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Setting aside a settlement of a claim re child sexual abuse

Between 1986 and 1989, a boy (let’s call him Tom) was a student at a Brisbane school. Kevin Lynch had been employed at the school since the beginning of 1973. When Tom attended the school, Lynch was the full time school counsellor. Tom experienced difficulties at home and at the school when he was 12 and 13 and in grades 8 and 9. He was counselled by Lynch. Subsequently, Tom reported that, in the course of purportedly counselling him, Lynch sexually assaulted him on numerous occasions. Lynch resigned his employment at the school towards the end of 1988 and was then employed at a different school. He committed suicide after being charged with sexual offences against a student at that school.

With assistance from lawyers, Tom brought a claim against the school which was settled in 2001. Tom received compensation of $47,000 plus costs of $12,000.

In June 2018, Tom applied in the Queensland Supreme Court for an order under subsection 48(5A) of the Limitation of Actions Act 1974 (QLD) that the settlement agreement between him and the school be set aside on the ground that it was just and reasonable to do so.

This is a new section of the Limitation of Actions Act 1974 which was introduced following recommendations made by the Royal Commission into Institutional Responses to Child Sexual Abuse that there ought to be no limitation periods with respect to historical abuse claims given the overwhelming evidence that the majority of claimants delay the disclosure of their experiences into their adulthood and should not be punished for failing to commence a claim within the ordinary three years allowed following the date of the abuse.

Section 48(5A) went beyond those recommendations to allow for claimants such as Tom who had already settled their claims while the ordinary three year time limit was in place to have their claim re-litigated if it was “just and reasonable” to do so.

Tom was unsuccessful in the Supreme Court and in his appeal to the Queensland Court of Appeal where the three judges unanimously agreed that there was no reason why the settlement reached in 2001 was not ‘just and reasonable’. Tom then appealed to the High Court of Australia. On 20 May 2021, a special leave application was heard by the High Court of Australia. Tom argued that the previous judges had made an error by not properly interpreting the phrase “just and reasonable” and by failing to give effect to the proper intent of the amendments to the Limitation of Actions Act 1974 which was to allow victims such as Tom to have their matter revisited. Ultimately, the High Court refused leave to appeal.

Unfortunately for Tom, this means that his right to have his settlement of $47,000 re-litigated has failed and he has no further legal recourse.

Impact of This Decision

While Queensland was the first State to introduce these “deed set aside” laws, there are now similar laws in Western Australia, Victoria, the Northern Territory and Tasmania. There is currently a comparable Bill being debated by the New South Wales Parliament.

There have been decisions in Western Australia and Victoria which allowed those subjected to abuse to have their matter re-litigated because the Court in those jurisdictions considered that it was ‘just and reasonable’ to do so given, amongst other things:

1. The fact that there was a statutory time limit in place at the time of the original settlement meant that the compensation paid to the claimant was arguably lower than what they might have received had they litigated their case in 2021.
2. There were potentially other legal defences available to the institutions at the time of the original settlement which have also been amended following recommendations from the Royal Commission.
3. There was unequal bargaining power between the parties.
4. New evidence was available which would be fair and just to consider in a re-examination of the claimant’s case.

It remains to be seen how the Courts of Western Australia and Victoria which have already made decisions differing from that in Tom’s case in Queensland will in future cases apply the just and reasonable test.

The proposed New South Wales legislation makes specific reference to a matter being capable of re-litigation if there is evidence that a technical defence such as a limitation defence was relied upon. This may allow claimants to distinguish their cases from Tom’s case in Queensland.

Schools and institutions which have previously resolved matters must be prepared, if they have not already been approached, for requests from lawyers representing students who have previously settled a claim against the school to have their matter re-litigated. A request of this nature will need to be carefully considered in light of the legislation in the jurisdiction in which the matter was previously settled and the circumstances in which a resolution was achieved when it first occurred. It is fair to say that the law around this particular issue is developing quickly and already shows degrees of unpredictability.

For assistance when you hear from former students wanting to undo previously agreed settlements, please contact Martin Slattery.