Cherry v State of Victoria

IN THE SUPREME COURT OF VICTORIA

Not Restricted

COMMON LAW DIVISION
INSTITUTIONAL LIABILITY LIST

S ECI 2022 03291

BETWEEN:

ANTHONY CHERRY	Plaintiff
v
THE STATE OF VICTORIA	Defendant

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JUDGE:	Ierodiaconou AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	29 July 2025
DATE OF RULING:	23 September 2025
CASE MAY BE CITED AS:	Cherry v State of Victoria
MEDIUM NEUTRAL CITATION:	[2025] VSC 603

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LIMITATION OF ACTIONS – Limitation of Actions Act 1958 (Vic) ss 27QD, 27QE – Institutional abuse – Prior settlement deed – Application to set aside prior deed – Whether just and reasonable to set aside prior deed – Where plaintiff overcame a limitation of actions defence in prior proceeding – Whether any legal barriers impacted plaintiff’s decision to enter into the prior deed – Whether the law on vicarious liability impacted plaintiff’s decision to enter into the prior deed – Adequacy of the settlement sum and other risk factors – Adequacy of legal representation – Bargaining power of the parties and conduct of the defendant – Plaintiff’s mental health – Not just and reasonable to set aside prior deed – DZY (a pseudonym) v Trustees of the Christian Brothers (2025) 99 ALJR 806 – New South Wales v Lepore (2003) 212 CLR 511 – Prince Alfred College Inc v ADC (2016) 258 CLR 134.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms C Willshire	Arnold Thomas & Becker
For the Defendant	Ms R Annesley KC with Ms M Cameron	Moray & Agnew

TABLE OF CONTENTS

Evidence

The prior deed

Background

The current pleadings
Mr Cherry’s prior proceeding

Witnesses

Mr Cherry
Mr Price

Legislation and applicable principles

Is it just and reasonable to set aside the prior deed?

Limitation of actions defence
Ellis defence
Legal barriers?
Mr Cherry’s submissions
Defendant’s submissions
Analysis

Adequacy of the settlement sum; other risk factors
Mr Cherry’s submissions
Defendant’s submissions
Analysis

Adequacy of legal representation; bargaining power and conduct of the defendant
Mr Cherry’s submissions
Defendant’s submissions
Analysis

Mr Cherry’s mental health; feelings of guilt and shame
Mr Cherry’s submissions
Defendant’s submissions
Analysis

Parties’ interests

Conclusion

HER HONOUR:

The plaintiff, Anthony Cherry, alleges he was sexually abused by schoolteacher Oswald Brian Sword (‘Sword’) while a student at Westall State Primary School (‘the School’). In this proceeding, he claims damages from the defendant, the State of Victoria. However, Mr Cherry had previously issued a proceeding concerning the abuse against the defendant in the County Court of Victoria (the ‘prior proceeding’). By a deed of release signed on 1 April 2003,[1] Mr Cherry released the defendant from claims relevant to the abuse (the ‘prior deed’). The defendant says the prior deed bars Mr Cherry from bringing the current proceeding and the proceeding should be struck out.
[1]The parties appear to agree that the prior deed was signed on 13 April 2003. However, based on the available documents and as will become evident from the chronology below, the prior deed was signed by Mr Cherry on 1 April 2003.
Mr Cherry applies to set aside the prior deed pursuant to s 27QD of the Limitations of Actions Act 1958 (Vic) (‘LAA’). The defendant opposes the application.

Evidence

In support of his application, Mr Cherry relies on his affidavit, affirmed on 24 July 2025, and an affidavit of his current solicitor, Kim Price, affirmed on 27 March 2025.
The defendant relies upon the affidavits of its current solicitor, Yolanta Figiel, affirmed on 1 May and 29 July 2025.

The prior deed

On 1 April 2003, Mr Cherry signed the prior deed. He settled his claim for ‘$180,000 as general damages inclusive of all costs and disbursements’ and any repayment to the Health Insurance Commission (‘HIC’) (the ‘settlement sum’). The prior deed relevantly states:
Background
A The Releasor has made a claim against the Releasee (claim) alleging that the Releasor suffered injury, loss and damage arising out of assaults which are alleged to have occurred at Westall State Primary School during the years 1967 to 1972.
B. A legal proceeding has been issued on the Releasor’s behalf in the County Court at Melbourne by proceeding number 4347 of 2001 (proceeding) in relation to the claim
C The Releasor and the Releasee have agreed to compromise the claim and the proceeding without any admission of liability by or on behalf of the Releasee in accordance with this release.
Agreed terms
1.Settlement sum
The Releasee promises to pay and the Releasor accepts the Releasee’s promise to pay $180,000 as general damages [handwritten and initialled] inclusive of all costs and disbursements (settlement sum) within 28 days of the later date of receipt by the Releasee’s solicitors of:
(a)       this release duly executed by the Releasor; and
(b)       a current notice of charge (notice) issued by the Health Insurance Commission under the Health and Other Services (Compensation) Act 1995 (Cth).
…
4.        Release
The Releasor releases and forever discharges the Releasee and the Releasee’s partners, servants, agents, successors and assigns from any and all liability whatsoever in relation to the claim or the proceeding or the matters the subject of the claim or the proceeding.
5.        Discontinuance of proceeding
The Releasor promises to take (at the Releasor’s expense) all steps necessary to discontinue the proceeding.[2]
[2]Exhibit ‘KP-1’ to the affidavit of Kim Price affirmed on 27 March 2025, 19-22 (‘Price affidavit’).

Background

Mr Cherry is currently 65 years of age. He is the middle of five siblings, raised in Clayton. He describes his family in positive terms.
Between 1965 and 1972, Mr Cherry completed Prep to Grade 6 at the School. He repeated Grade 2.

The current pleadings

Mr Cherry alleges the following.
Between 1967 and 1972 (the ‘relevant period’), Sword was a teacher at the School and provided one-on-one remedial English tuition in a room at the School. During these remedial lessons, Sword would touch Mr Cherry’s genitals for up to 20 minutes at a time while masturbating himself. Sword would continue to molest Mr Cherry behind a table while other teachers were present. On one occasion, another student entered the room while the abuse was occurring.
On three occasions, once in a classroom and twice in the school toilets, Sword anally raped Mr Cherry.
Collectively, I will refer to the above allegations as the ‘abuse’.
Although admitting Sword was a part-time teacher at the School between 4 February 1969 and November 1972, the defendant does not admit the abuse.
In around May 1997, Mr Cherry reported the abuse to Victoria Police. Sword suicided after being interviewed by police.[3]
[3]Exhibit ‘YFM-1’ to the affidavit of Yolanta Figiel affirmed on 1 May 2025, 111 (‘first Figiel affidavit’).
By his statement of claim in the current proceeding, Mr Cherry says the defendant operated and managed the Department of Education, which was responsible for the management of public schools in Victoria. The defendant admits this. Mr Cherry further says the School was managed and controlled by employees of the Department, specifically the Secretary of the Department and a Principal, namely David Sheard.[4] The defendant says it employed a Director of Education/Director-General of Education as opposed to a Department Secretary. It otherwise does not admit that the School was managed and controlled by the Department Secretary or Mr Sheard.
[4]It is unclear what position Mr Sheard held at the School. In the current proceeding, the plaintiff refers to him as the Principal. In the prior proceeding, by its answers to interrogatories, the defendant refers to him as the ‘acting principal’.
Mr Cherry says that during the relevant period the defendant knew or ought to have known that Sword was not suitable to work as a teacher because Sword had abused students before him; the Principal had received complaints from other students and their parents; and Mr Cherry had complained to John Johnson (presumably a staff member) in 1971 or 1972 that Sword had been ‘touching him up’ and touching other students. The defendant does not admit this.
The defendant admits the Principal and teachers at the School owed students ‘a duty to take reasonable care to protect them from reasonably foreseeable harm’ but does not admit it owed Mr Cherry a non-delegable duty to take the care a careful parent would take of their children. It further says that although in certain circumstances it may be held ‘vicariously liable for the tortious conduct of its employees acting within the scope of their employment’, if Sword did perpetrate the abuse, he was not doing so in the course of his employment. It otherwise denies it is vicariously liable or negligent.

Mr Cherry’s prior proceeding

In around 2000, Mr Cherry contacted Keith R Cameron Solicitors (‘KRC’) regarding the abuse. Mr Cherry says KRC advised him that pursuing a claim would be difficult due to the expiry of the limitation period and the time elapsed since the abuse.[5]
[5]Price affidavit, [7].
On 15 November 2000, Dr Lester Walton produced a psychiatric report on the instruction of Mr Cameron of KRC (‘Walton report’). Dr Walton diagnosed Mr Cherry with chronic post-traumatic stress disorder caused by the abuse and aggravated by physical injuries he sustained in 1996. He opined that the death of Mr Cherry’s brother had temporarily aggravated the injury. Further, he opined that Mr Cherry’s ‘post-traumatic psychological symptoms now constitute a significant partial incapacity for work.’[6]
[6]Exhibit ‘KP-1’ to the Price affidavit, 23-28.
On 22 May 2001, KRC filed a writ in the County Court of Victoria against the defendant. P.J Galbally QC and C.J Winneke signed the statement of claim. By his statement of claim, Mr Cherry pleaded:
(a)Sword was employed by the defendant as a teacher and acting in the course of his employment and/or as a servant or agent of the defendant;
(b)the abuse allegations, as outlined in the current proceeding, save for the claims of sexual abuse by penetration;
(c)two complaints: one made by the father of another student to the Principal in either 1967 or 1968 (‘Fullerton complaint’), and one made by Mr Cherry to Mr Johnson in 1971;
(d)the defendant was vicariously liable for Sword’s actions, or in the alternative, the negligence of the defendant, its servants and agents caused the abuse;
(e)he had suffered injury, loss and damage, including aggravated and exemplary damages.[7]
[7]Exhibit ‘YMF-1’ to the first Figiel affidavit, 1-9.
In June 2001, Mr Cherry engaged Galbally & O’Bryan (‘G&O’) to act instead of KRC.[8]
[8]Ibid 104. See also the Price affidavit, [10].
On 28 June 2001, the defendant filed a defence signed by its solicitors, Minter Ellison. The defendant did not admit that it employed Sword as a teacher at the School, the abuse allegations or the two complaints. Further, it denied it was vicariously liable or negligent. It pleaded the proceeding was statute-barred under s 5 of the then LAA.[9]
[9]Exhibit ‘YMF-1’ to the first Figiel affidavit, 10-11.
On 15 January 2002, Dr Ian Joblin produced a psychological report on the instruction of G&O (‘Joblin report’). Dr Joblin opined Mr Cherry did ‘not fulfil any criteria for a personality disorder or for any diagnosable psychological abnormality’. However, he opined the abuse had left a ‘virtually indelible mark on his psychological presentation’ and that there was nothing in his ‘history or presentation that would contradict the assumption that the dysfunctional symptoms’ he suffered were the ‘sequelae of the sexual abuse’.[10]
[10]Exhibit ‘KP-1’ to the Price affidavit, 29-33.
On 6 March 2002, G&O filed a reply. By his reply, Mr Cherry made an application under s 5(1A) of the LAA.[11] He pleaded that the cause of action arose less than six years before the issuing of the proceeding.[12]
[11]The reply is not in evidence: see the Price affidavit, [11].
[12]Exhibit ‘YMF-1’ to the first Figiel affidavit, 115.
On 6 March 2002, G&O filed interrogatories for the examination of the defendant. They were answered by Gail Hart, the defendant’s General Manager of the Shared Services Division of the Department of Education and Training on 6 September 2002 (‘defendant’s prior answers to interrogatories’). Relevantly, Ms Hart deposed:
(a)Sword ‘took intervention programs’ aimed at remedial teaching;
(b)she was unable to say whether Sword abused the plaintiff or other students at the School;
(c)the defendant did not receive any information before or during the relevant period that Sword had or might have acted indecently towards students. However, Acting Principal Mr Sheard had received a complaint from a parent in term 1 or 2 of 1972 that Sword had touched under their son’s pants during a reading group. She said Sword denied this allegation and Mr Sheard ‘counselled Sword in strong terms to refrain from any inappropriate conduct’. This complaint was not reported to the police or any other governmental authority;
(d)a mother of another student told the School’s canteen manager, Dorothy Saunders, that Sword had put his hand on her son’s knee. Ms Saunders did not report this allegation to the School or the defendant;
(e)there were no protocols or policies to guide the School and its teachers in cases where a teacher might be suspected of indecently assaulting or interfering with students.[13]
[13]Ibid 24-35.
On 10 June 2002, Mr Cherry is alleged to have added a prescription drug to his former wife’s coffee and then engaged in sexual activity with her. He was later charged under s 53(b) of the Crimes Act 1958 (Vic) with one count of causing the taking of a drug for the purpose of sexual penetration (‘count one’), and an alternative count under s 19 of causing the taking of a substance capable of interfering with bodily functions (‘count two’). He was initially found guilty of count one and sentenced to four and a half years' imprisonment.[14] On appeal, his conviction on count one was quashed and a new trial was ordered,[15] at which time he was found guilty of count two only and sentenced to 16 months’ imprisonment with a non-parole period of four months.[16] This conviction and sentence were later undisturbed on appeal.[17]
[14]See R v Cherry (County Court of Victoria, Douglas J, 1 October 2004) contained in exhibit ‘YMF-1’ to the first Figiel affidavit, 138-147.
[15]See R v Cherry [2005] VSCA 89 contained in exhibit ‘YMF-1’ to the first Figiel affidavit, 148-158.
[16]See R v Cherry, Anthony Norman [2006] VCC 618 contained in exhibit ‘YMF-1’ to the first Figiel affidavit, 159-168.
[17]See R v Anthony Norman Cherry (No 2) [2006] VSCA 271 contained in exhibit ‘YMF-1’ to the first Figiel affidavit, 169-179.
On 20 June 2002, Dr Paul Kornan prepared a psychiatric report on the instruction of Minter Ellison (‘Kornan report’). Dr Kornan diagnosed Mr Cherry with post-traumatic stress disorder attributable to the abuse. He also diagnosed Mr Cherry with chronic anxiety and depression and an associated loss of confidence and self-esteem, with the abuse being a ‘factor, but not the only factor’ in causing these conditions.[18]
[18]Exhibit ‘KP-1’ to the Price affidavit, 34-42.
On 14 August 2002, Ms Hart swore an affidavit of documents (‘defendant’s prior affidavit of documents’). By this affidavit, the defendant discovered, among other things, a list of principals and head teachers, a School diagram and a copy of Sword’s personnel file.[19]
[19]Exhibit ‘YMF-1’ to the first Figiel affidavit, 21-23.
On 18 September 2002, Mr Cherry and his solicitor, Andrew O’Bryan of G&O, filed affidavits in support of his application seeking a declaration in the prior proceeding that his cause of action had arisen within the six-year limitation period or that he be granted leave to bring the proceeding out of time (‘LAA application’).[20] He also sought to file an amended statement of claim. Mr Cherry deposed:
(a)in 1972 he disclosed the abuse to Mr Johnson, and in the mid-1990s, he disclosed the abuse to his former wife. Before 1997, he otherwise attempted to ‘switch [his] mind off’ from the abuse;
(b)in 1997, he telephoned Sword and then reported the abuse to the police. He also began contacting old school friends to ask if Sword had abused them. Sword suicided after being interviewed by police;
(c)in 2000, he spoke with another former School student, who I will refer to as ‘BD’, who was also abused by Sword. In August 2000, he contacted a counselling service on behalf of BD and himself;
(d)in September 2000, he sought legal advice from KRC;
(e)in October 2000, he began counselling;
(f)it was not until he read the Walton report on 3 April 2001 that he became aware he had chronic post-traumatic stress disorder caused by the abuse.[21]
[20]Ibid 102-113.
[21]Ibid 107-113.
A Minter Ellison file note dated 11 October 2002 and signed by ‘JLW’ appears to record a telephone conversation between the author and Mr O’Bryan of G&O. Relevantly, the file note states:
Pre mediation: - you note you haven’t provided any details of special damages or loss of earnings etc.
Also: you suspect this case will be “very difficult to settle” > your client has a firm view in his mind as to what it’s worth.[22]
[22]Exhibit ‘YMF-1 to the affidavit of Yolanta Figiel affirmed on 29 July 2025, 13-14 (‘second Figiel affidavit’).
On 29 October 2002, Anderson J gave an ex-tempore ruling in which he held that Mr Cherry only became aware of his injuries in respect of the abuse, and the fact that Sword caused those injuries, upon reading the Walton report. His Honour declared the cause of action was not statute-barred as it was taken to have accrued on or after 3 April 2001 (‘LAA ruling’). His Honour noted that a similar conclusion was reached in Fullerton v State of Victoria,[23] in which that plaintiff had also experienced sexual abuse by Sword at the School in 1967 and 1968.[24]
[23](County Court of Victoria, R.G. Williams J, 17 June 2002).
[24]Exhibit ‘YMF-1’ to the first Figiel affidavit, 114-128.
A Minter Ellison file note dated 29 October 2002 and signed by ‘JLW’ stated the author telephoned ‘D Campbell’ and advised them of the LAA ruling (‘Minter Ellison 29 Oct 02 file note’). It then stated:
We discussing pl’s evidence.
I to confirm in writing + seek instns [sic] re: appeal prospects.
The plaintiff has very firm views as to what he’s worth; wasn’t interested in mediating b/f yesterday’s hearing.
Knows he’s got @ least what we paid Douglas in the bank.[25]
[25]Ibid 185.
On 11 November 2002, G&O filed an amended statement of claim (‘prior ASOC’). By his prior ASOC, Mr Cherry:
(a)pleaded penetrative abuse in the school toilets by Sword;
(b)amended the year in which he had disclosed the abuse to Mr Johnson from 1971 to 1972;
(c)pleaded a non-delegable duty of care to ensure he was ‘not harmed by Sword on the school premises during school hours’, and a breach of this duty;
(d)pleaded a breach of fiduciary duty.[26]
[26]Exhibit ‘KP-1’ to the Price affidavit, 10-17.
On 11 December 2002, the defendant made an offer of compromise of $100,000. This offer was open for 14 days.[27] On 16 December 2002, G&O requested that the offer be extended to 17 January 2003 as Mr Cherry was not contactable during the holiday period.[28]
[27]Exhibit ‘YMF-1’ to the first Figiel affidavit, 180. See also exhibit ‘YMF-1’ to the second Figiel affidavit, 5.
[28]Exhibit ‘YMF-1’ to the first Figiel affidavit, 181-182.

On 20 December 2002, the defendant filed an amended defence in the prior proceeding. It did not admit the new abuse allegation and otherwise denied owing a non-delegable duty and fiduciary duty, and a breach of such duties.[29]
[29]Exhibit ‘KP-1’ to the Price affidavit, 18.
On 11 March 2003, Mr Cherry made an offer of compromise of $175,000, together with claimable party/party costs and disbursements’.[30]
[30]Exhibit ‘YMF-1’ to the first Figiel affidavit, 183. See also exhibit ‘YMF-1’ to the second Figiel affidavit, 6.
A Minter Ellison file note dated 12 March 2003 and authored by ‘JLW’, appears to record a without prejudice telephone conversation with Mr O’Bryan. It states:
Mediatn [sic] still to occur (you note).
You still to provide partics [sic] of special damages + eco loss.
I advise we don’t accept the offer of comp of $175k.
$175k is the limit of your instructns [sic] @ this stage.
You don’t think your client will take much less.
I to seek instructns [sic].
You believe he would get a lot more if it ran @ trial. I say we don’t see this as a pure assessment.[31]
[31]Exhibit ‘YMF-1’ to the second Figiel affidavit, 15.
On 13 March 2003, the defendant rejected the plaintiff’s offer and made an offer of compromise of $135,000.[32]
[32]Exhibit ‘YMF-1’ to the first Figiel affidavit, 184. See also exhibit ‘YMF-1’ to the second Figiel affidavit, 7.
On 25 March 2003, G&O wrote to Minter Ellison rejecting their offer of compromise and making an offer of $180,000 ‘all in’ (G&O 25 March 03 letter’). This offer was open for acceptance until 4:00pm on 28 March 2003. Relevantly, this letter states:
…
It is noted the parties are not substantially apart in terms of their settlement positions.
I assess the Plaintiff’s claimable party party costs inclusive of claimable disbursements at about $18,000. If this assessment is correct on an ‘all in’ basis, the Plaintiff’s previous offer was $193,000 and the Defendant’s $153,000.
In a final attempt to achieve a settlement without the parties incurring further substantial costs to mediation, the Plaintiff is prepared to further compromise his claim and settle for the ‘all in’ figure of $180,000. …
It is our view the offer represents a substantial compromise on the issue of damages should the Plaintiff succeed at trial. You should be made aware we have had some difficulty obtaining further instructions from the Plaintiff to put the above offer and it is put on a take it or leave it basis. Any counteroffer at a lesser sum will be rejected.
…
It is anticipated the Plaintiff’s particulars of loss of earnings and earning capacity will be available in about 14 days.[33]
[33]Exhibit ‘YMF-1’ to the first Figiel affidavit, 130-131.
A Minter Ellison file note dated 25 March 2003 records what appears to be the offers exchanged between the parties (‘Minter Ellison 25 March 03 file note’). It is unclear whether this was preceded by the G&O 25 March 03 letter or some other event. The file note states:
Instns: [sic] $229k + costs
Us: $100k + costs
P1: $175k + costs
Us: $135k plus costs
Them: $180k “all in![34]
[34]Ibid 129.
A Minter Ellison file note dated 25 March 2003 and authored by ‘JLW’ records a telephone conversation with Mr O’Bryan. The defendant accepted Mr Cherry’s offer of $180,000 ‘all in’ and queried whether it included a HIC repayment.[35] The following day, G&O wrote to Minter Ellison advising Mr Cherry’s ‘further settlement offer [was] inclusive of any HIC deduction’.[36]
[35]Exhibit ‘YMF-1’ to the second Figiel affidavit, 16.
[36]Ibid 8.
On 26 March 2003, Minter Ellison wrote to G&O accepting Mr Cherry’s offer of $180,000 ‘all in’.[37] On 28 March 2003, Minter Ellison posted the deed of release to G&O for signing.[38]
[37]Exhibit ‘YMF-1’ to the first Figiel affidavit, 132.
[38]Ibid 133.
On 1 April 2003, Mr Cherry executed the prior deed. On the same date, G&O wrote to Minter Ellison stating they enclosed a signed release, notice of judgment/settlement and section 23A statement/statutory declaration.[39]
[39]Exhibit ‘YMF-1’ to the second Figiel affidavit, 9.
On 24 April 2003, Minter Ellison wrote to G&O advising that they had received a valid Notice of Charge and there was no statutory repayment. They stated they would forward the settlement sum as soon as possible.[40]
[40]Ibid 10.
On 5 May 2003, G&O wrote to Minter Ellison stating Mr Cherry was requesting early payment of the settlement sum ‘due to a number of financial commitments’ (‘G&O 5 May 03 letter’).[41]
[41]Ibid 11.
On 7 May 2003, Minter Ellison posted G&O a cheque containing the settlement sum.[42]

Witnesses

[42]Ibid 12.

Mr Cherry

I accept Mr Cherry’s evidence, save for the following qualification. Where there is an inconsistency between a document and Mr Cherry’s recollection of an event, I prefer to rely upon the document.
Mr Cherry gave evidence that he contacted KRC about pursuing compensation for the abuse in about 2000. He said Mr Cameron told him that his claim was ‘out of time’ and ‘it would be difficult to show’ the defendant was ‘responsible for the abuse’.[43]
[43]Affidavit of Anthony Cherry affirmed on 24 July 2025, [10], [13] (‘Cherry affidavit’).
Mr Cherry recalled a conversation he had with a person from KRC in mid-2001. They informed him that the defendant had responded to the statement of claim in his prior proceeding, and the defendant’s position was that his case was out of time and that they were not responsible for Sword’s actions. KRC advised Mr Cherry that his case would be ‘difficult, time-consuming and costly.’[44]
[44]Ibid [15].
In late 2001, Mr Cherry engaged G&O. At this time, G&O advised him that they could pursue an extension of time application, and that his case was difficult and had ‘real risks’. Following the LAA ruling, Mr Cherry said G&O advised him that although his claim was no longer out of time, he would still need to prove the defendant was responsible for the abuse and the actions of Sword.[45]
[45]Ibid [16], [19]-[20].
Mr Cherry said that in about 2003, he had ‘numerous conversations’ with G&O, who informed him that the defendant was willing to settle outside of Court. He recalls they made an opening offer of $30,000. He doesn’t remember every offer made. He gave evidence that during what he has referred to as the ‘settlement period’, he was experiencing depression, anxiety and guilt. Yet he also said that he felt driven to go to Court as he wanted to ‘hold someone accountable’. Mr Cherry said G&O advised him that going to Court involved great risk. G&O told him that if he lost, there was a real risk he would have to pay both his legal costs and the defendant’s legal costs. He said he could not even afford his own legal costs as he was not working consistently or full-time, experiencing a relationship breakdown and dealing with a criminal matter.[46]
[46]Ibid [21]-[23].
Mr Cherry said the defendant made a ‘final offer’ of $180,000 inclusive of costs and repayments in about April 2003.[47] This evidence is inconsistent with the G&O 25 March 03 letter and the Minter Ellison 25 March 03 file note, which indicate that it was Mr Cherry who made an offer of $180,000 ‘all in’. I find the offer was made by Mr Cherry, not the defendant.
[47]Ibid [24].
Mr Cherry’s evidence is that G&O advised him that the offer of $180,000 was ‘likely the best’ he was going to receive, there was a real risk he would lose his Court case, and that it would be risky and difficult to prove the defendant was responsible. He was again advised of the adverse cost consequences should he be unsuccessful in Court and G&O told him that he could lose his house. G&O advised Mr Cherry that they could not continue acting for him if he did not accept the offer. Mr Cherry said he felt like he had no other option than to settle. He recalled receiving around $100,000 after costs and disbursements had been deducted.[48]
[48]Ibid [24]-[26].
Mr Cherry said he never felt that the prior settlement was fair or adequate. He was disappointed with the amount and felt angry and distressed.[49]
[49]Ibid [27].

Mr Price

Mr Cherry’s current solicitor is Mr Price. His affidavit largely exhibits documents from the prior and current proceedings. I accept Mr Price’s evidence save for the following exception.
Mr Price said that with the benefit of the expert reports obtained in the current proceeding, Mr Cherry is better able to appreciate and particularise the impacts of the abuse. Mr Cherry did not give evidence to this effect, nor is this corroborated in any other document. Nor do I accept Mr Price’s assertions as to the state of the law in 2003.

Legislation and applicable principles

Mr Cherry relies on s 27QD of the LAA to apply to set aside a previously settled cause of action. Section 27QE sets out the Court’s powers in respect of such an application:
Court's powers—previously settled causes of action
(1) On an application under section 27QD or otherwise in a proceeding on an action referred to in section 27QA(2), the court, if satisfied that it is just and reasonable to do so—
(a) may make an order setting aside the settlement agreement and any judgment or order giving effect to the settlement of the previously settled cause of action, whether wholly or in part; and
(b) may make any other order that it considers appropriate in the circumstances.
(2) In hearing and determining any action to which this Division applies on a previously settled cause of action, the court, if satisfied that it is just and reasonable to do so—
(a) when awarding damages in relation to the action, may take into account any consideration (whether monetary or non-monetary) paid, payable or given or to be given under—
(i) a settlement agreement set aside under this section; or
(ii) any other agreement related to the settlement that has been set aside under this section; and
(b) when awarding costs in relation to the action, may take into account any amounts paid or payable as costs under—
(i) a settlement agreement set aside under this section; or
(ii) any other agreement related to the settlement that has been set aside under this section.
The leading authority is DZY (a pseudonym) v Trustees of the Christian Brothers (‘DZY’).[50] In construing s 27QE of the LAA, the High Court plurality posed the following question and answer:
[t]he issue may be simply stated — is the operation of s 27QE of the Limitation of Actions Act limited to circumstances where the limitation defence or the Ellis defence materially influenced the claimant‘s decision to settle? The answer is ‘no’.[51]
[50](2025) 99 ALJR 806 (‘DZY’).
[51]Ibid [22] (Gageler CJ, Gordon, Edelman, Steward and Gleeson JJ).
The High Court held that the words ‘just and reasonable’ are words of wide import.[52] Citing Fraser JA in TRG v Board of Trustees of Brisbane Grammar School:[53]
[t]he use of the expression ‘just and reasonable’ to identify the only ground for such an order, the fact that the power is conferred upon courts, and the absence of any express identification of the material factors or the relative weight or significance to be attributed to any of them, compel the conclusion that the legislative purpose encompasses account being taken of the interests of both parties to the settlement in deciding whether it is just and reasonable to set aside the settlement agreement, the relative significance or weight to be given to the material factors in that exercise depending upon a judicial assessment of the particular circumstances of each case.[54]
[52]Ibid [25].
[53](2020) 5 QR 440.
[54]Ibid [28].
In finding that the relevant extrinsic materials reinforced the above construction, the High Court plurality stated:
… the extrinsic materials reinforce that the breadth of the words ‘just and reasonable’ in s 27QE allow a court to set aside settlements in response to a variety of injustices. So, for example, in relation to s 27QE, the Explanatory Memorandum to the Children Legislation Amendment Bill 2019 (Vic) said:
‘It is in the court’s discretion to determine what is just and reasonable according to the circumstances of each case, allowing the court to apply broad principles and take account of any relevant factors. This may include, for example, the relative strengths of the parties’ bargaining positions, the conduct of the parties and the amount of the settlement.’
Similarly, in the Second Reading Speech, the Minister said:
‘In determining what is just and reasonable a court can take into account a number of considerations, informed by the Royal Commission. … Where survivors faced significant disadvantage in pursuing compensation due to legal barriers such as the statute of limitations, the Ellis defence, or the deficiency of the law regarding the duty of care of organisations, settlements entered into should be set aside in the interests of justice, to allow victims to obtain compensation which is deemed adequate by today’s standards.
…
It is not necessary that the existence of the limitation period be the predominant reason as to why the agreement was entered into. There may be a number of reasons that a plaintiff entered into such an agreement, including but not limited to unequal bargaining power, barriers to identifying a proper defendant, feelings of guilt and shame compounded by the burden of giving evidence and being subject to cross-examination, or the behaviour of the relevant institution.’[55]
[55]DZY, [27]-[28] (citations omitted).
Although finding that the Court of Appeal had incorrectly considered the legal barriers, namely, the limitation defence or Ellis defence, as prerequisites or quasi-prerequisites to the exercise of the power under s 27QE, the High Court plurality continued:
[t]hat is not to suggest that the previous legal barriers are irrelevant in determining whether it is just and reasonable to set aside a settlement agreement in whole or in part under s 27QE. One or both of the legal barriers will ordinarily play some part in determining whether it is just and reasonable to set aside a settlement agreement under s 27QE.[56]

Is it just and reasonable to set aside the prior deed?

[56]Ibid [30].

Limitation of actions defence

At the time of Mr Cherry’s prior claim, the LAA applied and may have statute-barred him from bringing his proceeding. However, as was conceded by Mr Cherry, he was successful in overcoming the defendant’s reliance on the limitation defence in his prior proceeding. As described in the LAA ruling, the County Court held that his cause of action accrued on or after 3 April 2001. Mr Cherry recalled being advised that his case was ‘no longer out of time’.[57] Consequently, the limitation period could not have impacted his decision to enter into the prior deed.

Ellis defence

[57]Cherry affidavit, [20].

It is undisputed that the defendant was an entity capable of being sued at the time of the prior proceeding. Any difficulties that other plaintiffs may have faced in issuing proceedings against unincorporated bodies did not apply.

Legal barriers?

Mr Cherry’s submissions

The law on vicarious liability has changed since the prior proceeding. The parties agree that settlement discussions commenced in December 2002. The High Court published New South Wales v Lepore (‘Lepore’)[58] on 6 February 2003. In Lepore, the High Court held that sexual abuse was generally too far removed from a teacher’s duties to have occurred in the course of their employment, although the Court could consider whether the employer had assigned a special role to the teacher vis-à-vis the child. The joint judgment of Gummow and Hayne JJ adopted the traditional Salmond test:[59] ‘that an act is done in the course of employment if it is a wrongful act authorised by the employer, or a wrongful and unauthorised mode of doing an authorised act.’[60] Their Honours held that sexual abuse of a child failed that test. Given the Court’s findings in Lepore, there was a real risk at the time that Mr Cherry’s prior claim would fail, particularly given that the defendant had pleaded that Sword was not an employee, and the abuse was not in the course of his employment. It is unclear how much Lepore impacted the advice given to Mr Cherry by his solicitors.
[58](2003) 212 CLR 511 (‘Lepore’).
[59]Salmond, Law of Torts, 1st ed (1907), 83.
[60]Lepore, [226] (citations omitted).
Before Lepore, the law was less willing to accept that a school could be vicariously liable for sexual abuse committed by a teacher and there was no High Court authority on such an issue. Further, although the High Court had earlier held that schools owed students a non-delegable duty of care, this did not extend to intentional criminal acts.
In 2016, the High Court’s decision in Prince Alfred College Inc v ADC (‘Prince Alfred’)[61] altered the legal landscape of vicarious liability. Therefore, if Mr Cherry’s claim were to be determined today, it is more probable than not that he would succeed in establishing the defendant was vicariously liable.
[61](2016) 258 CLR 134 (‘Prince Alfred’).
In respect of negligence, by his prior ASOC, Mr Cherry pleaded the Fullerton complaint in 1967/8, and his own complaint to Mr Johnson in 1972. The defendant did not admit either complaint. However, in its answers to interrogatories, the defendant says it received a complaint from another student in 1972. Despite this, it did not seek to amend its defence, and it is unclear if that complaint is the Fullerton complaint or another complaint. The timing of the complaint is important because if the defendant received it in 1967, then the School was on notice of Sword’s abuse at that time, as opposed to 1972, being the last year of Mr Cherry’s abuse.

Defendant’s submissions

The law on vicarious liability has remained effectively the same since Lepore in 2003, save for the short interregnum in respect of Bird v DP (A Pseudonym).[62] The Court should not accept Mr Cherry’s submission that the law on vicarious liability was unfavourable when the parties resolved the prior proceeding. In Lepore, the Court held that it would consider any special role the employer had assigned the employee vis-à-vis the victim. This was a positive movement for plaintiffs in respect of vicarious liability. Mr Cherry’s evidence is that he was abused during one-on-one reading classes.
[62](2024) 419 ALR 552 (‘Bird v DP’).
Mr Cherry says his ability to establish vicarious liability was comprised; however, discovery and interrogatories had been completed before the 2003 settlement. The defendant had discovered Sword’s personnel records which confirmed his employment at the School. In the defendant’s prior answers to interrogatories, it gave evidence of Sword’s role at the School. It is more likely than not that Mr Cherry would have been successful in establishing a case in vicarious liability.
Regardless, Mr Cherry’s reliance on the vicarious liability issue is misplaced. Mr Cherry admits in his written submissions that it is unknown what reliance his prior solicitors placed on vicarious liability. Mr Cherry gave evidence of the advice he received from his prior solicitors regarding risks, but he did not say that one of these risks was whether or not he would succeed on vicarious liability.
In respect of negligence, the defendant’s prior answers to interrogatories deposed that Mr Sheard had received a complaint in 1972 and subsequently spoke with Sword. The answers also admitted the defendant did not know of any policies or protocols in place to guide the School or its teachers should they suspect a teacher might be indecently assaulting or interfering with students.

Further, Mr Cherry, KRC and G&O were aware of three related claims in which three male students alleged abuse by Sword. Mr Cherry’s evidence is that he contacted numerous former students who had disclosed their abuse by Sword. He could have called these former students as witnesses to support him in establishing his abuse.
On the balance of probabilities and in considering the liability evidence available to Mr Cherry before settlement, it is likely a court would have been satisfied the abuse had occurred and the defendant was negligent.
While conceding that the Court’s discretion is unfettered, it cannot be reasonable for the prior deed to be set aside because Mr Cherry now says he has a good chance at establishing vicarious liability. In the prior proceeding, he had a good case in negligence. He had also brought claims for breaches of a non-delegable duty and fiduciary duty. There must be some finality and certainty in litigation. The law must be applied as it was at the time, subject to unfair barriers.

Analysis

There were no legal barriers affecting Mr Cherry’s prospects of success at the time he entered into the prior deed.
Turning now to consider various elements of Mr Cherry’s case.

The abuse

Mr Cherry, in both his prior and current proceedings, was and is in a position to call evidence to corroborate the abuse. In 1971/2, he complained about Sword to Mr Johnson. It is unclear whether he made any enquiries to locate Mr Johnson and/or obtain his evidence. In about 1997, Mr Cherry contacted former students from the School, and a ‘number of them’ disclosed abuse by Sword.[63] On Mr Cherry’s evidence, Sword suicided shortly after being interviewed by police.[64] In 2000, he spoke with BD, who also disclosed abuse by Sword.[65] From at least May 2001, Mr Cherry and/or his prior solicitors were aware of the Fullerton complaint. The defendant’s prior answers to interrogatories also refer to a 1972 complaint to Mr Sheard, and suspicions held by Ms Saunders.[66] While I am not in a position to assess the evidence of these potential witnesses or comment on any tendency evidence that may be led, for the purpose of this ruling, I am satisfied that Mr Cherry had a relatively strong chance of proving the abuse occurred.

Vicarious liability

[63]Exhibit ‘YMF-1’ to the first Figiel affidavit, 111.

[64]Cherry affidavit, [7].

[65]Exhibit ‘YMF-1’ to the first Figiel affidavit, 111.

[66]Ibid 34.

In his prior claim, Mr Cherry alleged the defendant was vicariously liable for the actions of Sword.[67] The defendant denied vicarious liability.[68] The defendant pleaded no material facts in its defence.
[67]Prior ASOC, [11] as contained within exhibit ‘YMF-1’ to the first Figiel affidavit, 12-19.
[68]Prior amended defence, [6] as contained within exhibit ‘YMF-1’ to the first Figiel affidavit, 20.
I am not satisfied that Mr Cherry received advice regarding the risks of succeeding on vicarious liability. His evidence was that in mid-2001, KRC advised him that the defendant had responded to his claim and said, among other things, that they were ‘not responsible for Sword’s actions’.[69] Then, in around April 2003, he was advised that ‘there would be risk and difficulty in establishing the defendant was responsible for Swords (sic) conduct and the abuse’.[70] I am not prepared to infer that Mr Cherry’s use of the word ‘responsible’ in this context concerns the defendant’s vicarious liability. I accept that Mr Cherry received legal advice from G&O to the effect that his claim was risky. However, there is no evidence that this was because the law on vicarious liability was a legal barrier. There was no evidence from Mr Cherry – or any contemporaneous evidence - that the law on vicarious liability impacted his decision to settle.
[69]Cherry affidavit, [15].
[70]Ibid [24].
The authority of Lepore was applicable at the time Mr Cherry’s first offer was made. Accordingly, there is a timing problem with Mr Cherry’s submission that the law on vicarious liability before Lepore was a barrier. Further, there is no evidence that he received or relied on such advice.
On 11 December 2002, the defendant made an offer of compromise of $100,000.[71] G&O requested that this offer remain open until 17 January 2003.[72] It is unclear whether Mr Cherry responded to this offer or let it lapse. In any event, it was not until 11 March 2003 that Mr Cherry made his first offer: $175,000 ‘together with claimable party/party costs and disbursements’.[73]
[71]Exhibit ‘YMF-1’ to the first Figiel affidavit, 180.
[72]Ibid 181-182.
[73]Ibid 183. See also exhibit ‘YMF-1’ to the second Figiel affidavit, 6.
Lepore continues to be applied by the High Court.[74] It did not bar claims of vicarious liability against school authorities for historic sex abuse. However, it created uncertainty because there was no majority view on vicarious liability. The judgment of Gummow and Hayne JJ rejected the notion that a school could be vicariously liable, requiring a plaintiff to establish that the employee was engaged in conduct in the intended pursuit of the employer’s interests or the intended performance of the contract, or in the ostensible pursuit of the employer’s business or in the apparent exercise of the employer’s authority.[75] Callinan J held that deliberate criminal misconduct lies outside the scope or course of an employed teacher’s duty.[76] On the other hand, Gleeson CJ, Gaudron and Kirby JJ did not close the door to vicarious liability. They held that there may be circumstances in which a school authority may be vicariously liable. [77] McHugh J did not decide the question, considering the case to be one of direct liability.[78]
[74]See Bird v DP, [49], [53] (Gageler CJ, Gordon, Edelman, Steward and Beech-Jones JJ).
[75]Lepore, [239].
[76]Ibid [343]-[345].
[77]Ibid [67]-[74] (Gleeson CJ), [130]-[131] (Gaudron J), [309]-[333] (Kirby J).
[78]Ibid [136].
In 2016, the High Court in Prince Alfred provided guidance as to a school authority’s vicarious liability for sexual abuse committed by a teacher, acknowledging that guidance was required for lower courts due to the differing views expressed by the Court in Lepore.[79] The High Court held that in Lepore, Gummow and Hayne JJ may have taken too narrow a view on vicarious liability.[80] The High Court held in considering whether an employer was vicariously liable for an employee’s actions that may constitute a criminal offence,
…the relevant approach is to consider any special role that the employer has assigned to the employee and the position in which the employee is thereby placed vis-à-vis the victim. In determining whether the apparent performance of such a role may be said to give the ‘occasion’ for the wrongful act, particular features may be taken into account. They include authority, power, trust, control and the ability to achieve intimacy with the victim. The latter feature may be especially important. Where, in such circumstances, the employee takes advantage of his or her position with respect to the victim, that may suffice to determine that the wrongful act should be regarded as committed in the course or scope of employment and as such render the employer vicariously liable.[81]
[79]Prince Alfred, [10], [38] (French CJ, Kiefel, Bell, Keane and Nettle JJ).
[80]Ibid [79].
[81]Ibid [81].
The High Court’s clarification in Prince Alfred assisted plaintiffs with vicarious liability claims against school authorities based on sexual abuse of them as students by teachers. It has always been the case that ‘the wrongful acts must be committed in the course or scope of the employment’.[82] However, the High Court clarified that although a wrongful act is a criminal offence, it does not preclude a finding of vicarious liability.[83] I accept that the High Court’s clarification of vicarious liability in Prince Alfred meant that there was a more favourable legal environment for plaintiffs. This is consistent with the next authority.
[82]Bird v DP, [48] (Gageler CJ, Gordon, Edelman, Steward and Beech-Jones JJ).
[83]Prince Alfred, [80] (French CJ, Kiefel, Bell, Keane and Nettle JJ).
In WCB v Roman Catholic Trusts Corporation for the Diocese of Sale (No 2) (‘WCB – first instance’),[84] the plaintiff sued a Catholic Diocese for child abuse he had suffered at the hands of a priest. The plaintiff had previously issued a proceeding in the County Court and had not pleaded vicarious liability, with Keogh J finding this may have been because of the ‘less favourable legal environment which existed’ at that time (being in 1996).[85] In considering whether it was just and reasonable to set aside the plaintiff’s prior deed, his Honour stated:
[t]he clarification of the common law in relation to vicarious liability is favourable to the plaintiff in a way which increases his prospects of succeeding in the action against the Diocese, and of obtaining compensation deemed adequate by today’s standards. The improved position of the plaintiff in relation to vicarious liability is a consideration which weighs in favour of granting the application to set aside the Deed.[86]
[84][2020] VSC 639 (‘WCB – first instance’).
[85]Ibid [195].
[86]Ibid [198].
On appeal, the Court stated it was clear that Keogh J ‘gave little weight’ to this factor in deciding whether it was just and reasonable to set aside the plaintiff’s prior deed. The Court held:
[c]ertainly, the principles relating to vicarious liability, as understood before the explanation of those principles in Prince Alfred College, would have presented some difficulty to the plaintiff in the proceedings that he commenced in 1996. We doubt that the circumstance, that the then understanding of vicarious liability was less favourable to the plaintiff, would of itself be relevant in determining whether the settlement agreement should be set aside.[87]
[87]Roman Catholic Trusts Corporation for the Diocese of Sale v WCB (2020) 62 VR 234, [116] (Beach, Kaye and Osborn JJA) (‘WCB’), citing TRG v The Board of Trustees of the Brisbane Grammar School [2019] QSC 157, [263]-[265] (Davis J).
Consequently, although I accept that the law on vicarious liability has been clarified since Mr Cherry entered into the prior deed, I give this no weight, particularly in circumstances where there is no evidence that it impacted upon his decision to settle. Moreover, he had another cause of action available to him: a direct claim in negligence.
Negligence
In his prior claim, Mr Cherry alleged the abuse was caused by the negligence of the defendant, its servants and agents.[88] His particulars of negligence included failing to ascertain properly or at all, whether Sword was a suitable person to teach and continue teaching primary school children, failing to monitor Sword’s one-on-one teaching sessions with Mr Cherry, allowing Sword to regularly remain for lengthy periods in private with and near Mr Cherry without adequate supervision, failing to investigate allegations that Sword had indecently assaulted students at the School, failing to undertake its obligation to protect the welfare of Mr Cherry who was within its care, and failing to provide appropriate and effective tuition. The defendant denied that it was negligent.[89] However, in its prior answers to interrogatories, Ms Hart, on behalf of the defendant, admitted that during the relevant period it did not have any protocols or policies in place to guide the response of the School and its teachers in the event there was a suspicion a teacher might be indecently assaulting or otherwise interfering with students. Further, it admitted a 1972 complaint to Mr Sheard. There is a dispute about whether this 1972 complaint to Mr Sheard is the Fullerton complaint, or whether the Fullerton complaint occurred in 1967/8. From Mr Cherry’s submissions, it appears this dispute remains unresolved today.[90] It is not for me to determine this issue on this application.
[88]Prior ASOC, [12] as contained within exhibit ‘YMF-1’ to the first Figiel affidavit, 12-19.
[89]Prior amended defence, [7] as contained within exhibit ‘YMF-1’ to the first Figiel affidavit, 20.
[90]Although I note the Fullerton complaint was not pleaded or particularised in the statement of claim filed in the current proceeding.
In both the current and prior proceedings, the defendant denies that the abuse was caused by its negligence. There is no evidence that Mr Cherry’s current case in negligence has altered drastically or at all since the prior proceeding. In fact, Mr Cherry’s counsel queried the proper basis for the defence in both proceedings. I will address this submission below.
Ultimately, it is not for me to determine the nature of the duty owed to Mr Cherry or any breach of such duty. However, on the material before me, I am satisfied that Mr Cherry had a prima facie case in negligence at the time of his prior proceeding.

Non-delegable duty

In his prior claim, Mr Cherry alleged the defendant breached its non-delegable duty of care.[91] The defendant denied the allegation.[92]
[91]Prior ASOC, [12A], [12B] as contained within exhibit ‘YMF-1’ to the first Figiel affidavit, 12-19.
[92]Prior amended defence, [8] as contained within exhibit ‘YMF-1’ to the first Figiel affidavit, 20.
Liability for breach of non-delegable duty is direct, not vicarious.[93] Such duties have long been held to arise out of the school and pupil relationship.[94] In Lepore, the majority held that a school authority’s non-delegable duty of care did not extend to the intentional criminal conduct of a teacher who had sexually abused a student.[95] Prince Alfred did not reconsider the non-delegable duty.[96]
[93]Bird v DP, [36] (Gageler CJ, Gordon, Edelman, Steward and Beech-Jones JJ).
[94]Ibid [37], citing Commonwealth v Introvigne (1982) 150 CLR 258 (‘Introvigne’). Introvigne was distinguished in Lepore.
[95]Lepore, [36]–[39] (Gleeson CJ), [254]–[263] (Gummow and Hayne JJ), [292]–[296] (Kirby J), [340] (Callinan J).
[96]Prince Alfred, [37] (French CJ, Kiefel, Bell, Keane and Nettle JJ).
There was no evidence from Mr Cherry that the law on the non-delegable duty impacted his decision to settle.
Before turning to the next factors, I note that Mr Cherry also made a claim based on breach of fiduciary duty. There was no evidence from him about any legal barriers impacting on that cause of action.
This factor weighs against setting aside the prior deed.

Adequacy of the settlement sum; other risk factors

Mr Cherry’s submissions

The settlement sum is inadequate by today’s standards. Mr Cherry’s evidence is that he received $100,000 once costs and disbursements had been deducted from the settlement sum. Relying on the RBA inflation calculator, $100,000 is equivalent to $175,649.15 in 2024. By today’s standards, he would likely receive between $400,000 to $500,000 in general damages alone. The costs and disbursements deducted from the settlement sum are unknown. The $18,000 figure included in the G&O 25 March 03 letter may not comprise all fees, for instance, it may not include solicitor/client costs. Mr Cherry has estimated he received $100,000 in his pocket, but it may be more.
In his prior proceeding, Mr Cherry relied upon the Walton report. This report attributed his psychiatric condition to the abuse. In the current proceeding, Mr Cherry relies upon a medico-legal report of Dr Matthew Tagkalidis dated 2 March 2022 (‘Tagkalidis report’). Dr Tagkalidis attributed 100% of Mr Cherry’s emotional vulnerability and disorders to the abuse. It is in the interest of justice to allow a sexually abused child to recover damages against the defendant in circumstances where the medical evidence attributes Mr Cherry’s psychiatric injury to the abuse.
In his written submissions, Mr Cherry said the settlement sum did not appear to factor in an economic loss claim. However, at hearing, his counsel submitted that the sum was comprised of damages for both pain and suffering and economic loss. In comparison to the actuarial report obtained in the current proceeding, which estimates Mr Cherry’s economic loss between $3,639,697 and $1,923,835,[97] the settlement sum is significantly less than the amount he may be awarded today. In reply to the defendant’s submissions, Mr Cherry said that he should not be criticised for failing to disclose the abuse in the course of his earlier workplace injury proceeding.
[97]Exhibit ‘KP-1’ to the Price affidavit 70.

Defendant’s submissions

Mr Cherry’s evidence was that he only received $100,000 of the settlement sum after costs and disbursements had been deducted. Yet the G&O 25 March 03 letter stated that Mr Cherry’s claimable party/party costs, inclusive of claimable disbursements, were $18,000. It is difficult to accept that unrecoverable costs were a further $62,000. Relying on the RBA inflation calculator and assuming costs were approximately $20,000, $160,000 is equivalent to about $280,000 today.
Mr Cherry had three medical opinions available to him before settling the prior proceeding: the Walton report, the Kornan report and the Joblin report. These reports supported his claim for damages, albeit the Kornan report was less supportive than the other two. The Walton report was particularly supportive. The Tagkalidis report relied on in the current proceeding does not extend, expand or improve Mr Cherry’s claim for damages.
The settlement sum is within range according to today’s standards given the myriad of reasons that a discount may have been applied, including difficulties faced by Mr Cherry regarding his economic loss claim. Despite his literacy issues, Mr Cherry had been consistently employed before a workplace injury in 1996; his workplace injury had prevented him from working for several years, so too his child care responsibilities. The medical reports obtained in the workplace injury proceeding did not attribute Mr Cherry’s psychiatric condition or treatment to the abuse as he had not disclosed the abuse; according to some medical reports obtained in the workplace injury proceeding there was evidence his psychiatric condition was improving. Mr Cherry was charged, convicted and incarcerated for criminal offending against his former wife, which the trial judge described as a ‘particularly nasty type of offence’; the criminal prosecution and conviction may have impacted his prospects of employment and claim for future pecuniary loss. He had not received any significant treatment for the abuse.
In the current proceeding, Mr Cherry has engaged a forensic accountant in support of his claim for economic loss. He could have done so in the prior proceeding. In fact, his lawyers in his workplace injury proceeding engaged Cumpston Sarjeant to prepare a report in relation to his pecuniary loss. Any failure on his part or on his prior solicitor’s part to obtain such evidence in the prior proceeding should not be visited upon the defendant.

Analysis

The settlement sum was inclusive of legal costs. However, the defendant may have already paid some legal costs to Mr Cherry. In the LAA ruling, Anderson J ordered that the defendant pay Mr Cherry’s costs of the application on scale and certified counsel's fees. Later, in the G&O 25 March 03 letter, Mr Cherry’s solicitors assessed party/party costs at $18,000. It is unclear if the $18,000 included the costs of the LAA application. Mr Cherry recalls receiving about $100,000 in his pocket. This would mean his solicitor/client costs were $62,000. Mr Cherry’s counsel conceded that Mr Cherry may be mistaken in his recollection of his legal costs. I agree. Having considered the stage of the proceeding at which settlement occurred, and the material before me, it seems unlikely that solicitor/client costs at that time would have been that high. Experience suggests they would more likely have been in the range of $15,000 to $20,000. Allowing for a deduction of $20,000 for solicitor/client costs, and $18,000 for party/party costs would leave Mr Cherry with about $142,000.

It is common ground that there was medical evidence supporting Mr Cherry’s claim for pain and suffering damages and a claim for economic loss prior to the settlement.[98] There is also current medical evidence supporting such a claim.[99]
[98]See exhibit ‘KP-1’ to the Price affidavit, 23-33.
[99]Ibid 43-55.
However, in Mr Cherry’s case, an award of damages for pain and suffering and economic loss would have likely been discounted due to a range of causative and unrelated factors. Unfortunately, there is no evidence as to what factors were considered. Turning now to these potential factors.
On 9 June 1996, Mr Cherry suffered a workplace injury whilst employed as a derrickman with International Sea Drilling Ltd. In 1997, he issued a compensation claim against his former employer in the County Court of Victoria. Medical reports obtained in that proceeding variously diagnose Mr Cherry with multiple-level disc prolapse, degenerative cervical spinal disease, moderate anxiety, depression and post-traumatic stress disorder. The medical reports do not refer to childhood abuse. The claim resolved for $500,000, comprising pecuniary loss and damages for pain and suffering, with Mr Cherry signing a deed of release with his former employer on 30 September 1998.[100] The workplace injury proceeding and subsequent settlement may have impacted both Mr Cherry’s claim for general damages insofar as his psychiatric injuries could have been attributed to his workplace accident, and his claim for economic loss, at least from the date of the workplace injury. I do not consider that Mr Cherry’s failure to disclose the abuse in the workplace injury proceeding would have significantly impacted his credit.
[100]See exhibit ‘YMF-1’ to the first Figiel affidavit, 36-101.
Mr Cherry was convicted of a criminal offence against his former wife that occurred on 10 June 2002. This was, of course, during the prior proceeding and six months before the first offer of compromise was served. Unfortunately, there is limited evidence before me as to when Mr Cherry was investigated and/or charged with the criminal offending. Nevertheless, in his affidavit, Mr Cherry deposed that during the ‘settlement period’ G&O advised him about the risk of adverse costs. He said he was ‘not working consistently or full-time’, ‘experiencing a relationship breakdown and a criminal matter’.[101] In a medical-legal report obtained in the current proceeding, Mr Cherry told Dr Alan Jager that he did not have any criminal convictions save for the conviction following his former wife’s allegation.[102] I therefore consider the ‘criminal matter’ Mr Cherry was dealing with during the ‘settlement period’ was the criminal investigation, if not charge, of the offending against his former wife. This criminal investigation and/or charge may have been a consideration in discounting damages for at least future economic loss given the likelihood of a period of incarceration.
[101]Cherry affidavit, [23].
[102]Exhibit ‘KP-1’ to the Price affidavit, 62.
The defendant gave its solicitors instructions to settle for $229,000 plus costs.[103] The settlement of $180,000 was a substantial discount on this amount. That is, substantially less than the defendant’s assessment of damages.
[103]See exhibit ‘YMF-1’ to the first Figiel affidavit, 129.
Taking into account all the circumstances above, I find that the settlement sum is moderately less than what Mr Cherry might have been awarded if his prior claim had succeeded at trial.
The settlement of $180,000 inclusive of legal costs is also substantially less than what Mr Cherry might be awarded today for general damages and economic loss.[104]
[104]See the report prepared by Mark Thompson estimating Mr Cherry’s loss between approximately $1.9mil and $3.6mil: exhibit ‘KP-1’ to the Price affidavit, 68-115.
The inadequacy of the settlement amount weighs in favour of setting aside the prior deed.

Adequacy of legal representation; bargaining power and conduct of the defendant

Mr Cherry’s submissions

The defendant’s conduct in the prior proceeding demonstrated the unequal bargaining power between the parties. In 2002/3, the defendant was aware of numerous allegations of sexual abuse committed by Sword at the School during the relevant period but did not disclose this information to Mr Cherry. For instance, the Minter Ellison 29 Oct 02 file note indicates the defendant had resolved a claim presumably with BD. The defendant was also aware of Mr Fullerton’s claim, evidenced by Anderson J’s reference to Fullerton v State of Victoria in the LAA ruling. The defendant’s prior affidavit of documents did not include the Fullerton v State of Victoria ruling or any documents relevant to Mr Fullerton’s claim, despite Mr Cherry pleading the Fullerton complaint. Nor did it provide any documents regarding BD’s claim. These were documents that would have been relevant to the issues in dispute. By 2002, the defendant was aware of these other allegations against Sword and the strength of Mr Cherry’s claim, but Mr Cherry was not possessed with the same information in its entirety.
At no stage in the prior proceeding did the defendant seek to amend its defence despite its pleadings contradicting its prior answers to interrogatories.
Even in the current proceeding, the defendant has pleaded a blanket ‘do not admit’ in response to Mr Cherry’s pleading that the Principal knew or ought to have known that Sword was not suitable to work as a teacher. The defendant has not sought to particularise any complaints received by the Principal, despite its prior answers to interrogatories. The defendant’s current conduct may be extrapolated and is reflective of its conduct in the prior proceeding. There is no proper basis for its pleadings.
The Minter Ellison 25 Mar 03 file note indicates the defendant provided instructions to settle Mr Cherry’s prior proceeding for ‘$229k + costs’. The proceeding then settled for the settlement amount, providing the defendant with a discount of what it knew its risks to be.
The G&O 5 May 03 letter corroborates Mr Cherry’s evidence that financial considerations were at the forefront of his decision-making process, with the advice he received being that he could lose his house if he continued with his prior proceeding. This speaks to the bargaining position of the parties. It is immaterial who made the final offer of the settlement sum, the pressure on Mr Cherry should be seen within the context of the litigation landscape.

Defendant’s submissions

In the prior proceeding, Mr Cherry was represented by personal injury lawyers, who then engaged barristers who also specialised in personal injury.
The parties negotiated a settlement over a period of months, with the defendant first serving an offer of compromise in December 2002. Mr Cherry served his own offer of compromise. There is no evidence that Mr Cherry was coerced or put under time pressure when settling his prior proceeding. It did not settle on the eve of an impending court date. Further, there is no evidence that he didn’t understand the consequences. His signature on the prior deed was witnessed by his lawyer at the time.
Mr Price’s assertions that Mr Cherry’s psychiatric conditions, limited literacy and learning difficulties compromised his ability to comprehend the legal advice given to him during the prior proceeding and the implications of signing the prior deed are not supported by medical evidence or Mr Cherry’s own evidence. In light of the contemporaneous file notes detailing Mr Cherry’s attitude during the prior proceeding, Mr Price’s assertions should not be accepted.
There is no evidence that the conduct of the defendant adversely impacted Mr Cherry’s ability to pursue the prior proceeding. Mr Cherry made submissions regarding the defendant’s pleadings in the prior proceeding and its failure to admit or particularise the Fullerton complaint despite its prior answers to interrogatories. In the prior ASOC, Mr Cherry pleaded that the Fullerton complaint occurred in 1967/8. Sword commenced at the School on 4 February 1969.[105] There is a dispute on the evidence as to this complaint. In its prior answers to interrogatories, the defendant detailed a complaint made to Mr Sheard in 1972 and his subsequent action, and a concern raised by the School’s canteen manager. There is no inconsistency between the defendant’s prior pleadings and its prior answers to interrogatories.
[105]Counsel for the defendant referred me to Sword’s teacher card, however, there is no such document in evidence. I do note the defendant’s pleading at [7(b)] of its defence in the current proceeding that Sword was a teacher at the School from 4 February 1969 to November 1972.
In respect of the current proceeding, Mr Cherry’s pleadings as to the defendant’s alleged knowledge are vague. They do not include the Fullerton complaint. The defendant cannot be criticised for their pleadings.
The Court cannot be satisfied that the defendant acted inappropriately or that its conduct gave rise to a power imbalance in respect of the parties’ bargaining power. Nor is there any evidence that the defendant’s conduct forced Mr Cherry into entering the prior deed.
Mr Cherry gave evidence that he was advised about legal costs and the risk of adverse costs if unsuccessful. There was certainly a risk to him: he had a house and had received a significant Workcover settlement. However, this is not a reason that the Court ought to give special consideration to, as it is a risk that applies to every litigant.

Analysis

I accept that the defendant was in a more powerful bargaining position than Mr Cherry. The defendant is an experienced litigant with the resources of the State. Nevertheless, he was legally represented and his solicitors actively negotiated the settlement sum. Mr Cherry made two offers of compromise. In making the second offer, his solicitor informed the defendant that it was ‘put on a take it or leave it basis’ and any ‘counteroffer at a lesser sum [would] be rejected’.[106]
[106]Exhibit ‘YMF-1’ to the first Figiel affidavit, 130-131.
I am not satisfied that the defendant’s conduct hindered Mr Cherry’s ability to bargain with the defendant. Both parties were aware of the Fullerton complaint. Moreover, due to the defendant’s prior answers to interrogatories and his own inquiries, Mr Cherry was aware of complaints regarding other students of the School abused by Sword. The defendant was not required to offer or settle the claim for the upper limit it had assessed, being $229,000 plus costs. It was open to the defendant to accept Mr Cherry’s offer.
Mr Cherry received advice that if he lost, he could be responsible for the defendant’s legal costs and that he could lose his house. He said he could not even afford his own legal costs, let alone the defendant’s costs. The possibility of an adverse cost order is a risk faced by most parties.
I assess this factor marginally in favour of setting aside the prior deed.

Mr Cherry’s mental health; feelings of guilt and shame

Mr Cherry’s submissions

It is clear that Mr Cherry was under stress. He had and continues to have a psychiatric injury.

Defendant’s submissions

In 1997, Mr Cherry reported the abuse to police. He pursued Sword and contacted other students. He then sought legal advice and issued the prior proceeding. He changed solicitors from KRC to G&O. In his affidavit in support of the current application, he gave evidence that he was determined to go to Court.
During the prior proceeding, Mr Cherry was not reluctant to give evidence or to speak out due to feelings of guilt or shame. Mr Cherry gave evidence before Anderson J in his LAA application and was cross-examined by senior counsel for the defendant. There is no evidence that this impacted his decision to resolve the prior proceeding.
Mr Cherry has not given evidence that he experienced psychiatric distress due to the prior proceeding or that his mental health deteriorated over the course of the prior proceeding. He said that he settled because he felt like he didn’t have another option, but he did not say it was due to his psychiatric condition or deteriorating mental health. Nor does the medical evidence support this. He does say that he was feeling unwell and was depressed and anxious, but he was still motivated to go to Court.
Around the time he entered into the prior deed, Mr Cherry was experiencing other issues, including his family break-up and the criminal offending against his former wife.
The current medical evidence does not suggest that Mr Cherry’s medical conditions have improved so that he now has a greater capacity to consider the impacts of the abuse and understand legal advice given to him in the current proceeding. Based on Mr Cherry’s evidence, his fundamental reason for seeking to set aside the prior deed is because he wants additional compensation. It is not because of his psychiatric condition.

Analysis

There is no evidence to suggest Mr Cherry lacked capacity at the time of entering into the deed. I accept that he was diagnosed with chronic post-traumatic stress disorder by Dr Walton, and post-traumatic stress disorder, chronic anxiety and depression by Dr Kornan. There is no evidence that these conditions impacted upon his decision to settle. Nor did Mr Cherry give evidence that any feelings of guilt or shame induced him to settle. I weigh this factor neutrally.

Parties’ interests

Mr Cherry says it is in the interests of justice to set aside the deed. On the other hand, the defendant says that it is in the interests of justice to allow a sexually abused child to recover damages where the medical evidence is supportive: Mr Cherry did so in the prior proceeding. The defendant says that it is not in the interest of justice for him to have another opportunity; litigation favours finality.
There are competing interests. I accept that the defendant has an interest in maintaining the prior deed. I take into account that it paid, and Mr Cherry received, settlement monies per the deed. On the other hand, I accept it is congruent with Mr Cherry’s interests to set aside the deed. The question is what is just and reasonable.

Conclusion

I find that it is not just and reasonable to set aside the prior deed. I am not satisfied that there was any legal barrier that impacted Mr Cherry’s decision to enter into the settlement deed. He was paid a settlement amount per the deed. While it is likely less than he would have received if successful at trial in 2003, he entered into the deed with legal advice. I accept Mr Cherry was suffering from mental health conditions at the time of settlement, but there is no evidence his health impacted his decision to settle. He was concerned about the consequences of adverse costs if he were unsuccessful at trial. This is a risk faced by most litigants.

[2025] VSC 603

23 September 2025