Supreme Court New South Wales Medium Neutral Citation: Magann v The Trustees of the Roman Catholic Church of the Diocese of Parramatta [2018] NSWSC 1551 Hearing dates: 4 October 2018 Date of orders: 18 October 2018 Decision date: 18 October 2018 Jurisdiction: Common Law Before: Harrison AsJ Decision: The Court orders that: (1) Pursuant to 28.2 of the Uniform Civil Procedure Rules 2005 (NSW) there be a separate determination of the following questions: (a) Any liability of the defendant to the plaintiff (which is denied) was extinguished by operation of a Deed of Release between the plaintiff and the defendant dated 16 October 2007 based on the same cause of action. (b) In the alternative to (a) an order that the terms of a Deed of Release between the plaintiff and defendant dated 16 October 2007 be specifically performed by the plaintiff. (2) Costs of the defendant's notice of motion filed 5 April 2018 are reserved. (3) The plaintiff's notice of motion filed 5 June 2018 is dismissed. (4) The plaintiff is to pay the defendant's costs on an ordinary basis. (5) The matter is listed for directions at 9.00 am on 8 November 2018 before the Registrar to obtain a hearing date for the separate determination of the above questions. Catchwords: CIVIL PROCEDURE – Separate determination of questions – Whether appropriate in the circumstances – Uniform Procedure Rules 2005 (NSW), rr 28.2 and 28.4 – Whether enforceability of Deed of Release should be heard separately CIVIL PROCEDURE – Summary disposal – Judgment for plaintiff – Uniform Procedure Rules 2005 (NSW), r 13.1 – Where admission of incident occurring is alleged Legislation Cited: Civil Procedure Act 2005 (NSW), ss 56, 57, 58 and 60 Uniform Procedure Rules 2005 (NSW), rr 13.1, 28.2 and 28.4 Cases Cited: ABB Engineering Construction Pty Limited v Freight Rail Corp [1999] NSWSC 1037 Dunstan v Simmie & Co Pty Ltd [1978] VR 669 Integral Home Loans Pty Ltd & Anor v Interstar Wholesale Finance Pty Ltd & Anor [2006] NSWSC 1464 Perre v Apand Pty Limited (1999) 198 CLR 180; [1999] HCA 36 State of New South Wales v Lepore (2003) 212 CLR 511; [2003] HCA 4 Tepko Pty Limited v Water Board (2001) 206 CLR 1; [2001] HCA 19 Tyrrell v The Owners Corporation Strata Scheme 40022 [2007] NSWCA 8 Valenzuela v Commonwealth Bank of Australia [2017] NSWSC 1243 Category: Procedural and other rulings Parties: Darren Peter Magann (Plaintiff) The Trustees of the Roman Catholic Church of the Diocese of Parramatta (Defendant) Representation: Counsel: P Menzies QC with C Boyd (Plaintiff) L Gyles SC with A Campbell (Defendant) Solicitors: Herbert Weller (Plaintiff) Makinson d'Apice Lawyers (Defendant) File Number(s): 2017/254444 Publication restriction: Nil Judgment 1. HER HONOUR: There are two notices of motion before the Court. 2. By notice of motion filed 5 April 2018, the defendant seeks an order firstly, that the Court separately determine and dismiss the proceedings on the ground that any liability of the defendant to the plaintiff (which is denied) was extinguished by operation of a Deed of Release between the plaintiff and defendant dated 16 October 2007 based on the same cause of action; or secondly, an order that the terms of the Deed of Release between the plaintiff and the defendant dated 16 October 2007 be specifically performed by the plaintiff. 3. By notice of motion filed 5 June 2018, the plaintiff seeks an order that summary judgment be entered for the plaintiff against the defendant pursuant to 13.1 of the Uniform Procedure Rules 2005 (NSW) ("UCPR"). 4. The plaintiff is Darren Peter Magann. The defendant is the Trustees of the Roman Catholic Church of the Diocese of Parramatta. The parties relied upon the plaintiff's chronology binder (Ex 1) and their chronologies that are similar. Background 1. From June 1971 to June 1989, the plaintiff was a youth. 2. Between 1983 and 1991, the plaintiff alleges that he was sexually abused by Michael McGloyn, a Roman Catholic Priest. 3. Between 1987 and 1989, the plaintiff alleges that he was sexually abused by Henk Eijkman, a Roman Catholic Priest. 4. On 5 July 2002, the plaintiff lodged a Towards Healing complaint with Professional Standards Office (this was placed on hold pending criminal and civil proceedings). 5. The plaintiff has developed and suffers from diagnosed psychiatric conditions. I have referred to a number of them in this judgment. 6. On 30 September 2002, the plaintiff attended a consultation with clinical psychologist Peter Allen, who concluded in his report: "Mr Magann presented with symptoms consistent with severe chronic Post Traumatic Stress Disorder (PTSD) which appears to have developed as a direct consequence of being the victim of multiple instances of sexual assault. He also presented with significant depressive symptoms which appeared to meet the criteria of Major Depressive Disorder. His psychological symptoms appear to be exerting a marked adverse effect on key areas of functioning. While psychological treatment is likely to accelerate recovery and improve end state functioning, significant and disabling symptoms could well persist for at least several years." 1. On 7 October 2002, the plaintiff consulted a psychologist, Judith Carroll, who concluded: "Darren Magann has persistent symptoms of increased arousal not present before the sexual assaults. These symptoms are persistent irritability and outbursts of anger. Darren Magann displays also Acute Stress Disorder displayed by symptoms of despair and hopelessness. Darren Magann a suffer of Post Traumatic Stress Disorder as a result of a series of sexual assaults committed between 1982 and 1992, needs to experience some sort of disclosure. Darren informs me closure for him would mean that the Catholic Church would assist him. Darren will continue to suffer unless and until closure occurs in such a way that Darren feels vindicated." 1. On 17 October 2002, the plaintiff attended a medico legal appointment arranged by the defendant with Dr Boettcher, a consultant psychiatrist. Dr Boettcher stated: "I believe that it is likely that some catastrophic events occurred to Darren around 12 to 18 years of age and that quite possibly he was sexually abused. It could also be that he suffered from an evolution of Anti-social Personality Disorder traits, worsened by family, educational and social dysfunction. The traits would have a genetic basis more than an environmental genesis … He does display enough symptoms to fulfil the criteria for Post Traumatic Stress Disorder (PTSD) and clearly becomes depressed at times. It is not uncommon for PTSD or Anti-personality disorder patients to compensate into a serious depression and attempt suicide. He does seem to have a serious emotional control problem and if escalated enough in his already high level of anger could become uncontrollably violent." 1. On 6 November 2002, the plaintiff attended a conference with Mr Weller, Bill D'Aprice (a solicitor) and Bishop David Walker at Thornleigh. 2. On 19 May 2003, the plaintiff filed a statement of claim in the District Court of NSW. 3. On 7 August 2003, the plaintiff consulted Dr Robertson, a consultant forensic and general psychiatrist. Dr Robertson opined: "I think there can be little or no doubt that your client has suffered a chronic Post-Traumatic Stress Disorder (PTSD) as a result of the prolonged period of sexual abuse, as described in the body of this report. The assaults fully satisfy the stressor criteria for PTSD. He has quite typical core symptoms of PTSD, including a sleep disturbance, dreams of the assaults and flashbacks. There are also some indications that the assaults have resulted in a disorder of personality function, since they occurred during critical developmental years. His complete lack of self-identity, together with his chronic rage, suggest strongly that he may have a Borderline Personality Disorder, and this has been described as a quite common outcome of long-term sexual abuse occurring in childhood and early adolescence … In the meantime, I regard him as something of a danger to himself and to others. I do not see any sort of treatment as a viable option at the present time, and involuntary admission to a psychiatric hospital would undoubtedly greatly worsen his condition." 1. On 26 October 2003, the plaintiff made a statement to the Police. 2. On 12 November 2004, Sorby DCJ handed down his decision granting the plaintiff an extension of time under the Limitation Act 1969 (NSW). 3. On 4 November 2005, the Court of Appeal overturned the decision of Sorby DCJ and dismissed plaintiff's amended notice of motion to extend the limitation period with costs. 4. On 10 July 2006, the plaintiff attended a consultation with Dr Zolfaghari, a clinical psychologist, for his victims compensation claim. Dr Zolfaghari opined: "Consequent to the alleged incident of violence, I am of the opinion that Mr Magann developed Chronic Post Traumatic Stress Disorder. I also tend to think he has many of the features for an Axis II disorder of the type of Borderline Personality Disorder. Mr Magann continues to suffer from a Chronic Post Traumatic Stress Disorder. He continues to show many features of a Borderline Personality Disorder too. On the whole I would rate his present symptoms at a very severe level of distress. I am of the opinion that the client is likely to continue to suffer from the disorder indefinitely. Prior treatment, according to the client had not been very helpful. I am of the opinion that the prognosis is rather poor especially given the recent event wherein he feels the Priests got away in regard to the Court case." 1. On 14 August 2007, Robyn Bailey prepared an assessment report under Towards Healing protocol ("the Bailey report"). There is a factual dispute to whether the plaintiff has received the Bailey report prior to the settlement conference. 2. On 11 September 2007, a discussion took place between Mr Salmon and Mr Davis. The Diocese was prepared to pay the plaintiff $70,000 to $100,000, which it considered reasonable given the seriousness of the case. (Aff, Salmon 12 September 2018, Annexure B). 3. On 15 October 2007, there was a telephone conversation between Mr Wall and the plaintiff. The plaintiff told Mr Wall that he had spoken to his lawyer and barrister about the settlement conference. 4. On 17 March 2016, the Limitation Act was amended providing for no limitation period for child abuse actions. 5. On 2 May 2017, the plaintiff attended a conference with Mr Weller and Paul Davis at Parramatta. The conference was aborted due to the plaintiff's emotional and aggressive behaviour. 6. On 10 May 2017, the plaintiff consulted his general practitioner for a Centrelink medical certificate. His GP listed the plaintiff's symptoms as "Anger, frustration, depression and anxiety." The settlement conference and the Deed of Release 1. On 16 October 2007, a settlement meeting took place at Blacktown Travelodge between the plaintiff, his wife and Paul Davis, facilitated by Shane Wall. After the meeting the plaintiff attended his solicitor's office with the unsigned proposed deed. It is common ground that the plaintiff's solicitor did not attend that meeting. 2. The Deed of Release contained the usual clauses releasing the defendant from any past, present or future action arising from the subject matter of the claim and entitling the defendant to plead the deed in bar to any claim or proceeding by the plaintiff in respect of the complaint or any related matter. The deed also provided that the plaintiff acknowledged that by accepting the payment of $95,000 and executing the deed, he was not entitled to make any further approach to the defendant for assistance, damages or otherwise. Moreover, the defendant warranted in clause 6 of the deed that he has read and understood its terms and has obtained independent legal advice. The plaintiff signed the deed and it was witnessed by his solicitor, Mr Weller. 3. The Deed of Release executed by the plaintiff, witnessed by his solicitor and returned to Bishop Manning with note indicating that the plaintiff wanted to "put this behind us" (Aff, Davis 12 September 2018, Annexure A). On 17 October 2007, the plaintiff was paid the settlement sum of $95,000. (Aff, Davis 12 September 2018, Annexure B). Subsequent events 1. Between April 2014 and 6 June 2016, the plaintiff requested the defendant to pay or reimburse him for various expenses including legal fees, vehicle and accommodation costs, and treatment expenses. The defendant paid the additional amounts totalling $103,441. 2. On 21 August 2017, the plaintiff filed a statement of claim in this Court. 3. On 7 February 2018, the defendant filed its defence. 4. On 19 September 2018, a reply was served by plaintiff. The reply pleads as follows: "1. The plaintiff says the deed of release is unenforceable and should be avoided because of the defendant's behaviour. 2. The behaviour of the defendant was unconscionable. PARTICULARS OF UNCONSCIONABLE BEHAVIOUR (a) Misleading the plaintiff by failing to show the plaintiff the assessment report of Robyn Bailey. (b) Taking advantage of the plaintiff's vulnerability by negotiating with the plaintiff without the plaintiff having the assistance of legal advice. (c) Attempting to influence the plaintiff by negotiating with him when the plaintiff did not have legal advice, particularly having regard to the plaintiff's vulnerable state. (d) Applying pressure on the plaintiff by offering payment on the same day the deed of release was signed, particularly in circumstances where the plaintiff was in a vulnerable position. (e) Misleading the plaintiff about his entitlement in circumstances where the plaintiff was vulnerable and the defendant was aware that if the matter went to court the plaintiff might have recovered considerably more than the settlement proposed. (f) The defendant had the superior bargaining position in the negotiations with the plaintiff. (g) The defendant applied undue influence and unfair tactics against the plaintiff. (h) Because of his vulnerability the plaintiff was not reasonably able to protect his interests. (i) Misleading the plaintiff during the negotiations held directly with the plaintiff by suggesting that cases go for about $40,000 which the defendant knew well was false and misleading. 3. The deed of release is unenforceable because the intention of the parties was that the deed should not bind the parties finally to the agreement. 4. The deed of release did not finally determine the issue between the parties. 5. The plaintiff also seeks relief under the Contracts Review Act In the circumstances the deed of release was unjust. PARTICULARS (a) The defendant had superior bargaining power. (b) The defendant applied undue influence and undue pressure against the plaintiff to achieve a settlement. (c) Because of the plaintiffs vulnerability the plaintiff could not protect his own interests. (d) The plaintiff's standing, vulnerability, educational background and literacy disadvantaged him." 1. Senior counsel for the plaintiff foreshadowed that he will seek to amend the reply to allege that the plaintiff did not have capacity at the time he signed the Deed of Release due to brain damage relying on the opinion of Dr Robertson below. 2. On 26 September 2018, a report of psychiatrist Dr Robertson raised the plaintiff's incapacity in October 2007 for first time. Dr Robertson was asked and answered two specific questions. They are: "[A] Did the Plaintiff have mental capacity at the time of the presentation of the Deed of Release on 16 October 2007 to decide whether or not to accept the terms of settlement offered and sign the Deed of Release presented to him? I doubt very much whether in October 2007 he had the mental capacity to decide whether or not to accept the terms of settlement offered to him, and to sign the Deed of Release. [B] If the answer to [A] is "no", what was the probable cause of that lack of capacity? When I saw him in 2003 I thought that his barely controlled rage was probably the result of his excessive alcohol misuse, the so-called "wet brain", and if this was the case it would be expected that he was not capable of making a sound decision as to whether to sign. It seems that the increased offer of compensation from $80,000 to $90,000 was enough to sway him to accept. In addition, it is likely that his IQ has been, at best, in the Dull Normal range, and this would limit his ability to make a sound decision in a somewhat complex matter; thus he would be inclined to make an impulsive and poorly-considered decision, even in the absence of some degree of brain damage." 1. On 28 September 2018, the plaintiff's solicitor sent a letter to the defendant's solicitor stating: "As you have served evidence, putting Mr Magann's credit into issue, in a substantial way, it is our opinion that it is entirely inappropriate for your notice of motion to be decided before the Trial. The more appropriate course would be for your Motion to be dealt with by the Trial Judge." Determination of separate question 1. UCPR 28.2 and 28.4(1) read: "28.2 Order for decision The court may make orders for the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings." … 28.4 Disposal of proceedings (cf SCR Part 31, rule 6) (1) This rule applies if the decision of a question under this Division: (a) substantially disposes of the proceedings or of the whole or any part of any claim for relief in the proceedings, or (b) renders unnecessary any trial or further trial in the proceedings or on the whole or any part of any claim for relief in the proceedings. …" 1. There are many authorities on this topic which include Tepko Pty Limited v Water Board (2001) 206 CLR 1; [2001] HCA 19 ("Tepko"); Perre v Apand Pty Limited (1999) 198 CLR 180; [1999] HCA 36 at [436]; State of New South Wales v Lepore (2003) 212 CLR 511; [2003] HCA 4 at [187]; Dunstan v Simmie & Co Pty Ltd [1978] VR 669 at 671.30; and per Rolfe J in ABB Engineering Construction Pty Limited v Freight Rail Corp [1999] NSWSC 1037. 2. In Tepko, Kirby and Callinan JJ cautioned against the severing of issues by the court. Their Honours stated at [168] to [170]: "[168] …we should not leave this case without making four comments. Both Mason P and Fitzgerald JA were critical of the course of limiting the issues to be tried that the primary judge adopted. In Perre v Apand Pty Ltd attention was drawn to difficulties that can be caused when that course is adopted. In light of the experience in this case, what was there said should be restated with emphasis. The attractions of trials of issues rather than of cases in their totality, are often more chimerical than real. Common experience demonstrates that savings in time and expense are often illusory, particularly when the parties have, as here, had the necessity of making full preparation and the factual matters relevant to one issue are relevant to others, and they all overlap. [169] The second and related comment is this. A party whose whole case is knocked out on a trial of a preliminary or single issue, may suspect, however unjustifiably, that an abbreviated course was adopted and a decision reached in the court's, rather than the parties', interests. [170] Thirdly, there is an additional potential for further appeals to which the course of the trial on separate issues may give rise. Indeed, that could occur here were this appeal to be allowed and a retrial had in which the remaining issues of causation and damages were decided. Single-issue trials should, in our opinion, only be embarked upon when their utility, economy, and fairness to the parties are beyond question." [Footnotes omitted] 1. Since this decision was handed down, the Local, District and Supreme Courts in New South Wales have been affected by the Civil Procedure Act 2005 (NSW). Sections 56, 57 and 60 are relevant. 2. Sections 56, 57 and 60 of the Civil Procedure Act relevantly provide: "56 Overriding purpose (1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule. … 57 Objects of case management (1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects: (a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. … 60 Proportionality of costs In any proceedings, the practice and procedure of the court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute." 1. In Integral Home Loans Pty Ltd & Anor v Interstar Wholesale Finance Pty Ltd & Anor [2006] NSWSC 1464, Brereton J suggested (at [6]): "While much has been said against the resolution of separate questions in Courts of high authority, nonetheless, since the (NSW) Civil Procedure Act 2005, it is my view that the Court should take a more interventionist role in identifying and separating important issues which can resolve significant parts of the litigation expeditiously." See also Tyrrell v The Owners Corporation Strata Scheme 40022 [2007] NSWCA 8. 1. In addition, senior counsel for the defendant relied upon Valenzuela v Commonwealth Bank of Australia [2017] NSWSC 1243 ("Valenzuela"), a decision of Robb J which involves a similar factual situation to these current proceedings. In Valenzuela, the Bank had filed a notice of motion seeking the following relief: "2. In the alternative, pursuant to rule 28.2 of the Uniform Civil Procedure Rules, that an order be made for a separate determination of the following questions: (a) Is the Plaintiff estopped from bringing or maintaining these proceedings by reason of the Plaintiff being bound by the terms of the Deed Poll entered into by the Plaintiff in favour of a number of beneficiaries including the Defendant on 21 February 2014 in settlement of the proceedings no. 00294472 of 2013 in the Supreme Court of New South Wales ("Deed of Release"). (b) Is the Plaintiff not bound by the terms of the Deed of Release by reason of her entering into the Deed of Release under duress?" 1. Robb J was satisfied that it was an appropriate case for the court to make an order as sought by paragraph 2 of the notice of motion. His Honour's reasoning was that the question of whether Ms Valenzuela was bound by the Deed of Release and whether it precluded Ms Valenzuela from prosecuting the balance of her claims in her statement of claim were genuine separate questions. If they were determined in the Bank's favour, it would lead to the dismissal of Ms Valenzuela's statement of claim, which would save substantial costs and delay as it would be unnecessary for the parties to prepare and litigate the balance of the issues. Such a course was in Ms Valenzuela's interests because it could well substantially reduce the amount of the legal costs that she might otherwise be at risk of being ordered to pay to the Bank. 2. Robb J at [66] to [72] set out the legal principles as follows: "66. Although the events of the mediation occurred more than three years ago, and Ms Valenzuela has suffered significant psychological and emotional difficulties since that time, which may have a tendency to colour her recollection of what happened, I am generally prepared to accept Ms Valenzuela's evidence concerning her psychological experience of the mediation. However, as Ms Valenzuela had no experience of how mediations are generally conducted, I prefer the evidence of Mr Joseph and Ms Andersen concerning the events that occurred during the mediation. As I have said above, the objective evidence supports a finding that Ms Valenzuela was given substantial opportunity to explain the basis of her case. I do not accept that Mr Joseph or Ms Andersen acted in any way that was inappropriate or that they intimidated Ms Valenzuela to any further extent than might naturally and inescapably occur when the prospects of each party's case and the consequences of failure are discussed in a mediation in the ordinary way. 67. Furthermore, I am satisfied that, whatever Ms Valenzuela's frame of mind and emotional state may have been at times during the mediation, neither Mr Joseph nor Ms Andersen understood or believed that Ms Valenzuela was excessively intimidated or that her conduct was not the product of full understanding and her own free will. The objective circumstances did not require them to form a different understanding or belief than they in fact formed. Legal principles [duress and unconscionable conduct] 68. The principle that must be applied in this case is sufficiently stated in the joint judgment of the Court of Appeal in Australia & New Zealand Banking Group v Karam (2005) 64 NSWLR 149; [2005] NSWCA 344 at [66]. It will be helpful first to set out the following part of the Court of Appeal judgment: [45] In Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447, Mason J identified a significant distinction between a claim that a transaction should not be enforced because it has been induced by "undue influence" and one which should not be enforced because of "unconscionable conduct". His Honour stated (at 461) after reference to a number of bases upon which equity might decline to enforce a transaction: But relief on the ground on 'unconscionable conduct' is usually taken to refer to the class of case in which a party makes unconscientious use of his superior position or bargaining power to the detriment of a party who suffers from some special disability or is placed in some special situation of disadvantage … Although unconscionable conduct in this narrow sense bears some resemblance to the doctrine of undue influence, there is a difference between the two. In the latter the will of the innocent party is not independent and voluntary because it is overborne. In the former the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which he is placed and of the other party unconscientiously taking advantage of that position. 69. The Court of Appeal later said: [63] Because the trial judge in the present case appears to have adopted a broader approach, it is necessary to consider whether either the general law or statute law in this country has adopted some general doctrine of 'inequality of bargaining power' such as that identified by Lord Denning in Lloyds Bank Ltd v Bundy [1975] QB 326… … [66] The vagueness inherent in the terms "economic duress" and "illegitimate pressure" can be avoided by treating the concept of "duress" as limited to threatened or actual unlawful conduct. The threat or conduct in question need not be directed to the person or property of the victim, narrowly identified, but can be to the legitimate commercial and financial interests of the party. Secondly, if the conduct or threat is not unlawful, the resulting agreement may nevertheless be set aside where the weaker party establishes undue influence (actual or presumptive) or unconscionable conduct based on an unconscientious taking advantage of his or her special disability or special disadvantage, in the sense identified in Amadio… 70. The Court of Appeal also said at [100], referring to the joint judgment in Bridgewater v Leahy (1998) 194 CLR 457; [1998] HCA 66, that "there is nothing in the joint judgment which suggests that a transaction may be set aside on the basis of unconscionable conduct, absent any special disability, in circumstances where all that can be said is that the victim 'is by pressure impeded' from following his or her best interests". 71. Deane J gave the following explanation in Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; [1983] HCA 14 at 474-475 of the nature of special disadvantage and its significance to a finding of unconscionable conduct: "The jurisdiction of courts of equity to relieve against unconscionable dealing developed from the jurisdiction which the Court of Chancery assumed, at a very early period, to set aside transactions in which expectant heirs had dealt with their expectations without being adequately protected against the pressure put upon them by their poverty (see O'Rorke v Bolingbroke (1877) 2 App Cas 814 at 822). The jurisdiction is long established as extending generally to circumstances in which (i) a party to a transaction was under a special disability in dealing with the other party with the consequence that there was an absence of any reasonable degree of equality between them, and (ii) that disability was sufficiently evident to the stronger party to make it prima facie unfair or "unconscientious" that he procure, or accept, the weaker party's assent to the impugned transaction in the circumstances in which he procured or accepted it. Where such circumstances are shown to have existed, an onus is cast upon the stronger party to show that the transaction was fair, just and reasonable: "the burthen of shewing the fairness of the transaction is thrown on the person who seeks to obtain the benefit of the contract" (see per Lord Hatherley, O'Rorke v Bolingbroke, supra, at 823; Fry v Lane (1888) 40 Ch D 312 at 322; Blomley v Ryan (1956) 99 CLR 362 at 428–9). The equitable principles relating to relief against unconscionable dealing and the principles relating to undue influence are closely related. The two doctrines are, however, distinct. Undue influence, like common law duress, looks to the quality of the consent or assent of the weaker party (see Union Bank of Australia Ltd v Whitelaw [1906] VLR 711 at 720; Watkins v Combes (1922) 30 CLR 180 at 193–4; Morrison v Coast Finance Ltd (1965) 55 DLR (2d) 710 at 713 ). Unconscionable dealing looks to the conduct of the stronger party in attempting to enforce, or retain the benefit of, a dealing with a person under a special disability in circumstances where it is not consistent with equity or good conscience that he should do so. The adverse circumstances which may constitute a special disability for the purposes of the principles relating to relief against unconscionable dealing may take a wide variety of forms and are not susceptible to being comprehensively catalogued. In Blomley v Ryan (supra, at 405). Fullagar J listed some examples of such disability: "poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary". As Fullagar J remarked, the common characteristic of such adverse circumstances "seems to be that they have the effect of placing one party at a serious disadvantage vis-à-vis the other". 72. For the purposes of this case, it must be noted that the court will not set aside the Deed of Release on the basis that there was some inequality of bargaining power between the defendants and Ms Valenzuela. It is necessary for Ms Valenzuela to establish that the Deed of Release was a product of unconscionable conduct based on an unconscientious taking advantage of a special disability or special disadvantage from which Ms Valenzuela suffered." 1. His Honour concluded at [73] to [75]: "73. I am satisfied in this case that the evidence does not establish that during the mediation that took place on 21 February 2014, Ms Valenzuela was suffering from a special disability or disadvantage that was sufficient to form the basis of a finding that the defendants' conduct in causing her to execute the Deed of Release, or in taking advantage of the terms of that deed, was unconscionable in the sense necessary to justify the Deed of Release being set aside. Furthermore, the evidence does not establish that the representatives of the defendants at the mediation, being Mr Joseph and Ms Andersen had, or ought to have had, any knowledge or appreciation of Ms Valenzuela's actual psychological and emotional state that caused them, or should have caused them, to think that Ms Valenzuela was suffering from any unusual stress or anxiety in excess of that which would be normal for a lay person to experience when attending a mediation intended to settle a Supreme Court claim initiated by the person against a major bank. 74. My conclusions are reinforced by the fact that the mediation was sanctioned by the court and presided over by a Deputy Registrar. If Deputy Registrar Siva had formed the opinion that the circumstances of the mediation were such that it would be unconscionable for the defendants persuade Ms Valenzuela to execute the Deed of Release, she would have intervened to prevent that course of action. All that the circumstances caused Deputy Registrar Siva to do by way of intervention was to ask Ms Valenzuela whether she wished to obtain legal advice before she executed the Deed of Release, and Ms Valenzuela did not adopt that suggestion. 75. Ms Valenzuela's psychological and emotional state may well have put her at some disadvantage compared with the two experienced lawyers with whom she had to deal, but on the basis of the findings that I have set out above, that disadvantage fell far short of an apparent, special disadvantage that would have been understood by persons of good conscience as being such as to make it unconscionable to persuade Ms Valenzuela to settle her claim on the terms contained in the Deed of Release, or to take advantage of those terms." 1. Robb J made the following orders: "(1) Order pursuant to rule 28.2 of the Uniform Civil Procedure Rules, that the following questions be determined separately and before all other questions raised by the proceedings: (a) Is the plaintiff not bound by the terms of the Deed Poll entered into by the plaintiff in favour of a number of beneficiaries including the defendant on 21 February 2014 in settlement of the proceedings No 00294472 of 2013 in the Supreme Court of New South Wales ("Deed of Release") by reason of her entering into the Deed of Release as a result of unconscionable conduct on the part of the beneficiaries to the deed? (b) Is the plaintiff estopped from bringing or maintaining these proceedings by reason of the plaintiff being bound by the terms of the Deed of Release?" 1. Robb J answered the questions as follows: (a) The plaintiff is bound by the terms of the Deed of Release; and (b) The plaintiff is estopped from bringing or maintaining these proceedings by reason of the terms of the Deed of Release. The defendant's submissions 1. The defendant submitted that the Court in advance of the final hearing should determine the separate question of the enforceability of a Deed of Release entered into between the parties on 16 October 2007 as the deed, if upheld, will provide a complete defence to the case. It would therefore finally dispose of the whole of the proceedings without the need for a final hearing. 2. While it is not expected that the evidence of the abuse itself will be challenged given the outcome of an independent review arranged by the defendant, there are a number of issues which will require consideration by the Court. Senior counsel for the defendant estimates that a trial on its merits would possibly take two to three weeks. The determination of the separate question will take one to two days. 3. The plaintiff will be required to give evidence in the case going to his damages claim, including exemplary damages. Other lay witnesses may also be called. In addition, the plaintiff has served reports from two psychologists and one psychiatrist, and the defendant has one report from a psychiatrist. These will need to be considered by the Court. The costs of preparing and running the case will be substantial for both parties. 4. The defendant submitted that the plaintiff has not demonstrated any fact or circumstance which might vitiate the enforceability of the deed. In the circumstances, the plaintiff was legally represented before the deed was entered into, spoke to his solicitor and senior counsel a few days prior to the meeting, spoke to his solicitor on the day of the meeting, and had the deed explained to him by his solicitor. There is no warrant to challenge the enforceability of the deed. It is binding and the defendant is entitled to rely on it. 5. The fact that further moneys were paid by the defendant to the plaintiff does not affect the enforceability of the deed. The defendant should not be penalised for providing additional help with good grace to someone apparently having difficulties. 6. For these reasons, the defendant submitted that the Deed of Release is enforceable and is a complete answer to the plaintiff's claim. Pursuant to UCPR 28.4, the Court should hear this aspect of the defence to the claim as a separate question and should dismiss the proceedings with judgment granted in favour of the defendant. This would save substantial legal costs for both sides, save judicial time and be consistent with the just, quick and cheap resolution of the dispute between the parties. The plaintiff's submissions 1. The plaintiff submitted that a Deed of Release, which may otherwise be finally binding upon the parties, will be avoided if one of the parties behaved unconscionably in the relevant sense. 2. Bishop Manning intended the plaintiff to be aware of the contents of the assessment before he signed the Deed of Release. The assessment was referred to in the deed. There was no rational basis to refer to the assessment if it was not intended for the plaintiff to see it prior to signing the deed. The Bishop's letter, which bore the same date as the deed, both provided him with a copy of the deed and referred to the Bishop's belief that the plaintiff had already been provided with a copy of that deed. 3. The plaintiff further submitted that the subsequent payments to the plaintiff of amounts effectively tripling the "final offer" were readily authorised by the person with whom he had been negotiating. These point to a consciousness in the mind of the negotiator that he had actively misled the plaintiff and failed to follow the Bishop's instructions to show him the assessment before the deed was signed. 4. In the absence of an evidence to the contrary, it may be readily inferred that: 1. The arrangement to meet the plaintiff in the absence of his legal advisor was done deliberately to take advantage of his vulnerability and to influence him, without the assistance of any legal advice; 2. The offer of payment by 5:00 pm on the same day he signed the deed was designed to put pressure on him while he was in a vulnerable state; and 3. The negotiators were well aware that they were either acting directly contrary to the Bishop's understanding of the events and his intentions, or that Bishop Manning changed his position to deny access to the report. 1. It was apparent to the defendant from the assessment and findings of the Bailey report that if the matter went to trial, it would likely have been indefensible. Not only would a judgment have resulted in highly negative publicity, but it would also have been for a sum considerably greater than the proposed settlement. Accordingly, the plaintiff submitted that the conduct of the negotiators was relevantly unconscionable because the court would infer that the plaintiff would have not signed the deed had he been made aware of the assessment, its findings and conclusion. 2. Finally, the plaintiff submitted that the defendant's notice of motion has no content if the deed is avoided. If it is not, however, there is nothing identified that remains to be specifically performed. Conclusion 1. The determination of the separate question involves consideration of the plaintiff's mental capacity on 16 October 2007, as well as what took place at the settlement conference and the signing of the Deed of Release. This is the subject of factual dispute. 2. The factors that militate against the determination of a separate question are as follows. If it is unsuccessful, there will be an overlap of some witnesses being required at the determination of the separate question and the trial. Those witnesses include the plaintiff, those present at the meeting, and the plaintiff's solicitor, Mr Weller. I accept that the witnesses' credibility will be in issue. Further, as the plaintiff's medical capacity is in issue, I anticipate there will be a conclave of psychiatrists and Dr Robertson. A trial on all issues will take two possibly three weeks in addition to the determination of a separate question that will have taken one to two days of court time. 3. The factors that are in favour of ordering the separate determination are as follows. The question is a discrete one. If successful, it will render a full trial unnecessary. There is a bright line differentiating the issues to be determined at the separate determination from those that will be determined at the trial. If the separate determination of questions is successful, the parties may be able to settle or agree on damages. These proceedings are no longer statute barred. It will take one to two days so far as s 56 of the Civil Procedure Act is concerned. It will incur less costs and court time. It will be resolved at an earlier date as there is a longer waiting time to obtain a trial with an estimate of two weeks. 4. The issues for separate determination in these current proceedings are similar to those in Valenzuela. Valenzuela involved a separate determination to set aside a Deed of Release on the basis of duress (as opposed to unconscionability). 5. In the exercise of my discretion, the reasons in favour of a separate determination far outweigh the reasons against it. Pursuant to Part 28.2 of the Civil Procedure Act, I order that there should be a separate determination of the following questions: (a) Any liability of the defendant to the plaintiff (which is denied) was extinguished by operation of a Deed of Release between the plaintiff and the defendant dated 16 October 2007 based on the same cause of action; and (b) In the alternative to (a), an order that the terms of a Deed of Release between the plaintiff and defendant dated 16 October 2007 be specifically performed by the plaintiff. 1. Costs of the defendant's notice of motion filed 5 April 2018 are reserved. Plaintiff's notice of motion 1. On 5 June 2018, the plaintiff filed a notice of motion seeking summary judgment against the defendant pursuant to UCPR 13.1. Summary judgment 1. UCPR 13.1 relates to summary judgment. It reads: "13.1 Summary judgment (cf SCR Part 13, rule 2; DCR Part 11A, rule 2; LCR Part 10A, rule 2) (1) If, on application by the plaintiff in relation to the plaintiff's claim for relief or any part of the plaintiff's claim for relief: (a) there is evidence of the facts on which the claim or part of the claim is based, and (b) there is evidence, given by the plaintiff or by some responsible person, that, in the belief of the person giving the evidence, the defendant has no defence to the claim or part of the claim, or no defence except as to the amount of any damages claimed, the court may give such judgment for the plaintiff, or make such order on the claim or that part of the claim, as the case requires. (2) Without limiting subrule (1), the court may give judgment for the plaintiff for damages to be assessed. …" The plaintiff's submissions 1. The plaintiff seeks that judgment be entered in favour of the plaintiff in relation to liability and that there be a hearing for damages to be assessed. The plaintiff submitted that on 14 August 2007, Ms Robyn Bailey wrote an assessment for the defendant in the Bailey report under the Towards Healing Protocol. In that report, she says at [52.5]: "52.5 It is clear from the reports, however, that the medical experts not only accepted that Mr Magann suffers from a psychiatric injury, but also that that injury is casually connected to the incidents he describes. It is may recommendation that this be taken into account when formulating an appropriate response to Mr Magann's allegations." 1. The plaintiff alleges that if the contents of the Bailey report were adopted by Bishop Manning, this constitutes an admission that the sexual abuse occurred. 2. Senior counsel for the plaintiff, in the alternative, sought that the notice of motion be adjourned to a later date. The defendant's submissions 1. On 7 February 2018, the defendant filed its defence. Amongst other things, the defendant denies that it is liable for the causes of action pleaded by the plaintiff. In particular, it denies that it was negligent, vicariously liable or in breach of a fiduciary duty owed to the plaintiff. For the purposes of an application for summary judgment, its defence should be taken at its highest, and all of the list of issues would need to be dealt with before liability could be found. 2. In the light of the defence and the issues raised in it, the plaintiff's application for summary judgment is misconceived. There is no judgment which could properly be given. The plaintiff points to the Bailey report of going to whether the abuse took place. That is not binding on the Court or the defendant. The point is that even if it is accepted that the abuse took place, there are a number of other issues which require determination before liability against the defendant could be established. The liability issue is not simply whether the two priests sexually abused the plaintiff. The proceedings are against the corporate trustee of the Catholic Diocese of Parramatta. They are entitled to raise defence to the claim and have that determined (if the separate question is not determined in their favour). 3. There is no utility or power to make any summary judgment order in favour of the plaintiff and the motion should be dismissed with costs. UCPR, 13.1(b) has not been met and could not be in the circumstances here. 4. In oral submissions, senior counsel for the defendant submitted that the plaintiff's solicitor has not filed an affidavit, wherein he provides evidence that it is his belief that the defendant has no defence to the claim. This is required under UCPR, 13.1. It is therefore a complete answer to the plaintiff's claim for summary judgment. Conclusion 1. While the plaintiff sought an adjournment, no real reasons were proffered. Hence, I decline to grant an adjournment. 2. So far as whether the defence is arguable, while the defendant may admit that the sexual abuse occurred prior to the trial, there are other issues to be addressed before liability can be established. These are firstly, did the defendant owe the plaintiff a non delegable duty of care? Secondly, is the defendant vicariously liable for the conduct of McGloyn and Eijkman including whether priests are properly characterised as employees for that purpose? Finally, did the defendant owe a duty of care to the plaintiff in relation to the risk of abuse by McGloyn and Eijkman, including as to whether it knew of any such risk? If so, what was the scope of that duty and what precautions should it have taken? Did the defendant then breach the duty of care, including whether the precautions taken by it were reasonable in the circumstances? 3. The plaintiff has not complied with UCPR, 31(1) and this is an impediment to this Court granting summary judgment. 4. It is my view that the defendant's defence is arguable. The defence should not be struck out or dismissed. The plaintiff's notice of motion filed 5 June 2018 is dismissed. Costs 1. Costs are discretionary. Costs usually follow the event. The plaintiff is to pay the defendant's costs on an ordinary basis. The Court orders that: (1) Pursuant to 28.2 of the Uniform Civil Procedure Rules 2005 (NSW) there be a separate determination of the following questions: (a) Any liability of the defendant to the plaintiff (which is denied) was extinguished by operation of a Deed of Release between the plaintiff and the defendant dated 16 October 2007 based on the same cause of action. (b) In the alternative to (a) an order that the terms of a Deed of Release between the plaintiff and defendant dated 16 October 2007 be specifically performed by the plaintiff. (2) Costs of the defendant's notice of motion filed 5 April 2018 are reserved. (3) The plaintiff's notice of motion filed 5 June 2018 is dismissed. (4) The plaintiff is to pay the defendant's costs on an ordinary basis. (5) The matter is listed for directions at 9.00 am on 8 November 2018 before the Registrar to obtain a hearing date for the separate determination of the above questions. ********** 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. Decision last updated: 07 February 2019