Amendments to the Limitations Act 1958 (Vic) Relating to Prior Settlement Agreements

by | Apr 27, 2021 | Not for Profit & Social Enterprise

Coming into effect today ( 26 April 2021) are important amendments to prior settlement of claims subject to Part IIA Division 5 of the Limitations Act 1958 (Vic) (the Act).

Section 27OA of the Act allowed claimants who settled their matters by deed or court order prior to 1 July 2015, to apply to the Court to set aside their earlier settlement (prior deed). The amendments extend this date to 1 July 2018.

The judgment in Roman Catholic Trusts Corporation for the Diocese of Sale v WCB [2020] VSCA 328 clarified that the Court will grant applications where it is “just and reasonable to do so”. This decision is presently awaiting a special leave application hearing to the High Court.

Reasoning

Historically, the two main legal defences available to defendant institutions have been the limitation period and the Ellis defence.

The limitation period for abuse when people were minors was abolished, effective 1 July 2015 – meaning that all victims of physical and sexual abuse who were under 18 of the time of the abuse are no longer statute barred  from making a claim. For claimants who had settled claims before the abolition of the limitation period it was arguable that the settlements were compromised by reason of the fact that their right to pursue claims was statute barred.

Therefore, (before 26 April 2021) section 27QD of the Act, which allows claimants to apply to the Court for their prior settlement to be set aside, applied to only claims settled prior to 1 July 2015 to allow those claimants affected by the former bar, to bring their claims again.

The Ellis defence was available to some institutions where there was no legal entity which could be sued by the claimant (case in point – the Catholic Church). The use of the Ellis defence was removed with effect from 1 July 2018 with the commencement of the Legal Identity of Defendants (Organisational Child Abuse) Act 2018 (Vic).

Survivors who signed deeds with unincorporated defendant organisations relying on the Ellis defence between 2015 and 2018 still arguably faced a significant barrier to resolving their claims.

The amendments now align the effect of the abolition of the limitation period for claims based on abuse when people were minors with the effect of the abolition of the Ellis defence to the same date, namely 1 July 2018.

Application

Although the relevance of the extension remains questionable for settled matters against incorporated organisations between 2015 and 2018 (because a claimant did not face the same barrier as one would against an unincorporated institution), a plain reading of the amendment would mean that it nevertheless applies equally as broadly as it did to all pre-2015 matters – there being no requirement contained in section 27OA to establish that the settlement was materially induced by the Ellis defence. Therefore, the amendment applies to all previously settled matters before 1 July 2018 and that the WCB decision – qualifying the test of “just and reasonable” will apply until a decision to the contrary is handed down.

Scope of claims

Additionally, and following the observations concerning the broad ambit of the amendment, it is also worth mentioning that the Victorian legislation concerning child abuse matters is wider in scope than most other Australian states and Territories. To recount – the abolition of limitations in Victoria apply to: ‘(a) an act or omission in relation to the person when the person is a minor that is physical abuse or sexual abuse;’ or (b) psychological abuse arising from (a) (section 27O); there being no threshold that the abuse be “serious” (as for example, is legislated in NSW for claims of physical or abuse other than sexual).

Therefore, it is possible that defendant organisations in Victoria will experience an increase in claims of historical abuse.