Supreme Court of WA|2007-09-07|Before: Newnes J

CHRISTINE ANNE DONNELLAN (By her next friends WALTER FRANCIS MARTINS and AUDREY CONSTANCE MARTINS joint plenary guardians and administrators) -v- THE PUBLIC TRUSTEE [2007] WASC 213 (7 September 2007)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : CHRISTINE ANNE DONNELLAN (By her next friends WALTER FRANCIS MARTINS and AUDREY CONSTANCE MARTINS joint plenary guardians and administrators) -v- THE PUBLIC TRUSTEE

BETWEEN : CHRISTINE ANNE DONNELLAN (By her next friends WALTER FRANCIS MARTINS and AUDREY CONSTANCE MARTINS joint plenary guardians and administrators)

Practice and procedure - Earlier action brought against third party by plaintiff by defendant as next friend - Plaintiff's claim settled - Settlement approved by District Court under O 70 r 10 - Judgment giving effect to terms of settlement - Claim by plaintiff in these proceedings that defendant as next friend was negligent in settlement of the claim and in obtaining court approval - Application by defendant to stay the action as abuse of process - Whether present claim is collateral attack on earlier judgment - Whether an abuse of process - Relevant principles

Rules of the Supreme Court 1971 (WA), O 70 r 1, r 2, r 10

1 NEWNES J: This is an application by the defendant seeking an order that certain claims made by the plaintiff be permanently stayed on the ground that they amount to a collateral attack on a judgment of the District Court of 6 August 1993 and are therefore an abuse of process.

2 The plaintiff was involved in a motor vehicle accident in 1973. In 1977, she commenced proceedings in the District Court against the driver of the vehicle, claiming damages for personal injury. The conduct of the defence of the plaintiff's claim was assumed by the driver's insurer (the insurer).

3 On 15 April 1977, a certificate was issued by the defendant under s 35(1) of the Public Trustee Act 1941 (WA) (the Act) certifying that the plaintiff was an infirmed person for the purposes of that Act. The defendant was vested with responsibility for the care and management of the estate of the plaintiff, pursuant to s 36C of the Act.

4 On 2 August 1977, the defendant was appointed the plaintiff's next friend in the proceedings in the District Court, pursuant to O 70 of the Rules of the Supreme Court 1971 (WA). On the same day, the plaintiff's claim was compromised by leave of the District Court and judgment entered for the plaintiff for:

special damages of $1,024.04;
a lump sum payment of $75,000 to include all economic loss other than the costs of an attendant and associated workers' compensation and employer's liability insurance for such attendant; and
periodic payments, payable quarterly in advance, for the cost of an attendant at the rate of $91 per week, as varied from time to time, together with the costs of a workers' compensation and employer's liability insurance policy costing $12 per week.

5 The first of the quarterly payments was to be paid on 2 August 1977 and the payments were to be continued during the plaintiff's lifetime, with liberty to apply to the court in respect of the costs of the attendant and/or the costs of the insurance for the attendant.

6 On various occasions between 2 August 1977 and 19 July 1985 the defendant sought and obtained increases in the amount of the periodic payments. In July 1985, the insurer refused to increase the amount of the periodic payments and the payments continued at the then current rate.

7 On 31 January 1989, the plaintiff, by the defendant as next friend, applied to the District Court to increase the amount of the periodic payments as from 1 July 1989, for reimbursement of the difference between the costs incurred by the plaintiff for the attendant and the amounts received from the insurer for the period 1 July 1984 and 30 June 1989, and for interest and costs.

8 The application was opposed by the insurer and, in an affidavit sworn 21 March 1989, the insurer gave notice of an intention to seek an order that there be a lump sum payment in lieu of the periodic payments.

9 Negotiations ensued between the defendant and the insurer and, on 13 May 1993, the defendant, on behalf of the plaintiff, accepted the insurer's offer to redeem the order for periodic payments, and to settle the plaintiff's application, by a lump sum payment of $240,000. The settlement was subject to approval of a judge of the District Court, pursuant to O 70 r 10 of the Rules of the Supreme Court.

10 For the purposes of obtaining that approval the defendant caused independent counsel to be briefed to advise whether the proposed settlement was in the best interests of the plaintiff. The opinion of counsel to that effect was obtained.

11 On 6 August 1993, the approval of the District Court to the settlement was obtained and judgment entered giving effect to the terms of settlement.

12 In the action, the plaintiff's principal claim, as I understand it, is that the defendant was negligent in settling the plaintiff's claim for the sum of $240,000, as that sum was inadequate on any reasonable analysis, and that on the application under O 70 r 10 the defendant negligently put inadequate or incorrect material before the court, with the result that the settlement was approved. It was implicit in the plaintiff's case that had the District Court been properly informed it would not have approved the compromise.

13 The plaintiff alleges, among other things, that the defendant failed to take into account premiums for workers' compensation and employer's liability policies covering the carers providing the plaintiff's care, calculated the wages of carers on an after-tax rather than pre-tax basis, and did not take into account that, as at August 1993, there was already a shortfall in payments for the costs of attendant care of more than $90,000, in respect of which the settlement made provision of only $35,000.

14 I should say that, as it is currently framed, the statement of claim does not clearly put the claim in that way and the plaintiff's case has had to be gleaned from the statement of claim, the reply (which is itself unsatisfactory), and the statements of the plaintiff's counsel on the hearing of this application. But I understood from counsel for the plaintiff that that was in fact the substance of the claim, and it was apparent that the defendant's counsel understood it in that way.

15 I should say that there are some other claims made by the plaintiff in the proceedings which are put on a different footing and it is not necessary for present purposes to refer to those.

16 The defendant denies that it was negligent and says that the sum of $240,000 was a reasonable redemption of the order for periodic payments. The defendant says that it acted upon the opinion of its solicitors and of independent counsel that the proposed settlement of $240,000 could reasonably be regarded as being in the best interests of the plaintiff. It says that if the application had gone to trial, there was a real prospect that the plaintiff would have been awarded an amount less than $240,000.

17 Relevantly for present purposes, the defendant also says that the plaintiff's claim in respect of the settlement is a collateral attack on the judgment of the District Court of 6 August 1993 and is therefore an abuse of process. It is on that basis the defendant seeks a stay of that claim.

18 It was submitted on behalf of the defendant that, as the settlement was approved by the District Court on 6 August 1993 and is the subject of a judgment of that court, the plaintiff's claim is not maintainable as it amounts to a collateral attack on the judgment of the District Court and is an abuse of process.

19 Counsel for the defendant argued that the role of the District Court in the approval of a settlement under O 70 r 10 was not a formality, but an independent role, and the court cannot approve a settlement unless it is of the opinion that the settlement will benefit the person under a disability. No settlement or compromise of the plaintiff's claim was valid unless it was approved by the District Court.

20 In that connection, counsel pointed out that Kennedy DCJ, at a hearing on 19 July 1993, had expressed concern that the offer being put forward for approval would not be sufficient to pay a carer's wage for the life expectancy of the plaintiff. The matter was adjourned and a further affidavit filed on behalf of the defendant. When the matter came back before Kennedy DCJ on 6 August 1993, her Honour gave leave to compromise the claim and the orders giving effect to the compromise were then made. Under O 70 r 10, the settlement was effected by the decision of the court, not by the consent of the next friend.

21 The defendant's counsel submitted that it was clearly an abuse of process to mount a collateral attack upon a final decision of a court of competent jurisdiction made in proceedings in which the plaintiff has had a full opportunity of contesting the decision made by the court. That is so even if the parties opposed to the plaintiff in the two proceedings are different. Counsel referred to Hunter v Chief Constable of the West Midlands Police [1981] UKHL 13; [1982] AC 529 and Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615.

22 It was submitted that judgments made by consent but which are subject to, or require, the approval of the court, fall within judgments which are the subject of the rule against collateral attack. Counsel referred to Kelley v Corston [1998] QB 686 and Wood v Public Trustee (WA) (1995) 14 WAR 251.

23 The present claim was therefore a collateral attack upon the judgment of the District Court of 6 August 1993 and accordingly was an abuse of process.

24 The plaintiff's position was put shortly. Counsel submitted that the plaintiff's claim did not allege that the approval of the District Court was wrong on the materials put before that the court. Rather, the plaintiff's claim was that the next friend had negligently failed properly to determine the plaintiff's entitlements, with the result that the defendant had agreed with the insurer to settle the plaintiff's claim for an amount less than that to which the plaintiff would have been entitled had the application proceeded to trial. The approval of the court to settle for the agreed sum had been obtained only because the defendant had negligently put inadequate and incorrect information before independent counsel and the court.

25 The plaintiff says that had adequate and correct information been put before counsel and the court, the compromise of the claim for the sum of $240,000 would not have been approved.

26 The claim was not, therefore, a collateral attack on the judgment of the District Court, but a claim for negligence against the defendant, as next friend, in agreeing to compromise, and obtaining court approval to compromise, the plaintiff's claim.

27 In Walton v Gardiner (1993) 177 CLR 378, Mason CJ, Deane and Dawson JJ (at 392 - 393) observed that the inherent jurisdiction of a superior court to stay its proceedings on the grounds of abuse of process extends to all those categories of cases in which the processes and procedures of the court, which exist to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness. Their Honours identified the following as one instance of an abuse of process:

[P]roceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings. The jurisdiction of a superior court in such a case was correctly described by Lord Diplock in Hunter v Chief Constable of the West Midlands Police as 'the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people'.

28 In Hunter v Chief Constable of the West Midlands Police, the plaintiff, with others, had been convicted of murder, although he had claimed at his trial that his confession - which was an essential part of the prosecution case - was not voluntary but had been made under duress and, in particular, that he had been assaulted by police officers. The trial judge was satisfied on a voir dire that the plaintiff had not been assaulted and, by convicting him, the jury was taken to have been similarly satisfied. The plaintiff subsequently made the same allegation in civil proceedings for damages against the police officers allegedly involved in the assault.

29 It was held by the House of Lords that the issue of the alleged assault could not be raised in the civil proceedings against the police officers. Lord Diplock commenced his speech (with which the other members of the House agreed) by saying:

My Lords, this is a case about abuse of the process of the High Court. It concerns the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people.

The circumstances in which abuse of process can arise are very varied; those which give rise to the instant appeal must surely be unique. It would, in my view, be most unwise if this House were to use this occasion to say anything that might be taken as limiting to fixed categories the kinds of circumstances in which the court has a duty (I disavow the word discretion) to exercise this salutary power (536).

30 Later in his speech, in an oft-cited passage, Lord Diplock said:

The abuse of process which the instant case exemplifies is the initiation of proceedings in a court of justice for the purpose of mounting a collateral attack on a final decision against the intending plaintiff which has been made by another court of competent jurisdiction in previous proceedings in which the intending plaintiff had a full opportunity of contesting the decision in the court by which it was made (541).

31 Lord Diplock went on to refer to the well known case of Reichel v Magrath (1889) 14 App Cas 665, saying:

The passage from Lord Halsbury LC's speech in Reichel v Magrath 14 App Cas 665 at 668 deserves repetition here in full: '... I think it would be a scandal to the administration of justice if, the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same case again.'

32 Lord Diplock noted that what the plaintiff sought to do in the action was to raise the identical question that had been raised and determined in the criminal trial.

33 In Rogers v The Queen (1994) 181 CLR 251, Mason CJ observed that the decisions in Hunter v Chief Constable of the West Midlands Police and Walton v Gardiner, indicated

that there are two aspects to abuse of process: first, the aspect of vexation, oppression and unfairness to the other party to the litigation and, secondly, the fact that the matter complained of will bring the administration of justice into disrepute (256).

34 It has been accepted, however, that while, prima facie, re-litigation of an issue which has previously been finally decided by a court of competent jurisdiction is an abuse of process: McIlkenny v Chief Constable of West Midlands Police Force [1980] QB 283, 333; it is not necessarily an abuse.

35 In Walpole v Partridge & Wilson (a firm) [1994] QB 106, Ralph Gibson LJ said:

The decision of their Lordships in Hunter's case ..., however, was, in my judgment not that the initiation of such proceedings is necessarily an abuse of process but that it may be. The question whether it is so clearly an abuse of process that the court must, or may, strike out the proceedings before the trial must be answered having regard to the evidence before the court on the application to strike out. There are, in short, and at least, exceptions to the principle (116).

36 In Arthur J S Hall & Co (a firm) v Simons, the Court of Appeal reviewed a number of earlier decisions relating to an abuse of process by collateral attack. The court noted (at 643) that the initiation of later proceedings collaterally challenging an earlier judgment was not necessarily an abuse, but that it may be. The Court of Appeal went on to say that in considering whether, in any given case, later proceedings do constitute an abusive collateral challenge to an earlier subsisting judgment, it is always necessary to consider with care (1) the nature and effect of the earlier judgment, (2) the nature and basis of the claim made in the later proceedings, and (3) any grounds relied on to justify the collateral challenge (if it is found to be such).

37 In relation to civil proceedings, so far as relevant for present purposes, the Court of Appeal said:

When, without a fully contested hearing, the court has given an interlocutory judgment or approved a compromise under RSC Ord 80 ..., or made a consent order for ancillary relief, such judgment or order is of lesser weight [than a conviction], and the conditions which must be met to justify a collateral challenge to such a judgment or order will be less stringent. The giving of such judgments and the making of such orders are not, however, to be ignored because the full Hunter test is not satisfied. They involve an exercise of judicial authority, embodied in an enforceable order of the court. They are not to be lightly disregarded. At the very least, it will be incumbent on a party seeking to mount a collateral challenge to such an order to explain why steps were not taken to set aside or challenge the judgment or order complained of in the original proceedings. If that threshold is crossed, the Hunter test must be adapted appropriately to the case in question, always bearing in mind that the fundamental issue is one of abuse. The initiation of proceedings against legal advisers which involves a collateral attack upon a consent judgment approved by the court in previous proceedings may, and ordinarily will, be an abuse of the process unless the plaintiff can properly allege a breach of duty which either (1) deprived the plaintiff of a reasonable opportunity of appreciating that better terms were available whether on settlement or at a contested hearing than the plaintiff obtained, or (2) placed the plaintiff in the position of having to accept a settlement significantly less advantageous than he should have had (644).

38 I do not understand anything subsequently said in the House of Lords in that case (reported at [2002] AC 616, 665 et seq) to be in any relevant sense inconsistent with the principles applicable to an abuse of process by collateral attack as described by the Court of Appeal. In the House of Lords, Lord Browne-Wilkinson and Lord Hoffmann confined the principle in Hunter's case to cases where the further litigation would be manifestly unfair to the defendant or would bring the administration of justice into disrepute (at 685 and 702 - 703 respectively). Lord Hutton and Lord Millett agreed with Lord Hoffmann (at 727 and 752 respectively). Lord Hobhouse accepted that challenging an earlier decision did not necessarily amount to an abuse of process.

39 The view expressed by the Court of Appeal that the approach to a collateral challenge to a civil judgment or order will generally be less stringent than such a challenge in respect of a conviction, appears to be supported by the observation by Gleeson CJ, Gummow, Hayne and Crennan JJ (at [8]) in Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27, that while the inherent power identified by Lord Diplock in Hunter's case applies to both civil and criminal proceedings, it does so with somewhat different emphases attending its exercise, the considerations present in criminal cases not having the same force in civil litigation.

40 In the recent decision of the English Court of Appeal in Secretary of State for Trade and Industry v Bairstow [2004] Ch 1, Morritt VC, having reviewed the earlier cases, drew the following propositions from them:

(a) A collateral attack on an earlier decision of a court of competent jurisdiction may be but is not necessarily an abuse of the process of the Court ... (c) If the earlier decision is that of a court exercising a civil jurisdiction then it is binding on the parties to that action and their privies in any later civil proceedings. (d) If the parties to the later civil proceedings were not parties to or privies of those who were parties to the earlier proceedings then it will only be an abuse of the process of the Court to challenge the factual findings and conclusions of the judge or jury in the earlier action if (i) it would be manifestly unfair to a party to the later proceedings that the same issues should be relitigated or (ii) to permit such relitigation would bring the administration of justice into disrepute.

41 That passage was referred to with approval by the Court of Appeal of New South Wales in Cleary v Jeans [2006] NSWCA 9, albeit the court noted that it must be understood subject to the decisions of the High Court in D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1 and Giannarelli v Wraith [1988] HCA 52; (1988) 165 CLR 543, in relation to advocates' immunity. That qualification is not relevant for present purposes.

42 It is not, therefore, necessarily sufficient simply for the defendant to show that the proceedings are a collateral attack on an earlier final decision. It must also appear that it would be manifestly unfair to a party to the later proceedings that the same issues should be re-litigated or that to permit such re-litigation would bring the administration of justice into disrepute.

43 In that connection, in Walpole v Partridge & Wilson (a firm), Ralph Gibson LJ said, in relation to a claim against solicitors for negligence in the preparation of a case for trial:

If there is a sufficiently arguable case to show that the defendant solicitors, by their breach of duty, put the plaintiffs in the position of being unable properly to contest the first decision, so that the plaintiffs were reasonably compelled to submit to judgment on the issue, then, in my judgment, the plaintiffs' claim is not shown to be an abuse of the process of the court merely because it will, if it succeeds, require the court to assess damages on the basis that the prior decision of the court would not have been made if the solicitors had not been in breach of duty. In such circumstances, to return again to the opening passage in Lord Diplock's speech in Hunter's case, it would not be manifestly unfair to the defendant solicitors to permit the claim to proceed, and it would not bring the administration of justice into dispute (124 - 125).

44 In the present case, the defendant relied, in particular, on the decision of the English Court of Appeal in Kelley v Corston as authority for the proposition that the principle of finality of litigation requires that where the approval of the court is necessary and has been obtained for a consent judgment, a collateral attack on the judgment is an abuse of process.

45 In that case, the plaintiff's marriage had been dissolved and the defendant barrister was instructed to represent her at the hearing for ancillary relief. A conference took place the day before the hearing and the following day, at court, on the defendant's advice the proceedings were compromised, and a consent order was made giving effect to the terms of settlement pursuant to the provisions of the Matrimonial Causes Act 1973 (UK). Subsequently the plaintiff brought an action for damages against the defendant alleging that the defendant had been negligent in negotiating and advising her to accept a settlement of her claim for ancillary relief.

46 At first instance, the plaintiff's claim was struck out on the basis that the defendant's actions in negotiating and advising the plaintiff to accept a settlement of her claim were so closely connected with the conduct of the case in court as to render the defendant immune from an action for negligence and that the advice given the day before the hearing was part and parcel of the defendant's conduct and therefore subject to the same immunity.

47 An appeal from that decision was dismissed. After a review of the authorities, Judge LJ concluded that the claim for immunity of an advocate can only arise 'if the case falls squarely within one or more of these three principles, participation in court proceedings, intimate connection with the conduct of the case, or collateral attack on a final decision.' His Lordship considered that, subject to two exceptions, the settlement of litigation is not normally encompassed within the principles on which the immunity of the advocate is based. None of the relevant authorities required, and there were no public policy considerations which justified, a blanket immunity from suit for negligent advice to a client which results in a settlement of his claim, whether the advice is given by counsel or a solicitor (whether advocate or not) and whether the settlement is reached before the hearing or at the door of the court.

48 The two exceptions to which Judge LJ referred were, first, where the hearing had begun where it was self-evident that any settlement is intimately connected with the conduct of the case, and secondly (and relevantly for present purposes), where the settlement was subject to or required the approval of the court, such as the settlement of a claim by a person under a disability. In that respect, Judge LJ said:

Such settlements involve the direct participation of the judge who is invited to indicate his approval, and who is not bound to give it. This responsibility is clearly imposed on the judge who must make whatever inquiries seem appropriate to him before making his decision. In granting his approval he will of course have in mind the immense value of a settlement outlined earlier in this judgment. Nevertheless if he concludes that the settlement arrangements are inappropriate he cannot his ignore his responsibilities. Litigation which raises the question whether the advocate was negligent in the advice leading to any settlement requiring the approval of the judge is liable to circumvent the principle that the judge may not be asked to explain what he has said or done in court. If such litigation were permitted it is difficult to see how it would be fair to prevent the defendant advocate from seeking to call the judge to demonstrate that the settlement was reasonable. In any event the discussion of the settlement before the judge and response to any inquiries from him as well as the provision of the relevant material for his consideration all form part of the advocate's function in court. In my judgment this form of settlement is therefore immune from suit on the basis of the first two principles justifying immunity.

49 Pill LJ considered, by way of obiter, that where, such as in the approval of a settlement by a person under a disability, the court must consider the merits of the settlement, the fact of the intervention of the court was sufficient to give rise to the immunity. Pill LJ declined, however, to decide the appeal on that basis as it had only been raised in argument, by the court. He concluded that the advocates' immunity applied, as the settlement was made at the door of the court and therefore had an intimate connection with the conduct of the case.

50 Butler-Sloss LJ concluded that where the court must be satisfied that the settlement is appropriate, there is, in relation to the orders made, such an intimate connection with the conduct of the case that the immunity applies. As the judge had a duty to consider the order, it would be inappropriate as a matter of public policy to look at individual cases to see how far that task had been carried out. Butler-Sloss LJ also considered that as the settlement was made at the door of the court, it was intimately connected with the court proceedings and so came within the immunity on that ground too.

51 I should say that it does not appear to be suggested in the judgments in Kelley v Corston that the court making the order had not been properly informed of all the facts relevant to the settlement.

52 That case, of course, preceded the decisions of the Court of Appeal and the House of Lords in Arthur J S Hall & Co (a firm) v Simons. In Arthur J S Hall & Co (a firm) v Simons, the Court of Appeal considered that the principles it had enunciated in relation to collateral attack were consistent with, and indeed foreshadowed by, the earlier decisions to which it had referred, with, relevantly, the possible exception of Kelley v Corston. The Court of Appeal described Kelley v Corston 'as a very difficult case to follow and apply', observing (among other things) that the Hunter principle was not relied on, although it would seem to have provided the appropriate basis on which to consider the significance of the court's approval of the terms of settlement. The Court of Appeal concluded that it 'is difficult to derive any clear principle from the case'.

53 I would respectfully agree. In my view, insofar as the case might be thought to be relevant to an abuse of process by collateral attack, the applicable principles in relation to a court approved settlement are not as inflexible as the judgments in Kelley v Corston would appear to suggest. There does not seem to me to be anything in the authorities, or in principle, to suggest that any challenge to a court approved settlement is necessarily an abusive collateral attack. Indeed, the decision of the Court of Appeal in Arthur J S Hall & Co (a firm) v Simons is to the effect that such a challenge is not necessarily an abusive collateral attack. Whether or not it is an abuse will depend upon the particular circumstances of the case.

54 The defendant also relied on Wood v Public Trustee (WA), where a compromise had been approved under O 70 and a dispute subsequently arose as to who was to continue to control the proceeds. Owen J (as his Honour then was) considered, among other things, that as that issue had been fully argued on the application to compromise, and was the subject of a specific decision of the judge who approved the compromise, the application that the applicant should control the funds was a collateral attack on that decision. The case is therefore rather different to the present case, there being no suggestion in the present case that any, or at least any relevant, matter was argued on the application for approval to compromise.

55 In my view, the approach to be taken in the present case is that described by Morritt VC in Secretary of State for Trade and Industry v Bairstow, as more fully explained, in respect of a court approved settlement, by the Court of Appeal in Arthur J S Hall & Co (a firm) v Simons, in the passage which is set out above.

56 As the defendant's case on this application was put, it is necessary for the defendant to establish that the proceedings are an abusive collateral attack on the decision of the District Court. I am not persuaded that that has been made out.

57 The present case is not one in which the plaintiff has changed the form of the proceedings and seeks to determine the same question that was resolved in earlier contested proceedings. The application under O 70 r 10 was not in the nature of contested proceedings. Nor is the question in the current proceedings whether, on the basis of the material put before it, the District Court should have approved the settlement, but rather whether the defendant was negligent in agreeing to settle for the settlement sum and in putting before the District Court allegedly incorrect or incomplete material on the application for approval of the compromise.

58 At the time the application under O 70 r 10 was made the terms of the compromise of the plaintiff's claim had already been agreed between the insurer and the defendant, as the plaintiff's next friend. But in order to be valid the compromise had to be approved by the District Court under O 70 r 10.

59 True it is that the approval of the court under O 70 r 10 is not a mere formality. The purposes of requiring the approval of the court under O 70 r 10 are to ensure that the compromise is fair and reasonable, to provide a means by which the defendant can obtain a valid discharge, and to ensure that the solicitors for the person under a disability are paid their proper costs and no more: Benfield v Australian National Railways Commission (1992) 8 WAR 285, 292. Before approving a compromise, the court must be satisfied that all relevant facts have been considered by the next friend and its legal advisers, and the court must itself consider the compromise and be satisfied that it is in the interests of the person under a disability. Generally the compromise must be supported by the advice of independent counsel, as it was in this case.

60 But such proceedings are a long way removed from adversarial proceedings to which the rules relating to abuse of process by collateral attack are ordinarily directed. An application under O 70 r 10 does not involve a resolution of a dispute by the court by the determination of the rights and liabilities of the parties. It is, subject to the safeguards referred to, intended only to give effect to a settlement already reached between the parties. The interest of the defendant in such an application is to have the settlement approved to ensure its validity and to obtain an enforceable discharge. In the ordinary course - and it was not suggested in the present case that the application fell outside the ordinary course - the application will not involve competing contentions of fact or law.

61 The position of the present defendant as next friend of the plaintiff at the relevant time is an important consideration in the present application.

62 A person is required to bring proceedings by a next friend where by reason of some disability the person is incapable of managing their own affairs in respect of the proceedings: O 70 r 1, r 2.

63 It is therefore inherent in the appointment of a next friend that the person under a disability will be substantially, if not entirely, reliant upon the next friend to do all that is reasonably required to be done to ensure that all relevant evidence is obtained, that the settlement negotiations with the other side are conducted competently and on the basis of accurate and complete information, and that all relevant material is put before the court in connection with the application for approval of the settlement.

64 It is also inherent in the nature of the proceedings under O 70 r 10 that the court will be reliant to a substantial degree upon the next friend to ensure that all proper enquiries have been made and that the material put before the court is complete and accurate.

65 In the circumstances, I am not satisfied on the material before me that the plaintiff's claim, as finally formulated in the course of the hearing, is an abuse of process. There arises here no question of re-litigating an issue which has been the subject of a final determination after a contested hearing on the merits or of public confidence in the finality of curial resolution of disputes. The orders of the District Court were obtained by consent at the instigation of the defendant acting as the plaintiff's next friend. The defendant had been appointed as the plaintiff's next friend specifically because the plaintiff was suffering under a disability that deprived the plaintiff of the ability to determine what was in her own best interests. I do not consider it would be manifestly unfair to the defendant to these proceedings that the adequacy of the settlement should be litigated, nor do I consider that to permit such litigation would bring the administration of justice into disrepute.

66 On the contrary, in my view, it would be likely to bring the administration of justice into disrepute to find, as the defendant submitted I should do, that the District Court having approved the settlement - albeit, on the basis of material put before it by, or with the consent of, the defendant as the plaintiff's next friend - the next friend was immune from suit in connection with any alleged negligence in the conduct of the settlement negotiations or the proceedings for court approval.

67 The issues as to whether or not the settlement amount was adequate, and whether or not the defendant put before independent counsel and the District Court adequate and accurate material in relation to the settlement, involve, of course, issues of fact that do not fall for determination on this application.

68 There remains, however, one matter. I have previously mentioned that the statement of claim does not clearly frame the claim in the way in which I understand the plaintiff in fact seeks to advance it. While it was apparent that both counsel understood what case the plaintiff seeks to make, it is evident that the statement of claim requires some amendment to put it into proper order. That should be done promptly. I would not be inclined finally to dispose of this application while the statement of claim remains in its present unsatisfactory state. For the moment, I would stand over the present application pending the filing of the final form of the statement of claim.

69 On the material before me, I am not satisfied that the plaintiff's claim, as it is now formulated, is an abuse of process. I will stand over this application until the statement of claim is put in order and I will then hear the parties on the appropriate orders to be made in respect of this application and on the future progress of the action.

CHRISTINE ANNE DONNELLAN (By her next friends WALTER FRANCIS MARTINS and AUDREY CONSTANCE MARTINS joint plenary guardians and administrators) -v- THE PUBLIC TRUSTEE [2007] WASC 213 (7 September 2007)

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Judgment (86 paragraphs)

CHRISTINE ANNE DONNELLAN (By her next friends WALTER FRANCIS MARTINS and AUDREY CONSTANCE MARTINS joint plenary guardians and administrators) -v- THE PUBLIC TRUSTEE [2007] WASC 213 (7 September 2007)

Legislation Cited (2)

Cases Cited (6)