FEDERAL COURT OF AUSTRALIA

Button v CSL Limited [2014] FCA 601

FEDERAL COURT OF AUSTRALIA

Button v CSL Limited [2014] FCA 601

CORRIGENDUM

1.     In paragraph 2 of the Reasons for Judgment, in the second sentence, the word “significant” should read “significantly”.

Associate:

Dated:    6 June 2014

THE COURT ORDERS THAT:

1.    There be leave to compromise the applicant’s action pursuant to Rule 9.70 of the Federal Court Rules 2011 (Cth) in accordance with the terms of the Settlement Deed annexed to the affidavit of Julian Johnson, sworn on 23 May 2014 and the Court approves the agreement.

2.    National Australia Trustees Limited be appointed as trustee of such monies as are payable to the applicant, pursuant to the Settlement Deed.

3.    National Australia Trustees Limited, as trustee of such monies as are payable to the applicant, pursuant to the Settlement Deed, be empowered at its discretion to apply from time to time the whole or any part of the income from the investment monies with recourse if considered necessary to the capital thereof for the maintenance, welfare and advancement or otherwise for the benefit of the applicant, including in particular, but not limited to, payment in respect to the ongoing care, support and rehabilitation needs of the applicant.

4.    Liberty to apply with respect to the investment of monies, the trust and generally.

5.    The materials provided to the Court subject to claims of privilege and/or confidentiality identified below are confidential for the purposes of Rule 2.32 of the Federal Court Rules and are to be placed in sealed envelopes and marked in the manner described below and are not to be inspected except by order of the Court:

(a)    Annexure JJ1 to the affidavit sworn by Julian Johnson on 23 May 2014, Annexure JW to the affidavit sworn by Jan Wachowski on 23 May 2014, and the affidavit sworn by Kirsten Button on 23 May 2014, which are each to be marked and placed in a sealed envelope marked “CONFIDENTIAL DOCUMENT SEALED AND NOT TO BE REOPENED OR PROVIDED FOR INSPECTION WITHOUT COURT ORDER”; and

(b)    Annexures JJ2 and JJ3 to the affidavit sworn by Julian Johnson on 23 May 2014, which are each to be marked and placed in a sealed envelope marked “PRIVILEGED AND CONFIDENTIAL DOCUMENT SEALED AND NOT TO BE REOPENED OR PROVIDED FOR INSPECTION WITHOUT COURT ORDER”.

6.    Except to disclose the existence of a confidential and conditional settlement between the parties, the terms of the Settlement Deed referred to in paragraph 1 are not to be referred to in open Court or in any reasons for decision of the Court.

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

REASONS FOR JUDGMENT

1    Saba Button is now five years old having been born on 26 April 2009. In April 2010, just before her first birthday, she underwent vaccination with a 0.25ml dose of CSL 2010 Fluvax injected into her left arm by her general medical practitioner. The CSL 2010 Fluvax was manufactured and sold by CSL Limited.

2    As a consequence of the vaccination, Saba suffered hypoxic brain injury and consequential, severe disabilities. Her life expectancy has been significant shortened. Her disabilities are profound and permanent. She will require constant care for the remainder of her life.

3    By her mother and litigation representative, Kirsten Button, Saba commenced this proceeding and claimed that by the manufacture and supply of CSL 2010 Fluvax with which she was vaccinated, CSL Limited breached s 75AD, s 74B and s 74D of the Trade Practices Act 1974 (Cth) as it applied at material times.

4    By her litigation representative, Saba claims substantial compensation for the loss and damage she suffered as a result of receiving the vaccination.

5    CSL filed a defence in the proceeding denying any liability to Saba and claiming that the State of Western Australia and the Minister for Health of the State of Western Australia (as a body corporate under s 8 of the Health Act 1911 (WA)) were responsible for any compensation due to Saba. CSL also cross-claimed against the State and the Minister for a contribution in the event its defence were to fail.

6    The State and the Minister filed a defence to the cross-claim denying any liability in the matter.

7    Following private mediation of the claim and cross-claim, the parties to the proceeding have made a Settlement Deed which will operate to resolve all claims between the parties, subject to the approval of this Court to the agreement.

8    By Rule 9.70 of the Federal Court Rules 2011 (Cth), 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. If the Court approves the agreement, the agreement is binding on the person by or for whom it was made as if that person were not under a legal incapacity and the litigation representative had made the agreement as the person’s agent.

9    Rule 9.71 provides that the application for approval of an agreement must be accompanied by the following:

(1)    an affidavit stating the material facts on which the application relies;

(2)    the agreement that is sought to be approved;

(3)    an opinion of an independent lawyer that the agreement is in the best interests of the person under a legal incapacity.

10    The requirement for the provision of an opinion by an independent lawyer that the agreement is in the best interests of the person under a legal incapacity reflects the traditional approach of courts to the consideration of compromise applications for minors and persons under disability. Courts have long been accustomed to relying heavily on those advising the person under legal incapacity for assistance in deciding whether the compromise is for their benefit. Counsel, solicitors and litigation representatives have opportunities which the Court lacks for prolonged and detailed consideration of proposals and possible variations of them, in relation to the attitudes of the other parties and the apparent strength and weakness of the respective claims. Moreover, when a matter comes before the Court for approval, the terms of settlement are usually in final form and the time for consideration is of necessity less ample. The Court accordingly relies to a considerable extent on the views of those whose opportunities of weighing the matter have been so much greater and upon whom considerable responsibility thereby falls. See Re Barbour’s Settlement; National Westminster Bank Ltd v Barbour [1974] 1 All ER 1188 at 1191 (Megarry J); Attard v Marriott Support Services [2013] FCA 311 at [12] (Tracey J).

11    Saba, by her litigation representative, now seeks the following orders:

1.    There be leave to compromise the applicant's action pursuant to Rule 9.70 of the Federal Court Rules 2011 (Cth) in accordance with the terms of the Settlement Deed annexed to the affidavit of Julian Johnson, sworn on 23 May 2014 and the Court approves the agreement.

2.    National Australia Trustees Limited be appointed as trustee of such monies as are payable to the applicant, pursuant to the Settlement Deed.

3.    National Australia Trustees Limited, as trustee of such monies as are payable to the applicant, pursuant to the Settlement Deed, be empowered at its discretion to apply from time to time the whole or any part of the income from the investment monies with recourse if considered necessary to the capital thereof for the maintenance, welfare and advancement or otherwise for the benefit of the applicant, including in particular, but not limited to, payment in respect to the ongoing care, support and rehabilitation needs of the applicant.

4.    Liberty to apply with respect to the investment of monies, the trust and generally.

5.    The materials provided to the Court subject to claims of privilege and/or confidentiality identified below are confidential for the purposes of Rule 2.32 of the Federal Court Rules and are to be placed in sealed envelopes and marked in the manner described below and are not to be inspected except by order of the Court:

(a)    Annexure JJ1 to the affidavit sworn by Julian Johnson on 23 May 2014, Annexure JW to the affidavit sworn by Jan Wachowski on 23 May 2014, and the affidavit sworn by Kirsten Button on 23 May 2014, which are each to be marked and placed in a sealed envelope marked “CONFIDENTIAL DOCUMENT SEALED AND NOT TO BE REOPENED OR PROVIDED FOR INSPECTION WITHOUT COURT ORDER”; and

(b)    Annexures JJ2 and JJ3 to the affidavit sworn by Julian Johnson on 23 May 2014, which are each to be marked and placed in a sealed envelope marked “PRIVILEGED AND CONFIDENTIAL DOCUMENT SEALED AND NOT TO BE REOPENED OR PROVIDED FOR INSPECTION WITHOUT COURT ORDER”.

6.    Except to disclose the existence of a confidential and conditional settlement between the parties, the terms of the Settlement Deed referred to in paragraph 1 are not to be referred to in open Court or in any reasons for decision of the Court.

12    The question is whether the settlement should be approved and those orders made.

Should the agreement be approved and orders made?

13    The application for approval is supported by the affidavits of Kirsten Button, as litigation representation of her daughter Saba, Mr Julian Johnson, solicitor for Saba and her litigation representative, Kirsten Button, and Mr Jan Gerard Wachowski of National Australia Trustees Limited.

14    Kirsten Button states that at a private mediation on 6 May 2014, CSL Limited, the State and the Minister offered to settle the applicant’s action by payment of a substantial figure, plus a contribution towards legal costs (inclusive of disbursements). She says that in accordance with Mr Johnson’s advice she has accepted the offer, subject to approval by the Court and executed a confidential settlement agreement to such effect, a copy of which is annexed to Mr Johnson’s affidavit.

15    Kirsten Button says that she has read the opinion of independent senior counsel, Mr David Higgs SC, dated 9 May 2014, and the submissions and medical reports to which he refers and notes his belief that the compromise is a reasonable settlement of the action. She has confidence in his and Mr Johnson’s advice concerning the matter.

16    Kirsten Button says that she has carefully and meticulously reviewed Mr Higgs SC’s opinion and checked to ensure its accuracy and believes his opinion has given proper consideration to all aspects of the claim.

17    Kirsten Button considers the proposed compromise is beneficial to Saba.

18    She approves and consents to the compromise.

19    Kirsten Button says that it is her preference that National Australia Trustees Limited receive the proceeds of the proposed compromise as trustee for Saba.

20    Mr Johnson, in his affidavit, refers to the settlement reflected in the Settlement Deed and on behalf of Saba. He produces the Deed as annexure “JJ1” to his affidavit. He seeks an order to maintain the confidentiality which attaches to the Deed. He notes that the other parties also wish confidentiality in the Deed to be maintained.

21    Mr Johnson says that all facts relevant to Saba’s claim have been brought together and considered by both himself and Mr Higgs SC, who was asked to provide advice in relation to the merits of the proposed compromise and who represented the applicant with him at the recent private mediation at which the settlement was negotiated.

22    Mr Johnson produces the brief provided to Mr Higgs SC (as well as to the private mediator previously) as annexure “JJ2” to his affidavit. Again, he asks that the brief be placed in a sealed envelope and its confidentiality be protected by an order of the Court.

23    Mr Johnson further produces, as annexure “JJ3” to his affidavit, the opinion of Mr Higgs SC dated 9 May 2014, in relation to the Saba’s claims and the merits of the proposed compromise. Again, he asks that this opinion be the subject of confidentiality orders.

24    Mr Johnson says that he prepared the brief to Mr Higgs SC (and the private mediator previously) and believes that it contains all of the materials required to permit assessment of the merits of the case. He says all the facts upon which Mr Higgs SC’s opinion is based are correct and complete so far as he can ascertain after careful review.

25    Mr Johnson says that in his opinion the proposed compromise will be beneficial to the applicant.

26    I have had regard to the pleadings in the proceeding and particulars of claim. I have also considered the annexures to Mr Johnson’s affidavit, being the Settlement Deed executed by the parties, the brief of materials provided to Mr Higgs SC (and the private mediator) and the opinion of Mr Higgs SC dated 9 May 2014. I have further regarded closely the affidavits of Kirsten Button and Mr Johnson.

27    I am satisfied that appropriate disclosure of all relevant materials has been made on behalf of Saba to independent counsel.

28    I am also satisfied that the opinion of independent counsel fully and properly canvasses the appropriateness of the proposed settlement, and note that Mr Higgs SC considers the settlement sum to be an appropriate settlement, and that he recommends the settlement. In doing so, Mr Higgs SC was careful to consider the question of liability and possible defences and the possibility of a case against the State.

29    I have also closely considered the terms of the Settlement Deed.

30    Taking into account all of the materials referred to, I am satisfied the Settlement Deed should be approved.

31    In this regard, the critical consideration is whether the settlement is for Saba’s benefit. The independent advice of senior counsel, the opinion of Saba’s solicitor and the considered view of her mother and litigation representative, all go to persuade me that the settlement is for her benefit.

32    Finally, the affidavit of Mr Wachowski, senior trust officer for the Perth office of National Australia Trustees Limited, addresses the proposed management of funds should National Australia Trustees Limited be appointed trustee in accordance with the proposed orders. I am satisfied, on the basis of his affidavit, that National Australia Trustees Limited is suitable to be appointed as trustee for the purposes of the Settlement Deed.

33    I am also satisfied that, in the administration of justice, it is appropriate that the terms of the Settlement Deed executed by the parties, the brief of materials supplied to independent counsel (and previously to the private mediator) and the opinion of independent senior counsel, all referred to in Mr Johnson’s affidavit, as well as the affidavit of Kirsten Button filed 26 May 2014 and annexure “JW” to the affidavit of Jan Gerard Wachowski filed 29 May 2014, should be the subject of appropriate non-publication or confidentiality orders under s 37AG of the Federal Court of Australia Act 1976 (Cth) and for the purposes of Rule 2.32. The detail in those materials go to matters deeply personal to the applicant, to the particular terms upon which the parties have agreed to settle this proceeding and the manner in which settlement funds are to be managed. The administration of justice is served by those matters that are private to Saba, the precise terms of the settlement she is to receive and is to be managed on her behalf and the administration of the settlement fund remaining confidential. Further, by making the terms of the Deed confidential, it is likely parties to proceedings such as these will feel encouraged to conclude such proceedings by an appropriate settlement without the need for extended and costly litigation. The administration of justice is also served by that consideration.

orders

34    The orders asked for as set out above will therefore be made.

Associate:

Dated:    6 June 2014