Tusyn v State of Tasmania
[2004] TASSC 50
•26 May 2004
[2004] TASSC 50
CITATION: Tusyn v State of Tasmania [2004] TASSC 50
PARTIES: TUSYN, Walter Michael
v
STATE OF TASMANIA
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: 38/2003
DELIVERED ON: 26 May 2004
DELIVERED AT: Hobart
HEARING DATES: 10 February 2004
JUDGMENT OF: Blow J
CATCHWORDS:
Equity – General principles – Fiduciary obligations – Particular cases – Guardian and ward – Physical safety of ward.
Paramasivam v Flynn (1998) 90 FCR 489; Cubillo v Commonwealth (2001) 112 FCR 455, followed.
M (K) v M (H) (1992) 96 DLR (4th) 289, not followed.
Aust Dig Equity [36]
Limitation of Actions – Postponement of the bar – Fraud or mistake – Concealed fraud – Negligence claim by former State ward against State – Non-disclosure of availability of information that foster parent was dangerous.
Limitation Act 1974 (Tas), s32(1)(b).
Seymour v Seymour (1996) 40 NSWLR 358, followed.
Aust Dig Limitation of Actions [46]
REPRESENTATION:
Counsel:
Plaintiff: C J Gunson
Defendant: P Turner
Solicitors:
Plaintiff: Phillips Taglieri
Defendant: Director of Public Prosecutions
Judgment Number: [2004] TASSC 50
Number of Paragraphs: 41
Serial No 50/2004
File No 38/2003
WALTER MICHAEL TUSYN v STATE OF TASMANIA
REASONS FOR JUDGMENT BLOW J
26 May 2004
The defendant has applied, by an interlocutory application, for orders that the statement of claim herein be struck out, and that the action be dismissed. It contends that the statement of claim does not disclose a reasonable cause of action and, as an alternative, that the plaintiff's claim cannot possibly succeed because it has an unassailable defence.
On the basis of the plaintiff's pleadings, his case can be summarised as follows. He was born on 15 May 1950. (The defendant admits that allegation but disputes all others.) In September 1960, he was committed into the care of the Social Services Department by an order of a Children's Court pursuant to the Infants' Welfare Act 1935, s45. He thus became a "child of the State" for the purposes of that Act, with the result that the Director of the Social Services Department became his guardian pursuant to s8(1) thereof. In March 1961, the Director arranged for him to go to live with a man ("the alleged offender") and his wife. The plaintiff lived with them for a little over two months, during which time the alleged offender sexually abused him in ways that I need not describe. In late May 1961, the Director and his subordinates removed the plaintiff from the home of the alleged offender and his wife. As a consequence of the sexual abuse, the plaintiff suffered from post-traumatic stress disorder from 1961 onwards, and suffered other damage. The alleged offender had an IQ of about 70; was a homosexual with paedophilic tendencies; had a sociopathic personality; had been convicted of indecent assault and committed to the care of the Mental Deficiency Board in 1945; had been convicted of indecent assault in 1952 and as a result detained in prison during the Governor's pleasure; and had been convicted in 1959 on three charges of indecent practices between males and committed to an institution for mental defectives. Each of the court cases related to his conduct towards boys. The State of Tasmania, the Director, and their officers, servants and agents failed to undertake sufficient checks into the background of the alleged offender; failed to make any sufficient assessment as to that man's suitability as a carer for the plaintiff; and knew or ought to have known of his convictions in 1945, 1952 and 1959, the fact that he was a paedophile who engaged in homosexual practices, and the fact that he posed a risk to the plaintiff. They were negligent in permitting the alleged offender to care for the plaintiff.
On the basis of those alleged facts, the plaintiff contends that he has a cause of action in negligence against the State of Tasmania. He is claiming aggravated damages on the basis that the State, its officers, servants and agents, failed to take any steps to have the alleged offender prosecuted in respect of his sexual abuse of the plaintiff, and showed a contumelious disregard for the plaintiff's rights, despite State public servants being in loco parentis in relation to him. The defendant denies that the plaintiff has a cause of action in negligence, and contends in the alternative that any such cause of action is statute barred. The plaintiff contends that his right of action was concealed by the fraud of the defendant or its agents within the meaning of the Limitation Act 1974, s32(1)(b), and that it is therefore not statute barred.
He also contends that the State, the Director, his successors, and their subordinates owed him a fiduciary duty to provide for his care and maintenance; and that that duty was breached by them placing him in the care of the alleged offender in the circumstances that he alleges. On that basis, the plaintiff is seeking orders for damages or compensation in the Court's equitable jurisdiction. The defendant concedes that the relationship of guardian and ward gives rise to a fiduciary duty in relation to a ward's property, but contends that no fiduciary duty was owed or breached in relation to the plaintiff's physical safety, even if all his allegations are true. In the alternative, it contends that equitable relief must be refused because a court exercising equitable jurisdiction should apply by analogy the limitation period imposed in relation to personal injury claims by the Limitation Act.
A number of defences have been raised on the pleadings, but it is not necessary to discuss all of them. Counsel for the defendant, Mr Turner, rightly conceded that not all of them could properly form a basis for an application to strike out the statement of claim and dismiss the action. However he submitted that the plaintiff's action could not possibly succeed because (a) the Limitation Act, s5 provides the defendant with a defence to the claim for damages for negligence that cannot possibly fail; (b) even if all the plaintiff alleges is true, no relevant fiduciary duty was owed or breached; and (c) any claim based on a breach of a fiduciary duty would inevitably be defeated by the Court applying, by analogy, the Limitation Act, s5.
The Court has an inherent jurisdiction to strike out or dismiss proceedings that cannot possibly succeed. Similar powers are expressly conferred by the Supreme Court Rules 2000, r259, which reads as follows:
"259 ¾ If a pleading does not disclose a reasonable cause of action or answer or shows that the cause of action or defence is frivolous or vexatious, the Court or a judge may order ¾
(a) that the action be stayed or dismissed or the pleading be struck out; and
(b) that judgment be entered accordingly."
The principles to be exercised by a court determining an application like the present one, were stated by Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 128 – 130 as follows:
"… the jurisdiction summarily to terminate an action is to be sparingly employed and is not to be used except in a clear case where the Court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion. I have examined the case law on the subject … It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; 'so obviously untenable that it cannot possibly succeed'; 'manifestly groundless'; 'so manifestly faulty that it does not admit of argument'; 'discloses a case which the Court is satisfied cannot succeed'; 'under no possibility can there be a good cause of action'; 'be manifest that to allow them' (the pleadings) 'to stand would involve useless expense'…
As I have said, some of these expressions occur in cases in which the inherent jurisdiction was invoked and others in cases founded on statutory rules of court but although the material available to the court in either type of case may be different the need for exceptional caution in exercising the power whether it be inherent or under statutory rules is the same. … in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed."
In a very clear case, when a limitation defence has been pleaded and the plaintiff's action therefore cannot possibly succeed, it is appropriate for a defendant to apply for the action to be struck out or dismissed, not because the statement of claim discloses no reasonable cause of action, but because the availability of an unassailable defence makes the continuation of the proceedings an abuse of the process of the Court: Ronex Properties Ltd v John Laing Constructions Ltd [1983] QB 398 at 405, 408; Holderness-Roddam v Roberts Ltd A68/1996 Zeeman J at 5.
Breach of fiduciary duty
If, as the plaintiff alleges, he was committed into the care of the Social Services Department by an order of a Children's Court made in September 1960, it is clear that the Director of that Department thereupon became his guardian. In the Infants' Welfare Act, s3, the term "Child of the State" was defined to include "any other child received into or committed to an institution, or to the care of the Department". The following provisions as to guardianship were made by s8(1) thereof:
"(1) The Director shall be the guardian of every child of the State to the exclusion of the parent or other guardian, and shall, except during the time the child is lawfully detained in any certified institution, and except as hereinafter provided, continue to be such guardian, unless the Governor otherwise directs, until the child is discharged. The Director shall as such guardian have (except as aforesaid) the sole right to the custody of every child of the State, and shall deal with such child as directed by this Act."
The Infants' Welfare Act remained in force until the commencement of the Child Welfare Act 1960, which repealed and replaced it, on 2 September 1961: SR 1961, No 129. Under the Child Welfare Act, s80(4), every person of whom the Director was the guardian thereupon became a ward of the State. The Director of Social Welfare thereupon became the guardian of each such child by virtue of the Child Welfare Act, s46(1), which provided as follows:
"46 ¾ (1) Subject to this Act, the Director shall, to the exclusion of the father, the mother, and every other guardian become and be the guardian of the person and estate of a person who is a ward of the State for so long as that person remains a ward of the State."
Under the Child Welfare Act, s45(1), each such person continued to be a ward of the State until attaining the age of 18 years. The Minister could shorten that period or extend it, but not beyond the ward's 21st birthday: s45(2), (3) and (4). The result of all this is that, if the facts are as the plaintiff alleges, a relationship of guardian and ward existed between the relevant director and the plaintiff at all material times during 1961. It is well established that the relationship of guardian and ward is a fiduciary relationship: Clay v Clay (2001) 202 CLR 410 at 428 – 430; Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 per Dixon J at 420 – 421. The relationship was described by the High Court in Clay v Clay (supra) at 430 as "a fiduciary relationship with particular characteristics".
However, when the fiduciary relationship of guardian and ward exists, it does not necessarily follow that the guardian owes the ward a fiduciary duty to take reasonable care for the ward's physical safety. One needs to distinguish between moral duties, non-fiduciary duties imposed by law, and fiduciary duties. In Permanent Building Society v Wheeler (1994) 11 WAR 187 at 237, Ipp J, with whom Malcolm CJ and Seaman J agreed, said:
"It is essential to bear in mind that the existence of a fiduciary relationship does not mean that every duty owed by a fiduciary to the beneficiary is a fiduciary duty."
A very wide view of the scope of fiduciary duties has been taken in Canada. Counsel for the plaintiff relied heavily on the decision of the Supreme Court of Canada in M (K) v M (H) (1992) 96 DLR (4th) 289. The appellant in that case was a woman who was the victim of incest perpetrated by her father, beginning when she was 8 years old and ending when she left home at the age of 17. She sued her father for damages for assault and battery, and for equitable damages on the basis that, by sexually abusing her, her father had breached a fiduciary duty owed by him to her as her parent. The court held unanimously that the appellant was entitled to damages for the breach of such a fiduciary duty. The principal judgment was delivered by La Forest J, with whom Gonthier, Cory and Iacobucci JJ concurred. At 324 – 325, La Forest J adopted the following criteria for the identification of fiduciary obligations, which were originally proposed by Wilson J in Frame v Smith (1987) 42 DLR (4th) 81 at 99:
"Relationships in which a fiduciary obligation have been imposed seem to possess three general characteristics:
(1)The fiduciary has scope for the exercise of some discretion or power.
(2)The fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary's legal or practical interests.
(3)The beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power."
If the relationship of parent and child gives rise to a fiduciary obligation on the part of the parent not to abuse the child, it would logically follow that the relationship of guardian and ward gives rise to fiduciary obligations upon the guardian to refrain from sexually abusing the ward, and to take reasonable care to ensure that no-one else sexually abuses the ward. If guardians have such fiduciary obligations, their wards or former wards might be able to succeed in actions against them for compensation for breach of their fiduciary duties when claims in tort are statute barred. The critical question is whether the law as to fiduciary obligations as developed in Canada should be applied in Australia.
This question was considered by Kirby P (as he then was) in Williams v Minister, Aboriginal Land Rights Act 1983 (1994) 35 NSWLR 497 at 511. The appellant in that case (Mrs Williams) was a woman of Aboriginal descent who complained that she had been placed in a home at birth, and moved to a home for "white" children a few years later because she was fair-skinned; and that she suffered long-standing mental difficulties as a result of her treatment as a child and as an adolescent. She brought an action claiming damages in tort, and also claiming equitable relief on the basis that the Aborigines Welfare Board was in the nature of a statutory guardian, and owed her fiduciary duties as to her custody, maintenance and education. At first instance, an extension of time was refused, but the Court of Appeal, by majority, allowed her appeal and made an order for an extension of time. Kirby P identified certain errors on the part of the primary judge, and went on to say the following:
"But can it be said that the action for breach of fiduciary duty is so hopeless that this established legal error matters not? I do not believe that it can. The Board was in the nature of a statutory guardian of Ms Williams. The relationship of guardian and ward is one of the established fiduciary categories: see Hospital Products Ltd v United States Surgical Corporation Inc (1984) 156 CLR 41 at 141f; Bennett v Minister for Community Welfare (1992) 176 CLR 408 at 426f. 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 a 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 (4th) 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, Szarfer v Chodos (1986) 27 DLR (4th) 388; McKaskell v Benseman [1989] 3 NZLR 75."
Priestley JA agreed with the orders proposed by Kirby P, but said the following at 516:
"These considerations have influenced my general agreement with the approach of Kirby P. That approach involves conclusions, favourable to Mrs Williams, about the arguability of a number of issues. I have reached some of these conclusions only with hesitation and I recognise they may be vulnerable to a strict approach. However, this case seems to me pre-eminently to be of the kind where a broad approach should be taken to questions of arguability of legal propositions which may be novel but which require careful consideration in the light of changing social circumstances. On this basis I agree with the orders proposed by Kirby P."
In 1998, the question whether the relevant Canadian case law should be followed arose in an appeal to the Full Court of the Federal Court of Australia: Paramasivam v Flynn (1998) 90 FCR 489. The appellant in that case complained that she had been sexually abused by the respondent from about 1976, when she was 11 years old, until she was 21 years old. It was pleaded that such sexual abuse involved a breach of fiduciary duty from 1979 or 1980 or, at the latest, from a date in 1981 when the respondent had become the appellant's guardian. The appellant had applied to the Supreme Court of the Australian Capital Territory for an extension of time in which to sue that respondent, but at first instance her application was dismissed and the respondent was given leave to enter summary judgment. Her appeal was dismissed. The Full Court (Miles, Lehane and Weinberg JJ) considered a conclusion reached by Gallop J at first instance that he was not persuaded that the case based on breach of fiduciary duty had real prospects of success. Their Honours considered M (K) v M (H) (supra), Williams v Minister, Aboriginal Land Rights Act 1983 (supra), and Breen v Williams (1996) 186 CLR 71, in which the High Court held that a doctor does not owe that patient a fiduciary duty to disclose a patient's medical records to him or her. At 507 – 508, their Honours concluded:
"All those considerations lead us firmly to the conclusion that a 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 a relationship governed by contract or that liability in equity may co-exist 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 duty owed by the respondent to the appellant had real prospects of success."
In 1999, Abadee J tried Mrs Williams' action, and gave judgment against her: Williams v Minister, Aboriginal Land Rights Act 1983 (1999) 25 Fam LR 86; [1999] NSWSC 843. His Honour reviewed the case law as to the imposition of fiduciary duties in Australia, Canada, New Zealand and England, and concluded that the law was correctly stated in Paramasivam v Flynn (supra). At 240, his Honour said the following:
"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 would 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 any 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."
After his Honour gave judgment for the Minister, there was another appeal to the New South Wales Court of Appeal: Williams v Minister Aboriginal Land Rights Act 1983 (2000) Aust Torts Reports ¶81-578. However the claim based on breach of fiduciary duty was of no significance on the hearing of that appeal. Heydon JA (as he then was), with whom Spigelman CJ and Sheller JA agreed, said the following at 64,147:
"The claim based on breach of fiduciary duty caused the limitation period to be extended in 1994. It bulked very large in the submissions to the trial judge and in the written submissions on the appeal. But it shrank to complete insignificance in oral argument on the appeal. The plaintiff said that putting her case in that way, at least in the Court of Appeal, brought no advantage over putting it in negligence; and if she failed in negligence by reason of the failure to overturn the relevant factual findings of the trial judge, she must equally fail in her arguments that there was a breach of fiduciary duty. The only useful role which the fiduciary duty case would play would arise if adverse fact findings were reversed, but not the finding that there was no duty of care. So, its essential forensic purpose having been served in 1994, the fiduciary aspect was largely laid aside in the appeal."
The scope of the fiduciary duties of a statutory guardian was considered in the Full Court of the Federal Court again in Cubillo v Commonwealth (2001) 112 FCR 455. The appellants in that case complained that they had been removed from their Aboriginal families as children and detained against their will. They sued the Commonwealth alleging various torts and breaches of fiduciary duty. O'Loughlin J refused to grant them extensions of time in respect of their statutory and common law claims, and held that their equitable claims were barred by the doctrine of laches: Cubillo v Commonwealth (2000) 103 FCR 1. On appeal, the Full Court (Sackville, Weinberg and Hely JJ) considered the scope of the fiduciary duties of the Director of Native Affairs and the Director of Welfare as the appellants' statutory guardians. Their Honours concluded that the claims based on breaches of fiduciary duties faced insurmountable obstacles. Those obstacles included findings by the primary judge that he was not satisfied that the removal and detention of one appellant was not authorised by the Aboriginals Ordinance and a finding that the other appellant had been removed from his family at the request of his mother and with her informed consent, without the participation of the relevant director. Their Honours went on to say at 577 – 578:
"The second obstacle is that, in any event, the appellants' claims are, to 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."
An application to the High Court for special leave to appeal was unsuccessful: Cubillo v Commonwealth (unreported 3 May 2002). However nothing said by the High Court is of relevance to the question of the scope of a guardian's fiduciary duties. When refusing special leave, Gleeson CJ said the following:
"In the event that this Court were to grant special leave to appeal, on the appeal, unless this Court found error in the reasoning of the Full Court of the Federal Court on the questions of the limitation period and laches, the Court would not need to address any of the other issues that were debated in the Federal Court.
We are not persuaded that there is an arguable case that there was error in the reasoning and decision of the Full Court of the Federal Court on the questions of the limitation period, and laches, and the applications for special leave to appeal are dismissed."
There have been other cases in which Australian courts have left open the question of the existence of a fiduciary duty. In Johnson v Department of Community Services [1999] NSWSC 1156, the plaintiff alleged (inter alia) that he had been removed from his Aboriginal family when he was 4 years old, and that he had suffered physical mistreatment and acts of racial discrimination on the part of foster parents as a result of inadequate supervision by the defendants. He sought an extension of time, which a Master refused. On appeal, Rolfe J granted an extension of time. After reviewing the relevant authorities, he said at par126:
"I do not consider that … it can be said that there is not, relevantly for present purposes, an available action based on the existence of a fiduciary duty and breach of it."
In Carter v Corporation of the Sisters of Mercy of the Diocese of Rockhampton [2001] QCA 335, the Queensland Court of Appeal considered an appeal by a woman who alleged that she had been taken into the care and protection of the State at the age of two months, and that she was subsequently ill-treated in various institutions. In particular, she alleged that she had been repeatedly raped by a school bus driver employed by the first respondent. Her statement of claim included a claim based on allegations of breaches of fiduciary duty. At first instance, an application for an extension of time was dismissed. The Court of Appeal set aside that decision and granted an extension of time. Its judgment was delivered a week before the Full Court's judgment in Cubillo (supra). At par97, the Court of Appeal (McPherson JA, Muir and Atkinson JJ) said:
"The claim for breach of fiduciary duty could not be said to be fanciful. The Supreme Court in [sic] Canada, for example, held in M (K) v M (H) that incest is both a tortious assault and a breach of fiduciary duty."
A number of relevant cases have been reported in New Zealand, but it appears that it is still an open question in that country whether a fiduciary obligation exists in circumstances such as those alleged by the plaintiff in this case. In S v G [1995] 3 NZLR 681, the New Zealand Court of Appeal (Cooke P, Richardson, Casey, Hardie Boys and Gault JJ) allowed an appeal from a decision granting a plaintiff an extension of time. The plaintiff alleged medical neglect, and sexual, physical and emotional abuse, and had pleaded causes of action in negligence, trespass to the person, and breach of fiduciary duty. The alleged sexual abuse was said to have taken place in a community where the plaintiff/respondent had been taken by her mother to live. At 691 Gault J, delivering the judgment of the court, said that the fiduciary position of the leader of the community, and that of the respondent/plaintiff's mother "must be unquestionable". That comment was obiter since the Court of Appeal decided to allow the appeal and dismiss the application for an extension of time. Further, the report of that case does not suggest that there was any argument or consideration as to whether a breach of fiduciary duty had occurred in the circumstances alleged.
In H v R [1996] 1 NZLR 289, the plaintiff alleged that the defendant had sexually abused her when she was in her early teens. Her family and the defendant had owned separate holiday homes in the same area. Hammond J awarded damages to her for battery. She had also pleaded a breach of fiduciary duty. Hammond J discussed that claim at 306 – 307, but left open the question whether a fiduciary duty had existed, taking the view that he did not need to make a finding as to the claim made on that basis. At 307, he said:
"An otherwise admirable end cannot be met by utilising an important concept, and one which has a distinct moral and functional presence in our law, by watering down the basic concept of a fiduciary."
In Prince v Attorney-General [1996] 3 NZLR 733, the plaintiff claimed that, as a result of the conduct of an officer of a government department, she had been adopted by unsuitable adoptive parents and had suffered a deprived childhood. The causes of action that she pleaded included ones based on alleged breaches of fiduciary duty. Anderson J struck out the relevant parts of the statement of claim, but without rejecting the Canadian approach as to the existence of fiduciary duties. There was an appeal, but the Court of Appeal found it unnecessary to deal with any such point: Prince v Attorney-General [1998] 1 NZLR 262 at 277.
In L v Robinson [2000] 3 NZLR 499, a plaintiff recovered damages in tort in respect of sexual abuse by her physiotherapist. Chisholm J left open the question whether the physiotherapist had breached a fiduciary duty, though commenting at 508 that "recovery of damages for mental harm alone on the strength of such a fiduciary duty would require a major departure from traditional jurisprudence".
As far as I know, there are no reported English cases as to the existence or otherwise of fiduciary duties of the kind asserted in this case. However, as Abadee J pointed out in Williams v Minister, Aboriginal Land Rights Act 1983 (supra) at 241, there is English authority for the proposition that not all of the duties owed by fiduciaries are fiduciary duties, ie, that it is not sufficient for a breach of duty simply to have occurred during the subsistence of a fiduciary relationship: Henderson v Merrett Syndicates [1995] 2 AC 145.
To the best of my knowledge, the Canadian approach to the detection of fiduciary duties has not been applied in any reported case in Australia, New Zealand or England. It has been rejected by the Full Court of the Federal Court both in Paramasivam v Flynn (supra) and in Cubillo v Commonwealth (supra). I consider that I should follow those decisions. In my view the Canadian approach involves too great a departure from established principles for any other course to be appropriate. In my view the plaintiff's claim for compensation based on an alleged breach of fiduciary duty cannot succeed.
The limitation defence to the claim in tort
As I have said, the plaintiff contends that the defendant does not have a good limitation defence to the claim in tort because of the Limitation Act, s32(1)(b). That provision reads as follows:
"32 ¾ (1) Subject to subsection (2) where, in the case of any action for which a period of limitation is prescribed by this Act ¾
(a) the action is based upon the fraud of the defendant or his agent or of any person through whom he claims or his agent;
(b) the right of action is concealed by the fraud of any person referred to in paragraph (a); or
(c) …
the period of limitation shall not begin to run until the plaintiff has discovered the fraud or the mistake, as the case may be, or could with reasonable diligence have discovered it."
There is nothing relevant to this case in s32(2).
The plaintiff's case is that he knew nothing about the criminal record of the alleged offender, nor about any information being available to any relevant public servant or public officer concerning that man, until he was told certain things by a police officer on or about 26 June 2002. He contends that one or more servants or agents of the Crown in right of the State of Tasmania, either knowing that he had the cause of action in tort that is the subject of these proceedings, or being aware that he might have such a cause of action, unconscionably failed to make him aware of his cause of action, or the facts that entitled him to bring such an action, and thereby concealed his right of action by fraud within the meaning of s32(1)(b).
If the plaintiff has a right or action in tort, he has had it since 1961 ¾the year when, allegedly, he was sexually abused and commenced to suffer from post-traumatic stress disorder. The limitation statute then in force in relation to such rights of action was the Mercantile Law Act 1935. Under s3 of that Act, the applicable limitation period was six years. However s4 of that Act provided that if any person entitled to such action, at the time it accrued, was "within the age of twenty-one years", that person would be at liberty to bring the same action "after his coming to or being of full age". The plaintiff came to full age on his 21st birthday, ie, on 15 May 1971. The Limitation Act came into force on 1 January 1975. It repealed the relevant sections of the Mercantile Law Act. It introduced a limitation period of three years for claims in tort for damages for personal injuries, including any impairment of a person's mental condition, and a power for a judge to extend that period up to a maximum of six years: s5. Under s26(1) of that Act, in a case where a right of action has accrued to a person under a disability, and that includes infancy, the action may be brought at any time before the expiration of six years, or a smaller number of years if such is prescribed by that Act, from the time when the person ceased to be under a disability.
There appears to be some disagreement between the parties as to whether the Limitation Act can have any application to this case. The defendant initially pleaded that the alleged cause of action was barred by the Mercantile Law Act, s3. In an amended rejoinder it has pleaded that, if the Limitation Act is of application, the cause of action is barred by s5 thereof. Counsel told me that, for the purposes of this application, the defendant accepts that the Limitation Act applies. I take that to be a concession on the part of the defendant that it is at least arguable that the Limitation Act applies and the Mercantile Law Act does not, and that the claim in tort should not be dismissed, stayed or struck out if the plaintiff has some prospect of success in establishing that time did not commence to run against him until 2002 because of s32(1)(b).
At first glance, it might seem that s32(1)(b) is concerned only with situations involving the taking of positive steps to keep a plaintiff ignorant of his or her right of action after it has arisen. However the words "concealed by the fraud" have a much wider meaning than one might first think. The meaning of the English counterpart of our s32(1)(b), whose wording was not significantly different from that of the Tasmanian provision, was explained by Lord Denning MR in King v Victor Parsons & Co [1973] 1 All ER 207 at 209 – 210 in the following paragraph:
"The word 'fraud' here is not used in the common law sense. It is used in the equitable sense to denote conduct by the defendant or his agent such that it would be 'against conscience' for him to avail himself of the lapse of time. The cases show that, if a man knowingly commits a wrong (such as digging underground another man's coal); or a breach of contract (such as putting in bad foundations to a house), in such circumstances that it is unlikely to be found out for many a long day, he cannot rely on the Statute of Limitations as a bar to the claim: see Bulli Coal Mining Co v Osborne [1899] AC 351, [1895-99] All ER Rep 506 and Archer v Moss [1971] 1 All ER 747, [1971] 1 QB 406. In order to show that he 'concealed' the right of action 'by fraud', it is not necessary to show that he took active steps to conceal his wrongdoing or his breach of contract. It is sufficient that he knowingly committed it and did not tell the owner anything about it. He did the wrong or committed the breach secretly. By saying nothing he keeps it secret. He conceals the right of action. He conceals it by 'fraud' as those words have been interpreted in the cases. To this word 'knowingly' there must be added 'recklessly': see Beaman v ARTS Ltd [1949] 1 All ER 465 at 469, 470, [1949] 1 KB 550 at 565, 566. Like the man who turns a blind eye. He is aware that what he is doing may well be a wrong, or a breach of contract, but he takes the risk of it being so. He refrains from further enquiry lest it should prove to be correct; and says nothing about it. The court will not allow him to get away with conduct of that kind. It may be that he has no dishonest motive; but that does not matter. He has kept the plaintiff out of the knowledge of his right of action; and that is enough: see Kitchen v Royal Air Forces Association [1958] 2 All ER 241, [1958] 1 WLR 563. If the defendant was, however, quite unaware that he was committing a wrong or a breach of contract, it would be different. So if, by an honest blunder, he unwittingly commits a wrong (by digging another's man's coal), or a breach of contract (by putting in an insufficient foundation) then he could avail himself of the Statute of Limitations."
The concept of time not running against a plaintiff whose right of action had been concealed by fraud was developed by the Court of Chancery. Bulli Coal Mining Co v Osborne [1899] AC 351, which was referred to by Lord Denning MR in the passage I have just quoted, is a good example of its application. The appellants in that case had mined the respondents' coal secretly and knowingly for some years, thereby committing an underground trespass. Instead of suing at common law for damages, the respondents sued in equity for compensation. The Privy Council held that it was inappropriate to apply the Statute of Limitations by analogy because the conduct of the appellants amounted to concealed fraud. That case is significant because it was held that there had been concealed fraud even though the appellants had not taken any active measures to prevent the detection of their unlawful activities.
When the Tasmanian Parliament enacted s32(1)(b), copying the provision that Lord Denning MR was referring to in King v Victor Parsons & Co (supra), it obviously intended that time should not run against a plaintiff in circumstances which would have led a court of equity to refuse to apply a limitation statute by analogy, applying the doctrine of fraudulent concealment. A right of action will be regarded as "concealed by fraud" not only when active steps have been taken to conceal the existence of the right of action, and not only in the case of intentional torts, but also in situations where a person aware of the existence of a right of action, or aware of the possibility of the existence of a right of action, remains silent about its existence or the relevant facts: Seymour v Seymour (1996) 40 NSWLR 358; Cave v Robinson Jarvis and Rolf [2003] 1 AC 384 at 392 – 394; Inca Ltd v Autoscript (New Zealand) Ltd [1979] 2 NZLR 700. As these cases make clear, there is no scope for a finding of fraudulent concealment on the part of a person who is unaware of the existence of a right of action, and is not turning a blind eye to the possibility of the existence of one, such as the honest blunderer referred to by Lord Denning MR.
For a plea of concealment by fraud to succeed on the basis of non-disclosure, it is necessary to plead and prove that the individuals responsible for the non-disclosure were conscious that such non-disclosure was wrongful, or should have been conscious that it was wrongful. In Seymour v Seymour (supra) at 372, Mahoney A-CJ, with whom Meagher JA and Abadee A-JA agreed, said the following in relation to the New South Wales equivalent of s32(1)(b):
"In my opinion, the section is not confined to simple common law fraud. It extends to conduct beyond that. On the other hand, it is not, I think, sufficient merely that for the defendant to take advantage of the statute of limitations would be unconscionable or inequitable in the wide sense of these terms. Terms such as unconscionable and inequitable now are used to describe conduct which, in previous times, would not have fallen within them: see Baumgartner v Baumgartner (1987) 164 CLR 137 at 147 and Hibberson v George (1989) 12 Fam LR 725 at 731.
Nor, in my opinion, is 'fraudulently' wide enough to include everything which would fall within the description of 'equitable fraud'. Equitable fraud is a doctrine which depends, for this purpose, too much upon nice distinctions which have been drawn in other times: see Snell's Equity (29th ed) at 550 et seq; Meagher, Gummow & Lehane (3rd ed) at par 1208; and see the discussion in Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537 at 553. The history of the English legislation was recently reviewed in Sheldon v RHM Outhwaite [1996] 1 AC 102: see, eg, at 144, 153.
In my opinion, there must be in what is involved a consciousness that what is being done is wrong or that to take advantage of the relevant situation involves wrongdoing. At least, this is so in the generality of cases. (There is in this as in many things, the problem of dealing with the person who 'closes his eyes to wrong' or is so lacking in conscience that he is not conscious of his own lack of proper standards.)"
It seems quite unlikely that one or more public servants decided, in 1961, not to tell the plaintiff, a 10 –year-old boy in the care of the State, that he had the right to bring an action for damages against the State government, knowing that such non-disclosure was wrongful. However, it must be remembered that, subject to any question of fraudulent concealment and subject to any need for an extension of time under the Limitation Act, s5(2), any right of action available to the plaintiff subsisted until his 27th birthday. No evidence was adduced on the hearing of the present application. The argument proceeded upon the basis of the pleadings alone. The plaintiff's action could succeed if he is able to establish that, prior to his 27th birthday in 1977, one or more public servants either deliberately did not disclose to him the existence of his right of action or the information that was known or ought to have been known about the alleged offender, or turned a blind eye to the idea of any such disclosure, knowing that such non-disclosure was wrongful. Establishing fraudulent concealment on any such basis might be unlikely, but on the material before me I cannot rule out that possibility, or even say that it is so unlikely as to be unrealistic.
However the plaintiff's pleadings do not go so far as to allege any deliberate non-disclosure or turning of a blind eye, nor any knowledge that non-disclosure was wrongful. In the amended reply, it is alleged that the defendant and a number of public officers over the years had moral obligations to disclose to the plaintiff "the negligence of the defendant, its officers, servants or agents and/or the Director of the Social Services Department, his officers, servants or agents", and that they did not disclose such negligence to him. It is on that basis that concealment by fraud has been pleaded. In my view the facts alleged in the amended reply, if proved, would not be sufficient to establish concealment by fraud within the meaning of s32(1)(b).
On the material before me, I am unable to say whether the plaintiff contends that anyone with a moral obligation to make a disclosure to him was, or ought to have been, conscious that what had been done was wrong, or that to take advantage of the existing situation involved wrongdoing. I therefore think the plaintiff ought to be given an opportunity to re-plead in relation to s32(1)(b). I think it follows that the appropriate course is to make orders striking out the amended reply, and adjourning the interlocutory application, giving the plaintiff an opportunity to submit a fresh amended reply. Unless the plaintiff pleads facts in a fresh amended reply that would enable a plea of concealment by fraud to succeed, it will be appropriate for the action to be dismissed.
Conclusion
As the claim based on a breach of fiduciary duty must fail, there is no need for me to consider the arguments as to the application of the Limitation Act by analogy in relation to that claim. The appropriate course is for me to strike out those parts of the amended statement of claim that are referable only to the claim for equitable relief.
Accordingly, I make the following orders:
(1)That pars17 – 20 of the amended statement of claim dated 5 February 2004 and item D in the prayer for relief therein be struck out.
(2)That the amended reply be struck out.
(3)That the plaintiff have liberty to file and serve a further amended reply within 28 days.
(4)That the interlocutory application be adjourned sine die.
(5)That there be liberty to apply.
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