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Previous settlement a bar to recovery for victim of historical abuse

17 August 2020 | General Insurance

An applicant who had entered into a settlement with the respondent prior to changes removing the limitation period for victims of child sexual abuse, has failed to have the previous settlement set aside in order to pursue a further claim. 

In Issue

  • The applicant’s ability to pursue a claim the subject of a deed of release between the parties, and the basis on which the deed could be set aside.

The background

The applicant alleged historical sexual abuse by priests who were members of the respondent. The applicant commenced proceedings where the respondent raised a limitation defence. The proceedings resolved by way of a deed of release. The respondent paid $95,000 and the applicant released the respondent from, inter alia, future claims relating to the subject matter of the claim. 

The application at trial arose in the context of legislative change to the Limitation Act 1969 (NSW) which abolished the limitation period for victims of child abuse. The applicant sought to bring a further claim based on the same complaints, and the respondent raised the deed as a complete defence. A separate question was ordered to be tried as to whether the deed extinguished the liability of the respondent. The applicant alleged the deed to be unfair, and alleged unconscionable conduct in respect of the agreement to enter into the deed.

The decision at trial

The trial judge found that the deed extinguished the liability of the respondent, and dismissed the application. It was found that the applicant did not lack capacity when he entered into the deed and there was no unconscionable conduct by the respondent. The plaintiff had legal representation at the time he signed the deed.

The issues on appeal

  • Whether the deed of settlement was an unjust contract and whether the applicant was at a special disadvantage because of his PTSD condition;

  • Whether a relevant factual report which essentially established the applicant’s factual basis for the abuse claim had been provided to the applicant prior to the time of entry into the deed.

The Decision on appeal

The Court of Appeal relied on contemporaneous documents to resolve the dispute as to the timing of the receipt of the factual report. It upheld the trial judge’s finding that the report was provided to the applicant prior to the deed being entered. It was also found that the deed did not constitute an unjust contract within the meaning of the Contracts Review Act 1980 (NSW) and upheld the trial judge’s findings that there was no undue influence, or unconscionable conduct by the respondent, including in respect of the applicant being a sufferer of PTSD. The trial judge’s dismissal of the application was upheld.

Implications for you

The abolition of limitation periods for actions in respect of historical abuse removes an obstacle for victims of such abuse in seeking compensation. However, where the matter is the subject of a prior settlement and release, then a properly obtained release will still be a bar to any future action. 

The careful consideration of the circumstances of entry into the deed of release here is a reminder that such negotiations and settlements must be capable of scrutiny against unfair contract principles at a later date.

Magann v The Trustees of the Roman Catholic Church for the Diocese of Parramatta [2020] NSWCA 167

Author

Elizabeth O'Connor

Elizabeth O'Connor

Senior Associate