Laws v GWS Machinery Pty Ltd & 2 Ors (No 3)

[2007] NSWSC 1496

CITATION:

Laws v GWS Machinery Pty Ltd & 2 Ors (No 3) [2007] NSWSC 1496

HEARING DATE(S):

13 November 2007

 
JUDGMENT DATE : 

21 December 2007

JURISDICTION:

Common Law

JUDGMENT OF:

Rothman J

DECISION:

Further to the orders issued on 2 November 2007 in 20076/2002, John Rodney Laws:

(i) The verdict and judgment for the plaintiff be for a further amount for the costs of managing a fund of $9,174,461.32.

(ii)To the extent necessary, the order for costs already made include the costs of these subsequent proceedings.

(iii) Liberty to apply to all parties to provide a minute of the order to reflect the above calculation.

CATCHWORDS:	DAMAGES – personal injury – costs of funds management – arises where injury precludes plaintiff from managing own affairs – principal sum to be managed is a question of fact – in this case excludes only repayment to Medicare and Centrelink
CASES CITED:	Evans v Lindsay [2006] NSWCA 354 GIO v Rosniak (1992) 27 NSWLR 665 Laws v GWS Machinery Pty Ltd & 2 Ors; Laws v GWS Machinery Pty Ltd & Anor [2007] NSWSC 316 Laws v GWS Machinery Pty Ltd & 2 Ors; Laws v GWS Machinery Pty Ltd & Anor (No 2) [2007] NSWSC 1249 Nominal Defendant v Gardikiotis [1995] HCA 56; (1996) 186 CLR 49 Todorovic v Waller [1981] HCA 72; (1981) 150 CLR 402 Willett v Futcher [2005] HCA 47; (2005) 221 CLR 627
PARTIES:	John Rodney Laws (Plaintiff) GWS Machinery Pty Ltd (First Defendant) Motokov Australia Pty Limited (in liquidation) / CGU Insurance Australia Limited (Second Defendant) Thomas John Laws (Third Defendant) Thomas John Laws (Cross-Claimant) NRMA Insurance (Cross-Defendant)
FILE NUMBER(S):	SC 20076/2002
COUNSEL:	D A Wheelahan QC / P J Frame (Plaintiff) S G Campbell SC / P L Perry (First Defendant) S E Gray (Second Defendant) P J Doherty SC / D C Morgan (Third Defendant)
SOLICITORS:	Lamrocks Solicitors (Plaintiff) Moray & Agnew Solicitors (First Defendant) Curwoods Lawyers (Second Defendant) Somerville & Co (Third Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

ROTHMAN J

21 DECEMBER 2007

20076/2002 John Rodney LAWS by his tutor Catherine Anne LAWS v GWS MACHINERY PTY LIMITED & ORS

JUDGMENT

1 HIS HONOUR: This judgment refers to the two previous judgments issued by the Court in this matter and follows on from the leave granted to the plaintiff in the judgment of 2 November 2007 ([2007] NSWSC 1249). The earlier judgment of 4 June 2007 is [2007] NSWSC 316. This judgment relates only to John Rodney Laws (Laws Junior).

2 The 2 November 2007 judgment issued final orders and granted liberty to apply to the plaintiff Laws Junior to increase the verdict by the amount of the costs of any funds management. Application was made in that respect.

3 The application was opposed, in whole or in part, and a request was made for a hearing and for the cross-examination of the deponents to affidavits filed by the plaintiff, Laws Junior. The basis of the opposition was that the sum sought related to amounts that ought not to be included in the fund (or the subject of compensation for the management thereof). It was submitted that, for example, so much of the sum that related to past care was expense related, may be paid out, and, even if not, was not part of the cost of management recoverable by way of damages.

4 The application for a hearing and to cross-examine was ultimately withdrawn which withdrawal was notified to the Court on 6 December 2007.

5 As a matter of principle, the cost of fund management was dealt with in the judgment of 2 November 2007. The submission was put by the first defendant that the costs of funds management ought not to include the costs of managing that part of the funds that are not truly awarded by the Court for the production of future income.

6 The first defendant deals with the issue in two ways. First, it submits that because damages are awarded on the basis that the amount will have exhausted at the end of the plaintiff’s life, then the cost of managing the fund will reduce as the principal reduces. Secondly, it submits that only those amounts referable to future income and care are part of the fund for the purpose of “fund management” as these are the only amounts that require “harvesting” for the plaintiff.

7 The authorities discuss that which should be part of the fund for management purposes: see Willett v Futcher [2005] HCA 47; (2005) 221 CLR 627; GIO v Rosniak (1992) 27 NSWLR 665; Evans v Lindsay [2006] NSWCA 354. Ultimately it is a question of fact. But the starting point must be the general principle that the costs of funds management is a head of damage to put the plaintiff, as near as possible, in the same position as if the injuries had not been sustained: Todorovic v Waller [1981] HCA 72; (1981) 150 CLR 402. And are awarded because the injury caused by the negligence prevents the plaintiff from managing the funds: Nominal Defendant v Gardikiotis [1995] HCA 56; (1996) 186 CLR 49. In that sense, the cost of fund management is itself a compensation for the injury which occurred as a result of the tortious conduct of a defendant. On one view, if the injury prevents a plaintiff from managing her/his own money, even the cost of managing those pre-existing assets of the plaintiff, if, as a matter of fact, they are to be managed, ought be compensated. It is an issue I need not discuss.

8 The only question is what, as a matter of fact, is the sum to be managed. On the evidence, it is clear that but for past medical expenses and the reimbursement of social security payments the entire award is to be managed: see affidavit of Catherine Anne Laws of 19 November 2007, and of Stephen Peter Groves of 20 November 2007. See also Evans v Lindsay, supra, at [116].

9 Further, as a matter of fact, not unusually (and perhaps necessarily given the duties of trustees and the uncertainty of life expectancy), the fund is to be managed in a way that utilises the interest only and leaves the principal intact. This latter fact disposes of the first argument of the defendant. The finding of fact in the immediately preceding paragraph disposes of the other argument.

10 The award shall be increased by the cost of funds management being the cost of managing the total amount otherwise awarded less past medical expenses and reimbursement of social security payments. The deductions are for an amount of $108,348.88, being $4,187.05 to Medicare and $104,161.83 to Centrelink. After these deductions, the sum to be managed is $9,174,461.32. The estimated cost of managing that sum is $1,879,155 (as per the Report of Furzer Crestani Services of 28 November 1997 supplied by the first defendant) and I understand the parties are agreed on the formula to be used once the principal sum is defined.

11 I make the following further orders:

Further to the orders issued on 2 November 2007 in 20076/2002, John Rodney Laws:

(i) The verdict and judgment for the plaintiff be for a further amount for the costs of managing a fund of $9,174,461.32.

(ii) To the extent necessary, the order for costs already made include the costs of these subsequent proceedings.

(iii) Liberty to apply to all parties to provide a minute of the order to reflect the above calculation.

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