2/101084)
Mathew Brian Robert Pinchen (Defendant in 2022/101084)
Representation: Counsel:
J Wilson (Plaintiff in 2022/101083)
Solicitors:
RMB Lawyers (Plaintiff in 2022/101083)
Hall & Wilcox Lawyers (Defendant in 2022/101083)
[2]
Counsel:
J Wilson (Plaintiff and Defendant in 2022/101084)
Solicitors:
RMB Lawyers (Plaintiff and Defendant in 2022/101084)
File Number(s): 2022/101083 and 2022/101084
Publication restriction: Nil
[3]
ex tempore Judgment (revised)
HIS HONOUR: Before the Court are two summonses, both filed on 8 April of this year. The proceedings on both summonses have been heard concurrently, and I will give my judgment and make orders on both summonses together for reasons which will become apparent.
The first summons seeks an order under s 75 of the Civil Procedure Act 2005 (NSW) in relation to proceedings brought by the plaintiff, Mathew Brian Robert Pinchen, by his tutor Sharon Pinchen against Insurance Australia Limited. The orders sought relate to the approval of the settlement of those proceedings.
The second summons seeks orders pursuant to the NSW Trustee and Guardian Act 2009 (NSW) with respect to the management of the amount of the settlement, assuming that the proposed settlement is approved by me. In terms of the background of the matter, I intend to be brief.
The plaintiff is currently 39 years of age. He was injured in a motor vehicle accident on 18 June 2016 when he was a passenger in a vehicle that was involved in a single vehicle accident. As a result of that accident, he suffered various injuries including a severe traumatic brain injury. As a result, he brought proceedings for compensation against the defendant. The defendant has accepted liability in relation to the claim.
The plaintiff is currently in gaol, serving a sentence of imprisonment. He has something of a criminal record and has been in and out of gaol since 2011, mostly in relation to what are relatively short sentences. In support of the summons I have been provided with and have had regard to an affidavit of the plaintiff's solicitor, Mr Steven Grant Baker of 21 April 2022. That affidavit outlines something of the history of the matter and the litigation that has resulted.
Further, it annexes various documents, including a schedule of the defendant's various periods of imprisonment, a report of Peter Rawling, clinical neuropsychologist, of 4 October 2019, and reports of Professor Ian Cameron, who is a consultant physician in rehabilitation medicine, of 11 September 2020 and 5 September 2020. A third report of Mr Cameron is referred to in the affidavit but was tendered separately. That report is dated 30 October 2021.
I have also been provided with documentation relating to the legal fees incurred on behalf of the plaintiff in pursuing his claim. Also received into evidence was a second affidavit of Mr Baker of 21 April 2022, that affidavit annexing an unsworn affidavit of the plaintiff and explaining the reasons why that affidavit was not sworn, they being, in essence, the logistical difficulties arising as a result of the plaintiff's imprisonment.
In his affidavit, however, Mr Baker indicates that he read the affidavit to the plaintiff, confirmed his agreement with it and the plaintiff's willingness to swear its contents. On that basis, I have had regard to the annexed unsworn affidavit as if it had been sworn and provided in evidence before me.
I also received an affidavit of the plaintiff's mother, Ms Sharon Pinchen, of 30 March 2022. Additionally, I received a report in relation to the cost of funds management of 14 January 2022 of Mr Corey Plover of Cumpston Sarjeant, consulting actuaries. Finally, admitted into evidence on a confidential basis was the advice of the plaintiff's counsel, Mr John Wilson, of 29 April 2022. At the time of receiving that document I indicated that given its confidential nature it was to be placed in an envelope and sealed, marked not to be opened except on order of a judge of this Court.
The matters I have just referred to were admitted in relation to the claim with respect to approval of the settlement. The second summons, as I have already indicated, seeks orders in relation to what is to happen with those funds. I should indicate at this point that the parties in the first summons are Mr Pinchen as the plaintiff, and he is represented by Mr Wilson of counsel. The defendant, Insurance Australia Limited, is represented by Ms Hagley. In the second summons Ms Sharon Pinchen seeks the orders and appeared in person. Mr Wilson again appeared on behalf of Mr Pinchen, the plaintiff to the first summons and the defendant with respect to the second summons.
In the somewhat unusual circumstances of the matter, Mr Wilson sought to assist Ms Pinchen. On the questioning of the plaintiff by me conducted with the approval of Mr Wilson, I satisfied myself that Mr Pinchen understood what was being sought to be done; that his counsel would be, in effect, assisting what is technically his opponent in the litigation. But, in all the circumstances, it appears clear that whilst technically they are proceedings brought by the plaintiff's mother against the plaintiff, the parties are in agreement as to the outcome. In those circumstances, I regarded it as appropriate that Mr Wilson be allowed to assist Ms Pinchen in presentation of the case in the second summons.
Turning to the evidence in the second summons, that evidence comprised some of the same evidence admitted in relation to the first summons, that being the two affidavits of Mr Baker and the affidavit of Ms Sharon Pinchen, mother of the plaintiff in the first summons and herself the plaintiff on the second summons.
Turning to the evidence in relation to the injury, neuropsychological assessment indicates that the plaintiff has been left with significant impairments and disability as a result of the brain injury suffered in the accident. Brain imaging showed abnormalities and there was a relatively long period of post-traumatic amnesia, some 32 days post-injury, which I understand to be indicative of the severity of the injury.
The evidence is that the plaintiff does, nonetheless, have the capacity to instruct his legal representatives. But in saying that, it should be observed that he has, in this regard, always had the assistance of his mother. I further note that the plaintiff's mother has an enduring power of attorney over the plaintiff's affairs. It is fair to say from what I have seen in relation to these matters that the plaintiff's life has had its difficulties, but it is also apparent that he has been fortunate, at least in respect of the fact that he has had the ongoing support of his mother, who has clearly been there for him with his best interests at heart. He is, as I say, fortunate, at least in that regard.
The evidence is that he requires support on a regular basis in relation to his memory and organisation of his daily tasks. After his release from hospital he was approved for the Lifetime Care and Support Scheme, initially on an interim basis, but subsequently as a permanent participant in that scheme.
The plaintiff, however, has indicated that as time went by he determined that he did not want to use the Lifetime Care and Support carer as much as had been initially allocated on the basis that he, "found it unpleasant to have the carer around me all the time". He found that he was able to do lots of things himself and did not need the carer to be taking him to places almost every day, a matter which became a source of frustration for him.
The plaintiff went into custody in November 2016 and was released in May 2017. From that time, he has largely managed his own appointments and life generally. I should pause to note that that has not necessarily happened completely successfully, it being apparent that even in the litigation there was some difficulty in remembering and maintaining appointments in relation to various professionals upon which the plaintiff was required from time to time to attend. I mean no criticism at all of the plaintiff in that regard. He is to be commended for his efforts to manage himself independently. I merely raise that to say that despite his efforts, it is apparent that he, nonetheless, still has some difficulty.
The evidence I have referred to sets out various matters relevant to the issues I need to determine. In particular, set out is a settlement sum that has been agreed as a result of negotiations between the parties. That sum is an amount of $800,000. From the material I have seen, I am satisfied that that sum is an appropriate amount as a settlement of the claim. The material also sets out the legal costs incurred by the plaintiff. The proposed settlement includes an amount of $100,000 by way of costs. The material indicates that that will not cover all of the plaintiff's costs. An additional $69,602.65 has been sought as a deduction from the settlement to provide for costs not covered by the amount agreed to by the defendant.
In relation to that amount, I am satisfied that the particular circumstances of the claim are such that it was a somewhat more complicated matter than the ordinary case. I am also satisfied that the particular circumstances of the plaintiff's incarceration at times during the course over which the litigation has been conducted has made it more time consuming than otherwise would have been the case had he not been in custody.
Relatedly, those circumstances have necessitated the involvement of the plaintiff's mother in the conduct of the litigation and obtaining of instructions, with the result that some time has been spent which in effect was duplicated as between the plaintiff and his mother. Again, I accept that in the particular and unusual circumstances of this matter, it has been necessary to incur greater costs. I accept the sum sought to be deducted from the settlement sum is a reasonable amount in the circumstances. In so finding, I accept that the figure is greater than would normally be allowed under the regulations.
The settlement also seeks approval for the payment of $200,000 for fund management costs. There was a dispute between the parties as to the amount that is appropriate. The plaintiff relied upon the report of Mr Plover in support of his claim. The defendant tendered before me in these proceedings a letter dated 2 March this year from the defendants to the plaintiff's solicitors, disputing the basis upon which the amount was determined in Mr Plover's report. It is sufficient for present purposes to note the acceptance on behalf of the plaintiff that there was a legitimate dispute as between the parties as to the appropriate figure. Having regard to the evidence put forward from both sides in relation to that issue, I accept that the sum of $200,000 is a reasonable compromise of the competing arguments in that regard.
Additionally, evidence has been provided of moneys provided in advance to the defendant for expenses incurred by him. That is an amount of $44,000 which was provided by the defendant to the plaintiff in order to allow the plaintiff to obtain legal representation in relation to criminal proceedings against him. I am satisfied that it is appropriate to make the deduction of that amount in relation to those moneys that were provided in advance. The plaintiff's solicitor has also set out the amounts that it is estimated the plaintiff will be required to pay back to Medicare and to Centrelink.
As a result of the various deductions, the plaintiff's solicitor expects that the plaintiff will receive out of the settlement an amount of $647,160.15. Section 75 of the Civil Procedure Act provides as follows:
75 Settlement of claim made on behalf of, or against, person under legal incapacity (cf SCR Part 63, rule 13)
(1) This section applies to any claim, enforceable by proceedings in the court, that is made by or on behalf of, or against, a person under legal incapacity.
(2) If, before proceedings are commenced with respect to any such claim, an agreement for the compromise or settlement of the claim is made by or on behalf of the person under legal incapacity, the court may approve or disapprove the agreement.
(3) An agreement disapproved by the court does not bind the person under legal incapacity.
(4) An agreement approved by the court binds the person under legal incapacity 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.
The Court, in relation to the approval of a compromise under s 75, is exercising a protective function. I must be satisfied that the terms of the settlement are proper. That is, that they are reasonable and in the best interests of the incapable person.
I am, for the reasons I have already given, satisfied that the settlement proposed is reasonable. I am also satisfied that the orders sought are in the plaintiff's best interests. There is no reason, on the evidence before me, that I would not exercise my discretion to make the order, leaving only the question of my satisfaction that the plaintiff is a person under a legal incapacity within s 75(1) such that the power to make the order arises.
The definition of "person under a legal incapacity" is provided in s 3(1) of the Civil Procedure Act. The application is brought on the basis that the plaintiff falls within sub-paragraph (d). That is, that he is a protected person within the meaning of the NSW Trustee and Guardian Act. At the time of bringing the summons seeking orders under s 75 of the Civil Procedure Act, the plaintiff was not such a person.
However, as I have already indicated, at the same time as that summons was brought, a further summons has been brought and is presently before me, seeking orders under the NSW Trustee and Guardian Act. The effect of the orders sought on the second summons are such that if made, the plaintiff would be a protected person as defined in s 3 of the Civil Procedure Act.
The proceedings are being heard together because, in essence, the orders need to come into effect simultaneously in order to have operation. That is, there is no cause to consider the issue with respect to the NSW Trustee and Guardian Act unless there is an amount by way of settlement to be managed. On the other hand, the plaintiff's status as a protected person under that Act does not arise until orders are made for the management of moneys the subject of the settlement.
It was submitted, and I accept, that if orders are made at the same time, they will come into effect simultaneously, and the requirements of each will therefore be satisfied. On that basis, I am satisfied that the plaintiff is, at the time of making the orders I propose to make, a person under a legal incapacity within the definition in the Civil Procedure Act.
Turning then to the basis upon which I intend to make orders under the NSW Trustee and Guardian Act. I note that the evidence on this application comprised the two affidavits of the solicitor for the plaintiff in the first summons, together with the affidavit of the plaintiff's mother, who, as I have indicated, was the plaintiff in the second summons.
Section 41 of the NSW Trustee and Guardian Act provides as follows:
41 Orders by Supreme Court for management of affairs (cf PE Act, s 13)
(1) If the Supreme Court is satisfied that a person is incapable of managing his or her affairs, the Court may -
(a) declare that the person is incapable of managing his or her affairs and order that the estate of the person be subject to management under this Act, and
(b) by order appoint a suitable person as manager of the estate of the person or commit the management of the estate of the person to the NSW Trustee.
(2) The Supreme Court may make an order on its own motion or on the application of any person having a sufficient interest in the matter.
(3) For the purposes of this section -
(a) evidence of a person's capability to manage his or her own affairs may be given to the Supreme Court in any form and in accordance with any procedures that the Court thinks fit, and
(b) the Court may personally examine a person whose capability to manage his or her affairs is in question or dispense with any such examination, and
(c) the Court may otherwise inform itself as to the person's capability to manage his or her own affairs as it thinks fit.
(4) Subsection (3) also applies to an application arising out of the operation of section 37 (2) of the Powers of Attorney Act 2003.
The question that arises is whether the defendant is incapable of managing his affairs such that I should order that at least part of his estate be subject to management. If I am satisfied of this, there is no reason to suggest as to why I would not exercise my discretion to make orders in terms of those sought.
In the decision of CJ v AKJ (2015) 16 ASTLR 24; [2015] NSWSC 498, Lindsay J observed at [14] that the expression, "a person … incapable of managing his or her affairs", is not defined by the Act. His Honour went on to observe at [17]:
"The proper construction, and operation, of chapter 4 of the NSW Trustee and Guardian Act (in which both section 41 and section 86 are located) is informed by:
1. the nature and purpose of the Court's inherent, parens patriae (protective) jurisdiction (explained in Secretary, Department of Health and Community Services v JWB and SMB (Marion's case) (1992) 175 CLR 218 at 258-259), upon which chapter 4 is modelled; and
2. the "general principles" enunciated in section 39 of the NSW Trustee and Guardian Act."
His Honour at [27] observed as follows:
"In the absence of an express legislative definition, the expression "(in)capable of managing his or her affairs" should be accorded its ordinary meaning, able to be understood by the broad community (lay and professional) it serves, remembering that:
(a) the concept of incapacity for self-management is an integral part of the protective jurisdiction which, historically, arose from an obligation of the Crown (now more readily described as the State) to protect each person unable to take care of him or her self: Marion's Case (1992) 175 CLR 218 at 258, citing Wellesley v Duke of Beaufort (1827) 2 Russ 1 at 20; 38 ER 236 at 243.
(b) of central significance is the functionality of management capacity of the person said to be incapable of managing his or her affairs, not: (i) his or her status as a person who may, or may not, lack "mental capacity" or be "mentally ill"; or (ii) particular reasons for an incapacity for self-management: PB v BB [2013] NSWSC 1223 at [5]-[9] and [50].
(c) the focus for attention, upon an exercise by the Court of its protective jurisdiction (whether inherent or statutory), is upon protection of a particular person, not the benefit, detriment or convenience of the State or others: Re Eve [1986] 2 SCR 388 at 409-411, 414, 425-428, 429-430, 431-432 and 434; (1986) 31 DLR (4th) 1 at 16-17, 19, 28-30, 31, 32 and 34; JPT v DST [2014] NSWSC 1735 at [49]; Re RB, a protected estate family settlement [2015] NSWSC 70 at [54].
(d) the "affairs" the subject of an enquiry about "management" are the affairs of the person whose need for protection is under scrutiny, not some hypothetical construct: Re R [2014] NSWSC 1810 at [94]; PB v BB [2013] NSWSC 1223 at [6].
(e) an inquiry into whether a person is or is not capable of managing his or her affairs focuses not merely upon the day of decision, but also the reasonably foreseeable future: McD v McD [1983] 3 NSWLR 81 at 86C-D; EB & Ors v Guardianship Tribunal & Ors [2011] NSWSC 767 at [136].
(f) the operative effect given to the concept of capacity for self-management, upon an exercise of protective jurisdiction by the Court (whether inherent or statutory), is informed, inter alia, by a hierarchy of principles, proceeding from a high to a lower level of abstraction; namely:
(i) an exercise of protective jurisdiction is governed by the purpose served by the jurisdiction (protection of those not able to take care of themselves): Marion's Case (1992) 175 CLR 218 at 258.
(ii) upon an exercise of protective jurisdiction, the welfare and interests of the person in need of protection are the (or, at least, a) paramount consideration (the "welfare principle"): Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238B-C and 241A-B and F-G; A (by his tutor Brett Collins) v Mental Health Review Tribunal (No 4) [2014] NSWSC 31 at [146]-[147].
(iii) the jurisdiction is parental and protective. It exists for the benefit of the person in need of protection, but it takes a large and liberal view of what that benefit is, and will do on behalf of a protected person not only what may directly benefit him or her, but what, if he or she were able to manage his or her own affairs, he or she would, as a right minded and honourable person, desire to do: H.S. Theobald, The Law Relating to Lunacy (London, 1924), pages 362-363, 380 and 462: Protective Commissioner v D (2004) 60 NSWLR 513 at 522 [55] and 540 [150].
(iv) whatever is to be done, or not done, upon an exercise of protective jurisdiction is generally measured against what is in the interests, and for the benefit, of the person in need of protection: Holt v Protective Commissioner (1993) 31 NSWLR 227 at 238D-F and 241G-242A; GAU v GAV [2014] QCA 308 at [48]."
At [31]-[39] of his decision, Lindsay J set out a number of tests that have been applied over time. His Honour observed at [40] that:
"The utility of each of these formulations depends on whether (and, if so, to what extent) it is, in the particular case, revealing of reasoning justifying a finding that a person is or is not (as the case may be) capable of managing his or her affairs, having regard to the protective purpose of the jurisdiction being exercised and the welfare principle."
The third of the tests set out by his Honour at [38] of his reasons commends itself to me in the present matter. That approach was expressed by his Honour as follows:
"Thirdly: An approach which commends itself to me, in this case, is to record that, in considering whether a person is or is not capable of managing his or her affairs:
(a) a focus for attention is whether the person is able to deal with (making and implementing decisions about) his or her own affairs (person and property, capital and income) in a reasonable, rational and orderly way, with due regard to his or her present and prospective wants and needs, and those of family and friends, without undue risk of neglect, abuse or exploitation; and
(b) in considering whether a person is "able" in this sense, attention may be given to: (i) past and present experience as a predictor of the future course of events; (ii) support systems available to the person; and (iii) the extent to which the person, placed as he or she is, can be relied upon to make sound judgments about his or her welfare and interests."
As I have already indicated in relation to the settlement of the litigation, the neuropsychological assessment indicates that the plaintiff has been left with significant impairments and disabilities relating to his brain injury. Again, as previously observed, he does have the capacity to instruct his legal representatives but he has always had the assistance of his mother. It is relevant to observe in the context of the orders sought pursuant to the second summons that the plaintiff's deficits are compounded by the fact that he has suffered an addiction to drugs over a number of years. It is that addiction that has largely resulted in the criminal history already referred to.
Professor Cameron in his report of 11 September 2020 said the following:
"Mr Pinchen's impairments, and events since the motor vehicle crash, suggest that his ability to provide support and supervision of his son is impacted and should be monitored. Mr Pinchen is also unlikely to be able to manage significant amounts of money, or effectively make financial decisions. It appears that his driver's licence has been suspended for a long period. At the end of the suspension there would need to be careful assessment of his driving ability."
Professor Cameron in his more recent report, that of 30 October 2021, said:
"It is my opinion that Mr Pinchen is "incapable of dealing in a reasonably competent fashion, with the ordinary affairs of man", and, '"by reason of that lack of competence there is a real risk … that such moneys or property which he … may possess may be dissipated or lost.""
In support of that opinion, Professor Cameron pointed to the plaintiff's problems in dealing with daily life, including the drug and alcohol dependency and residual impairments following the severe traumatic brain injury.
In addition, the plaintiff's mother in her affidavit has indicated that she has doubts about whether her son would be able to manage the settlement money sensibly. She indicates that she feels his impulse control and drug addiction may have the result that he makes poor decisions with the money or that he may be taken advantage of by others that he thinks he can trust. She says that it is her view that it would be best if a professional manages the money on her son's behalf.
Finally, I note that the plaintiff himself has said in his unsworn affidavit that while he is capable of giving instructions to his legal representative, he, "[w]ould not be capable of managing a large amount of money properly". He states that Mr Baker and Mr Wilson have advised him that he would need to have someone appointed to manage the money on his behalf, and further indicates that he understands that this is to be done to ensure that the money will be managed appropriately by a professional so that the money will last him a long time into the future.
In terms of the identity of the trustee, Mr Baker indicates in his affidavit that he invested a considerable amount of time trying to have a private trustee manage the compensation sum on behalf of the plaintiff. He indicates that all private trustees that he approached refused to accept the plaintiff as a client as a result of the plaintiff's issues with drug addiction and his criminal history. The result of that is the compensation sum will need to be transferred to the NSW Trustee & Guardian for management.
Having regard to all of those matters, I am of the view that the orders sought on both summonses should be made. Before making those orders I should also note that I have, in the reasons I have given, referred to the plaintiff in the first summons as the plaintiff throughout, although he is, of course, the defendant in the second summons. I should also note that the plaintiff sought an amendment be made to the orders with respect to the settlement to allow for the $44,000 already advanced to the plaintiff by the defendant. As I have previously indicated, I am of the view that it is appropriate that that allowance be made.
In relation to the first summons, I make the following orders pursuant to s 75 of the Civil Procedure Act:
1. Judgment for the plaintiff against the defendant in the settlement sum of $800,000.00.
2. The defendant is to pay the plaintiff's costs as agreed in the sum of $100,000.00.
3. The defendant is to pay the amount of $200,000.00 for fund management costs.
4. The defendant is to deduct from the settlement sum any statutory charges including Health Insurance Commission and Department of Social Security.
5. The defendant is to deduct from the settlement sum the amount of $44,000.00 in accordance with s 83 of the Motor Accidents Compensation Act 1999 (NSW) by way of a statutory charge for monies paid in advance to the plaintiff;
6. The defendant is to deduct from the settlement sum the amount of $69,602.65 payable to the plaintiff's solicitors with respect to solicitor client costs;
7. The defendant is to pay the amount referred to in Orders 2 and 6 to the plaintiff's solicitors, RMB Lawyers;
8. The defendant is to pay the amount referred to in Order 3 to the NSW Trustee and Guardian; and
9. The defendant is to pay the balance of the net sum payable after any deductions as ordered to be paid to the NSW Trustee and Guardian.
10. In relation to the second summons, I make the following orders:
11. Pursuant to s 41(1)(a) of the NSW Trustee and Guardian Act 2009 (NSW), the defendant Mathew Brian Robert Pinchen be declared incapable of managing his affairs in relation to his claim for compensation arising from a motor vehicle accident which occurred on 18 June 2016;
12. Pursuant to s 41(1)(a) of the NSW Trustee and Guardian Act, that that part of the estate of the defendant relating to the defendant's claim for compensation consisting of the balance of the settlement sum approved in proceedings Mathew Brian Robert Pinchen v Insurance Australia Limited be subject to management under the Act;
13. Pursuant to s 41(1)(b) of the NSW Trustee and Guardian Act, commit that part of the estate of the defendant relating to the defendant's claim for compensation consisting of the balance of the settlement sum approved in proceedings Mathew Brian Robert Pinchen v Insurance Australia Limited to the NSW Trustee and Guardian pursuant to s 41(1)(b) of the Act; and
14. There be no order as to costs with respect to either summons.
[4]
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: 25 May 2022