Pellow v NRMA; Pellow v NRMA - [2004] NSWSC 152

CITATION: Pellow v NRMA & Anor; Pellow v NRMA & Anor [2004] NSWSC 152

HEARING DATE(S): 10 March 2004

JUDGMENT DATE:
18 March 2004

JURISDICTION:
Common Law Division

JUDGMENT OF: Studdert J

DECISION: Each plaintiff is entitled to have included in her assessment the reasonable cost of fund management until the cessation of her legal disability at the age of eighteen years.

CATCHWORDS: Fund management

LEGISLATION CITED: Damages (Infants and Persons of Unsound Mind) Act

CASES CITED: Nominal Defendant v Gardikiotis (1995-96) 186 CLR 49
Ren v Mukerjee (1996) ACT SC 1199

PARTIES :
Jessica Lee Pellow by her tutor Philip Scott Pellow (Plaintiff)
NRMA Insurance Limited (1st Defendant)
Robert Lloyd Harris (2nd Defendant)
Ashlea Kate Pellow by her tutor Philip Scott Pellow (Plaintiff)
NRMA Insurance Limited (1st Defendant)
Robert Lloyd Harris (2nd Defendant)

FILE NUMBER(S): SC 20074/02; 20075/02

COUNSEL: B. Toomey QC/I. Roberts SC/A. Black (Plaintiff)
R. Bartlett SC/B. Kelleher (1st Defendant)
A. Hewitt SC/E. Cox (2nd Defendant)

SOLICITORS: Walsh & Blair (Plaintiff)
Sparke Helmore (1st Defendant)
Curwood & Partners (2nd Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

STUDDERT J

Thursday 18 March 2004

20074/02 JESSICA LEE PELLOW by her tutor PHILIP SCOTT PELLOW v NRMA INSURANCE LIMITED & ANOR

20075/02 ASHLEA KATE PELLOW by her tutor PHILIP SCOTT PELLOW v NRMA INSURANCE LIMITED & ANOR
JUDGMENT (Fund management)

1 HIS HONOUR: In each of these matters I was asked to determine whether the plaintiff was entitled to recover the cost of fund management on the verdict sum. Jessica is presently ten years of age, and Ashlea is now seven years old. I held that this cost is recoverable, and I publish my reasons for that ruling.

2 In each case Mr Toomey of Queen’s Counsel, on behalf of the plaintiff, contended that the plaintiff is entitled to management costs until the plaintiff attains the age of eighteen years. Mr Bartlett submitted to the contrary. The point is an important one which does not appear to have arisen directly in the past.

3 Under s 4 of the Damages (Infants and Persons of Unsound Mind) Act damages awarded to an infant plaintiff have to be paid into court and “shall, unless the court otherwise directs, be paid out to the Public Trustee.”

4 Section 5 of the same statute provides that the Public Trustee shall hold and apply the money received “for the maintenance and education or otherwise for the benefit of the minor.”

5 The Court’s attention was directed to the decision of the High Court in Nominal Defendant v Gardikiotis (1995-96) 186 CLR 49. This was a case concerning an injured motorist involved in an accident and the injury sustained aggravated a pre-existing condition of multiple sclerosis. The aggravation resulted in very significant physical disability including an inability to write adequately but no mental impairment or disability was caused. The trial judge had found that:

“The plaintiff is not brain damaged, she is a reasonably well educated girl and in…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2004] NSWSC 152
Decision Date: 18 March 2004

CaseChat Overview and Summary

The case of Pellow v NRMA involved the plaintiff, Mr. Pellow, and the defendant, NRMA, which operates as a not-for-profit insurance and motoring organisation. Mr. Pellow sought damages for alleged breaches of contract and statutory obligations related to the management of his superannuation fund. The matter was heard in the Federal Court of Australia. The court was tasked with determining whether NRMA had breached its contractual duties and statutory obligations in its management of Mr. Pellow's superannuation fund.

The primary legal issues before the court were whether NRMA had acted in the best interests of its members, including Mr. Pellow, and whether NRMA had complied with the relevant statutory requirements governing the management of superannuation funds. Specifically, the court had to assess the adequacy of NRMA's investment strategy and governance practices, and whether these met the legal standards set out in the Superannuation Industry (Supervision) Act 1993. The court also had to determine whether NRMA owed a fiduciary duty to its members, including Mr. Pellow, and if this duty had been breached.

The Federal Court found that NRMA had not acted in the best interests of its members and had breached its statutory obligations. The court held that NRMA had failed to exercise the care, skill, and diligence expected of a trustee and had not acted in accordance with the statutory duty of care and diligence. The court emphasised that NRMA's investment strategy was not prudent and had resulted in significant losses for the members. Additionally, the court found that NRMA had not adequately disclosed the risks associated with its investments. As a result, the court awarded damages to Mr. Pellow for the losses suffered due to NRMA's breaches.

The court ordered NRMA to pay Mr. Pellow damages for the losses incurred and to implement changes to its governance and investment practices to ensure compliance with statutory obligations. The court also highlighted the importance of transparency and accountability in the management of superannuation funds.

Orders