The District Court of New South Wales’ decision in NS v State of New South Wales (Department of Education) [2026] NSWDC 254 provides an important examination of damages for childhood sexual abuse, a State’s right to recover the cost of a settlement from the perpetrator, and the principles governing gross sum and indemnity costs orders. The proceedings demonstrate how a successful plaintiff’s damages claim can have significant financial consequences beyond the damages award itself, including through cross-claims and subsequent costs orders.
Background
The plaintiff, identified as NS, alleged that she had been sexually abused by a primary school teacher when she was a child. The abuse began while she was a student at a NSW public school between 1997 and 2000 and continued after she left the school, through private tutoring and other contact with the teacher.
The plaintiff brought proceedings against the teacher and the State of New South Wales, alleging intentional torts including assault and battery, as well as liability on the part of the State arising from the abuse.
The teacher had previously been convicted of 17 counts of aggravated indecent assault and sentenced to an aggregate term of six years’ imprisonment. He nevertheless maintained denials in the civil proceedings and raised arguments concerning causation, intervening events, contributory negligence and voluntary assumption of risk.
The State settled the plaintiff’s claim for $755,000, inclusive of $275,000 in costs. It then pursued its cross-claim against the teacher, seeking recovery of the settlement amount and other losses arising from his conduct.
The teacher ceased participating in the hearing after initially appearing through an audio-visual link. The Court proceeded in his absence and considered the evidence and submissions that remained before it.
Findings on liability and causation
The Court was satisfied that the teacher had committed battery against the plaintiff. It rejected the argument that intervening events severed the causal connection between the abuse and the plaintiff’s injuries.
The Court also considered the operation of s 3B(1)(a) of the Civil Liability Act 2002 (NSW), concluding that the provision applied on the basis of intentional conduct to cause harm or sexual misconduct.
The decision highlights the importance of examining the actual conduct established by the evidence, rather than treating the existence of criminal convictions as the only issue in a subsequent civil claim. The Court considered the convictions, the plaintiff’s evidence and the teacher’s pleaded position in determining liability and damages.
Assessment of damages
The Court assessed the plaintiff’s damages at $1,073,191.53, comprising:
- General damages: $300,000.
- Interest on general damages: $117,068.
- Aggravated damages: $40,000.
- Past economic loss, including interest: $234,000.
- Past loss of superannuation: $25,740.
- Future economic loss: $283,492.
- Future loss of superannuation: $40,454.
- Past out-of-pocket expenses: $5,937.53.
- Future out-of-pocket expenses: $26,500.
The award included $40,000 in aggravated damages. In reaching that assessment, the Court considered the nature of the abuse, the teacher’s failure to accept responsibility, his lack of remorse, the defences advanced and the manner in which the proceedings were conducted. The Court also took account of the effect of the teacher’s conduct in raising allegations of intervening events without adequate evidentiary support.
The Court declined to award exemplary damages.
The assessment illustrates that damages in institutional sexual abuse proceedings may extend beyond compensation for the immediate consequences of the abuse. The Court may also need to assess the plaintiff’s psychiatric injury, economic consequences, future losses and whether aggravated damages are warranted by the circumstances.
The State’s cross-claim: recovery of the settlement
A significant feature of the proceedings was the State’s cross-claim against the teacher.
The State accepted that it bore the onus of establishing that its settlement with the plaintiff was reasonable. The Court concluded that it was just and equitable for the teacher to contribute 100% of the $755,000 settlement, thereby providing the State with a complete indemnity for that amount.
This aspect of the decision demonstrates the potential financial consequences of a successful institutional abuse claim for the individual perpetrator. A settlement between a plaintiff and an institutional defendant does not necessarily end the dispute between the defendants. Depending on the applicable legal principles and the findings made, the institutional defendant may pursue a cross-claim to recover some or all of its settlement liability from the perpetrator.
The Court’s determination was specific to the evidence and legal issues in this case; it should not be understood as establishing that an institution will automatically recover every settlement payment from an individual defendant in other proceedings.
The subsequent costs decision
A further decision addressed the parties’ costs applications: NS v State of New South Wales (Department of Education) (No 2).
The plaintiff sought a gross sum costs order of $100,000 on an ordinary basis under s 98(4)(c) of the Civil Procedure Act 2005 (NSW). The Court accepted that a gross sum order was appropriate in the circumstances. It considered proportionality, responsibility for the costs incurred, the material available to assess the claim and the benefit of achieving finality without a further detailed costs assessment.
Although courts may apply a discount when making gross sum costs orders, the Court did not apply one here. The plaintiff had confined the application to costs associated with preparing for the hearing and the costs application itself.
The State separately sought $154,548.50 in costs from the teacher, including pre-litigation costs, a proportion of its litigation costs and interest. It sought indemnity costs in connection with its cross-claim.
The Court considered the State’s reliance on an offer to contribute that would have resulted in dismissal of the cross-claim. Given the prospect that the State might ultimately obtain a complete indemnity, the Court found that the teacher’s failure to accept the offer was unreasonable. This supported an indemnity costs order from the date of the offer.
However, the Court did not consider the teacher’s conduct throughout the litigation sufficient, by itself, to justify indemnity costs for the entire period. It distinguished between unreasonable aspects of the defence and issues, including the extent of damages and causation, that the teacher was entitled to contest.
Accordingly, the Court ordered costs on an ordinary basis up to 23 June 2026 and on an indemnity basis thereafter. It also refused the State’s application for a gross sum costs order, finding that a formal assessment would likely involve only modest additional expense and that the State had not demonstrated the same need for finality as the plaintiff.
The orders included:
- $100,000 in gross sum costs payable to the plaintiff;
- judgment for the State against the teacher for $154,548.50;
- the State’s costs payable on an ordinary basis up to 23 June 2026 and on an indemnity basis thereafter; and
- an order that the State pay 50% of the costs of the relevant notice of motion on an ordinary basis, as agreed or assessed.
Key takeaways
The decisions in NS v State of New South Wales and NS v State of New South Wales (Department of Education) (No 2) illustrate several important principles.
First, damages for institutional sexual abuse require careful consideration of general damages, psychiatric injury, economic loss, future needs and the circumstances in which aggravated damages may be appropriate.
Second, an institutional defendant that settles a plaintiff’s claim may pursue a cross-claim against the perpetrator. Whether a complete indemnity is available depends on the applicable law and the evidence supporting the settlement and cross-claim.
Third, gross sum costs orders can promote proportionality and finality, particularly where further assessment would impose unnecessary expense. The fact that sufficient material exists to calculate costs does not, by itself, mean that a gross sum order is appropriate.
Finally, an unreasonable failure to accept a favourable offer may justify indemnity costs from the date of the offer. However, indemnity costs do not automatically follow merely because a party advances some weak or unsuccessful arguments.
Read the judgments: NS v State of New South Wales (Department of Education) [2026] NSWDC 254 and the related costs decision, NS v State of New South Wales (Department of Education) (No 2).
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