FEDERAL COURT OF AUSTRALIA

Tsirigotis v The Ivanhoe Girls Grammar School [2017] FCA 1064

ORDERS

THE COURT ORDERS THAT:

1.    The settlement of this proceeding set out in the Deed of Release dated 16 August 2017 marked as Exhibit CP1 to the affidavit of Claire Pirie affirmed 21 August 2017 be approved.

2.    For the purposes of s 37AG(2) of the Federal Court of Australia Act 1976 (Cth), to prevent any prejudice to the proper administration of justice, Exhibit CP1 to the affidavit of Claire Pirie affirmed 21 August 2017 be treated as confidential to the parties in this proceeding and until further order:

(a)    will be marked as confidential to the parties on the Court’s Electronic Court File; and

(b)    will not be available for public inspection, disclosed in open court or disclosed in the open part of any court transcript.

3.    For the purposes of s 37AG(2) of the Federal Court of Australia Act, to prevent any prejudice to the proper administration of justice, the affidavit of Claire Pirie affirmed 21 August 2017, and Exhibit CP2 to that affidavit, be treated as confidential to the applicant in this proceeding and until further order:

(a)    will be marked as confidential to the applicant on the Court’s Electronic Court File; and

(b)    will not be available for inspection by the respondent or for public inspection, disclosed in open court or disclosed in the open part of any court transcript.

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

REASONS FOR JUDGMENT

MORTIMER J:

1    Before the Court is an application for approval of a settlement for the applicant, who is now ten years old. She is a person under a legal incapacity for the purposes of r 9.61 of the Federal Court Rules 2011 (Cth). A settlement agreement will not be binding on her, unless it is approved by the Court under r 9.70 of the Federal Court Rules. For the reasons set out below, I am satisfied the settlement should be approved.

Background

2    The applicant, Stephanie, is a young girl who has a number of disabilities, including autism spectrum disorder. She brings this proceeding through her litigation representative Dina Tsirigotis, who is her mother.

3    The respondent, Ivanhoe Girls Grammar School, operates a private school in Melbourne. Sometime in 2007 or 2008, Stephanie’s parents had paid a fee to put Stephanie’s name on an enrolment placement list for Year 5, 2019 at the school. However, in 2016, her parents decided to seek to enrol Stephanie prior to Year 5. It was alleged Stephanie’s parents were twice informed the school had a vacancy for Stephanie in Year 2, for term three in 2016.

4    It was alleged that at an interview in June 2016 between Stephanie’s parents, the Principal of Ivanhoe Girls Grammar School, Dr Heather Schnagl, and other school employees, that despite Stephanie’s parents indicating they were prepared to pay for a full-time assistant, a number of statements were made by Dr Schnagl, the purport of which was that Ivanhoe Girls Grammar School would not “suit” Stephanie, that she would not “fit in” and that a particular school (Andale School) catering to children with language and learning disorders, would be more appropriate.

5    It was alleged Stephanie’s parents pressed for Stephanie to be enrolled into Year 3, in 2017, and did so by a request in writing after the interview.

6    It was then alleged that a few days after the meeting, Dr Schnagl wrote to Stephanie’s parents, informing them that Ivanhoe Girls Grammar School “was not able to meet Stephanie’s learning needs, and was not likely to be able to do so until she benefited significantly from a proposed intensive intervention strategy; that she strongly encouraged Mrs Tsirigotis to explore the possibility of Andale School for Stephanie”; and that, in any event, “there were no vacancies for Year 3 in 2017.”

7    On 31 July 2016, after unsuccessful attempts to resolve the matter with Ivanhoe Girls Grammar School, Mrs Tsirigotis made a complaint on behalf of Stephanie to the Australian Human Rights Commission under s 46P of the Australian Human Rights Commission Act 1986 (Cth). That complaint was terminated pursuant to s 46PH(1)(i) on 22 March 2017, and the applicant filed proceedings in this Court under s 46PO of the Act.

8    Thus the conduct alleged to constitute unlawful discrimination for the purposes of the Disability Discrimination Act 1992 (Cth) was the refusal to allow Stephanie to be enrolled at, and attend, Ivanhoe Girls Grammar School. The basis for the refusal was alleged to be Stephanie’s disabilities. Claims were made that the conduct contravened s 5(1) and, separately, s 5(2) of the Disability Discrimination Act. Claims were also made in relation to alleged breaches of ss 29(1)(b) and 34 of the Australian Consumer Law, at Sch 2 to the Competition and Consumer Act 2010 (Cth), by the making of false or misleading representations about the educational services provided by Ivanhoe Girls Grammar School.

9    Declaratory relief and damages were sought in relation to all claims, as well as a mandatory order that Stephanie be enrolled at Ivanhoe Girls Grammar School immediately.

10    When the matter was allocated to my docket, at the first case management hearing the parties were in agreement that an early mediation was appropriate. Since the claim concerned enrolment for a school term, I considered the matter should be set down for trial as a matter of urgency in the event it did not settle at mediation. I made orders fixing the matter for trial commencing on 14 August 2017.

11    This approach meant Ivanhoe Girls Grammar School did not file a defence prior to the mediation, so its responses to the claim have never been publicly articulated.

12    The matter was referred to mediation before a Registrar of this Court on 5 July 2017. In August 2017, the parties informed the Court that the matter had settled. They sought and obtained orders vacating the trial date.

The present application

13    The present application is supported by an affidavit of Claire Pirie, the applicant’s solicitor. The Settlement Deed is exhibited to that affidavit, as is an opinion of Senior Counsel concerning whether the settlement reached is in Stephanie’s best interests.

14    Ivanhoe Girls Grammar School was informed of, and I infer agreed to, the filing of the affidavit. The affidavit has not been served on the respondent, because the applicant seeks orders that it, and its exhibits, be and remain confidential to the applicant and her legal representatives, in particular the opinion of Senior Counsel.

Resolution

15    Rules 9.70 and 9.71 of the Federal Court Rules provide:

9.70     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.

9.71    Application by litigation representative for approval of agreement

(1)     An application by a litigation representative for approval of an agreement must be made by filing an interlocutory application.

(2)     The interlocutory application must be accompanied by the following:

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

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

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

16    As I noted in my reasons for approving settlement in Butler v Djerriwarrh Employment & Education Services Inc [2015] FCA 296 (at [10]), in determining whether or not to approve a settlement, for the purpose of rendering it binding on an applicant under a legal incapacity, the Court must be satisfied the settlement is in the applicant’s best interests, or beneficial to the applicant’s interests. That is not a requirement of the Rules themselves but stems from the nature of the jurisdiction exercised by the Court where a party is under a disability and unable to conduct a proceeding himself or herself.

17    In Scandolera v State of Victoria [2015] FCA 1451; 331 ALR 525 at [27]-[29] I said, referring to both the applicable principles and their application to that proceeding:

It is the Court’s responsibility to determine, for itself, whether the settlement is beneficial to the interests of the person under a disability: see Somerset v Ley [1964] 1 WLR 640 sub nom Re Ley’s Trusts [1964] 2 All ER 326; Permanent Trustee v Mills [2007] NSWSC 336; 71 NSWLR 1 at [29] per Hammerschlag J; Fisher v Marin [2008] NSWSC 1357 at [29] per Rothman J; Button v CSL Ltd [2014] FCA 601 at [31] per Barker J.

The Court is assisted in that determination by the provision of an opinion by an independent lawyer who has been briefed fully on the facts and relevant evidence, and may have access to more material than the Court. However the Court is not bound by the independent opinion, and indeed there have been situations where the Court has not approved a settlement despite the advice of an independent lawyer: see for example Rothman J’s decision in Fisher disapproving settlement (under equivalent NSW legislation). The circumstances of that case were somewhat particular, because the plaintiff’s litigation guardian had changed her mind and sought that the settlement not be approved. Rothman J ultimately agreed the settlement should not be approved.

The determination whether the proposed settlement is in the best interests of, or beneficial to the interests of, a person under a disability requires the Court to weigh, at least as an important consideration, the prospects of the applicants if the proceeding were continue[d]: see Fisher at [35]-[37]. Since the approval of a settlement will bind the party under the disability and bring the litigation to an end, the Court should consider the advantages and disadvantages of the litigation continuing not only in terms of whether the applicants might secure a more advantageous award from the Court at trial, but also issues such as the prospects of an appeal and the costs and pressures imposed on Matthew and Harley if the litigation were to continue to what is estimated to be a five-week trial.

18    I adhere to the view I expressed in Butler and Scandolera that the emotional and psychological strain of litigation is an important factor in considering the risks attending the full litigation of a proceeding. That is even when the applicant is quite a young child: not only is Stephanie old enough to experience such strain herself, but she would be exposed to the strain experienced by her parents in prosecuting a matter like this through to trial. Finally, because the application sought orders compelling the respondent to enrol Stephanie, contested litigation would have seen her claims pitted against the very school and the very teachers her parents were seeking to have educate her. If this could be avoided, it was obviously desirable.

19    Having considered the allegations as put, the opinion of Senior Counsel, and the terms of the Settlement Deed, I am comfortably satisfied that settlement of this proceeding on the terms set out in the Deed is in Stephanie’s best interests. The parties’ responsible and timely resolution of the proceeding should be publicly commended.

20    I am also satisfied it is appropriate to make orders pursuant to s 37AG of the Federal Court of Australia Act 1976 (Cth), preserving the confidentiality of the opinion given by Senior Counsel, and the terms of settlement. The orders will need to distinguish between those two documents, as the parties to be included in the scope of the orders differ.

21    Unlike Scandolera, there is no difficulty in this proceeding about how the settlement sum is to be preserved in trust, and applied towards Stephanie’s ongoing needs. I am satisfied the parties have made appropriate provision in the Settlement Deed for this to occur. Once the steps contemplated by the Settlement Deed have been taken, the parties will approach the Court for final orders. I am satisfied that process is appropriate in the circumstances.

Associate:

Dated:    7 September 2017