FEDERAL COURT OF AUSTRALIA

Smith v Marriott Support Services [2013] FCA 312

THE COURT ORDERS THAT:

1.     Pursuant to Rule 9.70 of the Federal Court Rules 2011 (Cth), the settlement between the parties recorded in the deed of release exhibited as KW-1 to the affidavit of Ms Kairstien Wilson sworn on 3 April 2013 be approved.

2.    The affidavit of Kairstien Wilson sworn on 3 April 2013 and the exhibits thereto be treated as confidential and be placed in a sealed envelope marked “NOT TO BE OPENED WITHOUT THE PERMISSION OF A JUDGE OF THIS COURT.”

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011

REASONS FOR JUDGMENT

1    Mr Bradley Smith suffers from epilepsy, attention deficit hyperactivity disorder, autism (Aspergers), developmental delay and a moderate intellectual disability. He is 26 years old.

2    From March 2006 Mr Smith was employed by the respondent pursuant to a contract of employment. He performed his duties in a sheltered environment as a supported employee.

3    In July 2010 the respondent advised Mr Smith that, as from 6 September 2010, his work hours would be reduced to two and a half days per week and that, from 30 June 2011, his paid employment would be terminated.

4    Mr Smith commenced a proceeding in Fair Work Australia. He alleged that the respondent had dismissed him from employment in contravention of the general protections provisions of the Fair Work Act 2009 (Cth) (“the Act”). The respondent sought to justify its actions on the ground of economic necessity. Attempts by Fair Work Australia to resolve the dispute were unsuccessful. On 29 March 2011 Commissioner Blair issued a certificate pursuant to s 369 of the Act. The issuing of the certificate enabled Mr Smith to commence the present proceeding in this Court: see s 371 of the Act.

5    The proceeding was referred to a Registrar of the Court for mediation. The issues between the parties were not resolved at mediation.

6    Shortly after the mediation had concluded Mr Smith’s solicitors filed an application seeking the appointment of his mother and carer Mrs Pembe Hussein as his litigation representative for the purpose of the proceeding. This application was approved by me on 5 December 2011.

7    Various steps were then taken to ready the matter for trial. Towards the end of 2012 discussions took place between the legal representatives of the parties. These discussions led to terms of agreement to settle the proceeding.

8    A deed of settlement was prepared and was signed by Mr Smith his litigation representative and the chief executive officer of the respondent. The deed was made on 6 March 2013.

9    Rule 9.70(1) of the Federal Court Rules 2011 (Cth) (“the Rules”) required that the litigation representative apply to the Court for approval of the agreement. The application was accompanied, as required by Rule 9.71(2), by:

    An affidavit from Mr Smith’s solicitor which provided the material facts on which the application relied;

    A copy of the deed of release; and

    The opinion of an independent lawyer to the effect that the agreement reflected in the deed was in the best interests of Mr Smith.

10    The affidavit sworn by Mr Smith’s solicitor:

    Exhibited a copy of the deed of release;

    Exhibited advice from counsel that the settlement terms “would be in the Applicant’s best interests, particularly given the scope and complexity of legal and factual disputes which would otherwise would have to be resolved by way of contested hearing”; and

    Provided reasons for concurring in counsel’s view that the proposed settlement was in the best interests of Mr Smith.

11    The “independent” lawyer who provided the advice was a barrister who had had no previous association with the case: cf Wade v State of Victoria (No 2) [2012] FCA 1080; Hickey v Public Advocate (Victoria) [2012] FCA 1203. Counsel had had access to the pleadings and the deed of release.

12    In determining whether to sanction a compromise under Rule 9.70(1) of the Rules the Court is concerned only with the benefit of the disabled person: see Gillespie v Alperstein [1964] VR 749. In forming the necessary judgment significant weight will be given to the opinions of the applicant’s legal advisers. In Re Barbour’s Settlement; National Westminster Bank Ltd v Barbour [1974] 1 All ER 1188 at 1191, Megarry J, speaking of an application made on behalf of a minor, said that:

“… there is the important matter of the minor’s benefit. When the court is asked to give its approval on behalf of minors to a compromise of a dispute, the court has long been accustomed to rely heavily on those advising the minors for assistance in deciding whether the compromise is for the benefit of the minors. Counsel, solicitors, and guardians ad litem or next friends have opportunities which the court lacks for prolonged and detailed consideration of the proposals and possible variations of them in relation to the attitudes of the other parties and the apparent strength and weakness of their respective claims. When the matter comes before the court, the terms of settlement are in final form and the time for consideration is of necessity less ample. The court accordingly must rely to a considerable extent on the views of those whose opportunities of weighing the matter have been so much greater. Expressing a view on whether the terms of a proposed compromise are in the interests of a minor is a matter of great responsibility for all concerned.”

13    The same considerations are, in my opinion, relevant when considering the approval of terms of settlement which involve an intellectually disabled adult.

14    Mr Smith’s solicitor has explained the manner in which she formed the opinion in favour of the settlement. Her views are founded, in part, on the advice of counsel with which she agrees. I have read counsel’s advice. It is supportive of the settlement of the proceeding and the terms on which it is proposed to do so. It is not appropriate that I summarise the advice which goes to the strengths and weaknesses of Mr Smith’s case. It is sufficient that I record that, had the matter proceeded to trial, Mr Smith would have confronted a number of complex factual issues including the financial viability of the respondent’s business activities and the extent of his contribution to it.

15    The terms of settlement include a clause which requires the parties to maintain, in confidence, the terms of their agreement. I have read the agreement and am satisfied that the compromise of the proceeding on the terms proposed is in Mr Smith’s best interests. In forming this view I have taken into account the carefully expressed opinions of his legal advisers and those attributed to his litigation guardian. Whilst Mr Smith’s intellectual disability undoubtedly limits to some extent his capacity fully to appreciate the proposed terms, I am satisfied that he has a basic understanding of at least some of them and looks forward to putting the dispute behind him and moving on with what his solicitor calls “the next chapter” of his life.

16    The terms of the settlement will be approved.

Associate:

Dated:    10 April 2013