Unlawful Conduct
42 Whether unlawful conduct by a plaintiff has the consequence that the plaintiff has no remedy for injury or loss s/he has suffered has frequently arisen in the context of the tort of negligence and other cognate contexts, e.g. in proceedings for an intentional tort or for breach of contract. When I come below to set out such considerations I do not, for present purposes, find it necessary to distinguish one context from another.
43 Save for one United States case, I have found no authority which has considered conduct which would otherwise constitute a crime of the utmost gravity but which, by reason of the insanity of the plaintiff, was not criminal.
44 The present case does not raise any issue about the existence of a duty of care, unlike proceedings in which a plaintiff and defendant are jointly engaged in a criminal enterprise. It was common ground that the Appellants owed the Respondent duties of care of the well-established character owed by a medical practitioner and hospital to a patient. The issue before the Court concerns the scope of that duty.
45 The mere fact of unlawful conduct is not determinative. It does not necessarily lead to the denial of a remedy at law. On the authorities, the weight to be given to unlawful conduct by a plaintiff depends on a range of considerations.
46 The closeness of the connection between the unlawful conduct and the alleged wrong is material:
· "No Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act." (Holman v Johnson (1775) 1 Cowp 341; 98 ER 1120 at Cowp 343, ER 1121.)
· "The act must … at least be a step in the execution of the common illegal purpose." ( National Coal Board v England [1954] AC 403 at 429.)
· Was the injury suffered "on a journey directly connected with the criminal purpose" so that there was a "sufficient of the connection to require a conclusion that it would be contrary to public policy that damages should be awarded for the injury". (Godbolt v Fittock [1964] NSWR 22 at 28.)
· "Where the plaintiff's action in truth arises directly ex turpi causa, he is likely to fail … Where the plaintiff has suffered a genuine wrong, to which allegedly unlawful conduct is incidental, he is likely to succeed …" (Saunders v Edwards [1987] 1 WLR 1116 at 1134.)
· "The facts which give rise to the claim must be inextricably linked with criminal activity." (Vellino v Chief Constable of Greater Manchester Police [2002] 1 WLR 218 at 236 [70].)
47 Furthermore, case law recognises that there is a scale of seriousness, so that if the unlawfulness involves a regulatory offence the weight to be given to illegality will often be slight. (See, e.g. Henwood v Municipal Tramways Trust (SA) (1938) 60 CLR 438 at 461-463; Gala v Preston (1991) 172 CLR 243 at 253; Godbolt v Fittock supra at 28.) As one recent authority put it, the criminal conduct "has to be sufficiently serious to merit the application of the principle. Generally speaking a crime punishable with imprisonment could be expected to qualify". (Vellino supra at 236 [70].)
48 In Beresford v Royal Insurance Co Ltd [1937] 2 KB 197, Lord Wright MR, Romer and Scott LLJ referred to the maxim ex turpi causa and said at 220:
"In these days there are many statutory offences which are the subject of the criminal law, and in that sense are crimes, but which would, it seems, afford no moral justification for the court to apply the maxim. There are likewise some crimes of inadvertence which, it is true, involve mens rea in the legal sense but are not deliberate or, as people would say, intentional."
49 That questions of fact and degree arise is also reflected in the observations of Diplock LJ in Hardy v Motor Insurers' Bureau [1964] 2 QB 745 at 767. His Lordship referred to the ex turpi causa maxim as constituting a rule:
"… that the courts will not enforce a right … which is regarded by the court as sufficiently anti-social to justify the court's refusing to enforce that right."
50 Neither degree of connection nor seriousness of the offence invokes a bright line test. Unlawful conduct should be regarded as a factor, the weight of which can vary from one situation to another. This approach would apply, to the multifactorial analysis in this context, to the determination of the existence and scope of duty in novel situations, to which I have referred above.
51 Indeed, this was the approach adopted with respect to unlawful conduct by Jacobs J in Progress & Properties Ltd v Craft (1976) 135 CLR 651, where his Honour, with whom Stephen, Mason and Murphy JJ agreed, said at 668:
"A plea of illegality in answer to a claim in negligence is a denial that in the circumstances a duty of care was owed to the injured person. A duty of care arises out of the relationship of particular persons one to another. An illegal activity adds a factor to the relationship which may either extinguish or modify the duty of care otherwise owed." [Emphasis added]
52 His Honour reiterated his approach, with the agreement or concurrence of other members of the Court, in Jackson v Harrison (1977) 138 CLR 438 at 457 and see 456 (Mason J), 462 (Murphy J), 466 (Aickin J).
53 In Gala v Preston (1990) 172 CLR 243, the joint judgment of Mason CJ, Deane, Gaudron and McHugh JJ adopted Jacobs J's approach at 250-253 but rephrased it in the then authoritative language of proximity. It is now appropriate to revert to Jacob J's original formulation: illegality "adds a factor to the relationship", which needs to be considered when determining the existence or scope of a duty of care.
54 In Progress & Properties Ltd v Craft, Jacobs J went on to refer to circumstances involving joint illegal activity, such as Smith v Jenkins (1970) 119 CLR 397. Where both the plaintiff and the defendant are engaged in a crime, in the course of which one injures the other, it is not possible to determine a standard of care. (See Progress & Properties Ltd v Craft at 668, Jackson v Harrison at 456, Gala v Preston at 252, 253, 254-255.) In such a case, the element of illegality, considered as one of many factors in a relationship, is entitled to considerable weight as, but for the criminal venture, there would be no relevant relationship. That has the consequence, to use Jacobs JA's terminology, of "extinguishing" any duty of care. In the present case, where the relationship is such that a duty does exist, as both parties in this Court accepted, the issue is one of the extent of the duty or, to again use Jacobs JA's terminology, whether the duty of care was "modified".
55 Of particular significance in determining the weight to be given to unlawful conduct is the degree of moral culpability that attaches to the plaintiff's conduct. That consideration is of great significance where, as here, the plaintiff has been held not to be criminally responsible for his actions.
56 The fact that the unlawful conduct constitutes a crime is itself material for reasons which have been variously expressed:
· " … the concern … is with the integrity of the legal system". Hall v Herbert [1993] 2 SCR 159 at 176 [17] per McLachlin J, as her Ladyship then was. (See also at 179.)
· "the civil law cannot condone breaches of the criminal law" Gala v Preston supra at 270.8, or "impair … the normative influence of a law creating an offence" 271-272 per Brennan J, and see at 277 per Dawson J.
· It is desirable to avoid "the sort of clash between civil and criminal law that is apt to bring the law into disrepute". State Rail Authority of New South Wales v Wiegold (1991) 25 NSWLR 500 at 514E per Samuels JA.)
57 Furthermore, the fact that the plaintiff knew that his or her conduct was wrongful is a matter that has been emphasised in a number of cases. This is perhaps understandable because none of these cases involved the situation in which a defence of insanity had been available to a plaintiff. Nevertheless, the significance of knowledge and intention has been frequently emphasised in a manner which indicates that the moral culpability of the plaintiff was a material factor.
58 In Adamson v Jarvis (1827) 4 Bing 66; 130 ER 693, Best CJ said, in a contractual context, at Bing 73; ER 696:
"… the rule that wrong-doers cannot have redress or contribution against each other is confined to cases where the person seeking redress must be presumed to have known that he was doing an unlawful act."
59 In Burrows v Rhodes [1899] 1 QB 816 Kennedy J stated the relevant principle in terms of a person being disentitled to relief: "If an act is manifestly unlawful, or the doer of it knows it to be unlawful" (at 828). His Lordship went on to note that mere ignorance that the act to be done constituted an offence would not be material so long as the person did the act "with knowledge of all the circumstances necessary to constitute the act an offence" (at 829) and distinguished conduct "which was not at the time apparently unlawful, and was done in honest ignorance of the particular circumstances which constituted its unlawfulness" (at 828-829).
60 In Hardy v Motor Insurers' Bureau supra Lord Denning MR referred at 760 to Beresford as authority for the following proposition:
"… no person can claim reparation or indemnity for the consequences of a criminal offence where his own wicked and deliberate intent is an essential ingredient in it … This rule … is based on the broad rule of public policy that no person can claim indemnity or reparation for his own wilful and culpable crime."
61 To similar effect was the observation of Diplock LJ who referred to the ex turpi causa maxim as applying where there was "an intentional crime committed by the assured" (at 769).
62 In Grey v Barr [1971] 2 QB 554, Lord Denning MR concluded that, on the civil onus, what was involved was an act of manslaughter. He applied the following test at 568:
"If his conduct is wilful and culpable, he is not entitled to recover."
63 The above line of case law was explained in Pitts v Hunt [1991] 2 QB 24 at 39G as drawing a clear distinction between "deliberate intentional acts and those which are unintentional though grossly negligent".
64 The element of moral culpability turning on a "rational and voluntary act" was also emphasised in this Court in State Rail Authority v Wiegold supra, where Samuels JA said at 517E:
"… a defendant should not be held responsible for the losses a plaintiff sustains the result from a rational and voluntary decision to engage in criminal activity. Such losses … fall outside the limits for which the wrongdoer should be held responsible. There was no suggestion that the Respondent's criminal conduct in the present case was not based upon voluntary and rational decisions. Indeed, his conviction and sentence for the crimes in question necessarily proceed upon the hypothesis that his conduct was so based …. Accordingly he was fully cognisant of the consequences of his conduct. The criminal conduct and its consequences were therefore not reasonably foreseeable."
65 The case that bears the closest resemblance to the present case is Clunis v Camden & Islington Health Authority [1998] QB 978. The plaintiff had a history of mental disorder and was found guilty of manslaughter on the grounds of diminished responsibility. He had been discharged from the defendant hospital shortly before killing a person. He sued the hospital for failing to detain him. He failed, but the reasons of the Court turned on the fact that he was guilty of a crime. In a joint judgment the Court of Appeal said, at 987:
"… public policy only requires the court to deny its assistance to a plaintiff seeking to enforce a cause of action if he was implicated in the illegality and in putting forward his case he seeks to rely upon the illegal acts."
66 After quoting the extract from Best CJ in Adamson v Jarvis that I have quoted above, the Court went on to say:
"The restriction of the operation of the policy to cases in which the person seeking redress must be presumed to have known that he was doing an unlawful act was confirmed in Burrows v Rhodes [1899] 1 QB 816."
67 The Court rejected a submission the it should recognise that the offence of manslaughter is an offence which varies greatly in its moral blameworthiness and that it should take into account the fact that the verdict of manslaughter was occasioned by reason of diminished responsibility. The Court concluded at 989:
"In the present case the plaintiff has been convicted of a serious criminal offence. In such a case public policy would in our judgment preclude the Court from entertaining the plaintiff's claim unless it could be said that he did not know the nature and quality of his act or that what he was doing was wrong. The offence of murder was reduced to one of manslaughter by reason of the plaintiff's mental disorder but his mental state did not justify a verdict of not guilty by reason of insanity. Consequently, though his responsibility for killing Mr Zito is diminished, he must be taken have know what he was doing and that it was wrong. A plea of diminished responsibility accepts that the accused's mental responsibility is substantially impaired but it does not remove liability for his criminal act. We do not consider that in such a case a court can or should go behind the conviction and, even if it could, we do not see in the medical report attached to the statement of claim any statement which would justify the court taking the view that this plaintiff had no responsibility for the serious crime to which he pleaded guilty."
"The plaintiff in this case, though his responsibility is in law reduced, must in Best CJ's words be presumed to have known that he was doing an unlawful act."
68 A number of United States cases reach the same result as Clunis for essentially the same reasons. (See Cole v Taylor, 301 NW 2d 766 (Iowa, 1981); Glazier v Lee, 429 NW 2d 857 (Mich, 1988); Rimert v Mortell, 680 NE 2d 867 (Ind, 1997).)
69 In Worrall v British Railways Board (Unreported, Court of Appeal, Civil Division, Beldam, Roch and Mummery, LJJ, 29 April 1999) the plaintiff suffered an electric shock as a result of the negligence of the defendant. He claimed that as a result of the electric shock he suffered psychological effects and his personality changed causing him to commit sexual offences against two prostitutes, for which he was convicted and sentenced to six years imprisonment. The Court held that the defendant was not liable for the plaintiff's subsequent loss caused by his imprisonment.
70 In Worrall the plaintiff submitted that the damage he had suffered was complete before he had committed the criminal offences and accordingly his cause of action did not depend on proof that he had committed the offences in question. Beldam LJ rejected the claim on the basis that the loss was founded on the commission of serious criminal offence for which the plaintiff was "fully responsible in law" and concluded that it would be contrary to public policy to allow him damages consequent upon the commission of the offences. Mummery LJ said:
"Having been convicted of those offences the plaintiff must be treated in this action as fully and personally responsible in law for his deliberate criminal acts and for the consequences of them, including financial loss resulting from the criminal conviction. It would be inconsistent with his criminal conviction to attribute to the negligent defendant in this action any legal responsibility for the financial consequences of crimes for which he has been found guilty of having deliberately committed."
71 There is only one case in which a criminal conviction for a serious offence has not led to a denial of civil remedy. That case, Meah v McCreamer (No 1) [1985] 1 All ER 367, has not been subsequently followed and must be taken to have been overruled (see Clunis supra at 989-990; State Rail Authority v Wiegold supra at 514; and Worrall supra).
72 Furthermore, this Court's decision in Grey v Simpson (Unreported, Supreme Court of New South Wales, Court of Appeal, Hope, Reynolds and Samuels JJA, 3 April 1978), on whether a plaintiff can recover for heroin addiction, may need to be reviewed. It was distinguished in Wiegold supra at 515B on the basis that the plaintiff in Grey v Simpson had never been found guilty of a crime. However, Grey is an application of a "but for test" simpliciter and does not appear to be consistent with the subsequent authority of March v E & M H Stramare Pty Ltd (1991) 171 CLR 506. The result has been different in other similar more recent cases. (See Anderson v Hotel Capital Trading Pty Ltd [2003] NSWSC 1195 at [51] affirmed [2003] NSWCA 78 appeal dismissed; Anderson v Hotel Capital Trading Pty Ltd [2005] NSWCA 78; Holt v Manufacturers' Mutual Insurance Ltd [2001] QSC 230 at [3].)
73 There are a number of obiter dicta which strongly indicate that conduct which has been successfully defended on the basis of a plea of insanity is not unlawful conduct which should lead to a denial of civil liability.
74 In Beresford supra, the deceased was found not to have been insane at the time of suicide. Relevantly for present purposes, albeit in the context of a claim by the deceased estate under a policy of life insurance, their Lordships said at 210-211:
"The question, therefore, is whether the felonious suicide of the assured is a bar to the present action. If the assured had taken his life while insane, the fact would not have constituted a defence. The act of an insane person is not in law his act - Felstead v The King [1914] AC 534 - and such a death is a death within the terms of the policy, unless there are special conditions excluding it. But suicide when sane is by English law a felony."
75 An appeal to the House of Lords was dismissed. (See Beresford v Royal Insurance Company Ltd [1938] AC 586.) Lord Atkin confined his reasoning to the situation of "intentional suicide by a man of sound mind" (at 594).
76 Similarly, in Clunis as quoted above, the Court indicated that the conclusion would be different if "it could be said that he did not know the nature and quality of his act or that what he was doing was wrong" (at 989). Dicta to similar effect appear in Rimert v Mortell supra at 874-875).
77 One United States case is in point. In Boruschewitz v Kirts, 554 NE 2d 1112 (Ill, 1990), an outpatient at a mental health centre killed two people. She was charged with murder and entered a plea of guilty but mentally ill. The court entered a finding of guilty but mentally ill, (a finding that she had the capacity to distinguish right from wrong) and sentenced her to incarceration. In some States such a finding is an alternative to insanity, with the consequence that incarceration is in a treatment facility. She brought an action against her psychiatrist and mental hospital alleging that their negligence caused her mental condition to deteriorate until she ultimately became insane, and committed the killings. The trail judge dismissed the complaint. On appeal, the judgment of the trial judge was reversed and the case was remanded for further proceedings. The court said at 1114:
"[P]laintiff has alleged in her complaint that she was insane, and we must accept this allegation as true. An insane person is not held to be responsible for his acts. Plaintiff is allowed an opportunity to rebut the prima facie case and prove that she was criminally insane. In other words, she should be allowed to demonstrate that she did not commit an intentional act and thus was not guilty of a crime. This is a question of fact. Whether she can maintain her burden of proof the issue is not our concern at this juncture.
Defendants claim that even if LuWanda is not criminally responsible for her actions, she still has committed an immoral or wrongful act. We reject this argument. Society cannot hold people who are insane to the same moral standards as people who are sane. Additionally, the term 'wrongful' must also take on a different meaning in the context of an allegation of insanity." [References omitted]
78 The significance of moral culpability in determining the weight to be given to unlawful conduct is clearly established on the authorities. Where, as here, a person has been held not to be criminally responsible for his or her actions on the grounds of insanity, the common law should not deny that person the right to a remedy as a plaintiff. In such a context the unlawfulness of the conduct is not entitled to weight in a multifactorial analysis.
Conclusion on Duty
79 For the reasons outlined above, the factors which are entitled to weight in determining the scope of the duty owed by the Appellants to the Respondent are control and vulnerability. Because of the option of voluntary admission, these factors, for the reasons outlined above, require consideration of the particular circumstances of the case.
80 In this, as in many other contexts, facts and matters relevant to the existence and scope of duty overlap with the facts and matters which are relevant to breach. It was in the latter context that many considerations relevant to the former were considered by Adams J, raised in the submissions to this Court and dealt with in the judgment of Sheller JA. These are matters considered by Sheller JA in rejecting the Appellants challenges to the factual findings of Adams J. For those reasons, in my opinion, the option of voluntary admission did not detract, in the present case, from the high level of control exercised by the Appellants and the high level of vulnerability exhibited by the Respondent.
81 The detail of the information which was in fact available to the Appellants was such that there was no proper basis on which either could have proceeded on the basis that the Respondent could look after his own interests to the extent of seeking voluntary admission or, on the Appellants' case, requesting a discharge.
82 Accordingly, balancing the various pertinent factors, and setting aside, for the reasons I have given, the unlawful but not criminal conduct of the Respondent, there was, in my opinion, a duty of care which extended to the exercise of the statutory powers in s18 and s21 of the Act. That duty was clearly breached.
83 The Appellants put the case in terms of causation as well as scope of duty. As I have mentioned above, similar considerations arise on either approach. The Appellants submitted that there was no causal nexus between their conduct and the killing of Ms Laws or, alternatively, that the killing broke the causal chain.
84 The death of Ms Laws was precisely the kind of "serious physical harm" which the exercise of the statutory power was designed to avert. As Lord Hoffman said in Reeves v Commissioner of Police of the Metropolis [2000] 1 AC 360 at 367H:
"It would make nonsense of the existence of such a duty if the law were to hold that the occurrence of the very act which ought to have been prevented negatived causal connection between the breach of duty and the loss."
85 The death of Ms Laws did not break the causal chain.
86 The issue of unlawful conduct could also arise in terms of causation. As was emphasised in March v Stramare supra at 515-516 and 524, value judgments must enter into the analysis of causation when determining whether a defendant is in law responsible for the loss or injury to a plaintiff. There has always been a normative dimension to causation. The Court asks "Should a person be held legally responsible for the loss or damage?" (See Chappel v Hart (1998) 195 CLR 232 at 248 [36]; Barnes v Hay (1988) 12 NSWLR 337 at 339G, 353E-F; State Rail Authority v Wiegold supra at 511; O'Halloran v RT Thomas & Family Pty Ltd (1998) 45 NSWLR 262 at 271-272; AMP General Insurance Ltd v Roads & Traffic Authority (NSW) (2001) Aust Torts Reports ¶81-619 at [26], [151]-[153]; Henville v Walker (2001) 206 CLR 459 at 491 [98]-[100].) Professor Jane Stapleton has divided the elements into a factual and a normative dimension. (Stapleton "Cause-in-fact and the Scope of Liability for Consequences" (2003) 119 LQR 388.) This has been characterised as a "two-limbed test". (See Ruddock v Taylor (2003) 58 NSWLR 269 at 285 [85]-[88]; Tambree v Travel Compensation Fund (2004) Aust Contract R ¶90-195 at [146]-[150]; Harvey v PD (2004) 59 NSWLR 639 at 670 [181]-[191].) In Harvey, I indicated at 643 [11] a reservation about the general application of a "two limbed test". However, I did not doubt that normative considerations are relevant when determining causation.
87 In the present case, the normative considerations that have been urged on the Court are those which I have considered above under the heading of "Unlawful Conduct". For the reasons there set out, where a person has been found not guilty of a criminal offence by reason of insanity, the acts which would otherwise constitute a crime do not break the causal chain.
88 The position is the same as that identified by Smith J in Haber v Walker [1963] VR 339: the "intervening occurrence" was not "human action that is properly to be regarded as voluntary" (358) in the sense that it could not be said "the actor should have exercised a free choice" (358 and see 361). (See also AMP v RTA supra at [21]-[24].)
89 In the present case the intervening event of the killing of Ms Laws cannot be regarded as "voluntary" or as the "exercise of free choice". Nor, to use another formulation, can it be regarded as "unreasonable or extraneous or extrinsic" (Bennett v Minister for Community Welfare (1992) 176 CLR 408 at 428).
90 This Court is concerned with the application to a novel situation of principles that have been established by the progressive development of the law of negligence. The determination of a particular case in accordance with those principles may lead to results which some sections of the community regard as inappropriate. In recent times the Parliaments of Australia have shown no reluctance to intervene where such a reaction receives a high level of political salience. Judicial decision-making must focus on the application and development of legal principle, rather than be constrained by policy considerations which are more appropriately left to parliamentary intervention.
91 Lord Scarman identified the proper role of the courts in this respect in McLoughlin v O'Brian [1983] 1 AC 410 at 430:
"The function of the court is to decide the case before it, even though the decision may require the extension or adaptation of a principle or in some cases the creation of new law to meet the justice of the case. But, whatever the court decides to do, it starts from a baseline of existing principle and seeks a solution consistent with or analogous to a principle or principles already recognised.
The distinguishing feature of the common law is this judicial development and formation of principle. Policy considerations will have to be weighed: but the objective of the judges is the formulation of principle. And, if principle inexorably requires a decision which entails a degree of policy risk, the court's function is to adjudicate according to principle, leaving policy curtailment to the judgment of Parliament. Here lies the true role of the two law-making institutions in our constitution. By concentrating on principle the judges can keep the common law alive, flexible and consistent, and can keep the legal system clear of policy problems which neither they, nor the forensic process which it is their duty to operate, are equipped to resolve. If principle leads to results which are thought to be socially unacceptable, Parliament can legislate to draw a line or map out a new path."
92 The decision of Adams J in the present case was the subject of some criticism in the media. That criticism was unfounded. It is the task of the courts to apply the law, irrespective of the popularity or otherwise of the outcome.
93 There was a suggestion, in some of the commentary, that somehow the Respondent has profited from the death of Ms Laws. That suggestion is completely misconceived.
94 First, the criminal process has determined that Mr Presland was not morally responsible for her death. Secondly, there is no profit. Mr Presland is entitled to compensation, and only compensation, for the loss he has suffered. He obtains no advantage or profit. He is to be placed in the same position as he would have been if the Appellants had not been negligent. He does not come out ahead in any way. Insofar as money can do so, he comes out square.
95 Finally, I observe, how a society treats it citizens who suffer from mental illness, particularly the criminally insane, is often a test of its fairness. It is never easy to be fair where an innocent person has suffered as Ms Laws, and those who grieve her loss, clearly have. The law must, however, insist on protecting the rights of people, even if they are unpopular. Mr Presland was the instrument by which Ms Laws died. However, by reason of his insanity, his acts were not such that his right to receive proper medical treatment should effectively be taken away without compensation.