Before the Court is an application for approval of a settlement brought pursuant to s 76 of the Civil Procedure Act 2005 (NSW) (the Act). Approval is required because the plaintiff, a young woman aged 21 years, is (at least, on her case) a person who suffers under a legal incapacity. That is said to arise from a significant cognitive and emotional impairment, itself said to arise from a traumatic brain injury that she suffered many years ago.
A foreshadowed application for the appointment of fund managers was not pressed before me. Rather, it was submitted at the hearing that I should make an order referring that question to the Protective List of the Equity Division of this Court for determination.
I was helpfully provided with a set of proposed orders that had been signed by the solicitor for the plaintiff on 6 February 2015. Proposed order nine is a confidentiality order. At the hearing I was not requested by either party to refrain from publishing my judgment on New South Wales Caselaw, to use pseudonyms in my judgment, or the like. I was requested by both parties to refrain from referring explicitly to the proposed settlement sum, and to refer to it merely by reference to the document setting out the proposed orders. I am content to accede to that request, although the formal order entered must be explicit.
Queen's Counsel who appeared for the plaintiff relied upon a number of documents. The first was a recent report of Dr Jungfer, a psychiatrist with a special interest in brain injury.
The second was a legal opinion from junior counsel (with the concurrence of senior counsel) that was marked as a confidential exhibit.
The third was an affidavit of the plaintiff herself, expressing her own understanding of the proposed settlement, and her contentment with it.
The fourth was an affidavit to similar effect from the tutor of the plaintiff, her mother.
The fifth was an affidavit of the solicitor for the plaintiff that annexed to it a large number of medical reports. They provided me with a sound understanding of the history of the matter, and the divergent views of the many medical experts who have been qualified by both parties.
The sixth and final document was an affidavit of the grandfather of the plaintiff to do with his readiness and suitability to act as a manager of any funds received by the plaintiff. In light of the fact that that foreshadowed order was not pressed, it was relied upon only in support of the proposition that, if I were content to approve the settlement, I should make the referral order.
[3]
Background
A summary of the evidence placed before me is as follows. The plaintiff was born on 21 October 1993 and grew up in the township of Moree in the northwest of New South Wales. On 25 October 1999, then aged 6 years, she was riding her pushbike whilst in the company of a family friend at premises over which the defendant had responsibility. Regrettably, whilst riding the plaintiff fell into a drain and struck her head forcefully on a piece of rock or concrete. The impact caused a piece of rock or concrete to lodge in her frontal lobe. It was removed by way of surgical operation the following day.
Quite apart from that penetrating brain injury, there is no dispute that the plaintiff also suffered permanent facial scarring as a result of the impact, as well as chronic sinus problems and an injury to her nasal septum.
Before the accident, the plaintiff had been an intelligent, organised and reserved little girl. After the accident, she retained her intelligence, and indeed she remains well above average in her intelligence today. But her mother noted not only that she was more readily fatigued than before, but also that she was disorganised and less capable of planning. Those attributes of the plaintiff did not fade away; to the contrary, they developed as the plaintiff grew into adulthood.
At school the plaintiff was the subject of bullying, said to be focused on her scarring, about which she was and is very self-conscious. She also began to show signs of anxiety and depression.
The liability of the defendant was determined in favour of the plaintiff as long ago as in March 2004. The determination of damages was postponed until well after the plaintiff completed high school, so that damages in general, and her future employment prospects in particular, could be properly amended.
In fact, the plaintiff did not score well in the High School Certificate, despite her intelligence. Nevertheless, by way of a pre-selection program, she was accepted by the University of New England at Armidale as a student of Arts and Law (it had always been the firm desire of the plaintiff to practice as a lawyer).
Things have not proceeded well at University, either academically or otherwise. The plaintiff was able to complete very few subjects, and she withdrew from a number of them on the basis that failure was inevitable. On her current rate of completion, it will take the plaintiff many years to attain the two degrees.
As well as that, her problems with mood have continued, and have been treated by medication. Furthermore, whilst she was living in a residential college, the behaviour of the plaintiff became risky and disinhibited. She commenced drinking excessively, and became a heavy smoker. According to at least one report, she went beyond experimentation in her use of cannabis and other prohibited drugs. On occasions, she would make socially inappropriate comments in conversation that others found embarrassing. She has placed herself in difficult, perhaps even physically dangerous, situations.
The position of the plaintiff is that all of those phenomena are the result of her traumatic brain injury, and should sound in damages. In particular, it is said that her poor academic achievements, even despite her intelligence, her disorganisation combined with lack of motivation, and her reckless impulsivity can be traced back without difficulty to the frontal lobe injury.
The defendant does not dispute that the plaintiff suffered a traumatic brain injury. Nor, as I understand it, is there a dispute that that has led to some degree of cognitive impairment. But the defendant, through the experts that it has qualified, sharply disputes that all of the aspects of the conduct of the plaintiff that I have summarised lead back to the accident. I shall refer to the opinions of those experts very briefly.
Dr Smith, a very experienced psychiatrist, has diagnosed the plaintiff with Bipolar Affective Disorder. In a report of 1 July 2014, he has expressed the firm opinion that much of her behaviour is caused by that condition, and not by the brain injury, and that that condition is, in turn, nothing to do with the brain injury.
Dr Rolden, a clinical psychologist, in a report of 22 April 2014 has suggested that the behaviour of the plaintiff could simply be the result of immaturity and lifestyle choices. He has also expressed the view - in stark contrast to the experts qualified on behalf of the plaintiff - that she is generally quite capable of living independently in the years ahead.
Dr Spira, a consultant neurologist, in a report of 1 May 2014 has expressed the opinion that the injury to the frontal lobe has been "overvalued" as an explanation for the behaviour of the plaintiff. He regards a "psychogenic behavioural disorder" as being the more likely explanation. He also believes that, as a result of the accident, the plaintiff was given "a latitude" by way of the lowered expectations of others. It is that, he considers, that has led to the behaviour of the plaintiff, including her lack of focused application to study.
Dr Defina, a clinical psychologist, in a report of 4 August 2014 on the letterhead of Vocational Capacity Centre, has referred to the possibility that mood disturbance at school, itself brought on by bullying, could also have contributed substantially to the academic underperformance of the plaintiff. He also referred to the opinion expressed by Dr Smith about the role of Bipolar Affective Disorder in the behaviour and mood of the plaintiff.
Ms Hammond, an occupational therapist, in a report of 1 August 2014 has made the point that risky behaviours are a not unusual part of adolescence. She has also expressed the firm opinion that the plaintiff will require very little or no ongoing care in the future.
In short, it can be seen that there is available to the defendant a panoply of evidence, provided by expert witnesses (all of whom are well qualified, and some of whom are eminent) that would be deployed at a full hearing firmly to resist the full measure of damages that the plaintiff would claim.
[4]
Submissions
It is in that context that Mr Semmler QC explained to me that the plaintiff through her tutor is concerned to avoid the very real risks of a full hearing. He also submitted that there would be, of course, a great deal of stress occasioned to the plaintiff and her mother by such an event. The injury occurred many years ago, and the family as a whole now seeks resolution of the litigation. A separate concern is an adverse costs order, in light of the procedural history of the matter. As well as that, Queen's Counsel did not seek to gainsay my understanding that both he and his junior are highly experienced in this field of litigation. In short he submitted that, taking into account the personal, evidential and professional matters to which I have referred, it is appropriate that I approve the proposed settlement.
[5]
Determination
The principles upon which such an application needs to be considered are well-established and do not require elaborate discussion by me. Suffice to say that the test to be applied is whether I am satisfied that the settlement is beneficial to the interests of the plaintiff under incapacity: see Permanent Trustees v Mills [2007] NSWSC 336; (2007) 71 NSWLR 1 at [19] (Hammerschlag J); Fisher by her tutor Fisher v Marin [2008] NSWSC 1357 at [29] and [41] (Rothman J); and Institoris by his next friend Maria Institoris v Falconer [2012] NSWCA 298 at [2] (Allsop P).
In this case, the plaintiff through her tutor is represented by two members of the Bar, one of them a silk, and each an expert in the relevant field. The proceedings have been appropriately postponed for many years to permit a clear and settled picture of the position to emerge. The medical condition of the plaintiff has been investigated exhaustively on her behalf. A full hearing with regard to damages will occasion significant stress to the plaintiff and her family. It may also result in a large adverse costs order. Most importantly, a full hearing is fraught with danger, in that it is certainly possible that a tribunal of fact could accept the expert evidence of the defendant, in whole or in part. Finally, without revealing the settlement sum, or the contents of the confidential legal advice about it, I consider that I can say that the amount proposed is very substantial indeed.
In all of those circumstances, I consider, exercising my own independent judgment with regard to the matter, that I should approve the settlement.
As for the ancillary orders that I have been asked to make, at the hearing Queen's Counsel assisted me by briefly analysing their practical effect, and has satisfied me that they are soundly appropriate and unexceptionable.
Finally, as for the appointment of funds managers, the proposal is that they would be the mother and grandfather of the plaintiff, as opposed to a professional entity such as the New South Wales Trustee and Guardian. That is a proposal that will require careful consideration. I accept the submission that it is appropriate for that question to be transferred to the Protective List of the Equity Division of this Court.
[6]
Orders
I make the following orders:
1. Judgment for the Plaintiff against the Defendant in the sum referred to in the consent judgment as term 1.
2. The Defendant to pay the Plaintiff's costs as agreed or assessed.
3. The Defendant is authorised to deduct from the judgment sum, monies already paid to, for or on behalf of the Plaintiff, as follows:
1. South Eastern Sydney Area Health Service in the sum referred to in the consent judgment as term 3(i).
2. New England Area Health Service in the sum referred to in the consent judgment as term 3(ii).
1. The Defendant is authorised to deduct and pay the amount referred to in the consent judgment as term 4 and forward it to Litigation Lending Pty Ltd, C/-McCabe Partners Lawyers, Office 5C, 1 Box Road, Taren Point, NSW, 2229 (PO Box 2114, Taren Point), being loan repayment of the Plaintiff's Litigation Lending Loan.
2. The Defendant is authorised to deduct and/or pay from the judgment sum any moneys repayable in respect of this action by the Plaintiff to any person or body whether in respect of Department of Human Services, Centrelink or otherwise concerning which any demand or notice has been served on or given to the Defendant or their solicitor or insurer either before, on or after the date of this order.
3. The Plaintiff undertakes and agrees to pay out of the judgment sum any moneys repayable by the Plaintiff to any person or body whether in respect of Department of Human Services, Centrelink or otherwise which may not have been deducted by the defendant pursuant to paragraph 5 and/or to the parties entitled, all outstanding medical, hospital, ambulance and other out-of-pocket expenses.
4. No interest to run on payment of the judgment sum until 28 days from the date of the latest of the following:
1. Approval of this settlement.
2. The earlier of:
1. receipt by the Defendant's solicitors of a Notice of Charge pursuant to section 24 of the Health and Other Services (Compensation) Act 1995 (Cth);
2. the expiration of the time prescribed by section 24 of the Health and Other Services (Compensation) Act 1995 (Cth);
3. receipt by the Defendant's solicitors of a sealed copy of the Consent Judgment; or
4. receipt by the Defendant's solicitors of a Notice of Charge or Compensation Release Notice from Centrelink.
1. The Judgment sum to be paid as follows:
1. Defendant to pay the judgment sum to the Supreme Court of New South Wales pending further orders to be made by the Protective Division.
1. The parties agree these terms are not to be disclosed.
2. The remaining application with regard to the appointment of a funds manager is transferred to the Protective List of the Equity Division of this Court.
[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: 19 March 2015