LSR3 v New South Wales

Supreme Court of NSW|2024-09-23|Before: Faulkner J

Solicitors: Karp O'Neill Lawyers (Plaintiff) Crown Solicitor for NSW (First and Tenth Defendants) File Number(s): 2023/00273367

Background

By these proceedings the plaintiff seeks compensation for alleged historic child abuse. The plaintiff sues multiple defendants including the State of New South Wales and the South East Sydney Local Health District of Caringbah (SESLHD). The plaintiff alleges assaults by numerous individuals (some of them named, others not) at numerous locations. The assaults are alleged to have taken place over a seven year period which concluded almost half a century ago. In the case of the State, liability is said to arise both by virtue of the State's own negligence and by virtue of the State's vicarious liability for the conduct of others. Apart from detailed factual issues, questions may arise about the standard of institutional care at the relevant time, discharge of the duty of care, causation and loss. The plaintiff alleges loss which includes a variety of psychological injuries and disabilities, out-of-pocket expenses, economic loss and loss of superannuation entitlements. The plaintiff also claims aggravated and exemplary damages. Expert evidence may be required in relation to a number of issues. Compulsory production of documents may be required.

Procedural history

The plaintiff was born in 1961.
The assaults against the plaintiff are alleged to have occurred between 1969 and 1976.
To paraphrase paragraph 38 of the plaintiff's pleadings, in 1997 the plaintiff brought Supreme Court proceedings concerning abuse he suffered as a child while in the State's care. There is significant overlap between the claims in that case and the claims in the current proceedings. In 2003 an agreement was entered into between the plaintiff and the State pursuant to which a consent judgment was ultimately given. The terms of the consent judgment were that there be a verdict and judgment for the State. The State paid $150,000.00 as contribution towards the plaintiff's costs and disbursements. The plaintiff did not personally receive any money. Without precision, these events are referred to as the 2003 Agreement.
To paraphrase paragraph 39 of the plaintiff's pleadings, in 2017 the plaintiff brought further Supreme Court proceedings against the State and other parties who are also defendants in the current proceedings. On 15 August 2017 the plaintiff entered into a deed of release with the State, the other defendants and certain third parties which included SESLHD. This is referred to as the 2017 Agreement. Under the 2017 Agreement the plaintiff received $152,000.00 after payment of costs and disbursements. There may be a dispute about the amount of the State's contribution to that sum but it does not matter for current purposes.
In the 2017 Agreement the plaintiff is referred to as the "Releasor". The State and SESLHD are each a "Releasee". Clause 2 of the 2017 Agreement provides: "The Releasor for himself, his executors, administrators, heirs and assigns, releases and discharges the Releasees and each of them and the accused or any of them from all actions, suits, claims and demands of every description, which he now has or might have, has had or, which could afterwards be asserted, made or brought by him or on his behalf or through either at law or at equity, or under the provisions of any Statute arising out of all or any of the acts, facts and circumstances constituted by the claims."
Clause 5 relevantly provides: "The Releasor covenants and agrees that he will take no action in respect of the claims against: [the State or SESLHD.]"
Where last referred to in clause 2 and in clause 5, the word "claims" is defined in the 2017 Agreement to include many of the allegations which the plaintiff makes in the current proceedings.
For current purposes, it may be accepted without deciding that by virtue of the 2003 Agreement and/or clause 2 of the 2017 Agreement the plaintiff will be precluded from bringing these proceedings against the State and SESLHD if: 1. the State and SESLHD plead the 2003 Agreement and/or the 2017 Agreement; and 2. the relevant agreement is enforceable in accordance with its terms.
There is one particular allegation about the plaintiff being assaulted in a department clothing store which is made for the first time in these proceedings and which may not be subject to either the 2003 Agreement or the 2017 Agreement. It is a relatively minor aspect of the plaintiff's entire case. The potential for that allegation to survive does not affect the determination of the current application because proceedings limited to that discrete allegation will be of a significantly lesser magnitude to those which are currently before the Court. Separate questions which remove all other issues may still have significant utility.
The current proceedings were commenced on 18 March 2024. An Amended Statement of Claim was filed on 20 March 2024. Apart from the State and SESLHD, the defendants include a number of religious institutions.
The State and SESLHD submit that the proceedings are complex. A final hearing on all issues will take at least three weeks and cost the State alone $400,000. Further costs will be incurred by the other parties. The limited resources of the Court will be called upon to hear the case. The proceedings will be stressful. Subject to seeing the defendant's defences (see below), all this may be accepted.
Apart from claims for damages, interest and costs, the plaintiff seeks the following orders in Prayers 4 and 5 of the Amended Statement of Claim: "4 That the settlement agreement entered into between the Plaintiff and the [State] in 2003, and the consequent consent judgement, be set aside pursuant to sections 7D and 7E of the Civil Liability Act 2002 (NSW). 5 That the settlement agreement entered into on 15 August 2017 between the Plaintiff, and the [State], the Third Defendant, the Fourth Defendant, the Fifth Defendant, the Eighth Defendant and [SESLHD] be set aside pursuant to section 7D of the Civil Liability Act 2002 (NSW)."
By these Prayers, the plaintiff seeks to engage the regime in Part 1C of the Civil Liability Act 2002 under which "affected agreements" and consequential judgments may be set aside. Where the regime is engaged, the Court has a discretion to set aside an affected agreement if it is just and reasonable to do so.
In paragraphs 38 and 39 of the Amended Statement of Claim the plaintiff pleads entry into the 2003 Agreement and the 2017 Agreement and the making of judgments pursuant to those agreements.
In paragraphs 88 to 91 of the Amended Statement of Claim the plaintiff pleads the facts and circumstances relied upon for the orders in Prayers 4 and 5. Those paragraphs contain the following allegations: "Relief under Part 1C of the CLA - First Defendant 88 The 2003 Agreement is an affected agreement under section 7C(1)(a) of the CLA. 89 It is just and reasonable to set aside the 2003 Agreement. Particulars (a) The Plaintiff did not receive any payment of compensation pursuant to the 2003 Settlement as the totality of the $150,000.00 paid by the First Defendant was contributed solely to the Plaintiff's legal costs and disbursements; (b) The Plaintiff was in a disadvantageous bargaining position in 2003 as his claim for compensation was statute-barred by some decades at the time of the 2003 Settlement; (c) The Plaintiff was emotionally vulnerable at the time of entering into the 2003 Agreement as: i. The Plaintiff had attempted suicide and was admitted to hospital shortly before entering into the 2003 Agreement; and ii. The Plaintiff was suffering severe psychological symptoms at the time of entering into the 2003 Agreement. 90 The 2017 Agreement is an affected agreement under section 7C(1)I of the CLA. 91 It is just and reasonable to set aside the 2017 Agreement. Particulars (a) The amount of $26,772.90 contributed by the First Defendant to the 2017 Settlement is not sufficient compensation given the nature and extent of the sexual abuse averred in paragraphs 41 to 64 above, as well as the severity of the Plaintiff's injuries and disabilities; (b) The offer of the amount of only $26,772.90 was predicated on the basis that the Plaintiff had already entered into a prior settlement agreement, being the 2003 Agreement which pursuant to paragraph 89, was not just and reasonable."
Neither the State nor SESLHD has filed a defence, nor has any other defendant.
By Notice of Motion filed on 6 August 2024, the State and SESLHD seek the following orders: "1. That pursuant to rule 28.2 of the Uniform Civil Procedure Rules 2005 the Court order that the following questions be decided separately from and before the trial in the proceedings: a. whether the settlement agreement entered into between the plaintiff and the State of NSW in 2003 be set aside pursuant to s.7D of the Civil Liability Act 2002 ("CLA"); b. whether on a proper construction of s.7C(1)(c) of the CLA, the "circumstances" include circumstances other than the barriers to the plaintiff being fully compensated removed by s.6A Limitation Act 1969 (NSW) and Part 1B of the CLA; c. whether the agreement between the plaintiff and the State of NSW and the South East Sydney Local Health District in 2017 is an "affected agreement" within the meaning of s.7C of the CLA; d. if the answer to question c. above is yes, whether the 2017 agreement should be set aside under s.7D of the CLA. 2. Costs of this Notice of Motion be costs in the cause."
In support of their application for separate questions, on 24 September 2024 the State and SESLHD offered a concession in the following terms: "If the plaintiff succeeds in this case on liability and quantum against the State, the amount paid by the State under the 2017 [Agreement] was not full compensation for his loss."

Separate questions under UCPR 28.2

Uniform Civil Procedure Rules 2005 (NSW) r 28.2 provides as follows: 28.2 Order for decision The court may make orders for the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings.
The word "question" is defined in UCPR 28.1 to include any question or issue in any proceedings, whether of fact or law or partly of fact and partly of law, and whether raised by pleadings, agreement of parties or otherwise.
The procedure contemplated by UCPR 28.2 is the final determination of the relevant question. It must be based on a final finding of any necessary facts and/or the parties' binding agreement on those facts: Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334 at 355 & 357-358; [45] & [51] (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ).
The Court has a discretion whether to make an order for the separate determination of questions.
Ordinarily the Court will hear and determine all issues in the case at the same time: Tallglen v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130 at 141 (Giles CJ in Comm Div). The discretion to order a separate hearing must be exercised with caution: Perre v Apand Pty Ltd [1999] HCA 36; (1999) 198 CLR 180 at 332; [436] (Callinan J). It is for the party who seeks a departure from the ordinary position to demonstrate that departure is desirable in the particular case.
Consideration will have to be given to whether there may be overlap between the evidence adduced at the hearing of the separate questions and the subsequent hearing of the rest of the questions. Overlap may make separate questions undesirable. In particular, the Court is unlikely to order separate questions if the determination of the separate questions may require consideration of the credit of a witness who is likely to be a witness at the subsequent hearing of the other questions in the case: Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 411 at 434 (Samuels JA).
Consideration must also be given to the implications for the case if the separate questions are determined one way or another. An order for a separate question may be appropriate where the determination of the question will resolve the entire dispute or substantially narrow the scope of the dispute. As a practical matter, determination of a separate question may facilitate settlement.
These principles demonstrate that careful consideration must be given to the terms of the questions which a party seeks to have separately determined and the legal and factual context in which those questions fall for determination in the particular case. Reasoning which initially favours an order for separate questions may turn out to be superficial as the preparation and hearing of the separate questions progresses: Tepko Pty Ltd v Water Board [2001] HCA 19; (2001) 206 CLR 1 at 55; [168] (Kirby & Callinan JJ).
When exercising the discretion under UCPR 28.2, the Court must seek to give effect to the overriding purpose to facilitate the just, quick and cheap resolution of the real issues in the proceedings: s 56(2) of the Civil Procedure Act 2005 (NSW).
Ultimately, an application for separate questions is not to be decided in a mechanical way but by reference to a commonsense analysis of the best way to progress the proceedings in accordance with the overarching purpose. As Bell J observed in Owners Corporation SP 70672 v Trustees of Roman Catholic Church [2010] NSWSC 946 at [16]: "…the determination of separate questions should generally only be ordered if the court is satisfied that doing so will "facilitate the quicker and cheaper resolution of the proceedings": Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 1215 at [7(6)] per Einstein J. In considering that question, the court needs to bear in mind that, while superficially it may appear attractive to order separate questions, experience often shows that that is not the case because, for example, of the complications that can arise in relation to appeals or to overlapping factual issues or to questions of credit, if the same witnesses have to give evidence in relation to questions that are separated and those that are not: see Tepko Pty Ltd v Water Board (2001) 206 CLR 1 at 55 per Kirby and Callinan JJ; Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 1215 at [7(6)] per Einstein J."

Part 1C of the Civil Liability Act 2002

The separate questions sought by the State and SESLHD relate to the operation of Part 1C of the Civil Liability Act and the application of that Part to the facts of this case.
Part 1C comprises six sections which provide as follows: Part 1C Child abuse - setting aside settlements 7A Definitions In this Part - affected agreement - see section 7C. applicant - see section 7D. 7B Object of Part The object of this Part is to provide a way for a person to seek to have an agreement set aside if - (a) the agreement settled a claim for child abuse perpetrated against the person, and (b) at the time of the agreement, there were certain legal barriers to the person being fully compensated through a legal cause of action. 7C Meaning of "affected agreement" (1) In this Part, an affected agreement means an agreement that prevents the exercise of an action on a cause of action to which section 6A of the Limitation Act 1969 applies, if the agreement occurred - (a) before the commencement of that section, and at the time of the agreement, a limitation period applying to the cause of action had expired, or (b) before the commencement of Part 1B of this Act, and at the time of the agreement, an organisation, that would have been liable under Part 1B for child abuse had the Part been in force, was not incorporated, or (c) before the commencement of Part 1B of this Act, and the agreement is not just and reasonable in the circumstances. (2) For the purposes of this section, a limitation period is taken to have expired even if it were possible at the time to seek the leave of a court to extend the period. 7D Court may set aside affected agreement (1) A person (the applicant) who, because of an affected agreement, is prevented from exercising an action on a cause of action may - (a) commence proceedings on the cause of action in a court with sufficient jurisdiction to hear the cause of action, and (b) apply to the court to set aside the affected agreement. (2) The court may set aside an affected agreement if it is just and reasonable to do so. (3) The court may consider the following in making its decision to set aside the affected agreement - (a) the amount paid to the applicant under the agreement, (b) the bargaining position of the parties to the agreement, (c) the conduct in relation to the agreement of - (i) the parties other than the applicant, or (ii) the legal representatives of the parties other than the applicant, (d) any other matter the court considers relevant. (4) Section 131(1) of the Evidence Act 1995 does not prevent evidence being adduced in proceedings under this section, even if the evidence is of a communication made, or a document prepared, in connection with an attempt to negotiate a settlement of the dispute to which the affected agreement relates. 7E Court may also set aside other things (1) If the court decides to set aside an affected agreement under this Part, it may also set aside any of the following that gives effect to the agreement - (a) a contract, deed or other agreement, (b) an order or judgment of the court or of a lower court. (2) However, the court must not set aside the following - (a) a deed of release signed by or on behalf of the applicant in acceptance of an offer under the National Redress Scheme and an agreement relating to a relevant prior payment that has been taken into account in the offer, (b) an agreement to the extent to which - (i) it settled a cross-claim between 2 or more defendants, or (ii) 1 defendant indemnified another, (c) a contract of insurance. (3) In this section - National Redress Scheme means the National Redress Scheme for Institutional Child Sexual Abuse established by the National Redress Scheme for Institutional Child Sexual Abuse Act 2018 of the Commonwealth. 7F Effect of setting aside affected agreement (1) A court may set aside an affected agreement or anything else under this Part only to the extent that it relates to the applicant. (2) An affected agreement and anything else set aside under this Part is void but only to the extent that it relates to the applicant. (3) An amount paid, including legal costs or disbursements, or other consideration given under the affected agreement - (a) is not recoverable despite the agreement being void, and (b) may be taken into account by a court in determining damages in proceedings for a cause of action to which the affected agreement relates.
Part 1C was inserted into the Civil Liability Act in 2021. It commenced on 18 November 2021. The introduction of Part 1C was the third measure in a trilogy of related measures enacted by the New South Wales Parliament following the Royal Commission into Institutional Responses to Child Sexual Abuse. The first measure was the prospective and retrospective abolition of the limitation period for actions for damages that relate to the death of or personal injury to a person resulting from an act or omission that constitutes child abuse of the person. Abolition of the limitation period was achieved by the 2016 insertion of s 6A(1) into the Limitation Act 1969 (NSW). The term "child abuse" is defined in s 6A(2). For current purposes, it may be accepted that the allegations made by the plaintiff in these proceedings are allegations of child abuse as defined.
The second measure was the abolition of the defence to child abuse actions which is sometimes referred to as the Ellis defence. Previously, the Ellis defence might have arisen where the defendant was an unincorporated association: Trustees of the Roman Catholic Church for the Archdioceses of Sydney v Ellis [2007] NSWCA 117. Abolition of the Ellis defence was achieved by the 2018 insertion of Part 1B into the Civil Liability Act 2002.
The establishment of the regime in Part 1C to set aside affected agreements is the third measure. Informed by the object of Part 1C as set out in s 7B and the definition of "affected agreement" in s 7C, the overall statutory scheme is clear. Part 1C provides a discretionary mechanism to set aside historic settlements of child abuse actions which were compromised at a time when the limitation defence and/or the Ellis defence applied, so that the claimant may now pursue full compensation for the alleged child abuse unaffected by those defences: see EXV v Uniting Church in Australia Property Trust (NSW) [2024] NSWSC 490 at [47] (Weinstein J).
The only issue before the Court on the current application is whether an order for separate questions ought to be made. The Court does not need to decide (nor is it able to decide on the evidence) whether the 2003 Agreement and/or the 2017 Agreement is an affected agreement or whether it is just and reasonable for either or both to be set aside. It is, however, necessary to consider the elements of those issues in order to understand what would be required for the determination of the separate questions sought by the State and SESLHD and what the implications would be for the rest of the case.
The structure of Part 1C is as follows: 1. there must be an "affected agreement" as defined in s 7C(1); 2. the claimant must be prevented from exercising an action on a cause of action because of the affected agreement - s 7D(1); 3. the claimant must apply to have the affected agreement set aside - s 7D(1)(b); and 4. the Court then has a discretion to set aside the affected agreement "if it is just and reasonable to do so" - s 7D(2).
The threshold requirement that there be an "affected agreement" has a number of subcomponents by virtue of the definition in s 7C(1). In the case of s 7C(1)(a): 1. there must be an agreement; 2. the agreement must prevent the exercise of an action on a cause of action for child abuse; 3. the agreement must have "occurred" before 17 March 2016 (when the limitation period for child abuse actions was abolished); and 4. when the agreement "occurred", the limitation period for the claimant's claims must have already expired.
In the case of s 7C(1)(b): 1. there must be an agreement; 2. the agreement must prevent the exercise of an action on a cause of action for child abuse; 3. the agreement must have "occurred" before 1 January 2018 (when the Ellis defence was abolished); and 4. when the agreement "occurred", an organisation would have been liable for child abuse alleged by the claimant but for the Ellis defence.
The subcomponents required by s 7C(1)(c) are the same as for s 7C(1)(b) except that the applicability of the Ellis defence at the time the agreement "occurred" is not required. Instead, it must be the case that "the agreement is not just and reasonable in the circumstances".
Apart from what may be inferred from the adjective "affected", the definition of "affected agreement" does not require that entry into the settlement agreement was subjectively influenced by the expired limitation period or the Ellis defence. All that is required is that the settlement agreement was entered into at a time when either of those defences existed.
Nonetheless, it is likely that the subjective influence which the relevant defence had on a particular claimant's decision to settle will be a relevant issue on an application to set aside the affected agreement. Subjective influence, or the absence of it, may be important to the Court's assessment of whether it is just and reasonable to set aside the affected agreement. Section 7D(3) lists three particular matters to be taken into account on that question, but s 7D(3)(d) makes clear that the list is not exhaustive. In EXV v Uniting Church in Australia Property Trust at [202]-[208], the primary reason why Weinstein J held that it was not just and reasonable to set aside an affected agreement was that the claimant had not been influenced by either the expiry of the limitation period or the Ellis defence when deciding to accept the settlement. In the case of the limitation period, it had expired but the Uniting Church had told EXV in correspondence that it would not be relied upon.
A claimant who contends that it is just and reasonable to set aside an affected agreement bears the onus of demonstrating to the Court that it is so; EXV v Uniting Church in Australia Property Trust (NSW) at [168] (Weinstein J).

Parties' submissions

Accepting the burden of demonstrating why the Court ought depart from the ordinary position of having all issues determined at the same time, the State and SESLHD put forward six reasons why separate questions ought to be ordered in this case.

The procedure contemplated by Part 1C

First, the State and SESLHD submitted that "it might even be thought that Parliament contemplated that applications under ss 7D and 7E would ordinarily be heard and determined separately from final proceedings". The only reason given for that submission is that there have been a number of cases where the Court has decided whether to set aside a settlement agreement before deciding any other issues in the case. Apart from EXV v Uniting Church in Australia Property Trust, the other cases which took that approach were decided in accordance with the statutory regime enacted by other states. The regimes are not uniform. There are material differences to the procedural framework contemplated in each state. For example, in Western Australia s 92 of the Limitation Act 2005 (WA) expressly requires the settlement agreement to be set aside before fresh proceedings are commenced.
In EXV v Uniting Church in Australia Property Trust the plaintiff commenced proceedings and then filed a Notice of Motion in which he sought an order under s 7D that the relevant settlement agreement be set aside. That was the procedural vehicle for the early determination of the application of Part 1C by Weinstein J. The defendant also filed a Notice of Motion seeking an order for separate questions about Part 1C. The defendant's motion was listed for hearing at the same time as the plaintiff's motion. In effect, both parties sought early determination of the Part 1C issues. There is no indication from the judgment that the Court was asked to consider whether a separate hearing ought to be ordered. Ultimately it was not necessary for Weinstein J to decide whether separate questions ought to be ordered and no orders were made under UCPR 28.2.
There is nothing in EXV v Uniting Church in Australia Property Trust which demonstrates an intention of the Parliament that such an approach will ordinarily be taken by the Court under Part 1C. In any event, each case has its own facts and procedural history. Decisions in other cases about ordering the separate determination of particular questions are a poor guide to whether separate questions ought to be ordered in another case.
The intention of Parliament is to be ascertained by construing Part 1C of the statute. Where, because of an "affected agreement", a claimant is prevented from exercising an action on a cause of action, the claimant may do two things under s 7D(1). The claimant may: 1. commence proceedings on the cause of action in a court with sufficient jurisdiction to hear the cause of action; and 2. apply to the Court to set aside the affected agreement.
The State and SESLHD submit that the structure of s 7D(1) suggests Parliament contemplated applications to set aside affected agreements would ordinarily be heard and determined before the final hearing of the cause of action. The State and SESLHD point out that s 7D(1)(a) permits the claimant to "commence" proceedings, which might be contrasted with other provisions which permit a person to "commence and maintain" proceedings (eg Legal Profession Uniform Law (NSW) 2014, Div 1; Water Management Act 2000 (NSW), Div 3). The language of the other statutory regimes, each enacted for its own purposes, is of limited assistance to the construction of s 7D(1).
Section 7D(1) permits an application to set aside an affected agreement to be determined prior to the claims in the proceedings but it should not be construed so as to require it. The wording of the provision lacks the specificity which would be necessary to require the Court to apply its own discretionary procedures in such a narrow way regardless of the circumstances of any particular case. Had that been intended, a mechanism similar to that adopted in Western Australia would be expected: Limitation Act 2005 (WA), s 92.
Rather s 7D(1) ought to be construed so as to reserve to the Court flexibility in the practical implementation of the beneficial procedures in Part 1C in each particular case. There are a number of reasons why it is clear that flexibility is intended.
First, s 7D(1) contemplates that there may be circumstances in which proceedings are on foot for a cause of action whilst the application to set aside the relevant affected agreement remains undetermined. That may not necessarily be so in every case, but the wording specifically allows that possibility.
Secondly, the distinction between the right to "commence" proceedings and the right to "commence and maintain" proceedings lacks the materiality it would otherwise have (if any) because the right given to the claimant by s 7D(1)(b) is described as a right to "apply". Section 7D(2)(b) says nothing about the claimant having the application determined at any particular time. The two paragraphs of s 7D are to be construed harmoniously. The claimant is empowered to start the relevant procedures ("commence" or "apply") and the subsequent determination of each procedure is evidently left to the usual procedures of the Court.
Thirdly, flexibility may be necessary for the efficacious application of Part 1C. The definition in s 7C(1) applies to agreements that "prevent" the exercise of an action on a cause of action for child abuse. There will be cases, of which this case is one, where a previous settlement agreement does not qualify as an "affected agreement" until and to the extent that it is pleaded by the defendant. A release or similar defence is a matter for specific pleading: UCPR 14.14. Until they are pleaded, the 2003 Agreement and the 2017 Agreement do not prevent the plaintiff form exercising his right to bring these proceedings.
This is not a theoretical matter. It is not uncommon in cases of historic child abuse for a defendant not to rely on a defence which may otherwise be available to it. The defendant's response to EXV's unlitigated claim in 2007 is an example of such conduct. In the face of Part 1C or in any event, institutional reliance on previous settlement agreements may become an exception rather than the norm. If so, when proceedings are commenced for historic child abuse, the plaintiff may not know whether an application under s 7D(1)(b) will be necessary. The procedures contemplated by s 7D(1) are intended to have sufficient flexibility to accommodate such a circumstance. There may be other procedural developments which may occur after proceedings have been commenced which makes it desirable for the Court to retain flexibility when considering when to determine an application to set aside an affected agreement.
There is nothing in the provisions of Part 1C which requires the current application to be determined other than in accordance with the usual principles which apply to the application for separate questions under UCPR 28.2.

The plaintiff's promise in clause 5 of the 2017 Agreement

The second reason put forward by the State and SESLHD as to why separate questions ought to be ordered is that under clause 5 of the 2017 Agreement the plaintiff has promised that he will "take no action" in respect of the claims against the State, SESLHD and a number of other parties. The State and SESLHD submit that the benefit to them of the clause 5 promise is not to be vexed by litigation irrespective of the ultimate outcome of the litigation. They will be deprived of that benefit for so long as the plaintiff's application to set aside the 2017 Agreement remains undetermined.
The State and SESLHD rely on Buurabalayji Thalanyji Aboriginal Corp v Onslow Salt Pty Ltd (No 4) [2019] FCA 1275 at [75]-[79] where McKerracher J ordered separate questions to determine whether the plaintiff was breaching a contractual promise not to sue by bringing proceedings in which the defendants had pleaded the contract as a defence.
In this respect, the definition of "affected agreement" means an agreement that prevents "the exercise of an action on a cause of action". This is broad language which covers not just an agreement which releases liability or otherwise extinguishes a substantive right but also an agreement which prevents the "exercise" of an "action". The term "affected agreement" is defined widely enough to include a promise not to sue.
Superficially this is the best argument in favour of separate questions but it does not survive analysis.
First, the plaintiff did not give a promise not to sue in 2003. This argument is irrelevant to the 2003 Agreement.
As for the 2017 Agreement, the premise for the argument is that the purpose of the 2017 Agreement is to bring finality to a dispute "and to prevent further vexation in respect of that dispute". That premise raises a question of construction of the 2017 Agreement and clause 5 in particular. The clause 5 promise to "take no action" may be thought to be merely incidental to the clause 2 release, but it is an additional promise which the parties objectively intended to have content. Clause 5 follows clause 4 in which the plaintiff acknowledged that he is not entitled "to make any further approach" for financial assistance to the State and other defendants. As a matter of construction, the State and SESLHD are correct to submit that a purpose of clause 5 is to relieve them of future vexation by the plaintiff, including by him bringing fresh litigation.
However, clause 5 is to be construed to avoid the plaintiff's promise being legally ineffective. This is an elementary principle of construction (Fell v Fell [1922] HCA 55; (1922) 31 CLR 268 at 275 (Isaacs J)), based on the presumption that the parties are unlikely to have intended to agree to something legally ineffective (Bank of Credit and Commerce International SA v Ali [2001] 1 AC 251 at 269 (Lord Hoffman)). Were that intention otherwise susceptible to doubt in this case, clause 6 of the 2017 Agreement demonstrates the parties' intention that the 2017 Agreement be as valid and effective as possible. That intention casts doubt on whether clause 5 ought to be construed so as to preclude the plaintiff from exercising his statutory right to commence proceedings under s 7D(1)(a) of Part 1C even though that right was enacted after the 2017 Agreement was entered into. Such a construction may be correct, having regard to s 3A(2) of the Civil Liability Act 2002, but there remains an argument that the parties lacked competency to forestall or overrule future legislation of the character of Part 1C (Glacken v Tooth & Co Ltd (1935) 54 CLR 97 at 102 (Rich J), 105 (Dixon J) & 106 (McTiernan J)). If so, clause 5 is to be construed as limited to "action" which was available to the plaintiff in 2017.
Even if clause 5 is otherwise to be construed broadly, there may still be a question whether it is unenforceable as contrary to public policy to the extent that it would otherwise preclude the plaintiff from commencing proceedings under s 7D(1)(a), at least whilst the related application under s 7D(1)(b) remained undetermined. Whether or not clause 5 is vulnerable to such unenforceability depends upon a consideration of the scope and policy of Part 1C, and whether Part 1C is intended to deal with private rights only, or whether it is intended to have a more extended operation as a matter of public policy (Re Morris (1943) 43 SR (NSW) 352 at 356-357 (Jordan CJ)).
There is no doubt that Part 1C is primarily concerned with private rights, but a public interest cannot be ruled out. The enactment of Part 1C had its origins in the findings of the Royal Commission into Institutional Responses to Child Sexual Abuse and was one part of the Parliament's multi-part response to under-compensation of victims of historic child abuse. Part 1C in general and s 7C(1)(a) in particular are concerned with the application of limitation periods. Limitation of actions is a matter of both private and public interest (Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 552-553 (McHugh J)). Section 7E(1) provides for setting aside orders of the Court which is relevant to the public interest in the administration of justice and finality. Minds may differ as to whether Part 1C embodies a public interest which would be infringed by permitting parties to contract out, just as judicial minds differed in Re Morris as to whether a statutory right to make a family provision claim was a purely private right or whether it also concerned a public interest.
More important than the construction of clause 5, there is a question of the construction of s 7D(1)(a) about the meaning of the stipulation that the claimant "may" commence proceedings. By this provision, it seems unlikely that Parliament intended no more than to recognise the rights which every person already has to commence civil proceedings in accordance with the Civil Procedure Act 2005 and the Uniform Civil Procedure Rules. If that is all s 7D(1)(a) means, it may be otiose. A more likely construction is that Parliament intended the claimant to be relieved of any adverse consequences which would otherwise arise from an affected agreement were the claimant to commence proceedings as specified in s 7D(1)(a), at least until the application to set aside the affected agreement is determined. If so, any contractual right the State and SESLHD have not to be vexed by litigation has been overridden by s 7D(1)(a).
These construction issues do not need to be decided on an application for an order for separate questions. For current purposes it is sufficient to say that it is doubtful that the clause 5 promise has significant practical value for the State and SESLHD following the enactment of Part 1C. The existence of the clause 5 promise is not irrelevant to the current application and must be taken into account, but it is far from decisive.
Ultimately the Court still needs to consider whether the current proceedings is an appropriate case for separate questions to be ordered having regard to all the circumstances. This was the approach taken in Buurabalayji Thalanyji Aboriginal Corp v Onslow Salt Pty Ltd (No 4) where McKerracher J considered not just the promise not to sue but also the overlap in the various questions in the case, the relative efficiency of ordering and not ordering separate questions and the implications for the proceedings which would flow from the alternative outcomes.

The extant orders of the Court and the administration of justice

As their third reason, the State and SESLHD point out that most of the rights which the plaintiff claims in these proceedings have merged with the Court orders in 2003 and 2017. They submit that maintenance of proceedings which are inconsistent with extant orders of the Court is contrary to the administration of justice. The submission is sound as a matter of general principle but it must yield to Parliament's intention as expressed in ss 7D(1) and 7E(1). In the circumstances contemplated by s 7E(1), s 7D(1) gives a claimant a statutory right to commence proceedings which are inconsistent with extant orders of the Court. The exercise of that right is not contrary to the administration of justice.

Implication for the proceedings if the State and SESLHD succeed on the separate questions

Fourthly, given the substantial overlap between the claims made in the current proceedings and the claims released in 2003 and 2017, the separate questions will be decisive (or nearly decisive) for the outcome of these proceedings if they are decided in favour of the State and SESLHD. The substantial overlap is not in dispute, nor is there a material dispute about the outcome for the proceedings if the State and SESLHD succeed (both at first instance and on any appeal).
Whilst this circumstance might be thought to be a necessary condition for separate questions to be ordered, it is not in itself sufficient. Regard must still be had to all the circumstances of the case.

Enlarging the prospects of settlement

Fifthly, the State and SESLHD submit that determination of the separate questions will assist the parties to settle the claims by removing an existing uncertainty. That may be accepted.

Efficacy of separate questions in these proceedings

Finally, the State and SESLHD submit that the questions whether the 2003 Agreement and the 2017 Agreement should be set aside are amenable to being heard and determined separately from the other issues in the case.
This last reason is the most important submission which needs to be considered because it is the one which grapples with the efficacy of separating out some questions for early determination in this case. If the questions cannot be separated out in a practical and realistic way, then it is difficult to see how an order for separate questions can be made even if the benefits of early determination may be significant.
In advancing this reason, the State and SESLHD accept that: 1. the plaintiff's subjective motivations for entering into the 2003 Agreement and the 2017 Agreement are relevant to whether it is just and reasonable for the Court now to set them aside; 2. the plaintiff's prospects for success on liability and quantum may be relevant to whether it is just and reasonable to set aside the 2003 Agreement and the 2017 Agreement; and 3. if separate questions are ordered, the plaintiff will have to give evidence twice.
In this context, the concession offered by the State and SESLHD (see paragraph [22] above) is not sufficient to remove the plaintiff's prospects as an issue which will be relevant to setting aside the 2003 Agreement and the 2017 Agreement. The proffered concession of under-compensation is qualified by the plaintiff first succeeding both on liability and quantum. At the hearing of separate questions, it may remain open to the plaintiff to seek to demonstrate that his prospects on liability and/or quantum are strong.
The State and SESLHD nonetheless submit that an order for separate questions is appropriate because the topics on which the plaintiff will give evidence will be different at the hearing of the separate questions than at the final hearing. The motivation for entry into the settlement agreements will not arise at the final hearing. Whilst prospects of success on liability and quantum will arise at the hearing of the separate questions, it is submitted that the Court will not conduct a preliminary trial.
There are a number of material difficulties in the approach advocated by the State and SESLHD. First, the order for separate questions is sought before the State, SESLHD and the other defendants have filed their defences. Even if it is assumed that the State and SESLHD will plead the 2003 Agreement and the 2017 Agreement to the fullest extent possible, the other issues in the case have not yet been defined by pleadings. The real issues in the case not yet defined by pleadings, it is premature to consider the plaintiff's prospects for success on liability and quantum.
Further, whilst the extent of the controversy between the parties remains undefined, the extent of private and public resources which might be saved by ordering separate questions is unknown. The magnitude of the controversy and expense and other resources required to resolve it are currently based on assumptions which may not ultimately prove correct.
Secondly, should separate questions be ordered, the plaintiff will bear the onus of demonstrating that it is just and reasonable to set aside the settlement agreements. With that onus, it is not clear to what extent, if any, the plaintiff will be precluded from adducing evidence at the hearing of the separate questions to demonstrate the strength of his case on liability and quantum. The State and SESLHD submit that "the Court would not conduct a preliminary trial". It may be accepted that the Court will be loath to do so. Nonetheless, it is not possible to know with confidence the extent to which the Court will have to consider liability and quantum at the hearing of the separate questions. The degree of overlap between the separate questions and the substantive issues is presently unclear. It may be substantial.
Thirdly, the plaintiff may be prejudiced by having to demonstrate the strength of his prospects if he has to do so at a limited hearing of separate questions rather that a final hearing when all the evidence is before the Court.
The State and SESLHD submit that the extent of overlap will be limited because separate questions about whether it is just and reasonable to set aside the 2003 Agreement and the 2017 Agreement will be confined by the particulars currently set out in paragraphs 89 and 91 of the Amended Statement of Claim. The difficulty with that argument is the dynamic reality of litigation, especially where relatively new legislation is being considered by the Court. The decision to order separate questions must be made having regard not just to the current particulars but also to the realistic possibility of evolution in the plaintiff's case.
In any event, even on the current particulars it seems that one issue which will be common to both the determination of the separate questions and the issues to be decided at the final hearing will be the credit of the plaintiff. This is a consideration which weighs heavily against an order for separate questions. In this case in particular, where the plaintiff alleges historic child abuse, it would be highly undesirable for the plaintiff to be required to give evidence and to be cross-examined twice. In the face of that prospect, it would be necessary for the State and SESLHD to demonstrate the most compelling reasons before an order for separate questions could be made.
In that context, another important consideration is the delay which will likely result from an order for separate questions. The questions will each have to be argued and decided. The proceedings in EXV v Uniting Church in Australia Property Trust (NSW) commenced in 2022, the separate questions were argued over four days in May and July 2023 and judgment was handed down in May 2024. Given the novelty of the legislation, Weinstein J was required to consider and decide a range of issues without the advantage of prior consideration by the Court. There may yet to be an appeal. The case before Weinstein J does not appear to be as complicated as the current case so the separate questions may take longer in this case. There is also a prospect of an appeal in the current case.
Notwithstanding the submissions of the State and SESLHD, the proceedings are not amenable to a separate hearing of the questions in the Notice of Motion.

The plaintiff's consent to two of the separate questions

The State and SESLHD point out that the plaintiff consents to separate questions being ordered in accordance with paragraphs 1(b) and 1(c) of the Notice of Motion. The parties' consent is relevant to the exercise of the Court's discretion but the Court must still seek to give effect to the overriding purpose when exercising that discretion: s 56(2) of the Civil Procedure Act 2005.
The question in paragraph 1(b) is phrased as a question of construction about s 7C(1)(c). The plaintiff does not plead s 7(1)(c) in relation to the 2003 Agreement: paragraph 88 of the Amended Statement of Claim. It is unclear if s 7C(1)(c) is pleaded in relation to the 2017 Agreement because of the evident typographic error in paragraph 90. In any event, it is not appropriate to order the separate question in paragraph 1(b) of the Notice of Motion. There is no apparent utility in obtaining an early answer to such a narrow question of construction in isolation from the other proposed questions, and certainly not enough utility to justify the delay which a separate question would cause.
Nor is it appropriate to order the separate question set out in paragraph 1(c) of the Notice of Motion. Despite what is set out in paragraphs [43] and [44] above, it may yet be argued (as the State and SESLHD currently submit: Written Submissions dated 6 September 2024, paragraph 60) that an inquiry into whether the 2017 Agreement is an "affected agreement" will require examination of the plaintiff's subjective motivation for entering into the 2017 Agreement. That inquiry will require the plaintiff to give evidence, presumably to be cross-examined and possibly the subject of a credit finding. The plaintiff's agreement to an order for this separate question is made on the basis that paragraph 1(c) raises a question of law only, which may not be correct. The inquiry into whether the 2017 Agreement is "an affected agreement" is best left for the final hearing when all other issues in the case are to be determined.

Conclusion

The State and SESLHD have not demonstrated that it is appropriate in this case to depart from the ordinary position of deciding all issues in the case at a single hearing.
The Notice of Motion filed on 6 August 2024 is to be dismissed with costs.

Amendments 06 December 2024 - Name of counsel for the plaintiff corrected to "Emmerig" on cover sheet. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 06 December 2024

At a glance

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Judgment (15 paragraphs)

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Cases Cited (17)