Supreme Court New South Wales Medium Neutral Citation: Linus Basch by his tutor Christoph Basch v AAI Limited t/as GIO Insurance [2021] NSWSC 1275 Hearing dates: 30 September 2021 Date of orders: 30 September 2021 Decision date: 30 September 2021 Jurisdiction: Common Law Before: Cavanagh J Decision: (1) I order judgment for the plaintiff in accordance with the consent orders signed by the parties. (2) I direct the defendant to pay the settlement monies to the plaintiff's solicitors for them to deduct payments owed to the three identified Germany insurers in the amounts nominated. (3) I direct the plaintiff's solicitors to forward the balance of the settlement monies after deductions to the plaintiff's tutor and financial guardian for investment in accordance with the relevant provisions of Germany law. (4) I order the defendant to pay the agreed sum for costs to the plaintiff's instructing solicitors. Catchwords: CIVIL PROCEDURE – Proceedings brought by persons under legal incapacity – Settlement of proceedings – Court Approval Legislation Cited: Civil Procedure Act 2005 (NSW) Motor Accidents (Lifetime Care and Support) Act 2006 (NSW) Category: Principal judgment Parties: Linus Basch by his tutor Christoph Basch (Plaintiff) AAI Limited trading as GIO Insurance (Defendant) Representation: Counsel: A Stone SC (Plaintiff) K Rewell SC (Defendant) Solicitors: Schweizer Kobras (Plaintiff) Moray & Agnew Lawyers (Defendant) File Number(s): 2019/16324 Publication restriction: Nil REVISED EX TEMPORE Judgment 1. This matter comes before me today for the purposes of an approval of the settlement of the plaintiff's claim for personal injuries under s 76 of the Civil Procedure Act 2005 (NSW). Mr Andrew Stone SC appears for the plaintiff and Mr Keith Rewell SC appears for the defendant. I was provided with extensive material prior to the haring, which I have considered. 2. The plaintiff will shortly turn 24. He sustained injuries in an accident whilst on holidays in Australia in January 2017. At the time, he was travelling in a motor vehicle with his girlfriend, Victoria, when they were involved in an accident. Sadly, Victoria suffered fatal injuries. 3. The plaintiff suffered a significant traumatic brain injury as well as significant physical injuries. 4. The plaintiff is a German national. He remained at Canberra Hospital for a period of three weeks. He was then medically repatriated to Germany. 5. The plaintiff was admitted into the NSW Lifetime Care and Support Scheme on 26 March 2018 being 14 months after the accident. He has subsequently been made a permanent member of the Lifetime Care and Support Scheme. This is a scheme operated under the Motor Accidents (Lifetime Care and Support) Act 2006 (NSW) which provides payment of care and treatment expenses on an ongoing basis to persons who qualify for those benefits. The plaintiff will continue to qualify and receive those benefits even though he will continue to reside in Germany presumably on a long term basis. 6. The result of the plaintiff being a member of the Lifetime Care and Support Scheme is that the damages to which he would be entitled would not include an allowance for the costs of care or future treatment. He may be entitled to some allowance for past voluntary care and any treatment expenses which were incurred prior to admission into the Scheme. 7. It follows that, unlike damages claims which might have been pursued before the introduction of the Lifetime Care and Support Scheme, the amounts that can be recovered are generally limited to amounts for pain and suffering and loss of income as well as other special damages which might be for additional accommodation, travel and transport, funds management and future financial management. 8. In a sense, this explains why in a case such as this, the potential of the claim is not as high as it might have been under the old system, bearing in mind that persons who were catastrophically injured were previously awarded significant sums for care on an ongoing basis. 9. The plaintiff commenced these proceedings against the defendant as the compulsory third party insurer of the driver at fault. He pursues the proceedings through his tutor, his father, Christoph Basch. 10. The defendant admitted liability and the only issue between the parties related to the assessments of damages. 11. The matter proceeded to mediation and although the matter did not settle at the mediation, it settled thereafter (subject to court approval) in the sum of $4 million plus costs. 12. In support of the application for approval, the plaintiff relies on an affidavit of the tutor, Christoph Basch, dated 16 September 2021 as well as two affidavits of the solicitor for the plaintiff, Fiona Henderson, dated 30 August and 8 September 2021. 13. In addition, I am in receipt of a confidential advice of Senior Counsel for the plaintiff. Mr Stone recommends the settlement and explains the basis for it in a comprehensive manner. 14. As Mr Stone also indicated, when the matter came on before me today for the purposes of the approval application the plaintiff has received the maximum amount to which he would be entitled for pain and suffering or non-economic loss and close to the maximum in respect of economic loss. Of course, as might be expected, there has been some compromise on account of economic loss but, on my analysis, it is not a significant compromise. 15. The plaintiff is nearly 24. At the time of his accident he was just beginning his post-school life. He was between school and university and was having a holiday in Australia as so many young people do. 16. The effects of the accident on him have been catastrophic. He now needs extensive care. There is a doubt as to what work he may be able to do in the future. He is cared for by his parents and I understand from the evidence that he has a very close relationship with his parents. In addition, he receives other care. 17. As set out in the advice of Mr Stone and the affidavits of Ms Henderson, the settlement includes a payment of $590,000 for general damages (which is the maximum) and $1.3 million for future loss of earning capacity. 18. The sum of $4 million includes an allowance for tax liability on the claim for future loss of potential earning capacity in the sum of $600,000. Unlike in Australia, when the plaintiff receives the lump sum, he will be subject to tax and be required to complete a tax return disclosing receipt of the sum that has been allowed for future loss of earning capacity. 19. In any event, the defendant has allowed for that in the amount of money which was offered to the plaintiff and the plaintiff's calculations of what he should receive thus reflect the fact that the defendant has agreed to and has paid that sum. 20. Of course, it is difficult for the parties to have predicted what the plaintiff might have done with his career but for the accident but again, I understand that the allowance for future loss of earning capacity is towards the top end of a realistic range. 21. I have had regard to the affidavit of the plaintiff's tutor. It is clear that the benefits of the settlement and the nature of the settlement as well as the plaintiff's entitlement to have support from the Lifetime Care and Support Scheme have been explained to him. He is aware of the amount that the plaintiff will receive in net terms after payment of all expenses. He has provided an acknowledgement that this is a once and for all settlement subject to the Lifetime Care and Support Scheme. 22. Further, he says that he will be managing the balance of the settlement funds which will be placed into an account on behalf of his son which he and his wife will operate as guardian and financial manager. He points out that under Germany's guardianship arrangements he has a legal obligation to only spend that money for the purposes of the plaintiff's health and welfare, and that he is required to provide an annual account to the Court in Germany of all expenditure. 23. I am satisfied that this is an appropriate arrangement having regard to what appears to be a very close relationship between the plaintiff and his father, and the very significant support which has been and will continue to be provided by both the plaintiff's mother and father. 24. In the circumstances it seems to me that the plaintiff has done just about as well as he possibly could have in terms of the amount of the settlement and I am satisfied that the settlement is appropriate. 25. Of course, the Civil Procedure Act does not provide any guidance as to the considerations that the Court should take into account in determining whether to approve the settlement but the Court's function is essentially protective. 26. The settlement should be approved provided that it is beneficial to the interests of the plaintiff. In my view, this is a settlement which is beneficial to the plaintiff's interests. I am also satisfied that all steps have been taken to ensure that the money is adequately protected and will be used appropriately. 27. In the circumstances, the settlement is approved. I make the orders set out in the consent orders which have been signed by the parties. 28. I order judgment for the plaintiff in accordance with the consent orders signed by the parties. 29. I direct the defendant to pay the settlement monies to the plaintiff's solicitors for them to deduct payments owed to the three identified Germany insurers in the amounts nominated. 30. I direct the plaintiff's solicitors to forward the balance of the settlement monies after deductions to the plaintiff's tutor and financial guardian for investment in accordance with the relevant provisions of Germany law. 31. I order the defendant to pay the agreed sum for costs to the plaintiff's instructing solicitors. ********** 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: 08 October 2021