| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : BRADLEY JAMES COXON by his Next Friend JANINE COXON -v- STEVENS [2004] WADC 220 CORAM : EATON DCJ HEARD : 15 OCTOBER 2004 DELIVERED : 10 NOVEMBER 2004 FILE NO/S : CIVO 251 of 2004 BETWEEN : BRADLEY JAMES COXON by his Next Friend JANINE COXON Plaintiff (Applicant)
AND
PETER JAMES STEVENS
Defendant (Respondent)
Catchwords: Person under disability - Application to approve a compromise of a claim for damages - Terms of offer - Fees of Public Trustee
Legislation: Rules of the Supreme Court 1971
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Result: Application adjourned sine die
Costs reserved Representation:
Counsel:
Plaintiff (Applicant) : Mr M E Herron
Defendant (Respondent) : Mr J R Brooksby
Solicitors:
Plaintiff (Applicant) : Simon Walters
Defendant (Respondent) : Greenland Brooksby
Case(s) referred to in judgment(s):
Sosa v Carter [1978] WAR 123
Wood v Public Trustee (1995) 16 WAR 58
Case(s) also cited:
Nil
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1 EATON DCJ: By an originating summons filed 7 September 2004 the plaintiff, by his next friend, seeks leave to accept in full and final satisfaction of his claim for damages the sum of $450,000, inclusive of Public Trustee fees, plus two thirds of special damages. The amount is to be paid to the Public Trustee in the State of Western Australia ("the Public Trustee") for investment for the plaintiff.
2 The plaintiff, who was then not a person under disability, commenced an action by a writ of summons on 5 June 2001 seeking damages for personal injuries arising out of a motor vehicle accident which occurred on 1 October 1999 which accident, it was alleged, was caused by the negligence of the defendant. The defendant entered an appearance and the parties, in due course, filed a statement of claim and defence. 3 By Chamber Summons filed on 28 November 2002 the plaintiff sought a declaration pursuant to O 70, r 1 of the Rules of the Supreme Court 1971 to the effect that he was a person incapable of managing his own affairs in relation to the action and an order that Janine Coxon, his mother, be appointed next friend for the purpose of concluding his legal proceedings. That application was supported by an affidavit which annexed a report dated 18 July 2002 from Mr Coxon's general practitioner, Dr Michael Beinart, a report from a consultant psychiatrist Dr C N De Felice dated 8 November 2002 and a further report from Dr Michael Beinart dated 13 November 2002. In Dr De Felice's opinion Mr Coxon was: "definitely not capable of managing his own financial affairs, particularly where it involves large sums of money. I would strongly encourage the appointment of a guardian to manage his financial affairs, particularly if large sums of money are involved. I would strongly support a legally appointed guardian in such matters." In his second report Dr Beinart expressed the opinion that Mr Coxon was not capable of handling his everyday affairs or managing his own financial affairs, particularly with respect to large sums of money. 4 The application came before his Honour Judge Wisbey on 13 December 2002. Both parties were represented. On that day his Honour made orders in terms of the application. Bradley James Coxon was declared to be incapable of managing his own affairs and Mrs Janine Coxon, his mother, was appointed his next friend, she having consented in writing to the appointment. Counsel for the defendant informed his
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Honour that the defendant neither consented to nor opposed the orders being sought. 5 It follows from the foregoing that Bradley James Coxon is a person under disability having regard to the provisions of O 70 of the Rules of the Supreme Court 1971. Order 70, r 10 provides that no settlement or compromise whenever entered into or made in any cause or matter in which there is a claim by a person under disability shall be valid unless it is approved by the Court. An application for approval before trial is to be made by summons in chambers and must be supported by affidavit and by the opinion of an independent counsel unless a judge dispenses with the necessity of the latter. Order 70, r 12 obliges a court to order any money relating to an approved settlement or compromise be paid to the Public Trustee for investment on behalf of the person under disability unless otherwise ordered by the Court. 6 The application before me is supported by an affidavit sworn by Simon Myer Walters on 18 August 2004 who deposes to the fact that he is the solicitor for the plaintiff and that after protracted negotiations with the defendant an offer to compromise the plaintiff's claim in the sum of $450,000 was filed on 28 August 2003. He further deposed to enquiries having been made with the Public Trustee. Those enquiries revealed that the total fee for the life of the trust for the management of those invested funds by the Public Trustee would be $60,391. It is apparent that the offer made by the defendant did not include an additional component to cover the fees of the Public Trustee. 7 On the hearing of the application for approval of the compromise counsel for the defendant made it clear that the defendant's attitude was that the plaintiff was not a person under disability and that there was no need for a next friend. Counsel for the defendant said: "…if the plaintiff chooses to invest that money, that's a matter for him…" 8 The affidavit of Simon Myer Walters refers to and annexes two opinions of counsel. The first is by Mr Theo Lampropolous who concludes his opinion with the following: "In all the circumstances, if the defendant is prepared to pay the Public Trustee fees (the one off entry fee plus the ongoing management fees) over and above the amount of $450,000 (plus two thirds of the special damages) plus costs I would recommend settlement on those terms on the basis that such a settlement would be beneficial to the plaintiff."
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9 The second opinion referred to is that of Mr David Clyne which includes the following passage:
"I am instructed however that the defendant is not prepared to pay Public Trustee fees which amount to some $60,391. I have two comments to make in that regard. The first is that in real terms the net figure being offered would be something less than $400,000. That is too little in the circumstances of this case. The other point that needs to be recognised however is that Bradley Coxon is under a disability. The money must be invested with the Public Trustee or some other authorised trustee and the cost of that should properly be born by the defendant." 10 The application for compromise of the action based on the offer referred to is supported by the next friend who swore an affidavit on 3 September 2004. She says that it is in her son's best interests to settle his claim and that she has given instructions to her solicitor, Mr Walters, to effect a settlement for the sum of $450,000 inclusive of the Public Trustee fees, plus two thirds of the special damages, despite counsel's opinion. She deposes to having discussed the question of the risks of litigation in the light of her understanding that liability for her son's claim is disputed by the defendant. 11 It is the case that the plaintiff Bradley James Coxon is a person under disability as a matter of law. The approval of a compromise of an action brought by a person under disability has implications for both the defendant and the next friend. As Pidgeon J pointed out in Wood v Public Trustee (1995) 16 WAR 58 at 63: "It would be unsafe for a defendant to enter into a compromise with a plaintiff under a disability suing by a next friend as such a contract may well be voidable." 12 Approval by a court of a compromise in such circumstances has the effect of protecting the next friend from any allegation that he or she may have acted in a way which was not for the benefit of the person under disability. 13 In the matter before me the defendant, not having contested the declaration that the plaintiff is a person under disability now may obtain the benefit of an order for the compromise of the plaintiff's action while denying that the plaintiff is a person under disability. That status is not, however, a matter of fact but rather a matter of law. The defendant does (Page 6)
not seek to formally challenge the legal status of the plaintiff but is content to obtain the benefit of an order approving a compromise of the action. It appears to me that the stance taken by the defendant is inappropriate. 14 If the compromise were approved the Court would be obliged, pursuant to its obligation to protect the interests of the person under disability in the role of the Crown as parens patriae, to create a trust by way of an order for the investment and control of funds. It would not be a matter, as suggested by counsel for the defendant, of the plaintiff choosing whether to invest the funds or not. The applicant seeks that the proceeds of the compromise be paid to the Public Trustee and that such investment be not restricted to the common fund with liberty to apply in respect of the investment moneys. Having regard to the assessment of the Public Trustee's management fees it is clear that the net amount available for investment for the benefit of the plaintiff will be in the vicinity of $390,000. 15 In Sosa v Carter [1978] WAR 123 Burt CJ said at 124: "Expressed in general terms this Court ought not and indeed cannot approve the proposed settlement unless it be of the opinion that it will be for the benefit of the infant plaintiff…In my view what the Court is called upon to do is to satisfy itself that all the facts relevant to the plaintiff's claim have been brought together and considered by her legal advisers and, unless the requirement be dispensed with, that the settlement is supported by the opinion of independent counsel. It should itself consider the opinion given and the reasons for it. If having done that it appears that all aspects of the case have received proper consideration it should be slow to disagree with the opinion particularly upon such a matter as the assessment of damages for personal injuries. The Court should be aware of the risks of litigation in an area in which reasonable men can reasonably reach different conclusions and hence slow to force the infant to take a risk which the Court is unable to underwrite. It should, too, satisfy itself that the opinion of counsel has been considered and understood by the infant's guardian and it should give proper weight to the fact that the guardian, as is necessarily the case, wishes to accept the settlement." 16 In the present case the opinion of Mr Lampropolous is a careful consideration of the prospects of the plaintiff. The affidavit of the next (Page 7)
friend indicates that she has perused all medical reports and "counsel's opinion". She confirms that the facts upon which counsel's opinion is based are correct and complete in every aspect. Her reference to "counsel's opinion" I take to be a reference to the opinion of Mr Lampropolous. She does not appear to make any reference to the brief opinion of Mr Clyne. 17 It is the case that neither opinion supports the compromise in the terms proposed. It is the case that the compromise is not supported by independent counsel. Order 70, r 10 provides that an application for approval of a settlement or compromise shall be supported by affidavit and by the opinion of independent counsel unless I dispense with the necessity of the latter. I do not do so in this case. It follows from the foregoing that I should not approve the proposed compromise of the action. Counsel for the applicant, Mr Herron, submitted that it was not a matter to be taken likely. I entirely agree. He said that the only issue between the parties is whether the Public Trustee's fees should be paid on top of the offer of settlement. That issue arises from the stance taken by the defendant which is, for the reasons already outlined, inappropriate. The legal status of the plaintiff was not and is not formally challenged by the defendant. To now, by way of an offer of settlement, attempt to deny the factual basis of the declaration of that legal status is to, in effect, penalise the plaintiff for that status whilst seeking to obtain the protection afforded to a defendant by the approval of the proposed compromise. I am not satisfied, in the circumstances of this case, that I should approve the proposed compromise. My inclination is that the application should be dismissed. I am, however, acutely aware that the application represents an attempt by the next friend to bring the litigation to an end in circumstances that will serve the best interests of the plaintiff. The parties must necessarily have regard to both the legal status of the plaintiff and the provisions of O 70 of the Rules of the Supreme Court. Regard should be had to the Court's obligation to the plaintiff when considering the question of a compromise and the consequences of approval. It may be that the parties, having considered the foregoing, will review their respective positions. In the circumstances, intransigence would not appear to be an appropriate stance. I will hear the parties as to the fate of the application and the question of costs in the light of the foregoing.
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