"SD" & 2 Ors v Director General of Community Welfare Services

"SD" & 2 Ors v Director General of Community Welfare Services - [2001] NSWSC 441 - NSWSC 2001 case summary — Zoe

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1 MASTER: By notice of motion filed 20 April 2000 the plaintiffs seek an order extending the time within which to commence proceedings pursuant to ss 60G and I of the Limitation Act 1969 (NSW). The plaintiffs are not relying on s 58 of the Limitation Act. The first plaintiff "SD" relied on his affidavit sworn 5 July 2000. The second plaintiff "BD" relied on her affidavits sworn 11 July 2000 and 14 July 2000. The third plaintiff "JD" relied on her affidavit sworn 15 July 2000. The plaintiffs also relied on the affidavits of their solicitors Maithri Panagoda sworn 17 July 2000 and Virginia Hart sworn 14 February 2001. "SD", "BD" and "JD" are siblings. The first defendant is the Director General of Community Welfare Services (Vic). The second defendant is the Minister for Community Welfare Services (Vic). The third defendant is the State of Victoria. The first to third defendants relied on two affidavits of Deborah Jackson sworn 15 November 2000 and 14 February 2001. The fourth defendant is the Minister for Community Services (NSW). The plaintiffs are not proceeding against the fourth defendant. The fifth defendant is the State of New South Wales. It did not rely on any affidavit evidence. 2 The statement of claim alleges that from October 1979 until mid 1985 the first to fifth defendants failed to take any care of, or exercise any role in relation to the plaintiffs. The plaintiffs allege that the defendants breached their duties by failing to care for the them and to protect them from harm; failing to act on their best interest in accordance with their long term needs; failing to ensure that they were well cared for and that their physical, intellectual and spiritual development was preserved and enhanced; failing to ensure that they received adequate and appropriate educational opportunities and failing to ensure that they were not exposed to physical or mental ill treatment or to the avoidable risk of such ill treatment. 3 The plaintiffs also allege that the defendants failed to care for and supervise them adequately or at all from 12 October 1979 to June 1985 by failing to protect them from physical and psychological mistreatment and sexual abuse and failing to supervise the plaintiffs' parents so as to ensure that the plaintiffs did not suffer ill treatment or neglect including physical and psychological mistreatment and sexual abuse. Additionally, the plaintiffs allege that the defendants failed to take any adequate steps to protect and supervise the plaintiffs notwithstanding their awareness from at least June 1981 that the plaintiffs were not in their mother's care; and home release had broken down. The plaintiffs were not under the supervision of, in New South Wales, the New South Wales department because they were thought to be in Victoria. The plaintiffs were not under the supervision, in Victoria, of the Victorian department and the plaintiffs' father knew of their whereabouts. 4 The plaintiffs pleaded breaches of fiduciary duty, statutory duty and negligence by the defendants from 1979 to 1985. The plaintiffs require an extension of time to commence proceedings in relation to the claims for breaches of statutory duty and negligence. However, the plaintiffs have separate entitlements to prosecute their claims for breaches of fiduciary duty and do not require an extension of time to commence those proceedings. 5 In Williams v Minister, Aboriginal Land Rights Act 1983 & Anor (1994-95) 35 NSWLR 497, the Court of Appeal considered whether s 60G and s 60I of the Act apply to a claim for breach of fiduciary duty. The facts in Williams are that Ms Williams, a woman of Aboriginal descent, born in 1942, was placed at birth in a home for Aboriginal children by the Aborigines Welfare Board. A few years later she was moved by the Board to a home for "white" children because she was fair-skinned. She claimed that it was not until 1991 that she came to realise her borderline personality disorder was the result of her childhood experiences. She therefore sought an order for an extension of time under the Act in order to proceed against the relevant authorities for negligence, breach of duty and wrongful detention. The motion to extend the limitation period was dismissed at first instance and the plaintiff appealed this decision. In Williams Kirby P at 509 stated: "But it is a mistake of law to assume that an equitable claim, based on an equitable cause of action, not for damages but for equitable compensation, is to be dealt with under s 60G of the Limitation Act . It is not. It raises separate and different questions. Nor can the application of the Act "by analogy" lead to the automatic application of s 60G to such a claim. Analogous application of the statute does not necessarily mean exact application of its terms. The considerations that may be relevant to a defence of laches will be different from (or not exactly the same as) the considerations relevant to the application of the Act." 6 The matter of Williams was heard by Abadee J who decided that there was firstly, no common law duty of care owed by the defendant; secondly, no actionable statutory duty; thirdly, that the Board did not owe the plaintiff any fiduciary duty; and fourthly, if any of these duties had been owed to the plaintiff they had not been breached. The appeal from Abadee J's decision was dismissed ([2000] NSWCA 225). 7 A similar and instructive case is Johnson v DOCS [1999] NSWSC 1156. These proceedings concerning an extension of time were decided by Rolfe J. In Johnson an Aboriginal boy was made a ward of the State as an infant. After the expiration of the limitation period he sought to bring proceedings against the respondents alleging common law negligence, and breach of statutory and fiduciary duties. I shall refer to this decision in more detail later in this judgment.

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(i) Whether the plaintiffs have proved that "they did not know that a personal injury had been suffered " 14 The plaintiffs submitted under s 60I(1)(a)(i) that they did not know that they had diagnosable psychiatric illnesses until they had read the reports of Dr Quadrio and Dr Waters in 1998. The first plaintiff was aware that he had suffered from physical injuries inflicted by his father at a date earlier than 20 April 1997. Both the second and third plaintiffs also admit they were aware that they had suffered physical injuries prior to the relevant date but their claims in these proceedings are for damages for psychological and psychiatric injuries. 15 The first plaintiff is a practising solicitor who was admitted in May 2000. He currently practices in the field of banking and finance. It was the first plaintiff's sister "JD") who was the driving force in seeking legal redress for the actions of their father and the defendants in these proceedings. The first plaintiff gave evidence that he only became aware of the nature and extent of his injuries in late October or November 1997 after reading the report of Dr Quadrio dated 21 October 1997. At paragraph 172 of his affidavit he stated that the report "told me things about myself I had not considered before". When cross examined on his awareness he gave evidence to the effect that he did not turn his mind to the events of his childhood until recently (t 24.42). 16 The second plaintiff gave evidence in her affidavit at paragraph 79 to the effect that it was only after reading the reports of Dr Quadrio and Dr Waters, dated 21 October 1997 and 7 October 1998 respectively, that she became aware of the extent of the psychiatric injuries she had suffered. The third plaintiff gave similar evidence in her affidavit citing at paragraph 102 the medical reports of Dr Quadrio and Dr Waters and stating that she was "extremely disturbed by the comments as [they] highlighted things about myself I had not understood or recognised before". 17 As was stated by the Full Federal Court in Commonwealth of Australia v Dinnison (1995) 56 FCR 389 (per Gummow and Cooper JJ at 402) it is important to appreciate that the personal injury which the plaintiff suffered was a psychiatric illness. It should also be appreciated that it is the perception of the plaintiff that is important. 18 On 6 September 1986 the plaintiffs were transferred to the Salvation Army Family Group home. They attended counselling with Chris Lennings, psychologist, at Marrickville Community Health centre. At this stage only details of the physical abuse were proffered to Mr Lennings. In particular "SD" was aware that he felt outcast, lonely and had had trouble forming friendships for many years. The plaintiffs continued counselling with Mr Lennings until the late 1980's. In 1986 "BD" and "JD" attended counselling with Liz Yeo psychologist. In August 1991 "BD" informed Ms Yeo that she was sexually abused by her father and was referred to counselling with Annie Kennedy, psychologist at Ashfield. In December 1996 "JD" attended counselling a couple of times per week with Beverly Laurie. She continued to see Ms Laurie until 2000. 19 In 1996 the plaintiffs took proceedings in the Victims Injury Tribunal in Victoria. The plaintiffs were cross examined as to their knowledge and awareness in relation to their claims made before the Victims Compensation Tribunals of both New South Wales and Victoria. The plaintiffs first saw a solicitor with regard to these matter in December 1996 at the Inner City Legal Centre. There was then a delay in filing the claim while the matter was researched. Police statements and psychological assessments were tendered to the Tribunal. "SD" made his Police statements on 1 August 1997, "BD" on 22 March 1997 and "JD" on 5 June 1997. Each of the plaintiffs received a report on 20 October 1997. The plaintiff were not required to make any appearance or undertake any other tasks and, according to "SD", were not involved in the process beyond signing prepared documents and the like (t 6.36). They did not give oral evidence at the Victims Injury Tribunal. 20 In making the reports to the police "SD", in particular, did not give the full details of the abuse just general statements about their father's violent attitude towards them (t8.35). As stated in their earlier evidence it was only when the reports of Dr Quadrio were received that the plaintiffs began to realise the full extent of their psychological and psychiatric injuries. The evidence given by "SD" suggests that he (the other plaintiffs were not cross examined on this issue) did not think rationally about the nature of the compensation claims made, he "never thought dads hit me therefore he has committed a crime against me." Even though the plaintiffs made claims to the VCT, their evidence is that they were still not aware of their injuries. As in Dinnison. While each plaintiff may have been aware that they suffered from symptoms such as being lonely or depressed prior to the limitation period expiring it is my view that the plaintiffs did not know that they suffered from a diagnosable psychiatric illness until they read the reports of Drs Quadrio and Waters at the end of 1997 and beginning of 1998. As this knowledge falls within the time period stipulated in s 60I(1)(b) the plaintiffs have passed through the s 60I(1)(a)(i) gateway.

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(ii) Whether the plaintiffs have proved that they were "unaware of the nature or extent of the personal injury suffered " 21 The test of knowledge posed by s 60I(1)(a)(ii) requires the court to look at the actual awareness of the plaintiffs. Neither the reasonableness of that awareness nor constructive knowledge is an element of s 60I(1)(a) - (Harris v Commercial Minerals Limited (1995-96) 186 CLR 1 at 9 and 10). Harris, is a case of physical disease of gradual onset, not one of psychiatric illness. 22 The nature and extent of the injury which the plaintiffs have sustained is to be determined as at the date of the hearing of the application (Harris pp 13 and 14). The plaintiffs may be held to have been aware of the nature or extent of their injuries within the relevant period if during that period they were aware of the effect which the injuries were then having upon them and of their likely future course, even though they may have been unaware of the precise pathology or medical diagnosis. On the other hand, knowledge of the medical diagnosis will not itself amount to knowledge of the nature and extent of the injuries if the plaintiffs were unaware of significant aspects of the prognosis, for example that the injury is permanent and will not be amenable to treatment; or that it may deteriorate with the passage of time. As long as the consequences are of a kind that the plaintiffs expect, the plaintiffs will be aware of the extent of the injuries. 23 On the topic of awareness, the High Court referred to a passage from Deming No 456 Pty Ltd v Brisbane Unit Development Corporation Pty Ltd (1983) 155 CLR 129 at 151, where it said that the meaning of the words "first becomes aware of" in a Queensland statute is equally applicable to the term "unaware" in s 60I(1)(a): "[T]he very words 'become aware' strongly indicate that the statute is looking to the purchaser's actual knowledge of the failure which, by description, is a failure to comply with the statutory provisions. We conclude that the words 'becomes aware of the failure' in s 49(5) involve not only knowledge that a statement containing the specified material has not been given but an awareness that the fact that such a statement was not given constitutes a 'failure' to do something which the Act says should be done." 24 The words "become aware" mean that the plaintiffs must have knowledge and awareness of the fact that such a statement was given. In terms of awareness it must be remembered that individuals have different perceptions. I had difficulty understanding the first plaintiff's evidence at page 8 of the transcript. I asked: "Q. I have some difficulty accepting that you are [were] a law student - albeit it in your first year. Your father hit you and what you are trying to tell me is that is not an assault? A. I was aware it was an assault. Q. To me and to others you would think that if someone hit you, then they assaulted you? A. I don't think I was thinking about it in that way. It was my father who was doing those things to me. I don't know. It's something about - I can't really explain it. It's perhaps not rational to say - it's not rational to think. Maybe you don't automatically think it is as (sic) assault. I am sorry, I can't give you more - I never actually have thought 'dad's hit me therefore he has committed a crime again (sic) me.' It's just something that happened." 25 Nevertheless, after this explanation I accept his answer. I believe him to be truthful as it appears that because these acts were committed by a parent, the first plaintiff did not have an insight that these actions were assaults. Hence he was unaware of the nature or extent of his injuries. 26 For reasons given under s 60I(1)(a)(i) it is my view that it was late 1997 or early 1998 when the plaintiffs became aware of the nature or extent of their injuries. Hence, the plaintiffs have passed through the s 60I(1)(a)(ii) gateway.

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(iii) Whether the plaintiff was unaware of the connection between personal injury and the defendant's act or omission 27 Section 60I(1)(a)(iii) is concerned with ignorance of the existence of acts or omissions rather than legal conclusions. The acts or omissions referred to in s 60I(1)(a)(iii) are the acts or omissions on which the plaintiffs rely to found the cause of action referred to in s 60G. Those acts or omissions, will be found in the plaintiffs' particulars of negligence - Drayton Coal Board Pty Limited v Drain (NSWCA Gleeson CJ, unreported 22 August 1995). 28 The first plaintiff deposed that it was in January 1998 when he first began to consider the possibility that the defendants may have breached the duty of care they owed him. However in February 2000 he received copies of his files from the defendants and these, in conjunction with the medical reports and advice from Mr Peter Gray of counsel, led him to realise that he may have a cause of action against all the defendants. "SD" stated that he didn't blame the government at the time and that he, understandably, rarely thought about the instances of abuse (t 24.42). He stated that he only began to feel anger after he began to receive copies of parts of his file and he received these documents after 20 April 1997. The second and third plaintiffs gave similar evidence to the effect that they only became aware of the nexus between their injuries and the defendants' acts or omissions in February 2000 when they received legal advice from Mr Gray of counsel - see paragraphs 80 and 102 of the second and third plaintiffs' affidavits respectively. 29 It is my view that the plaintiffs were unaware of the connection between the personal injuries and the defendants' acts or omissions until January 1998 at earliest. This is within the time frame stipulated in s 601(i)(b). The plaintiffs have passed through the s 60I(1)(a)(iii) gateway. 30 As the plaintiffs have satisfied the provisions of s 60I(1)(a)(i),(ii) and (iii) I turn to consider whether it is just and reasonable to extend the limitation period.

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32 As previously stated the plaintiffs allege that the defendants were responsible for the care and welfare of the plaintiffs from at least 12 October 1979 until at least January 1986. As previously stated it is alleged that the defendants owed duties to the plaintiffs which included: (a) to care for them and protect them from harm; (b) to act in their best interests and in accordance with their long term needs; (c) to ensure that they were well cared for and that their individual interests were preserved and enhanced, whilstever they were living in the various institutions and places; (d) to ensure they received sufficient education opportunities; and (e) to ensure that they were not exposed to physical or mental ill-treatment or the avoidable risk of such treatment. 33 It is alleged that the defendants owed the plaintiffs a fiduciary duty and duties in torts and statutory duties of similar character by virtue of the provisions of ss 9, 10, 22, 23, 24, 25, 50, 53, 54, 82, 144 and 148B of the Child Welfare Act (NSW) and similar provisions in the Victorian Social Welfare Act are pleaded. It is alleged that the defendants breached the duties they owed. These breaches are particularised in para 29(iii) of the statement of claim. 34 Under the Child Welfare Act the Minister becomes the guardian of the plaintiffs even though other parties, such as parents, have custody and care for the plaintiffs. In Williams v Minister, Aboriginal Land Rights Act 1983 & Anor (2) [2000] NSWCA 255 it was stated that it was no specific incident that gave rise to the psychiatric injuries but rather a period of ongoing negligence through acts and/or omissions that led to the damage. There are some specified incidents of sexual and physical abuse in these proceedings. As in Johnson, I respectfully agree with Rolfe J where at para 81 he stated that the decision in Williams did not involve a determination of all the issues raised in these proceedings. Likewise the decision of the Court of Appeal in Williams did not involve a determination of all the issues raised in these proceedings. I also respectfully agree with Rolfe J when he said, suffice to say that in this area of the law, it could not be said that there was not an available cause of action based on a perception of the meaning of the statute without an examination of the facts. The decision in relation to summary judgment in Cubillo v Commonwealth of Australia (1999) 163 ALR 395 also supports this view. In Cubillo the causes of action were pleaded for wrongful imprisonment, breaches of general duty of care and breaches of fiduciary duty. The plaintiffs in Cubillo were unsuccessful at trial. An appeal is pending. 35 In Johnson Rolfe J held that it is difficult to say that the relationship of child and guardian does not give rise to a fiduciary relationship or obligation. Of course, in any care it is necessary to examine the content of the duty and the alleged breach of it. His Honour referred to Williams where Kirby J at 511 stated: "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. … 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 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 …" 36 And the High Court in Breen v Williams (1996) 186 CLR 71 where it was stated at para 134: "The acceptance in Bennett v Minister of Community Welfare that the relationship of guardian and ward created a fiduciary relationship and the acknowledgment in Paramasivan v Flynn that the relationship of guardian and ward may give rise to a fiduciary relationship are sufficient to persuade me that it would be premature to hold, at this stage, that the applicants have failed to make out a care of a fiduciary relationship on the pleadings. It may transpire, when all the evidence has been taken, that no such relationship has been proved: that is matter, however, that should await the trial of the action." 37 Once again, I respectfully agree with Rolfe J. 38 It is alleged that as a result the plaintiffs suffer from a number of psychiatric illnesses, especially chronic post traumatic stress disorder. As mentioned earlier this condition has a range of effects on the plaintiffs but has manifested itself in certain ways in the plaintiffs. In particular "SD" suffers from abnormally high feelings of anxiety, dependency and vulnerability; "BD" from profound depression and vulnerability; and "JD" remains vulnerable to chronic anxiety, low level depression and hypervigilance. These symptoms are, in each of the plaintiffs respectively, the most prominent in a range of progressive and cumulative personality disorders that were caused through the extended and ongoing physical and sexual abuse of the plaintiffs during their formative stages of personality development. 39 The plaintiffs submitted that the damage they suffered, in the form of psychiatric injuries, was due to the negligent acts and omissions of the defendants who failed to fulfil their duty to adequately care for the plaintiffs, when as guardians, they had a duty to do so. In light of these allegations the plaintiffs tendered the report of Dr Waters, psychiatrist, dated 7 October 1998. What follows is a summary of the representations made by Dr Waters in his report: (1) As at early 1979 the Victorian Department was aware that the parents could no longer care for the children and was aware the father had an extensive criminal history and was mentally disturbed.

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(4) The failure of the defendants to closely and carefully monitor the plaintiffs stemmed from lapses in judgment; firstly, the defendants ignored the fathers transparent history of evasiveness and deception; secondly, they ignored his ability to totally dominate his wife and the plaintiffs both physically and mentally; and thirdly, his capacity to act in an extremely destructive manner was also ignored. 40 In relation to the law as to whether a breach of the statutory duty gives rise to a private right in Sovar v Henry Lane Pty Limited (1966-67) 116 CLR 397 Kitto J at p 405 stated: "…The intention that such a private right shall exist is not … conjured up by judges to give effect to their own ideas of policy and then 'imputed' to the legislature. The legitimate endeavour of the courts is to determine what inference really arises, on a balance of considerations, from the nature, which it is directed, the nature of the conduct prescribed, the pre-existing state of the law, and, generally, the whole range of circumstances relevant upon a question of statutory interpretation." 41 The above quote was cited with approval in Stubbs v NRMA Insurance Limited (1997) 42 NSWLR 550 at 555. 42 It can be argued that the defendant as guardian owed a duty to the plaintiffs to act in their interests and in a way that truly provided a manner apt for a fiduciary for their care. As in Williams Kirby P (as he then was) at p 511C-D stated that it is arguable that a person who suffers as a want of proper care on the part of fiduciary may recover equitable compensation from the want of proper care. As Kirby P pointed out in Williams, in other jurisdictions, compensation for breach of fiduciary duty has been held to include recompense for the injury suffered to the plaintiff's feelings. It can be argued that the common law duty of care is similar to the fiduciary duty or the statutory duty. In relation to breach of statutory duty, it is my view that it is arguable that such a breach could give rise to a private right once the facts are established. The causes of action for breaches of statutory duty and negligence depends on evidence largely common to the claim for equitable compensation for breaches of fiduciary duty. It is my view that the plaintiffs have a real case to advance. 43 Williams was decided before Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; 129 ALR 1. Consideration must be given as to whether the defendants can obtain a fair trial or whether they will suffer significant prejudice. The principles concerning prejudice have recently been considered in Holt v Wynter [2000] 49 NSWLR 148, the Court of Appeal (per Sheller JA with whom Meagher, Handley JJA and Brownie AJA agreed) at 147 para 119 stated that the effect of the High Court decision in Taylor's case is that an application for an extension of time under limitation legislation should be refused if the effect of granting the extension would result in significant prejudice to the potential defendant. The applicant would not be able to demonstrate that it was fair and just that leave be granted if to do so would result in significant prejudice to the potential defendant. If there is an absence of significant prejudice to a potential defendant, there is no reason why the discretion should be exercised in favour of the plaintiff. 44 The defendants have denied liability. I accept that with the passing of 22 years, it can be expected that memories will have faded with the effluxion of time and some witnesses may no longer be alive or able to be located. Indisputably there is presumptive prejudice. 45 The first to third defendants submitted that they will suffer from real and actual prejudice. The first to third defendants' solicitor Ms Jackson deposed that several lay witnesses were not available to give evidence, namely employees of the first, second and third defendants: Lyn Davers, Valerie Chandler, Peg Gordon and E Gillmatter. Margaret Vaux, was located and is now 76 years of age. It was Ms Jackson's view that Ms Vaux found it difficult to recall events that occurred 22 years ago. None of the parties suggested that the plaintiffs' parents are not able to be located, nor that they were not able to give evidence. One of the plaintiffs' siblings is not a party to these proceedings. It was not contended that she was unable or unavailable to give evidence. 46 The affidavit of Virginia Hart, the plaintiffs' solicitor, sworn 14 February 2001 deposed that all the witnesses have been located and are able to give evidence. E Gillmatter was actually Gill Matters. Ms Hart spoke with Mrs Vaux on 6 February 2001 and found her recollection of the plaintiffs to be sufficient for the purposes of giving evidence. Further, there is available documentary evidence as to the awareness of the defendants as to the dangers faced by the plaintiffs and the treatment of the plaintiffs at the hands of their father. There are witnesses with a knowledge of these events who can give evidence at trial. However, Dr Chandler who examined the plaintiffs and their parents 1978 has died but her reports remain. If the reports are admitted into evidence at trial the defendants will not have the opportunity to cross examine him. 47 The files of New South Wales and Victorian departments of the defendants dating back to 1978, including medical reports in relation to the children are in existence. However the first to third defendants have submitted that they are not in a position to know if there were further documents that were created and have now been lost. It is more likely than not that in 1979 there were no further documents created. The most likely explanation for the trail going cold is because nothing was done by the department until 1985 when the plaintiffs' father voluntarily took them to the DOCS office at Bondi Junction. The responsibility fell between the Victorian and New South Wales agencies and neither one checked on the welfare of the plaintiffs during these years. I am satisfied that there is evidence available to the defendants in order to properly cross examine the plaintiffs. There are witnesses available who can give evidence as to what occurred. Even though Dr Chandler has died her reports remain. It is my view that the defendants will be afforded a fair trial and that they will not suffer significant prejudice. 48 It is my view that the plaintiffs have discharged their onus and satisfied me that it is just and reasonable that an order be made that the limitation period be extended. In Wynter, Sheller JA stated that in relation to costs ordinarily a successful applicant, who has allowed him or herself to get out of time, should pay the costs of the application unless the respondent's opposition was wholly unreasonable. It cannot be said that the defendants opposition was not wholly unreasonable. The plaintiffs should pay the defendants' costs. 49 The orders I make are:

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