In this case the plaintiff, Carol Alford, by her tutor claims damages from the defendant, the statutory body that operates the Hornsby Ku-ring-gai Hospital, arising out of the alleged failure hospital staff appropriately to diagnose, and manage in a timely fashion, her presenting symptoms (essentially, a bleeding duodenal ulcer) on 21 July 2019, and the delay in doing so caused haemorrhagic shock, cardiac arrest and an acute infarct to the right temporal-parietal occipital region of her brain. The plaintiff remained in hospital until 2 September 2019, when she was discharged home.
The evidence discloses that the plaintiff remains significantly disabled following these events, notably from the stroke, to such an extent that it was not in dispute that the plaintiff was a person under a legal incapacity.
The parties have reached an agreement to settle the plaintiff's claim subject to the approval of the Court, which is required under s 76(1) of the Civil Procedure Act 2005 (NSW) ("the Act"). Subsection (1) of that section provides that the section applies to proceedings commenced "by or on behalf of … a person under legal incapacity", such as the plaintiff in these proceedings.
Pursuant to s 76(3) of the Act, there may not be any compromise or settlement of any proceedings as regards a claim made by or on behalf of a person referred to in s 76(1) except with the approval of the Court. Further to this, s 76(4) provides that the Court may either approve or disapprove any such proposed settlement.
The Act does not provide any specific guidance as to what matters the Court should consider when making a determination under s 76(4) to either approve or disapprove the settlement. Notwithstanding, there are several authorities that inform the nature of the Court's consideration. In Bacon by his tutor Sarah Rea v Western New South Wales District Health Service [2018] NSWSC 1840 at [3] the Court stated in effect that:
1. the Court's function is essentially protective;
2. the Court should scrutinise the terms of the settlement for the purpose of protecting the interests of the person who is under a legal incapacity; and
3. the approval depends ultimately on whether the settlement is beneficial in the interests of that person.
The Court's protective function in a hearing concerning s 76 of the Act has been elaborated upon in other cases. For example, in Permanent Trustee Co Ltd v Mills (2007) 71 NSWLR 1; [2007] NSWSC 336, Hammerschlag J commented at [29]:
1. "The principle is that for the Court to grant approval for a compromise to be entered into by the disable person it must form the view that it is beneficial to his or her interests. The compromise should be assented to by the tutor and there should be opinions from his or her legal advisers that they consider it to be so: Re Birchall. The Court will consider for itself whether the compromise will be beneficial to the disable person: Re Ley's Trusts [1964] 1 WLR 640."
It can be noted at this point that there was a previous settlement which Chen J refused to approve on 3 April 2023. His Honour's reasons for doing so are set out in his judgment with the medium neutral citation: Alford v Northern Sydney Local Health District [2023] NSWSC 324. The background to these proceedings, the nature of the issues relating to both liability and causation of loss and the other pertinent issues before Chen J, and now before me, are adequately set out in his Honour's judgment and I respectfully adopt his account of the facts and circumstances and his Honour's analysis. As a result, it is not necessary for me to repeat any of those matters in these reasons.
It is sufficient to record that the most recent affidavits of Zac Hussain, the plaintiff's tutor, sworn 8 November 2023, and of Dominic Dagher, the solicitor with the day to day carriage of the matter, sworn 7 November 2023, address the substance of the matters that caused Chen J some concern and led to his refusing to approve the settlement proposed at that time.
In particular, the settlement amount (inclusive of funds management costs but plus party and party costs) for which approval is now sought is 40% more than the amount (inclusive of funds management costs but plus party and party costs) for which Chen J refused approval earlier this year.
The absence of evidence concerning the likely costs of funds management which caused Chen J some concern has now been remedied and an estimate based on specified assumptions has been provided by letter from Paul O'Neill, Senior Manager - Business Development, from Australian Executor Trustees dated 11 September 2023. I am satisfied that the assumptions on which that estimate is based are appropriate and that the estimate is reasonable.
On the early application for approval, the tutor provided what Chen J described in effect as "consent … in a highly qualified way" to the settlement then reached. I understand from the tutor's affidavit of 8 November 2023 that his consent to the latest settlement is not so qualified. I shall return to the tutor's position later in these reasons.
Chen J was of the view that, because of the liability as well as damages issues identified by the parties, the plaintiff's claim called for "potentially significant compromise". I agree with that assessment on substantially the same basis as his Honour outlined in his judgment. In light of the significantly increased amount of the proposed settlement sum, however, I am satisfied that the degree of compromise now involved if the latest settlement were approved is not outside the range of what is reasonable in all the relevant circumstances.
Finally, Chen J noted the plaintiff's solicitors' proposal to charge estimated non-recoverable solicitor client costs of "no more than" the amount specified in par 17(c) of Mr Dagher's affidavit of 13 March 2023 as one of the reasons why the plaintiff would be left with a net amount which his Honour was, in effect, not prepared to approve. In Mr Dagher's latest affidavit of 7 November 2023, however, the solicitors now propose to charge estimated solicitor client costs of "no more than" a sum which is only about 42% of the corresponding amount in the 13 March affidavit. Accordingly, the net amount likely to be available for the plaintiff's benefit under the current proposed settlement is significantly greater than under the earlier proposed settlement.
I pause to observe here in relation to solicitor and own client costs that there is no evidence before me as to how the anticipated non-recoverable solicitor and client costs have been calculated or as to the extent to which they may be recoverable on an assessment of solicitor and own client costs. I specifically note that my comments in the preceding paragraph and my approval of this settlement should not be taken as in any way endorsing either the charging of non-recoverable solicitor and own client costs, or the amount of those costs. In due course, should there be any non-recoverable solicitor and own client costs, the assessment and payment of those costs will be a matter that will need to be considered by the tutor and trustee appointed to manage the funds on behalf of the plaintiff.
I also note from Mr Dagher's affidavit of 7 November 2023 that, despite requests being made some months ago, up to date information as to the repayments required to be made to Medicare and My Aged Care have not been able to be obtained. Nonetheless, I accept that the current estimates given by Mr Dagher are appropriate and reasonable and I have taken them into account in assessing the likely net amount available for the plaintiff's benefit should the settlement be approved.
I have also had the benefit of reading the Confidential Approval Advice of Mr Andrew Campbell of counsel dated 13 November 2023. I have taken into the matters raised in that advice.
I have also had particular regard to the latest affidavit of the plaintiff's tutor, Mr Hussain, sworn on 8 November 2023, including the material in relation to the plaintiff's circumstances, now and into the future, the tutor's concerns about the original settlement proposal, the net amount likely to be received for the benefit of the plaintiff after deduction of relevant amounts and his understanding of the risks involved in pursuing proceedings in this matter rather than settling and the advantages of resolving the matter at this stage. Mr Hussain states that he is of the view that it is in the plaintiff's best interest for the latest settlement offer to be accepted and that her future circumstances will be more secure if the settlement proposal is approved by the Court, as the risk of detrimental financial pressures will be avoided, especially in the plaintiff's later years.
I was informed that the tutor understood that, if approved, the proposed settlement would be full and final, any right of the plaintiff to seek to recover further compensation form the defendant in respect of the subject of the parties' dispute in the present matter would be extinguished.
In light of the information and opinions I have mentioned and having regard to the difficult issues likely to be required to be resolved if the matter were to proceed to trial and the plaintiff's circumstances, I am satisfied that the latest proposed settlement is reasonable and its approval would be beneficial and in the best interests of the plaintiff.
I have been provided with a form of consent judgment signed on behalf of the parties on 7 November 2023, annexure J to affidavit of Mr Dagher of 7 November 2023 which formally sets out the terms of the settlement agreed between the parties, subject to the Court's approval. That form of consent judgment includes the terms of the orders sought and other matters, should the Court decide to approve the latest settlement.
In all the circumstances, I am of the view that the settlement of 7 November 2023 should be approved and orders should be made to give effect to that settlement. It is also appropriate to note the agreements between the parties and other acknowledgements and undertakings included in the agreed settlement.
Accordingly, the Court makes the following orders:
1. Pursuant to s 76 of the Civil Procedure Act 2005 (NSW), an order that the settlement in these proceedings as agreed between the parties and recorded in the form of consent judgment signed on behalf of the parties on 7 November 2023 (the Form of Consent Judgment) is approved.
2. Orders in accordance with pars 1, 2 and 7 of the Form of Consent Judgment with the word "Plaintiffs" in par 7(a) replaced with the word "Plaintiff".
The Court also notes the acknowledgements, undertakings and agreements between the parties in paragraphs 3, 4, 5, 6, 8 and 9 of the Form of Consent Judgment.
[3]
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Decision last updated: 20 November 2023