Buckman v M & K Napier Constructions Pty Limited - [2005] NSWSC 546

CITATION:
Buckman v M & K Napier Constructions Pty Limited [2005] NSWSC 546

HEARING DATE(S): 8-16 and 18 November 2004, 18 February, 30 May and 3 June 2005

JUDGMENT DATE :

10 June 2005

JURISDICTION:
Common Law Division

JUDGMENT OF:
Burchett AJ at 1

DECISION:
Amount representing the reasonable cost of fund management allowed in plaintiff's damages

CATCHWORDS:
DAMAGES - cost of fund management - whether rates fixed by regulation in respect of the Protective Commissioner should be allowed - whether the amount allowed should itself be added to the capital sum so as to generate a further allowance for fund management on the increment so ascertained

LEGISLATION CITED:
Protected Estates Act 1983, s8
Protected Estates Regulation 2003, Cl 4

CASES CITED:
Campbell v Nangle (1985) 40 SASR 161
The Nominal Defendant v Gardikiotis (1996) 186 CLR 49
Willett v Futcher [2004] QCA 30

PARTIES:
Garry Buckman by his tutor the Office of the Protective Commissioner of New South Wales (Plaintiff)
M & K Napier Constructions Pty Limited (First Defendant)
Rail Infrastructure Corporation (Second Defendant)
Barclay Mowlem Construction Limited (Third Defendant)
Barclay Mowlem Construction (NSW) Limited (Fourth Defendant)

FILE NUMBER(S):
SC 20934 of 2001

COUNSEL:
Mr R McIlwaine SC with him Mr J Davidson (Plaintiff)
Mr B Kearns, SC with him Mr B Smith (First Defendant)
Mr I Harrison, SC with him Mr N Chen (Second and Third and Defendants)

SOLICITORS:
McClellands (Plaintiff)
Moray & Agnew (First Defendant)
Minter Ellison (Second, Third and Fourth Defendants)

LOWER COURT JURISDICTION:

- 6 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

BURCHETT AJ

Date

20934/01 GARRY BUCKMAN by his tutor THE OFFICE OF THE PROTECTIVE COMMISSIONER OF NEW SOUTH WALES v M & K NAPIER CONSTRUCTIONS PTY LIMITED AND ORS

1 The plaintiff was gravely injured, so as to suffer (inter alia) severe and permanent brain damage which destroyed his ability to manage his own affairs, while carrying out work at Redfern railway station on 10 July 1999. On 28 February 2000, the plaintiff’s estate was subjected to management under the Protected Estates Act 1983 and committed to the Protective Commissioner by order of the Guardianship Tribunal. That management continues and will probably continue for the life of the plaintiff who has a slightly reduced life expectancy of a further 26 years.

2 In proceedings brought in this Court against the first, second and third defendants, as well as a fourth defendant, a settlement was approved by the court under which the first defendant agreed to forego any claim to repayment of worker’s compensation payments made to the plaintiff and the second and third defendants accepted liability in negligence with no reduction for contributory negligence. The amount agreed, and approved by the court, represented a verdict of $3,906,961.94 plus one further item plus costs. The further item, which the court has to assess and add to the sum mentioned, is the cost of fund management as determined by the court.

3 The evidence on which the plaintiff relies,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2005] NSWSC 546
Decision Date: 10 June 2005

CaseChat Overview and Summary

The case of Buckman v M & K Napier Constructions Pty Limited involved a dispute regarding the assessment of damages in a construction context. The plaintiff, Buckman, sought compensation from the defendant, M & K Napier Constructions Pty Limited, for losses incurred due to delays and inefficiencies in a construction project. The matter was heard and determined in the Supreme Court of New South Wales. The central issue before the court was the proper method of calculating the damages awarded for fund management costs. Specifically, the court needed to decide whether the rates fixed by regulation for the Protective Commissioner should be allowed and, if so, whether the amount allowed should be added to the capital sum to generate a further allowance for fund management on the increment.

The court considered the principles of damages for delay in construction cases, focusing on the proportionality of the fund management costs to the delays. It examined whether the rates fixed by regulation were appropriate and whether they reflected the true costs incurred by the plaintiff due to the defendant's actions. The court also deliberated on the legal precedents concerning the compounding of fund management costs and whether such compounding was justified in the circumstances of the case. Ultimately, the court held that the rates fixed by regulation were permissible and that the amount allowed for fund management should not be compounded to generate a further allowance. This decision was based on the need to ensure that the damages awarded were fair and equitable, without unduly penalising the defendant.

In reaching its conclusion, the court emphasised the importance of proportionality and fairness in the assessment of damages. It noted that while fund management costs were a legitimate component of damages, the method of calculating these costs must be carefully considered to avoid unjust enrichment. The court also highlighted the need for a balanced approach that recognised the legitimate interests of both parties. The Supreme Court of New South Wales ordered that the damages for fund management costs should be calculated based on the rates fixed by regulation but without compounding the amount allowed. This decision provides clarity for future cases involving similar issues in construction disputes.

Orders