District Court New South Wales Medium Neutral Citation: Thomas By His Tutor Dorothy Jean Hinton v Howe [2021] NSWDC 106 Hearing dates: On the papers Date of orders: 1 April 2021 Decision date: 01 April 2021 Jurisdiction: Civil Before: Dicker SC DCJ Decision: (1) Pursuant to section 76 of the Civil Procedure Act 2005 (NSW), the court approves the compromise of the funds management expenses to be paid by the defendant in the sum of $220,000 ("the Sum"). (2) Pursuant to section 77(3) of the Civil Procedure Act 2005 (NSW), and subject to any order or direction of the NSW Trustee and Guardian, the Sum referred to in Order 1 be paid to Australian Unity Trustees Limited in its capacity as manager of the protected estate of Matthew Thomas. Catchwords: PROTECTED PERSON – uncontested application for approval of settlement of reserved funds management expenses – approval considered in the light of Supreme Court declaration that the plaintiff is incapable of managing his affairs and an order that his estate be subject to management under the NSW Trustee and Guardian Act 2009 (NSW) Legislation Cited: NSW Trustee and Guardian Act 2009 (NSW) Civil Procedure Act 2005 (NSW) Cases Cited: Fairhurst (bht NSW Trustee and Guardian) v Fairhurst [2012] NSWSC 388 Institoris (bhnf Maria Institoris) v Falconer [2012] NSWCA 298 Wigmans v AMP Limited [2021] HCA 7 Category: Consequential orders Parties: Matthew William Thomas By His Tutor Dorothy Jean Hinton (Plaintiff) Clare Howe (Defendant) Representation: Counsel: Solicitors: Kells (Plaintiff) Hall and Wilcox (Defendant) File Number(s): 2006/00299257 Judgment 1. This is an application under s 76 of the Civil Procedure Act 2005 (NSW) for approval of a settlement of an aspect of proceedings involving a protected person. 2. The plaintiff, Matthew Thomas, by his tutor, Dorothy Jean Hinton, sued the defendant, Clare Howe, for damages for personal injuries arising out of a motor vehicle accident which occurred on 11 September 2003 when the plaintiff was a child. After a number of days of hearing at a final hearing of the claim before Weinstein SC DCJ, the matter was referred to mediation and the dispute was settled, subject to the approval of the court. 3. On 19 August 2020 at Wollongong, I approved the proposed settlement and entered judgement for the plaintiff against the defendant in the sum of $617,462.05 "plus funds management costs as agreed or determined". Leave was granted to the parties to relist the matter before the Civil List Judge in Sydney on two business days' notice in the event that agreement could not be reached as to the quantification of funds management expenses. 4. In due course, the parties agreed to a settlement of the question of funds management expenses, subject to court approval. The agreement was reached in the sum of $220,000 for funds management expenses. 5. Before the court in support of the application for approval were the following affidavits: 1. Affidavit of Dorothy Jean Hinton dated 11 December 2020; and 2. Affidavit of David Potts dated 14 December 2020. 1. Ms Hinton is the mother of the plaintiff and brought the proceedings on his behalf in the District Court. Ms Hinton refers to negotiations about the question of funds management costs and her intention to make an application to the Supreme Court seeking the approval for Australian Unity Trustees Limited to be appointed the trustees to look after the protected estate of her son, Matthew Thomas. Ms Hinton states in paragraph 6 of her affidavit that she has been told that the total cost that Australian Unity will charge will be approximately $267,000 of fees over the life of the fund but that an agreement was accepted in the sum of $220,000 which was the maximum amount the defendant's solicitors were willing to pay towards the cost of funds management and which represented about 80% of the costs that Australian Unity will charge. Ms Hinton notes in paragraph 9 that the sum is in her view in her son's best interest as it is substantially more than the published fees of the New South Wales Trustee and Guardian. 2. Mr Potts in his affidavit annexes an expert report from Mr Corey Plover, consulting actuary, about the costs of funds management in relation to the plaintiff. In his report, Mr Plover notes that the appropriate current fees of the New South Wales Trustee and Guardian would be $151,500, the minimum viable fees for the New South Wales Trustee and Guardian would be $213,800 and that AMP & Equity Trustees and Perpetual Trustees would charge sums considerably in excess of $300,000. 3. Mr Potts notes in paragraph 18 of his affidavit that the amount of $220,000 is well over the anticipated costs to be charged by the New South Wales Trustee and Guardian, if they were to be the trustee of the estate of Mr Thomas. 4. In due course, an application was made in the Protective List of the Equity Division of the New South Wales Supreme Court. Justice Lindsay, after noting the background to the matter and referring to the evidence presented to him, declared that Mr Thomas was incapable of managing his affairs and ordered that the estate of Mr Thomas be subject to management under the NSW Trustee and Guardian Act 2009. His Honour also ordered that Australian Unity Trustees Limited be appointed manager of the estate of Mr Thomas subject to the orders and direction of the New South Wales Trustee and that, subject to any further order of the court or any order or direction of the New South Wales Trustee, all funds held in Court on the account of Mr Thomas in the proceedings number 2006/00299257 in the District Court, including accrued interest, be paid out to Australian Unity Trustees Limited in its capacity as manager of the estate of Mr Thomas. 5. After a request by the court following a review of the affidavit evidence, short written submissions were provided in relation to whether the sum proposed should be approved. It was noted that the defendant would argue in any hearing of a dispute as to the funds management fees, that the New South Wales Trustee and Guardian was available and could be appointed to the protected estate and would charge substantially less fees than the proposed settlement sum for funds management fees of $220,000. It was put in the submissions that the defendant was arguing that if the plaintiff wanted a better standard of service, or for other reasons preferred a different trustee, that was a matter for the plaintiff and the additional cost should not be visited on the defendant. 6. The plaintiff's solicitor expressed the view in the submissions that the argument of the defendant "probably will not be accepted but this is not without significant doubt. There is some risk, which is not insignificant, that this argument could find favour in a trial on the question of the cost of funds management". 7. The solicitor for the plaintiff, Mr Potts, supported the approval of the agreed sum of $220,000. The defendant did not oppose the application. The tutor supported the application. 8. There are no statutory guidelines as to the exercise of the court's discretion to approve or disapprove terms of settlement. The principle which must be applied is whether the settlement is in the best interests of the minor or the protected person: Institoris (bhnf Maria Institoris) v Falconer [2012] NSWCA 298 at [2] per Allsop P approving Fairhurst (bht NSW Trustee and Guardian) v Fairhurst [2012] NSWSC 388 at [30]-[38]. See also Wigmans v AMP Ltd [2021] HCA 7 at [112] and footnote 159. 9. Having regard to all of the evidence before the court, the orders and declarations of the Supreme Court, the support of the plaintiff's solicitor and tutor and the matters raised in the written submissions, I am satisfied that the settlement of $220,000 for the sum for funds management which was reserved in the court's 19 August 2020 decision, is in the best interests of the plaintiff. The sum recognises that there are arguments against a higher sum and in favour of a lower sum. The sum is also far higher than the fees which would be charged by the New South Wales Trustee and Guardian. In my view, therefore, the proposed settlement of the funds management fees should be approved. 10. I make the following orders: 1. Pursuant to section 76 of the Civil Procedure Act 2005 (NSW), the court approves the compromise of the funds management expenses to be paid by the defendant in the sum of $220,000 ("the Sum"). 2. Pursuant to section 77(3) of the Civil Procedure Act 2005 (NSW), and subject to any order or direction of the NSW Trustee and Guardian, the Sum referred to in Order 1 be paid to Australian Unity Trustees Limited in its capacity as manager of the protected estate of Matthew Thomas. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 April 2021