Institoris by his next friend Maria Institoris v Falconer

Judgment 1ALLSOP P: The plaintiff, the applicant for leave to appeal, Brodie Institoris, by his tutor, Maria Institoris seeks approval of terms of settlement pursuant to the Civil Procedure Act 2005 (NSW), s 76. Pursuant to that section the Court may approve terms of settlement where proceedings relate to a person under a legal incapacity. The definition of a person under a legal incapacity in s 3 of the Act includes a child under the age of 18. Brodie is a minor born on 7 November 1999 and so s 76 applies. Section 76 relevantly provides as follows: "Settlement of proceedings commenced by or on behalf of, or against, person under legal incapacity (1) This section applies to proceedings commenced by or on behalf of, or against, any of the following persons: (a) a person under legal incapacity, (b) a person who, during the course of the proceedings, becomes a person under legal incapacity, (c) a person whom the court finds, during the course of the proceedings, to be incapable of managing his or her own affairs. (2) The court may make a finding referred to in subsection (1)(c) only on the basis of evidence given in the proceedings in which it is made, and such a finding has effect for the purpose only of those proceedings. (3) Except with the approval of the court, there may not be: (a) any compromise or settlement of any proceedings to which this section applies, or (b) any acceptance of money paid into court in any such proceedings, as regards a claim made by or on behalf of, or against, a person referred to in subsection (1). (4) If an agreement for the compromise or settlement of any matter in dispute in any such proceedings is made by or on behalf of a person referred to in subsection (1), the court may approve or disapprove the agreement. (5) An agreement disapproved by the court does not bind the person by whom or on whose behalf it was made. (6) An agreement approved by the court binds the person by whom or on whose behalf it was made as if he or she were of full capacity and (if it was made by some other person on his or her behalf) as if that other person had made the agreement as his or her agent." 2Cases considering the application of s 76 were helpfully summarised recently by Hallen AsJ in Fairhurst v Fairhurst [2012] NSWSC 388 at [30]-[40]. I am assisted by that helpful recitation of authority and take those matters of principle into account. There are no guidelines as to the exercise of the Court's discretion to approve or disapprove terms of settlement. The principle is whether the settlement is in the best interests of the minor or is beneficial to the minor. 3Brodie was injured in a car accident on 29 June 2004. He was then aged four years and seven months. His mother was driving the vehicle, which left the road and collided with a tree. The evidence was that she fell asleep at the wheel. Liability was admitted and the matter proceeded as an assessment of damages. The tutor in these proceedings is Marie Institoris, who is Brodie's grandmother and has custody of him. 4Brodie suffered a fracture which required surgery to his right elbow as a result of the accident. He was taken to Orange Base Hospital and underwent an open reduction and internal fixation on the same day. Further surgery was performed on 16 July 2004 and again on 26 July 2004 at Dubbo Base Hospital to remedy malunion of the fracture with a varus deformity. A plate remains in Brodie's elbow. There was also evidence in the medical reports that he suffered a fracture of the right second rib posteriorly and pulmonary contusions. 5The Motor Accidents Authority assessed Brodie's injuries as not meeting the threshold for an award of non-economic loss. The only issue before the primary judge in the District Court (Balla DCJ) was the amount that Brodie was entitled to receive for future economic loss. 6There was some contest in the medical reports as to the likely future effects of Brodie's injury. The primary judge preferred the evidence of two orthopaedic surgeons, Doctors Giblin and Barrett, and an occupational physician, Dr Marsh, over the evidence of Dr Conrad, a general surgeon. 7The primary judge stated that the three doctors, whose evidence her Honour preferred, considered that Brodie had made a full recovery and did not suffer from restricted movement or flexibility. Dr Conrad considered that Brodie did suffer from restricted movement and could possibly require future treatment. The reports of Doctors Marsh, Barrett and Conrad are contained in the annexures to the affidavit of Matthew Palazzolo, solicitor for the plaintiff, sworn 13 August 2012, which is before me and which I take as read. 8The primary judge summarised Dr Conrad's observations as to possible future complications as follows: "Dr Conrad considered that the plaintiff had an impairment in his working capacity as the doctor was of the view that he will undoubtedly be restricted in doing certain heavy work with his right arm, such as in certain trades where he needs to do heavy lifting and using heavy tools or vibrating tools. He may have problems in doing heavy labouring work and doing computer work in the future." 9As to the evidence, the primary judge concluded: "[T]he three other doctors, including a treating doctor, consider that the plaintiff has made a full recovery. I prefer the opinions of those three doctors. They have explained their conclusion by reference to the radiological investigations and their examinations. Dr Conrad has not explained why he thinks the growth plate might be involved, why arthritis might develop or why the plaintiff will not be able to do heavy work." 10The primary judge gave judgment in favour of the plaintiff for $5,000 on 6 March 2012. The plaintiff lodged a notice of intention to appeal on 30 March 2012 and a summons seeking leave to appeal on 6 June 2012. The summary argument states that the primary judge erred in assessing the most likely future circumstances pursuant to s 126. 11Her Honour made no finding as to the credit of Brodie, who gave evidence of some ongoing problems including pain at the site of injury when bumped or when playing some sports. Brodie provided an account of this to Dr Conrad, which formed the basis of his opinion. 12The summary of argument states that the amount claimed at trial was in the order of $150,000. On 28 June the defendant's legal representatives made an offer of settlement in the sum of $43,000 plus costs subject to deductions for amounts already paid by the defendants or payable to Medicare. The terms seek to have the money paid directly to the New South Wales Trustee and Guardian to be held on trust until Brodie reaches majority. 13There was provided in the material to the Court the notice of charge to Medicare which is in the sum of $439.30. That notice of charge, however, expired on 28 December 2011 and a current and valid notice will need to be obtained and provided to the Court. 14The evidence discloses that the plaintiff's counsel and solicitor considered the offer and were of the view that it was within the range of damages and advised the plaintiff to accept it. That advice was taken by the plaintiff and his tutor and approval is sought for the settlement. 15I have considered Balla DCJ's reasons, the medical evidence and the other material placed before me. Whilst the settlement sum is significantly below the amount said to be claimed in the summary of argument, in my view, bearing in mind the risks of litigation, the potential consequences of costs orders should litigation fail and the content of the medical reports, the sum offered and accepted is a reasonable and appropriate settlement. Taking into account all the risks and all the circumstances, it is one that is in the interests of the minor and beneficial in that sense. 16For these reasons, I would make an order today, but I will refrain from doing so until I have seen the final notice of charge from Medicare. I appreciate that it is unlikely to be either different or substantially different from that which has been provided to me but I do not think I should make the order until that time. 17I have been given orders under the terms of settlement which I am prepared to make and upon being provided with that updated notice of charge I would be prepared to make the orders. 18The papers make clear, and the orders make clear, that the sum being paid suffers deductions only for amounts already paid and amounts payable to Medicare and is not being reduced for legal costs for any practitioner. 19On that basis I am prepared to make the orders and will do so upon provision of the current notice of charge to Medicare. 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 September 2012