Supreme Court New South Wales Medium Neutral Citation: Abdul-Rahman v Kadhemi [2014] NSWSC 594 Hearing dates: 13 March 2014 Decision date: 16 May 2014 Jurisdiction: Common Law Before: Schmidt J Decision: 1. Verdict and judgment for the Plaintiff against the Defendant in the sum of $500,000.00. 2. The Defendant be at liberty to deduct from the settlement monies referred to in order 1 above, the following: (a) Medicare Charge - $1,371.55; and (b) Any money owing to Centrelink. 3. The Defendant pay the Plaintiff's party/party costs and disbursements agreed in the sum of $150,000.00 inclusive of GST within 28 days from the date of these orders. 4. The sums of $120,693.22 inclusive of GST be released to the Plaintiff's solicitor's Trust Account forthwith in payment of their solicitor/client costs and disbursements upon the Defendants paying the settlement monies to the New South Wales Public Trustee and Guardian. 5. In addition to order 4 above, the sums of $7,628.50 and $8,959.70 inclusive of GST, be released to the Plaintiff's solicitor forthwith in payment of firstly, their tax invoice dated 26 May 2010, being for costs and disbursements incurred by the Plaintiff's solicitor for the Plaintiff in criminal proceedings against Police (CAN No: H 39457132) and secondly, DIB Lawyers' invoice of 23 April 2014. 6. The Defendants to pay the balance of the settlement monies to the New South Wales Public Trustee and Guardian. Catchwords: PROCEDURE - notice of motion - order seeking settlement approval - settlement approved Legislation Cited: Civil Procedure Act 2005 (NSW) Legal profession Act 2004 (NSW Motor Accidents Compensation Act 1999 (NSW) Category: Procedural and other rulings Parties: Rabah Abdul-Rahman by his tutor Entissar Abdul-Rahman (Plaintiff) Ali Ali Kadhemi (First Defendant) Tania Daryawish (Second Defendant) Representation: Counsel: Mr M Joseph SC with Mr D Stanton (Plaintiff) Mr Williams SC (Defendant) Solicitors: Sanford Legal (Plaintiff) Vardanega Roberts Solicitors (Defendants) File Number(s): 2012/209717 Publication restriction: None Judgment 1These proceedings were commenced by statement of claim filed by the plaintiff, Rabah Abdul-Rahman, in July 2012. The defence was filed in October and in April 2013, the plaintiff's mother, Entissar Abdul-Rahman consented to act as his tutor in place of his father Mohammed. 2By motion filed on 5 March 2014, approval was sought of an agreement reached between the parties in settlement of the matter. The orders sought by consent were: "1. Verdict and judgment for the Plaintiff against the Defendant in the sum of $500,000.00. 2. The Defendant be at liberty to deduct from the settlement monies referred to in order 1 above, the following: (a) Medicare Charge - $1,371.55; and (b) Any money owing to Centrelink. 3. The Defendant pay the Plaintiffs party/party costs and disbursements agreed in the sum of $150,000.00 inclusive of GST within 28 days from the date of these orders. 4. The sum of $120,693.22 inclusive of GST be released to the Plaintiffs solicitors Trust Account forthwith in payment of their solicitor/client costs and disbursements upon the Defendant paying the settlement monies to the New South Wales Public Trustee and Guardian. 5. In addition to order 4 above, the sum of $7,628.50 inclusive of GST, be released to the Plaintiffs solicitor forthwith in payment of their tax invoice dated 26 May 2010, being for costs and disbursements incurred by the Plaintiffs solicitor for the Plaintiff in criminal proceedings against Police (CAN No: H 39457132). 6. The Defendant pay the balance of the settlement monies to the New South Wales Public Trustee and Guardian. 7. Such other orders this Honourable Court deems fit." 3The motion was supported by affidavits sworn by Mrs Abdul-Rahman, the plaintiff's solicitor, Mr Chidiac and Mr Abdul-Rahman's doctor, Dr Abdel Megeed. 4They disclosed that Mr Abdul-Rahman was very seriously injured in a motorbike accident in July 2009, when he was aged some 20 years. He was unlicensed, riding an unregistered bike with his cousin, while not wearing a helmet. He suffered head injuries, as well as injuries to his back, neck, shoulders, arms, legs and knees, with the result many months of hospitalisation and substantial ongoing consequences, which will prevent him resuming his former occupation of an excavator. He was admitted to the Lifetime Care and Support Scheme on 19 August 2011. 5Mr Abdul-Rahman was examined for medico legal purposes by a number of doctors in 2010, 2011, 2012 and 2013. The reports of the orthopaedic surgeon, neurologist, clinical psychologist, neurosurgeon and plastic and reconstructive surgeons who examined him, as well as that of an occupational therapist, were annexed to Mr Chidiac's affidavit. Those reports explain the nature and extent of the serious injuries which Mr Abdul-Rahman suffered and his poor prognosis. In her affidavits, his mother described some more recent improvement in his health. 6Liability was denied by the defendants' insurer. An expert opinion provided to the defendant by Mr William Bailey, a mechanical and biomedical engineer, was served in August 2013. In his opinion the accident occurred when Mr Abdul-Rahman attempted to overtake a car as it was turning left, with the result that the bike rammed the car. It was a low speed collision, but he was travelling faster than the car when they collided. The result was that he struck the car and fell onto the road. 7In Mr Bailey's opinion, the accident would not have occurred if Mr Abdul-Rahman had obeyed the applicable road rules, which required a left turn to be made from the far left side of the road. He did not keep a safe distance from the car and did not overtake when it was safe to do so. He would have been far less seriously injured if he had been wearing a helmet, which would have limited the effects of the impact forces and laceration to his head, with the result that he would not have sustained the skull fractures, intracranial bleeding and brain injury which he suffered. 8The defendants relied on this report as a complete defence to Mr Abdul-Rahman's claim and on this report and s 138 of the Motor Accidents Compensation Act 1999 (NSW), as providing them with a 100% contributory negligence defence. 9A mediation was conducted by Mr Christopher Hickey SC on 28 August 2013. Mr Abdul-Rahman attended with his mother. He was then represented by Mr Joseph SC and Mr Stanton of counsel, as well as by his solicitor. The defendants were represented by Mr Williams SC and their solicitor. The matter was settled for $500,000 plus costs as agreed or assessed. 10Mr Chidiac issued a tax invoice in the sum of $270,693.22 for costs and disbursements. The parties later agreed that the defendant would pay $150,000 inclusive of GST for costs and disbursement. Mr Chidiac described the negotiations over both the settlement and later the costs to have been "protracted". He also explained in his affidavit that he had agreed with Mr Abdul-Rahman and his mother that they would pay the balance of the $270,693.22. 11In the result the Court was asked to make an order deducting $120,693.22 from the settlement money, so that this payment could be made, together with costs and disbursements of $7,628.50 owing in respect of criminal proceedings in which he and Mr Stanton had appeared for Mr Abdul-Rahman. 12Mr Chidiac also deposed to having advised Mr Abdul-Rahman and his mother as to the terms of the settlement and its consequences, as well as to the appointment of a trustee and the provisions of s 77 of the Civil Procedure Act 2005 (NSW) and of their rights under the Legal Profession Act 2004 (NSW) in relation to the outstanding costs. 13In her affidavit Mrs Abdul-Rahman confirmed that they had received such advice and had decided to appoint the NSW Public Trustee and Guardian ('Trustee') as Mr Abdul-Rahman's trustee. The Trustee has accepted the appointment. She also said that they had decided not to seek an assessment of legal costs and disbursements. 14The parties' settlement is subject to the Court's approval under s 76 of the Civil Procedure Act, which 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." 15There is no question of Mr Abdul-Rahman's ongoing incapacity. 16Unless positively convinced that the evidence establishes that the settlement will protect Mr Abdul-Rahman's interests, the Court's approval of the settlement should be withheld. That requires consideration of whether there is sufficient prospect of Mr Abdul-Rahman obtaining a more favourable judgment. That requires considerable weight to be given to the advice of his legal representatives, on which his claim was settled for a figure which Mr Williams SC explained in his submissions, had somewhat exceeded what he had advised the defendant to offer Mr Abdul-Rahman. 17I am satisfied on the evidence that there is not sufficient prospect of Mr Abdul-Rahman obtaining a more favourable judgment by pressing his case against the defendants, so as to warrant approval of the parties' settlement being withheld. There is an obvious risk that Mr Abdul-Rahman will not be able to establish the defendants' liability, or that they will establish very considerable contributory negligence on his part. In the result the parties' settlement should be approved 18I was, however, concerned about the orders proposed in relation to costs and disbursements, which do not form a part of the settlement, but are in part, it appears, to be made for the benefit of Mr Abdul-Rahman's solicitor and Mrs Abdul-Rahman. 19Mrs Abdul-Rahman deposed that she understood that she and Mr Abdul-Rahman were liable for the balance of the costs and disbursements not met by the defendants; that she had the right to seek an itemised bill; that she was entitled to dispute the bill, that she had agreed to waive her rights in that respect; that she understood that the balance was to be taken out of the settlement moneys; and that Mr Abdul-Rahman would be liable for his future expenses and whatever care he might need. 20The evidence was that on the information provided to various of the medical experts, Mr Abdul-Rahman's family comes from a non-English speaking background. Neither of his parents can read or spell in Arabic. He and all of his siblings had learning difficulties and problems with reading, spelling and mathematics. He had intellectual and academic problems, even prior to his accident. Mrs Abdul-Rahman's affidavits do not deal with these matters and did not indicate that they had been prepared with the assistance of an interpreter. Mrs Abdul-Rahman was, however, present in Court with an interpreter. 21I was left with a concern that it was proposed that very considerable costs and disbursements of some $270,000 which have been incurred in proceedings which were commenced in July 2012 and resolved at a mediation in August 2013 in the circumstances outlined, would be paid out of the settlement proceeds in the circumstances I have outlined. There was no explanation in the evidence as to what those costs and disbursements comprised, on which any assessment could be made as to their reasonableness. 22I raised this concern at the hearing. Mr Joseph SC acknowledged the Court's discretion to decline to make the orders sought as to costs, even if the parties' agreement was approved. An order which would not require a costs assessment was urged, given the time and expense involved in any assessment and the difficulty which would result if the Trustee released funds to Mr Abdul-Rahman, leaving insufficient funds for payment of outstanding costs. And if no order was made, that the Trustee would take commission on the whole sum, even that portion which had to be paid for costs and disbursements. He urged that a costs order should be made, rather than the trouble and considerable expense of pursuing a costs assessment. 23The hearing was adjourned so that further information and submissions could be provided as to what was proposed in relation to costs. 24All that was initially provided was a copy of the solicitor's tax invoice. It disclosed that an unitemised account had been given for work undertaken since instructions were received. What rate had been charged for the work undertaken by the solicitor was not disclosed. Junior counsel's fees totalled $28,500 plus GST and senior counsel's $22,500 plus GST, totalling $51,000 plus GST. Legal fees totalled some $186,500 out of a total of $246,204.47 exclusive of GST, with other disbursements for medical reports, filing fees, a mediation hearing fee and other disbursements amounting to $59,704. 25The evidence did not disclose how the $150,000 which the defendants had agreed to pay was calculated. A reasonable assumption is that it included the disbursements incurred. 26It was in those circumstances that I was concerned that no proper basis had been established for an order deducting a further $120,693.22 from the settlement money for legal costs. 27Further submissions were invited to explain the basis upon which it was submitted that the orders in relation to solicitors' costs could properly be made. None were forthcoming. 28What was later provided was a further affidavit sworn by Mr Chidiac, to which was annexed a report obtained from Ms Ghania Dib, a costs consultant who had inspected and considered what had been revealed by the solicitor's file. Mr Chidiac sought a further order deducting the cost of that report, $8,959.70, from the settlement money. 29The report noted that various requirements of the Legal Profession Act 2004 (NSW) as to cost disclosure and costs agreements had been complied with; the hourly rates charged by Mr Chidiac and the solicitors, para legals, clerks and secretaries who had undertaken work for which a charge had been made; the way in which hourly charges had been calculated; and who had undertaken various work. 30Ms Dib considered that the time charged for various attendances as recorded in time sheets were fair and reasonable on a practitioner and client basis. He noted that a number of the fee earners had undertaken work at rates less than those disclosed in the fee agreement and that no charge had been made for a number of attendances. Ms Dib considered that in the circumstances of the case, it had been fair and reasonable to engage both senior and junior counsel, whose rates of charge had been fair and reasonable for the work undertaken. He also considered the disbursements incurred were fair and reasonable. In the result, in accordance with s 363 of the Act. Ms Dib concluded that it had been reasonable for the work undertaken to be performed. It was carried out in a reasonable manner; and that the total costs of $163,887.46 inclusive of GST and disbursements of $122,193,22 were fair and reasonable, given the work undertaken. 31I am satisfied that Ms Dib's report is a proper basis upon which the orders sought should be made. The same result could have been achieved had there been proper attention paid to the necessity to provide some information as to the basis upon which very considerable costs and disbursements had been incurred in the proceedings. The matters addressed in Ms Dib's report were all matters within Mr Chidiac's knowledge and could have been addressed in his affidavit and become the subject of submissions at the hearing, which could have addressed the obvious concern which I then raised. 32No doubt that, too, would have involved additional cost, but would have ensured that the resulting delay in approval of the settlement could have been avoided. 33In the result, I have concluded that a proper basis has now been established for approval of the settlement and the making of the orders sought, including in relation to the cost of Ms Dib's report. 34Accordingly, I make the orders proposed: 1. Verdict and judgment for the Plaintiff against the Defendants in the sum of $500,000.00. 2. The Defendants be at liberty to deduct from the settlement monies referred to in order 1 above, the following: (a) Medicare Charge - $1,371.55; and (b) Any money owing to Centrelink. 3. The Defendants pay the Plaintiff's party/party costs and disbursements agreed in the sum of $150,000.00 inclusive of GST within 28 days from the date of these orders. 4. The sums of $120,693.22 inclusive of GST be released to the Plaintiff's solicitor's Trust Account forthwith in payment of their solicitor/client costs and disbursements upon the Defendants paying the settlement monies to the New South Wales Public Trustee and Guardian. 5. In addition to order 4 above, the sums of $7,628.50 and $8,959.70 inclusive of GST, be released to the Plaintiff's solicitor forthwith in payment of firstly, their tax invoice dated 26 May 2010, being for costs and disbursements incurred by the Plaintiff's solicitor for the Plaintiff in criminal proceedings against Police (CAN No: H 39457132) and secondly, DIB Lawyers' invoice of 23 April 2014. 6. The Defendants pay the balance of the settlement monies to the New South Wales Public Trustee and Guardian. ********** 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: 16 May 2014