Sass v Allianz Insurance Ltd

[2012] NSWSC 844

Supreme Court

New South Wales

Medium Neutral Citation:

Sass v Allianz Insurance Ltd [2012] NSWSC 844

Hearing dates:

01/06/2012

Decision date:

01 June 2012

Before:

Garling J

Decision:

(1) Pursuant to section 76 of the Civil Procedure Act 2005 I approve of the agreement between the parties set out in the consent orders.

(2) Order that there be judgment for the plaintiff in the sum set out in paragraph 2 of the consent judgment plus past out of pocket expenses as paid by the defendant up to and including 1 June 2012, plus legal costs as agreed.

(3) Note the parties' agreements in paragraphs 3, 4, 5, 6, 7, 8, and 9 of the consent judgment.

(4) Order that the defendant is to pay the sum of $200,000 into court to abide any further order of the court.

(5) Order the defendant to pay the balance of the judgment after deductions approved by the Court to the plaintiff's court-appointed guardian in Hanover, Germany, Dr Wolfgang Nicholas Fontaine to be invested, managed and applied by him for the benefit of the plaintiff.

Catchwords:

PRACTICE AND PROCEDURE - proposed settlement between court-appointed guardian and financial custodian of plaintiff and defendant - settlement requires approval of court under s 76 Civil Procedure Act 2005 because plaintiff a person under legal incapacity - plaintiff resides in Germany - relevant considerations

Legislation Cited:

Civil Procedure Act 2005
Legal Profession Act 2004

Category:

Procedural and other rulings

Parties:

Madeline Sass by her tutor Anke Sass
Allianz Insurance Australia Limited

Representation:

M A Cleary (P)
D P Newell (D)
Solicitors:
Stacks Goudkamp (P)
Dibbs Barker (D)

File Number(s):

2005/269498

EX TEMPORE Judgment

1. These proceedings come before the Court for approval pursuant to s 76 of the Civil Procedure Act 2005 of a settlement of the claim made by Madeline Sass against Allianz Insurance Australia Limited.

1. Miss Sass at the age of nearly five was injured in a motor vehicle accident whilst a back seat passenger. Liability was admitted and the matter has proceeded, at all times, as an assessment of damages.

1. In January 2012, a mediation took place in Germany over a period of three days as a result of which the parties have reached an agreement. That agreement to resolve the matter requires the approval of this Court because Miss Sass is still less than 18 years of age.

1. The complicating feature of the claim was that Miss Sass was injured whilst a tourist in Australia. Upon her discharge from hospital she returned with her family to Germany and has lived there ever since. There is no suggestion in the proceedings that she would live anywhere else, and, accordingly, the assessment of damages in this case has been somewhat more complicated because it has been necessary to determine what the likely expenses of Madeline's care will be in Germany.

1. Madeline's tutor, Anke Sass, who is her mother, does not speak English and, accordingly, the whole of the proceedings had to be conducted with extensive use of interpreters. The mediation was conducted by a qualified mediator from Sydney but who is fluent in the German language, and, as well, the interpreter used at the mediation was a German lawyer who is fluent in both English and German who, coincidentally, had some short work experience in a law firm in Sydney.

1. These factors together with the fact that senior counsel for the plaintiff and her principal solicitor Mr Goudkamp attended at the mediation, and the fact that the mediation lasted over a number of days combined to satisfy me, together with my assessment of the sum in question, and the unequivocal advice of senior counsel for the plaintiff that the settlement is a fair and reasonable one, that the settlement is one which is entirely proper, and, accordingly, one which the Court should approve. In due course, I will make the appropriate orders.

1. In addition to approving the settlement, I am asked to authorise the payment of an identified sum of money to the plaintiff's solicitors in relation to the shortfall between the agreed party and party costs and the solicitors' client costs. At the mediation, the lawyers for the defendant insurer and the plaintiff's solicitor agreed upon a sum which both regarded as reasonable for the party and party costs of the plaintiff. The sum which is sought by the Court's order to be paid directly to the plaintiff's solicitors represents an additional 25% of the sum agreed between the parties.

1. I have been provided with evidence of a number of costs agreements entered into between the plaintiff's tutor on behalf of the plaintiff and the plaintiff's solicitor. The first was made in May 2003; the second appears to have been signed by the plaintiff's tutor in November 2007 and sent by a German lawyer to the plaintiff's solicitor at that time; and the third, I am told, was a document provided in January 2012 at the time of settlement. These are, without diminishing them or their importance, pro forma documents.

1. I have not been provided with the accounts which have been rendered or which are intended to be rendered to the plaintiff's tutor, I have not been provided with an itemised bill of costs, and I do not regard myself as being in the same position as a skilled costs assessor in this matter to make any assessment of the fairness or reasonableness of the costs agreements or of the account which is rendered by the plaintiff's solicitor to the plaintiff's tutor.

1. In so saying, I wish to make it plain that I am not expressing any view one way or the other as to whether the costs are fair and reasonable or not. The fact is I simply do not know. Nor, in my view, is it appropriate to put a judge in the course of an approval of an infant settlement, unless in the simplest and most obvious of cases, in the position of having to form a view as to whether costs proposed to be charged are fair and reasonable or not.

1. There is a proper process which the Legal Profession Act 2004 fixes which enables all of these things to be appropriately determined. So far as I see it, in a matter as complex as this, there is no shortcut that can be responsibly achieved by having the Court make orders as part of the approval of the settlement.

1. Accordingly, I decline to make the order sought with respect to authorising a deduction from the settlement moneys in the payment of that sum to the plaintiff's solicitors.

1. Because the plaintiff is a minor and has suffered a significant brain injury, and as the evidence discloses to this Court she is incapable of managing her own affairs, Dr Wolfgang Nicholas Fontaine has been appointed by the First Instance Court in Hanover in Germany as the financial custodian of the plaintiff. In that position, Dr Fontaine is subject to his professional obligations as a lawyer, and he is subject to the constraints imposed by the court which appointed him. His power to invest and manage the funds is as that court has dictated.

1. In those circumstances, I am satisfied that the appropriate orders to make are that the relevant settlement sums be paid to Dr Fontaine rather than be paid into court and managed in New South Wales.

1. In light of my decision, that I will not permit the deduction of $200,000 by way of a sum for the payment of legal costs, a question has arisen whether it is more appropriate for me to make an order that that sum remain in Australia in an account in court pending the determination of the costs questions between the plaintiff's tutor and the plaintiff's solicitor.

1. Understandably, the plaintiff's solicitor points to the complication of having to retrieve money which the plaintiff's solicitor submits is a proper sum from a financial custodian in another country and the complications and expenses associated with that. I am persuaded that it would be appropriate for the sum claimed for costs to be kept in Australia and paid into court and abide the further order of the court.

1. In those circumstances I will make the following orders:

(1) Pursuant to section 76 of the Civil Procedure Act 2005 I approve of the agreement between the parties set out in the consent orders which I will initial and place with the papers on the terms set out in that consent judgment.

(2)   I order that there be judgment for the plaintiff in the sum set out in paragraph 2 of the consent judgment plus past out of pocket expenses as paid by the defendant up to and including 1 June 2012, plus legal costs as agreed.

(3)   I note the parties' agreements in paragraphs 3, 4, 5, 6, 7, 8, and 9 of the consent judgment.

(4)   I order that the defendant is to pay the sum of $200,000 into court to abide any further order of the court.

(5)   I order the defendant to pay the balance of the judgment after deductions approved by the court to the plaintiff's court-appointed guardian in Hanover, Germany, Dr Wolfgang Nicholas Fontaine to be invested, managed and applied by him for the benefit of the plaintiff.

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Decision last updated: 26 July 2012