From: Neil Foster <neil.foster@newcastle.edu.au>

Sent: Wednesday 9 April 2025 02:31

To: obligations@uwo.ca

Subject: ODG: HCA on setting aside deed relating to child abuse

Dear Colleagues;

The High Court of Australia decision in DZY (a pseudonym) v Trustees of the Christian Brothers [2025] HCA 16 (9 Apr 2025) concerns a legislative provision in Victoria allowing the setting aside of a deed of settlement of civil proceedings relation to child sexual or physical abuse. Following our Royal Commission on Institutional Child Abuse jurisdictions amended their laws to remove limitation periods in relation to these actions, and also passed laws allowing actions to be taken against unincorporated religious bodies (removing what has become known as the Ellis defence.) Following these amendments, a number of jurisdictions have also passed laws allowing the re-opening of civil claims which had previously been settled. For many parties who had previously settled, the operation of the former limitation bar and the Ellis defence meant that the settlement was made on a legal basis which no longer exists.

The two issues in DZY were (1) was it necessary, when a court was considering whether setting aside a former settlement (in this case under s 27QE of the Limitation of Actions Act 1958 (Vic)) for the court to find that the settlement had been primarily influenced by the two former barriers of limitations and Ellis? (2) Even if not, was the Victorian Court of Appeal correct to find that it was not 'just and reasonable' to set aside the economic loss component of a former settlement agreed to by DZY.

The majority (plurality) of the court (GAGELER CJ, GORDON, EDELMAN AND GLEESON JJ) held that the answer to q (1) was No. The legislation itself did not incorporate the need for these factors to have influenced the settlement, for the jurisdiction to set it aside to be enlivened (although they would of course be relevant factors- [30]). Actually the sole dissenter, Steward J, also agreed with this proposition, though at [40] he felt the plurality had been a bit tough in reading the majority of the VSCA as so finding: This Court should not strain to find appellate error. It should not voraciously construe the reasons of appellate courts.

The answer to q (2) was agreed on by all the members of the court. The circumstances of the prior settlement by DZY did not make it 'just and reasonable' for the settlement of the claim for economic loss to be overturned. The plurality commented:

[35] The evaluative judgment undertaken by the Court of Appeal identified, correctly, that the evidence did not allow the Court to be satisfied it was just and reasonable to set aside either deed insofar as it released the Trustees from an economic loss claim. There was no dispute about the relevant factual circumstances and the following circumstances were identified by both parties during the course of argument. 

[36] First, there was no direct evidence from DZY that, at the time he signed each of the deeds, he decided to renounce his economic loss claim due to the limitation defence or the Ellis defence. Rather, the evidence suggested that he chose to renounce his economic loss claim because of concerns about a potential "clawback" of Centrelink benefits. 

[37] Second, although DZY was affected by alcohol consumption and anxiety at relevant times in 2012 and 2015: DZY was legally represented and he was provided legal advice in relation to both deeds; he was not rushed into signing either deed, but rather had several weeks to think about them before signing; DZY's legal representatives certified that DZY appeared to understand the purport and effect of each deed; and DZY's statement that he felt like he had "no choice but to accept the offer because the legal barriers were too great" was not related to any conduct of the Congregation or to DZY's decision to renounce economic loss - rather, that statement appears to relate to DZY's acceptance of the settlement sum for his general damages claim.

 Regards

Neil

NEIL FOSTER

Associate Professor, School of Law and Justice

College of Human and Social Futures,

 The University of Newcastle
Hunter St & Auckland St, Newcastle NSW 2300

T: +61 2 49217430

E: neil.foster@newcastle.edu.au

Further details: http://www.newcastle.edu.au/profile/neil-foster

My publications: http://works.bepress.com/neil_foster/ , http://ssrn.com/author=504828

Blog: https://lawandreligionaustralia.blog

I acknowledge the Traditional Custodians of the land in which the University resides and pay my respect to Elders past and present.
I extend this acknowledgement to the Worimi and Awabakal people of the land in which the Newcastle City campus resides and which I work.

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