Sinnamon v Maher - [2016] QSC 51

SUPREME COURT OF QUEENSLAND

CITATION:

Sinnamon v Maher & Anor [2016] QSC 51

PARTIES:

VINCENT SINNAMON by his litigation guardian MICHAEL SINNAMON

(plaintiff)

v

DARREN PATRICK MAHER

(first defendant)
AAI LIMITED (ACN 005 297 807)
(second defendant)

FILE NO/S:

Brisbane No S2958 of 2015

DIVISION:

Trial Division

PROCEEDING:

Miscellaneous Application - Civil

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

14 March 2016

DELIVERED AT:

Brisbane

HEARING DATE:

19 February 2016

JUDGE:

Flanagan J

ORDER:

1. The damages for management fees payable by the second defendant to the plaintiff are assessed in the sum of $635,714.

2. In accordance with Order 7 of Martin J on 15 December 2015, the second defendant pay the assessed management fees in the sum of $635,714 to the administrator within 21 days of this order, whose receipt shall be sufficient discharge for the second defendant.

3. In accordance with Order 8 of Martin J dated 15 December 2015, the Court orders that pursuant to section 59(2) of the Civil Proceedings Act 2001 interest on the assessed management fees in the sum of $635,714 is not payable if such sum is paid by the second defendant to the administrator in accordance with Order 2 above. If unpaid then interest accrues and is payable on the unpaid balance pursuant to section 58(3), from the date of order default.

4. In accordance with Order 9 of Martin J made 15 December 2015, the second defendant pay the plaintiff’s standard costs of and incidental to the assessment of damages for management fees within 21 days of their assessment or prior agreement between the second defendant and the administrator as to their amount.

5. Each of the parties, the administrator and the plaintiff’s solicitors have liberty to apply in respect of these orders.

CATCHWORDS:

DAMAGES – MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR TORT – PERSONAL INJURIES – GENERAL PRINCIPLES – Where plaintiff suffered personal injury as result of defendant’s negligence - Where plaintiff is unable to manage own financial affairs – Where administrator is appointed to manage plaintiff’s financial affairs – Where the administrator seeks to invest plaintiff’s award – Where determination necessary to calculate management fees of the administrator

Civil Liability Act 2003 (Qld), s 57

Civil Proceedings Act 2011 (Qld), s 61(4)

Guardianship and Administration Act 2000 (Qld), s 12, s 51

Public Trustee Act 1978 (Qld), s 59(1)

Trusts Act 1973 (Qld), s 24(1)

Bell v Pfeffer [2009] QSC 209, applied

Gray v Richards (2014) 253 CLR 660; [2014] HCA 40, applied

Lewis v Bundrock [2008] QSC 189, considered

Todorovic v Waller (1981) 150 CLR 402; [1981] HCA 72, applied

Willett v Futcher (2005) 221 CLR 627; [2005] HCA 47, considered

COUNSEL:

M Eliadis for the plaintiff

G Crow QC for the second defendant

SOLICITORS:

Shine Lawyers for the plaintiff

Quinlan Miller & Treston Lawyers for the second defendant

Introduction

On 2 December 2010 the plaintiff suffered personal injuries, including a severe traumatic brain…

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.

Continue reading Sinnamon v Maher

Details

AGLC: Sinnamon v Maher [2016] QSC 51
Case: [2016] QSC 51
Decision Date: 14 March 2016

CaseChat Overview and Summary

In Sinnamon v Maher, the plaintiff, a minor who suffered personal injuries due to the defendant's negligence, was unable to manage their own financial affairs. An administrator was appointed to manage the plaintiff's financial affairs. The dispute centered on the determination of management fees payable to the administrator for managing the plaintiff's award. The court had to decide whether the administrator's estimate of trustee and investment management costs, including superannuation administration costs, was reasonable and whether it complied with the High Court's decision in Gray v Richards. The administrator provided detailed calculations, including an amortisation schedule and a life expectancy assumption, which were validated by a consulting actuarial firm. The court needed to assess these calculations and determine if they were in line with the legal principles governing damages for personal injury cases.

The court evaluated the administrator's calculations, which included the superannuation administration costs as part of the overall management fees. The calculations were based on a schedule of fees published in the MLC Wrap Super, Series 2, Product Disclosure Statement. The court confirmed that the fees were compliant with the Gray v Richards decision and that the assumptions used in the calculations, such as the life expectancy and annual drawing, were reasonable. The court concluded that the administrator's estimate of costs, including the superannuation administration costs, was fair and appropriate.

The court ordered that the damages for management fees payable by the defendant to the plaintiff were assessed in the sum of $635,714. The defendant was required to pay this sum to the administrator within 21 days of the order, with interest not payable if paid within the specified period. The court also ordered that the defendant pay the plaintiff's standard costs of and incidental to the assessment of damages for management fees. The parties were granted liberty to apply in respect of these orders.

Orders

Orders of the court

1. The damages for management fees payable by the second defendant to the plaintiff are assessed in the sum of $635,714.

2. In accordance with Order 7 of Martin J on 15 December 2015, the second defendant pay the assessed management fees in the sum of $635,714 to the administrator within 21 days of this order, whose receipt shall be sufficient discharge for the second defendant.

3. In accordance with Order 8 of Martin J dated 15 December 2015, the Court orders that pursuant to section 59(2) of the Civil Proceedings Act 2001 interest on the assessed management fees in the sum of $635,714 is not payable if such sum is paid by the second defendant to the administrator in accordance with Order 2 above. If unpaid then interest accrues and is payable on the unpaid balance pursuant to section 58(3), from the date of order default.

4. In accordance with Order 9 of Martin J made 15 December 2015, the second defendant pay the plaintiff’s standard costs of and incidental to the assessment of damages for management fees within 21 days of their assessment or prior agreement between the second defendant and the administrator as to their amount.

5. Each of the parties, the administrator and the plaintiff’s solicitors have liberty to apply in respect of these orders.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

On 23 November 2015 Ms Harper wrote to the solicitors for the plaintiff detailing the administrator’s estimate of the trustee and investment management costs on a settlement amount of $1,549,197.[9] This calculation includes the Super Platform Costs of $78,457. The letter identifies these costs as follows:“Superannuation Administration Costs – this is not a NAT fee. This fee is applicable where NAT manages the client’s personal injury settlement within the superannuation environment. NAT uses the MLC Public Office Superannuation Fund accessed via the MLC Wrap platform where superannuation is an appropriate strategy for the client.”[9] Exhibit 5. The administrator’s estimate of costs represents the net present value of these costs on a settlement amount of $1,549,197.[10] The letter states that the costs are calculated in a manner that complies with the decision of the High Court in Gray v Richards and have been validated by a consulting actuarial firm, Cumpston Sarjeant.[11] [10] Exhibit 5.[11] Exhibit 5; the reference to Gray v Richards is to the decision of the High Court in Gray v Richards (2014) 253 CLR 660; [2014] HCA 40. The amount of $78,457 is calculated by reference to a schedule of fees published in the MLC Wrap Super, Series 2, Product Disclosure Statement.[12] Ms Harper has prepared an amortisation schedule which sets out the Super Platform Costs. These fees are in accordance with those disclosed in the Product Disclosure Statement.[13] The amortisation schedule[14] is based on a settlement sum of $1,549,197. The assumptions upon which the Super Platform Costs are calculated is an annual drawing of $27,179, an earning rate of 0% and a discount rate of 5%. The amortisation schedule is based on a life expectancy of a further 57 years. The plaintiff was born on 11 March 1996 and is presently 19 years of age. Because of his injuries his life expectancy has been shortened by five years.[15] The amortisation schedule therefore assumes that the plaintiff has a life expectancy of a further 57 years. The schedule amortises (straight line) the investment portfolio over the plaintiff’s assumed life expectancy. The notes to the amortisation schedule relevantly state:“The schedule assumes that 100% of the portfolio is held within the MLC Public Offer Superannuation Fund on the MLC Wrap Platform and provisions for such costs of accessing the super environment. The fees are: - a Platform Admin Fee of 0.40% per annum on the balance below $200,000, then 0.3% per annum on the balance between $200,000 and $500,00 and then 0.5% per annum on balance above $500,000 capped at $3,700 per year - a super administration fee of 0.5% per annum on the balance of the super fund, capped at $1,000 per year; and- the fees are inclusive of GST.”[12] Exhibit 2, p.20.[13] Exhibit 2, p.20; Transcript of proceedings, 18 February 2016, 1-12, lines 15-24.[14] Exhibit 6.[15] Exhibit 5. The notes further state that the schedule has been prepared using the Gray v Richards methodology. The Order of Martin J dated 15 December 2015

CITATION:	Sinnamon v Maher & Anor [2016] QSC 51
PARTIES:	VINCENT SINNAMON by his litigation guardian MICHAEL SINNAMON (plaintiff) v DARREN PATRICK MAHER (first defendant) AAI LIMITED (ACN 005 297 807) (second defendant)
FILE NO/S:	Brisbane No S2958 of 2015
DIVISION:	Trial Division
PROCEEDING:	Miscellaneous Application - Civil
ORIGINATING COURT:	Supreme Court of Queensland at Brisbane
DELIVERED ON:	14 March 2016
DELIVERED AT:	Brisbane
HEARING DATE:	19 February 2016
JUDGE:	Flanagan J
ORDER:	1. The damages for management fees payable by the second defendant to the plaintiff are assessed in the sum of $635,714. 2. In accordance with Order 7 of Martin J on 15 December 2015, the second defendant pay the assessed management fees in the sum of $635,714 to the administrator within 21 days of this order, whose receipt shall be sufficient discharge for the second defendant. 3. In accordance with Order 8 of Martin J dated 15 December 2015, the Court orders that pursuant to section 59(2) of the *Civil Proceedings Act* 2001 interest on the assessed management fees in the sum of $635,714 is not payable if such sum is paid by the second defendant to the administrator in accordance with Order 2 above. If unpaid then interest accrues and is payable on the unpaid balance pursuant to section 58(3), from the date of order default. 4. In accordance with Order 9 of Martin J made 15 December 2015, the second defendant pay the plaintiff’s standard costs of and incidental to the assessment of damages for management fees within 21 days of their assessment or prior agreement between the second defendant and the administrator as to their amount. 5. Each of the parties, the administrator and the plaintiff’s solicitors have liberty to apply in respect of these orders.
CATCHWORDS:	DAMAGES – MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR TORT – PERSONAL INJURIES – GENERAL PRINCIPLES – Where plaintiff suffered personal injury as result of defendant’s negligence - Where plaintiff is unable to manage own financial affairs – Where administrator is appointed to manage plaintiff’s financial affairs – Where the administrator seeks to invest plaintiff’s award – Where determination necessary to calculate management fees of the administrator Civil Liability Act 2003 (Qld), s 57 Civil Proceedings Act 2011 (Qld), s 61(4) Guardianship and Administration Act 2000 (Qld), s 12, s 51 Public Trustee Act 1978 (Qld), s 59(1) Trusts Act 1973 (Qld), s 24(1) Bell v Pfeffer [2009] QSC 209, applied Gray v Richards (2014) 253 CLR 660; [2014] HCA 40, applied Lewis v Bundrock [2008] QSC 189, considered Todorovic v Waller (1981) 150 CLR 402; [1981] HCA 72, applied Willett v Futcher (2005) 221 CLR 627; [2005] HCA 47, considered
COUNSEL:	M Eliadis for the plaintiff G Crow QC for the second defendant
SOLICITORS:	Shine Lawyers for the plaintiff Quinlan Miller & Treston Lawyers for the second defendant