DISTRICT COURT OF QUEENSLAND
CITATION:
Jones v Warwick Total Security Service Pty Ltd [2017] QDC 114
PARTIES:
JAMES CHRISTIAN JONES
(plaintiff)v
WARWICK TOTAL SECURITY SERVICE PTY LTD
(defendant)FILE NO/S:
3468 of 2015
DIVISION:
Civil
PROCEEDING:
Trial
ORIGINATING COURT:
District Court at Brisbane
DELIVERED ON:
12 May 2017
DELIVERED AT:
Brisbane
HEARING DATE:
24 April 2017
JUDGE:
Smith DCJA
ORDER:
1. I assess the quantum of the management fees to be paid by the defendant to the plaintiff in the sum of $196,112.35.
2. I will hear the parties on the question of costs.
CATCHWORDS:
DAMAGES – Quantum of management fees to be awarded to plaintiff with an impaired capacity to manage his financial affairs – whether the amount should be for a limited period – whether the amount should be discounted and if so by how much
Civil Liability Act 2011 (Q) s 57
Civil Proceedings Act 2011 (Q) ss 57, 61
Guardianship and Administration Act 2000 (Q) ss 5, 6, 7, 11, 12, 28, 31, Schedules 1 and 4
Malec v J C Hutton Pty Ltd (1990) 169 CLR 638
Sharman v Evans (1977) 138 CLR 563
Todorovic v Waller (1981) 150 CLR 402
Willett v Futcher (2005) 221 CLR 627
COUNSEL:
Mr M. Eliadis for the plaintiff
Mr P. Telford for the defendant
SOLICITORS:
Shine Lawyers for the plaintiff
Carter Newell Lawyers for the defendant
Introduction
This is a trial on the issue of the quantum of management fees of damages payable to the plaintiff.
The plaintiff, who was born on 5 January 1993, suffered serious injuries after being assaulted outside of a hotel in Warwick on 18 August 2012. The plaintiff sued Warwick Total Security Service Pty Ltd for damages for negligence.
The plaintiff’s claim was settled on 24 November 2016. The plaintiff accepted the defendant’s offer to settle the claim for $300,000 inclusive of statutory refunds plus costs to be agreed or assessed, plus administration fees to be agreed or assessed. A discharge was provided by the defendant which was signed by the plaintiff on 16 February 2017. In paragraph 7 of the discharge it is said “the defendant shall pay to the plaintiff the sum of $300,000 (settlement sum) plus costs to be agreed or assessed and plus administration fees to be agreed or assessed in full and final settlement of the claim.”[1] The issue is the period over which management fees should be calculated.
[1]Exhibit 1, p 142.
On 21 September 2016, the plaintiff appeared before the Queensland Civil and Administrative Tribunal in relation to the issue of whether he had impaired capacity to manage an award of damages or any compensation settlement money received in relation to the claim.[2]
[2]Exhibit 1, p 126.
The Tribunal decided that the plaintiff had impaired capacity for that financial matter and it appointed National Australia Trustees Limited as administrator for the award of damages made pursuant to the order of the District Court of Queensland or any compensation settlement monies in relation to the client.
The order was continued by QCAT on 13 March 2017 and is next to be reviewed in 2 years.[3]
[3]Exhibit 1, p 129.
National Australia Trustees Limited, in a letter dated 5 December 2016 noted that they had been advised that the plaintiff had a normal life expectancy of a further 61 years.[4] Based on a settlement value of $294,274, the fees would be as follows:
[4]Exhibit 1, p 136.
(a) National Trustee fees - $149,095;
(b) Fund manager costs - $80,848;
(c) Superannuation costs - $48,175;
(d) External tax return submission - $14,587.[5]
[5]Exhibit 1, p 136.
The total amount sought by the plaintiff is $292,705[6] discounted by 10% for contingencies. On the other hand the defendant submits the award should be for 10 years i.e. $67,856.
Evidence
[6]This is includes the 5% discount factor - s 57 of the Civil Proceedings Act 2011 (Q) and s 61 of the Civil Proceedings Act 2011 (Q).
Plaintiff’s evidence
There is no doubt the plaintiff sustained significant injuries from the assault.
Dr Ken Arthur, a psychiatrist in his report dated 28 March 2014 found the plaintiff suffered a moderate brain injury with radiological evidence of a traumatic subarachnoid haemorrhage, subdural haematoma and contusions of the left frontal and temporal lobes. He considered there was a combination of depressive and anxiety symptoms. This had impacted on his ability to maintain employment and led to impulsive spending and amotivation. The diagnosis was adjustment disorder with mixed anxiety and depression, cognitive disorder not otherwise specified, alcohol misuse, history of moderate acquired brain injury and acute post traumatic seizures, vocational, social and financial instability and a GAF score of approximately 60 with moderate symptoms and impairment in role functioning.[7] He recommended a further neuropsychological assessment to quantify cognitive impairment. He thought the prognosis was reasonable and despite the injury he had made a reasonable recovery. He thought that whilst there were anxiety symptoms they were amenable to treatment, but poor prognostic factors included his past hesitancy to engage in therapy; transient lifestyle and the presence of high order cognitive deficits.[8]
[7]Exhibit 1, p 14.
[8]Exhibit 1, p 16.
Dr Scott Campbell, a neurosurgeon in his report dated 28 March 2014 relevantly diagnosed traumatic brain injury resulting in cognitive deficits and post traumatic headaches.[9] He thought the plaintiff had reached maximum medical improvement and further recovery was unlikely in the future. He assessed an 18% whole person impairment under AMA guides 5th edition DRE category II. There were ongoing complaints of short poor term memory, poor concentration and difficulties with multi- tasking and learning new information. There was also 3% whole person impairment regarding the headaches.[10]
[9]Exhibit 1, p 24.
[10]Exhibit 1, p 25.
Dr Shelley Keane, a neuropsychologist has provided a number of reports and gave evidence.
In a report dated 4 April 2014,[11] Dr Keane noted that the plaintiff was a 21 year old man who had been assaulted. A CT scan dated 19 August 2012 reported traumatic subarachnoid haemorrhage, subdural haematoma and haemorrhagic contusions involving the left frontal and temporal lobes. The CT scan dated 26 August 2012 reported expected resolution of the left temporal and frontal haemorrhagic contusions with mild increase in adjacent oedema component. He reported experiencing difficulty holding down work.[12] There had been emotional problems since the incident. Although his general cognitive functioning fell within the average range, against this background there were some specific areas of his cognitive functioning where his performance was below that which would be expected of someone with his intellect, namely attention and concentration, information processing speed, visual memory functioning and executive functioning. In her report, Dr Keane stated, “when compared to previous assessments, his performance demonstrated some recovery as expected and the pattern of performance was consistent across the assessments”.[13]
[11]Exhibit 1, p 27-51.
[12]Exhibit 1, p 43.
[13]Exhibit 1, p 44, para 7.12 of the report.
Dr Keane continued, “Mr Jones has a number of cognitive deficits that appear to be outside the normal range of variability that would be expected of his level of functioning. The neuropsychological profile elicited on testing is consistent with this function in attention and concentration and executive functioning. There are a number of factors that could contribute to his functioning including [a head injury], [anxiety and depression], [deficits in attention and concentration and processing speeds].”[14]
[14]Exhibit 1, p 44, paras 17.13 – 17.16 of the report.
Dr Keane noted:
“However I think the subtle deficits in executive functioning and some attention and concentration deficits are consistent with those seen in the context of a traumatic brain injury. They are consistent with the problems reported at interview and with the medical information on imaging.”[15]
[15]Exhibit 1, p 45, para 7.17 of the report.
Dr Keane considered that the assessment being conducted 19 months post-accident led to a conclusion of a stable neuropsychological status.[16]
[16]Exhibit 1, p 45, para 8.3 of the report.
Dr Keane was of the opinion the plaintiff had a 13% impairment after an assessment on PIRS scale.[17]
[17]Exhibit 1, p 46.
Ultimately she assessed a 10% impairment of the whole person on the AMA 5 guidelines as a consequence of cognitive deficits associated with the subject accident. She noted that “while his cognitive deficits could be classified as generally mild, they nonetheless represent a reduction from his likely premorbid functioning in these specific areas and have the potential to impact adversely on his ability to work.”[18]
[18]Exhibit 1, p 47.
At paragraph 8.16 she noted:
“I do not consider that Mr Jones has the capacity to manage any possible future settlement of the claim because of his cognitive impairment, level of maturity and limited experience with managing money. Whilst this may be no different to the majority of his age-related peers, Mr Jones has been diagnosed with an acquired brain injury with subtle but significant cognitive impairment, executive functioning. Mr Jones’ judgment is impaired which will adversely affect his ability to understand the nature and effect of decisions about the matter. Any settlement he may be awarded should be managed by an independent trustee for at least five years while he matures. If Mr Jones applies to QCAT for a review of the management of his money, I think that a neuropsychological assessment form part of the review.”[19]
[19]Exhibit 1, p 49.
Dr Keane, in a report dated 4 April 2016,[20] addressed the issue about whether the deficits would continue beyond the five years she mentioned in her original report. It was Dr Keane’s opinion that the plaintiff would require his funds to be managed by an independent trustee and given the passage of time and information provided, he would likely require the trustee to manage the settlement fund for the long term.[21]
[20]Exhibit 1, p 83 and 84.
[21]Exhibit 1, p 84.
As a result of the issues raised concerning the quantum of administration expenses, Judge Rafter SC on 28 February 2017 ordered a joint report from Dr Keane, Dr Chalk and Dr Coyne on the issues.[22]
[22]Exhibit 1, p 127.
The conclave report is dated 7 March 2017 and is signed by the three Doctors.[23]
[23]Exhibit 1, p 93-97.
In this report Dr Coyne felt only qualified to comment from the “organic perspective” and did not think he should express an opinion in regard to the functional (psychiatric/psychological effect) of the injury. Both Dr Keane and Dr Chalk were of the view that the plaintiff’s difficulties resulted in an impaired capacity to manage settlement monies.[24] Dr Coyne was of the view that the impairment stemming only from the organic effects of the head injury was not sufficient to render him incapable of managing the settlement monies, but he deferred to the two other experts as to the functional difficulties. Both Drs Kean and Chalk were of the view the combination of functional and organic impairments rendered the plaintiff unable to manage any settlement monies.[25] It was agreed it was unlikely there would be any change in the organic component of the impairment but there was some scope for improvement in his functional capacity, but his prognosis was very guarded in light of his unwillingness to participate in treatment and this was unlikely to change in the foreseeable future.[26] They agreed that any improvement was likely to be slow and agreed that a timeframe of some ten years was in the circumstances not inappropriate.[27] It was further agreed that improvement was likely to be slow and incomplete and evaluation was imperative prior to any change in the financial management of his affairs.[28]
[24]Exhibit 1, p 94.
[25]Exhibit 1, p 95.
[26]Exhibit 1, p 95.
[27]Exhibit 1, p 96.
[28]Exhibit 1, p 95-96.
The plaintiff’s solicitors sought to clarify the conclave report with Dr Keane and as a result a file note was prepared dated 19 April 2017.[29] In this file note Dr Keane expressed the opinion:
[29]Exhibit 1, p 124-125.
(a) She was doubtful the plaintiff would have any significant improvement due to a combination of impaired insight and maladaptive coping strategies which was a consequence of both cognitive and psychological injuries.
(b) There was a 10% chance of the plaintiff obtaining capacity in the future.
(c) It was mandatory that a psychiatric neuropsychological re-evaluation take place before there is any reconsideration of capacity.
(d) The unwillingness to participate in treatment is both organic and psychological.
(e) He would benefit from Acceptance and Commitment therapy.
In cross-examination:
(a) Dr Keane agreed the reference to the 10% chance was not in the early report.[30]
[30]Transcript day 1, p 28.15.
(b) She said that the reference to 10 years in the conclave report was if there was to be improvement this would be likely within 10 years.[31]
[31]Transcript day 1, p 32.35.
(c) She thought if the anxiety did not improve in 10 years it would likely be permanent.[32]
[32]Transcript day 1, p 33.6.
(d) She agreed that these matters are very difficult to predict.[33]
[33]Transcript day 1, p 33.9.
(e) She thought it was highly likely the impairment would be permanent but she could not say with total certainty.[34]
[34]Transcript day 1, p 34.12.
(f) Further as to the 10 years in the conclave report she thought that 10 years was the earliest the money might not be managed.[35]
[35]Transcript day 1, p 35.15.
(g) She thought she and Dr Chalk may have been at cross purposes.[36]
[36]Transcript day 1, p 35.29.
(h) She thought that if there was improvement it would be likely to occur in the 10 years.[37]
[37]Transcript day 1, p 36.36.
(i) Her choice of the 10% was her clinical judgment. It was a low chance.[38]
[38]Transcript day 1, p 38.14.
(j) She denied writing a report that that the plaintiff would like to see. Her reference to 5 years in the original report was for QCAT reviews.[39]
[39]Transcript day 1, p 39.10.
(k) In reaching her views about management for the long term she agreed with Dr Coyne and her own neuropsychological assessment.[40]
[40]Transcript day 1, p 41.25-30.
(l) She agreed she relied on the solicitor’s email where it stated the plaintiff had continued to move around with no permanent address, but it was one of the factors she considered.[41]
[41]Transcript day 1, p 46.15.
(m) As to any potential inconsistency with Dr Chalk’s report and this fact she said that whilst the plaintiff told Dr Chalk as to his address he might not have been accurate, because of his head injury and he does not necessarily appreciate his own behaviour.[42]
[42]Transcript day 1, p 47.15-25.
(n) She took into account the plaintiff had taken himself to Canada between December 2013 and September 2014 for a working holiday as though this was an example of his not setting down.[43]
[43]Transcript day 1, p 49.45-50.25.
(o) She thought he was struggling.[44] His longest employment was 6 months.[45]
(p) As to the 10% point she was more comfortable with the way she had expressed matters in earlier reports.[46]
[44]Transcript day 1, p 51.40.
[45]Transcript day 1, p 52.45.
[46]Transcript day 1, p 59.7.
Defendant’s evidence
Dr Terry Coyne has provided a report dated 23 December 2015.[47] Dr Coyne expressed the opinion that the plaintiff sustained a significant closed-head injury and soft tissue injury to his cervical and thoracic spine when assaulted on 18 August 2012.[48] The head injury would be regarded as moderate in severity given the CT head scan findings of structural brain injury and his lengthy period of post-traumatic amnesia.[49] The head injury had features consistent with a residual degree of cognitive impairment.[50] He would not describe the head injury as severe but overall, considering Mr Jones’ history and documentation it would be reasonable to accept that the head injury he sustained is consistent with resulting in a degree of residual cognitive impairment although such impairment would not be expected to be marked.[51] He thought that “it would be anticipated that any cognitive impairment as a result of Mr Jones’ closed-head injury would not impair his capacity to participate in employment of a routine, structured fashion.”[52]
[47]Exhibit 1, p 74-82.
[48]Exhibit 1, p 79.
[49]Exhibit 1, p 79.
[50]Exhibit 1, p 79.
[51]Exhibit 1, p 80.
[52]Exhibit 1, p 80-81.
Dr Coyne using the AMA guides (5th Edition) assessed a 7% whole person impairment as a result of cerebral impairment subsequent to the closed head injury. His psychological condition would be best assessed by a psychiatrist.[53]
[53]Exhibit 1, p 81.
Dr Coyne, in a further report dated 11 July 2016,[54] noted:
“I acknowledge there are likely some persisting effects of the head injury sustained by Mr Jones in the subject incident on his cognitive functioning. However considering the factors outlined above, in my view these effects are not of a severity that is necessary to have any settlement managed by a trustee. I have also noted the opinion of Dr John Chalk (psychiatrist) who was of the opinion that any settlement should be managed by an independent trustee ‘for at least five years’. This if possibly a reasonable compromise. A further five years will allow Mr Jones to reach full maturity, both with respect to biological brain maturation and the acquired skills of adult life. I would not expect it likely that he would require a trustee to manage any settlement monies beyond this time.”[55]
[54]Exhibit 1, p 88-90.
[55]Exhibit 1, p 89.
Dr Coyne’s reports however should be read subject to the conclave report.
Dr John Chalk, psychiatrist has provided a report dated 2 November 2015.[56] Dr Chalk expressed the opinion that the plaintiff had suffered significant head injuries together with a variety of physical injuries in the aftermath of this assault.[57] “From a psychiatric perspective, this man had a mild neurocognitive impairment as a consequence of his organic brain injury and a secondary adjustment disorder with depressed and anxious mood.”[58]
[56]Exhibit 1, p 53-71.
[57]Exhibit 1, p 62.
[58]Exhibit 1, p 62.
He did not disagree with any of Dr Keane’s findings.[59] He thought, “I think it will have an impact on his ability to carry out day-to-day work duties and employment in the future. He would benefit in these circumstances from some treatment and ongoing support although I do not think he needs to be case managed as such.”[60] Then later he said, “I do not think that this man has the capacity to manage his financial affairs in the sense of managing a large settlement…I think the amount awarded should be managed by an independent trustee for at least five years”.[61]
[59]Exhibit 1, p 63.
[60]Exhibit 1, p 67.
[61]Exhibit 1, p 69.
In a second report dated 24 November 2015,[62] Dr Chalk did not find evidence of ongoing alcohol excess. There was some THC found on urinalysis,[63] but on my view of the oral evidence, Dr Chalk did not necessarily think this was significant.[64]
[62]Exhibit 1, p 72-73.
[63]Exhibit 1, p 73.
[64]Transcript day 1, p 70.40-71.15.
In a third report dated 13 May 2016,[65] Dr Chalk expressed the opinion that he was in basic agreement with Dr Keane, that the man would benefit from a trustee to management a settlement sum in the longer term. He thought this should be over “an extended period of time”.[66]
[65]Exhibit 1, p 85-87.
[66]Exhibit 1, p 86.
He noted:
“I note that you have asked Dr Keane about a five years horizon. Given that this man’s original injury was 2012 and we are now four years down the track I think that a degree of appropriate pessimism in regard to a maturing of his capacity is warranted and in my view Dr Keane is correct in suggesting that he will need his funds to be managed in the longer term.” [67]
[67]Exhibit 1, p 87.
In a further report dated 20 September 2016,[68] Dr Chalk stated:
“In my report of 13 May 2016 I addressed the need for Mr Jones to have any settlement funds managed by an independent trustee in the longer term. In my view this should be for a period of at least 10 years.”
[68]Exhibit 1, p 91-92.
As noted earlier the conclave report was signed on 7 March 2017.
After Dr Keane’s further report on 19 April 2017,[69] Dr Chalk signed a file note on 20 April 2017.[70] In this file note he expressed the opinion that there was a moderate chance the plaintiff’s condition would improve over time. He did not like to place a percentage chance on this. He thought management for 10 years was a conservative option. He thought Dr Keane’s view of a 10% chance of obtaining capacity was inconsistent with the view expressed at the conclave. He thought that a period of at least 10 years was the agreed period.[71]
[69]Exhibit 1, p 124.
[70]Exhibit 2.
[71]Exhibit 2.
In evidence Dr Chalk:
(a) Said that the reference to “the longer term” in his report was a 5 year time frame.[72]
[72]Transcript day 1, p 64.21.
(b) He thought that hopefully, when he was 10 years older whilst the organic component will not alter there was a capacity to mature, room for improvement and for the development of a capacity to manage matters.[73]
[73]Transcript day 1, p 65.45.
(c) He felt that he and Dr Keane had come to a conclusion that he would have capacity in 10 years’ time.[74] There would need to be a re-evaluation.[75]
(d) He agreed though there is a degree of significant uncertainty.[76]
[74]Transcript day 1, p 66.30.
[75]Transcript day 1, p 66.43.
[76]Transcript day 1, p 67.1.
In cross-examination Dr Chalk:
(a) Agreed that the plaintiff had suffered significant head injuries.[77]
[77]Transcript day 1, p 67.44.
(b) There were 2 separate interrelated deficits.[78]
[78]Transcript day 1, p 68.10-12.
(c) He agreed with Dr Keane’s assessment of 10% impairment.[79]
[79]Transcript day 1, p 68.40.
(d) He agreed he conducted his own PIRS rating of 5%.[80] One was organic and one functional.[81]
[80]Transcript day 1, p 68.46.
[81]Transcript day 1, p 69.9.
(e) He agreed that in his first report he talked of a lack of capacity to manage financial affairs for at least 5 years and then there would be a reassessment.[82]
[82]Transcript day 1, p 69.15-20.
(f) In his May 2016 report he agreed he agreed he expressed a degree of pessimism regarding maturation of capacities.[83]
[83]Transcript day 1, p 72.25
(g) He agreed his opinion changed from 5 to 10 years.[84]
[84]Transcript day 1, p 73.15.
(h) He thought there was a significant degree of uncertainty but some factors were remediable.[85]
[85]Transcript day 1, p 73.30.
(i) It could be beyond 10 years.[86]
[86]Transcript day 1, p 74.11.
(j) He accepted the words “very guarded” were used in the conclave report.[87] They were both of the view improvement was unlikely in the foreseeable future.[88]
[87]Transcript day 1, p 75.45.
[88]Transcript day 1, p 76.7.
(k) He repeated his view that there was a moderate chance of improvement and he was not as pessimistic as Dr Keane.[89]
(l) He agreed that any unwillingness to participate in treatment is contributed to by both the organic and functional issues.[90]
Submissions
[89]Transcript day 1, p 77.30-78.5.
[90]Transcript day 1, p 79.32.
Plaintiff’s submissions
In written submissions[91] the plaintiff submits:
[91]MFI A.
(a) Refers to the various medical reports concerning the injuries.
(b) Submits that by reference to Sharman v Evans[92] there should be no discounting for the vicissitudes of life.
[92](1977) 138 CLR 563 at 588 per Gibbs and Stephen JJ
(c) Submits that by reason of Malec v J C Hutton Pty Ltd[93] it is not appropriate to calculate management fees to a specific age or for a specific period.
[93](1990) 169 CLR 638 at 642-643.
(d) Submits that the evidence does not support the defendant’s contention the amount should be limited for 10 years and in this regard the defendant has not satisfied an evidential onus.
(e) Submits that the opinions of Dr Chalk (in his latest report) and Dr Keane should be accepted.
(f) Submitted that the Tribunal has determined the plaintiff has impaired capacity to manage any compensation settlement monies received in relation to the claim.
(g) That the evidential onus is on the defendant to prove only 10 years of management fees is appropriate.
In oral submissions it was submitted that there was really no need to prefer Dr Keane or Dr Chalk but if pressed Dr Keane should be preferred.
It is submitted that the amount awarded should be the amount specified in the NAB letter with, at worst, a 20% discount.
In further written submissions,[94] the plaintiff submitted that:
[94]MFI C.
(a) There is no evidence the impairment and incapacity will cease when the plaintiff is 34 years old.
(b) It is not the case where the plaintiff can simply apply to QCAT to have the administration ceased.
(c) The court should proceed on the assumption that QCAT will continue its order.
(d) On all of the evidence, it is likely the plaintiff will be under the incapacity for the rest of his life.
(e) Dr Chalk’s evidence does not lead one to a conclusion of a 77% discount.
(f) It is submitted the onus is on the defendant to prove a 10 year incapacity period.
Defendant’s submissions
In written submissions,[95] the defendant submits:
[95]MFI B.
(a) That on the medical evidence his need for funds management will cease after 10 years i.e. when he is 34 years old.
(b) The matter will return to QCAT periodically which will assess the condition and may well discharge the order.
(c) It should be borne in mind the plaintiff was able to go to Canada.
(d) Dr Terry Coyne is of the opinion there is no reason why the plaintiff cannot manage his financial affairs.
(e) Dr Chalk’s evidence should be preferred in light of Dr Keane’s recent opinion regarding the 10% chance.
(f) Dr Keane’s evidence should be rejected in light of the inconsistency in her views.
(g) The plaintiff has not discharged the onus regarding a need to have ongoing management of funds for 61 years.
In oral submissions it was submitted the court would prefer the evidence of Dr Chalk to Dr Keane as Dr Keane had not been consistent whereas Dr Chalk had.
In further written submissions,[96] the defendant submitted:
[96]MFI D.
(a) The claim for ongoing management fees is to be categorised as special or pecuniary damages.
(b) That contingencies such as ill health, unemployment, accidents etc. are not relevant in this case.
(c) The plaintiff has not proved that there is a 90% change external management will be required for the remainder of his life.
(d) There is no onus on the defendant here.
Disposition
Findings of fact
A crucial issue to be determined is whether to accept the evidence of Dr Keane or Dr Chalk. Dr Coyne is relevant to some extent but ultimately he deferred to the other two doctors on the question of functional overlay.
I consider that both Dr Keane and Dr Chalk honestly and genuinely held the views they expressed in this case. I consider there is a difference between their ultimate conclusions. Dr Keane says there is only a 10 % chance of recovery such that management is likely. Dr Chalk considers there is a moderate chance of recovery in the next 10 years.
Having heard their evidence I prefer the evidence of Dr Keane for the following reasons:
(a) I consider that the evidence of all of the doctors supports the conclusion there was a reasonably significant head injury with functional overlay.
(b) I consider it relevant that Dr Campbell thought matters had stabilised.
(c) I thought that the conclave report supported her conclusions that improvement was not likely.[97] I consider that the evidence reveals a very guarded prognosis for improvement by reason of these injuries.
[97]Exhibit 1, p 95 - reference to guarded prognosis and unlikely to change in foreseeable future.
(d) I did not think Dr Keane was inconsistent contrary to the defence submissions. It seems to me that the issue as to the management of financial affairs has only crystallised as time has progresses. The fact is Dr Keane referred to the long term in her report dated 4 April 2016.[98]
[98]Exhibit 1, p 84.
(e) I did not consider her opinion undermined concerning the cross examination on her reliance on the solicitors’ email. As Dr Keane said the lack of address for example was one of the factors she considered.[99] As she said what needs to be considered is his impaired capacity.[100] The decision involves a number of factors.[101]
(f) In any event the email is consistent with Dr Chalk’s report dated 13 May 2016[102] where Dr Chalk stated “I note in the last 2 years this man has been unable to implement structure and strategies. He has apparently a fairly choppy history of employment, his living arrangements have been unstable and he has had to borrow money from family friends and loan organisations in Canada.”
[99]Transcript day 1, p 46.15.
[100]Transcript day 1, p 50.26.
[101]Transcript day 1, p 51.25.
[102]Exhibit 1, p 86.
As to the 10 years expressed in the conclave report it is my view that perhaps the Doctors were at cross purposes. Indeed whilst the question may suggest something different (Dr Chalk’s view) the wording supports Dr Keane’s view i.e. the 10 years related to improvement in condition.
However I am less convinced as to the 10% assessment. At best this is an educated guess. On the evidence it is impossible to say in percentage what the chances are of improvement or otherwise. I am satisfied though that the longer term is far more than 10 years and could be for many more years.
As to Dr Chalk I thought it significant that in his report dated 13 May 2016[103] he considered what had happened in recent times was not reassuring and that he was pessimistic in regard to a maturing of his capacities. Yet his views seem to have changed somewhat by the time of trial. Also in the conclave report he agreed that the prognosis was very guarded and this was unlikely to change in the future.[104] I thought this more in keeping with Dr Keane’s evidence as distinct from Dr Chalk’s more recent view. I also consider relevant Dr Chalk’s concession in evidence it could be beyond 10 years.[105]
[103]Exhibit 1, p 86.
[104]Exhibit 1, p 95.
[105]Transcript day 1, p 74.11.
I therefore find on the balance of probabilities:
(a) The plaintiff has significant deficits which leads one to the conclusion that the plaintiff is unlikely to manage his financial affairs in the long term.
(b) There will need to be financial management in the long term.
(c) Whilst it is impossible to say how long this will be on the evidence it is likely to be at least 10 years and most likely many more years.
(d) The plaintiff’s further life expectancy is 61 years.
Assessment of the quantum
The starting point is that an award of damages is an attempt to put the plaintiff in the same position as he would have been in had the tort not occurred.[106] It should also be borne in mind that once damages are awarded a plaintiff is free to do what they like with them.[107]
[106]Willett v Futcher (2005) 221 CLR 627 at [51].
[107]Todorovic v Waller (1981) 150 CLR 402 at [412].
In respect of a claim for management fees in Willett v Futcher[108] it was said at [49]:
“As noted at the start of these reasons, the central issue in the appeal to this Court is what kinds of costs of managing the damages awarded to a person incapable of managing his or her own affairs, whose incapacity was caused by the defendant's negligence, are to be allowed in assessing the damages allowed to that person. The question should be answered: an amount assessed as allowing for remuneration and expenditures properly charged or incurred by the administrator of the fund during the intended life of the fund.” (My underlining).
[108](2005) 221 CLR 627 at [49].
In Malec v J C Hutton Pty Ltd,[109] it was said at page 642:
“When liability has been established and a common law court has to assess damages, its approach to events that allegedly would have occurred, but cannot now occur, or that allegedly might occur, is different from its approach to events which allegedly have occurred. A common law court determines on the balance of probabilities whether an event has occurred. If the probability of the event having occurred is greater than it not having occurred, the occurrence of the event is treated as certain; if the probability of it having occurred is less than it not having occurred, it is treated as not having occurred. Hence, in respect of events which have or have not occurred, damages are assessed on an all or nothing approach. But in the case of an event which it is alleged would or would not have occurred, or might or might not yet occur, the approach of the court is different. The future may be predicted and the hypothetical may be conjectured. But questions as to the future or hypothetical effect of physical injury or degeneration are not commonly susceptible of scientific demonstration or proof. If the law is to take account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. The probability may be very high - 99.9 percent - or very low - 0.1 percent. But unless the chance is so low as to be regarded as speculative - say less than 1 percent - or so high as to be practically certain - say over 99 percent - the court will take that chance into account in assessing the damages. Where proof is necessarily unattainable, it would be unfair to treat as certain a prediction which has a 51 percent probability of occurring, but to ignore altogether a prediction which has a 49 percent probability of occurring. Thus, the court assesses the degree of probability that an event would have occurred, or might occur, and adjusts its award of damages to reflect the degree of probability. The adjustment may increase or decrease the amount of damages otherwise to be awarded.”
[109](1990) 169 CLR 638 at 642 per Deane, Gaudron and McHugh JJ.
In my view the starting point in this case in light of the factual findings is the entire life of the plaintiff but the next issue is what discounting should occur i.e. adjustments as contemplated by Malec.
What discounting (if any) should occur
It is common ground between the parties that there would be discounting by reason of the possibility that QCAT may revoke it order. This leads to a consideration to the circumstances of this possibility.
Section 12 of the Guardianship and Administration Act 2000 (Q) (“GAA”) permits the Tribunal to make an order for an adult if it is satisfied that the adult has impaired capacity for the matter, there is need for a decision in relation to the matter and without an appointment the adult’s needs will not be adequately met or the adult’s interests will not be adequately protected.
Schedule 4 of the GAA includes the following definitions:
“Impaired capacity” for a person for a matter means the person does not have the capacity for a matter
“Capacity” for a person for a matter means the person is capable of:
(a) understanding the nature and effect of decisions about the matter; and
(b) freely and voluntarily making decisions about the matter; and
(c) communicating the decisions in some way.”
There is no doubt, given the orders made by the Tribunal, the Tribunal was satisfied that the plaintiff has impaired capacity to manage any compensation settlement monies which might be received in relation to the claim.
Section 28 of the GAA provides that the tribunal must review the appointment of a guardian or administrator at least every 5 years. Section 31 of the GAA provides as to the review process. Section 31(2) provides that the tribunal must revoke its order unless it is satisfied it would make an appointment if a new application for an appointment were to be made. Section 31(3) provides that if the tribunal is satisfied there are appropriate grounds for an appointment to continue it may continue the order or change the order.
It is important to note that s 5(d) of the GAA provides “the right of an adult with impaired capacity to make decisions should be restricted, and interfered with, to the least possible extent”.
Further, s 6 of the GAA provides:
“Purpose to achieve balance
This Act seeks to strike an appropriate balance between—(a) the right of an adult with impaired capacity to the greatest possible degree of autonomy in decision-making; and
(b) the adult’s right to adequate and appropriate support for decision-making.”
Section 7 of the GAA provides:
“Way purpose achieved
This Act—(a) provides that an adult is presumed to have capacity for a matter; and
…
(c) states principles to be observed by anyone performing a function or exercising a power under the scheme; and
…”
Section 11 of the GAA provides:
“Principles for adults with impaired capacity
(1) A person or other entity who performs a function or exercises a power under this Act for a matter in relation to an adult with impaired capacity for the matter must apply the principles stated in schedule 1 (the general principles and, for a health matter or a special health matter, the health care principle).
Example 1—
If an adult has impaired capacity for a matter, a guardian or administrator who may exercise power for the matter must—
(a) apply the general principles; and
(b) if the matter is a health matter, also apply the health care principle.
Example 2—
The tribunal in deciding whether to consent to special health care for an adult with impaired capacity for the special health matter concerned, must apply the general principles and the health care principle.
Note—
Function includes duty and power includes authority—see the Acts Interpretation Act 1954, schedule 1.
…”
Turning then to Schedule 1 of the Act, Part 1 provides:
“1 Presumption of capacity
An adult is presumed to have capacity for a matter.
2 Same human rights
(1) The right of all adults to the same basic human rights regardless of a particular adult’s capacity must be recognised and taken into account.
(2) The importance of empowering an adult to exercise the adult’s basic human rights must also be recognised and taken into account.
3 Individual value
An adult’s right to respect for his or her human worth and dignity as an individual must be recognised and taken into account.
4 Valued role as member of society
(1) An adult’s right to be a valued member of society must be recognised and taken into account.
(2) Accordingly, the importance of encouraging and supporting an adult to perform social roles valued in society must be taken into account.
5 Participation in community life
The importance of encouraging and supporting an adult to live a life in the general community, and to take part in activities enjoyed by the general community, must be taken into account.
6 Encouragement of self-reliance
The importance of encouraging and supporting an adult to achieve the adult’s maximum physical, social, emotional and intellectual potential, and to become as self-reliant as practicable, must be taken into account.
7 Maximum participation, minimal limitations and substituted judgment
(1) An adult’s right to participate, to the greatest extent practicable, in decisions affecting the adult’s life, including the development of policies, programs and services for people with impaired capacity for a matter, must be recognised and taken into account.
(2) Also, the importance of preserving, to the greatest extent practicable, an adult’s right to make his or her own decisions must be taken into account.
(3) So, for example—
(a) the adult must be given any necessary support, and access to information, to enable the adult to participate in decisions affecting the adult’s life; and
(b) to the greatest extent practicable, for exercising power for a matter for the adult, the adult’s views and wishes are to be sought and taken into account; and
(c) a person or other entity in performing a function or exercising a power under this Act must do so in the way least restrictive of the adult’s rights.
(4) Also, the principle of substituted judgment must be used so that if, from the adult’s previous actions, it is reasonably practicable to work out what the adult’s views and wishes would be, a person or other entity in performing a function or exercising a power under this Act must take into account what the person or other entity considers would be the adult’s views and wishes.
(5) However, a person or other entity in performing a function or exercising a power under this Act must do so in a way consistent with the adult’s proper care and protection.
(6) Views and wishes may be expressed orally, in writing or in another way, including, for example, by conduct.
…”
In my view, the guiding principles to be applied by QCAT are such that is desirable that a person’s affairs be not interfered with or at least to the least possible extent. The scheme of the GAA is to encourage self-reliance.
I consider the amount specified by National Australia Trustees Ltd should be discounted for the possibility that the Tribunal in the future may reverse its decision. Bearing in mind the structure of the Act, I consider that a not insignificant discount should be applied.
The fact is even on Dr Keane’s evidence it is possible the plaintiff may improve such that he has capacity within the next 10 years.
Balancing up the evidence I have accepted and the scheme of the legislation it seems appropriate to me to discount the amount sought on this ground by 33%.
The next issue is whether further discounting for other vicissitudes should occur.
In light of the defendant’s concession I do not propose to discount the amount further.
Conclusion
I therefore assess the quantum of the management fees to be paid by the defendant to the plaintiff in the sum of $196,112.35.
I give the parties liberty to apply so as to correct any calculation or as to the form of order under the slip rule.
I will hear the parties on the question of costs.