Queensland Judgments
Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode

G.J Murphy Holdings Pty Ltd (in liquidation) v Murphy & Ors

Unreported Citation:

[2021] QSC 225


In this interesting application his Honour considered whether the Court’s jurisdiction to sanction settlements or compromises of a proceeding involving a party under a legal incapacity is limited to only those proceedings which are brought under s 59 of the Public Trustee Act 1978. That particular issue arose because the litigation guardian applied for a sanction of a proposed compromise concerning a legally incapable defendant.

Williams J

10 June 2021 (delivered ex tempore

Briefly, proceedings had been brought against the first defendant to recover approximately $3 million as a pecuniary penalty as a result of her alleged failures to comply with her director’s duties under the Corporations Act 2001 (Cth). That action had been compromised. [1], [3]. At issue was whether the settlement should be approved under r 98 of the Uniform Civil Procedure Rules 1999 (“UCPR”) given the first defendant’s legal status. [8].

Rule 98 of the UCPR provides that a settlement or compromise of a proceeding in which a party is a person under a legal incapacity is ineffective unless it is approved by the Court or the Public Trustee acting under s 59 of the Public Trustee Act 1978. That section enables the compromise of actions by or on behalf of persons under a legal disability who claim moneys or damages. Whilst it was unnecessary for his Honour to conclusively settle the scope of r 98, given s 59 is “a very particular provision” which contemplates “that it is actually a claim by the person the subject of the legal incapacity”, it warranted closer attention. [14].

His Honour was assisted by r 5 of the UCPR. Reading r 98 in its context (and having regard to the principal obligations therein) it became apparent that the intended interpretation of r 98 is that the jurisdiction of the Court to endorse settlements or compromises of a proceeding involving a party where a person is under a legal incapacity extends beyond proceedings which are brought under s 59 of the Public Trustee Act 1978. [16]. That construction also aligned with the broader parens patriae jurisdiction of the Court, his Honour commenting:

As has been recognised by the cases, the Supreme Court has an extremely wide jurisdiction in relation to the supervision of the interests of parties who are under an incapacity, and to construe rule 98 of the UCPR to limit the Court’s inherent jurisdiction would be inconsistent with the width of that inherent jurisdiction.” [17].

In the circumstances, and noting that any failure to approve the terms of the settlement that had been reached would result in the legally incapable defendant potentially risking liability for the entire amount of the claim, his Honour’s view was that even if he was incorrect about the interpretation of r 98, the Court would nonetheless have jurisdiction to consider the settlement under its parens patriae jurisdiction. [18].

In the result the settlement was duly sanctioned, the Court satisfied that it was in the first defendant’s best interests. [23].

A Jarro

Require Technical Assistance?

Message sent!

Thanks for reaching out! Someone from our team will get back to you soon.

Message not sent!

Something went wrong. Please try again.