Australia

We review a NSW Supreme Court decision to refuse the application made by a child sexual abuse survivor to set aside a deed of settlement in respect of a previously settled abuse compensation claim against Knox Grammar School. EXV (a pseudonym) made an application to set aside the original Deed of Settlement relying on significant changes in the law related to:

a court's ability to set aside earlier Deeds of Settlement if just and reasonable to do so;
the lifting of time limits for child abuse compensation claims; and
a defence known as the Ellis defence.

Many survivors of child sexual abuse may have chosen to settle their claim for less than it's worth because the law was not on their side. There has been a growing recognition that survivors of child abuse faced significant barriers, including legal barriers, that stopped them from receiving full and fair compensation for the harm that they suffered.

To remedy this, in 2021, the NSW Government introduced new laws allowing a Deed of Settlement to be set aside in circumstances where it is just and reasonable to do so, allowing survivors to bring another claim.

What is a Deed of Settlement?

Deed of Settlement is a legal document that represents an agreement by two or more parties to finalise a legal dispute. Most deeds in personal injury cases (including abuse compensation cases) will include a clause where the defendant agrees to pay to the plaintiff a certain amount of money in return for the plaintiff releasing the defendant from any future claims.

A Settlement Deed usually represents the end of legal proceedings for that particular case.

Significant changes to NSW laws related to abuse compensation claims

Since 2016, there have been several significant changes to the law aimed at putting survivors of child abuse into better positions to pursue compensation.

Limitation periods (time limits to pursue a claim) were removed with respect to child abuse claims in 2016.
The Ellis defence (see below) was removed in 2018.
In 2021, provisions were introduced to allow courts to set aside prior Deeds of Settlement in abuse compensation claims, paving the way for abuse survivors to bring a further claim against the same defendant.

NSW courts can set aside a Deed of Settlement in abuse claims if just and reasonable to do so

In 2021, the NSW government introduced Part 1C of the Civil Liability Act 2002 (NSW), which allows NSW courts to set aside 'affected agreements', essentially making those agreements void where it is just and reasonable to do so. An 'affected agreement' is a settlement deed that prevented a person from bringing any further claim for child abuse where the original claim was settled prior to 2016.

This means that survivors of child abuse who have previously settled their compensation claim in certain circumstances may be able to revisit the same claim against the same defendants a second time to seek full and fair compensation.

Removal of limitation periods (time limits) in abuse compensation claims

A limitation period is basically a timeframe a person has to bring a claim for compensation.

For child abuse claims, the limitation period for claims prior to 2016 was generally three years. That meant a survivor of child abuse only had three years from the date of the abuse to commence legal proceedings against their abuser.

It is now well understood that many survivors of child abuse will take years, if not decades, to feel comfortable to talk about the abuse that they suffered. Often, by the time a survivor was ready to bring a legal claim, the limitation period for that claim had long passed.

What was the Ellis defence in abuse compensation claims?

The Ellis defence prevented an abuse survivor from suing an unincorporated organisation. Entities like churches and schools were often unincorporated.

This meant that survivors could not bring claims against those organisations for negligence but were limited to bringing claims against the individual perpetrators of the abuse. This often limited the sort of compensation they could seek as these defendants were often penniless and so it was rarely worthwhile bringing a claim for compensation against them.

NSW case review – court denies application to set aside Deed of Settlement

In May 2024, the Supreme Court of NSW handed down the first decision regarding an application to set aside the original Deed of Settlement: EXV v Uniting Church in Australia Property Trust (NSW) [2024] NSWSC 490 ("EXV").

Background

In late 2006 or early 2007, EXV alleged that he had been sexually assaulted by a teacher, Mr Adrian Nisbett, while he was a student at Knox Grammar School back in the early 2000s. He was represented by a lawyer and a barrister.

After mediation in 2008, EXV signed a Deed of Settlement finalising legal proceedings against the school due to the alleged abuse. EXV received $115,000 in return for releasing Knox Grammar School from all direct and vicarious liability in relation to the alleged abuse.

In 2016, the Royal Commission into Institutional Responses to Child Sexual Abuse revealed that Knox Grammar School had been aware that Mr Nisbett had engaged in inappropriate behaviour prior to EXV's allegations. The Royal Commission noted that the school had been aware of that behaviour but had not taken any significant action to protect its students.

In 2022, EXV brought a new claim against the school, based on the same allegations as the original claim. Knox relied on the 2008 Deed of Settlement, and EXV brought an application to have the Deed set aside under the new 2021 legislation.

Arguments brought by the abuse survivor to have the Deed of Settlement set aside

EXV argued:

that his claim had been affected by the limitation period, which was three years at the time of his original claim and which had expired by 2008 (almost 8 years after the alleged abuse);
the Ellis defence as Knox Grammar School was an unincorporated organisation, and there was no proper defendant to sue at the time of the original claim;
that his lawyers could not sign off that his original claim had reasonable prospects of success due to a lack of evidence; and
that Knox Grammar School had evidence regarding Mr Nisbett's inappropriate behaviour and had failed to disclose it.

EXV also argued that other reasons to set aside the agreement included:

the low sum of compensation he received as part of his settlement;
the imbalance in the bargaining position between the parties; and
the conduct of the school's lawyers during the 2008 mediation.

The court's decision

Justice Weinstein refused to set aside the 2008 Deed of Settlement, finding that it would not be just and reasonable to do so.

In his reasoning, Weinstein J considered:

the interpretation of Part 1C of the Civil Liability Act 2002 (NSW);
the documentary and witness evidence of both parties; and
whether the legal barriers that existed at the time played a material role in EXV's decision to settle his claim.

Justice Weinstein accepted that Part 1C was aimed at setting aside agreements that were affected by the limitation period issues and/or the Ellis defence where it is just and reasonable to do so.

In this respect, his Honour did not accept that the inability of EXV's lawyers to certify that the claim had reasonable prospects of success was a legal barrier for the purposes of Part 1C but did consider that it could be taken into account as a factor when deciding whether it was just and reasonable to set the deed aside.

Justice Weinstein accepted that the plaintiff (EXV) held the onus of establishing the existence of legal barriers. In this case, there was some evidence that EXV's lawyers were concerned about the limitation period. However, his Honour did not accept that the limitation period had a material effect on EXV's decision to settle.

Likewise, Weinstein J did not accept that the Ellis defence affected EXV's decision to settle, given that there was no evidence that this was the case, and it was only raised in a cursory way.

Instead, Weinstein J found that EXV had settled because he did not think that he had sufficient evidence against Knox Grammar School and because of his anxiousness to resolve his claim rather than have it litigated in court.

His Honour accepted that the amount of compensation paid to EXV was modest and represented a significant compromise. Aside from that, his Honour did not accept that the conditions of the mediation in 2008 were harsh and did not accept that Knox Grammar School had any obligation to disclose evidence that it held back in 2008.

In fact, EXV's lawyers had advised EXV not to settle in 2008, which suggested that they still believed that further evidence could be unearthed and that the limitation period did not present a material barrier to the claim.

Justice Weinstein did not consider the bargaining position of the parties to be significantly imbalanced, at least not unusually so. The imbalance was reduced by the fact that EXV had experienced lawyers representing his interests.

What this means for child sexual abuse survivors

This decision shows that in circumstances where a survivor has previously entered into a deed of settlement and is now wanting to bring a claim, they will need to carefully consider whether they can obtain evidence demonstrating that either the limitation period or the Ellis defence materially affected their decision to settle their proceedings. If this can be demonstrated, it will allow a court to determine that it is just and reasonable to set aside a previous abuse compensation settlement.

Other matters that may be considered under the legislation will likely play a secondary role compared to the existence and material effect of a legal barrier. That being said, each case is decided on its facts, and in this case, other than the low settlement sum, the court did not find that other factors, such as the bargaining position of the parties or the conduct of the defendant's legal representatives, assisted EXV's application to have the Deed of Settlement set aside.

Get help from an abuse lawyer

We understand that for an abuse survivor, discussing the particular circumstances will be difficult, however, we believe it is important for survivors to know their rights and entitlements.

If you've previously settled your abuse compensation claim but would like advice about any entitlement you may have to revisit that claim, please contact a member of our abuse law team.

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Supreme Court NSW denies child sexual abuse survivor to revisit settled claim

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