Zreika v The Sydney Children's Hospital Network

[2022] NSWSC 1467

Supreme Court

New South Wales

Medium Neutral Citation:

Zreika v The Sydney Children’s Hospital Network [2022] NSWSC 1467

Hearing dates:

13 October 2022; further submissions and evidence filed 25 October 2022.

Date of orders:

26 October 2022

Decision date:

26 October 2022

Jurisdiction:

Common Law

Before:

Chen J

Decision:

(1) The settlement recorded in par 2 of the consent judgment filed in Court, 13 October 2022, and signed by the parties is approved pursuant to the Civil Procedure Act 2005 (NSW), s 76, and there will be judgment in accordance with that paragraph.

(2) The judgment sum less statutory deductions authorised by the consent judgment is, subject to any further order, to be paid into Court pending the application for the appointment of a trustee to hold on trust the judgment sum.

(3) The Court makes orders in accordance with pars 5 and 6 of the consent judgment and notes the agreement between the parties set out in pars 3, 4, 7, 8 and 9 of the consent judgment.

(4) Grant liberty to the parties to apply in respect of the above orders.

In relation to the second and third plaintiffs’ claims:

(1) Judgment for the second plaintiff in the sum of $XX inclusive of costs.

(2) The Court makes orders in accordance with par 14 of the consent judgment and notes the agreement between the parties set out in pars 12, 13, 15, 16 and 17 of the consent judgment.

(3) Judgment for the third plaintiff in the sum of $XX inclusive of costs.

(4) The Court makes orders in accordance with par 21 of the consent judgment and notes the agreement between the parties set out in pars 19, 20, 22, 23 and 24 of the consent judgment.

(4) Grant liberty to the parties to apply in respect of the above orders.

Catchwords:

CIVIL PROCEDURE – infant settlement approval – compromise – whether settlement in best interests of infant

Legislation Cited:

Civil Liability Act 2002 (NSW)

Civil Procedure Act 2005 (NSW)

Cases Cited:

Budini v Sunnyfield (No. 3) [2021] FCA 1540

Permanent Trustee Co Ltd v Mills (2007) 71 NSWLR 1; [2007] NSWSC 336

Scandolerabhnf Robinson v Victoria (Department of Education and Early Childhood Development) [2015] FCA 1451

Category:

Procedural rulings

Parties:

Noreen Zreika by her Tutor Maryam Zreika (First Plaintiff)
Maryam Zreika (Second Plaintiff)
Salem Zreika (Third Plaintiff)
Sydney Childrens’ Hospital Network (Westmead Hospital) (Defendant)

Representation:

Counsel:
Mr G Segal (Plaintiff)
Ms L Boyd (Defendant)

Solicitors:
NSW Litigation Lawyers (Plaintiffs)
Crown Solicitor for NSW (Defendant)

File Number(s):

2020/189941

JUDGMENT

1. This is an application for judicial approval of a settlement pursuant to s 76(3) of the Civil Procedure Act 2005 (NSW). The approval is necessary because the plaintiff, Noreen Zreika, is a person who is under legal incapacity being, at the time of judgment, eight years of age.

2. The matter most recently came before me for approval on 13 October 2022, but there remained an issue about funds management. I indicated to the parties that, subject to receiving that further evidence (see paragraph [9(4)], below), I would be prepared to deal with the matter in Chambers – a course that was consented to by the plaintiff and defendant.

Background

3. In the period commencing 7 May 2014, when the plaintiff was around 4 months old, her parents took her to the Westmead Children’s Hospital (‘the Hospital’) because, since 24 April 2014, she had presented with a rash that had spread to her hands, chest and legs; a mild cough; and, an appearance of red eyes indicating conjunctivitis.

4. The plaintiff’s case is that, at the time she presented to the Hospital, she had symptoms consistent with her suffering from Kawasaki disease and that the Hospital, through its staff, allegedly failed to diagnose and treat this condition leaving her with significant cardiac impairments – in particular, permanent damage to her coronary arteries.

5. By these proceedings, the plaintiff seeks recovery of damages alleging that her injuries and disabilities were the consequence of the negligence of the defendant and those for whom the defendant is vicariously liable.

6. Put very simply, Kawasaki disease is an acute inflammatory disease of unknown origin which affects children and infants, usually between one and four years of age (and, occasionally, older patients). Inflammation of blood vessels is a common feature of the illness and affects the arteries, particularly in areas where these blood vessels are subjected to frequent or excessive movement or stretching. The expert evidence suggests that the coronary arteries, which supply oxygen to heart muscles, and the axillary arteries (those in the arm pit) are especially vulnerable because of the continuous movement of the heart and the extreme range of shoulder movement. The inflammation of these arteries leads to softening of the walls, which in turn can lead to the artery “ballooning out” in the weak area producing an aneurysm (a localised bulge).

7. A common complication, or consequence, is that a blood clot may form in the aneurysm, and cause blockage of the vessel with resulting damage to the heart muscle, that is supplied by the artery in question. These are the broad nature of the injuries suffered by the plaintiff.

8. The matter was recently listed for mediation, and shortly after that the parties reached a proposed settlement. The matter is now before me for approval of that settlement.

9. In support of the application for approval, I received the following:

1. An affidavit from Dominika Walkowiak affirmed 30 September 2022. Ms Walkowiak is a solicitor with day-to-day carriage and conduct of the matter on behalf of the plaintiff.

2. An affidavit from Maryam Zreika sworn 30 September 2022. Ms Zreika is the plaintiff’s mother, and her tutor in these proceedings.

3. Two confidential opinions from Graham Segal of counsel dated 26 September and 9 October 2022.

4. An email sent to Chambers on 25 October 2022 (with the consent of the defendant) detailing costs of management by the Public Trustee, and short submissions on those costs. That email will be marked exhibit C.

Approval: the relevant principles

10. When the Court is asked to approve a settlement of proceedings commenced by or on behalf of a person under legal incapacity, its function is protective. The ultimate question is whether any compromise entered into is beneficial to the interests of the person and thus in their best interests: Permanent Trustee Co Ltd v Mills (2007) 71 NSWLR 1; [2007] NSWSC 336 at [29] (Hammerschlag J) (“Mills’); Budini v Sunnyfield (No. 3) [2021] FCA 1540 at [10] (Perry J).

11. It is the Court’s responsibility to determine this matter itself, albeit that it will be assisted – but not bound – by the provision of a confidential advice by the person’s legal representatives that they consider the settlement to be beneficial to, and in the best interests of, the person: Mills at [29]; Scandolera bhnf Robinson v Victoria (Department of Education and Early Childhood Development) [2015] FCA 1451 at [27] (Mortimer J) (‘Scandolera’).

12. The Court, as part of its assessment, is to consider the “the advantages and disadvantages of the litigation continuing not only in terms of whether the applicants might secure a more advantageous award from the Court at trial, but also issues such as the prospects of an appeal and the costs and pressures imposed on [the plaintiff] if the litigation were to continue”, to what is, in this case, estimated to be a two week trial: Scandolera at [29].

13. The tutor must also provide their assent to the compromise. That has occurred in this case: see pars 17-20 of the affidavit of Maryam Zreika.

Pleadings

14. It is necessary to say something more about the plaintiff’s claim, and the material allegations made in it.

15. The plaintiff’s claim is that the Hospital failed to promptly diagnose – and thereafter treat – the Kawasaki disease. Specifically, her case is that her condition should have been diagnosed, and treatment commenced, on 8 May 2014; whereas, in breach of the duty owed to her, her condition was not diagnosed, and treatment did not commence, until 20 May 2014: Amended Statement of Claim, pars 42(i)-(vii).

16. The Hospital has admitted that it breached its duty of care in failing to diagnose the plaintiff “as suffering atypical Kawasaki disease prior to 20 May 2014” and, at least implicitly, to treat that disease with the administration of immunoglobulin: Defence to the Amended Statement of Claim, pars 25(a) and 27(a).

17. Three matters should be noted at this point. First, although breach of duty was admitted by 20 May 2014, there is no admission as to precisely when that breach first occurred. Secondly, the expert evidence – notably the opinions expressed by Associate Professor Ward and Professor Wilkinson – agree that 24 April 2014 was the date of onset of symptoms of the disease. The significance of that day is that the plaintiff did not attend the Hospital until 7 May 2014; that is, approximately 14 days after the date of onset. Thirdly, in those circumstances, the plaintiff’s claim is not that the defendant caused the disease but rather failed to diagnose, and treat, that illness promptly; put another way, the plaintiff’s claim for damages is for the damage which occurred in consequence of the failure to diagnose and treat the disease in a timely way, and not for the disease itself.

Assessment and consideration

18. Having read the evidence, and in light of what I have set out above, it is clear that there are a number of significant causation and damages issues. I will make mention of one by way of illustration.

19. The medical evidence establishes that timely treatment of Kawasaki disease, specifically, by intravenous immunoglobulin administered within the first ten days of onset, reduces the risk of coronary artery damage – potentially quite significantly: report from Associate Professor Cameron Ward, the Hospital’s qualified paediatric cardiologist dated 27 February 2022, page 1. Associate Professor Ward expressed the opinion that, remembering that the plaintiff did not attend the Hospital until 7 May 2014: “the vast majority of irreparable coronary artery damage was done well before May 7 and [intravenous immunoglobulin] administered beyond May 7 was unlikely to significantly mitigate that damage’: report dated 27 February 2022, page 2. Later, in that same report, Associate Professor Ward said that, by 8 May 2014, “there was little or no likelihood [the plaintiff] would have avoided suffering significant injury to her coronary arteries”.

20. The plaintiff’s expert evidence was somewhat more measured, but recognised that the plaintiff presented to the Hospital on day 14 of her illness (7 May 2014). That is, beyond the treatment window which I have earlier referred to.

21. The plaintiff qualified a consultant paediatric cardiologist, Professor James Wilkinson, who prepared a number of reports. In his report dated 17 February 2020, Professor Wilkinson made the following key points. First, that it was “widely accepted that treatment needs to be initiated wherever possible by 7 – 9 days after the onset of symptoms and delay after that increases the risk of coronary artery damage” (report, page 11). This opinion is in line with the one expressed by Associate Professor Ward that I have referred to. Secondly, when specifically addressing the question of the likely outcome had the plaintiff being treated by intravenous immunoglobulin when she first attended the Hospital (that is, on day 14), Professor Wilkinson said that it was “reasonable to conclude that her coronary artery problems would probably not have been avoided completely but might have been reduced” (report, page 15).

22. The plaintiff also secured a further report from a consultant paediatrician and cardiologist, with particular expertise in Kawasaki disease, Professor Samuel Menahem. In a report dated 17 February 2021, Professor Menahem specifically agreed with this last opinion expressed by Professor Wilkinson. Proving the “reduction” as Professors Wilkinson and Menahem described, would be far from straightforward, as the expert evidence has recognised. That is, the causation/damages issue is whether – and if so to what degree – the administration of intravenous immunoglobulin after 7 May, but before 20 May 2014, would have resulted in a better outcome for the plaintiff.

23. It seems to me, based upon my assessment of the material, including the expert evidence, that there were a number of scenarios open on the evidence – including, the plaintiff could have succeeded entirely in her claim – but that success would only entitle her to recover damages for the damage occasioned by the failure to treat the Kawasaki disease by intravenous immunoglobulin at an earlier point in time; or, possibly, the defendant could have succeeded on causation, essentially by establishing that any breach of duty did not cause or contribute to the plaintiff’s coronary problems. Obviously, there are other variants. These are just some of them.

24. My assessment of the case on causation – admittedly without the benefit of hearing from the witnesses and following that from counsel – is that it is not without difficulties, and the proposed settlement reflects this.

25. I am in receipt of a confidential advice from counsel. I consider the assessments contained within the advice dated 9 October 2022 to be fair and reasonable, and I agree with the tenor of the advice about the risks and that the case called for compromise. I add: I was helpfully provided with submissions from the defendant that identified similar issues to which reference has been made, and to which counsel had appropriately addressed in the confidential opinions.

26. In my view, the case had a range of risks, inclusive of failing entirely and, even if it did not, there were prospects of securing significantly less damages than the primary claim.

27. Ultimately, this is a case that justified compromise, bearing in mind the risks on causation that I have identified. Of course, the plaintiff is required to prove causation and bears the onus of proving any fact relevant to the issue of it: ss 5D and 5E of the Civil Liability Act 2002 (NSW).

28. It is of course, not without difficulty to reliably predict what judgment sum the plaintiff might have secured in these circumstances. Nevertheless, based upon the material, and the confidential advice to which reference has been made, I am comfortably satisfied that the settlement is in the best interests of the plaintiff, and for her benefit, and so should be approved.

29. The settlement sum is for an amount of $XX inclusive of all paybacks and fund management costs, plus agreed costs. The payback only appears to be to Medicare and said by counsel for the plaintiff to be $XX. This amount is to be dealt with by an advance payment of 10%.

30. Ms Walkowiak has also disclosed that they propose to seek, from the Trustee, payment of $XX in solicitor and client costs. There is no evidence at all before me about what this figure represents (and why it is to be charged), and my approval of this settlement should not be taken in any way to have endorsed either the charging of solicitor and client costs, nor the amount of them. In due course, should there be solicitor and client costs that is a matter that will need to be addressed and determined by the Trustee.

31. Exhibit C identifies the fees that will be incurred if the judgment is managed by the Public Trustee. My understanding is that, based upon what is contained in that exhibit, application will be made for the public trustee to hold the money on trust for the first plaintiff.

32. I make the following orders:

1. The settlement recorded in par 2 of the consent judgment filed in Court, 13 October 2022, and signed by the parties is approved pursuant to the Civil Procedure Act 2005 (NSW), s 76, and there will be judgment in accordance with that paragraph.

2. The judgment sum less statutory deductions authorised by the consent judgment is, subject to any further order, to be paid into Court pending the application for the appointment of a trustee to hold on trust the judgment sum.

3. The Court makes orders in accordance with pars 5 and 6 of the consent judgment and notes the agreement between the parties set out in pars 3, 4, 7, 8 and 9 of the consent judgment.

33. In addition to the plaintiff’s claim there were two claims brought by parents of the plaintiff for nervous shock: they were the second and third plaintiffs. Those matters have also resolved and the consent orders prepared by the parties contain proposed orders disposing of those claims.

34. I make the following orders:

1. Judgment for the second plaintiff in the sum of $XX inclusive of costs.

2. The Court makes orders in accordance with par 14 of the consent judgment and notes the agreement between the parties set out in pars 12, 13, 15, 16 and 17 of the consent judgment.

3. Judgment for the third plaintiff in the sum of $XX inclusive of costs.

4. The Court makes orders in accordance with par 21 of the consent judgment and notes the agreement between the parties set out in pars 19, 20, 22, 23 and 24 of the consent judgment.

35. I will sign, date and have sealed the consent orders, and they will be placed on the Court files. I grant liberty to the parties to apply in respect of the above orders.

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Decision last updated: 26 October 2022