Zhang v Heritage Golf & Country Club
[2023] FedCFamC2G 1191
•14 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Zhang v Heritage Golf & Country Club [2023] FedCFamC2G 1191
File number(s): MLG 3365 of 2021 Judgment of: JUDGE J YOUNG Date of judgment: 14 December 2023 Catchwords: INDUSTRIAL LAW – application by litigation guardian for approval of settlement of agreement involving minor – whether settlement in best interests of minor – approval of settlement by Court. Legislation: Fair Work Act 2009 (Cth)
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 rr 1.06(2), 11.01(1), 11.07.
Federal Court Rules 2011 rr 9.70, 9.71(2)(a)(b)(c).
Cases cited: Butler v Djerriwarrh Employment & Education Services Inc [2015] FCA 296
Scandolera v State of Victoria [2015] FCA 1451
Division: Division 2 General Federal Law Number of paragraphs: 30 Date of hearing: Determined on the papers Place: Melbourne Solicitor for the Applicant: Did not participate Solicitor for the Fourth Respondent: Michelle Dawson of Emplawyer Solicitor for the First, Second, Third, Fifth, Sixth, Seventh Respondents: Did not participate ORDERS
MLG 3365 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: ZHENG ZHANG
Applicant
AND: HERITAGE GOLF & COUNTRY CLUB
First Respondent
JESHING PROPERTY MANAGEMENT PTY LTD
Second Respondent
HUA WANG
Third Respondent
ZHEN NAN WANG (and others named in the Schedule)
Fourth Respondent
ORDER MADE BY:
JUDGE J YOUNG
DATE OF ORDER:
14 DECEMBER 2023
THE COURT ORDERS THAT:
1.The settlement between the parties recorded in the deed of release annexed and marked XG-1 to the affidavit of Ms Xiaohua Guo affirmed on 22 August 2023 be approved.
2.No order as to costs.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE J YOUNG:
Before the Court is an Application in a Proceeding (Application) for the approval of a settlement agreement (Settlement Deed) commenced by the litigation guardian of the fourth respondent, Master Zhen Nan Wang, who is a minor born [date] 2006 and aged 17.
The Settlement Deed will not be binding on Master Wang unless the Court grants approval pursuant to r 9.70 of the Federal Court Rules 2011 (FC Rules).
For the reasons set out below, I am satisfied the Settlement Deed should be approved.
BACKGROUND
On 21 December 2021, the applicant filed an Application (Primary Application) under the Fair Work division of this Court against the respondents.
By their Response and Cross-Claim filed 21 April 2022, the respondents to the primary Application brought a cross-claim against the applicant and another cross-respondent named in the cross-claim (Primary Proceeding).
For the purposes of the Application currently before the Court, it is not necessary to detail the particulars of the primary Application, Response or Cross-Claim filed in the Primary Proceeding. However, it is noted that the applicant’s claim against Master Wang was, in broad terms, limited to an incident on 16 October 2021 and alleged breaches of the Fair Work Act 2009 (Cth) arising from the incident.
On 21 March 2022, the Court made orders by consent that Ms Xiaohua Guo be appointed as the litigation guardian of Master Wang.
On 12 May 2022, the parties attended Court-based mediation, with discussions continuing after the mediation. The Court was then informed on 6 June 2022 that the proceedings had settled in principle.
On 3 August 2022, the parties executed the Settlement Deed to settle all disputes between them, finalising the Primary Application.
The Settlement Deed contains a confidentiality clause which prevents the disclosure of the terms of the Settlement Deed and the content of all discussions leading to the settlement reached. Accordingly, the delineation of the Court’s reasoning is restricted to some extent, so as to ensure the confidentiality of the Settlement Deed is maintained.
LEGAL PRINCIPLES
Rule 11.07 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (FCFCOA Rules) provides that a person in a proceeding who is a minor is taken to need a litigation guardian in relation to the proceeding. Rule 11.01(1) of the FCFCOA Rules further provides for the appointment of a litigation guardian.
However, whilst the FCFOA Rules provide for the appointment of a litigation guardian for minors, they are silent as to the process for approving any agreement to settle a claim against a minor, for whom a litigation guardian has been appointed.
Rule 1.06(2) of the FCFCOA Rules provides that where the FCFCOA Rules are insufficient, the Court may apply the FC Rules “in whole or in part and modified or dispensed with, as necessary”.
Chapter 2, Part 9, Division 9.6 of the FC Rules concerns persons under a legal incapacity in proceedings, which includes minors.
Rule 9.70 deals with settlement of a matter involving a minor during the course of the proceeding and is as follows:
9.70 Compromise or settlement of matter in proceeding
(1)If a litigation representative agrees to the compromise or settlement of any matter in dispute in a proceeding, the litigation representative must apply to the Court for approval of the agreement.
(2)If the Court approves the agreement, the agreement is binding on the person by or for whom it was made as if:
(a) the person were not under a legal incapacity; and
(b)the litigation representative had made the agreement as the person’s agent.
(3)The Court may, as a condition of approval, require that any money or other property payable for the benefit of a person under a legal incapacity be dealt with by way of a settlement, or in any other way that the Court considers appropriate.
Note: The Court may give approval subject to conditions—see rule 1.33.
(4)If the Court does not approve the agreement, the agreement is not binding on the person under a legal incapacity.
Rule 9.71 then sets out the requirements for an Application by the litigation representative for approval of the agreement and is as follows:
9.71 Application by litigation representative for approval of agreement
(1)An application by a litigation representative for approval of an agreement must be made by filing an interlocutory application.
(2)The interlocutory application must be accompanied by the following:
(a) an affidavit stating the material facts on which the application relies;
(b) the agreement that is sought to be approved;
(c)an opinion of an independent lawyer that the agreement is in the best interests of the person under a legal incapacity.
When determining whether or not to approve a settlement agreement, the Court must be satisfied the settlement agreement is in the best interests, or beneficial to the interests, of the person under a legal incapacity: Butler v Djerriwarrh Employment & Education Services Inc [2015] FCA 296 at [10].
Further, when considering whether to approve an agreement, pursuant to r 9.71(2)(c) of the FC Rules, the Court should be assisted by the opinion of an independent lawyer. Whilst the independent lawyer may be someone who has access to more material than the Court, and who has been briefed fully on the facts and relevant evidence, the Court is not bound by the independent opinion: Scandolera v State of Victoria [2015] FCA 1451 at [28].
THE CURRENT APPLICATION
Master Wang’s litigation guardian filed the Application for approval of the Settlement Deed on 14 September 2023.
The Application was accompanied by:
(1)an affidavit of the litigation guardian in accordance with r 9.71(2)(a) of the FC Rules;
(2)a copy of the Settlement Deed annexed to the litigation guardian’s affidavit at Annexure XG-1, in accordance with r 9.71(2)(b) of the FC Rules; and
(3)an opinion of an independent lawyer in accordance with r 9.71(2)(c) of the FC Rules.
In her affidavit, the litigation guardian deposes to the following:
·On 22 June 2022, the litigation guardian received a copy of the Settlement Deed;
·On 23 June 2022, the litigation guardian met with Master Wang. At that meeting, the litigation guardian:
·had a printed copy of the Settlement Deed;
·explained to Master Wang that the Settlement Deed would finalise the proceedings; and
·explained the terms of the Settlement Deed and, in particular, what they meant between Master Wang and the applicant.
·On 25 July 2022, the litigation guardian executed the Settlement Deed on behalf of Master Wang.
·On 19 July 2023, the litigation guardian participated in a video conference with Master Wang and his lawyer. The purpose of the meeting was to confirm Master Wang fully understood the terms of the Settlement Deed and the obligations it placed on him. At the meeting, Master Wang’s lawyer read the entire contents of the Settlement Deed to Master Wang and his litigation guardian. At the meeting, Master Wang’s lawyer also explained the effect of particular clauses of the Settlement Deed and the obligations they placed on Master Wang.
·Following the video conference on 19 July 2023, and on that same day, the litigation guardian spoke to Master Wang to confirm he understood the terms of the Settlement Deed. Master Wang confirmed he understood the terms of the Settlement Deed and how they impacted him.
The litigation guardian further deposed to the following:
·She is satisfied Master Wang understands the terms of the Settlement Deed and the obligations it places on him, including specific clauses directly relating to Master Wang’s obligations.
·She is satisfied Master Wang is aware of his rights pursuant to the Settlement Deed, including specific clauses relating to the applicant and Master Wang.
·She does not believe any further actions are required to be taken to assist Master Wang with his understanding of the terms of the Settlement Deed and his obligations pursuant to the Settlement Deed.
In her opinion, the independent lawyer sets out her reasons as to why the Settlement Deed is in the best interests of Master Wang.
The independent lawyer states that her opinion was prepared in furtherance of her duty to the Court, and not in furtherance of any duty to a party to the proceeding.
The independent lawyer further sets out the scope of the claim against Master Wang and the risks to him if the Settlement Deed was not approved. This includes the potential of:
·A declaration against Master Wang and imposition of pecuniary penalties, which particularly given his status as a minor, would have serious legal, financial and reputational consequences;
·A lengthy litigation process and trial, which would likely lead to substantial legal expenditure for Master Wang, particularly as he would continue to require separate legal representation to the other respondents;
·The adverse impact on Master Wang’s wellbeing as a young person if he were subjected to cross-examination and any potentially self-incriminating evidence and exposure to criminal liability.
The independent lawyer then sets out the features and terms of the Settlement Deed and how they benefit Master Wang’s interest. Put broadly, this included:
·A holistic settlement is in Master Wang’s interest as it dispenses of the need for him to appear as either a party or a witness in any proceedings;
·The Settlement Deed ensures final settlement of all issues between Master Wang and the applicant;
·Discussion of specific terms of the Settlement Deed and how they are in Master Wang’s best interests.
The independent lawyer also confirmed she had read the litigation guardian’s affidavit.
In conclusion, the independent lawyer gave the opinion that:
Having regard to the risks of continuing this proceeding, the terms of the settlement, and on satisfaction that Master Wang understands the terms of the Deed and how they impact him, I consider that the Deed is in the best interest of Master Wang.
CONSIDERATION
On the basis of the evidence before the Court, I am satisfied that approval of the Settlement Deed is in the best interests, or beneficial to the interests of, Master Wang.
Accordingly, I make the orders set out at the commencement of these reasons.
I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment of Judge J Young. Associate:
Dated: 14 December 2023
SCHEDULE OF PARTIES
MLG 3365 of 2021 Respondents
Fifth Respondent:
TRUE GAINS LIMITED
Sixth Respondent:
THE WANG HOLDINGS GROUP PTY LTD
Seventh Respondent:
HGC PROPERTIES PTY LTD
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