BH by her next friend VH v AME Hospitals Pty Ltd

[2010] WADC 5

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CIVIL

LOCATION:   PERTH

CITATION:   BH by her next friend VH -v- AME HOSPITALS PTY LTD & ORS [2010] WADC 5

CORAM:   MARTINO DCJ

HEARD:   18 JANUARY 2010

DELIVERED          :   18 JANUARY 2010

FILE NO/S:   CIV 49 of 2005

BETWEEN:   BH by her next friend VH

Plaintiff

AND

AME HOSPITALS PTY LTD (ACN 054813991)
First Defendant

MAURICE FERRI
Second Defendant

JEFFREY STEVENS
Third Defendant
 

Catchwords:

Trusts and trustees - Public Trustee - Application for approval of expenditure of moneys already spent

Legislation:

Nil

Result:

Application adjourned

Representation:

Counsel:

Plaintiff:     No appearance

First Defendant             :     No appearance

Second Defendant         :     No appearance

Third Defendant           :     No appearance

Public Trustee               :     Ms T L Minchin

Solicitors:

Plaintiff:     Not applicable

First Defendant             :     Not applicable

Second Defendant         :     Not applicable

Third Defendant           :     Not applicable

Public Trustee               :     Public Trustee

Case(s) referred to in judgment(s):

Morris v Zanki (1997) 18 WAR 260

1. MARTINO DCJ:  The Public Trustee applies for approval to apply a maximum of $439,552.22 towards the construction of a residence for the plaintiff.  I have very serious reservations about this application and, on the materials presently before me, I am unlikely to approve it.  I will explain my reasons and then adjourn the application to come back before me, so that if the Public Trustee wishes to place any further information before me it can do so.

2. The plaintiff was born on 10 April 1990, she is now aged 19.  She was born with cerebral palsy and is very seriously disabled.  A claim for damages was made on her behalf against the defendants, claiming that they were negligent in relation to matters associated with her birth. There were complex issues of liability and causation in the claims.  On 21 March 2005 this court approved the compromise of the claims for $1,400,000, being 40 per cent of her assessed loss.  Of that sum of $1,400,000 the sum of $300,000 was to be paid to the plaintiff's mother and $1,098,389.08 was to be paid to the Public Trustee.  The court granted to the Public Trustee liberty to apply in relation to the investment of the monies.

3. By an application filed on 30 June 2008 the Public Trustee applied to this court for authorisation to apply a maximum of $380,000 towards the construction of a residence for the plaintiff.  That application was supported by an affidavit sworn on 19 June 2008 by Shaun William Conlin, the Director of Trustee Services for the Public Trustee. In that affidavit Mr Conlin deposed:

   •on 23 June 2005 the Public Trustee purchased for $395,000 a property at Banjup with the intention of constructing a residence purpose built for the long term accommodation needs of the plaintiff;

   •the Public Trustee held for the plaintiff $622,282.90 in the common fund, approximately $11,000 worth of furniture and effects, a bus purchased in December 2005 for $62,575 and the property in Banjup;

   •the Public Trustee had entered into a building contract, subject to court approval, for the construction of a residence on the property in Banjup for the cost of $318,700.81;

   •the Public Trustee estimated that the additional costs of completing the construction of the residence would be no more than $62,000; and

   •the Public Trustee had obtained a valuation that the property in Banjup would be worth $1,069,000 once the residence was completed.

4. On 21 July 2008 this court authorised the Public Trustee to apply a maximum of $380,000 towards the construction of the residence.

5. The Public Trustee now applies for approval to apply a maximum of $439,552.22 towards the construction of that residence.  In support of the application Mr Conlin has sworn an affidavit on 11 December 2009 in which he has deposed that:

   •the construction of the house was completed in early May 2009 and the final payment was made to the builder on 5 May 2009;

   •the total cost of construction of the residence was $439,552.22;

   •the Public Trustee holds for the plaintiff $163,991 in the common fund, approximately $11,000 worth of furniture and effects, the bus purchased in December 2005 for $62,575 and the property in Banjup;

   •the property in Banjup is valued at approximately $765,000;

   •as a result of unforeseen and unavoidable variations to the original contract the Public Trustee spent on the construction of the residence $59,552.22 more than was provided for by the court's order on 21 July 2008; and

   •the Public Trustee is satisfied that the additional costs of construction and completion of the residence were reasonable.

6. I conclude from Morris v Zanki (1997) 18 WAR 260 that in considering this application I am to consider what is in the best interests of the plaintiff. Mr Conlin's affidavit of 11 December 2009 shows that the Public Trustee has expended $59,552.22 more than authorised. This is 15.67 per cent of the sum authorised to be spent and is 36.31 per cent of the moneys left in the common fund. In view of the small amount of moneys left in the common fund, the very serious disability that the plaintiff suffers and her age I am concerned that the decision to spend all those moneys may not have been in her interests. In my view consideration should have been given to not expending all of those moneys. The evidence before me does not show that any such consideration was given. Nor does the evidence disclose when it became apparent to the Public Trustee that the amount authorised by the order of 21 July 2008 would be exceeded or why an application was not made to this court for approval before the extra moneys were expended.

7. In view of all these matters, and in particular the fact that the application is made by the Public Trustee after all the monies have already been spent, I am unlikely to approve the application on the materials before me.  To approve the application I would need further evidence as to the matters that I have raised.  I would then be in a position to make a final decision as to whether or not I would approve the application.