Smith (a pseudonym) v Daramalan College Ltd [2025] ACTSC 521

1. The plaintiff, who has been given the pseudonym Charles Smith, is a former student of Daramalan College (College) alleged to have been operated by the defendant, Daramalan College Limited. In 2008, he brought proceedings in this court seeking damages against a number of entities including the defendant, for personal injury suffered as a result of sexual abuse he claims to have suffered from 1978 to 1979, while he was a child attending the College. The proceedings settled in around 2009 with a deed of release signed on 11 June 2009 (settlement agreement), under which $55,000 was paid to the plaintiff, comprising $30,000 in compensation and $25,000 for legal costs and disbursements.

2. The plaintiff applied to set aside that settlement agreement, by an application dated 6 September 2024 which was heard on 28 April 2025 (application). He relied on a statutory power to set aside agreements where the subject matter involves institutional sexual abuse allegations. The defendant’s attitude to the application was that it neither consented to, nor opposed, the application. Following the hearing of the application, orders were made setting aside the settlement. Reasons were reserved at the time judgment, and they now follow.

3. I set aside the settlement agreement because the plaintiff had met the statutory requirements for enlivening the court’s discretion (discussed below), the case had arguable merit (it was not an abuse of process), and there were no circumstances particular to the case that warranted the refusal of relief. The application fell squarely within the very mischief that the legislative amendments sought to address in providing the court with a power to set aside settlement agreements in historical child sexual abuse cases.

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

4. It is helpful to understand the legislative context because it assists in understanding the purpose of the power given to the court, which in turn informs the exercise of the court’s discretion. The legislative context also helps to explain why the provisions of the Civil Law (Wrongs) Act 2002 (ACT) (Wrongs Act) that applied in this case are drafted in a certain way; one that distinguishes between settlement agreements made before and after the legislative reforms discussed, providing for different requirements to be satisfied to enliven the court’s power in each case.

5. The Royal Commission into Institutional Responses to Child Sexual Abuse: Redress and Civil Litigation (Interim Report, September 2015) (Report) found that limitation periods were a barrier to survivors of child sexual abuse in pursuing litigation seeking damages for their injury and loss: Explanatory Statement to the Justice and Community Safety Legislation Amendment Bill 2016 (No 2). It recommended legislative intervention to overcome that barrier, with retrospective effect (Recommendations 85 and 86).

6. In the Territory, that was achieved by the Justice and Community Safety Legislation Amendment Act 2016 (No 2) (2016 Amendment Act). Section 8 of the 2016 Amendment Act introduced s 21C of the Limitation Act 1985 (ACT) (Limitation Act) which commenced on 26 August 2016. The gist of the section is that it removes any applicable limitation period for actions substantially arising out of child sexual abuse. Among other things, it provides that where an action for personal injury substantially arises from child abuse to which the person was subjected, the action is maintainable at any time, regardless of the form of the action (such as tort, contract or breach of statutory duty).

7. A separate legal hurdle referred to in the Report was the inability to sue a readily identifiable entity that had the financial capacity to meet claims arising out of child abuse: Explanatory Statement to the Civil Law (Wrongs) (Child abuse claims against unincorporated bodies) Amendment Bill 2018. In part, this was associated with the so-called “Ellis defence”, named after Trustees of the Roman Catholic Church v Ellis [2007] NSWCA 117; 70 NSWLR 565, where it was held (at 577) that an unincorporated association could not be sued in its own name because it lacked legal personality. The Report recommended legislative intervention to overcome the difficulties in suing a proper defendant and associated difficulties such as an institution holding assets in trusts which were unavailable to pay any liability for child abuse claims (Recommendation 94).

8. In the Territory, those legal barriers were addressed through the introduction of Part 8A of the Wrongs Act in 2018. The amendments enabled an unincorporated body to nominate an entity to act as defendant, gave power to the court to make an order to appoint a related trust as a defendant to a child abuse claim, and allowed trustees to apply trust property to meet a liability for child abuse.

9. However, the removal of statutory limitation periods and reforms making it easier to identify and sue a defendant did not go far enough, because in the meantime, people who had claims substantially arising out of child sexual abuse had settled their claims, and the quantum of those settlements may have been significantly reduced due to the parties factoring in the operation of the legal barriers that existed at the time the claims were brought and settled. People in that position could not bring fresh causes of action in respect of claims that had been settled, whereas people who had not yet pursued claims for historical child abuse were able to take advantage of the removal of any limitation period for such claims. The inequity arising from the fact that, unlike other jurisdictions, the Territory did not provide a process which permitted a grant of leave to set aside deeds of release that had been previously executed was the subject of comment in Pool (a pseudonym) v Trustees of the Marist Brothers Property Group (No 3) [2021] ACTSC 89 at [81], affirmed on appeal: Poole v Parkinson [2022] ACTCA 54 with express reference to that point at [24].

10. That inequity was later addressed by ss 114J and 114K of the Civil Law (Wrongs) Act 2002 (ACT) (Wrongs Act) which were introduced by the Justice and Community Safety Legislation Amendment Act 2022 (2022 Amendment Act). Those provisions commenced on 10 December 2022. The amendments sought to put those who had resolved claims earlier “on equal footing” with those who had yet to resolve their cases and benefited from the legislative reforms, such as the removal of an applicable limitation period: Explanatory Statement to the Justice and Community Safety Legislation Amendment Bill 2022.

11. For completeness, another legal barrier identified by the Report dealt was the lack of a positive duty of care owed by institutions, either because the alleged perpetrator was not an employee (and accordingly there was no relationship giving rise to vicarious liability) or the management or control of the organisation had been delegated to another entity. The Report recommended legislative intervention to impose a non-delegable duty of care on certain institutions and to impose liability upon an institution for child abuse by persons associated with the institution, unless the institution proves it took reasonable steps to prevent the abuse (a reverse onus provision): Recommendations 89-91. In Bird v DP (a pseudonym) [2024] HCA 41; 98 ALJR 1349, the High Court confirmed the vicarious liability doctrine depended upon a relationship of employment.

12. On 13 November 2025, further legislative reform came into force through the Civil Law (Wrongs) (Organisational Child Abuse Liability) Amendment Act 2025 (Liability Amendment Act), which broadened the definition of “employee” to include an individual who is “akin to an employee” and to make an organisation responsible for a child even if it “delegates the exercise of care, supervision or authority over a child to another organisation”: Wrongs Act, ss 114BC and 114BD. A statutory vicarious liability provision was also introduced: Wrongs Act, s 114BE. These amendments were not in effect at the time the application was heard and determined. However, by virtue of the transitional provisions in the Liability Amendment Act, the new provisions apply to any proceedings commenced but not finally decided before the commencement of the amendments. The amendments thus apply to these proceedings.

13. That context is sufficient to understand the operation of the provisions considered by the Court in the circumstances of the present case. A more detailed discussion of the legislative context may be found in Walsh (a pseudonym) v Trustees of the Roman Catholic Church for the Archdiocese of Canberra and Goulburn [2024] ACTSC 81 (Walsh) at [102]-[122].

Overview of the criteria for enlivening the court’s power

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

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

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

The plaintiff’s agreement was an “abuse settlement agreement”

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

18. It can be seen that s 114J is structured to create different ways in which an agreement constitutes an “abuse settlement agreement”, depending on the timing of the agreement in question. The timing distinction is between agreements made before s 21C of the Limitation Act commenced (26 August 2016), and agreements that were made after that section had commenced, but before the commencement of part 8A of the Wrongs Act (10 December 2022). Agreements that happened before the commencement of the most recent tranche of legislative reform (see the Liability Amendment Act at [12] above) are now also included (s 114J(1)(b)(iii)) however that sub-section has been omitted because it was not in force at the time of the determination of the application.

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

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

(a) an agreement;

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

(c) that “prevents the plaintiff or claimant from the exercise of an action on a cause of action to which s 21C of the Limitation Act 1985 (ACT) applies”.

20. As to the first of those matters, the settlement agreement the subject of the application was in evidence. It included both the plaintiff and the defendant as parties (although there were other defendants also bound by the agreement). It was in writing, expressed as a deed, properly executed and there was no question about its validity.

21. As to whether it settled a child abuse claim, that required the court to look at the claim being settled and see whether it met the definition of a child abuse claim. In that regard:

(a) A “child” is an individual who is under 18 years old, if age rather than descendancy is relevant (as is the case here): Legislation Act 2001, Dictionary.

(b) Child abuse is defined to mean “physical abuse or sexual abuse of a child”: Wrongs Act, s 114AA(1) with that definition adopted in the Limitation Act, s 21C(4).

(c) Physical abuse excludes conduct that is justified or excused under a law applying in the Territory: Wrongs Act, s 114AA(2).

(d) Sexual abuse of a child includes both an offence of a sexual nature and misconduct of a sexual nature: Wrongs Act, s 114AA(2).

22. The claim that was settled must therefore be one relating to the period when the claimant was a child, and the conduct alleged must fall within the above definitions of physical or sexual abuse: Wrongs Act, s 114A.

23. Here, I found that the settlement agreement was one which settled a “child abuse claim” because it expressly stated that the “claim” being settled by way of payment of money was a claim that while the plaintiff was a pupil at the College he was unlawfully assaulted by a teacher at the College, as a result of which, he sustained loss, damage and injuries. The reference to the plaintiff being a pupil at a secondary school implicitly includes a period when the plaintiff was a child. The reference to being unlawfully assaulted fell within the definitions of abuse set out above.

24. I considered next whether the settlement agreement prevented the exercise of an action (such as commencing proceedings in the Supreme Court) on a cause of action (in this case, negligence, assault, battery and trespass). That again required consideration of the terms of the settlement agreement. I found that it did prevent such actions in this case, because it included clauses expressly providing for:

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

(b) such a release to operate as a complete defence to any such claims (by permitting the respondents to plead the Deed as a bar to any such claim).

25. I also found that those causes of action were ones to which s 21C of the Limitation Act 1985 applied. The relevant parts of s 21C are as follows (emphasis added): (1) This section applies to an action on a cause of action for the death or personal injury of a person— (a) if the cause of action substantially arises from child abuse to which the person was subjected when the person was a child; and (b) whether liability for the death or personal injury arises in tort or contract or on another form of action (including breach of statutory duty); and (c) whether the cause of action accrues before, on or after the commencement of the Justice and Community Safety Legislation Amendment Act 2016 (No 2), section 3. (2) An action on the cause of action is maintainable at any time and is not subject to any limitation period under this Act, despite anything elsewhere in this Act or another territory law. …

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

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

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

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

29. That left for consideration the timing of the settlement agreement and satisfaction of the criteria prescribed by 114J(1)(b) of the Wrongs Act.

30. The settlement agreement here was signed on 11 June 2009. That was before s 21C of the Limitation Act commenced. The conduct that was the subject of the claim was alleged to have occurred in 1978-1979 (by the pleading that was filed in 2008 and the more recent affidavit of the plaintiff).

31. The claim that was settled in 2009 was first brought in this court in 2008. That was at a time when the relevant limitation period provided for by ss 11 and 16B of the Limitation Act (respectively 6 years as a general limitation period and 3 years for personal injury damages claims) had ended.

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

The court’s power under s 114K was enlivened

33. Section 114K of the Wrongs Act applied in this case. I will deal first with the requirements of that section and then how they were satisfied in this case.

Section 114 of the Wrongs Act

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

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

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

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

38. Three points should be made about these provisions:

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

39. As to the nature of the discretion, in most of the other Australian jurisdictions, the test when exercising the discretion is whether it is ‘just and reasonable’ to set aside an agreement: s 7D(2) of the Civil Liability Act 2002 (NSW); s 54(5) of the Limitation Act 1981 (NT); s 48(5A) of the Limitation of Actions Act 1974 (Qld); s 50W(2) of the Civil Liability Act 1936 (SA); s 27QC(1) of the Limitation of Actions Act 1958 (Vic); and s 92(3) of the Limitation Act 2005 (WA).

40. In Tasmania, the applicable test for setting aside this kind of agreement is if it is “in the interest of justice to do so”: s 5C(2) of the Limitation Act 1974 (Tas).

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

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

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

The application of s 114K in this case – there was a legal barrier at the time of settlement

44. I was satisfied that at the time the plaintiff signed the settlement agreement, there was a legal barrier to him being fully compensated. The legal barrier was the existence of the limitation periods referred to above, and the lack of any section removing those barriers (such as s 21C of the Limitation Act that was subsequently introduced).

45. There is some discussion in Walsh at [159]-[199] as to what constitutes a legal barrier. In that case the court was dealing with circumstances where a limitation period was not actually relied on by a defendant, and the submission was made that if that legal barrier was not otherwise a material consideration to a plaintiff entering into an abuse settlement agreement, then the agreement could not be set aside under s 114K(3)(a) of the Wrongs Act: Walsh at [147]. Curtin AJ construed s 114K(3)(a) to extend to any potential defence or remedy reasonably available to a defendant, regardless of whether the point was taken or communicated to the plaintiff: Walsh at [197].

46. In Xavier (a pseudonym) v Trustees of the Marist Brothers [2024] ACTSC 141, Baker J referred at [12] to an initial submission that Walsh was wrongly decided, but ultimately concessions were made, and it was unnecessary for the court to consider the correctness of any of the conclusions reached in Walsh.

47. For the purpose of resolving the present application, it was similarly not necessary to reach any view about the correctness of the reasoning in Walsh or otherwise explore here the metes and bounds of whether the phrase “there were legal barriers” in s 114K(3)(a) included legal barriers that may have existed at law but were expressly not relied upon by a defendant in a particular case.

48. That is because the evidence before the Court on the present application established that at the time the settlement agreement was made, the defendant had filed a defence to the plaintiff’s statement of claim and pleaded the statutory limitation period created by ss 11 and 16B of the Limitation Act. As set out above, any limitation period applying to the plaintiff’s claims had long since expired. That evidence satisfied the court that a legal barrier existed (both at law and as a pleaded fact) to the plaintiff being fully compensated. The gateway criteria in s 114K(3)(a) was met.

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

50. The plaintiff submitted that there were other legal barriers that he faced at the time of the settlement agreement. These were canvassed as part of satisfying the court of s 114K(3)(a) or alternatively in support of establishing that the agreement was not “just and reasonable” under the s 114K(3)(b) pathway, as well as favouring the plaintiff in the court’s exercise of residual discretion. As I was already satisfied by the existence of statutory limitation periods, all of which had expired well before the claim was brought, I have dealt with them as part of the discussion that follows as to whether the court should exercise the discretion. Setting aside the settlement agreement was appropriate in this case

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

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

53. Dealing with the circumstances of the settlement, the pathway established by the plaintiff made it unnecessary to consider the reasonableness of the settlement agreement, or whether it was just. However, that does not mean that where those features existed, they were irrelevant to the court’s residual discretion.

54. The plaintiff deposed to knowing that the limitation period had been raised, although the evidence did not go so far as to suggest that this was knowledge he personally had in 2009, or that this was a material consideration in his agreeing to the settlement that was recorded in the settlement agreement.

55. Even so, assuming the plaintiff may not have fully appreciated the significance of the limitation defence, the plaintiff was represented by experienced lawyers in the area at the time, and their advice as to settlement (which was not before the court) was given in circumstances of a pleaded defence of a limitation period that had clearly expired. The plaintiff’s bargaining position was objectively poor.

56. In addition, the difficulties in establishing vicarious liability for intentional torts, particularly where the entity with care and control of the College may have been different to the employer of the alleged perpetrator of the child abuse were readily apparent from the defence that was filed. The plaintiff sued five different defendants, a number of whom (including the present defendant) either did not admit or denied they had care and control of the College. All defendants who filed defences denied that they had any positive duty to take steps to protect the plaintiff from criminal acts by the alleged perpetrator.

57. Taking into account the conduct alleged, the circumstances in which it was alleged to have occurred (taken from the pleading), the injuries alleged (supported by medical evidence that had been obtained at the time which was also before the Court), and the quantum paid under the settlement agreement, my view was that the settlement reflected the known likelihood of success one or more of the legal defences that existed at the time, or at least the increased difficulty and costs in overcoming those defences or barriers.

58. Even accepting that a settlement is a compromise, the amount paid represents a figure far below what might be seen as full compensation if the plaintiff fully succeeded at trial, and significantly below what would be a compromise in the plaintiff’s interests if the proceeding were settled in the different legislative landscape that exists today. Accordingly, once those barriers are removed, as they now have been through legislative intervention, the settlement viewed today is unjust.

59. The alleged perpetrator is deceased. He was deceased at the time of the settlement. That factor is neutral here. There was no other argument raised about any circumstance that would make it inappropriate to grant the relief. On the contrary, I considered this to be precisely the kind of case that the legislation was designed to benefit.

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

Orders

61. The orders of the Court made following the hearing were as follows: (1) Pursuant to s 114K(3)(a) of the Civil Law (Wrongs) Act 2002 (ACT), the deed of release between the plaintiff and the defendant dated 11 June 2009 is set aside. (2) The costs of this application are costs in the cause.

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

I certify that the preceding sixty-two [62] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Justice McWilliam Associate: Date: