Roman Catholic Trusts Corporation for the Diocese of Sale v WCB  VSCA 328
This Judgment confirms the original decision regarding the application of the deed setting aside legislation, in particular sections 27QD and 27QE of the Limitations of Actions Act 1958 (Limitations Act). It provides assistance in understanding how a court will exercise its discretion to determine circumstances when it is ‘just and reasonable’ to set aside a deed of release. Please also see the Case Alert (October 2020) found here for our summary of the original Supreme Court decision and the relevant legislative provisions.
The Court of Appeal largely agreed with the original decision of Justice Keogh, however provided further guidance on the circumstances that will be taken into account when considering an application for leave to set aside, as well as providing comment on vicarious liability.
This Case Alert will focus on the deed set aside provisions.
The appeal largely related to the construction and implementation of sections 27QD and 27QE of the Limitations Act.
Section 27QD enables an application to set aside a settlement agreement; specifically, section 27QD(2) provides:
In a proceeding to which this section applies, application may be made to the court for the settlement agreement and any judgment or order giving effect to the settlement of the previously settled cause of action to be set aside.
Section 27QE(1) then sets out court powers in relation to setting aside a settlement agreement – in part stating:
The court, if satisfied that it is just and reasonable to do so it:
- may make an order setting aside the settlement agreement and any judgment or order giving effect to the settlement of the previously settled cause of action, whether wholly or in part; and
- may make any other order that it considers appropriate in the circumstances.
The Court of Appeal rejected each ground of appeal made by the Roman Catholic Trust Corporation of Sale (Diocese of Sale). The analysis of the primary judge’s decision was largely accepted by the Court of Appeal.
The Court of Appeal went so far as to conclude that:
“If we had been required to determine the Plaintiff’s original application for ourselves, we would have had little hesitation in granting the application”.
The Court of Appeal Judges found:
“Indeed, in our view, when all of the relevant circumstances are taken into account, it is difficult to see how there could be any conclusion other than that the Plaintiff’s application must be granted. The settlement, entered into in a case which was statute barred and lacked a viable defendant, was, because of those facts, a very modest one which did not provide the Plaintiff with appropriate compensation for the wrong done to him. In those circumstances, and notwithstanding the difficulties created by the elapse of time, it is, in our view, very plainly just and reasonable to set aside the Deed. Indeed, it would positively be unjust and unreasonable not to do so.”[Emphasis added].
In confirming the original decision, the Court of Appeal Judges considered the construction of the new provisions, the context and history of the legislative amendments and the overall circumstances of the claim.
Construction of the new provisions
In considering the construction of the new legislation, specifically sections 27QD and 27QE of the Limitations Act, the Court of Appeal Judges found them to be clear and unambiguous, stating:
“In essence, if the Court is satisfied that it is ‘just and reasonable to do so’, it may make an order setting aside the settlement agreement, and any other order it considers appropriate in the circumstances.”
The Court of Appeal Judges found that this does not require the party seeking to set aside a settlement agreement to demonstrate ‘clear and compelling reasons’ for doing so.
Context of the legislation amendments
The Court of Appeal Judges considered the history and context of the legislative amendments and found:
“It is necessary to understand and take into account the historical context in which that provision was enacted in 2019, so as to properly understand its purpose and effect.”
In this regard, the Court acknowledged the barriers faced by Plaintiffs historically when bringing claims against institutions, including, but not limited to the:
- nature of the abuse and impact of feeling constrained;  and
- identifying a relevant legal entity as a defendant in a proceeding. 
The Court of Appeal Judges considered:
“[i]t is axiomatic that, in determining whether it was just and reasonable to set aside a settlement agreement, it is relevant to consider whether that agreement constituted a just and fair resolution of the claim made by the Plaintiff.” 
In this regard, the Court of Appeal Judges accepted that:
“At the time the Plaintiff entered into the settlement agreement, the claim that he had commenced faced two very substantial legal barriers, which had been subsequently recognised by the Parliament as being unfair and unjust.” 
The Court of Appeal Judges did not accept that the “Plaintiff is attempting to re-litigate a previously settled cause of action ‘in more favourable legal conditions”.  They accepted that the Plaintiff settled the original claim at a significant discount.
Prejudice faced by the defendant
The Court of Appeal Judges disagreed with the opinion of Justice Keogh in relation to prejudice. Justice Keogh held that the prejudice faced by the Defendant is not a relevant consideration in determining an application to set aside a deed. The Court of Appeal Judges found that this is a relevant consideration when considering all of the relevant circumstances.
The Court of Appeal Judges were not persuaded that the Defendant would suffer material prejudice in the defence of the claim by the Plaintiff, specifically commenting on the vicarious liability claim.
The Court of Appeal Judges acknowledged that:
“[i]t may be accepted that, as a result of the effluxion of time, the Defendant may be at a disadvantage in resisting the claims made on behalf of the Plaintiff. However, as the foregoing analysis reveals, the Defendant has not been able to identify any material prejudice by reason of which it would not be just and reasonable for the Court to set aside the Deed concluded by the parties in 1996.” 
In respect of the vicarious liability claim, the Court of Appeal Judges stated:
“[T]he central issue will depend, not so much on the actual duties that were delegated to Hourigan as an assistant priest, but, rather, on whether the authority, power, trust and control, that he bore, and that derived from his status as a parish priest, enabled him to take advantage of his position to sexually abuse the Plaintiff…
The principal evidence, relevant to that issue, will be that of contemporaneous witnesses … as to how Hourigan conducted his office as a priest at that time...
The determination of the question of the Defendant’s vicarious liability for Hourigan’s conduct would substantially depend upon the relevant nexus that might be established between the authority and power vested in him as an assistant parish priest, and his abuse of the Plaintiff."
The Appellate Judgment provides further guidance for Plaintiffs and institutions regarding the relevant circumstances that a court will consider when determining whether it is ‘just and reasonable’ to set aside a deed of release. In particular, the court may consider the clear construction of the legislative amendments, the context and historical background of the legislative amendments, recognition of the barriers to justice faced in historical settlements and if there was any significant discount of an original settlement. This Judgment recognises that a Defendant’s prejudice is a relevant factor for the court to consider; however, the Defendant will be required to demonstrate ‘clear material prejudice’ in order for this factor to outweigh the other factors in support of an earlier deed being set aside.