Cunningham & Ors v FAI

[1998] QSC 121

IN THE SUPREME COURT

OF QUEENSLAND

Brisbane  No 3849 of 1987

Before the Hon. Mr Justice Lee

[Cunningham & Ors. v. FAI]

BETWEEN:

C

(by his next friend)

First Plaintiff

AND:

FAI GENERAL INSURANCE COMPANY LIMITED  

Defendant        

CATCHWORD:       TRUSTS AND TRUSTEE - protection of persons under disability - whether compromise should be sanctioned - application not a formality - role of plaintiff’s legal adviser - deficiency of material - material required - precautions to be taken - whether large sum for past care should be paid to next friend - parens patriae jurisdiction - role of the court - costs - solicitors and own client costs - party and party costs - whether taxation required.

Public Trustee Act 1978 , s. 59
Fowler v.  Gray [1982] Qd.R. 334; Madden v.  Hough [1969] Q.W.N. 14; Phillips v. Munro [1957] St.R.Qd. 427; Griffiths v.  Doolan[1959] Qd.R.304; Colls v.  Colls Brothers [1968] Qd.R. 314 Kyte v.  Georgettis [1969] Q.W.N. 46; Flood v.  Williscroft [1987] 2 Qd.R. 358; Re Ross [1988] 2 Qd.R.61; Stephenson v.  Geiss (W1360 of 1995, 4 July 1997 unreported) applied

COSTS - solicitor and own client - solicitor and client - sanction of compromise - whether taxation necessary - Public Trustee Act 1978, s. 59 - Civil Justice Reform Act 1998.

Counsel:Mr P.  Hackett for the applicant

Solicitors:H. Drakos & Company, solicitors for the applicant plaintiff

McInnes Wilson & Jensen, solicitors for the respondent defendant

Hearing Dates:  10 March 1998; 9 June 1998.

REASONS FOR JUDGMENT - LEE J.

Judgment delivered 16 June 1998

This application makes it again necessary to warn the profession of the need for strict compliance with the correct procedures when seeking the sanction of a “settlement” for a person under a legal disability within the meaning of s.59 of the Public Trustee Act 1978 (the Act) and a protection order pursuant to s.67 of that Act. This is particularly so in a case such as the present where an accompanying order is sought that 25 per cent of what, at first sight, appears to be a large “settlement” of $1,150,000.00, be paid directly to the next friend, the father of the disabled person.

It was said that the sanction would take 10 minutes in Chambers.  It must be reiterated that these matters are by no means mere formalities; this initially appeared to have been the approach of counsel appearing for the plaintiff, without demur by the solicitors appearing for the defendant.  It appears to have been assumed that because the “settlement” had been achieved as a result of a settlement conference involving hard bargaining between the legal representatives on behalf of the plaintiff and Queen’s Counsel on behalf of the defendant, the sanction would present little difficulty.  It has emerged from the initial hearing on 10 March 1998 and on the resumed hearing on 9 June 1998, that the matter is extremely complex and involves an examination of a wealth of material requiring lengthy submissions and subsequent consideration.

The plaintiff’s injuries consisted of extensive brain damage and other injuries when he was only 18 months old, rendering him grossly and permanently disabled and in need of total care and supervision in his daily life ever since and will do so for the rest of his life.  He has a 75 per cent loss of vision in his right eye, and various impediments in his facial expression and gait.  He attended special schools.  His IQ was initially assessed when he was quite young in the order of 75.  Subsequently it was assessed at between 30 to 49 and finally by another psychologist in the order of 67.  All experts agree that he is severely mentally retarded although he has insight into his difficulties, recognising that he is “different”.  He is totally unemployable.  He was born on 9 April 1980 and was injured in a motor vehicle accident on 16 October 1981.  He is now 18 years of age.  He is socially isolated and his future is bleak, although counsel stated that he is now becoming interested in certain areas of sporting activity.  There appears to be no medical or other evidence bearing upon this question or as to his capabilities.

The material initially presented was inadequate and showed that the nature of the parens patriae jurisdiction of the Court is not always fully understood. The Court must exercise an independent (and indeed confidential) protective jurisdiction and considerable care in ensuring that the “settlement” is for the benefit of the person under the legal disability, before legal sanction is given to it so that it binds that person: s.59(3) of the Act. It is tempting to say that a “settlement” in excess of $1 million dollars is reasonable. This is not the test. The proceeding on the sanction does not directly concern the defendant, whose only interest is to ensure that it obtains a valid discharge pursuant of s.59 of the Act. I repeat what I said in Fowler v Gray [1982] Qd.R 334 at 349:-

“However the application is made, the Court has a special responsibility for the welfare of persons under a legal disability. They lack full legal capacity, they are incapable of waiving their rights, and they cannot give a discharge to the defendant under the ‘agreement’ unless it is sanctioned by the Court. This is the defendant’s primary concern: s59(1),(3). In Day v Victorian Railway Commissioners (1948-1949) 78 C.L.R 62 at p 85, Rich J said:-

‘ It is the interposition of the court, charged with the duty to watch over the infant’s interests, that lends sanctity to a judgment for or against an infant and binds him: Arabian v. Tufnall and Taylor Ltd [1944] 1 K.B. 685 at p.688.’

The Court is, in reality, a persona designata, vested with the responsibility of protecting the interest of the person under a legal disability.  If the compromise is sanctioned, the agreement entered into by the parties has legal affect in so far as that person is concerned, and binds him.  The court is not determining a lis interpartes.  It does not try issues in dispute nor does it arrive at a decision as at a trial.  It is only concerned whether, in all of the circumstances of a particular case as presented, the settlement is reasonable and for the benefit of the person under the disability.  If that opinion is formed the compromise takes affect as in any other case between persons of fully legal capacity.

This shows that care should be taken when a sanction is sought, and particularly so if it is not approved.  In some cases, it may be that no prejudice is caused at all to either party if the contents of the material and the reasons for the compromise or refusal to sanction are publicly aired.  In other cases, there may well be prejudice to either party if a settlement is not sanctioned and the matter goes on to trial, unless some precautions are taken.”

In Phillips v.  Munro [1957] St.R.Qd. 427, Philp J. said  at 430:-

“According to law an infant cannot give a valid discharge for payment of moneys due to it nor can a father or other guardian of the person give a valid discharge on behalf of the infant ...

I apprehend that few fathers would realise that it is primarily a father’s duty to maintain the infant out his own pocket and not out of the infant’s income.”

The foregoing applies to all persons under a legal disability, and is not limited to infants.  Also it is clear that the Court, in sanctioning a compromise on behalf of a person under a legal disability,  must consider the best interests of that person so that the settlement is seen to be of benefit to him and not for the benefit of the next friend or any other person.  Stephenson v.  Geiss (W 1360 of 1995, 4 July 1997, Lee J, unreported).  The solicitor’s client is the next friend, and not the person under a disability.  This is in no way  intended to impugn the  integrity of the next friend who has doubtless spent considerable time and effort in caring for the plaintiff and honestly believes that his recommendation is in the plaintiff’s best interests.  However the court’s role is an entirely independent one.  The Court has an overriding duty to exercise extreme care in protecting the interests of a person who is under a legal disability, and also against the attempts of any persons acting innocently and with the best of motives, but mistakenly ; Re John McLaughlan [1985] A.C. 343, 350; Re Ross [1988] 2 Qd.R.61 at 76; Flood v.  Williscroft [1987] 2 Qd.R.358 at 360.

It is also necessary to remind the profession that the Court, particularly in this jurisdiction, is not necessarily bound by the evidence as presented, including that concerning experts: Flood v.  Williscroft (supra) at 360; Re Ross (supra) at 76.  Also, the court is entitled in this particular jurisdiction to rely not only upon the material as presented, but upon its general experience, providing the plaintiff’s counsel has adequate opportunity to deal with any matters which might be taken into account, which has occurred on this application by reason of the adjournment and subsequent hearing: Stephenson v.  Geiss (supra).  In Re Magavalis [1983] 1 Qd.R.59 at 63, McPherson J. (as His Honour then was):-

“But the jurisdiction which I am asked to exercise is protective, and applications such as the present are not to be disposed of on precisely the same considerations as govern ordinary civil litigation interpartes.  As is said by Theobald, op. cit., p.60:

‘The Judge in Lunacy, having regard to the incapacity of the persons he has to protect, must often act on evidence obtained by himself or by persons acting under his direction.’”

The relevant test for this court in considering whether a compromise should be sanctioned, has been set out in Fowler v.  Gray at 350, 351 and in Stephenson v.  Geiss, referring to the Supreme Court Practice UK 1985 para.80/10-11/5 where the following appears:-

“In considering whether to approve a settlement, the question before the court is, not what amount of damages should be or would have been awarded to the plaintiff on the trial of the action, but whether the settlement itself is a reasonable one, and is for the benefit of the infant, having regard to all of the circumstances of the case, including the risks of litigation, the desire of the party to settle, and the disinclination of the plaintiff to go to trial.  If counsel has advised on the reasonableness or otherwise of the settlement, his opinion should be placed before the Master, who must, however, form his judgment whether to sanction the settlement or not.”

Also the following passage from Cairns, Australian Civil Procedure (1981) as approved in Fowler v.  Gray at 389 is relevant:-

“Once the Court is satisfied that questions of liability have been properly disposed of, it turns its attention to quantum.  The nature of inquiry, and the loss and damage, both present and prospective, must be fully explained.  From the information the court must be able to assess whether the amount offered is adequate to recompense for alleged loss and damage.  Particular attention is given to settlements where there is a discrepancy between what is offered and the loss suffered.  There are many perfectly adequate reasons for such a discrepancy.  What must be explained to the court is that reason.  In addition, the court must be able to measure the risk of proceeding against the certainty of accepting settlement.  If the risk of proceeding outweighs the apparent disadvantage of accepting what appears to be an inadequate offer, then acceptance of a compromise is a preferable course.”

The special responsibility of the legal advisers for a disabled person is well recognized.  This exists at two broad levels.  The first is that considerable care is needed to ensure that all aspects concerning liability and quantum have been fully considered by the solicitor, counsel, and his next friend, in determining whether or not it is in the bests interests of the disabled person  to recommend that the compromise be sanctioned: In Re Barber’s Trusts [1974] 1 W.L.R. 1198 per Megarry J. at 1201; Stephenson v.  Geiss (supra); H.  v.  The Nominal Defendant (Qld) (W 966 of 1994, 19 December 1997, Lee J.  unreported).  Even then, the Court is not bound by any such recommendation.

The second area involves the manner in which the information is presented to the court and the precautions taken by the plaintiff’s legal representatives to ensure that matters germaine to the recommendation are not disclosed to the opponent in the event that the compromise is not sanctioned.  See the procedure laid down in Madden v.  Hough [1969] Q.W.N. 14 per W B Campbell J. and Fowler v.  Gray (supra) in particular at 350-351 where the manner and presentation of the relevant material are set out in detail, as well as what precautions are normally necessary.

In this case, all of the initial material read on the application has been served on the defendant’s solicitors, contrary to the procedure specifically referred to where it is stated that if the settlement is not sanctioned, and the matter goes to trial, the plaintiff might be disadvantaged by disclosure of facts or of opinions which should remain confidential, and which may bear upon liability and quantum.  In this regard, even though the disabled person is not strictly the client of the solicitor, nevertheless the principles of legal professional privilege should be observed.  I do not, of course, refer to material which must be compulsorily disclosed pursuant to O.39 r.29C of the Rules of the Supreme Court.

The foregoing is the reason why such material, and particularly counsel’s opinion in proper form, is usually placed in a sealed envelope with appropriate endorsements.  These precautions are enshrined in Rule 122 of the proposed “Uniform Civil Procedure Rules”.  Counsel stated that the material had been disclosed at the settlement conference. 

When the matter came before me on 10 March 1998, the only material read was the summons dated 17 February 1998 and an affidavit of the solicitor for the plaintiff filed 17 February 1998.  There was no affidavit from the next friend as to his view about the compromise, or to explain the basis of his large claim of $248,683.00 for past care plus $7,000.00 interest (totalling $255,683.00).  Attached to the solicitor’s affidavit was ex.A, a facsimile transmission from counsel appearing for the plaintiff headed “Heads of Damages”, dated 5 February 1998.  Neither that document nor the affidavit of the solicitor made reference to considerations of the kind referred to in the passages quoted above.  Nor did they make any recommendation that the matter was for the benefit of the plaintiff.  The “Heads of Damage” contain comments by counsel under each head. Because this material and some other material to be referred to has been served on the solicitors for the defendant, there is now no harm in referring to it in more detail than would ordinarily be done on an application of this type. 

The summons seeks an order that the plaintiff’s claim in the sum of $1,150,000.00 together with the costs of and incidental to the action to be taxed or agreed, be sanctioned.  A protection order is also sought.  An order is sought that from that sum, the defendant pay to the next friend sums totalling $255,683.00 “on account of past care and interest thereon in reimbursement of the value of services supplied by him to the plaintiff to date ...”.  Other orders are sought refunding sums totalling $16,317.00 to hospitals and the like.  Various orders for costs  are also sought and to which reference will be made subsequently.  The solicitor’s affidavit stated in para.7 that at a mediation conference held on 6 February 1997 with counsel and solicitors for the defendant  (not a court appointed mediator but a private settlement conference),  the plaintiff’s claim was compromised in the sum of $1,150,000.00 together with costs to be taxed or agreed on a party and party basis, calculated as follows:-

(a)       Pain, suffering and loss of amenities  $120,000.00

(b)Interest (on $30,000.00)  $9,900.00

(c)Past economic loss  nil

(d)Future economic loss (calculated at the weekly rate of $350.00 to age 60)       $326,000.00

(e)Lost superannuation  $19,600.00

(f)        Past Griffith v.  Kerkemeyer   $248,683.00

(g)Interest  $7,000.00

(h)Future care  $614,000.00

1. Out of pocket medical expenses  $16,317.00

(j)Future operation to correct squint  $1,000.00

(k)Public Trustee charges  $75,000.00

Sub-Total  $1,437,500.00

Less 20 per cent for vicissitudes of life  $287,500.00

Total  $1,150,000.00

Paragraph 8 of the affidavit states:-

“As the within compromise is within the range of Mr Hackett’s advice on quantum and in accordance with comparable previous decisions of this Honourable Court, I humbly request this Honourable Court make orders in terms of the Summons filed herewith.”

The next friend’s claim is for the entire sum of $248,683.00 for past Griffiths v.  Kerkemeyer expenses plus $7,000.00 interest, neither of which are reduced by the 20 per cent for overall vicissitudes of life as the total sums arrived at have been so discounted.  The gross sum is claimed.  Also, it is not immediately apparent why a further substantial 20 per cent deduction for the vicissitudes of life was taken off all of the various components set out in the above calculation, as opposed only to the future components.  Furthermore, some of the items referrable to the future already appear to have been discounted to some extent. 

The only advice on quantum from counsel before the court at the initial hearing was ex.A to the affidavit referred to above, dated 5 February 1998.  After comments as to each head of damages, it concluded with the following summary:-

General damages  $130,000.00
Interest on $30,000.000  $10,000.00
Past economic loss  nil
Future economic loss (to age 60)  $416,000.00
Lost superannuation (to age 60)  $23,000.00
Griffiths v.  Kerkemeyer:

Past  $333,000.00

Interest  $7,000.00

Future (to age 73)  $846,000.00

Special Damages

Medical expenses (out of pocket)  $16,317.57

Other future expenses:

Teeth  ?

Public Trustee charges  $100,000.00 ?

Home modification: Granny flat  $50,000-$100,000.00

Pharmaceutical  $?

Operation to correct squint  $2,500.00

Total  $1,983,817.57

Then follows a note that for all future amounts of damages, a contingency reduction of about 15 per cent should be made to represent the vicissitudes of life.  The total of future economic loss, lost superannuation, and future Griffiths v.  Kerkemeyer expenses total close to $1,300,000.00.  15 per cent of that sum is about $195,000.00.  In round figures, on this basis, the estimated damages were said to be in the order of between $1.7M and $1.8M.  Whilst some of the above figures were estimates only, nevertheless they show a figure in total substantially above the figure arrived at at the settlement conference.  This discrepancy, of course, is not necessarily the end of the matter.

On noting the absence of any medical reports or a proper opinion of counsel, or any affidavit from the next friend, or material in any way to justify the very substantial claim of $255,683.00 to be paid out of the plaintiff’s damages direct to the next friend, including interest, counsel tendered a very large bundle of some 16 medical and associated reports which the solicitor for the defendant had in court.  These are marked ex.1.  Counsel then also read an affidavit by the next friend sworn 6 February 1997 which, he submitted, justified the claim for moneys sought to be paid direct to the next friend.  It was marked ex.2.  It also exhibits several lengthy reports of schools, school records, a report from “Dial an Angel” which is also contained in ex.1.  Nowhere in that affidavit or in any other material was there any evidence of loss of income suffered by the next friend in order to care for the plaintiff, such as might justify a claim for interest on such moneys lost.  The medical reports (as counsel later confirmed), showed that the next friend himself was seriously injured in the same collision involving some brain damage and other injuries, and has been unable to work ever since.  I was also told that he had received a substantial award for his own damages.

At the request of counsel, the matter was adjourned to a date to be fixed.  The solicitor for the defendant sought costs thrown away by the adjournment.  After expressing some doubt as to whether the defendant had any right to such costs (not being a party to the application in the ordinary sense), costs of the adjournment were reserved.  The purpose for the adjournment was to allow counsel to prepare an opinion in proper form, a further affidavit by the solicitor and next friend with particular reference to provide more information to justify the very large claim sought by the next friend.

The matter came on for hearing again on 9 June 1998 when counsel for the plaintiff read a further affidavit by the solicitor and by the next friend.  He also then read a document headed  “Updated Statement of Loss and Damage” filed 4 June 1997.  To the solicitor’s affidavit was exhibited a memorandum of advice of counsel dated 17 March 1998.  Counsel informed the court that neither of the last two affidavits (and the annexed memorandum of advice) was served on the solicitors for the defendant, which accords with the proper practice previously intimated.  Accordingly, I do not propose to discuss the contents of those two affidavits except in a limited but necessary way.

I have in the meantime had the opportunity of closely perusing all of the very lengthy material including the 16 medical and associated reports as well as the exhibits to the next friend’s affidavit sworn 6 February 1997.  The plaintiff’s solicitor in the further affidavit filed on 9 June 1998 has now expressed the opinion that the compromise is in the plaintiff’s interest and should be sanctioned by the court.  In para.4 of that affidavit, he deposes as follows:-

“Having had the benefit of Mr Hackett’s summary of quantum dated 5 March 1998, the conference with Mr Hackett and the next friend prior to the settlement conference and having received Mr Hackett’s oral advice amending his summary of quantum both prior to and during the settlement conference I concurred with Mr Hackett’s advice to the next friend that the Defendant’s offer in the amount of $1,150,000.00 should be accepted.”

The reference to 5 March 1998 is obviously an error and should be 5 February 1998, the reference being to ex.A referred to above.  The amended oral advice of counsel as referred to in the affidavit read on 9 June 1998  was not mentioned in the solicitors’ affidavit sworn 12 February 1988 which was prepared after that oral advice and after the settlement conference on 6 February 1998 when the figure of $1,150,000.00 was agreed to.  The initial affidavit in para.6 merely referred to ex.A after which it was stated that the plaintiff’s claim was compromised. 

Counsel’s memorandum of advice exhibited to the solicitor’s affidavit filed 9 June 1998 is dated 17 March 1998.  Counsel has stated that the initial statement of quantum dated 5 February 1998 was refined during discussions during the settlement proceedings.  The details of this will not be disclosed in this decision.

The next friend’s further affidavit refers to counsel’s previous summary dated 5 February 1998 (ex.A of the solicitor’s first affidavit), a reading of the medical legal reports, and the conferences on 6 February 1998.  He then set out other matters which will not be mentioned in this judgment.  In para.6 he swears as follows:-

“In view of the passage of time my son’s action has taken to reach this stage to obtain an offer from the Defendant I decided it was in my son’s best interest to accept the offer based upon (counsel’s) advice so that the action could be concluded and the future care of my son provided for.”

The next friend gave no further details of his claim of $255,683.00 but simply said that the basis of his claim for that sum was detailed in his affidavit sworn 6 February 1997 (ex.2).  This statement by the next friend is in accord with what counsel submitted on the initial hearing, but a close reading of the affidavit sworn 6 February 1997 shows that it does not establish the claim as made.

At the resumed hearing, the solicitor for the defendant did not appear.  This allowed the matter to be discussed in some detail between counsel and the court.  Counsel handed to the court an outline also marked “A”.  After discussing the matter in some detail, the matter was adjourned pending a further outline by counsel extracting as best he could from various sources in the material, the basis of the next friend’s claim.  This outline is marked “B”.  I have carefully considered all of the material and oral submissions.

As counsel points out, there are three sources of information dealing with the next friend’s claim.  All of these sources have been served on the defendant.  These are ex.2 to the affidavit of the next friend sworn 6 February 1997 (the Dial an Angel Report dated 12 September 1996), the updated statement of loss and damage filed 3 June 1997, and the summary of damages (by counsel) i.e. Annexure A to the solicitor’s first affidavit filed 17 February 1998.  Each of these show three widely divergent bases on which the claim is made as well as who provided the care for the plaintiff from time to time.  This of course in no way affects the plaintiff’s entitlement to a substantial award for past Griffiths v.  Kerkemeyer damages because of his clearly established need.  However, it throws into doubt the basis of the claim by the next friend when compared with all other persons who independently contributed towards the plaintiff’s care since his accident.      The foregoing is not to assert that the next friend will not necessarily be entitled to some clearly proven, but conservative, component for past care, but excluding interest which he claims.  However, even taking into account the three possible bases submitted by counsel, it is almost impossible to confidentially determine what that sum should be.  I draw attention to the modest approach referred to in numerous authorities set out in Fowler v.  Gray (supra) in this regard.  Neither is this intended to convey that the next friend, along with his second wife, did not spend time and effort in caring for the plaintiff at various periods since the accident in 1981.  Of course it must be always remembered, as Philp J.  pointed out in Phillips v.  Munro (supra), that a father has the duty to maintain, care for and nurture  a young child throughout his childhood and teenage years in any event.  Counsel submitted that this was reflected in the difference between the sum of $333,000.00 in the summary in ex.A, and the gross sum of $248,683.00 “agreed” at the conference.

The material served upon the defendant shows that the plaintiff is one of nine persons in the household.  In the motor vehicle accident on 16 October 1981, the next friend’s then wife (the plaintiff’s mother) was killed.  So was his eight year old sister.  In the same accident, the plaintiff’s two older siblings, a girl and a boy, were also seriously injured.  As indicated, the car was driven by the next friend who was also grievously injured.  The car came into collision with a vehicle driven by a person insured by the defendant.  Liability was not in issue in the action commenced by writ issued 16 October 1987.  The next friend’s action went to trial and he received a substantial award.  I was told that the actions of the siblings were resolved.  They have since become of age.  His father remarried on 22 January 1983.  He second wife had two children of her own.  She assisted with caring for the plaintiff at different times.  Subsequently the next friend and his second wife had two further children, thus involving a family of nine all told including the plaintiff.

The totality of the medical and associated reports paint a dismal picture for the plaintiff, notwithstanding his apparent recent efforts to become involved in some sports.  He has insight into his difficulties, justifying a substantial amount for pain, suffering and loss of amenities. Of particular concern, as some of the medical reports point out, is that the next friend will not be able to care for the plaintiff for his whole life notwithstanding his genuine desire to do so.  There is evidence that he suffered a heart attack recently.  Some reports show that the plaintiff will need constant supervision in his daily life.  It is well known that a severely disabled person causes considerable strain on families.  There is the possibility that the plaintiff may at some stage require long term institutional or other care with appropriate assistance, as some of the medical opinions appear to demonstrate. 

Counsel referred to several decisions of  judges of this court involving serious head injuries.  In Trenerry v.  Hedge & Anor, W 2249 of 1997, 14 May 1996), Shepherdson J.  awarded $2,120,343.00 to a female aged 17 at the date of an accident.  In Greene v.  Discombe, (W 3854 of 1988, 19 April 1995), Derrington J.  awarded $2,455,939.00 to a male aged 13 at the time of the accident and 20 years at trial.  This allowed a reduction of 20 per cent or $491,187.00 to take account of the  plaintiff’s contributory negligence.  In Harrington & Anor v.  Queensland Corrective Services Commission (W152 of 1993, 26 August 1994, Townsville) Kiefel J.  awarded $2,215,246.00 to a male aged 39 at the date of the accident.  In Lebsanft (an infant) v.  Wood & Anor.  (W 1 of 1994, 4 July 1996, Toowoomba), de Jersey J.  (as the Chief Justice then was) awarded $1,593,712.00 to a male plaintiff, aged four years at the time of trial and three weeks of age at the time of sustaining the severe head injuries when he was thrown from a car driven by his mother.  There are of course other cases involving lesser sums.  In FAI General Insurance Co Ltd v.  Green & Anor., (CA 195 of 1995, 19 April 1996), the Court of Appeal reduced a trial judge’s award of $1,307,115.00 in favour of a male aged 9 at the date of the accident in mid-1994 to $902,076.00.  In Marshall v.  Beaver & Anor.  (W 532 of 1991, 8 February 1995, Byrne J.  awarded $475,793.00 to a male school boy aged 12 at the date of the accident on 12 May 1988 and 18 at trial.  There was an additional sum for Public Trustee charges.

Of course no two cases are the same and in any event, my role on this application is not to determine the actual quantum.  In accordance with the tests set out above, I am merely to determine whether on all of the material, the compromise is in the best interests of the plaintiff and whether or not it should be sanctioned.  Nothing appears in the material to show that the plaintiff and the next friend do not wish to go to trial.  Nor is there medical evidence that a trial would be to the detriment of the plaintiff in some way.  Nor is there any medical or other evidence to the effect that early disposition of the matter would be to his advantage.  Counsel informed the court that there was no problem with the plaintiff and his next friend coming to Brisbane for the settlement conference or to a trial if necessary.  Nor does there appear to be any pressing reason why judgment should be given quickly because of financial constraints.  Counsel stated that the plaintiff was on a full disability pension. 

Having regard to the detailed medical and other reports and the view expounded with regard to the plaintiff’s disabilities and long term needs, and having regard to the present state of the material, I am unable to sanction the settlement or make the orders sought at the present time.

In England, the practice appears to be that when the court is not entirely satisfied with the proposed settlement, the matter is often adjourned to give the parties a further opportunity to negotiate and possibly agree upon an increased sum by way of settlement.  See Fowler v.  Gray (supra) at 352.  Whether the parties continue to negotiate is a matter for them. Whilst there is adequate material on which a protection order might now be made, in accordance with the course I took in Fowler v.  Gray (supra), I propose to adjourn the whole application to a date to be fixed so that the parties may take such action as they may be advised.  I would have been inclined to order a speedy trial but as counsel has stated, there is no particular urgency in the plaintiff’s case which would justify such an order which should proceed to trial in the ordinary way.  In any event, the matter should not be delayed.

In the meantime, I propose to order that the further affidavit of the solicitor and that of the next friend with the accompanying advice by counsel filed by leave on 9 June 1998 together with counsel’s outline of argument which I have marked “A” (not the exhibit to the solicitor’s first affidavit),  and counsel’s further outline marked “B” be placed in a sealed envelope and marked “Not to opened except by order of a Judge”.  I propose simply to reserve the question of the costs of this application.

One other comment should be made regarding the nature of the costs order sought in the summons, as follows:-

“7.The Defendant pay the Third Plaintiff’s party and party costs to be taxed or agreed.   

8.The Third Plaintiff’s costs be taxed or assessed as may be agreed as between solicitor and  own client.

10.The Public Trustee pay out of such moneys to the solicitors for the Third Plaintiff whose receipt shall be a sufficient discharge the difference between the amount of costs received by the solicitors for the Third Plaintiff from the Defendant and the amount of costs taxed or assessed as between solicitor and own client.”

The order seeks that party and party costs be “taxed or agreed”, whereas the solicitor and own client costs “be taxed or assessed as may be agreed”.  Paragraph 10 refer to solicitor and own client costs as “taxed or assessed”.

As pointed out in Stephenson v.  Geiss (supra), the solicitor’s client is the next friend and not the person under a disability.  Also, the person under a disability would otherwise be totally unable to agree on anything affecting the disposition of his estate, including costs, whether party and party, or solicitor and own client.  Furthermore, as pointed out in Stephenson v.  Geiss (supra), it is inappropriate that party and party costs be simply “agreed” between the solicitor acting for the defendant and the solicitor acting for the next friend (on behalf of the plaintiff).  The same may be said for solicitor and own client costs.  Presumably, if an order was made as set out in para.8 of the summons, the “agreement” would be made between the solicitor for the next friend and the next friend himself.  Without in any way impugning the integrity of the solicitors for either party, it must be remembered that the difference between solicitor and own client costs and party and party costs, comes out of the estate of the disabled person.  For this reason, the court has for many years made orders of the type referred to in Phillps v.  Munro (supra); Griffiths v.  Doolan [1959] Qd.R. 304 at 314; Colls v.  Colls Brothers [1968] Qd.R. 314; Kyte v.  Georgettis [1969] Q.W.N.46; Stephenson v.  Geiss(supra).  The Public Trustee has on many occasions preferred that such orders be made. 

At times, a passage in para.[8071] of the Queensland Supreme Court Practice Vol.2 at p.13,139 is misunderstood.  It is set out there that orders formerly made as in the above cases just referred to, are no longer necessary since the enactment of the Public Trustee Act 1978, s.59. It is more correct to say that because of s.59, it is not essential that such orders be made where the parties seek only to rely upon the provisions of that section which refers only to costs “as between solicitor and client”, and not “as between solicitor and own client”.  The relevant sections are as follows:-

“(6)The costs of the plaintiff or, if more than one, of all the plaintiffs in any such cause or matter or incident to the claims therein or consequent thereon shall be taxed by the taxing officer on the request, in the form approved by the Public Trustee, of the Public Trustee or of the plaintiff or the plaintiff’s next friend, as between party and party and as between solicitor and client and no authority other than the provisions of this section shall be necessary to require the taxing officer to carry out such taxation.

(6A) The taxing officer shall certify the respective amounts of the party and party and solicitor and client costs, and the difference (if any) and the proportions of such difference (if any) payable respectively by or out of the moneys of any party who is a person under a legal disability and by any other party to the cause or matter and no costs other than those so certified shall be payable from such moneys.

(6B) However, the Public Trustee may, without requiring any such taxation, in any case in which the Public Trustee considers it reasonable to do so, agree to the payment to the solicitor for the plaintiff, or to any person who has incurred costs on behalf of the plaintiff, or to whom costs are payable on the part of the plaintiff, or to whom costs are payable on the part of the plaintiff of such sum or sums as appears to the Public Trustee to be reasonable.

(7) The result of such taxation shall be notified to the Public Trustee by the taxing officer. ”        

Section 6B allows the Public Trustee the discretion not to require “any such taxation”, which refers to taxation not only as between solicitor and client, but also as between party and party, yet the subsection then authorises payment only to the solicitor for the plaintiff or to any person who has incurred costs on behalf of the plaintiff (the next friend), of such sum or sums as appears to the Public Trustee to be reasonable.  If there was no taxation as between party and party, presumably an agreement for such costs can be made between the solicitor acting for the next friend and the solicitor for the defendant.  The Public Trustee has drawn the court’s attention over the years to cases where party and party costs as so agreed have not been to the full extent of what the defendant would be ordered to pay on a taxation.  Also, at times, the solicitors for the next friend have not been overly concerned because the solicitor and client costs, to the extent that they exceed the party and party costs (as they invariably do), will be paid out of the estate of the person under a disability.  For this reason, the Public Trustee usually prefers a court order.  However, this in no way is intended to impugn the integrity of the solicitors for the next friend or of the defendant in this case.

Also, it should be said that if no order is otherwise made by the court as to costs and as to taxation, then s.59(6) and the other subsections take effect. As indicated, this limits the solicitor for the next friend to receive costs only as between “solicitor and client”, and not as between “solicitor and own client”: Stephenson v.  Geiss (supra). It is sometimes said that s.59(6) and s.59(6A), provide that a solicitor acting for a next friend is entitled only to solicitor and client costs, and not solicitor and own client costs. This is misconceived. Section 59(4) of the Act provides as follow:-

“All money or damages paid to the Public Trustee under this section shall, subject to any general or special direction of a court upon application made on that behalf, be held and applied by the Public Trustee on trust for the person under a legal disability.”

That subsection is very similar to s.51(2) of the Act’s predecessor, the Public Curator Act 1915-1971. Also the provisions of s.59(6) (6A) and (7) of the current Act are substantially similar to the provisions of s.51(7) of the former Act. Section (6B) appears to be a new subsection introduced by the current Act.

Notwithstanding s.51(7) of the former Act, which is in substantially the same as s.59(6), (6A) and (7) of the current Act, the court has regularly prescribed a special form of order dealing with “solicitor and own client costs” as opposed to “solicitor and client costs”. See the cases referred to above. The most convenient statement of the form of order appears in Kyte v.  Georgettis (supra).  As Philp J.  said in Phillips v.  Munro (supra) (also in Stephenson v.  Geiss (supra)), the solicitor acting for the next friend who brings the action on the part of the person under a disability, is entitled to all proper costs incurred in advancing the case for the benefit of the person under the disability and that this should be on a solicitor and own client basis. Also it clearly recognises the scope of s.59(4) of the current Act (s.51(2) of the former Act). It provides that “subject to any general or special direction of a court ...”, all moneys paid to the Public Trustee are to be applied on trust for the person under a legal disability. Orders of the type referred to in the authorities just mentioned amount to a “general or special direction of a court ...”. They in no way run counter to the requirements of s.59(6) and (6A), the latter of which provides that “no costs other than so certified shall be payable from such moneys”.

Therefore, the heading “Order Sanctioning Compromise” in para.[8071] of Vol.2 of the Queensland Supreme Court Practice requires modification.  For my part, I have always made orders of the type referred to in Kyte v.  Georgettis (supra).  The Public Trustee has frequently stated that orders of this type cause the Public Trustee no difficulty in managing the affairs of a person under a legal disability.

It may be observed that the Civil Justice Reform Act 1998 provides a new process for determining costs between solicitor and client. It does not appear to deal with party and party costs. Perhaps the Uniform Court Procedure Rules when they come into effect will do so. From a quick perusal of the Civil Justice Reform Act, it appears to make no reference to s.59 of the Public Trustee Act 1978, so if a next friend, acting for a disabled person, purports to make an agreement for solicitor and own client costs, a question might arise as to whether the Public Trustee is bound by such an agreement. It seems likely that s.59 was intended by the Parliament to be unaffected by the 1998 Act for the simple reason that whilst a next friend, who is liable to the solicitor for costs incurred on behalf of a disabled person, may make such an agreement, the Public Trustee must be concerned that the solicitor and own client costs are properly ascertained because the surplus of such costs, over and above party and party costs properly ascertained, come out of the estate of the disabled person who simply cannot agree as to any such costs: Stephenson v.  Geiss (supra).

Accordingly, as I have declined to sanction the proposed settlement at the present time, I will simply adjourn this application, including the application for a protection order, so that the  parties may take such action as they may be advised.  Costs of the application are reserved.