Kelly McCann v NSW Self Insurance Group 
Supreme Court of New South Wales1
Where its provisions are open to interpretation a structured
settlement will be interpreted in favour of the injured
The claimant was an infant female who was catastrophically
injured in a motor accident on 13 September 1985. As a result of
her injuries she required constant intensive care. The claim was
resolved in 1986 with a structured settlement which provided for an
upfront lump sum payment and ongoing payment of medical expenses,
attendant care services and equipment.
A dispute arose in 2011 regarding the extent of care that was
required, partly because the claimant had a child. This dispute was
resolved between the parties and a further deed was entered in
2011. A further dispute arose regarding the provision of care,
particularly in relation to whether the insurer was obliged to pay
for nursing care and carer's admission fees when the claimant
was attending to leisure activities. The claimant commenced
proceedings seeking damages for breach of the deeds.
The Court ultimately held that, given the deeds were entered for
the purpose of providing for the ongoing medical, hospital and
support needs of a catastrophically injured person in respect of
their personal injury claim, the terms of the deeds should be
interpreted beneficially towards the claimant. Furthermore, the
Court noted that the deeds required the insurer to provide for the
claimant's "reasonable" needs and that it should be
expected that the reasonable needs would change over time. The
Court made declarations confirming the insurer's obligations to
provide for care under the deeds and awarded the claimant damages
for the insurer's breach of the deeds.
This case demonstrates the difficulty insurers face when
entering structured settlements. The Court has indicated it will
take a beneficial approach in interpreting the terms of a
settlement where such terms are left open to interpretation.
Therefore, insurers can face costs years, if not decades, later
which were beyond contemplation when a claim was settled.
The majority of such catastrophically injured claimants will now
be participants in the Lifetime Care and Support Scheme.
Nevertheless, this case remains relevant because, while damages in
the original claim were awarded under the Motor Vehicles (Third
Party Insurance) Act 1942, parties may still enter structured
settlements pursuant to s 143 of the Motor Accidents
Compensation Act 1999.
In general terms, this case illustrates the difficulties that
the Lifetime Care and Support Scheme will face in the future when
it must meet the ever changing needs of its participants. It also
serves as a general deterrent to insurers to negotiate a structured
settlement under s 143, a section that has to date attracted no
judicial consideration and appears to be rarely used by insurers to
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The failure of a party to call a witness does not necessarily give rise to an adverse inference being drawn in accordance with Jones v Dunkel (1959) 101 CLR 298. An unfavourable inference is drawn only if evidence otherwise provides a basis on which that unfavourable inference can be drawn.
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