Trout v Minister for Health - [2012] WADC 172

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: TROUT -v- MINISTER FOR HEALTH [2012] WADC 172

CORAM: SLEIGHT DCJ

HEARD: 19 OCTOBER 2012

DELIVERED : 19 OCTOBER 2012

PUBLISHED : 11 DECEMBER 2012

FILE NO/S: CIVO 48 of 2008

BETWEEN: MATTHEW TROUT
Plaintiff
AND
MINISTER FOR HEALTH
Defendant

Catchwords:

Practice and procedure - Evidence required to support application for approval of compromise - Appointment of a private trustee - Evidence required in support of application to appoint a private trustee

Legislation:

Rules of the Supreme Court 1971

Result:

Application for approval of compromise adjourned sine die

Representation:

Counsel:

Plaintiff: Mr D J Bayly
Defendant: Mr C S Bydder

Solicitors:

Plaintiff: Bradley Bayly Legal
Defendant: State Solicitors Office

Case(s) referred to in judgment(s):

Jones v Moylan (1997) 18 WAR 492
Morris v Zanki (1997) 18 WAR 260
Re Hoang Minh Le; ex parte The Public Trustee [2012] WASC 31
Sosa v Carter [1978] WAR 123
Sullivan (by her next friend Leanne Cahill) v Kalina [2009] WADC 57

SLEIGHT DCJ: [This judgment was delivered extemporaneously on 19 October 2012 and has been edited from the transcript.]
The application before me today is by chamber summons for the approval of a proposed compromise of a claim of Matthew Trout. Matthew suffered a severe permanent brain damage type injury as a result of a cardiac arrest caused by a post‑tonsillectomy haemorrhage. He suffers spastic quadriparesis and other complications.
The defendant has offered to settle Matthew's claim by payment of [suppressed]. Under the terms of the proposed settlement the National Australia Trustees Ltd is to be appointed as the protective trustee and, after deductions payable to Medicare and Centrelink, the balance of the settlement sum is to be paid to the protective trustee.
The application for approval of the proposed compromise is made pursuant to O 70, r 10 of the Rules of the Supreme Court1971. This order provides as follows:
No settlement or compromise, and no acceptance of money paid into court, whenever entered into or made in any cause or matter (other than appeal to the Court of Appeal) in which there is a claim by or on behalf of an or against a person under a disability, shall be valid unless it is approved by the Court.
The court file reveals a complication in this matter. The proceedings against the defendant were not commenced within the time limit provided under the Limitations Act 1935. On 16 April 2008 Matthew's then solicitors, Hoffmans, filed an originating summons seeking leave to bring an action out of time.
On 9 May 2008 an order was made by consent by Commissioner Heron that:
The plaintiff do have leave to bring an action against the defendant, its servants and or agents pursuant to section 47A(3) of the Limitation Act 1935.
The order contained no provision as to when the action was to commence. Subsequently Matthew changed his solicitors and is now represented by Bradley Bayley. Apparently, under a misapprehension that a writ had been issued, Matthew's new solicitors filed a statement of claim in the originating summons proceedings. The court accepted the statement of claim and all subsequent documents, including a defence filed by the defendant, in these proceedings.
At no time was an action commenced by writ. This difficulty can, in my view, be overcome if the application by chamber summons currently before the court is treated as an application under O 70 r 11, which enables the court to approve an agreement of settlement or compromise prior to the commencement of proceedings.
This complication has only been drawn to the attention of counsel for the parties by me today. For that reason alone the application before me needs to be adjourned for the parties to address this issue. However, it is appropriate that I also record my concern about what I consider to be the lack of appropriate information before the court to approve the compromise.
The purpose of the requirement to obtain leave of the court to compromise is to ensure that the settlement is fair and reasonable. It is a protective mechanism for the benefit of the person under the disability. The court needs to be satisfied that all the facts relevant to the case of the person under disability have been brought together and considered by the claimant's legal advisors (see Seaman, par 70.10.2).
However, the court should be slow to disagree with a settlement which is supported by independent counsel having regard to the risk of litigation. The relevant principles for approval of a compromise as set out in Sosa v Carter [1978] WAR 123 where Burt CJ said:
Expressed in general terms, this court ought not and indeed cannot approve the proposed settlement unless it be of the opinion that it will be for the benefit of the infant plaintiff. In my view what the court is called upon to do is to satisfy itself that all the facts relevant to the plaintiff's claim have been brought together and considered by her legal advisors. And unless the requirement be dispensed with the settlement is supported by the opinion of independent counsel. It should itself consider the opinion given and the reasons for it. If having done that it appears that all aspects of the case have received proper consideration it should be slow to disagree with the opinion particularly on such a matter as the assessment of damages for personal injuries. The court should be aware of the risk of litigation in an area in which reasonable men can reasonably reach different conclusions and hence slow to force the infant to take a risk which the court is unable to underwrite. It should too satisfy itself that the opinion of counsel has been considered and understood by the infant's guardian and should give proper weight to the fact that the guardian, as is necessarily the case, wishes to accept the settlement. (124)
The application for leave to compromise in this matter is supported by two affidavits:
1.An affidavit of Kimberly Therese Baven sworn 16 October 2012; and
2.An affidavit of Michelle Littlecott sworn on 16 October 2012.
Both affidavits annex an opinion of independent counsel Mr David Bruns dated 17 September 2012. The opinion recommends a settlement in terms of the proposed compromise, but the compromise mentioned in the opinion is different to the compromise the subject of the application. This needs to be reconciled and explained to the court.
The affidavit material does not provide to the court any of the brief to counsel sent to Mr Bruns. The affidavit of Ms Baven simply states:
The facts and circumstances relevant to the plaintiff's claim as outlined in Mr Bruns' opinion are true and correct as far as can be reasonably ascertained.
This wording is from a practice direction which states that:
The court will normally be required to be satisfied that sufficient facts are identified to enable the court to form an opinion in respect of the matter to be approved.
In this case, in my opinion, the written opinion of Mr Bruns contains a minimalist description of the relevant details and circumstances of Matthew's claim.
I have expressed on previous applications for leave to compromise that have come before me that a broad reference to the facts mentioned in the opinion is not generally a satisfactory method of informing the court of the relevant details and circumstances of a case. It is my view that such applications should be supported by either the brief to counsel for opinion, or at the very least copies of all relevant reports, schedules and witness statements upon which counsel relies.
I conclude there is inadequate material before the court in the following areas:
(1)There is inadequate material before the court as to Matthew's functioning. In particular, the extent of his cognitive functioning, which is particularly relevant to the question of what amount ought to be allowed for general damages.
(2)In relation to an allowance for home modifications there are no details provided to the court as to the proposal for Matthew's future accommodation other than what has been presented from the bar table today. For example, there is no evidence before the court as to the modifications that may be required to a home which is apparently proposed to be built for Matthew.
(3)There are no details provided to the court and apparently counsel, as to what future medical needs Matthew will require, except as to a need for future hand surgery. As a result, no allowance is made in the opinion of counsel for future medical treatment other than hand surgery and an estimate by counsel, without any supporting material of the need for a review by a general practitioner.
Given Matthew's injuries, one would expect a medical opinion as to whether Matthew requires regular reviews from a general practitioner, neurologist (according to the particulars of damages, Matthew has suffered seizures), a urologist (according to the particulars of damages, Matthew suffers incontinence), a gastroenterologist (according to the particular of damages, Matthew has undergone operative treatment for gastro complaints), a pulmonologist (the opinion of Mr Bruns mentions Matthew has suffered episodes of pneumonia) and a specialist physician.
Normally I would expect all of these issues would be dealt with in a comprehensive report of a medical rehabilitation specialist and possibly from specialists within the individual areas of expertise.
(4)There is no report from an appropriately qualified medical practitioner as to the future medication needs of Matthew. It appears from the particular of damages filed that the calculation of future medication expenses has been based upon existing medication use only.
In relation to the application for the appointment of the National Australia Trustees Limited as the protective trustee under the proposed compromise, the usual affidavit of a representative of the National Australia Trustees Limited as to the financial security of that organisation has not been filed. There is simply a letter from the National Australia Trustees Limited annexed to the affidavit of Ms Littlecott setting out fees and charges and other details concerning the investment strategies. There is evidence in the affidavit of Ms Littlecott as to what she has been told by the National Australia Trustees Limited as to the security it offers as a protective trustee.
Although this court has on a number of occasions appointed the National Australia Trustees Limited as the protective trustee (see, for example, Sullivan (by her next friend Leanne Cahill) v Kalina [2009] WADC 57), this does not, in my opinion, remove the need to provide sufficient evidentiary material to satisfy the court that it is appropriate to appoint the National Australia Trustees Limited in preference to the Public Trustee.
In Morris v Zanki (1997) 18 WAR 260 the Full Court emphasised that the security of the fund in the long term is of utmost importance to the interests of the beneficiary and that the discretion to place the funds with an entity other than the Public Trustee should only be exercised when satisfactory evidence is presented to the court as to the financial and structural security of the proposed trustee (see also Jones v Moylan (1997) 18 WAR 492, 496).
Order 70 r 12(1) of the Rules of the Supreme Court 1971 provides relevantly:
(a)…
(b)…
(c)in an application under rule 11(1) the Court has ordered the payment into court or investment of any moneys relating to a settlement or compromise,
the money shall, unless otherwise ordered by the Court, be paid to the Public Trustee for investment on behalf of the person under disability, and if the Court so orders may be invested by the Public Trustee in investments outside the Common Account established under the Public Trustee Act 1941.
This provision provides no more than a predisposition towards selection of the Public Trustee as a trustee to manage and invest verdict moneys allowed to a disabled person. The court has a wide ranging discretion to examine all available options in relation to the investment and management of moneys awarded to a disabled person.
The discretion must be exercised judicially in the best interests of the disabled person. In Morris v Zanki the court stated as follows:
The court has a duty to consider the future management of the verdict moneys and it has a discretion. The governing consideration is what is best to be done for the person under the disability. A discretion must be exercised judicially. It cannot be determined arbitrarily. Where the court is asked to exercise the power to place funds with a private trustee rather than the Public Trustee, the judge must examine all of the circumstances and decide what is in the best interests of the person for whose benefit the funds are to be held.
This will, of necessity, require consideration of available options and alternatives, but this is not to say that a predisposition towards the Public Trustee is an impermissible fetter on the discretion. It serves a number of purposes. It indicates the onuses on the person seeking the exercise of the discretion in his or her favour to establish grounds on which the order should be made.
It means that if no application is made or if no good reason is shown for preferring a private trustee, the Public Trustee will assume the role. We have chosen the adjective 'good' in relation to the reasons that are advance in support of the application quite deliberately. We would avoid other possible descriptions such as 'cogent', 'special' or 'exceptional'. (286)
Although the practise of this court has been on occasions to appoint a protective trustee other than the Public Trustee without comparing the fees and charges of the two entities, in my opinion, on an application for approval of a protective trustee other than the Public Trustee, the court should normally be presented with a comparison of the fee structure of the two entities. This is particularly where the proposed settlement involves a large sum of money.
In this matter, there has been no information provided on the Public Trustee's fees and charges to compare them with the fees and charges of the National Australia Trustees Limited. Also, although it is material to take into account the wishes of the next friend in relation to the appointment of the trustee, there is no evidentiary material before me to inform me as to the extent to which the preference expressed by Ms Littlecott in her affidavit that the National Australia Trustees Limited be appointed is an informed opinion.
The final issue that should be addressed is whether an order should be made authorising the investment of the sum in superannuation. I refer to the recent decision of Beech J in the matter of Re Hoang Minh Le; ex parte The Public Trustee [2012] WASC 31. In that case at [23] Beech J recommended that counsel framing the proper terms of an order should give consideration to such an authorisation in order to avoid the need to make subsequent applications to the court.
For the above reasons, the application for compromise will be adjourned for further information to be provided to the court. I do this reluctantly, as I appreciate Matthew's mother and family will be very anxious to finalise the matter.
Also, I am conscious of the fact that a delay in settlement will also cause a delay in the investment of funds on behalf of Matthew. However, in my opinion, to approve the compromise on the current information before the court would depart from the principles I have outlined above in relation to such applications. I will adjourn the application sine die so it can be brought back before the court as soon as further information is available to present to the court.