Piekuta by her tutor Piekuta v Saab

Judgment 1Before the Court is an application for approval of a settlement of litigation in which the plaintiff is a minor who sued by her mother as tutor. The application is brought pursuant to section 76 of the Civil Procedure Act 2005 (NSW) ("the Act"), which is as follows: 76 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. 2The question is whether I should approve a settlement in a sum that is markedly less than the quantum of damages that would fully recompense the plaintiff for her injuries, in circumstances in which the establishment of liability is by no means certain. Chronological background 3In July 2003, the first defendant purchased some premises at Hunters Hill. She resided there with her husband, the second defendant, and their children. The second defendant installed a commercially manufactured water feature. The first defendant sold the premises in February 2004. 4The plaintiff was born in December 2005 and is accordingly now aged eight years old. 5In October 2007, the plaintiff and her family moved into the premises. Between that month and February 2004, there had been a large number of occupiers of the premises. Some of them can be identified. However, there are gaps in the knowledge of the legal advisors of the plaintiff as to who precisely was in occupation during that period. There are also gaps in the available evidence as to the state of the premises generally, and the water feature in particular, throughout that period. Specifically, it is not clear that the state of the water feature when it injured the plaintiff is the same as it was when the second defendant installed it, or when the defendants moved out. 6On 7 July 2008, the plaintiff (then aged two and a half) was playing in the backyard of the premises. A heavy column of the water feature that had been installed five years previously fell, and occasioned a serious brain injury to the plaintiff. 7On 10 March 2014, the matter was set down for hearing in this Court with regard to liability only. Shortly before that time, the parties commenced settlement negotiations. There were various disagreements along the way; it is unnecessary to detail them. Eventually, the position was reached on 1 May 2014 that the matter could be finally resolved if the plaintiff were to receive $150,000 in damages free of any deductions. 8It is that settlement that I am asked to approve. Submissions 9Junior counsel for the plaintiff read a number of affidavits in support of the application. One of them annexed an exhibit that was written advice from senior counsel and junior counsel of the plaintiff that was kept confidential from the solicitor for the defendants, in accordance with usual practice. I was asked to refer in my judgment to that advice without undue specificity. The advice sets out the reasons why its authors consider that the settlement is appropriate. I was informed that both of the authors of that advice are counsel highly experienced in this area of law. I was also told from the Bar table, without objection from the defendants, that the solicitor for the plaintiff has had 30 years' experience in this field of litigation. 10Junior counsel for the plaintiff accepted that the settlement constitutes a very marked reduction of the total damages that the plaintiff could expect to receive if she succeeded completely on the question of liability. However, he submitted that there are real difficulties in establishing liability on the part of the defendants. First, there is a question of substantive law about whether the elements of the tort of negligence can be established against the defendants in the circumstances of this case. Secondly, even if that be the case, because of the gaps in the information available to the legal advisers of the plaintiff to which I have referred, there will be substantial evidentiary difficulties in establishing liability. 11Junior counsel for the plaintiff submitted that, in the circumstances, it is quite appropriate that the quantum of damages be markedly reduced, in order to reflect, as a matter of "risk management", the significant possibility that the claim could fail completely. 12He also submitted that, because of the unusual substantive questions, there is a real prospect that the matter would not conclude at first instance, and could be appealed by either party. He explained that the plaintiff's tutor is concerned about the prospect of very significant costs accruing to the family were the claim to fail. He also submitted that the tutor and the family generally seek a resolution of the matter now, almost six years after the injury occurred. 13He emphasised that the mother of the plaintiff, the father of the plaintiff, her solicitor, junior counsel, and senior counsel are all in favour of the settlement that is proposed. 14The solicitor for the defendant made no submissions opposing the approval, and simply noted that, from her perspective, the settlement sum constitutes a sound protection of the interests of the plaintiff. Determination 15The test may be stated simply as being whether I am satisfied that the settlement is beneficial to the interests of the plaintiff under incapacity. In Permanent Trustee v Mills [2007] NSWSC 336; (2007) 71 NSWLR 1 at [19] Hammerschlag J discussed the principles underlying section 76 of the Act as follows: "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." 16In Fisher by her tutor Fisher v Marin [2008] NSWSC 1357 Rothman J referred with approval to that discussion. His Honour also said at [41]: "Ultimately, the principle that I apply is whether the settlement that has currently been reached (and the amount thereof) is in the interests of the plaintiff. In that regard, bearing in mind the risk that, liability being in issue, the plaintiff would receive nothing from any hearing that may occur, the test may be described as whether the risk to the plaintiff, of losing that which is already agreed, is outweighed by the possibility of receiving more if the matter were to go to hearing." 17Although the wishes of the tutor and the plaintiff's father, along with the legal opinions of the three lawyers of the plaintiff are not conclusive, I consider that they should be given substantial weight. There is nothing to suggest that the parents of the plaintiff are motivated by anything other than love for their daughter and concern for her best interests. And the standing of senior counsel for the plaintiff, and the experience of all of her lawyers, is surely a relevant factor in my assessment of their views about the matter. 18On the material before me, I consider that the adoption of a "risk management" approach leading to the marked reduction in damages is appropriate. 19Nor do I consider that the desire to have the proceedings brought to finality is in any way untoward. 20I consider that the test as explained in the two cases to which I have referred has been made out, and that the terms of settlement are beneficial to the interests of the plaintiff. I certainly see no basis upon which I should stand in the way of the wishes of the tutor, informed as she is by the professional opinion of two expert members of the Bar, one of them senior counsel. 21Accordingly, I propose to make orders approving of the settlement of the matter in the sum of $203,753.06 plus costs. Orders 22I make the following orders: (1)Judgment for the plaintiff against the defendants in the sum of $203,753.06 plus costs in the sum of $122,664.42. (2)The defendants to pay $122,664.42 representing party/party costs directly to Stacks Goudkamp. (3)Direct that the settlement monies of $203,753.06 payable to the plaintiff, less $53,753.06 representing payback to BUPA and Medicare, be paid to the New South Wales Public Trustee and Guardian to be held until the plaintiff reaches age 18. 23Noting, by consent and without admission: (1)Settlement approved pursuant to section 76 of the Civil Procedure Act 2005. (2)The defendants shall be at liberty to deduct and pay from the said sum any moneys payable or repayable by the plaintiff to any person or body whether in respect of treatment expenses, social services, Medicare benefits or nursing home benefits or otherwise concerning which any demand or notice has been or may be served on or given to the defendants or their solicitor or insurer and also any moneys paid or payable pursuant to the Health and Other Services (Compensation) Act 1995 (NSW) as amended or the Health and Other Services (Compensation) Care Charges Act 1995 (NSW). Interest under paragraph 23(5) hereof shall not be recoverable by the plaintiff in respect of that part of the judgment sum covered by any such deduction. (3)The plaintiff by her tutor undertakes and agrees to pay out of the said sum any moneys payable or repayable by the plaintiff to any person or body whether in respect of treatment expenses or social services or pursuant to the Health and Other Services (Compensation) Act 1995 as amended or otherwise which may not have been deducted by the defendants pursuant to paragraph 23(2) hereof and also to pay to the parties entitled all outstanding medical, hospital, ambulance and other out-of-pocket expenses. (4)The amount of the judgment sum or the balance thereof after any deductions made pursuant to paragraph 23(2) hereof shall be paid into Court pursuant to section 77 of the Civil Procedure Act 2005 within 28 days of the receipt by the defendants or their insurer of a notice from the Managing Director of Medicare Australia under section 24 or section 25 of the Health and Other Services (Compensation) Act 1995 as amended or a clearance from Centrelink or the Department of Education, Employment and Workplace Relations whichever is the later unless the Court otherwise orders. (5)No interest shall be payable in respect of the judgment sum and costs herein if said be paid: (a)within 28 days from the date of the agreement or assessment or allocateur respectively; or (b)within 28 days after the receipt by the defendants or their insurer of a completed notice pursuant to section 23 of the Health and Other Services (Compensation) Act 1995 satisfactory to the defendants and their insurers; or (c)within 28 days after the receipt by the defendants or their insurer of a notice from the Managing Director of the Health Insurance Commission under section 24 or section 25 of the Health and Other Services (Compensation) Act 1995 as amended; or (d)within 28 days after the receipt by the defendants or their insurer of notices from Centrelink and the Department of Education, Employment, and Workplace Relations requiring payment of any amount or providing a clearance from paying any amount pursuant to the provisions of social security legislation provided the defendants or their insurer received or receives notices from Centrelink and the Department of Education, Employment, and Workplace Relations on or before the date of this agreement advising of a potential liability to repay moneys to Centrelink or the Department of Education, Employment, and Workplace Relations under social security legislation whichever is the later. (e)The plaintiff acknowledges that in accordance with section 22 of the Health and Other Services (Compensation) Act 1995 as amended the plaintiff has been informed of a possible liability to pay amounts under the said Act or under the Health and Other Services (Compensation) Care Charges Act 1995. (6)These terms not to be disclosed other than as necessary to fulfil the requirements of the Health and Other Services (Compensation) Act 1995 as amended.