Public Trustee v David Thompson Public Trustee v Hong Nguyen [2000] ACTSC 4 (3 February 2000)

Last Updated: 16 October 2000

Public Trustee v David Thompson

Public Trustee v Hong Nguyen

[2000] ACTSC 4 (3 February 2000)

CATCHWORDS

COURTS - Supreme Court of the Australian Capital Territory - jurisdiction - inherent jurisdiction - welfare of incapable persons.

INFANTS - damages recovered on behalf of infant held by Public Trustee - damages included sums allowed for gratuitous services - whether payment should be authorised to compensate care giver - whether payment is in best interest of child.

Public Trustee Act 1985, s 25(7)(b)

Supreme Court Act 1933, s 20

Federal Court of Australia Act 1976 (Cth), s 25

Griffiths v Kerkemeyer [1977] HCA 45; (1977) 139 CLR 161

ES and the Mental Health Act 1958 [1984] 3 NSWLR 341

Jones v Moylan (1998) Aust Tort R 81-464

Beasley v Marshall (No 4) (1986) 42 SASR 407

Kars v Kars [1996] HCA 37; (1996) 187 CLR 354

Hunt v Servers [1994] UKHL 4; [1994] 2 AC 350

Grincelis v House (1998) 84 FCR 190

Nos SC 669 and 670 of 1998

Judge: Miles CJ

Supreme Court of the ACT

Date: 3 February 2000

IN THE SUPREME COURT OF THE )

) No SC 669 of 1998

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: PUBLIC TRUSTEE FOR THE AUSTRALIAN CAPITAL TERRITORY

Plaintiff

AND: DAVID THOMPSON

Defendant

No SC 670 of 1998

BETWEEN: PUBLIC TRUSTEE FOR THE AUSTRALIAN CAPITAL TERRITORY

Plaintiff

AND: HONG NGUYEN

Defendant

ORDER

Judge: Miles CJ

Date: 3 February 2000

Place: Canberra

THE COURT ORDERS THAT:

1. In matter number SC 669 of 1998 the plaintiff pay to the defendant out of the funds held on behalf of Jason Thompson the sum of $100,000.

2. In matter number SC 670 of 1998 the plaintiff pay to the defendant out of the funds held on behalf of Lien Nguyen the sum of $150,000.

1. These are applications in which the applicant Public Trustee for the Australian Capital Territory seeks the direction of the Court pursuant to s 25(7)(b) of the Public Trustee Act 1985 (the Public Trustee Act) as to the management of certain trust funds. The proceedings in each case were brought describing the parties as plaintiff and defendant. I prefer to describe them in these reasons as applicant and respondent. In each case there is a single trust fund held on behalf of a person under the age of 18 years who recovered damages for personal injuries (the injured plaintiff). The trust fund is constituted essentially by the damages recovered, subject to payments made from the fund from time to time for the benefit of the injured plaintiff by the Public Trustee at her discretion. In each case the damages recovered by the injured plaintiff included a component calculated in accordance with the principle in Griffiths v Kerkemeyer [1977] HCA 45; (1977) 139 CLR 161, being a sum representing the value of gratuitous care provided in the past to the injured plaintiff by the respective respondent to the present application. In each case the Public Trustee seeks a direction as to whether part of the trust funds should be paid out to the respondent, and, if so, what amount.

2. A brief history of the background to each application is as follows:

Matter No 669/1998

26 May 1982	Injured plaintiff born.
17 January 1985	Injured plaintiff suffers injury.
10 April 1985	Proceedings commenced on behalf of injured plaintiff.
12 June 1998	Master approves judgment in favour of injured plaintiff for $1,250,000 clear of out-of-pocket expenses.
24 July 1998	Judgment sum paid out of court to Public Trustee.

6 August 1998	Father of injured plaintiff (respondent) makes claim on Public Trustee for $199,200 for past gratuitous care of injured plaintiff.
6 October 1998	Originating application filed.

Matter No 670/1998

15 February 1982	Injured plaintiff born.
23 October 1984	Injured plaintiff suffers injury.
17 December 1984	Proceedings commenced on behalf of injured plaintiff.
21 August 1998	Master approves judgment in favour of injured plaintiff for $1,412,500 clear of out-of-pocket expenses.
24 August 1998	Mother of injured plaintiff (respondent) makes claim on Public Trustee for $273,105 for past gratuitous care of injured plaintiff.
11 September 1998	Judgment sum paid out of court to Public Trustee.
6 October 1998	Originating application filed.

3. At the hearing of the applications counsel instructed by the Community Advocate was given leave to appear for the injured plaintiffs. The Public Trustee and the respondents were also represented by counsel. The Court is indebted to all counsel for their helpful submissions.

4. There is no doubt that the Court has the power to make orders of the nature sought. The jurisdiction conferred by s 20 of the Supreme Court Act 1933 (the Supreme Court Act), as amended in 1993 consequent upon self-government, extends to "all original and appellate jurisdiction that is necessary to administer justice in the Territory". Whilst the limits of that jurisdiction are yet to be defined (for instance the Federal Court of Australia Act 1976 (Cth), s 25, confers upon the Federal Court of Australia jurisdiction to hear and determine appeals from judgments of the Supreme Court of a Territory, including the Australian Capital Territory) there is no cause to read them more narrowly than those which existed prior to the 1993 amendments. The jurisdiction previously exercised within the Territory was similar to that exercised by the Supreme Court of New South Wales prior to 1 January 1911 within the geographical area now comprising the Territory. The jurisdiction of the Supreme Court of New South Wales was described for present purposes by Powell J in ES and the Mental Health Act 1958 [1984] 3 NSWLR 341 at 343 in a case which raises issues similar to those presently raised:

"... it is undoubtedly open to the court, in an appropriate case to authorize the making, out of the estate of a mentally ill, or incapable, person of an ex gratia payment in recognition and satisfaction, of some moral claim upon that person ..."

5. A similar, if not identical, power was also recognized by a Full Court of the Supreme Court of Western Australia in Jones v Moylan (1998) Aust Tort R 81-464. The jurisdiction was described by Wallwork J at 64,868 as follows:

"... there is an ancient protective jurisdiction to establish a regime for the conservation of funds for the benefit of an injured person under a legal disability and that the ultimate source of the power and duty to protect the interests of a disabled person lies in the role of the Crown as parens patriae. [The Court in Zanki v Morris] noted that initially the Court of Chancery had jurisdiction in respect of the estates of persons under a disability, with the Lord Chancellor acting as the delegate of the Sovereign. This is a jurisdiction which the Supreme Court of Western Australia has inherited as part of its inherent jurisdiction and specifically through s 16(1)(d) of the Supreme Court Act 1935."

6. In Beasley v Marshall (No 4) (1986) 42 SASR 407, a Full Court of the Supreme Court of South Australia appeared to doubt not the existence of the power but whether it was appropriate for the Court to exercise it, rather than leaving to the manager the decision whether or not to do what the plaintiff would be morally obligated to do if the plaintiff were not under a disability. It was said by King CJ, with whom Cox and Bollen JJ agreed at 412:

"It would be entirely inappropriate, in my opinion, for the court to require notice to be given to supposed claimants or to allow them to debate their respective claims before the court. Such a procedure would be expensive and futile. There being no legal basis for any claim by a provider of gratuitous services, there could be no satisfactory legal criteria by reference to which the court could resolve competing claims. If the manager is in genuine perplexity and feels a compelling need for the directions of the court, he should place all relevant considerations before the court, leaving the court to decide what, if any, directions it should give upon the material placed before it by the manager."

7. The Public Trustee has, in effect, done what King CJ considered to be proper and brought the two present matters before the Court. The next question is whether the power, which undoubtedly exists, should be exercised in the circumstances of the present case on the material before the Court.

8. It is necessary to say something about the nature of the damages recovered by the injured plaintiffs in respect of the cost of past gratuitous care. It is clear that in Australia damages awarded to compensate a plaintiff for incapacity after injury which represent the market value of services provided or to be provided by a gratuitous carer do not raise a trust in favour of the carer: Griffiths v Kerkemeyer, per Stephen J at 177, approved by a majority of the High Court in Kars v Kars [1996] HCA 37; (1996) 187 CLR 354. A contrary view has been taken in England: Hunt v Servers [1994] UKHL 4; [1994] 2 AC 350.

9. In Re ES, Powell J described as "more apparent than real" the conflict between the moral claim or expectation of a person who has provided gratuitous services and the overriding responsibility of the manager of the plaintiff's fund to ensure that its administration serves the best interests of the plaintiff. His Honour stated that a liberal view ought to be taken as to what is in the best interests of the plaintiff and that, in the circumstances of the case before him, "full play should be given to family considerations".

10. I respectfully agree with Powell J. Similar considerations apply in the present applications.

11. The circumstances of the event in which injury was received by Jason have not been made known to the Court. In the action brought through his mother as next friend, liability was admitted. Thus, in approving the settlement of his claim, I expect that the Master took into account that there should be a negligible discount for liability. In a written advice of counsel, presumably based on facts that could be proved, the serious injuries to Jason's head were stated to have resulted in backwardness at school and behavioural problems going so far as to suggest that he is unemployable. By the time of counsel's advice, Jason and his younger brother (who also has behavioural problems) were in the care of their father, the present respondent. It was alleged that the father gave up full-time work in order to look after Jason, to whom he has devoted and continues to devote five hours a day, seven days a week, which for 13.3 years at a commercial rate of $15 per hour gives a figure of approximately $363,000, without allowance for tax. At $525 per week, it appears to exceed the father's income from his employment as an abattoir worker and in other occupations.

12. Among the major components of damages likely to be recovered by Jason, counsel assessed likely general damages between $125,000 and $150,000 and loss of earning capacity between $250,000 and $400,000. Realistically, counsel advised that it was unlikely that there would have been much additional gratuitous care necessitated by Jason's injuries until the child was about 10 years of age. On that basis the component of the damages for the five or six years of gratuitous care from age 10 to the date of the hearing before the Master was about $125,000 ($500 x 50 x 5) to $150,000 ($500 x 50 x 6). From then to the present would be about $40,000, making a total of about $165,000 to $190,000. Jason's father's estimate of the value of his care to date in the present proceedings was originally $199,200. He now limits that estimate to $100,000. In the light of the facts sworn to in his affidavit that is a modest estimate.

13. Lien suffered injury when she ran out onto the roadway and was struck by a passing vehicle. Her injuries include brain damage. Proceedings were commenced through her next friend, her father. Liability was not admitted. Thus in the negotiations for settlement of her claim there was a real question of compromise because of questions of liability. When the matter came before the Master, it was noted that the insurer had already paid more than $85,000 in respect of out-of-pocket expenses. The medical evidence available to counsel suggested that remunerative employment for Lien was likely to be available only in a sheltered workshop and it was estimated that damages for loss of earning capacity were between $400,000 and $500,000 and general damages between $150,000 and $200,000.

14. Counsel's advice suggested an award for gratuitous care, past and future, of between $150,000 and $273,105, together with interest thereon (subject to the still pending hearing by the High Court of the appeal from the Federal Court in Grincelis v House (1998) 84 FCR 190) of between $41,100 and $74,830. Counsel's assessment for future gratuitous care was $200,000 to $356,317. These assessments were somewhat speculative because there was little before counsel to provide evidentiary proof of the time spent in care, or of the nature of the care given. The assessment included an assumption that in the previous five years and in the future the parents between them spent and would spend two hours of care per day attending to the plaintiff's injury. On that basis counsel estimated the likely damages overall at between $1,110,000 and $1,610,000, so that the acceptance of the offer of $1,412,000 was considered clearly to be in the child's best interest. The proposal is that the respondent, Lien's mother, Hong Nguyen, be paid on her own behalf and on behalf of her husband, the sum of $150,000 for past care, which again, in the circumstances is a modest sum.

15. As far as both injured plaintiffs are concerned, it is, in my view, in their best interests that family life be preserved as far as possible, for as long as it may remain harmonious. Bearing in mind that both injured plaintiffs turn 18 years of age this year, there are substantial prospects that, unless the Guardianship Tribunal makes an order for management of property, there will be no obstacle to their assuming control of all of the funds now with the Public Trustee. They may, or may not, be disposed towards discharging the moral obligation to reimburse their parents for past and present continuing gratuitous services. It would be greatly to their disadvantage if harmonious relationships within the family and within the household were disrupted because of any lack of appreciation on their part that the funds available contain substantial components which represent the value of gratuitous past care on the part of their parents. It is more likely that each family would continue in harmonious relationship, and therefore that it would be in the best interests of each of the injured plaintiffs, if their parents were compensated for their gratuitous care by payment of a part, although a substantial part of those monies held on behalf of the injured plaintiff which were included in the judgment sum, to represent the cost of that care if provided on a commercial basis.

16. In the circumstances, I make the following orders.

(i) In matter number SC 669 of 1998 I order the plaintiff to pay to the defendant out of the funds held on behalf of Jason Thompson the sum of $100,000.

(ii) In matter number SC 670 of 1998 I order the plaintiff to pay to the defendant out of the funds held on behalf of Lien Nguyen the sum of $150,000.

17. Whatever be the ultimate decision of the High Court in Grincelis v House, I do not think it appropriate that I exercise the discretion to order payment out of any amount to represent interest on any sum which may be taken to represent all or part of the commercial value of the gratuitous care rendered by either of the defendants.

18. So far as the costs of the present applications are concerned, I shall hear counsel if they wish to be heard. Otherwise all parties are to pay their own costs.

I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, the Chief Justice.

Associate:

Date: 3 February 2000

Counsel for the plaintiff: Mr R Crowe

Solicitor for the plaintiff: Public Trustee for the Australian Capital Territory

Counsel for the defendants : Mr G A Stretton

Solicitor for the defendants: Ken Johnston Bedford & Co

Counsel for the Community Advocate: Mr R Bayliss

Solicitor for the Community Advocate: ACT Government Solicitor

Date of hearing: 18 August 1999

Date of judgment: 3 February 2000