Davis v Western Sydney Local Health District

[2021] NSWSC 179

Supreme Court

New South Wales

Medium Neutral Citation:

Davis v Western Sydney Local Health District [2021] NSWSC 179

Hearing dates:

10 February 2021

Date of orders:

04 March 2021

Decision date:

04 March 2021

Jurisdiction:

Common Law

Before:

Harrison J

Decision:

(1)      I note that this matter has settled subject to approval, in accordance with the terms of a consent judgment which for identification I will initial and place with the papers.

(2) I approve the settlement pursuant to s 76(4) of the Civil Procedure Act 2005.

(3)      I make orders in accordance with paragraphs 1 to 7 inclusive of that consent judgment.

(4) I order in accordance with s 77(2) of the Civil Procedure Act 2005 that the judgment sum referred to in paragraph 1 of the consent judgment, less any authorised deductions for which the consent judgment specifically or by necessary implication provides, be paid into Court for payment out thereafter to the NSW Trustee & Guardian or as the Court may upon application make pursuant to s 77(3) of the Act otherwise direct.

(5)      Grant liberty to apply.

Catchwords:

SETTLEMENT – approval of settlement – plaintiff under legal disability – where plaintiff a joint proprietor of the family home with her husband subject to a substantial mortgage – where tutor seeks order for payment from settlement of monies sufficient to discharge the mortgage – where husband providing care for plaintiff in substitution for commercial assistance contemplated by the settlement amount - whether Court has power to make such an order – where decision properly a matter for trustee

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Category:

Procedural rulings

Parties:

Rebecca Davis by her tutor Matthew Davis (Plaintiff)
Western Sydney Local Health District (Defendant)

Representation:

Counsel:
J M Morris SC with R Bianchi (Plaintiff)

Solicitors:
Bilias & Associates (Plaintiff)
Norton Rose Fulbright Australia (Defendant)

File Number(s):

2019/115124

Publication restriction:

Nil

Judgment

1. HIS HONOUR: By notice of motion filed on 16 December 2020, Rebecca Davis sought orders for the approval of a settlement of the proceedings pursuant to s 76 of the Civil Procedure Act 2005. An order is also sought that from the settlement sum, an amount of $306,419 “be deducted and paid” to the plaintiff’s husband “for the purpose of discharging the mortgage over the family home”. Ms Davis also asks for an order that “the proceedings” be transferred to the “Protective Division of the Equity Division for the appointment of a private trustee and manager”. That application arises in the following circumstances.

2. Ms Davis sues by her tutor, Matthew Davis, who is Ms Davis’ son. Ms Davis was born on or about March 1971 and sustained an hypoxic brain injury at Blacktown Hospital during a routine operation on 14 April 2016. Ms Davis has been left with profound difficulties, including cognitive impairment, difficulties with memory and concentration, fatigue, emotional lability and associated difficulties with daily living.

3. Ms Davis and her husband are the joint proprietors of a property in Glenorie, which is subject to a mortgage securing repayment of the debt earlier described. In an affidavit, read in support of the application for approval of the settlement, Matthew Davis deposes to the following matters:

“8. I have…had discussions with my father in relation to him seeking an amount sufficient to discharge the current mortgage over the property in which he and my mother reside at ** Smith Lane, Glenorie…

9. I am aware the mortgage is in joint names. The amount required to discharge the mortgage …is $306,419.56.

10. My father has spent countless hours looking after my mother since her incident. He has spent well over 40 hours per week looking after her. I understand a claim for his assistance to my mother was advanced at the mediation.

11. I am aware the Glenorie property was purchased shortly before my mother’s incident. At that time, my mother was in employment and was intending to contribute financially to the repayment of the mortgage. Following my mother’s incident, my father had to considerably restrict his work to enable him to look after my mother which affected his earning capacity and he was obliged to make payments on the mortgage out of an inheritance he received.

12. I have discussed the current situation with my father, and he would like to keep the fund available to my mother from the settlement sum intact for as long as possible before there is any considerable drawn down [sic] to pay care or medical expenses. He is intending to continue to work and pay those expenses out of his earnings.

13. I understand my father has discussed this proposal with the proposed trustee, Ability One Financial Management.

14. I can see the financial common sense in such an arrangement and I understand the contribution by my mother towards discharging the mortgage will be recorded in the unlikely event there is any separation or divorce.

15. Accordingly, I support my father’s application.”

4. The following submissions were made in support of the application:

“7.   As to whether the deductions mentioned at paragraph 4 above should be made before a financial manager is appointed, the payments sought are of two different categories. The first is the payment of the amounts that are sought to pay incurred medical expenses, or to reimburse amounts paid on the plaintiff’s behalf by her son, Matthew, for medical treatment. These can be the subject of an order as they are obligations that have been incurred for the plaintiff’s benefit and ought be repaid as part of the award that she has recovered for past out-of-pocket expenses. They are also small in amount and given the settlement sum, could not be said to realistically impede her capacity to provide for her future needs. The legal representatives for the plaintiff submit that these payments can be made.

8.   The second category of deduction from the settlement sum is of a different character. It seeks the deduction of an amount sufficient to discharge the joint mortgage liability of the plaintiff and her husband, Peter. The objective is that the joint liability will be discharged, and the plaintiff’s husband will not be required to work as much and so can effectively replace the amount provided for future care, by providing the necessary supervision and attendant care services voluntarily, rather than on a commercial basis. This will not replace the commercial services but gives him the opportunity to supplement it. At the moment he has to work [to] pay the mortgage. The funds sought represent the voluntary domestic assistance provided by Peter for which the plaintiff has received compensation. There is no obligation for a plaintiff to pay to the provider of any voluntary domestic assistance any amount that she has received from the defendant for voluntary domestic assistance.”

5. As I indicated during the course of the approval proceedings, I do not accept I have power to make an order of the kind that is sought with respect to the mortgage debt or the other amounts incurred by members of Ms Davis’ family in generously providing care and support for her since she became incapacitated. As the submissions made on behalf of Ms Davis correctly observe, my function in dealing with an application for approval of a settlement is protective in nature and calls for a determination of whether the settlement is beneficial to the interests of Ms Davis, as the person under a legal incapacity. It does not extend to usurping the role of the trustee or to making decisions about the investment, expenditure or distribution of the fund. There are fundamental, but also practical, reasons for this. At a purely practical level, in considering whether or not to approve a compromise, the Court is not possessed of the kind of detailed information about Ms Davis’ circumstances, or those of her family members who might be expected to have an interest in supporting and assisting her, that would be required before particular decisions concerning administration of the fund could be made.

6. Nor is it necessary to transfer the proceedings to another Division of this Court. Section 77 of the Civil Procedure Act 2005 is in these relevant terms:

77 Payment of money recovered on behalf of person under legal incapacity

(1) This section applies to money recovered in any proceedings on behalf of any of the following persons--

(a) a person under legal incapacity,

(b)…

pursuant to a compromise, settlement, judgment or order in any proceedings.

(2) All money recovered on behalf of a person referred to in subsection (1) is to be paid into court.

(3) Despite subsection (2), the court may order that the whole or any part of such money not be paid into court but be paid instead to such person as the court may direct, including--

(a) if the person is a minor, to the NSW Trustee and Guardian, or

(b) …

(c) …

(4) Money paid into court under subsection (2) is to be paid to such person as the court may direct, including--

(a) if the person is a minor, to the NSW Trustee and Guardian, or

(b) …

7. Ms Davis has foreshadowed that she wishes to apply for the appointment of a corporate trustee. Section 77(3) provides for such an application. Any decisions that are to be made better to provide for Ms Davis’ needs and ongoing care and support, including, if appropriate, the utilisation and compensation of members of her family, are matters that the trustee can attend to in due course. It seems to me to be appropriate in these circumstances to retain the proceedings in this Division in anticipation of any application that is to be made.

8. I will make the following orders:

1. I note that this matter has settled subject to approval, in accordance with the terms of a consent judgment which for identification I will initial and place with the papers.

2. I approve the settlement pursuant to s 76(4) of the Civil Procedure Act 2005.

3. I make orders in accordance with paragraphs 1 to 7 inclusive of that consent judgment.

4. I order in accordance with s 77(2) of the Civil Procedure Act 2005 that the judgment sum referred to in paragraph 1 of the consent judgment, less any authorised deductions for which the consent judgment specifically or by necessary implication provides, be paid into Court for payment out thereafter to the NSW Trustee & Guardian or as the Court may upon application make pursuant to s 77(3) of the Act otherwise direct.

5. Grant liberty to apply.

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Decision last updated: 04 March 2021