In the recent matter of Cherry v State of Victoria [2025] VSC 603, the plaintiff, Mr Anthony Cherry, commenced proceedings against the defendant, State of Victoria, in relation to historical sexual abuse.

Between 1965 and 1972, the plaintiff completed Prep to Grade 6 at Westall State Primary School. He repeated Grade 2. The plaintiff alleges that he was sexually abused by school teacher, Mr Oswald Brian Sword (‘Sword’), whilst he was a student at Westall State Primary School (“the School”). The plaintiff alleges the following:

  • Between 1967 and 1972 (“the relevant period”), Mr Oswald Brian Sword was a teacher at Westall State Primary School and provided one-on-one remedial English tuition in a room at Westall State Primary School. During these remedial lessons, Mr Oswald Brian Sword would touch the plaintiff’s genitals for up to 20 minutes at a time while masturbating himself. Mr Oswald Brian Sword would continue to molest the plaintiff behind a table while other teachers were present. On one occasion, another student entered the room while the abuse was occurring.
  • On three occasions, once in a classroom and twice in the school toilets, Mr Oswald Brian Sword anally raped the plaintiff.

Although admitting Mr Oswald Brian Sword was a part-time teacher at Westall State Primary School between 4 February 1969 and November 1972, the defendant does not admit the abuse.

In around May 1997, the plaintiff reported the abuse to Victoria Police. Mr Oswald Brian Sword committed suicide after being interviewed by the police.

In this proceeding, the plaintiff claims damages from the defendant, the State of Victoria. However, the plaintiff had previously issued a proceeding concerning the abuse against the defendant in the County Court of Victoria (“the prior proceeding”). By a deed of release signed on 1 April 2003, the plaintiff released the defendant from claims relevant to the abuse (“the prior deed”). The defendant says the prior deed bars the plaintiff from bringing the current proceeding and the proceeding should be struck out.

The plaintiff applies to set aside the prior deed pursuant to section 27QD of the Limitations of Actions Act 1958 (Vic) (‘LAA’). The defendant opposes the application.

It was undisputed that the defendant was an entity capable of being sued at the time of the prior proceeding.

The authority of Lepore was applicable at the time the plaintiff’s first offer was made. Accordingly, there was a timing problem with the plaintiff’s submission that the law on vicarious liability before Lepore was a barrier. Further, there was no evidence that he received or relied on such advice. The Court noted at [85] to [86]:

On appeal, the Court stated it was clear that Keogh J ‘gave little weight’ to this factor in deciding whether it was just and reasonable to set aside the plaintiff’s prior deed. The Court held:

[c]ertainly, the principles relating to vicarious liability, as understood before the explanation of those principles in Prince Alfred College, would have presented some difficulty to the plaintiff in the proceedings that he commenced in 1996. We doubt that the circumstance, that the then understanding of vicarious liability was less favourable to the plaintiff, would of itself be relevant in determining whether the settlement agreement should be set aside.

Consequently, although I accept that the law on vicarious liability has been clarified since Mr Cherry entered into the prior deed, I give this no weight, particularly in circumstances where there is no evidence that it impacted upon his decision to settle. Moreover, he had another cause of action available to him: a direct claim in negligence.

There was no evidence from the plaintiff that the law on the non-delegable duty impacted his decision to settle, nor his claim based on fiduciary duty.

The settlement sum was inadequate by today’s standards. The plaintiff’s evidence was that he received $100,000 once costs and disbursements had been deducted from the settlement sum (however this was doubted). Relying on the RBA inflation calculator, $100,000 is equivalent to $175,649.15 in 2024. The court said that by today’s standards, he would likely receive between $400,000 to $500,000 in general damages alone. The inadequacy of the settlement amount weighed in favour of setting aside the prior deed.

As to bargaining positions, the court said at [123] – [126]:

I accept that the defendant was in a more powerful bargaining position than Mr Cherry. The defendant is an experienced litigant with the resources of the State. Nevertheless, he was legally represented and his solicitors actively negotiated the settlement sum……

I am not satisfied that the defendant’s conduct hindered Mr Cherry’s ability to bargain with the defendant.

Mr Cherry received advice that if he lost, he could be responsible for the defendant’s legal costs and that he could lose his house. He said he could not even afford his own legal costs, let alone the defendant’s costs. The possibility of an adverse cost order is a risk faced by most parties.

I assess this factor marginally in favour of setting aside the prior deed.

As to parties’ interests, the Court provided at [134] to [135] as follows:

Mr Cherry says it is in the interests of justice to set aside the deed. On the other hand, the defendant says that it is in the interests of justice to allow a sexually abused child to recover damages where the medical evidence is supportive: Mr Cherry did so in the prior proceeding. The defendant says that it is not in the interest of justice for him to have another opportunity; litigation favours finality.

There are competing interests. I accept that the defendant has an interest in maintaining the prior deed. I take into account that it paid, and Mr Cherry received, settlement monies per the deed. On the other hand, I accept it is congruent with Mr Cherry’s interests to set aside the deed. The question is what is just and reasonable.

Ultimately, on 23 September 2025, the Supreme Court of Victoria held at [136] as follows:

I find that it is not just and reasonable to set aside the prior deed. I am not satisfied that there was any legal barrier that impacted Mr Cherry’s decision to enter into the settlement deed. He was paid a settlement amount per the deed. While it is likely less than he would have received if successful at trial in 2003, he entered into the deed with legal advice. I accept Mr Cherry was suffering from mental health conditions at the time of settlement, but there is no evidence his health impacted his decision to settle. He was concerned about the consequences of adverse costs if he were unsuccessful at trial. This is a risk faced by most litigants.

We are specialist abuse lawyers and can help you receive acknowledgement, meaningful apology and financial resolution from those institutions and systems of power that failed to protect you from harm. If you would like advice in relation to a childhood or adult sexual, physical and/or psychological/emotional abuse claim in any jurisdiction in Australia, please reach out to Littles Lawyers today. 

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