Bushby (by his litigation representative Webling) v State of Victoria

Federal Court of Australia|2023-04-05|Before: McEvoy J

The requirement in r 9.71(2)(c) of the Federal Court Rules 2011 (Cth), that the interlocutory application be accompanied by an opinion of a lawyer who is "independent", be dispensed with.
Pursuant to r 9.70 of the Rules, the settlement of these proceedings, as set out in the Deed of Settlement marked as Annexure "JW-1" to the affidavit of Julie Webling, affirmed 15 March 2023, be approved.
Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), on the ground that the order is necessary to prevent prejudice to the proper administration of justice, Annexures "JW-1" and "JW-2" to the affidavit of Julie Webling, affirmed 15 March 2023, be treated as confidential to the parties to this proceeding and until further order: (a) be marked as confidential to the parties on the Court's Electronic Court File; and (b) not be available for public inspection, disclosed in open court or disclosed in the open part of any court transcript.
Pursuant to r 26.12(4) of the Rules, the applicant have leave to file a notice of discontinuance on terms that the parties bear their own costs.
There be liberty to apply in relation to any matters arising out of these orders. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

MCEVOY J: 1 Before the Court is an interlocutory application dated 15 March 2023 seeking orders for the approval of the settlement of this proceeding as set out in the Deed of Settlement exhibited to the affidavit of Ms Julie Webling, the applicant's litigation representative, affirmed on 15 March 2023. Ms Webling has applied for approval of the settlement of the proceeding pursuant to rr 9.70 and 9.71 of the Federal Court Rules 2011 (Cth). Certain orders are also sought pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) that the Deed of Settlement and an advice from counsel dated 14 March 2023 (which is also exhibited to Ms Webling's affidavit) be treated as confidential to the parties to the proceeding. 2 In addition to Ms Webling's affidavit the application is supported by an outline of written submissions dated 3 April 2023. The application is consented to by the respondent, the State of Victoria (Department of Education and Training). 3 The Court having considered the above material, the parties were informed on 5 April 2023 that if they wished the application could be determined on the papers pursuant to s 20A of the Act. The parties agreed to the adoption of this course and orders in the terms sought were made that day. My reasons for those orders are as follows.

THE PROCEEDING 4 The proceeding concerns the applicant, Jake Bushby, who suffers from Autism Spectrum Disorder (ASD), intellectual disability, dyspraxia, fine and gross motor delay, severe language disorder and slow transient constipation, all "disabilities" within the Disability Discrimination Act 1992 (Cth) (DDA). Jake alleges that the respondent unlawfully discriminated against him in contravention of the DDA, the Australian Human Rights Commission Act 1986 (Cth) and the Charter of Human Rights and Responsibilities Act 2006 (Vic). 5 The discrimination is alleged to have occurred while Jake was a student at Southern Autistic School (SAS), a specialist developmental government school dedicated to the education of children with ASD which was operated by the respondent. The discrimination is alleged to have occurred between February 2006 and May 2019. Generally speaking it is claimed that Jake was given a substandard education, was not taught skills that he needed to be taught, and was banned from some school activities. 6 Jake sought a declaration of unlawful discrimination and orders for damages and other relief against the respondent. The damages sought included past and future economic loss, and were calculated on Jake's income earning potential had he not suffered from the alleged unlawful discrimination. 7 The respondent denies liability, contending that the evidence does not come close to establishing the relevant claims to the requisite standard. Significantly, it makes the point that general evidence about SAS of the kind filed, divorced from the specific claims of discrimination against Jake, is irrelevant and inadmissible. 8 The parties having agreed to settle the proceeding it is necessary to consider whether the settlement should be approved.

Relevant principles 9 Rules 9.70 and 9.71 of the Rules provide: 9.70 Compromise or settlement of matter in proceeding (1) If a litigation representative agrees to the compromise or settlement of any matter in dispute in a proceeding, the litigation representative must apply to the Court for approval of the agreement. (2) If the Court approves the agreement, the agreement is binding on the person by or for whom it was made as if: (a) the person were not under a legal incapacity; and (b) the litigation representative had made the agreement as the person's agent. (3) The Court may, as a condition of approval, require that any money or other property payable for the benefit of a person under a legal incapacity be dealt with by way of a settlement, or in any other way that the Court considers appropriate. Note: The Court may give approval subject to conditions - see rule 1.33. (4) If the Court does not approve the agreement, the agreement is not binding on the person under a legal incapacity. 9.71 Application by litigation representative for approval of agreement (1) An application by a litigation representative for approval of an agreement must be made by filing an interlocutory application. (2) The interlocutory application must be accompanied by the following: (a) an affidavit stating the material facts on which the application relies; (b) the agreement that is sought to be approved; (c) an opinion of an independent lawyer that the agreement is in the best interests of the person under a legal incapacity. 10 In determining whether or not to approve a settlement, for the purpose of rendering it binding on an applicant under a legal incapacity, the Court must be satisfied that the settlement is in the applicant's best interests, or beneficial to the applicant's interests: Scandolera v Victoria (Department of Education and Early Childhood Development) (2015) 331 ALR 525 at [27] (Mortimer J); Fisher v Marin [2008] NSWSC 1357 at [29] (Rothman J). The Court should be concerned "only with the benefit of the disabled person": Modra v State of Victoria (Department of Human Services Victoria) [2013] FCA 1041 at [12] (Tracey J); Gillespie v Alperstein [1964] VR 749. 11 Since the approval of a settlement will bind the party under the disability and bring the litigation to an end, the Court should consider the advantages and disadvantages of the litigation continuing; not only in terms of whether the applicant might secure a more advantageous award from the Court at trial, but also issues such as the prospects of an appeal and the costs and pressures imposed on the applicant if the litigation were to continue to trial: Scandolera at [29]; Fisher at [35]-[36]. 12 In Fisher at [35]-[36], Rothman J noted that the determination of whether the proposed settlement is in the best interests of, or beneficial to the interests of, a person under a disability requires the Court to weigh, at least as an important consideration, the prospects of the applicant if the proceeding were continued. 13 The emotional and psychological strain of litigation is also a matter to be considered: Scandolera at [32]; Butler v Djerriwarrh Employment & Education Services Inc [2015] FCA 296 at [15] (Mortimer J). 14 Another important factor in considering whether the settlement is in the best interests of the applicant is how the settlement sum is to be preserved for his or her benefit. Unless this can be achieved the Court may have doubt about whether the settlement proposal overall is beneficial: Freeman v State of Victoria [2018] FCA 797 at [12] (Moshinsky J); Scandolera at [33]. To avoid the possibility of dissipation of the settlement sum it may be appropriate for the sum to be held securely in trust and applied towards the educational, developmental or health interests of the applicant: Freeman at [12]; Scandolera at [34].

Independent lawyer requirement 15 Rule 9.71(2)(c) of the Rules requires that an application by a litigation representative for approval of a settlement agreement be accompanied by an opinion of an independent lawyer that the agreement is in the best interests of the person under a legal incapacity. The opinion of Mr Hancock annexed to the affidavit of Ms Webling is advanced in compliance with this rule. 16 There is a serious question as to whether Mr Hancock qualifies as an "independent lawyer" for the purposes of r 9.71(2)(c) of the Rules, given that he was briefed to act and has acted on behalf of Jake in this proceeding. 17 There is authority for the proposition that a lawyer, although retained to act for one of the parties, might nonetheless qualify as "independent" for the purposes of r 9.71(2)(c) of the Rules: see Wade v State of Victoria (No 2) [2012] FCA 1080 at [9] (Bromberg J) cited in Lewis v State of Victoria (Department of Education and Training) [2019] FCA 714 at [13]-[14] (Kenny J); Koenders v State of Victoria (Department of Education and Training) [2016] FCA 842 at [3] (Davies J); Modra at [9]; Hickey v Public Advocate (Victoria) [2012] FCA 1203 at [10]-[11] (Gray J). 18 There is also authority for the alternate view, namely that a lawyer who has been involved in the case cannot be said to be "independent" in the requisite sense: see Allen v State of Victoria (Department of Education and Training) [2019] FCA 1074 at [8] (Snaden J); Jones v State of Victoria (2014) 145 ALD 619 at [4]-[5] (North J). 19 Whatever may be said about the independence of Mr Hancock, in the circumstances of this case I am content to receive and rely upon Mr Hancock's opinion. It would be productive of unnecessary expense, and such expense may well be disproportionate to the circumstances of the proceeding, to require another lawyer to be engaged to prepare an opinion. Nonetheless, in all the circumstances I will make an order that the requirement in r 9.71(2)(c) that the interlocutory application be accompanied by an opinion of a lawyer who is "independent" be dispensed with: Freeman at [17].

Whether the settlement is in the best interests of Jake 20 In forming the necessary judgment, the Court will give significant weight to the opinions of the applicant's legal advisers: Modra at [12]. However, the Court is not bound to accept those opinions, and must determine for itself whether the settlement is beneficial to the interests of the party: Scandolera at [28]. 21 Mr Hancock's opinion contains a discussion about the likely prospects of success of Jake's claim, the respondent's position in relation to the relevant evidence, the uncertainties and potential costs of the litigation, as well as an assessment of the offer. He expresses the view that the agreement contained in the Deed of Settlement is in the best interests of the applicant. In the present situation, I am satisfied counsel's opinion fairly sets out the benefits of the settlement and the risks of the matter proceeding to trial. 22 The trial of the proceeding would have been lengthy and complex, and it would have involved calling numerous lay and expert witnesses. Significant sums would have been expended. Jake and his representatives would have been exposed to the risk of a sizeable adverse costs order, and the trial would have been stressful for Jake's representatives and perhaps, in this way, for Jake also. Settlement avoids the stress of trial, the risk of a less advantageous outcome, the incurring of significant legal costs, and the risk of exposure to an adverse costs order. 23 In light of Mr Hancock's opinion, and having considered the pleadings, the evidence filed and the parties' opening written submissions, I consider that the settlement amount and other settlement terms are reasonable and in Jake's best interests. On this basis an order approving the settlement is appropriate. 24 It should be noted that a portion of the settlement sum will be used for legal fees and other disbursements in the proceeding. Other than this agreed amount, the parties will bear their own costs of and incidental to the proceedings. The remainder of the settlement amount will be held on trust for Jake and used for his benefit.

Confidentiality orders 25 It is also appropriate that there be an order pursuant to s 37AF of the Act, preserving the confidentiality of the opinion given by counsel, and the terms of the Deed of Settlement. I am satisfied that the protection afforded by the prospect of a confidentiality regime under s 37AF of the Act, including but not limited to any payment made, is likely to have encouraged and facilitated the resolution of the proceeding. It may be that such a settlement would not have occurred without the prospect of such protection. The interests of the administration of justice are served by the making of an order to preserve the confidentiality of the terms of settlement, and of counsel's opinion: s 37AG(1)(a) of the Act. The interests of justice are served not only for the parties to this proceeding, but also in ensuring that other litigants can have confidence that the Court may facilitate the resolution of proceedings of this kind by including such orders in any approval of a settlement: James v WorkPower Inc [2019] FCA 1239 at [18] (Mortimer J).

Other matters 26 Consistently with what has been agreed it is appropriate that there be an order pursuant to r 26.12(4) of the Rules that the applicant have leave to file a notice of discontinuance on terms that the parties bear their own costs. Liberty to apply in relation to any matters arising out of these orders is also appropriate. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McEvoy.

Charter of Human Rights and Responsibilities Act 2006(Vic)

DDA, the Australian Human Rights Commission Act 1986(Cth)

Federal Court Rules 2011(Cth)rr 9.70, 9.71, 26.12

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