This matter came before me recently in the Duty List for approval of the settlement of personal injury proceedings arising from a motor vehicle accident, pursuant to s 76 of the Civil Procedure Act (NSW).
Although I have taken a little time to reflect on the matter, I am soundly satisfied that the settlement should be approved, and that the settlement is beneficial to the interests of the incapacitated plaintiff: see Gray v Richards (2014) 253 CLR 660; [2014] HCA 40.
[2]
Background
Dr David Gruenewald, the plaintiff, is 36 years of age. He suffered severe injuries in a motor vehicle accident on 27 November 2013 in the Sydney suburb of Pymble. The plaintiff at the time was within the confines of a pedestrian crossing, and an insured driver drove through a red traffic light and the motor vehicle collided with him. Regrettably, the plaintiff suffered severe injuries, chiefly orthopedically and to his brain. Since then, he has spent significant periods in hospital, and has undertaken a great deal of medical treatment.
Before the accident, the plaintiff was physically well, and intellectually very accomplished: he was an academic in the field of mathematics, as well as being a gifted musician. Despite the severe brain injury that was inflicted upon him, he has made a recovery remarkable enough for him to return to tutoring university students in mathematics.
Gruenewald by his tutor Gruenewald v Chalhoub [2018] NSWSC 1241 | Case summary | Zoe
Liability was admitted by the insurer (the defendant) at an early stage. Nevertheless, there was an ongoing question about the measure of damages. A further aspect of the litigation was that the plaintiff moved in and out of the Lifetime Care and Support Scheme (LCSS), with the result that at various stages it seemed to the solicitors for the plaintiff that they needed to prepare a multi-million dollar claim on his behalf.
Ultimately, the proceedings came before Gibson DCJ for approval on 8 June 2018. Her Honour expressed a number of concerns about the matter, and took the view that the better course was for the proceedings to be transferred, for further consideration of the question of approval by a judge of this Court: see Gruenewald by his tutor Gruenewald v Chalhoub (District Court of NSW, Gibson DCJ, unreported, 13 June 2018) at [34].
As I have said, on transfer the proceedings came before me. I had the benefit of affidavit evidence (some of which was not before her Honour) that provided me with a conspectus of the whole matter, along with a confidential advice from counsel on quantum, as well as the extremely helpful oral submissions of senior counsel for the plaintiff.
[3]
Three areas of concern
Her Honour expressed concern about three aspects of the matter.
First, whether the proportion of the settlement funds that would go towards legal costs was appropriate, bearing in mind that the proceedings were "un-litigated".
Secondly, her Honour was concerned that the fact that an application for appointment of a fund manager had not been made at the time of the application for approval was seemingly contrary to a Practice Note of the District Court.
Thirdly, her Honour queried whether, in light of the remarkable cognitive improvement in the plaintiff, funds management was required, in particular for the rest of his life.
[4]
Submissions
Senior counsel for the plaintiff submitted that, with the benefit of further evidence and further submissions, my mind could be at ease with regard to each of the three matters that troubled her Honour.
First, as to costs, he explained that, due to the plaintiff coming within and without the LCSS, the matter was not as straightforward as it may at first appear.
Separately, the tutor of the plaintiff (his father, Dr Gruenewald senior) and the mother of the plaintiff, and indeed the plaintiff himself, had had a breakdown of costs explained to them in detail, and they were all content with it.
Furthermore, if I were troubled, the solicitors for the plaintiff would be perfectly content to submit to costs assessment ordered by me.
Finally, if the funds manager who is proposed to be appointed were troubled in that way, the solicitors would be just as content to submit to costs assessment at that stage.
Secondly, as to the question of the necessity of funds management, senior counsel agreed that remarkable progress had been made. But he invited my attention to reports of more than one medical expert to the effect that some deficits remain. Those deficits are not only cognitive; they include emotional aspects of the plaintiff, and include a certain naiveté, and perhaps even gullibility. He submitted that those attributes could leave the plaintiff open to manipulation by unscrupulous persons once he comes into a very large sum of money.
The point was also made that the parents of the plaintiff will not be available throughout the whole of his life to love and care for him, and there could be vulnerability in the future as a result.
The point was finally made that, in the case of any person who comes into a large lump sum, expert financial advice is very often appropriate; in the case of a person who has suffered a degree of cognitive deficit as a result of a brain injury, one should err on the side of abundant caution.
Thirdly and finally, as to the timing of the application for appointment of a funds manager, I was respectfully informed that the approach of the Equity Division is generally to prefer the application to be made after approval including funds management has been granted by a judge of the Common Law Division. And I was given an undertaking by senior counsel, reflected in the transcript of the hearing, that, unquestionably, the application will be made promptly after any approval granted by me.
Speaking more generally, the submission of senior counsel was simply that my mind could be at ease that the proposed settlement has been the subject of detailed consideration by solicitors and counsel expert in this field, and has met with the personal approval of the tutor, the mother of the plaintiff, and, to the extent relevant, the plaintiff himself.
[5]
Determination
As I have said, I have reached a state of satisfaction that the simple test of whether the settlement is beneficial to the interests of the incapacitated plaintiff has been made out. I say that for the following reasons.
First, without divulging the details of the confidential affidavit, I accept the proposition that the settlement is a very substantial percentage of the maximum claim that could have been advanced on behalf of the plaintiff. And I am well familiar with the vagaries of litigation, which almost always call for an appropriate level of caution on behalf of sensible litigants and lawyers.
Secondly, I am satisfied that the lawyers involved in this matter are experts in this field. To give but one example, the solicitor for the plaintiff has deposed that he has been a Law Society Accredited Specialist in the field of personal injury for a quarter of a century. It was also clear that senior counsel who appeared on the application before me is thoroughly versed in all aspects of this area of law.
Thirdly, there is not the slightest material to suggest that the tutor, and indeed his wife, the mother of the plaintiff, have anything other than the best interests of their son at heart.
Fourthly, based upon the submissions and assurances that I have set out above, I am untroubled by the level of legal costs proposed.
Fifthly and finally, I accept without difficulty the proposition that funds management is appropriate in this case; the risks of the plaintiff managing his own funds, especially later in life, are simply too great. As well as that, it is my own experience that applications for appointment are made after approvals; in any event, I accept without reservation the undertaking about what will be promptly done, which was provided to me in open court by senior counsel for the plaintiff.
In summary then, I am content to approve the settlement at which the parties have arrived.
Finally, as against the possibility that either or both parties may seek to have the precise verdict sum redacted on Caselaw, this judgment will not be posted to that website before 12 midday on Monday 13 August 2018.
[6]
Orders
I make the following orders, in conformity with orders sought in the summons originally filed in the District Court:
(1) Verdict for the plaintiff in the sum of XXXX plus recoverable legal costs.
(2) The defendant must pay the plaintiff's costs of the motor accident claim and these proceedings, in the sum of $100,000.
(3) That verdict sum is to be paid into court pending further order.
[7]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 18 August 2018