Elford, Elford & Elford, Re [1992] QSC 2

' (l 'o51 . ' i"-) IN THE SUPREME COURT OF QUEENSLAND O.S. No. 1247 of 1991 Before Mr. Justice Cooper IN THE MATTER of the PUBLIC TRUSTEE ACT 1978-1990 - and - IN THE MATTER of JAMES GREGORY ELFORD LUKE PATRICK ELFORD and REBECCA GILLIAN ELFORD REASONS FOR JUDGMENT - COOPER J. Delivered the 23rd day of January, 1992. CATCHWORDS: Counsel: Mr. McEniery for Public Trustee Mr. Williams Q.C. & T. Matthews for Elfords Solicitors: Official Solicitor to Public Trustee Dillions for Elfords Hearing date: 21 January, 1992. -- 1 of 12 -- IN THE SUPREME COURT OF QUEENSLAND O.S. No. 1247 of 1991 IN THE MATTER of the PUBLIC TRUSTEE ACT 1978-1990 - and - IN THE MATTER of JAMES GREGORY ELFORD LUKE PATRICK ELFORD and REBECCA GILLIAN ELFORD REASONS FOR JUDGMENT - COOPER J. Delivered the 23rd day of January, 1992. On 21 June, 1991 the Public Trustee was appointed the ) trustee of the damages awarded to James Gregory Elford, Luke Patrick Elford and Rebecca Gillian Elford, infants for loss of dependency consequent upon the death of their father Robert Glen Elford. Each damages award was to be administered as a separate trust fund. A question has arisen as to the proper approach to be taken by the Public Trustee as to the amount of money to be paid by the Public Trustee to Loyola Elford the mother and ·.~ guardian of the children for the welfare, maintenance and education of the said children in the proper discharge of each trust. On 20 December, 1991 the Public Trustee applied pursuant to s. 134 of the Public Trustee Act 1978 as amended for the opinion and direction of the court on the question raised. When the matter came on for hearing counsel for Mrs. Elford raised the question of my jurisdiction to hear the matter having regard to the provisions of s. 134 ( 2) of the Public Trustee Act. When I advised the parties that I had not been assigned by the Chief Justice pursuant to the section to -- 2 of 12 -- 2 discharge the duty to advise and direct the Public Trustee, the parties asked that the matter be treated as an application under s. 59(8) of the Public Trustee Act and/or s. 96 of the Trusts Act 1973 for directions from the court as to the administration of the trust funds. I am satisfied that I have jurisdiction under each of those sections to give the directions sought if I am satisfied that they ought to be made. At the date of judgment James was aged 13 years, Luke was aged 11 years and Rebecca was aged 7 years . Senior Master ) Horton Q.C. found that it was the intention of the deceased to educate his children at private Catholic schools and later at tertiary level. The learned Master assessed dependency on that basis. The deceased died on 5 September, 1983. The learned Master assessed the past dependency to judgment in the sum of $34,060.00. He awarded interest on this amount so that \ , j the award to each child under past loss and interest was $40,077.00 each. The learned Senior Master assessed current dependency in relation to each child at $101.00 per week and found that such dependency would continue for all three initially for 11 years and in relation to Luke and Rebecca thereafter for two years at $150.00 per week and thereafter for one year for Rebecca at $300.00 per week. The effect of the learned Senior Master's finding was that each of the boys were treated as being dependent until he attained 24 years and the daughter dependent until she attained 21 years. In accordance with the correct method of assessing damages the future weekly -- 3 of 12 -- ) 3 dependence was converted to a present value capital sum by applying the three per cent discount present value tables. This resulted in the following sums being awarded for future loss: James Luke Rebecca $49,355.00 $60,274.00 $70,712.00 The order appointing the Public Trustee as trustee of the funds constituting the award of damages was in the following terms:- "The PUBLIC TRUSTEE OF QUEENSLAND hold each sum paid in respect of the said infants as a separate trust fund in trust for each of the said infants until the infant on whose behalf each such sum is held shall attain the age of eighteen ( 18) years, each such fund and the income thereof to be applied in the meantime in such manner as the PUBLIC TRUSTEE OF QUEENSLAND thinks fit for the maintenance and education or otherwise for the benefit of the infant on whose behalf it is held." The terms of the trusts make it clear that as each child attains his or her majority at age 18 he or she will be entitled to call upon the Public Trustee to transfer to him or ~) her such balance on account of capital and income as remains in the hands of the Public Trustee. Mrs. Elford has sworn, and it is accepted by the Public Trustee that she has from her own funds spent in excess of $34,060.00 on each child between the date of the deceased's death and the date of judgment for the maintenance, welfare and education of that chid. Such funds have come from the private funds of Mrs. Elford. Although Mrs. Elford has sought that the Public Trustee pay to her the actual costs of maintaining and educating the -- 4 of 12 -- 4 children, which sums significantly exceeded the learned Senior Master's assessment of $101.00 per week, a direction in those terms was not pressed before me. The Public Trustee has paid, or proposes to pay the following sums in respect of each child:- James Luke Rebecca $151.00 $1 01 . 00 $100.00 In settling on those figures the Public Trustee was influenced by the findings of Lovering in a study for the Australian Institute of Family Studies "Cost of Children in Australia". Under the study in June 1991 the cost of maintaining three children in a middle income family on a weekly basis would be: James Luke Rebecca $116.23 $ 77.31 $ 61.24 The difficulty with these figures "housing, medical transport, and dental school fees and is that they exclude uniforms, child care, expenses". In assessing the dependency figures the learned Senior Master took into account these expenses, particularly those associated with a private education at a private Catholic school and later tertiary studies. In administering the trust estates certain matters must be kept clearly in mind. The award of damages is to compensate each child as far as money can for the loss of a lifestyle and education which the child could reasonably have -- 5 of 12 -- 5 expected having regard to the funds available to the deceased and the extent to which the deceased would have applied those funds to the welfare and education of the child. It is not the purpose of such an award that the funds are to stand as a capital fund accreting until the child attains 18 years. Rather, the purpose is to give the child so far as possible the welfare, maintenance and education the child could reasonably have expected by the application of the funds during the infancy of the child. The assessment of the future weekly loss of a child in terms of a present capital value is predicated on the basis that the income earned and the capital fund itself when applied over the period of dependency will together provide the weekly sum taking into account inflation over that period (see the statements of principle as applied to future economic loss in personal injuries action in Todorovic v. Woller (1981) 150 C.L.R. 402 at 424 ff; Gwydir v. Peck [1983] 1 Qd.R. 351). The learned Senior Master has therefore assessed each child's award on the basis that all children will have $101.00 per week, adjusted for inflation, for each week of a dependency period of 11 years and that at the expiration of that period so far as the child James is concerned the capital sum and interest earned will have been fully expended. The other two children can likewise expect that at the expiration of their respective dependencies their capital and interest will have been expended. Naturally the calculation is at best an arithmetic calculation which may or may not prove correct depending upon the economic circumstances prevailing during -- 6 of 12 -- 6 the relevant periods. The Public Trustee is concerned that it should do nothing to reduce the available capital to provide monthly income at the levels it presently proposes, or pay in excess of the levels it presently proposes, lest there will be insufficient funds to provide for maintenance and education for each child in the post majority years provided for by the learned Senior Master. The Public Trustee is further concerned that it should do nothing to deplete the capital of each trust fund against contingencies such as lower interest yields, significant increases in school fees, major medical ) problems and the like. Because of these concerns the Public Trustee has not paid anything to Mrs. Elford on account of the cost to her of past maintenance, welfare and education expenses for each of the children. The award of damages for past loss to each child was intended to either compensate the child for the deprivation of \J the maintenance, welfare and education that he or she could reasonably have expected if their father had lived. Where the maintenance, welfare and education is provided for the children by another, in this case their mother, pending the award of damages, in circumstances where the children had neither the means or the capacity to provide for the same, the award is not to be viewed as a capital windfall for the children. Section 59(4) of the Public Trustee Act recognises that benefits of this nature may be provided by another person to a person under disability and that such a person ought to be reimbursed. The section provides:- "(4) All money or damages paid to the Public Trustee under this section shall, subject to any general or -- 7 of 12 -- 7 special direction of the Supreme Court or a judge thereof upon application made in that behalf, be held and applied by him on trust for the person under a legal disability: Provided that in addition to his other powers as a trustee the Public Trustee shall have - (a) power to discharge or reimburse any expenses reasonably incurred by or on behalf of the person under disability." In my opinion where the sums have been expended in fact on the maintenance, welfare and education of a child, in the situation of these children, and the expense is reasonable, where the award specifically provides a component for past ,~ loss, the Public Trustee ought to reimburse the expenses incurred up to the amount actually paid but not to exceed the component in the award under the head past loss. The section does not specifically provide for the payment of interest on such sums and I would reserve my opinion on whether interest can in an appropriate case be paid. I' ) In the instant case I am of the opinion that Mrs. Elford ought to be paid the sum of $34, 060.00 in respect of each child for past maintenance, welfare and education. There is . ) \'-.__/ no issue that the money has been expended and that it was reasonably expended for this purpose. Even if I was persuaded that interest was payable on such a sum there is no material to show that the money was expended at the times and in the sums contemplated by the learned Senior Master in his computation of interest. The power conferred by s. 59 ( 4) (a) is in the nature of a power to indemnify rather than compensate. In the circumstances I propose to direct that the Public Trustee pay to Mrs. El ford the sum of $34,060.00 for -- 8 of 12 -- 8 each child in respect of moneys expended by her on them for maintenance and education between the date of death of their father and judgment. The learned Senior Master has assessed the future needs of the children. Initially he has assessed a sum of $101.00 per week each. As I have indicated above the basis of the calculation was that the income and capital would be fully expended at the expiration of the dependency period. Although the Public Trustee is right to adopt a conservative approach with an eye to preserving the capital, each of the trusts ought not be administered with a view to preserving the capital intact or substantially intact at the end of the dependency period. the intention of weekly sums he The Public Trustee ought to give effect to the Senior Master's order by paying the determined for future dependency adjusted annually for inflation. It is apparent that if the Levering figures are correct the payment for James will not cover the actual cost of maintaining and educating him. His mother will have to cover that additional cost from her own resources. However, the award is intended to cover the loss of dependency from money which would have been provided by their deceased father. The award is not to cover actual costs of maintenance, welfare and education irrespective of what would have been provided. Although there is some risk, as with all awards of damages, that future economic circumstances will be such that the income and capital are expended before the expiration of the term used for calculation, having regard to the length of -- 9 of 12 -- 9 dependency fixed by the learned Senior Master, between 11 years and 14 years, the risk, if it arises, will occur towards the end of the period when the children are more able to contribute to their own maintenance and education. If there is a short fall it will more likely than not occur during the majority of each child. The Senior Master's assessment takes account of the contingencies of life. That is, a number of the matters concerning the Public Trustee as to future contingencies which may arise are reflected in the award. Although the figure r-) awarded is calculated as a weekly figure, in reality it requires budgeting to make some provision for contingencies. This is not to say that the Public Trustee ought not to give ) favourable consideration to any major unexpected need provided it can be accommodated without rendering the fund incapable of providing the base weekly payment contemplated by the learned Senior Master's award. Now is not the time to express any view as to the payment of any unexpected future contingency. The issue does not arise until, if at all, the contingency arises and an assessment can be made as to the state of the capital fund, the future needs and the economic circumstances at the time. I make the following directions pursuant to s. 59 ( 4) of the Public Trustee Act 1978 as amended:- 1. I direct that the Public Trustee of Queensland do reimburse Loyola Kathleen Elford out of the separate trust funds established by the orders of Senior Master Horton Q. C. that sum which was assessed in respect of -- 10 of 12 -- /") ) 1 0 past loss of dependency to the date of judgment namely the sum of $34,060.00 from each fund; and 2. I direct that the Public Trustee ·of Queensland do pay to Loyola Kathleen Elford the following sums for the maintenance, welfare and education of the said children: (a) (b) (c) From the trust fund of James Gregory El ford the sum of $101.00 per week adjusted annually for inflation until the said James Gregory Elford shall attain his majority. From the trust fund of Luke Patrick El ford the sum of $101.00 per week adjusted annually for inflation until the said Luke Patrick El ford shall attain his majority. From the trust fund of Rebecca Gillian El ford the sum of $101.00 per week, or such other sum as _ assessed by the learned Senior Master as payable at the expiration of the dependency of James Gregory Elford, adjusted annually for inflation until the said Rebecca Gillian Elford shall attain her majority. and that such payments be made first from the income of such funds and in the event of such income being insufficient then from the capital of the relevant trust fund. Insofar as the Public Trustee has asked three specific questions those questions are addressed in the above reasons and the directions I have given render any specific answer to any question unnecessary. Mrs. Elford makes no application for costs of her appearance in these proceedings. -- 11 of 12 -- 1 1 The Public Trustee's right to fees and expenses in respect of the application is dealt with by s. 17 of the Public Trustee Act 1978 as amended. In the circumstances I make no order as to costs. C) ( ). "-- -- 12 of 12 --