State of New South Wales v LSR3: NSWCA 151 Abuse Law Update
In the recent matter of State of New South Wales v LSR3 [2025] NSWCA 151, the plaintiff, LSR3 (a pseudonym), brought proceedings against the on 28 August 2023 first defendant, the State of New South Wales, and multiple other defendants including the South East Sydney Local Health District of Caringbah (“SESLHD”), seeking personal injury damages in relation to historical abuse the plaintiff suffered.
The plaintiff alleges assaults by numerous individuals (some of them named and others not) at numerous locations. The assaults are alleged to have taken place over a seven year period which concluded almost half a century ago. In the case of the State, liability is said to arise both by virtue of the State’s own negligence and by virtue of the State’s vicarious liability for the conduct of others. Apart from detailed factual issues, questions arise about the standard of institutional care at the relevant time, discharge of the duty of care, causation and loss. The plaintiff alleges loss which includes a variety of psychological injuries and disabilities, out-of-pocket expenses, economic loss and loss of superannuation entitlements. The plaintiff also claims aggravated and exemplary damages. None of the defendants has filed a defence.
The plaintiff had previously sued both the State (twice) and SESLHD for substantially the same allegations as those raised in the 2023 proceedings. Those past claims were both settled on terms which included the payment of money by the State (the 2003 Settlement Agreement and the 2017 Settlement Agreement). By Statement of Claim filed on 20 March 2024, the plaintiff sought to have those Settlement Agreements set aside, relying on Part 1C of the Civil Liability Act 2002 (NSW) (“CLA”), alleging that they were “affected agreements” under section 7C and that it was “just and reasonable” to set them aside under section 7D of the CLA.
Part 1C of the CLA provides a discretionary mechanism to set aside historic settlements of child abuse actions where such agreements are “affected”, allowing claimants to pursue full compensation for the alleged child abuse.
Without filing any defence in the proceedings, the State and SESLHD applied for the separate determination of certain questions under Rule 28.2 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”), namely whether the 2003 and 2007 Settlement Agreements should be set aside under section 7D of the CLA. In that application, the State and SESLHD conceded that the following issues would arise in the determination of the separate questions:
- consideration of the plaintiff’s subjective motivations for entering into the 2003 and 2017 Settlement Agreements;
2. consideration of the plaintiff’s prospects for success on liability and quantum; and
3. the credit of the plaintiff, such that he would have to give evidence twice.
The primary judge refused to make an order under Rule 28.2 of the UCPR. His Honour’s dispositive reasoning relied on “a number of material difficulties” with the application for separate questions, including that:
- the scope of the controversy remained largely undefined in the lack of any defences having been filed;
2. there was a potential for prejudice against the plaintiff particularly if his credit was the subject of both the separate questions and the final hearing; and
3. an order for separate questions would likely cause delay.
The State and SESLHD applied for leave to appeal from that decision, arguing that the primary judge misconstrued sections 7C and 7D of the CLA as permitting a plaintiff to proceed on the basis of a cause of action prior to setting aside any agreement which had the effect of preventing such a course and/or in the face of extant orders of the court “determining causes of action being maintained”.
Ultimately, on 11 July 2025, the New South Wales Court of Appeal (Bell CJ, Payne JA and Price AJA agreeing) held, refusing the application for leave to appeal:
- Observations on the principles relevant to the grant of leave to appeal from interlocutory decisions pertaining to practice and procedure: [19]-[21] (Bell CJ); [33] (Payne JA); [34] (Price AJA).
PPK Willoughby v Baird [2019] NSWCA 48; Adam P Brown Male Fashions Pty Ltd v Philip Morris Incorporated (1981) 148 CLR 170; [1981] HCA 39; In the matter of the Will of F B Gilbert (dec) [1946] NSWStRp 24; (1946) 46 SR (NSW) 318; House v R (1936) 55 CLR 499; [1936] HCA 40, cited.
Part 1C of the CLA did not mandate that where an application to set aside an “affected agreement” is made in the same proceedings as the underlying claim, that application must be determined in advance of hearing the underlying claim: [22]-[25] (Bell CJ); [33] (Payne JA); [34] (Price AJA).
- The primary judge’s assessment of the competing considerations weighing against the making of an order under UCPR r 28.2 was not in error nor was it the subject of any direct attack on appeal: [26]-[29] (Bell CJ); [33] (Payne JA); [34] (Price AJA).
EXV v Uniting Church in Australia Property Trust (NSW) [2024] NSWSC 490; Steen v Trustees of the Diocese of Tasmania [2024] TASSC 3, referred to.
The New South Wales Court of Appeal further that there be a costs order against the defendant parties.
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