High Court of Australia decisions pending on permanent stays

By Kate Tilley

Barristers Katrina Kluss and Peter Dunning KC explored several matters currently before the High Court and others ripe for HCA consideration at the AILA conference.

Willmot v The State of Queensland [2023] QCA 102 and RC v The Salvation Army (Western Australia) Property Trust [2023] WASCA 29 were heard separately on 7 May 2024 and both seek clarification on what constitutes exceptional circumstances.

Willmot was an Indigenous child who was allegedly a sexual abuse victim while in foster care in the late 1950s. The State was granted a permanent stay of proceedings, which was upheld on appeal, on the basis a fair trial was impossible because of the passage of time.

RC was also a sex abuse case for which a permanent stay was awarded in the WA District Court and upheld on appeal. RC alleged sexual abuse in 1959 and 1960 by a Salvation Army officer when he was in the Nedlands Boys’ Home.

Dr Kluss said neither appeal court had the benefit of the HCA ruling in GLJ v The Trustees of the Roman Catholic Church for the Diocese of Lismore [2023] HCA32 when they upheld the permanent stays.

Caption: L-R Peter Dunning KC and Dr Katrina Kluss

Last resort

In GLJ, the majority HCA judgement said: “The grant of a permanent stay to prevent an abuse of process involves an ultimate decision that permitting a matter to go to trial and the rendering of a verdict following trial would be irreconcilable with the administration of justice through the operation of the adversarial system.

“That ultimate decision must be one of last resort on the basis that no other option is available. This is why only an exceptional case justifies the exercise of the power of a court to permanently stay proceedings.”

The cases were able to be brought in the first instance because, following the 2017 royal commission into institutional child sexual abuse, limitation periods for child abuse claims were removed.

Dr Kluss said the pending HCA decisions in Willmot and RC “should assist plaintiffs and insurers to determine what constitutes exceptional circumstances”.

“The primary issue for determination is whether the permanent stays granted should remain, and therefore whether a trial of the claims would be unfair to the respondents or so unfair or oppressive to the respondents as to constitute an abuse of process,” she said.

Mismatched views

Mr Dunning said there was a mismatch of views on permanent stays in the civil and criminal jurisdictions.

In civil proceedings for non-sexual abuse cases, “a stay is not as hard to get as some think it should be”.

In criminal cases, it was “extremely difficult” for an accused to get a stay, even if they argued the events occurred many years prior, people involved were dead and no evidence was available.

The HCA heard Bird v DP (a pseudonym) [2023] VSCA 66 on 14 March 2024. An historical sexual abuse claim between priest and parishioner, Dr Kluss said the primary issue for determination is whether the doctrine of vicarious liability should be extended to a relationship which is neither one of employment nor ‘true agency’.

She said the HCA decision would be “fundamental to the scope of vicarious liability” and may prompt an influx of claims if it were extended.

International cases

Among matters ripe for HCA consideration were two international cases, XL Insurance Company SE & Ors v Quadra Commodities SA UKSC 2023/0063 and Smith v Fonterra & Ors [2024] NZSC 5.

Quadra, an agricultural commodities trader, entered into contracts to buy and sell grain with Agroinvest Group.

Quadra was insured under a marine cargo open policy for “loss of or damage to goods…through the acceptance of…fraudulent shipping documents”, and for loss “directly caused…by misappropriation”.

Quadra claimed on its policy after Agroinvest fraudulently sold and refinanced commodities stored in warehouses in Ukraine multiple times and ultimately misappropriated the goods.

The insurers denied liability, arguing Quadra had no insurable interest, because the insured goods either never existed, or the loss was financial rather than physical.

At trial, Quadra was found to have an insurable interest and its loss was covered by the misappropriation clause. All four grounds for appeal were dismissed.

Dr Kluss said implications for the insurance industry included:

• An insurable interest can be present where goods are unascertained and in the absence of title being acquired to the goods.
• Physical loss is therefore not always vital for a claim to succeed.
• Depending on the policy wording, an insurer could be liable to respond to multiple claims on the same product.
• Insurers should carefully consider their policy wordings and how they respond to misappropriation to ensure the cover provided is not broader than anticipated.
• Misappropriation can be a product of social engineering and invoice fraud, rather than physical theft.

Climate change threat

In the New Zealand case of Smith v Fonterra, Michael Smith is a Maori elder who claimed that coastal land to which he has a traditional connection is threatened by the effects of climate change.

Mr Dunning said Mr Smith pleaded causes of action based in torts of (1) public nuisance and (2) negligence, and (3) a proposed new tort relating specifically to climate change.

The defendants were seven private companies in the diary, steel, petroleum and coal industries which Mr Smith claimed were major contributors to greenhouse gas emissions.

He sought declarations they breached duties owed to him and orders they make substantial emission reductions.

The defendants applied to strike out Mr Smith’s claim. The NZ High Court granted strike out relief in two of the three causes of action; the Appeal Court granted strike out relief for all three. The Supreme Court overturned the NZCA decision and has allowed the matter to go to trial on all three causes of action.

Mr Dunning said industry implications were:

• The NZSC found the claims’ novel nature and the significance of alleged harm weighs against strike out relief.
• There may be an increase in novel claims before the courts.
• In England, two climate activist cases were brought against company directors alleging they had breached their directors’ duties by failing to sufficiently address the risks of climate change through the companies’ operations.

“While unsuccessful, it demonstrates a tendency to try novel claims in this space,” Mr Dunning said.

In Australia, ASIC has issued three proceedings for alleged greenwashing by superannuation funds.

“Insurers ought to be alive to the possibility of such claims, and ensure policies are updated to adequately respond,” Mr Dunning said.

“Smith reminds us you are entitled to bring novel claims. Lawyers will keep pushing the boundaries and our system works best when people do that.”

He said Australia, as a major coal and iron ore producer, was heavily exposed to the potential for climate change litigation.

Photo credit: AILA 2024 Conference photos supplied warringtonphotography.com.