Director of Proceedings v Southern District Health Board
[2020] NZHC 503
•12 March 2020
ORDER PROHIBITING PUBLICATION OF NAMES OR IDENTIFYING PARTICULARS OF THE CHILD OR REFERENCES TO THE HEALTH OF THE CHILD. IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE
CIV-2020-412-000003
[2020] NZHC 503
IN THE MATTER of an application under s 104 of the Contract and Commercial Law Act 2017 BETWEEN
DIRECTOR OF PROCEEDINGS
Applicant
AND
SOUTHERN DISTRICT HEALTH BOARD
First Respondent
AND
BRIDGET PATRICIA DAVIDSON
Second Respondent
Counsel: Applicant in person
G N Gallaway and M Nicol for First Respondent Second Respondent in person
Judgment:
12 March 2020
(Determined on the papers)
[REDACTED] JUDGMENT OF OSBORNE J
This judgment was delivered by me on 12 March 2020 at 4.30 pm
Registrar/Deputy Registrar
Date:
DIRECTOR OF PROCEEDINGS v SOUTHERN DISTRICT HEALTH BOARD [2020] NZHC 503 [12 March 2020]
Introduction
[1] Bridget Patricia Davidson is the mother of [redacted], a minor born on [redacted].
[2] It is common ground between the parties that beginning in 2006, [redacted] suffered [redacted]. In subsequent years, he attended Dunedin hospital for [redacted] services. Eventually, in 2011, when [redacted] was aged [redacted] the extent of his [redacted] was identified by the first respondent, the Southern District Health Board (SDHB). At that point, [redacted] was correctly fitted with [redacted].
[3] It is common ground that a conclusive diagnosis for [redacted] took a significantly longer time than it would have for most children in the same situation. The failure to identify [redacted]’s [redacted] occurred at [redacted]. The delay would have had significant consequences for his [redacted].
[4]Assessment in 2019 demonstrated [redacted].
[5] [redacted]’s treatment was the subject of a complaint to the Health and Disability Commissioner (Commissioner). The Deputy Commissioner, in November 2018, found that the SDHB had breached [redacted]’s rights under the code. The SDHB was referred to the Director of Proceedings for the purpose of deciding whether any proceedings should be taken.1
Application
[6] The Director applies for approval for a proposed settlement deed (“the draft deed”), a copy of which has been provided to the Court. The approval is required by reason of [redacted]’s remaining a minor. The application is made under s 104 Contract and Commercial Law Act 2017.
1 Appointed under s 15 Health and Disability Commissioner Act 1994.
The proposed agreement
[7] The Director has provided affidavit evidence in relation to her process and its outcome.
[8] Upon the matter being referred to the Director, she entered into “without prejudice” negotiations with the SDHB. Those negotiations have resulted in tentative terms of settlement which have been incorporated in the draft deed, which the Director intends, if approved by the Court, to have executed by herself, Mrs Davidson and the SDHB.
[9] Unsurprisingly, the parties have prepared the draft deed on the basis that those terms will remain confidential to the parties save with certain express rights of notification.
Statutory provisions for approval of settlements on behalf of minors
[10] Section 104 Contract and Commercial Law Act 2017 provides for court approval of the compromise or settlement of claims by minors. It states:
104 Claim that is not subject of proceeding
(1)An agreement for the compromise or settlement of a claim is binding on the minor if—
(a)the agreement was entered into by the minor, or on the minor’s behalf by a person who in the opinion of a specified court is a fit and proper person to do so; and
(b)the claim is not the subject of a proceeding before any court in New Zealand; and
(c)the agreement or a release of the claim is in writing and is approved by a specified court.
(2)In this section, specified court means—
(a)a court (other than the Disputes Tribunal) in which a proceeding could be taken to enforce the claim; or
(b)in the case of a claim that could not be the subject of a proceeding in New Zealand, a court in which a proceeding could be taken to enforce a similar claim in New Zealand.
[11] Section 106 allows an application for court approval to be made by or on behalf of the minor or by any other party to a compromise agreement.
Fit and proper person
[12] The Court must be satisfied that, in terms of s 104(1)(a) (above at [10]), the person entering into the agreement on behalf of the minor is a fit and proper person to do so.
Appropriate terms of agreement
[13] The requirement of court “approval” under s 104(1)(c) and s 107 of the Act imports a requirement that the Court has sufficient information as to how the terms of agreement, including importantly the amount of any settlement, were arrived at to enable the Court to approve such terms.
The evidence
[14] Mrs Davidson ([redacted]’s mother) has filed an affidavit recording her satisfaction with the terms of the proposed settlement. She is clearly a fit and proper person to enter the proposed agreement on behalf of [redacted].
[15] The Director has filed two affidavits, the first dealing with the background to settlement discussions and the reaching of the agreement on settlement terms and the second dealing with the basis upon which the Director has negotiated the terms of settlement with the SDHB. The Director has stated that she is guided by the principles outlined by the Human Rights Review Tribunal in Hammond v Credit Union Baywide.2 She has explained how, based upon the Hammond case, she has come to view the proposed terms of settlement as satisfactory.
Trust for [redacted]
[16] I am satisfied, on the Director’s evidence, that the terms of settlement proposed are appropriate, subject to the following amendments I now identify.
2 Hammond v Credit Union Baywide [2015] NZHRRT 6.
[17] There is a payment to be made for [redacted]’s benefit under the draft deed. Upon consideration of the papers I issued a minute noting that the Court would normally expect a trust arrangement in relation to such funds.3 I recorded:4
I appreciate that the amount of the settlement sum is such that a formal trust arrangement may appear burdensome but, given that the Court is being asked to approve all aspects of this arrangement, I seek from one or more of the parties a memorandum as to the basis upon which the Court may authorise the payment of this settlement sum directly to [redacted].
[18] Counsel have joined in a memorandum in response to the minute. They have recorded that although the draft deed provides for the payment to be made to [redacted] as “the aggrieved person”, the bank account identified in the draft deed for such payment is that of Mrs Davidson. They note that [redacted] also has his own personal bank account.
[19] Counsel record in their memorandum that they have agreed that a formal trust arrangement is unnecessary and would be unduly burdensome in light of the amount and nature of the settlement and of [redacted]’s age ([redacted] years at present).
[20] In the circumstances, I accept that a discrete trust deed would be unnecessary and burdensome. That said, the receipt of money by Mrs Davidson (on behalf of [redacted]) should be made the subject of an express trust with powers of advancement.
[21] The Court’s approval of the proposed settlement will accordingly be subject to an appropriate amendment to the draft deed to appropriately establish the trust.
The issuing of this judgment
[22] There is a reference in the background to the draft deed at para D to a “Minute”. The fact that this Court has approved a settlement deed should be a matter of public record – this judgment itself has been prepared in terms which safeguard the confidentiality of the detail of settlement (save in relation to the bare fact that a sum
3 Director of Proceedings v Southern District Health Board HC Dunedin CIV-2020-412-3, 2 March 2020.
4 At [4].
is being paid for the benefit of [redacted]). Therefore there will need to be an amendment to para D in the background to the draft deed.
Order
[23] I approve the terms of agreement to be executed by the parties as attached as annexure “A” to the originating application in this proceeding, save that:
(a)in para D of the background to the draft deed the words “by way of Minute dated [XXXX] 2019 per [XXXX] J” shall be replaced by the words “by Judgment dated 12 March 2020 [2020] NZHC 503); and
(b)in cl 1 of the draft deed the words “to the aggrieved person” shall be replaced with the words “to Mrs Davidson in trust for the aggrieved person”; and
(c)an additional cl 6 shall be added to the draft deed which reads:
6.The trust established under cl 1 is a trust whereby Mrs Davidson shall hold the fund paid to her under cl 1 in trust for [redacted] while he remains a minor but subject to a power to make payment for and towards his maintenance or education or his advancement or benefit of the capital and the whole or such part, if any, of the income of that fund, as may, in all the circumstances, be reasonable, and otherwise without restricting the powers of the trustee under the Trustee Act 1956.
(d)leave is reserved to counsel to apply further by memorandum in the event any aspect of these orders is problematic.
There is no order as to the costs and disbursements of this proceeding.
Osborne J
Solicitors:
HDC, K Eckersley – Director of Proceedings Chapman Tripp, Christchurch
Copy to: B P Davidson
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