FEDERAL COURT OF AUSTRALIA

AYX18 (by his litigation representative AYY18) v Minister for Home Affairs [2024] FCA 974

ORDERS

THE COURT NOTES THAT:

A.    The Applicant is a minor and is therefore a person under a legal incapacity within the meaning of Sch 1 of the Federal Court Rules 2011 (Cth) (the Rules).

B.    The Applicant commenced this proceeding, through his litigation representative AYY18, by way of originating application dated 1 March 2018.

C.    The parties have executed a Deed of Settlement (Deed) which notes that the settlement is subject to the approval of the Court.

D.    The Applicant’s litigation representative applies to the Court for approval of the settlement set out in the Deed, pursuant to r 9.70 of the Rules.

THE COURT ORDERS THAT:

Settlement Approval

1.    The settlement set out in the Deed be approved.

2.    The NSW Trustee and Guardian be appointed as the Applicant’s nominated settlement funds administrator, of the Settlement Sum only and to the exclusion of any other assets of the Applicant.

3.    Within 28 days of this order being made, the Respondents shall pay the Settlement Sum into the trust account, opened by the NSW Trustee and Guardian on behalf of the Applicant, as directed by the NSW Trustee and Guardian.

4.    The Applicant has leave to file a notice of discontinuance of this proceeding with costs to be dealt with as set out in the Deed. This constitutes an order otherwise for the purposes of r 26.12(7) of the Rules.

Confidentiality

5.    Until three years from the date of these orders or until further order, under s 37AF(1) of the Federal Court of Australia Act 1976 (Cth) (the FCA Act), on the ground in s 37AG(1)(a) of the FCA Act, the agreed terms of settlement of this proceeding between the parties, including the settlement amounts, are prohibited from disclosure by publication or otherwise.

6.    Until further order, pursuant to ss 37AF and 37AG of the FCA Act and on the grounds set out at s 37AG(1)(a) and (c) of the FCA Act:

(a)    publication is prohibited of the following information (being information that would tend to reveal the identity of the Applicant):

(i)    the name of the Applicant or any member of the Applicant’s family;

(ii)    the identification number of the boat on which the Applicant first arrived in Australia;

(iii)    the age of the Applicant (other than that he is a minor);

(iv)    the Applicant’s country of origin; and

(v)    any medical conditions of the Applicant.

(b)    the following documents be treated as confidential to the parties to this proceeding, be marked as confidential to the parties on the Court’s file, and not be made available for public inspection, disclosed in open court or disclosed in the open part of the transcript of any court proceeding:

(i)    the medical reports filed and served on behalf of the Applicant being “Annexure EH-3” to the affidavit of Emma Hearne affirmed 13 May 2024;

(ii)    the medical reports filed and served on behalf of the Respondents being “Annexure EH-4” to the affidavit of Emma Hearne affirmed 13 May 2024; and

(iii)    all other medical reports filed by the parties in the proceeding.

7.    Until further order, pursuant to ss 37AF and 37AG of the FCA Act and on the ground that it is necessary to prevent prejudice to the proper administration of justice, counsel’s Confidential Opinion, being “Annexure EH-2” to the affidavit of Emma Hearne dated 13 May 2024, be marked as confidential on the Court’s file, and not be made available for inspection by the Respondents or the public, disclosed in open court or disclosed in the open part of the transcript of any court proceeding. The publication or disclosure of counsel’s Confidential Opinion or its terms is prohibited.

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

REASONS FOR JUDGMENT

BUTTON J:

INTRODUCTION

1    By an interlocutory application dated 13 May 2024 the Applicant, AYX18, through his mother as his litigation representative, AYY18, seeks Court approval of an agreement to settle the proceeding pursuant to r 9.70 of the Federal Court Rules 2011 (Cth) (the Rules), and certain confidentiality orders.

2    The parties also jointly seek confidentiality orders in relation to the agreed terms of settlement of this proceeding, including the settlement amounts, pursuant to ss 37AF(1) and 37AG(1) of the Federal Court of Australia Act 1976 (Cth) (the FCA Act).

3    For the reasons outlined below, I am satisfied that it is appropriate to approve the settlement and to make the confidentiality orders sought.

FACTUAL AND PROCEDURAL BACKGROUND

4    The following history is drawn from the Applicant’s statement of claim dated 18 June 2018. It should be understood as a brief outline of the Applicant’s claims, not as findings of this Court.

5    The Applicant was born overseas and is a minor. The Applicant and his parents arrived in Australia by boat, without a visa, on or around 23 July 2013. They were therefore “unauthorised maritime arrivals” as defined in s 5AA of the Migration Act 1958 (Cth) (the Act) and were detained on Christmas Island. On or around 24 August 2013, the Applicant and his parents were taken from Christmas Island to Nauru via Cairns, where they were detained in immigration detention. The Applicant and his parents were subsequently recognised by the Nauruan government as refugees. The Applicant lived on Nauru under temporary settlement visas granted by that government until he was brought to Australia pursuant to orders made in this proceeding on 6 March 2018.

6    On 1 March 2018, the Applicant commenced this proceeding through his litigation representative by way of originating application. The application was accompanied by an interlocutory application seeking, amongst other relief, orders requiring the Respondents immediately to transfer the Applicant and his mother to a location where he could be assessed and admitted to a specialist in-patient child psychiatric unit.

7    On 6 March 2018, the Court made orders requiring the Minister for Home Affairs to cause the requested transfer as soon as reasonably practicable.

8    On 18 June 2018, the Applicant filed a statement of claim seeking damages, costs and an order making final the interlocutory orders made on 6 March 2018.

Stay of proceeding

9    This proceeding is part of a cohort of similar proceedings in which the Respondents submitted that the Court had no jurisdiction to hear the cases by operation of s 494AB of the Act. On 8 March 2019, this proceeding was stayed pending the hearing and determination of four cases, selected as a representative sample of the cohort, for hearing by the Full Court. On appeal from the Full Court, the High Court held that s 494AB of the Act did not have the effect that the proceedings could not be instituted or continued in this Court: Minister for Home Affairs v DLZ18 (2020) 270 CLR 372; [2020] HCA 43. Rather, the High Court confirmed that s 494AB “creates a defence which the Commonwealth may, but need not, plead to specific claims in all courts, except the High Court” (at [4]).

10    The progress of the test cases accounts for some of the delay in this proceeding being mediated and finalised.

THE CLAIMS AND DEFENCES SUMMARISED

The claims

11    By his statement of claim, the Applicant alleges that, at all material times, the Respondents owed him a duty of care. While the content of this duty was said to change over time, in broad terms it was said to require that reasonable care be taken to: protect the Applicant from unreasonable risks of harm, including psychological harm; monitor the Applicant; and take measures, including the provision of appropriate medical facilities and treatment, in the event that the Applicant manifested adverse effects from the conditions in immigration detention. The Applicant further alleges that, from around January 2018, when the Respondents allegedly became aware or ought to have become aware that the Applicant’s psychological condition had worsened to the extent that appropriate medical facilities and treatment were not available on Nauru, the Respondents came under an additional duty to remove the Applicant from Nauru to a location with appropriate facilities and treatment.

12    The Applicant alleges that the Respondents breached their duty of care by failing to protect him from unreasonable risks of harm, including psychological harm, following his relocation from Christmas Island to Nauru, and failing to take measures (in particular, the provision of appropriate medical treatment and reunification with his father, who was transferred to Australia in June 2016 for specialist medical treatment) when the Applicant manifested symptoms of psychological injury.

13    The Applicant alleges that the Respondents’ breach caused him to suffer a psychological injury (or alternatively, worsened or aggravated his psychological injury) from December 2013 “and continuing”.

The defences

14    The Respondents deny almost all of the Applicant’s claims. In their amended defence filed 27 August 2021 the Respondents:

(a)    admit that the Commonwealth owed the Applicant a duty of care during the period in which he was detained on Christmas Island, but claim that such duty ceased to be owed after the Applicant was transferred to Nauru;

(b)    deny breach of any duty of care owed to the Applicant;

(c)    say that the Applicant’s allegations concerning his transfer to, and period in, Nauru impermissibly invite the Court to apply the standard of negligence to decisions of high-level government policy, which involve or are dictated by economic, social and political factors, including the Commonwealth’s relationships with foreign governments, and in respect of which the Court should not impose a duty of care;

(d)    say that the imposition of a duty of care in relation to the Applicant’s transfer to, and period in, Nauru would be incompatible with the statutory duty contained in s 198AD(2) of the Act and the purpose of Pt 2 Div 8 Subdiv B of the Act; and

(e)    deny that the Applicant is entitled to any of the relief claimed, including damages.

THE SETTLEMENT APPROVAL APPLICATION

The materials

15    By an interlocutory application dated 13 May 2024, the Applicant seeks orders for approval of the settlement (proposed settlement) provided for in a Deed of Settlement between the parties executed on 29 April 2024 (Deed).

16    The Applicant relies upon the affidavit of his mother (and litigation representative) affirmed 12 May 2024, and that of Emma Hearne, lawyer at the National Justice Project, affirmed 13 May 2024. Ms Hearne’s affidavit annexed a number of documents, including:

(a)    a copy of the Deed;

(b)    a copy of the confidential opinion of Geoffrey Watson SC (Confidential Opinion) dated 9 May 2024 in support of settlement approval;

(c)    the Applicant’s filed and served medical reports; and

(d)    the Respondents’ filed and served medical reports.

17    The Applicant filed written submissions in support of settlement approval dated 2 August 2024. The Respondents did not file submissions in respect of the application for settlement approval.

Applicable principles

18    Pursuant to r 9.70 of the Rules, if a litigation representative agrees to the settlement of a matter in dispute in a proceeding, the litigation representative must apply to the Court for approval of that agreement. Until such time as the Court approves that agreement, the agreement is not binding on the person under a legal incapacity.

19    The principles applicable to the Court’s approval of a proposed settlement under r 9.70 of the Rules were helpfully summarised by Murphy J in DIZ18 (by her litigation representative DJA18) (No 3) v Minister for Home Affairs [2023] FCA 1350 (DIZ18) at [36]–[38]. I adopt his Honour’s summary (emphasis in original):

The Court’s task pursuant to r 9.70 is to determine whether the proposed settlement is in the best interests of the person under a disability or beneficial to that person’s interests: Scandolera v State of Victoria [2015] FCA 1451; 331 ALR 525 at [27]-[29] (Mortimer J, as her Honour then was). The Court should be concerned only with the benefit to the person under a disability: Modra v State of Victoria [2013] FCA 1041 at [12] (Tracey J).

That task is not prescribed by the Rules themselves, rather it is implied by the nature of the jurisdiction where the party is under a disability and unable to conduct the litigation on his or her own behalf: Elliot v State of Victoria (Department of Education & Training) [2018] FCA 1029 at [17] (Mortimer J).

The determination of whether the proposed settlement is in the best interests of, or beneficial to, the interests of the person under a disability, requires the Court to weigh, at least as an important consideration, the prospects of the applicant succeeding if the proceeding continues: Fisher v Marin [2008] NSWSC 1357 at [35]-[36] (Rothman J). Because approval of the settlement will have the effect of binding the applicant to the terms of the settlement and bringing the proceeding to an end, it follows that the Court should consider the advantages and disadvantages of the proceeding continuing by reference not just to whether the applicant may secure a more advantageous outcome if the Court found in her favour, but also the prospects of an appeal, and the costs and pressures imposed on the applicant if the proceeding went to trial, including the emotional and psychological strain of litigation: Scandolera at [29]; Fisher at [35]-[36].

20    I also refer to, without repeating, my summary in FBV18 v Commonwealth of Australia [2024] FCA 947 at [29]–[31] of the case law concerning the requirement set out in r 9.71(2)(c) of the Rules that an application made under r 9.70 be accompanied by “an opinion of an independent lawyer that the agreement is in the best interests of the person under a legal incapacity”. As set out there, the weight of authority favours the view that r 9.71(2)(c) does not exclude the opinion of a lawyer with a previous involvement in the case, provided that opinion is given in furtherance of that lawyer’s duty to assist the Court, and not in furtherance of any duty to a party.

Consideration

21    For the reasons outlined below, I am satisfied that the proposed settlement is in the Applicant’s best interests and that it is appropriate to approve the settlement.

22    First, the Applicant, through his mother as litigation representative, has agreed to the terms of the proposed settlement. The Applicant’s mother attended the mediation in this proceeding, has received legal advice and has read the Confidential Opinion. I have no reason to doubt the evidence of Ms Hearne in her affidavit affirmed 13 May 2024 that the Applicant’s mother supports and cares deeply for the Applicant, and acts with his best interests in mind. The Applicant’s mother is well placed to evaluate what is in her son’s best interests.

23    Secondly, the Applicant’s claims as to the existence, scope and breach of a duty of care are contestable and have been strenuously defended by the Respondents to date. As the Applicant observed in his submissions: “These proceedings have been lengthy and delayed to date, having already been on foot for over 6 years. It is reasonable to assume that this will likely continue to be the case in the future”. Further, the medical reports annexed to Ms Hearne’s affidavit evidence significant disagreement between the medical experts as to the nature and extent of the Applicant’s psychological injury. Were this proceeding to progress to trial, the Applicant would be exposed to significant legal uncertainty and further emotional and psychological strain.

24    Thirdly, I have reviewed the Confidential Opinion of Geoffrey Watson SC dated 9 May 2024. Mr Watson provided the Confidential Opinion in furtherance of his duty to assist the Court to determine whether the settlement is in the Applicant’s best interests, and not in his capacity as counsel for the Applicant. As such, having regard to the authority referred to above, it is an opinion of an independent lawyer within the meaning of r 9.71(2)(c) of the Rules. If it is not, for any reason, then I would dispense with the requirement set out in r 9.71(2)(c). While it would not be appropriate to disclose the content of the Confidential Opinion in any detail, I am satisfied that Mr Watson gave careful and balanced consideration to the risks faced by the Applicant in relation to liability and quantum. Mr Watson concluded that the proposed settlement was in the Applicant’s best interests.

25    Finally, it is proposed that the settlement sum be held on trust and managed by the NSW Trustee and Guardian until the Applicant turns 18. I am satisfied that this approach will ensure that the settlement sum is preserved for the Applicant’s benefit.

THE CONFIDENTIALITY APPLICATION

26    By a further interlocutory application dated 13 May 2024 the parties jointly seek that the terms of the Deed, including the settlement amount, be kept confidential and prohibited from disclosure by publication or otherwise. The parties do so pursuant to ss 37AF(1) and 37AG(1) of the FCA Act on the ground that it is necessary to prevent prejudice to the administration of justice.

27    The Respondents rely on the affidavit of Rodger Prince, a lawyer with the Australian Government Solicitor, affirmed 13 May 2024. This affidavit makes clear that, while the interlocutory application was filed by the Respondents, it was made by the parties on a joint basis.

28    By his interlocutory application for settlement approval dated 13 May 2024, the Applicant also seeks confidentiality orders in respect of:

(a)    the annexures to Ms Hearne’s affidavit, namely:

(i)    the Deed, which is “Annexure EH-1”;

(ii)    the Confidential Opinion, which is “Annexure EH-2”;

(iii)    the medical reports, which are “Annexures EH-3 and EH-4”;

(b)    any information that would tend to reveal:

(i)    the Applicant’s name or any member of his family;

(ii)    the identification number of the boat on which the Applicant first arrived in Australia;

(iii)    the Applicant’s age (other than that he is a minor);

(iv)    the Applicant’s country of origin;

(v)    any medical conditions of the Applicant;

(collectively, Personal Information); and

(c)    all medical reports filed by the parties in this proceeding.

29    The Applicant also seeks that the Confidential Opinion be restricted from being disclosed to any party (other than the Applicant), non-party or in open court.

The materials

30    The Respondents filed written submissions on 2 August 2024 in support of the confidentiality application. The Applicant’s submissions in support of settlement approval also advanced submissions in respect of the additional confidentiality orders sought.

Applicable principles

31    The confidentiality orders are sought pursuant to s 37AG(1) of the FCA Act on the basis that the orders are “necessary to prevent prejudice to the proper administration of justice”.

32    As observed by Murphy J in Gray v State of Victoria (Department of Education and Early Childhood Development) [2017] FCA 353 at [21]–[22] (and quoted in DIZ18 at [52]), the word “necessary” in s 37AG(1)(a) indicates a “reasonably strict test” and the concept of the “proper administration of justice” is multi-faceted, incorporating the public interest in preserving the confidentiality of the mediation and negotiation of settlement agreements, keeping people to their freely-entered bargains and the public interest in settlement of proceedings prior to trial.

33    Justice Murphy stated further in DIZ18 (at [53]):

The Court has been satisfied that it is appropriate to make orders to protect the confidentiality of the terms of settlement of a proceeding brought by a person under a legal incapacity, and the confidential opinion of counsel in support of a settlement approval application, for reasons including the following:

(a)    the likelihood that a settlement would not have occurred without the prospect of such protection: Elliott v State of Victoria [2018] FCA 1029 at [24] (Mortimer J, as her Honour then was); James v WorkPower Inc [2019] FCA 1239 at [18] (Mortimer J, as her Honour then was). Bushby (by his litigation representative Webling) v Victoria (Department of Education and Training) (No 2) [2023] FCA 34 at [25] (McEvoy J);

(b)    so that future parties, that is, not the parties in the proceeding before the Court, can have confidence that the Court may be prepared to facilitate resolution of such proceedings, including by orders for confidentiality as to the terms of settlement and counsel’s opinion in support of settlement approval: Elliott at [18]; James at [18]; Bushby at [25];

(c)    the conserving of the parties’ and the Courts resources by the facilitation of consensual resolution: Elliott at [24]; and

(d)    bringing finality to the litigation; Elliott at [24].

Consideration

34    For the reasons outlined below, it is appropriate to make the confidentiality orders sought on the ground that it is necessary to prevent prejudice to the proper administration of justice and, in respect of some of the information in question, on the ground that the orders are necessary to protect the safety of the Applicant and his family members given they are refugees. In doing so, as required under s 37AE of the FCA Act, I have taken into account that a primary objective of the administration of justice is to safeguard the public interest in open justice.

35    The application for confidentiality is made jointly. The Applicant’s litigation representative, having had the benefit of receiving legal advice and reviewing the Confidential Opinion, has maintained her instructions to accept the terms of the proposed settlement as contained in the Deed, including the confidentiality terms therein. There is a public interest in keeping people to their freely-entered bargains (DIZ18 at [52]). To this end, I note the evidence of Mr Prince that if the terms of the proposed settlement were made public as part of the approval process, the confidentiality terms of the Deed would be frustrated or undermined. In Cannon v Griffiths & Ors (No 2) [2015] NSWSC 1329, Beech-Jones J observed at [17]: “In my view the public interest in respecting that settlement would tend to be undermined by removing an assumption on which the settlement was arrived at, namely the confidentiality of its terms.” Were the Applicant not a minor, the Court’s approval would not have been required and no question of whether the Deed should remain confidential would arise.

36    As outlined in Mr Prince’s affidavit, this proceeding is part of a significant cohort of similar proceedings in this Court commenced by “transitory persons” (as defined in the Act) and based in the law of negligence. Mr Prince deposes that many of these proceedings will be mediated in the medium to long term, and that those mediations will be prejudiced if the terms of settlement in the present proceeding were publicly disclosed. I consider that the administration of justice is served if parties to future mediations — in particular, the proceedings within this cohort — can have confidence that the Court may be willing to facilitate the resolution of such proceedings, including by orders for confidentiality as to the terms of the proposed settlement. In addition, dissemination of the terms of the settlement reached with the Applicant would tend to undermine the Respondents’ position in future mediations of proceedings in the cohort, making it less likely that such mediations will be successful in resolving the dispute. That would be inimical to the administration of justice.

37    It is also necessary to determine the period for which the confidentiality orders are to operate. Pursuant to s 37AJ of the FCA Act, in doing so the Court must “ensure that the order operates for no longer than is reasonably necessary to achieve the purpose for which it is made”. The Respondents submitted that it is “appropriate to limit the term of the confidentiality orders to three years from today’s date” (quoting Murphy J in BXD18 (by her litigation representative Marie Theresa Arthur) v Minister for Home Affairs (No 2) (2024) 301 FCR 392; [2024] FCA 16 at [50]). I accept that a three-year timeframe is reasonably necessary, having regard to the need to prevent prejudice to the Respondents’ position in future negotiations with applicants in similar proceedings. If further cases in this cohort remain pending before this Court at the expiry of this period, the Respondents can apply to extend the orders.

38    However, I do not consider it appropriate to limit the timeframe for the operation of confidentiality orders in respect of the Confidential Opinion. The Confidential Opinion was provided as an independent advice to assist the Court in the settlement approval application. It contains details, opinions and conclusions about the Applicant’s case and prospects of success. If made available to any person, including the Respondents, this document could cause serious prejudice to future applicants in similar proceedings. Further, as observed by Murphy J in DIZ18 (at [65]), if the Confidential Opinion was made available, “there is a risk that counsel will be less frank in the future when setting out their views in relation to any weaknesses in their client’s case”. Accordingly, the Confidential Opinion should remain confidential unless or until this Court orders otherwise.

39    I reach the same conclusion in respect of the Applicant’s medical reports and any documents or information that would tend to reveal the Applicant’s Personal Information. The Applicant is a refugee who, by nature of him seeking asylum, requires protection from the publication of information that would tend to identify him — particularly to those in the country from which he fled. The Applicant is also a minor whose privacy ought to be protected. I note that Perram J made indefinite non-publication orders in respect of most of the Applicant’s Personal Information on 4 November 2019. I consider that all of this information should remain confidential unless or until a court orders otherwise.

Associate:

Dated:    26 August 2024