FEDERAL COURT OF AUSTRALIA

Elliott v State of Victoria (Department of Education & Training) [2018] FCA 1029

ORDERS

THE COURT ORDERS THAT:

1.    The settlement of this proceeding set out in the Deed of Settlement and Release marked as Exhibit CP1 to the affidavit of Claire Pirie affirmed 18 April 2018 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 18 April 2018 must be treated as confidential to the parties in this proceeding and until further order:

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

(b)    must 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, Exhibit CP2 to the affidavit of Claire Pirie, affirmed 18 April 2018, must be treated as confidential to the applicant in this proceeding and until further order:

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

(b)    must 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.

4.    Costs in relation to the interlocutory application filed on 18 April 2018 are to be costs in the proceeding.

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

REASONS FOR JUDGMENT

MORTIMER J:

1    This is an application for approval of a settlement for the applicant, who is now 18 years old. At the time that proceedings were commenced she was 17 years of age. The settlement relates to claims of disability discrimination contrary to ss 22(2)(a), 22(2)(c), 5(1), 5(2) and 6(1) of the Disability Discrimination Act 1992 (Cth) and s 32 of the DDA by virtue of s 5.2(1) of the Disability Standards for Education 2005 (Cth).

2    For the reasons set out below, I am satisfied the settlement should be approved.

Background

3    The applicant, Jennifer, is a young person who has a number of disabilities, including a mild intellectual disability. She brings this proceeding through her litigation representative Mr Anthony Elliott, who is her father.

4    The respondent, the State of Victoria (Department of Education and Training), operates Portland Bay School and Heywood and District Secondary College in South West Victoria. Portland Bay School is a special development school for children with intellectual disabilities. Heywood and District Secondary College is a government high school.

5    The applicant was enrolled at Portland Bay School between January 2013 and around June 2016, and was enrolled at Heywood and District Secondary College between January 2016 and December 2016. From February 2016 to April 2016, Jennifer attended both schools. Jennifer’s claim covers the majority of the period during which she was enrolled at either or both schools.

6    In June 2016, a complaint was made on Jennifer’s behalf to the Australian Human Rights Commission under s 46P of the Australian Human Rights Commission Act 1986 (Cth). On 14 February 2017, that complaint was terminated pursuant to s 46PH(1)(i) of the AHRC Act, in the form it then was. The applicant filed proceedings in this Court under s 46PO of the AHRC Act on 13 April 2017 (VID 391 of 2017). Further proceedings were commenced in this Court on 31 July 2017, also alleging disability discrimination (VID 840 of 2017). These two proceedings were later consolidated. Therefore, orders have only been made in the consolidated proceeding, which is VID 391 of 2017.

7    The central conduct alleged to constitute unlawful discrimination for the purposes of the DDA was the schools’ refusal to allow Jennifer to attend full-time, its failure to take steps to protect her from bullying and its decision to move Jennifer up to Year 11. The basis for Jennifer’s alleged exclusion from school was contended to be her disabilities. It was also alleged that by not allowing Jennifer to repeat Year 10 and failing to take certain steps to prevent her from being bullied, the respondent had failed to make reasonable adjustments in light of Jennifer’s disabilities. Additionally, the proposal alleged to have been made to move Jennifer up to Year 11 (rather than allowing her to repeat Year 10) was contended to have imposed on Jennifer a requirement with which she could not comply due to her disabilities, to her disadvantage, thus indirectly discriminating against her on the basis of her disabilities.

8    The applicant claimed the respondent’s conduct contravened ss 22(2)(a) and 22(2)(c) of the DDA on the basis that Jennifer’s access to benefits provided by the respondent as an educational authority was denied, limited (or that this was proposed), and further claimed that the respondent’s conduct subjected or proposed to subject Jennifer to a detriment. Claims were made under s 5(1), and separately, under ss 5(2) and 6(1) of the DDA. There were also claims based on an alleged contravention of s 32 of the DDA by breaches of standards made under the DDA. The applicant alleged a contravention of s 5.2(1) of the Disability Standards for Education 2005 (Cth), because the respondent failed to take reasonable steps to ensure that Jennifer was able to participate in Heywood College’s educational program from May to September 2016, and in 2017.

9    Declaratory relief and damages were sought in relation to all claims.

10    The respondent denied that any unlawful discrimination had occurred. It denied that it had refused to let Jennifer attend school full-time, or had otherwise excluded her from accessing the curriculum, and denied that any exclusion was on the basis of Jennifer’s disabilities. It denied that it had failed to make reasonable adjustments for Jennifer’s disabilities, including in relation to bullying. The State contended adjustments had been made by reference to Jennifer’s educational needs, strengths, interests and capacity as well as the feedback of her family and teachers. It denied that retaining Jennifer in Year 10 was a reasonable adjustment, and denied that the decision to progress her to Year 11 disadvantaged her or resulted in her being treated less favourably because of her disabilities. The respondent also denied that it had failed to take reasonable steps to ensure that she could participate in the educational program at Heywood College in 2016 and 2017.

11    At the first case management hearing of the proceeding before me, this matter was referred to mediation before a Registrar of this Court. A mediation was held on 1 August 2017. The matter did not settle on this date, but the Court was informed negotiations continued on for some further weeks, with the assistance of the mediator.

12    On 6 September 2017, the parties informed the Court at a case management hearing that an “in principle” agreement had been reached. At the request of the parties, orders were made consolidating the two Federal Court proceedings (which contained related claims), and requiring a consolidated concise statement to be filed and served by the applicant. A response to the consolidated concise statement was filed by the respondent.

13    Despite what was said at the September 2017 case management hearing, the Court was subsequently informed that negotiations were continuing between the parties. By early November, the Court was informed the parties had agreed on the matters set out in the settlement agreement. However, it was not until 18 April 2018 that the parties informed the Court the matter had formally settled, and the applicant then applied to the Court for approval of the settlement agreement.

14    The present application is supported by an affidavit of the applicant’s solicitor, Ms Claire Pirie affirmed on 18 April 2018. The Settlement Deed is exhibited to that affidavit, as is an opinion of counsel concerning whether the settlement reached is in the applicant’s best interests.

15    The respondent was informed of, and I infer agreed to, the filing of the interlocutory application and the affidavit. The applicant informed the Court that it intended to serve a copy of the interlocutory application on the respondent. 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. The applicant also seeks orders that the interlocutory application is to be treated as confidential, although not, I infer, from the respondent.

Resolution

16    Rules 9.70 and 9.71 of the Federal Court Rules 2011 (Cth) 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.

17    As I noted in my reasons for approving the 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 or conclude a proceeding himself or herself.

18    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.

19    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. As I observed in Tsirigotis v The Ivanhoe Girls Grammar School [2017] FCA 1064, that is the case even when the applicant is quite a young child. In the present proceeding, not only is Jennifer old enough to experience such strain herself, but she would be likely to be exposed to the strain experienced by her father and step-mother in prosecuting a matter like this through to trial.

20    The settlement includes payment of a settlement sum to the applicant by the respondent. It also provides that the respondent will pay the applicant’s legal costs reasonably incurred in the proceeding, but does not fix a figure for costs. While no explicit provision has been made for this in the Settlement Deed, Ms Pirie’s evidence is that the applicant’s solicitors will not charge the applicant legal fees over and above what they can recover from the respondent on a party-party basis.

21    There are aspects of the settlement agreement which are said to be important to Jennifer, her father and step-mother, and which were unlikely to have been obtained through trial. Having seen the agreement, I accept that is the case. This is a factor I have taken into account in approving the settlement.

22    Having considered the allegations as put, the opinion of counsel, and the terms of the Settlement Deed, I am satisfied that settlement of this proceeding on the terms set out in the Deed is in Jennifer’s best interests.

23    The Settlement Deed provides that the settlement sum is to be paid into the Supreme Court of Victoria, to be held as funds in Court for Jennifer’s benefit. In Scandolera at [35] to [43], I considered the power of this Court to make orders that the settlement sum be paid into the Supreme Court of Victoria to be administered by the Senior Master, and the appropriateness of such an arrangement in ensuring that the settlement sum is preserved in trust and applied towards the ongoing needs of the individual under a legal incapacity. I am satisfied the parties have made appropriate provision in the Settlement Deed for this to occur, so that in the present proceeding it is not necessary for this Court to make orders of the kind this Court made in Scandolera.

24    I am also satisfied it is appropriate to make limited orders pursuant to s 37AG of the Federal Court of Australia Act 1976 (Cth), preserving the confidentiality of the opinion given by counsel, and the terms of settlement. I am satisfied that the protection afforded by the prospect of a confidentiality regime under s 37AG as to the final terms of settlement, including but not limited to any payment made, has encouraged and facilitated the resolution of the proceeding. I consider it unlikely that such a settlement would have occurred without the prospect of such protection. The interests of the administration of justice are served by the making of limited orders to preserve the confidentiality of the terms, and of counsel’s opinion. The interests of justice are served not only for these parties, but so that future parties can also have confidence the Court may be prepared to facilitate the resolution of these kinds of proceedings by including such orders in any approval of a settlement. The resources of the parties and the Court have been conserved, and finality has been brought to a dispute which would have been intensive and time consuming for all concerned. Instead, the parties and potential witnesses on both sides, including the teachers involved, and Jennifer and her family, can move on. It is to be hoped that the future will be positive for Jennifer.

25    I am not persuaded there is anything about the interlocutory application itself, or the body of the supporting affidavit, which justifies orders under s 37AG. The manner in which an application for final orders is made, and the affidavit evidence to support it (aside from the terms of settlement themselves and counsel’s opinion) do not have the necessary quality of confidence about them. There are no wider interests served by making orders under s 37AG in respect of these documents, and indeed the interests of justice are better served by these documents being publicly available so that the basis for the Court’s final orders has some public form.

26    Finally, as I noted at the start of these reasons, Jennifer turned 18 years of age just prior to the Settlement Deed being signed on her behalf. Although the application for the initial orders for a litigation representative was made on the stated basis of Jennifer’s age, it is apparent from the nature of her claim that despite turning 18, it is appropriate for this proceeding, and for its settlement, to have been conducted on Jennifer’s behalf by her father as her litigation representative. No party suggested otherwise. I am satisfied that it remains appropriate for the Court to approve the settlement, despite Jennifer having turned 18, and for the Court to do so in terms which will see the settlement sum held for her benefit, rather than being paid directly to her. Again no party suggested otherwise. Whether or not the Supreme Court of Victoria requires any further evidence concerning Jennifer’s continuing capacity to make decisions for herself, will be a matter for that Court.

Associate:

Dated:    6 July 2018