From Our Desk

Prior to the Royal Commission into Institutional Responses to Child Sexual Abuse there were a number of barriers to survivors of child sexual abuse pursuing claims for damages.  This, most notably, included the expiration of statutory limitation periods, which provided a complete defence to the majority of claims that were not pursued before a survivor turned 21 years of age. Another significant barrier was the inability to pursue a claim against certain institutions as they were not considered to be a legal entity that was capable of being sued (commonly referred to as the “Ellis Defence”).

It is fair to say that, as these legal barriers could not often be overcome, and as survivors were often advised they risked receiving no compensation at all, survivors often accepted menial settlement sums from the institutions they held responsible for the abuse they had suffered. 

Following the Royal Commission, State Governments introduced legislation to try and address these barriers, including affording Courts the power to set aside previous settlements that had been entered into unfairly. 

To set aside a settlement in Queensland, a survivor needs to convince a Court that it is ‘just and reasonable’ to do so.

A recent Queensland decision^[1] found that it was not just and reasonable to set aside a previous settlement primarily because it found that the expiration of the then statutory limitation period did not have a “material impact” on the settlement.

Subsequently, in Roman Catholic Trusts Corporation for the Diocese of Sale v WCB,^[2] the Victorian Court of Appeal found that it would be “positively unjust and unreasonable” not to set aside the previous settlement where the expired statutory limitation period and the Ellis Defence had clearly impacted on the settlement. 

This decision is of assistance to survivors of child sexual abuse who entered into a settlement prior to the removal of the legal barriers as it provides an example of when those barriers have been found to materially impact on a settlement. 

The Court did, however, find that prejudice to a defendant is a consideration that must be taken into account in exercising the discretion to set aside a previous settlement.

BACKGROUND

WCB alleged he was abused by a Priest between 1977 and 1980. He commenced a claim in the County Court of Victoria in 1996. Due to the issues arising from the Ellis Defence^[3], the claim was pursued against the Bishop responsible for the Parish as at 1996 (and not the Bishop appointed to the Parish at the time of the abuse). 

The claim settled and a deed of release (“the deed”) between the Bishop and WCB was entered into in November 1996. As expected, the deed stipulated that it would act as a bar to any future claim the survivors may seek to pursue against any Catholic institution.

WCB’s evidence was that he was advised by his legal representatives that he had a “hard case”, but there was nothing to suggest he was specifically advised this was due to expiration of the limitation period or the Ellis Defence. 

At first instance, the Supreme Court ordered the deed be set aside on the basis that it was just and reasonable to do so. 

APPEAL

The defendant appealed the decision of the Victorian Supreme Court on the basis that the Trial Judge erred:

1. In the interpretation of the legislation that gave Courts the power to set aside previous settlements;
2. In exercising the discretion to set aside the 1996 settlement, including giving undue weight to factors such as the change in the law that favoured WCB, and giving insufficient weight to the interests of the defendant in maintaining the deed; and
3. In finding that any prejudice to the defendant is irrelevant to the exercise of judicial discretion to set aside the 1996 settlement.

The Court of Appeal confirmed the Supreme Court’s interpretation of the legislation that gave Courts the power to set aside previous settlements and, in dismissing the first two grounds of appeal, concluded:

1. Although it needs to be taken into account that setting aside a previous settlement disturbs the legal rights and obligations of the parties that are contained within the deed, that consideration does not require a party seeking to set aside a previous settlement to demonstrate “clear and compelling reasons for doing so”;
2. The Ellis Defence and the expiration of the statutory limitation period were recognised as being unfair and unjust by the Victorian Parliament, and were addressed by the passing of legislation that:
   • removed the limitation period;
   • required institutions to identify a legal entity to respond to claims relating to institutional abuse; and
   • gave the Court discretionary power to set aside the deed.
   • Notwithstanding the lack of evidence of such advice to him, in WCB’s case it was held that the expired limitation period and the inability to identify a proper defendant were the principle barriers to WCB succeeding in his claim in 1996 and, as a result, it would be artificial to ignore the cumulative effect of those barriers;
3. Taking into account the psychiatric evidence, which highlighted the severity of the psychiatric condition caused by the abuse, and in the absence of the above barriers, WCB would have been entitled to an award of damages substantially in excess of the settlement sum.

When considering the third ground of appeal, the Court found that consideration must be given to “whether it would be just and reasonable for the defendant to lose the protection of the terms of settlement and not be exposed to a further claim on it by the plaintiff…” and that this “would involve a consideration of whether there would be unfair prejudice to the defendant in the conduct by it of its defence from such proceedings”.^[4] 

The Court of Appeal concluded there was no material prejudice to the defendant as:

1. The defendant was first notified that WCB alleged he was sexually abused by the Priest in 1986 and was also on notice the Priest had admitted perpetrating that abuse;
2. The allegations had been investigated by Catholic entities in 1986 and 1992, the abuse had been reported to police in 1995 and the Priest was criminal charged in respect to the abuse;
3. Although the defendant submitted that relevant documents had been destroyed, the contents of available documents did not suggest other documents actually existed and the defendant was not able to identify any relevant document which was no longer available to it; and
4. Although relevant witnesses had passed away, in light of the existence of contemporaneous documents and other witnesses being available to give evidence, it was not apparent that the death of witnesses materially prejudiced the defendant.