Nguyen v Sydney Children’s Hospital Network

HIS HONOUR: When aged only 14 months, Alexander Nguyen suffered a severe hypoxic-ischaemic cerebral insult at the Children’s Hospital at Westmead following an elective tracheoplasty to correct a congenital malformation of his trachea. This was performed on 7 December 2016.

Following the surgery, Alexander was extubated on 12 December 2016 and was fed by a nasogastric tube and a transpyloric tube. However, in an agitated state the next day, Alexander pulled out the nasogastric tube and substantially removed the transpyloric tube. During attempts to reinsert the tubes, the tracheoplasty wound was perforated, resulting in hypoxia, bilateral pneumothoraces, a pneumomediastinum and surgical emphysema. Attempts were made in the ward to intubate him but these attempts ruptured the tracheal wound anastomosis. He was eventually taken to theatre where his trachea was repaired. This did not occur until Alexander had suffered severe global encephalopathy.

There are four substantial allegations made against the defendant. First, the recommendation and performance of unnecessary surgery. Secondly, a failure adequately to inform Alexander’s parents that it was possible to take a wait and see approach to his condition. Thirdly, failure properly to plan for his post-operative management. Finally, unreasonable delay securing an airway after wound breakdown. An allegation of a failure to warn of the risks associated with the surgery has also been foreshadowed as a possible additional claim.

The proceedings have resolved following mediation. I am now asked to approve a settlement in favour of Alexander in the sum of $10.25M inclusive of interim payments of $800,000 and funds management, as well as statutory and other third party repayments totalling approximately $70,000. The proposal is exclusive of party and party costs. There is likely to be an application to the trustee for the payment of solicitor and client costs.

I have been provided with a detailed and helpful written opinion from Mr Graham SC who appears for Alexander. Mr Graham has provided me with his views on the range of likely damages that Alexander would recover if the matter were litigated, and the extent to which any amount offered as a compromise of the proceedings should be discounted by reference to issues of liability and the general vicissitudes of litigation. Without descending into the detail of that opinion, it is sufficient for me to observe that the proposed settlement sum falls within the range of likely or probable damages that Alexander could be expected to recover on a contested basis. Included in that assessment is the fact that Alexander has an anticipated life expectancy to only the age of 20 years approximately.

The applicable principles in an application for approval of a proposed compromise are well settled. In Elliott v Diener (1978) 21 ACTR 21, Blackburn CJ said:

I am required to form a view about whether the risk to Alexander of losing the sum certain that has been agreed is outweighed by the possibility of receiving more after a hearing.

That decision calls for an experienced judgment taking into account the sometimes unexpected or unpredictable litigious outcomes, the difficulties and problems of securing a satisfactory result on appeal, and the usually grave financial consequences if an amount proposed by way of compromise were not exceeded at trial.

Applying these principles to the present case, I consider that the proposed settlement is a satisfactory outcome for Alexander and it is in his interest for it to be approved. The risk of losing the proposed settlement sum is not in my opinion outweighed by the prospect of receiving more at trial. There are potentially grave financial consequences for Alexander and his family if the offer is rejected and he fails to do better than any offer of compromise that may be served by the defendant for this amount.

In these circumstances I will make the following orders: