(iv) such other insurances as would reasonably be expected to be required to give effect to the indemnities given under this agreement.
7.2 At the same time as the annual audited financial statements are forwarded to the Area Manager, the organisation shall forward either a list of the insurance policies required to be maintained under this agreement, or a statement that the policies are the same as those forwarded the previous year. The list shall include, for each policy, the type of policy, the amount insured and the due date of the policy. The list or statement shall be signed by two principal office bearers of the organisation.
7.3 In the event that any insurance policy included on the most recent list forwarded to the Department lapses or is cancelled the organisation shall immediately notify the Area Manager in writing."
102 The Conditions of Funding also included in cl 9 that the "funded organisation" would "provide an opportunity for a representative of he Department … to attend board/committee meetings" if prior written request were made.
103 First addressing a duty of care to protect the claimant from physical harm, why in these circumstances was the first opponent under a duty of care to put the programme conducted by the Association in the hands of a different disability care association or cause the claimant to be removed form the Association's programme? The first opponent provided funds to a disability care association which, so far as the claimant's case went, it could expect to look after those who participated in its programme with competence. The fact of no insurance meant nothing for the physical safety of those participating in the Association's programme. By providing the funding the first opponent did not itself take on the care of the participants, nor can I see an arguable case that it was or thereby put itself in a position in which it owed to the participants a duty to protect them from physical harm. That responsibility rested on the Association.
104 In truth, the reasoning underlying the ostensible duty to protect the claimant from physical harm is founded on a duty to protect the claimant from economic loss. The reasoning is that, knowing the Association was uninsured, the first opponent should have put the programme conducted by the Association in the hands of an insured disability care association, so that, if she happened to suffer physical injury, she would have the benefit of the insurance, or should have caused her to be removed from the Association's programme so that she would not be injured without insurance protection. As a matter of causation, had that been done, it could be argued that breach of the duty of care led to suffering the physical injury. I say nothing as to the validity or strength of the argument, and removal from the Association's programme would hardly have benefited the claimant if she were left without participation in any programme. But the breach would be breach of a duty to protect the claimant from economic loss.
105 Going then to that duty, why in the circumstances set out above did the first opponent owe to the claimant a duty to protect her from economic loss? Let it be accepted that the Act required that, in providing the funding through the Department, the first opponent was obliged to further the interests of persons with disabilities in conformity with the objects set out in the Act and with the principles and applications of principles set out in Schedule 1 of the Act. I have not set out the objects, or the principles and their applications, and have only described them in general terms, but even if regard may be had to them in the face of s 25(1) of the Act none of them approaches ensuring that a person with disabilities who suffers physical injury in the course of provision of a designated service such as the Association's day programme (if that was a designated service) had the benefit of insurance. The Agreement did call for insurance, but that does not mean that the first opponent owed to those in whose interests it provided funding a duty of care to call for insurance, still less a duty of care to ensure that the insurance for which it called was in fact in place. Indeed, cl 7 of the Conditions of Funding seems directed to protecting the interests of the Minister as the object of a claim by third parties, not to protecting the interests of the ultimate beneficiaries of the funding.
106 Reasonable foreseeability of economic loss is necessary but not sufficient to give rise to a duty of care to protect from economic loss ( Perre v Apand Pty Ltd at 198, 207, 248-9). Restraint in finding such a duty of care is warranted, for reasons sometimes differently expressed ( ibid at 192-3, 199-200, 208-10). There must be something more than reasonable foreseeability of economic loss, and the turbulence to which I earlier referred has been in attempting to describe that something more. For some years it was proximity, but that criterion has fallen from favour and there is no unanimity as to a criterion to replace it or, indeed, as to whether the search for a criterion is futile and there must be a case by case assessment of factors justifying compensation for loss.
107 The claimant relied in particular on the evidence to which I have referred in describing the material to which the first opponent objected. It is open on that evidence that the first opponent (through the Department) could have done a number of things, although the claimant was unable to point to a satisfactory statutory basis for doing some of them. It could have conducted a review of the Association's "consumer service delivery" and financial management. It could have requested the Association to give information to parents and carers of those participating in the Association's programme. It could have appointed an "interim auspice", although what that really meant counsel were unable to explain - it seems some kind of arrangement for provision of services, with "auspicing" being provision of services or seeing that services were provided when the Association stopped providing them. It could have suspended funding, although that would hardly have benefited the participants in the Association's programme.
108 But what the first opponent could not have done was require that the Association cease conducting its programme, require that parents and carers be informed, or require that insurance be obtained, other than by the threat of suspending funding. If it could not require that the Association get insurance, cause the programme conducted by the Association be put in the hands of a different disability care association, or cause the claimant to be removed from the Association's programme, it could hardly be under a duty to do so, or a duty to achieve the same result by indirect means, see Agar v Hyde (2000) 201 CLR 552 at [16], [81].
109 The further question is whether the first opponent should have taken some such action because the Association did not have public liability insurance. There was no evidence in the first opponent's application of actual knowledge that the Association did not have public liability insurance, and as I have said the particulars appear to have abandoned actual knowledge. The Agreement was entered into in early December 1994, and there was nothing to suggest that the Department should have inquired into the Association's holding of public liability insurance prior to the injury to the claimant. The Department was to receive insurance particulars when it received financial statements, in its own interests rather than the interests of the participants in the programme. I do not think the Minister's obligations under the Act, or the agreement to provide funds pursuant to the Agreement, called for the first opponent to inquire. So it did not have the knowledge which called for the action necessary for the claimant's case.
110 The claimant placed particular reliance on Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1. It was there held that there was a duty in the exercise of statutory powers and duties to take reasonable care to protect a waterside worker from the risk of harm from exposure to asbestos. The duty was a duty to protect from physical harm, not from economic loss, and the statutory powers and duties were specifically directed to, amongst other things, health and safety of waterside workers. As was said by Gleeson CJ at [45], the authority knew of the risk to health, and was in a position itself to take steps, short of orders having the force of law, to control or minimise the risks. It was a very different case from the present case.
111 Duties of care having the content of duties to insure or advise of non-insurance in order to protect from economic loss were rejected in Reid v Rusk-Tompkins Group Pty Ltd (1990) 1 WLR 212 and Van Oppen v Clerk to the Bedford Charity Trustees (1990) 1 WLR 235, both also being different cases from the present case. In Brewer Brothers v Canada (1991) 8 CCLT (2d) 45 the Canadian Grain Commission was held liable to grain producers for negligently allowing a grain elevator operator to carry on business without giving adequate security as required by s 36 of the Canada Grain Act. That provision provided that a licence to operate an elevator should not be given unless the applicant had given adequate security, and it was considered that it created a duty owed to the class of grain producers: again, a very different case from the present case.
112 Some other cases were referred to in the appeal, but they also were remote from the present case. The closest analogous case was adverse to the claimant. In Curran v Northern Ireland Co-operative Housing Association Ltd (1987) 1 AC 718 a statutory body provided a grant for extensions to a house. The extensions were so defective that they had to be demolished and rebuilt. It was held that the statutory body had no control over the building of the extensions other than withholding the grant, and that it did not owe subsequent occupiers a duty of care not to make payment in respect of the defective work: such a duty of care was described (at 728) as bizarre.
113 It is necessary to consider the positions of the claimant (and others in her position) and the first opponent, and the relationship between them, on the facts of the present case. I am unable to see an arguable case for the duty of care necessary for the claimant's cause of action against the first opponent.