Supreme Court New South Wales Medium Neutral Citation: Kingsman v NSW Trustee & Guardian (No 2) [2014] NSWSC 226 Hearing dates: 11 March 2014 Decision date: 12 March 2014 Jurisdiction: Common Law Before: Schmidt J Decision: 1. Judgment for the Second Defendant and the Third Defendant with respect to the Plaintiff's claim. 2. No order as to costs between the Plaintiff, Second Defendant and Third Defendant with respect to the Plaintiff's claim. Catchwords: PROCEDURE - settlement approval - notice of motion - order seeking settlement approval as against second and third defendants - settlement approved Legislation Cited: Civil Procedure Act 2005 (NSW) Damages (Infants and Persons of Unsound Mind) Act 1929 (NSW) Cases Cited: Kingsman v NSW Trustee & Guardian [2013] NSWSC 487 Porter v Le [2010] NSWSC 998 Category: Procedural and other rulings Parties: Joshua Andrew Kingsman (Plaintiff) NSW Trustee & Guardian (First Defendant) Anthony Robert Williamson & James Valenzi Isabella t/as Williamson Isabella Lawyers (Second Defendant) Roger John Downs, David Laurence Potts, Peter Chodat, Paul Dante Maganino, Mario Quintiliani & Michael John Hatfield t/as Kells the Lawyers (Fourth Defendant) Gail Whitton (Fifth Defendant) Jane Louise Kingsman (Sixth Defendant) Tony Robert Kingsman (Seventh Defendant) Representation: Counsel: Mr DJ Barnett (Plaintiff) Solicitors: Lough & Wells (Plaintiff) Ms N Polorotoff, K&L Gates (Second and Third Defendants) File Number(s): 2012/183580 Publication restriction: None Judgment 1By motion filed on 28 February 2014, the plaintiff. Joshua Andrew Kingsman, by his tutor, his grandmother Valerie Brenda Davis, seeks an order under s 76 of the Civil Procedure Act 2005 (NSW), approving a settlement of these proceedings against the second and third defendants, his former solicitors. The terms of that settlement are contained in a deed annexed to an affidavit sworn by Mr Kingsman's solicitor, Mr Trevor Wells. 2The settlement will not resolve a cross-claim brought by the first defendant, the NSW Trustee and Guardian, against the second and third defendants. It neither consented to nor opposed the settlement. 3Mr Wells explained the circumstances in which the settlement was arrived at to be that he was instructed in 2012, at a time when the applicable limitation period was shortly due to expire. Proceedings were commenced against Mr Kingsman's former solicitors for abundant caution on the advice of counsel, Mr McInerney SC, in circumstances where it was not possible to pursue investigations which would otherwise have been undertaken, before the proceedings were commenced. 4Mr Wells explained his instructions then to have been that Mr Kingsman was seriously injured in 1996 at eight years of age while riding a bicycle, when he was hit by a car. He suffered paraplegia and a significant head injury, involving oedema, subarachnoid haemorrhage, a Glasgow coma score of 10, later reduced to 8 and some 12 days of post traumatic amnesia. He was in intensive care for some 7 days. 5His mother, the sixth defendant, acting as his tutor, brought proceedings in this Court, which were settled upon approval of this Court for a sum of $1,250,000 plus costs. The settlement sum was paid into Court and then to the Public Trustee for investment in accordance with the Damages (Infants and Persons of Unsound Mind) Act 1929 (NSW), pursuant to orders made by Adams J in November 2003. The second and third defendants acted for Mr Kingsman in those proceedings. 6In May 2004, the Public Trustee asked them whether the injuries Mr Kingsman had sustained might prevent him from giving a discharge when he reached 18 years. They advised that there did not appear to have been any significant ongoing brain injury as a result of the accident and that they were not aware of any reasons as to why Mr Kingsman may not be able to receive his entitlements then. 7A house was purchased for Mr Kingsman out of the settlement moneys at Uralba Street, Figtree, New South Wales. It was transferred to Mr Kingsman shortly after he turned 18 and the balance of the settlement monies were then transferred to his bank account. He was not medically examined beforehand. His mother helped him purchase another property at Darragh Drive, Figtree, New South Wales, for cash. The fourth and fifth defendants acted as his solicitors on that transaction. 8Within days of this transaction, the Uralba Street property was transferred to Mr Kingsman's mother and his stepfather, the seventh defendant, for nil consideration. The fourth and fifth defendants acted for all parties to this transaction. Mr Kingsman received no independent legal advice. In October 2009 the Darragh Drive property was sold. The fourth and fifth defendants also acted on this transaction. 9Mr Kingsman's mother was a signatory to his bank account. Between 2006 and 2012, she withdrew in excess of $500,000 from his account. He was left impecunious, wheelchair bound, living in his car and precluded from obtaining the disability pension until 2017. 10Mr Wells deposed that when the proceedings commenced his opinion was that the involvement of the second and third defendants in that matters the subject of the proceedings in which Mr Kingsman alleges breach of various duties owed to him by various defendants, was minimal and not causative of his losses. Further investigations undertaken since the proceedings were commenced and advice since received had led Mr Wells to the view that the liability of Mr Kingsman's mother and father would be undisputed; that Mr Kingsman was at risk of not being able to establish a reasonable cause of action against the second and third defendants; that the settlement arrived at with those defendants was reasonable in the circumstances, a view which had been confirmed by junior and senor counsel; that Mr Kingsman and his tutor had instructed that the settlement should be pursued; that if the case is pursued unsuccessfully against the the second and third defendants, Mr Kingsman would then be liable for costs in the order of $100,000- $150,000, given the estimated five day hearing; and that he then would be put at risk of losing a substantial part of what he is expected to recover from the other defendants. 11Section 76 of the Civil Procedure Act provides: "76 Settlement of proceedings commenced by or on behalf of, or against, person under legal incapacity (1) This section applies to proceedings commenced by or on behalf of, or against, any of the following persons: (a) a person under legal incapacity, (b) a person who, during the course of the proceedings, becomes a person under legal incapacity, (c) a person whom the court finds, during the course of the proceedings, to be incapable of managing his or her own affairs. (2) The court may make a finding referred to in subsection (1) (c) only on the basis of evidence given in the proceedings in which it is made, and such a finding has effect for the purpose only of those proceedings. (3) Except with the approval of the court, there may not be: (a) any compromise or settlement of any proceedings to which this section applies, or (b) any acceptance of money paid into court in any such proceedings, as regards a claim made by or on behalf of, or against, a person referred to in subsection (1). (4) If an agreement for the compromise or settlement of any matter in dispute in any such proceedings is made by or on behalf of a person referred to in subsection (1), the court may approve or disapprove the agreement. (5) An agreement disapproved by the court does not bind the person by whom or on whose behalf it was made. (6) An agreement approved by the court binds the person by whom or on whose behalf it was made as if he or she were of full capacity and (if it was made by some other person on his or her behalf) as if that other person had made the agreement as his or her agent." 12The section applies to persons under legal incapacity. There is no question as to Mr Kingsman's incapacity. Mr Kingsman is represented by a tutor, his legal advisers having earlier identified the need for such representation, given his incapacity (see Kingsman v NSW Trustee & Guardian [2013] NSWSC 487 at [15]). 13The Court must scrutinise the terms of the settlement to satisfy itself that it will protect Mr Kingsman's interests. Unless positively convinced that this is established on the evidence, approval should be withheld. That requires consideration of whether there is sufficient prospect of obtaining a more favourable judgment, if the matter is pursued. 14This is not a case such as that considered in Porter v Le [2010] NSWSC 998, where there was a "fierce contest" between the parties on the question of liability, where approval was refused. Here, while the Trustee has brought a cross-claim against the second and third defendants, it does not oppose the settlement, in circumstances where Mr Kingsman's legal advisers all consider that their involvement in the events in question were not causative of the loss which he pursues. 15The advice of Mr Kingsman's legal representatives has to be given considerable weight. The claim which Mr Kingsman brought against the second and third defendants may be arguable, but that there is any real prospect of establishing causation is difficult to see in the face of Mr Well's evidence. Also to be considered is that the settlement has the advantage that Mr Kingsman will not have to bear the costs which the second and third defendants have already incurred. It will also ensure that he does not jeopardise a large part of the damages which he expects to receive from the other defendants, if the claim against the second and third defendants is pursued and fails, as his lawyers expect that it will. 16Accordingly, in all of those circumstances, I am satisfied that there is not sufficient prospect of Mr Kingsman obtaining a more favourable judgment if the claim against the second and third defendants is not settled, for approval of the settlement. The parties' settlement is accordingly approved. I order that: 1. Judgment for the Second Defendant and the Third Defendant with respect to the Plaintiff's claim. 2. No order as to costs between the Plaintiff, Second Defendant and Third Defendant with respect to the Plaintiff's claim. ********** 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: 12 March 2014