James v Major Carpets Pty Ltd

[2016] VSC 138

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

S CI 2014 01956

MARK JAMES (a person under a disability who sues by his Litigation Guardian SAMANTHA LEE JAMES)	Plaintiff
v
MAJOR CARPETS PTY LTD	Defendant

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JUDGE:	T FORREST J
WHERE HELD:	Melbourne
DATE OF HEARING:	5 April 2016
DATE OF JUDGMENT:	7 April 2016
CASE MAY BE CITED AS:	James v Major Carpets Pty Ltd
MEDIUM NEUTRAL CITATION:	[2016] VSC 138

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NEGLIGENCE – Application for approval of compromise under the Supreme Court (General Civil Procedure) Rules 2015, Order 15 – Person under a disability – Relevant test to apply on application for approval – Compromise approved - Elderfield v Transport Accident Commission [2010] VSC 116.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J. Mighell QC Mr S. Martin	Slater and Gordon
For the Defendant	Mr C. Blanden QC Ms F. Crock	Solicitor to the Transport Accident Commission

HIS HONOUR:

1. The plaintiff is a handicapped person within the meaning of Order 15.01 of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’).  He sues via his litigation guardian, Samantha Lee James.

1. Mr James was injured in a work-related motor vehicle accident in 8 March 2008.  He suffered both physical and psychiatric injury.  In very short compass, he sustained soft tissue injuries to the cervical, thoracic and lumbar spine.  After some years of conservative treatment, a C6/7 anterior cervical discectomy and fusion was carried out without complications.  He also suffers from L4/5 and L5/S1 disc degeneration without radiculopathy.  This has been treated conservatively.  His lumbar spine symptoms fluctuate, as do his apparently milder cervical spine symptoms.  Mr James also suffered concussion in the 2008 accident.

1. Mr James has suffered for many years with schizophrenia; an illness which substantially pre-dated the 2008 accident.  The accident is said to have aggravated this illness and to have caused depression and a post-traumatic stress disorder.

1. Mr James remains in receipt of Workers Compensation weekly payments. To date, he has received $168,371. He has also received a s 98C[1] Lump Sum of $22,740.

   [1]Section 98C Accident Compensation Act 1985.

1. Mr James Mighell QC, who appears for the plaintiff with Mr Simon Martin, has advised me that, subject to my approval, the parties had agreed to settle the matter as follows:

1.The defendant pay the plaintiff the sum of $250,000 for general damages only.

2.The plaintiff retain the weekly workers compensation payments and the s 98C lump sum.

3.The defendant pay the plaintiff’s costs, including reserved costs on a standard basis.

4.That I certify for senior counsel’s fee on brief at $7,700 with junior counsel’s fee on brief to be $3,850.

(b)for two days preparation at the above daily rates for both senior and junior counsel.

5.That the proceeding be dismissed.

1. I have read the court books provided by both parties, and I have heard from the Litigation Guardian.  Relevantly, she swore that she had received advice about the proposed settlement and wished to accept the defendant’s offer.  She said that she understood the risks that attached to this claim, particularly the risk of future pecuniary loss damages being compromised by the plaintiff’s pre-existing illness, his prior patchy work history, and the substantial amount that had already been received in weekly payments.  In these circumstances, she was content to settle the matter for general damages only, with the trade-off for abandoning the future pecuniary loss claim being that the plaintiff remained at this stage on weekly payments.  She said she understood there was no guarantee that these payments would continue to be paid.  I am satisfied the Litigation Guardian has a sound understanding of the basis of this proposed settlement and the reasoning behind it.

1. As a person under a disability under O 15.01, the proposed compromise will not be valid without the approval of the Court. The Rules provide that application for approval is to be made by summons, save that the court may dispense with that requirement where the application for approval is made at the trial of the case, as it has been in this case. I dispense with the summons requirement.

1. The test that I apply in considering whether to approve this settlement is whether it would be in the interests of the plaintiff to reject the compromise and continue the action in the hope of receiving a larger amount.  Robson J put it this way:

The question is relevantly answered by deciding whether or not in … [the Court’s] opinion the certainty of obtaining compromise sum is significantly outweighed by the uncertain prospect of obtaining more by rejecting the compromise, after taking into account the risk of obtaining less.[2]

This has been described in shorthand form as the ‘bird in the hand’ approach.[3]

[2]Eldenfield v Transport Accident Commission [2010] VSC 116, at [20].

[3]Laracy & ors v Baxters Concrete Pty Ltd [2015] VSC 776, at [8].

1. In this case, I have concluded that I should approve this settlement for the following reasons:

9.1I consider that there were risks attached to liability and there was some chance, and not a completely remote one, that the plaintiff would fail to establish negligence.  The plaintiff’s case was essentially that the trailer that he was towing had been incorrectly loaded with carpet, in some indeterminate way, by the defendant.  The carpet became loose, the trailer unbalanced and he lost control of the tow car, thus causing the accident.

There were no independent witnesses to this, and when the defendant arrived at the scene the load appeared correctly secured.  The plaintiff attributed this to the efforts of well-meaning onlookers.  He gave a consistent account of the accident to paramedics shortly after their arrival at the crash site.  The plaintiff was, it seems, at least in part, responsible for securing the carpet at his employer’s base in Chelsea Downs. 

This recitation of the essential facts is sufficient, I think, to spell out the risks that attached to this action.  This was a single vehicle collision with no witnesses apart from the plaintiff.  I think it likely that the plaintiff would have succeeded in establishing liability, but the possibility of failure was real.  I also consider that there was a real prospect that the plaintiff would have been found to have been contributorily negligent.

9.2In these circumstances, notwithstanding the seriousness of the plaintiff’s physical and psychiatric injuries, I consider the sum of $250,000 for general damages to be a sound reflection of the monetary value placed upon the plaintiff’s injuries tempered by the risks of litigation.  Had I been asked to assess damages tempered by this risk, $250,000 is about the figure I would have assessed.

9.3I consider the decision to jettison the pecuniary loss claim to be sound.  The plaintiff had a patchy past work history largely resulting from his schizophrenia; his economic future is also clouded by this illness.  Additionally, he has received $168,371 so far in weekly payments.  Should the plaintiff proceed and succeed to some degree with his economic loss claim, his final judgment would be reduced by this amount, and he would lose his entitlement to further weekly payments.  These sums will not be deducted from his proposed general damages settlement.  I consider the proposal that the plaintiff abandon pecuniary loss in return for retaining his weekly payments to be sensible, despite the uncertainty that attaches to their continuity.  In different circumstances, I would have given the same advice.

1. I have had the advantage of reading an opinion of the merits of this proposed settlement that has been prepared by the plaintiff’s counsel.  It reinforces the conclusion that I have reached that I should approve the compromise and I direct that this opinion be placed on in the confidential documents section of the court file.