Layne Carmel Dixon BY Her Next Friend Andrew Nigel Dixon v Clarke

[2017] WASC 310

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   LAYNE CARMEL DIXON BY HER NEXT FRIEND ANDREW NIGEL DIXON -v- CLARKE [2017] WASC 310

CORAM:   ALLANSON J

HEARD:   23 OCTOBER 2017

DELIVERED          :   31 OCTOBER 2017

FILE NO/S:   CIV 1095 of 2014

BETWEEN:   LAYNE CARMEL DIXON BY HER NEXT FRIEND ANDREW NIGEL DIXON

Plaintiff

AND

SIMON CLARKE
First Defendant

AME HOSPITALS PTY LTD
Second Defendant

Catchwords:

Practice and procedure - Approval of settlement under O 70 r 10 RSC - Where confidential deed of settlement - Where plaintiff seeks appointment of private trustee company - Turns on own facts

Legislation:

Corporations Act 2001 (Cth), s 601RAB
Court of Appeal (Supreme Court) Rules 2005 (WA), r 60
Federal Court Rules 2011 (WA), r 9.70
Rules of the Supreme Court 1971 (WA), O 70 r 10, O 70 r 12
Trustee Companies Act 1987 (WA)

Result:

Application granted

Category:    B

Representation:

Counsel:

Plaintiff:     Mr G Droppert

First Defendant              :     Mr G P Bourhill

Second Defendant         :     Mr M L Williams

Solicitors:

Plaintiff:     Ilberys Lawyers

First Defendant              :     Tottle Partners

Second Defendant         :     Minter Ellison

Case(s) referred to in judgment(s):

Attwells v Jackson Lalic Lawyers Pty Limited [2016] HCA 16; 259 CLR 1

Biasin v State of Victoria [2017] FCA 161

Farrell v Allregal Enterprises Pty Ltd [No 3] [2011] WASCA 247

Maas v O'Neill [2013] WASC 379

Morris vZanki (1997) 18 WAR 260

Scandolera v State of Victoria [2015] FCA 1451; 331 ALR 525

Sergi v Sergi [2012] WASC 18

Sosa v Carter [1978] WAR 123

Wade v State of Victoria (No 2) [2012] FCA 1080

1. ALLANSON J:  The plaintiff applies by chamber summons for the court's approval of the compromise of her action against the defendants on the terms set out in a confidential deed of settlement.

2. The plaintiff was born on 7 August 2001, and is now aged 16 years.  She suffers from cerebral palsy with quadriparesis.  The plaintiff commenced this action by writ filed 23 January 2014.  She sues by her next friend, Andrew Nigel Dixon (her father).  The action was to go to trial in November this year.

3. The parties seek orders that:

   1.The Plaintiff do have leave to compromise this action pursuant to Order 70 Rule 10 of the Rules of the Supreme Court 1971 on the terms set out in the confidential draft deed of release which is attached to the affidavit of Andrew Nigel Dixon sworn in support of the proposed compromise and which is to be executed by Andrew Nigel Dixon, Amanda Carmel Dixon and the Defendants ('the Deed').

   2.Perpetual Trustee Company Limited (ABN 42 000 001 007) ('the Court Trustee') be appointed the trustee of such money as is payable to the Plaintiff pursuant to the Deed ('the Court Compensation Trust').

   3.The Court Trustee be empowered at its discretion to apply from time to time the whole or any part of the income from the monies paid pursuant to the Deed with recourse if considered necessary to the capital thereof for the maintenance, welfare and advancement or otherwise for the benefit of the Plaintiff, including in particular, but not limited to, payment in respect to the ongoing care, support, accommodation, and rehabilitation needs of the Plaintiff.

   4.There be liberty to apply with respect to the Defendants' payment obligations under the Deed.

   5.There be liberty to apply with respect to the Court Compensation Trust.

   6.The materials provided to the Court in support of the proposed compromise and appointment of private trustee being the affidavits of Peter Lyndon Harris of Ilberys Lawyers Pty Ltd, Christopher Ian Robert Marshall of Perpetual Trustee Company Limited, and Andrew Nigel Dixon sworn in support of the proposed compromise) be sealed and are not to be opened without the leave of a Judge of this Court.

   7.The parties have leave to file a Minute of Consent Orders that the action be dismissed with no further orders.

4. Under Order 70 rule 10 of the Rules of the Supreme Court 1971 (WA):

   (1)No settlement or compromise, and no acceptance of money paid into court, whenever entered into or made, in any cause or matter (other than an appeal to the Full Court) in which there is a claim by or on behalf of or against a person under disability, shall be valid unless it is approved by the Court.

   (2)An application for approval under paragraph (1) -

   (a)if made before the hearing of a cause or matter, shall be by summons in chambers;

   (b)…,

   and shall be supported by affidavit and by the opinion of an independent counsel; but the Court or Judge may dispense with the necessity of obtaining counsel's opinion.

The evidence

1. The application for approval was supported by the following affidavits:

   (1)affidavit of Mr Dixon, dated 4 October 2017, attaching the opinion of Graham Droppert, counsel;

   (2)supplementary affidavit of Mr Dixon, dated 19 October 2017, attaching the proposed deed of settlement;

   (3)affidavit of Christopher Ian Marshall, senior adviser with Perpetual Trustee Company Limited, dated 5 October 2017; and

   (4)affidavit of Peter Lyndon Harris, the solicitor for the plaintiff, dated 11 October 2017.  Mr Harris attaches the documents with which counsel was briefed for the preparation of the opinion.

The action

1. The statement of claim was filed on 29 January 2016.  Defences were filed in February 2016.  The plaintiff filed particulars of damage on 3 August 2016. 

Approval of a settlement

1. The approval of a settlement under O 70 r 10 requires the resolution of issues by the exercise of judicial power: Attwells v Jackson Lalic Lawyers Pty Limited [2016] HCA 16; 259 CLR 1 [61]. The court is exercising its protective jurisdiction. The role of the court in considering whether to approve a compromise and the factors to be considered are well settled. The basic question for the court is whether the compromise will be for the benefit of the person under the disability: Halsbury's Laws of Australia, vol 20 [325] ‑ [6827].  In summary, the court must satisfy itself that:

   (1)the proposed settlement will be for the plaintiff's benefit;

   (2)all the facts relevant to the matter have been brought together and considered by the plaintiff's legal advisers;

   (3)the proposed settlement is supported by the opinion of an independent counsel who has given proper consideration to all aspects of the case, and

   (4)the independent counsel's opinion has been considered, understood and approved by the next friend of the person under disability.

2. The court should give proper weight to the fact that the next friend wishes to accept the settlement.  The wishes of the next friend will be taken into account but are not decisive.  See Sosa v Carter [1978] WAR 123; Sergi v Sergi [2012] WASC 18 [39], and the cases there cited.

3. In Sosa v Carter the issue arose on appeal, but the principles are unaltered.  Burt CJ said:

   In my view what the court is called upon to do is to satisfy itself that all the facts relevant to the plaintiff's claim have been brought together and considered by her legal advisers and, unless the requirement be dispensed with, that the settlement is supported by the opinion of independent counsel. It should itself consider the opinion given and the reasons for it.  If having done that it appears that all aspects of the case have received proper consideration it should be slow to disagree with the opinion particularly upon such a matter as the assessment of damages for personal injuries.  The court should be aware of the risks of litigation in an area in which reasonable men can reasonably reach different conclusions and hence slow to force the infant to take a risk which the court is unable to underwrite.  It should, too, satisfy itself that the opinion of counsel has been considered and understood by the infant's guardian and it should give proper weight to the fact that the guardian, as is necessarily the case, wishes to accept the settlement (124).

4. I also take into account the additional factor referred to in Scandolera v State of Victoria [2015] FCA 1451; 331 ALR 525 [29], where Mortimer J said:

   … Since the approval of a settlement will bind the party under the disability and bring the litigation to an end, the Court should consider the advantages and disadvantages of the litigation continuing not only in terms of whether the applicants might secure a more advantageous award from the Court at trial, but also issues such as the prospects of an appeal and the costs and pressures imposed on [the plaintiffs] if the litigation were to continue [to trial].

The opinion of counsel

1. The proposed settlement is supported by the opinion of Graham Droppert, counsel.  Mr Droppert appeared for the plaintiff on the application.  His opinion was placed before the court as a confidential attachment to the first affidavit of Mr Dixon, with the statement that the plaintiff wishes to maintain legal professional privilege in the opinion.  It is appropriate that the opinion and the materials on which it is based remain confidential.  It has not been the subject of submissions, so I will express no view on whether privilege can be maintained in these circumstances when the advice has been provided to the court. 

2. Mr Dixon states, and I accept, that he has discussed the opinion with his solicitor and understands its contents.  He approves of and consents to the proposed settlement of the plaintiff's claim.

3. I raised at the hearing whether Mr Droppert can be properly described as independent counsel.  He is a member of the independent bar.  On the other hand, his name appears on the statement of claim as counsel who settled the plea.  He has acted as counsel for the plaintiff. 

4. In Wade v State of Victoria (No 2) [2012] FCA 1080 [9], Bromberg J said of r 9.70 of the Federal Court Rules 2011, which requires the opinion of an independent lawyer that the agreement is in the best interests of the person under a legal incapacity, that the lawyer must be independent in the sense that the opinion is provided in furtherance of the lawyer's duty to assist the court and not in furtherance of any duty the lawyer may have to a party in the proceeding.  The approach of Bromberg J has since been followed in similar proceedings under the Federal Court Rules:  see, for example, Biasin v State of Victoria [2017] FCA 161 (Kenny J); and Maas v O'Neill [2013] WASC 379 (Pritchard J).

5. In Farrell v Allregal Enterprises Pty Ltd [No 3] [2011] WASCA 247 [18] ‑ [19], Pullin JA considered r 60 of the Court of Appeal (Supreme Court) Rules, which requires approval of a settlement or compromise to be filed with an opinion of an 'independent' lawyer.  His Honour said:

   The word 'independent' has its ordinary meaning.  It means 'not influenced by others in manners of opinion, conduct, etc; thinking or acting for one's self ... not subject to another's authority or jurisdiction; autonomous; free ... not influenced by the thought or action of others' The Macquarie Dictionary.

   There may be cases where a court perceives that a lawyer providing an opinion has some relationship with the litigation guardian which leads to the conclusion that the lawyer is not independent.  This would be of concern in circumstances where there may be a suspicion that the litigation guardian may not have the interests of the person represented at heart.  This is not such a case.  The Public Trustee is a statutory body.  Mr Ashdown is a member of the independent bar and he has prepared an opinion which has closely examined the merits of the three appeals.  Mr Waugh contends that Mr Ashdown is not independent because he appeared on behalf of the Public Trustee at hearings in early 2009 where there was a question whether the Supreme Court would appoint the Public Trustee or the Public Advocate as the litigation guardian to represent Mrs Farrell's interests and whether the Public Trustee could be appointed by the court in circumstances where it did not consent to the appointment.  Mr Ashdown did appear when those matters were considered.  They were matters involving the power of this court to appoint the Public Trustee.  Once those matters were resolved, Mr Ashdown was retained to advise on the merits of the appeals and whether they should be compromised.  My conclusion is that Mr Ashdown's opinion is that of an 'independent' lawyer.  Even if I had reached a conclusion that on a proper construction of r 60 Mr Ashdown was not independent, I would have been prepared to act on Mr Ashdown's opinion and make an order under r 60 dispensing with the need for an opinion of an independent lawyer.  This is because of the correctness of the opinions he has expressed about the fact that no different orders would be made if the appeals proceeded to a hearing.

6. Again it is unnecessary to reach any final view.  The court has power to dispense with the opinion of independent counsel.  If it is necessary to exercise that power, I do so where the opinion that has been provided is by very experienced counsel and deals comprehensively with those matters of fact and law necessary for the court to be satisfied that all aspects of the case have received proper consideration.

7. Counsel was briefed with all relevant documents to enable him to express an opinion in relation to liability, and also to consider in detail the assessment of damages.  Because the parties wish the terms of the settlement to remain confidential, I will not discuss the evidence in detail.  I have, however, considered the expert reports with which counsel was briefed and his opinion. 

8. The evidence on liability included reports of two experts ‑ each of undoubted standing.  There was some difference in opinion between them.  It is neither possible nor necessary to determine how that might have resolved at trial.  Counsel has regard to the conflicting evidence and his opinion regarding liability is realistic. 

9. For the purpose of assessing the likely award of damages, counsel has considered the expert opinions regarding the nature of the plaintiff's injuries and the resulting disabilities.   I am satisfied that he has given proper consideration to all matters relevant to the assessment.

10. The expert opinions which have been provided are comprehensive and provide proper support for counsel's opinion.  I am satisfied that the proposed settlement is for the benefit of the plaintiff. 

Private or public trustee

1. The evidence is that the plaintiff does not have the capacity to herself manage the settlement sum.  The plaintiff also seeks an order that Perpetual Trustee Company Limited be appointed as trustee of the money payable to the plaintiff pursuant to the deed.

2. Under O 70 r 12(1),

   Where ‑

   (a)in any proceedings money is recovered by or on behalf of or is adjudged or ordered or agreed to be paid to or for the benefit of a person under disability; or

   …

   the money shall, unless otherwise ordered by the Court, be paid to the Public Trustee for investment on behalf of the person under disability, and if the Court so orders may be invested by the Public Trustee in investments outside the Common Account established under the Public Trustee Act 1941.

3. The court has power to appoint the Public Trustee, a trustee company or an individual private trustee (or trustees).  There is a predisposition in favour of the appointment of the Public Trustee, but nothing more than a predisposition.  The court must examine all of the circumstances and decide what is in the best interests of the person for whose benefit the funds are held:  see Morris v  Zanki (1997) 18 WAR 260, 286.

4. The proposed trustee is a wholly owned subsidiary of Perpetual Limited. It is a trustee company as defined in s 601RAB of the Corporations Act 2001 (Cth), and a trustee company under the Trustee Companies Act 1987 (WA). It is an experienced fund manager, and there is no reason to doubt its long term financial security. I am satisfied that the appointment of Perpetual would ensure the plaintiff's interests are protected.

5. Mr Marshall has met and established a relationship with the plaintiff's parents.  The plaintiff's parents have also discussed the choice of trustee with their solicitor.  They have expressed a preference for the services offered by Perpetual.  As the plaintiff is now only 16, the relationship between the plaintiff (and her parents) and the trustee may be important.  In any event, the preference of the parents is a relevant factor in the exercise of discretion.

6. It is difficult to conduct an exact comparison of the fee structures of Perpetual and the Public Trustee.  The evidence, however, includes a report by Cumpston Sarjeant, consulting actuaries, that enables me to be satisfied that the anticipated fees to be charged by Perpetual are reasonably comparable with those charged by the Public Trustee.  

7. I am satisfied that there are good reasons to appoint Perpetual, in accordance with the wishes of the plaintiff's parents, and that I should make the order sought.

Confidentiality

1. The settlement is confidential.  I will make the orders requested to preserve that confidentiality.