SB v State of New South Wales

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 7694 of 2000

S.B. (by her Litigation Guardian)	Plaintiff
V
STATE OF NEW SOUTH WALES	Defendant

JUDGE:	Redlich J
WHERE HELD:	Melbourne
DATE OF HEARING:	2-19 September 2003; 13-14 November 2003
DATE OF JUDGMENT:	14 December 2004
CASE MAY BE CITED AS:	S.B. v State of NSW
MEDIUM NEUTRAL CITATION:	[2004] VSC 514	First Revision 12/4/05

NEGLIGENCE- Statutory Authority- exercise of statutory powers

Child Welfare Act (NSW) 1939 - Responsibility of statutory authority for protection of children and young persons – Guardian-Ward relationship - Plaintiff sexually abused by foster parent and restored to natural father who pursued an incestuous relationship for balance of wardship - allegation of incestuous relationship conveyed to the Department - two children born of the union.

Action not commenced for 16 years - Limitation Act 1969 (NSW) defence - whether Plaintiff under a disability by reason of “mental condition” or “restraint” - application for extension of time.

Whether asserted common law duty a novel claim – incremental development – analogous circumstances – underlying principles and policies.

Exercise of statutory power to restore Plaintiff to natural parent - increased risk - subsequent failure to exercise statutory power to remove ward - scope and purpose of legislation - salient features of relationship between Plaintiff and Department - Child Welfare Act 1939 - ss 9, 10, 23, 76, 148B and 158

Child protection cases – duty as a guardian - X (Minors) v Bedfordshire County Council distinguished – circumstances in which duty exists.

Whether breach of duty of care in restoring Plaintiff - whether breach in failing to remove Plaintiff from incestuous and harmful relationship – risk of injury foreseeable.

Pre-existing psychiatric conditions of borderline personality disorder, post traumatic stress disorder, attributable to maternal deprivation and foster parent’s abuse – prolonged aggravation of conditions as a consequence of Departmental breach – application of principle in Watts v Rake.

Diminution in earning capacity - absence of criteria for calculation - assessment where difficulty in quantification - whether multiplier approach appropriate.

Conduct of Department not warranting exemplary damages.

Claim for equitable compensation for breach of fiduciary duty considered.

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J. Kennan S.C. with Ms M. Bylhouwer	Clark & Toop Lawyers
For the Defendant	Mr P. Menzies Q.C. with Mr F. Saccardo	Victorian Government Solicitors

TABLE OF CONTENTS

The Claim....................................................................................................................................... 1
Uncontested Wardship History................................................................................................. 2
Uncontested Post Wardship History.......................................................................................... 5
The reliability of the Plaintiff as an historian............................................................................ 7
The Plaintiff’s claim of imprisonment by her father................................................................ 9

LIMITATION ACT DEFENCE........................................................................................................ 13

Was the Plaintiff under a disability?........................................................................................ 13
Extension of time under s 60G of the Limitation Act 1969 (New South Wales).................. 21

Conclusion.......................................................................................................................................... 26

THE NEGLIGENCE CLAIM........................................................................................................... 27

STATUTORY POWERS AND THE DUTY OF CARE................................................................. 31

Scope and purpose of the legislation....................................................................................... 32

EXERCISE OF STATUTORY POWER........................................................................................... 40

Did the Department owe the Plaintiff a duty of care to avoid injury which was reasonably foreseeable as a consequence of its decision to restore the Plaintiff to the care of her father? 40

WHERE THE AUTHORITY BY SOME CONDUCT HAS INCREASED THE RISK OF INJURY 41

FAILURE TO EXERCISE STATUTORY POWER......................................................................... 43

Following the Plaintiff’s restoration to the care of her father did the Department owe the Plaintiff a duty of care to avoid injury which was reasonably foreseeable as a consequence of the Department’s failure to remove the Plaintiff from her father’s care or to impose conditions on her father’s custody?......................................................................................................................... 43

Salient features of the relationship............................................................................................... 45

(i)........... Actions were within the ambit of the statutory powers............................................. 46
(ii).......... The powers must be “operational” – relevance of the “discretion” to exercise
.............. power......................................................................................................................... 46
(iii)......... The duty must be consistent with the legislative purpose......................................... 49
(iv)......... The person or class possesses a particular vulnerability............................................ 51
(v).......... The Authority’s degree of control over the risk.......................................................... 53
(vi)......... The Authority’s knowledge or imputed knowledge of the risk................................... 55
(vii)........ The content of the duty must be capable of specification........................................... 56

Over-arching principles............................................................................................................. 56
Policy reasons relied upon to advance or deny the duty...................................................... 61
Duty of care in analogous cases or by incremental development....................................... 65
Child Welfare Protection Cases and the common law duty.....................................................

X (Minors) v Bedfordshire County Council............................................................................. 67
Williams v The Minister for the Aboriginal Land Rights Act (1983) – First instance............ 71
Williams v The Minister for the Aboriginal Land Rights Act (1983) – Court of Appeal........ 72
TC v The State of New South Wales......................................................................................... 73
s.148B........................................................................................................................................ 76
Johnson v Department of Community Services........................................................................ 77
Sullivan v Moody...................................................................................................................... 78
Barrettv Enfield London Borough Council............................................................................. 79
W& Ors v Essex County Council............................................................................................. 82
Waters v Commissioner of Police for the Metropolis................................................................ 83
Attorney-General v Prince and Gardner.................................................................................. 83
B v Attorney-General of New Zealand..................................................................................... 85
Cubillo v Commonwealth of Australia...................................................................................... 86
Phelps v Hillingdon London Borough Council......................................................................... 89
D v East Berkshire NHS Trust................................................................................................. 90

Conclusion.......................................................................................................................................... 96

WAS THE DEFENDANT IN BREACH OF ITS DUTY IN RESTORING THE PLAINTIFF TO HER FATHER?.......................................................................................................................................... 101

Conclusion........................................................................................................................................ 123

IF THE DEPARTMENT WAS IN BREACH OF ITS DUTY BETWEEN NOVEMBER 1983 AND 1 MARCH 1984 DID THE PLAINTIFF SUFFER FORESEEABLE INJURY AND LOSS AS A RESULT OF THE BREACH?................................................................................................................................ 125

BY OMITTING TO FURTHER EXERCISE ANY POWER WAS THE DEPARTMENT IN BREACH OF ANY DUTY OF CARE IN LEAVING THE PLAINTIFF IN THE CARE OF HER FATHER OR IN NOT IMPOSING CONDITIONS UPON HIS CUSTODY?................................................................. 126

Conclusion........................................................................................................................................ 153

Removal of the Plaintiff following the annual review – May 1985.................................... 153

WHAT INJURIES DID THE PLAINTIFF SUFFER AS A RESULT OF THE BREACH OF THE DEPARTMENT’S DUTY?.............................................................................................................. 169

No compensable loss before intervention date..................................................................... 171
Foreseeable injuries after restoration..................................................................................... 172

Injury from absence of counselling......................................................................................... 173
Injury and damage as a consequence of the sexual abuse by her father –
Foreseeable after July 1984..................................................................................................... 174

To what extent are the Plaintiff’s injuries and loss attributable to the Defendant’s breach of duty...................................................................................................................................................... 175
The nature and cause of the Plaintiff’s psychiatric disabilities.......................................... 176
Conclusion as to psychiatric injuries...................................................................................... 185

DAMAGES....................................................................................................................................... 187

Pain and Suffering..................................................................................................................... 189

Loss of earning capacity – past and future............................................................................ 193

Conclusion....................................................................................................................................... 198

Exemplary Damages................................................................................................................. 200

Claim for Equitable Compensation as a consequence of a breach of Fiduciary Duty.... 203

HIS HONOUR:

The Claim

The Plaintiff, who was a Ward of the Minister for Child Welfare in the State of New South Wales, seeks damages from the State of New South Wales (“hereafter the Defendant”) for personal injuries which she suffered as a consequence of the New South Wales Department of Youth and Community Services (“hereafter the Department”) placing her and subsequently leaving her in the care of her natural father.

The Plaintiff, who had been placed as an infant with a foster family, was sexually abused by her foster father for some years. When this was discovered, the Plaintiff, then just sixteen years of age, was sent by the Department to live with her father whom she barely knew. She was then sexually abused and isolated by her father over a period in excess of ten years. As a result of the incestuous relationship the Plaintiff gave birth to two children. After ceasing to live with her father, the Plaintiff, who was suffering from multiple psychiatric disorders, spent time in a women’s refuge with her children. She was subsequently made an involuntary patient at a psychiatric hospital for approximately twelve months. As a consequence of her acute psychiatric condition the Plaintiff attempted self-harm on numerous occasions and was frequently admitted to hospital, sometimes as an involuntary psychiatric patient. State Trustees were appointed to administer her estate and her children were permanently removed from her care.

The Plaintiff claims that the Department owed her both a duty of care and a fiduciary duty to exercise its powers and perform its functions carefully so as to prevent foreseeable risk of injury. The Department exercised its statutory power to restore the Plaintiff to her father’s care. In doing so, the Plaintiff claims the Department was in breach of its duties. By failing to remove her from her father’s care, or in failing to impose conditions upon his care and custody of her, the Plaintiff claims that the Department further breached those duties.

As a consequence of being returned to, and left in her father’s care, the Plaintiff claims to have suffered an aggravation of her Borderline Personality Disorder (BPD) and a Post Traumatic Stress Disorder (PTSD). The Plaintiff claims that she was imprisoned, assaulted and sexually abused by her father and that she was prevented from obtaining counselling, continuing her education or finding employment. She seeks general damages, damages for loss of earning capacity and exemplary damages.

It was not disputed that by virtue of the Crown Proceedings Act 1988 (NSW), civil proceedings against the Crown in right of the State could be brought by the Plaintiff against the State of New South Wales.

On 5 February 2003 Ashley J refused an application by the Defendant to transfer the proceedings to New South Wales. ([2003] VSC 9). At that time the action was to be heard by a judge and jury. The matters advanced in support of the application largely related to forum conveniens and are no longer relevant. At the commencement of the trial, Mr Menzies Q.C., who appeared with Mr Saccardo for the Defendant, acknowledged that the issue of justiciability of the common law claim, resting as it does upon the scope and purpose of the Child Welfare Act 1939 (NSW), had not been raised before Ashley J. No further application to transfer the proceedings was made.

Uncontested Wardship History

The Plaintiff, S. B. (formerly known as Julie Grech), was born on 28 December 1967 in Williamstown, Victoria. She had four siblings, Charles Grech born on 24 September 1961, Theresa Grech born on 15 April 1964, Paul Grech born on 21 May 1966 and Josephine Grech born on 28 December 1971.

It is admitted by the Defendant that pursuant to the Child Welfare Act 1939 (NSW) (No.17 of 1939) (hereafter “the Act”), the Plaintiff was a ward of the Minister from 12 May 1971 until 21 November 1985, having been committed to the care of the Minister by order of the Metropolitan Children’s Court of New South Wales at Stanmore.

She and her four siblings were all placed in the care of the Department on 26 March 1971, initially being sent to Bidura before being transferred on 15 May 1971 to Corelli. The Plaintiff’s father, Alfred Grech was incarcerated at this time, he being released on 11 May 1972. The Plaintiff’s sister Theresa died on 2 June 1972 at which time the Plaintiff’s mother disappeared and has not since been located.

On 25 August 1972, the Plaintiff and her sister, Josephine were subsequently placed by the Defendant with foster parents, the Egri family, at 33 Nightingale Road, Pheasant’s Nest, New South Wales. Whilst in the care of her foster parents, the Plaintiff had no contact with her father until early 1981 when a series of three contact visits occurred between the Plaintiff, her sister Josephine and their father, Alfred Grech,[1] with a further contact visit occurring on 1 July 1981.
[1]6 April 1981, 24 April 1981 and 5 June 1981.

The Plaintiff’s brother Charles Grech, born 24 September 1961 had been injured in a motor vehicle accident prior to becoming a ward in 1971. After a number of placements he was restored to his father’s care in 1978 and shortly thereafter discharged from the State’s control.

The Plaintiff’s second brother, Paul Grech, born 28 May 1966 was returned to his father’s care on 27 February 1981 and was shortly thereafter discharged from State control.

In April 1981 Mr Grech, having requested that the Department arrange a meeting with his daughters over the Easter period, threatened to go to the press and the Minister, his request having been refused. Mr Grech contacted the Minister’s office that day asking that something be done in order that he might see his children. As a consequence a further meeting was arranged for late April 1981. Following that meeting the Plaintiff informed the Department she did not wish to see her father again.

In June 1981 the Departmental officer responsible for the Plaintiff’s foster placement with the Egri family described the Department’s “gross inefficiencies” in dealing with the Plaintiff and her sister’s case. He noted that in the ten years of foster care the only contact with their natural father had been in the last five months.

On 2 November 1983, the Plaintiff first complained of sexual abuse by her foster father Mr Egri to her school counsellor. The Department was advised of her complaint and over the next week they obtained a detailed account from the Plaintiff. It was also alleged that Josephine had been similarly abused.

The sexual abuse perpetrated upon the Plaintiff by her foster father was not disputed at trial. It may have begun within the first year or two of the Plaintiff being placed in the foster home (T. 158) although there are differing accounts from the Plaintiff as to when it first occurred. This abuse eventually included inappropriate touching, oral sex and ejaculation on parts of the Plaintiff’s body by Mr Egri. The sexual abuse did not include any acts of sexual penetration. As well as sexual abuse, the Plaintiff was also subjected to physical assaults by hitting and kicking. These frequently resulted in bruising on her arms and legs. On one occasion an assault resulted in the Plaintiff’s nose being broken.

The Plaintiff and her sister were removed by the Department from their foster home on 11 November 1983. The Plaintiff was placed in the temporary foster care of the Cook family.

On 1 January 1984 Josephine Grech was restored to the care of her father. On 5 March 1984, as a consequence of a sudden breakdown in relations between the Plaintiff and the Cook family, the Plaintiff was sent to live with her father.

Mr Quinnell, a Departmental officer, reported that the charges against the Plaintiff’s foster father, Mr Egri, were to be heard in June 1984 at Campbelltown Court. Both girls would be required to attend court. Mr Quinnell stated that in addition to the publicity which would attend the court case Mr Grech had threatened to go to the Minister and the Premier in respect of his daughters to complain about the treatment that he had received from the Department over the past ten to twelve years. Mr Quinnell suggested that there should be some discussions held with Mr Grech in regard to his ideas of approaching the Minister in relation to his family’s case.[2]
[2]Exhibit A Document 269-272.

The Plaintiff’s foster father, Mr Egri pleaded guilty to the more serious sexual assault of the Plaintiff on 4 June 1984 and was sentenced to a term of imprisonment in July 1984. The charges against him in relation to the Plaintiff’s sister, Josephine, however were dismissed.

On 9 July 1984, a Sister Antil contacted a social worker, with information obtained from an occasional de-facto partner of Mr Grech, that Mr Grech was sleeping with his daughter Julie. As a result of this information, a District Officer from Hurstville visited Mr Grech and his two daughters, all of whom were interviewed on 11 July 1984. Visits by the Defendant occurred subsequently on 21 August 1984 and 5 September 1984. In a report dated 3 November 1984, it was documented that the Plaintiff’s sister Josephine and her brother Paul had run away from home. Mr Grech and the Plaintiff were interviewed on that same day regarding Josephine. On 7 December 1984 the Plaintiff, together with her father and brother Charles moved to 18 Cardigan Street, Stanmore New South Wales with the assistance of the Department. The Plaintiff’s file was hereafter transferred to the Stanmore Community Corrections Office.

The Plaintiff’s first child Teresa Grech was born on 28 September 1985 in Camperdown New South Wales. The pregnancy was the result of sexual abuse by the Plaintiff’s father. On 12 November 1985, a letter from the Department was sent to the Plaintiff informing her that after her eighteenth birthday she would cease to be a Ward of the State. On 7 February 1986 the Plaintiff was discharged from the care of the Department and on 1 January 1987, the Plaintiff, her daughter, her father and brother Charles, all moved to Sunshine Victoria.

Uncontested Post Wardship History

A second daughter Victoria was born to the Plaintiff on 23 August 1988, the father of this child also being the Plaintiff’s father. On 1 January 1991 the Plaintiff, together with her children, her father and brother moved to Laverton, Victoria. On 1 April 1992 the Plaintiff went with her two children to live with her sister Josephine in Queensland. She was subsequently brought back to Victoria by her father. The Plaintiff’s third child a son, Paul, was born on 21 September 1992, the father of this child being no relation to the Plaintiff.

The Plaintiff states that she only left her father once when she went to Queensland and that he effectively kept her a prisoner. The extent of her imprisonment however is in issue. She made an attempt to leave very early on after her restoration to him when she ran away, but her father followed her and brought her back to the family home. When her brother Paul and her sister Josephine ran away from home, the Plaintiff states that her father then put bolts on the windows and deadlocks on the doors and that her brother Charlie acted as her keeper.

On 9 June 1994, the Plaintiff attended at the Werribee Police Station with her three children, notifying the police about the ongoing sexual abuse perpetrated by her father. She and her three children were placed in a refuge before being transferred to another refuge in Bendigo where they remained until August 1994. They were then subsequently transferred to a refuge in Queensland. On 1 August 1994 whilst at the refuge in Queensland, the Plaintiff attempted suicide by overdose.

The Plaintiff returned to Melbourne with her children and lived in a room in the backyard of her cousin’s house. She continued to be depressed and suicidal. She was unhappy with her past and present life and she hated her father. The Plaintiff again attempted suicide on 29 May 1995 by deliberately lighting a fire in the premises in which she and her three children were living. She took the children out into the yard and then locked herself inside the burning shed. She was subsequently rescued however without physical injury.

The following day she was admitted as an involuntary patient to the Footscray Psychiatric Hospital where she remained for a total of twelve months over an eighteen month period. From June 1995 onwards, the Plaintiff has not had care of her three children. On 12 October 1995 there was a Guardianship Order put in place until 11 October 2001. Upon its expiration the Guardianship Order was extended for the Plaintiff’s second child Victoria whose name had been changed on 29 August 2001. The State Trustee was appointed to administer the Plaintiff’s estate in June 1996.

On her first admission to the Footscray Hospital in 1995, the Plaintiff was diagnosed as having symptoms of Post Traumatic Stress Disorder as well as a depressive disorder accompanied by repeated acts of self-harm.[3] Subsequent to this initial admission, the Plaintiff has had many further admissions to psychiatric care as an involuntary patient. Between 30 May 1995 and 7 September 2001, the Plaintiff was admitted to hospital on twenty-eight occasions.[4] These admissions were a consequence of her acute psychiatric states and her attempts at self-harm. Episodes of trauma aggravated her psychiatric condition. She became unwell for a long period and required hospitalisation after her father’s committal proceedings (T. 408).
[3]See Transcript of evidence of Dr Illesinghe.
[4]Exhibit YY.

The Plaintiff’s father Alfred Grech was sentenced to a term of imprisonment for sexual offences relating to the Plaintiff on 21 November 1995. On 27 May 1996, the Crimes Compensation Tribunal awarded the Plaintiff $20,000 following an application for compensation made on 27 June 1994 – the crime being incest perpetrated by her father.

The Plaintiff commenced a de-facto relationship with L.A. in June 1996. There are two daughters born of that relationship - one born on 9 September 1997 and the other on 21 December 1999.

The reliability of the Plaintiff as an historian

It was submitted on behalf of the Defendant that the Plaintiff should be treated as a witness whose evidence was unreliable by reason of the combination of her psychiatric condition and her loss of memory caused by reason of the effluxion of time.

It is plain that the Plaintiff’s psychiatric disorders affect her capacity to accurately recall past events. The experts were in general agreement that both of the disorders from which she suffered had the capacity to affect her reliability as a historian.[5] Post Traumatic Stress Disorder is often accompanied by loss of memory and difficulty in recalling events surrounding trauma (T. 472). Dr Flower, a psychiatrist called on behalf of the Plaintiff, considered the Plaintiff’s memory to be faulty, but did not regard her as having the ability to consciously provide a false account in order to influence the listener (T. 503). Similarly, Dr Kornan, a psychiatrist called on behalf of the Defendant, testified that having regard to the Plaintiff’s history there would be a level of repression necessary for her emotional survival as opposed to any wilful or conscious exaggeration of events (T. 905). He continued by saying that the disorders from which the Plaintiff suffered would result in a greater than normal variation in the accuracy and recollections of events. He considered however that the Plaintiff was doing her very best (T. 905). In her own evidence the Plaintiff admitted that her memory was patchy and was poor in relation to more distant events (T. 248). She said that her memory of events of five to ten years ago had worsened (T. 347).
[5]Dr Illesinghe T. 242; Dr Flower T. 472 and Dr Kornan T. 905.

In written submissions, the Defendant raised a number of examples of the Plaintiff’s unreliability as a witness and historian. One such example was the account which the Plaintiff had given Dr Flower that she did not recall any Departmental workers coming to see her when she lived with her father. The Plaintiff repeated this in her evidence (T. 250). The fact that these visits were not remembered is not surprising given the small number of visits to the Plaintiff and her father by different Departmental officers during 1984. I do not however need to revisit all the other examples referred to in the Defendant’s written submissions which illustrate inconsistencies in the accounts given by the Plaintiff at different times, or indeed inconsistencies between the Plaintiff’s evidence and other evidence which is not in dispute.

In highlighting those examples, the Defendant submits that I should exercise great caution in accepting as reliable any evidence given by the Plaintiff which is not the subject of independent corroboration. It is further submitted that where there is a conflict between the Plaintiff’s evidence on an issue and the evidence of another witness, the Plaintiff’s evidence should not be accepted as being more likely to be a truthful and accurate statement of the fact.

In reply it is submitted on behalf of the Plaintiff that the examples upon which the Defendant relies provide no basis to doubt the primary facts upon which the Plaintiff’s case rests that she was repeatedly raped and physically assaulted by her father, that she was in fear of her father and that she was imprisoned by him. It is also submitted for the Plaintiff that it was never suggested in cross-examination of the Plaintiff that she was not raped or physically assaulted, or in fear of her father. Similarly, her evidence that her nose was broken by her father was unchallenged.

Parallels were drawn between the Plaintiff’s circumstances and the Plaintiff in a medical negligent case[6] who asserts that if they had been given certain advice they would not have undergone surgery. It was submitted that the quality of human nature which leads persons who suffer harm and sue for damages to genuinely believe that they would not have willingly submitted themself to such risk is apposite to the Plaintiff’s circumstances. It was said on the Defendant’s behalf that I should be cautious about necessarily accepting the Plaintiff’s account of her thought processes at the time of the restoration as it would be natural for the Plaintiff, having endured what she endured, to look back on those events claiming that she would not have willingly exposed herself to such a life. It was submitted by the Defendant that her present testimony was unlikely to be really indicative of her feelings when she was an immature sixteen year old girl.
[6]Rosenberg v Percival (2001) 205 CLR 434; 178 ALR 577 per McHugh J at 583 [256].

The Plaintiff’s claim of imprisonment by her father

An aspect of the Plaintiff’s testimony which was disputed by the Defendant at trial was her claim that her life with her father was lived in constant fear and that she was a prisoner in her father’s house. It was argued for the Defendant that the proper finding on the evidence should be that the Plaintiff remained in her father’s household as a matter of choice rather than coercion and that the Plaintiff had come to accept her role in the family. The Defendant relies upon the statement made by the Plaintiff to the police on 9 June 1994[7] in which she said that she became used to having sex with her father and although she never liked it she did not know what else to do. The Defendant relied upon certain observations made by District Officer Hansell that on a Departmental visitation, the Plaintiff and her father seemed quite comfortable in each other’s presence and that she appeared content in her role in the household. The Defendant also listed a range of matters in support of the conclusion that the Plaintiff had the means and ability to leave her father had she wished to do so.
[7]Exhibit C.

In the Plaintiff’s reply, it was submitted that the facts relied upon by the Defendant did not establish that the Plaintiff was enjoying a normal lifestyle. Reference was made to witnesses who gave evidence which, it was submitted, was highly corroborative of the Plaintiff’s claim that she feared her father and had been imprisoned by him.[8] It was also submitted that the reports of various Departmental officers which noted the isolation of the Plaintiff and the control her father exercised over her, corroborated the Plaintiff’s account.
[8]Evidence of Paul Robson T. 459-468 and Sharon Hamilton T. 439.

The Plaintiff’s evidence

The substance of the Plaintiff’s evidence that she was imprisoned was to the following effect. She was not allowed outside the house except on errands such as going to the supermarket (T. 169 and 175). Her father would give her just enough money to do the shopping (T. 176). She received Unemployment Benefits but these were controlled by her father who was the custodian of her bank account together with the PIN number for that account (T. 177). She did obtain a driver’s licence and she went to bingo about every two weeks but she would be dropped off and picked up by her father (T. 176 and 184).

The Plaintiff made no attempt to escape from her father because she was too scared (T. 178). After her brother and her sister had left her father’s home via a bedroom window at night, she was told by her father that she was not to leave the house (T. 193). He placed deadlocks on all the doors and locks on the windows (T. 194). He threatened to kill her just as he had killed her mother if she did not do as he wished (T. 193-194). Her father kept a rifle and bullets under the bed (T. 169). When she had told her father that she wanted to leave the home, he had slapped her (T. 402). She regarded herself as a prisoner of her father (T. 402). Her brother Charlie stayed at home to watch her. He was her guard (T. 418). She could not disagree with her father and she had to accept what he said (T. 311). He did not want her to have any friends (T. 369). She felt ‘overpowered’, unhappy and depressed (T. 411).

The Plaintiff said that she did not make any complaints to anyone in the Department because she was scared of her father (T. 396-397). She did not like what was going on but put up with it because there was no alternative. This was the reason why she did not reveal anything (T. 398). Her father arranged for her to attend at a doctor’s clinic when she was pregnant (T. 179) and he would take her to all her medical appointments during her pregnancies (T. 412). Even after the birth of her second child, she did not tell anyone at that time about her father because she was scared of him (T. 414-415). Her father had told her not to tell (T. 414). At a later stage the Plaintiff tried to get away from him by travelling to Queensland with her two children to visit her sister Josephine (T. 402). Her father followed her and threatened both she and the children if she did not return home with him (T. 185 and 366). The Plaintiff returned to Melbourne with her father and she continued to live with him for over a year until one morning he was again violent to her and threatened to kill her (T. 186). She then went to the Werribee Police Station and complained for the first time about what had been occurring (T. 187).

The Plaintiff agreed that she would have taken any other alternative but that there was none (T. 398). She felt depressed and unhappy from the time she had started living with her father until the time that she stopped living with him (T. 429). She regarded the situation with her father as a nightmare as too was her existence with her foster father (T. 249).[9] The Plaintiff agreed that she lived through it (T. 249).[10] She attended at the Werribee Police Station to make complaint regarding her father as he had been violent to her and had threatened to kill not only her but also her children (T. 185).
[9]See also evidence of Dr Flower T. 499.
[10]Ibid.

The Defendant accepts that there has been no wilful attempt by the Plaintiff to exaggerate or distort events. The Defendant submits that the Plaintiff’s lifestyle should not however be characterised, as the Plaintiff does in her submission, as one of “a prisoner exposed to constant fear and emotional turmoil”.

In my view the submissions of both parties as to the Plaintiff’s reliability as a historian and her claim of virtual imprisonment over-simplifies these issues. The Plaintiff resided with her father from 1984 to 1994. Throughout that time the Plaintiff suffered from a number of psychiatric disorders which made her vulnerable and interfered with her capacity to object to the lifestyle that her father imposed upon her. Her dependency was probably heightened as a consequence of the birth of her father’s children. The Plaintiff’s memory as to the detail of her abuse and of the many traumatic events that occurred in her life is patchy. There can be no doubt that terrible events had taken place in the Plaintiff’s life which, together with the effluxion of time and her psychiatric condition, has not unexpectedly produced variations in her account. Despite memory problems however, the histories offered to treating doctors, psychologists and psychiatrists by her are largely consistent. The nature of her illnesses and her circumstances make it highly likely that at different times her feelings vacillated about the circumstances in which she found herself. She showed great fear in 1994 when she left her father. The apparent contentment in her father’s environment on the few occasions when she was seen in 1984 may, in part, be attributable to being emotionally numbed or de-sensitised and also to the fact that she had difficulty in verbalising her thoughts.

Whilst the Plaintiff was not held in captivity she believed that she had no alternative but to accept the lifestyle that her father imposed upon her. Because of her various disabilities, her vulnerability and previous life experiences, the Plaintiff felt compelled to remain with her father.

The Plaintiff’s reliability as an historian relates not so much to the occurrence of events, but as to how they affected her. The expert testimony called by the Defendant was that there was no wilful or conscious exaggeration by the Plaintiff of her circumstances. The Plaintiff’s testimony reflects her sense that she was captive to her father’s power and control over an extended period. Having been the subject of sexual abuse at her foster father’s hands she was, as all of the experts testified, highly vulnerable to further sexual abuse.[11] Her maturity was some years less than her age. It was not challenged by the Defendant that the Plaintiff was isolated, deprived and controlled. According to the expert testimony, the Plaintiff is likely to have existed in an emotionally numbed state where she remained detached from reality.[12] She suffered great emotional distress, was subjected to violence, and was the victim of a decade of sexual abuse by her father.
[11]Evidence of Dr Flower T. 488; Dr Kornan T. 924 and Ms Zsizsmann T. 778, 789 and 801.
[12]Evidence of Dr Flower T. 515.

LIMITATION ACT DEFENCE
Was the Plaintiff under a disability?

The writ was issued in November 2000, some sixteen years after the Plaintiff was restored to her father and fourteen years after she ceased to be a ward.

By its defence, the Defendant pleaded that any course of action in tort for breach of duty of care pleaded by the Plaintiff had accrued more than six years prior to 21 November 2000 and that such course of action was statute barred pursuant to the provisions of s.14(1)(b) Limitation Act 1969 (NSW) (No. 31 of 1969) (hereafter “the Limitation Act”).

Section 11(3) Limitation Act 1969 provides that a person is under a disability while under the age of 18 or:

“While the person is, for a continuous period of 28 days or upwards, incapable of, or substantially impeded in, the management of his or her affairs in relation to the course of action in respect of a limitation period for which the question arises, by reason of:
(i) any disease or any impairment of his or her physical or mental condition;
(ii)restraint of his or her person, lawful or unlawful, including detention or custody under the Mental Health Act 1958.”

The case for the Plaintiff was that by virtue of her restraint by her father and her mental condition whilst living with her father, she was “substantially impeded in the management of her affairs” (T. 449). The restraint continued until she was able to leave her father in June 1994. It is not disputed that after she left her father there was a period of eleven months during which the Plaintiff was an involuntary hospital patient and that she was disabled during that period. It is argued for the Plaintiff that even if the Plaintiff was not, after May 1995, substantially impeded in the management of her own affairs by reason of her mental condition, time to commence the action did not expire until May 2001. The Plaintiff, however, submits that the nature of her mental condition continued to substantially impede her capacity to manage her own affairs up to the commencement of the proceedings, this situation requiring her to have a litigation guardian.

Dr Kaplan, a psychiatrist called by the Plaintiff, found that the Plaintiff had difficulty with concentration, anxiety and memory. He relied upon the history that he had obtained from the Plaintiff as to her terror of her father together with her history of emotional, social and educational deprivation (T. 689). He accepted that the Plaintiff was dominated by her father at that time and that he had great power over her. He considered she may well have had difficulties recognising that she had the right to take some kind of action against him (T. 691).

Dr Kaplan thought that it would have been difficult for the Plaintiff to make decisions (T. 692). In relation to the Plaintiff’s PTSD, Dr Kaplan said:

“It can, again depending upon the severity, and again in combination with depression and anxiety, and again perhaps with the panic disorder and agoraphobia as well, that leads people to have great difficulty venturing out of the home and can also have an impact upon an ability to, I guess, lead a normal lifestyle and do the things that one would normally do.” (T. 697)

Although the Plaintiff may have realised that there was something wrong with her and that the Department may have caused her a wrong, Dr Kaplan testified that she probably would have had difficulties understanding this and that the Plaintiff would have required assistance to do so.

Dr Flower, a psychiatrist called by the Plaintiff referred to the following parts of the Plaintiff’s history. The Plaintiff had grown up in a rural environment and had less ability to deal with an urban environment (T. 486). When she went to be reunited with her father she had never been on a train and there was nobody there to meet her (T. 486). She was very afraid because it was a completely new environment. She has a limited intellectual ability which would mean her knowledge of how to manage finances, how to arrange accommodation, even how to look after a baby would have been much more limited than a person of average intelligence (T. 486). Dr Flower said that given the traumatic experiences that she was subjected to and the physiological effects of trauma upon her, she would have been in considerable difficulty in organising her affairs and managing daily living. Because she was not being allowed to go out, her actual access to every day life was very restricted. She didn’t have great cognitive capacities at her best, and at her worst, they would have been severely limited because of the effects of trauma (T. 486-487).

Speaking of her capacity to understand the issues involved in bringing legal action and instructing a lawyer, Dr Flower said that as the Plaintiff had young children, was house-bound and was imprisoned, she was frightened (T.488). She said victims of sexual abuse often feel they are to blame. She said that the Plaintiff had grown up in a household where she was subjected to abuse, so there probably was an expectation on her part that this is what happens. She may not have actually realised that she could bring a legal action because she thought that “this is my life”, “this is what happens to me, I’ve been abused since the age of three, I’m now in another abusive relationship”. Dr Flower further testified that there is a lot of evidence to show that some victims of physical and sexual abuse in childhood will then choose partners later in life who will physically and sexually abuse them. There is an underlying psychological assumption that that is what will happen to them (T. 488).

Ms Zsizsmann, a psychologist called by the Plaintiff, said that the Plaintiff’s capacity to make judgments would depend upon when those judgments were validated and valued. She said that self-confidence increased when someone was able to stand up for themselves and to be assertive and not accept behaviours that in the past they would have accepted. This would not occur until they changed their view of themselves from that of a victim to that of someone who had control over their lives. Ms Zsizsmann said that that would be the kind of expectation and outcome that she would expect as a result of counselling (T. 812-813).

Dr Kornan, who was called on behalf of the Defendant, could not easily answer the question as to how the Plaintiff managed her own affairs. He thought however, it was clear that initially she was “terrorised” by the father and would have been unable to handle matters (T. 915). He thought that the Plaintiff was clearly breaking free from her father from about 1992 onwards, but he was uncertain as to whether or not she was capable of handling her own affairs (T. 915). Dr Kornan thought the problem was complicated by the reality factors of having two children and a third child coming. There were very young children and there was nowhere to go (T. 916).

The Defendant submitted that the Plaintiff did not suffer from a disability whilst living with her father and that the limitation period had expired prior to the commencement of the Plaintiff’s action. It was submitted that I should view the Plaintiff as an unreliable witness and treat her evidence about her life with her father with considerable caution. It was said that the medical evidence relied upon by the Plaintiff as to her capacity to manage her affairs is dependent upon an acceptance of the Plaintiff’s testimony that she was exposed to a life of traumatic physical and sexual abuse and a life in which she was imprisoned. Both Dr Kaplan and Dr Flower assumed when expressing their opinions about the period in which the Plaintiff lived with her father that she was terrified of him and lived in a constant state of anxiety and depression. Their opinions were based on the view that her father exercised great power over her.

Dr Kornan, in relying upon the Plaintiff’s history, did not demur from this view, but expressed the opinion that by 1992 the Plaintiff appeared to be breaking away from her father in that she was able to have a separate relationship with a young man. He considered that at the time of the trial the Plaintiff was functioning at a level that did not require her to have a litigation guardian.

In relation to the time after which she had made complaint about her father, the Plaintiff said that she had not given consideration to legal proceedings but that the refuge had applied on her behalf for crimes compensation. She had not thought of any other forms of legal action (T. 194). She had thought however that the Department was to blame for not protecting her and for putting her with her foster parents and her father (T. 423). She agreed that she had always thought this, but that she could not remember exactly when she commenced to think this way, but that it had been a while (T. 423).

Dr Kaplan testified that the Plaintiff would have had a very limited capacity to make a judgment such as commencing legal proceedings and would have had great difficulty in understanding her rights (T. 675 and 691). He was of the opinion that without assistance, the Plaintiff would have had difficulties in dealing with the concept that there was something wrong with her for which the Department was responsible. Dr Flower found also that the Plaintiff had a limited intellectual ability significantly below that of a person of average intelligence. Dr Flower said that the Plaintiff’s IQ was not much more than that of a person with an intellectual disability (T. 487) and that such people need some help in dealing with the more complex tasks of daily living. Given the traumatic events she had experienced and given their physiological and psychological effects, I am satisfied, based upon Dr Flower’s opinion, that the Plaintiff’s cognitive capacities were severely limited (T. 486-487).

Dr Flower considered that the Plaintiff may not have realised that she could bring a legal action and that she had come to expect that sexual abuse was part of her life. Dr Flower did not consider the Plaintiff to have the cognitive capacity to mount an action against the Department (T. 488). Ms Zsizsmann thought that the Plaintiff’s capacity to make such judgments would be a consequence of counselling which would have changed the Plaintiff’s view of herself and would have given her sufficient self-confidence to be assertive and to exercise some control over her life (T. 812).

In April 1999, the Plaintiff’s husband sought legal advice concerning matters related to her circumstances, she at that time being an in-patient at the Sunshine Psychiatric Hospital. The Plaintiff was subsequently seen by her present solicitor, Mr Gary Clarke, who formed the view that she was incapable of managing her affairs and that she required a litigation guardian.[13] Mr Clark deposed that despite spending a large amount of time explaining to the Plaintiff her rights and entitlements at common law, it was his view that the Plaintiff had little understanding of these issues. Although it was Mr Clark’s observation that the Plaintiff’s psychiatric condition appeared to improve, he was of the view that she did not have a sufficient capacity to understand and make decisions concerning litigation and that she would still require a litigation guardian. That assessment was confirmed by her medical practitioner, Dr Keddie, and specialists Dr Epstein, Dr Flower and Dr Kaplan. It was Dr Keddie’s view that the Plaintiff should be treated as a person with a disability for the purpose of the court proceedings and that any stress related to those proceedings should be minimised in order to protect the Plaintiff from further psychological distress.[14]
[13]Exhibit F.
[14]Exhibit G.

In his report dated 19 August 2003 and his testimony Mr James Drury, a neuro-psychologist called by the Plaintiff, stated that the Plaintiff’s verbal reasoning skills were below average which indicated that she was unable, other than at a very basic level, to think in an abstract manner (T. 749). This opinion accords with those limited observations made of the Plaintiff by officers of the Department who noted the Plaintiff’s limited ability to verbalise her thoughts in 1984.

It is submitted for the Plaintiff that the evidence establishes that the Plaintiff was substantially impeded by reason of her mental condition in managing her affairs. It was submitted that this body of evidence was not contradicted by any witness called by the Defendant. Counsel for the Plaintiff pointed to the heavy reliance placed by the Defendant on the severe nature of the Plaintiff’s Borderline Personality Disorder when cross-examining the Plaintiff’s medical witnesses. On the Defendant’s case, the severity of this disorder was well established prior to the Plaintiff’s restoration to her father.

Reliance was also placed by the Plaintiff upon the restraint of her person by her father. Reliance was placed on the Plaintiff’s father’s sexual and physical abuse, his threats, her isolation from the outside world, her confinement most of the time to the house, the use of her brother Charlie to guard her, and other evidence which indicated the nature of the physical restraint imposed by her father.[15]
[15]Plaintiff’s submission at [1.1.4]-[1.1.26].

Counsel for the Plaintiff submitted that it was relevant to take into account the Plaintiff’s psychiatric condition in considering whether the Plaintiff was the subject of restraint which impeded the management of her own affairs. In reply, it was submitted by Mr Saccardo for the Defendant that the term “restraint of her person” within s.11(3) of the Limitation Act meant physical restraint and not a mental condition which would fall within sub-section (i). The Defendant pointed to her father’s trip to Malta leaving the Plaintiff at home as well as the occasion when the Plaintiff travelled to Queensland alone as indicating that the Plaintiff was not subject to physical restraint.

At the conclusion of the evidence I was left in no doubt that the Plaintiff was under a disability during the entire period in which she resided with her father. Despite the inconsistencies in the Plaintiff’s testimony to which reference has rightly been made, the overwhelming impression gained from the Plaintiff’s testimony, and largely confirmed by the Departmental file, was that throughout the period that she lived with her father, she was dominated and controlled by him and was isolated from external influences. The totality of the medical evidence that I heard makes clear that the Plaintiff, suffering from a combination of psychiatric disorders, had no capacity to assert or protect herself. I accept the Plaintiff’s testimony that she believed she had no alternative but to remain with her father and make the best of her circumstances. She had endured a similar ordeal with her foster father. I am satisfied that her father was violent towards her and threatened her with violence if she did not do as he directed. The medical opinions of Drs Kaplan, Flower and Kornan were substantially based on a history which has been established by the evidence.[16] Furthermore, whilst there is some disagreement between the parties as to the causes of the Plaintiff’s psychiatric disorders, it is not in dispute that the Plaintiff suffered from them at the time that she lived with her father. All of the medical witnesses considered that these disorders would have incapacitated the Plaintiff. Counsel for the Defendant candidly acknowledged the relative weakness of its position on this issue (T.1351-1352).
[16]Barneveld v Hume City Council [2004] VSC 350.

In my opinion the Plaintiff’s mental condition rendered the Plaintiff incapable of, or substantially impeded her, in managing her own affairs during the period in which she lived with her father. Whether the Plaintiff was physically confined so as to fall within s.11(3)(ii) of the Limitations Act, I need not decide, as the Plaintiff was under a disability because of her mental condition throughout the period she was with her father and up to the date upon which these proceedings were issued. The incapacitating nature of the Plaintiff’s medical condition as indicated by the medical witnesses continued to disable the Plaintiff during the whole of the period 1994 to 2000. The opinion of Dr Flower was that the Plaintiff continued to exhibit symptoms after she left her father which demonstrated her lack of capacity to manage her own affairs.[17] The report[18] of Dr Sunil Datta, psychiatrist, indicates that the Plaintiff’s mental condition had continued to incapacitate the Plaintiff up to August 2002 when she was last seen by him. In August 2003, Dr Kaplan was of the opinion that the Plaintiff required a litigation guardian because she would have been incapable of making informed and reasoned judgments in respect of her legal rights.[19]

Extension of time under s 60G Limitation Act 1969 (New South Wales).

[17]Exhibit W.

[18]Exhibit S.

[19]Exhibit HH.

Subdivision 3 of Division 3 in Part 3 of the Limitation Act is concerned with the discretionary extension of a limitation period where a Plaintiff was by a relevant period unaware of the fact, nature, extent or cause of her injury or impairment. The limitation period may be extended where the Plaintiff was unaware of the fact, nature, extent or cause of her injury or impairment during a relevant period.[20] The limitation period for a cause of action may be extended by the court if it is considered just and reasonable to do so.[21] Where the cause of action arose before 1 September 1990 the court may extend the time within a period of three years from the date fixed by s.60I of the Limitation Act.
[20]See s.60F Limitations Act.
[21]See s.60G(2) Limitation Act.

Section 60I provides that:

“The Court may not make an order under s 60G … unless it is satisfied that
(a) the plaintiff:
(i) did not know that personal injury had been suffered; or
(ii)was unaware of the nature or extent of personal injury suffered; or
(iii)was unaware of the connection between the personal injury and the Defendant’s act or omission, at the expiration of the relevant limitation period or at a time before that expiration when proceedings might reasonably have been instituted; and

(b)the application is made within three years after the plaintiff became aware (or ought to have been become aware) of all three matters listed in paragraph (a)(i) – (iii).”

Section 60G and s.60I are intended to operate together. The Plaintiff must prove as a fact that she was unaware of one or more of the matters specified in s.60I although she need not prove those matters (which form part of the cause of action) on application to extend the limitation period.[22]
[22]Commonwealth v McLean (1996) 41 NSWLR 389; Walter v State of New South Wales [2000] NSWSC 237 per O’Keefe J at [10]; BHP Steel (AIS) Pty Ltd v Guidice & Ors (1996) 41 NSWLR 393.

If the Plaintiff was not suffering from a disability within the meaning of s.11 of the Limitation Act it is submitted for the Plaintiff that I should extend the period in which the Plaintiff is permitted to commence these proceedings. It is submitted that she did not become aware of the nature or extent of the injuries which she suffered[23] and she was unaware of the connection of those injuries to the Defendant’s acts or omissions[24] until shortly before the proceedings were commenced.

Awareness of her injury and of the connection between those injuries and the acts and omissions of the Defendant

[23]Section 60(I)(a)(ii).

[24]Section 60(I)(a)(iii).

The knowledge required by s.60L is the actual awareness of the Plaintiff. It cannot rest on any notion of reasonableness or constructive knowledge.[25] It is significant that the personal injury suffered was a psychiatric illness and it is the perception of the Plaintiff that is important.[26] The Plaintiff said in evidence that she believed after she had left her father that she was damaged and that she suffered from depression and mood swings. She was not aware however that she suffered from any recognised psychiatric illness (T. 203-204; 425-426 and 429). The Defendant in submissions properly acknowledged that if the Plaintiff was unaware of the nature or extent of her psychiatric injury the Defendant would be hard pressed to argue that she had the requisite knowledge of her injuries (T. 1351).[27]
[25]Harris (as Administratrix of the Estate of Hollins) v Commercial Minerals Ltd (1996) 186 CLR 1 at 9-10.
[26]Commonwealth of Australia v Dinnison (1995) 56 FCR 389; (1995) 129 ALR 239 per Gummow and Cooper JJ at 251.
[27]Calder v Uzelac [2003] VSCA 175.

There is a distinction that must be drawn between knowledge of symptoms and an awareness that those symptoms amounted to a psychiatric illness or personality disorder.[28]
[28]Commonwealth v Dinnison (n. 26); Donnelly v State of Victoria Unreported VSC, 30 June 1994 per O’Bryan J; Calder v Uzelac (n. 27) per Buchanan JA at [8]-[9].

The Plaintiff blamed the Department both for what had happened to her in foster care and as a result of the restoration to her father. She thought the Department could get into trouble for not having protected her properly but she did not have any understanding that she could start court proceedings (T.204-205). While the Plaintiff blamed the Department for not protecting her, at no material time did she have an awareness of any relevant act or omission of the Department which might support such proceedings.[29] It was submitted for the Plaintiff that it was not enough that the Plaintiff knew that the Department had allowed her to go and live with her father and that the Department had not removed her thereafter. The Plaintiff did not have an understanding of the acts or omissions of the Defendant, as revealed in the particulars of negligence in the Further Amended Statement of Claim, which constituted the basis for her claim.[30] It was submitted that the Plaintiff would need to be aware of those facts upon which the decision was made to restore her to her father rendering the Department’s failure to remove her unreasonable. It is evident that the Plaintiff had no understanding of the legal system or the factual basis upon which the Department’s liability might rest. The question is whether the Plaintiff was ignorant of the acts or omissions of the Department, rather than the legal conclusions which flow from them.[31] It is apparent that the Plaintiff was not aware that the exercise or failure to exercise statutory powers could provide the basis upon which to make a claim against the Department. She was not aware that the acts or omissions as particularised in the Further Amended Statement of Claim might provide the basis for a claim against the Department. I am also satisfied that the Plaintiff, being unaware of the nature and extent of the personal injuries which she suffered was unaware of the connection between them and the Defendant’s acts or omissions.
[29]Dedousis v Water Board (1994) 181 CLR 171.
[30]Drayton Coal Pty Ltd v Drain Unreported NSWCA 22 August 1995; Deming No. 456 Pty Ltd v Brisbane Unit Development Corporation Pty Ltd (1983) 155 CLR 129 at 151.
[31]Drayton Coal Board Pty Ltd v Drain (n.30) per Gleeson CJ.

Just and Reasonable

The Applicant bears the onus of persuasion under s.60G of the Limitations Act that she has a case that ought to be advanced.[32] As the application for an extension of time has been made in conjunction with the trial of the Plaintiff’s claims, I need not further consider the question as to whether the Plaintiff has a sufficiently arguable case as the determination of the Plaintiff’s claim will resolve this issue.
[32]Sydney CityCouncil v Zegarac (1998) 43 NSWLR 195; Dow Corning Australia Pty Ltd v Paton Unreported NSWCA, 24 April 1998.

Prejudice

Initially, Mr Menzies foreshadowed that he intended to lead a considerable body of evidence on the question of prejudice were I to allow the Plaintiff’s claim for breach of fiduciary duty to proceed (T.28-29). Counsel contemplated leading such evidence in pursuit of the equitable defence of laches and prejudice. During preliminary argument it was resolved that the Plaintiff’s causes of action for breach of common law duty and fiduciary duty and her application for an extension of the limitation period, (should I find that it had expired before the commencement of the proceedings), should be heard together and the Plaintiff complete her case in relation to all issues before the Defendant commenced its case.

Even if the Plaintiff has a ‘good’ cause of action, whether it is just and reasonable to extend the limitation period must depend on the impact of any prejudicial factors on the fair trial of the action.[33]
[33]Brisbane South Regional Authority v Taylor (1996) 186 CLR 541; (1996) 139 ALR 1; Sydney City Council v Zegarac (n. 32); Walter v State of New South Wales (n. 22); Holt v Wynter (2000) 49 NSWLR 148 [119].

The Defendant submits that the Plaintiff should not be given leave to commence these proceedings as it would suffer both actual and presumptive prejudice.[34] The Defendant also submitted that the evidence of Departmental officers demonstrated that, by reason of the effluxion of time, they were no longer able to recall critical matters relevant to liability and causation.[35] A Departmental officer, Mr Smith, was incapable of giving evidence because of his mental state at the time of trial. Mr Smith had made detailed reports which were placed on the Plaintiff’s Departmental file setting out the relevant events and his detailed views about what had occurred and what was required to advance the Plaintiff’s welfare. Neither party had any difficulty in establishing what had occurred during Mr Smith’s period of supervision nor was any amplification of Mr Smith’s views necessary. Some Departmental officers were no longer able to recall what alternative accommodation may have been available for the Plaintiff at the time at which her temporary placement with the Cook family broke down.
[34]Brisbane South Regional Health Authority v Taylor (n. 33) 129 ALR at 554.
[35]Written submission at [16].

In oral submissions this was said on behalf of the Defendant to be another form of prejudice. It was submitted that loss of memory resulted in it being unknown whether officers had given active consideration to placement alternatives. But counsel for the Defendant later submitted that all the evidence was to the effect that a foster placement for the Plaintiff at that age was really impossible. This suggested prejudice is illusory.

There was evidence from a number of officers that there were viable alternatives to that of returning the Plaintiff to her father. The decision to restore the Plaintiff was made on the very day that the temporary placement failed. I infer from this circumstance, the Department’s policy that restoration to a natural parent was in the Ward’s best interests and the absence of any note on the Departmental file that no prior consideration had been given to any alternative placement for the Plaintiff. The Defendant did not avail itself of leave to file a further submission identifying further matters of prejudice but none was filed. In my view the submission that the Defendant has been prejudiced is unsustainable.

The evidence of Departmental officers related to the period November 1983 to December 1985. The narrative by each Departmental officer of relevant events was based substantially upon their sequential records of events relating to the Plaintiff as contained within the Plaintiff’s Departmental file. The contemporaneous record upon which the witnesses relied was frequently their own report or record of an event. Meetings between Departmental officers and the Plaintiff or other members of her family were relatively few. I was not left with the impression that Departmental officers who testified were handicapped by loss of memory in addressing the issues in the trial. Each officer who was called had recourse to the Departmental file which contained an apparent record of all relevant reports of those officers who were concerned with the Plaintiff’s case. The procedure generally followed by Departmental officers was to record such contact as they had with the Plaintiff or her father and commonly to record the substance of what was discussed. There was little dispute as to whether a Departmental officer had or had not done something. In alleging that the Department was negligent in restoring the Plaintiff to her father, the focus was upon the Department’s failure to follow its procedures and properly assess whether the Plaintiff’s welfare would be advanced by returning her to her father. The alleged negligence of the Department in failing to remove the Plaintiff from her father’s care also rested upon omissions. There was little, if anything, in the way of dispute concerning the alleged omissions of the Department. I could discern no unfairness to individual Departmental officers who testified or any substantial prejudice to the Department despite the age of the events to which the witnesses deposed.

Conclusion

The Plaintiff was at all material times under a disability within the meaning of s.11 of the Limitation Act. The limitation period had not expired at the time that the Plaintiff commenced proceedings by the filing of the Statement of Claim on 21 November 2000. I would, if it were necessary to do so, extend the limitation period for the Plaintiff’s cause of action as I am satisfied on the balance of probabilities that if the Plaintiff ceased to suffer from a disability within the meaning of s.11 so that the limitation period expired, the Plaintiff was not aware of the nature and extent of the personal injury she had suffered nor was she aware of the connection between the personal injuries she had suffered and the Defendant’s acts or omissions (s.60I(1)(a)). The Plaintiff’s application for an extension of the limitation period was made within three years after she became aware, or ought to have become aware of the matters set out in (s.60I(1)(b)). It is just and reasonable to extend the limitation period (s.60G(2)). The Plaintiff has satisfied me that the commencement of her action beyond the limitation period has not resulted in material or significant prejudice to the Defendant, notwithstanding the presumptive prejudice arising from the lapse of time since the relevant acts or omissions of the Defendant.

THE NEGLIGENCE CLAIM
The pleadings

The Plaintiff’s Statement of Claim was the subject of numerous amendments, the final Further Amended Statement of Claim (hereafter FASC) being filed pursuant to leave granted on 23 September 2003. It is unnecessary to revisit the Plaintiff’s earlier pleadings. The Defendant in its pleadings consistently denied that it owed the Plaintiff a duty of care.

The Plaintiff pleaded that at all material times the Minister and officers exercising his powers owed the Plaintiff a duty of care and a fiduciary duty to promote the welfare of the Plaintiff and to exercise those powers carefully so as to prevent a foreseeable risk of injury to the Plaintiff. The duty of care was said to arise as a matter of law from the relationship between guardian and ward (FASC [2A]). The Plaintiff pleaded by way of particulars that the Department’s Ward Manual contained numerous provisions which made express reference to the care required in exercising the Minister’s powers. It was further pleaded that the Defendant was aware from 7 November 1983 that the Plaintiff had been sexually abused by her foster father and that she was particularly vulnerable and in need of care and counselling as a result of that abuse (FASC [5A] and [5B]). Particulars to this allegation made reference to a report obtained by the Defendant on 10 January 1984 from a psychologist, one Ms Judd, which referred to the depressing problems from which the Plaintiff suffered as a result of the breakdown of the foster placement, that the Plaintiff was suffering from acute sexual conflicts and great fear and that counselling would be required. It was pleaded that as a consequence of this knowledge and the vulnerability of the Plaintiff, the Defendant owed a duty of care to the Plaintiff to discharge its functions and powers under the Act and as the guardian of the Plaintiff to do so carefully so as to avoid a foreseeable risk of injury to the Plaintiff (FASC [5C]). The Plaintiff’s pleading then alleged that the restoration of the Plaintiff to her father was unlawful and in breach of the procedures set out in the Ward Manual as there was no approval given by the designated officer in charge, no approved case plan and no case conference, all of which were required by the Ward Manual (FASC [6A]).

The pleading then alleges that the Defendant, in breach of its duties, failed to exercise reasonable care “in its management of the Plaintiff including the restoration of her to her father in the period from 7 November 1983 until 5 March 1984” (FASC [6B]). The particulars of breach alleged various failings by the Defendant to address the needs of the Plaintiff as a consequence of the sexual abuse by her foster father. The particulars also enumerated failings by the Defendant in planning for the Plaintiff’s future and in failing to properly assess the suitability of restoring the Plaintiff to her father. The particulars of injury relating to the alleged breach of the Defendant’s duty between November 1983 and March 1984 stated:

“The impact of the abuse of the foster father on the Plaintiff would have been reduced. In addition, the Plaintiff would have been able to continue with her education and would have been able to have enjoyed a normal earning capacity to the level of her education. The additional injuries suffered as a result of the restoration to her father including the aggravation of pre existing injuries would not have been suffered.”

The Plaintiff then pleaded that, in the period from 5 March 1984 until the discharge of the Plaintiff from wardship, the Defendant became aware of allegations concerning the sexual abuse of the Plaintiff by her father and other matters likely to cause injury to the Plaintiff and which prevented her from recovering from injuries already suffered as a result of the abuse by her foster father (FASC [7A]). The Defendant was alleged to be in breach of its duty of care by permitting the Plaintiff to continue to reside with her father and in failing to take action to ensure that she received counselling, support, care and employment while she was living with him (FASC [7B]). Further extensive particulars were set out in the Further Amended Statement of Claim relating to the alleged failings of the Defendant with respect to the Plaintiff’s restoration to her father and to her subsequent management (FASC [10]).

At the conclusion of the evidence the parties were granted time to prepare and file written submissions to which they would subsequently address oral argument. The parties reached agreement as to the list of issues relating to duty of care and breach which should be addressed in their written submissions. Those issues were formulated by the parties in the following terms:

“2.      Did the Defendant owe a duty of care to the Plaintiff in the period from November 1983 to December 1985”;
“3.      Was the Defendant in breach of its duty of care to the Plaintiff in the period 7 November 1983 to 1 March 1984?” (the first period); and if so
“4.      Did the Plaintiff suffer foreseeable injury and loss as a result of the breach?”;
“5.      Was the Defendant in breach of its duty of care to the Plaintiff at any time between 1 March 1984 and 27 December 1985?” (the second period); and if so
“6.      Did the Plaintiff suffer foreseeable injury and loss as a result of the breach?”

The issues addressed in the written submissions reflected the Plaintiff’s pleading which alleged a duty of care during each of these two periods and numerous particulars of breach of that duty within each period.

Refinement of the duty during submissions

During the course of oral submissions counsel for the Plaintiff narrowed the ambit of the claimed duty. Whilst maintaining that the Defendant was in breach of a duty of care to the Plaintiff during the first period, counsel for the Plaintiff conceded that the evidence did not establish that any injury or damage suffered by the Plaintiff was attributable to a breach of the Defendant’s duty of care prior to the Plaintiff’s restoration to her father. I was invited to consider the particulars of breach of duty relating to the period prior to restoration as relevant to the Defendant’s decision to restore the Plaintiff to her father and the Defendant’s subsequent inaction. That is to say, the Plaintiff relied upon the evidence of what had been alleged to be the Defendant’s breach of its duty in the period prior to restoration as relevant to the alleged subsequent breaches of duty by the Defendant.

At the conclusion of the oral submissions the parties were given leave to file a further written submission confined to whether the law recognised that the Defendant owed the Plaintiff a duty of care. Pursuant to that leave a further comprehensive written submission by Mr Kennan S.C. and Mr P. Vout was filed which amplified the Plaintiff’s contentions as refined in the course of the oral submissions. The duty was postulated as follows:

“….the Defendant owed a duty of care to avoid injury to the Plaintiff which was a reasonably foreseeable result of the exercise of its powers under the Act to restore the Plaintiff to the care of her father and failing to exercise its powers under the Act to direct the removal of the Plaintiff from her father’s custody, or impose appropriate conditions on such custody.”

It has become unnecessary for me to consider whether there was a duty of care prior to restoration although the Plaintiff continued to rely upon the details of the Defendant’s conduct during this period.[36] It is not contended on behalf of the Defendant, nor could it be, that it has been prejudiced in any way by the narrowing of the period in which duty, breach and injury are alleged.
[36]Plaintiff’s final written submission at [2.2.1] and [3.1.9] and Plaintiff’s first written submission at 24-49 and 53-73.

It was not in issue that as a consequence of her life experiences, the Plaintiff was at the time of restoration a person who was vulnerable and at risk or that the Department knew this. Her psychiatric disorders, anxiety, depression, and previous life experiences including maternal deprivation, abandonment and sexual abuse left her vulnerable to domination and further sexual abuse. The Plaintiff’s case, as refined, rests upon the claims that the Department did not take into account her vulnerable status or assess her father’s capacity or will to meet her needs when making the decision to restore her to her father. Having restored her, the Department did not then adequately monitor her situation and did not take the necessary action to protect her and advance her welfare.

At the commencement of the trial, application was made to strike out the Plaintiff’s claim on the basis that the law did not recognise a duty of care in such circumstances. It was submitted that the Act did not support any common law duty. I ruled at the conclusion of substantial argument that such a cause of action was arguable. In final addresses, both parties adopted their oral and written submissions made on this strike out application and both made further oral and written submissions on the issue. I have given careful consideration to all of these submissions.

STATUTORY POWERS AND THE DUTY OF CARE

The Defendant submits that the Plaintiff’s claim is a novel one and that the Department owed the Plaintiff no duty of care in exercising, or failing to exercise, any of the statutory powers available to it. It is convenient to first consider the present state of the law relating to the exercise of statutory powers and the duty of care.

An action for the negligent exercise of a statutory power concerns a well-established category of duty of care. Those conferred with statutory powers have a duty to exercise those powers with reasonable care to avoid injury that is likely to be caused by their exercise.[37] Accordingly, trials concerning the negligent exercise of statutory powers tend to focus on breach, causation and remoteness.[38]
[37]Caledonian Collieries Ltd v Speirs (1957) 97 CLR 202, Dixon CJ, McTiernan, Kitto and Taylor JJ at 202; Sutherland Shire Council v Heyman (1985) 157 CLR 424, per Mason J at 458; Pyrenees Shire Council v Day (1998) 192 CLR 330, per Gummow J at 391 [177]; Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1, per McHugh J at 29 [62]; Great Central Railway v Hewlett [1916] 2 ACT 522, per Lord Parker at 519.
[38]Crimmins (n. 37) per McHugh J at 20 [63].

Exemplary Damages

Counsel for the Plaintiff argues that this is an appropriate case for the imposition of an award of exemplary damages because there has been a contumelious disregard of the Plaintiff’s rights by the Defendant. The Defendant submits that the circumstances do not warrant such an award.

The nature of such damages is punitive, rather than compensatory in character[501] with the conduct or the wrong being such as to be deserving of exemplary punishment. The objects of exemplary damages are not only to punish[502] the Defendant but to deter others from participating in similar conduct.[503] They may also appease the victim’s sense of grievance.[504]
[501]Halsbury’s Laws of Australia, LexisNexis Butterworths at [135-1] and at [135-495]; Coloca v BP Australia Ltd [1992] 2 VR 441; Cubillo (n. 109) per O’Loughlin J at [1551]; XL Petroleum (NSW) Pty Ltd v Caltex Oil (Aust) Pty Ltd (1984) 155 CLR 448; 57 ALR 639; Cotogno v Lamb (1986) 5 NSWLR 559 per Kirby J at 570-571.
[502]Broome v Cassell & Co [1972] AC 1027 at 1130 as to the social purpose of exemplary damages.
[503]Whitfield v De Lauret & CoLtd (1920) 29 CLR 71.
[504](n. 501) Cotogno v Lamb.

In order to attract an award of exemplary damages however, the Defendant’s conduct in relation to the Plaintiff must be wanton, as where it discloses fraud, malice, violence, cruelty, insolence or the like, or it must amount to behaviour which demonstrates a “conscious wrongdoing in contumelious disregard[505] of the plaintiff’s rights.”[506] Exemplary damages go beyond compensation and are awarded as a punishment to the guilty in order to deter like behaviour.[507]
[505](n. 503) per Knox CJ.
[506]Ibid at [135-150] and the cases referred to therein.
[507]Exemplary damages have been referred to as “a sort of hybrid”. See Musca v Astle Corporation Pty Ltd (1988) 80 ALR 251 at 262 and the cases referred to therein.

Both in Canada[508] and Australia,[509] exceptional misconduct is required to limit the award of exemplary damages. Although exemplary damages may be awarded in negligence cases, those awards are likely to be “unusual and rare.”[510] There is also a legislative trend against the power to award exemplary damages.[511]
[508]Vorvis v Insurance Corporation of British Columbia [1989] 1 SCR 1085; Robitaille v Vancouver Hockey Club [1981] 3 WWR 481. Also see Waddams, S.M. (1991) The law of damages (2^nd Ed.) Toronto, Canada Law Book at [11.210].
[509]Uren v John Fairfax & Sons, (1968) 117 CLR 118; Australian Consolidated Press Ltd v Uren [1969] 1 A.C. 590; (1967) 117 CLR 221.
[510]Coloca v BP Australia (n. 501); Gray v Motor Accident Commission, (1998) 196 CLR 1 at 7 [14].
[511]Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298 at [387]; [2003] NSWCA 10.

The Plaintiff relies on a passage from Gray v Motor Accident Commission which states the following:

“Because of the kinds of case in which exemplary damages might be awarded are so varied, it may be doubted whether a single formula adequately describes the boundaries of the field in which they may properly be awarded…..
……there can be cases, framed in negligence, in which the defendant can be shown to have acted in contumelious disregard of the rights of the Plaintiff or persons in the position of the plaintiff. Cases of an employer’s failure to provide a safe system of work for employees in which it is demonstrated that the employer, well knowing of an extreme danger thus created, persisted in employing the unsafe system might, perhaps be of the latter kind.” [512]

[512](n. 510) Gray v Motor Accident Commission at [14] and [22].

These principles were recently restated in De Reus v Gray.[513]A claim in negligence will not attract exemplary damages unless it can be shown that the Defendant acted in conscious and contumelious disregard of the Plaintiff’s rights.
[513][2003] VSCA 84 per Winneke P at [18].

It is simply not enough for a court to disapprove of a Defendant’s conduct. Exemplary damages ought only to be awarded for “the more flagrant instances of conscious wrongdoing”[514] where the conduct of a party is sufficiently reprehensible to require the court to signal its disapproval of that conduct by way of an award of exemplary damages. Such conduct by a party bears the traces of criminal conduct which notionally could be described as conscious, voluntary and deliberate.
[514](n. 509) Australian Consolidated Press Ltd per Windeyer J at 212.

The instances of alleged contumelious disregard of the Plaintiff’s rights were set out in the Plaintiff’s written submissions and included the following:

·     Knowing how vulnerable she was it failed to act on the Judd Report;
·     It failed to take any action to ensure her basic needs in terms of education, training and counselling were met;
·     Knowing how vulnerable she was, they ignored the appropriate and sensible requirements of the Interim Guidelines and the Ward Manual, including the requirements for approval of a restoration;
·     They put her on a train by herself on 1 March and without even knowing whether her father was at home;
·     From the time of the Patten report of 27 June, they were aware that she was in fact being neglected and the Judd Report was not being implemented and they did nothing;
·     From July onwards they suspected and then in 1985, believed that she was being sexually abused and again they did nothing;
·     No officer in these proceedings has denied that they had the necessary powers to intervene. They simply chose not to do so;
·     They did not seek advice from senior managers or other resources available to them, although Mrs Paten said they were encouraged to use other resources;
·     They effectively decided to leave the Plaintiff with her father knowing that she was suffering a denial of reasonable opportunities to rebuild her life, and knowingly it was likely that she was being sexually abused by him.

The Plaintiff also relied upon the Defendant’s conduct in its failure to adequately and appropriately respond to requests for discovery and the production of documents.

In assessing the conduct of a Defendant, the court must be satisfied that the behaviour is so reprehensible as to warrant punishment which does not merely irritate but stings.[515] The conduct must be so wrongful and reprehensible that it calls for manifest disapprobation by the community; the conduct must require punishment to deter the wrongdoer and others of like mind from similar conduct; and similarly the conduct must attract something more than compensation to ameliorate the plaintiff’s sense of grievance.[516]
[515]Digital Pulse Pty Ltd v Harris (2002) 166 FLR 421 at 440 [133]; [2002] NSWSC 33.
[516](n. 515) Digital Pulse Pty Ltdv Harris (2002) 166 FLR at [113].

Though the Department’s failure to act warrants disapproval it did not occur in contumelious disregard of the Plaintiff’s rights. However one views the Department’s intransigence and its consequences for the Plaintiff, its conduct was not of the character which attracts an award of exemplary damages.

CLAIM FOR EQUITABLE COMPENSATION AS A CONSEQUENCE OF A BREACH OF FIDUCIARY DUTY

In the alternative to her common law claim, the Plaintiff claims equitable compensation as a consequence of a breach of fiduciary duty by the Defendant in the period November 1983 to December 1985. The Plaintiff argues that the Defendant owed a fiduciary duty to the Plaintiff as a consequence of their relationship as guardian and ward, this being an established category of fiduciary relationship.[517]
[517]Clay v Clay (2001) 178 CLR 193; Bective, Countess of v Federal Commissionerof Taxation (1932) 47 CLR 417; Bennett v Minister for Community Welfare (1992) 176 CLR 408 at 426; Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 141; Williams v Minister Aboriginal Land Rights Act 1983 (n. 72) (1994) 35 NSWLR 497 per Kirby J.

The Plaintiff seeks equitable compensation in the event that her common law claim failed. Out of deference to the parties who have fully argued the alternate claim, I should state my view.

It is submitted that the Defendant in breach of its fiduciary duty, failed to take proper care of the Plaintiff and that equitable compensation for such a breach should include compensation, for loss of earnings and earning capacity and as the authorities in Canada and New Zealand suggest, for injuries to her feelings.

The Defendant submits that no cause of action exists for breach of fiduciary duty of the nature alleged by the Plaintiff based on s.9 Child Welfare Act 1939.[518] The Defendant argues that the existence of a duty of the nature alleged by the Plaintiff is contrary to authority.[519]
[518]Section 9 reads as follows: “Notwithstanding any other law relating to the guardianship or custody of children the minister shall be and become the guardian of every child or young person who becomes a ward to the exclusion of the parent or other guardian and shall continue to be such guardian until the child or young person ceases to be a ward.”
[519]Breen v Williams (1996) 186 CLR 71; Paramasivam v Flynn [1998] 160 ALR 203; (1998) 90 FCR 489; [1998] FCA 1711.

It was not disputed that there was a fiduciary relationship between the Minister and the Plaintiff by virtue of his guardianship. The Defendant submitted that it did not give rise to an obligation to care for the Plaintiff which could sound in damages for personal injury. It was accepted by the Defendant that the fiduciary duty arose out of s.9 which made the Minister the guardian of every child or young person who became a ward to the exclusion of the parent. Section 9 it was said, was attenuated by s.10 which provides that the Minister has the care of wards

“except during a period where they are inmates of an institution or are boarded out or placed as adopted boarders with foster parents or placed out with any other persons”.

The fiduciary duty it was said thereafter did not extend to any responsibility for the care of the person of the ward. It should be noted in passing that the words “placed out” are defined in s.3 as meaning “placed in employment”.

It was rightly contended by counsel for the Defendant that a fiduciary duty is of a proscriptive rather than a prescriptive nature.[520] He submitted that damages flowing from a breach of fiduciary duties such as a duty to avoid a conflict of interest or to account does not give rise to a claim for tortious damages irrespective of whether a common law duty to take care also existed. Passages from the judgments in Breen v Williams, it was submitted, put beyond argument that a breach of fiduciary duty does not give rise to a claim for tortious damages.[521]
[520]Ibid Breen v Williams.
[521]Ibid per Gaudron and McHugh JJ at 113 and per Gummow J at 133 and 135.

Fiduciary Duty

The critical feature of a fiduciary relationship is that the fiduciary undertakes to act in the interests of another in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense.[522] A fiduciary relationship is one which gives the fiduciary a special opportunity to exercise that power or discretion to the detriment of that other person, who accordingly is vulnerable to abuse by the fiduciary.[523] In equity, a fiduciary has a duty to act in good faith for the benefit of another. Persons subject to a fiduciary duty are not permitted to profit from their positions (other than where expressly permitted) or to put themselves in a position where the fiduciary duty and personal interest may conflict.[524]
[522]See Hospital Products Ltd v United States Surgical Corporation Inc (n. 517) per Mason J. Both Gibbs CJ and Mason J refer to the “openness” of the criteria by reference to which the existence of a fiduciary relationship might be established.
[523]Ibid Hospital Products Ltd (n. 517).
[524](n. 519) Breen v Williams and Paramasivam v Flynn.

In New Zealand, the law concerning the question as to whether fiduciary obligations exist between guardian and ward is not settled, with many cases leaving the question of the existence of such duties open.[525] In Canada, the scope of the law with respect to this question is wide.[526] In M (K) v M (H)[527] the relationship between child and parent was said to support a fiduciary obligation on the part of the parent not to abuse the child.[528] In Tusyn v Tasmania[529], Blow J observed that it would logically follow from the decision in M (K) v M (H) that a relationship between ward and guardian might give rise to a similar obligation, namely that a guardian refrain from abusing the ward or that the guardian take responsibility to make sure that no-one else did so.[530] Does the law relating to fiduciary obligations and duties as developed in Canada or New Zealand apply however to this particular case?
[525]See S v G [1995] 3 NZLR 681; H v R [1996] 1 NZLR 289; Prince v Attorney-General [1996] 3 NZLR 733; Attorney-General v Prince & Gardner (n. 327); L v Robinson [2000] 3 NZLR 499. There are a number of cases in Australia which have also left open the question of the existence of fiduciary duties. See Johnson v Department of Community Services (n. 72) [1999] NSWSC 1156 and Carter v Corporation of the Sisters of Mercy of the Diocese of Rockhampton [2001] QCA 335.
[526]M (K) v M (H) (1992) 96 DLR (4th) 289. For the identification of fiduciary obligations see Frame v Smith (1987) 42 DLR (4th) 81 per Wilson J at 99.
[527](n 526).
[528]Ibid at [13].
[529](n. 368).
[530]Ibid at [13].

The Law in Australia

The fiduciary obligations imposed upon a person in equity that they should not put themselves in a position where interest and duty conflict and should not make a profit from their position was considered in Breen v Williams.[531]In that case, Dawson and Toohey JJ regarded fiduciary obligations as having no application in the treatment of a patient by a doctor. Their Honours stated:

“…..There the duty of the doctor is established both in contract and in tort and it is appropriately described in terms of the observance of a standard of care and skill rather than, inappropriately, in terms of the avoidance of a conflict of interest. It has been observed that what the law exacts in a fiduciary relationship is loyalty, often on an uncompromising kind, but no more than that…….. The concern of the law in a fiduciary relationship is not negligence or breach of contract……”[532]

[531](n. 519) at 93.

[532]Ibid at 93.

As observed in Breen v Williams, the law has not yet been able to formulate any precise or comprehensive definition of the circumstances in which a person is constituted as a fiduciary in their relations with another, although there are accepted categories of fiduciary relationships such as that of solicitor/client and trustee/beneficiary.[533]
[533]Both Gaudron and McHugh JJ in Breen v Williams (n. 519) and Gibbs CJ and Mason J in Hospital Products Ltd v United States Surgical Corporation (n. 517) refer to the way in which Australian courts have refrained from attempting to provide a general test for determining when or what class of person stands in a fiduciary relationship with another because the term fiduciary relationship itself defies definition.

Gaudron and McHugh JJ identified a number of circumstances which may indicate, but which do not determine the existence of a fiduciary relationship between one party and another. These included the undertaking to fulfil a duty in the interests of another, the scope for one party to unilaterally exercise a power or discretion that may affect the rights or interests of another; and a dependency on the part of one party which causes that party to rely upon the other. Such a relationship however will be the subject of scrutiny to ensure that the fiduciary does not obtain a benefit of that relationship.[534]
[534]See Meagher, R.P. et al (1992) Equity: doctrines and remedies, (3^rd ed.) Sydney, Butterworths at Chapter 5 [501-555]; Parkinson, Patrick (ed.) (2003) Principles of Equity, Sydney, Lawbook Company at 339-392; and Jordan, Sir Frederick (1983) Select legal papers, Sydney, Legal Books, Subtitle Chapters in Equity at 112-129 as to the way in which such duties and breaches are dealt with.

Moreover the duties imposed upon a fiduciary are proscriptive. Gaudron and McHugh JJ observed:

“In this country, fiduciary obligations arise because a person has come under an obligation to act in another’s interests. As a result, equity imposes on the fiduciary proscriptive obligations – not to obtain any unauthorised benefit from the relationship and not to be in a position of conflict. If these obligations are breached, the fiduciary must account for any profits and make good any losses arising from the breach. But the law of this country does not otherwise impose positive legal duties on the fiduciary to act in the interests of the person to whom the duty is owed……. If there was a general fiduciary duty to act in the best interests of the patient, it would necessarily follow that a doctor has a duty to inform the patient that he or she has breached their contract or has been guilty of negligence in dealings with the patient. That is not the law of this country.”[535]

[535](n. 519) Breen v Williams at 113.

In Williams the appellant, in seeking an application for an extension of time to bring an action against the Aboriginal Welfare Board, claimed damages in tort as well as claiming equitable relief. On the basis of her wardship, the Plaintiff argued that the Board owed her a fiduciary duty as to her custody, maintenance and education. This claim was rejected at first instance, but was allowed on appeal. Kirby P observed:

“…….The Board was, in my view, arguably obliged to Ms Williams to act in her interest and in a way that truly provided, in a manner apt for a fiduciary, for her ‘custody, maintenance and education’. I consider that it is distinctly arguable that a person who suffers as a result of a want of proper care on the part of the fiduciary, may recover equitable compensation from the fiduciary for the losses occasioned by the want of proper care; cf Norberg v Wynrib [1992] 4 WWR 577 at 606; (1992) 92 DLR (4^th) 499. In other jurisdictions, compensation for breach of fiduciary duty has been held to include recompense for the injury suffered to the plaintiff’s feelings: see, eg, Szafer v Chodos (1986) 27 DLR (4^th) 388; McKaskell v Benseman [1989] 3 NZLR 75.”[536]

[536](n. 72) (1994) 35 NSWLR at 511.

The view of Kirby J that it is “distinctly arguable” is not readily reconcilable with Breen v Williams. My research has failed to disclose any subsequent Australian authority which has shown any attraction to the Canadian position. It has twice been rejected by the Full Court of the Federal Court and by single judges on four occasions.

In Paramasivam v Flynn[537] a claim for breach of fiduciary duty against a guardian who had sexually assaulted a child under his care and control was rejected by the Full court. In dismissing the appeal, their Honours having considered M (K) v M (H), Williams v Minister, Aboriginal Land Rights Act 1983 and Breen v Williams said:

“All those considerations lead us firmly to the conclusion that fiduciary claim, such as that made by the plaintiff in this case, is most unlikely to be upheld by Australian courts. Equity, through the principles it has developed about fiduciary duty, protects particular interests which differ from those protected by the law of contract and tort, and protects those interests from a standpoint which is peculiar to those principles. The truth of that is not at all undermined by the undoubted fact that fiduciary duties may arise within the relationship governed by contract or that liability in equity may coexist with liability in tort. To say, truly, that categories are not closed does not justify so radical a departure from underlying principle. Those propositions, in our view, lie at the heart of the High Court authorities to which we have referred, particularly perhaps, Breen. It follows that Gallop J was justified in concluding that he was not persuaded that the appellant’s claim based on breaches of fiduciary owed by the respondent to the appellant had real prospects of success.”[538]

[537](n. 519).

[538](n. 519) (1998) 160 ALR at 221.

The law in Australia, Canada and New Zealand concerning breaches of fiduciary duties between guardian and ward was reviewed in the trial of the action of Williams.[539] Abadee J concluded that the law in Australia had been correctly stated in Paramasivam v Flynn. His Honour observed:

“Indeed, in my view in the circumstances where similar facts could possibly give rise to a claim in negligence and for breach of fiduciary duty, if there is in the circumstances an action available it should be according to the common law and not otherwise. In my opinion fiduciary duties should not be found, additional to common law duties, merely for forensic purposes in order to avoid or circumvent limitation periods which apply to common law actions (on the same facts), or to fill a ‘gap’ where such common law actions fail or are not available for good and/or valid reasons. Nor in my view should fiduciary duties be imposed to circumvent the non-imposition of a common law duty, which is denied, for example, for policy reasons, or to support a claim for relief where no breach of common law duty of care has been established on the merits. Indeed, I see no reason why there should be a concurrent fiduciary obligation or duty to enable a plaintiff in a particular case to even avoid or circumvent an obligation to mitigate damage, to avoid common law principles of causation, novus actus interveniens or to circumvent other common law principles.”[540]

On application to the High Court for Special Leave to appeal, the fiduciary aspect of this case “shrank to complete insignificance in oral argument”[541] and the issue was put to one side.

[539](n. 72) [1999] NSWSC 843.

[540]Ibid at [735].

[541](n. 72) (2000) Aust Torts Reports 81-578; [2000] NSWCA 255 per Heydon JA (as he then was) at [55].

In Cubillo v Commonwealth,[542] the Full Court of the Federal Court again considered the scope of fiduciary duties as it applies to the relationship of guardian and ward. An application for extension of time in respect of their statutory claims and common law claims was refused at first instance by O’Loughlin J.[543] On appeal the Full Federal Court (Sackville, Weinberg and Hely JJ) concluded, after having considered the appellant’s statutory claims, that the claim based in breaches of fiduciary duties “faced insurmountable obstacles.”[544] Having commented initially upon the findings of the primary Judge concerning what he considered to have been the authorised removal of the appellants from their families, their Honours said:

“The second obstacle is that, in any event, the appellant’s claims are, to the use the language of Paramasivam v Flynn, within the purview of the law of torts. As the High Court has held, there is no room for the superimposition of fiduciary duties on common law duties simply to improve the nature and extent of the remedies available to an aggrieved party. If it had been the case that the removal and detention of the appellants were not authorised by the Ordinances (or otherwise justified by law), those who caused the removal or detention would be guilty of tortious conduct and liable at common law. There would be no occasion to invoke fiduciary principles.”[545]

[542](n. 109).

[543](n. 109) (2001) 183 ALR 249 at 370 [466].

[544]Ibid at [465].

[545]Ibid at [466].

Equitable principles governing fiduciary duty protect particular interests which differ from those protected by the law of contract and tort. Although fiduciary duties may co-exist with a liability in tort, consistent with the approach of the High Court in Breen v Williams the court in Cubillo regarded the upholding of such a claim as involving a radical departure from underlying principle. An Application for Special Leave to the High Court to appeal the decision of the Full Federal Court in Cubillo was unsuccessful.[546]
[546]Unreported 3 May 2002, Melbourne D10/2001. It was common ground on this Application that only questions relating to the limitation period and laches were at issue. No other questions were raised on this Application.

In Tusyn v Tasmania[547] the Plaintiff, having been committed to the care of the Social Services Department under the Tasmanian Welfare Act 1935, alleged a breach of fiduciary duty as a consequence of sexual abuse to which he was exposed whilst placed in foster care. Blow J found that a fiduciary relationship existed between a guardian and ward but that “ … it does not necessarily follow that the guardian owes the ward a fiduciary duty to take reasonable care of the ward’s physical safety”.[548] Blow J followed the decisions in Paramasivam and Cubillo, his Honour viewing the Canadian approach, as involving too great a departure from established principles. In striking out the claim based upon an alleged breach of fiduciary duty as one that could not succeed his Honour observed, “One needs to distinguish between moral duties, non-fiduciary duties imposed by law, and fiduciary duties.”[549]
[547](n. 368).
[548]Ibid at [11].
[549]Ibid at [11].

In discussing English authority[550] in Williams Abadee J made the observation that not all duties owed by fiduciaries are fiduciary duties. Ipp J expressed a similar view in Permanent Building Society v Wheeler.[551]
[550]Henderson v Merrett Syndicates [1995] 2 AC 145.
[551](n. 368).

In Webber v State of New South Wales[552] Dunford J was called upon to consider the viability of claims made by a former ward of the State of New South Wales who sought common law and equitable damages arising from acts and omissions which allegedly caused him injury whilst he was a ward of the State pursuant to s.9 of the Child Welfare Act 1939. The statement of claim included causes of action for breach of the duty of care and breach of fiduciary duty. Dunford J struck out so much of the statement of claim as related to the claim for breach of fiduciary duty holding that even if the Defendant stood in a fiduciary duty to the Plaintiff as guardian to ward, any breach of fiduciary duties which might give rise to equitable compensation would be confined to instances where the fiduciary acts for, or exercises a discretion on behalf of another party; where the fiduciary is concerned with economic or proprietorial rights; where the fiduciary‘s duties are proscriptive rather than prescriptive and where the breaches of duty are not an alternative to those arising out of tort, contract or common law.
[552][2003] NSWSC 1263 per Dunford J at [47].

The breaches alleged by the Plaintiff are couched in terms of a failure by the Defendant to take positive or prescribed action to protect the interests of the Plaintiff.

In the present case the Plaintiff alleges that the Defendant as guardian failed to take reasonable or proper care of her as a ward. That duty of care arises not because the Defendant owed a proscriptive obligation or duty to the Plaintiff but because, as guardian, the Defendant was required to protect and promote the Plaintiff’s welfare and interests. It is not possible to characterise any of the conduct of the Defendant as falling within the purview of doctrines of equity. The Defendant has not put itself in a position of either accruing a benefit from or being in conflict with the Plaintiff.[553] Intentional, negligent and/or wrongful conduct may be appropriately compensated by common law principles.[554] It follows that in this case, the claim for equitable compensation as a consequence of a breach of fiduciary duty must fail.
[553](n. 519) Paramasivam v Flynn at 219.
[554]Ibid.

I award the Plaintiff damages in the sum of $281,461.00 comprising general damages of $195,000, past loss of earnings of $26,461 and future loss of earning capacity of $60,000. I will hear from the parties as to the form the orders should take.

[2004] VSC 514

14 December 2004