Eady (a pseudonym) v Daramalan College Ltd [2025] ACTSC 523

1. The plaintiff, who has been given the pseudonym Thomas Eady, is a former student of the defendant, Daramalan College Limited (the College). He has brought proceedings in this court seeking damages for personal injury suffered as a result of sexual abuse he claims to have experienced from 1988 to 1989 while he was a child attending the College.

2. The plaintiff previously brought proceedings in respect of the same subject matter in this court in 2001. Those proceedings settled in the plaintiff’s favour for $230,000 inclusive of legal costs and disbursements. A deed of release was signed on 18 January 2007.

3. By application filed on 15 October 2024 (application), the plaintiff sought to set aside that settlement agreement. The application was heard on 28 April 2025. The application relied on a statutory power to set aside agreements where the subject matter involves institutional child abuse (physical or sexual) allegations. The defendant’s attitude to the application was that it neither consented to, nor opposed, the application. Following the hearing of the application, orders were made setting aside the settlement. Reasons were reserved at the time of judgment and they now follow.

4. I set aside the settlement agreement because the plaintiff had met the statutory requirements for enlivening the court’s discretion (discussed below), the case had arguable merit (it was not an abuse of process), and there were no circumstances particular to the case that warranted the refusal of relief. As with the other two proceedings that were heard at the same time, Smith (a pseudonym) v Daramalan College Ltd [2025] ACTSC 521 (Smith), and Jones (a pseudonym) v Trustees of the Roman Catholic Church for the Archdiocese of Canberra and Goulburn [2025] ACTSC 522 (Jones), the application was of the kind that the legislative amendments sought to benefit in providing the court with a power to set aside settlement agreements in historical child sexual abuse cases.

The legislative context for the discretionary power to set aside a settlement agreement

5. The legislative context for the statutory provision enabling the court to set aside a settlement agreement was set out in Smith at [5]-[13]. That context assists in understanding the purpose of the power given to the court. Understanding the purpose behind the legislation in turn informs the exercise of the court’s discretion. It also helps to explain the legal barriers faced by plaintiffs prior to 2016 and the circumstances in which this particular plaintiff settled his claim against the College. In summary: (a) The legislation allowing people to set aside agreements that had been made settling claims arising out of child abuse (physical or sexual) followed recommendations made by the Royal Commission into Institutional Responses to Child Sexual Abuse: Redress and Civil Litigation (Interim Report, September 2015).

(b) Historically, claimants in such matters faced a number of legal barriers. Those barriers included limitation periods that had expired and difficulties in identifying an appropriate defendant, being one that was a legal entity that could be sued and that had financial capacity (or assets available) to meet claims for damages or compensation. There were legal barriers to pursuing an organisation on the basis of the vicarious liability doctrine or the basis of a non-delegable duty of care, due to the person who was alleged to have perpetrated abuse being employed by a different institution to that who owned or operated the school and the nature of the conduct involved being either criminal or an intentional tort or both.

(c) Legislation in the Territory has now removed those barriers retrospectively, broadly as follows: i. Where an action for personal injury substantially arises from child abuse to which the person was subjected, the action is maintainable at any time, regardless of the form of the action (such as tort, contract or breach of statutory duty): Limitation Act 1985 (ACT) (Limitation Act), s 21C. ii. Unincorporated bodies that are sued may nominate an entity to act as defendant, or the court has power to appoint a related trust as a defendant to a child abuse claim: Civil Law (Wrongs) Act 2002 (ACT) (Wrongs Act), ss 114D and 114E. iii. Trustees may apply trust property to meet a liability for child abuse: Wrongs Act, s 114G(2). iv. The vicarious liability doctrine has been expanded under statute by including in the definition of an ‘employee’ an individual who is “akin to an employee”: Wrongs Act, s 114BC. v. An organisation remains responsible for a child even if it “delegates the exercise of care, supervision or authority over a child to another organisation”: Wrongs Act, s 114BD. (d) To avoid injustice arising for people who had already settled their child abuse claims at a time when legal barriers operated, those claimants can seek leave of the court to set aside the agreement or deed of release, so as to pursue the claim and achieve redress without the said legal barriers influencing settlement considerations.

Overview of the criteria for enlivening the court’s power

6. The applicable legislation is ss 114J and 114K of the Wrongs Act. The plaintiff had to establish that: (a) The agreement he signed was the type of agreement contemplated by the legislation (with s 114J of the Wrongs Act supplying the relevant definition of an ‘abuse settlement agreement’); and (b) When he made the agreement, either there was a legal barrier to him being fully compensated through a legal cause of action, or at the time the application was made to the court, in all the circumstances the agreement was not just and reasonable: Wrongs Act, s 114K.

7. Once the court was satisfied of those criteria, it was then empowered to set aside the relevant agreement, or not, as a matter of discretion: Wrongs Act, s 114K.

8. Each of those aspects of the process provided for by the Wrongs Act will now be explained.

The plaintiff’s agreement was an ‘abuse settlement agreement’

9. An ‘abuse settlement agreement’ is defined under s 114J of the Wrongs Act as follows: (1) In this part: abuse settlement agreement means an agreement— (a) that settles a child abuse claim and prevents the exercise of an action on a cause of action to which the Limitation Act 1985, section 21C (Personal injury resulting from child abuse) applies; and (b) that— (i) happened before the commencement of the Limitation Act 1985, section 21C, and at a time when a limitation period applying to the cause of action had ended; or (ii) happened before the commencement of this part, and the agreement is not just and reasonable in the circumstances. …

10. It can be seen that s 114J is structured to create different ways in which an agreement can constitute an ‘abuse settlement agreement’, depending on the timing of the agreement in question. The timing distinction is between agreements made before s 21C of the Limitation Act commenced (26 August 2016), and agreements that were made after that section had commenced, but before the commencement of pt 8A.3 of the Wrongs Act (10 December 2022).

11. The remainder of the definition (s 114J(1)(b)(iii)) includes agreements that happened before the commencement of the amendments dealing with vicarious liability and non-delegable duties of care, which came into force in November 2025 and apply to all proceedings commenced but not finally determined as at the date the amending provisions commenced. It has been omitted because the provision was not in force at the time of the determination of the application and was not the relevant part of the definition relied upon by the plaintiff.

The features of s 114J(1)(a) of the Wrongs Act were met

12. Starting with the common features set out in paragraph (a), what is required is:

(a) an agreement;

(b) that “settles a child abuse claim”, and

(c) that “prevents the exercise of an action on a cause of action to which the Limitation Act 1985, section 21C […] applies”.

13. As to the first of those matters, the settlement agreement dated 18 January 2007 that is the subject of the application was in evidence. It included both the plaintiff and the defendant as parties (proceedings were also brought against the estate of the perpetrator who was deceased at the time, but the estate was not party to the agreement). It was in writing, expressed as a deed, properly executed and there was no question about its validity.

14. Next, I found that the settlement agreement settled ‘a child abuse claim’ because:

(a) The plaintiff was born in 1973 and was thus 15 or 16 when the abuse was alleged to have occurred. He was therefore a child: Legislation Act 2001 (ACT), Dictionary; and

(b) The claim that was settled constituted ‘child abuse’, with the allegation being that during the period alleged, the plaintiff was “unlawfully assaulted”. That conduct falls within the definition of child abuse (physical or sexual abuse): Wrongs Act, s 114AA(1) with that definition adopted in the Limitation Act, s 21C(4). Although physical abuse excludes conduct that is justified or excused under a law applying in the Territory, the allegation that the conduct was unlawful overcomes that potential exclusion. In any event, the critical conduct was sexual abuse, which includes both an offence of a sexual nature and misconduct of a sexual nature: Wrongs Act, s 114AA(2).

15. The remaining part of s 114J(1)(a) for consideration was whether the settlement agreement prevented the exercise of an action (such as commencing proceedings in the Supreme Court) on a cause of action (in this case assault and breach of duty).

16. Having considered the terms of the settlement agreement, I found that it did prevent such actions in this case, because it included clauses expressly providing for:

(a) A full release and discharge of the defendant “from all actions, suits, claims and demands of every description past, present or future relating to or arising from the [said] claim”; and

(b) Such a release to operate as a complete defence, pleaded as a bar to any claim or proceeding by the plaintiff or any person claiming on his behalf.

17. I also found that those causes of action were ones to which s 21C of the Limitation Act applied. The relevant parts of s 21C are as follows (emphasis added): (1) This section applies to an action on a cause of action for the death or personal injury of a person— (a) if the cause of action substantially arises from child abuse to which the person was subjected when the person was a child; and (b) whether liability for the death or personal injury arises in tort or contract or on another form of action (including breach of statutory duty); and (c) whether the cause of action accrues before, on or after the commencement of the Justice and Community Safety Legislation Amendment Act 2016 (No 2), section 3. (2) An action on the cause of action is maintainable at any time and is not subject to any limitation period under this Act, despite anything elsewhere in this Act or another territory law. …

18. Having found that the claim itself involved allegations of child abuse, the release of the defendant (among others) was from causes of action ‘arising from’ the child abuse alleged.

19. Further, the section applied retrospectively, that is, to conduct that occurred before it came into effect: s 21C(1)(c) refers to the commencement of the enacting legislation, discussed above. Accordingly, s 21C of the Limitation Act applied to the causes of action referred to in the release clause of the settlement agreement.

20. The settlement agreement was thus one satisfying the features of s 114J(1)(a) of the Wrongs Act.

The criteria of s 114J(1)(b) of the Wrongs Act were met

21. I found that the requirements of 114J(1)(b) of the Wrongs Act were also met because:

(a) The settlement agreement here was signed on 18 January 2007 (before s 21C of the Limitation Act commenced).

(b) The conduct that was the subject of the claim was alleged to have occurred in 1988-1989.

(c) The relevant limitation period provided for by ss 11 and 16B of the Limitation Act was respectively six years as a general limitation period and three years for personal injury damages claims.

(d) The claim that was settled was only commenced in 2001 – well outside those limitation periods.

22. The settlement agreement thus met the time criteria provided by s 114J(1)(b)(i) of the Wrongs Act, and the consequence was a finding that the settlement agreement was an “abuse settlement agreement” by the pathway identified in ss 114J(1)(a) and (b)(i) of the Wrongs Act.

The court’s power under s 114K was enlivened

23. Section 114K of the Wrongs Act applied in this case. I will take the same approach as that taken in Smith at [33] in addressing first the requirements of that section, followed by how they were satisfied in this case. What follows is largely taken from Smith at [34]- [43] but is set out below for convenience.

Section 114 of the Wrongs Act

24. Section 114K(1) provides: (1) This section applies if a person (the applicant) is prevented from exercising an action on a cause of action because of an abuse settlement agreement.

25. That was the case here because, for reasons explained above, the terms of the settlement agreement prevented further legal claims, and the document was ‘an abuse settlement agreement’.

26. The applicant in those circumstances was permitted to commence a proceeding in this court (being a court with jurisdiction to hear the claims alleged) and apply to the court to set aside the agreement: Wrongs Act, s 114K(2).

27. The provisions of significance for the court on the application are s 114K(3) and (4), which is in the following terms (emphasis added): (3) The court may set aside the agreement if the court is satisfied that— (a) when the agreement was made there were legal barriers to the person being fully compensated through a legal cause of action; or (b) when the application is made to set aside the agreement, the agreement is, in all the circumstances, not a just and reasonable agreement. (4) The court may consider the following in deciding whether to set aside the agreement: (a) the amount paid to the applicant under the agreement; (b) the bargaining position of the parties to the agreement; (c) the conduct of the following people in relation to the agreement: (i) a party other than the applicant; (ii) a legal representative of a party other than the applicant; (d) any other matter the court considers relevant.

28. Three points should be made about these provisions:

(a) Paragraphs (a) and (b) in s 114K(3) of the Wrongs Act are alternatives. If the court is satisfied of either of those two alternatives, it may set aside the agreement. Neither party urged upon this court any different construction and it seems clear from the structure and use of the word ‘or’ that the court may exercise the discretion if either gateway provision is satisfied. In the present case, the emphasised words are the pathway of which I was satisfied. (b) Upon either gateway under s 114K(3)(a) or (b) being satisfied, the court retains a discretion whether to set aside the settlement agreement or not (indicated by the word ‘may’). (c) That discretion is unconfined, in that there are no limits prescribed and s 114K(4)(d) permits consideration of any matter the court considers to be relevant. Some guidance is provided in the list of specific matters in s 114K(4), but those matters are features of the agreement which the court ‘may’ consider, as opposed to being mandatory or exclusive considerations.

29. As to the nature of the discretion, in most of the other Australian jurisdictions, the test when exercising the discretion is whether it is ‘just and reasonable’ to set aside an agreement. The specific legislative provisions are set out in Smith at [39]. In Tasmania, the applicable test for setting aside this kind of agreement is if it is “in the interest of justice to do so”: s 5C(2) of the Limitation Act 1974 (Tas).

30. The wording of s 114K here is different. It does not confine the court’s residual discretion or prescribe any test that must be met at the determination stage. Where an agreement was made at a time when legal barriers to achieving full compensation existed, there is no specific requirement that the court find the agreement was not just and reasonable before it may set the agreement aside.

31. Insofar as the ‘just and reasonable’ requirement operates, it applies only to the alternative pathway and to the agreement itself ‘in all the circumstances’, with the assessment occurring at the time the application to set aside the agreement is made.

32. Caution must therefore be exercised in attempting to derive assistance from authorities in other jurisdictions, where legislative amendments were made at different times, with similar but not identical wording and structure, because different considerations may arise. That said, it is difficult to imagine a scenario where the court would find that an agreement was unjust, or that it was in the interests of justice having regard to all the circumstances to set aside an agreement, and yet not set aside a settlement agreement. The point of drawing attention to these differences is simply to highlight the nuances of the legislation and to explain why it was not necessary in the circumstances of this case to examine specifically whether the agreement itself was ‘just and reasonable’.

There were legal barriers when the agreement was made (s 114K(3)(a) is satisfied)

33. In the circumstances of this case, I was satisfied that, at the time the plaintiff signed the settlement agreement, there were legal barriers to him being fully compensated. I reached that conclusion because:

(a) The defence at the time expressly pleaded that the limitation period of six years referred to above had expired and at the time of the abuse settlement agreement being made, s 21C of the Limitation Act was not in force.

(b) The defendant denied that it was vicariously liable for any acts of the teacher.

34. These were legal barriers subsequently addressed by legislative reforms as discussed above. They were barriers preventing the plaintiff from being fully compensated if the conduct were established. The gateway criteria in s 114K(3)(a) was thus satisfied.

35. As stated in Jones at [39], there is some discussion in Walsh (a pseudonym) v Trustees of the Roman Catholic Church for the Archdiocese of Canberra and Goulburn [2024] ACTSC 81; 386 FLR 264 (Walsh) at [159]-[199] as to what constitutes a legal barrier and whether a defence not relied upon by a defendant nevertheless remains a legal barrier “to the person being fully compensated” by virtue of the mere fact that it existed and could have been raised.

36. That issue did not arise here. The legal barriers were expressly pleaded in the defence filed by the defendant on 7 March 2003. Further, one of the recitals in the settlement agreement was to the effect that, although the defendant recognised its pastoral obligations to the plaintiff, it did not admit legal liability for the claim or any loss, damage and injuries and that the settlement was made to avoid the cost, expense and inconvenience of litigation. Although materiality is not a pre-condition to the court’s satisfaction, the barriers were an implicit consideration in the settlement agreement. Accordingly, the correctness of the reasoning in Walsh did not arise for consideration.

37. The conclusion with regard to s 114K(3)(a) also meant that the need to consider whether s 114K(3)(b) was also an applicable gateway fell away, as did any requirement to consider the correctness of any statements in Walsh construing that section.

Setting aside the settlement agreement was appropriate in this case

38. The circumstances here warranted the setting aside of the settlement agreement because the case had arguable merit (it was not an abuse of process), the amount paid to the plaintiff was indicative of the legal barriers identified above bearing upon the settlement, and there were no countervailing circumstances making it appropriate to decline relief.

39. As to arguable merit, there was a properly articulated pleading and medical evidence to support the plaintiff’s case at the time of the settlement. The solicitor with carriage of the matter affirmed a separate affidavit deposing to her opinion that the plaintiff’s claim has reasonable prospects of success based on provable facts and a reasonably arguable view of the law. As I said in Smith at [52], while the court should not permit a claim to go forward that has no apparent prospects of success, this was not such a case.

40. Dealing with the circumstances of the settlement, the pathway established by the plaintiff made it unnecessary to consider the reasonableness of the settlement agreement or whether it was just. I took into account the terms of the settlement agreement but did not find it necessary or appropriate to embark on an exploration of the quantum paid and whether it reflected in monetary terms the barriers that were pleaded so as to form any view about whether the defences were material to the compensation agreed. The legislation does not require the court to go behind the negotiations that resulted in the settlement agreement before exercising the discretion to set the agreement aside. There is nothing in the statutory provisions creating the power to suggest that this type of application requires the divulging of legal advice given at the time. What was significant was that the barriers discussed above have now been either removed or otherwise addressed by statute and that alters the position for the plaintiff.

41. There was no other argument raised about any circumstance that would make it inappropriate to grant the relief. The alleged perpetrator is deceased, but as with Smith and Jones, that was the position at the time of the settlement. The removal of a statutory limitation period does not condition a plaintiff’s ability to proceed on an action against any given defendant, such as by providing that there be no prejudice to a defendant.

42. Accordingly, I concluded that it was appropriate to exercise the discretion to set aside the settlement agreement.

Orders

43. The orders of the Court made following the hearing were as follows: (1) Pursuant to s 114K(3)(a) of the Civil Law (Wrongs) Act 2002 (ACT), the deed of release between the plaintiff and the defendant dated 18 January 2007 is set aside. (2) The costs of this application are costs in the cause.

44. Further orders directed to the future progress of the proceeding were also subsequently made.

I certify that the preceding forty-four [44] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Justice McWilliam Associate: Date: