Solicitors:
Slater and Gordon (First to Fourth Plaintiffs)
Wotton + Kearney (Defendant)
File Number(s): 2012/21327
[2]
Judgment
The first plaintiff, and his children the second, third and fourth plaintiffs, for whom he is the tutor, all claim damages from the defendant, for both nervous shock and compensation to relatives arising out of the tragic death of the first plaintiff's wife and the second, third and fourth plaintiff's mother. In May 2016, the deceased and her family were dining at an Italian restaurant in Parramatta operated by Alaska Group Pty Ltd (Alaska). She suffered a fatal anaphylactic reaction due to the sesame seeds in the food she was served at the restaurant.
The plaintiffs' case was that, at the time of the accident, Alaska had care, control and management of the restaurant, and was vicariously liable for the acts and omissions of its employees working in the restaurant. It is alleged that Alaska ought to have been aware of anaphylactic reactions by members of the public to certain foods and substances which were used in the restaurant.
Alaska has subsequently been deregistered and the defendant in these proceedings is the relevant insurer of Alaska at the time of the accident.
The parties have agreed to settle the first, second, third and fourth plaintiff's claims on terms that are recorded in forms of consent judgment, which have been provided to the Court and which the parties request the Court to make, if it is satisfied that the settlement in respect of the second, third and fourth plaintiffs should be approved.
Section 76(3) of the Civil Procedure Act 2005 (NSW) (CP Act) provides that any compromise or settlement of proceedings commenced by a person under legal incapacity, such as the second, third and fourth plaintiffs in this case, may not proceed without the approval of the Court. Section 76(4) empowers the Court to approve or disapprove the agreement.
The CP Act itself does not provide any specific guidance as to the considerations that the Court should take into account in carrying out the task of approving or disapproving a settlement such as this. However, the broad principles governing the exercise of the Court's jurisdiction under s 76, and related provisions, were considered in Permanent Trustee v Mills (2007) 71 NSWLR 1; [2007] NSWSC 336. At [19], Hammerschlag J said:
"SCR Pt 63 rr 11 and 13 as well as ss 75 and 76 are provisions intended to facilitate the obtaining of the Court's approval. The substantive principles which underpin those provisions are the following:
(a) this Court has parens patriae jurisdiction which in general terms is exercised when there is some risk to a child's welfare and which supports a great variety of orders, including orders related to protection of property: AMS v AIF (1999) 199 CLR 160 at 189 per Gaudron J;
(b) when a claim of an infant or other person under disability is before the Court, the Court needs, for the purpose of protecting his or her interests, full control over any settlement compromising his or her claim: Dietz v Lennig Chemicals Ltd [1969] 1 AC 170 at 189 per Lord Pearson;
(c) in an action by an infant by means of a best friend or tutor whatever is done must be for the benefit of the infant, and if, in the opinion of the Court it is not so, the infant is not bound: Rhodes v Swithenbank (1889) 22 QBD 577 at 578-579. Concomitantly, the Court will not enforce a compromise against the opinion of the tutor and his or her advisers: Re Birchall (1880) 16 Ch D 41."
The relevant principles can be summarised in the following way:
1. the Court's function is essentially protective;
2. it should scrutinise the terms of the settlement for the purpose of protecting the interests of the person who is under a legal incapacity; and
3. approval depends ultimately on whether the settlement is beneficial to the interests of that person,
Bacon by his tutor Sarah Rea v Western New South Wales District Health Service [2018] NSWSC 1840 at [3].
I have had the considerable advantage of reading the confidential memorandum of advice of Mr Kelvin Andrews of counsel, who appeared for the first to fourth plaintiffs, in relation to the matter. I have taken what is contained in that memorandum into account.
I have also had regard to the following affidavits provided by the first plaintiff, in his capacity as a tutor for the second, third and fourth plaintiffs, as well as the affidavits of the solicitor for the first to fourth plaintiffs, Ms Sarian, as follows:
1. affidavits of the first plaintiff, in relation to the second plaintiff sworn 8 October 2020, in relation to the third plaintiff sworn 8 October 2020 and in relation to the fourth plaintiff sworn 8 October 2020;
2. affidavits of Eleni Sarian, in relation to the second plaintiff sworn 9 October 2020, in relation to the third plaintiff sworn 9 October 2020 and in relation to the fourth plaintiff sworn 9 October 2020; and
3. an affidavit of Eleni Sarian sworn 15 October 2020 annexing the substantive part of Mr Andrews' confidential advice and proposed forms of orders.
All three of the second to fourth plaintiffs remain under a legal incapacity in that they are all still under the age of 18 years.
[3]
The Second Plaintiff
In the affidavit of the first plaintiff, he explained that, in his capacity as tutor, he had read the expert evidence obtained by both the second plaintiff's solicitor and the defendant's solicitor. He also stated that he had received advice from Mr Andrews and Ms Sarian and understood that by agreeing to resolve the second plaintiff's claim, the second plaintiff can never sue the defendant for his injuries sustained in relation to this accident, even if his injuries deteriorate and even if he requires ongoing treatment. The first plaintiff further stated that he understood that the defendant will have no further liability for ongoing treatment required, or other losses suffered, by the second plaintiff in the future arising out of the subject matter of the present proceedings, if the settlement is approved and the orders are made.
In relation to damages, besides the inherent difficulties in establishing psychiatric illness arising from events which occurred when the second plaintiff was only 8 years old, the second plaintiff's case was rendered more complicated by the conflicting assessments of the psychiatrist, Dr Apler, who was retained by the plaintiffs, and the views of the psychologist, Dr Roberts, who was retained by the defendant. Both of them assessed the second plaintiff in 2018. Dr Apler was of the view both in his 11 September 2018 report and later in his 18 September 2020 report that the second plaintiff continued to experience sadness related to the loss of his mother and his symptoms had persisted to a greater extent than expected following the accident, despite counselling, and could be diagnosed in psychiatric terms as dysthymic disorder. By contrast, Dr Roberts was of the view in her 29 January 2019 report that:
"On the basis of current evidence, I do not think [the second plaintiff] has any diagnosable emotional disorder attributable to 21 May 2016. I would accept he was understandably distressed about the circumstances of his mother's death and the difficulties that have occurred since, which would not be helped if his father behaved generally as he did at this appointment. …
Based on current information, I do not think that [the second plaintiff] needs any treatment for psychological issues, nor does it appear that he has any, apart from seeing the school counsellor.… "
The diverging opinions of these two experts reveal the competing views as to the second plaintiff's condition. As a result, the second plaintiff's success or failure would be likely to depend on which opinions were accepted, even if liability were established.
It also appears that the continuation of these proceedings is unlikely to be in the best interests of the second plaintiff as it would prolong his association with the circumstances of her mother's death.
Taking all of those considerations into account and having regard to the amount of the agreed settlement as well as the percentage range for non-economic loss estimated by Mr Andrews, I am satisfied that what is proposed is prudent and it would be in the second plaintiff's best interests if the settlement is approved, as requested by his tutor.
[4]
The Third Plaintiff
In the affidavit of the first plaintiff, in his capacity as tutor, he explained that he had read the expert evidence obtained by both the third plaintiff's solicitor and the defendant's solicitor. He also stated that he had received advice from Mr Andrews and Ms Sarian and his understanding was to the same effect as that already mention in relation to the second plaintiff.
As with the second plaintiff's claim, issues of the third plaintiff's injury and loss as well as liability came to the fore in the divergent views expressed by the psychiatrist, Dr Apler, and the psychologist, Dr Roberts. In Dr Apler's report dated 11 September 2018, he found that the third plaintiff had developed a grief reaction after the accident and felt very sad when thinking about his mother, both at home and at school, and would refuse to go to restaurants. Dr Apler considered his symptoms "greater than expected" and diagnosable as dysthymic disorder in psychiatric terms. Dr Alper was of the opinion that the third defendant required counselling and recommended 12 sessions of psychological intervention at fortnightly intervals. Dr Roberts's report of 29 January 2019, however, painted a different picture. Dr Roberts found that her assessment of the third defendant did not indicate that he was clinically anxious or depressed and did not have post-traumatic stress disorder attributable to the incident leading to this claim. She also found a discrepancy between the first plaintiff's ratings of the symptoms and problems the third plaintiff was suffering from and those given by the third plaintiff himself. Dr Roberts concluded that she was not of the view on the information before her that the third plaintiff's condition supported a diagnosis of dysthymia. It should also be noted that in Dr Apler's second report of 18 September 2020 he found that the third plaintiff's condition had improved but that he was still affected by dysthymic disorder in a mild form. It was said that while further counselling sessions were needed, his future earning capacity might not be affected by the incident.
In light of the material available, it appeared to me that the issues of causation, and the nature and extent of loss and damage, as well as broader liability issues are far from clear cut. The success of the third plaintiff's case, if this matter were heard, would depend greatly on how he presented in evidence and which of the opinions of Dr Alper or Dr Roberts should be accepted.
It also seems to me that the discontinuance of these proceedings is in the best interests of the third plaintiff, so as not to prolong his association unnecessarily with matters surrounding his mother's tragic death.
Taking all of those considerations into account, his tutor's request that the settlement be approved and having regard to the amount of the agreed settlement as well as Mr Andrews' opinions, I am satisfied that what is proposed is prudent and it would be in the third plaintiff's best interests if the settlement is approved.
[5]
The Fourth Plaintiff
In the affidavit of the first plaintiff, in his capacity as tutor for the fourth plaintiff, he explained that he had read the expert evidence obtained by both the fourth plaintiff's solicitor and the defendant's solicitor. He also stated that he had received advice from Mr Andrews and Ms Sarian and his understanding in relation to the fourth defendant was to the same effect as that already mention in relation to the second plaintiff.
Much like with the second and third plaintiffs, the opposing opinions presented by Dr Apler and Dr Roberts outline issues that would need to be resolved if this matter were to proceed to a hearing. In his report of 11 September 2018, Dr Apler stated that the fourth plaintiff had developed separation anxiety disorder as a result of her mother's death and required psychological counselling involving her father. He recommended at least 12 counselling sessions at fortnightly intervals. Somewhat contrary to this was the report of Dr Roberts, who stated that she did not think that the fourth plaintiff had diagnosable levels of disabilities and did not think that any psychological treatment was required. Dr Roberts expressed disagreement with the diagnosis and treatment plan suggested by Dr Apler. It should also be noted that more recently, Dr Apler said in his report of 18 September 2020 that the fourth plaintiff's separation anxiety disorder, which he had previously diagnosed, had become mild and thought any adverse effects on her future earning capacity was unlikely.
The opinions expressed by Dr Apler and Dr Roberts once again offer two competing views not only on the extent of the fourth plaintiff's circumstances at the time the clinical assessments were undertaken but also of any forecasts as to her prospective condition. The fourth plaintiff was only two years and eight months old at the time of her mother's death. In my opinion, her age at the time of the incident only compounds the difficulties that may arise if this matter were to go to a hearing. As with the second and third plaintiff the outcome would depend largely on which of the opinions expressed was accepted by a trial judge.
Taking these significant issues into account, as well as the potential for further psychological harm or distress to the fourth plaintiff in the event that these proceedings are not resolved by agreement and she is subjected to more discussions about her deceased mother in the course of further litigation, and having regard to the amount of the agreed settlement, I am satisfied that what is proposed is prudent and it would be in the fourth plaintiff's best interests if the settlement is approved as sought by her tutor.
[6]
Payment of settlement money
Section 77 of the CP Act requires, in a case such as the present, that any money paid pursuant to the orders made as a result of the approval of the settlements be paid into court or, if the Court so directs, to the NSW Trustee and Guardian.
The parties have requested that I direct that the money to be paid as a result of judgments in favour of the second, third and fourth plaintiffs, if the settlements are approved, be paid to the NSW Trustee and Guardian to be held in accordance with s 78(1) of the CP Act.
In my view, such a course is appropriate in the circumstances and I propose to so order and direct.
[7]
Orders
Accordingly, the Court orders that:
1. In so far as these proceedings relate to the second, third and fourth plaintiffs, the settlement of these proceedings is approved.
and, by consent, makes:
1. In respect of the first plaintiff, orders in accordance with paragraphs 1, 2, 4, 5 (as amended) and 9 of the form of consent judgment signed and dated with today's date and to which the Court seal has been affixed and notes the agreements of the parties in paragraphs 3, 6, 7 and 10 and the undertaking of the first plaintiff in paragraph 8 of that form of consent judgment.
2. In respect of the second plaintiff, orders in accordance with paragraphs 1, 2, 4, 5 (as amended), 6 and 10 of the form of consent judgment signed and dated with today's date and to which the Court seal has been affixed and notes the agreements of the parties in paragraphs 3, 7, 8 and 11 and the undertaking of the second plaintiff in paragraph 9 of that form of consent judgment.
3. In respect of the third plaintiff, orders in accordance with paragraphs 1, 2, 4, 5 (as amended), 6 and 10 of the form of consent judgment signed and dated with today's date and to which the Court seal has been affixed and notes the agreements of the parties in paragraphs 3, 7, 8 and 11 and the undertaking of the third plaintiff in paragraph 9 of that form of consent judgment.
4. In respect of the fourth plaintiff, orders in accordance with paragraphs 1, 2, 4, 5 (as amended), 6 and 10 of the form of consent judgment signed and dated with today's date and to which the Court seal has been affixed and notes the agreements of the parties in paragraphs 3, 7, 8 and 11 and the undertaking of the fourth plaintiff in paragraph 9 of that form of consent judgment.
[8]
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Decision last updated: 20 October 2020