Barclay v Trustees of the Marist Brothers (Ruling)
[2024] VCC 1859
•28 November 2024
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
| INSTITUTIONAL LIABILITY LIST |
Case No. CI-23-04351
| GREGORY PAUL BARCLAY | Plaintiff |
| v | |
| TRUSTEES OF THE MARIST BROTHERS | Defendant |
---
JUDGE: | HER HONOUR JUDGE K L BOURKE | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 3, 4 and 23 September 2024 | |
DATE OF JUDGMENT: | 28 November 2024 | |
CASE MAY BE CITED AS: | Barclay v Trustees of the Marist Brothers (Ruling) | |
MEDIUM NEUTRAL CITATION: | [2024] VCC 1859 | |
RULING
---
Subject:LIMITATION OF ACTIONS
Catchwords: Settlement agreements – historical sexual abuse – application to set aside settlement agreements under the Limitation of Actions Act1958, s27QE – meaning of “just” and “reasonable”
Legislation Cited: Limitation of Actions Act1958, s27QE
Cases Cited:Roman Catholic Trusts Corporation for the Diocese of Sale v WCB (2020) 62 VR 234; Trustees of Christian Bros v DZY (a pseudonym) [2024] VSCA 73; Trustees of the Roman Catholic Church for the Archdiocese of Sydney v Ellis (2007) 70 NSWLR 565; Jens v The Society of Jesus in Australia [2024] VSC 329; EXV v Uniting Church in Australia Property Trust (NSW) [2024] NSWSC 490; Pearce v Missionaries of the Sacred Heart [2022] VSC 697
Ruling: Leave granted to set aside the Deed in its entirety.
---
APPEARANCES: | Counsel | Solicitors |
| For the Applicant/Plaintiff | Ms K Foley SC with Ms S Dhanji | Rightside Legal |
| For the Respondent/Defendant | Mr J Pappas with Mr C Currie | Carroll & O’Dea Lawyers |
Table of Contents
Introduction and summary……………………………………………………………………..1-2
Remedial nature of the legislation…………………………………………………………….2-3
“Just and reasonable”…………………………………………………………………………..4-7
Summary of issues………………………………………………………………………………7-8
Plaintiff’s evidence
Plaintiff…………………………………………………………………………………….8-19 Paul Holdway……………………………………………………………………………19-29
Laird Macdonald ………………………………………………………………………..30-31
Mark Thompson, Forensic Accountant – Vincents…………………………………..31-32
Defendant’s evidence
Martin Slattery……………………………………………..………………..…………..32-39
Daniel Creasey ……………………………………………..………………..…………39-43
Charles Harrison………………..………………..………………..…………...................43
Andrew Muller SC………………..………………..………………..……………….…43-44
Submissions
Did the Ellis defence have a material influence………………..……………………44-45
Plaintiff………………..………………..………………..……………………....45-51
Defendant ………………..………………..………………..…………………..51-62
Plaintiff’s response to the Usual Proper Defendant Defence……………………….61-68
Economic loss
Defendant ……………………………………………………………………….69-70
Plaintiff …………………………………………………………………………..70-75
Analysis…………………………………………………………………………………….......75-83
HER HONOUR:
Introduction
1Gregory Barclay, the plaintiff, seeks relief from the compromise of a claim for personal injury damages recorded in a Deed entered into on 12 November 2015 (“the previously settled cause of action”) with the defendant, the Trustees of the Marist Brothers.
2By Summons filed in the proceeding on 24 May 2024, the plaintiff has applied to set aside the Deed pursuant to s27QD(2) of the Limitation of Actions Act 1958 (Vic) (“the Act”), so that he may bring action afresh in relation to the previously settled cause of action. The defendant seeks to maintain the effect of the 2015 Deed.
3Section 27QD(2) of the Act provides that, in a proceeding to which this section applies, application may be made to the Court for the settlement agreement, and any judgment or order giving effect to the settlement of the previously settled cause of action to be set aside.
4The application to set aside a previously settled cause of action can only be made in respect of actions referred to in s27QA(2).[1]
[1]Per s27QD(1)
5Any set-aside order may set aside the previously settled cause of action in whole or in part.[2]
[2]Per s27QE(1)(a)
6There is no dispute between the parties that this application is one that falls within the scope of the relevant provisions. Division 5 of Part IIA applies to the cause of action, and the application is made in relation to a “previously settled cause of action” within the meaning of s27QA(2) (applying the definition in s27OA).[3]
[3]A cause of action that was settled and given effect by a settlement agreement before 1 July 2018
7Pursuant to s27QE(1)(a) of the Act, the Court may set aside the Deed if satisfied that it is just and reasonable to do so. As the Court of Appeal observed in Roman Catholic Trusts Corporation for the Diocese of Sale v WCB:[4]
“… s 27QE does not prescribe matters which the Court should have regard to in determining that question.”
[4](2020) 62 VR 234 (“WCB”) at paragraph [121]
8The plaintiff bears the burden of proof in this application.[5]
[5]WCB at paragraphs [145] and [157]
9If the Court is satisfied that it is “just and reasonable” to do so, it must set the settlement agreement aside; it is not a discretionary exercise of power.[6] Rather, the word “may” is facultative depending upon the antecedent assessment of relevant facts and circumstances by a court.[7]
[6] Trustees of the Christian Brothers v DZY (a pseudonym) [2024] VSCA 73 (“DZY”) at paragraph [94] (Beach and Macaulay JJA)
[7]DZY at paragraph [101]
10The legal test leads to a binary outcome: it is either just and reasonable that the party should not be bound by a previous settlement, or it is not.[8] It is not sufficient to establish a mere risk of injustice or unreasonableness.[9]
[8]DZY at paragraph [96]
[9]DZY at paragraph [95]
11If the setting aside of the previously settled cause of action would be either unjust or unreasonable, then the relief must be refused.
Remedial nature of the legislation
12It is clear that the legislative reforms are remedial in nature and should therefore be construed so as to provide the benefit of a set-aside order where the legal test is satisfied.
13The Court of Appeal has emphasised the need to construe s27QE and related provisions in light of the purpose of these amendments to the Act – in particular, that these provisions were introduced because of the unfairness faced by plaintiffs in child sexual abuse cases by reason of two historical legal barriers to litigation.
14In WCB, the Court of Appeal identified the legal barriers to litigation that are relevant to applications under s27QD(2).[10] These are:
(a) First, under the provisions of the Act, as then in force, the plaintiff’s claim was almost certainly statute barred (“the Limitations defence”); and
(b) Secondly, there was no realistically viable defendant against whom the plaintiff could make a claim. In particular, it was understood proceedings could not be brought against unincorporated church entities (“the Ellis defence”).[11]
[10]At paragraphs [6]-[12]
[11]Trustees of the Roman Catholic Church for the Archdiocese of Sydney v Ellis (2007) 70 NSWLR 565 (“Ellis”)
15The Court went on to set out the legislative change to the Limitations defence, which took effect from 1 July 2015 and abolished the limitation period for personal injury claims in respect of historical sexual abuse.[12]
[12]WCB at paragraph [8], citing the provisions of the Limitation of Actions Amendment (Child Abuse) Act 2015 (Vic)
16The Court also set out the legislative change that took effect from 1 July 2018 which:
“… provided for the nomination or appointment of an entity, often a trust associated with the relevant non-government organisation (“NGO”), to act as a proper defendant to a claim on behalf of the NGO, and to incur any liability arising from the claim on behalf of the NGO.”[13]
[13]WCB at paragraphs [9]-[10] citing the provisions of the Legal Identity of Defendants (Organisational Child Abuse) Act 2018 (Vic)
17The Court stated that:
“… it would be entirely artificial, in construing s 27QE, to ignore the cumulative effect of the two principal barriers that obstructed the rights of victims of childhood sexual abuse … from obtaining suitable redress through the courts … .”[14]
[14]WCB at paragraph [106]
“Just and reasonable”
18The most informative and authoritative of the Victorian cases is Trustees of the Christian Brothers v DZY,[15] which sets out the relevant and binding principles for determining whether it is “just and reasonable” to set aside a settlement under s27QE.[16]
[15]Supra
[16]DZY at paragraphs [90]-[96] and [106]-[113]
19Factually, DZY was a case where both “barriers” were an impediment to the plaintiff achieving fair compensation. In that case, the Court of Appeal unanimously refused the application to set aside two deeds of settlement – one entered into in 2012 and the other in 2015 – insofar as they related to any economic loss claim.
20In DYZ, Beach and Macaulay JJA (the majority) characterised the 2015 and 2018 amendments as “legislative remedies to the two legal barriers facing plaintiffs in child abuse cases,” and stated that the reform was designed to “remedy” the “mischief” of a potentially unfair settlement.[17]
[17]At paragraphs [108]-[109]
21The majority also considered what role the Limitations defence and the Ellis defence played in applying the statutory test of “just and reasonable”. Their Honours considered that legislative reform abolishing both of those defences “reinforces the centrality of the actual influence of one or both of those two barriers in the consideration of whether it is just and reasonable to set aside a settlement agreement.”[18]
[18]At paragraph [109]. Applied by Ierodiaconou AsJ in Jens v The Society of Jesus in Australia [2024] VSC 329 (“Jens”) at paragraph [94]
22The majority in DZY described the just and reasonable test as a “strict legal rule” which must be satisfied before a set-aside order may be made.[19]
[19]At paragraph [94]
23Beach and Macaulay JJA went on to say that:
“… If a finding was made that one or other of those legal barriers had a material impact on the claimant’s decision to settle his or her claim, a cogent ground would exist to conclude that it was just and reasonable to set the settlement aside.”[20]
[20]At paragraph [110]
24Their Honours also noted that:
“… there could be additional factors that might legitimately be taken into account. Potentially those factors might include, for example, prospects of success (that is, that the claimant could do better than he or she had previously done by the settlement); the respondent’s conduct in the settlement process; unequal bargaining power; any feelings of guilt or shame (compounded or not by the burden of giving evidence and being subject to cross-examination); and (as noted) prejudice to the respondent.”[21]
[21]At paragraph [109]
25Further, their Honours held:
“Hence, built into the necessary condition for the availability of the s 27QE remedy is the requirement that the particular settlement occurred at a time — but not beyond that time — when the time limitation and/or Ellis defences were capable of unfavourably influencing settlements for claimants.
Of course, being fair to both sides, it would be necessary to consider the effect on and any prejudice to the respondent in deciding whether to set it aside. If no finding was made that either legal barrier had such an impact, it is doubtful that any cogent ground would exist to conclude it was just and reasonable to set the settlement aside.”[22]
[22]At paragraphs [109]-[110]
26Thus, in determining an application under s27QD(2) the Court must consider facts and matters as they existed at the time of the previous settlement, such as the existence and influence of the two historical legal barriers. The Court may also consider facts and matters as they exist at the time of the application; for example, whether the respondent is prejudiced by reason of the passage of time.[23]
[23]At paragraph [106], citing WCB at paragraph [124]
27In this matter, there was no significant dispute about the relevant legal principles.[24]
[24]Transcript (“T”) 3, T41
28Counsel for the defendant also relied on EXV v Uniting Church in Australia Property Trust (NSW),[25] which it was submitted contains reasoning and analysis which is likely to be of assistance to the Court in resolving the present application. It was submitted that decision clearly supported what was said in DZY and the centrality of demonstrating material impact in the present application.[26]
[25][2024] NSWSC 490 (“EXV”)
[26]T18
29In EXV, Weinstein J considered the New South Wales equivalent legislative provision found in Part 1C of the Civil Liability Act 2002 (NSW), which is cast in language partially identical to the Victorian legislation, but which goes on to provide a non-exhaustive list of factors a court might take into account in making its decision to set aside the affected agreement.
30Following an exhaustive consideration of legislative reforms and the factual circumstances affected the Deed, His Honour concluded that it would be unjust and unreasonable to set aside the Deed and disturb the legal rights and obligations of the parties contained in that document.
31While the plaintiff was not troubled by the explanation of the principles in that case, there were two points of difference to the present application. Firstly, none of the plaintiff’s witnesses in EXV mentioned Ellis in either their oral or written evidence, and secondly, there was concern about the sufficiency of the evidence on liability – neither of which were issues in the present case, with liability being admitted and the Ellis issue mentioned by the plaintiff’s witnesses.[27]
[27]T45
32On 5 September 2024 (subsequent to the hearing in this proceeding on 3 and 4 September), the High Court granted special leave to the plaintiff DZY to appeal in respect to the following grounds:
(a) Ground 1 – The Court of Appeal majority (Beach and Macauley JJA) erred in finding that the power provided in s27QE(1) of the Act is not enlivened unless a claimant establishes that the limitation defence and/or the Ellis defence had a “material impact” on, or was a ‘leading” factor in, the claimant’s decision to settle; and
(b) Ground 3 – The Court of Appeal, in finding the judgment below was in error, (i) misapplied the House standard; and
(ii) misapplied the correctness standard.
33While counsel for the defendant advised the Court it would be preferable from the defendant’s point of view that the question before the High Court be resolved one way or another on appeal before this application is determined, given the plaintiff’s desire to proceed, it was a matter for the Court.[28]
[28]T1-2
34In the interests of justice, I propose to determine this application before the High Court’s ruling.
Summary of issues
Defendant
35The limitation period “barrier” had been removed by the time the Deed was signed. The other so called “barrier,” now known almost universally as the “Ellis defence” was removed by statute on 1 July 2018.
36It follows, the central, but not necessarily determinative, issue in dispute is whether the settlement was actually influenced unfavourably by a single “barrier” – the Ellis defence.
37The question of whether that factor actually influenced the settlement unfavourably in whole or on part is to be assessed objectively from the position of the plaintiff at the time of entering the settlement Deed.[29]
[29]EXV at paragraph [175]
38The answer to that question is not necessarily determinative of the application. Whether it is now just and reasonable to set the Deed aside may depend on other factors.
39The plaintiff has not established that the Ellis defence was a material factor that bore unfavourably on his settlement.
40There would be quite a lot of evidence about whether the Ellis impediment existed or not in a real or practical sense in this case because of the way the defendant approached the plaintiff’s claim for compensation and the way the matter was resolved.[30]
[30]T18
Plaintiff
41The Deed was made “while the Ellis defence remained available to defendant organisations.”[31]
[31] See DZY at paragraph [11]
42The plaintiff was advised and believed that there were legal hurdles, including the Ellis defence, which prevented him from bringing a viable claim against the Marist Brothers. This belief informed and founded his entire approach to engaging with the defendant. The evidence establishes the Ellis defence had a material impact on his decision to settle the claim.
43The plaintiff had and has a strong negligence claim against the defendant. Further, the Court should find he settled the claim at undervalue.
44There is no dispute that the plaintiff did not make an economic loss claim when through his lawyer he negotiated with the defendant and then entered into the Deed. However, there is no evidence that the plaintiff elected not to pursue an economic loss claim. The Ellis defence had an impact on his decision to settle the entirety of his claim.
The evidence
45The application proceeded on affidavit and other documentary evidence. A number of witnesses were cross-examined.
The plaintiff
46The plaintiff affirmed an affidavit on 10 May 2024[32] and was cross-examined.
[32]“Barclay affidavit”
47The plaintiff was born in regional Victoria in July 1956. When he was about 13, he started school at St Colman’s College (“St Colman’s”), a Marist Brothers school in Shepparton.
48In about around 1971, when aged about 14, he was sexually abused by Brother John Skehan (“Skehan”) a teacher apppinted by the Marist Brothers (“the abuse”).
49The plaintiff was pulled out of class by Skehan and taken by him to the Marist Brothers’ residence on the school grounds. Skehan took the plaintiff to his bedroom, had him sit on his bed and then lie down on his back. Skehan proceeded to fondle the plaintiff’s genitals then forced him to masturbate Skehan’s erect penis. Skehan directed the plaintiff to role onto his stomach. He then fondled the plaintiff’s buttocks and penetrated his anus.[33]
[33]Amended Statement of Claim at paragraph [11](i)-(j)
50The abuse has been admitted by the defendant.[34]
[34]Defence at paragraph [11]
51The plaintiff left St Colman’s in 1974 when he was seventeen without completing Form 5.[35]
[35]Amended Statement of Claim at paragraph [8]
52The abuse had always been on his mind, but his mother was a devoutly Catholic woman, and he did not want to disturb her faith by reporting the abuse while she was alive. She died on 1 November 2013. Three days later, the plaintiff first spoke to the police about the abuse and eventually signed a statement on 12 November 2013.
53His intent originally was to simply go and tell his story after his mother died, and he was not even aware at that stage Skehan was still alive.[36]
[36]T37
Work history and training
54The plaintiff is currently working as an executive officer with an industry training board.[37] He holds a range of tertiary qualifications, commencing with a Bachelor of Arts in 1980 and then postgraduate studies in social work at Monash University, graduating with a Bachelor’s Degree in Social Work.
[37]T20
55After completing that degree, he moved to Bendigo and started work with the Department of Community Services in Child Protection. He then worked as a Community Development worker for a couple of years until starting teaching at Bendigo TAFE. He also did some youth work and worked with the Disaster Unit after Ash Wednesday.
56He completed various courses including a Graduate Diploma of Education in November 1990/91. He later obtained certificate in fitness from Bendigo Regional Institute and later, a further Certificate in Training and Assessment in 2006.[38]
[38]T22
57In 2000, he was elected a delegate of the Australian Education Unit (“AEU”) and held that role for three years. He was then the president at Bendigo and later returned to teaching. He was then back fulltime as an elected official of the AEU and later vice president.[39]
[39]T24
58Thereafter, the plaintiff’s employment was largely union-related, and after the second stint with the AEU, he taught at Melbourne Polytechnic for about 18 months. He then commenced work in his current position, in which he is in his third term.
59In 2010, when employed with the Bendigo Regional Institute of Technical and Further Education (BRIT), he sent an email to members of the AEU also employed at BRIT regarding an upcoming audit.[40] As a consequence of this email, he was sanctioned by his employer. With the support of the AEU, he brought a claim under the Fair Work Act 2009. His case did not succeed at the High Court.[41]
[40]T50
[41]T49
60Throughout the process of that litigation, he was aware there were risks in his case being ultimately unsuccessful. He was also aware that his case had some chance of success. There was an argument that was worth making and he was prepared to see what the Court would ultimately decide. The vagaries of litigation were not in the back of his mind as he had union backing and the AEU agreed to pay “if it all went wrong.”[42]
[42]T50
Criminal process
61The criminal process against Skehan commenced when the plaintiff gave his police statement and concluded in October 2014 when Skehan was given a non-custodial sentence for the abuse.[43]
[43]Amended Statement of Claim at paragraph [12]. Following a guilty plea, Skehan was sentenced to eight months’ imprisonment, suspended for two years.
62The plaintiff was disappointed in the sentence; he wanted Skehan to be jailed, but he was proud of himself for confronting his abuser.
63In cross-examination, he was shown an article from The Age on 30 October 2014, published after the sentencing, with a photograph of him posing in front of a tree. The article was about his sexual abuse, and it was important that Skehan’s behaviour and the actions of paedophilia in society more generally be made public.[44] The plaintiff was not interested in damages then. It was about getting the court case done and getting Skehan convicted.[45]
[44]T43
[45]T44
64The plaintiff was not interested in any offer of counselling around the time of the court case, as he had just gone and told the world what Skehan had done.[46]
[46]T45
65Prior to the court case, he had prepared a victim impact statement.[47] There were a number of dot points – a list of things he might want to consider in preparing the statement. He may have written the dot points 1 to 4 “as a bit of a lead for [him]”. He hoped what he wrote would have some impact on the criminal proceedings. He was keen to put in writing how Skehan’s behaviour affected him.[48]
[47]Dated 14 August 2014
[48]T38
66He did not recall putting “N/A” in answer to dot point 2, “financial loss suffered as a result of the crime”. He understood that meant immediate financial loss, [49] and he did not lose any money as a result of the abuse.[50]
[49]T40
[50]T39
67He agreed the emotional trauma he described was from the date of the crime to the present. He did not regard himself as having suffered any financial loss. He was “actually consumed by the emotional issues.” He wanted Skehan to understand what he had done to him, his children, and his family: “[he] wanted to look at him and talk to him about what he’d done.”[51]
[51]T41
Lewis Holdway
68After giving his Victim Impact Statement, but before Skehan was finally sentenced, the plaintiff contacted Lewis Holdway (“his former solicitors”) about the abuse and the consequences he had lived with across his life.[52]
[52]He confirmed he first saw his former solicitor before Skehan’s conviction.
69He was given advice about his potential options for pursuing compensation: VOCAT, Sentencing Act, or a civil claim. Until then, he was generally uninformed about the process, having done no research about his ability to sue the Marist Brothers.
70Mr Holdway explained the legal barriers in his way and discussed the limitations issue with him. The plaintiff was also aware of “that legal construct that existed in terms of not being able to do anything in that space as well.” He was scared, in terms of a civil case, when “there was talk of if you lose, you have to pay.” He wanted to wait until the conviction – although he knew time was running out – as it would prove he had been assaulted.[53]
[53]T47
71He was concerned he would have to pay if the action went wrong, and was attracted to his solicitor’s offer that he would not have to pay unless he got a settlement. His solicitor was very concerned about his welfare. A consensual resolution seemed the most viable way, given the obstacles.[54] He viewed the process as a pathway to accountability. An injustice had been done and he was owed something.[55]
[54]T52
[55]T53
72He could not say what he was asked by Mr Holdway on the first attendance. He was not certain they discussed his mortgage.[56]
[56]T49
73After the first meeting, he received a letter from Mr Holdway dated 15 September 2014 setting out his legal options. The letter which the plaintiff read, confirmed what he had previously been told: he was out of the time to bring a claim against the Marist Brothers, and he would also likely confront a defendant who put the assets of the unincorporated association in a trust he could not access. He was also advised in the letter if he went to trial and lost, he could be made to pay the Marist Brothers’ costs.
74After the resolution of the criminal case and with this knowledge, he asked Mr Holdway to commence a claim for compensation against the Marist Brothers (“his previous claim”). The plaintiff understood from a legal rights perspective the deck was stacked against abuse survivors like him. He could not demand it, and he could not really take the Marist Brothers to court and win because of the hurdles his lawyer had informed him about. This was different to his previous litigation; he did not have a good argument to put before the Court.
75He agreed in his email to Lewis Holdway on 4 December 2014 he was confirming it would be best to approach the Order, as there was no value in pursuing Skehan individually.[57]
[57]T65
76After commencing his claim and learning about the barriers abuse survivors faced, he started to follow the issue more closely. In February 2015, he wrote to his former solicitor because he saw the Victorian Parliament was considering legislation abolishing time limits for abuse survivors. He asked if the proposed changes would impact the way his case would proceed. He received an email confirming there were other hurdles stopping him from receiving proper compensation from the Marist Brothers.[58]
[58]Email chain dated variously between 25 February to 9 March 2015
77He understood the Ellis defence and agreed he was certainly interested in compensation after Skehan’s conviction. He recalled seeing something about the removal of the limitation period, but was not aware of moves afoot to remove Ellis.[59]
[59]T54
78He chose to engage with the Marist Brothers in an informal process as it was the most viable way to go given the obstacles: the problem of the time that elapsed since the incident and “also that legal structures that the churches had created to basically keep them out of the process, which [he] now know[s] as the Ellis defence.”[60]
[60]T92
79Whilst he could not remember seeing the defendant’s response dated 2 April 2015 to the Letter of Demand, he recalled some discussion about an insurer being involved. It was his understanding the Brothers were attending the settlement process with a desire to resolve his claim.[61]
[61]T70
80When it was suggested that the Marist Brothers were receptive and had a desire to try to resolve things, the plaintiff agreed that they had not denied his claim.[62]
[62]T70
81The previous claim was made informally; there was no case issued and he never had a court date. It was not civil claim for damages – he was asking for charity. He understood his lawyer’s advice was he could not win if he were to take the Marist Brothers to court.
The settlement
82He had no idea who started the negotiations at the settlement conference at $220,000.[63]
[63]T74
83He was paid compensation of $165,000. After he paid his lawyers, he received a little under $154,000.
84At the time and now, that amount felt like a very modest figure when he thought about how his education was derailed, how he never felt safe at school after he was abused, and how he had been dealing with poor mental health for years and years. The abuse and consequences had impacted every part of his life.[64]
[64]T85
Economic loss
85He did not remember his former solicitor asking if he had any relevant documents to bring them in an attempt to resolve a claim for compensation, or being asked to provide documents that might evidence a claim for economic loss: “I wouldn’t know what documents I would need. And when you ask that question I’ve got no idea what documents I would need.”[65]
[65]T57
86Having been shown the defendant’s 19 April 2015 letter, he conceded the defendant was asking for details of any economic loss.[66]
[66]T71
87He had periods not working, but not for psychiatric reasons. He had linked his problems with drugs and alcohol to Skehan, but he “chose to keep that very secret from a lot of people.”[67]
[67]T58
88He could not remember whether a “List of Requests” was typed by him or presented to him in a typed form before the settlement conference. He could not remember mentioning “Dealing with Financial Stress by reduction of Mortgage. This was not his aim, “absolutely not”.[68] He knew nothing about the handwritten figures on the List of Requests.[69]
[68]T60
[69]T72
89He was asked why, if he thought he had economic loss as of November 2015, he did not put that on the List of Requests. He responded “probably because even today [he had] no way to sit down and actually try and calculate what – what an economic loss would be”.[70]
[70]T74
90His former solicitor may have told him about the notion of loss of earnings, but he had no understanding he could claim for that: “being told something and understanding it are two different things.”[71]
[71]T78
91He then agreed he was told by his former solicitor to provide any documentation: “yeah, and as I said earlier I’ve got – to this day I’ve got no idea about how you would go about putting a table together about um what you’ve lost in terms of potential earnings.”[72]
[72]T78
92He had no real recollection of his former solicitor discussing with him the provision of documents supportive of loss of earnings. He was not saying his former solicitor did not say it to him. To this day, he had no idea “how you would make up a table”.[73]
[73]T79
93There was nothing in his victim impact statement about economic loss because his view was he had no financial consequences; he was focussed on the personal impact rather than anything else.[74]
[74]T93
94In terms of economic loss, when he reflects now, he left work recently with the union because of his reaction to a co-worker’s description of paedophilia, despite knowing the plaintiff’s story. Reflecting now, he had been doing well at school before the abuse, having been in the top two or three academically. He was doing well socially and with sport, but moved away from his peer group after the abuse.[75]
[75]T94
The Deed
95He understood it was a binding Deed.[76] He could not remember the words in the Deed verbatim, but there was one paragraph which he thought was quite bizarre “and that it felt to me like it was saying ‘and if you think of anything else in the future don’t bother coming back’”. He knew he was basically signing a statement saying “okay, this is the best for the outcome”.[77]
[76]T75
[77]T76
96He agreed under clause 1(f) of the Deed he was acknowledging he was not making a claim for loss of earning capacity. He agreed that was consistent with his victim impact statement where financial loss was marked “N/A”, and consistent with no supporting documents being provided: “[he] wasn’t even aware [he] could do it.”[78]
[78]T77
97He understood the signing of the Deed concluded the process. He did not remember giving any explicit instructions to his former solicitor to thank Catholic Church Insurance (CCI) for the manner in which the settlement conference had been conducted.
98He had always been dissatisfied with the level of compensation he received throughout this process – “Even prior to starting the process, he made it clear to everyone that “money never compensates for what happened to [him] and others”.[79] Almost from the time of the settlement, he was fundamentally unhappy with the compensation he received.[80]
[79]T81
[80]T85
99He received an email on 19 November 2015 from his former solicitors, after the settlement conference, which stated:
“We confirm as discussed prior to the conference one of your aims was to significantly reduce your mortgage. We note that the settlement allows you to do this and with three years of working at least you will be able to pay the mortgage off which will relieve you of a lot of financial stress in the future.”
100In a break in the hearing, because he had been “pushed” on the issue of getting money to pay off his mortgage, he recalled there was a connection between the end of his term with the AEU, which was coming up soon, and if he was not elected he would be unemployed. He had a mortgage to pay off, so the two things would probably have connected together. That would have helped him in a period of unemployment had he not been re-elected.[81]
[81]T88
101Paying off his mortgage was “not the purpose [he] sought compensation in the first place. That’s where we got to through a process, but it’s not what drove [him] to start the compensation quest.”[82] He did not remember saying to his former solicitor before the settlement conference that his aim was to get his mortgage paid.[83]
[82]T88
[83]T89
Rightside
102He was alerted to the fact the legal situation had changed and there might be an opportunity to go back again after he had heard from Rightside Legal (“Rightside”). The conversation was there were now legal options he could look at again in terms of further compensation that were not open before.[84]
[84]T85
103He thought Rightside told him Ellis had been “chucked out” by the Labor Government in Victoria” and that he was originally asked to go in and provide some assistance for another client they were working with. He had not complained to his former solicitor, because he had always been of the view that while he had received insufficient funds, he got the best he could, and there was no way to get any more.[85]
[85]T86
Paul Holdway
104Mr Holdway affirmed an affidavit on 21 May 2024[86] and was cross examined.
[86]“Holdway affidavit”
105He acted for the plaintiff in the previous claim. He is the managing director and principal of Lewis Holdway Lawyers. He has acted for survivors of childhood sexual and physical abuse for nearly thirty years.
Earlier experience with abuse cases
106When first instructed by the plaintiff, Mr Holdway had worked with abuse survivors for at least 19 years, and was actively involved in the Royal Commission into Institutional Responses to Child Sexual Abuse.
107He had also lodged a submission to the Victorian Parliamentary Inquiry (“the Inquiry”) that went on to publish the Betrayal of Trust Report. His submission to the Inquiry gave a comprehensive overview of the way his clients had to navigate the compensation landscape at that time. These difficulties included the Statute of Limitations, the church not being a legal entity, the church’s assets being protected by property trusts, Church personnel not being considered employees, and the vow of poverty taken by abusive members of the church. Further, the submission called for specific law reform to remove these barriers.
108In about 2002, his firm was sued for professional negligence by a previous client who had been sexually abused. Mr Gamble, who acted for a religious order, gave evidence on Mr Holdway’s behalf that there was no effective way to force compensation from a religious order. The negligence action was dismissed.
109Having worked with survivors over an extended period, he came to know the members of the various religious orders, as well as other lawyers and activists in this space. After John Ellis lost his case against the Sydney Archdiocese, he met with him to discuss the outcome of his litigation and implications for all abuse survivors.
Usual practice with clients – Restorative Justice
110When he was acting for the plaintiff in 2014-15, he did not formally litigate for survivors. He thought it was not possible to do so. He structured his practice as a mediation practice, and sometimes he used the term “restorative justice” (“RJ”). Rather than making an empty threat about taking a Catholic diocese or religious order to court, he engaged with them and sought to appeal to their sense of pastoral responsibility to those who had been abused. RJ encompassed a whole person approach, being financial, physical, psychological, whatever needs there were.[87]
[87]T106
111He was engaged on a pro bono basis, taking on anyone who needed help. His firm got some money out of the process, but never the full fee.[88]
[88]T101
112He attempted to create an environment for a survivor where they were listened to and believed. He followed a similar process for each matter: he would provide a letter of advice to the survivor when he commenced to act for them, adjusted to reflect the factual background, but the procedural and substantive legal advice did not vary meaningfully.
113In summary, the advice to each client was as follows:
(a) the time limit for bringing a claim had long expired;
(b) an application could be made to extend the time limit, but the application would be at the discretion of the Court;
(c) there were legal technical difficulties including issues relating to property trusts and available defendants; the fact that members of the religious order are not employees; and the doctrine of vicarious liability did not extend to them; and
(d) the worst-case scenario was that a survivor could lose a civil case and face a cost order in favour of the other party.
114RJ was completely different to a court claim: “We had no draft statement of claim. We had no Medicare records. We had no tax records. We weren’t gearing up to go to court if there was no settlement”. RJ has a much broader focus, also taking into account mental health and wellbeing.[89]
[89]T114
His knowledge and understanding of the Ellis defence in 2014-2015
115When he acted for the plaintiff, he knew the plaintiff could not succeed in a litigated claim against the Marist Brothers – the legal barriers faced were insurmountable”
“Fundamentally there was no corporation sole in Australia for a legal entity or an Archbishop, or Provincial and therefore you had to sue the person at the time, rather than the current person or the current organisation. You could not sue the trustees of a property trust, because they were a property trust they didn’t run the programs that might have, or engaged anyone that might have, led to the abuse. That’s [his] general understanding of the Ellis case”.[90]
[90]T144
116The real-world consequence of legal barriers such as Ellis was that historical abuse claims were almost never litigated; instead, parties engaged in informal settlement discussions. In his experience, religious organisations took advantage of the difficult position survivors were in and were only prepared to make modest payments. It was impossible to gain compensation for lost earnings for abuse survivors.
117There is no way he could have forced a common law assessment of the plaintiff’s damages. The Brothers, like the other institutional defendants, would reject arguments for economic loss and refuse to pay compensation for lost income.
118Like all his clients, the plaintiff’s only real choice was to accept whatever was offered by the Marist Brothers. He proceeded to deal with them through the RJ process.
119He agreed that the background and the mood was changing in September 2015, putting a statutory abolition of Ellis “on the horizon.” However, he had been working in that field for 20 years already and there had been very little change, and he had no idea when anything would happen or what it would look like.[91] He did not seriously consider delaying the plaintiff’s case for an uncertain future.[92]
[91]T152
[92]T153
120In theory, he could have asked the Marist Brothers insurers whether they would rely on the Ellis defence. He totally rejected the time was ripe to press them on that position.[93]
[93]T157
121By November 2015, there had been law reform around the issue of time limits for abuse survivors and that was a positive step, but not a cure for all the barriers that confronted the plaintiff. He would not agree there had been a “significant” shift with the removal completely of the limitation period.[94]
[94]T157
122By the time of the settlement conference, there had been law reform around the issue of time limits for abuse survivors. That was a positive step but not a cure for all the barriers that confronted the plaintiff.
123In November 2015, the Ellis defence could – and he believed would – have been used by the Marist Brothers to defeat any civil claim that the plaintiff brought. Eventually, there was substantive law reform related to the Ellis defence, but that was not until 2018.
Usual Proper Defendant Practice
124He did not agree it was in fact possible to bring a legal claim by naming the appropriate individual defendants. He did not consider it possible to sue the individual office bearers of a relevant unincorporated entity in respect of the alleged abuse.[95]
[95]T126
125The problem with Ellis was that it was “multifaceted” to do with not just identifying defendants: “you have to identify knowledge, you have to identify vicarious liability, then you have to identify assets that were available to meet the claim.”[96]
[96]T127
126It was theoretically possible to bring a civil proceeding against a proper defendant. In this case, it could have been individual office bearers. He agreed he had never asked the Trustees to nominate the proper defendant in respect of the plaintiff’s claim.[97] In theory, he supposed he could have asked them or their insurer to assist him to identify the proper defendants for a civil claim.[98]
[97]T127
[98]T125
127While Mr Slattery deposed the Marist Brothers had publicly stated in 2015 they had not generally relied on the Ellis defence,[99] he was “talking about court, and joining parties and uninsured claims and all that stuff is nothing to do with what we were doing”.[100]
[99]T153
[100]T154
128There was also the issue of vicarious liability that was not touched on in Ellis, which was very real in these cases. When it was suggested that the Marist Brothers, at no point, disputed liability, he responded:
“We’d never talked about liability as a concept, so … there’s nothing to dispute … at no time did we think that they felt they were liable at all legally … they were there as a funding source to help the Marist respond more partially and meet the needs of these, you know, Mr Barclay’s difficult situation.”[101]
[101]T145-146
129He disagreed with the proposition that the Marist Brothers acted as if they were “derivatively responsible” for Skehan’s conduct. He denied it was open to the plaintiff to sue Skehan’s employer or the school employing him directly for failing to supervise. Skehan was not an employee.[102] A brother was not in a master/servant relationship with the Order.[103]
[102]T146
[103]T147
130It was put it would have been open to the plaintiff to sue the Marist Brothers – whoever was running the school or in a position of management, such as the principal.[104] He did not think the principal would be personally liable. Further, he had formed the view very strongly that Skehan was not under the supervision or control, “because he just wanders in, takes someone out of a classroom and abuses him.”[105]
[104]T149-150
[105]T151
131He was not aware of any successful lawsuits against the Marist Brothers, or any other Catholic orders, on the basis of suing individual members for the abuse of a brother or a priest. He was not aware of the Marist Brothers paying compensation for lost income to survivors of childhood sexual abuse.[106]
[106]T159
Conduct of the plaintiff’s claim
132He did not recall the plaintiff every raising any concern about the risk of being exposed to costs.[107] He had no idea that the matter in which the plaintiff was involved in the High Court was unsuccessful. He just knew the plaintiff was a party and a representative of the union, and therefore did not consider any consequences for himself personally.[108]
[107]T102
[108]T101
133He wrote to the plaintiff at the end of 2014, seeking his instructions as to what was the best approach for the chance of a positive outcome. Financial settlement was certainly part of it, but not the complete picture.[109]
[109]T108
134Having been instructed by the plaintiff to pursue a claim, he wrote to the Provincial of the Marist Brothers on 13 March 2015 inviting them to participate in an RJ process. Colin Biggers Paisley (“CBP”) responded on 2 April 2015 on the Marist Brothers’ behalf, confirming they were willing to participate in the process.[110]
[110]T104
135He thought the Marist Brothers seemed to say they were willing to consider RJ. They were not experienced with it, and they set out what they would normally do. He agreed this initial contact was a positive response.[111] The Marist Brothers indicated their insurers would be involved, and their preparedness to meet a financial element to any settlement was positive in the sense that “we were looking for a response”. He did not think of it in terms of a potential defendant, he “thought of people willing to respond to our call for RJ for Greg”.[112]
[111]T104
[112]T108
136However, insurers were less open to things like RJ, because they had broader obligations and were less likely to support the broader aims of a not-for-profit organisation. Often organisations without insurance can be more flexible in processes and responses.[113] Because they were looking like things like RJ and holistic approaches, they had found organisations more flexible if they were not insured.[114]
[113]T105
[114]T106
137Ultimately, the parties participated in a settlement conference on 12 November 2015 with representatives from the Order and CCI. Prior to the conference, he had certainly settled the plaintiff’s List of Requests.[115]
[115]T134
138A handwritten file note, which appeared to be dated 10 November 2015 (before the settlement conference) captured the substance of discussions between he and the plaintiff that day in broad terms.[116] The handwriting on that document was essentially him keeping a note over the course of the settlement discussions and the handwriting and figures reflected negotiations.[117]
[116]T130
[117]T134
139The note included the type of things that were ultimately in the plaintiff’s List of Requests, including money to assist with mortgage – “$200,000, now, repayments”. The note indicated some discussion about identifying a list of wants as part of the preparation process for the settlement conference.[118]
[118]T131
140It looked like $220,000 was the starting point of negotiations, but he could not recall how they started with that figure. He agreed it appeared that figure would cover the plaintiff’s mortgage. He had no note of the plaintiff objecting to that starting point, and he would not put an offer if the client was not happy with it.[119]
[119]T136
141He agreed that the plaintiff’s central financial desire was assistance with his mortgage, and that was really the central wish on the list. “Looking for actions, not just money” was a sentiment the plaintiff conveyed in that conference. The plaintiff was keen on getting rid of the mortgage and “from an RJ point, looking at the harm, you would have expected someone of his age perhaps to own their own home about that time, so responding to the harm and dealing with that would be to get rid of the mortgage if possible”.[120]
[120]T133
142In his letter to the plaintiff on 19 November, after the settlement conference, he noted the settlement sum allowed the plaintiff to pay off his mortgage.[121]
[121]T141
The Deed
143The Deed required the defendant pay the plaintiff $165,000 inclusive of legal costs, and recorded the terms of the financial settlement, but not other things agreed, like an apology.[122]
[122]T139
144Recital 1(f) stated that “the agreed sum does not include any allowance for loss of earnings or loss of earning capacity as no such claim was made by the claimant”.
145In his experience, that clause was routinely inserted in deeds relating to child abuse claims at that time. The deeds, and the modest sums were impacted by the barriers confronting survivors, the types of which he had identified and written submissions about.
146Another reason this clause was routinely contained in deeds in child abuse cases at that time was to protect the survivor from any potential clawback from Centrelink in circumstances where lost income was not being compensated for by the religious organisation.
147He wrote to Mr Creasey on 18 February 2016 following the conference, a process which he thought had been “respectful and calm”.[123] He would not agree his dealings with Mr Creasey were fair, because he did not think there was a level playing field.[124]
[123]T117
[124]T143
148He asked Mr Creasey to pass on his appreciation to his client for the manner in which the settlement conference was conducted.[125] If the plaintiff had been unhappy with the process, Mr Holdway would not have made that request.[126] The plaintiff never came back to him after the letter to him in November 2015 expressing any dissatisfaction with the settlement outcome.[127]
[125]T142
[126]T143
[127]T141
Economic loss claim
149At the outset, he took a history from the plaintiff of relevant matters. They talked about some of the jobs and the things the plaintiff had done. He did not take a full chronology, but they went over bits of the plaintiff’s working life.
150Usually, he would take a general history of a plaintiff’s life, education, work, and family, looking at the consequences of abuse on a person.[128]
[128]T100
151He would have taken a full history of the plaintiff’s education and working life had he thought an economic loss claim was on the table.[129] He did not even think in terms of an economic loss claim. He was focused on RJ and what the harms were, and how they should be responded to.[130] The harm does include financial loss in a person’s life, which for the plaintiff was focused on his mortgage stress, so they were considering economic matters, but not an economic loss claim in the way that that would normally be used.[131]
[129]T127
[130]T112
[131]T128
152They were looking for whatever the Order was going to pay to the plaintiff as part of acknowledging his pain and suffering. It was completely different to a court claim.[132]
[132]T114
153They fully expected to receive a financial offer, as they had been involved in many conferences before, with an insurer involved. He made no enquiries to the extent of insurance that was available.
154It was all about accountability and a very different mindset to words like “economic loss”, “general damages”, or “special damages”, and they were not using those words with their clients, the insurers, the Marists Brothers, or anyone else. He agreed it was his job to put forward the best case possible for the plaintiff in terms of a settlement outcome. He had never articulated an economic loss claim on the plaintiff’s behalf.[133]
[133]T116
155Correspondence from CBP in April 2015 setting out “We would be pleased to receive from you all documents relevant to the claim … and any documents in support of a claim for economic loss (if relevant)” conveyed to him the insurers were prepared to consider all aspects of a claim the plaintiff may wish to make, including an economic loss claim “if it was relevant”.[134]
[134]T109
156The request for any documents in support of a claim for economic loss was not relevant in the plaintiff’s case because it was not possible to bring a legal claim, let alone a claim for economic loss at that point in time.[135] He rejected the interpretation on the words “if relevant” meant there was a factual basis to make an economic loss claim.[136]
[135]T110
[136]T115
157In his view, he could not make an economic loss claim, so he did not discuss it as a specific issue with the plaintiff. It was not relevant, because it was not possible to bring a legal claim, let alone an economic loss claim.[137]
[137]T113
158He had no recollection of discussing or explaining the request for documents with the plaintiff. He did not recall receiving any documents relevant to economic loss. from the plaintiff.[138]
[138]T111
159He and the plaintiff talked about the plaintiff’s mortgage and things like that, but it was not articulated as an economic loss claim. He did not discuss in writing, or at the conference, with the insurer or the Marists what their attitude would be to an economic loss claim.[139]
[139]T117
Laird Macdonald
160Mr Macdonald of Rightside affirmed an affidavit on 14 May 2024. He currently shares the conduct of the plaintiff’s claim.
161Rightside has represented a large number of plaintiffs in common law claims for damages arising out of institutional sexual abuse. Clients in Victoria have won five verdicts in abuse claims for damages ranging from $720,000 to $5,900,000.
162He summarised the history of legal action leading up to the plaintiff contacting Rightside in May 2023 to seek proper compensation from the Marist Brothers in relation to the abuse. The plaintiff also instructed that he had signed a previous deed.
163Rightside commenced proceedings on behalf of the plaintiff by filing and serving a Writ and Statement of Claim on 11 August 2023. By its Defence dated 24 October 2024, the defendant raised the previous unlitigated compensation process. The defendant asserted, by reason of the 2015 Deed, the plaintiff is prevented from recovering any amount of damages from the defendant in respect of the sexual abuse.
164He described the legal hurdles at the time of the 2015 settlement and the subsequent legislative changes, quoting from the Attorney-General’s Second Reading Speech to Parliament in relation to the 2018 legislation.
165If the Court is minded to make an order setting aside the previous deed, he believed the plaintiff has excellent prospects of establishing liability of the defendant for the abuse. Skehan was an individual who sexually abused multiple students in various Marist Brother schools. He had spoken to a number of Skehan’s former students who were abused by him.
166The Court may consider, in deciding whether to set aside the previous deed, whether the plaintiff is likely to obtain a figure greater than the compensation of $165,000 already received.
167In Rightside’s experience of litigating sexual abuse claims, if the plaintiff’s Deed was to be set aside, the plaintiff would obtain a settlement or verdict vastly in excess of $165,000, inclusive of legal costs.
168In his further affidavit affirmed on 6 August 2024, Mr Macdonald exhibited a medico-legal report from psychiatrist, Dr Matthew Tagkalidis.
169In his third affidavit affirmed on 30 August 2024, Mr Macdonald exhibited a report from forensic accountant, Mr Mark Thompson, making an assessment of the plaintiff’s past and future economic loss.
170In his view, Mr Thompson’s report demonstrates the significant loss the plaintiff has experienced from an economic loss perspective as a result of the sexual abuse at the time of his prior settlement and today.
Mark Thompson, forensic accountant – Vincents
171Mr Thompson assessed the plaintiff’s economic loss on two distinct approaches.
172Approach A: Losses assessed as at 30 June 2015 was a comparison of:
(a) the plaintiff’s notional (that is, but for) and career earnings as a teacher, progressing to the role of assistant principal from 1 January 1979 to 20 February 2011 (when he became a union representative with the AEU); and
(b) his actual career and earnings in various roles up to 20 February 2011.
173In that regard there was a loss of $253,710. In addition, there was a past loss of ESSS Pension of $32,732 and a future loss of pension of $239,422, making a total loss of $525,864.
174Approach B: Losses assessed as at 31 August 2024 was an assessment of the plaintiff’s economic loss as at that date, with future economic loss identified and two methodologies adopted to allow for indexation of past economic loss. Method 1 (exclusive of an allowance for indexation to be applied to past losses) resulted in a loss of $1,124,858; and Method 2 (inclusive of indexation) resulted in a loss of $1,408,188.
The Defendant’s evidence
175Apart from the events surrounding the plaintiff’s individual claim, the defendant relied on evidence of the general practice of CCI and the lawyers it instructed during 2014/2015.
Martin Slattery
176Mr Slattery, partner at Carroll & O’Dea Lawyers, swore an affidavit on 2 August 2024[140] and was cross examined.
[140]“Slattery affidavit”
177He had had carriage of historical abuse matters on behalf of the Marist Brothers since admission as a solicitor in 2008. He had also acted for a number of other religious institutions and schools in responding to historical abuse claims, as well as acting for plaintiffs and claimants in historical abuse claims. Since 2008, under supervision, he had acted for and advised the Marist Brothers in these claims in a variety of forums. Since becoming a partner in about 2014, he had conducted matters himself.
178He had read the affidavits of Laird Macdonald affirmed on 14 May 2024, and Paul Holdway affirmed on 21 May 2024. Those affidavits made a number of statements about the manner in which historical abuse claims were run and the manner in which the Marist Brothers responded to those claims. His recollection differed.
179The material available in the plaintiff’s case relating to his negotiations in 2015 made no reference to issues such as liability, limitation periods, or identification of correct defendant. That is consistent with the way negotiations of historical abuse claims in which he was involved occurred around that period. The absence of any reference to liability is reflective of the fact that those issues were not defences upon which the Marist Brothers intended to rely. In his experience, such issues would be flagged in correspondence or in discussions with the claimants or their lawyers if they were likely to be raised in the event a claim could not be resolved by negotiation.
180Having adopted his affidavit, he confirmed from his experience there were most certainly proceedings being commenced against the Marist Brothers in 2015.[141] None went to trial or judgment. They all resulted in a resolution using a court-ordered mediation. At that stage, their practice was entirely dedicated to uninsured claims. A number of other firms acted where there was insurance.[142]
[141]T191
[142]T192
181There were then firms that were simply commencing common law proceedings, one being Porters Lawyers Canberra. That firm would write to Mr Slattery’s firm. They would join the provincial of the Order, the principal of the school, and generally also put in the Trustees of the Marist Brothers.[143]
[143]T193
182His firm also acted for plaintiffs from about 2011 in relation to historical abuse claims. With one or two plaintiffs, they commenced proceedings, but the majority would be resolved through alternative dispute resolution without commencing proceedings. Their usual operation was not to commence common law proceedings.[144]
[144]T193
The Ellis defence
183The defence raised by some institutional defendants that there was no proper defendant to sue (commonly referred to as the Ellis defence (Proper Defendant Defence) is something that is commonly misunderstood in his experience and has received an overstated importance in the media.
184A technicality arises from the fact that many religious institutions, including the defendant, were (and are) unincorporated associations comprised of a provincial leader and an advisory committee known as the Provincial Council. For the purposes of land holding, this created a difficulty as it would mean if the provincial changed, the property would need to be transferred into the name of the new provincial. To avoid this, legislation – the Roman Catholic Church Communities’ Lands Act 1942 (NSW) was enacted which created a body corporate for the Marist Brothers in which property could be held and there was no need to transfer.
185It was not until this Act was amended in 1986 that these powers were broadened to beyond a purely land holding capacity to include the ability to operate schools and hospitals.
186That gave rise to a potential technical defence that for a tort which occurred in a school before 1987, the operator of that school was an unincorporated association comprising of individuals rather than the body corporate which held the assets and was therefore more likely to have sufficient assets to meet any judgment debt.
187From the time of the settlement of the prior claim until the enactment of the 2018 legislation, which introduced the statutory process of nominating a proper defendant, in any litigated matter against the Marist Brothers, the practice of the Marist Brothers and his instructions were invariably: in claims where the alleged abuse occurred before 1987, the plaintiff’s lawyers would be informed of the identity of the members of the unincorporated association at the relevant time who should be named as the defendants responsible for the operation of a given school.
188In the plaintiff’s case, he would be suing the provincial, sometimes the provincial council, but usually just the provincial. He agreed there was not an entity that they were given to sue; it was these individuals, and seasoned litigators would also include the Trustees.[145]
[145]T201
189He accepted that the 2018 Act was intended to provide an avenue for child abuse plaintiffs to sue an organisational defendant in respect of unincorporated non-government organisations. He did not agree that the 2018 Act was a recognition that survivors of child abuse faced litigation barriers, describing it as theoretical barriers to litigation, not agreeing there were real barriers. What he really meant was the number of defendants who actually relied on the barrier was negligible. He then agreed it was, in fact, a barrier.[146]
[146]T196
190Child abuse survivors did have a corporate entity they could sue. He suggested they could sue the Trustees of the Marist Brothers, although he conceded a response to that could have been “well, sorry, we didn’t operate the school”. He conceded that could have been a barrier in reality.[147]
[147]T197
191He agreed that members of the Catholic clergy, brothers, and priests were not a viable solution for a plaintiff, given the vow of poverty. He also accepted the institution to which this brother or priest belonged was an unincorporated association, a collection of individuals to sue rather than an entity. He agreed it was easier for an abused child to sue a government school, the pathway being the State. A person abused in a Catholic school did not face a range of problems, “but hurdles”.[148]
[148]T197
192He agreed a priest or brother at a Catholic school is not considered an employee in the same way as a State school. He had never seen that as a problem.[149]
[149]T198
193His response to the proposition put to him that it was never communicated to Mr Holdway that the insurer would not rely on the Ellis defence if he sued in relation to his claim was: “that question was never asked though … the answer was never given I guess, yeah.”[150]
[150]T204
194The Ellis defence was rarely raised in negotiations because it was not an issue. He disagreed it was not raised as an issue because it was a well understood and well-established part of the legal landscape at the time.[151]
[151]T204
Usual Proper Defendant Practice
195The Usual Proper Defendant Practice meant that the correct defendants were joined to the proceedings to make clear that the Proper Defendant defence was not being relied upon.
196Where an individual (or their estate) was named as a defendant, they were indemnified by the Trustees. If the question of an individual’s ability to meet any judgment debt was raised by a claimant’s solicitor, the fact that they were indemnified by the Marist Brothers was confirmed in writing, if it had not already been made clear.
197He had never advised the Marist Brothers that a claim should be compromised by a claimant due to the theoretical availability of a Proper Defendant Defence.
198In May 2015, the Marist Brothers publicly stipulated they would not generally rely on the Proper Defendant Defence for uninsured claims. He confirmed that no public statement had been made in terms of insured claims, as was the case with the plaintiff’s claim where his solicitor sought a RJ process.[152]
[152]T202
199Having been shown the newspaper article in which it was stated the Marist Brothers would not generally rely on the so-called Ellis defence, as was the case with the Christian Brothers, he confirmed the article also said that the Marist Brothers were powerless in relation to what might happen with insurance claims. He agreed there was no other public statement made to alter the position before the settlement of the plaintiff’s case in November 2015.[153]
[153]T204
200By 2015, in the majority of cases they were being asked either “we’re about to commence proceedings, who should we be naming?” or “if we decide to commence proceedings, who should we be naming?” Proceedings were actually commenced after those questions had been answered and the proper defendant nominated.[154]
[154]T191
201None of these proceedings went to trial or judgment: they all resolved using a court-ordered mediation. At that stage, his practice was entirely dedicated to uninsured claims.[155]
[155]T192
Effect of the legislative change
202Having been taken to the Court of Appeal’s decision in WCB, which set out the range of hurdles to a child abused by a Catholic priest in proceedings on foot in 1996, he agreed the 2018 legislation significantly removed restraints or difficulties, classifying the legislation as “streamlining or, you know, decluttering the process”.[156]
[156]T200
203He agreed there had been a significant increase in the number of litigated claims after the 2018 legislation was enacted and one may take from that that people who previously felt it was difficult to litigate could now litigate.[157] It was a much more straightforward process to be able to commence proceedings, agreeing “the identity of the defendant had gone”.[158]
[157]T200
[158]T201
Cross examination
204Mr Slattery set out in his affidavit a number of historical sexual abuse cases which had been successfully litigated prior to the settlement of the plaintiff’s claim.
205In response to Mr Holdway’s evidence that he knew the plaintiff could not succeed in a litigated claim against the Marist Brothers,[159] he agreed that those cases did not relate to abuse by a member of the Catholic clergy, priest, or brother. Each was litigation against an individual defendant or where the plaintiff had a corporate entity to sue. He listed those case because there was potential litigation and there were damages available.[160]
[159]T205
[160]T209
206He had not been able to identify a single reported decision with someone like the plaintiff who had been abused by a brother or an Order or a priest who had been able to get to judgment and get some money through a litigated outcome.[161]
[161]T209
Economic loss claim
207In his experience, a no economic loss clause (clause 1(f) was only inserted in a deed in circumstances where:
(a) It is factually accurate that the settlement sum makes no allowance for economic loss;
(b) The claimant has never asserted that they are entitled to economic loss or have clearly abandoned a prior assertion that they are entitled to economic loss; and
(c) It has been agreed between the parties to the deed that the above two criteria are accurate and that a no economic loss clause should be inserted into a deed.
208When his firm was acting for plaintiffs at that time, their practice would be to take a complete history to prepare a statement, including a history of work, as that was always relevant to being able to advise a client properly about their damages or compensation. Their practice was always to issue an economic loss claim.[162]
[162]T194
209There would be two approaches in that context. One would be to grapple with quantifying that claim through the history and periods of unemployment, whether the claimant had been hospitalised, but then there was another, which was loss of opportunity or loss of chance. If you did not take a work history, you would not be able to advise someone about the possibility of an economic loss claim.[163]
[163]T194
Daniel Creasey
210Mr Creasey affirmed an affidavit on 27 August 2024[164] and was cross examined. He worked in the litigation practise at CBP from September 2014 to September 2017.
[164]“Creasey affidavit”
211In that role, he acted for various religious orders which were insured by CCI in relation to claims involving historical sexual abuse including the plaintiff’s prior claim.
The Ellis defence
212While he did not have a specific memory of the settlement conference in this case,[165] the Ellis defence was not a legal issue that informed his assessment of quantum when managing these claims. He never raised nor relied upon it at any informal settlement conference. He would have felt very uncomfortable doing this work if CCI or the religious orders instructed him to take technical defences in order to put downward pressure on potential settlements.
[165]T168
213He agreed there was no statement by the Marist Brothers that they were open to an economic loss claim or would not take the Ellis defence.[166] “It rings a bell” that the Marist Brothers did not generally rely on Ellis in uninsured claims. A public statement and an article in The Age was in similar terms. His only dealings were with insured claims, and he was not aware of any public statement in regard to insured claims.[167]
[166]T185
[167]T168
214He was confident that he did not raise the Ellis defence in the plaintiff’s settlement conference.[168] He was aware of the publicity in relation to the defence, but it was not something he was asked to advise on. The Ellis defence was not something that was alive in any of the work he did at all.[169]
[168]T169
[169]T170
215He agreed he did not tell anyone the Ellis defence would not have been invoked in this case: “we weren’t asked, so I didn’t answer that question.”[170] He stressed this was an odd case where he was not asked for names and did not provide them. It was a standard question, and it would not have been difficult to tell the plaintiff’s solicitor the defence would not be relied on.[171]
[170]T171
[171]T182
Usual Proper Defendant Practice
216Before the Ellis reforms, as he understood it, the hurdle had been overcome in these type of matters that he was dealing with because the relevant order and the lawyers acting for them were providing names of the people to be sued. He would not have been working in that space if that was not the case and the defence was taken.[172]
[172]T181
217Mr Holdway made no request to CBP seeking instructions as to the appropriately indemnified entity/entities or persons to be named as defendants in any potential proceeding. At that time, Mr Creasey’s standard practise was to provide this information if requested. In most other claims CBP were dealing with they were asked specifically to name an appropriate defendant. Had Lewis Holdway requested this information in the prior claim, he would have provided it for that purpose.[173]
[173]T171
218From practice, there would normally be an individual, such as the principal or provincial, and an order named. There were multiple names that were often provided by the relevant orders.[174]
[174]T172-3
219Mr Holdway could have asked for defendants to be named. Names would have been given, being the provincial, principal, or even the perpetrator, and of course the trustees. The plaintiff’s solicitor could have got around/avoided Ellis by using some sort of name or position. There would be someone who could pay.[175]
[175]T176
220When asked whether he considered a lawsuit against Marist Brothers was a viable course of action, just not theoretically possible, he responded: “we were not instructed to pursue this issue with CCI.” It was viable to sue if there was someone ultimately responsible who was insured.[176]
[176]T178
Cross examination
221He was not aware of a successful plaintiff suing individual members of the provincial council. From memory there might have been other cases that related to other orders but not the Marist Brothers.[177] He did not know of one matter that was successfully litigated against another order relying on the approach he suggested was open to Mr Holdway.[178]
[177]T178
[178]T179
222He was at CBP for three years and, over that time, did over seventy-five informal conferences. None of his matters went to court. There might have been one or two instances where proceedings had been filed. He did not think he had ever filed a defence.[179]
[179]T180
Economic loss claim
223He understood Lewis Holdway did not provide a schedule of special damages to CBP prior to the settlement conference, but provided a “List of Requests” on the plaintiff’s behalf outlining his various aims, one of which was “dealing with financial stress by reduction of mortgage.”
224He understood Lewis Holdway did not exchange any documents relating to economic loss and ultimately did not make a claim in this regard or for loss of earning capacity at the settlement conference – a clause reflected this in the Deed.
225Having been shown the CBP April 2015 “standard” letter which included a request that economic loss documents be provided, he agreed there were very few claims made for economic loss “in this space.”[180]
[180]T190
The settlement sum
226His assessment of quantum in these matters focussed on the available documents supporting the claim which were primarily of a medico legal nature and clinical records.
227In addition to the plaintiff’s police statement and his Victim Impact Statement, he had reports from medico legal psychiatrist Dr Cohen and psychologist, Dr Poznanski.[181] He provided a paragraph summary of their views as to the plaintiff’s success in the workforce, his diagnosis and reasonable prognosis.
[181]He made no mention of the plaintiff’s medico legal assessment by Dr Tagkalidis, psychiatrist
228The settlement amount of $165,000 all in was comparable to settlements achieved in or about 2015, including settlements in litigated claims in matters involving a similar level of abuse and psychiatric injuries and in which no claim for economic loss or loss of opportunity was made. He dealt with hundreds of settlements at the time.[182]
[182]T186
229He did not think any – perhaps two or three – were litigated claims as opposed to settled claims. Proceedings might have been filed but from memory they were all put on hold. The settlement amount was comparable to claims where there was no economic loss claimed.[183]
[183]T187
230He received a letter from Lewis Holdway after the settlement conference, requesting he “pass on our appreciation to your client for the manner in which the settlement conference was conducted.”
Charles Harrison
231Charles Harrison, solicitor at Carroll & O’Dea Lawyers, swore an affidavit on 2 August 2024. He currently has the day-to-day carriage of this matter under the supervision of Martin Slattery.
232He exhibited extensive documentation to his affidavit relating to the background of the prior claim, the Lewis Holdway file and the circumstances of the prior Deed.
233In his further affidavit sworn on 28 August 2024, he exhibited an expert opinion from Mr Andrew Muller SC.
Mr Muller SC’s opinion dated 22 August 2024
234Mr Muller SC was asked to provide an opinion as to the range of damages that a plaintiff in the position and circumstances of Mr Barclay may have expected to receive in a negotiated settlement as at 2015 (he assumed, for the purposes of this report, that the question asked him to address matters as they existed as at the date of the execution of the Deed).
235Having regard to and referring to, as necessary, to the facts and circumstances, et cetera, he was asked to provide his opinion as to the range of the damages that a plaintiff in the position and circumstances of the plaintiff might have expected to receive in a litigated outcome as at 2015.
(b) even if the Marist Brothers as an entity had been sued, the Order could have responded with a position that it didn’t run the school;[273]
(c) individual brothers took vows of poverty, which does not create a viable solution for a plaintiff wishing to sue for compensation;[274]
[272]T197
[273]T197
[274]T197
(d) brothers were not employees of schools in the way teachers are employees of schools;[275]
(e) the assets of the Marist Brothers were protected by property trusts.[276]
[275]T198
[276]T198
337Mr Slattery also accepted in cross-examination that there was no public statement by the Marist Brothers that if an individual was successfully sued and unable to meet a judgment debt, they would be indemnified by the Marist Brothers.[277]
[277]T201
338It is irrelevant for the defendant to contend merely that the plaintiff could have commenced proceedings against the Marist Brothers. It would have to demonstrate that, despite the recognition by the Court of Appeal of the difficulties created for survivors of childhood sexual abuse by the Ellis defence, it was somehow not a real difficulty for the plaintiff in this case. The inability of the defendant’s own witnesses to present a coherent pathway for viable litigation (let alone the inability to point to a single successful litigated claim prior to November 2015) speaks volumes.
Plaintiff’s oral submissions
339The question was – was there a viable civil claim that could be prosecuted by a plaintiff lawyer on behalf of a client. DYZ and WMB made it very clear that it was the unfairness created for victim survivors of these obstacles that was the problem and as Mr Holdway explained it was a multifaceted issue.[278] The multifaceted issues he spoke about created unfairness. The fact the Marist Brothers was an unincorporated association meant that entity could not be sued, so you were faced with having to sue individuals. You could name them but you would not be able to show attribution of knowledge in the same way as if you had an unincorporated association who you could have sued. [279]
[278]T55
[279]T56
340There were also issues with vicarious liability, which was not the case if the offender had been employed by the State. Brothers and priests were not employees of the school.[280]
[280]T56
341So, for the defendant’s witnesses to say, “Well you could have asked us who to sue and we would have told you”, does not go very far because of all these issues.[281] Of course, a plaintiff’s lawyer is not going to go down that path with those issues.[282]
[281]T56
[282]T57
342The question is, “was there a viable claim, and the answer to that is of course not, because the plaintiff lawyers were not doing it and that is why, once the law changed, there had been a significant increase in claims (as the defendant witness agreed)”:[283]
“On the defendant’s case was that all just a misunderstanding by all of the plaintiff lawyers, as well as the Royal Commission, as well as the Parliament in enacting the reforms. Was it all unnecessary? Of course not.”[284]
[283]T57
[284]T57
343The issue is not one of possibility. The issue is would a plaintiff taking on a cost risk, actually have a viable cause of action, and “it was not until those changes came in that we can actually name an entity like the Trustees of the Marist Brothers and all of those related issues then fall away”.[285]
[285]T58
344It was the legal environment that was an unfairness that someone very experienced Mr Holdway was very well aware of. It did not need to be spelled out by the defendant’s lawyers at the conference for the circumstances to be unfair.[286]
[286]T58
345The whole thrust of the submissions that there was no pressure or the claim was settled fairly, or in fair circumstances, misses the point that the entire legal environment in which the plaintiff was operating at that time was unfair.[287]
[287]T55
346The defendant’s blindness to this structural unfairness:
“the fact that by 2015 no claim which had not settled at mediation ever went beyond court directed mediation is a powerful indicator that the plaintiff was not disadvantaged by the defendant seeking to hide behind or take advantage of the remaining barrier…”[288]
completely ignored the obvious reason why claims were not going to court, and it was because they could not and had to settle at mediation.[289]
[288]Paragraph [292] of my judgment
[289]T58
347As Mr Holdway said, the legal barriers were insurmountable and that is why the there was law reform and precisely why the legislation now allows these kinds of deeds to be set aside.[290]
[290]T58
348The so-called proper defendant procedure has not been demonstrated by the defendant’s witnesses to have been a viable pathway.[291] Mr Creasey could not recall a single case against the Marist Brothers where there was successful litigation. Mr Slattery’s evidence was to a similar effect.[292]
[291]T59
[292]T60
349As a result, there is no basis to say Mr Holiday was ignorant. He knew very well, as an experienced solicitor, what the barriers were and there was no magic solution he could have “cottoned on” to and no basis for saying the plaintiff would have a remedy available to him by suing Mr Holdway for negligence.[293]
[293]T61
350Neither of the defendant’s witnesses could point to a single successfully litigated claim brought by someone in the plaintiff’s position at that time.[294] That is why Mr Holdway did not frame the plaintiff’s claim as a common law damages claim at all. He adopted a different framework because he did not consider the plaintiff had a damages claim open to him.[295]
[294]T63
[295]T63
Economic loss
351Clause 1(f) of the Deed provided:
“The agreed sum does not include any allowance for loss of earnings or loss of earning capacity as no such claim was made by the Claimant.”
Defendant’s submissions
352It was not said by the defendant that the plaintiff does not have an economic loss claim: “it was never pressed as part of his claim for compensation”.[296]
[296]T96
353The defendant submitted there was nothing in the evidence to suggest economic loss was not pursued because of Ellis, particularly in circumstances where there was a specific invitation and the plaintiff had an experienced solicitor. The failure to bring an economic loss claim was not actuated by Ellis.[297]
[297]T33
354The Marist Brothers in this case were willing to participate in the process and asked for all relevant documents. There was no restriction placed on the plaintiff by the defendant as to what could be claimed, including economic loss. It was a big jump to say that the fact that none of the comparative settlement figures included economic loss indicated a claim in that regard was never contemplated.[298]
[298]T16
355It is neither just nor reasonable to set aside the Deed as a bar to action in relation to any claim by the plaintiff for past or future economic loss. That is because the Court cannot be satisfied on the evidence that the Ellis defence played any material part in the plaintiff’s decision to forego, as a term of the settlement, any future claim for economic loss.
356The plaintiff represented prior to November 2015 that he suffered no economic loss in consequence of the abuse.[299] His education and work history were indicative of there being no economic loss claim at the time.
[299]Victim Impact Statement dated 17 August 2014
357Having regard to the plaintiff’s education and background, his evidence that he did not understand the concept of economic loss and that his failure to disclose any economic loss in his earlier prepared Victim Impact Statement sprung from some supposed misunderstanding that he could only nominate those particulars in circumstances where, for example, he had been robbed, the Court should reject his evidence as self-serving and frankly unbelievable.
358If the plaintiff was generally confused by the concept of economic loss or how such a claim could be made and substantiated, he had at his disposal an experienced legal practitioner of his choosing from whom he could have sought advice, more especially in circumstances where he had been invited by the defendant to provide particulars of his economic loss.
359The plaintiff made no economic loss claim because his lawyer did not even consider it in the specific context of his case, despite the invitation from the defendant to do so. His solicitor had not explained to the plaintiff what documents might be relevant to an economic loss claim, had not taken a history or instructions for the purpose of, or which would enable him, to identify and give advice about an economic loss claim.[300]
[300]T111-115
360It would not be just and reasonable to set aside the deed insofar as it would permit the plaintiff to make a claim for economic loss now when, with the benefit of the legal advice he accepted at the time, he elected not to do so in the prior claim. The evidence does not demonstrate that the Ellis defence obstacle – relevantly, difficulty in identifying a funded legal entity to sue – actually influenced the decision to confine his claim to the exclusion of economic loss.[301]
[301]See Pearce v Missionaries of the Sacred Heart (supra) at paragraphs [109]-[110] per Forbes J
361Nothing done, said, nor intimated by the defendant led to nor materially influenced the plaintiff’s decision to make no economic loss claim.
Plaintiff’s submissions
362There is no dispute between the parties about the fact the plaintiff did not make an economic loss claim when he settled his claim in November 2015. The question is whether that fact is relevant to the Court’s determination of the application (and if so, how). In this regard, it is to be noted that the defendant’s position is not that the plaintiff had (or has) no economic loss claim available to him. Rather, the defendant’s position is that the plaintiff did not put such a claim forward in November 2015 and gave no instructions in relation to such a claim.[302] On this basis, the defendant’s position appears to be that since the plaintiff did not previously put forward an economic loss claim, he cannot do so now.
[302]T96
363The plaintiff gave evidence of his understanding that the claim for compensation was made informally, that it was not a civil claim for damages; it was asking for charity.[303] He was not aware he could make a claim for compensation for loss of income or impaired earning capacity.
[303]Barclay affidavit at paragraph [18]
364The plaintiff’s evidence was he was asked by Mr Holdway about his education or employment history.[304] He did not recall Mr Holdway asking him to marshal documents for his claim or to produce any documents that might evidence an economic loss claim.[305] He agreed that prior to the RJ process, he did discuss with Mr Holdway the fact that he had money owing on his mortgage.[306]
[304]T48-49, 127-128
[305]T56-59, 70-71
[306]T49
365Mr Holdway also gave evidence in relation to the economic loss claim issue. Speaking to a note prepared at a conference with the plaintiff prior to the settlement conference, Mr Holdway explained that the note captured that – for the plaintiff – he was primarily seeking the symbolic chance to be listened to, and money was secondary.[307] This is consistent with the RJ approach, where financial compensation was part of what was sought but was not the sole/driving factor.[308]
[307]T133-134
[308]T140-141
366Mr Holdway further contextualised this particular financial aspect of the RJ process as follows:
“Yes, he was keen on getting rid of the mortgage if at all possible. From a restorative justice point of view, looking at the harm you would have expected someone of his age, perhaps, to own their own home by about that time, so responding to the harm and dealing with that would be to get rid of the mortgage, yes, if possible.”[309]
[309]T133
367Mr Holdway stated in re-examination that he was not aware of instances of the Marist Brothers paying compensation for lost income to survivors of abuse.[310]
[310]T159
368In cross-examination, Mr Holdway agreed that a letter from the insurer’s solicitors received prior to the settlement conference included a reference to provision of documents in support of a claim for economic loss if relevant.[311] However, he explained that an economic loss claim was not relevant to the plaintiff’s claim because “it was not possible to bring a legal claim, let alone a claim for economic loss at that point in time.”[312]
[311]T103-105, 115-116
[312]T110
369Despite having information available to him that was capable of informing whether there was a potential economic loss claim, Mr Holdway’s evidence was that he “didn’t ever think in terms of economic loss claims. [He] was focused on restorative justice and what the harms were, and how they should be responded to.”[313] The invitation to provide all relevant documents was to be understood as an invitation to “put the best claim forward we could legally put. But given that I did not believe at all that there was a court claim you could put as such, and never acted in such court claims, and made clear to the client when they first came to us that we didn't do that, we were doing them restorative justice, to see the best offer we could get on the table from the Marists, backed by their insurers.”[314]
[313]T112, 115-116, 127-128
[314]T124
370Mr Holdway restated his view that RJ was a different forum altogether to litigation, with a much broader focus.[315] As such, he did not put forward an express claim for economic loss (understood in the litigation sense of that term) on behalf of the plaintiff at the settlement conference.[316]
[315]T114-116
[316]T116-117
371After the settlement conference, the Deed was signed. The plaintiff agreed that the Deed included a clause acknowledging that he was making no claim for loss of earnings.[317] Mr Holdway deposed that the agreement in the Deed stated that this was not a claim for economic loss because this was not a case where Mr Holdway was pursuing common law damages; he was not able to do that.[318]
[317]T77
[318]T77-79
372The plaintiff’s evidence was that he always felt that the settlement figure in the Deed was a very modest figure.[319] He always felt dissatisfied with the figure.[320] However he believed that the amount he received was the best he could get.[321]
[319]T81-82
[320]T86
[321]T86-87
373In light of the evidence, there is no basis for the finding that the plaintiff elected not to pursue and economic loss claim. The significance of the legal hurdles he faced (including the Ellis defence) applied to the entirety of his claim
Plaintiff’s oral submissions
374The defendant does not say the plaintiff does not have an economic loss claim available if the Deed is set aside, what is being said is, “but you didn’t bring one”. The plaintiff entered into this settlement with that unfairness “an arm behind his back.” One of the outcomes of that was no economic loss claim was brought.[322]
[322]T65
375The defendant asserts, without any reference to the evidence, the plaintiff elected not to make an economic loss claim. There is no evidence in support of this submission. To the contrary, the evidence supports a finding that he made no such election, indeed, his evidence was, he was not aware he could make a claim for compensation for loss of income or impaired earning capacity.[323]
[323]T61
376There is an inconsistency between the two propositions put by the defendant - the plaintiff elected not make an economic loss claim and Mr Holdway did not even consider it and did not explain it to the plaintiff.
377In Mr Holdway’s opinion, it was not possible to bring a legal claim at all, let alone an economic loss claim - his affidavit evidence it was impossible to gain compensation for lost earnings for abuse survivors was not challenged. Also important relevant evidence, was Mr Creasey, the lawyer acting at the settlement conference, did not ever say “we would’ve paid an economic loss component”.[324]
[324]T62
378If the plaintiff could not bring a viable claim, it would follow he could not bring a claim for economic loss.[325]
[325]T63
379In response to the defendant’s case that it was “willing to negotiate a compromise on a full common law footing,” firstly, the evidence does not bear that out and, secondly, if it did, the defendant did not share that information with the plaintiff or his solicitor.
380Significantly, Mr Creasey, the solicitor in the conference, did not depose or say the defendant was in fact willing to negotiate a compromise on a full common law footing.[326]
[326]T52
381The evidence relied on seems to be solely the 15 April 2015 letter, but, of course, at no point did that letter actually say the defendant was willing to negotiate a compromise on a full common law footing.[327] It should not be accepted the evidence demonstrates a willingness, and even if there was that willingness internally, there was no evidence it was communicated to the plaintiff or his solicitor.[328]
[327]T52
[328]T53
382If there was a change by that letter, as to the plaintiff’s understanding of the Ellis Defence, there is no evidence that was the case. Mr Holdway confirmed his position he did not believe there was a court claim as such. He disagreed it was possible to bring a legal civil claim. Having got that letter, he did not say, “hang on a minute the Marist Brothers are open to a full claim.”[329]
[329]T54
Analysis
383I accept the Ellis defence had a material influence on the plaintiff’s decision to settle his claim.
384I found both the plaintiff and Mr Holdway to be credible witnesses and accept their evidence in relation to their understanding of the operation of the legal hurdle at the time and their actions as a result thereof, leading to a settlement in a RJ process rather than suing the defendant.
385As the plaintiff submitted, the evidence of those witnesses was never addressed by the defendant in its written submissions.[330] Nor did the defendant’s evidence engage at all with Mr Holdway’s evidence about the Ellis defence or how he saw the obstacle working in practice with the plaintiff. Further, the defendant in submissions did not grapple with the plaintiff’s evidence about his state of mind and his advice from his solicitor.[331]
[330]T49; set out in paragraphs [277]-[278] of my judgment
[331]T49
386There was no suggestion by the defendant that the evidence of these witnesses should not be believed; their evidence was just ignored. In contrast, I accept that these two witnesses – the plaintiff and Mr Holdway – gave clear evidence of material influence which is simply not grappled with it at all by the defendant.[332]
[332]T49
387As the plaintiff submitted, applying the concept of “material impact” as set out in DZY, Mr Holdway’s advice did not have anything less than a material impact and actual influence on the plaintiff’s state of mind. It is apparent from his evidence that his choices in relation to how he would engage with the Marist Brothers were founded upon Mr Holdway’s advice about the options open to him (in particular, that he could not sue and win).
388I also accept there were other matters (such as the risk of an adverse costs order, obtaining an apology, and relieving mortgage stress) which the plaintiff took into account when deciding to settle his claim rather than sue, but these matters must be seen in the context of the legal obstacles the plaintiff had been told about by Mr Holdway underpinning his decision-making.[333]
[333]DZY at paragraphs [112]-[113]
389The acknowledged presence and/or benefits of other matters that were taken into account does not detract from the centrality of the Ellis defence in the plaintiff’s decision-making.
390As the plaintiff submitted, it is unclear how the matters relied on by the defendant under the heading “what the plaintiff asked for and what he got” is actually relevant to the Court’s assessment of “just and reasonable”. The defendant does not squarely identify whether that section is directed to the material factor of the Ellis defence or whether it is directed to establishing there is another factor which should be said to be weigh against the setting aside of the Deed.[334]
[334]T50
391The defendant’s submissions under this head do not deal with why Mr Holdway adopted the RJ process – a process completely different to a court claim – in the first place. Nor do they deal with his evidence that it was impossible to formally litigate, nor the plaintiff’s evidence of why he chose not to sue.[335]
[335]Paragraphs [282]-[294] of my judgment
392I reject the defendant’s submission the evidence of its witnesses was unchallenged. In my view, there was a “full-on” challenge to the main part of their evidence relating to the Usual Proper Defendant Practice and the ability of the plaintiff to bring viable common law proceedings at that time.[336] The thrust of their evidence – “you could have asked for names,” “you could have gone ahead and issued proceedings” – “fell flat” in cross-examination.[337]
[336]T12
[337]T10
393While Mr Holdway may have been given names had he asked, in practice that meant little. Mr Creasey could not recall the name of an entity that could be sued. He agreed that Marist Brothers were not employees of a school governed by the principal. He agreed there would be significant difficulties in attributing knowledge to an individual (such as the provincial) as opposed to a corporation, and he was not aware of a single case against the Marist Brothers that was litigated prior to 2015 that resulted in a successful outcome for a plaintiff suing individual members of the provincial council.[338]
[338]T178
394Mr Creasey did not know of one matter that was successfully litigated against another order relying on the approach he suggested was open to Mr Holdway. In his three years at CBP, not one of over seventy informal conferences in which he was involved made its way to court. He did not think he ever filed a defence.
395Further, Mr Slattery agreed in cross-examination that where a Catholic order is an unincorporated association, the plaintiff must sue a collection of individuals – there is no entity to sue. Even if the Marist Brothers as an entity had been sued, the Order could have responded with a position that it did not run the school. Individual brothers took vows of poverty, which does not create a viable solution for a plaintiff wishing to sue for compensation, and brothers were not employees of schools in the way teachers are employees of schools. Further, the assets of the Marist Brothers were protected by property trusts.[339]
[339]T198
396Mr Holdway was not aware of any successful lawsuits against the Marist Brothers or any other Catholic orders on the basis of suing individual members for the abuse of a brother or a priest.
397As the plaintiff submitted, it is irrelevant for the defendant to contend merely that the plaintiff could have commenced proceedings against the Marist Brothers. It would have to demonstrate that, despite the recognition by the Court of Appeal of the difficulties created for survivors of childhood sexual abuse by the Ellis defence, it was somehow not a real difficulty for the plaintiff in this case.
398Significantly, the defendant never told the plaintiff it would not rely on the Ellis defence at the time when that legal obstacle existed. The defendant never indicated to the plaintiff that it was prepared to deal with his claim on a full common law basis, either before or at the settlement conference.
399While the defendant “publicly stipulated” that it would not rely on the Ellis defence in uninsured claims, it never made such a statement in relation to an insured claim such as the plaintiff’s. In circumstances where there was no insurance, as Mr Holdway explained, there was greater flexibility for an order to deal with such claims.
400The defendant may have been willing to resolve the plaintiff’s claim based on Skehan’s illegal behaviour, to attend a settlement conference and agree to pay the plaintiff compensation, but that willingness was limited to the RJ process and was not on a full common law basis.
401While there was no evidence or suggestion that the plaintiff was pressured or treated unfairly by the defendant in the conduct of his claim or at the settlement conference, there was an atmosphere of unfairness created by the legal obstacle. There was not a level playing field.
402The “thankyou” conveyed by Mr Holdway to CBP after the settlement conference was for the manner in which the conference was conducted, not for the settlement amount or as an indication of the plaintiff’s happiness with that amount. The plaintiff’s evidence was that he probably indicated his dissatisfaction with the sum within the first 12 hours.
403Mr Holdway pursued the RJ process (and the plaintiff accepted his advice to do so) because there was no option of a viable common damages claim. Mr Holdway’s view was not “fixed and fatalistic,” as the defendant submitted – it was realistic. In those circumstances, any suggestion that the plaintiff has a remedy against his former solicitor in professional negligence for settling his claim prematurely or at undervalue has little merit.
404It is interesting that the defendant, in cross-examination, put to Mr Holdway that he should have waited for the legislative reform of Ellis before settling the plaintiff’s claim, suggesting that there were significant changes in the landscape, yet also argued Mr Holdway would have been able to resolve the plaintiff’s claim in November 2015 as he could do after the 2018 legislation. The defendant further suggested that it acted on a voluntary and willing basis then as it would now be required to do so by statute.
405It is difficult to see how Mr Holdway can be criticised for not waiting for reform if it was not required and the plaintiff was able to bring a common law damages claim before the legislation was enacted.
406The 2018 legislation was designed to address the obstacle that confronted claimants like the plaintiff by providing for the nomination by an unincorporated association of an entity that is capable of acting as a proper defendant in the proceeding, enabling historical sexual abuse victims to litigate their claims for their abuse.[340] This legislation was much more than the “decluttering” or “streamlining” of the process that Mr Slattery described.
[340]WCB at paragraph [111]
407It is not in dispute that after the 2018 legislation was enacted there has been a significant increase in the number of litigated claims. As Mr Slattery agreed, one could take from that people who previously felt they could not litigate now could. Following the 2018 legislation, an entity like the Trustees of the Marist Brothers could be named, “and all of those related issues fell away”.[341]
[341]T58
408The existence of the Ellis defence and the lack of a viable common law claim is also of relevance to the availability of any economic loss claim to the plaintiff at that time.
409Consistent with his view as to the operation of the Ellis defence, Mr Holdway did not seek the detailed instructions from the plaintiff as would usually be taken when an economic loss claim was possible – details of work history, tax returns, etc. Economic loss was not relevant because it was not possible to bring a legal claim let alone a claim for economic loss.
410Mr Holdway’s approach was not altered by the defendant’s invitation in its April 2015 correspondence for him to provide any documents in support of an economic loss claim. That offer was “if relevant”, and I accept Mr Holdway’s explanation that it was not relevant at that time.
411There was nothing in that letter, or at any other time, to change Mr Holdway’s view of the unavailability of an economic loss claim or indicate a willingness on the defendant’s part to deal on a full common law basis.
412Mr Holdway was not aware of the Marist Brothers paying compensation for lost income to survivors of childhood sexual abuse. Mr Creasey confirmed there was no statement by the Marist Brothers that they were open to an economic loss claim.
413There is no evidence that the plaintiff elected not to pursue an economic loss claim. It was not put to the plaintiff he made any such election. This issue was addressed in a sentence in the defendant’s written submission and not explained in oral submissions.
414As the plaintiff submitted, the evidence supports a finding to the contrary that he made no such election; indeed, his evidence was that he was not aware he could make a claim for compensation for loss of income or impaired earning capacity.[342]
[342]T61
415In those circumstance, the plaintiff cannot be said to have made any election.
416In those circumstances, I reject the defendant’s submission that the plaintiff’s evidence of his lack of understanding of what an economic loss claim involved was “self serving and frankly unbelievable”.
417Further, there is an inconsistency between the two propositions put by the defendant – namely, the plaintiff elected not make an economic loss claim, and Mr Holdway did not even consider it and did not explain it to the plaintiff.
418In my view, the plaintiff’s decision not to pursue an economic loss claim was materially influenced by the existence and the potential impact of the Ellis defence.
419In DZY, one of the factors the Court said might legitimately be taken into account might include prospects of success (that is, that the claimant could do better that he or she had previously done by the settlement).[343]
[343]At paragraph [112]
420Before addressing the adequacy of the settlement sum, in my view, the plaintiff has a strong claim in negligence, the defendant having admitted the abuse. Further, the plaintiff’s current solicitor, Mr Macdonald, has spoken to other former students abused by Skehan.
421In terms of quantum, in my view, the plaintiff settled his claim at undervalue by accepting the sum of $165,000 inclusive of costs.
422The evidence of the plaintiff’s current solicitor, Mr Macdonald, that if the Deed is set aside the plaintiff would obtain a verdict or settlement vastly in excess of the settlement sum, was unchallenged. There is also expert evidence of economic loss not taken into account in the settlement sum.
423Any reliance on comparable cases by the defendant is not of assistance when considering this issue. None of the cases decided pre-November 2015 relied on by Mr Slattery or Mr Muller SC involved a lawsuit against a Catholic priest or brother, so are not relevant comparators. Further, none of those cases included any allowance for economic loss.
424Mr Slattery accepted there were “not many” litigated claims at the time. As the plaintiff submitted, the small number of litigated claims is further evidence of the very real difficulties faced by childhood sexual abuse survivors in 2015 who were considering whether to commence proceedings.
425These cases were negotiated without any real leverage in circumstances where the legal barrier existed. As the plaintiff submitted, there are no examples of unfettered damages because of the hurdles.[344]
[344]T64
426It is not the point to say the plaintiff got what he wanted (that is, an amount that almost paid off his mortgage) – the issue is what is just and reasonable.
427While the settlement sum was “not a mere pittance”,[345] in my view, the plaintiff’s claim settled at undervalue given the nature of the abuse and the impact the plaintiff has described across his life, and also the absence of any allowance for economic loss.
[345]T34
428The settlement sum in the Deed was not a reasonable assessment of the plaintiff’s loss and damage in 2015, or adequate compensation by today’s standards.
429The significance for the plaintiff of the legal hurdles he faced, including the Ellis defence, applied to the entirety of his claim.
430There is no forensic prejudice to the defendant in terms of missing witnesses or missing documents at trial if the Deed is set aside. The intention of the 2018 statutory reform was that if a plaintiff satisfies the “strict legal rule”– the just and reasonable test, he is able to bring proceedings afresh in relation to the previously settled cause of action. This is the case the defendant now must meet.
431For the above reasons, I am satisfied that it is just and reasonable to set aside the Deed, and, accordingly order, pursuant to s27QE of the Act, that the Deed be set aside in its entirety.
- - -
1
7
0