Hassan v State of Victoria
[2023] VSC 478
•17 August 2023
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
GROUP PROCEEDINGS LIST
S ECI 2021 00826
BETWEEN:
| IDRIS HASSAN | First Plaintiff |
| HAWA WARSAME | Second Plaintiff |
| -and- | |
| STATE OF VICTORIA | Defendant |
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JUDGE: | John Dixon J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 24 July 2023 |
DATE OF JUDGMENT: | 17 August 2023 |
CASE MAY BE CITED AS: | Hassan & Anor v State of Victoria |
MEDIUM NEUTRAL CITATION: | [2023] VSC 478 |
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REPRESENTATIVE PROCEEDINGS – Part 4A Group proceeding – Application for approval of settlement – False imprisonment and assault – Lockdown during COVID-19 pandemic -Whether proposed settlement is fair and reasonable – Whether reimbursement payments to representative plaintiffs fair and reasonable – Supreme Court Act 1986 (Vic) Pt 4A, s 33V.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Dr J Lucy | Clemens Haskin Legal |
| For the Defendant | Ms G Costello KC, with Ms E Levine and Ms M Brady | Corrs Chambers Westgarth |
TABLE OF CONTENTS
The application................................................................................................................................... 1
Background......................................................................................................................................... 1
The settlement.................................................................................................................................... 3
The evidence....................................................................................................................................... 4
The applicable principles............................................................................................................... 10
Assessment of the settlement........................................................................................................ 13
Plaintiffs’ submissions................................................................................................................ 13
Defendants’ submissions........................................................................................................... 16
Consideration of the settlement as between the parties........................................................ 20
Consideration of the settlement as between group members.............................................. 23
Settlement Distribution Scheme................................................................................................... 27
Plaintiff’s costs................................................................................................................................. 27
Conclusion......................................................................................................................................... 28
HIS HONOUR:
The application
In this group proceeding, the plaintiffs claimed damages against the State of Victoria for false imprisonment and assault, on behalf of themselves and group members, alleging confinement against their will at a number of public housing towers in Melbourne in July 2020 due to concerns about the spread of Covid-19.
The plaintiffs applied for approval of a settlement of the proceeding with the defendant, pursuant to ss 33V and 33ZF of the Supreme Court Act 1986 (Vic).
Background
At around 4pm on 4 July 2020, at a televised press conference, the Premier of Victoria announced the immediate lockdown of nine estate towers in North Melbourne and Flemington. There was no prior warning of the lockdown. At the time of the announcement armed police officers, who had surrounded the towers, prevented residents from leaving the towers.
The group members in this proceeding are individuals who resided or stayed at any of the nine affected estate towers, and who were subjected to imprisonment, confinement or total restraint against their will, between around 4pm on 4 July 2020 and 5pm or 11:59pm on 9 July 2020 (the first detention period). Close contact directions were then applied to the residents of 33 Alfred Rd Towers, requiring them to self-isolate, from 11:59pm on 9 July 2020 until 11:59pm on 18 July 2020 (the second detention period). The latter constitute a sub-group of the group members.
The defendant relied on a number of detention directions, purportedly made under s 200(1) of the Public Health and Wellbeing Act 2008 (Vic) (PHW Act) and signed shortly before the press conference, to authorise the detention in the first detention period, and relied on close contact directions that required the residents in 33 Alfred Street to self-isolate, albeit surrounded by armed police officers, in the second detention period.
The plaintiffs claimed that the conditions of their detention were particularly difficult because it was imposed with undue haste and their lack of opportunity to prepare for it. The plaintiffs pleaded that they received inadequate food and groceries, the food supplied did not meet dietary and religious requirements, access to medication was inadequate, of a lack of access to fresh air and exercise, unnecessary exposure to illness and inadequate access to mental health and medical services.
The plaintiffs claimed false imprisonment of both plaintiffs and group members for the first detention period and false imprisonment of the second plaintiff and the Alfred Street Group members in the second detention period. They claimed aggravated damages on the basis they suffered injury to their feelings and dignity due to lack of warning about the detention and the detention conditions. They claimed exemplary damages because the defendant constructively knew they were vulnerable yet acted in contumelious disregard of their rights. The plaintiffs also claimed assault, alleging the police officers threatened them with harm or violence should they attempt to leave, including damages for the humiliation and indignity suffered as a result of the assault. They also claimed aggravated and exemplary damages in respect of the assault.
The defendant accepted the plaintiffs and group members were detained by it in the first detention period but not in respect of the second. It also accepted it gave no warning but did not accept many of the allegations about the conditions of the lockdown. The defendant pleaded that the first detention period was authorised by various directions made under s 200(1) of the PHW Act and that the restraint during the second detention period was authorised under two directions made under that provision, being the Diagnosed Persons and Close Contacts Directions (No 4) and (No 5). In addition, the defendant pleaded that by reason of s 28LE of the Wrongs Act 1958 (Vic), the plaintiffs and group members could not recover damages for non-economic loss unless they had suffered significant injury. They resisted the claims for aggravated and exemplary damages, and denied that police officers threatened the plaintiffs or group members with harm or violence and there was no assault.
In reply, the plaintiffs contended that the defendant’s justification of the detention ought be rejected, pleading that the Detention Directions were invalid or partly invalid and that the Close Contact Directions were invalid or partly invalid, and that, in any event, such Directions neither applies to the Alfred Street Group Members nor authorised their detention. The plaintiffs maintained Dr Annalise van Diemen made the Detention Directions under dictation; the Directions were uncertain, and involved impermissible delegation of the power under s 200(1) of the PHW Act; there was no compliance with the provisions of s 200 of the PHW Act which are required for the detention to be valid; and the conduct breached plaintiffs’ and group members’ rights under the Charter of Human Rights and Responsibilities Act 2006 (Vic).
The Directions in respect of the second detention period were invalid because they impermissibly purported to delegate emergency powers under s 200(1) of the PHW Act; they were made for an improper purpose; there was no individual assessment of whether the residents were close contacts; the police restraint was unlawful and inconsistent with self-isolation. The plaintiffs also pleaded in reply that s 28LE of the Wrongs Act has no application to infringement of liberty or to intentional acts (including reckless indifference to injury).
The settlement
The parties executed a settlement deed (Deed) on 7 March 2023. The main terms are:
(a) The defendant is to pay $5million to the plaintiffs and group members, without admission of liability, in settlement of all claims.
(b) The plaintiffs may apply to the court for an amount to be deducted from the settlement sum in recognition of their position as lead plaintiffs, which amount must be approved by the court
(c) Each group member will receive an equal share of the settlement sum, with child group members (under 16 as at 4 July 2020), receiving 50% of the adult share.
(d) Other costs of the proceeding, including legal costs and costs of distributing settlement monies, will not be deducted from the settlement sum. These costs, including plaintiffs’ legal costs (as approved) will be paid by the defendant.
(e) In return for the settlement sum, the plaintiffs and group members release the defendant from the claims as set out in their amended statement of claim and all claims in connection with or arising out of or in relation to the subject matter of the proceeding or similar circumstances.
(f) If the settlement is approved, the settlement sum will be distributed to the plaintiff and group members by the court appointed administrator, who the parties propose be the Secretary of the Department of Health, Professor Euan Wallace AM. The administrator will assess claims made to ensure the claimant is eligible for payment (verifying identity, that they were subject to the lockdown, and age) and make those payments where a claim is established. The administrator must as soon as possible prepare a register of group members. The administrator’s costs will not be deducted from the settlement sum but will be borne by the defendant.
(g) A review process in place for potential group members will permit an independent reviewer to assess a claimant’s claim. Notices of assessment will be given to each group member. Group member payments will be distributed within 60 business days of the last independent reviewer determination. However, the administrator must endeavour to complete the distribution of the scheme within 180 days of the settlement approval order and then report to the court 20 business days later, including total amounts paid and number of group members who have been paid.
The evidence
The plaintiffs relied on an open affidavit deposed to by each the plaintiffs and two open affidavits deposed to by the plaintiffs’ solicitor, Benedict Clemens, as well as a confidential affidavit from each of them. It was proper that the latter affidavits be filed on a confidential basis to protect confidential information and privileged communications. The defendant’s solicitor, Daniel Marquet, also filed two affidavits.
The affidavits, in summary, stated the following:
(a) As directed by the court, the Notice of Proposed Settlement to Group Members was translated into twelve languages and posted in a variety of places (both online and physically) to best come to the attention of group members. Mr Marquet detailed the lengths that were taken to ensure the group members received the Notice, and the media attention the Notice received.
(b) Group members’ responses to notice:
(i) The State has received 2,656 notices of claim. A small number were received after the due date. Some of those claims are duplicates. After carrying out a process of review, a total of 2,570 discrete completed notices of claim have been received: and a review as at the date of the hearing, which is not yet final, showed 1,819 adults and 751 children. However, the de-duplication process is ongoing and this may change. In a review of 560 hard copy notices of claim, approximately 250 were incomplete or unclear (missing key contact or other information about claimant), 130 seek to claim on behalf of adult family members without providing any separate details about the claimant or authority to do so. The Department has emailed 240 individuals and resolved uncertainties for only 80 of the incomplete notices. It has received very few responses to requests for clarity about authority to submit on behalf of others or about the bulk of the incomplete notices. The parties sought an extension of time to accept notices of claim and liberty to apply in case they need clarity from the court as to how to deal with incomplete forms and I will grant that relief.
(ii) Approximately 17 individuals objected, one of which stated that he represented his family and four other individuals who wish to remain anonymous. Six of the objections did not set out any reasons. Five of those six filled out inconsistent claim forms. The plaintiffs’ solicitors attempted to contact them: three of them said they did not wish to lodge an objection and the remaining two could not be reached.
(iii) The plaintiffs’ solicitors received approximately 250 telephone enquiries and 30 email enquiries asking for clarification about the settlement and how to complete the claim form. Many tenants expressed gratitude and satisfaction with the outcome. However, 30 people asked whether a public apology from the Premier would be forthcoming or expressed disappointment it was not part of the settlement. 30 people expressed views as to the sufficiency of the settlement sum. 10 questioned why those detained for a longer period (the 33 Alfred Street group) would not be receiving more money. Several people expressed disappointment at foregoing the prospect of giving witness testimony in open court.
(iv) The total number of Notices of Claim received represents approximately 88.5% of the estimated number of 3,000 potential claimants. In light of the number of Notices of Claim received, the State estimated that:[1]
[1]Assuming the proposed payment of $40,000 to each plaintiff is approved.
(a) the Adult Share of the Settlement Sum will be approximately $2,150; and
(b) the Child Share of the Settlement Sum will be approximately $1,078.
(v) Only 19 individuals have opted out.
(c) Objections:
(i) Reasons given for the objections received were that the settlement sum was insufficient and the fairness of the distribution formula was questioned given the range of impacts across the group – particularly the aged and disabled.
(ii) One objection stated that the plaintiff’s lawyers had not engaged with them and that group members who did not understand English would be disadvantaged in the settlement process and that the notice of settlement did not set out the reimbursement payment amounts to be paid to the plaintiffs.
(iii) Several objectors provided accounts of their experiences of the lockdowns and how they have been affected, including feelings of emotional distress, alienation, isolation, loss of income, anxiety, depression, suicidal feelings, general negative impacts on mental and emotional health, fear of police brutality and dehumanising treatment from the Department of Health, and lack of regard for the basic human rights and dignity of the individuals involved. The objections explained the difficulties those group members experienced in obtaining food, supplies, medicine, fresh air and exercise over that time- particularly the elderly, infirm or disabled. There were accounts of older relatives who suffered during the lockdown and have since passed away, and whose health declined sharply from the lockdown.
(d) Response to objections:
(i) Sufficiency of settlement: The plaintiffs’ solicitor agreed that it would be better if the settlement sum were higher and stated the sum accepted was not intended to diminish the real trauma endured by the group members. The sum accepted was the result of legal and practical considerations, based on Mr Clemens’ own professional skill and judgment, as well as the confidential opinion of counsel.
(ii) Differentiation: the uniform payments to group members (save as between adults and children, who would likely have suffered different impacts to their dignity and reputation) was because all group members were treated the same way and suffered the same injury for the purposes of the tort of false imprisonment (deprivation of liberty). Assessment of each individual’s circumstances would be impractical, lead to inordinate delays and great expense. The period of detention of 33 Alfred Street tower residents was admittedly much longer – an additional 9 days.
(iii) Apology: Despite the plaintiffs’ strong request for an apology, the defendant’s position remained firm, as expressed by the Premier on numerous occasions. The State refused to admit liability in the proceedings.
(iv) Objectors: None of the objections indicated a willingness by the objector to assume the role and risk of being lead plaintiff in the proceeding or to otherwise contribute to the costs or disbursements of the proceeding.
(v) Fair and reasonable:
· Mr Clemens’ opinion was that the settlement was fair and reasonable and will bring finality, certainty, costs containment and significant comfort to group members. For most group members, giving evidence at trial may well have produced considerable distress and anxiety. In his confidential affidavit he explained why it was appropriate to accept an offer at the lower end of the range of awards for false imprisonment.
· Mr Clemens exhibited the confidential opinion of Dr Juliet Lucy, who was counsel for the plaintiffs throughout. Her opinion reasoned through the prospects of each of the causes of action and the likely range of quantum involved. After assessing all of the legal and practical risks attendant in continuing with the proceeding, counsel’s opinion was that the settlement sum was within the range of reasonable outcomes, albeit at the lower end of that range.
· The second plaintiff said in her open affidavit that the scenes during the lockdown reminded her of the war zone from which she escaped. She was greatly distressed and her husband was sick and could not get medication. She still suffers from anxiety and helplessness. She said that she hopes the settlement of the case will alleviate some of the trauma and allow her to move forward. She was glad the government had agreed to pay the residents and believes it will help to make the painful memories more bearable.
(e) Further conduct to trial: Should approval not be obtained, the trial would be set down on a 20-day estimate. Further preparation of evidence and submissions would be required, together with consultations with the plaintiffs and lay and expert witnesses. Mr Clemens set out a detailed breakdown of total costs up to trial estimated at $550,00 (including GST).
(f) Reimbursement to the plaintiffs, in respect of which a payment of $40,000 each was sought:
(i) Mr Clemens maintained that each of the plaintiffs expended considerable time and effort, and experienced considerable stress and anxiety in bringing the proceedings on behalf of group members.
(ii) The first plaintiff explained in his affidavit that prior to his involvement in these proceedings, he had many friends in the Somali community, which he described as a close-knit and fairly insular community. He said as a result of his role in these proceedings, he has been ostracised by the Somali community, which affected his mental and emotional wellbeing. He deposed to having experienced depression, sadness, anxiety and disappointment as a result. He has not been able to attend community events. He explained that he has expended valuable time away from income-earning activities to act as representative plaintiff and has incurred significant expenses in doing so. He estimates he has spent a total of 30 full days performing tasks related to the proceeding.
(iii) The second plaintiff explained that her family has been part of Melbourne’s Somali community since they arrived in Australia. The community meets frequently for prayer and weekend events. She has not had many dealings with the non-Somali community and the community provides her with an important human connection and a connection to her mother-tongue. She explained she has been ostracised from her community as a result of taking on the role of representative plaintiff in this proceeding. She described this in her confidential affidavit. Like the first plaintiff, she has sacrificed valuable time and incurred expenses in the interests of prosecuting this proceeding on behalf of group members and has experiences. She has experienced a significant degree of stress and anxiety in the fulfillment of her role. She estimates having spent a total of 20 full days conducting tasks associated with her role.
The applicable principles
I recently set out the relevant principles in Somers v Box Hill Institute.[2] They are, in relevant part, as follows.
[2][2022] VSC 730, [15]-[26].
Section 33V of the Act provides:
Settlement and discontinuance
(1)A group proceeding may not be settled or discontinued without the approval of the Court.
(2)If the Court gives such approval, it may make such orders as it thinks fit with respect to the distribution of any money, including interest, paid under a settlement or paid into court.
The two sub-sections of 33V confer two distinct, but related, powers: first, to approve the settlement and, second, to approve the distribution of payments under it.
The principles that guide the exercise of the court’s power to approve a proposed settlement are well established.[3] The court must consider whether the proposed settlement is fair and reasonable as between the parties having regard to the claims of the group members bound by the settlement; whether it is in the interests of group members as a whole and not just in the interests of the plaintiffs and the defendants and whether the assessment and distribution of the settlement sum to individual group members inter se is fair and reasonable.
[3]Williams v FAI Home Security Pty Ltd [No 4] (2000) 180 ALR 459, 465–6 [19]; Darwalla Milling Co Pty Ltd v F Hoffman-La Roche Ltd (No 2) (2007) 236 ALR 322, 332–6 [30]–[40]; Blairgowrie Trading Ltd v Allco Finance Group Ltd (rec and mgr apptd) (in liq) [No 3] (2017) 343 ALR 476, 499–500 [81]–[85]; Botsman ff (n 2) 110 [195].
Approval of a compromise of litigation requires an assessment of whether the plaintiff is likely to succeed in the action, the measure of damages that a successful judgment would yield, the prospects of recovery, and the expenditure in costs, time and effort that would be required to bring the proceedings to a conclusion.[4]
[4]Williams (n 3) 465 [19].
Whether a proposed settlement is fair and reasonable depends not only on whether the settlement sum is fair and reasonable, but also, among other things, on whether the distribution of the settlement sum among group members is fair and reasonable. I must be independently satisfied of the fairness and reasonableness of the proposed settlement. It will not be sufficient to simply assess whether the opinions expressed by the plaintiffs’ legal advisers appear, on their face, to be reasonable. The absence of substantive objections to the settlement does not relieve the court of its obligations, but the court’s assessment can do no more than confirm whether or not the proposed settlement is within the range of fair and reasonable outcomes as the relative prospects of success can only be broadly gauged.
The statutory task calls for matters of judgment based on imperfect knowledge and is influenced by appetite for risk. It is that state of imperfect knowledge and the existence of risks that will have likely induced the settlement and those matters should be accorded a degree of prominence in any assessment of the reasonableness of the settlement.[5]
[5]Botsman (n 2) 112 [206].
Factors relevant in this proceeding in determining whether the proposed settlement is fair and reasonable as between the parties, having regard to the interests of group members as a whole, include:[6]
[6]Williams (n 3) 465-6 [19].
(a) the complexity and likely duration and cost of ongoing litigation;
(b) the reaction of the class to the settlement;
(c) the stage of the proceeding;
(d) the risks of establishing liability and the likely size of quantum;
(e) the risks of maintaining a group proceeding;
(f) the ability of the defendant to withstand greater judgment;
(g) the range of reasonableness of the settlement in light of the best recovery;
(h) the range of reasonableness of the settlement in light of all the attendant risks of litigation; and
(i) the terms of any advice received from counsel and/or from any independent expert in relation to the issues which arise in the proceeding.
The distribution of the settlement sum and the precise settlement terms are also important. This includes payments made to particular group members, the lead plaintiffs, and how legal costs and disbursements will be treated.[7] Although not so in this case, usually legal costs will be deducted from the settlement sum and the court’s role is to satisfy itself the costs are reasonable and proportionate in all the circumstances.[8] That is particularly so where costs are opaque to group members because of confidentiality concerns. In this case, the court does not have to engage in that process. The costs are not to be deducted from the settlement and the costs of the administration of the distribution will also not be deducted. In the circumstances, the costs incurred, which are to be borne by the defendant, can be assessed by the costs court in the ordinary course without any impact on this process.
[7]Botsman (n 2) 112 [209].
[8]Earglow Pty Ltd v Newcrest Mining Limited [2016] FCA 1433, [91]; Blairgowrie (n 3) [180]-[181]; Botsman (n 2) 116-7 [223].
Assessment of the settlement
Plaintiffs’ submissions
The plaintiffs submitted that, having regard to an assessment of the prospects of success, the settlement was fair and reasonable between the parties. The plaintiffs maintained that the proposed settlement figure fell within an acceptable range, by reference to the relevant factors that I have set out.
First, the litigation was going to be factually and legally complex because of the size of the group and number of allegations about the conditions of the detention. There was a very large number of discovered documents. There were a number of claims about the validity of legal instruments and directions and about administrative action. There was complexity associated with the damages claims and application of the Wrongs Act. The trial was anticipated to run for 20 days, involving a large number of witnesses on each side. It was unlikely it would be heard before next year, in circumstances where the proceedings have been on foot since 19 March 2021.[9]
[9]I note that that the proceeding was set down for trial in September 2023 had it not settled at mediation.
Second, the reaction of group members had been generally positive. Objections have only been received from 0.3% of the class. Complaints about the inadequacy of the settlement were understandable and detailed some great suffering and trauma experienced by some of the objectors, including infringements to their basic human rights, and losing loved ones who were already in poor health and vulnerable as a result of the stress of the lockdown. They complained about the unfair distribution between adults and children, and between those who were in 33 Alfred St and those who were not. The plaintiffs acknowledged that these complaints carry some force.
Third, while the proceeding was at an advanced stage, there was still much preparation work for the parties of evidence and submissions for a final hearing – settlement would save the parties significant costs and save the witnesses stress and time.
Fourth, there were risks in maintaining the proceeding and the outcome was uncertain. The particular assessment of the risks and of the likelihood of establishing liability, loss and damage were examined in some detail in counsel’s confidential opinion and in Mr Clemens’ confidential affidavit. The relevant prospects may only be broadly gauged, particularly where evidence has not been heard or tested as is the case here.
The plaintiffs submitted that the issues that would have to be resolved in their favour included the following:
(a) False imprisonment:
(iv) Whether the directions relied upon to justify the first and second detention periods were invalid or did not apply to the group members for all or part of those periods.
(v) Whether Dr van Diemen made the directions for the first detention period under dictation or failed to make an independent decision – in other words, did she permit the decisions of third parties or their actions or attitudes (in this case the Premier or her superiors in the Health Department) to control the way in which her statutory discretion was exercised.
(vi) What the counterfactual situation would have been if Dr van Diemen had not acted under dictation – ie. Would she have been likely to make substantially similar directions a day later? In which case, it may be that the plaintiffs and group members were only entitled to compensation for that short period.
(vii) Whether the directions were otherwise invalid for failure to comply with s 200 of the PHW Act. The power to detain is subject to compliance with those provisions and the plaintiffs maintained they did not do so. The question was whether that was the case, and even if it was, whether that rendered the detention unlawful, given the urgent circumstances in which the decision was taken – in the context of a public health crisis.
(viii) Whether Dr van Diemen failed to comply with s 38(1) of the Charter when deciding to make the directions, by not giving proper consideration to certain human rights of the group members, including the rights to non-degrading treatment, liberty and freedom of movement, or whether she acted in a way incompatible with those rights. The defence is that the Charter did not apply because the directions were legislative in character. The plaintiffs contended this was purely an administrative power, and it was indicative of error to use it to make purported legislative instruments.
(ix) Whether the Close Contact Directions were invalid because the authorised officers who made them impermissibly purported to delegate the authorisation given to them under the PHW Act. Did Drs van Dieman and Romanes misconstrue their powers under that Act? Were the powers exercised for an improper purpose?
(x) Whether the Close Contact Directions applied to the defendants given they were not individually considered diagnosed persons or close contacts. Was the blanket determination alleged by the plaintiffs invalid and inconsistent with the relevant directions?
(b) Assault: Whether the armed police surrounding the towers were threatening force against the plaintiffs and group members should they leave the premises, ad whether the group members reasonably believed the threat would be carried out forthwith.
(c) Damages: Relevant considerations would be whether the quantum was affected by the fact that the plaintiffs and group members were detained in their homes; the circumstances of restriction they would otherwise have faced during the COVID-19 lockdown period; the rationale for the lack of warning for their protection (in the context of a public health crisis); the duration of the imprisonment, particularly if Dr van Diemen’s decision was regularised in a day; whether s 28LE of the Wrongs Act applies to limit claims to significant injury.
In the plaintiffs’ open submissions, confidential submissions and counsel’s confidential opinion, the plaintiffs detailed the law around each of these issues, and the parties’ respective arguments with a careful analysis of the prospects of each claim. I have given careful consideration to this material when concluding that a substantial discount for litigation risk was warranted.
Fifth, it is likely the State of Victoria is able to withstand a greater judgment without constraints on recovery.
Sixth, it may be inferred from the fact that the parties agreed to settle on this basis, that they considered the settlement to be reasonable. The risks of litigation are significant including claims or defences not succeeding, as well as the personal impact on the litigants and witnesses.
Finally the plaintiffs submitted that there are other benefits to the settlement including finalisation, avoidance of continuing personal anxiety, stress and suffering, the advancement of payment, and containment of costs.
As to the differentiation between adults and children, the plaintiff submitted that there is case law supporting the proposition that children are less likely to suffer the same degree of humiliation and indignity as adults when subject to false imprisonment, justifying lower quantum of compensatory damages.[10] One of the factors influencing settlement was that each adult and each child be treated the same way – because the impracticality of assessing each individual’s circumstances in a group of this size was insurmountable.
[10]Louis v Commonwealth (1987) 87 FLR 277, 284; Cubillo v Commonwealth of Australia (No 2) [2000] FCA 1084, [1531].
Defendants’ submissions
The State maintained that the Towers confinement was a lawful, necessary and proportionate emergency response to a rapidly escalating COVID-19 outbreak among Towers residents, at a time when there was no vaccine, the disease was rampantly contagious, and there was a significant mortality rate for those infected with the virus. The State’s position was that, absent the Towers confinement in July 2020, the situation in the Towers presented a very real risk that cases of COVID-19 would increase rapidly and exponentially within and outside the Towers and more people would contract COVID-19 and die.
The State contended that its emergency response was effected for the sole purpose of protecting the lives and health of Towers residents and the broader Victorian community. A community-based approach to policing formed an important and appropriate part of the State’s overall response to a quickly developing public health emergency and a 1800 support telephone line was established, elderly and vulnerable residents were proactively contacted, testing and health facilities on site were established and rent relief and lump sum income and household support payments were provided.
Nevertheless, the State acknowledged litigation risk on both sides that warranted compromise, particularly:
(a) The Plaintiffs brought multiple novel statutory construction arguments in the context of actions by the State during an unprecedented public health emergency.
(b) Any trial would be likely to be of long duration, complex and costly with a delay to await judgment, the spectre of ensuing appeals, and the binary outcome of one side succeeding and the other side losing the case altogether.
(c) The quantum of any damages, if awarded at all, was difficult to estimate with any precision, including because of the unique feature that the confinement took place in the group members’ own homes within the broader reality of lockdowns affecting Victorians beyond the Towers. A further complicating factor in respect of the quantum of any damages was that the State presented a counterfactual in which Towers residents would have been detained lawfully after around the initial 32 hours in any event, such that, even if the Plaintiffs were to establish liability, only nominal damages may be able to be recovered.
The State noted that the Secretary of the Department of Health, Professor Euan Wallace AM, will be appointed by the Court as Administrator of a Settlement Distribution Scheme (SDS) agreed between the Plaintiffs and the State. By that scheme, the Administrator will be responsible for:
(a) assessing claims for payment of settlement monies made by each Group Member who applies to participate in the distribution of the Settlement Sum, including by taking all reasonable steps to verify the identity, age and eligibility of that Group Member;
(b) applying a formula for distribution fixed by the SDS;
(c) notifying all eligible group members of the proposed payment and how it was calculated;
(d) making payments to the eligible Group Members from the Settlement Sum, calculated in accordance with the formulae for distribution fixed by the SDS;
(e) endeavouring to complete the administration of the settlement in 180 days;
(f) reporting to the court in the finalisation of the administration of the SDS.
The defendant also submitted that there was a substantial degree of complexity to the issues in dispute, a factor that weighed significantly in favour of an early compromise of the proceeding. The State noted a number of factors of particular complexity.
(a) It contended that Dr van Diemen lawfully exercised her powers;
(b) even if the Plaintiffs established that the Detention Directions were unlawful on the basis that Dr van Diemen acted under dictation, the State would contend for a finding that no later than midnight on 4 July 2020, or alternatively midnight on 5 July 2020, an authorised officer would have made lawful directions in the same or substantially in the same form as the Detention Directions.[11] Were this argument to succeed, the period of unlawful detention in the first period would reduce from around five days to around 32 hours.
(c) Dr van Diemen made the Detention Directions in compliance with the statutory scheme regulating the exercise of the power to ‘detain any person or group of persons …’ set out in s 200 of the PHW Act and that there was no failure to comply with the procedural requirements of that provision. Alternatively, any non-compliance was not jurisdictional error and would not have invalidated the Detention Directions.
[11]Note Lewis v Australian Capital Territory (2020) 94 ALJR 740; CPCF v Minister for Immigration and Border Protection (2015) 255 CLR 514, 570 [157], 572 [164], 610-611 [324]-[325], 655-656 [511]-[512]; Fernando v Commonwealth (2014) 231 FCR 251 [113]; Guo v Commonwealth (2017) 258 FCR 31.
Concerning the second period affecting 33 Alfred Street, the State’s position would have been that Dr van Diemen determined that residents of 33 Alfred Street were ‘close contacts’ based on her own expert review of testing and epidemiological data showing continuing unexplained chains of transmissions between residents of that Tower. Her determination was properly focussed on whether those individuals were at sufficient risk of having contracted COVID-19 to make it proportionate, from a public health perspective, to require them to self-quarantine and her decision to make the close contacts determination applying to 33 Alfred Street residents was both lawfully made and proportionate having regard to the public health knowledge at the time.
The State would have contended that the conduct of police in enforcing the DPCC Directions at 33 Alfred Street did not amount to an act of false imprisonment of residents.
The State also submitted that the plaintiffs contentions based on s 38 of the Charter faced the threshold difficulty identified in Kerrison v Melbourne City Council.[12] The directions were supportable as not amounting to jurisdictional error,[13] or were reasonable and demonstrably justifiable limits on relevant human rights in accordance with s 7(2) of the Charter.
[12](2014) 228 FCR 87, [199].
[13]See Bare v IBAC (2015) 48 VR 129, [139]-[152].
There was no assault by police.
Aggravated damages and exemplary damages could be disregarded as remote risks.
Consideration of the settlement as between the parties
I am satisfied, particularly since the whole of the lump sum is to be paid to the plaintiffs and group members such that the settlement sum is exclusive of costs and administration expenses, that the settlement is within the range of fair and reasonable settlements. That it falls towards the lower end of the spectrum, as some objectors have complained, is true, but not a sufficient reason to refuse to approve the settlement.
The submissions that I have set out in some detail expose the issues creating litigation risk for one party or the other and I cannot further evaluate those submissions other than by a trial, but I will say a little more below.
There are good reasons why the plaintiffs, on behalf of group members, accepted a substantial discount from a theoretical best outcome following trials. I have considered the submissions and counsel’s confidential opinion on the risks of the group proceeding continuing to trial. I generally accept counsels’ opinion and analysis of the risks involved in the litigation and the likely outcome for the plaintiffs and group members if this went to trial. While the plaintiffs appear to have strong prospects from some perspectives, both sides agree that the legal and factual complexity of these claims presented significant risk to the plaintiffs that on the one hand rendered a settlement at the lower end of the spectrum of damages for false imprisonment, appropriate for the group, and on the other hand, dictated the sensibility for the defendant in compromising the claims made against it. The assessments of risk and the analysis of the settlement being in a fair and reasonable range that the parties have each made appears to have been formed with a high degree of confidence because there has already been discovery and the filing of expert evidence.
The settlement avoided a trial set down for at least 20 days with very large costs and time commitment involved in the preparation for that trial. I accept that the witnesses in this case would suffer some stress in giving testimony about the events that transpired during the detention at the towers and it is not an insignificant benefit that this matter is resolved without recourse to a trial.
Equally, the defendant faced a searching analysis of the efficacy of emergency management regulation and practice that would raise many novel questions. It cannot be discounted that the losing party might appeal adding further uncertainty, cost and delay before a payment was made to group members.
I have noted what some of the group members have said in their objections which I take seriously. As I have said, this is a settlement on the low end of the spectrum. However, the settlement in this case has been reached for legal and commercial reasons that are appropriate, realistic and justified. The plaintiffs’ claims, for the reasons I have canvassed, carried real risks of an adverse outcome, particularly:
(a) the risk that the plaintiffs would fail to establish liability for false imprisonment at all, during either the First Period or the Second Period, or, if liability were to be established, that any award of damages would be nominal or modest;
(b) the risk that the plaintiffs would fail to establish liability for assault during either the First or the Second Period
Focussing on quantum, the authorities suggest that the length of the period in detention is not necessarily the critical factor. In Ruddock v Taylor, Spiegelman CJ observed:
Damages for false imprisonment cannot be computed on the basis that there is some kind of applicable daily rate. A substantial proportion of the ultimate award must be given for what has been described as “the initial shock of being arrested”. As the term of imprisonment extends the effect upon the person falsely imprisoned does progressively diminish.[14]
[14](2003) 58 NSWLR 269, 279 [49].
As noted above there are other distinct factors that contribute to the application of similar sentiment in this case. As Harrison J observed in Beckett v New South Wales:
In Australia, there is no authoritative guideline on how to calculate damages in wrongful imprisonment or malicious prosecution cases by reference to the period of time the plaintiff was detained. There is no clear arithmetical symmetry. Each case appears to turn on its facts and the reasoning behind the quantum of damages is usually short.[15]
[15][2015] NSWSC 1017 [670]; see also Hrdavec v New South Wales [2021] NSWSC 560, [467].
There were unique features for false imprisonment claims. Group Members were:
(a) confined in their homes, not a prison cell, police custody, or immigration detention;
(b) provided with significant welfare support by the State during the period of the Towers lockdown, as well as having already received financial relief payments related to the lockdown;
(c) Group Members would, in any event, have been subject to significant restrictions on their liberty and freedom of movement given the postcode specific and State-wide public health directions which were in place during the relevant period; and
(d) at least some of the Group Members would in any event have been subject to self-isolation or self-quarantine orders that applied throughout the relevant time to persons who had been diagnosed with COVID-19 or were a household or close contact of a diagnosed person.
These reasons support approval of an equally shared payment from the settlement sum to adult group members and a lesser equally shared payment to children. The costs of preparation of assessments taking account of and allowing for individual circumstances would likely see significant further costs incurred to enable proper preparation, presentation, assessment and review of payments determined by reference to the circumstances of some individuals. The defendant plainly did not agree to bear the costs of individually attuned assessments and this modest settlement sum cannot reasonably bear those costs as on a per person basis that additional expense is not justifiable. There is considerable merit in simplifying the assessment and distribution of payments in the manner agreed by this settlement.
At first blush it might appear inequitable that each sub-group member, adults and children, receives the same payment, but I am satisfied, as I will later explain, that the reasoning of the parties in structuring the settlement in this way is sound.
Ultimately, the vast majority of group members appear to have endorsed the settlement. There are real and practical benefits to now flow to them, including lifting the anxiety of litigating against a government. I am satisfied that it would not be in the group members’ bests interests to refuse to approve this settlement in the expectation of a better settlement or a better outcome at trial.
The settlement falls within the range of fair and reasonable outcomes as between the parties.
Consideration of the settlement as between group members
Four different groups of affected persons are identifiable:
(a) Group Members who were confined to their homes for the First Period only (five days);
(b) Group Members resident at 33 Alfred Street and who were confined to their homes for both the First Period and Second Period (14 days);
(c) Group Members who were under 16 years as at 4 July 2020; and
(d) the plaintiffs.
Before turning to this analysis, I turn to the claim of the plaintiffs to an additional sum of $40,000 each to compensate them for the time spent prosecuting the proceedings and for the effect that their role as plaintiffs has had on them personally. They have described the circumstances in their confidential affidavits and I have earlier set out generally the nature of their claims.
The State does not oppose a modest reimbursement amount from the Settlement Sum, in recognition of the plaintiffs’ unique role in the litigation.
Group members were notified that the plaintiffs may apply to the court for an amount to be deducted from the settlement sum in recognition of their position as lead plaintiffs representing group members and that amount must be approved by the court, but no specific amount was advertised to group members. No group member objected to this claim, but neither the sum sought not the fact that due to the size of the group, this payment will not have a significant impact on any individual group member was disclosed. Not much can be made of the absence of objection in these circumstances.
The plaintiff submitted, correctly, that it is common for courts to approve compensation to plaintiffs for the time and expenses, inconvenience and additional burden incurred in the interests of prosecuting the proceedings on behalf of group members as a whole. The plaintiffs maintained that an additional payment is appropriate in this case, to ensure justice is done as contemplated by s 33ZF of the Supreme Court Act. The plaintiffs faced risks of significant adverse costs orders, were potentially liable for the State’s costs, and experienced great stress and anxiety by fulfilling their role in this proceeding.[16]
[16]Downie v Spiral Foods Pty Ltd [2015] VSC 190, [173].
The plaintiffs’ claim is the highest I have seen and the cases in this court show reimbursement payments approved in a range from $13,470.46[17] to $30,000.[18] The plaintiffs’ submit that their claims for $40,000 each are reasonable in light of the significant stress occasioned in their roles, the time spent prosecuting the proceedings, and the personal risks each of them have taken in terms of exposure to liability for costs.
[17]Ibid [92].
[18]Lenehan (n 20).
In Somers,[19] I considered plaintiff reimbursements. I noted that it is appropriate to recognise in a modest way that the burdens assumed by a representative plaintiff can involve the discharge of not insignificant responsibility in acting as a representative party to achieve a corresponding benefit to the group as a whole. I also noted that the authorities indicate that a conservative approach should be taken to the quantification of compensation of this kind, and a distinction should be drawn between time devoted by the plaintiff to work activities that benefit the group as a whole, as opposed to work that benefits the plaintiff’s personal claim. The claim must be based on adequate evidence.[20]
[19](n 2) [53]-[56].
[20]See, eg, Pathway Investments Pty Ltd v National Australia Bank Ltd (No 3) [2012] VSC 625, [17], [21]; Lenehan v Powercor Australia [2020] VSC 82, [92].
The plaintiffs have deposed in open and confidential affidavits to the adverse consequences this proceeding has had on their lives, as well as the time and effort expended on the proceedings, which is significant. The ostracization and alienation the plaintiffs have experienced is unique and may warrant some compensation, but there is a real issue as to whether the compensation should be paid by group members rather than those responsible for what the plaintiff have had to endure who have not been identified. Further, the plaintiffs have submitted that any payment to them ought to be kept confidential, but I cannot agree that undisclosed deductions paid to the plaintiffs individually could meet the requirement of fairness between the members as between themselves. In Somers,[21] I noted:
The first named plaintiff, Ms Somers, has stated that the proceedings have taken a personal toll on her causing frustration and stress. She has been subjected to trolling; substantial online ridicule and at times direct verbal abuse by group members over an extended period of time. While I sympathise with Ms Somers that she has been required to endure such reprehensible behaviour, no basis has been identified for requiring that she be compensated for her anxiety and distress by group members rather than the perpetrators of such behaviour. Although I do not take that factor into account, I accept that Ms Somers carried the greatest burden of advocating for group members in terms of the time that she has devoted to assisting in the preparation of the proceeding…
[21]At [56].
In this case similar considerations apply. I accept, as J Forrest J said in Downie, ‘[t]he role of the lead plaintiff should not be underestimated.’[22] But, that said, as Nichols J observed in Lenehan v Powercorp,[23] while it is appropriate to compensate representative parties in this way, a conservative approach should be taken to the quantification of compensation of this kind, distinguishing activities that benefit the group as a whole from work that benefits the plaintiffs’ claim. In the same way, compensation for loss or damage falling outside of the claims or beyond the work involved in preparing them for the benefit of the group as a whole must also be distinguished.
[22]Downie v Spiral Foods Pty Ltd [2015] VSC 190, [175].
[23]Lenehan (n 20).
The plaintiffs have only provided very general evidence as to the expense they have incurred, which I do not consider to be adequate, and I cannot see how it can be put that the personal toll they have borne, as distinct from litigation stress, is compensable in this way by reference to the principles identified. Their evidence was supported by their solicitor and, in the circumstances, I am persuaded that, but for considerable effort and stress on the part of the plaintiffs, the group members may well not have recovered anything. It is appropriate to recognise, in a modest way, the burden that the plaintiffs discharged for the benefit of others.
I approved a payment of $37,500 from the settlement sum, being $22,500 to the first plaintiff and $15,000 to the second plaintiff. Their unsubstantiated guestimate of 30 and 20 days work respectively on the matter seems, at least, to support that distinction.
Next, as the payment predominately reflects success on the false imprisonment claim and is discounted to reflect the prospective strength of the State’s counterfactual, the length of the period of imprisonment is not the critical factor and the cases I cited earlier identify a principle that applies in assessing the fairness of the settlement as between the first and second groups. It is reasonable to regard the payment as principally directed to compensating all group members for the initial shock of being detained. As I have noted, there were other factors put in submissions that were relevant to this assessment and which I accept.
The position of the child group members is affected by a proper understanding of the nature of compensatory damages for false imprisonment. In Cubillo,[24] the court cited a passage from McGregor on Damages with which I also agree:
generally it is not a pecuniary loss but a loss of dignity and the like, and is left much to the jury's or judge's discretion. The principal heads of damage would appear to be the injury to liberty, i.e. the loss of time considered primarily from a non-pecuniary viewpoint, and the injury to feelings, i.e. the indignity, mental suffering, disgrace and humiliation, with any attendant loss of social status.[25]
[24](n 10) [1529].
[25]16th Ed, London, Sweet & Maxwell 1997 and the same passage appears in the 19th Ed at 40-012.
A judge’s role in an assessment of that sort may be compared to that of a jury and the common experience of humanity, as judges have noted, is that responses like humiliation and indignity are more marked in adults who have suffered false imprisonment and less apparent in children. Although this is a generality, taking this perspective into account, I am satisfied at a trial judge would probably assess the damages of a child in a lesser sum than the damages of an adult in similar circumstances and that the differential agreed by the settlement falls in a fair and reasonable range.
The settlement is a fair and reasonable outcome as between group members, including the reimbursement payment approved for the plaintiffs.
Settlement Distribution Scheme
I have considered the terms of the SDS and I approve of it.
Plaintiff’s costs
At the time of the hearing, the plaintiffs had just received a lump sum costs assessment from a costs assessor that had been provided to the defendant who had not had an opportunity to take instructions in respect of it. The plaintiffs seek costs and disbursements in the sum of $669,680. Given that the costs are being paid in addition to the settlement sum rather than from it, any assessment of costs can be taken up in the Costs Court. However, I have reserved the question of quantum for the time being with liberty to apply in the expectation that the parties may agree the final amount. If they do not I will order that the costs be assessed, on a lump sum basis, by the Costs Court.
Conclusion
I will order that:
(a) the settlement of the proceeding between the plaintiffs and the defendant (the Proceeding) is approved on the terms set out in the Deed and in accordance with the SDS;
(b) the persons affected and bound by these orders are the plaintiffs, the defendant and the group members, save for any group members who have opted out of the Proceeding and have not been reinstated;
(c) the plaintiffs are authorised nunc pro tunc on behalf of the group members described in the preceding sub-paragraph to enter into and to give effect to the Deed and the transactions thereby contemplated for and on behalf of those group members;
(d) the sum of $37,500 from the settlement sum is approved as an additional payment to the plaintiffs (reimbursement amounts of $22,500 to the first plaintiff and $15,000 to the second plaintiff), such sums to be paid to the plaintiffs within 20 business days;
(e) the defendant pay the plaintiff's reasonable costs and disbursements, the quantum of which is reserved and I grant liberty to apply;
(f) I appoint the Secretary for the Department of Health Mr Euan Wallace AM as Administrator of the Scheme (the Administrator);
(g) I direct that within 20 business days of the Administrator distributing the final balance of compensation entitlements to registered group members, the Administrator file and serve an affidavit reporting on the completion of the administration.
and I will make such other consequential orders, including orders concerning confidentiality of filed material, as are agreed between the parties.
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