Oroz v Hansen Yuncken Pty Ltd

[2006] NSWSC 737

CITATION:	Oroz v Hansen Yuncken Pty Ltd & Anor [2006] NSWSC 737
HEARING DATE(S):	7 July 2005; 29 August 2005
JUDGMENT DATE :	28 April 2006
JUDGMENT OF:	Simpson J
DECISION:	Parties to notify when final orders reflecting all determinations in this matter have been prepared.
CATCHWORDS:	verdict and judgment against each defendant - damages for personal injury - quantification of damages - obligation of counsel not to attack integrity or bona fides of colleagues unless sufficient basis can be shown to exist - effect of Gordian Runoff Ltd v Heyday Groups Pty Ltd [2005] NSWCA 29 - tax deductibility of fund management costs - plaintiff's entitlement to costs of fund management - re-litigating matters already the subject of judgment - adjustment under s151Z Workers Compensation Act 1987 - fund management damages as a head of damage - workers' compensation payments
LEGISLATION CITED:	Law Reform (Miscellaneous Provisions) Act 1946 s5(1) Protected Estates Act 1983 Protected Estates Regulation 2003 4(1)(g) Workers Compensation Act 1987 s151Z
CASES CITED:	GIO v Rosniak (1992) 27 NSWLR 665 Gordian Runoff Ltd v Heyday Group Pty Ltd [2005] NSWCA 29 Multiplex Constructions Pty Limited v Irving & Ors; Fugen Holdings Pty Limited v Irving & Ors [2004] NSWCA 346 Todorivic v Waller [1981] HCA 72; 150 CLR 402 Oroz v Hansen Yuncken Pty Ltd & Anor [2004] NSWSC 1288 Oroz v Hansen Yuncken Pty Ltd & Anor [2005] NSWSC 203 Oxley County Council v MacDonald & Other [1999] NSWCA 126
PARTIES:	Ilija Oroz - Plaintiff Hansen Yuncken Pty Ltd - 1st Defendant Auburn United Formwork Pty Ltd - 2nd Defendant
FILE NUMBER(S):	SC 20905/01
COUNSEL:	D Kennedy SC/F Fletcher - Plaintiff J de Greenlaw - 1st Defendant HG Shore SC - 2nd Defendant
SOLICITORS:	Taylor & Scott - Plaintiff McCulloch & Buggy - 1st Defendant Bartier Perry - 2nd Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

SIMPSON J

Friday 28 April 2006

20905/01 Ilija Oroz v Hansen Yuncken Pty Ltd & Anor

JUDGMENT

1 HER HONOUR: In this matter I delivered my original judgment on 1 October 2004 (Oroz v Hansen Yuncken Pty Ltd & Anor [2004] NSWSC 1288) (“the primary judgment”). The matter was then listed, in what it is now obvious was an overabundance of optimism, on 1 December 2004, for finalisation of outstanding matters, including the updating of evidence going to calculation of some heads of damages.

2 On that date I was asked, on behalf of the second defendant, to “revisit” some of my findings in the primary judgment. Written submissions dated 30 November 2004 were presented. These went to the findings in respect of loss of earning capacity, and the allowance to be made for the plaintiff’s future care. These were all matters that had been the subject of the primary judgment. It seems that the first of these was uncontroversial. I had, apparently, mistakenly undertaken such calculations as I did on the basis of gross wage figures rather than net wage figures. That could easily be remedied.

3 However, senior counsel for the second defendant also sought to re-agitate issues concerning future care. Notice not having been given, the other parties were not in a position to respond. Accordingly, it was necessary to stand the matter over.

4 During the course of that hearing I said:

“I am going to direct all parties to notify all other parties of any other issues arising out of the judgment that can be either resolved by agreement or need to be determined by me. I am not going to come back on another occasion and have any party ambushed by the raising of issues that have not previously been notified. Now is that clear to everybody?”

I was told that it was. I gave directions accordingly.

5 Written submissions dated 10 December 2004 were received from the plaintiff and from the first defendant. A response by the second defendant to both submissions, dated 15 December 2004, was also received. The matter was re-listed on 22 December 2004. On that day, after hearing argument, I dealt ex tempore with some items of claimed damages that had not been included in the primary judgment. These were a claim for handyman assistance, an allowance for future paid care and an allowance for the increased costs the plaintiff will, by reason of his injury, incur when he takes holidays.

6 The matter was again re-listed on 11 March 2005. There is no complete transcript, only a summary, of the proceedings of that day. It was plain that the parties would not, even in the light of the findings of fact I had made, reach any agreement as to the calculation of damages.

7 The matter was next re-listed on 15 March for judgment on a single issue, the assumption concerning the rate of dissipation of the fund that should be built into the calculations to be performed by accountants or actuaries. On that day a facsimile from senior counsel for the second defendant was received by my Associate. I found the facsimile obscure. It made reference to “an advance payment” which, I was later told, had been made to the plaintiff by the first defendant. Just what orders or directions (if any) were being sought never became clear to me. I proceeded to deliver judgment on the dissipation issue (Oroz v Hansen Yuncken Pty Ltd & Anor [2005] NSWSC 203).

8 No further progress could then be made because the plaintiff’s wife was receiving advice as to any action that ought to be taken, having regard to the plaintiff’s injury, with respect to protection of his estate.

9 On 6 May 2005, on the application of the plaintiff’s wife, an order was made in the Protective List of the Equity Division of this Court rendering the plaintiff’s estate subject to management under the provisions of the Protected Estates Act 1983, and appointing Mr Daniel Mulcahy manager of the estate, under the order and direction of the Protective Commissioner. A further order, that the costs of the proceedings be paid out of the plaintiff’s estate, was made.

10 The matter was re-listed on 7 July 2005. For that hearing, counsel for the plaintiff provided written submissions dated 4 July. Counsel for the first defendant relied on his written submissions dated 26 June. Notwithstanding the clear direction I had previously given, senior counsel for the second defendant sought to raise matters for determination (including an application that I vacate an order previously made) of which no notice had been given. Counsel for the plaintiff was not in a position to respond. It was necessary again to stand the matter over. Again, I directed all parties to provide in clear terms, and circulate, a formulation of the orders, directions or determinations for which they contended.

11 Notwithstanding the number of occasions on which this matter has been before the court, there remain some outstanding issues. In the hope that the proceedings could be brought to finality, I directed the parties to provide a list of outstanding issues. The proceedings were further re-listed on 29 August 2005. Before proceeding to deal with the outstanding matters, I make some preliminary observations about the manner in which the most recent submissions on behalf of the second defendant have been made.

12 Interspersed among the submissions directed to the issues raised was an escalating attack upon the integrity of, in particular, counsel for the first defendant, and also senior counsel for the plaintiff. The attack took the form of questioning the motives of counsel for the first defendant in advancing certain submissions (or making certain concessions), and suggesting that those parties, through their legal representatives, had entered into some kind of underhand (or even sinister) agreement, the effect of which would be to expose the second defendant to greater than its share of the joint liability of the defendants in damages to the plaintiff.

13 I extract from the submissions some illustrations. They begin with this:

“It is important, however, to record that the recent written submissions of the First Defendant and of the Plaintiff need not only to be considered together, but need to be treated as part of a team event. Synchronised swimming is not a bad example.”

The submissions go on to extract a proposition from the submissions put on behalf of the first defendant about which the following comment is made:

“It is difficult to imagine a statement more favourable to the Plaintiff, or one more contrary to the factual experience of funds in the last few years. One might query the possible motive for such a statement being included in the first Defendant’s submissions. And equally as to the possible motive for the Plaintiff looking such a gift horse in the mouth and [putting a contrary proposition].”

14 A complaint was then made that the first defendant took a position, in respect of certain aspects of the matter, contrary to that taken by the second defendant.

15 Later, a submission made earlier on behalf of the first defendant (which the second defendant had initially supported), was characterised as:

“... an argument that could only have assisted the Plaintiff ... [and] a submission that could not have assisted the First Defendant unless some agreement was in place with the Plaintiff of a sort that has not been disclosed .” (italics added)

16 This was followed shortly after by the following:

“The question may be asked as to why the First Defendant may be advancing arguments designed to assist the Plaintiff. ... No one can specify precisely what arrangements have been made. All that can be said, however, is that on the substantial probabilities the Court has been provided with a non-genuine issue to be resolved. That can only be an abuse of process of the Court. An agreement to execute as against one defendant and not against another would be quite sufficient.”

17 Subsequently, in submissions dated 15 August 2005, the point was reiterated. The following appears:

“9 ... The raising of the point in such a subliminal way by the First Defendant, notwithstanding the availability of such an argument, would appear to indicate a healthy belief on the part of the First Defendant that the Plaintiff does not propose to levy execution against it.”

As to submissions made by the plaintiff and the first defendant, the following was put:

“[The submissions] appear to have been designed to either establish or confirm findings without disclosing to the Court the significance of the questions it was being asked to rule upon. The appropriate conclusion is that there was an intention on the part of the Plaintiff and of the First Defendant to bring the matter back before the Court to have it decide at least part, and perhaps all, of the matters dealt with in Gordian [ Gordian Runoff Ltd v Heydey Group Pty Ltd [2005] NSWCA 29] with its difference of approach from Oxley [ Oxley County Council v MacDonald & Others; Brambles Holdings Ltd v MacDonald & Others [1999] NSWCA 126] without identifying the true issues and, indeed, diverting attention from them.”

In paragraph 14 the following was put:

“The last paragraph of the First Defendant’s written submissions is not about seeking to make a submission to the Court. It is about leaving a footprint that could be later said to have been a sufficient raising of the matter with the Court.”

In paragraph 15 the following:

“It appears to be a paragraph designed to be misunderstood rather than understood.”

18 And at 22:

“The Court was presented with a submission on behalf of the First Defendant ... the adoption of such a course is consistent only with a confidence that the First Defendant will not be called upon to pay the increased judgment sum. The only explanation that makes any sense is that the Plaintiff does not propose to execute against the First Defendant beyond the advance that was volunteered by the First Defendant to the Plaintiff and that the First Defendant knows that. Only in such a circumstance is there no downside to the First Defendant in making the submissions that it made. The benefit to the Plaintiff is plain. The judgment sum is increased.”

19 Accusations of the same kind were repeated in oral submissions.

20 Counsel for the first defendant, with justification, protested, characterising the submissions as “snide” and “false, without substance and offensive”. Senior counsel for the plaintiff also protested.

21 The characterisation proffered by the first defendant appears to me to be a not inaccurate one.

22 Members of the legal profession representing parties in litigation are placed in a privileged position. The privilege is to be used responsibly. Just as counsel are under an ethical obligation not to put to parties or witnesses, without sufficient basis, accusations of impropriety, so counsel are under an obligation not to attack the integrity or bona fides of colleagues in the profession unless a sufficient basis can be shown to exist. No such basis has here been shown.

23 In part the submissions appear to proceed upon the mistaken assumption that, in litigation involving co-defendants, all defendants ought to adopt, against the plaintiff, a common position, and present a united front. This is plainly not so. It is perfectly appropriate, and indeed expected, that parties to litigation will make appropriate concessions. Each defendant must proceed in accordance with the advice that he, she or it receives. I see no reason to question the bona fides of the approach taken by the first defendant, no doubt acting on the advice of its legal representatives.

24 I record that I reject the suggestions made. I may add that I have been far from assisted in the determination of the issues by the distraction of unsubstantiated and personal attacks upon members of the profession. I turn now to what appear to be the remaining issues.

25 Given the history of this matter, it is as well to record the list of matters proposed as outstanding on behalf of the plaintiff and of the second defendant. So far as I can see, although the first defendant provided written submissions, it did not provide such a list. The plaintiff’s list is as follows (I have taken the liberty of paraphrasing rather than quoting precisely):

1. the effect of the decision of the Court of Appeal in Gordian Runoff Ltd v Heydey Group Pty Ltd [2005] NSWCA 29;
2. whether any tax deductibility in respect of the cost of the fund management should be taken into account in the calculations of damages to be awarded for fund management, and if so, in what way;
3. the plaintiff’s entitlement to the appropriate costs of fund management in the light of the projected income of the fund;
4. whether the second defendant ought to be permitted to re-litigate an earlier determination as to the appropriate dissipation rate, and if so, what decision ought to be made;
5. whether an award of damages for fund management constitutes a “head of damage” to form part of the fund on which fund management is calculated;
6. whether any adjustments pursuant to s151Z of the Workers Compensation Act 1987 are to be made before or after determination of the fund management figure;
7. whether workers’ compensation payments are to be taken into account in the determination of fund management damages once or twice.

26 The list provided on behalf of the second defendant is as follows: again I paraphrase rather than quote:

1. The effect (if any) of the decision in Gordian Runoff (see item 1 of the plaintiff’s list);
2. reconsideration of three matters already determined: (i) the tender of a report concerning damages against the second defendant; (ii) whether an earlier interlocutory judgment deals with the size of the fund in relation to the first defendant; (iii) the dissipation rate, also earlier decided;
3. deductibility of fund management expenses (see item 2 of the plaintiff’s list);
4. fund management rates;
5. whether fund management costs are payable on the allowance for fund management.

27 These lists in no way coordinate with written submissions made on behalf of each of the parties.

28 I can now proceed to deal with the identified outstanding issues.

1. the effect of Gordian Runoff Ltd v Heydey Group Pty Ltd:

29 This issue has arisen at the instigation of the second defendant. The issue, as I understand it, is this. At common law, where a plaintiff is awarded damages against each of two or more defendants as joint tortfeasors, the plaintiff is entitled to enter judgment against each of those defendants in the whole of the amount awarded. (The plaintiff cannot, however, recover the total sum from each of the defendants. What the plaintiff may do is to recover the total sum against any one or more of the defendants. That is because each defendant is, vis-a-vis the plaintiff, liable for the whole of the damage.) S5(1) of the Law Reform (Miscellaneous Provisions) Act 1946 provides for adjustments between the defendants by allowing for an order for contribution or indemnity in accordance with the respective share of each defendant of responsibility for the damage suffered by the plaintiff. But s5(1) is a provision concerned with adjusting liabilities between joint tortfeasors; it does not affect a plaintiff’s right to recover the whole amount of the damages from any defendant: see Oxley County Council v MacDonald & Ors; Brambles Holdings Ltd v MacDonald & Ors [1999] NSWCA 126 at [51] – [54].

30 The Workers Compensation Act 1987 introduced a new complication to this principle. That Act introduced extensive modifications or “reforms” in the previously existing system for the recovery of damages at common law by an employee injured as a consequence of the breach of duty of an employer. Relevantly for present purposes, in Part 3 of the Workers Compensation Act, limits were imposed upon the quantum of damages that might be awarded to an employee against an employer in respect of various heads under which damages were (and are) commonly awarded. Those limitations, however, applied only where the award of damages was made against an employer. The limitations did not apply to a joint tortfeasor who was not an employer.

31 S151Z of the Workers Compensation Act is directed to preventing the circumvention of the limitation on damages imposed by the Workers Compensation Act by the device of bringing proceedings only against a non-employer tortfeasor and not against the employer tortfeasor. Subs(2) provides a complex mechanism pursuant to which any damages awarded against the non-employer tortfeasor are to be reduced. It is unnecessary to go into the complexities of the formula.

32 The question which now arises is whether s151Z also has the effect of altering the previously accepted common law position that, where two or more jointfeasors are held jointly liable, each remains liable to the plaintiff for the full amount of the damages.

33 The question arises as a direct result of the decision of the Court of Appeal in Gordian Runoff. It is the second defendant’s position that that decision has reversed the common law position as well as the decision, also of the Court of Appeal, in Oxley County Council.

34 I have come to the conclusion that the argument is misconceived although, it is to be recognised, that there are passages in Gordian Runoff which support the position taken by the second defendant.

35 For example, at [49] Tobias JA, with whom Beazley and Santow JJA agreed, said:

“However, in my opinion there is a fallacy in this argument of the nature of that identified by Ipp JA in Multiplex . [ Multiplex Constructions Pty Limited v Irving & Ors; Fugen Holdings Pty Limited v Irving & Ors [2004] NSWCA 346]. Although the plaintiff is entitled to recover the whole of the judgment sum entered against Heyday [the plaintiff’s employer], the true extent of its common law liability as a joint or concurrent tortfeasor with Baulderstone [an occupier, corresponding to the first defendant in the present case] is only in respect of 35% of that sum. In other words, Heyday's common law liability to the plaintiff arising out of the latter's employment or qua the plaintiff as an employee, extends only to 35% of the judgment sum.”

36 With respect to their Honours, I find it impossible to reconcile the first part of the second sentence with the third sentence. (I take the first part of the second sentence to mean “although the plaintiff is entitled to recover against Heyday the whole of judgment sum entered ...”; the alternative construction, which I do not think is what was intended, is that the object of the clause “... the plaintiff is entitled to recover” is “the whole of the judgment sum entered against Heyday”.) There is a perfectly reasonable explanation for the apparent confusion. The proceedings in the Court of Appeal were between Heyday, as the plaintiff’s employer, and Gordian, an insurer with whom Heyday held a “construction works legal liability policy”. Heyday also held a workers’ compensation policy with another insurer, GIO. The issue before the Court of Appeal arose out of judgment given in the trial, not in respect of the plaintiff’s claim, but in respect of a cross-claim in which Heyday claimed against Gordian complete indemnity in respect of the entirety of the liability it was found to have to the plaintiff. An order in those terms was made. It was that order that was the subject of the appeal.

37 The “fallacy” to which Tobias JA referred, of the kind identified by Ipp JA in Multiplex, was a fallacy concerned with a rule or principle that arises peculiarly in the context of insurance law.

38 The original proceedings were brought by an employee against Heyday as employer and Baulderstone Hornibrook Pty Ltd as occupier and controller of premises upon which he was injured. So far the parallel with the present case is evident. The plaintiff was successful against each. What happened thereafter involved Gordian, as insurer of Heyday, disputing the extent of its liability to indemnify Heyday. The coversheet of the judgment shows that, although the plaintiff was the fourth respondent to the appeal, he did not appear and did not participate in the appeal. There was no reason why he should do so. In para [55] Tobias JA recognised that the plaintiff was entitled to enforce the judgment in the full amount against each of the tortfeasors. This was in the context of considering the extent of the cover provided to Heyday by the policy. His Honour said:

“Although at one point I was concerned with the prospect of a worker suing a non-employer joint tortfeasor, obtaining judgment but then being unable to recover it due to that tortfeasor being either insolvent or uninsured, on reflection I can see no reason in principle why the employer's insurer , even absent any contractual indemnity between the tortfeasors, should be required to cover the liability to the worker of a non-employer tortfeasor merely because that tortfeasor is unable to pay its share of the judgment debt entered against it. The mere fact that the worker is entitled to enforce the judgment in the full amount against each of the employer and non-employer tortfeasors (where both are sued) cannot be allowed to extend the insurer's liability beyond that which, on its true construction, the policy is intended to cover, namely, the common law liability of the employer qua employer only.” (italics added)

39 If Gordian Runoff were to be given the construction proposed on behalf of the second defendant, the effect on the rights of the plaintiff could have been significant. If Tobias JA intended, as is suggested, not only to make such a profound change to the long-established common law principle, but also to override an earlier, but recent, decision (Oxley) of the same court, two things could have been expected to occur. Firstly, it would be expected that the plaintiff would have been given notice of what was contemplated, and invited to participate; secondly, some reference to Oxley would have been expected. Tobias JA made no such reference. That is because, in my opinion, his Honour did not intend to depart from it.

40 I am satisfied that Gordian Runoff is not authority for the proposition proposed on behalf of the second defendant. In due course I will enter judgment in the full amount of the plaintiff’s verdict (as adjusted by the application of the s151Z formula) against each defendant.

41 That disposes of Item 1 on each list of outstanding issues.

42 In written submissions filed on behalf of the second defendant, I was asked, in the event of holding to the effect that I do, to refrain from proceeding to judgment in order to enable the second defendant’s insurer to determine whether it would wish to decline indemnity to the second defendant. It was undisputed that the proceedings had been conducted on instructions from the second defendant’s insurer. I declined to withhold judgment for the reason given. Unfortunately, since there still remain some calculations to be performed by the parties, it may not be possible to enter judgment. I make it clear, however, that, if it were open to me to do so, I would decline to refrain from proceeding to judgment for the reason proposed.

2. tax deductibility of fund management costs:
3. plaintiff’s entitlement to costs of fund management:

43 The issue of tax deductibility was first raised on behalf of the first defendant in written submissions dated 24 June 2005.

44 The argument was based upon a series of (largely un-stated) propositions, or assumptions. These appear to me to be as follows:

(i) management (investment) of the plaintiff’s fund will generate income;
(ii) the income will be subject to taxation;
(ii) a deduction from the taxable income will be allowed in respect of the costs of management;
(iv) accordingly, the sum allowed in respect of fund management ought to be reduced in order to reflect the actual (post-tax) cost to the plaintiff of having his fund managed.

45 However, the argument was not confined to these simple propositions. As I read the first defendant’s submission, another assumption is integral. The issue arises because the court has ordered that the plaintiff’s estate be subject to management under the provisions of the Protected Estates Act, and has appointed Mr Daniel Mulcahy as manager of the plaintiff’s estate. The further assumption is that, because the plaintiff’s fund will be professionally managed, he can expect a higher rate of return than if he were to undertake the investment himself. It was put that the plaintiff could expect to achieve a rate of return as much as 2% higher than if he managed the funds himself.

46 Towards the end of this submission, counsel for the first defendant, for the first time, contested the entitlement of the plaintiff to any sum of damages, to be awarded against the first defendant, to represent the cost of fund management. As I noted in the primary judgment, that entitlement was, during the substantive hearing, effectively conceded. However, circumstances have altered since then, by the plaintiff’s estate being brought under the management I have already referred to. Accordingly, on behalf of the first defendant, it was submitted that the cost of administration of the funds under the Protected Estates Act will be “well and truly met” by the additional funds generated by the professional administration, exceeding what he could reasonably expect if he administered his estate himself.

47 I do not think this argument holds good. It is true that a protection order has the consequence that the plaintiff does not have a choice as to whether or not he will rely upon professional administration, as he would have had had no such order been made. But an order for an award of damages to cover the cost of fund management is not dependant upon an incapacity of the kind that has been visited upon this plaintiff; almost any plaintiff in personal injury litigation, awarded a large sum of damages (of a magnitude to which most would never previously have had access, and which is to compensate him or her for life) would require professional assistance in investment and management. It is inexperience in managing large sums of money, and the need to preserve the fund so that it does support the injured plaintiff for life, that creates the justification for an award of damages under this head. I therefore reject the proposition that the fact that the plaintiff’s estate has been ordered to be subject to management has any bearing on this question.

48 Also incorporated in the argument were references to the decision of the High Court in Todorovic v Waller [1981] HCA 72; 150 CLR 402 and of the Court of Appeal in GIO v Rosniak (1992) 27 NSWLR 665. These cases concern the discount rate that ought to be applied in relation to amounts awarded to compensate a plaintiff in respect of future economic loss, and assumptions that ought to be made about the rate of return on the investment sum. The incidence of taxation was one factor relevant to that determination. An attempt was made to borrow from the reasoning in each of those cases.

49 The short answer to the contention made on behalf of the first defendant is that it is based upon a series of assumptions for which there is (and, in some respects, because dependent upon events which may be long in the future, can be) no evidence. Nor is it established that the cost of fund management is, or will be, a deductible expense. I therefore reject the contention made on behalf of the first defendant. No deduction will be made from the sum awarded in respect of fund management to recognise the incidence of taxation.

50 I note that, included in the order for estate management, was an order that the costs of the application (which was made by the plaintiff’s wife) be paid out of the estate of the plaintiff. These costs ought to be included in the judgment sum.

4. re-litigating the determination as to the dissipation rate:

51 As earlier noted, on 15 March 2005 I delivered judgment (Oroz v Hansen Yuncken Pty Ltd & Anor [2005] NSWSC 203] following argument in relation to the dissipation rate that should be built in to the assessment of damages to be awarded in respect of fund management.

52 The second defendant seeks to reopen a variety of issues, already the subject of decision, including the question of the dissipation rate.

53 Except in relation to one matter, which, I was told, was the subject of agreement (and with which I have already dealt), I consider it inappropriate to return to matters already fully litigated, decided, and the subject of judgment. No adequate basis has been proposed for doing so. I decline to reopen any issues that have been the subject of formal ruling.

5. fund management damages as a head of damage:

54 I should set out in full this issue as defined on behalf of the plaintiff. It is expressed as follows:

“Is the fund management figure to be regarded as a ‘head of damage’ and to form part of the fund to which the fund management figures are determined? Are any adjustments pursuant to s151Z of the Workers Compensation Act to be carried out before or after the determination of the fund management figure?”

55 Two distinct questions are posed. I have some difficulty understanding the first. I will deal with it as best I can understand it. It seems to me that, while that part of the award of damages which is allowed for fund management is properly characterised itself as a “head of damage”, it cannot form part of the fund on which the allowance for fund management is determined. To do so would be impossible, because the figure could not be known until the balance of the fund is quantified. It would be wrong in principle to allow for fund management on that part of the damages which are awarded for fund management.

56 The correct approach to the first of these questions is that the whole of the fund which will be available to the plaintiff for investment must be quantified; when that is done, the figure to be allowed for fund management can be calculated and added.

57 As to the second question, it seems to me that principle requires that all adjustments, including the deduction of workers’ compensation figures, should be made before the determination of the fund management figure. This is for the obvious reason that the fund management figure represents that amount which the plaintiff will require in order adequately to manage the fund available for investment. Such sums as have to be deducted or repaid will not form part of that sum. Nor will any amounts that have been paid in advance to the plaintiff and expended by him or on his behalf.

58 The operation of the Workers Compensation Act means that, even in the light of what I have determined in respect of the first issue (the Gordian Runoff issue), the final verdict on judgment figures against the two defendants will not be identical. The s151Z adjustment ought to be made before determination of the allowance for fund management.

6. workers’ compensation payments:

59 The answer to this question follows from what I have earlier said. For the purpose of determining the fund management allowance, the workers’ compensation payments should be deducted from both verdict sums. That is because, although the plaintiff only has to repay the workers’ compensation to the second defendant, and not to the first defendant, the first defendant should not be liable for a sum representing fund management on a sum that the plaintiff will not be entitled to receive and will not receive.

60 That does not, of course, mean that the workers’ compensation payments should be deducted from the first defendant’s ultimate verdict; it is the second defendant who is entitled to a defence in that respect. The adjustment between the defendants is to be made in the resolution of the cross-claims.

61 That concludes the issues raised on behalf of the plaintiff. I turn to what remains of the issues listed on behalf of the second defendant. I have dealt with the first three of these, as well as 5. That only leaves the issue identified as 4, which is framed as follows:

“The fund management rates to apply have to be ascertained, including whether the Protective Commissioner rates are said to apply. It will need to be ascertained whether the plaintiff proposes to call evidence or not on this question.”

62 I think it is correct that the evidence is deficient in respect of the final quantification of the amount to be awarded for fund management. This is because, although the rates charged by the Protective Commissioner are fixed by Regulation 4(1)(g) of the Protected Estates Regulation 2003, the evidence was that the plaintiff’s funds will be managed by Mr Mulcahy. The evidence seems to suggest that this would be at a lesser rate. It will be necessary for the plaintiff to establish the appropriate rates.

63 That concludes the issues that can presently be determined.

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