FEDERAL COURT OF AUSTRALIA

McElligott v Commonwealth of Australia represented by Services Australia [2023] FCA 1638

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to r 9.70 of the Federal Court Rules 2011 (Cth), settlement of this proceeding be approved pursuant to the Settlement Deed marked annexure “A” of the affidavit of Lorain McElligott sworn on 25 November 2023.

2.    Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) the affidavit of Lorain McElligott sworn on 25 November 2023 and the unsworn affidavit of Lorain McElligott dated 8 December 2023, including their annexures, be treated as confidential to the parties to this proceeding and until further order:

(a)    Not be published or disclosed except in accordance with an order of a Justice of this Court;

(b)    Be marked as confidential to the parties on the Electronic Court File; and

(c)    Not be available for public inspection, disclosed in open court or disclosed in the open part of any court transcript.

3.    Pursuant to r 26.12(4) of the Rules, the applicant be granted leave to file a notice of discontinuance.

4.    The parties bear their own costs of and incidental to this application.

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

REASONS FOR JUDGMENT

MEAGHER J

INTRODUCTION

1    This is an application for approval of a settlement reached between the parties pursuant to r 9.70 of the Federal Court Rules 2011 (Cth).

2    The applicant, Ms Takarli McElligott, is a 15-year-old girl who is conducting these proceedings through her litigation representative and mother, Ms Lorain McElligott. The applicant has filed two affidavits, the first sworn by Lorain McElligott on 25 November 2023 (First Affidavit) which annexes a signed deed of release (Settlement Agreement) and the second unsworn but signed by Lorain McElligott on 8 December 2023 (Second Affidavit) which annexes a letter from an independent lawyer providing an opinion on the Settlement Agreement.

3    The applicant sent an email to the Court explaining why the Second Affidavit was unsworn, including that she was unable to obtain a witness due to being in a remote area where the Justice of the Peace only operate in a short window and she was unable to attend at that time, and her mobility has been restricted due to her disability. Despite its form, no objection was raised by the Commonwealth. Accordingly, I am prepared to accept the Second Affidavit.

4    The Commonwealth filed submissions and an affidavit affirmed by Sarah Mackie on 14 December 2023 in support of the Settlement Agreement being approved.

5    For the reasons that follow, I approve settlement of this matter.

BACKGROUND

6    This matter commenced by an originating application lodged on 10 November 2022, which claimed that the respondent, the Commonwealth of Australia represented by Services Australia discriminated against the applicant on the basis of her age as it required her to undertake a "more onerous and less favourable assessment process" during the course of making an application for Carers Payment and Carers Allowance (Payments), both of which are types of social security payments administered by Services Australia. The applicant claimed that, as she is aged under 18, the assessment process for the payments exceeded "her level of maturity and physical capacity relevant to her ability to fulfil her caring role", and therefore she was discriminated against pursuant to ss 14, 15, 31, 41 and 57 of the Age Discrimination Act 2004 (Cth).

7    The applicant made eight claims for the Payments between 27 November 2018 - 8 August 2018 on the basis that she is a carer for her mother. The applicant made a ninth claim on 29 November 2022, which was ultimately successful. The applicant made a complaint to the Australian Human Rights Commission on 25 November 2021 which was subsequently terminated pursuant to s 46PH(1B)(b) of the Australian Human Rights Commission Act 1986 (Cth) as there were no reasonable prospects of the matter being settled by conciliation.

8    The applicant filed a Statement of Claim on 20 April 2023. It did not comply with Pt 16 of the Rules, which is understandable given the applicant's litigation representative appeared self-represented. Attempts were made to obtain assistance from a pro-bono lawyer pursuant to r 4.12 of the Rules, however the Court was unable to secure assistance. The Commonwealth helpfully wrote to the applicant pointing out those parts of the Statement of Claim which were non-compliant. The applicant was granted leave to file an Amended Statement of Claim which was filed on 24 August 2023. The Amended Statement of Claim also did not substantially comply with Pt 16 of the Rules, however in order to progress the matter and in recognising that the applicant made the best attempt she could, I waived strict compliance with div 16.1 of the Rules and ordered that the Commonwealth file and serve a defence, and that the parties attend a mediation thereafter.

9    The Commonwealth's defence was filed on 6 October 2023, and a mediation was held before a Registrar of this Court on 7 November 2023. The mediation was ultimately successful.

LEGAL FRAMEWORK

10    According to s 33V of the Federal Court of Australia Act 1976 (Cth), a representative proceeding can only be settled or discontinued with the approval of the Court.

11    Rule 9.70 of the Rules provides:

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.

12    Rule 9.71 of the Rules prescribes how an application is to be made:

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     In determining whether to approve the settlement or not, the Court must be satisfied that the settlement is in the best interests of, or beneficial to the interest of, the applicant: Butler v Djerriwarrh Employment & Education Services Inc [2015] FCA 296 at [10] (Mortimer J, as her Honour then was). This requirement stems from the nature of a representative proceeding, whereby the applicant is unable to conduct the proceeding on their own behalf: James v WorkPower Inc [2019] FCA 1239 at [11] (Mortimer J, as her Honour then was); Tsirigotis v Ivanhoe Grammar School [2018] FCA 2038 at [12] (Mortimer J, as her Honour then was). The Court must come to this satisfaction of its own accord, however is assisted by the provision of independent legal advice that the applicant is required to file with their application: Butler at [11]-[12]. It should be noted that the Court is not bound by the advice given by an independent lawyer: Scandolera v State of Victoria (2015) 331 ALR 525 at [27] (Mortimer J, as her Honour then was).  

14    The Court must also consider the prospects of success if the applicant's proceeding were to continue, the advantages and disadvantages of proceeding to trial, including any potential costs order and any pressures that a proceeding might impose upon the applicant: Scandolera at [29]. The Court may also consider whether the settlement provides a substantive benefit to the applicant: Tsirigotis v Victoria (Department of Education and Training) [2020] FCA 1771 at [13] (Anastassiou J).

CONSIDERATION 

15    Without going into specifics, the Settlement Agreement provides a sum to the applicant considerably less than what was sought in her originating application, and both parties are to bear their own costs of the proceeding. In the advice provided to the applicant, it is acknowledged that the sum is less than that which was sought in this proceeding, however it is the opinion of the lawyer that the Settlement Agreement is in the best interests of the applicant. I am satisfied that the opinion is provided by an independent lawyer who has not otherwise been involved in these proceedings.

16    In considering whether to approve the Settlement Agreement, I have had regard to the following factors.

17    First, as noted above, this proceeding was commenced over a year ago and is brought in relation to a claim under the Age Discrimination Act. While I acknowledge that the applicant has represented herself before this Court and has made her best endeavours to comply with the orders of this Court, there have been delays in the progression of the matter in order to provide reasonable accommodations to the applicant’s litigation representative. The Commonwealth has foreshadowed bringing an interlocutory application to strike out aspects of the applicant’s pleadings which it submits this Court does not have jurisdiction to hear. This matter is both legally and procedurally complex.

18    Without the Settlement Agreement, this matter will be required to proceed to a trial which itself will be complex and lengthy. It is likely that preparation for the trial will also be protracted, particularly as the applicant does not have the benefit of legal representation. The proceeding thus far has no doubt caused an emotional and psychological strain on the applicant. If it were to proceed to a hearing that strain would be prolonged.

19    Second, with respect, it is difficult to see how the applicant could achieve a more advantageous outcome by pursuing proceedings based on the applicant’s pleadings as they are currently drafted. Furthermore, the Commonwealth has raised an arguable defence to the alleged discrimination, which the applicant is yet to rebut.

20    Third, if the matter proceeds to trial, it is likely that substantial costs will be incurred, and there is potential for an adverse costs order if the applicant were not to succeed at trial.

21    Fourth, there has been a material change in circumstances for the applicant since the originating application was filed, being that she has since been granted the Payment to which she continues to be entitled. Given the discrimination claim was raised by reason of the process the applicant was required to undertake when making an application for the Payment, the risk of any ongoing alleged discrimination is minimal. This change in circumstances may also impact on the quantum of damages if the applicant were to be successful at trial.

CONCLUSION

22    Accordingly, given the factors stated above, I am satisfied that the Settlement Agreement is in the best interests of the applicant.

23    The respondent requested confidentiality pursuant to s 37AF(1)(b) of the Act in relation to the First Affidavit and Second Affidavit. I am satisfied that it is in the interests of the administration of justice that confidentiality is ordered over the terms of the Settlement Agreement and the opinion supporting the Settlement Agreement. It is accepted that keeping terms of settlement confidential assists and motivates in resolving matters, and, as in this case, encourages settlement when it otherwise would not have occurred: Murrell v Mansfield Autism Statewide Services [2020] FCA 943 at [11] (Mortimer J, as her Honour then was).

Associate:

Dated:    20 December 2023