GWG v Province Leader of the Oceania Province of the Congregation of the Christian Brothers

[2024] WADC 8

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CIVIL

LOCATION:   PERTH

CITATION:   GWG -v- PROVINCE LEADER OF THE OCEANIA PROVINCE OF THE CONGREGATION OF THE CHRISTIAN BROTHERS [2024] WADC 8

CORAM:   GETHING DCJ

HEARD:   14 FEBRUARY 2024

DELIVERED          :   20 FEBRUARY 2024

FILE NO/S:   CIV 3780 of 2021

BETWEEN:   GWG

Plaintiff

AND

PROVINCE LEADER OF THE OCEANIA PROVINCE OF THE CONGREGATION OF THE CHRISTIAN BROTHERS

Defendant

Catchwords:

Practice and procedure - Historic sexual abuse claim - Whether leave should be granted to plead a prior settlement agreement - Whether there should be a trial of a preliminary of separate issue

Legislation:

District Court Rules 2005 (WA), r 48A

Rules of the Supreme Court 1971 (WA), O 21 r 5, O 32 r 4

Result:

Leave given to amend defence
Application for trial of a preliminary issue dismissed

Representation:

Counsel:

Plaintiff	:	Mr T J Hammond SC
Defendant	:	Mr T H Offer

Solicitors:

Plaintiff	:	Bradley Bayly Legal (Perth)
Defendant	:	Irdi Legal

Case(s) referred to in decision(s):

Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175

BJP1 v Salesian Society (Vic) Inc [2021] NSWSC 241

Bowen v Alsanto Nominees Pty Ltd [2011] WASCA 39

Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd [2004] WASC 47

Hightime Investments Pty Ltd v Lungan [No 2] [2010] WASC 296

Hungry Jack's Pty Ltd v The Trust Company (Australia) Ltd [No 2] [2020] WASC 427

Landsdale Pty Ltd v Moore [2009] WASCA 176

Mann v Bankwest - A Division of Commonwealth Bank of Australia [2020] WASCA 35

Masters v Cameron (1954) 91 CLR 353

McIvor v Westpac Banking Corporation [2012] QSC 404

Patrick Jebb as trustee for Trafalgar West Investments Trust v Corrs Chambers Westgarth (a firm) [2022] WASC 165

Sino Iron Pty Ltd v Mineralogy Pty Ltd [2014] WASC 406

Stuart v Hanna [No 3] [2018] WASC 208

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165

Townsend v Roussety & Co (WA) Pty Ltd [2007] WASCA 40

Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21

Veitch v Connor [2023] WADC 38

Ventia Utility Services Pty Ltd (ACN 010 725 247) (formerly known as Thiess Services Limited) v Electricity Networks Corporation t/as Western Power [2023] WASC 381

Walthamstow Pty Ltd v Caratti [No 3] [2023] WASC 413

Westpac Banking Corporation v Anderson [2017] WASC 106

Woodley v Woodley [2014] WASC 377

GETHING DCJ:

1. In the late 1960s the plaintiff was sent to boarding school at Castledare and then Clontarf, two facilities operated by the defendant.  He says that whilst at each facility he was sexually abused.  By writ filed 30 September 2021 the plaintiff commenced an action against the defendant seeking damages for the consequences of this sexual abuse.

2. The action is listed for a 13-day trial commencing 17 July 2024.  At this stage, I am the allocated trial judge.

3. Nearly two years after the commencement of the action, and after it was allocated trial dates, the defendant made an application for leave to amend the defence to plead that by agreement made on 11 September 2018, the plaintiff had settled his claim against the defendant (Agreement).  At the same time, the defendant sought an order that this issue be dealt with by way of a preliminary issue or separate trial.

4. The application was heard by me on 14 February 2024.  At the conclusion of the hearing I made orders that:

   (a)the defendant have leave to amend his defence in terms of the First Defendant's Minute of Amended Defence dated and filed on 6 July 2023 (Minute);

   (b)the Minute stand as the Amended Defence without further service on the plaintiff;

   (c)the defendant's application filed 11 December 2023 (Application) be otherwise dismissed;

   (d)by 28 February 2024, the plaintiff file and serve any reply;

   (e)the plaintiff have leave to amend the writ to join Kelso Lawyers as the second defendant;

   (f)the action be listed for directions on 25 March 2024 at 2.15 pm; and

   (g)the defendant pay the plaintiff's costs of the Application in any event.

I said I would publish reasons later.  These are my reasons.

History of the action

1. When the action was commenced there were initially two defendants, the second being The Perth Diocesan Trustees (essentially the Anglican Church).  However, by orders made by consent on 28 December 2023, the plaintiff's action against the second defendant was dismissed with no order as to costs.

2. The defendant filed its defence on 11 November 2021.

3. The action was entered for trial on 2 September 2022.

4. At a pre-trial conference on 30 November 2022, the action was listed for a listing conference on 16 January 2023, and a mediation conference on 28 March 2023, along with some programming orders.  The listing conference was later adjourned by consent to 27 March 2023.

5. On 27 March 2023, the action was listed for a 13-day trial commencing 17 July 2024.  The mediation conference listed for 28 March 2023 was vacated to be relisted, and the action was listed for a directions hearing on 4 December 2023.

6. On 6 July 2023, the defendant filed a minute of proposed amended defence (being the Minute).  I note that the Minute was filed after counsel for the defendant had certified to the court on 24 March 2023 that she had reviewed the pleadings and was 'satisfied that they adequately define all issues of fact or law that will need to be determined at trial'.

7. The Minute contained two broad amendments.  The first was to add further particulars to a plea that the plaintiff has suffered personal injury, loss and damage that was not caused or materially contributed to by the sexual abuse he alleges.  The plaintiff does not oppose this amendment, so I do not need to consider it further in these reasons.

8. The second was to plead the Agreement, which he did in the following terms (Settlement Amendments):

   1A.By a written agreement made on 11 September 2018 (Agreement), the Plaintiff offered to settle his claim for damages as against the First Defendant arising from the matters pleaded in the statement of claim (Plaintiff's Claim) for the sum of $127,500 (inclusive of legal costs and disbursements), which offer was accepted by the First Defendant.

   Particulars of Agreement

   1A.1The Agreement is contained in an email from Kelso Lawyers to Carroll & O'Dea dated 10 September 2018 offering to settle the Plaintiff's Claim and an email in reply from Carroll & O'Dea to Kelso Lawyers dated 11 September 2018 accepting the Plaintiff's offer.

   1B.The First Defendant remains willing and able to complete the Agreement.

   1C.By reason of the matters pleaded in paragraph 1A and 1B above, the Plaintiff has no legal right to pursue the Plaintiff's Claim as against the First Defendant.

   1D.If the pleas in paragraphs 1A to 1C are not accepted, the First Defendant relies upon the remainder of this defence.

9. On 14 July 2023, the parties attended a mediation conference.  The action did not settle.

10. The action was listed for a listing conference on 4 December 2023.  The principal registrar made an order giving the defendant leave pursuant to District Court Rules 2005 (WA) (DCR) r 48A to make an application for leave to amend his defence in terms of the Minute. She also made some programming orders and listed the action before a trial list judge on 5 February 2024.

The Application

1. As mentioned, the Application was filed on 11 December 2023.  It was returnable at the hearing on 5 February 2024.  The orders sought were:

   1.The First Defendant have leave to amend his Defence in terms of the First Defendant's Minute of Amended Defence dated and filed on 6 July 2023 (Minute).

   2.The Minute stand as the Amended Defence without further service on the other parties.

   3.As between the Plaintiff and the First Defendant there be a hearing of the following preliminary issues:

   3.1.Whether, on or about 11 September 2018, the Plaintiff and the First Defendant entered into a legally binding agreement to settle the Plaintiff's claim against the First Defendant for damages arising from his sexual abuse between 1968 and 1971 whilst he was in the care of the First Defendant for the sum of $127,500 (inclusive of legal costs).

   3.2.Whether the Plaintiff's claim for damages against the First Defendant in the action should be dismissed

   4.Such other orders as the Court sees fit to make.

2. At the hearing on 5 February 2024, I adjourned the Application to 13 February 2024.  On that date, I listed it for hearing on 14 February 2024.

Defendant's position

1. The facts relied on by the defendant are set out in two affidavits, each sworn by Anna Maria Liscia, a legal practitioner with the defendant's lawyers.  The first was sworn 11 December 2023 and the second 12 February 2024.[1]

   [1] Which I will refer to as the 'Liscia First Affidavit' and the 'Liscia Second Affidavit' respectively.

2. Ms Liscia deposes that in the course of preparing for the mediation, further information came to light to indicate that on 11 September 2018 the plaintiff, by his lawyers at that time, had entered into a legally binding agreement to settle his claim for damages against the defendant arising from his sexual abuse whilst in the care of the defendant between 1968 and 1971 (being the Agreement).  The plaintiff's lawyers at the time were Kelso Lawyers.  She arranged for investigations to be conducted by the defendant and its lawyers in the Eastern States, Carroll and O'Dea (COD), to locate the documents relating to the Agreement.

3. Ms Liscia annexes the relevant documents to her first affidavit.  The documents, she says, reveals the following chronology:[2]

   [2] Liscia First Affidavit, par 30.

6/7/2018	Kelso email to COD attaching position paper and seeking to settle plaintiff's claim for $254,000 (inclusive of costs and disbursements).	Page 23
11/7/2018	COD letter to Kelso with counteroffer of $80,000 (incl).  Refers to execution of the First Defendant's standard Deed of Settlement and Release as a condition of settlement.	Page 25
14/8/2018	Kelso's counteroffer of $150,000 (incl)	Page 27
15/8/2018	COD counteroffer of $90,000 (incl).  Reference to execution of standard Deed of Settlement and Release	Page 27
16/8/2019	I am informed by Mr Greg McAllister and verily believe that he telephoned Kelso and advised that if an offer of $120,000 (incl) was made by the Plaintiff, it would be accepted by the First Defendant.	Page 27
22/8/2018	COD counteroffer of $120,000 (incl)	Page 30
24/8/2018	COD confirm offer made on 22/8/2018 is limit of their instructions	Page 31
10/9/2018	Kelso email making offer to settle for $127,500 (incl)	Page 32
11/9/2018	COD acceptance of offer of settlement made by Kelso on 10/9/2018.	Page 32
11/9/2018	First Defendant written apology sent to plaintiff	Page 33
19/9/2018	COD email attaching Deed of Settlement and Release.	Page 34
21/11/2018	Kelso letter to COD advising of the lien being claimed for $27,500.  Letter confirming agreement between parties, that Deed of Settlement and Release sent to the plaintiff for execution, and that Plaintiff has not returned Deed or contacted Kelso.	Page 42

1. The central two emails are those on 10 and 11 September 2018.  The substance of the email from Patricia Hall of Kelso Lawyers to COD dated 10 September 2018 was:[3]

   Thank you for your letter of 22 August 2018 with your client's offer of $120,000.00 inclusive of legal costs and disbursements in full and final settlement of this matter.

   Our client has given instructions to reject that offer and to make a counter offer of $127,500.00 inclusive of legal costs and disbursements.

   We kindly await your reply in regards to the above offer.

   [3] Liscia First Affidavit, page 10.

2. The response from COD on 11 September 2018 was:[4]

   We are instructed to accept your client's $127,500.00 inclusive of costs and disbursements in full and final settlement of this matter.

   Acceptance of this offer will require your Client signing our standard Deed of Settlement and Release for such matters.  We will forward a copy of this to you shortly.

   [4] Liscia First Affidavit, page 10.

3. In the Liscia Second Affidavit, Ms Liscia attaches an email from the practice manager at Kelso Lawyers, who confirmed the following in relation to the plaintiff's matter:[5]

   •On 10 September 2018 we put forward an offer of settlement to the solicitors for the Christian Brothers pursuant to instructions from [the plaintiff] and his support person Carolyn Brown;

   •On 11 September 2018 we received confirmation from the solicitors for the Christian Brothers that this offer had been accepted;

   •On 19 September 2018, the solicitors for the Christian Brothers sent through a Deed of Release for execution by our client.  We then sent this Deed by express post to [the plaintiff];

   •We followed up with [the plaintiff] via his support person on a number of occasions seeking to make an appointment to advise him on the Deed of Release.  Ultimately that appointment was never able to be scheduled;

   •During this time period neither [the plaintiff] or his support person advised us of a decision to terminate the retainer with our firm, however on 21 November 2018 we were advised by the solicitors for the Christian Brothers that [the plaintiff] had appointed new legal representation.  It was therefore concluded by us at this time that the agreement had been terminated.

   [5] Liscia Second Affidavit, page 3.

4. Ms Liscia deposes (on information and belief) that the settlement deed was in the form of the standard Christian Brothers' deed, and that Kelso Lawyers did not request any amendment to the standard deed.

5. A copy of the standard Christian Brothers' deed was emailed by a lawyer at COD to a Ms Hall on 19 September 2018.  The email read:[6]

   [6] Liscia First Affidavit, page 12.

   Please find attached our client's Deed of Settlement and Release (the 'Deed') in this matter.  Could you please complete the solicitor certificate and have your client sign the Deed as soon as possible.  Once the Deed is complete could you please send us a soft copy and also return the original Deed by post to our office? We will then have our client sign the Deed and provide you with a soft copy of the fully executed Deed for your records.

   The 'Independent Solicitor Certificate' is in the following terms:

   INDEPENDENT SOLICITOR CERTIFICATE

   I, Patricia Hall, of Kelso Lawyers, 671-677 Hunter Street, Newcastle in the State of New South Wales certify that:

   I am a legal practitioner holding a current practising certificate and am instructed and employed independently of the Body Corporate and the Institute.

   I have explained the purport and effect of the annexed Deed to the Releasor who appeared to me to understand the purport and effect of this Deed.

   The Releasor voluntarily executed the above Deed in my presence.

   I have explained to the Releasor that this is a full and final settlement of his claims.

6. I add at this point that it is not in issue that the plaintiff never signed a deed in relation to the Agreement.

7. Ms Liscia reviewed the documents provided to her by both defendant and COD and formed the view that the plaintiff had entered into the Agreement.  As a result of those investigations, it was apparent to her that the defendant's defence required amendment to raise the Agreement as an issue in this action.

8. Ms Liscia noted that the Agreement was made after amendments to the Limitation Act 2005 (WA) (LA) and the Civil Liability Act 2002 (WA) which introduced laws removing limitation periods for historical child sexual abuse claims and other matters. This included the power in LA s 92 for the court to set aside a deed of settlement entered into prior to 1 July 2018. As the Agreement was entered into after 1 July 2018, she deposes that LA s 92 could have no application to the plaintiff.

9. Ms Liscia then deposes (on information and belief) that the defendant is able and willing to pay the plaintiff the agreed settlement amount.

10. As to whether there should be a trial of a preliminary issue, in her first affidavit, Ms Liscia deposes that:

    (a)to hear and resolve the preliminary issue will take 2 or 3 days;

    (b)the defendant would call two witnesses, being the two lawyers at COD who dealt with the matter in 2018, who would give evidence of their communications with Kelso Lawyers;

    (c)if the preliminary issue is resolved in favour of the defendant, the first defendant will 'not incur legal fees in defending the claim';

    (d)the cost savings to the defendant in not having to defend the claim would be in the order of $300,000 plus disbursements; and

    (e)if the preliminary issue is not determined in favour of the defendant, then there will be no need to hear evidence and argument on it at the trial of the action.

11. Ms Liscia first wrote to the plaintiff's lawyers raising the Agreement by letter dated 5 July 2023.

12. Counsel for the plaintiff objects to 'large portions' of both affidavits on the ground that the evidence contained within them is either privileged (which the plaintiff has not waived) or contained hearsay evidence which is of no forensic value.  Other than to note that these concerns have some merit and would need to be determined at any trial, whether separate or otherwise, I do not need to deal with them further in order to determine the Application.

Plaintiff's position

1. The facts relied on by the plaintiff are set out in six affidavits:

   (a)the plaintiff, sworn 24 January 2024;

   (b)Andrew John Ponnambalam, a legal practitioner with the plaintiff's lawyers, sworn 24 January 2024;

   (c)Kim Weatherston, a psychologist who treats the plaintiff, sworn 25 January 2024;

   (d)Carolyn Joy Brown, the plaintiff's carer between 2011 and 2018, sworn 25 January 2024;

   (e)Mr Ponnambalam, sworn 26 January 2024; and

   (f)Mr Ponnambalam, sworn 13 February 2024.

2. The plaintiff in his affidavit verifies the factual basis of his claim and its impact on him throughout his life.  He deposes that in 2017 Kelso Lawyers started acting for him so that he could claim compensation from the Catholic Church.  On a date that he cannot recall sometime in 2018, he received a telephone call from Peter Kelso of Kelso Lawyers.  Mr Kelso told him that the Catholic Church had made an offer of $150,000 to settle his claim, from which he would receive approximately $120,000 after Mr Kelso had deducted his fees.  Mr Kelso told him that this was the best offer he was going to get.

3. The plaintiff was not happy with the offer.  He arranged for Caz, being Ms Brown, to join the phone call.  Mr Kelso told Caz what he had told the plaintiff.  The plaintiff then told Mr Kelso he was fired, expressing his displeasure using expletives.  He deposes that he was angry and hung up the telephone, though believed that Caz continued the call without him.  Mr Kelso tried to contact him but he did not pick up the call.  He deposes that he did not authorise Mr Kelso to accept any settlement offer.  Nor has he told Mr Kelso or anyone else that he accepted any settlement offer.

4. Ms Brown in her affidavit corroborates the plaintiff's account.

5. Ms Weatherstone annexes to her affidavit notes from an appointment which the plaintiff had with her on 17 September 2018.  She provided a typewritten version of the notes to Mr Ponnambalam which he annexes to his affidavit sworn 26 January 2024.  The notes record a conversation with the plaintiff about settlement.  Ms Weatherstone's evidence is hearsay, and would not be admissible as to the truth of what was said at any trial.  It is sufficient for me to observe for present purposes that she does not record anything that could be characterised as a prior inconsistent statement by the plaintiff on the issue of whether he agreed to settle his claim in 2018.

1. In his first affidavit, Mr Ponnambalam annexes a medico-legal report on the plaintiff from a psychiatrist.  The salient point for the determination of the Application I draw from this report is that the plaintiff's psychological health is very poor.  Mr Ponnambalam also annexes the particulars of damages relied on by the plaintiff, as well as the expert accounting report on which it is based.  The damages he claims are in the order of $2 million.

Should the defendant be given leave to amend?

1. It is necessary to commence with the defendant's application for leave to amend as regards the Settlement Amendments.  If no leave to amend is given, then the question of whether there should be a trial of a preliminary issue falls away.

2. As mentioned, the defendant was given leave to bring the Application pursuant to DCR r 48A. I take this to mean that the defendant does not have to comply with the requirements of DCR r 48A(3), but nonetheless, must persuade the court that leave to amend is appropriate (given that the time period in which amendments may be made without leave set in DCR r 48A(2) has expired).

3. Pursuant to Rules of the Supreme Court 1971 (WA) (RSC) O 21 r 5(2), the court has the power 'at any stage of the proceedings' to grant leave to a party to amend a pleading 'on such terms as to costs or otherwise as may be just and in such manner (if any) as the court may direct'.

4. The principles by which the power to amend should be exercised were considered by the Court of Appeal in Mann v Bankwest - A Division of Commonwealth Bank of Australia:[7]

   The principles concerning whether an amendment should be allowed are not prescribed by O 21 r 5. They involve the exercise of discretion in the interests of justice. The overarching principles concerning amendment of pleadings were considered by the High Court of Australia in Aon Risk Services Australia Ltd v Australian National University …  In the joint judgment of the plurality, their Honours said:

   An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation.  There is no such entitlement.  All matters relevant to the exercise of the power to permit amendment should be weighed.  The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend …

   The point may be reached where a party has had a sufficient opportunity to plead his or her case such that it is too late for further amendment so as to do justice to the other party and other litigants … Much depends on the point the litigation has reached relative to the trial …  In this court it has been recognised that when an application is made late in the day, and requires that dates set down for trial be vacated, the applicant bears a heavy burden to show why leave should be granted.  In such a case the public interest in the timely and efficient resolution of legal proceedings and the effective use of court resources is a relevant consideration …

   For present purposes it is not necessary to catalogue all the relevant considerations on an application for leave to amend …  Any attempt at a list cannot be exhaustive and in a given case it will be necessary to consider the individual circumstances before the court.  It is, however, worth emphasising that the relevant considerations on an application for leave to amend will include that:

   1.The goal of the practice, procedure and interlocutory processes of the court is the elimination of delay beyond that reasonably required for activities essential to the fair and just determination of the matters genuinely in contention and the presentation of the case for trial (O 1 r 4A).

   2.Actions are to be managed and supervised in accordance with a system of positive case flow management with the objects of: (1) the just determination of litigation; and (2) the efficient disposition of the court's business, the efficient use of judicial resources, the timely disposal of business and proportionality (which are all aspects of the just determination of litigation) (O 1 r 4B).

   [7] Mann v Bankwest - A Division of Commonwealth Bank of Australia [2020] WASCA 35 [78] ‑ [80] (judgment of the court). The quote from the decision in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 is at [111] (Gummow, Hayne, Crennan, Kiefel & Bell JJ) (Aon).  Other references are omitted.

5. The High Court in Aon made a number of observations about the considerations relevant to the exercise of the discretionary power to allow or refuse amendment,[8] which were conveniently summarised by Beech J in Hightime Investments Pty Ltd v Lungan [No 2]:[9]

   [8] See generally:  Aon [89] – [103]; [111] – [112].

   [9] Hightime Investments Pty Ltd v Lungan [No 2][2010] WASC 296 [52] (Beech J) (Hightime).  This summary has been regularly approved, see for example:  Walthamstow Pty Ltd v Caratti [No 3] [2023] WASC 413 [12] (Lundberg J); Mann [80]; Hungry Jack's Pty Ltd v The Trust Company (Australia) Ltd [No 2] [2020] WASC 427 [22] (Tottle J); Stuart v Hanna [No 3] [2018] WASC 208 [27] (Tottle J) (Stuart); Sino Iron Pty Ltd v Mineralogy Pty Ltd [2014] WASC 406 [31] (Edelman J) (Sino).

   (a)the effect of an amendment on the court and on other litigants is relevant;

   (b)there is no right to amend to introduce an arguable case and it is wrong to say that only in extreme circumstances would a party be shut out from litigating an arguable case;

   (c)justice requires that parties have a proper opportunity to plead their case, but limits may be placed on repleading when delay and cost are taken into account;

   (d) a just resolution does not mean that a party will always be permitted to raise any arguable case at any point in the proceedings, on payment of costs, even indemnity costs;

   (e)the inevitable strains of litigation must be taken into account in weighing the adverse consequences of delay - this applies to natural persons and other litigants;

   (f)the nature and importance of the amendment to the party amending must be taken into account;

   (g)attention must be given to the extent of the delay, and the costs associated with it, the prejudice which might reasonably be assumed to follow from it and any prejudice that is shown;

   (h)the point in the litigation relative to the trial may be an important consideration;

   (i)where a discretion is sought to be exercised in favour of a party, an explanation will be called for;

   (j)the point can the point can be reached where a party has had a sufficient opportunity to put its case ...

6. To this is added the requirement that the amending party should explain any substantial delay in making the amendment.[10]

   [10] Stuart [28]; Hightime [54].

7. There are five factors in favour of allowing the amendment.

8. The first is that the amendments relating to the Settlement Agreement disclose a reasonable defence in the sense that if the pleaded facts are proven at trial, there would be a complete defence to the plaintiff's action.  From a pleadings perspective, the point is arguable (I return to whether it is arguable factually later in these reasons).

9. The second is that the amendments will not imperil the trial dates.  In my view, and with one caveat, the additional issue raised will only add marginally to the evidence that would otherwise be called.  I add to this the fact that when the trial dates were allocated the second defendant was still a party, so the trial would have had to consider the separate abuse which the plaintiff alleges he suffered for which it was responsible.  As the plaintiff's claim against the second defendant has been dismissed, this time is now available for use in determining the issues relating to the Agreement.  So, although the amendment is sought in close proximity to trial, in practical terms, this is of less significance than in other cases.

10. The caveat is that the plaintiff may wish to join Kelso Lawyers as a second defendant.  This is because, if the plaintiff's claim against the defendant is barred because of the Agreement, counsel for the plaintiff foreshadowed that the plaintiff may wish to sue Kelso Lawyers because it entered into a settlement agreement on his behalf, contrary to his instructions.  As discussed with counsel at the hearing, if this occurs, it should be possible to separate out the trial of the issues as between the plaintiff and Kelso Lawyers until the determination of the issue as between the plaintiff and the defendant.  If the defendant does not get up on its argument that the Agreement was binding, the plaintiff would have no need to proceed with the action against Kelso Lawyers.  For this reason, even if Kelso Lawyers are joined, the issues as between the plaintiff and the defendant can, in my view, still be dealt with within the 13 days allocated.

11. The third is that the amendment is significant to the defendant as it raises a potential, complete, defence.  There would thus be significant prejudice to the defendant if it is not permitted to raise this defence.

12. The fourth is that the amendment is not sought against the background of the defendant having made multiple amendments to its defence.  This is the first one.

13. The fifth is that the amendment is not one which means that the plaintiff has wasted a significant amount of costs in its trial preparation based on a change in approach by the defendant.

14. There is only one significant factor suggesting that leave should not be granted.  This is that the defendant has provided no explanation as to why there was a lapse of nearly two years (September 2021 to July 2023) between when this action was commenced and when the defendant's current lawyers became aware of the possible settlement.

15. On balance, I am of the view that it would be unjust for the defendant to be shut out from litigating this arguable defence.  The amendment should be allowed.

Should there be a trial of a preliminary or separate issue?

1. Having given the defendant leave to amend in terms of the Settlement Amendments, I then need to consider whether there should be a separate trial of the issue of whether the plaintiff agreed to settle the claim the subject of the action.

2. The power to order that any question or issue be tried separately from any other question or issue whether before or after the trial of the proceedings is found in RSC O 32 r 4.

3. As to the starting point in the analysis, in Landsdale Pty Ltd v Moore Newnes JA observed:[11]

   The starting point is that ordinarily the trial of an action should include all issues arising in the action.  The determination of an application for separate trials requires a careful balancing of the prospective advantages and disadvantages involved in separating the issues, bearing in mind the uncertainties inherent in litigation, and that, once embarked upon, it is a course from which it may be difficult and even impossible to retreat.  It should only be embarked upon where its utility, economy and fairness to the parties is clearly made out…

   [11] Landsdale Pty Ltd v Moore [2009] WASCA 176 [21] (Newnes JA with whom Buss JA agreed) (reference omitted). Adopted in: Ventia Utility Services Pty Ltd (ACN 010 725 247) (formerly known as Thiess Services Limited) v Electricity Networks Corporation t/as Western Power [2023] WASC 381 [22] (Archer J) (Ventia); Patrick Jebb as trustee for Trafalgar West Investments Trust v Corrs Chambers Westgarth (a firm) [2022] WASC 165 [21] (Solomon J).

4. In Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd McKechnie J gave the following summary of the principles to be applied in determining whether to order a separate trial of issues:[12]

   [12] Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd [2004] WASC 47 [4] (McKechnie J). Adopted in: Ventia [23]; Woodley v Woodley [2014] WASC 377 [10] (Beech J) (Woodley).

   •A separate trial of issues is only appropriate in clear and simple cases.

   •Separate trials of issues should only be embarked upon when the utility, economy and fairness are beyond question.

   •The fact that the resolution of a separate trial may determine the litigation is relevant.

   •Separate trials of issues may be appropriate where it is likely to save expense and inconvenience.

   •There is a focus in the Rules of the Supreme Court on the expedition of determination of matters before the Court and separate trials of issues may advance the expedition.

   •A possibility that the determination of issues tried separately may lead to settlement should be taken into account even though the issues may not finally dispose of the action.

   •In many cases the formulation of specific questions to be tried separately, from and in advance of other issues, will assist in the resolution of the matters in issue if the questions are capable of final answer in accordance with the judicial process.

   •Separate trials are inappropriate where the result depends on complex issues of fact or when a preliminary question is one of mixed fact and law.

   •The procedure should be confined generally to cases where facts are [not] complicated and the legal issues short, otherwise it can be a treacherous shortcut.

   •Separate trials may be productive of delay, extra expense and uncertainty of outcome, which they are intended to avoid.  Saving some time is often illusory when the parties have the necessity of making full preparation and factual matters relevant to one issue are relevant to others which overlap.

   •There is potential for further appeals.

5. In Woodley after referring to the list in the preceding paragraph, Beech J observed:[13]

   The emphasis is on the possible saving of costs and the speedy resolution of matters that is most likely to occur where the preliminary issue is relatively simple and is not enmeshed in factual controversy.  Ultimately, the question is whether the court is satisfied that it is 'just and convenient' for an order for a separate trial to be made ...

   [13] Woodley [11] (reference omitted). Adopted in Ventia [24].

6. I add to these factors the principles set out in RSC O 1 r 4A and r 4B, which are summarised at [41], as well as the case management principles more generally discerned from the Aon decision (set out at [42]).

7. There is a further body of principle which is relevant to the present application. As counsel for the plaintiff points out, what the defendant is in effect seeking to do is to make a very late application for summary judgment. What could have happened is that within 21 days after the defendant filed its memorandum of appearance (or such later time as the court allowed), he could have applied for summary judgment pursuant to RSC O 16 r 1. If the court was persuaded that, on the basis of the Agreement, the defendant had a good defence on the merits, the court could have disposed of the action summarily.

8. The principles governing the 21-day time limit were explained by Pritchard J in Westpac Banking Corp v Anderson in terms that are apposite to the present application:[14]

   The 21 day limit for applications for summary judgment clearly reflects a policy view that such applications should be brought at an early stage in the proceedings, and before too much expense has been incurred … If there is a delay, it must be explained…and it is up to the applicant to show that the delay in bringing the application was justifiable in the circumstances … However, the Court clearly has a broad discretion as to whether to grant leave to apply out of time.  Clearly the prospects of the application will be relevant.  To proceed to trial, with the expense that that may incur, when there is no defence to an action, or where an action pursued by counterclaim has no prospect of succeeding, would of itself be contrary to modern principles of case management.  Prejudice to the other party, occasioned by the delay in bringing the application, will clearly be relevant …

   [14] Westpac Banking Corporation v Anderson[2017] WASC 106 [38] (Pritchard J) (references omitted) (Westpac).

9. Having said that, I accept the point made by counsel for the defendant that the factual issues involved in determining whether the plaintiff had agreed to settle his claim may well have made the case an inappropriate one for summary judgment.  Be that as it may, at the very least, what should have happened is that the Settlement Amendments should have been in the original defence.  The question of whether there should be a separate trial of the issue of whether the plaintiff had agreed to settle his claim could have been considered at a point in time before either party, but particularly the plaintiff, had gone to significant expense to get the action up for trial. So in this context, the considerations identified by Pritchard J in Westpac remain instructive.

10. On the basis of these principles, there are two factors suggesting that it would be appropriate to order a trial of preliminary issue.

11. The first is that the proposed preliminary issue is clear and straightforward.  The facts are not complicated and the legal issue is short.  It could be determined in a 1-to-2-day trial.  Moreover, it could be determined separately from the remaining issues in the trial.

12. The second is that, if determined in favour of the defendant, the preliminary issue would bring the action to an end as between the plaintiff and the defendant.  This would save the defendant the expense of a trial on the merits.  However, it would not save the plaintiff the expense of trial as he would need to continue the action against Kelso Lawyers for breach of contract or negligence.  The damages assessment in that case would essentially be the same as in the action against the defendant.[15]  However, I do not accept Ms Liscia's opinion that there would be costs savings in the order of $300,000.  The cost saved would be the costs to be incurred from here on in getting up and at the trial.  The figure of $300,000 is more like the taxed costs of the action as a whole, including the getting up expenses incurred to date.

    [15] See for example:  Veitch v Connor [2023] WADC 38.

13. On the other hand, there are six factors suggesting that it would not be appropriate to order a trial of a preliminary issue.

14. The first is that, as I have mentioned, the defendant has provided no explanation as to why there was a lapse of nearly two years (September 2021 to July 2023) between when this action was commenced and when the defendant's current lawyers became aware of the possible settlement.

15. The second, which follows from the first, is that the parties, in particular the plaintiff, has been put to significant expense in getting a 13‑day matter up for trial.  Among other things, this has included obtaining detailed expert opinions from a psychiatrist and a financial expert.  It would, in my view, be manifestly unfair to the plaintiff to now embark on a process which may mean that this expense was unnecessarily incurred.

16. The third is that there is a real risk that a trial of a preliminary issue would imperil the trial dates.  In order to accommodate the trial of the preliminary issue, the court would have to expedite the trial so that it could be heard and determined sufficiently prior to 17 July 2024 for the trial to proceed on that date if the preliminary issue is resolved in favour of the plaintiff.  In the meantime, the plaintiff would be in the unfair position of having to continue to incur expense to get the action up for trial not knowing whether or not the trial would proceed.

17. The fourth is that if the defendant is successful in the separate issue, the plaintiff could appeal.  If there was a successful appeal, the action would then have to be relisted for trial.  This would inevitably lead to a two or so year delay in the trial commencing.

18. The fifth is the inevitable strain of the litigation on the plaintiff.  It is evident from the materials before the court that the fact that the plaintiff has to in effect 're-live' the abuse he alleges while the action is being progressed is causing him significant psychological harm.  Moreover, he has been proceeding on the legitimate expectation that he will be given a trial on the merits of his claim.  That legitimate expectation was fostered by the manner in which the defendant conducted his defence up until July 2023.  To now face the prospect of his action being summarily determined is, in my view, manifestly unfair.

1. The sixth is that the defendant's argument that there was a binding settlement agreement with the plaintiff is, in my view, weak.  I can leave to one side the plaintiff's evidence that he in fact gave no instructions to settle, as this could potentially be met by an argument based on ostensible authority.  Although I obviously do not need to, and cannot, finally determine the issue of whether there is a binding settlement agreement, the merits of the defendant's argument is nonetheless relevant for case management purposes.  Any view on the merits I express is necessarily a preliminary one based on the limited materials currently before the court.

2. It is clear that what was contemplated was that the plaintiff would sign an agreement in the form of the standard Christian Brothers' deed.

3. The issue for a judge determining any separate issue would be which of the four classes of agreement based on the decision in Masters v Cameron would the present case fall.[16]  As Newnes JA summarised in Bowen v Alsanto Nominees Pty Ltd:[17]

   In Masters v Cameron (360), the High Court identified three classes of case where parties have reached agreement on the terms of their bargain but intend to sign a formal contract at a later date.  The first is where the parties intend to be bound immediately but wish to have the agreement incorporated in a more formal document; the second is where the parties intend to be bound immediately but have made performance of one or more of the terms conditional upon the execution of a formal document; and the third is where the parties do not intend to make a binding agreement unless and until they execute a formal agreement.

   [16] Masters v Cameron (1954) 91 CLR 353, 360 ‑ 361 (Dixon CJ, McTiernan & Kitto JJ) (references omitted) (Masters).

   [17] Bowen v Alsanto Nominees Pty Ltd[2011] WASCA 39 [84] (Newnes JA with whom McLure P & Murphy JA agreed) (Bowen).  See also:  Townsend v Roussety & Co (WA) Pty Ltd [2007] WASCA 40 [71] (Buss JA with whom McLure & Wheeler JJA agreed) (Townsend).

4. As to the fourth class, in Townsend Buss JA stated:[18]

   It appears now to be accepted that there is a fourth class of agreement (in addition to the three referred to in Masters v Cameron), namely, where the parties have made an agreement and intend to be bound to its performance although anticipating to make a further agreement in substitution for the existing agreement containing, by consent, further terms.

   However, there is also an argument that the fourth class is merely a restatement of the second class, and does not cover any ground that is not covered by the first or second class.[19]

   [18] Townsend [72].See also: Bowen [85].

   [19] Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21 [87] ‑ [94] (Buss JA with whom McLure P & Newnes JA agreed).

5. The status of a particular agreement is to be determined objectively.  It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations.  What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe.  This requires a consideration of the language used by the parties, the surrounding circumstances known to the parties and the purpose and object of the transaction.[20]

   [20] Masters [362]; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, 179 [40] (Gleeson CJ, Gummow, Hayne, Callinan & Heydon JJ); Bowen [86]; Townsend [71].

6. The defendant says that the present case falls within the fourth class (or perhaps first class).  There was an immediately binding agreement by way of the email exchange on 10 and 11 September 2018, although the parties anticipated making a further agreement in the form of the standard Christian Brothers' deed.

7. Counsel for the plaintiff submits that the present case falls within the third class, that there was to be no binding agreement until the standard Christian Brothers' deed was executed.  He points to what was said by COD in the email of 11 September 2018 - 'Acceptance of this offer will require your Client signing our standard Deed of Settlement and Release for such matters' - as being a condition of settlement (quoted at [21]).  This condition was never satisfied.

8. Counsel for the defendant submitted that the present case bears a strong similarity with the decision in BJP1 v Salesian Society (Vic) Inc.[21]That case was also a historical sexual abuse case.  The action was referred to mediation and a settlement agreement was reached.  The issue for the court was whether the settlement 'was intended to, and did, constitute an immediately binding agreement between the parties or whether the agreement reached at the mediation was intended only to become effective if and when a Deed of Release was executed by each of the parties and, in the case of the plaintiff, that executed copy returned to the  defendant to enable it to take the necessary steps to pay the agreed monies'.[22]  The principles considered by Garling J mirror those which I have set out at [73] ‑ [75].  Garling J concluded 'that the agreement reached between the solicitors for the parties at the mediation … was, and was intended to be, a final and immediately binding agreement to resolve the proceedings'.[23]

   [21] BJP1 v Salesian Society (Vic) Inc [2021] NSWSC 241 (BJP1).

   [22] BJP1 [9].

   [23] BJP1 [14], [85].

9. It is significant in BJP1 that the agreement was reached at a mediation conference.  The mediation was conducted using AVL equipment.  The plaintiff did not participate directly, but was available to, and did, provide instructions to his solicitor and counsel by telephone.  After the mediation the plaintiff had signed a document headed 'Instructions to Settle' which had been sent to him by his solicitor.  It was only after this that the plaintiff in effect changed his mind, terminated the retainer of the solicitors who acted for him at the mediation and changed lawyers.  He refused to sign the deed of release.

10. In my view, there are two significant differences between the present case and that in BJP1.  The first is that the settlement agreement arose out of a mediation at which the plaintiff was an active participant.  However, I can put this to one side.  The second, and crucial, difference is that, while the deed of release was in similar terms of the standard Christian Brothers' deed, there was one critical exception.  This is that it does not contemplate that an independent solicitor certificate would be provided in relation to the plaintiff's execution of the deed of release.

11. I have set out the terms of the Independent Solicitor Certificate at [24].

12. I have not been able to find any case law on Independent Solicitor Certificates in historical sexual abuse cases.  They appear to be derived from similar certificates used in guarantee cases.  In McIvor v Westpac Banking Corporation Applegarth J explained their use in this context in the following terms:[24]

    Ordinarily, a solicitor's assumption of legal and professional responsibilities provides sufficient assurance that he or she will give the requisite advice independently, competently and in a disinterested manner.  The provision of a solicitor's certificate does not wholly eliminate the risk of undue influence or misrepresentation.  But it does provide a bank with a degree of assurance, depending upon the contents of the certificate, that the party to whom the independent advice has been given understands the purport and effect of the transaction, including its risks, and is in a position to make a free choice about proceeding with the transaction, knowing those risks. Although the risk of undue influence is not wholly eliminated by such a certificate, it usually will be sufficient to put to rest what otherwise would have been a suspicion of undue influence.

    [24] McIvor v Westpac Banking Corporation [2012] QSC 404 [98] (Applegarth J).

13. There are somewhat different risks in historical sexual abuse cases.  Those risks are aptly summarised in the assessment of the plaintiff's condition by Dr Shub, the psychiatrist retained on his behalf in the action:[25]

    It is my view that the sexual abuse significantly negatively affected [the plaintiff's] cognitive development and his ability to engage in education. He discussed in detail his inability to focus and concentrate on his schoolwork due to his distracting post-trauma symptoms, and particularly noted dissociative phenomena in the classroom, noting that he experienced a sensation where his mind was 'floating' elsewhere.

    Dr Shub goes on to say, in effect, that these types of outcomes are common amongst survivors of childhood sexual abuse.  So, in this context, the use of an Independent Solicitors Certificate by the defendant as part of its general practice may be regarded both as prudent risk management on its part and trauma informed practice as regards the person signing the deed.

    [25] Annexure AJP 1 of Mr Ponnambalam's first affidavit, page 15.

14. However, if the defendant's argument is correct, and the agreement reached between the lawyers was binding, the Independent Solicitor Certificate could be seen as a farce.  On the defendant's argument, if the plaintiff, after having had the meaning of the deed explained by the lawyer, refused to sign the deed, he would still be bound by reason of the exchange of correspondence between the lawyers by which the terms were agreed.  This seems compelling evidence that the objective intention of the parties was that there would be no binding agreement until the purport and effect of the deed had been explained to the plaintiff to the satisfaction of the independent lawyer, who then executed it in the presence of that lawyer.  Although I do not need to, nor intend to, finally determine the issue, and do not have a complete suite of evidence, it seems clear to me that, for this reason, the defendant's argument is weak.

15. The conclusion which follows is that this is not a case in which an action where there is a compelling defence on the merits is being forced to trial, rather than being summarily or separately determined.  To the extent that the defendant is being forced to incur the expense of a full trial where it may possibly have a complete defence, this is a problem of the defendant's own making by delaying raising the issue of the Agreement.  As I have said, it would have been open to the defendant to have included the issue in its defence when first filed, and either sought summary judgment (which it could have done as of right) or sought an early separate trial of this issue, before the parties went to the expense of getting the action up for trial.

16. The factors against ordering a separate trial markedly outweigh the factors in favour of so ordering.  Accordingly, in my view, it is neither just nor convenient for an order for a separate trial to be made.  For these reasons, I declined to make the order sought.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.

LL

Associate

20 FEBRUARY 2024