On 30 September 2016, Justice Henry of the Cairns Supreme Court considered whether management fees were recoverable in a loss of dependency claim.[1]

Application

An Application was bought for the sanction of the Second Applicants settlement. The parties disagreed as to whether the Second Applicant was entitled to recover damages for management fees.

Background

Andrew Hill was hit and killed by a police car on 24 April 2003. Mr Hill left behind his wife (the First Applicant) and a three month old daughter (the Second Applicant). A loss of dependency claim was bought, with the First Applicant acting as Litigation Guardian for the Second Applicant. The claim was settled for $775,000.00, of which $250,000.00 was apportioned to the Second Applicant’s claim.

The issue

The issue between the parties was whether the Second Applicant was entitled to recover management fees.

The Applicants relied on the 1995 High Court case of Nominal Defendant v Gardikiotos[2]. In that case, the High Court found that management fees should not be applicable where a Plaintiff had not suffered any incapacity to manage her settlement monies. However, they also stated that the case would have been different if the Defendant’s negligence had caused the Plaintiff to suffer from a legal disability or where the Plaintiff had a pre-existing legal disability.

The Respondents sought to apply the recent Supreme Court Case of Maggs v RACQ Insurance Ltd[3]. In that case, it was held that management fees could not be recovered by a Plaintiff making a claim for loss of dependency.

Finding

Justice Henry held that management fees were recoverable. In coming to his decision, Justice Henry noted that in Maggs v RACQ Insurance Ltd, Justice Boddice referenced a number of cases, all of which came before the High Court decision of Nominal Defendant v Gardikiotos and no reference was made to Nominal Defendant v Gardikiotos. He also differentiated the case at hand to one of those relied upon by Justice Boddice and took issue with the reasoning on which the other was based.

His Honour ultimately concluded that the Second Applicants need for management fees was reasonable and foreseeable. He noted that the Second Applicant was under a legal disability when the accident occurred and thus the Respondents would have to take her as they found her. Justice Henry ordered that the matter be sanctioned for $261,309.00 comprising of $250,000.00 in damages and $11,309.00 in management fees.

What is the effect of this case?

This case reverses the position taken in Maggs v RACQ Insurance Ltd and supports the notion that a person under a legal disability will be entitled to claim management fees in Lord Campbell claims.

A copy of the decision can be found here.