In 2003, 10 year old Rhiannon Gray sustained a traumatic
brain injury in a motor vehicle accident. Due to her injuries, she
will require constant care and will remain incapable of managing
her own affairs. Through her mother, she commenced legal
proceedings and the parties compromised the majority of her claims
for $10 million plus an amount of damages, to be assessed at a
later date, to cover the expenses associated with managing her lump
The defendant's negligence was responsible for the
plaintiff's inability to manage her lump sum award and
therefore, in accordance with the principles in Todorovic v
Waller  HCA 72, her damages should include a component
for managing the lump sum award (fund management damages).
In Gray's case, there has been significant litigation in
relation to fund management issues.
On 15 October 2014, the High Court handed down its decision and
held as follows:
The calculation of the cost of managing an incapacitated
plaintiff's damages was not a separate exercise from
calculating the value of fund management expenses as part of the
plaintiff's future outgoings. The expenses in question are not
incurred separately from the cost of fund management; they are an
integral part of that cost.
Whether the fund management expenses are reasonable is not
generally a matter of judicial discretion. The court's concern
is to ensure that the plaintiff's actual loss is compensated.
If the fund management expense component of the award reflects the
actual market conditions and is not contrary to any statutory
control then it is an expense that is a consequent of the
tortfeasor's negligence and therefore compensable.
An incapacitated plaintiff is entitled to recover from the
defendant the costs associated with managing the fund management
An incapacitated plaintiff is not entitled to recover costs
associated with managing the predicted future income of the managed
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This was an interlocutory decision about the appointment of a tutor for the child appellant, to carry on his proceedings.
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