FEDERAL COURT OF AUSTRALIA

Goldsmith v Yeshivah & Beth Rivkah Colleges Inc [2014] FCA 996

THE COURT ORDERS THAT:

1.    The settlement of this proceeding contained in the Deed of Settlement, dated 17 June 2014, is approved pursuant to Rule 9.70 of the Federal Court Rules 2011 (Cth).

2.    The settlement sum referred to in the first line of paragraph 1 of the said Deed is to be held by the second applicant on trust for the first applicant, to be used for the first applicant’s benefit, until he reaches the age of 18 at which time the balance is to be paid by the second applicant to the first applicant.

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

REASONS FOR JUDGMENT

1    Before the Court is an application for approval of a settlement in the proceeding. The proceeding was commenced by the first applicant, who is under 18 years of age, through his litigation representative, his mother and the second applicant, Mrs Deanne Goldsmith. The need for the Court to approve the terms of the settlement arises under Rule 9.70 of the Federal Court Rules 2011 (Cth).

2    The way in which this judgment addresses the application is circumscribed to some extent because the terms of the settlement, set out in the Deed of Settlement dated 17 June 2014, contain a confidentiality clause which prevents disclosure of the terms. The effect and value of such a clause will be diminished if the reasons for judgment have the effect of disclosing those terms.

3    In support of the application for approval by the Court, the applicants have filed an opinion of independent counsel dated 3 September 2014, which concludes that the offer made by the respondent is appropriate and reasonable in the circumstances. The opinion was provided specifically for the purpose of the application for approval. It sets out the nature of the claims, which include claims under the Disability Discrimination Act 1992 (Cth), under the Competition and Consumer Act 2010 (Cth), and for breaches of contract and negligence.

4    The advice explains that the first applicant was born on 21 September 2004. He has autism spectrum disorder (Asperger’s Syndrome), pragmatic language disorder, fine motor skills disorder, depression, hyperactivity and aggression.

5    The first applicant attended the respondent’s college for two years and three months, from August 2009 to November 2011. The advice explains the allegations which, in summary, involve the failure of the teaching institution to provide for or properly accommodate the disabilities of the first applicant. The applicants’ claims and contentions are set out in detail and involve serious consequences to the first applicant as a result of the alleged failure of the respondent to properly deal with his disabilities. Included in the allegations are that the first applicant was subjected to physical restraint, seclusion, illegal imprisonment, and bullying and teasing by other students. The advice discloses the applicants’ claim that the respondent was aware of the particular disabilities of the first applicant, as a result of expert reports provided to the respondent.

6    The advice then sets out the respondent’s contentions. In summary, the respondent asserted that its conduct was appropriate in the circumstances, admitting, however, that the first applicant was physically restrained, but saying that it was necessary to avert imminent danger to himself and to other students and staff of the college. There is a denial by the respondent that the first applicant was bullied. The respondent admitted that it had refused to refund tuition fees for term 4 of 2011, even though the first applicant was suspended at the end of the third term of 2011, and formally expelled on 15 November 2011. The respondent said that this was a result of its policy of non-refundability of tuition fees.

7    The advice then considers the strength of the applicant’s case and the likelihood of success. It concludes that the applicant has more than a reasonable prospect of success. It points out that at the same time, there is no certainty in result, and that the vagaries of litigation raise the risk of exposure of the second applicant to costs if the application is unsuccessful.

8    The advice then makes an assessment of the settlement amount. It does so by reference to a series of cases in which courts and tribunals have made awards for discrimination. In the State of Victoria v Turner (2009) VR 110; [2009] VSC 66, the applicant was 13 years old with a severe language disorder and severe learning disability. An award for just over five years’ discrimination was made in the sum of $50,500, calculated as $10,000 for each year of discrimination.

9    In Hurst and Devlin v Education Queensland [2005] FCA 405, Beasley v the State of Victoria (2006) 24 VAR 479; [2006] VCAT 1050, and Clarke v the Catholic Education Office & Anor (2003) 202 ALR 340; [2003] FCA 1085, the applicants were all deaf children of either 12 or 14 years of age. The circumstances of these cases might be thought to be rather different to the circumstances of the present proceeding. But the advice looks at the awards made in each of the three cases as a guide. These amounts were, respectively: $20,000 in general damages, plus interest of $4,000, and $40,000 for loss of future earning capacity; $20,000 in damages; and lastly, $20,000 in damages plus interest of $6,000. Held against those awards, the advice assesses the proposed settlement sum in this case as more than adequate.

10    Importantly, the advice also addresses the views of the second applicant concerning bringing the litigation to an end. It explains that the litigation has caused the first applicant and the family a great deal of stress, and that peace of mind and certainty of outcome are valuable results from the settlement.

11    The settlement includes a separate amount for costs and disbursements. The solicitors for the applicants have indicated that they will not seek any amounts beyond the settlement amount set aside for costs, and consequently, the entirety of the balance of the settlement sum will be available to the applicants. The advice discloses that approximately half of the settlement sum has already been expended by the second applicant. The second applicant intends to hold the remaining half until the first applicant turns 18 years old.

12    The advice addresses the issues in a methodical, careful and comprehensive manner. There is only one area in which there are grounds for some misgivings. By approaching the assessment of the adequacy of the quantum of damages by reference to decided cases, there is a danger that the particular circumstances applicable to the present case might be overlooked. The serious allegations of physical restraint and bullying suggest circumstances which, if established, would take the case outside the area of the decided cases.

13    In any event, the proper approach in advices of this nature is to look to the damage which the particular applicant has suffered. When the figure calculated on that basis is arrived at, that figure may be compared with the outcomes in decided cases. That part of the advice in this case, which starts from the decided cases rather than from an assessment of the particular damage suffered by the first applicant, should not be regarded as significant in determining whether the settlement is reasonable.

14    However, I am satisfied, from my own assessment of the limited information that the outcome is fair, particularly when one takes into account the benefits of the conclusion of the litigation and the ability of the first applicant to get on with his life with some financial assistance provided by the settlement sum. It is significant that the settlement was arrived at after extensive debate which occurred during two full-day mediations on 20 June 2013 and 22 May 2014.

15    Further, counsel for the applicants indicated that the provision for an apology from the respondent was an important element for them for the finalisation of the litigation.

16    Although the second applicant indicated that the balance of about half the settlement sum would be retained for the first applicant until he turns 18, the orders of the Court will provide that the settlement sum be held on trust by the second applicant to be used for the benefit of the first applicant until he turns 18, and that the then remaining amount be paid to him. This will allow the second applicant to use the funds to assist in the welfare of the first applicant immediately if necessary. That order takes into account the fact that the first applicant is still young and may need assistance in the years before he turns 18.

17    For those reasons, the settlement is approved under Rule 9.70.

Associate:

Dated:    15 September 2014