New South Wales Supreme Court CITATION : Uttinger v The Trustees of the Hospitaller Order of St John of God Brothers [2008] NSWSC 1354 HEARING DATE(S) : 7 November 2008 JUDGMENT DATE : 16 December 2008 JURISDICTION : Common Law JUDGMENT OF : Rothman J (i) The statement of claim against the first and second defendants be dismissed; (ii) The proceedings be dismissed; DECISION : (iii) The plaintiff pay the defendants' costs of and incidental to the proceedings, as agreed or assessed; (iv) The parties have liberty to make an application as to any special or different order as to costs on 3 days' notice to the Court or any person so affected. Such application to be made no later than Friday 13 February 2009. CATCHWORDS : PRACTICE AND PROCEDURE – motion to strike out – no arguable case – deed of release – bar to proceedings – time limit for Contracts Review Act action to set aside deed – no negligence by solicitors then acting – motion granted Accident Compensation Act 1972 (NZ) LEGISLATION CITED : Contracts Review Act 1994 Roman Catholic Church Trust Property Act 1936 Roman Catholic Church Communities' Lands Act 1942 CATEGORY : Procedural and other rulings Amaca Pty Ltd v Bernard George Frost [2006] NSWCA 173; (2006) 67 NSWLR 635 CASES CITED : Regie Nationale des Usines Renault SA v Zhang [2002] HCA 10; 210 CLR 491 Trustees of the Roman Catholic Church v Ellis [2007] NSWCA 117; (2007) 70 NSWLR 565 Brian Uttinger (Plaintiff) PARTIES : The Trustees of the Hospitaller Order of St John of God Brothers (First Defendant) Peter Jackson (Second Defendant) FILE NUMBER(S) : SC 20122/2007 D W Elliott (Plaintiff) COUNSEL : R Cavanagh (First Defendant) D Priestley (Second Defendant) Gerard Malouf & Partners Solicitors (Plaintiff) SOLICITORS : Caroll & O'Dea Lawyers (First Defendant) HWL Ebsworth Lawyers (Second Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ROTHMAN J 16 DECEMBER 2008 20122/2007 Brian Uttinger v The Trustees of the Hospitaller Order of St John of God Brothers & Anor JUDGMENT 1 HIS HONOUR: The plaintiff, Brian Uttinger, was a student at a boarding school conducted by the Brothers of St John of God at Marylands, Christchurch, New Zealand ("the School"). The first defendant, the Trustees of the Hospitaller Order of St John of God Brothers ("the Trustees"), is a body said to be incorporated under the Roman Catholic Church Communities' Lands Act 1942 and engaged in education and religious services in Australia and New Zealand, and most particularly responsible for the conduct of the Brothers of St John of God in conducting the School. 2 It is said, that Mr Uttinger, in the course of attendance at the School, was physically abused by one or more Brothers engaged for the purpose of carrying out the educational and religious operations of the Trustees. 3 During Mr Uttinger's time at the School, he was a minor and was suffering an intellectual disability, namely, autism. The allegation in the statement of claim is that Mr Uttinger suffered severe physical abuse: heavy slapping across the face, kicking to his stomach, grabbing him by the ankles and forcibly turning him upside down, dropping him on the floor upside down, using the strap and cane to hurt and injure, pulling him by the hair, and the like. Mr Uttinger alleges he was also deprived of food as a punishment. 4 Further, it is alleged Mr Uttinger suffered psychological abuse at the hands of the same Brother and another. Lastly, it is alleged that the same two Brothers sexually abused Mr Uttinger. 5 In 2001, the plaintiff contacted Peter Jackson, a solicitor, allegedly for the purpose of Mr Jackson advising him on the cause of action, if any, against the Trustees and/or the School. As a consequence of the representation by Mr Jackson, the plaintiff, on 30 May 2001, executed a deed of release in return for an "ex-gratia" payment. 6 The plaintiff seeks to set aside the deed, by which that payment was made, under the Contracts Review Act 1984, as unfair, and he also alleges unconscionable conduct by the Trustees. 7 Further, the plaintiff sues Peter Jackson for breach of duty of care and damages arising therefrom, namely, the negligent advice as to his prospects of succeeding against the Trustees, the appropriateness of the figure received pursuant to the deed, and the finalisation of the offer made by the Trustees. 8 The Trustees (and Peter Jackson) move to dismiss the proceedings. 9 Written submissions were filed and the motions were listed before the Court on 3 October 2008. Issue was taken by those then representing the plaintiff as to the delay in the filing of submissions on behalf of the defendants and there was an adjournment until 24 October 2008. 10 On 24 October 2008, there was an appearance "for the solicitors formally instructed by the plaintiff", their retainer having been terminated, the appearance occurring, as a matter of courtesy, for the purpose of making that announcement. The Court had received, previously, a notice of ceasing to act. Notwithstanding that the plaintiff had been informed of the date of the hearing and the fact that his solicitors would appear only for the purpose of announcing their withdrawal, the Court adjourned the proceedings to Friday 7 November 2008 and directed the first defendant to notify the plaintiff, at his last known address, of the adjourned date and time. 11 When the matter resumed before the Court on 7 November 2008, there was, once more, no appearance for the plaintiff and the Court indicated that it would proceed by way of the written submissions that had been filed, subject to a further notification to the plaintiff, by the first defendant, of the plaintiff's liberty to provide written submissions within 14 days. No written submissions were received from the plaintiff. Issues 12 The issues raised by the Trustees, in its motion to strike out the statement of claim, are: (a) The effect of the deed of release precludes this further claim; (b) The limitation period under the Contracts Review Act has expired; (c) The Trustees, as a statutory corporation, do not owe the duty of care alleged by the plaintiff and the funds of the Trustees are not available to meet any damages of the kind alleged. 13 The second defendant relies on the last of the above-mentioned points as one of the reasons that no good cause of action can be shown for negligence in relation to the advice given as to the settlement reached in 2001. Further, the second defendant, the solicitor, relies on New Zealand law, and, in particular, the operation of the Accident Compensation Act 1972 (NZ) to show that claims for common law damages have been statute barred. The Effect of the Deed of Release 14 In ordinary circumstances, a deed of release settling the matter between the plaintiff and the first defendant would disentitle the plaintiff from obtaining damages for the same cause of action. 15 However, in the current circumstances, the plaintiff seeks to set aside the deed of release and pursue common law damages against the first defendant. In those circumstances, should the claim for the setting aside of the deed of release be successful, the plaintiff would be at liberty to pursue damages (assuming no statutory bar). For that reason, on its own, this ground for the dismissal of the proceedings is rejected. It should be noted however that, during the course of the negotiation of the deed, the plaintiff had access to his own independent legal advice (albeit that he now complains about its quality). That advice included not only Mr Jackson (the second defendant), but also junior and senior counsel who were then appearing for him. In those circumstances, it would be difficult, without further material, to suggest that the plaintiff did not have independent legal advice or was unable to form an opinion as to his best interests. Contracts Review Act 16 The deed that is sought to be impugned was made on 30 May 2001. Section 16(a) of the Contracts Review Act provides a relevant limitation period of two years after the date on which the contract was made. That time expired on 30 May 2003. 17 The statement of claim was filed on 3 May 2007. It was approximately four years beyond the limit imposed by the Contracts Review Act and was out of time. The statement of claim, insofar as it relies upon the Contracts Review Act, must fail. 18 To the extent that the Contracts Review Act claim fails, it then becomes necessary to deal with the deed of release. 19 Paragraph 8 of the deed of release is an acknowledgment by the plaintiff that, by accepting the agreed sum, the plaintiff was not entitled to make any further claim against the Trustees. The plaintiff covenanted and agreed that he would not take action against the Trustees, the accused Brothers or any servant or agent of the institute in respect of the claims. 20 The deed of release, once it is not impugned or sought to be impugned in the proceedings, provides an absolute defence to the Trustees. The mere fact that there may have been more acts of abuse or sexual abuse, particularised in the statement of claim, than the police were informed of at the time, does not mean that the terms of the deed of release do not prevent this action. 21 Clause 9 of the deed of release makes clear that the plaintiff, in these proceedings, "will take no action against the Body Corporate, the Institute, the accused Brothers or any servant or agent of the Institute or any of them in respect of the claims." The claims are defined as the claims by the plaintiff that he was unlawfully assaulted by former Brother McGrath or some other Brother who is a member of the Institute and that, as a result of such unlawful acts, the plaintiff sustained loss, damage and injuries. 22 The Institute is a reference to the Hospitaller Order of St John of God Brothers, an unincorporated association sued, in the earlier proceedings, through Brother Peter Burke. 23 There can be little doubt that the deed of release is an absolute defence to any damage or loss arising from the abuse, sexual abuse or other psychological damage perpetrated by Brother McGrath or Brother Roger Maloney. The deed remains an absolute defence until such time as it is or would be otherwise set aside. Statutory Corporation 24 The Trustees, as earlier stated, is a duly incorporated body pursuant to the Roman Catholic Church Communities' Lands Act. It is the statutory equivalent, incorporating certain religious orders of the Catholic Church, to the statute that incorporates the Catholic Church through the Archdiocese of Sydney, namely, the Roman Catholic Church Trust Property Act 1936. 25 The purpose of the legislature in enacting the Roman Catholic Church Communities' Lands Act was to create bodies corporate for the purpose of holding, dealing with and managing property on trust for the use or benefit of certain religious orders. Those religious orders are particularised in s 3 of the Act and in the Schedule to the Act. Nothing in the Act seems to confer on the Trustees the power to appoint, deal with or control persons involved in the Church. 26 This issue was considered by the Court of Appeal in Trustees of the Roman Catholic Church v Ellis [2007] NSWCA 117; (2007) 70 NSWLR 565. Ellis was a proceeding, the facts of which were relevantly indistinguishable from the present proceedings. The suit, in Ellis, related to conduct of an assistant priest. There may be a distinction based upon the power of the Trustees to conduct a school, which power is contained in the statute subject to review in Ellis (see s 4(3) of the Roman Catholic Church Trust Property Act). A similar power is found in the statute here under examination (s 4(3) of the Roman Catholic Church Communities' Lands Act). 27 The current proceedings are taken, relevant to the first defendant, against the statutory corporation and not against some administrative arm or group of individuals acting as an unincorporated venture. Relevantly for present purposes, the Court of Appeal held (at [111]-[112], [117], [141] and [148]) that the Roman Catholic Church Trust Property Act (and, by analogy, the Roman Catholic Church Communities' Lands Act) does not confer on the statutory body corporate, created by the Act, the appointment, management and removal of priests and does not render the Trustees' property subject to all of the legal claims associated with Church activities (per Mason P, with whom Ipp and McColl JJA agreed). 28 It is unnecessary for the Court, as presently constituted, to determine, from first principles, the liability of the first defendant. The judgment of the Court of Appeal in Ellis is indistinguishable, for present purposes, and determines, against the plaintiff, the liability of the first defendant. The Brothers are not employees of the School and their control, like the assistant priest in Ellis, is not one of the functions of the body corporate. Negligence of the Second Defendant 29 Given the determination of the Court, and the binding effect of the judgment of the Court of Appeal in Ellis, supra, it cannot have been negligent of the solicitor to advise to accept a settlement in terms proffered by the Trustees. Even if Ellis where distinguishable, such an issue going to liability must significantly affect any advice on the appropriateness of any settlement and any determination of the risk of not settling. 30 Of itself, such a finding would preclude a cause of action proceeding against the second defendant. The second defendant also raises issues associated with the operation of the Accident Compensation Act. The New Zealand Accident Compensation Act provides for no-fault accident compensation, the corollary to which is to bar actions for damages in the common law. It has operated since in or about April 1974. The only exception, relevant for present purposes, is a claim for exemplary damages. 31 At least since the judgment of the High Court in Regie Nationale des Usines Renault SA v Zhang [2002] HCA 10; 210 CLR 491, there can be no doubt, since the cause of action arose in New Zealand, that the law to be applied is New Zealand law: see Amaca Pty Ltd v Bernard George Frost [2006] NSWCA 173; (2006) 67 NSWLR 635. 32 As the judgment of the Court of Appeal in Amaca makes clear, the fact that the proceeding was litigated in the New South Wales Supreme Court would not affect the law to be applied. New Zealand law would apply and it prevents a damages claim of the kind here sought. 33 In those circumstances, the action against the second defendant can not proceed for two fundamental bases: it was not negligent to recommend a settlement from Trustees, in circumstances where they were otherwise not liable in damage; and, the settlement was above and beyond any compensation that could be obtained under the universal compensation and/or insurance scheme that operated in New Zealand and, as a result of which, this action in damages in common law under New Zealand law is precluded. 34 It is, as a consequence of the foregoing, unnecessary to deal with the other issues, whereby, it is said by the second defendant, that the claim against him fails. Conclusion 35 For the foregoing reasons, the Trustees are not liable in damage for the damage suffered by the plaintiff. Nothing in that finding understates or minimises the damage to the plaintiff. If the plaintiff were treated in the manner alleged, then the damage would be significant and, no doubt, continuing. Nevertheless, the causes of action do not lie against the parties now being sued, the claim is outside the time-limit set by the statute, and it cannot be said of the solicitors, then acting for the plaintiff, that they have acted negligently in advising to accept the settlement offered. There is, on the allegations of the plaintiff, no arguable possibility of succeeding and no arguable case. 36 The Court makes the following orders: (i) The statement of claim against the first and second defendants be dismissed; (ii) The proceedings be dismissed; (iii) The plaintiff pay the defendants' costs of and incidental to the proceedings, as agreed or assessed; (iv) The parties have liberty to make an application as to any special or different order as to costs on 3 days' notice to the Court or any person so affected. Such application to be made no later than Friday 13 February 2009. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.