Harold Joseph Martin Cadwallender by his next friend Stavroulla Cadwallender v The Public Trustee [2003] WASC 72

Harold Joseph Martin Cadwallender by his next friend Stavroulla Cadwallender v The Public Trustee [2003] WASC 72 - WASC 2003 case summary — Zoe

[66]

33 An occasion where a somewhat similar issue was examined by the Full Court arose in the case of Perpetual Trustees (WA) Ltd v Naso [1999] WASCA 80; (1999) 21 WAR 191. In that litigation, a young man, still an infant, had recovered a very large settlement of his claim for damages for catastrophic injuries sustained when a small boy rendering him quadriplegic and ventilator dependent. The $5,750,000 which he had recovered was ordered to be paid to a private trustee company by an order of the District Court, made after the approval of the settlement of the action, "to be held by [the trustee] on trust for the first plaintiff until further order with the trustee to have all the powers of investment and otherwise conferred by the Trustees Act 1962 including the power to make advances out of income or capital for the welfare, education or advancement of the first plaintiff". The injuries sustained by the young man were so great that he had never been able to complete a conventional education, was wheelchair bound and needed the attention of nurses and carers 24 hours a day. He had never had any opportunity to develop personal independence and had little, if any, experience of financial affairs or the considerations needed for the investment and management of such a large capital sum. Notwithstanding this, shortly after reaching his majority, he applied for the discharge of the trustee and the payment to him of the whole of the trust fund, making that application, not to the District Court which had established the trust, but to this Court by an originating summons seeking a declaration that the trust constituted by the order of the District Court was at an end. However, the trustee, entertaining concerns over the claimant's mental capacity and, in particular, whether or not he might have been acting at the influence of his father, sought an order in the proceedings requiring the compulsory psychiatric examination and assessment of the claimant pursuant to RSO O 28 r 1. A Master refused this application and the trustee appealed from that refusal to the Full Court. The claimant asserted that, having come of age, he was entitled to demand the transfer to him of the whole of the corpus of the trust property, there being no other beneficiary, pursuant to the rule in Saunders v Vautier [1841] EngR 629; (1841) 4 Beav 114; 49 ER 282. However, the Full Court allowed the appeal, gave leave to the trustee to require the claimant to undergo compulsory medical examination, including psychiatric assessment as proposed, and then stayed further proceedings on the originating summons until further order. The basis for the stay was that the court concluded that the order of the District Court establishing the trust was intended to be binding beyond the claimant's eighteenth birthday and, that as that order had not been revoked, varied, discharged or appealed, the current proceedings should be stayed with a view to the applicant applying to the District Court for an order varying or discharging the order establishing the trust.

[82]

44 Another significant feature is that the award of damages is intended to provide compensation for the claimant to be enjoyed and applied during his or her lifetime, rather than establish a capital sum which will be kept intact for the remainder of his or her life and then be passed on to others. Hence, any management of the fund created by the damages should proceed by recognising that the money is intended for the use and enjoyment of the claimant, both as to capital and income, and that it is not objectionable for the capital to be progressively reduced over time. Again, the administration of the trust will vary according to the disabilities and needs of the disabled person and the various factors which were recognised by the court when awarding the damages or approving the settlement which created the fund. Accordingly, an award of damages which provides compensation for pain and suffering and loss of amenities alone may call for a different exercise of the powers and discretions of a trustee than an award which contains components not only for pain and suffering and loss of amenities, but for loss of past and future earning capacity and for the costs of ongoing medical, nursing and other therapeutic care. In the latter instance, a prudent trustee should manage the fund having regard to the need for future medical, nursing and therapeutic care and in the knowledge that the beneficiary's earning capacity has been lost or reduced so that he is dependent upon the fund and its income for basic necessities. This range of examples again confirms the earlier conclusion that the trust fund is for the use of the claimant and for no others. It is an asset to which the claimant is beneficially entitled and, assuming that the beneficiary has retained testamentary capacity, or has made a valid will before the onset of his disability, will be disposed of in accordance with any such testament on his death or, if he dies intestate, according to the rules of intestate distribution adopted by the Administration Act and not by the terms of the order establishing the trust.

[89]

49 There can be no doubt that the District Court of Western Australia had jurisdiction to entertain and determine Mr Cadwallender's original action for damages for negligence causing the personal injuries sustained in his motor vehicle accident. That was a personal action for damages in respect of the death of, or bodily injury to a person, in respect of which jurisdiction was granted to the District Court specifically by s 50(2) of the District Court of Western Australia Act (1969). As it was an action within the civil jurisdiction of the court, the court had power to grant such relief, redress or remedy or combination of remedies either absolute or conditional, and to make any order that could be made in relation to any such action and to give such and like effect to every ground of defence or counterclaim equitable or legal in full and ample a manner as might be done in the like case by the Supreme Court - s 55. If such an action had been brought in the Supreme Court, this Court would have all the powers conferred by s 16 and s 23 to make provision for the representation and protection of the interests of infants and disabled persons. Indeed, that is the purpose which authorises the rules contained in O 70, including the provisions obliging a disabled person to sue by a guardian ad litem, requiring prior approval of any compromise of a disabled person's claim before it will be binding, and then stipulating for the control of moneys recovered by payment to a trustee appointed by, and subject to the direction of the court. This jurisdiction and these powers are, therefore, all ancillary to a claim directly within the civil jurisdiction of the District Court and no issue can possibly arise that, not being ancillary to the principal claim, they are outside the scope of that court's equity jurisdiction such as led to the decision in Commercial Developments Pty Ltd (t/as Don Rogers Motors Pty Ltd) v Mercantile Mutual Insurance (Workers Compensation) Ltd (1991) 5 WAR 208.

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (99 paragraphs)

Harold Joseph Martin Cadwallender by his next friend Stavroulla Cadwallender v The Public Trustee [2003] WASC 72 (11 April 2003)

Parties

Legislation Cited (3)

Cases Cited (14)