The Supreme Court of New South Wales ruling on 28th October 2019 relating to a historical sexual assault is an important decision for insured institutions and reinforces the notion of ‘once and for all’ in relation to an agreed Deed of Release.

Claims relating to abuse by Catholic Priests in the 1980s and early 1990s were raised by Mr Magann. However, the NSW District Court ruled in 2003 that Mr Magann’s case was statute-barred. He then entered a 2007 Deed of Release between himself and the Diocese of Paramatta. Mr Magann’s obligations under the Deed of Release were to release the Diocese from all actions, suits, claims and demands relating to or arising from the Claim or the Complaint or any other matters set out in the Deed. Mr Magann also agreed not to make any adverse comments, publicly or otherwise, about the Diocese and its related agencies and clergy. An agreed payment of $95 000 plus extras payments including legal costs was made to Mr Magann by the Diocese.

After the Royal Commission into Institutional Responses to Child Sexual Abuse Report was released, amendments were made to the Limitation Act. The Limitation Amendment (Child Abuse) Act 2016 (NSW) allowed removal of limitation periods for actions relating to child abuse. Mr Magaan then sought to make a new claim against the Trustees of the Roman Catholic Church for damages arising out of historical sexual assault allegations.

The Diocese filed what would eventually be a successful defence citing the earlier Deed of Release.

The Court considered that at the time Mr Magann had entered into the agreement with the Diocese he had reasonable capacity to do so. Mr Magann had contended that the Church applied undue influence and unfair tactics against him and that he did not have his lawyer present at the meeting with the Diocese. The Court, however, found that:
“Mr Magann has not established that he suffered from any special disadvantage, let alone that the Church took advantage of it. No predatory state of mind on the part of the Church has been established”.

It was further ruled that the Deed used clear language and that the Court was not satisfied with medical evidence that Mr Magann lacked the relevant mental capacity at the time the Deed was entered into. At [222] – 226] the Court held:
“As for the terms of the Deed, there were no conditions which were unduly difficult to comply with: Mr Magann had to agree not to make any further claims against the Church in circumstances where he had no legal right to do so at that time.”

In relation to the intention of the parties to the Deed, the Court held at [190] – [191]:
“The Deed expressly extended to any future claim that Mr Magann may bring against the Church in respect of the abuse he allegedly suffered. Standard deeds of release contain such terms. There is a public interest in ensuring the finality of deeds of release. If parties to settlement negotiations were aware that such a release would not extend to any future changes in the law, the settlement process would be undermined.”

This decision removes the liability for the defendant in regards to matters contained within the Deed. The case is of significance as the binding nature of a Deed of Release agreement is reinforced. There is nonetheless likely to be future claims seeking to set aside settlement deeds and potentially expose insured institutions to large damages claims. However, the precedent has been established that the amendment to the Limitation Act does not necessarily allow settled claims and agreements to be revisited in the courts.

Reference: https://www.wottonkearney.com.au/revisiting-historical-sexual-abuse-settlements-in-nsw/