Abuse Law – Case Law Update – Setting Aside a Deed & the Impact of Prejudice

In the matter of Williams v State of Victoria [2022] VSC 456, the plaintiff, Shirlee Williams, had executed a Deed of Release in relation to a settlement (of $120,000.00) with the defendant, the State of Victoria, on 16 March 2015 in relation to the plaintiff’s personal injury claim for damages for her injuries and losses as a result of sexual abuse the plaintiff suffered whilst she was a ward of the State of Victoria. The effect of the deed of release was that the plaintiff released the defendant from any further claims in relation to the abuse.  

Of note, the perpetrator of the abuse, Mr Kevin Sanders, passed away prior to the negotiations and settlement of the plaintiff’s claim.  

The plaintiff commenced new court proceedings against the defendant and in 2022 sought for the previous deed of release be set aside pursuant to ss 27QD and 27 QE of the Limitation of Actions Act 1958 (Vic).   

At [80] and [82],  

The plaintiff submitted that the defendant will not suffer substantial prejudice if the settlement agreement is set aside and the proceeding continues, and that there has not been an effluxion of time so burdensome that a fair trial would not be possible. The plaintiff submitted that delay in reporting abuse is a frequent feature of child abuse cases. The plaintiff contended that in this case the Sanders had died before the 2014-15 settlement negotiations and the defendant did not make detailed investigations at the time the deed was being negotiated and has not contended that delay has caused a substantial deficiency in the documentary record. 

The plaintiff submitted that in settling her claim in 2015 for $120,000 inclusive of costs, she did so at a heavy discount because of the barriers and uncertainties her claim faced.  In this regard, the plaintiff pointed to Ms Sdrinis’ advice to the plaintiff on 13 June 2013 that, in addition to issues establishing liability, the plaintiff was out of time to bring her claim and that there was no guarantee that the Court would grant an extension of time to bring the claim.  The plaintiff also pointed to Ms Sdrinis’ advice to the plaintiff on 17 December 2013 that while the report of the Victorian Parliamentary Inquiry recommended the abolition of the limitation period, there was, at that time, no indication that the government would accept that recommendation. 

At [81] and [83], 

In response, the defendant argued that it may suffer substantial prejudice. First, the defendant said the death in 2016 of the plaintiff’s brother, the only witness to the alleged abuse, has deprived it of the ability of cross-examining a key witness about his statement and his recollections and beliefs. Second, the defendant said it is ‘likely to suffer prejudice’ in being able to locate and identify Departmental witnesses that were involved in the supervision of the plaintiff when she was a ward. The defendant said that it presently did not know if such witnesses are deceased, infirm or, because of the passage of time, no longer recollect the plaintiff’s wardship. Third, in respect of the death of Kevin and Patricia Sanders, who were deceased at the time the settlement was reached, the defendant contended that it was not the case that it would suffer no prejudice but rather that it would suffer no additional prejudice. 

The defendant contended that there is nothing to suggest that the settlement reached with the plaintiff in 2015 was anything but fair when assessing her legal risks and comparative awards and settlements at that time. The defendant relied on the following evidence of RCT’s [the plaintiff’s previous legal representatives in the 2014-2015 negotiations] advice to the plaintiff in support of this contention: 

1. the unfiled statement of claim provided by RCT to the VGSO in 2014 made no claim for economic loss; 
2. the settlement range was between $32,500 and $55,000; 
3. the plaintiff’s case was not strong on liability because it would be difficult to show that the defendant knew or should have known that the plaintiff was at risk, there was very little evidence of abuse and causation was complicated by the head injuries sustained by the plaintiff in a motor vehicle accident which may have explained the plaintiff’s behavioural difficulties; 
4. RCT was not prepared to litigate the plaintiff’s claim because of the liability issues; 
5. the plaintiff was invited repeatedly to seek a second opinion or await the outcome of the Royal Commission; 
6. the plaintiff indicated she wanted at least $42,000, $50,000 or $80,000 by way of settlement and received well above this amount; 
7. the plaintiff was ‘very pleased’ with the defendant’s opening offer of $90,000 and ‘very happy’ with the defendant’s final offer of $120,000 when she instructed RCT to accept the offer; 
8. RCT’s first counteroffer of $140,000 was proximate to where the matter finally settled; and 
9. in signing the authority, the plaintiff acknowledged that the settlement amount was ‘a compromise of [her] claim taking into account the risks of litigation which [had] been fully explained to [her]’ and that the ‘offer [did not] necessarily represent the most [she] could receive if [she] proceeded with [her] action to a final judgment by the court but [represented] a fair and reasonable resolution of [her] claim taking into account the risks of litigation’. 

The court provided the following: 

The adequacy of the settlement amount must be assessed against the strength of the plaintiff’s case. The uninformed views of the plaintiff about the amount she desired to settle her claim are unlikely to assist in assessing the adequacy of the settlement against the strength of the plaintiff’s case. Similarly, the plaintiff’s reaction to the settlement may not be a reliable guide to the adequacy of the settlement, that reaction being likely to be influenced by the advice she received from her solicitors about the possible settlement range.  In this case, the plaintiff’s solicitors quoted a settlement range that was plainly well below the value of the plaintiff’s claim.  Even taking into account the forensic issues, the limitation issues, and perhaps a desire to manage the plaintiff’s expectations, the quoted range is out of step with the award amounts in the comparable cases identified through the VGSO’s research. [111] 

In my view, the safest guide to the adequacy of the settlement amount is the comparable awards identified by the VGSO. Those cases identified a number of court awards with an average award around $145,000. Those cases, however, included a large number of cases against individuals, as opposed to the State or a business organisation.  The awards made in cases against individuals were frequently significantly below $100,000. By comparison, cases involving negligence claims against the State were awarded amounts significantly higher than the average.  The VGSO’s letter to the Department seeking instructions for the claim settlement negotiations also identified a claim that was ‘broadly similar’ to the plaintiff’s claim which had settled for $130,000, inclusive of costs.  That case involved what appears to be a similar type of abuse over a four-year period, although details of the injury are not provided.  The VGSO’s letter identifies the abuse in the plaintiff’s case as having taken place over six to seven years.  Absent greater information about the ‘broadly similar’ settled claim, it is difficult to understand why the plaintiff’s claim was not accorded a higher value. [113] 

In relation to the prejudice issue, and the potential for the defendant to seek a permanent stay, the court provided at [117]: 

I accept that if the deed is set aside, the defendant will suffer prejudice and that this prejudice is relevant to the exercise of the Court’s discretion to set aside the deed. It will lose the protection of the plaintiff’s releases contained in the deed. It will also be prejudiced by the loss of the opportunity to cross-examine the plaintiff’s brother, a key corroborating witness. I note that the defendant will still be able to make submissions about the weight any trial court should give to the plaintiff’s brother’s statement, if that statement is adduced in evidence. Similarly, the death of the Sanders (the alleged perpetrator) means they are not available to potentially participate in any trial. I have approached the defendant’s submissions about the potential prejudice through loss of documents and difficulties in identifying witnesses with some caution, given these were put at a level of generality unsupported by evidence of any investigations undertaken by the defendant. 

Ultimately, the court ordered that the previous deed of release be set aside on the basis that the settlement in 2015 was inadequate and was, at least in part, influenced by the limitation issue that was in existence at the time. The court further ordered that notwithstanding the fact that the defendant would be prejudiced, it is still just and reasonable that the 2015 deed of release be set aside. 

We are specialist abuse lawyers and can help you receive acknowledgement, meaningful apology and financial resolution from those institutions and systems of power that failed to protect you from harm. If you would like advice in relation to a childhood or adult sexual, physical and/or psychological/emotional abuse claim in any jurisdiction in Australia, please reach out to the author, Emily Wright, at Littles Lawyers today. 

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