FEDERAL COURT OF AUSTRALIA

Koenders v State of Victoria (Department of Education and Training) [2016] FCA 842

ORDERS

THE COURT ORDERS THAT:

1.    Subject to Order 2, pursuant to rule 9.76 of the Federal Court Rules 2011 (Cth) the settlement of this proceeding set out in the Settlement Deed marked as Exhibit 1 be approved.

2.    If the Senior Master of the Supreme Court makes an order under r 79.10(2) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) that the settlement monies set out in the Settlement Deed be held in court for the benefit of the Applicant:

(a)    the Respondent shall pay the settlement monies to the Senior Master for the benefit of the Applicant; and

(b)    the Applicant has leave to file a notice of discontinuance of this proceeding with no order as to costs.

3.    If the Senior Master of the Supreme Court does not make the order described in paragraph 2 by 18 August 2016, the matter be listed for directions on 2 September 2016 at 9.30 am.

4.    Pursuant to s 37AG(2) of the Federal Court of Australia Act 1976 (Cth), Exhibit 1 and Exhibit 2 are to be retained in envelopes marked and treated as confidential and are 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

DAVIES J:

1    Application has been made by the applicant’s litigation representative for approval of a settlement of the proceedings. The Court’s approval is required pursuant to r 9.70 of the Federal Court Rules 2011 (Cth) (“the Rules”) which states as follows:

Compromise or settlement of matter in proceeding

(1)    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.

(2)    If the Court approves the agreement, the agreement is binding on the person by or for whom it was made as if:

(a)    the person were not under a legal incapacity; and

(b)    the litigation representative had made the agreement as the person's agent.

(3)    The Court may, as a condition of approval, require that any money or other property payable for the benefit of a person under a legal incapacity be dealt with by way of a settlement, or in any other way that the Court considers appropriate.

Note    The Court may give approval subject to conditions – see rule 1.33.

(4)    If the Court does not approve the agreement, the agreement is not binding on the person under a legal incapacity.

2    The application is supported by evidence from the applicant’s solicitor that he is of the opinion that the settlement reached in this matter is in the best interests of the applicant. Counsel acting for the applicant in these proceedings has provided the “independent lawyer’s” opinion in which he also expressed his view that the settlement is in the best interests of the applicant.

3    There is some authority on whether counsel acting for an applicant is “an independent lawyer” as prescribed by r 9.70. In Wade v State of Victoria (No 2) [2012] FCA 1080 at [9], Bromberg J considered that the requirement that the lawyer be “independent” does not mean that an opinion must be obtained from a lawyer with no prior association with the proceeding, but rather, what the rule intends is that the opinion prepared by the lawyer be provided in furtherance of the lawyer’s duty to assist the Court and not in furtherance of any duty the lawyer may have to a party in the proceeding. Other cases have since followed that decision: Modra v State of Victoria (Department of Human Services Victoria & Department of Education and Early Childhood Development) [2013] FCA 1041, [9] (“Modra”); Hickey v Public Advocate (Victoria) [2012] FCA 1203, [10]–[11]; cf Jones v State of Victoria [2014] FCA 1404, [4]. In each of those cases, the Court was prepared to waive the requirement for an independent lawyer if the rule would otherwise exclude the particular lawyer. I propose to follow a similar course.

4    In Modra, Tracey J set out the approach to be taken by the Court in considering whether to approve a settlement. At [12], his Honour stated:

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 minors’ 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.”

The question for the Court is whether the settlement itself is reasonable and for the benefit of the person under the legal incapacity, having regard to all the circumstances of the case. In Modra, Tracey J stated that in forming the necessary judgment, significant weight will be given to the opinions of the applicant’s legal advisers. It is important to emphasise though that the Court is not bound to accept those opinions and must determine for itself whether the settlement is beneficial to the interests of the party: Scandolera v State of Victoria [2015] FCA 1451, [26]–[27]. The submissions by counsel for the applicant appeared to proceed on the presumption that because he and the instructing solicitor both considered that it is in the best interests of the applicant that the Court approve the settlement, that the Court would do so as a matter of course. The Court will always give critical consideration to the opinion from the independent lawyer; merely to make the application in accordance with the Rules does not guarantee the approval of the settlement.

5    In the present case, the applicant’s claims against the respondent are made under the provisions of the Disability Discrimination Act 1992 (Cth), the Australian Human Rights Commission Act 1986 (Cth) and the Disability Standards for Education 2005. It is alleged that the applicant suffers from various disabilities which come within the meaning of “disability” as defined in s 4 of the Disability Discrimination Act and as a student at Marnebek School between February 2011 and July 2012, the applicant was the subject of direct discrimination on the ground of his disabilities. The claims are defended by the respondent.

6    In his opinion, counsel has expressed his view about the likely prospects of success in this proceeding as well as various other matters which in counsel’s opinion materially bear upon the reasonableness of the settlement reached between the parties. Those matters include a comparison of awards of compensation made in other cases where children have been successful in establishing claims of unlawful discrimination, counsel’s view of the damages likely to be awarded to the applicant if the matter proceeded to trial and the claims were established, and the benefits of certainty of outcome and peace of mind for the applicant going forward without the stress and emotional strain attached to litigation.

7    In considering whether to approve the settlement, other important considerations are that:

(a)    the settlement fund is to be paid into the Supreme Court Senior Master’s Fund to be administered by the Senior Master for the applicant’s benefit; and

(b)    the settlement sum will not be reduced by legal fees taken out by the applicant’s solicitors.

8    On the strength of these matters, I am satisfied that the settlement should be approved.

Associate:

Dated:    27 July 2016