Howarth v Tweed Shire Council

Lawyers (P) DLA Piper Australia (D1) Rankin Ellison Lawyers (D2) File Number(s): 2007/00265045

EX TEMPORE Judgment 1This is an application for approval pursuant s 76(4) of the Civil Procedure Act 2005 of the compromise that has been reached between the plaintiff and the first and second defendants. The terms of the compromise are recorded in two documents, each of which are consent judgments signed by the parties. As well, the terms are supplemented by the orders sought in a Notice of Motion filed today, 4 September 2013. 2The plaintiff, Carly Howarth, was involved in an incident as a very young child in which she fell into a retention pond, and was taken to hospital suffering the effects of a near drowning. 3Proceedings were commenced against the Tweed Shire Council, which was the owner of the land upon which the retention pond was situated, and also against her father in whose care she was at the time. A cross-claim has been instituted by her father against GIO Australia Insurance seeking indemnity with respect to any award of damages. The insurer denies any obligation to indemnify Mr Howarth. The cross-claim between these parties has settled. That compromise does not require the approval of the Court. 4Following upon an informal settlement conference the parties have agreed, subject to the Court's approval, to resolve the proceedings. 5In considering whether to approve a compromise for an infant settlement such as this one, the central question is whether having regard to all of the relevant facts, matters and circumstances, the compromise is a fair and reasonable one, in the interests of the plaintiff to approve: see Yu Ge v River Island Clothing Pty Ltd [2002] NSWSC 28, (2002) Aust Torts Reports 81-638 at [30]-[32]; Fairhurst v Fairhurst [2012] NSWSC 388 at [30]-[39]. 6It is fair to say the sum which Carly will receive is not at, or near, the upper end of the range of damages which she might otherwise possibly recover if the proceedings ran through to judgment. However, there are a number of features about this proposed compromise which strongly point to the desirability of the Court's approval of it. 7The first of those features is relevant to the issue of the sum of damages which might be recovered. In order for Carly to recover damages at, or approaching, the upper end of the range of damages, the Court would need to hear and determine a dispute between the parties as to the causation of Carly's current disabilities. The nature of that dispute involving, as it does, a debate between congenital abnormality and abnormalities acquired by reason of the incident in question, would be complex, lengthy and one which has the potential to cause significant family and matrimonial disharmony. As well, it is an issue which is unclear in terms of the result which may be expected. 8The second feature assumes that Carly was to succeed on liability against each of the first and second defendants, which as it seems to me is the most likely outcome of any hearing. As the second defendant, Mr Howarth, Carly's father, is uninsured with respect to any judgment entered against him, then the impact of Mr Howarth being required to meet a component of any judgment entered in favour of Carly, most probably because the first defendant, Tweed Shire Council, having paid the total judgment would then be seeking to recover such share as the Court determines that it would be equitable for Mr Howarth to pay, then the entirety of the family's assets would be placed at risk. 9Whilst this probably would not have a direct financial impact upon Carly, it is most likely that it would have significant, and ongoing, indirect impact upon her and upon her welfare. Not the least of these indirect impacts would be that, because Mr Howarth's principal asset is his home, of which he is a joint tenant with his wife, there is a real risk that the home would be sold, and that the family including Carly, would be obliged to find alternate, and no doubt less satisfactory, accommodation. This is an impact upon Carly which cannot be measured simply in dollar terms. 10However, it can be measured by considering what effect that may have on the future family support which Carly is likely to require and to receive for a very long time. In my assessment it would have a significantly detrimental effect upon future family support. 11In all of the circumstances, I am satisfied that this is a matter where the compromise reached between the parties is a proper one for approval and it is in the interests of Carly that the compromise be approved in the terms in which it has been reached. 12Since Carly will turn eighteen in a little over two months it is appropriate that I do not immediately make an order for the payment out of Court of the judgment sum to the New South Wales Trustee and Guardian, until Carly and her parents have had an opportunity of considering what arrangements ought be made with respect to the appointment of a financial manager for Carly once she turns eighteen. 13I make the following formal orders: (1)Pursuant to s 76(4) of the Civil Procedure Act 2005, I approve of the compromise reached between the plaintiff and each of the defendants. (2)I note that the compromise has been reached in circumstances where neither of the defendants admit they are liable to pay any sums to the plaintiff. (3)I order that there be judgment for the plaintiff against the first defendant in the sum set out in the consent judgment between the plaintiff and first defendant dated 4 September 2013. (4)I order the first defendant to pay the plaintiff's costs in the sum set out in term 2 of the consent judgment. (5)I note the first defendant has agreed to waive the benefit of the costs order made in its favour by the Court of Appeal on 28 April 2009. (6)I note the terms of paragraphs 4, 5, 6, 8 and 9 of the consent judgment between the plaintiff and the first defendant. (7)I note that pursuant to s 77(2) of the Civil Procedure Act 2005, the judgment sum is less the amount of $2,154.90 to be paid into Court. I note the first defendant is to be at liberty to deduct and pay from the judgment sum the amount of $2,154.90 so as to enable the payment of that sum to the Health Insurance Commission. (8)I order that there be a judgment for the second defendant. I make no order as to costs of the proceedings between the plaintiff and the second defendant. I note that the parties are agreed that these terms are not to be disclosed. (9)I make an order that the affidavits which have been relied upon, are to be placed in a sealed envelope and only opened by order of a judge of the Court. (10)By consent and without admission of liability, I order that the First Cross-Claim brought by Tweed Shire Council against the first cross-defendant, Mr Howarth, be dismissed. (11)I order that the Third Cross-Claim brought by Mr Howarth, as cross-claimant, against Tweed Shire Council, as cross-defendant, be dismissed. (12)I order Tweed Shire Council to pay Mr Howarth's costs in the sum of $50,000. (13)I order that no interest is to run on payment of those costs until twenty-eight days from the later of the following; (i)approval of the settlement by this Court between the plaintiff and the first defendant; or (ii)receipt by Tweed Shire Council's solicitor of an authority to receive. Note the parties are agreed that the terms are not to be disclosed.