For the Defendant - December 2016

Welcome to the latest edition of our newsletter to keep our clients up to date with the latest developments in personal injury and insurance law in Queensland & what they mean for you.

Fund Management Fees Recoverable for Child Dependants

We recently received judgment in the matter of Case & Anor v Eaton & Anor [2016] QSC 239.

Justice Henry’s reasons contain a thorough analysis of a controversial decision covered in a previous edition of For the Defendant: Maggs v RACQ Insurance Limited [2016] QSC 041.

 Background: Maggs v RACQ

In Maggs, Boddice J held that the statutory entitlement of child dependants under the Civil Proceedings Act 2011 (Qld) to damages for losses suffered as a consequence of their parent/s’ death does not extend to fund management fees.

 Boddice J reasoned that the need for such fees to be paid to a dependent child arises after the death of a deceased rather than as a result of it.

The ruling in Maggs was poorly received by the legal community and resulted in a request from the Law Society that the Attorney-General amend the CPA to allow these fees to be recovered.

Case v Eaton

In Case, Justice Henry was, “not prepared to follow” the decision in Maggs.

His Honour considered the decision in Nominal Defendant v Gardikiotos (1995) 186 CLR 49, where the High Court clarified the circumstances in which a plaintiff may recover fund management fees in a claim for damages for personal injuries. This entitlement extends to plaintiffs who require assistance in managing their settlement funds due to being, “…intellectually impaired as a result of the defendant’s negligence or by reason of some pre-existing disability.”

Children are under a legal disability, namely their age, which gives rise to the need for another to manage their money until they are of age. Pursuant to s 59 of the Public Trustee Act 1978 (Qld), there is a requirement that the compromise of their claims be sanctioned.

In Case, the plaintiff was three months old when her father died. His Honour therefore found that her age was, “…a pre-existing disability. The defendant must, in that sense, take the plaintiff as it found her – a minor whose need for assistance in managing any fund awarded was foreseeable at the time of her father’s death and occasioned by the same event entitling her to such an award.”

Our comment

There is no Court of Appeal authority which considers the conflicting decisions in Case and Maggs. That being said, Justice Henry had the benefit of being able to consider Maggs and also considered the important High Court decision of Gardikiotos, which remains good law. Case is currently the best authority on this head of damages in Queensland.

Costs Provisions Don’t Conflict

In Clapham v Butler & Anor No. 2 [2016] QDC 286, his Honour Judge Andrews SC considered the appropriate costs order where the judgment sum was more favourable to the defendant CTP insurer than both its MFO and higher formal UCPR offer made when proceedings were on foot.

Between the compulsory conference and trial, the insurer obtained evidence of a pre-existing injury. This evidence significantly affected the plaintiff’s award for damages. Nonetheless, the plaintiff still elected to refuse the insurer’s larger UCPR offer prior to trial.

The issue was whether the plaintiff should pay costs from the date proceedings commenced, pursuant to the MAIA, or from the date of the insurer’s later offer, pursuant to the UCPR.

The plaintiff submitted that r 361 of the UCPR conflicts with s 55F of the MAIA with the result that, when a party elects to make an offer under r 361 subsequent to making an MFO under the MAIA, the formal UCPR offer should prevail, subject to the court not being satisfied that another order for costs is appropriate in the circumstances.

His Honour found there was no conflict between the statutory regimes, with the MAIA governing pre-proceedings offers and the UCPR concerning offers made after proceedings have commenced.

Judge Andrews was satisfied the making of the UCPR offer did not affect the merits of the plaintiff’s refusal of the earlier MFO. Pursuant to the MAIA, his Honour thus ordered the plaintiff to pay the insurer’s costs on the standard basis from the date proceedings commenced.

Practical significance

Given the costs protection the insurer’s MFO provided in Clapham, this decision highlights the benefits of making competitive MFOs at the compulsory conference stage.

Workplace Sexual Harassment Claim Fails

In Polichronis v Teys Australia Food Solutions Pty Ltd [2016] QDC 225, a food-processing factory worker sued her employer for psychiatric injury allegedly sustained as a result of a workplace sexual assault committed by one of her co-workers.

Witnesses corroborated neither the plaintiff’s account of the assault nor her claims that she reported the incident to her supervisor.

The employer’s policy for addressing such claims, though rudimentary, was not found to breach its common law duty of care. The plaintiff admitted she was aware of the policy to report the incident to her supervisor and simply failed, on the evidence, to do so.

The specialist evidence of the plaintiff’s psychiatrist Dr Nadam, who attributed her PTSD to the assault, and the defendant’s expert Dr Kar, who diagnosed a borderline personality disorder resulting from an abusive childhood, was diametrically opposed.

Judge Dick ultimately preferred the evidence of Dr Kar because his findings were based on a more detailed and accurate account of the plaintiff’s psychiatric and developmental history.

Judgment was therefore entered for the defendant with no order as to costs.