W v The Attorney-General
[2003] NZCA 150
•15 July 2003
IN THE COURT OF APPEAL OF NEW ZEALAND
CA227/02
BETWEENW
Appellant
ANDTHE ATTORNEY-GENERAL
Respondent
Hearing:7, 8 and 9 April 2003
Coram:Blanchard J
Tipping J
McGrath J
Anderson J
Glazebrook JAppearances: J M Ablett Kerr QC and S A Saunderson-Warner for Appellant
H S Hancock, C J Mathieson and I C Vernon for Respondent
Judgment:15 July 2003
JUDGMENT OF THE COURT DELIVERED BY BLANCHARD J
[1] This judgment is delivered at the same time as the judgment in S v Attorney-General, CA43/02, and should be read in conjunction with it. It is an appeal against a reserved decision of Smellie J in the High Court at Wellington delivered on 3 October 2002 after an 18 day hearing. Mrs W, to whom we will refer as EW, is seeking compensatory and exemplary damages from the Department of Social Welfare (as successor of the Department of Education) for the mental consequences of physical and emotional abuse by foster parents, and in particular sexual abuse by a foster father, WF, in whose home she was placed by the Superintendent of Child Welfare from June to December 1970.
[2] The claims made by EW, as relevant to this appeal, were of (a) assault and battery and negligence by the foster parents, for which the Department was alleged to be vicariously liable, (b) negligence by Child Welfare Officers, and (c) breach of fiduciary duty by the foster parents and the Department. Both compensatory and exemplary damages were claimed. The Department denied liability and also said that the claims were barred both under the Limitation Act 1950 (or, in the case of breach of fiduciary duty, by analogy) and under the accident compensation legislation.
Facts
[3] EW was born in Hamilton on 16 December 1958 which was, by striking coincidence, one day after the birth of the plaintiff in S v Attorney-General. She is Maori. She was one of nine children. Smellie J found that the family lived in impoverished circumstances in an isolated North Island rural area. Although EW was “happy in her heart” in that home and there was a strong family bond, the children were neglected, the parents over-indulged in alcohol and there was harsh discipline. Three successive complaints were made by Child Welfare to a Children’s Court that the parents were neglecting the children. On 23 June 1970 when EW was 11½, she and her siblings were committed to the care of the Superintendent and the next day she and her sister DW, who was a year older, were placed in the home of Mr and Mrs F.
[4] Almost immediately, WF began sexually assaulting the two girls during the evenings after his wife had gone to bed. He would come to their bedroom, expose himself and put his penis in the mouth of one of them, also fondling her breasts and genitals. After six days DW was moved to another home, apparently because it came to the attention of the Department that she and EW were fighting. (Although DW gave evidence for EW at the trial, the two are not close. DW was sexually abused also in her next foster home, the E household, by a son of Mrs E, but she then had the good fortune to be placed in the care of an elderly Maori woman who looked after her very well. She still suffers from her childhood abuse but has managed to have a successful business career, which is in stark contrast to the life of her sister.)
[5] EW remained in the F family for six months and the abuse by WF continued during that time. In December 1970 she was removed and then placed in a succession of other homes until eventually she was returned to her parents, in January 1973.
[6] EW also claimed that she was physically assaulted in one of the successor homes, that of Mr and Mrs W, and that she was malnourished. She said that in both the F and W homes her parents had been racially denigrated by the foster parents in conversations with her or in her presence.
[7] Between dates in August and October 1973 WF committed a series of sexual assaults on boys living in his home. These were reported to the authorities and he was prosecuted. In April 1974 he was convicted and sentenced to six months imprisonment. One of the respects in which the Department was said to have been negligent was that it had never undertaken any investigation of whether there had been abuse of other children in WF’s care. In particular, no approach was made to EW.
[8] In the meantime she had begun criminal offending and in December 1973 had been sent to a girls’ home in Hamilton. Her offending continued, gradually becoming more serious. She joined a gang and remained a member for many years. She married and had several children but also served four jail terms, the longest being for one year.
[9] In April 1996 EW read an article in a newspaper about a woman she knew who was issuing proceedings against the Department because of abuse suffered while a child in care and sought access to her departmental file. She was also assessed by a consultant psychiatrist, Dr Aranui-Faed. She was diagnosed as suffering from post-traumatic stress disorder (PTSD) and borderline personality disorder (BPD). Her application for leave to commence this proceeding was made in March 1997. That application was refused in the High Court but her appeal to this Court succeeded and leave was granted: W v Attorney-General [1999] 2 NZLR 709.
[10] Smellie J found that EW was sexually abused by her foster father, WF, as described above. There is no cross-appeal against that finding. However, he concluded that, judged by the standard of the day, other treatment of her by Mr and Mrs F did not amount to a breach of duty which could justify the award of damages. In particular, he said, the almost complete failure to recognise or nurture her ethnic and cultural background was the norm. What he called the more enlightened view applying today he ascribed to the establishment of the Treaty of Waitangi Tribunal in 1975 and the Puao-Te-Ata-Tu (Daybreak) report of the Ministerial Advisory Committee on the Maori perspective of the Department of Social Welfare in 1986. He said that the Superintendent could be excused in 1970 for attitudes which would not be tolerated today. That conclusion is challenged in EW’s appeal.
[11] In relation to EW’s time in the W household, the Judge said that it had exposed her to verbal and physical abuse but the circumstances would not support other than modest damages. As there is no cross-appeal against this finding and we are not concerned in this judgment with the quantum of damages, we do not find it necessary to refer to it further.
[12] The Judge then gave extensive consideration to a matter which was of great importance to EW’s claim that, in addition to negligence of the foster parents for which the Department was vicariously liable, there had been negligence – indeed, it was said, gross negligence - on the part of officers of the Department, in particular a Senior Child Welfare Officer, Mrs Von Hartitzsch. After reviewing the relevant evidence, and taking into account that Mrs Von Hartitzsch was unavailable to give evidence because she had died in 1983, the Judge found that an initial complaint by EW to a junior officer of “rudeness” towards her by WF had been made but, because of that officer’s workload or inexperience, not recognised as a serious complaint of sexual abuse. More significantly, however, the Judge also found that EW and her sister DW did complain of such abuse by WF to Mrs Von Hartitzsch but were not taken seriously (when they should have been) and were fobbed off by being bought a new dress each. Smellie J also accepted that EW had complained to Mrs Von Hartitzsch about sexual abuse by WF on another occasion but that Mrs Von Hartitzsch “failed to support her and offered instead extra pocket money”.
[13] Smellie J also made findings that DW had complained about violation by WF and by the son of her next foster parents. There had also been evidence, extracted in cross-examination of another foster child, L, who had been called by the Crown to give character evidence about WF, that she too had been sexually abused in another foster home over a lengthy period.
[14] The Judge described all this as a disturbing picture. He said there was credible evidence of the following:
· Sexual abuse of the plaintiff and her sister DW at the home of Mr and Mrs F in 1970.
· Sexual abuse of DW and another foster child in 1971 at the foster home of Mr and Mrs E.
· Sexual abuse of L over a period of nine to ten years (approximately 1973 to 1982) in a third foster home by a son of the foster parents.
· Sexual abuse of boys in the F family home in 1973 by WF and his son R for which they were prosecuted in 1974 and convicted and WF was imprisoned.
[15] The Judge commented:
In all these cases Mrs Von Hartitzsch was the Senior Child Welfare Officer involved in the placement. In the first three the police were not advised and in the first two the children apparently not believed and/or the matter not properly investigated. So far as the fourth episode is concerned the evidence of Mrs F suggests that temporary caregivers in the family home “went over Mrs Von’s head” and reported to the police when Mrs F herself was possibly in hospital. Further, it seems that no follow-up of children in care in the F, E and W foster homes was conducted to see whether others had suffered similar victimisation.
[16] The Judge found that there were several proven breaches by the Department of its direct duty of care towards EW. There had been a failure to act with due skill and care in placing her with the F family. Mrs F already had a working husband and three children to look after. She had had a nervous breakdown in the past and had attempted suicide. The Department placed with her two infant intellectually disabled children as well as EW, DW and “various others”. The number of foster children exceeded the permissible number (five). Mrs F carried a huge burden which deprived her of the time and energy properly to supervise and protect EW. It may have been difficult to find an alternative foster home but the vulnerability of Mrs F was known by Mrs Von Hartitzsch and the load she was carrying perceived and understood by Mrs Von Hartitzsch and visiting inspectors.
[17] The Judge also found that the Department had failed to act with due care and skill to ensure that EW’s relationship with other significant family members was maintained, contrary to a clear indication from the Magistrate who made the committal order and who had expected that Child Welfare would ensure that the family was reunited as soon as possible.
[18] Importantly, negligence by the Department was also found in relation to Mrs Von Hartitzsch’s failure to act on complaints of sexual abuse and to provide counselling and support. She had failed to listen and take seriously EW’s complaints of sexual abuse by WF.
[19] But Smellie J concluded that there had been no breach relating to EW’s cultural safety, saying that today’s standards cannot fairly be applied to conduct over 30 years ago. EW appeals against that finding.
[20] There is no cross-appeal by the respondent against the findings of direct negligence by the Department. The Judge found that the Department is vicariously liable for the negligence of Mrs Von Hartitzsch. The respondent also accepts that finding.
Negligence of foster parents
[21] Smellie J did not characterise the torts which had been committed against EW by the foster parents. It hardly needed to be said that the sexual abuse amounted to assault and battery. Although he did not in so many words make a finding of negligence by the foster parents, it follows from his factual conclusions that he would also have characterised the conduct of WF as negligence. Again, as in the S case, no point has been taken about the availability of a cause of action in negligence when the acts in question were intentional and amounted to assault and battery. We proceed on the basis that in sexually assaulting her WF was in breach of his duty of care towards EW, as were the other foster parents in the respects referred to above. Whether this approach is correct is not of moment to the assessment of damages in this case because of the finding of direct negligence by officers of the Department. In fact, the Judge did not think it was necessary on the compensatory damages claim to decide whether vicarious liability should be imposed for the conduct of foster parents although appearing to indicate a negative opinion. EW contests that view on this appeal.
Abuse causative of mental injury
[22] The Judge considered whether EW had suffered injury consequent upon abuse in the F and W households. The Crown accepted, as it did in this Court, that EW is “a grossly damaged woman”, suffering from psychiatric illness or illnesses which severely inhibit her ability to function satisfactorily in everyday life and necessitate medication. The defence case was, however, that the abuse was not the real cause of her condition. After an examination of the expert psychiatric evidence, Smellie J was satisfied that there was a causative link between the sexual abuse and the PTSD or BPD conditions which presently afflict EW. He said that the sexual abuse and the circumstances under which it occurred had a significant, if not dominant, causative effect. The Crown does not contest this finding.
Limitation defence – discoverability
[23] The Judge then dealt with the limitation defence to the negligence claim. In reliance on W v Attorney-General he looked at “when in fact the plaintiff made the link and secondly whether given her circumstances she ought reasonably to have made the link at an identified earlier time”. He referred in some detail to the evidence of EW and the experts and set out an extended passage from Mr Hancock’s final submissions for the Crown in which the objective test of reasonable discoverability was discussed. By what he described as a fine margin, the Judge accepted EW’s evidence as to when she discovered the link, namely, not until after her interviews with Dr Aranui-Faed between September and November 1996. In coming to his conclusion he relied also upon the psychiatric evidence of the conditions EW suffered from, saying that when he added the psychiatric evidence to that of EW he was well satisfied to the requisite standard. The Limitation Act therefore did not bar EW’s claim.
[24] In our view, notwithstanding the submissions made to us on behalf of the Crown, it was well open to the Judge to reach this conclusion on the evidence. Mr Mathieson persuaded us that the Judge failed to make a finding concerning whether EW ought reasonably to have made the link between the abuse and her mental injury at an earlier time. It will be clear from the references we have made to the way in which the Judge stated the applicable test and the adoption in his conclusions of the psychiatric evidence, which was that it was reasonable for the link not to have been made until counselling, that the Judge recognised the objective component.
[25] It was further submitted to us that the Judge had placed insufficient weight on EW’s long-standing awareness of her “symptoms” and on evidence that she had attempted to make an accident compensation claim in 1985. But what counsel called a description by EW of her symptoms was in fact her memories of the abuse. The psychiatric evidence was to the effect that most child abuse victims will, like EW, remember the abuse, although they may try (consciously or subconsciously) to blot it out from their memory. Counsel’s argument, with respect, confused knowledge of the event of abuse with knowledge of the link between that event and the dysfunction it is causing in the present life of the victim. So far as the accident compensation claim in 1985 is concerned, it was open to the Judge to accept EW’s evidence that she tried to make the claim only because another prison inmate had told her she might be entitled to a payment if she had been sexually abused as a child. She was not attempting to claim because she had an appreciation that the sexual abuse was a cause of her ongoing difficulties or had led or contributed to her criminal offending.
[26] The Judge was criticised by counsel for over-reliance on the psychiatric evidence but in this difficult area the courts need such guidance and, reading the relevant passage of the judgment as a whole, it is plain that the Judge considered the opinions of the psychiatrist and then, as one would expect, reached an independent view.The Crown did not call any psychiatric evidence.
[27] The Limitation Act challenge to the negligence claim therefore fails, both in regard to the conduct of the foster parents and the conduct of the Department. In neither case is it shown that EW discovered, or ought reasonably to have discovered, until she had undergone counselling late in 1996, that the abuse by the foster parents, which was not detected or brought to an end by the Department, was causing her ongoing problems.
Accident compensation bar
[28] Smellie J found that the appellant’s common law compensatory damages claims were barred by the Accident Rehabilitation and Compensation Insurance Act 1992 (the ARCI Act). As is the situation in S v Attorney-General, it does not appear that the argument which we heard was made to him. For the reasons given in S v Attorney-General, we consider that there is no such bar to EW’s claims.
[29] An additional argument was made by counsel for the Crown relating to Accident Insurance Act 1998 (the 1998 Act) which replaced the ARCI Act as from 1 July 1999. It was submitted that, even if the claims may not have been barred by ARCI Act, they were barred by ss40, 44 and 394 of the 1998 Act (and continue to be barred by ss21, 36 and s317 of the current legislation, the Injury Prevention, Rehabilitation and Compensation Act 2001 which are in the same terms):
40 Cover for mental injury caused by certain criminal acts
(1) An insured has cover for a personal injury that is a mental injury if—
(a) He or she suffers the mental injury inside or outside New Zealand on or after 1 July 1999; and
(b) The mental injury is caused by an act performed by another person; and
(c) The act is of a kind described in subsection (2).
(2) Subsection (1)(c) applies to an act that—
(a) Is performed on, with, or in relation to the insured; and
(b) Is performed—
(i) In New Zealand; or
(ii) Outside New Zealand on, with, or in relation to an insured who is ordinarily resident in New Zealand when the act is performed; and
(c) Is within the description of an offence listed in Schedule 3.
…
44Date on which insured suffers mental injury caused by certain criminal acts
(1) The date on which the insured suffers mental injury in the circumstances described in section 40 is the date on which the insured first receives treatment for that mental injury as that mental injury.
(2) In subsection (1), treatment means treatment of a type that the insurer is liable to provide under Part 1 of Schedule 1, whether or not the insurer provides any treatment in the particular case.
394 Proceedings for personal injury
(1) No person may bring proceedings independently of this Act, whether under any rule of law or any enactment, in any court in New Zealand, for damages arising directly or indirectly out of—
(a) Personal injury covered by this Act; or
(b) Personal injury covered by the former Acts.
…
The definition of “treatment” in s13 of the 1998 Act included a certificate required by the insurer. On 3 September 1999, it was said, the appellant had applied for ACC benefits and a certificate had been completed by a medical practitioner. It was subsequently sent to the Corporation. Thus, it was argued, the date of the first treatment was after the 1998 Act came into force (s44) and so there was cover under s40(1). Accordingly s394 barred any proceedings, even, it was submitted, if instituted prior to 1 July 1999.
[30] The short answer to this submission provided by Mrs Ablett Kerr QC is that s422 of the 1998 Act denied cover under that Act to EW. That section provided that a claim must be determined under the ARCI Act if it was for a personal injury suffered before 1 July 1999, was lodged with the former Corporation before that date and was not determined before that date. EW had made claims under the ARCI Act but had not pursued them. A determination would not occur under the ARCI Act until a claim was accepted or declined and the claimant advised accordingly or there was a deemed declinature under s66 (where the Corporation did not advise a decision or request further information within one month). None of these things occurred. EW was asked for further information within one month and no further action was ever taken by the Corporation to communicate with her about her claims. So when the 1998 Act came into force on 1 July 1999 they had not been determined. As EW therefore had no cover under either the ARCI Act or the 1998 Act, her compensatory claims for personal injury are not barred.
[31] We would add that the Crown’s position actually appears to contradict an argument which it made in the High Court relating to s63(3) of the ARCI Act and which Smellie J accepted. That argument was that EW had made claims under the ARCI Act but had failed to follow through on them. The inference drawn by Smellie J, at the urging of the Crown, was that treatment was not received only because EW chose not to avail herself of it. The Judge held that the provisions of the ARCI Act could not be rendered ineffective by simple inactivity on the part of a claimant. He therefore regarded EW as having had treatment during the period of the ARCI Act.
[32] We have held that the ARCI Act, properly interpreted, did not contain any bar for EW’s proceeding. But, as the Crown has not withdrawn its allegation that EW must be taken to have received treatment while that Act was in force, if it had been necessary we would not have been disposed to uphold its argument that treatment was first received after the 1998 Act came into force. In saying this, we do not intend any criticism of EW’s conduct in relation to her claims lodged under the ARCI Act.
[33] In the absence of very express language to the contrary, we would also have been reluctant to attribute to Parliament an intention to deprive EW, under the 1998 Act, of her common law claim in respect of which she had already brought a proceeding prior to the passage of that Act.
Vicarious liability for compensatory claims
[34] For the reasons given in S v Attorney-General, we hold that the Department is liable vicariously for the negligence committed by the foster parents. As well, it is liable for the negligence of officers of the Department.
Limitation defence - assault and battery
[35] The Judge dealt with the assault and battery claim only very briefly. He took the view that because such a cause of action could be maintained without proof of damage, it would have accrued when EW attained her majority. “She knew what had been done to her at that stage and there was no discoverability issue which could delay the running of the six year period laid down by the Limitation Act”. He held that this cause of action was statute barred. Little or no attention seems to have been given to whether EW was suffering from a disability in terms of s24 of the Act preventing her from being able to commence a proceeding.
[36] In this Court counsel for EW submitted that evidence had been adduced that EW was suffering from a disability. Mrs Ablett Kerr QC pointed to her apparent inability to complete a process of litigation relating to a house fire in 1989 even after an offer of settlement had been made to her lawyer. EW had simply walked away from the case. Her lawyer could not get instructions.
[37] Perhaps more pertinently, counsel referred us to the report of Dr Crawshaw, a psychiatrist, who had given an opinion that the pervasive effect on EW’s life of her psychological difficulties had led to a “significant disability in firstly recognising their link to her abuse and then bringing a claim for compensation”. Dr Crawshaw expressed himself as being satisfied in terms of “the Appeal Court ruling” (evidently a reference to this Court’s decision in the appeal concerning leave to commence the proceeding) that there was a significant psychological disability that prevented her bringing her claim earlier. Mrs Ablett Kerr described his Honour’s dismissal of this cause of action as the more curious because he had accepted the evidence of Dr Crawshaw that EW continues to suffer from a serious and ongoing disability.
[38] The respondent’s position was that the Judge had made no finding on disability, but because he had, in dealing with discoverability in the negligence claim, referred to her inability to “surmount her disability”, it took the precaution of cross-appealing on this issue. It submitted that EW had never lacked the psychological ability to take legal action against WF or the State. She did not claim that her mental injury affected her reasoning process. Dr Crawshaw had gone no further than saying that the severity of her PTSD had made it “very difficult” for her to contemplate and bring legal action. Very difficult was said to be not the same as incapable or unable. She had approached a lawyer after reading an article in a newspaper and before any meeting with a psychiatrist. The PTSD had not prevented the approach to the lawyer. It was submitted that the Court should take a “commonsense” approach and rely on these facts rather than on the opinions of experts who examined EW only after the litigation process was started.
[39] We have concluded that it has not been shown, on balance, that EW was suffering from a disability which prevented her bringing a claim for assault and battery. She may well have been inhibited to an extent which would have made it difficult for her to pursue litigation but, as Dr Crawshaw himself recognised, the predominant reason why EW did not bring a proceeding at an earlier time was because she had not made the link between the sexual abuse and her psychiatric problems. But her inability to make that link is irrelevant to her claim for assault and battery. Once she did make the link she was, as Crown counsel submitted, able to pursue litigation with some vigour even though the influence of her PTSD continued. The inference that can reasonably be drawn is that if EW had discovered the link at an earlier time she would have then commenced a proceeding. Indeed, it is of some significance that she was not in 1985 disabled from attempting to bring an accident compensation claim – a step which obviously required her to confront the sexual abuse. The failure to proceed in 1989 with the house fire claim is not shown to have had anything to do with the problems caused by the abuse.
[40] It follows that in our view an action for assault and battery was statute barred many years before the proceeding was actually commenced.
Breach of fiduciary duty
[41] Smellie J said that he had reservations about this claim but that it would be precluded by the ARCI Act, surviving only for the exemplary damages claim. He did not find it necessary to make any determination.
[42] In S v Attorney-General breach of fiduciary duty was claimed against the Department directly. In this case, while there is a claim of breach by the Department itself, especially in relation to the cultural safety question (which was also addressed by counsel as an aspect of negligence and which we will consider separately), Mrs Ablett Kerr submitted that the acts of WF in sexually abusing a child in his care constituted a breach of fiduciary duty on his part for which the Department was vicariously liable.
[43] In our view the claim made against the Department directly under this head must fail. As in S, the real complaint is of a lack of care by the Department. In this respect the alleged failings of the Department concerning cultural safety are no different from the other allegations of want of reasonable care.
[44] We turn to the claim of vicarious liability for a breach of fiduciary duty by WF. It is well established in Canada since the decision of the Supreme Court in M(K) v M(H) [1992] 3 SCR 3, that a parent who takes sexual advantage of his or her child commits a breach of fiduciary duty. The child who trustingly looks to the parent for protection is instead exploited for the gratification of the parent. That is a breach of a duty owed by the parent to the child arising out of the trust and confidence imposed in the parent by the child. The parent acts in his or her own perverted interest, contrary to the duty to the child. If the Canadian analysis is to be accepted, we can see no good reason for distinguishing the position of a foster child who is, in practical terms, as much at the mercy of the parent as a natural child. In B(KL) v British Columbia (2001) 197 DLR (4th) 431 at 440 the relationship was said to have similar characteristics involving power and discretion on one side and dependence and vulnerability on the other. It is true that there is the possibility of the child approaching the Department as the organ of government charged with the child’s special protection but many foster children will be quite unaware of the Department’s role or will be unable to make the approach. And, as we see in this case, the approach may be unavailing.
[45] Having said this, however, the essential allegation against the foster parent, WF, under this head is exactly the same as for the allegation of negligence, where in assessing damages the fact that the tort was deliberate and was committed on a child in the care of the perpetrator will be fully taken into account. Damages will be no greater in equity. As we have held that there is no limitation bar, there is no procedural advantage in this case to be gained from the alternative formulation as an equitable claim. We leave open whether such a claim can be made in this country.
Cultural safety
[46] The allegation is that the High Court erred in finding that there was no breach of a duty to provide for the cultural safety of EW; that even by the standards of the 1970s the Department’s conduct towards EW fell short of what was reasonable for her and other Maori children. Specifically it is said that there was a duty to inquire of her family and of licensed Maori foster parents concerning her placement. She was not placed, from a cultural perspective, in a suitable home. Appropriate information concerning her Maori heritage – she is descended from a chief of her iwi – had not been given to her foster parents. Her Maori identity was not respected despite the fact that the Department was aware that attention should have been paid to it.
[47] The Judge in fact made findings in favour of the appellant that the Department had not acted with due care and skill in placing EW with the Fs (see para [16]). He said it had not ensured that EW’s relationship “with other significant family members” was maintained, as had been expected by the judicial officer who made the committal order. Although this finding was not directed particularly to the recognition that the family were Maori, that factor would be likely to have made the position worse. To that extent the judgment is already in EW’s favour. We can readily understand also the distress for a Maori child in hearing her natural parents denigrated by her foster parents on racial grounds. That too was not to be tolerated by the standards of those times and can be taken into account in assessing damages.
[48] But we agree with the Judge, who had some years of experience presiding over a Tribunal in this field, that it is not appropriate to superimpose on the past the standards of today. What happened to EW concerning her Maori culture and heritage was regrettable, especially so by modern standards. The Department could, even then, have done more to sustain her sense of her Maori culture. But, like the Judge, we do not consider that in failing to take positive action in this respect the Department’s conduct towards EW can be regarded as having been negligent by the standards of the day.
Contributory negligence/ mitigation of damage
[49] Perhaps encouraged by a remark from the trial Judge that even if damages for personal injury had been available they would have been very substantially reduced on account of failure to mitigate and contributory negligence, counsel for the Crown in their written submissions somewhat cursorily took the same line. Discouraged no doubt by comment from the Bench, they sensibly did not pursue these matters in oral submissions. We disagree with the Judge’s comment. In view of the findings concerning discoverability it would be entirely inconsistent then to say that the appellant should have sought treatment at an earlier time and has thereby contributed to or failed to mitigate her injury.
Exemplary damages
[50] In S v Attorney-General we held that the Crown was not liable for exemplary damages on a vicarious basis. The like claim in this case must also fail for the same reasons.
[51] The claim is also made on another basis, namely that the respondent is directly liable for the negligent acts and omissions of Mrs Von Hartitzsch. That involves two questions: (a) whether, because of her position in the Department and its relation to EW, her acts and omissions should be attributed to the Department and, if so, (b) whether her conduct was so grossly inappropriate by the standards of the 1970s that it can truly be said to have involved outrageous disregard for the rights of EW.
[52] As regards (a), the Judge was not apparently invited to consider the matter in this way. The argument is that the Department is not being made answerable for the fault of another, its employee, but instead is answerable for its own default committed by the person who constituted the Department in the particular instance. The employee, Mrs Von Hartitzsch, is said to have acted as the Department in her dealings with EW.
[53] Guidance is to be found in the opinion of the Privy Council, though in a vastly different factual setting, in Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 3 NZLR 7 at 12, which can be adapted to fit the situation of a government department rather than a trading company. It is necessary to look at the substantive rule – here, that a person is liable for exemplary damages if that person acts in outrageous disregard for the rights of the plaintiff – and then to work out whether it is proper to apply it to a government department, as to which we have no doubt, and, if so, how it is appropriate to apply it. In Meridian the Privy Council said that the Court has to fashion a special rule of attribution for the particular substantive rule. This involves determining whose act (or knowledge or state of mind) was for this purpose, i.e. attribution of conduct, intended to count as the act etc of the defendant. Rephrased for the current circumstances, the question in this case would be: for the purpose of attributing outrageous conduct whose act ought to count as the act of the Department? It cannot possibly be said that the foster parents acted as the Department so no exemplary damages can on this basis be awarded for their actions. But it is arguable that the position is different in relation to the acts and omissions of Mrs Von Hartitzsch. She was, as a Senior Child Welfare Officer, the person responsible for EW’s placement and supervision and the person to whom EW brought, in vain, her complaints. She was exercising or able to exercise authority under s20 of the Child Welfare Act 1925 which provided for placements of children to be made by the Superintendent or “any officer of the Child Welfare Division authorised by the Superintendent in that behalf”. Mrs Von Hartitzsch evidently had that authority to represent the Department in her dealings with EW. In the circumstances it is therefore arguable that her acts and omissions should be attributed to the Department and that, if her acts and omissions were so bad as to be deserving of being marked by an award of exemplary damages, then an award should be made against the Department. But, for reasons which now follow, we find it unnecessary to reach a final conclusion on that question.
[54] In declining to award exemplary damages Smellie J referred to three particular factual findings. The first was the placement of EW with a foster mother, Mrs F, who had suffered a nervous breakdown, had attempted suicide and was already overburdened in looking after her family and an excessive number of foster children. The second was his finding that there was a failure to ensure that EW was reunited with her family as soon as possible. Smellie J referred to the decision of the Privy Council in A v Bottrill [2002] 3 WLR 1406 that there might be the “rare case” where, in the words of Lord Nicholls of Birkenhead, the defendant departed so far and so flagrantly from the dictates of ordinary or professional practice precepts of prudence, or standards of care, that his conduct satisfied the test of outrageousness even though he was not consciously reckless.
[55] Smellie J said that the two findings that he had made did not meet the exacting requirements laid down in Bottrill. However, he went on to say that he had found that the most severe breach was the failure of Mrs Von Hartitzsch to listen to and take seriously EW’s complaints of sexual abuse by WF. He said that if he could be satisfied that the circumstances of WF’s violation of EW had been clearly articulated, so that Mrs Von Hartitzsch could not have failed to understand what was being alleged, he would have had little difficulty in holding her either consciously reckless in failing to act and certainly as having flagrantly departed from acceptable standards of practice and care. But EW herself had not said that she went beyond making allegations of “rudeness” to Mrs Von Hartitzsch. Her sister, DW, had been “rather more forthcoming” and had described Mrs Von Hartitzsch as a good listener in relation to sensitive matters. Nonetheless, the Judge said, DW’s evidence did not show that a detailed description of WF’s conduct was provided to Mrs Von Hartitzsch. The Judge had found that Mrs Von Hartitzsch was negligent “in not picking up the message, taking it seriously and acting to protect the plaintiff”. But as he had not heard her explanation, he said that he could only speculate as to why nothing was done. It may have been that, given the imprecise nature of the complaints, “the default was towards the error of judgment end of the spectrum and well removed from the flagrant breach of acceptable practice threshold”. The consequence, said the Judge, was that WF’s violation of the plaintiff never came to the attention of the defendant. He was therefore not satisfied that Mrs Von Hartitzsch’s conduct called for condemnation by way of exemplary damages.
[56] It was Mrs Ablett Kerr’s submission that the evidence revealed a systemic failure by the Department to act upon complaints of sexual offending against children in its care. The case had not, however, been pleaded in that way and it would accordingly not be proper for us to consider the evidence relating to abuse of children (other than EW and her sister in the home of Mr and Mrs F) except where that other evidence may shed light upon the attitude of Mrs Von Hartitzsch towards the complaints of abuse made to her by EW. In other words, we take into account only for that more limited purpose evidence relating to Mrs Von Hartitzsch’s reaction to complaints made by other children about abuse they suffered from their foster parents.
[57] It was the evidence of EW herself that she went no further than telling Mrs Von Hartitzsch that her foster parents were “rude”. If, as EW’s brief of evidence states it, the complaint was about rudeness by both foster parents, it is quite possible that on that occasion even someone with Mrs Von Hartitzsch’s experience might not have picked up the real nature of the complaint. She is unlikely to have suspected abuse participated in by Mrs F, and indeed there was no such participation. In any event, EW went on to say that Mrs Von Hartitzsch “was too nice to tell. We didn’t want to knock the niceness out of her by telling her”. This suggests that EW and her sister realised that Mrs Von Hartitzsch had not understood the nature of the complaint. It was on that occasion that Mrs Von Hartitzsch had taken the two girls to the shops and bought them new dresses.
[58] EW said that on another occasion she had told Mrs Von Hartitzsch about WF being “rude” and had been put off with an offer of extra pocket money. Whilst it was negligent for Mrs Von Hartitzsch not to make further inquiry and not to appreciate the reality of what she was being told on this second occasion, EW’s account again does not paint a picture of flagrant disregard for her rights or the grossest negligence. It is entirely understandable that there should again have been a lack of specificity in the complaint, which may possibly have been taken to have been about the same kind of rudeness as EW had earlier said she had experienced from both foster parents. It was the evidence of Miss Henderson, a junior departmental officer who had dealings with EW, that there was not then the present day awareness of and sensitivity to sexual abuse possibilities. We agree with the Judge that Mrs Von Hartitzsch was in a different category, as she was more experienced. Her failure to pick up on what EW was trying to tell her and to investigate the complaints was negligent, even in the context of the times and of the way the complaints were expressed. But it was not negligence of such a degree as to be the exceptional case within the Bottrill decision of the Privy Council. In reaching that conclusion, we have had regard to all the evidence concerning the relevant failures of the system towards EW (though not of its systemic failures towards other children, which were not pleaded). But such failures towards EW, even in aggregate, did not amount to flagrant disregard for EW’s rights or to gross and outrageous negligence.It was very unfortunate that a child’s complaints should be ignored on multiple occasions but there is insufficient material upon which to conclude that Mrs Von Hartitzsch or the Department condoned sexual abuse, and in particular abuse by a foster father, and therefore to conclude that Mrs Von Hartitzsch not only understood the allegations made by EW but also deliberately tried to “buy her off”. That clearly would have warranted an award of exemplary damages, but we agree with the Judge the evidence just does not reach that far.
[59] DW also gave evidence of complaining to Mrs Von Hartitzsch about sexual assault by WF but a good deal of her evidence was concerned with the abuse she had received later in the E household. Her evidence of complaints to both Mrs Von Hartitzsch and another officer, Mr Graham, at the same time (which Mr Graham himself did not remember) was related to her removal from the E household at the end of 1971 and thus about a year after EW had left the home of Mr and Mrs F. It is not clear that at the earlier time when EW and DW went to see Mrs Von Hartitzsch and were bought new dresses, DW’s complaint had been any more specific than that of her sister. As might be expected after 30 or so years, DW clearly had difficulty in trying to remember exactly when she was living with her sister in the F home and when the complaints had been made. Her evidence was in this respect somewhat internally inconsistent.
[60] Perhaps the most concerning aspect is the failure of the Department, after WF’s conviction, to investigate whether EW had been the victim of sexual assaults by him, particularly if Mrs Von Hartitzsch recollected being told that he had been “rude” with her and her sister. But in those days there was not the knowledge that we have today about the serious effects on victims of child abuse. The expert evidence was that the more modern understanding evolved only during the 1980s. In the early 1970s it may well have seemed better not to disturb EW, now long removed from the home, by asking her questions about WF.
[61] Like the Judge, we have real concerns about the Department’s conduct towards EW, and its failure to understand and act upon a vulnerable child’s cries for help, however expressed. But while that conduct has deserved a finding of negligence, we are not persuaded that, judged by the standards of the time, it was so grossly neglectful that it ought to be marked by an award of exemplary damages.
Result
[62] The appeal is allowed and the matter remitted to the High Court for assessment of compensatory damages. The cross-appeal is dismissed. The appellant is entitled to costs on the appeal of $15,000 together with reasonable disbursements, including counsel’s travel and accommodation expenses, to be fixed if necessary by the Registrar.
Solicitors:
McKinnon Aitken Martin, Dunedin for Appellant
Crown Law Office, Wellington
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