(2009) 14 BPR 26,923
Tillett v Varnell Holdings Pty Ltd [2009] NSWSC 1040
Warren v Coombes (1979) 142 CLR 531
Source
Original judgment source is linked above.
Catchwords
McGloin v Magann[2013] NSWCA 36
South Western Sydney Local Health District v Gould (2018) 97 NSWLR 513[2018] NSWCA 69
Spina v Permanent Custodians Limited [2009] NSWCA 206(2009) 14 BPR 26,923
Tillett v Varnell Holdings Pty Ltd [2009] NSWSC 1040
Warren v Coombes (1979) 142 CLR 531
Judgment (7 paragraphs)
[1]
Background
On 5 July 2002, Mr Magann lodged with the Respondents a Statement of Complaint (the Complaint), in which he complained of emotional, psychological and sexual assault by an Assistant Priest, Dr Henk Eijkman (Dr Eijkman) and a parish Priest, Fr Michael McGloin (Father McGloin), between "1981 and 1989 approx[imately]". In the Complaint, Mr Magann indicated that he sought a written and verbal apology from both men, charges to be brought against both men, financial compensation for suffering and counselling for both himself and his wife. The Complaint indicated that he had notified the Police about the matters the subject of the Complaint.
On 13 August 2002, Mr Magann sent a letter to Bishop Manning of the Roman Catholic Diocese of Parramatta which he characterised as a letter of demand for compensation for the sexual abuse that he alleged occurred against him at the hands of Father McGloin and Dr Eijkman over a 10 year period starting in approximately 1982. The letter stated that the Parramatta Diocese was responsible for both past and present employees and accountable for their actions. The letter signified an "intention to have this matter dealt with immediately" and asserted that "it is your responsibility to accommodate my request".
On 19 May 2003, Mr Magann filed a Statement of Claim in the District Court of New South Wales against the Respondents (the 2003 Proceedings). Father McGloin and Dr Eijkman were the second and third defendants respectively. The Statement of Claim alleged that the two priests sexually abused Mr Magann over a number of years and that the Respondents were responsible for that conduct. As a result of the alleged abuse, damages including exemplary and punitive damages were sought. The allegations against Father McGloin related to the period 1983 through to 1991, and the allegations against Dr Eijkman related to the period 1987 through to about 1989.
Mr Magann sought an extension of time under the Limitation Act 1969 (NSW) to bring his claims. Although an extension was initially granted by Judge Sorby in the District Court in November 2004, that extension decision was reversed by a decision of this Court on 8 December 2005: see Eijkman v Magann; McGloin v Magann; Trustees of the Roman Catholic Church of Diocese of Parramatta v Magann [2005] NSWCA 358.
Just over a month after the Court of Appeal's decision, on 8 December 2005, Mr Magann's then solicitor, Herbert Weller (Mr Weller), wrote to the then solicitors for the current Respondents proposing a mediation conference "to effect a fair and compassionate resolution of the matter".
The evidentiary record is largely silent as to what, if anything, transpired in the period immediately following this request. It is clear, however, that Mr Magann's Complaint and demands were considered as part of the Church's "Towards Healing" process. As part of that process, by way of a letter dated 21 March 2007, Ms Bailey was appointed to assess Mr Magann's complaints against Dr Eijkman and Fr McGloin. She was asked to investigate and report on whether there were grounds for concluding, on the balance of probabilities, that his complaints were justified either totally or in part.
Ms Bailey's review included a series of interviews (including of Mr and Mrs Magann, Dr Eijkman and Fr McGloin), as well as with Mr Magann's then legal representatives, Mr Russell QC and Mr Weller, and the solicitor for Dr Eijkman, Mr Walsh. Ms Bailey also considered a bundle of documents supplied to her by the Professional Standards Office of the Catholic Church (PSO).
Ms Bailey produced a report dated 14 August 2007 which ran to some 31 closely typed pages and resulted in Ms Bailey concluding that:
"Having considered the available evidence, and having made the above findings, I am of the view that, on the balance of probabilities, there are grounds for finding that Mr Magann's allegations are justified."
There was an issue at the hearing of the separate question as to when the Bailey Report was provided to Mr Magann. The primary judge found that it was handed to him on 11 September 2007 at a meeting at the premises of the PSO with Mr Paul Davis (Mr Davis) and Mr Michael Salmon (Mr Salmon): at [122]. Mr Davis was special counsel to the Office of Safeguarding and Professional Standards for the Catholic Diocese of Parramatta, and Mr Salmon was the Director of the New South Wales PSO between 2003 and 2018.
Mr Magann claimed that he did not receive the Bailey Report until after the Deed had been entered into (which was on 16 October 2007), and was supported in this respect by evidence given at the hearing before the primary judge by his former wife, Mrs Magann. As already noted, the primary judge's finding as to the date of receipt of the Bailey Report is a central part of the appeal and I consider this aspect of the appeal at [39]-[46] below.
It is clear that, on 11 September 2007, Mr Magann met with Mr Salmon and Mr Davis at the premises of the PSO. (The primary judge's reference at [121] to Mr Wall being present at this meeting appears to be erroneous, but nothing turns on that).
Mr Salmon's contemporaneous file note of the 11 September 2007 meeting was relevantly as follows:
"Meeting at PSO.
PRESENT: Darren Magann, Paul Davis and Michael Salmon.
- DM was by himself and was not accompanied by a mate Michael and/or by his father as he informed me he would the previous afternoon.
- DM was formally handed an edited version of the assessment report being the document agreed this morning by Paul Davis and Michael Salmon that it would be appropriate to provide to DM.
DM said words to the effect that all he wanted was compensation pursuant to his formula of $10k for every year he has suffered. He did not evince a need for aspects of a pastoral response inclusive of a meeting with the Bishop although this might change.
DM was generally advised that the Bishop supported the assessor's findings, and in the back or those findings he was sympathetic to DM's request for an appropriate financial settlement.
However, he was also advised that in achieving the financial settlement the CA was committed to pursuing this in the usual fashion pursuant to TH. Therefore, that would mean the appointment of an independent facilitator.
DM assumed that the facilitation process would be much speedier than the assessment phase of TH.
DM advised that the CA would approach Shane Wall for the process and that we would expect Shane to be in touch with DM in the near future."
It may be inferred that the reference to TH in this file note was a reference to the "Towards Healing" process. Shane Wall (Mr Wall), also referred to in the file note, was an independent facilitator engaged by the NSW Professional Standards Office of the Roman Catholic Church to facilitate the Towards Healing complaint lodged by Mr Magann. He, together with Mr Davis and Mr Salmon, all gave evidence in the proceedings at first instance.
Also in evidence was Mr Salmon's copy of the Bailey Report which bore the handwritten note "Final Edited Version Handed to DM at PSO on 11/9". "DM" may reasonably be inferred to be a reference to Mr Magann.
On 15 October 2007, Mr Wall sent the following email to Mr Salmon:
"Dear Paul,
I have received a further phone call from Darren, following my advice for him to 'cool down', eliminate the 'ultimatum stance', to desist from pre-empting/predicting the outcome from the mediation conversation tomorrow, and to talk to his legal adviser to get a more objective bearing on the best way forward (including an awareness of the options - or lack of - should he choose to not participate in the meeting tomorrow). As you know, he was threatening to cancel the meeting unless he got what he wanted: $150K.
The meeting is on.
Darren has advised me that he has spoken to lawyer Herbert Weller and QC Dave Russell. Darren said that they advised him to get to the meeting and to negotiate a resolution. Darren also said that they told him to ensure that if settlement is achieved, a Deed of Release records such resolution. Furthermore, that he should argue for settlement to be facilitated into his nominated bank account within 7 days. He will come to the meeting with those details.
Paul, I think that all of the above augers well for resolution tomorrow.
I think it is important to have the Deed and the letter from Bishop Manning. Darren has indicated - and I record it here - that he has already sought legal advice. He may need to fax the proposed Deed to Herbert Weller on the day, or take it away to show him and seek advice.
No doubt you will discuss all of the above with Bishop Manning; I'll leave that up to you.
I look forward to seeing you tomorrow morning when I arrive in Sydney. I'll call you on my mobile after landing.
Regards,
Shane."
The settlement conference was held on 16 October 2007 with Mr and Mrs Magann, Mr Wall and Mr Davis in attendance. The primary judge recorded some areas of dispute as to what transpired at this meeting at [73]-[78] of her reasons. The manner in which her Honour resolved these areas of dispute is considered below in the context of considering the grounds of appeal relating to the Contracts Review Act and unconscionability: see [47]-[68] below.
It was uncontroversial that a draft of the Deed without any settlement amount specified was given to Mr Magann at the settlement conference, and that the Respondents increased an original offer of $85,000 to $95,000 and reduced the payment period from the 28 day period referred to in the draft deed to 7 days, at Mr Magann's request. It is also not controversial that Mr Magann did not sign the draft deed at the meeting, but took it to his solicitor Mr Weller and discussed it with him prior to signing and returning it. This occurred later in the day on 16 October 2007.
Mr Magann also delivered a handwritten letter to Bishop Manning on the same day in the following terms:
"Dear Bishop Manning
Enclosed is the signed 'Deed of Release' by both myself + my solicitor Herbert Weller.
I would ask that you return to me a signed copy of this in the Express Post envelope provided asap.
I hope that we can put this behind us and start 'fresh' and I hope that in the near future we may be able to sit down and chat over a cup of tea.
Remaining Yours
DARREN MAGANN"
On 17 October 2007 at 8.27am, Mr Wall sent the following email to Mr Magann:
"Dear Darren,
I write to confirm that your Towards Healing facilitation matter was resolved at our meeting in Blacktown yesterday.
You agreed to settle at $95,000 in full recognition of your complaint. I also confirm that you have forwarded a signed Deed of Release, witnessed by your legal adviser Herbert Weller, to the Diocese of Parramatta. It was agreed that you will receive the settlement funds within 7 days of receipt by the Diocese of the executed Deed.
You have also indicated to me that you will fax to me a copy of a letter that you have written to the Bishop expressing your hope and desire of a new and reconciled relationship with the Bishop now that this matter is resolved.
Darren, may I take the opportunity to thank you for the manner in which you conducted yourself throughout this process. You were respectful and acted with great dignity. A warm thank you also to Leanne who, I believe, supported you with honesty and genuine wisdom.
Yours sincerely,
Shane Wall
Facilitator".
The Recitals to the Deed were as follows:
"A. Mr Magann registered complaint with the New South Wales Police amounting to allegations of sexual assault in the period 1987 - 89 against Fr Henk Eijkman in July 1994.
B. Mr Magann registered a Statement of Complaint with the NSW Professional Standards Office on 9 July 2002 against the then Fr Henk Eijkman and Fr Michael McGloin (now retired) regarding allegations of psychological and sexual assault which spanned over the period of 1981-89.
C. Mr Magann commenced civil proceedings in the District Court of New South Wales against the Trustees of the Roman Catholic Church of the Diocese of Parramatta & Ors No 2134/03 seeking damages [for] negligence and breach of duty of care in respect of the alleged assault (the Proceedings).
D. In his decision of 12 November 2004, Sorby J granted leave for Mr Magann to file a Statement of Claim out of time. This decision was subsequently the subject of Appeal. On Appeal Mr Magann was denied the opportunity to commence proceedings for negligence and breach of duty of care against the Trustees of the Diocese of Parramatta and Ors.
E. The Professional Standards Office in collaboration with The Diocese of Parramatta commissioned an Assessment of the complaints of Mr Magann in March 2007. This process of investigation was completed and a report was prepared dated 14 August 2007.
F. The Diocese, without admitting liability, and Mr Magann have reached agreement on the terms set out in this Deed."
The operative terms of the release were contained in cl 5 as follows:
"5.1 Mr Magann releases the Diocese, its related agencies, its current and future Bishops, trustees, clergy, officers, employees and agents from all actions, suits, claims and demands of every description past present or future relating to or arising from the Claim or the Complaint or any other matters set out in this Deed.
5.2 The Diocese may plead this Deed in bar to any claim or proceeding by Mr Magann or any person claiming on his behalf in respect of the Complaint or any related matter.
5.3 Mr Magann acknowledges that by accepting the payment specified in this Deed and executing this Deed he is not entitled to make any further approach to the Diocese for assistance, damages or otherwise."
The Deed also contained an acknowledgment by Mr Magann in cl 7.2 that upon receipt of the payment referred to in the Deed, Mr Magann will have received all payments and benefits he may be entitled to receive in connection with the Complaint, the Proceedings or any matter incidental to the Complaint or the Proceedings.
[2]
Consideration
Ground 1A (see [6] above), namely the contention that the Deed was "not binding because it did not represent the compromise of a genuine dispute, taking into regard the risks associated with litigation", must be rejected.
As the Recitals to the Deed extracted at [29] above plainly demonstrate, there was a genuine dispute. Indeed, Mr Magann's grievance was of a profound kind. If the point of this argument was that there was no dispute because Mr Magann had failed in his application for an extension of time before the Court of Appeal, Mr Magann still pressed his claim against the Church. So much is apparent from the letter from his solicitor referred to at [14] above, as well as Mr Magann's pursuit of his claim which was the subject matter of the Bailey Report.
Litigation need not be on foot for a dispute or claim, however weak or otherwise unlikely to succeed, to be settled and for a deed recording that settlement to be binding and efficacious.
Counsel appearing for Mr Magann did not explain what was meant by the expression "taking into regard the risks associated with litigation" in ground 1A. If by this he meant that, because Mr Magann's claim for an extension of time had been rejected (see [13] above) and the 2003 Proceedings had been dismissed so that Mr Magann had no risks to "lay off" by way of settlement, this only serves to illustrate the providence of the settlement from his perspective.
To the extent that Mr Magann relied upon Atkins Freight Services Pty Ltd v Fair Work Ombudsman [2017] FCA 1134 (Atkins) in support of this ground of appeal, that decision has no relevance to a case of the present kind. It was a case decided in a particular statutory context, as is made clear in the following passage from the judgment of White J at [49]:
"The FWO's first contention on the appeal concerning the Deeds was that no effect should be given to them because it is not possible for employers and employees to contract out of the minimum entitlements established by awards. That principle is well established: Josephson v Walker [1914] HCA 68; (1914) 18 CLR 691 at 700; Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd [2002] FCA 1406 at [23][35]; Metropolitan Health Service Board v Australian Nursing Federation [2000] FCA 784, (2000) 99 FCR 95 at [17][25]. The FWO accepted that this general principle does not preclude parties from compromising bona fide current and contemplated litigation. So much was confirmed by the Full Court in Kowalski at [17]:
'In these circumstances to view the Heads of Agreement as simply involving some diminution of the appellant's statutory rights is to misunderstand the agreement reached. Plainly the appellant and the second respondent had litigation outstanding. Plainly enough each party was putting a particular position in that litigation. There were risks to each. True it is that statutory public rights cannot be waived or compromised. However, this does not prevent the parties from compromising litigation on foot and in contemplation, having regard to the various risks to the parties in that litigation.'"
The particular industrial relations law context of Atkins is reflected in White J's observation at [52], that "[t]he principle acknowledged in Kowalski should be carefully confined in its application. Were it otherwise, the general principle that parties cannot contract out of award obligations may be easily subverted."
This line of authority has no relevance to the present case. No statutory right or obligation was being released or contracted out of in the Deed.
[3]
The Bailey Report
It is next convenient to deal with the challenge to the primary judge's finding that Mr Magann received the Bailey Report on 11 September 2007, because the contention that he did not receive it until after the Deed had been entered into formed part of his attack on the Deed under the Contracts Review Act limb of the case.
The primary judge referred to some of the competing evidence in relation to this issue at [65]-[69] of her judgment as follows:
"[65] Contemporaneous documents show that on 31 August 2007 Mr Salmon sent Mr Davis some proposed redactions to Ms Bailey's report (in relation to the personal details of various people). Mr Salmon's evidence was that this was 'so that we are able to forward a copy of the document to Darren Magann as soon as practicable'.
[66] On 11 September 2007, Mr Magann met with Mr Salmon and Mr Davis at the Church's Professional Standards Office in Sydney. Mr Salmon's evidence was that he handed an edited version of Ms Bailey's report to Mr Magann at that time. His copy of the report, which was produced in evidence, had the following words written on it: 'Final edited version handed to DM at PSO on 11/9'. Mr Salmon also prepared a contemporaneous file note on the day recording the meeting.
[67] Mr Magann claims not to have received Ms Bailey's report until seven to nine days after the subsequent 'settlement' meeting. Mr Magann's evidence was that 'I did not see the report of Miss Robyn Bailey until about a week after receiving the payment of compensation of $95,000 provided for in the deed of release'. He repeated in cross-examination that he had only received the report a week after payment was made.
[68] Mrs Magann's evidence was also that she had a 'clear recollection' of Mr Magann receiving the report of Ms Robyn Bailey after the meeting held on 16 October 2007. She stated 'I remember him saying to me, "[t]his is the first time I have seen this report. At last someone believes me."' As to timing she stated:
'Q. When did you see the report, of Robin Bailey?
A. I came home from work, Darren was sitting in - on the edge of the bed in our bedroom and I walked in and that is when I saw it, he handed it to - to me and told me what it was.
Q. Can you help as to the timing
A. That was after the meeting.
Q. How long after the meeting, are you able to say?
A. At least - at least a week, at least.'
[69] The evidence of both Mr Davis and Mr Salmon was that Mr Magann was given a redacted version of the Assessment Report of Ms Bailey at the meeting on 11 September 2007 when Mr Magann attended the Professional Standards Office."
The primary judge turned to a resolution of this factual issue at [121]-[128] of her judgment. Her analysis was as follows:
"[121] I am satisfied that on or about 11 September 2007 Mr Magann met with Paul Davis and Shane Wall at the Professional Standards Office. The contemporaneous documents I have already described and the evidence of Mr Davis and Mr Wall confirm this. Mr Magann did not deny any meeting per se, he just suggested it was at a different time.
[122] As for the provision of the redacted copy of the Bailey report, I am satisfied that it was provided to Mr Magann by Mr Salmon on 11 September 2007 at the Professional Standards Office at the meeting. There are contemporaneous documents that establish that on 31 August 2007 he sent Mr Davis some proposed reductions to that report 'so that we are able to forward a copy of the document to Darren Magann as soon as possible'. Mr Salmon wrote on his copy of the report 'final edited version handed to DM at PSO on 11/9'.
[123] As was submitted by senior counsel for the Church, in order to reject the Church's evidence on this issue I would have to make a finding that Mr Salmon falsely prepared a file note and knowingly made a false representation on his copy of the document at the time. This was not put to him in cross-examination. Such a finding would also require the rejection of the evidence of Mr Davis and Mr Wall.
[124] As for the submission that if Mr and Mrs Magann had a copy of the Bailey report with them at the meeting it would have featured more prominently in discussions on that day, I am not persuaded that would necessarily be the case: the meeting was about quantum not liability.
[125] I have paid close regard to the evidence of Leanne Magann. I have referred to her evidence above. She gave her evidence in a calm way and impressed me in the way she answers questions in cross examination. She was estranged from Mr Magann at the time she gave her evidence. Nothing about her evidence gave me the impression that she was intentionally given false evidence; on the contrary, she gave her evidence in a calm and forthright manner and was not evasive in any way. This leaves me with two possible routes by which to reconcile her evidence that Mr Magann first received the Bailey report after the Blacktown meeting and the contemporaneous documents showing that he did. Either Mr Magann was given the document beforehand but, for some reason did not read it, forgot about and then did not locate it until after the Blacktown meeting or she has honestly but unreliably reconstructed the incident where Mr Magann received the report after the meeting.
[126] Mr Magann was unable to provide any evidence in the form of a letter, envelope or other document to establish that he was provided with the report by post after the meeting. Significantly, he did not contact the Church to complain that he had not received the Bailey Report until after the settlement in circumstances where he had no hesitation in corresponding with the Church to air other grievances.
[127] Mr Magann relied heavily on a letter said to have been sent by Bishop Manning on 16 October 2007 in which the Bishop stated that he understood that Mr Magann had received 'an extract' of Mr Bailey's report. It was submitted on his behalf that this can only be construed as meaning Mr Magann received the report after the meeting. I am not satisfied that this is the only inference arising from the document. It seems to me this quite neutral in this regard. A copy of the Bailey Report provided to Mr Magann was tendered at this application. I note that the redactions are minimal and only to de-identify relevant persons.
[128] For these reasons I am unable to accept that Mr Magann did not have a copy of the report before the meeting."
The ground of appeal in relation to this finding was as follows:
"The Trial Judge misdirected herself in placing greater weight on the contemporaneous documents when dealing with the appellant's case that he had received the Bailey report in circumstances where:
• the Trial Judge accepted the evidence of Leanne Magann and found that Leanne Magann honestly but unreliably reconstituted the incident where the appellant received the report after the meeting on 16 October 2007;
• the finding in the previous subparagraph was never put to Leanne Magann;
• the acceptance by the respondent that Leanne Magann supported the applicant at the meeting 'with honesty and genuine wisdom'."
The primary judge's reliance on contemporaneous documents to resolve the dispute as to the timing of the receipt of the Bailey Report was entirely orthodox and her reasoning by reference to those documents was impeccable. The events in question had occurred more than 12 years prior to the evidence given by Mrs Magann. The documents pointed overwhelmingly to the fact that Mr Magann had been given a lightly redacted version of the Bailey Report prior to the settlement meeting: see, for example, [21] and [23] above. It was not put to either Mr Salmon or Mr Davis that they had fabricated these documents which supported that conclusion, or were either lying or mistaken in their sworn evidence as to when Mr Magann was provided with the Bailey Report.
There was no suggestion, either by the primary judge or senior counsel for the Respondents, that Mrs Magann was dishonest in her evidence. It was put to her in cross examination that she was mistaken in her recall of the matter. Counsel for Mr Magann in this Court expressly eschewed any submission that there had been a failure to comply with the rule in Browne v Dunn (1893) 6 R 67.
The primary judge's reconciliation of her finding that Mrs Magann had given her evidence honestly with the judge's rejection of this particular aspect of her evidence was entirely unremarkable and compelling in light of the contemporaneous documents.
This ground of appeal must be rejected.
[4]
Contracts Review Act/unconscionability
The appeal in relation to these two grounds can be dealt with compendiously in light of the arguments put, and the fact that a failure to make out a case under the Contracts Review Act will generally, although not necessarily, mean that success under the equitable doctrine of unconscionability is unlikely cf. Spina v Permanent Custodians Limited [2009] NSWCA 206; (2009) 14 BPR 26,923.
In considering an appeal from a decision under the Contracts Review Act, it is also necessary to bear in mind that what is under review is an evaluative decision based on the totality of relevant circumstances (see Provident Capital Ltd v Papa (2013) 84 NSWLR 231; [2013] NSWCA 36 at [7]) or, as it has also been put, a broadly based value judgment: Antonovic v Volker (1986) 7 NSWLR 151 at 154-155.
In Perpetual Trustee Company Limited v Albert and Rose Khoshaba [2006] NSWCA 41, the Court considered the role of an appellate court in an appeal concerning a finding that a contract was unjust within the meaning of the Contracts Review Act. Although Spigelman CJ expressed the matter more tentatively, Handley and Basten JJA considered that appellate review of a finding that a contract was unjust (or, I would add, not unjust, as held in the present case) should be undertaken by reference to the principles identified in Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9. See also Canty v PaperlinX Australia Pty Ltd [2014] NSWCA 309 at [125] (Canty); Al Maha Pty Ltd v Coplin [2017] NSWCA 318 at [29]. As such, as Gleeson JA said in Canty at [125]:
"…the appellate court, when reviewing a finding that a contract was unjust, is generally taken to be in as good a position as the trial judge to decide on the proper inferences to be drawn from the established facts, although respect and weight will be given to the conclusions reached by the trial judge."
A valuable recent summary of the principles governing consideration of an application under the Contracts Review Act is that of Gleeson JA, sitting at first instance, in Lauvan Pty Limited v Bega (2018) 330 FLR 1; [2018] NSWSC 154 at [283]-[285]:
"283. It may be accepted that one of the general legislative purposes of the Contracts Review Act is to protect persons who, for various reasons, are not able to look after their own interests, and who are preyed upon by dishonesty, trickery and other forms of predation: Kowalczuk v Accom Finance (2008) 77 NSWLR 205; [2008] NSWCA 343 at [102] (Campbell JA, Hodgson and McColl JJA agreeing); Provident Capital Ltd v Papa (2013) 84 NSWLR 231; [2013] NSWCA 36 at [7] (Allsop P, Sackville AJA agreeing); Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389 at [270]).
284. However, it is also well-established that a contract will not be unjust merely because it was not in someone's interest to enter into it: Esanda Finance Corporation Ltd v Tong (1997) 41 NSWLR 482 at 491 (Handley JA, Santow and Simos AJJA agreeing); or because it was inopportune or produced a loss Elkofairi v Permanent Trustee Co Ltd [2002] NSWCA 413 at [78] (Beazley JA, Santow JA and Campbell AJA agreeing); or because the party seeking relief was foolish, gullible or greedy: Perpetual Trustee Co Ltd v Khoshaba [2006] NSWCA 41; 14 BPR 26,639 at [128] (Basten JA); or because the contract was burdensome, a hard bargain, strongly in the interests of the party against whom relief is sought, or in some sense unreasonable: Conley v Commonwealth Bank of Australia [2000] NSWCA 101 at [96] (Heydon JA, Handley JA agreeing).
285. The significance of the absence of independent legal advice will depend on the circumstances. It will be of particular significance if the party seeking to enforce the contract is actually aware that the advice has not been given or has not been understood: Esanda Finance Corporation Ltd v Tong at 491 (Handley JA, Santow and Simos AJJA agreeing), approving comments by Rolfe J in St George Commercial Credit Corporation Ltd v Collins Wallis Properties Pty Ltd (Supreme Court of NSW, 11 February 1994, unreported)."
Before turning to the substance of the appeal in relation to the primary judge's findings with respect to the Contracts Review Act and unconscionability, it is to be observed that, apart from the challenge to the Bailey Report, no other factual findings were identified either in the Notice of Appeal or in a statement accompanying the written submissions identifying the findings of fact which were challenged and the alternative findings contended for, as required by the Uniform Civil Procedure Rules 2005 (NSW) r 51.36(2) (UCPR).
Whether or not this was intentional or inadvertent was not entirely apparent; the Notice of Appeal appeared to signal an intention to challenge further findings of fact, but these were not identified or elaborated on either in written submissions or in the (in this case, non-existent) narrative statement as required by UCPR r 51.36(2). That rule provides that:
"Submissions raising any challenges to findings of fact must include a statement in narrative form (not exceeding 2 pages) at the end of the submission setting out only the following-
(a) the findings challenged and supporting references to the judgment of the court below,
(b) the findings contended for and supporting references to the transcript and other evidence in the court below."
The purpose of this rule, as explained by Beazley JA (as her Honour then was and with whom Giles and Whealy JJA agreed) in Hamod v State of New South Wales [2011] NSWCA 375 at [774], was separately to identify "substantial challenges made to primary facts found by the trial judge". In South Western Sydney Local Health District v Gould (2018) 97 NSWLR 513; [2018] NSWCA 69 at [135], Leeming JA (with whom Basten and Meagher JJA agreed) remarked that it was:
"…not for this Court, in order to resolve a factual challenge advanced by an appellant, to trawl through the entirety of the record in order to collect and then evaluate the relevant evidence… Based on the limited submissions advanced on appeal, I would not conclude that the finding of the primary judge is one which should be disturbed on appeal".
Most recently, in Best v Rosamond [2020] NSWCA 90 at [21], Payne JA (with whom Leeming JA and I agreed) noted the absence of a statement by the appellant identifying the findings of fact which were challenged and the alternative findings contended for, observing that that was an "important omission in the present case as the appellant's challenge essentially rests on overturning numerous findings of fact, including demeanour based credit findings." See also Namrood v Ebedeh-Ahvazi [2017] NSWCA 310 at [61].
It is of particular importance, especially in a fact intensive matter such as an appeal involving an attempt to set aside a contract under the Contracts Review Act, that the procedure required by the UCPR is adhered to. That procedure does not represent a procedural option. Adherence to it is important for at least three reasons.
First, it serves to focus the mind of the lawyer drafting the submissions on precisely what factual errors are relied upon to underpin the appeal, and whether there is a proper basis in the evidence to challenge that finding or those findings. Secondly, adherence to the rule is important as a means of putting the respondent on fair notice as to the level of detail at which the decision at first instance is to be challenged. Thirdly, adherence to the procedure is vitally important in delineating this Court's task on appeal and assisting the Court with all relevant evidentiary references. The high volume of appellate work conscientiously undertaken by this Court demands that practitioners who should have the closest familiarity with the evidentiary record in a given matter, frequently running to thousands of pages of documentary evidence and transcript, assist the Court with precise and accurate references to that record, as required by the rules, in respect of those findings of primary fact which are sought to be challenged.
Returning to the substance of the appeal, central to Mr Magann's case at trial in relation to his attempt to set aside the Deed under the Contracts Review Act or, alternatively, on grounds of unconscionability, was the dispute in the evidence as to what transpired at the settlement conference on 16 October 2007, in addition to the matter already dealt with, namely when Mr Magann received the Bailey Report and whether or not it was before or after the meeting of 16 October 2007.
As to the other issues in dispute as to the 16 October 2007 meeting, the primary judge held at [129]-[137] as follows:
"[129] The next factual finding I am required to make is as to whether any pressure was put on Mr Magann at the meeting and what in fact was said at that meeting.
[130] Mr Magann asserted that Mr Wall and Mr Davis told him that they did not wish to be there all day and to take the offer as 'that is all you are getting'. Both men deny saying this. In any event the meeting lasted for 3-4 hours. It seems to me that the longer the meeting, the less likely there was an unfair pressure placed on Mr Magann. Although it may well have been the case that one or other of the men indicated that a higher amount would not be paid, that does not necessarily mean any pressure being put on Mr Magann.
[131] I am also unable to accept Mr Magann's evidence that he was told that if he wanted the money he had to get the Deed returned the same day. This is inconsistent with the amendment to the Deed, made at the meeting, that payment would be made within 7 days (rather than 28 days).
[132] I have had regard to the likeliness of whether Mr Davis or Mr Wall would have said at the meeting that they did not wish charges to be brought against Fr McGloin and that they would make sure that he was dealt with. I am unable to accept the submission made on behalf of the Church that it would be 'unlikely' that this was said, but in any event, I am not satisfied that this issue in and of itself could establish unjustness or unconscionable conduct.
[133] It seems to me that the email sent to the Bishop by Mr Magann the following day (extracted above at [101]) to tell against Mr Magann's version of the settlement process. If Mr Wall and Mr Davies had behaved in the way that Mr Magann now says they did, it is difficult to understand why Mr Magann would have written such a positive email to the Bishop the following day when he returned the Deed and suggested they have a 'cup of tea' sometime.
[134] I am not satisfied that Mr Magann was told at the meeting that he was not allowed to have a copy of the Bailey report. This is inconsistent with the contemporaneous document showing that he was provided a copy of it on 11 September 2007.
[135] As for Mr Magann's demeanour at the meeting, although it may be the case that he started the meeting in the 'calm' way that Mr Wall and Mr Davies describe, I find it difficult to accept that he was able to get through the whole meeting without losing his temper. This would be completely inconsistent with all of the medical reports and his long-standing PTSD which manifests itself in a short temper. Significantly, it is also contrary to the evidence of Mrs Magann. Her evidence is that at one stage he thumped the table during the meeting. It seems to me he may well have done so. The meeting went for 3-4 hours. The evidence of Mr Wall and Mr Davies was that Mr Magann was initially unhappy with the amount offered, but then was much happier with the increased amount. Mr Wall and Mr Davis had dealt with Mr Magann before. It may well be that Mr Magann was calmer than usual at the meeting. This does not mean that he did not exhibit anger and frustration at it, as Mrs Magann suggested.
[136] I am not satisfied that Mr Magann was told that he was not allowed to bring a lawyer to the conference. Clearly Mr Weller was not in attendance during the meeting. The evidence of Mr Wall and Mr Davies was that Mr Magann told them that Mr Weller would not be coming but that he was available by telephone if needed. I find it difficult to accept that on the one hand the Church knew that Mr Weller was available for Mr Magann to speak with that day and required Mr Magann to go and speak with him, but on the other hand did not want a solicitor involved in any of the negotiations. Moreover, Mr Wall's contemporaneous report on the meeting (see above at [105]) records that Mr Magann wanted to sign the Deed at the meeting but was told he could not until he spoke with Mr Weller. Mr Weller did not suggest in his evidence that Mr Magann was told that he could not have a lawyer at the meeting.
[137] As for the question of whether Mr Magann received any legal advice, the evidence of Mr Weller is conclusive on this issue. I have summarised it above at [79] - [84]. Mr Weller explained to Mr Magann that he had no rights to give up in any Deed of Release. It is to be accepted that Mr Weller did not go through every clause of the Deed with Mr Magann including the warranty as to legal advice, but it is important to understand the context of the Deed. Mr Magann was not settling proceedings which were still on foot. He was not giving up any legal rights by signing the Deed; he had no legal rights to give up and he was very excited about getting the money. I am satisfied that no criticism should be made of Mr Weller at the time; he could not have anticipated an amendment to the Limitation Act."
As has been observed, no challenge was made to any of the factual findings set out in these paragraphs. Although the Court is engaged in a "Warren v Combes" rather than "House v R" level of appellate review, that review falls to be undertaken by reference to the unchallenged factual findings made at first instance. The underlying fact finding process is not repeated unless specific findings of fact are challenged, but the Court may reach its own evaluative determination of the question of unjustness, drawing inferences from unchallenged findings of fact.
Counsel for Mr Magann expressly accepted that Mr Weller was correct in his advice to Mr Magann prior to executing the Deed that he had no rights to give up. Rather, the primary point put by counsel for Mr Magann related to Mr Magann's diagnosis of PTSD, and that, because of this condition, he was unable to protect his own interests. He emphasised this matter together with Mr Magann's lack of relative bargaining ability and the fact that there was no negotiation as to the terms of the Deed (other than as to quantum and date of payment).
The primary judge was well aware of the fact that Mr Magann suffered from PTSD and took it into account, although her Honour rejected a separate argument, not pressed on appeal, that Mr Magann lacked capacity to enter into the Deed.
Mr Gyles SC, who appeared for the Respondents, did not question that Mr Magann was suffering from PTSD. He submitted, correctly, that this fact did not in and of itself mean that the Deed was unjust. Were that not so, any number of deeds of settlement beneficially entered into by persons suffering from such a disorder would be vulnerable to being set aside. Nothing should be done to discourage the settlement of such claims. Where, of course, such a deed has been entered into in circumstances attracting the operation of the Contracts Review Act, it will be apt to be set aside but, at least perhaps only in the most extreme circumstances (and even then, the matter would be open to argument), the mere presence of such a disorder in a settling party could not, by itself and without more, attract the beneficial operation of the Contracts Review Act.
In this context, the Respondents referred to the decision of Brereton J (as his Honour then was) in Tillett v Varnell Holdings Pty Ltd [2009] NSWSC 1040 (at [70], where his Honour said:
"The presence of mental illness is not… necessarily indicative of 'special disadvantage' in the relevant sense. People who are depressed or psychotic are not necessarily unable to look after their own interests. The evidence does not establish that depression, of itself, inhibits a person's ability to attend to his or her own interests, or renders one vulnerable to exploitation. Delusions and hallucinations may, but not necessarily do, affect a person's judgment; that will typically depend on the subject matter of the delusion or hallucination. Thus, in the context of testamentary capacity, 'insane delusions' that poison the testator's affections in respect of potential beneficiaries bear on capacity; but only if the delusions be of such a character as to have 'a direct bearing on the provisions of the will' [Banks v Goodfellow, 557; Bull v Fulton (1942) 66 CLR 295 at 299]. I recognise immediately that 'special disadvantage' may exist far short of insanity, but I do not see why insane delusions unrelated to and having no bearing on the impugned transaction necessarily amount to a 'special disadvantage' in respect of the disposition."
As already noted, Mr Magann did not press a claim of lack of capacity that had failed at first instance, and did not challenge the rejection by the primary judge at [195]-[202] of the evidence of Dr Robertson to the effect that Mr Magann was incapable of understanding the Deed.
Mr Gyles also embraced those findings of fact made by the primary judge as set out at [58] above to which challenge was not made. He also made the point that, on the aspects of the Deed where there was negotiation, the Respondents acceded to Mr Magann's demands. Thus, the initial offer was increased by $10,000 and the date for payment was accelerated from 28 days to 7 days.
Also of relevance was the fact that, although Mr Magann did not have legal representation at the settlement conference, he had obtained legal advice both before it, including from Mr Russell QC (see [24] above) and after it, but before he executed the Deed, from Mr Weller. It was not submitted that insofar as Mr Weller told him he had no rights to give up that this advice was in substance wrong, and the fact is that Mr Magann was not giving up any legal rights he had at the time in relation to the subject matter of the Deed. The limitation period for his claims had passed, and his application for an extension of time had been denied. As Mr Boyd, who appeared for Mr Magann, put in oral submissions, "he [Mr Magann] had nothing to protect except a desire to bring something to a conclusion".
The primary judge held at [226] that she was unable to identify any undue influence or unfair pressure or tactics to have been exerted by the Respondents on Mr Magann. Nor am I. As the Respondents submitted, and I accept, this conclusion was and is amply justified by the following matters:
"(a) the meeting went for three to four hours: J[222]. That meant the appellant was not rushed;
(b) tea, drinks and food were provided: J[222];
(c) an independent facilitator (Mr Wall) was appointed by the respondent and attended. Mr Wall had spoken to Mr Magann a couple of times before the meeting to get the process started: J[222];
(d) Mr Magann was allowed to bring a support person, and did (his wife): [222];
(e) the understanding of Mr Davies at least was that Mr Magann had seen his lawyer, Mr Weller, before the meeting;
(f) the appellant was not told he could not bring a lawyer to the meeting: J[136]. Mr Weller's evidence was that he knew the meeting was about to take place. He did not suggest that he was prohibited from attending: J[222].
(g) there was an apology from the Bishop Manning, with whom the appellant had dealings, for his non-attendance: J[222];
(h) he did not sign the Settlement Deed in the meeting, but with his solicitor: J[85]; and
(i) immediately following the meeting, in his covering letter to Bishop Manning returned the Settlement Deed, the appellant's tone was calm and friendly. He indicated a desire to meet with Bishop Manning again J[101]. It is inherently improbable the appellant would have written a letter in such terms, having seen his lawyer, if he had been unfairly pressured or influenced earlier that day. The objective reading of that document is that he was happy with the process and was looking forward to moving on."
In short, there was no substantive or procedural unfairness or unjustness which vitiated the Deed (see West v AGC (Advances) Ltd (1986) 5 NSWLR 610 at 620; Nemeth v Australian Litigation Funders Pty Ltd [2014] NSWCA 198 at [94]-[97]), and the primary judge was correct to so hold. So also, with respect, the primary judge was correct to conclude that no basis lay to impugn the Deed in equity by reference to the doctrine of unconscionable conduct.
[5]
A question of timing and a final observation
As this Court noted in Moubarak by his tutor Coorey v Holt (2019) 100 NSWLR 218; [2019] NSWCA 102 at [32]-[34], on 17 March 2016, s 6A was introduced into the Limitation Act removing any limitation period for child abuse actions: see Limitation Amendment (Child Abuse) Act 2016 (NSW). Similar, albeit not identical, reforms have been enacted in all other Australian states and territories: see Limitation Act 1985 (ACT) s 21C; Limitation Act 1981 (NT) s 5A; Limitation of Actions Act 1974 (Qld) s 11A; Limitation of Actions Act 1936 (SA) s 3A; Limitation Act 1974 (Tas) s 5B; Limitation of Actions Act 1958 (Vic) ss 27O-27R; and Limitation Act 2005 (WA) s 6A. The reforms were enacted in response to recommendations made by the Royal Commission into Institutional Responses to Child Sexual Abuse.
Had a section such as s 6A of the Limitation Act existed at the time of Mr Magann's 2003 Proceedings, there would have been no relevant limitation period and thus no occasion for Mr Magann to seek an extension of time. As has been noted above, his failure to achieve such an extension left him with no relevant legal rights against the Respondents at that time or at the time of entry into the Deed, insofar as the subject matter of those proceedings was concerned.
The amendments effected by the Limitation Amendment (Child Abuse) Act in New South Wales did not address the situation of someone in Mr Magann's position, who had entered into a deed of release in relation to what may be described as a claim based on alleged historic child sexual abuse in circumstances where that claim was statute barred. Legislation in other states has addressed this circumstance, albeit in a non-uniform way. The relevant legislation is referred to and discussed in a NSW Government Discussion Paper entitled "Setting aside settlement agreements for past child abuse claims" (the Discussion Paper), accessible at . The Discussion Paper called for submissions which closed on 15 April 2020.
Paragraph 4.15 of the Discussion Paper referred to the decision at first instance in the present case, noting that:
"The Supreme Court recently found, in relation to an application to set aside a deed of release for a child sexual abuse claim, that the [Contracts Review] Act prevents the court from having regard to injustice arising from circumstances not reasonably foreseeable at the time the agreement was made, including the subsequent removal of the limitation period. The court therefore could not take into account the perceived injustice arising from the change in the law when considering the fairness of the deed in that matter." (footnotes omitted).
The Respondents very properly drew the Court's attention to the Discussion Paper. Mr Boyd did not seek to make any submission in relation to the Discussion Paper.
[6]
Conclusion
The appeal must be dismissed with costs.
MACFARLAN JA: I agree with Bell P.
PAYNE JA: I agree with Bell P.
[7]
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: 04 August 2020
Parties
Applicant/Plaintiff:
Magann
Respondent/Defendant:
The Trustees of the Roman Catholic Church for the Diocese of Parramatta
nell Holdings Pty Ltd [2009] NSWSC 1040
Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9
West v AGC (Advances) Ltd (1986) 5 NSWLR 610
Texts Cited: NSW Government, "Setting aside settlement agreements for past child abuse claims" (Discussion Paper) [4.15]
Category: Principal judgment
Parties: Darren Peter Magann (Appellant)
The Trustees of the Roman Catholic Church for the Diocese of Parramatta (Respondents)
Representation: Counsel:
T Boyd (Appellant)
L V Gyles SC, A Campbell (Respondents)
Solicitors:
Luke Clarke Solicitor (Appellant)
Makinson D'Apice Lawyers (Respondents)
File Number(s): 2020/00013590
Publication restriction: N/A
Decision under appeal Court or tribunal: Supreme Court of New South Wales
Jurisdiction: Common Law
Citation: [2019] NSWSC 1453
Date of Decision: 28 October 2019
Before: N Adams J
File Number(s): 2017/00254444
Judgment
BELL P: This is an appeal from the decision of N Adams J (the primary judge) in which her Honour answered in the affirmative a separate question as to whether or not a deed of settlement and release dated 16 October 2007 (the Deed) extinguished the liability of The Trustees of the Roman Catholic Church for the Diocese of Parramatta (the Respondents) to the Appellant, Mr Darren Peter Magann (Mr Magann). In consequence of her answer to the separate question, her Honour dismissed proceedings that had been brought by Mr Magann.
The separate question was ordered by Harrison AsJ in proceedings which had been commenced against the Respondents by Mr Magann in 2017, some ten years after the Deed had been entered into (the 2017 Proceedings): see Magann v The Trustees of the Roman Catholic Church of the Diocese of Parramatta [2018] NSWSC 1551.
Mr Magann contended that the primary judge erred in not holding that the Deed constituted an unjust contract within the meaning of the Contracts Review Act 1980 (NSW), and that its entry was unconscionable and involved the Respondents taking advantage of a special disadvantage which Mr Magann contended he was under at the time of entry into the Deed, namely Post Traumatic Stress Disorder (PTSD).
One particular factual finding which is challenged on appeal relates to the date on which Mr Magann received a report of Ms Robyn Bailey (the Bailey Report) which had been commissioned by the Respondents and whether or not that was before or after entry into the Deed. The significance of the Bailey Report is explained more fully below.
Subject to the argument noted in [6] below (which was not put at first instance), it was implicit in the nature of the arguments advanced on Mr Magann's behalf that he accepted that, unless set aside, the Deed provided a complete answer to his claim in the 2017 Proceedings.
It was contended for the first time on appeal and only in the written submissions that the Deed was "not binding because it [did] not represent the compromise of a genuine dispute, taking into regard the risks associated with litigation". This submission was characterised by counsel for Mr Magann as appeal ground 1A.
For the reasons that follow, I do not consider that the primary judge erred in her factual findings, analysis or ultimate conclusion that the Deed was not "unjust" within the meaning of the Contracts Review Act, and that its entry was not procured by the unconscientious taking advantage of a special disadvantage under which Mr Magann was labouring at the time of entry into the Deed: see Magann v Trustees of the Roman Catholic Church of the Diocese of Parramatta [2019] NSWSC 1453. To the contrary, the primary judgment is carefully and closely reasoned and not affected by error of the kind asserted.
There is also no substance to the contention that the Deed was not binding because it did not represent the "compromise of a genuine dispute, taking into regard the risks associated with litigation".
Before turning to the reasons for these conclusions, it is first necessary to set out the background which led to the entry into the Deed on 16 October 2007.