FEDERAL COURT OF AUSTRALIA

Murrell v Mansfield Autism Statewide Services [2020] FCA 943

ORDERS

THE COURT ORDERS THAT:

1.    The settlement of this proceeding, as set out in the Agreement marked as Annexure “MJB-1” to the affidavit of Michael James Bates, affirmed 28 May 2020, 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 sum referred to in cl 1 of the Agreement marked as Annexure “MJB-1” to the affidavit of Michael James Bates, affirmed 28 May 2020 be held in court for the benefit of the applicant, born on 14 July 2008, until he attains the age of 18 years:

(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. For the avoidance of doubt, this constitutes an order otherwise for the purposes of r 26.12(7).

3.    If the Senior Master of the Supreme Court does not make the order described in paragraph 2 by 4 August 2020 the matter be listed for case management on a date to be fixed.

4.    Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), on the ground that the order is necessary to prevent prejudice to the proper administration of justice, Annexures “MJB-1” and “MJB-2” to the affidavit of Michael James Bates, affirmed 28 May 2020 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.

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

REASONS FOR JUDGMENT

MORTIMER J:

1    This is an application for approval of a settlement reached between the parties to the proceeding. The applicant, Lachlan Murrell, applies for this approval through his litigation guardian Emily Dive, who is his mother.

2    This settlement relates to claims of indirect and direct disability discrimination contrary to s 5 and s 6 of the Disability Discrimination Act 1992 (Cth) (including claims of failures to make reasonable adjustments) and allegations of contraventions of the Disability Standards for Education 2005 (Cth), and therefore contraventions of s 32 of the DDA.

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

Background

4    The respondent in its defence described itself as “a not for profit organisation which delivers innovative educational and training programs for people with Autism spectrum disorder and other disabilities from infancy to adulthood”.

5    Lachlan Murrell is almost 12 years old. While the respondent did not admit the description of his disabilities as alleged in the Statement of Claim (which included Autism Spectrum Disorder; Attention Deficit Hyperactivity Disorder; Separation Anxiety Disorder and Post-Traumatic Stress Disorder), there is no dispute that Lachlan had disabilities of a kind which were covered by services provided by the respondent. The respondent admitted in its defence that it provided some services to Lachlan, at its premises and at an offsite camp, as well as in his home, at various times between February 2017 and August 2018. It admitted that on some occasions Lachlan was subject to “temporary seclusion” and restraint, which it maintained was used as a “last resort” and was required because of Lachlan’s behaviour, in order to protect his own health and safety and that of others. The use of restraint and seclusion during Lachlan’s time with the respondent was a principal focus of the Statement of Claim.

6    In February 2018 a complaint was made by Ms Dive on behalf of Lachlan to the Australian Human Rights Commission under s 46P of the Australian Human Rights Commission Act 1986 (Cth). The complaint was terminated by the Commission on 16 August 2018, on the basis that there was no reasonable prospect of the matter being settled by conciliation. This proceeding was commenced on 12 October 2018. The respondent has denied engaging in any unlawful discrimination.

7    Initially, Lachlan and his mother as his litigation guardian were represented by a different firm of solicitors to those who are currently on the Court’s record. Little occurred to progress the claim. The present solicitors took over this proceeding with the objective of assisting Ms Dive to progress the claim in a reasonable and efficient manner; these objectives were explained by Mr Bates, the solicitor for the applicant, at several case management hearings. Unfortunately, the claims were still slow to progress, although ultimately the matter was listed for trial in April 2020. However, there were delays in having an amended statement of claim prepared, and delays in trial preparation. Ultimately, after several revisions to the timetable, these delays had the result that the trial date became untenable and the listing was vacated by the Court.

The present application

8    In early April 2020, the Court was informed the parties had agreed to settle the proceeding.

9    The settlement approval application is supported by an affidavit of Michael Bates, the applicant’s solicitor. The settlement deed is exhibited to that affidavit, as is an opinion of Mr Bates concerning whether the settlement reached is in Lachlan’s best interests.

10    No orders are sought that the affidavit, and its exhibits, remain confidential to the parties, despite the settlement agreement being expressed to be confidential and including a mutual obligation to take reasonable steps to keep the settlement confidential. Accordingly, I consider it is appropriate for the Court of its own motion to make orders pursuant to s 37AF(1)(b) of the Federal Court of Australia Act 1976 (Cth) to ensure the settlement agreement, and Mr Bates’ opinion, remain confidential as the parties have intended.

11    I am satisfied that the protection afforded by the prospect of a confidentiality regime under s 37AF as to the final terms of settlement, including but not limited to any payment made, is likely to have 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 of settlement, and of any opinion supporting the settlement. The interests of justice are served not only for these parties, but so that future parties can also have confidence the Court may facilitate the resolution of these kinds of proceedings by including such orders in any approval of a settlement.

Resolution

12    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.

13    I have set out my approach to the approval of settlements in a number of previous decisions, most recently summarised in James v WorkPower Inc [2019] FCA 1239 at [11]-[14]. I have taken the same approach to the consideration of this application. See also Fish v New South Wales Department of Education and Training [2018] FCA 434 (Gleeson J) and Mununggurr v Channel Seven Sydney [2019] FCA 2188 (Rares J).

14    I noted in Scandolera v State of Victoria [2015] FCA 1451; 331 ALR 525 at [27]-[29] that the Court is assisted in its task of deciding if the proposed settlement is in the best interests of the person under a disability by the provision of an opinion by an independent lawyer. In this case, only Mr Bates has provided an opinion to the Court, as the applicant’s solicitor. As he has made clear in case management hearings, he did not practice in anti-discrimination law before taking on this proceeding, and several others, in approximately February 2019. However, he is a practitioner with some 13 years’ experience in practice, who now specialises in superannuation and insurance disability claims. I accept he is well acquainted with the risks of litigation at trial level, in fact-intensive matters. I also accept that since February 2019 he has worked diligently to acquaint himself with the law in this area, consulting counsel where required, and has become more familiar with the issues which may regularly arise in this jurisdiction. In his affidavit he deposes to some knowledge about other settlements in this jurisdiction, against which he can assess the reasonableness of the current proposed settlement.

15    In his affidavit he deposes to his knowledge about some of the circumstances of Lachlan and his mother, which I need not set out, and to some recent positive developments in Lachlan’s care and educational circumstances, all of which contribute to his view that it is in Lachlan’s best interests to move on from this litigation.

16    The settlement sum is relatively modest. There is no evidence that any separate agreement has been made in respect of the applicant’s legal costs. There is no disclosure that any sum for legal costs is to be deducted from the settlement sum: if that were to be the case, the Court would expect that to have been disclosed, as it would plainly affect the Court’s consideration whether or not to approve the settlement.

17    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 consider the prospects of the applicants if the proceeding were continued: see Fisher v Marin [2008] NSWSC 1357 at [35]-[37], Rothman J. 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 Lachlan (and his mother as his litigation guardian) if the litigation were to continue to what was estimated to be a two week trial. This litigation was, on the applicant’s side, far from ready for trial. Mr Bates acknowledged as much, despite his best efforts. I accept that a settlement at this point in time avoided a number of risks for the applicant, and certainly avoided much stress and strain on his mother, and therefore likely also on him.

18    Considered overall, and provided the settlement sum is preserved for the benefit of Lachlan alone, I am satisfied the settlement is in Lachlan’s best interests. The orders to be made by the Court reflect an arrangement with the Supreme Court of Victoria, for which this Court is grateful. It has been used in several previous settlement approvals. The applicant’s legal representative was notified of the Court’s proposal in this respect, and informed the Court that the applicant’s litigation guardian consented to it. The respondent also consented to orders in this form.

19    The Court commends the parties’ responsible resolution of the proceeding.

Associate:

Dated:    7 July 2020