Eng20 (by her litigation guardian Eng20a) v Med-El Implant Systems Australasia Pty Ltd
[2022] FedCFamC2G 473
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
ENG20 (by her litigation guardian ENG20A) v MED-EL Implant Systems Australasia Pty Ltd [2022] FedCFamC2G 473
File number(s): PEG 311 of 2020 Judgment of: JUDGE LUCEV Date of judgment: 15 June 2022 Catchwords: CONSUMER PROTECTION – product liability claim – settlement of proceeding – approval of settlement by Court
PRACTICE AND PROCEDURE – Respondent legally incapable – settlement – approval of settlement by Court – best interests of applicant – requirement that application be accompanied by opinion of independent lawyer – settlement approved
Legislation: Australian Consumer Law ss 54, 55, 259(4)
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 1.06(2)
Federal Court Rules 2011 (Cth) rr 9.70, 9.71
Cases cited: Butler v Djerriwarrh Employment & Education Services Inc [2015] FCA 296
Gillespie v Alperstein [1964] VR 749
Harrington v Catholic Education Office of Western Australia & Anor [2014] FCCA 2260
Hickey v Public Advocate (Victoria) [2012] FCA 1203
Re Barbour’s Settlement; National Westminster Bank Ltd v Barbourand others [1974] 1 All ER 1188
Reid & Anor v Marilandy Pty Ltd [2017] FCCA 2403; (2017) 325 FLR 235
Smith v Marriot Support Services [2013] FCA 312
Wade v State of Victoria (No 2) [2012] FCA 1080
Division: Division 2 General Federal Law Number of paragraphs: 17 Date of hearing: 15 June 2022 Place: Perth Counsel for the Applicant: Mr J Johnson Solicitor for the Applicant: Julian Johnson Lawyers Counsel for the Respondent: Mr K Grunder by Windows Teams Solicitor for the Respondent: Wotton Kearney Lawyers ORDERS
PEG 311 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: ENG20 (BY HER LITIGATION GUARDIAN ENG20A)
Applicant
AND: MED-EL IMPLANT SYSTEMS AUSTRALASIA PTY LTD ACN 161 162 385
Respondent
ORDER MADE BY:
JUDGE LUCEV
DATE OF ORDER:
15 JUNE 2022
THE COURT ORDERS THAT:
1.Pursuant to Rule 9.70 and 9.71 of the Federal Court Rules 2011 (Cth) the applicant and respondent do have leave to compromise the action in accordance with the terms of the draft Deed of Release between the applicant and the respondent (the Deed), annexed to the affidavit of ENG20A, sworn on 27 April 2022.
2.Within 14 days of the date of this order, ENG20A, on behalf of the applicant, and the respondent shall execute the Deed giving effect to the compromise.
3.The applicant consequently do have leave to thereafter consent to this action’s dismissal.
4.The Public Trustee be appointed as trustee of such monies as are payable to the applicant pursuant to the Deed.
5.The Public Trustee, as trustee of such monies, be empowered at its discretion to apply from time to time, until further order, the whole or any part of the income from the investment of such monies with recourse if considered necessary to the capital thereof for the maintenance, welfare and advancement or otherwise for the benefit of the applicant, including in particular, but not limited to, payment in respect to her ongoing care, support and needs, until she attains the age of 18.
6.The Public Trustee on 27 January 2032 pay to the applicant, the then remaining balance of monies held by it as trustee, if any, upon her turning 18 years of age and such trust will thereupon be terminated.
7.Liberty to apply with respect to the investment of monies, the trusts and generally.
8.Pursuant to r 2.32 of the Federal Court Rules 2011 (Cth), the affidavit of ENG20A sworn on 27 April 2022 and the annexures to it unless and until further order must be treated as confidential to the applicant in this proceeding and until further order:
(a)must be marked as confidential to the parties on the Court’s Electronic Court File; and
(b)must not be available for inspection by the respondent or the public, disclosed in open court or disclosed in the open part of any court transcript.
9.Liberty to apply to the respondent within seven days.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
(Edited ex tempore reasons)JUDGE LUCEV
Before the Court is an Application in a Proceeding (“Approval Application”) for the approval of a settlement agreement (“Settlement Deed”). The applicant is an eight year old minor, anonymised as ENG20. ENG20A is the litigation guardian on behalf of ENG20.
The Settlement Deed will not be binding unless the Court grants the Approval Application pursuant to r 9.70 of the Federal Court Rules 2011 (Cth) (“FC Rules”), which are applicable by reason of r 1.06(2) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth (“GFL Rules”), the GFL rules being insufficient for present purposes in that they do not provide an approval mechanism for settlement in cases such as this.
The Settlement Deed includes a confidentiality clause preventing the disclosure of the terms of settlement. For this reason, the Court’s published reasoning in this matter will, to some extent, be restricted.
The Originating Application (“Substantive Application”) together with a Statement of Claim was filed on 15 October 2020. It is sufficient to observe that the claim relates to product liability and relies upon ss 54 and 55 of the Australian Consumer Law (“ACL”), and claims compensation under s 259(4) of the ACL.
The matter was listed for a directions hearing on 3 November 2020, and orders were made at the directions hearing, which, among other things, referred the matter to mediation before a Registrar of the Court. On 21 April 2020 mediation before a Registrar of the Court resulted in a settlement subject to judicial approval of a settlement deed.
The Approval Application seeks the Court’s approval of the Settlement Deed under r 9.70 of the FC Rules. The Approval Application was accompanied by an affidavit of ENG20A (“ENG20A Affidavit”), annexing the Settlement Deed and the opinion of a legal practitioner, Mr Julian Johnson (“Mr Johnson”).
Orders are also sought to maintain confidentiality of certain material, to appoint the Public Trustee as trustee of monies paid under the Settlement Deed, for execution of the Settlement Deed and for the subsequent dismissal of these proceedings.
Rules 9.70 and 9.71 of the FC Rules concern an application by a litigation representative for approval of an agreement where proceedings have already commenced in the Court.
Rule 9.71 of the FC Rules allows a litigation representative to apply to the Court for approval of an agreement. Rule 9.71 of the FC Rules requires that:
(1) An application by a litigation representative for approval of an agreement must be made by filing an interlocutory application.
(2) The interlocutory application must be accompanied by the following:
(a) an affidavit stating the material facts on which the application relies;
(b) the agreement that is sought to be approved;
(c)an opinion of an independent lawyer that the agreement is in the best interests of the person under a legal incapacity.
The relevant legal principles were summarised as follows in Reid & Anor v Marilandy Pty Ltd [2017] FCCA 2403; (2017) 325 FLR 235 at [12]-[15] per Judge Lucev as follows:
(a)in Butler v Djerriwarrh Employment & Education Services Inc [2015] FCA 296 (“Butler”), when determining whether or not to approve a settlement agreement, Mortimer J at [10] stated that the Court must be satisfied the settlement is in the best interests of the legally incapable person: citing Gillespie v Alperstein [1964] VR 749; Smith v Marriot Support Services [2013] FCA 312 at [12] per Tracey J;
(b)when making this determination, pursuant to r 9.71(2)(c) of the FC Rules the Court should be assisted by the opinion of an independent lawyer;
(c)in Wade v State of Victoria (No 2) [2012] FCA 1080 (“Wade (No 2)”) and Hickey v Public Advocate (Victoria) [2012] FCA 1203 (“Hickey”), lawyers acting for the party in each case were found to be an independent lawyer for the purposes of r 9.71(2)(c) of the FC Rules provided the opinion given was in furtherance of the lawyer’s duty to assist the Court: Wade (No 2) at [8]-[9] per Bromberg J and Hickey at [10]-[11] per Gray J; and
(d)in respect of the person under a disability, the Court should rely to a considerable extent on the views of those who may have access to more material and have been afforded greater opportunity to weigh the matter than the Court: Harrington v Catholic Education Office of Western Australia & Anor [2014] FCCA 2260 at [12] per Judge Lucev and Re Barbour’s Settlement; National Westminster Bank Ltd v Barbourand others [1974] 1 All ER 1188 at 1191 per Megarry J.
It is the opinion of Mr Johnson that the terms of the Settlement Deed are reasonable and in ENG20’s best interests. Mr Johnson is well known to the Court, and is a lawyer with more than two decades of experience in the field of product liability. Although Mr Johnson is the principal of the firm of lawyers acting for ENG20 the Court is satisfied that he is an independent lawyer in the sense referred to in Wade (No 2) at [8]-[9] per Bromberg J and Hickey at [10]-[11] per Gray J. Noting the relevant factors identified by Mortimer J in Butler at [15] and [17], the independent legal opinion has accounted for and weighed all relevant considerations in concluding the Settlement Deed is in the best interests of ENG20. The Court therefore sees no reason not to accept Mr Johnson’s opinion in this case.
With respect to the confidentiality requested by the parties, it is neither necessary nor appropriate for the contents of the ENG20A Affidavit or Mr Johnson’s opinion, to be exposed.
In Butler at [16] per Mortimer J opined that the jurisdiction of the Court to approve a settlement for a person under a disability is inherently protective:
I take that to mean protective not only of the financial interests of the person under a disability, but also protective of her interests in being as well and as healthy as she can, of living as comfortably as she can, with a good quality of life.
Having read Mr Johnson’s opinion and the Settlement Deed, and noting the consent of ENG20A, the litigation guardian, and without any objections having been raised by the respondent, the Court is satisfied that the terms of Settlement Deed are in ENG20’s best interests, and further that the quantum of the agreed settlement amount is appropriate to ENG20’s circumstances and sufficient to satisfy the protective function referred to in Butler.
The Court approves the Settlement Deed annexed to the ENG20A Affidavit.
Pursuant to r 9.70(2) of the FC Rules this approval by the Court will be from the date of execution of the Settlement Deed by the party last executing, and will thereunto be binding upon the parties.
In the circumstances there will be orders as per the orders sought in the Approval Application, with some slight amendments relating to the title, and application with respect to confidentiality and inspection of documents, of the FC Rules.
I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Lucev. Associate:
Dated: 16 June 2022
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