West (by his litigation representative Toms) v State of Victoria

Principles 10 Rules 9.70 and 9.71 of the Rules provide a regime for court approval of a settlement of proceedings involving a person under a legal incapacity. Those rules provide: 9.70 Compromise or settlement of matter in proceeding (1) If a litigation representative agrees to the compromise or settlement of any matter in dispute in a proceeding, the litigation representative must apply to the Court for approval of the agreement. (2) If the Court approves the agreement, the agreement is binding on the person by or for whom it was made as if: (a) the person were not under a legal incapacity; and (b) the litigation representative had made the agreement as the person's agent. (3) The Court may, as a condition of approval, require that any money or other property payable for the benefit of a person under a legal incapacity be dealt with by way of a settlement, or in any other way that the Court considers appropriate. Note: The Court may give approval subject to conditions - see rule 1.33. (4) If the Court does not approve the agreement, the agreement is not binding on the person under a legal incapacity. 9.71 Application by litigation representative for approval of agreement (1) An application by a litigation representative for approval of an agreement must be made by filing an interlocutory application. (2) The interlocutory application must be accompanied by the following: (a) an affidavit stating the material facts on which the application relies; (b) the agreement that is sought to be approved; (c) an opinion of an independent lawyer that the agreement is in the best interests of the person under a legal incapacity. 11 In deciding whether or not to approve a settlement agreement under r 9.70 of the Rules, the Court must be satisfied that the settlement is in the best interests of the person, or beneficial to his or her interests: Butler v Djerriwarrh Employment & Education Services Inc [2015] FCA 296 at [10] (Mortimer J, as her Honour then was); Scandolera v State of Victoria (2015) 331 ALR 525 at [26] (Mortimer J). 12 In forming the necessary judgment, significant weight will be given to the opinions of the applicants' legal advisers: Modra v State of Victoria (Department of Human Services Victoria) [2013] FCA 1041 at [12] (Tracey J). The Court is assisted in its determination by the provision of an opinion by an independent lawyer who has been briefed fully on the facts and relevant evidence, and may have access to more material than the Court: Scandolera at [28]. However, the Court is not bound by that opinion, and must form its own view as to whether the settlement is beneficial to the interests of the person under a legal incapacity: Butler at [13]; Scandolera at [28]. 13 To determine whether a proposed settlement is in the interests of a person under a legal incapacity, the court is required to consider the advantages and disadvantages of the litigation continuing: Scandolera at [29]. This encompasses matters such as the benefits conferred under the settlement, whether the applicant might secure a more advantageous outcome if ultimately successful at trial, the time that will be taken to obtain judgment at first instance and the prospect of an appeal, the risks of litigation, the possible exposure to adverse costs orders, the emotional and psychological strain of continued litigation on the applicant and his family, and the finality and certainty secured in bringing an end to the litigation: see Snell v State of Victoria (Department of Education and Training) (No 3) [2024] FCA 825 at [26] (Horan J).

Approval of settlement 14 While the opinion of Mr Hancock does not bind the Court, I give the opinion significant weight. 15 Mr Hancock has undertaken a detailed assessment of each aspect of the settlement, and assessed the benefit to the applicant of each component of the settlement. The terms of the settlement have been, in my view, fairly assessed against the potential advantages and disadvantages of the proceeding continuing. The advice considers, in appropriate detail, the relative strength of the applicants' case and prospects of success, the inherent uncertainties in litigation, the potential exposure of the applicants, the amount of damages that the applicants might expect to achieve in pursuing the proceeding, and the certainty of outcome that the settlement achieves. 16 In weighing up the totality of the matters relevant to the settlement, Mr Hancock has reached the opinion that the settlement is in the best interests of the applicants, in both the short term and in relation to the applicants' ongoing needs for the future. 17 The opinion of counsel is clear and appears to be well-reasoned. It comprehensively addresses the matters relevant to the Court's determination of whether the settlement should be approved under r 9.70 of the Rules. 18 Having considered the terms of the settlement, and giving appropriate weight to the opinion of counsel, I am satisfied that the settlement is in the best interests of the applicants. Accordingly, the settlement as set out in the Deed, will be approved.

Independent lawyer 19 Rule 9.71(2)(c) requires the settlement application to be accompanied by an opinion of a lawyer who is "independent". A separate question therefore arises as to whether I should accept the opinion of Mr Hancock as an "opinion of an independent lawyer". 20 Mr Hancock has been involved in advising the applicants and their family at various times throughout this proceeding, including the drafting of documents and legal submissions, and appearances at previous hearings. Mr Hancock nevertheless states that he considers that his opinion is independent for the purposes of r 9.71, or alternatively that it is appropriate that compliance with r 9.71(2)(c) be dispensed with. 21 In Young v Victoria (Department of Education and Training) [2018] FCA 1124 at [18]-[19], Bromberg J stated: A separate question arises as to whether I should accept the opinion of Mr Hancock as an "opinion of an independent lawyer" for the purposes of r 9.71(2)(c), in circumstances where Mr Hancock had been briefed to act for the applicant in the proceeding. In [Wade v Victoria (No 2) [2012] FCA 1080] at [7]-[9] I construed the reference to an "[independent] lawyer" in r 9.71(2)(c) as not excluding a lawyer who may have had a prior association with the proceeding but whose opinion was provided in furtherance of that lawyer's duty to assist the Court and not in furtherance of any duty the lawyer may have had to a party in the proceeding. I noted that in many cases the substantial additional costs involved in obtaining the opinion of a lawyer with no prior knowledge or familiarly with the proceeding may be prohibitive. I observed that the Court has a capacity to dispense with the requirement of r 9.71(2)(c). In that case, I determined that if it were the case that r 9.71(2)(c) required that an opinion be provided by a lawyer who had no prior association with the proceeding, I would dispense with the requirement made by that Rule. Wade has since been followed in Modra at [9] (Tracey J), Hickey v Public Advocate (Victoria) [2012] FCA 1203 at [10] -[11] (Gray J), Koenders v Victoria [2016] FCA 842 (Davies J) and Biasin v Victoria [2017] FCA 161 at [15] -[16] (Kenny J). In the circumstances of this case, I consider it appropriate to receive and rely upon the opinion of Mr Hancock. It would be productive of unnecessary expense disproportionate to the circumstances of the proceeding to require another lawyer to be engaged to prepare an opinion. Accordingly, I propose to follow the same course here as that which I adopted in Wade. 22 As I outlined above, Mr Hancock's opinion is clear and appears to be well-reasoned. It would be productive of unnecessary expense that would be disproportionate in the context of the settlement to require another lawyer to cover the same ground covered in Mr Hancock's opinion. Accordingly, even if Mr Hancock does not qualify as an "independent lawyer" within the meaning of r 9.71(2)(c), it is appropriate to dispense with the requirement under that rule.

Confidentiality 23 The applicants seek an order of confidentiality, pursuant to s 37AF of the Act, over the Deed and the opinion of counsel, Mr Hancock, being Annexures ST-1 and ST-2 respectively to the affidavit of Ms Toms affirmed 29 May 2024. 24 Section 37AF(1) of the Act confers power to make a suppression or non-publication order prohibiting or restricting the publication or other disclosure of, relevantly, information that relates to a proceeding before the Court and is lodged with or filed in the Court. Such an order may be made on one or more grounds set out in s 37AG(1), including where the order is necessary to prevent prejudice to the proper administration of justice. 25 The confidentiality of the settlement terms was a key part of the settlement and assisted the parties in achieving the settlement outcome, and thereby, the efficient resolution of the matter before the Court. I am satisfied that an order of confidentiality in respect of the Deed under s 37AF(1) of the Act is appropriate, on the basis that it is necessary to prevent prejudice to the proper administration of justice. Without such order, the confidential nature of the settlement would be lost. The interests of justice are served not only for the parties to the current proceeding, but also for future parties who can have confidence that the Court may facilitate the resolution of these kinds of proceedings by including such orders: see James v Workpower Inc [2019] FCA 1239 at [18] (Mortimer J). 26 It is similarly appropriate to preserve the confidentiality of counsel's opinion. Counsel's opinion has been provided to assist the Court in determining whether the terms of the settlement are in the best interests of the applicants, and discloses the underlying terms of the settlement. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Anderson.