Supreme Court New South Wales Medium Neutral Citation: Cabides v Commonwealth of Australia [2013] NSWSC 1221 Hearing dates: 30 August 2013 Decision date: 30 August 2013 Before: Adamson J Decision: (1) Dismiss the plaintiff's notice of motion for interim payment. (2) Order the plaintiff to pay the defendant's costs of the motion. (3) Grant liberty to the plaintiff to list the matter before the Registrar for allocation of a hearing date. Catchwords: PRACTICE AND PROCEDURE- application for interim payment- use of payment relevant to exercise of discretion Legislation Cited: - Civil Procedure Act 2005 (NSW), s 82, s 82(1), s 82(3), s 82(4), s 82(5) Cases Cited: - Dimkovski v Ken's Painting & Decorating Services Pty Ltd [1999] NSWSC 795 Category: Interlocutory applications Parties: Joel Joseph B Cabides (Plaintiff) Commonwealth of Australia (Defendant) Representation: Counsel: K Andrews (Plaintiff) PS Jones (Defendant) Solicitors: Wyatts Attorneys (Plaintiff) Australian Government Solicitor (Defendant) File Number(s): 2013/106981 Publication restriction: Nil Judgment Introduction 1The plaintiff, who was born in 1984, suffered a catastrophic injury on 18 January 2007 at Duntroon Military Academy, in the Australian Capital Territory (ACT), as a result of which he became a quadriplegic who requires ventilation. 2On 7 November 2007, the plaintiff commenced proceedings against the Commonwealth for damages in the Supreme Court of the ACT. On 27 June 2008, the defendant admitted breach of its duty of care to the plaintiff. The only issue remaining is the quantum of damages. 3On 19 March 2013 the proceedings were transferred to this Court. The motion for an interim payment The relief sought 4The plaintiff by notice of motion filed on 17 June 2013 seeks an order that the defendant pay $3m by way of advance payment of damages pursuant to s 82 of the Civil Procedure Act 2005 (Cth) (the Act). 5Pursuant to s 82(1) of the Act, the Court may, in any proceedings for the recovery of damages, order a defendant in the proceedings to make one or more payments to the plaintiff of part of the damages sought. 6It is common ground that the conditional prohibition on making an order in s 82(3) does not apply because the Commonwealth has admitted liability and that the restriction in s 82(4) on making an order is not relevant to this application. 7The discretion to make an order for interim payment in s 82(1) is also subject to s 82(5) of the Act which provides: The court may order a defendant to make one or more payments of such amounts as it thinks just, but not exceeding a reasonable proportion of the damages that, in the court's opinion, are likely to be recovered by the plaintiff. 8It is common ground that the amount sought by the plaintiff does not exceed a reasonable proportion of the damages that are likely to be recovered by the plaintiff. 9The plaintiff's needs and intentions are relevant considerations for the Court to take into account: Dimkovski v Ken's Painting & Decorating Services Pty Ltd [1999] NSWSC 795 at [7] - [9] per Adams J. The plaintiff's needs and intentions 10Since the plaintiff's accident, substantial steps have been taken to ensure that his needs are met pending the assessment of damages at a final hearing. On 18 August 2008, a deed of appointment was executed by Australian Government Solicitor (AGS) and the Public Trustee NSW, now the NSW Trustee & Guardian (NSW TAG) pursuant to which AGS appointed the Public Trustee as its agent in respect of funds which AGS deposited with the Public Trustee from time-to-time. 11On 2 October 2008, the Public Trustee executed a Deed of Trust for the purposes of establishing a trust fund from which amounts could be advanced, in its discretion, to the plaintiff for his continued monitoring, assessment, treatment and maintenance. Since that time AGS has directed interim payments totalling $6,333,645.00 be paid into the Trust Fund, the subject of the Deed. 12When the balance of the Trust Fund falls below $100,000 the NSW TAG sends to AGS a request to transfer additional amounts into the Trust Fund in order that all monthly expenses can be met and when they fall due. When it receives such a request, AGS seeks instructions from the Commonwealth to transfer additional amounts into the Trust Fund. 13From 3 October 2008 until 31 April 2013, amounts that total $5,958,704.76 have been paid to, or on behalf of the plaintiff, from those amounts held in the Trust Fund. 14From the Trust Fund, the NSW TAG makes payments, in its discretion, on behalf of the plaintiff for his expenses which includes the plaintiff's nursing care costs, totalling approximately $20,000.00 per fortnight and the plaintiff's rental accommodation costs. 15From February 2009 until May 2011, the plaintiff and his family resided at a house in Bronte for which NSW TAG routinely paid $13,904.76 per month, or $3,476.19 per week, for rent associated with this property. 16From May 2011 until approximately 17 July 2013, the plaintiff and his family resided at a house in Waverley. The NSW TAG paid $2,900.00 per week for rent associated with this property. 17In about July 2013 the plaintiff and his family moved to a house in Bellevue Hill where they currently reside. 18Additional amounts have been paid by the NSW TAG from the Trust Fund for removal costs, maintenance of the various rental properties and costs associated with any necessary adjustments to the property to ensure it is suitable for the plaintiff's needs. 19The NSW TAG also currently pays a weekly allowance to the plaintiff in the amount of $450 for general living expenses and has paid fortnightly payments to his parents in the amount of $750 for general living expenses. 20The NSW TAG has also advanced monies to the plaintiff for other expenses, including medical expenses including consultant appointments and medical disbursements, allied health professionals, the purchase of a modified vehicle, costs associated with the registration, service and cleaning of the modified vehicle, grooming and veterinary care of the plaintiff's dog, the payment of water, Telstra, Vodaphone, Foxtel and other accounts and the purchase of furniture and other household items. Any other expenses incurred by the plaintiff that fall within the scope of the Trust Deed are invoiced to the NSW TAG so that payment can be made. 21It can be seen from the summary set out above that the plaintiff's reasonable needs are presently being met. The Parties' Submissions 22Mr Andrews, who appeared on behalf of the plaintiff, identified as the principal ground in support of the application the plaintiff's desire to have a permanent home, rather than to have to rent accommodation which needed to be modified. He submitted that it was undesirable for him to receive substantial rental amounts by way of advance in circumstances where he did not know how much of those amounts would be recoverable as damages. He contended that, in circumstances where a hearing date would be at least a year away, it would be just to allow him an interim payment of $3m to buy a house in which he could reside permanently and which could be modified for his long-term needs. 23The reason for the quantum sought was that the plaintiff wishes to reside in the Eastern Suburbs where, as it happens, property prices are generally higher than elsewhere in the Sydney Metropolitan area. The reason for the plaintiff's preference is said to be that the hospital where he is treated is in that area. 24The plaintiff submitted that the purchase of a house would make it easier for his damages to be assessed because the comparison between what he needs and what he would have needed, but for the accident, would be more readily made in circumstances where he had actually purchased a house and modified it for his needs. 25The plaintiff also made complaints about the procedure that needed to be undertaken in order to obtain money from NSW TAG and instanced the irritation occasioned by the insistence on obtaining a number of quotations for basic items. I understood this to be a subsidiary issue and much less significant than his desire to purchase a residence. Furthermore there is nothing in the evidence that suggests that the manager is doing anything other than acting prudently and in the plaintiff's best interests. 26Mr Andrews considered that the hearing would take up to four weeks. He estimated that by the time the Court allocated a hearing date at the end of this year, the earliest date for a hearing of that length would be in late 2014. 27Mr Jones, who appeared on behalf of the defendant, opposed the plaintiff's application, principally on the basis that it would not be in the plaintiff's interests for monies to be advanced to permit the plaintiff to buy real estate. 28The defendant referred to the amount in excess of $8m claimed for Funds Management in the plaintiff's schedule of damages. Mr Jones referred to the following passage from the report of Associate Professor Yeo: In my previous report dated 11.2.11 I recommended Mr Cabides have the assistance of appropriate professional advice to ensure that his provided funds are appropriately allocated and generally managed in order for him to receive the essential financial support over his lifetime. The commitment involved by a financial adviser is, in my opinion, not likely to be achieved by Mr Cabides unless he has further training and expertise in funds management. The high-level tetraplegic casualty is prone to fatigue, both physically and mentally. It has been my experience that the high level tetraplegic casualty has a great deal of difficulty in maintaining concentration which is necessary to effectively management large sums of money in this present economic climate. I therefore continue to recommend that Mr Cabides has funds management assistance in order to ensure that any allocation of funds in the future will be appropriately applied for this patient's safety and well being. 29Mr Jones submitted that, in circumstances where the plaintiff was unable to manage any award of damages, it was not desirable that he makes a significant purchase without assistance of a disinterested person. 30The defendant also submitted that the assessment of damages referable to the plaintiff's accommodation needs was necessarily hypothetical since the damages awarded would represent the difference between the accommodation the plaintiff would have had but for the accident and the accommodation the plaintiff reasonably requires as a result of the accident. He submitted that both integers of that calculation were hypothetical since the house which the plaintiff might purchase would not necessarily be one that he reasonably requires. 31Mr Jones contended further that neither the Court nor the defendant is in a position to assess the suitability of any house that the plaintiff proposed to purchase in circumstances where no property has yet been identified. 32Mr Jones noted that the plaintiff had just moved house and that it had been modified to make it suitable for the plaintiff's needs and that it could be disruptive to the plaintiff to move again. He also contended that the dispute between the parties about the damages referable to this head principally related to whether the plaintiff's preference for the Eastern Suburbs was not only reasonable but also a matter for which the defendant would be accountable, or whether the plaintiff's need for suitable accommodation could be reasonably fulfilled by his residing in a less expensive location in an appropriately modified dwelling. 33Although the defendant accepted that the quantum of the interim payment sought was not unreasonable, having regard to the total value of the damages likely to be awarded, Mr Jones submitted that there would inevitably be a discrepancy between what the plaintiff was likely to be awarded for home modifications, a sum in the order of $200,000, and the interim payment of $3m for the purchase of a house, which was not, of itself, recoverable. He contended that an interim payment could cause dislocation at some future stage of amounts that would otherwise be required to be invested for future care and treatment. 34Mr Jones also identified the following matters of concern: 1 The sum sought is significantly in excess of Dr Cooke's (the plaintiff's expert) highest estimation of a new purpose-built house upon a very expensive suburban block of land. 2. There is no evidence that the provision of the accommodation proposed to be purchased would enable any better care to be provided to the plaintiff. 3. If the court were to accede to the plaintiff's application, the plaintiff may well proceed, on what may be interpreted as the Court's imprimatur, to purchase what would be a very expensive land and building package, when ultimately the Court that determines the matter may find that it is not reasonable in all the circumstances to include such a sum in any award of damages. 35The defendant submitted that to make an interim payment would have the effect of enabling the plaintiff to expend a significant proportion of his damages in the purchase of the accommodation, which may be inconsistent with the prudent management of his funds in the long-term. Reasons 36I do not consider that it would be just to make the order for interim payment and I decline to make it. Although I accept that the plaintiff wishes to buy a house in which to live with his family, I am satisfied that all his reasonable needs are currently being met by timely payments from the defendant through the trust established for his benefit. It is not necessary, before making an order pursuant to s 82 of the Act, that I endorse the use to which any interim payment is proposed to be put. Such proposed use is, however, a relevant consideration in the exercise of my discretion. It may be inconvenient for the plaintiff to live in rental accommodation until damages have been assessed on a final basis. However, there is no evidence to suggest that his current accommodation is in any way unsuitable or inadequate, or that he will not be able to live there until the determination of these proceedings. 37Although the sum sought by way of interim payment is not, in the scheme of a likely award, excessive, it is nonetheless a significant sum of money. The transaction costs of purchasing a property of the type envisaged are relatively high. It would, in my view, be in the plaintiff's interests to await assessment of his damages in order that such a substantial decision can be made in the context of knowing how much money the plaintiff will have available to him. If his claim for funds management is allowed, he will also have the benefit of an independent adviser who can assist him to spend the funds prudently in accordance with his long-term interests. Subject to one matter, I accept the defendant's submissions as to each of the three concerns to which the proposed purchase gives rise which are set out above. The one qualification is that it would be erroneous, having regard to the terms of s 82 of the Act, for expenditure consequent upon the ordering of an interim payment to be regarded as having been sanctioned by the Court, since the order is not made on conditions. 38I do not consider that it would be appropriate to order a sum lesser than the amount sought, in the circumstances set out above. 39Mr Andrews informed me that if I declined his client's application for an interim payment, he applies for expedition of the proceedings in order to reduce the delay in assessment of damages. It is not necessary that all steps required to be taken to prepare the matter for hearing be taken before a hearing date is allocated. Accordingly I grant leave to the parties to apply to list the matter before the Registrar for allocation of a hearing date. Orders 40I make the following orders: (1)Dismiss the plaintiff's notice of motion for interim payment. (2)Order the plaintiff to pay the defendant's costs of the motion. (3)Grant liberty to the plaintiff to list the matter before the Registrar for allocation of a hearing date. ********** 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: 30 August 2013