannuation ($1,146 plus interest); (b)to rectify projected loss of wages based on the counter-factual scenario that her employment would have continued to the end of her Subclass 407 visa ($73,359 plus interest) and superannuation ($6,969 plus interest); and (c)general damages for distress suffered from her experience working for the first respondent, including the effect of lost migration opportunity, indignity of being forced to pay one’s own cost of employment, and psychiatric injury from which she now suffers ($150,000). ... [105] In addition to her claim for economic loss, the applicant also claims compensation by way of general damages. It is said that compensable damage arises from the significant distress and indignity of the applicant having to pay her own wages and from what she describes as the “lost migration opportunity”. As to that lost opportunity, the applicant submits that if her employment had continued until the end of the visa period she would have gained additional experience and would have had at least a realistic prospect of pursuing a skilled migration pathway with another employer. ... [107] The claim for compensation for “loss of opportunity” also requires the court to engage in a predictive exercise. The court must undertake a realistic assessment of the applicant’s claim that, had the kickback arrangement not occurred and her employment not been terminated, she would have continued in employment with the first respondent, obtained a second visa from another employer and improved her prospect of remaining in Australia as a permanent resident. ... [141] I am inclined to the view that the applicant’s current psychological state can only partly be attributed to the respondents’ contraventions. An equal or greater cause of her distress is the concern she has about her uncertain migration status and the risk that she may not secure a visa to remain in Australia. She carried similar stress and concerns before she was introduced to Mr Rajput. [142] I do not accept that the applicant has lost any migration opportunity by reason of the contraventions. The evidence was that she was desperate for a working visa when her brother approached Mr Rajput and he accommodated that need, albeit in an unlawful manner. Had the respondents not sponsored the applicant there is no evidence that someone else would have.": Kaur v P & G Accounting Solution Pty Ltd (No 2) [2026] FEDCFAMC2G 478.
> ** "[222] The insurer also raised the possibility he may return to India where salaries and wages are much lower. This adds another element of uncertainty which favours the insurer, but marginally as Mr Noori is attempting to obtain permanent residence. [223] If Mr Noori’s application to remain in Australia was unsuccessful due to being rejected for his accident related injuries, that could also sound in damages against the insurer. Mr Noori’s back will always be a source of discomfort, which will wax or wane wherever he lives. With the right treatment the bowel problems may not be as long lived, but it is still a long term factor.": Noori v Insurance Australia Limited t/as NRMA Insurance [2025] NSWPIC 143.
> ** "[33] In July 2015, Ms Fath withdrew her visa sponsorship of the appellant, as a result of which the Department required him to show cause why his application for a partner visa (which was still pending) ought not be refused. His application was refused on 25 August 2015. The appellant sought a review of the refusal in the Administrative Appeals Tribunal (AAT) and also applied for permanent residency. The appellant argued that Ms Fath withdrew her sponsorship of him because of the psychiatric injury he had sustained and, thus, his damages should be assessed on the basis that, but for the psychiatric injury, the sponsorship would have continued and he would have become a permanent resident. This matter is relevant only to the assessment of damages which, in light of my conclusion on liability, does not arise. ... : Karzi v Toll Pty Ltd [2024] NSWCA 120.
> commercially valuable opportunity: "[267] If the right to occupy a home is seen as comprising of both a financial and a non-financial benefit, Finkelstein J’s reasoning may indicate that “benefits” are not necessarily limited to strictly financial or monetary ones, at least for the purposes of the ASIC Act. Adopting a broad interpretation of the legislation, I consider that the ambit of “financial returns, or other benefits” under both Acts is wide enough to encompass the immigration-related benefits which the plaintiff’s investment was intended to generate. If the payment of the $2 million assisted in getting a positive outcome for the visa application, then that would enable Yeung and her husband to become permanent residents and conduct business in Australia. The opportunity to reside here and to conduct business in this country is an economic benefit.": Yeung v Zank Capital Ltd [2026] VSC 75.
> "76. ... The Former Agent has demonstrated misconduct of a serious nature by failing to deal with her clients competently, diligently and fairly, which resulted in her clients incurring significant adverse consequences through lost visa opportunities, financial loss, having to depart Australia for a period of time and the emotional stress involved.": 'CAS-14922-V4Q3 & CAS-04701-J8N1' (DHA MARA Decision Record, 15 April 2024) <https://portal.mara.gov.au/disciplinary-decisions/sanctioned-agent-detail/?discid=1cc04340-5fe6-ee11-904c-000d3ad1c7f2>.
> "128. I find that the Agent was not diligent in the assistance he provided to Mr K. Over the period of approximately 18 months that Mr K was his client, Mr K: i. paid the Agent several thousand dollars; ii. obtained a successful skills assessment for an occupation that was subsequently not required in Australia; iii. missed out on an opportunity to lodge an expression of interest for a skilled visa; iv. lost his opportunity to apply for permanent residence; and, v. had to leave Australia. 129. I am satisfied that the Agent failed to act in the legitimate interests of his client and was neither diligent nor competent in his attempts to lodge Mr K’s EOI. I am satisfied that the Agent did not attempt to lodge the EOI for some months. There is no evidence of any reason for the delay when he had all the information and documentation to lodge it prior to 18 March 2018 when the MLTSSL was changed. I am satisfied that the Agent has breached clauses 2.1 and 2.18 of the Code and caused a significant detriment to Mr K.": 'CMP–38823, CMP- 42462, CMP- 43708, CMP- 47741 & CMP- 49873' (DHA MARA Decision Record, 22 April 2021) <https://portal.mara.gov.au/disciplinary-decisions/sanctioned-agent-detail/?discid=28ac58e5-35a3-eb11-b1ac-00224815071a>.