In WCB v Roman Catholic Trusts Corporation for the Diocese of Sale (No 2)  Keogh J of the Victorian Supreme Court set aside the previous settlement of a claim by a victim of child sexual abuse and considered amendments to Victorian legislation which enabled the Court to set aside previous settlements if it was just and reasonable to do so.
The decision contrasts with the Queensland Court of Appeal’s interpretation of similar amendments to the Limitations of Actions Act 1974 in TRG v The Board of Trustees of the Brisbane Grammar School.
Of significance in WCB, Keogh J identified the “very different” extrinsic materials produced by the Queensland and Victorian Legislatures as a reason for the differing interpretations of when it might be just and reasonable to set aside a previous settlement.
In WCB the plaintiff alleged that he was abused by an assistant priest between 1977 and 1980 and commenced a claim in the County Court of Victoria in 1996. Due to the issues arising from the “Ellis Defence”, the defendant to the claim was the bishop responsible for the Parish at the time proceedings were instituted (and not the bishop appointed to the Parish at the time of the abuse ).
The proceeding settled and a deed of release between the bishop and the plaintiff was entered into in November 1996. The deed barred any future claim against any Catholic institution.
The plaintiff’s evidence was that he was told by his legal representatives that he had a hard case, but there was nothing to suggest he was specifically told it was hard due to expiration of the limitation period.
Two Contrasting Speeches
In discussing the purpose of the Victorian legislative provisions, significant weight was placed on the Second Reading Speech of the Victorian Minister for Child Protection, which included the following comments:
“. . .the Bill proposes to amend the Limitation of Actions Act 1958 to allow a court to set aside past judgments and previously settled causes of action relating to child abuse concluded after a limitation period had expired, if it is just and reasonable to do so. . .
Community expectations and understanding today recognise the lifelong impact of child abuse and the key responsibility of institutions in protecting children from abuse. Where survivors faced significant disadvantage in pursuing compensation due to legal barriers such as the statute of limitations, the Ellis defence, or the deficiency of the law regarding the duty of care of organisations, settlements entered into should be set aside in the interests of justice, to allow victims to obtain compensation which is deemed adequate by today’s standards. . .
It is not necessary that the existence of the limitation period be the predominant reason as to why the agreement was entered into. There may be a number of reasons that a plaintiff entered into such an agreement, including but not limited to unequal bargaining power, barriers to identifying a proper defendant, feelings of guilt and shame compounded by the burden of giving evidence and being subject to cross-examination, or the behaviour of the relevant institution.”
The tone of these comments contrast with the statements made by the Queensland Shadow Attorney-General which were given weight in the TRG decision:
“We also believe that deeds that have been previously entered into and may have been unfairly settled due to the time limitation period and the relative lack of bargaining power for the survivor should be able to be reopened upon application to the court.
…the range of deeds that have been entered into in these circumstances is undoubtedly going to be a very wide range.
. . . you may have a person in their mid-20s who goes to an institution and alerts the institution to the abuse that has occurred and yet is told by the institution, ‘Bad luck. Your time limit’s expired,’ and there is no doubt, I am sure, that in some of those cases the institution said to the victim, ‘Here’s $1000. Sign a deed. Go away. You’ve lost your rights,’ and that was the end of the matter. I am sure that there are other deeds that have been entered into which are more complex than that and which may have been a fair dealing with the relevant person…
The mechanism that we will propose in our amendment to the legislation is that the court can, upon being satisfied that it is just and reasonable to do so, reopen the deed. That retains as best we can within this difficult area the sanctity of the arrangements of deeds which people enter into voluntarily which basically should be balanced against the fact that obviously that mechanism could be adversely used against a victim given that the victim had little or no bargaining power in the circumstance.
. . .a court will need to find that the relevant deed should be reopened and that it is just and reasonable to do so, the same phrase used by the government in relation to setting aside judgments that have already been delivered in these matters. The court has to find that and the reason for that is that these deeds could have been entered into for a variety of reasons and with a variety of consequences and I do not believe it is fair, as the private member’s bill initially proposed, to simply have a broad voiding of those deeds. I think a court needs to make that decision.”
In considering the purpose of the legislation, Keogh J rejected the defendant’s submissions that compelling reasons are required to set aside a settlement.
The grounds for an extension of a limitation period were held not to be relevant in assessing whether it was just and reasonable to set aside a previous settlement. Keogh J observed that the amendments were instead directed to address the mischief which “limitation periods, difficulties identifying a proper defendant and the state of the law regarding the duty of care of organisations, and the disadvantaged bargaining position which may result from those barriers, caused to victims of child abuse”.
In determining that it was just and reasonable to set aside the previous settlement, Keogh J found that:
Keogh J went on to consider whether the proceeding created prejudice to the defendant of such significance that it constituted an abuse of process and the claim should be permanently stayed.
In support of its submission that the proceeding should be permanently stayed, the Defendant relied on evidence from other priests and a director of Catholic Education attesting to the numerous searches of the records of the defendants and evidence that could not be located.
In determining that the claim should not be permanently stayed, Keogh J found:
There are clear differences in the extrinsic material relating to the passing of the relevant legislative amendments. The interpretation of that material by the Courts in Victoria and Queensland does seem to mean it will be easier for claimants in Victoria to set aside a previous settlement. In particular, Victorian claimants will benefit from the Court’s ability to consider the change in the law of negligence applying to institutions as a factor in favour of setting aside a settlement.
There are, however, obvious material differences in the factual circumstances of TRG and WCB which contribute to the contrasting outcomes. It is significant that no issues arose with the Ellis defence in TRG. The conduct of the mediation and counsel’s advice about likely quantum were also key issues in TRG but were not raised in WCB.
A key difference in the judgments also appears to be Keogh J’s inference that the plaintiff was told he had a “hard case” because of difficulties arising with the Ellis Defence and the expiration of the limitation period. In TRG Davis J and Fraser JA did not make such an inference in light of other factors.
Despite the different extrinsic legislative materials, WCB still assists claimants in Queensland in interpreting when it might be just and reasonable to set aside a previous settlement. It has also confirmed the high bar a defendant must reach to have a claim permanently stayed.
Brendan Ezzy – Senior Associate
  VSC 639
  QCA 190 and at first instance TRG v The Board of Trustees of the Brisbane Grammar School  QSC 157
 The defence raised in Trustees of the Roman Catholic Church for the Archdiocese of Sydney v Ellis & Anor that the Catholic Parish itself is not a legal entity available to be sued leaving only the clergy members as legal entities capable of being sued.
  VSC 639 at 153
  VSC 639 at 204
  VSC 639 at 205
  VSC 639 at 212