Jurisdiction to sanction a settlement for a person under a disability

Dickson v Australian Associated Motor Insurers Limited [2010] QSC 69

An application was made asserting the compromise reached and sanctioned by the court was not binding on the plaintiff and voidable on the basis the court did not have jurisdiction to sanction the settlement.

The applicant’s submission as to jurisdiction

[30] Mr Grant-Taylor SC who appeared with Ms Heyworth-Smith of counsel for the applicant draws attention to the differences between s 59(1) and s 59(2) of the Act: s 59(1) is framed in the negative in that it provides that no compromise of a claim of a person under a legal disability, where the proceeding has commenced, is valid without the sanction of a court or the Public Trustee, but s 59(2) is framed in the positive in that it provides that a claim of a person under a legal disability may be settled with the sanction of the Public Trustee, before the proceeding is commenced. The applicant therefore contends for the construction of s 59 of the Act (when the order was made) that after the proceeding has been commenced, a settlement is not valid, until it is sanctioned, but that prior to commencement of the proceeding, a settlement of the claim is valid, but is voidable and does not become binding, unless sanctioned by the Public Trustee.

[31] It is therefore argued that the settlement that was reached on the applicant’s behalf and was the subject of the order, where no proceeding for damages for personal injuries had been commenced by the applicant, was not void ab inito, but was voidable at the election of the applicant, because it had not been sanctioned by the Public Trustee.

[32] The applicant also argues that s 59 of the Act abrogated the parens patriae jurisdiction of the court in respect of the sanction of the settlement or compromise of a claim on behalf of a person under a legal disability that is within the terms of s 59 and draws support from the terms of r 98(1) of the Uniform Civil Procedure Rules 1999 (UCPR). The applicant therefore argues that the purported sanction of the court under the order was of no effect, as there was no sanction by the Public Trustee.

Her Honour Justice Mullins examined at length the history of court’s jurisdiction to sanction compromises whether reached during court proceedings or before proceedings had been commenced (paragraphs 13-28).

Whilst not finally determining the application her Honour did conclude that the jurisdiction was founded on the parens patriae jurisdiction:

[42] The terms of ss 59(1) and (2) of the Act, as they stood in 2001, are given effect, because of the content of the court’s parens patriae jurisdiction. The fact that s 59(1) is framed in the negative provides for the statutory consequence where no sanction is obtained from the court or the Public Trustee in circumstances where s 59(1) is applicable, but remains consistent with the exercise by the court of its parens patriae jurisdiction in considering whether it sanctions the settlement. Section 59(2) of the Act conferred statutory jurisdiction on the Public Trustee to sanction the settlement of a personal injuries claim made by a person under a legal disability, before the proceeding to prosecute such a claim had been commenced, but s 59(2) was not framed in terms that prescribed the sanction by the Public Trustee as the means of obtaining the approval of the settlement, in order to validate it, to the exclusion of the exercise of the court’s parens patriae jurisdiction. The express provisions of ss 59(1) and (2) of the Act did not preclude the exercise by the court of its inherent jurisdiction to sanction the compromise of the settlement of a claim for damages by a person under a legal disability, before the proceedings began, in circumstances that were not covered expressly by s 59(1) of the Act.

[43] In the circumstances which applied to the applicant at the time the application was made on her behalf for the sanction of the settlement of her personal injuries action, the only basis on which she could apply to the court for the sanction was the parens patriae jurisdiction, because she had not commenced her personal injuries action when she settled her claim. That was the only power that the court could exercise when making the order. It is implicit in the terms of paragraph 1 of the order that the court found that the compromise that was sanctioned was for the benefit of the applicant. The fact that technically the circumstances of the application did not fall within the express terms of either ss 59(1) or (2) does not alter the fact that the court was asked to exercise its parens patriae jurisdiction and did do so. The incorrect reference in paragraph 1 of the order does not invalidate the exercise by the court of its parens patriae jurisdiction.

Brisbane Barrister – David Cormack

Related Posts

Recent Comments

    Categories