Mills v Central Sydney Area Health Service

[2002] NSWSC 728

CITATION:

Mills & Anor v Central Sydney Area Health Service & Anor [2002] NSWSC 728

CURRENT JURISDICTION:

Common Law

FILE NUMBER(S):

SC 20266/2000

HEARING DATE(S):

10 April 2002

JUDGMENT DATE:

27 August 2002

PARTIES :

Desiree Dorrian Mills
(First Plaintiff)

James Dorrian
(Second Plaintiff)

Central Sydney Area Health Service
(First defendant)

Heng Hwee Yeo
(Second Defendant)

JUDGMENT OF:

Master Harrison

COUNSEL :	Mr B Gross QC with Mr D J Williams (Plaintiffs) Mr M Windsor (First Defendant)
SOLICITORS:	Herbert Weller (Plaintiffs) Ms B Lyons of Lyn Boyd Solicitors (First Defendant)
CATCHWORDS:	The law on summary judgment - The pleadings - Nature and scope of duty of care - General duty of care - Non-delegable duty of care - Vicarious liability - Nervous shock - Spoliation of evidence
LEGISLATION CITED:	Supreme Court Rules - Part 15 r 26; Part 13 r 5; Part 32A r 2 Compensation to Relatives Act 1987 (NSW)
CASES CITED:	Air Services Australia v Zarb (NSWCA unreported, 26 August 1998) Dey v Victoria Railways Commissioners (1946) 78 CLR 62 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Webster & Anor v Lampard (1993) 177 CLR 598 X v Amalgamated Television Services Pty Ltd (No 2) (1987) 9 NSWLR 575 Hospitals Contribution Fund of Australia v Hunt (1982) 44 ALR 365 Gibson v Parkes District Hospital (1991) 26 NSWLR 9 Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313 Collins v Minstry v Hertforshire County Council [1947] KB 598 Cassidy v Minstry of Health [1951] 2 KB 343 Roe v Minster of Health [1954] 2 QB 66 Samios v Repatriation Commission [1960] WAR 219 Toronto General Hospital v Matthews [1972] SCR 435 Albrighton v Royal Prince alfred Hospital (1980) 2 NSWLR 542 Kondis v State Transport Authority (1984) 154 CLR 672 Ellis v Wallsend District Hospital (1989) 17 NSWLR 553 Lepore v State of NSW & Anor (2001) 52 NSWLR 420 Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254 Scott v Davis (2000) 74 ALJR 1410 Rich v State of Queensland & Ors [2001] QCA 295 Commonwealth v Introvigne (1982) 150 CLR 258 Lister & Ors (AP) v Hesley Hall Limited [2001] UKHL 22 Deatons Pty Limited v Flew (1949) 79 CLR 370 Howard v State of Queensland [2000] QCA 223 Carpenters' Investment Trading Co Ltd v Commonwealth of Australia (1952) 69 WN (NSW) 175 Auckland Workingmen's Club and Mechanics Institute v Rennie [1976] 1 NZLR 278 Lackersteen v Jones (1988) 92 FLR 6 General Engineering Services v Kingston Corporation [1989] 1 WLR 69 Canterbury Bankstown Rugby League Football Club Ltd v Rogers (1993) Aust Tort Rep 81-246 Trotman v North Yorkshire County Council [1999] LGR 584 Racz v Home Office [1994] s AC 45 Bazley v Curry (1999) DLR (4th ed) 45 Jacobi v Griffiths (1999) 174 DLR (4th ed) 71 Moses v The Diocese of Colarado (1993) 863 P 2d 310 (Colo 1993) Gifford & Ors v Strang Patrick Stevedoring Pty Ltd [2001] NSWCA 175; (2000-2001) 51 NSWLR 606 Mt Isa Mines Ltd v Pusey (1970) 125 CLR 383 Jaensch v Coffey (1983-4) 155 CLR 549 Annetts v Australian Stations Pty Ltd (2000) 23 WAR 35 Morgan v Tame [2000] NSWCA 121 The Ophelia [1916] 2 AC 206 Allen v Tobias (1958) 98 CLR 367 McCabe v British American Tobacco Australia Services Limited [2002] VSC 73 Steiner Wilson & Webster Pty Ltd t/as Abbey Bridal v Amalgamated Television Services Pty Ltd (2000) Aust Torts Reports 81-537 Instant Colour Pty Ltd v Canon Australia Pty Ltd [1996] 763 FCA 1 Smith v Superior Court 198 Cal Rptr 829 (1984) Valasco v Commercial Building Maritime Co 169 Cal App 3d 874 Gomez v Aquitstapace 57 Cap Rptr 2d 821 (1996) Smith: Cedars-Sinai Medical Center v Superior Court of Los Angeles County 954 P 2d 511 (1998) Temple Community Hospital v Superior Court of Los Angeles County 976 P 2d 223 (1999) Hirsch v General Motor Corporation 628 2d 1108 (1993) Coleman v Eddy Potash Inc 905 P 2d 185 (1995) Smith v Atkinson 771 So 2d 429 (2000) Continental Insurance co v Herman 576 So 2d 313 (1991) St Mary's Hospital Inc v Brinson 685 So 2d 33 (1990) Barker v Bledsoe 85 FRD 545 (1979) Smith v Howard Johnson Co 615 NE 2d 1037 (1993) Boyd v Travelers Insurance Company 652 NE 2D 267 (1995) Hazen v Municipality of Anchorage 718 2d 456 (1986) Levinson v Citizens National Bank 644 NE 2d 1264 (1994) Holmes v Amerex Rent A Car 710 A 2d 846 (1998) St Louis v The Queen (1895) 25 SCR 649; rev'g (1894) 4 Ex CR 185 Lindsay v Davidson [1911] 1 WWR 125 (Sask. SC) Endean v Canadian Red Cross Society (1998) 157 DLR (4th) 465 (BCCA) Robb Estate v St Joseph's Health Centre (unreported, May 29 1998 (Ont. Gen.Div.) Feldham J) Rintoul v St Joseph's Health Centre (1998) 42 OER (3d) 379 (Div. Ct) Spasic Estate v Imperial Tobacco Limited (2000) 2 CCLT (3d) 43 Hunt v T & N pic [1990] 2 SCR 959 (SCC) Willard v Caterpillar 48 Cal Rpts 2d 607 (Cal. App. 5 Dist. 1995)
DECISION:	(1) The statement of claim is dismissed as against the first defendant; (2) The plaintiffs are to pay the first defendant's costs

- 36 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

MASTER HARRISON

TUESDAY, 27 AUGUST 2002

20266/2000 - DESIREE DORRIAN MILLS & ANOR v
CENTRAL SYDNEY AREA HEALTH
SERVICE & ANOR

JUDGMENT (Summary judgment; spoliation;
nervous shock)

1 MASTER: By notice of motion filed 22 October 2001 the first defendant seeks an order that the statement of claim be struck out as against it pursuant to Part 15 r 26 of the Supreme Court Rules (SCR); or alternatively, that the statement of claim be dismissed as against it pursuant to Part 32A r 2 SCR; or that the statement of claim be stayed or dismissed generally as against it pursuant to Part 13 r 5 of the SCR. The first defendant relied on the affidavit of Blaise Robinson Lyons sworn 18 October 2001. The plaintiffs relied on the affidavit of Herbert Weller sworn 21 December 2001. The first plaintiff Desiree Dorrian Mills is the next friend of James Dorrian the second plaintiff. She is also his grandmother. The first defendant is Central Sydney Area Health Service.

2 The first plaintiff is the mother of Christopher Mark Dorrian, who died on 23 June 1997 (the deceased). The second plaintiff James Dorrian is the son of the deceased. The second defendant Keng Hwee Yeo was employed by the first defendant as a psychiatric nurse in the Palm Court Rehabilitation Unit at Rozelle Hospital (Palm Court). The first plaintiff brings this action on her behalf and that of the second plaintiff, pursuant to the provisions of the Compensation to Relatives Act 1987 (NSW). The plaintiffs also claim damages for nervous shock, damages both aggravated and exemplary, negligence and damages for spoliation of evidence.

The law on summary judgment

3 Part 15 r 26 provides:

“(1) Where a pleading -
(a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading;
(b) has a tendency to cause prejudice, embarrassment or delay in the proceedings, or
(c) is otherwise an abuse of the process of the Court,
the Court may at any stage of the proceedings, on terms, order that the whole or any part of the pleading be struck out.
(2) The Court may receive evidence on the hearing of an application for an order under subrule (1).”

4 Part 13 r 5 says:

“(1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings-
(a) no reasonable cause of action is disclosed;
(b) the proceedings are frivolous or vexatious;
or
(c) the proceedings are an abuse of the process of the Court,
the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.”

5 In a Court of Appeal decision Air Services Australia v Zarb (NSWCA unreported, 26 August 1998) Rolfe AJA found it useful to remind himself of the highly demanding test imposed on a party seeking summary judgment. His Honour referred to Dey v Victorian Railways Commissioners (1949) 78 CLR 62; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 and Webster & Anor v Lampard (1993) 177 CLR 598. I have reproduced some of the passages quoted in Zarb.

6 In General Steel Barwick CJ, who heard the application alone stated:

“Although I can agree with Latham CJ in the same case when he said that the defendant should be saved from the vexation of the continuance of useless and futile proceedings, in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff’s claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed.”

7 Barwick CJ also said:

“It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of cause of action - if that be the ground on which the Court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; ‘so obviously untenable that it cannot possibly succeed’; ‘manifestly groundless’; ‘so manifestly faulty that
it does not admit of argument’; ‘discloses a case which the Court is satisfied cannot succeed’; ‘under no possibility can there be a good cause of action’; ‘be manifest that to allow them’ (the pleadings) ‘to stand would involve useless expense’.”

8 In Webster Mason CJ, Deane and Dawson JJ reinforced the rigorous test stating, at 602:

“The power to order summary judgment must be exercised with ‘exceptional caution’ and ‘should never be exercised unless it is clear that there is no real question to be tried.”’

9 According to Rolfe AJA in Zarb:

“The demanding nature of the test is in no way lessened in circumstances where there are the potential for difficult factual and legal issues to arise. Rather, as the decision in Webster made clear, it is heightened: see also Wickstead & Ors v Browne (1992) 30 NSWLR 1 and Esanda Finance Corporation Limited v Peat Marwick Hungerfords (1997) 188 CLR 241.”

10 However in X v Amalgamated Television Services Pty Ltd (No 2) (1987) 9 NSWLR 575 Kirby P (as he then was) at 588 stated “novelty of an argument is not a reason for inaction where the law permits action and justice requires it.”

11 Master Allen (as he then was) in Hospitals Contribution Fund of Australia v Hunt (1982) 44 ALR 365 at 373-374 stated:

“…It is not by any means rare in the history of the development of the common law that a high appellate court, in enunciating a novel development in the law, albeit one avowedly based on a miscellany of old cases, has chosen to use general words of imprecise limits in meaning to facilitate the arrival, in later cases, of the final form of the development without the need to overrule what earlier had been stated. That being so I am of opinion that a court at first instance should be particularly astute not to risk stifling that development of the law by summarily throwing out of court actions in respect of which there is a reasonable possibility that it will be found, in the development of the law, still embryonic, that a cause of action does lie. The risk of injustice to the plaintiff, which summary termination of his claim would entail, is real. One cannot predict, with firm assurance, what the future holds as the final formulation of the new development.”

12 This passage was quoted with approval by Justice Badgery-Parker in Gibson v Parkes District Hospital (1991) 26 NSWLR 9 at 35. This Gibson decision is instructive as it critically analysed whether tortious duty to act in good faith, which had not previously been recognised in Australia, should be permitted to proceed to trial. Badgery-Parker J ultimately decided that the tort to act in good faith should go to trial. I have adopted the methodology of Badgery-Parker J and have referred to this throughout this judgment. This case tests the boundaries of the recognised law in Australia and questions whether the plaintiff should be given an opportunity to plead a tort of spoliation which is currently not recognised in Australia. Further, where there is a divergence in legal opinion I will examine the plaintiffs’ claim in light of the decision most favourable to them.

The pleadings

13 The allegations contained in the amended statement of claim filed 10 April 2002 are that between 12 April 1997 and 6 May 1997 the deceased was admitted as a patient to Palm Court. While the deceased was a patient in Palm Court the second defendant nurse commenced a sexual relationship with him. The plaintiffs pleads that by virtue of the nurse commencing and maintaining a sexual relationship with the deceased, both the first and second defendant were negligent in their medical treatment of the deceased (ASC filed 10 April 2002). The nature and scope of duty of care is not pleaded.

14 On 23 June 1997 it is alleged that the deceased was murdered or otherwise unlawfully killed by the second defendant (para 8 ASC). On 17 July 2001 the Court of Criminal Appeal quashed the second defendant’s conviction for murder. A retrial has been held. On 25 May 2002 the second defendant was found guilty of murder. She has not yet been sentenced.

Nature and scope of duty of care

15 The statement of claim does not actually plead that the defendants owed the deceased a duty of care. There are three possible duties of care which could be alleged that the hospital owed the patient. They are firstly a general duty of care; secondly, a non-delegable duty of care; or thirdly, the hospital could be held vicariously liable for the actions of its employee the nurse. I shall deal with each of these.

16 Most actions in tort arise out of relationships in which the duty of care is well established and the nature of the duty is well understood. In this case it is not disputed that a hospital owes a duty of care to a patient. The hospital has a duty to exercise reasonable care in the treatment of a patient and cannot delegate that care to other persons such as doctors or nurses. Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313 McHugh J at 367-8; Collins v Hertforshire County Council [1947] KB 598; Cassidy v Ministry of Health [1951] 2 KB 343; Roe v Minister of Health [1954] 2 QB 66; Samios v Repatriation Commission [1960] WAR 219; Toronto General Hospital v Matthews [1972] SCR 435; Albrighton v Royal Prince Alfred Hospital (1980) 2 NSWLR 542; Kondis v State Transport Authority (1984) 154 CLR 672; and Ellis v Wallsend District Hospital (1989) 17 NSWLR 553. However as Mason P stated in Lepore v State of NSW & Anor (2001) 52 NSWLR 420, there will be situations where the court will need to determine the precise area even for a recognised category such as hospital/patient – at para [46]. This is such a case.

17 Had the deceased been injured while an inpatient by a negligent act performed by an employee, the nurse, during the course of her employment with the hospital, the hospital would owe the deceased a duty of care for those negligent acts. However, there are two distinguishing features in this case which takes it outside the understood nature of that duty. They are firstly that the deceased was no longer a patient in the care of the hospital when he was killed and secondly, the acts that killed him were deliberate and criminal.

18 The hospital submitted that while the allegations may give rise to a duty of care to the deceased as a patient, they do not establish either the existence or the scope of the duty of care in relation to harm deliberately inflicted on him after he was discharged from Palm Court. For the purposes of this application it is accepted (as pleaded) that a sexual relationship developed between the nurse and the deceased while he was an in-patient of the hospital and this relationship continued after discharge. The plaintiffs could have pleaded that the hospital as employer of the nurse had a duty of care which continued after the deceased’s discharge from the hospital. The plaintiff’s murder took place about six weeks after discharge. It is pleaded that by virtue of the nurse commencing and maintaining a sexual relationship with the deceased, both the hospital and the nurse were negligent in their medical treatment of the deceased (para 7 SC).

19 The particulars of negligence which are pleaded are firstly, failing to take adequate steps to prevent the nurse from commencing and maintaining a sexual relationship with the deceased while he was a patient in Palm Court; secondly, failing to adequately supervise the nurse to ensure that she did not engage in relationships with patients; thirdly, failing to dismiss the nurse from the employ of the hospital; fourthly, failing to warn the deceased as to the need to report any sexual advances by hospital staff; fifthly, failing to instruct and warn hospital staff to be alert for, and to report, any physical or sexual advances made by the nurse or other hospital staff towards patients; and sixthly, failing to adequately train hospital staff not to attempt to enter into sexual relationships with patients, to avoid and discourage any communications which might induce patients such as the deceased to wish to enter into such a relationship. As I understand the plaintiff’s case, if the hospital had proper procedures in place, the relationship between the nurse and Mr Dorrian would not have developed and therefore Mr Dorrian would not have been killed.

General duty of care

20 If the claim pleaded a general duty of care there are circumstances where the relationship between two parties may mean that one has a duty to take reasonable care to protect the other from the criminal behaviour of third parties, random and unpredictable as such behaviour may be. Such relationships may include those between employer and employee, school and pupil, or bailor and bailee. But the general rule that there is no duty to prevent a third party from harming another is based in part upon a more fundamental principle, which is that the common law does not ordinarily impose liability for omissions – see Gleeson CJ in Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254 at para 26.

21 The unpredictability of criminal behaviour is one of the reasons why, as a general rule and in the absence of some special relationship, the law does not impose a duty to prevent harm to another from the criminal conduct of a third party, even if the risk of such harm is foreseeable. However, in the case before me it is not the criminal behaviour of an unknown third party that caused the death of the patient but rather the behaviour of an employee of the hospital. However, even if a nurse has a sexual relationship with a patient, the patient’s subsequent murder cannot be said to be a predictable event.

22 In Modbury the primary issue considered was the principle upon which an occupier of land may be liable in an action for negligence to a person who is injured while on the land as a result of the deliberate wrongdoing of a third party. It was argued that the appellant was the occupier of a parked car which had its lights off and the failure to leave the lights on was negligent, the risk of harm was foreseeable and the negligence was the cause of the harm.

23 In Modbury, Gleeson CJ [para 30] stated that there may be circumstances in which, not only is there a foreseeable risk of harm from criminal conduct by a third party, but, in addition, the criminal conduct is attended by such a high degree of foreseeability, and predictability, that it is possible to argue that the case would be taken out of the operation of the general principle and the law may impose a duty to take reasonable steps to prevent it. The possibility is that knowledge of previous, preventable, criminal conduct, or of threats of such conduct, could arguably give rise to an exceptional duty. In the case before me it is pleaded that the hospital was investigating in relation to the nurse’s alleged prior sexual relationships with other patients. For the purposes of this application I am prepared to accept that the hospital armed with this knowledge could have taken some preventative steps such as those referred to earlier in this judgment. However, the hospital cannot be fixed with knowledge of some prior criminal activity on the nurse’s part because there was none. It is my view that it is not arguable that the hospital’s knowledge would give rise to an exceptional duty.

24 The allegation of negligence pleaded in the case before me (referred to earlier) are those of omissions namely the hospital failed to take certain steps to prevent harm to the deceased. It is pleaded that the death of the deceased was caused by the negligence of the defendant (para 9 SC). Causation is problematic. The direct and immediate cause of Mr Dorrian’s death was the deliberate wrongdoing of the nurse. It was not the pre-existing sexual relationship that caused his death. However, in the case before me the hospital does owe a patient a duty of care. The wrongdoer is not a third party but an employee of the hospital. The hospital has a duty to use reasonable care in the medical treatment of the patient. However, the subsequent murder of a person who is no longer an in-patient of the hospital by the hospital’s employee is not foreseeable. The risk of a patient being murdered even if a sexual relationship commences while the patient is admitted into the care of the hospital is far fetched or fanciful – see Wyong Shire Council v Shirt (1980) 146 CLR 40. It is my view that the plaintiffs’ argument that the hospital owed the patient a duty of care of the scope and nature as pleaded is doomed to failure. If I am wrong, it is my view that the hospital cannot have breached its duty of care as the murder was not reasonably foreseeable. This argument is also doomed to failure.

Non-delegable duty of care

25 The concept of non-delegable duty of care has been described as a logical fraud and sophistry and a legal fiction – see Professor J P Swanton, Non Delegable Duties: Liability for Negligence of Independent Contractors (1991) 4 JCL 183 at 188. Recently in Scott v Davis (2000) 74 ALJR 1410 at [248] Gummow J pointed out that with respect to any doctrine of “non-delegability” there is a difficulty in identifying any principle which dictates the expansion of liability such that the defendant becomes in effect the insurer of some activity even when it is performed by another.

26 Two recent Court of Appeal decisions are in conflict on the issue of whether a school owes a student a non-delegable duty of care where a teacher sexually assaults that student. They are the New South Wales Court of Appeal decision of Lepore and the Queensland Court of Appeal decision of Rich v State of Queensland & Ors [2001] QCA 295. Special leave has been granted by the High Court in both cases.

27 Both Lepore and Rich agree that it is clear that a State owes a student at its school a non-delegable duty of care – see Commonwealth v Introvigne (1982) 150 CLR 258. The issue is in what is the nature and scope of a non-delegable duty of care. The starting point I think is Kondis where Mason J (with whom Dean and Dawson JJ agreed) stated in relation to the non-delegable duty of care of a hospital:

“The liability of a hospital arises out of its undertaking an obligation to treat its patient, an obligation which carries with it a duty to use reasonable care in treatment, so that the hospital is liable, if a person engaged to perform the obligation on its behalf acts without due care: Gold v Essex County Council [1942] 2 KB 293. Accordingly, the duty is one the performance of which cannot be delegated not even to a properly qualified doctor or surgeon under a contract for services: Cassidy v Ministry of Health [1951] 2 KB 343.

28 Likewise and in relation to a school authority, Mason J in Kondis stated:

It is under a duty to ensure that reasonable care is taken of pupils attending the school. It is the immaturity and inexperience of the children and their propensity for mischief that lie at the basis of special responsibility which the law imposes on a school authority to take care for their safety: Introvigne (1982) 150 CLR at 271. The child’s need for care and supervision is so essential that it is a necessary inference of fact from the acceptance of the child by the school authority, “that the school authority undertakes not only to employ proper staff but to give the child reasonable care”, to use the words of Kitto J in Ramsay v Larsen (1964) 111 CLR at 28.”

29 For the purposes of this application it is accepted that a patient receiving psychiatric treatment may be emotionally vulnerable and involving himself in a relationship with a nurse during treatment may exacerbate his psychiatric condition.

30 In Lepore the Court of Appeal (per Mason P and Davies AJA, with Heydon JA dissenting) held that a school authority’s duty to take reasonable care to ensure the safety of a pupil extends to protecting the pupil from physical and/or sexual abuse, at least where due care would have avoided it. Mason P described the expression of “non-delegable” duty as being somewhat misleading. The approach Mason P took was to say that almost by definition, tort requires the plaintiff to show a reason why the burden of his or her loss or injury should be transferred to the defendant’s shoulders. The attribution of vicarious liability or a non-delegable duty of care are situations where legal responsibility is fixed upon an “innocent” party by reason of some antecedent relationship with the victim and some capacity to control the individual wrongdoer. The defendant upon whom a “direct” or “personal” non-delegable duty is imposed is treated as if it had undertaken directly with the plaintiff to ensure that no harm befalls the plaintiff (within the sphere of protection undertaken) as the consequence of wrongdoing. Viewed thus, there is no basis for distinguishing between negligently inflicted harm and intentionally inflicted harm.

31 According to Mason P, the non-delegable duty of care stemmed from the entrustment of children into the virtually exclusive care of the educational authority in school hours on school premises. It was Mason P’s view that the State’s obligation to school pupils on school premises and during school hours extends to ensuring that they are not intentionally or negligently injured physically at the hand of an employed teacher. Thus the non-delegable duty of the school in Lepore includes a duty to ensure that the pupils are not sexually assaulted, but is confined to assaults occurring within school during school hours. Mason P commented that there will be times when it may be difficult to determine whether a pupil is within the umbrella of a non-delegable duty of care such as when the pupil may be at school outside ordinary school hours or the assault occurs outside school premises. There is no decided case in New South Wales where an employer owes a non-delegable duty of care for the acts of an employee who is an intentional wrongdoer outside hours of employment.

32 By contrast in approach, in a unanimous decision of Rich (McPherson, Thomas and Williams JJA) the Queensland Court of Appeal held that the source of the State’s liability is not the acts committed by the teacher but the omission by the State to take reasonable steps to foresee and prevent those acts from taking place. McPherson JA stated that the State cannot escape liability by delegating that duty. But before the State can be held liable for failing to perform its duty, it must be proved and, for that purpose, must be alleged to have acted in breach of its duty in some identifiable and identified respect.

33 McPherson JA stated that even though the school authority’s duty is non delegable, it does not follow that it imposes an obligation to ensure that no harm of any kind befalls children at school through the act and omission of other from any cause or source. Like Heydon JA in Lepore, McPherson JA found it difficult to identify either an authority or reason for any conceptual basis for imposing this extensive form of liability on a school authority [para 18]. The duty is not a form of absolute duty nor can it be equated to a warranty, promise or undertaking to indemnify. According to McPherson JA a non-delegable duty goes no further than a duty by the State requiring it to take reasonable steps to prevent the students from being harmed or what reasonable steps the State could have taken to prevent danger [para 13].

34 Rich involved an appeal against a decision to summarily strike out a statement of claim. McPherson JA pointed out that there was a missing step in fixing the State with liability. His Honour stated that it is not enough for the plaintiffs to assert, as they do in para 3 of their statements of claim, that, because the State’s employee and teacher the third defendant D’Arcy assaulted the plaintiffs “at school”, the State acted in breach of its duty to ensure that reasonable care was taken of them by the State. Without more, such an assertion fails to identify, allege and plead any matter of fact showing that the State omitted some precaution reasonably needed to ensure their safety. Because the plaintiffs’ failure or it may be their refusal to plead any such particular, it was the court’s view that the statement of claim is, in the language of the old procedure, demurrable and ought to be struck out.

35 If the Mason P test in Lepore is applied, and this is the test most favourable to the plaintiffs’ case, it can be said that a non-delegable duty of care stemmed from the entrustment of a vulnerable patient into the virtually exclusive care of the hospital authority in hospital premises, such as Palm Court, Rozelle. The hospital’s obligation to the patient while an in-patient at Rozelle extends to ensuring that he is not intentionally or negligently injured at the hand of an employed nurse. The relationship commenced while the plaintiff was an in-patient at the hospital and during the hours the nurse was employed. If Mason P’s definition of non-delegable duty is applied it may be arguable that the hospital owed a duty of care to prevent hospital staff having sexual relationships with patients. Such a duty would cover the period in which the deceased was an inpatient. However the relationship continued outside the hospital grounds and outside the nurse’s work hours and during a period in which the deceased was no longer an in-patient at the hospital. Although imposing a duty of care in this period will require an incremental development in the law, it is arguable that such a duty exists. Even if the breach of duty can be established, the plaintiffs must fail on causation. The murder took place six weeks after discharge and cannot be said to have been caused by the hospital’s alleged failure to prevent staff engaging in sexual relationships with patients. This argument is doomed to failure.

Vicarious liability

36 Vicarious liability has been described as a species of strict liability and can be best understood as a loss – a distribution device - see Lister & Ors (AP) v Hesley Hall Limited [2001] UKHL 22 per Lord Millett [64]. The distinction between vicarious liability and non-delegable duty of care has been the subject of criticism. It has been described as specious – see article by Swanton.

37 It is the law in Australia that an employer is not generally vicariously liable for independent personal acts by an employee which are not connected with or incidental in any way to the work the employee is expressly or impliedly authorised to perform. This decision is not in line with England nor a recent Canadian decision. The leading Australian case is Deatons Pty Limited v Flew (1949) 79 CLR 370. The owner of a hotel was not held to be vicariously liable for an unprovoked assault by a barmaid who threw a glass of beer into a customer’s face. She was not in charge of the bar. Dixon J at pp 381-382 stated:

“an act of passion and resentment done neither in furtherance of the master’s interests nor under his express or implied authority nor as an incident to or in consequence of anything the barmaid was employed to do. It was a spontaneous act of retributive justice. The occasion for administering it and the form it took may have arisen from the fact that she was a barmaid but retribution was not within the course of her employment as a barmaid.”

38 Illegal acts committed by an employee which are wholly unauthorised and inimical to the purposes of the employment are regarded as falling outside the course of employment and no vicarious liability falls upon the employer in respect of such acts – see Howard v State of Queensland [2000] QCA 223 [para 15]; Deatons; Carpenters’ Investment Trading Co Ltd v Commonwealth of Australia (1952) 69 WN (NSW) 175; Auckland Workingmen’s Club and Mechanics Institute v Rennie [1976] 1 NZLR 278; Lackersteen v Jones (1988) 92 FLR 6; General Engineering Services v Kingston Corporation [1989] 1 WLR 69; Canterbury Bankstown Rugby League Football Club Ltd v Rogers (1993) Aust Torts Report (1993) 81-246 at pp 62,543 and 62,551.

39 There is a recent decision of the House of Lords in Lister in which it was held that that school authority was vicariously liable for the torts of its employee. The warden was employed to take care of boys between 12 and 15 years of age who had emotional and behavioural difficulties when they were not at school. The Warden systematically sexually assaulted some of the boys. The House of Lords overruled its previous decision of Trotman v North Yorkshire County Council [1999] LGR 584 where the council was held to be vicariously liable for the sexual assaults by a deputy headmaster on a pupil while on a school organised holiday in Spain.

40 In Lister Lord Steyn (with whom Lord Hutton agreed) referred to a statement of Salmond test, which had been adopted for nearly a century. Salmond said that a wrongful act is deemed to be done by a “servant” in the course of his employment if “it is either (a) a wrongful act authorised by the master”: Salmond on Torts, 1st ed (1907), p 83; and Salmond and Heuston on Torts, 21st ed (1996), p 443. Salmond further stated that “a master … is liable even for acts which he has not authorised, provided they are so connected with acts which he has authorised, that they may rightly be regarded as modes – although improper modes – of doing them”.

41 Lord Steyn then pointed out that since Racz v Home Office [1994] 2 AC 45, an employer can be held to be vicariously liable for the intentional wrongdoing of its employees and that this responsibility for wrongdoing fell in with Salmond’s formulation. Lord Steyn concluded that it becomes possible to consider the question of vicarious liability on the basis that the employer undertook to care for the boys through the services of the warden and that there is a very close connection between the torts of the warden and his employment. The assaults were committed in the time and on the premises of the employers while the warden was also busy caring for the children. The employers had entrusted the care of the children in Axeholme House to the warden. The question raised was whether the warden’s torts were so closely connected with his employment that it would be fair and just to hold the employers vicariously liable. On the facts of the case the answer was yes. It was held that the sexual abuse was inextricably interwoven with the carrying out by the warden of his duties in Axeholme House. Lord Steyn acknowledged that matters of degree arise but the present cases clearly fall on the side of vicarious liability.

42 Two cases in the Supreme Court of Canada and one in the Supreme Court of Colorado illustrate the approach in those countries. Bazley v Curry (1999) DLR (4th ed) 45 was concerned with a Foundation which ran a residential care facility for emotionally troubled children. The victim, whilst a resident of the facility, was repeatedly sexually assaulted and abused by Curry, an employee of the Foundation. It was held that the Foundation set out to create a quasi-parental relationship between its employees and the children in its care with all of the authority and intimacy of such a relationship; that materially increased the risk of harm and the conduct in question was therefore sufficiently linked to the employment to give risk to vicarious liability. This concept on “sufficiently linked” is similar to the English Salmond approach in Lister of the acts being “so connected”.

43 Jacobi v Griffiths (1999) 174 DLR (4th ed) 71 concerned a Club providing recreational activities and outings for children using mainly volunteer staff. Two children were sexually assaulted by an employee (with one minor exception) at the employee’s home outside working hours and away from the club which was the principal place of employment. The decisions in Curry and Griffiths were handed down consecutively by the Supreme Court of Canada. In the latter case the victim failed to establish that the Club was vicariously liable for the conduct because the intentional tort was not significantly linked to the employment on the facts of that case.

44 The Supreme Court of Colorado sitting in Banc in Moses v The Diocese of Colorado (1993) 863 P 2d 310 (Colo 1993), was concerned with an action brought by a woman against the Diocese of an Episcopalian Church for damages for sexual assault by a priest who was her counsellor. Ultimately that court held that the evidence supported the claims of negligent hiring and supervision against the Bishop and the Diocese and the victim was entitled to recover, but the church was not vicariously liable for the conduct of the priest.

45 Even on a most liberal reading of the overseas case law it is my view that it is not arguable that the hospital was vicariously liable for the nurse’s action. The current law in Australia would mean that the nurse’s acts were expressly and impliedly unauthorised. The Canadian decision of Jacobi failed because the acts took place outside the working hours and away from the club premises which meant that the intentional tort was not significantly linked or connected to the employment. This is a similar situation to the case before me. The plaintiffs’ claim if it relates to vicarious duty of care by the hospital to the patient is doomed to failure.

46 Overall, it does not matter whether the duty of care is alleged to be vicarious liability, non-delegable duty of care or a general duty of care. They are all doomed to failure. However, if I am wrong, I turn to consider whether the plaintiffs have an arguable claim for nervous shock.

Nervous shock

47 The first plaintiff was required to attend Glebe morgue to identify the remains of the deceased which consisted only of a severed head and by reason of which the first plaintiff suffered nervous shock. The second plaintiff has been told the manner of his father’s death and it is alleged that he too has suffered nervous shock. The second plaintiff did not witness the death of his father nor the aftermath.

48 In Gifford & Ors v Strang Patrick Stevedoring Pty Ltd [2001] NSWCA 175; (2000-2001) 51 NSWLR 606 the Court of Appeal reaffirmed that it is a condition to the recovery of damages for nervous shock by children of a deceased person that the person’s death take place within their sight or hearing.

49 The brief facts in Gifford are that the accident which caused the deceased’s death was horrific. At about 4.00 pm on 14 June 1990, he was walking along a wharf at Darling Harbour, when a large forklift vehicle reversed into and over him, crushing him to death immediately. Mrs Gifford was soon afterwards, on that day at her place of work, informed of the death by Mr Morgan and her uncle. She was shocked and distressed, and was taken home. She was off work for two weeks because of her distress. The three children were informed of the death at their home in Woolloomooloo, in the presence of Mrs Gifford, later on the day of the accident. They too were shocked and distressed at the news. None of the four appellants saw the deceased’s body after the accident. They were apparently discouraged from doing so because of its damaged condition.

50 At paragraph 40 Hodgson JA (with whom Handley and Ipp JJA agreed) stated:

“However, at present authority is strongly against the view that there can be liability at common law for damages for mental injury to a person who is told about even an horrific accident or injury to a loved one but does not at any time actually perceive the incident or its aftermath.”

51 Hodgson JA there referred to Mt Isa Mines Ltd v Pusey (1970) 125 CLR 383 at 407 and Jaensch v Coffey (1983-4) 155 CLR 549 at 567 where Brennan J stated that a psychiatric illness induced by mere knowledge of a distressing fact is not compensable; and Annetts v Australian Stations Pty Ltd (2000) 23 WAR 35. Hodgson JA concluded:

“I agree that these authorities should be followed. It may be the case that substantial mental injury can be caused to a person by that person merely hearing of a loved one being killed, injured or put in peril, without having perceived the incident or its aftermath; and it may be that the nature of the relationship with the primary victim is a more significant factor in determining whether such injury occurs than the manner of learning about the incident; and it may also be the case that it is therefore foreseeable that loved ones will be caused mental injury by merely hearing about an incident. However, quite apart from the strength of the authorities, I do not think this is sufficient reason to extend the duty of care or liability at common law to persons who are merely told about an incident, however horrific the incident and however close the personal relationship.”

52 and at paragraph 46:

“There may be some room for development in relation to what amounts to perception of an incident, just as there has been some development so as to include perception of the close aftermath of an incident and not merely perception of the incident itself. Some cases have required direct unaided perception; but there may be a question as to how far liability extends, for example, where sound is amplified or events are seen by those present portrayed live on a large television screen, and so on. It is not necessary to consider that question in this case.”

53 The result was that the children’s appeal failed. Both Annetts and the recent decision of Morgan v Tame [2000] NSWCA 121 have been granted special leave in the High Court. Gifford which similarly concerns claims for nervous shock by children of the deceased has also been granted special leave in the High Court and the appeals have been heard. Judgment is reserved. Hence the High Court is currently revisiting the scope of nervous shock claims.

54 If no special leave had been granted in Gifford, I would have dismissed James Dorrian’s claim. If Gifford is overruled the second plaintiff may have an arguable case for nervous shock so at present I cannot say that his claim is hopeless. It should not be dismissed. In relation to Ms Mills’ claim, it is my view that it is arguable that by viewing the severed head of her son, the deceased, she experienced the aftermath of the incident. Hence, the first plaintiff has an arguable claim for nervous shock and it should not be dismissed. Thus these claims for nervous shock should be permitted to go to trial.

55 If I am wrong on the issue of duty of care, I will consider whether the tort of spoliation of evidence should be permitted to go to trial.

Spoliation of evidence

56 At paragraph 15 ASC the plaintiffs plead that the hospital, with knowledge that its records relating to investigation of the sexual conduct of the nurse concerning the deceased and other patients were likely to be significant evidence in any court proceedings for damages brought by the deceased’s relations in respect of his death, intentionally, recklessly and negligently destroyed or lost evidence that is relevant to these proceedings, namely evidence concerning an internal investigation held by the hospital into the conduct of the nurse towards the deceased and other patients while the nurse was an employee of the hospital and seeks damages (Para 14 SC). That is the plaintiffs pleaded a cause of action, the tort of spoliation.

57 However mere novelty of the cause of action alleged is not a basis for striking out: Gibson. In Gibson the plaintiff did not cite any case from a common law jurisdiction outside the United States of America where a cause of action involving a duty to act in good faith had been recognised. It is of course highly relevant to the determination of whether the proposed cause of action should be allowed to proceed to trial that so far it has never been successfully relied upon in this country.

58 Further in Gibson, Badgery-Parker J quoted Master McLaughlin’s statement at first instance:

“What is being alleged is a separate tort. It is a basic principle of the law that the categories of tort are not closed and that they cannot be considered to be closed. Even if there has not been any decided case in New South Wales expressly dealing with a tort of the nature alleged in the amended statement of claim, that of itself would not preclude the plaintiff from claiming that she is entitled to damages for conduct of the nature alleged in the pleading."

59 In the United Kingdom, while a separate tort of spoliation is not recognised, the courts recognise the principle of omnia praesumuntur contra spoliatorem: everything is presumed against a wrongdoer. The leading case, which is a unanimous decision of the Privy Council, is The Ophelia [1916] 2 AC 206. The brief facts are that on 18 October 1914, the German auxiliary military hospital ship Ophelia, was encountered by a British squadron in the North Sea in circumstances which excited suspicion, and was ordered to follow HMS Meteor to Yarmouth. The Ophelia was then taken to the Thames, where she was formally seized as prize. On 21 May 1915, the President of the Probate, Divorce, and Admiralty Division (Sir Samuel Evans) delivered judgment condemning the Ophelia as lawful prize on the ground that she had forfeited the right to the protection to which a military hospital ship is entitled under the Hague Convention No X, as the evidence showed that she was adapted and used as a signalling ship for military purposes. Captain Pfeiffer admitted that when the Ophelia was about to be searched and so as to avoid records getting into enemy hands, he acted on the principle of throwing too many rather than too few. The records that went overboard included the Morse signal book and the stock book of signal lights.

60 Sir Arthur Channel said:

“If anyone by a deliberate act destroys a document which, according to what its contents may have been, would have told strongly either for him or against him, the strongest possible presumption arises that if it had been produced it would have told against him; and even if the document is destroyed by his own act, but under circumstances in which the intention to destroy evidence may fairly be considered rebutted, still he has to suffer. He is in the position that he is without the corroboration which might have been expected in his case.”

61 The appeal was dismissed. Their Lordships concluded that Captain Pfeiffer and the other (German) witnesses had by their acts put themselves in such a position that their evidence could not be relied upon. That the evidence disclosed facts of which no satisfactory explanations were or could be given.

62 Thus the Privy Council views spoliation of evidence as giving rise to an evidentiary presumption where the spoliation is intentional. The Ophelia has been adopted into Australian law in Allen v Tobias (1958) 98 CLR 367 where the High Court proceeded on the assumption that an agreement between the defendant and the Council was executed. The first ground is the one that is relevant here. Three copies of that agreement were destroyed by the defendant. The trial judge stated that because copies of the agreement were destroyed by the defendant, this raised the suspicion that they were destroyed lest the fact of execution by one or more of the parties to the agreement might prove difficult for the defendant in anticipated litigation (371). This fact that the agreements were executed was presumed against the defendant. The High Court (per Dixon CH, McTiernan and Williams JJ) stated that this was a proper application to the circumstances of the principle omnia praesumuntur contra spoliatorem. The High Court referred with approval to this statement of principle by the Privy Council in The Ophelia (quoted earlier).

63 In The Ophelia, the remedy was to disregard the evidence given by the defendants whereas in Allen the remedy was to assume against the defendant’s interests that the agreements had been executed. This approach in applying the principle omnia praesumuntur contra spoliatorem has been reaffirmed as good law in a number of recent decisions: see for example McCabe v British American Tobacco Australia Services Limited [2002] VSC 73; Steiner Wilson & Webster Pty Ltd t/as Abbey Bridal v Amalgamated Television Services Pty Ltd (2000) Aust Torts Reports 81-537; Instant Colour Pty Ltd v Canon Australia Pty Ltd [1996] 763 FCA 1.

64 There has been limited recognition of the tort in the United States of America and Canada. Intentional, negligent and reckless spoliation have been distinguished by courts.

65 The tort of intentional spoliation of evidence was first recognised by the California Court of Appeals in Smith v Superior Court 198 Cal Rptr 829 (1984). In that case, the plaintiff was injured in a car accident when another vehicle’s left rear wheel and tyre came loose and crashed through the windshield of her vehicle. The automobile dealer for the other car initially agreed to maintain certain automobile parts as physical evidence, but subsequently destroyed, lost or transferred that evidence making it impossible to pinpoint the cause of the failure of the wheel assembly of the other car. The court considered it appropriate therefore to recognise a new tort for the intentional spoliation of evidence. In doing so, the court pointed out that “new and nameless torts are being recognised constantly” and that the “common thread woven into all torts is the idea of unreasonable interference with the interests of others” (at 832). The court analogised intentional spoliation of evidence to the tort of intentional interference with prospective business advantage and concluded that a prospective civil action is a probable expectancy entitled to legal protection (at 836-837). This decision was followed in Valasco v Commercial Building Maritime Co 169 Cal App 3d 874 (1985) and Gomez v Aquistapace 57 Cal Rptr 2d 821 (1996). However more recently Californian courts have held that tortious actions for spoliation of evidence are not sustainable, and in doing so have overruled Smith: Cedars-Sinai Medical Center v Superior Court of Los Angeles County 954 P 2d 511 (1998) and Temple Community Hospital v Superior Court of Los Angeles County 976 P 2d 223 (1999).

66 In Cedars-Sinai, the Supreme Court of California weighed the policy considerations that favour and oppose a remedy in tort. In favour of the remedy in tort were the goals of deterrence and compensation of victims of such misconduct. Weighing against the recognition of the tort were the existence of effective non-tort remedies to punish and correct litigation misconduct, the uncertainty of the fact of harm, the costs that a tort remedy would impose, the significant risk of erroneous findings and the threat to finality of adjudication and the stability of judgments. The court considered that whatever incremental benefits such a tort would create were outweighed by those policy considerations and costs. Their conclusion was that there is no tort remedy for the intentional spoliation of evidence by a party to the underlying cause of action if the spoliation victim knew or should have known of the spoliation before the decision on the merits of the underlying action.

67 In Temple Community Hospital, the Supreme Court of California considered a related issue not resolved in Cedars-Sinai, namely whether a tort cause of action will lie against a third party who is not involved in a lawsuit, who intentionally destroys or suppresses evidence that would be relevant in the lawsuit. The court held that such a tort claim was not recognised in California.

68 Other United States states have recognised either the tort of intentional spoliation of evidence or the tort of negligent spoliation of evidence. In Hirsch v General Motors Corporation 628 A 2d 1108 (1993), the Superior Court of New Jersey recognised the tort of intentional spoliation of evidence, but not the tort of negligent spoliation of evidence. The court defined spoliation of evidence in prospective civil actions as the destruction of evidence pertinent to an action, thereby interfering with the action’s proper administration and disposition.

69 In Coleman v Eddy Potash Inc 905 P 2d 185 (1995), the Supreme Court of New Mexico declined to recognise negligent spoliation of evidence as a tort, but did recognise the tort of intentional spoliation of evidence, based on the approach that one who intentionally causes injury is subject to liability to the other for that injury, if his or her conduct is generally culpable and not justifiable under the circumstances. The court defined the tort as “the intentional destruction, mutilation or significant alteration of potential evidence for the purpose of defeating another person’s recovery in a civil action” (at 189). The elements of the tort were held to be (1) the existence of a potential lawsuit; (2) the defendant’s knowledge of the potential lawsuit; (3) the destruction, mutilation or significant alteration of potential evidence; (4) intent on part of the defendant to disrupt or defeat the lawsuit; (5) a causal relationship between the act of spoliation and the inability to prove the lawsuit; and (6) damages.

70 In Smith v Atkinson 771 So 2d 429 (2000) the Supreme Court of Alabama concluded that general principles of Alabama law afford a plaintiff an adequate remedy. The court recognised a claim against a third party for spoliation of evidence, under the traditional doctrine of negligence, but considered there to be no need to recognise a new cause of action for spoliation of evidence.

71 Florida recognised a cause of action for negligent spoliation of evidence in Bondu v Gurvich 473 So 2d 1307 (1985). In doing so the court relied on the criteria to establish a claim in ordinary negligence, particularly the need to establish the existence of a duty recognised by law requiring the defendant to conform to a certain standard of conduct for the benefit of the plaintiff. In this case the duty arose from a statute requiring preservation of the medical records.

72 In Continental Insurance Co v Herman 576 So 2d 313 (1991) the Florida District Court of Appeal affirmed the existence of the cause of action for negligent spoliation of evidence and held the elements to be: (1) existence of a potential civil action, (2) a legal or contractual duty to preserve evidence which is relevant to the potential civil action, (3) destruction of that evidence, (4) significant impairment in the ability to prove the lawsuit, (5) a causal relationship between the evidence destruction and the inability to prove the lawsuit and (6) damages.

73 In St Mary’s Hospital Inc v Brinson 685 So 2d 33 (1990) the Court of Appeal of Florida expressly recognised a cause of action for spoliation of evidence and adopted the characterisation of the tort’s elements expressed in Herman.

74 The District Court for the Western District of Oklahoma considered the issue in Barker v Bledsoe 85 FRD 545 (1979) and stated that:

“When an expert employed by a party or his attorney conducts an examination reasonably foreseeably destructive without notice to opposing counsel and such examination results in either negligent or intentional destruction of evidence, thereby rendering it impossible for an opposing party to obtain a fair trial, it appears that the Court would be not only empowered, but required to take appropriate action, either to dismiss the suit altogether, or to ameliorate the ill-gotten advantage.”

75 This case does not use the terms “spoliation of evidence” or “tort” nor does it actually recognise a cause of action of spoliation.

76 Ohio recognised intentional spoliation of evidence as a distinct tort in Smith v Howard Johnson Co 615 NE 2d 1037 (1993) and articulated the elements as (1) pending or probable litigation involving the plaintiff, (2) knowledge on the part of the defendant that litigation exists or is probable, (3) wilful destruction of evidence by the defendant designed to disrupt the plaintiff’s case, (4) disruption of the plaintiff’s case, and (5) damages proximately caused by the defendant’s acts.

77 The Supreme Court of Illinois in Boyd v Travelers Insurance Company 652 NE 2d 267 (1995) held that a claim for negligent spoliation could be stated under existing negligence law without creating a new tort. The court considered that traditional remedies for the destruction of evidence were adequate.

78 The issue came before the Supreme Court of Alaska in the case of Hazen v Municipality of Anchorage 718 P 2d 456 (1986) in which the court held that a common law cause of action in tort existed for intentional interference with a prospective civil action by spoliation of evidence.

79 In the case of Levinson v Citizens National Bank 644 NE 2d 1264 (1994) decided by the Indiana Court of Appeals, it was held that although Indiana recognises the tort of intentional interference with civil litigation, it does so only with respect to spoliation or destruction of evidence, and then only under very specific circumstances. In the absence of an independent tort, contract, agreement or special relationship imposing a duty to the particular claimant, the claim of negligent or intentional interference with a person’s prospective or actual civil litigation by the spoliation of evidence is not and ought not to be recognised in Indiana.

80 In the Federal Courts, the DC Circuit of the Federal Court of Appeals accepted that negligent or reckless spoliation of evidence is an independent and actionable tort: Holmes v Amerex Rent A Car 710 A 2d 846 (1998). The court held the elements of the tort to be (1) existence of a potential civil action; (2) a legal or contractual duty to preserve evidence which is relevant to that action; (3) destruction of that evidence by the duty-bound defendant; (4) significant impairment in the ability to prove the potential civil action; (5) a proximate relationship between the impairment of the underlying suit and the unavailability of the destroyed evidence; (6) a significant possibility of success of the potential civil action if the evidence were available; and (7) damages adjusted for the estimated likelihood of success in the potential civil action. Counsel for the plaintiff submitted that the DC Circuit was a particularly well respected US federal court, and that its decision therefore is of some significance.

81 Although the tort of spoliation has been recognised in a number of American jurisdictions, there are similarly a number of states which have expressly rejected the tort remedy, and a number which have yet to consider the issue. However, of the United States courts that recognised the tort of spoliation most only recognised intentional spoliation and not negligent spoliation.

82 The tort of spoliation has also been raised in a number of recent Canadian decisions. The position in Canada has traditionally been that spoliation of evidence gives rise to a rebuttable evidentiary presumption that the evidence would have been unfavourable to the party who destroyed it: see St Louis v The Queen (1895) 25 SCR 649; rev’g (1894) 4 Ex CR 185 and Lindsay v Davidson [1911] 1 WWR 125 (Sask. SC). The principle is represented by the maxim omnia praesumuntur contra spoliatorem and falls into line with the current law in the United Kingdom and Australia. In recent years, there have been some cases before the Canadian courts in which the courts have been asked to recognise the tort of spoliation as an independent cause of action. In each of those cases however, the court has refused to do so.

83 In Endean v Canadian Red Cross Society (1998) 157 DLR (4th) 465 (BCCA) the British Columbia Court of Appeal considered the validity of spoliation as an independent cause of action and declined to recognise it as a tort. In doing so, the court affirmed the appropriateness of a procedural, as opposed to substantive, remedy for spoliation. The plaintiffs were granted leave to appeal to the Supreme Court of Canada, however the appeal was subsequently abandoned.

84 The issue was again raised in Robb Estate v St Joseph’s Health Centre (unreported, May 29 1998 (Ont. Gen. Div.) Feldman J) in which the plaintiff sought leave to amend the statement of claim to include a claim for damages for the tort of spoliation against the defendant. The facts pleaded were essentially the same as those rejected in Endean as giving rise to a tort of spoliation. Declining to follow Endean, Feldman J granted leave to the plaintiffs to amend their statement of claim. On successful appeal to the Divisional Court, the proposed amendment was struck out.

85 In Rintoul v St Joseph’s Health Centre (1998) 42 OR (3d) 379 (Div. Ct) the majority held that to treat spoliation as a tort would be inconsistent with the decision of the Supreme Court of Canada in St Louis v The Queen that spoliation gave rise to a rebuttable presumption. In dissent, Corbett J disagreed with the majority view that St Louis dealt with the question of whether the tort of spoliation existed in Canada, stating that it was instead concerned with the appropriate application of the spoliation presumption.

86 The Robb Estate and Rintoul cases were heard together on appeal and it was held that the allegations of spoliation were not made out. The plaintiff appealed on the grounds that the court had erred in failing to award damages for the tort of spoliation. The judgment on appeal did not address the substantive issues raised by the plaintiffs’ spoliation appeal, since the court held that even assuming a tort of spoliation exists, the evidence reveals the claim for spoliation to be without merit.

87 Counsel for the plaintiffs submitted that the tort of intentional spoliation of evidence has been recognised in Canada in Spasic Estate v Imperial Tobacco Limited (2000) 2 CCLT (3d) 43. This Court of Appeal decision does not hold that a tort of spoliation exists, rather it stands for the proposition that spoliation should not be dismissed on a preliminary motion to strike out a pleading, but should instead proceed to trial for determination on the evidentiary record. Thus the Canadian Court of Appeal decision has permitted the tort to go to trial. The case was an appeal from a decision striking out certain paragraphs of the plaintiff’s statement pleading the tort of spoliation. At first instance, those paragraphs were struck out on the basis that they did not disclose a reasonable cause of action since no such cause of action existed under Ontario law. The motions judge followed the decision of the Divisional Court in Robb Estate in coming to that conclusion.

88 The Court of Appeal however followed the reasoning of Wilson J in Hunt v T & N plc [1990] 2 SCR 959 (SCC), a decision in which another unrecognised tort was pleaded and permitted to proceed to trial. Having stated that there may be good reason to extend the law of tort to this new context, Wilson J said:

“This is precisely the kind of question that it is for the trial judge to consider in the light of the evidence. It is not for this Court on a motion to strike out portions of a statement of claim to reach a decision one way or the other as to the plaintiff’s chances of success. As the law that spawned the “plain and obvious” test makes clear, it is enough that the plaintiff has some chance of success.
…
The fact that a pleading reveals “an arguable, difficult or important point of law” cannot justify striking out part of the statement of claim. Indeed, I would go so far as to suggest that where a statement of claim reveals a difficult and important point of law, it may well be critical that the action be allowed to proceed. Only in this way can we be sure that the common law in general, and the law of torts in particular, will continue to evolve to meet the legal challenges that arise in our modern industrial society.”

89 The Court of Appeal added that:

“There is no reason to embark on a detailed consideration of the strengths and weaknesses of the law, including the Canadian law, on the tort of spoliation. If it is established that the conduct of the respondents resulted in harm to the plaintiff by making it impossible for her to prove her claim, then it will be for the trial judge, in the context of a complete record, to determine whether the plaintiff should have a remedy. This is how the progress of the common law is marked in cases of first impression, where the court has created a new cause of action where none had been recognised before.”

90 In response to the argument that the existence of alternative remedies negated the need for the tort, the Court of Appeal stated:

“I do not see why the existence of procedural sanctions to the “spoliation inference” which may, or may not, ameliorate the effects of spoliation should in themselves preclude the recognition of an independent tort. As the appellant relies on the spoliation inference, the trial judge will hear and consider evidence of spoliation in any event. I can see no reason why the trial judge should be precluded from considering all possible remedies, including a separate tort, on the basis of the record that will be developed.”

91 Whether or not a tort of spoliation will be recognised in Ontario remains to be determined. Although in Canada opportunities have been allowed for the tort of spoliation to be argued at trial, it has not been recognised by any court in Canada. Counsel for the plaintiffs did not cite any cases from jurisdictions outside the United States and Canada in support of the existence of the tort.

92 After I reserved judgment in this case, the Supreme Court of Victoria published the decision of Eames J in McCabe. That was a case in which the plaintiff brought an application to strike out the defence in circumstances where the defendant had destroyed documents relevant to the proceedings before proceedings were issued and a time when no other proceedings were on foot. The plaintiff based her application on principles of abuse of process, whilst the defendant argued that a company is entitled to destroy documents when there are no proceedings on foot against it, and that only legislative reform could deny a company the right to do so. The defendant submitted that the plaintiff must be content with seeking to have adverse inferences drawn by virtue of the spoliation. The plaintiff submitted that where the requirements of discovery are so significantly disregarded as to prevent a fair trial the court has inherent power to strike out the defence. His Honour decided to strike out the defence. McCabe is currently the subject of appeal in the Victorian Court of Appeal.

93 McCabe is not a case in which the plaintiff sought the court’s recognition of the tort of spoliation. However Eames J considered the extent of the court’s regulatory power and noted the application of the tort of spoliation in the United States in various state jurisdictions. Whilst recognising that the tort does not exist in this country, His Honour opined that the underlying rationale for the principle applied by the American courts could as readily be applied with respect to the rules relating to discovery in this country.

94 His Honour quoted the following statement by the Court of Appeal in California in Willard v Caterpillar 48 Cal Rpts 2d 607 (Cal. App. 5 Dist. 1995) at p21-22 which helpfully summarises the varied opinions of the American courts with regard to the application of the tort of spoliation. The relevant passages state:

“Federal courts consider the conduct of a party prior to the commencement of the litigation in determining whether a party's failure to comply with a production order is wilful or in bad faith. If, prior to litigation, a party “‘deliberately courted legal impediments to production,' “it cannot then be heard to assert its good faith after the expectation is realized. For conduct to constitute ‘courting legal impediments,' it was not necessary that the actual litigation in which the documents are ordered produced be pending or specifically contemplated. “‘Although a potential litigant is under no obligation to preserve every document in its possession, whatever its degree of relevance, prior to the commencement of a lawsuit, ... some duty must be imposed in circumstances such as these lest the fact-finding process in our courts be reduced to a mockery.’" (General Atomic Co v Exxon Nuclear Co, Inc (SD Cal 1981) 90 FRD 290, 295-296, 299, 304 [party housed its cartel documents in Canada, whose law precluded their release, in anticipation of antitrust litigation in the United States].) The proper inquiry is whether the defendant, with knowledge that the lawsuit would be filed, wilfully destroyed documents which it knew or should have known would constitute evidence relevant to the case. (Wm T Thompson Co v General Nutrition Corp, supra, 593 F Supp at p1445.)
Finally, at the other end of the spoliation liability continuum, some courts have held there is no liability for failing to preserve documents before a party has notice of their relevance to litigation likely to be commenced. One court noted that the potential for litigation arises at the moment of injury, but the injured party may not contemplate filing a lawsuit. Therefore, discovery sanctions for spoliation of evidence are warranted only if evidence was destroyed when the products liability action was contemplated rather than merely possible. (Iowa Ham Canning, Inc v Handtmann, Inc (ND Ill 1994) 870 F Supp 238, 244; and see Akiona v US (9th Cir 1991) 938 F 2d 158, 160-161 [sanctions not warranted unless party had some notice the documents were potentially relevant]; PBA Local No 38 v Woodbridge Police Dep (DNJ 1993) 832 F Supp 808, 833-834 [no spoliation of evidence where tape recordings at issue were routinely taped over four or five years before litigation commenced].)
These cases demonstrate the ‘common understanding of society’ regarding the wrongfulness of evidence destruction is tied to the temporal proximity between the destruction and the litigation interference and the foreseeability of the harm to the nonspoliating litigant resulting from the destruction. There is a tendency to impose greater responsibility on the defendant when its spoliation will clearly interfere with the plaintiff's prospective lawsuit and to impose less responsibility when the interference is less predictable.”

95 Eames J concluded that the defendant’s actions denied the plaintiff a fair trial. His Honour said that:

“The formal rules of procedure complement and acknowledge the inherent powers of the court which apply with the overriding objective of ensuring that parties to litigation receive a fair trial. Central to the conduct of a fair trial in civil litigation is the process of discovery of documents.”

96 His Honour considered the possible remedies to ameliorate the prejudice suffered by the plaintiff as a result of the spoliation, including proceeding with the trial subject to further directions and orders for further discovery. His Honour concluded that the appropriate remedy in this case was to strike out the defence and enter judgment for the plaintiff.

97 Although the tort of spoliation was not raised in McCabe, the significance of the decision for present purposes lies in its evaluation of the remedies available to a plaintiff prejudiced by the defendant’s spoliation of evidence. Australian courts may remedy spoliation of evidence in a number of ways. As previously discussed, the spoliation may give rise to an evidentiary presumption against the spoliator. Alternately, the court has an express power in all Australian jurisdictions, provided by the relevant court rules, to order that a defence be struck out where a defendant fails to comply with an order for discovery, production or inspection or refuses to answer interrogatories. In NSW, the powers of the court as regards discovery are found in Pt 23, and as regards interrogatories are found in Pt 24 of the Supreme Court Rules 1970. In NSW, the order may state that judgment will be entered against the plaintiff: Pt 24 r 9(1)(b). In addition, the New South Wales Supreme Court has the power to make whatever order it thinks is appropriate where a party has defaulted: SCR Pt 23, Pt 24 r 9(1).

98 Counsel for the plaintiffs referred me to an article by Richard Sommers and Andreas Seibert entitled “Intentional Destruction of Evidence: Why Procedural Remedies are Insufficient” (1999) 78 Canadian Bar Review 38, which was also referred to by Eames J in McCabe. The learned authors are of the view that civil procedure sanctions and traditional common law procedural remedies are often insufficient to deter the destruction of evidence and to compensate victims. They propose instead that a civil cause of action is appropriate and necessary.

99 In McCabe, Eames J dealt with the intentional spoliation of evidence by striking out the defence. Sommers and Siebert make the point however that there is nothing punitive in striking out the defence in a case in which the spoliator would have lost anyway. In cases where admission of the destroyed evidence would have resulted in inflated or even punitive damages, striking out the defence may not adequately compensate the plaintiff.

100 In Allen the court took into account that the documents were destroyed because litigation was anticipated. In The Ophelia, the court took a drastic step when it decided documents had been deliberately destroyed, of rejecting the evidence of the destroyer’s witnesses. Thus the remedies available under the recognised principle of praesumuntur contra spoliation are varied. Currently, in McCabe, the remedy that was exercised was to strike out the defence and conduct a trial on damages. However, while the tort has some recognition in the United States, the Canadian position is that pleading the tort of spoliation has not been successful but it can be argued at trial. The two leading cases followed in Australia, The Ophelia and Allen which adopt the principle of omnia praesumuntur contra spoliatorem, were decided many years ago, 1916 and 1958 respectively. As there is some uncertainty in the Australian law as to the circumstances when a party is obliged to retain documents and it is debatable whether the current remedies act as a deterrent, it is my view that the tort of spoliation should be permitted to go to trial. Unfortunately, as the plaintiffs’ claim that the hospital owed a duty of care to the deceased is doomed to failure, this is not to eventuate.

101 I make orders that the plaintiffs’ statement of claim is dismissed as against the first defendant. Costs are discretionary. Normally costs follow the event. The plaintiffs are to pay the first defendant’s costs.

102 The court orders:

(1) The statement of claim is dismissed as against the first defendant.

(2) The plaintiffs are to pay the first defendant’s costs.
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Last Modified: 08/28/2002