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[2020] QCA 190
General information, not legal advice.
Court of Appeal (Qld)
2020-09-07
Fraser and Morrison and Mullins JJA
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Source: Queensland Judgments (Supreme Court Library Queensland) (www.queenslandjudgments.com.au). Converted to plain text by ZoeLaw. Not the official version.
SUPREME COURT OF QUEENSLAND
CITATION: TRG v The Board of Trustees of the Brisbane Grammar School [2020] QCA 190
PARTIES: (appellant) / v / (respondent)
FILE NO/S: Appeal No 7592 of 2019 / SC No 6267 of 2018
DIVISION: Court of Appeal
PROCEEDING: General Civil Appeal
ORIGINATING COURT: Supreme Court at Brisbane – [2019] QSC 157 (Davis J)
DELIVERED ON: 7 September 2020
DELIVERED AT: Brisbane
HEARING DATE: 19 November 2019
JUDGES: Fraser and Morrison and Mullins JJA
ORDER: Appeal dismissed with costs.
CATCHWORDS: LIMITATION OF ACTIONS – OTHER MATTERS – where the appellant was a student at the school operated by the respondent between 1986 and 1989 – where the appellant reported that the school counsellor sexually assaulted him on numerous occasions – where many former students brought claims against the school in 2001 in relation to sexual assaults by the counsellor – where, by the time the claims were brought, they were time barred under the Limitation of Actions Act 1974 (Qld) – where the claims were mediated and the appellant reached a settlement with the respondent in 2002 – where subsequently the Limitation of Actions Act was amended by the Limitation of Actions (Child Sexual Abuse) and Other Legislation Amendment Act 2016 (Qld) to remove the limitation period for personal injury claims relating to child sexual abuse – where the amending Act also introduced a provision, s 48(5A), allowing settlements entered before the amendments to be set aside if the court considers it just and reasonable to do so – where the appellant’s application in the Trial Division to have his settlement with the respondent set aside on that ground was refused – whether it is just and reasonable to set aside the settlement / STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – GENERAL APPROACHES TO INTERPRETATION – PURPOSIVE APPROACH – GENERAL PRINCIPLES – where the primary judge found that the legislative purpose of s 48(5A) requires a balance to be struck between the interests of both parties to the settlement agreement, the balance being what is “just and reasonable” – where the appellant submits that the primary judge erred in failing to find that the dominant purpose of s 48(5A) is to allow childhood sexual abuse victims to have their claims decided on their merits, not influenced by limitation periods – where the appellant therefore argued that the most important factor in any application under s 48(5A) must be the circumstance that expiry of the applicable limitation period influenced the settlement – whether the primary judge erred in interpreting the legislative purpose of s 48(5A) – whether the construction contended for by the appellant should be accepted / LIMITATION OF ACTIONS – EXTENSION OR POSTPONEMENT OF LIMITATION PERIODS – EXTENSION OF TIME IN PERSONAL INJURIES MATTERS – KNOWLEDGE OF MATERIAL FACTS OF DECISIVE CHARACTER – GENERALLY – where the primary judge found that the limitation issue did not materially affect the quantum of the settlement and was not a material factor in that settlement – where the appellant’s solicitors were given advice by counsel before the mediation regarding the prospects of establishing that the respondent was liable for the assaults and the prospects of obtaining an extension of the limitation period – where, on the law as it stood at the time, there were difficulties in attributing liability to the respondent for the assaults – where the appellant was said to have reasonably good prospects of obtaining an extension of the limitation period in light of new evidence that emerged in 2002 of complaints made to the school principal at the time about the counsellor’s conduct – whether that new evidence could have constituted a “material fact of a decisive character” for the purpose of an application for extension of the limitation period – whether the expiry of the limitation period materially affected the appellant’s decision to settle or the amount of the settlement / Acts Interpretation Act 1954 (Qld), s 14A, s 14B Legislative Standards Act 1992 (Qld), s 4 Limitation of Actions Act 1974 (Qld), s 11, s 11A, s 31, s 48 / Limitation of Actions (Child Sexual Abuse) and Other Legislation Amendment Act 2016 (Qld) / Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41, cited Australian Education Union v General Manager of Fair Work Australia (2012) 246 CLR 117; [2012] HCA 19, cited FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268; [1988] HCA 13, cited Glen Alexander Pikrt v Hagemeyer Brands Australia Pty Ltd [2006] QCA 112, cited Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; [1986] HCA 40, cited New South Wales v Lepore; Samin v Queensland; Rich v Queensland (2003) 212 CLR 511; [2003] HCA 4, cited Prince Alfred College Inc v ADC (2016) 258 CLR 134; [2016] HCA 37, cited Re Bolton; Ex parte Beane (1987) 162 CLR 514; [1987] HCA 12, cited Rich v State of Queensland & Ors [2001] QCA 295, considered Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9, cited Wood v Glaxo Australia Pty Ltd [1994] 2 Qd R 431; [1993] QCA 114, cited
COUNSEL: S Holt QC, with R J Lynch and J P D Trost, for the appellant J McKenna QC, with K Holyoak, for the respondent
SOLICITORS: McNamara Law for the appellant Corrs Chambers Westgarth for the respondent
“An action may be brought on a previously settled right of action if a court, by order on application, sets aside the agreement effecting the settlement on the grounds it is just and reasonable to do so.”
Between 1986 and 1989 the appellant was a student at the school operated by the respondent, Brisbane Grammar School. Kevin Lynch had been employed at the school since the beginning of 1973. When the appellant attended the school Lynch was the full time school counsellor. The appellant experienced difficulties at home and at the school when he was 12 and 13 and in grades 8 and 9. He was counselled by Lynch. Subsequently the appellant reported that, in the course of purportedly counselling him, Lynch sexually assaulted him on numerous occasions. Lynch resigned his employment at the school towards the end of 1988 and was then employed at a different school. He committed suicide after being charged with sexual offences against a student at that school.
In about 2000, many former Brisbane Grammar School students retained a firm of solicitors, Shine Roche McGowan (“Shine”), to act on their behalf in relation to their claims that Lynch had sexually assaulted them. The school accepted that it had moral responsibilities for the former students and it facilitated a system of counselling for them. The school did not accept that it was legally liable for sexual assaults by Lynch. On 27 April 2001 Shine commenced legal proceedings on behalf of numerous former students of the school, including the appellant.
In late 2001 proceedings brought by two former students, “AB” and “CD”, were served on the respondent. In February 2002 the solicitors retained by the respondent, Corrs Chambers Westgarth (“Corrs”), filed applications in AB and CD’s proceedings seeking various orders, including that judgment be given for the respondent upon the ground that the claims were statute barred under the Limitation of Actions Act 1974. Shine filed applications on behalf of AB and CD for an extension of the relevant limitation period pursuant to section 31 of the Limitation of Actions Act 1974. After an adjournment each of the applications was listed to be heard on 22 April 2002. By agreement, those applications were adjourned. They were never heard. They and the other claims in which Shine was retained for the claimants were mediated.
The claimants, including the appellant, were represented at the mediation by solicitors from Shine and senior and junior counsel. The school was represented by senior and junior counsel, instructed by solicitors from Corrs. Solicitors representing insurers of the respondent were also present. A framework for the mediation was agreed. It proceeded in a formal way, starting with an opening session concerning all of the claims on 30 September 2002. There followed separate sessions for each claimant, the appellant’s separate session being on 7 October 2002. The mediator was a senior counsel who specialised in mediations.
The appellant’s claim was not settled at the mediation. After negotiations conducted by correspondence between the parties’ solicitors between 7 and 29 October 2002 the appellant’s claim was settled for $47,000.00 plus costs calculated on the District Court scale. The settlement agreement was finalised when it was returned to the respondent on 9 December 2002. By the settlement agreement, the appellant released and indemnified the respondent, the school, and its employees and agents from present and future claims arising out of the subject matter of his claim and other specified matters related to it and he agreed that the settlement agreement could be pleaded as a bar to any such claims. The parties to the settlement agreement also acknowledged that they or their legal advisors, agents or servants might discover facts different from or in addition to the facts they then knew or believed to be true with respect to the subject matter of the settlement agreement and they intended to fully, finally and absolutely settle according to the provisions of that settlement agreement the claims and other specified matters provided by it. The settlement sum was paid on 20 December 2002. The amount of the costs payable to the appellant was subsequently agreed at $12,000.00. After payment of that sum to the appellant his claim was discontinued on 10 January 2003.
“48 Transitional provision for Limitation of Actions (Child Sexual Abuse) and Other Legislation Amendment Act 2016
(1)Section 11A applies to an action for damages whether the right of action accrued before or after the commencement of that section (the commencement).3
(2)An action on a previously barred right of action may be brought even if—
(a)a limitation period previously applying to the right of action has expired; or
(b)another action has been started in the right of action but not finalised before the commencement; or
(c)another action was started in the right of action and discontinued before the commencement; or
(d)a judgment was given in relation to the right of action on the ground that a limitation period applying to the right of action had expired; or
(e)an action in the right of action was dismissed on the ground that a limitation period applying to the right of action had expired.
(3)If an action on a previously barred right of action is brought after the commencement, the court hearing the action may, if the court decides it is just and reasonable to do so, do either or both of the following—
(a)set aside a judgment given in relation to the right of action on the ground that a limitation period applying to the right of action had expired;
(b)take into account any amounts paid or payable as damages or costs under the judgment.
(4)The Supreme Court may, on application, set aside a judgment under this section even though the Supreme Court is not hearing the action.
(5)However, a court, other than the Supreme Court, may not set aside another court’s judgment under this section.
(5A) An action may be brought on a previously settled right of action if a court, by order on application, sets aside the agreement effecting the settlement on the grounds it is just and reasonable to do so.
(5B) If a court makes an order under subsection (5A) for a previously settled right of action—
(a)each associated agreement is void despite any Act, law or rule of law; and
(b)a party to an associated agreement voided under paragraph (a) may not seek to recover money paid by, or for, the party under the agreement.
(5C) However, a court hearing an action on a previously settled right of action may—
(a)when awarding damages in relation to the action—take into account any amounts paid or payable as consideration under an associated agreement voided under subsection (5B)(a); and
(b)when awarding costs in relation to the action—take into account any amounts paid or payable as costs under an associated agreement voided under subsection (5B)(a).
(6)In this section—
associated agreement**,** for a previously settled right of action, means—
(a)the agreement effecting the settlement; or
(b)any other agreement, other than a contract of insurance, related to the settlement.
previously barred right of action means a right of action for an action to which section 11A applies that was not maintainable immediately before the commencement because a limitation period applying to the right of action had expired.
previously settled right of action means a right of action for an action to which section 11A applies that was settled before the commencement but after a limitation period applying to the right of action had expired.”
In June 2018 the appellant applied in the Trial Division for an order under subsection 48(5A) that the agreement effecting the settlement between the appellant and the respondent in the appellant’s previous proceeding be set aside on the grounds that it is just and reasonable to do so. The hearing of that application before the primary judge, Davis J, proceeded upon affidavit evidence. The only issue was whether it was just and reasonable for the Court to make an order setting aside the settlement agreement.
After reserving judgment the primary judge published detailed written reasons and ordered that the application be dismissed. The primary judge recorded that the present case does not require resolution of some issues that might arise from differences in the text and structure of subsections 48(3) and 48(5A). The application was litigated upon the assumption that those provisions do not contemplate the imposition of terms upon the setting aside of a judgment or settlement4 and the primary judge did not take into account that no undertaking was offered by the appellant (for example, to contribute in some way to costs thrown away on the previous proceedings). The primary judge’s main conclusions of relevance in this appeal may be summarised as follows:(a)Upon the proper construction of subsection 48(5A):5Just as a judgment for a defendant who successfully relied upon a limitation period is maintained unless and until the Court decides that it is just and reasonable to set the judgment aside under subsection 48(3), settlement agreements remain valid and enforceable unless and until a court decides that it is just and reasonable to set them aside under subsection 48(5A). The onus is upon an applicant for orders under either provision to establish that it is “just and reasonable” to disturb the status quo and set aside the judgment or settlement agreement.The starting point in an application is that the applicant/plaintiff seeks to set aside a binding settlement agreement, under which both parties have rights and obligations, and to commence new proceedings in which the result may be more favourable than the settlement. The interest of the respondent/defendant is to avoid that prospect.Subsection 48(5A) requires the Court to consider the parties’ competing interests and to strike a balance between them, the balance being what is “just and reasonable”.Because of the width of the term “just and reasonable” many factors may be relevant in determining which of the competing interests should prevail.(b)A factor in favour of an order setting aside a settlement agreement is that no limitation period now applies to claims arising from child sexual abuse and settlements may have been entered into which are unfair. The context makes it clear that the primary judge’s reference to an unfair settlement connoted a settlement that may have been unfair because it was made after the expiry of the applicable limitation period, that being the “mischief” addressed by subsection 48(5A).(c)Because section 11A manifests the legislative intention that the interests of those persons claiming damages resulting from child sexual abuse should prevail without any restriction as to when the proceedings are commenced, prejudice to a respondent/defendant caused by delay is largely irrelevant (although a defendant could rely upon delay in an application for a stay of the proceedings and in the forensic contest in which the plaintiff attempts to prove the claim). As to the impact upon the respondent of the very long delay in the bringing of the application under subsection 48(5A):The respondent would be prejudiced in the defence of any proceedings because it is now likely impossible (it having been difficult by 2001) for the respondent to investigate legitimate lines of enquiry with friends, associates and teachers who knew and observed the appellant at school for the purposes of challenging the quantum of the appellant’s claim.Although there may be cases where, despite the policy underlying section 11A, the prejudice to a defendant caused by delay might be a weighty consideration, the general decay of memories of witnesses who dealt with the appellant whilst he was at school was a kind of prejudice which would be irrelevant because of the policy underlying section 11A. For that reason the primary judge ignored that prejudice.(d)The prospects of success in the new proceeding is a relevant factor in determining whether it is just and reasonable to permit the appellant to commence proceedings. In this respect, the primary judge took into account that if the settlement were set aside the appellant would have good prospects of recovering significantly more than the settlement sum paid in 2002:The primary judge was not asked to make findings that Lynch had committed the sexual assaults upon the appellant but his Honour observed that it is to be expected that the appellant would in any future trial give evidence consistently with his allegations to that effect; there was evidence of other former students who were sexually assaulted by Lynch; other former students described sexual assaults by Lynch that were very similar to that alleged by the appellant; in the 2001 proceeding, the respondent did not deny that Lynch engaged in the sexual offending but merely did not admit it; and the respondent had made public acknowledgements of the fact of Lynch’s sexual offending.If the appellant were accepted in his evidence that he was sexually assaulted by Lynch, whilst attribution of legal liability to the respondent for Lynch’s actions would have been problematic at the time of the settlement agreement with reference to the law as it was then understood, upon the law more recently expressed in the High Court’s decision in the appellant would have strong prospects of establishing that the respondent is vicariously liable for Lynch’s sexual assaults upon him.As a result of cases about the quantum of damages decided since the settlement agreement was made and other changes since then (including that a heavy discount of damages warranted at the time of settlement on account of the understanding of the law of vicarious liability at that time would not be warranted in the new proceeding), it was likely that in the new proceeding an award of damages would substantially exceed the settlement sum agreed upon in 2002.(e)The significance for the exercise of the discretion of the change in the understanding of the law of vicarious liability was not that the respondent would now be forced to litigate in a legal milieu that was less favourable to it than at the time of settlement. It was that the change of the law did not of itself amount to a factor favouring the appellant because it was not a policy underlying subsection 48(5A) that settlements should be set aside to enable plaintiffs to take advantage of more favourable views about the vicarious liability of employers for the criminal actions of their employees.(f)As to the conduct of the respondent in the 2001 proceedings and the settlement process:The appellant’s concessions that the mediation was fair and the respondent acted in an exemplary fashion were properly made. In particular:
“(i) an experienced mediator was engaged;
(ii)the mediator was engaged in setting up the structure of the mediation process;
(iii)the respondent paid for the mediation;
(iv)the applicant was represented by experienced solicitors and very able counsel;
(v)the sessions were organised so the claimants were not involved in legal argument but could concentrate on giving input into their individual claims;
(vi)although the applicant may now consider that the mediations were rushed, they were not. The individual sessions were each between one and two hours and it appears clear that the applicant was given ample opportunity to put his point of view;
(vii)during the mediation there was no challenge to the applicant's allegations of being abused by Lynch; and
(viii)The respondent's acceptance of the truth of the allegations was reinforced in the apology session.”17
(ii)That was a relevant factor, as was the incurring by the respondent of substantial costs in relation to the appellant’s claim in 2001,18 but only in the limited ways that:
“(i) There was no intimidation, bullying or high handed action by the respondent.
(ii)The respondent paid for and otherwise facilitated an elaborate process for settlement of all claims including that of the applicant.
(iii)By those actions, and because the applicant was represented by Shine and competent counsel, there was no inequality of bargaining position.”19
(g)The settlement made between the appellant and the respondent resulted from “fair, arms-length negotiations between two parties on equal footing, both appropriately represented”.20
(h)The issue about expiry of the limitation period “did not materially affect the quantum of the settlement reached and was not a material factor in the applicant’s decision to settle the 2001 proceedings”,21 the settlement of $47,000.00 plus costs “was a fair settlement reflecting the factual and legal strengths and weaknesses of the parties’ respective cases properly assessed at that time by them” and the amount by which the appellant’s claim was discounted “was not materially contributed to by any consideration of limitation defences”.22
(i)“In the circumstances as I have found them, and having directed myself to the purposes for which the discretion is to be exercised as I have identified, I find that it is not just and reasonable to set aside the settlement.”23
Construction of s 48(5A)
“(i) finding … that the legislative purpose is striking a balance between the appellant’s interest in commencing a new claim where the result may be more favourable to him and the respondent’s interest in avoiding the costs and uncertainty of future litigation; and as a result
(ii)failing to find … that the dominant legislative purpose of the scheme of s 48(5A) … is, in context, to recognise the inherent unfairness of limitation periods in actions involving the sexual abuse of children and to provide the means to re-open cases where settlement of such cases was influenced or affected by such unfairness.”
The primary judge adopted the conventional approach of ascertaining the meaning of the statutory language of subsection 48(5A) considered in its context.24 The primary judge was required to consider arguments that drew very extensively upon speeches in Parliament leading to the enactment of subsection 48(5A). As the primary judge recognised, such speeches are referred to only for the limited purpose of supplying context that assists in ascertaining the meaning of the statutory language;25 ascertainment of the legislative purpose does not involve a search for a subjective purpose of members of the Parliament.26 The matters which must be taken into account in the exercise of the discretion created by the very general expression “just and reasonable” in subsection 48(5A) are to be determined “by implication from the subject matter, scope and purpose of the Act”.27
As I have mentioned, the primary judge accepted that it was a factor in favour of an order setting aside a settlement agreement that no limitation period now applies to claims arising from child sexual abuse and settlements may have been entered into which are unfair because they were made after the expiry of the applicable limitation period. The primary judge rejected submissions by the appellant that if a settlement agreement was influenced by a limitation defence the settlement “should in most circumstances be set aside”28 and as a general proposition it should be assumed “that settlements entered into in actions commenced after the expiry of a limitation period are prima facie subject to being set aside”.29 The primary judge observed that nothing in section 48 supported such a presumption; even in the case of a judgment that had been given in favour of a defendant on the ground that the limitation period had expired the judgment would not be presumed to be liable to be set aside under subsection 48(3). Both under subsection 48(3) and subsection 48(5A) the discretion to set aside the judgment or settlement arises only where it is “just and reasonable” to do so.
Appeal ground (b) contends that the “dominant legislative purpose” of subsection 48(5A) is the provision of the “means to re-open cases” where settlement of such cases was influenced or affected by the inherent unfairness of limitation periods barring actions involving child sexual abuse. In argument the appellant articulated the similar legislative purpose that subsection 48(5A) requires the court “to consider whether the settlement should be set aside in light of the primary legislative purpose of allowing childhood sexual abuse victims to have their claims decided on their merits, not influenced by expired limitation periods.” According to the appellant’s argument it would follow that in every application under subsection 48(5A) the circumstance that expiry of the applicable limitation period influenced the settlement must be the most important factor and all other relevant factors must be subordinated to it.
“That the government bill be amended to provide the courts, at their discretion, the right to re-open Deeds of Settlement which have been entered into, with respect to time barred sexual abuse claims.”
The reference to the discretionary nature of the proposed power is significant. Similarly, the Explanatory Note for the amendments to the first bill which was tabled by the shadow Attorney-General described the objective of the relevant amendment as “providing the opportunity for a Court to void a previous deed of settlement that may have been unfairly settled because it was entered into after the time limitation period had expired”, that object to be achieved by providing that “an action may be brought on a previously settled right of action if a court, by order on application, sets aside the agreement effecting the settlement on the grounds it is just and reasonable to do so”. The primary judge’s construction of subsection 48(5A) is consistent with that expression of the objective and how it is to be achieved. That differs markedly from the “primary legislative purpose” propounded by the appellant of “allowing childhood sexual abuse victims to have their claims decided on their merits, not influenced by expired limitation periods.”
In support of the amendments, the shadow Attorney-General made statements that are inconsistent with a legislative purpose of fettering the exercise of the judicial discretion under subsection 48(5A) in the way proposed by the appellant:
“We also believe that deeds that have been previously entered into and may have been unfairly settled due to the time limitation period and the relative lack of bargaining power for the survivor should be able to be reopened upon application to the court. … the range of deeds that have been entered into in these circumstances is undoubtedly going to be a very wide range … you may have a person in their mid-20s who goes to an institution and alerts the institution to the abuse that has occurred and yet is told by the institution, ‘Bad luck. Your time limit’s expired,’ and there is no doubt, I am sure, that in some of those cases the institution said to the victim, ‘Here’s $1000. Sign a deed. Go away. You’ve lost your rights,’ and that was the end of the matter.
I am sure that there are other deeds that have been entered into which are more complex than that and which may have been a fair dealing with the relevant person. … The mechanism that we will propose in our amendment to the legislation is that the court can, upon being satisfied that it is just and reasonable to do so, reopen the deed. That retains as best we can within this difficult area the sanctity of the arrangements of deeds which people enter into voluntarily which basically should be balanced against the fact that obviously that mechanism could be adversely used against a victim given that the victim had little or no bargaining power in the circumstance.”
“I have been careful in drafting the amendment with advice to do so and to provide a number of safeguards, and I just want to go through those for the House. The first is that a court will need to find that the relevant deed should be reopened and that it is just and reasonable to do so, the same phrase used by the government in relation to setting aside judgements that have already been delivered in these matters. The court has to find that and the reason for that is that these deeds could have been entered into for a variety of reasons and with a variety of consequences and I do not believe it is fair, as the private member’s bill initially proposed, to simply have a broad voiding of those deeds. I think a court needs to make that decision.
Secondly, there will be a provision that relates to not only the relevant deed but any associated documents, and these may be documents that protect an insurer in relation to the settlement made to ensure that if the court does feel it is just to reopen the transaction it can do so setting aside any documents that may release an insurer from liability and at the same time, by virtue of the drafting of the clause, ensure that any insurance policy is not affected by the setting aside of the deed. The court, when it is taking into account the justness and reasonableness of setting it aside, will realise what these consequences are and I am sure will take all of those matters into account in determining whether it is appropriate in a particular circumstance to reopen the deed or not. It is a significant step to take, but my submission is that we have made a number of significant steps tonight and this would be consistent with the other steps we have taken.”
There is a difficulty in seeking to ascertain the legislative purpose underlying subsection 48(5A) from the extensive proceedings, including many speeches, in the Legislative Assembly in circumstances in which the final form of the amending Act resulted from an amendment to a government bill that was opposed by the government and different views about the need for and intended effect of the proposed legislation were conveyed in different parliamentary speeches in support of the amendments proposed by the opposition. What can be said is that the overall effect of the extrinsic material to which the parties referred – most significantly the Explanatory Note for the amendments moved by the shadow Attorney-General and his speeches in support of the amendments – is consistent with the primary judge’s construction of subsection 48(5A).
The issue concerns the nature of the remedy provided for the mischief, and particularly the content of the expression “just and reasonable” in subsection 48(5A). The primary judge’s extensive analysis of the question whether expiry of the limitation period influenced the appellant’s decision to settle or the quantum of the settlement reflects his Honour’s acceptance of the implication that such an influence is to be characterised as an unfairness which is to be taken into account as a factor in favour of an order setting aside the settlement agreement. A corollary of that implication is that a “discount” in the amount of the settlement derived by the respondent as a result of expiry of the limitation period is to be regarded as having been “unfairly” obtained for the purposes of the exercise of the discretion under subsection 48(5A). I would therefore accept that if expiry of the limitation period had a material influence upon a settlement, that would favour an order setting aside the settlement agreement notwithstanding the bare fact that the respondent would thereby retrospectively be deprived of a corresponding benefit in the settlement which itself resulted from the influence of expiry of the limitation period. That would not deny the relevance as factors opposed to an order of consequential or different forms of prejudice to a respondent. It was not necessary for the primary judge to address that topic in light of his Honour’s finding that expiry of the limitation period had no material influence upon the appellant’s decision to settle or the quantum of the settlement. The factors found by the primary judge to favour rejection of the application were of a different character.
The different construction advocated by the appellant should not be accepted. The statutory text considered in its context (including the extrinsic material to which the appellant referred) does not justify the claimed implication that, regardless of the kind or degree of influence of expiry of the limitation period upon the settlement, the fact that there was such an influence necessarily must be given greater weight than any factor favouring refusal of the claimed order. The use of the expression “just and reasonable” to identify the only ground for such an order, the fact that the power is conferred upon courts, and the absence of any express identification of the material factors or the relative weight or significance to be attributed to any of them, compel the conclusion that the legislative purpose encompasses account being taken of the interests of both parties to the settlement in deciding whether it is just and reasonable to set aside the settlement agreement, the relative significance or weight to be given to the material factors in that exercise depending upon a judicial assessment of the particular circumstances of each case. That accords with the primary judge’s construction.
Challenge to the exercise of the discretion
Ground (a): the primary judge erred in finding that the limitation issue did not materially affect the quantum of the settlement and was not a material factor in that settlement;36 and
Ground (c): the primary judge erred in attaching excessive weight to the fairness of the process at the mediation between the appellant and the respondent.
At the hearing of the appeal the appellant’s senior counsel, who frankly acknowledged that the mediation process was of an exemplary nature, disavowed reliance upon ground (c) if ground (a) is not upheld. Accordingly these reasons focus upon the specific error contended for in ground (a).
The appellant argues that the challenged finding is inconsistent with uncontroversial evidence. The limitation period had expired many years before the appellant brought his claim. If the appellant failed to obtain an extension of the limitation period his claim would be extinguished altogether. Both in a newsletter issued in June 2000 and in communications between Corrs and Shine between March 2001 and May 2001, the respondent made it clear that it would rely upon the limitation defence in proceedings brought by former students. The respondent pleaded the limitation defence in the proceedings commenced by AB and CD. Applications to extend the limitation period in those matters were adjourned pending the outcome of the mediations. The primary judge considered that from the point of view of the respondent “it was in its interests to keep the limitation defence alive so it could be used as a negotiating tool”.37 At the opening session in the mediation, which was designed to encompass discussion of issues common to all of the claims against the respondent, the respondent made submissions in support of its reliance upon the limitation defence. The appellant was given legal advice that the limitation issue was a litigation risk which should be taken into account in the settlement. In paragraph 31 of the appellant’s first affidavit he deposed “I can remember being told that there could be an issue because the statutory time limit had passed … I was told by someone at Shine that because I was out of time we would have to go for an ‘out of court settlement’”.38
Considered without reference to other evidence to which the primary judge referred those matters would support an inference that the settlement was materially influenced adversely to the appellant by the expiry of the limitation period. The primary judge took all of the matters upon which the appellant relies into account but nevertheless concluded that the limitation issue was not a material factor in the appellant’s decision to settle and it did not materially affect the quantum of the settlement. The respondent submits that the primary judge’s conclusion was correct because, in summary, the objective evidence about the context and course of the matter reveals that the limitation issue had become insignificant by the time the settlement was agreed and there is no direct evidence that a settlement more favourable to the appellant would have been negotiated if the limitation defence was not in issue. For the reasons which follow the respondent’s argument should be accepted.
“… it is the fact that [BQP] and [BQH] will give their evidence (putting to one side whether it will be accepted at trial) that puts the plaintiff in a position to have fair to reasonable prospects of succeeding in obtaining a limitation extension.”63
Counsel explained the latter conclusion:(a)The appellant knew nothing of BQP or BQH’s evidence until told of it by Shine. Their evidence was probative of the material fact of a decisive character relating to the appellant’s right of action that former students reported to Dr Howell sufficient matters of suspicion to put the respondent on a train of inquiry which probably would have led to the detection of Lynch’s sexual assaults, which apparently had commenced in about 1975.64(b)To gain an extension of time the evidence did not have to prove the truth of the material fact but only a prima facie case that it existed and evidence was available to be called, proof that the fact was true being a matter for trial on the issue of liability.65
The primary judge expressed the prospects of establishing a material fact of a decisive character in terms more favourable to the appellant. I agree with the primary judge’s conclusion – which the appellant does not challenge – that, at the relevant time, the fact of the communications by BQP and BQH “may easily be regarded as both material and decisive given that [on the authority of Rich v State of Queensland] it was necessary to demonstrate the respondent’s knowledge of the risk”,66 and without their evidence the appellant could not prove that knowledge. That analysis is consistent with a series of decisions.67
Subject to that qualification (which does not favour the appellant’s case) there is no suggestion that counsels’ advice to Shine was incorrect. In particular, the appellant does not challenge the accuracy of counsels’ advice that to gain an extension of time the appellant was not required to prove the truth of the material fact but only a prima facie case that it existed and evidence was available to be called at a trial. This point supplies substantial support for the primary judge’s conclusion that the “real problem” facing the appellant at the time of settlement was proving that the respondent was legally liable for Lynch’s sexual assaults rather than obtaining the necessary extension of the limitation period.
In the last section of the written advice (headed “Prospects Generally”), counsel expressed their advice about prospects in terms that also support the primary judge’s conclusion that the real problem for the appellant was not the limitation issue but the difficulty in proving liability. Counsel explained that this section of the advice assessed the appellant’s prospects having regard both to the liability and limitation extension issues already discussed. They observed that:
“Merging the prospects, particularly having regard to the liability issues, in qualitative terms we consider that the prospects could be broadly described as fair to reasonable.
In quantitative terms we consider that the plaintiff would have to seriously consider any offer which involves him receiving at least 50% to 60% of whatever are the properly assessed damages, plus his ordinary assessed costs which a court would award (not his solicitor and own client costs in respect of our instructing solicitors) on the appropriate court scale.”68
That advice was reflected in a summary towards the beginning of counsels’ advice which stated that ultimately “the litigation risks, consisting principally of proving at trial liability in the school for the actions of Lynch, to a lesser extent obtaining prior to [trial] a limitation extension, and to a lesser extent again consisting in quantum assessment vicissitudes, dictate that the plaintiff ought seriously entertain any offer which is 50% to 60% of a proper assessment of his damages”.69
In addition to the emphasis given to the prospects in relation to liability by the word “particularly” and the description of the proof of liability as the “principal” litigation risk, it is significant that in the overall assessment the prospects of the appellant obtaining a judgment are described using the same expression (“fair to reasonable”) that was used to describe the prospects of succeeding on liability.70 As the respondent argues, the advice does not suggest an accumulation of separate risks upon the limitation issue and the liability issue.
That is consistent with the way in which the mediation and the subsequent negotiations during the following three weeks proceeded in relation to the appellant. Following negotiations about a proposed mediation of the numerous claims and a meeting with the proposed mediator, the terms of the mediation agreement were settled in April 2002. They included the following provisions. The respondent would pay the mediator’s costs. If a claim was not settled the mediation costs of each party to that claim, including the mediator’s fees, would be costs in the cause of the relevant proceeding. The plaintiffs would provide statements of loss and damage. Psychiatric examinations by a psychiatrist agreed between the parties would be conducted. The respondent would meet the costs of the psychiatric examination and supply of a psychiatric report in respect of each of the plaintiffs, such costs to be costs in the cause of the action by a plaintiff whose claim was not settled during the mediation process. The plaintiffs would provide the respondent with a quantum schedule and an offer of settlement in respect of each claim. The respondent subsequently would provide a quantum schedule and an offer of settlement in respect of each claim. The first day of the mediation process would be set aside to accommodate submissions by the parties’ representatives on issues common to all claims in respect of liability and limitation of time issues. The balance of the three week mediation period would be allocated to the separate mediation of the damages and any individual issues in each plaintiff’s claims.
The primary judge made findings about the mediation that accorded with the evidence to which he referred. The appellant was not present at the joint session relating to all claims on the first day of the mediation. At that session, senior counsel for the plaintiffs acknowledged that each claimant must prove that the respondent knew or ought to have known of the risk Lynch posed, submitted that the evidence of BQP and BQH would establish that knowledge, and explained that the material facts of a decisive character on which the applications for an extension of the limitation period were founded were BQP and BQH’s communications to Dr Howell, which did not come to the claimants’ attention until after the expiry of the limitation period.
Proposed order
I would dismiss the appeal with costs.
MORRISON JA: I have read the reasons of Fraser JA and agree with those reasons and the order his Honour proposes.
MULLINS JA: I agree with Fraser JA.
Royal Commission into Institutional Responses to Child Sexual Abuse, “Redress and Civil Litigation Report”, September 2015, recommendations 85 and 86. ↩
Limitation Amendment (Child Abuse) Act 2016 (NSW), Schedule 1, cl 4 (concerning only judgments and agreements entered into before and in connection with any such judgment); Children Legislation Amendment Act 2019 (Vic), s 32; Limitation of Actions (Child Abuse) Amendment Act 2018 (SA), Schedule 1, cl 3 (with respect to judgments only); Civil Liability Legislation Amendment (Child Sexual Abuse Actions) Act 2018 (WA), s 12; Justice Legislation Amendment (Organisational Liability for Child Abuse) Act 2019 (Tas), s 8 (with respect to settlements only); Limitation Amendment (Child Abuse) Act 2017 (NT), s 8. ↩
Section 11A commenced on 1 March 2017. ↩
Section 14 of the Civil Proceedings Act 2011 (Qld) empowers courts to impose on an order conditions the court considers appropriate. Whether that provision applies in relation to an order made under subsection 48(5A) is not in issue in this appeal. ↩
Reasons [133], [151] – [159]. ↩
See Reasons [156] and fn 174, with reference to Reasons [117], [126] and the Explanatory Note quoted in [23] of these reasons. ↩
Reasons [254] – [256]. ↩
Reasons [274]. ↩
Reasons [161]. ↩
TRG
The Board of Trustees of the Brisbane Grammar School [2020] QCA 190
(2009) 239 CLR 27
(2012) 246 CLR 117
(1988) 165 CLR 268
(1986) 162 CLR 24
(2003) 212 CLR 511
(2016) 258 CLR 134
(1987) 162 CLR 514
(1979) 142 CLR 531
(2012) 250 CLR 503
(2017) 262 CLR 362
(2012) 248 CLR 378
(2019) 264 CLR 595
(2015) 256 CLR 569
(2002) 209 CLR 478
(1992) 174 CLR 178
(2006) 226 CLR 486
(2013) 251 CLR 396
(2003) 214 CLR 118
(2019) 266 CLR 129
The Royal Commission into Institutional Responses to Child Sexual Abuse was established following an announcement by the Commonwealth Government in 2012. The appellant gave a statement to the Royal Commission and he gave evidence at hearings of that Commission. In an interim report delivered in September 2015 the Royal Commission recommended that State and Territory Governments should introduce legislation to remove any limitation period applicable to a claim for damages by a person whose claim is founded on personal injury of the person resulting from sexual abuse in an institutional context when the person is or was a child, the limitation period to be removed with retrospective effect and regardless of whether or not the claim was subject to a limitation period in the past.1
The States and Territories enacted legislation to implement that recommendation. Queensland and some other jurisdictions have enacted additional provisions that were not the subject of any recommendation by the Royal Commission, empowering courts to set aside previous judgments and settlements of actions that were time barred.2
In Queensland the relevant provisions added by the Limitation of Actions (Child Sexual Abuse) and Other Legislation Amendment Act 2016 are sections 11A and 48 (particularly subsection 48(5A)) of the Limitation of Actions Act 1974. Subsection 11A(1) provides that an action for damages relating to the personal injury of a person resulting from the sexual abuse of the person when the person was a child may be brought at any time and is not subject to a limitation period. Subsections 11A(3) and (4) provide that section 11A applies whether the claim for damages is brought in tort, in contract, under statute, or otherwise and it applies to identified kinds of actions for damages, including an action that has survived on the death of a person for the benefit of the person’s estate. Subsection 11A(5) provides that section 11A does not limit any inherent, implied or statutory jurisdiction of a court or any other powers of a court under the common law or any other Act (including a Commonwealth Act), rule of court, or practice direction. That subsection includes the example that section 11A does not limit a court’s power to summarily dismiss or permanently stay proceedings if the lapse of time has a burdensome effect on the defendant that is so serious that a fair trial is not possible.
Section 48 provides:
The suggested legislative purpose is sourced in the primary judge’s observation that section 11A “manifests the legislative intention that the interest of … those claiming damages resulting from child sexual abuse … should prevail without any restriction as to when the proceedings are commenced”.31 That observation describes the legislative purpose underlying the abolition of limitation periods for an action for damages relating to the personal injury of a person resulting from sexual abuse when the person was a child. As the primary judge considered, that is a relevant consideration, but subsections 48(3) and 48(5A) directly address the supervening circumstance of a judgment in favour of the defendant or a settlement between the plaintiff and the defendant, after which the parties’ rights and obligations in relation to the claimed right of action have been replaced by rights and obligations under the judgment or settlement. That is significant. Section 4 of the Legislative Standards Act 1992 (Qld), to which the respondent referred, describes “fundamental legislative principles” – “principles relating to legislation that underlie a parliamentary democracy based on the rule of law” – one of which requires that legislation has sufficient regard to rights and liberties of individuals. The section provides that whether legislation has sufficient regard to such rights and liberties depends on various matters, including (section 4(3)(g)) whether the legislation does not adversely affect rights and liberties, or impose obligations, retrospectively. Congruent common law rules of statutory construction require clear legislative language for a statute to be construed as retroactively falsifying legal rules upon which people have ordered their affairs or exercised rights and incurred liabilities, and that legislation will not be construed as retrospective to a greater extent than is indicated by a clearly expressed legislative intention.32
Section 4 of the Legislative Standards Act 1992 does not fetter legislative power but it is indicative of the exceptional nature of legislation which retrospectively displaces accrued legal rights or obligations. The exceptional nature of such legislation was recognised in some of the speeches in Parliament, including the shadow Attorney-General’s speech. Subsections 48(3) and 48(5A) clearly express a legislative intention to empower a court to make orders the effect of which will be to retrospectively extinguish legal rights and obligations accrued under the described judgments and settlements, but they confer such a power only in cases in which the court decides that it is just and reasonable to set aside the judgment or the settlement.
The parties’ arguments about ground (b) included extensive reference to the history of sections 11A and 48 and many speeches in Parliament about the appropriate response to the Royal Commission’s recommendation for legislative reform. I will briefly outline the legislative history. A government bill (“the first bill”) provided for an amendment to the effect of section 11A except that, in accordance with the Royal Commission’s recommendation, the first bill applied only to rights of action for child sexual abuse in an institution. The first bill also provided for an amendment to the effect of section 48 except that it did not include any analogue of subsections 48(5A) – 48(5C) or the definitions of terms used in those provisions in subsection 48(6). A very different bill (“the second bill”) was introduced by an independent member of Parliament. It included provisions for amendments that would remove any limitation period for a right of action relating to personal injury resulting from sexual abuse or serious physical abuse of a child and deprive all past settlement agreements of their legal effect of preventing a person from bringing an action on such a right of action. Sections 11A and 48 as enacted accord with the first bill as it was amended in Parliament, as proposed by the shadow Attorney-General, to extend its effect to all rights of action for personal injury resulting from child sexual abuse and to add subsections 48(5A) – 48(5C) and the definitions in subsection 48(6) of terms used in those provisions.
The appellant sought support for the legislative purpose he advocated in extracts from the various speeches in Parliament and explanatory memoranda concerning the first bill and the second bill. Those extracts lack persuasive force in relation to the present issue because those bills did not contain any provision analogous with subsection 48(5A) or the other provisions in the amendments to the first bill proposed by the shadow Attorney-General.
The primary judge rejected a submission for the appellant that the speech in the Legislative Assembly by the shadow Attorney-General supported the presumption for which the appellant contended. That speech also does not support the different legislative purpose for which the appellant contends in this appeal. After the first bill and the second bill were read for the first time they were referred to a parliamentary committee which received submissions, conducted public hearings, and reported on the bills. The committee recommended that the first bill be passed and the second bill not be passed. As the primary judge recorded,33 non-government members on the committee made two recommendations, the second of which foreshadowed the amendment that resulted in the enactment of subsection 48(5A):
The appellant argues that the construction he propounds is supported by an implication that the field of operation for subsection 48(5A) is confined to cases in which the settlement was influenced by expiry of the limitation period. If the operation of subsection 48(5A) is confined in that way that would reinforce the view that a finding of such influence is a factor in favour of setting aside the settlement, but it would not justify adoption of the fetter upon the discretion for which the appellant contends. In any case I do not accept that the power conferred by subsection 48(5A) is so confined. The definition of “previously settled right of action” makes it a condition of the court’s power to set aside a settlement agreement that a right of action of the kind described in subsection 48(1) was settled before the commencement of the Limitation of Actions (Child Sexual Abuse) and Other Legislation Amendment Act 2016 but after the expiry of the applicable limitation period. Subsection 48(5A) does not express the different condition that the settlement was influenced adversely to the applicant by the expiry of the limitation period. The implication of such a condition seems a little unlikely in a setting in which subsection 48(5A) confers a power which is broadly analogous with the power conferred by subsection 48(3) but, whereas subsection 48(3) is confined to judgments given on the ground that the limitation period had expired, subsection 48(5A) does not express as a condition of the power that there must be a specified relationship between expiry of the limitation period and the settlement. In light of the legislative purpose of conferring a discretionary power upon courts to provide a remedy for what is to be regarded as an unfairness constituted by an influence, or a possible influence, upon a settlement of expiry of the applicable limitation period, it seems unlikely that the discretion would be exercised to set aside a settlement agreement in the absence of a finding that there was such an influence adverse to the applicant, or at least a finding that there may have been such an influence. There is insufficient justification, however, for taking the very large step of imposing an unexpressed condition upon a new jurisdiction and discretionary power vested in a court.34
Finally, it should be noted that subsection 48(5C) makes provision for one of the consequences of an order being made under subsection 48(5A). That may assist a respondent only in a case in which the successful applicant for an order under subsection 48(5A) ultimately succeeds at the trial of his or her action and recovers an award of damages and costs. The possibility that in such a case one of the adverse consequences for a respondent of a settlement being set aside might be ameliorated to an unknown extent does not suggest a legislative purpose that every consequence of a settlement being set aside under subsection 48(5A) that is adverse to the respondent necessarily carries less weight in an application under that provision than the circumstance that the settlement was influenced in some degree by expiry of the applicable limitation period. The same is true in relation to an order setting aside a judgment under subsection 48(3)(b).35
The appellant’s challenge to the primary judge’s construction of subsection 48(5A) should be rejected.
There is no direct evidence that the limitation issue was taken into account by the respondent in negotiating or settling or that it would have been prepared to pay more if there were no limitation issue. Although the appellant swore two affidavits he did not depose that the expiry of the limitation period or the risk of failure of an extension application influenced his decision to agree to the settlement. There was no evidence that the limitation period was mentioned at all after the initial session at the mediation at which the appellant was not present. No lawyer involved for the appellant in the mediation gave any evidence. The evidence for the appellant was confined to his affidavits and affidavits by the solicitor conducting his new claim. The affidavits by that solicitor exhibit correspondence, pleadings, reports, and other documents but no record from Shine’s files is exhibited: it appears that any such record had been destroyed in the ordinary course of events over the years.
Senior counsel for the appellant placed considerable emphasis upon the text in paragraph 31 of the appellant’s first affidavit quoted in [34] of these reasons. In reliance upon that evidence, the appellant submits that the limitation issue affected the appellant’s decision to agree to the settlement because it was the reason the appellant gave for agreeing to any settlement. I do not accept that argument for a number of reasons:(a)That part of the appellant’s affidavit was immediately preceded by a statement that the appellant could not recall the extent of the advice he was given about the legal process. The appellant did not depose that the advice about the limitation period influenced his decision to interrupt the progress of his claim through the court by a mediation, his subsequent decision to settle upon the terms of the settlement agreement, or his decision to settle at all.(b)It seems clear from both the terms of paragraph 31 and the context in which it appears that the advice was not given during or after the mediation. The appellant states in his affidavit that he recalled attending the mediation but he did not have a good recollection of what occurred, he did not remember where it occurred, at the time of the mediation he was significantly depressed and suicidal, and he had “a very patchy recollection of what was said”.39 He did not recall how the settlement figure was arrived at, any negotiation, or knowing what his claim was worth if it were assessed by a court.40 He thought that the day of the mediation was when a figure for his claim would be determined. After deposing that he had “no recollection” of anyone sitting down with him and advising him of the psychiatric evidence, the assessment of damages, or the alternatives to accepting the offer and the steps to trial, he deposed that the “only other thing” he could recall from the mediation was the offer of access to counselling through the school, which had a severely adverse emotional effect upon him.41 The appellant’s belief that he signed the settlement agreement at the mediation42 is inconsistent with the uncontroversial chronology summarised in the first section of these reasons. It is apparent that the appellant had no reliable recollection of the events at or after the mediation that are significant for the purposes of this appeal.(c)An implication that paragraph 31 of the appellant’s first affidavit concerns advice given a long time before the mediation is consistent with the structure of the affidavit. The affidavit commences with biographical facts, including Lynch’s sexual offending. Paragraphs 28, 29 and 30 concern the appellant’s initial contact and consultation with Shine and the accuracy of the circumstances of sexual abuse set out in the appellant’s claim and statement of claim (which the appellant could not recall having seen when it was prepared and filed). There follows the reference in paragraph 31 to the advice upon which the appellant relies. In paragraph 32 the appellant refers to a recollection that he saw someone from Shine on two or three occasions between 2000 and 2002, biographical matters around that time, and a subsequent consultation with Dr Larder for the purposes of a medicolegal report in July 2002. After referring in paragraphs 33 and 34 to events occurring after the appointment with Dr Larder, the appellant refers to a recollection of attending the mediation.
Contrary to the appellant’s argument, it is neither expressed nor implied in his affidavit that the limitation issue ultimately affected his decision to agree to any settlement or his decision to enter into the settled agreement.
The primary judge did not draw any inference adverse to the appellant from his omission to adduce any direct evidence that expiry of a limitation period influenced his conduct. That was appropriate having regard to the appellant’s personal circumstances and the fact that a great deal of time had elapsed after the settlement agreement was made and before the subject application was brought. The challenged finding was an inference drawn from uncontroversial facts found by the primary judge. Because there was no oral evidence the appeal must be decided upon the footing that this Court is in as good a position as was the primary judge to decide upon the proper inferences.43 It is necessary to discuss each of the relevant factors separately, but it is their combined effect that justifies the primary judge’s conclusion.
As the primary judge accepted, in the period from when the allegations against Lynch emerged up until the commencement of the mediation the respondent made clear its intention to rely upon available limitation defences to the appellant’s claim.44 The respondent also repeatedly made it clear that it would consider and take into account the likelihood that each claimant would obtain an extension of the relevant limitation period.45 The appellant also relies upon the view expressed by the primary judge that it was in the respondent’s interests to keep the limitation defence alive (by the adjournment of AB and CD’s applications for an extension of the limitation period) so that it could be used as a “negotiating tool”.46
The weight of those considerations was diminished by subsequent developments and other matters. One matter of importance is that, apart from any impact of the limitation issue, liability was a contentious issue. Another is the related consideration that, as the primary judge concluded, the appellant’s “real problem” was not the limitation issue but the difficulty for the appellant in proving that the respondent should be held liable for Lynch’s sexual assaults upon the appellant;47 the issue about the limitation period was “inextricably bound up with the issue of proving the respondent’s liability for Lynch’s actions”.48
Another related matter concerns the discovery of new evidence in 2002 regarding complaints made to the school principal about Lynch. AB and CD’s applications for an extension of the limitation period (which had been adjourned pending the mediation) derived some support from their discovery in early 2002 of evidence (which was contradicted by evidence for the respondent) that in 2000 a former student claimed that, some 20 years earlier in 1979 or 1980, he had complained to the school principal about Lynch. By the time of the mediation, however, the appellant’s proposed application for an extension was substantially further strengthened by the addition of the then very recent receipt of a statutory declaration by a man that in 1981 he had complained to the principal that Lynch had sexually assaulted his son.
I will refer to those matters in more detail.
In the proceedings brought by AB and CD, which were served on the respondent in late 2001, the respondent’s defences included the following two allegations:(a)If Lynch sexually assaulted AB and CD he did so without the respondent’s knowledge and not in circumstances in which the respondent ought to have known the danger.(b)The claims were statute barred by the provisions of the Limitation of Actions Act 1974.
Section 11 of the Limitation of Actions Act 1974 imposes a time limit of three years from the date on which a cause of action arises for the bringing of any action for damages for negligence, trespass, nuisance, or breach of a duty in which damages claimed by the plaintiff consist of or include damages in respect of personal injury to any person.49 Because the appellant was a child when his claimed right of action against the respondent accrued the limitation period for bringing such an action expired three years after he became an adult.50 The limitation period therefore expired in late 1994.
In February 2002, Shine filed AB and CD’s applications for an extension of the relevant limitation period pursuant to section 31. Where section 11 of the Limitation of Actions Act 1974 would supply a defence to a plaintiff’s claim, section 31 of that Act empowers the Court to order an extension of the limitation period if it appears to the Court that “there is evidence to establish the right of action apart from a defence founded on the expiration of a period of limitation” and – significantly in the present matter – “a material fact of a decisive character relating to the right of action was not within the means of knowledge of the applicant until a date after the commencement of the year last preceding the expiration of the period of limitation”.
The primary judge concluded that the settlement of the appellant’s claim against the school occurred in a context in which, whilst the appellant had strong prospects of establishing that he suffered injury and loss as a result of sexual assaults committed upon him by Lynch,51 attribution of legal liability to the respondent for the actions of Lynch was problematic upon the law as it was then understood.52 The primary judge referred to this court’s decision in Rich v State of Queensland & Ors53 that “it remains the law in Australia that an employer is generally not vicariously liable for an assault by an employee that is an independent personal act not connected with or incidental in any way to work the employee is expressly or impliedly authorised to perform”. In that case the State was found not to be liable in relation to sexual assaults committed by a former Minister of the Crown at a time when he was school teacher, those assaults being “in no sense capable of being regarded as methods of conducting his teaching function, but were done in utter defiance and contradiction of it and of his duties as an employee of the State”.
The evidence adduced for the respondent indicated that by the time claims were made against the respondent such records as it retained included no reference to any contemporaneous complaint or concern about Lynch’s conduct. Many years afterwards, on 6 June 2000 and 17 September 2002, evidence emerged of two oral complaints said to have been made about sexual assaults by Lynch before his alleged sexual assaults upon the appellant. Dr Howell was the headmaster of the school from 1965 until he retired in 1989. One of his responsibilities was dealing with complaints about members of the staff. When Dr Howell retired he was replaced by Dr Lennox. On 6 June 2000 a former student (“BQP”), who had been at the school between 1976 and 1980, asserted in a letter to Dr Lennox that in 1979 or 1980 Lynch had sexually assaulted him and that he had complained about the assault to Dr Howell a couple of days afterwards. The respondent disclosed that letter in about January or February 2002 in AB and CD’s proceedings. The evidence of it was included in an affidavit by BQP exhibiting his letter filed in support of AB and CD’s applications for an extension of the limitation period.
In an affidavit sworn by Dr Howell in April 2002 dealing with BQP’s allegations Dr Howell said “At no time did I ever receive any complaint from students, staff, parents or any other person, in relation to Kevin Lynch’s behaviour or counselling techniques”.54 Dr Howell added that if he had received such a complaint he would have investigated it and, if the type of behaviour subsequently alleged was established, Lynch’s contract of employment would have been terminated immediately and the matter reported to the appropriate authorities. Dr Howell referred in that connection to an occasion in 1969 when a parent reported alleged sexual misconduct by a teacher that did not directly involve students. Dr Howell immediately put the allegation to the teacher, who admitted it and resigned immediately. If the teacher had not resigned his employment would have been terminated immediately.55 In addition an affidavit filed on behalf of the respondent by a teacher at the school, Mr Cannon, denied that the complaint BQP alleged he had made could have been made in the particular way he described in his letter. Other teachers who were said to have been put on notice as a result of BQP’s complaints provided affidavits in which they denied knowledge of any complaints about improper behaviour by Lynch.56 The respondent relied upon those affidavits as part of the evidence filed in opposition to AB and CD’s applications for an extension of the limitation period.
After the interlocutory applications in AB and CD’s proceedings had been adjourned and the mediation was imminent, evidence emerged of one other complaint about Lynch, a complaint made by a parent (“BQH”) of a boy (“BQJ”) who, with his brother, were students at the school. BQJ told BQH’s wife that when BQJ was in grade 8 in 1981 (and therefore 13 years old) Lynch had fondled his penis. BQH swore a statutory declaration dated 17 September 2002 in which he made the following statements. Sometime in winter 1981 BQH and his wife rang Dr Howell’s secretary and made an appointment to see him. BQH and his wife drove to Brisbane. After arriving at the school, BQH went into Dr Howell’s office while his wife waited outside. BQH told Dr Howell that BQJ had told them that Lynch had been fiddling with BQJ’s penis. Dr Howell asked BQH if he was going to tell the police. Dr Howell did not express surprise but seemed concerned that BQH might tell someone else. BQH said he did not intend to tell the police because he did not think the offence was as serious as that but felt that he should tell someone who was in charge of the school. BQH said that if it was an isolated incident it was up to Dr Howell and the school to speak with Lynch. If others were complaining BQH would expect the school to take appropriate action to protect their children. Dr Howell’s attitude was non-committal. He said words to the effect, “Yes. Righto. Thanks for telling me”, indicated he would look into the matter, and engaged in some pleasantries about how BQH’s sons were going generally. The meeting was over in about five minutes. BQH was never contacted by Dr Howell about the subject again and had no direct contact with him during the rest of his sons’ schooling at the school. BQH’s statutory declaration to that effect was in Shine’s possession before the appellant’s counsel gave Shine their joint written advice dated 25 September 2002, shortly before the mediation commenced on 30 September 2002.
The primary judge referred to some of the bases for potential challenges to the foreshadowed evidence of BQP and BQH.57 As the primary judge found,58 the problems in relation to liability were understood by counsel advising the appellant when he entered into the settlement. In senior and junior counsels’ joint written advice dated 25 September 2002 to Shine, counsel advised that, upon the present state of the law (including Rich v State of Queensland), the strongest argument for the appellant about liability (“the suspicion argument”) was that as a result of reports to Dr Howell by BQP and BQH, the respondent was put on a train of inquiry which probably would have led to the detection of Lynch’s conduct, which appears to have commenced in about 1975. The suspicion argument would certainly succeed if the evidence of BQP and BQH was accepted at the trial, but Dr Howell – a well credentialled headmaster – would give evidence denying that he was told anything that should have put him on notice of sexual assaults by Lynch. The Court would need to resolve questions of credit about evidence to be given by BQP, BQH, and Dr Howell. It was difficult to predict the outcome of the trial. The appellant’s prospects of establishing liability based on the suspicion argument were said to be “fair to reasonable”.59
Counsel advised Shine as follows in relation to the limitation issue:(a)There was a “significant issue” that the appellant’s proceeding was (or probably was) statute barred, the appellant had “adverse prospects of proving his proceeding is not statute barred”,60 and the appellant’s proceeding “is statute barred”.61(b)Counsel referred to the “[BQP]/[BQH] evidence ground” and expressed the opinion that upon that basis the appellant had “reasonable prospects” of obtaining an extension of time.62 After referring to other grounds, in respect of which the advice described the prospects of obtaining an extension in more pessimistic terms, counsel summarised their opinion:
Consistently with the appellant’s case in relation to liability, senior counsel for the respondent submitted in a written submission paper that, in accordance with Rich, the allegations of breach could not succeed without proof that the respondent “ought to have foreseen the relevant risk (molestation or kindred inappropriate behaviour) and guarded against that by taking reasonable steps to prevent that risk causing injury”. The position paper developed a detailed argument in support of the conclusion that even if the claimant proved that there were conversations between BQP and BQH and Dr Howell, they would not be able to prove that the conversations were in such terms as to put Dr Howell on notice of the risk posed by Lynch. For reasons already given, this argument would not detract from the evident strength of the extension application.
Most of the respondent’s position paper was taken up with the arguments about liability. The argument about the limitation issue was brief. First, it was submitted that in “a number of cases” plaintiffs would not be able to demonstrate that the alleged material facts (which were said to be unclear) were decisive and not within the means of knowledge of the plaintiff. This was a manifestly unpersuasive argument in light of its generality, its confinement to only an unstated number of unidentified plaintiffs, the absence of reference to any supporting evidence, and particularly the failure to address the lately discovered evidence of BQP and BQH.
The expressed confinement of the respondent’s argument to “a number of cases” is significant for another reason. By the mediation agreement the parties’ submissions about liability and limitation of time issues at the opening session of the mediation were to be confined to “issues common to all claims”. The mediation agreement provided that the subsequent, separate sessions were allocated to the mediation of damages “and any individual issues in each of the claims”.71 In the absence of any direct evidence upon the point, and having regard also to the obviousness of the material facts of a decisive character for the appellant’s claim in the evidence of BQP and BQH, it is to be inferred that the respondent’s argument upon this point would apply in the appellant’s case only if it were raised at his individual session or in the subsequent negotiations.
The second contention about the limitation issue in the respondent’s position paper is that the application under section 31 would be refused because the respondent would suffer “insurmountable prejudice” by the grant of an extension. I also agree with the primary judge’s explanation for the conclusion (which the appellant did not challenge) that the prejudice alleged in the respondent’s position paper was not such as to support dismissal of an application under section 31 on that ground:72(a)The death of Lynch was not significant in this context given that, in the face of evidence that would be given by dozens of former students that they were sexually assaulted by Lynch in his counselling sessions, the respondent would not have called Lynch to give evidence if he had not died.(b)Missing documentation was unlikely to be a real issue. Given that it would not be in issue that numerous claimants were counselled by Lynch and he had the opportunity to sexually assault them, the absence of appointment books and the like would not be of great importance. Neither would the loss of Dr Howell’s diaries be significant given that it was not so much the fact that the conversations with BQP and BQH occurred but their content that was the real issue.(c)General dwindling of the memories of witnesses would be unlikely to lead to a dismissal of an application under section 31 in those circumstances.(d)The disentangling of medical evidence would be an issue at trial upon which the psychiatrist would give evidence but it was unlikely to form the basis of dismissal of an application under section 31.
Consistently with the primary judge’s analysis, counsels’ advice to Shine about the limitation issue did not suggest that any discretionary consideration was an obstacle to success in an application to extend the limitation period.
Overall, the evidence suggests that after the opening session, at which the appellant was not present, the respondent did not press any point about the limitation issue. The best evidence of what occurred at the separate session involving the appellant was contained in the affidavit by Ms Cameron. She recalled that “the most significant issues discussed in this mediation were causation and quantum”.73 Her notes include no reference to a limitation issue. As I have indicated, the limitation issue also was not mentioned during the following weeks when offers and counter-offers were exchanged before the claim was eventually settled.
In reaching the conclusion that, notwithstanding the matters upon which the appellant again relies in argument in this Court, the expiry of the limitation period was not a material factor in the appellant’s decision to settle and did not materially affect the amount of the settlement reached the primary judge also took into account his Honour’s conclusion that there were pressures upon the respondent to reach a settlement, having regard to the seriousness of the allegations against it that would be aired at a trial.74 As the primary judge noted, Shine had referred to the public nature of the contemplated litigation in correspondence with Corrs in March and April 2001, it had conducted a press conference before the proceedings were served upon the respondent, and the parties had agreed not to make media statements at the mediation and to keep the terms of settlement confidential.75
Another consideration taken into account by the primary judge concerns the likely amount of a judgment if the appellant succeeded in his claim against the respondent. The appellant’s claim for economic loss as particularised in his statement of loss and damage was based upon the premise that he would have pursued a career as a medical practitioner. Upon that premise, he claimed past economic loss of $289,920.95 as the difference between the income of $70,079.05 he had earned from 1990 to May 2002 and his potential income of $360,000.00 from 1997 (the time by which it was alleged the appellant would have gained the necessary medical qualifications) to 2002. Upon the same premise the appellant claimed $816,527.00 as future economic loss.
As the primary judge concluded, a claim upon that premise was never seriously pressed. The appellant’s opening offer was that he would settle his claim for $150,399.00 plus costs, a figure which included only $40,000.00 for each of the claims for past economic loss and future economic loss. That offer signalled an acknowledgement that the evidence – which included evidence that the appellant was awarded average grades at school – did not supply a basis for the premise that the appellant might have gained entry to and successfully completed the necessary university degree courses to become qualified as a medical practitioner. The offer reflected the high end of the range of past economic loss and future economic loss of $20,000.00 – $40,000.00 in counsels’ advice to Shine of 25 September 2002, in which the range of damages the appellant could expect to receive at a trial was assessed as being between $95,565.00 and $167,110.00.
The appellant relies upon the circumstance that the settlement sum of $47,000.00 was less than the minimum figure within the range of 50 per cent to 60 per cent of the properly assessed damages which the appellant’s counsel advised he should seriously consider accepting (see [56] of these reasons). For the following reasons, the point does not have the significance attributed to it in the appellant’s argument:(a)The settlement amount is only about $800.00 below the bottom of the range of figures suggested by counsel.(b)In a passage in counsels’ advice to Shine, which the primary judge cited, counsel pointed out the notorious difficulty of assessing damages in cases involving psychiatric injury.76(c)The psychiatric evidence reveals some specific difficulties in the assessment. Dr Larder77 diagnosed the appellant as suffering from chronic depression, alcohol abuse, stimulant abuse, opioid dependence and an anxiety disorder. Because the appellant’s drug use was severe and long term it was not possible to separate its devastating consequences from the consequences of the appellant’s childhood sexual abuse. Dr Larder opined that the abuse distorted the appellant’s sexual, personal and social development but other factors contributed to the appellant’s personality and occupational history of unskilled work, unemployment and various kinds of labouring type work: a “biological predisposition to mental disorder”; a teenage back condition and a knee condition; difficult relationships with the appellant’s father and stepmother; the appellant’s reported family history of “severe interpersonal conflict [particularly between his parents], aggression, paternal alcohol abuse”; the appellant’s “unsuccessful attempts as a child to assist his mother in physical altercations with his father”; and “parental separation when he moved to live with his father” (when the appellant was in grade 8). The severity of the appellant’s reaction to the pathological student-counsellor interpersonal relationship was described as “moderate”. Dr Larder opined that a component of the appellant’s psychiatric condition could be attributed to the alleged abuse and there was considerable evidence that it could have resulted from many other life experiences. There was a “direct and complex relationship between some of these subsequent life issues and the alleged abuse.”(d)Dr Larder concluded that it was “possible, but not probable, that in the absence of the alleged abuse his work record could have been improved”.(e)Before the primary judge the respondent submitted that the range of damages in counsels’ opinion to Shine was too high and that the correct range upon the evidence was between $61,000.00 and $96,050.00. The appellant submitted that the primary judge should act upon the assessment in counsels’ opinion in 2002 because its proximity in time to the settlement necessarily rendered it superior to the quantum analysis by counsel for the respondent before the primary judge. Unsurprisingly the primary judge rejected that argument. The primary judge considered that it was not appropriate to assess quantum because the application before his Honour involved only a general assessment of the reasonableness or otherwise of the figure upon which the parties settled. The primary judge found that the nature of and variables involved in the task of assessing damages made it a difficult one and that the lawyers for both sides would have had that in mind when they negotiated the settlement in 2002.
The evidence supports the primary judge’s findings to the effect that the settlement amount is a reasonable measure of the amount of the appellant’s loss and damage caused by the alleged wrong, and that it was not discounted with reference to the limitation issue but rather to take into account counsels’ advice that the appellant’s prospects of establishing that the respondent was liable were no better than “fair to reasonable”.
In the context of the primary judge’s consideration of the significance of all of the potentially relevant matters, the primary judge was persuaded that the expiry of the limitation period did not materially affect the appellant’s decision to settle or the amount of the settlement. The appellant has failed to establish any error in that finding, which, together with other factors that are not in issue in this appeal, led to his Honour’s conclusion that it was not just and reasonable to set aside the settlement.
Appeal ground (a) is not established.
Reasons [272]. ↩
Reasons [165] – [170]. ↩
See [47] of these reasons. ↩
(2016) 258 CLR 134. ↩
Reasons [172] – [187]. ↩
Reasons [188] – [195]. ↩
Reasons [263] – [265]. ↩
Reasons [237]. ↩
Reasons [260]. ↩
Reasons [277]. ↩
Reasons [278]. ↩
Reasons [233]. ↩
Reasons [279]. ↩
Reasons [280]. ↩
Reasons [145] – [147], citing Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46 – 47 [47]; Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503; Acts Interpretation Act 1954 (Qld), ss 14A and 14B; SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362 at 368 [14] (Kiefel CJ, Nettle and Gordon JJ) and at 374 – 375 [35] – [40] (Gageler J). ↩
See Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518; Certain Lloyd’s Underwriters Subscribing to Contract No IH00AAQS v Cross (2012) 248 CLR 378 at 388 – 389 [23] – [25]. ↩
Reasons [148], citing Unions NSW v New South Wales (2019) 264 CLR 595 at 656 – 657 [168] – [172] (Edelman J). ↩
Reasons [143], citing Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 30 – 40 (Mason J); see also North Australian Aboriginal Justice Agency Limited v Northern Territory (2015) 256 CLR 569 at 591 [34] (French CJ, Kiefel and Bell JJ); Gerlach v Clifton Bricks Pty Ltd (2002) 209 CLR 478 at 503 – 504 [70] (Kirby and Callinan JJ). ↩
Reasons [95]. ↩
Reasons [155]. ↩
Appellant’s amended outline of argument, 15 August 2019, para 32. ↩
Reasons [151]. ↩
Australian Education Union v General Manager of Fair Work Australia (2012) 246 CLR 117 at 135 [30] – [31] (French CJ, Crennan and Kiefel JJ). ↩
Reasons [112]. ↩
See FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268 at 290 (Gaudron J); Knight v FP Special Assets Ltd (1992) 174 CLR 178 at 205 (Gaudron J); Mansfield v Director of Public Prosecutions (DPP) (WA) (2006) 226 CLR 486 at 492 [10] (Gleeson CJ, Gummow, Kirby, Hayne and Crennan JJ); Weinstock v Beck (2013) 251 CLR 396 at 419 – 420 [55] (Hayne, Crennan and Kiefel JJ). ↩
It is difficult to discern what practical impact that provision might have, given that it appears to assume that a defendant might have paid damages and costs under a judgment in the defendant’s favour. ↩
Ground (a) also sets out particulars of the ground which are in the nature of arguments; these are taken into account in the following reasons. ↩
Reasons [208]. ↩
Appellant’s affidavit dated 4 July 2018, para 31, quoted at Reasons [227]. ↩
Appellant’s affidavit dated 4 July 2018, paras 35 - 36. ↩
Appellant’s affidavit dated 4 July 2018, para 38. ↩
Appellant’s affidavit dated 4 July 2018, para 38. ↩
Appellant’s affidavit dated 4 July 2018, para 37. ↩
Warren v Coombes (1979) 142 CLR 531 at 551; Fox v Percy (2003) 214 CLR 118 at 127 [25] and 128 [29]; Lee v Lee (2019) 266 CLR 129 at 148 – 149 [55]. ↩
Reasons [197] – [208]. ↩
See in particular Corrs’ letters to the then headmaster Dr Lennox of 27 March 2001, 1 May 2001 and 22 May 2001. The most relevant passages are quoted at Reasons [200], [203] and [206]. ↩
Reasons [208]. ↩
Reasons [232]. ↩
Reasons [220]. ↩
Section 11 includes an exception in relation to rights of action relating to personal injury resulting from a dust-related condition, which are not subject to a limitation period. ↩
Limitations of Actions Act 1974, ss 5(2), 29(1), and 29(2)(c). ↩
Reasons [171]. ↩
Reasons [172]. ↩
[2001] QCA 295 at [6]. (An appeal to the High Court was subsequently dismissed: New South Wales v Lepore; Samin v Queensland; Rich v Queensland (2003) 212 CLR 511). ↩
Affidavit of Dr Howell dated 15 April 2002, para 8. ↩
Affidavit of Dr Howell dated 15 April 2002, para 9. ↩
Affidavit of Mr Cochrane dated 15 April 2002 and affidavit of Mr Bromiley dated 16 April 2002. ↩
Reasons [179] – [183], [212], [220], [223], [231]. In addition, as senior counsel for the respondent noted at the hearing of the appeal, at the opening session at the mediation, the respondent informed the claimants’ lawyers that a representative of the respondent had spoken to BQP over the phone and he conceded that he did not convey his complaint to Dr Howell as clearly as he had suggested in his letter to the school: see affidavit of Ms Cameron dated 23 August 2018, Ex “JPC-8”, para 8. ↩
Reasons [184]. ↩
Advice paras 66 – 76. Another argument, concerning the school’s systems, was described as “arguable, though not a strong one, for the plaintiff”, with the plaintiff’s prospects of proving liability not being able to be “elevated above” the fair to reasonable range: paras 77 – 79. ↩
Advice paras 11 and 13. ↩
Advice para 90. ↩
Advice para 96. ↩
Advice para 111. ↩
Advice paras 69.1, 92 – 95.1. ↩
Advice para 97. ↩
Reasons [214]. ↩
Wood v Glaxo Australia Pty Ltd [1994] 2 Qd R 431 at 437 (Macrossan CJ); Dick v University of Queensland [2002] 2 Qd R 476 at 480 [5] (Pincus JA) and 486 [28] (Thomas JA); Glen Alexander Pikrt v Hagemeyer Brands Australia Pty Ltd [2006] QCA 112 at [45] (McMurdo J, Holmes J agreeing); Greenhalgh v Bacas Training Limited & Ors [2007] QCA 327 at [18] (Keane JA, Cullinane and Lyons JJ agreeing). ↩
Advice paras 115 and 116. I have added the emphasis. ↩
Advice para 17. I have added the emphasis. ↩
Advice paras 14 (in the summary towards the beginning of the advice) and 115 (“prospects generally”, taking into account the liability and limitation extension issues). ↩
Mediation agreement, Ex “AWA4” (clause 25) to the affidavit of the appellant’s solicitor Mr Arends dated 25 June 2018. I note also that a solicitor from Corrs, Ms Cameron, deposed that “It had been agreed between the parties that if there were issues that were relevant to the limitation period point in respect of a particular Claimant, then those issues would be raised in the individual mediations.”: affidavit of Ms Cameron dated 23 August 2018, para 42. ↩
Reasons [215] – [219]. ↩
Affidavit of Ms Cameron dated 23 August 2018, para 66. ↩
Reasons [243]. ↩
Reasons [244]. ↩
Advice para 120. ↩
Dr Larder’s report to Corrs dated 15 July 2002. Dr Larder provided an updated report to Shine dated 8 October 2002, but it appears to be little more than a brief summary of the earlier report. ↩