This is an application for judicial approval of a settlement pursuant to s 76(3) of the Civil Procedure Act 2005 (NSW). The approval is necessary because the plaintiff, Carol Alford, is under a disability, and these proceedings have been carried on by her tutor, Zac Hussain. Mr Hussain is the plaintiff's husband.
In support of the application for approval, I received the following:
1. An affidavit of Dominic Dagher, the plaintiff's solicitor, sworn 13 March 2023 ('Dagher affidavit');
2. An affidavit of Zac Hussain, sworn 21 March 2023 ('Hussain affidavit');
3. Confidential advice from counsel for the plaintiff dated 22 February and 27 March 2023; and
4. Written submissions from the defendant dated 31 March 2023.
The affidavit sworn by the plaintiff's solicitor annexed a considerable amount of medical and expert evidence.
[2]
Background
The plaintiff was born on 19 October 1952, and she is approximately 70 years of age.
The defendant is the statutory body that operates the Hornsby Ku-ring-gai Hospital ('the hospital') and employed, or is otherwise legally responsible for, the relevant specialists and hospital staff - and thus vicariously liable for their acts and omissions.
The essential claim of the plaintiff is that, having been taken by ambulance to the hospital shortly after 10pm on 21 July 2019, the hospital staff failed to appropriately diagnose, and manage, her presenting symptoms (essentially, a bleeding duodenal ulcer), and that 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.
The matter has resolved, subject to approval, in the amount of $XX plus costs. That occurred at a mediation on 21 February 2023. At the time, the tutor gave instructions to accept that settlement.
Since that time, however, the plaintiff's tutor has indicated to the solicitors for the plaintiff that "he does not believe the outcome is satisfactory and requests that the court review the medical evidence and evaluate whether the settlement offer is sufficient": Dagher affidavit, par 12.
Mr Hussain has sworn an affidavit dated 21 March 2023 where he has expressed concerns about the inadequacy of the settlement. He has explained his reasons for this, and it is essentially around the nature and extent of the plaintiff's needs, and their cost.
It is clear, in my view, based upon his evidence, that he has only provided a qualified degree of consent to the compromise sought to be approved.
Although the settlement amount was for $XX plus costs, there are a number of matters that are proposed to be deducted from the settlement sum - being (Dagher affidavit, pars 15-17):
1. a repayment to Medicare of approximately $XX;
2. a repayment to My Aged Care of approximately $XX; and
3. a proposal by the plaintiff's solicitors to charge solicitor and client costs of "no more than $[XX]".
The settlement sum is accepted to be inclusive of funds management costs. There is no evidence about the likely costs. Based upon the charges publicised by the New South Wales Public Trustee and Guardian, and assuming an approximate life expectancy of 10 years, these are likely to be somewhere around $50,000. Counsel for the plaintiff has suggested that it would be "less than $100,000". However, two matters should be noted. The first is that it is not for the Court to speculate about such a matter; it should be the subject of evidence. The second is that the tutor has expressed a desire for the settlement sum to be privately managed. That only emphasises the need for evidence directed to this issue.
Given what I have set out in pars [13]-[14] above, it seems likely that the plaintiff would receive, for investment, possibly only around $XX.
The evidence also establishes that there would be a preclusion period for the plaintiff to secure social security benefits - the evidence did not identify the extent of that preclusion - which only serves to emphasise (if it were otherwise needed) the importance of the settlement sum.
[3]
Approval: the relevant principles
The relevant principles are not in doubt.
When the Court is asked to approve a settlement of proceedings commenced by or on behalf of a person under legal incapacity, its function is protective. The ultimate question is whether any compromise entered into is beneficial to the interests of the person and thus in their best interests: Permanent Trustee Co Ltd v Mills (2007) 71 NSWLR 1; [2007] NSWSC 336 at [29] (Hammerschlag J) ("Mills'); Budini v Sunnyfield (No. 3) [2021] FCA 1540 at [10] (Perry J).
It is the Court's responsibility to determine this matter itself, albeit that it will be assisted - but not bound - by the provision of a confidential advice by the person's legal representatives that they consider the settlement to be beneficial to, and in the best interests of, the person: Mills at [29]; Scandolera bhnf Robinson v Victoria (Department of Education and Early Childhood Development) [2015] FCA 1451 at [27] (Mortimer J) ('Scandolera').
The Court, as part of its assessment, is to consider the "advantages and disadvantages of the litigation continuing not only in terms of whether the applicants might secure a more advantageous award from the Court at trial, but also issues such as the prospects of an appeal and the costs and pressures imposed on [the plaintiff] if the litigation were to continue": Scandolera at [29].
The tutor must also provide their consent to the compromise. As I earlier explained, I am not satisfied that the plaintiff's tutor has provided consent other than in a highly qualified way.
[4]
Assessment and consideration
The key liability issue relates to when the plaintiff should have been taken to surgery. In very simple terms, the competing cases are as follows. The plaintiff's expert evidence is to the effect that the plaintiff did not receive appropriate treatment, and that she should have undergone emergency surgery within two hours of her admission and that there was no clinical benefit in delaying surgery until the following morning. The hospital's case, however, is that before surgery it was necessary to control the bleeding before the plaintiff could be operated upon and that, once it was controlled, the plaintiff was taken promptly to theatre. Furthermore, the evidence from the hospital is that earlier intervention in fact increases the prospect of adverse outcome.
The plaintiff's expert liability evidence consists of reports from Professor Raftos, an emergency medicine physician, and Dr Siddarth Sethi, a consultant gastroenterologist and hepatologist. The defendant has qualified a number of experts, by way of response, including Dr Dane Chalkley, a consultant emergency physician. Dr Chalkley essentially addressed whether the plaintiff's treatment, following her admission to the hospital, was in accordance with accepted professional practice: his opinion was to that effect, and largely aligns to the summary that I have earlier referred to.
It is fair to say that there is a contest between the opinions from Professor Raftos and Dr Chalkley. Professor Raftos has prepared a responsive report, dated 6 August 2021, to the report from Dr Chalkley. It is equally fair to say that Professor Raftos provided an emphatic rejection of the opinions expressed by Dr Chalkley: he confirmed that proper and accepted practice was to provide "resuscitation with intravenous fluids and blood products and, if that does not return [the patient] to haemodynamic stability, to control the haemorrhage either endoscopically or surgically". Although it has been suggested that the answer to this, favourable to the defendant, was that the general parameters of the plaintiff immediately prior to the surgery were favourable, Professor Raftos has maintained the position that if this was so that was a consequence of the inappropriate use of noradrenaline to maintain the plaintiff's blood pressure.
A further issue should be noted - namely, the "cause" of the stroke. The plaintiff's case is that the delay in locating and stopping the bleeding increased the likelihood of her suffering from hypovolaemic cardiac arrest. It is also argued that, even if not attributable in that way, it remained a contributing factor and likely attributable to the administration of a vasospasm drug. On this hypothesis, its administration was a consequence of the failure to definitively intervene, at an earlier point, to address the bleeding - and had that occurred, the bleeding would have been minimised or avoided the necessity for the use of that drug.
In terms of damages, there are a range of issues including the presence of pre-existing conditions and the impact that those conditions might have had in connection with the assessment of damages. Another issue is the effect of those conditions on the plaintiff's life expectancy. These are self-evidently matters that also called for compromise.
Each side has prepared a schedule of damages which they submit reflects the reasonable assessment of the plaintiff's damages claim. In relation to the defendant's schedule of damages, while it was expressed to be a preliminary one and that "reasonable minds may differ", in my respectful view, having reviewed the medical and expert evidence, I do not think that it reasonably assesses the value of the claim in the event that the plaintiff succeeded across all issues - but rather is a reflection of the plaintiff failing across a number of damages issues. The plaintiff's assessment of damages is essentially double the high range of the defendant's assessment (although that assessment does recognise that it represents the plaintiff's best case).
I am unpersuaded that I should approve this settlement bearing in mind the concerns of the tutor, my consideration of the settlement sum, what is contained within the confidential advice and the trial issues. That is for the following reasons.
First, although the claim called for compromise (and potentially significant compromise), the discount here is substantial - a modest fraction of the plaintiff's best case. Even if that assessment is moderated, as counsel for the plaintiff has fairly accepted was likely if the matter was to proceed to trial, even then the matter has been very heavily discounted. I appreciate that the assessment that I make about this has some inbuilt limitations: before me is a limited amount of material, and I have not had the benefit of joint reports from the experts or hearing from them. Nevertheless, I must be guided by my assessment of the evidence, and my impression of it. I am unpersuaded that the liability issues identified, real though they are, justify this degree of compromise, leaving the plaintiff with around $XX.
Secondly, the tutor has only given highly qualified assent to the settlement. His evidence is that, although he formed the view that it was in the plaintiff's best interests to accept the offer made by the defendant at the mediation, and provided instructions for the offer to be accepted (subject to approval), he now has concerns that the offer was insufficient, particularly bearing in mind the current, and future, care needs of the plaintiff: Hussain affidavit, pars 13-14; Dagher affidavit, par 12. Mr Hussain set out the plaintiff's current care expenses and they are approximately $XX per annum: Hussain affidavit, par 15.
The plaintiff's legal representatives do, however, support the settlement. The plaintiff's solicitor has advised that he "formed the view that the offer made is on the lower end of the range of what might be expected as an appropriate settlement offer": Dagher affidavit, par 8. I accept that counsel for the plaintiff have appropriately advised the plaintiff, and have pointed out the range of outcomes that are possible if the matter were to proceed to trial. They are in favour of the settlement. I am mindful that those representing the plaintiff support the resolution, and of course I have given careful consideration to the opinion given by counsel.
Thirdly, I am mindful of the importance of certainty that comes with a settlement, and the consequences of proceeding further. But my function is different and that function is to be affirmatively satisfied that the proposed settlement is in the plaintiff's best interests.
As I have indicated, I am not so satisfied.
[5]
Orders
For the above reasons, I make the following orders:
1. Pursuant to s 76 of the Civil Procedure Act, I decline to approve the settlement.
2. Order that the confidential advice from counsel for the plaintiff dated 22 February and 27 March 2023 be placed in a sealed envelope, with access to that envelope to be granted only by leave of a Judge of the Court.
3. List the matter for directions before the Common Law Registrar on 17 April 2023.
[6]
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Decision last updated: 03 April 2023