McElhinney by her tutor McElhinney v Ambulance Service of New South Wales

[2020] NSWSC 1471

Supreme Court

New South Wales

Medium Neutral Citation:

McElhinney by her tutor McElhinney v Ambulance Service of New South Wales [2020] NSWSC 1471

Hearing dates:

21 October 2020

Date of orders:

23 October 2020

Decision date:

23 October 2020

Jurisdiction:

Common Law

Before:

Wright J

Decision:

(1)   The Court orders that the settlement of these proceedings is approved.

(2)   The Court makes orders in accordance with paragraphs 1, 5, 7 and 8 of the form of consent orders signed on behalf of the parties and signed, sealed and dated by the Court.

(3)   The Court notes the agreements between the parties and the undertaking by the plaintiff in paragraphs 2, 3, 4, 6 and 9 of the form of consent orders.

Catchwords:

CIVIL PROCEDURE – Proceedings brought by person under legal incapacity – Settlement of proceedings brought by minor – Court approval – No points of principle

Legislation Cited:

Civil Procedure Act 2005 (NSW)

NSW Trustee and Guardian Act 2009 (NSW)

Cases Cited:

Bacon by his tutor Sarah Rea v Western New South Wales District Health Service [2018] NSWSC 1840

Category:

Principal judgment

Parties:

Sophie McElhinney by her tutor Corey McElhinney (Plaintiff)
Ambulance Service of New South Wales (Defendant)

Representation:

Counsel:
G Parker SC with K Oldfield (Plaintiff)

Solicitors:
Shine Lawyers (Plaintiff)
McCabe Curwood (Defendant)

File Number(s):

2016/281560

Judgment

1. The plaintiff by her tutor claims damages from the defendant arising out of the circumstances of her birth on 7 May 2013 and the treatment received by her and her mother from paramedic ambulance officers who attended the mother while she was in labour and who transported the plaintiff and her mother to hospital, where the plaintiff was born.

2. The plaintiff’s case, in substance, is that the defendant is liable for the negligence of the ambulance officers in: failing to recognise the obstetric emergency in the form of shoulder dystocia; failing to provide appropriate treatment and timely transport to hospital; and/or failing to seek appropriate expert assistance or advice in the circumstances. In addition and alternatively, it is contended in effect that the defendant was negligent in failing to provide appropriate training for its officers in relation to this type of obstetric emergency.

3. Various aspects of the plaintiff’s case on liability are subject to significant contest by the defendant. There appears to be substantial dispute as to what actually occurred between the arrival of the ambulance officers and the plaintiff’s birth and as to what should and could have been done. In addition, the defendant relies on ss 5O and 42 of the Civil Liability Act 2002 (NSW).

4. Thus there is a significant risk that, if the matter went to trial, the plaintiff would not be successful in establishing liability.

5. As to her injuries, the plaintiff suffered hypoxic ischaemic encephalopathy because of her delayed birth. Further, it appears to me that the evidence is likely to establish that the plaintiff presently suffers from essentially three relevant conditions:

1. cerebral palsy, which is spastic diplegic;

2. moderate intellectual disability or developmental delay or disability; and

3. autism spectrum disorder.

6. There is, however, a dispute of substance as to whether the plaintiff’s cerebral palsy or her autism spectrum disorder are causally related to the relevant circumstances of her birth. As a result, there is a not insubstantial risk for the plaintiff that, if the matter goes to trial, she would not recover damages in respect of her autism spectrum disorder or possibly her cerebral palsy.

7. The parties have agreed to settle, subject to the Court’s approval, the plaintiff’s claim on terms set out in a form of consent judgment signed on behalf of both parties and filed on 11 September 2020.

8. Under s 76(3) of the Civil Procedure Act 2005 (NSW), any compromise or settlement of proceedings commenced by or on behalf of a person under legal incapacity, such as the plaintiff in the present case, may not proceed except with the approval of the Court. Moreover, s 76(4) empowers the Court either to approve or disapprove such an agreement.

9. The Civil Procedure Act itself does not provide any guidance as to the considerations that the Court should take into account in carrying out the task of approving or disapproving the settlement. However, it is well established that:

1. the Court’s function is essentially protective;

2. it should scrutinise the terms of the settlement for the purpose of protecting the interests of the person who is under a legal incapacity; and

3. the approval depends ultimately on whether the settlement is beneficial in the interests of that person,

4. Bacon by his tutor Sarah Rea v Western New South Wales District Health Service [2018] NSWSC 1840 at [3].

10. I have had the considerable advantage of reading the “Confidential Advice” of Mr Geoffrey Parker of Senior Counsel and Ms Oldfield, who appear for the plaintiff, in relation to the matter. I have taken that material into account in relation to the liability and causation aspects as well as quantum.

11. I have been provided with an affidavit from the plaintiff’s tutor, sworn 9 October 2020. I have taken this into account. In particular, the plaintiff’s tutor has stated that he agreed with the settlement proposed and that it had been explained to him how damages would be assessed and what would be involved in proceeding to trial including the risks of so doing. Understanding the risks, the tutor said that he believed the proposed settlement was in plaintiff’s best interest. He also stated that he understands that, if the Court approves the settlement, the plaintiff will have no further entitlement to bring any claim against the defendant in respect of the events on 7 May 2013 or in respect of any deterioration or change in the plaintiff’s condition or injuries suffered at that time and that it is a once and for all settlement and it cannot be revisited at a later time.

12. In addition, the plaintiff’s tutor set out his understanding of various deductions that would be made from the proposed settlement sum as well as the fact that party and party costs to be recovered by the plaintiff from the defendant were still to be negotiated or assessed and that the plaintiff may be liable for solicitor/client costs which may exceed the party and party costs which she may recover.

13. Finally, the tutor said that he had considered the advantages and disadvantages of using a private trustee as opposed to the NSW Trustee and Guardian and preferred the option of Equity Trustees Wealth Services Ltd (Equity Trustees) managing the plaintiff’s funds.

14. I have also had regard to the affidavits of the solicitor for the plaintiff, Ms Brielle Straney affirmed on 9 October 2020 and 20 October 2020. In the first affidavit she referred to and exhibited the reports of the plaintiff’s and the defendant’s experts proposed to be called to give evidence at trial on questions of liability as well as to the reports of the experts proposed to be called in relation to causation and quantum. The most recent statement of particulars of the plaintiff’s claim was also included in the annexures to the solicitor’s affidavit. Ms Straney also referred to the advice provided to the tutor in relation to the risks of proceeding to trial and the nature and effect of a settlement, if it is approved by the Court.

15. In the second affidavit, Ms Straney provided current details of the deductions to be required from the proposed settlement figure as at 20 October 2020. Mr Parker also gave some updated figures in relation to deductions during oral submissions. Ms Straney also estimated likely figures in relation to both party/party costs and solicitor/client costs but it can be noted that these matters have not been fully resolved.

16. Taking all of the above considerations into account and having regard to the amount of the agreed settlement, I am satisfied that what is proposed is prudent and that it would be in the best interests of the plaintiff if the settlement is approved.

17. In relation to the proposal that Equity Trustees be appointed as trustees for the plaintiff in respect of the settlement funds, Ms Straney gave evidence that she had attempted to obtain information from the NSW Trustee and Guardian concerning the fees that body was likely to charge if the “Judgment Sum” less deductions were to held on trust by that body. In addition, she had received an estimate of total charges from Equity Trustees. Her estimate of the total fees likely to be charged by the NSW Trustee and Guardian, over the expected life of the plaintiff (which I was informed was another eighty years) was $1,608,607.41. The corresponding figure for Equity Trustees was said to be $1,147,000.00. In addition, there were affidavits from a Client Relationship Manager with Equity Trustees and from a Financial Adviser with AMP Advice concerning this proposal.

18. During the hearing, I raised with the parties the possibility of making an order under s 77(2) of the Civil Procedure Act for the payment of the “Judgment Sum” after deductions to Equity Trustees to be held on trust for the plaintiff, instead of making an order in terms of par 5 of the proposed orders, so that a further application would not be necessary. A revised form of par 5 was drafted by counsel for the plaintiff for this purpose and, subsequently, I have been provided with a form of amended consent judgment, signed on behalf of the parties, with a revised version of par 5, which related only to the period of the plaintiff’s minority.

19. The original form of proposed consent judgment includes par 5 in the following terms:

“After the deductions referred to in paragraphs 2, 3 and 4, pursuant to section 77 of the Civil Procedure Act 2005, the Defendant is to pay the balance of the Judgment Sum into Court pending an application for the appointment of a trustee to hold the Judgment Sum on trust and for investment for the benefit of the Plaintiff or as otherwise ordered by the Court.”

20. There was before the Court a consent signed on behalf of Equity Trustees:

“to act as manager of the estate of [the plaintiff] under the order and direction of the NSW Trustee and Guardian pursuant to Chapter 4 of the NSW Trustee and Guardian Act 2009 (NSW), if so appointed by the Court”.

21. On consideration of the consent provided by Equity Trustees, however, it appears to me that this form of consent may not be appropriate in the present case. It was not contended before me that the plaintiff is a “managed person” for the purposes of Ch 4 of the NSW Trustee and Guardian Act 2009 (NSW) or that the estate of the plaintiff, as opposed to the “Judgment Sum” after deductions, was to be the subject of any trust. In addition and bearing in mind the assumptions which underlie Equity Trustees’s consent, I am concerned that the fees estimates put forward by Ms Straney may have been calculated on an inappropriate or inapplicable basis.

22. In these circumstances and in order not to delay the approval and making of orders in this matter, it appears to me to be preferable to make an order in accordance with the original form of par 5 of the proposed consent judgment at this time rather than to make an order under s 77 of the Civil Procedure Act for payment of the “Judgment Sum” less deductions to Equity Trustees to be held in trust while there is some confusion as to the precise arrangements to which Equity Trustees are consenting and as to the amount of fees that might be charged. An application can be made for an appropriate order under s 77(4) once those matters have been clarified and the relevant deductions have been made, as envisaged in the original form of the consent judgment.

23. Accordingly,

1. The Court orders that the settlement of these proceedings is approved.

2. The Court makes orders in accordance with paragraphs 1, 5, 7 and 8 of the form of consent orders signed on behalf of the parties and signed, sealed and dated by the Court.

3. The Court notes the agreements between the parties and the undertaking by the plaintiff in paragraphs 2, 3, 4, 6 and 9 of the form of consent orders.

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Decision last updated: 23 October 2020