Record damages awarded in a recent Victorian institutional abuse case
Oct 2021 | InsuranceFacts
In 1988, the plaintiff was in year 8 at the Geelong College (defendant) when he started attending a building known as the ‘House of Guilds’ on the school’s premises after hours. The building contained a room fitted out to allow students to undertake woodwork projects, ceramics and other crafts (workshop).
The House of Guilds was also open to students from other schools and to members of the community upon payment of a membership fee. There was no process or procedure to review and approve applications for memberships by the school.
The perpetrator was an honorary member of the House of Guilds. He attended the workshop regularly and interacted with, and at times supervised, the students using this particular workshop, which included the plaintiff.
Between late 1988 to mid-1990, the plaintiff was sexually abused by the perpetrator on more than 50 occasions at the House of Guilds, in the perpetrator’s car and home. The perpetrator was in his 70s at the time and passed away in about 1999. He was not a teacher at the school nor did he ever qualify as a teacher.
The plaintiff kept the abuse a secret until in mid-2007 when he disclosed it to his immediate family following a psychological breakdown, whilst he was working for his then employer.
The plaintiff sought and received psychological treatment following the 2007 breakdown. In 2019, the plaintiff suffered another breakdown when he was retrenched from his position with his subsequent employer. He has not worked since being retrenched but has been receiving regular treatment with a psychologist.
The plaintiff’s treating psychologist and a medico-legal expert diagnosed the plaintiff as suffering post-traumatic stress disorder (PTSD) and generalised anxiety disorder.
The plaintiff initiated proceedings in the Supreme Court of Victoria against the defendant, claiming damages in negligence and/or vicarious liability in respect of the psychiatric injury he sustained as a result of the sexual abuse he suffered at the hands of the perpetrator.1
Issues
The issues before O’Meara J included:
- Whether the defendant was vicariously liable for the acts of the perpetrator;
- Whether the defendant breached its duty of care owed to the plaintiff and if so, to what extent; and
- How to assess damages.
Decision
Issue 1 (Vicarious liability)
The plaintiff contended that the defendant should be vicariously liable for the abuse perpetrated upon him by the perpetrator. The plaintiff relied on the following passage from the High Court in Prince Alfred College Incorporated v ADC,2 which he alleged provided a ‘framework’ within which vicarious liability may be made out:
‘In determining whether the apparent performance of such a role may be said to give the “occasion” for the wrongful act, particular features may be taken into account. They include authority, power, trust, control and the ability to achieve intimacy with the victim.’ 3
There was no controversy that the perpetrator regularly attended the House of Guilds and interacted with the students, including supervising them at times. Many witnesses considered the perpetrator to be part of the ‘fabric’ of the place. There was also a statement published in the school’s magazine to the effect the perpetrator was assisting in the running of the House of Guilds.
However, his Honour distinguished the facts of the case with Prince Alfred College, on the basis that in the latter the perpetrator was an employed boarding housemaster and the passage quoted above refers to and was premised on an employer-employee relationship existing.
His Honour was not persuaded that the defendant, ‘generally held the perpetrator as a teacher at the school to those who attended the House of Guilds’. There was no evidence to suggest that the perpetrator was assigned a professional title, paid by the defendant, formally assigned, supervised, or attended the House of Guilds under a direction of the defendant, or that the defendant maintained a personnel file on him in an employee capacity.
His Honour concluded that the existence of a relationship of employer and employee was a pre-requisite before the Court could proceed with the multifactorial analysis to determine whether a defendant was vicariously liable for the criminal acts of the perpetrator. Accordingly, the plaintiff’s contention that the defendant was vicariously liable for the actions of the perpetrator was rejected.
Issue 2 (Negligence)
Was there a breach of duty?
Alternatively, or in the event vicarious liability was not made out, the plaintiff contended that the defendant was liable in negligence.
The defendant admitted that it was the occupier of the House of Guilds and accordingly, ‘owed a non-delegable duty of care to the plaintiff to exercise reasonable care to avoid him suffering reasonably foreseeable injury whilst he was a student’.4
The defendant did not contest the general proposition that it was reasonably foreseeable that students at the school might have been at risk of sexual abuse. In the circumstances the issue for his Honour to determine was what a reasonable organisation in the defendant’s position would do by way of response to this risk, and whether the defendant had adequately responded to this risk.
At the time, the defendant employed a full-time warden and had a system of rostering teachers for supervision at the House of Guilds. The warden passed away before the proceedings were issued.
The plaintiff led evidence of historic abuse at the school, particularly in the late 60s and early 70s. Relevantly, the plaintiff led evidence through a former student of the school, to the effect that he had complained of sexualised fondling by the perpetrator in the House of Guilds in late 1987 and early 1988, which is shortly before the plaintiff’s attendance at the building.
This witness had reported his complaints of the perpetrator’s actions to both the warden and one of the responsible teachers. However, that teacher testified that he had no recollection of the former student nor could he recall any complaints of such nature.
His Honour considered the former student to be an excellent witness. It was noted that the witness was measured in his presentation and appeared to be at times ‘re-experiencing’ some of his evidence. This leant to a ‘quality of immediacy’ to his evidence, which combined with remembering several details of the layout of the House of Guilds, made his evidence more compelling. In the circumstances, his Honour accepted the former student’s evidence, including the complaint to the warden.
Moreover, and importantly, the responsible teacher confirmed that the defendant, ‘had not provided instructions to its teachers concerning risks of sexual abuse, nor sponsored any specific discussions concerning complaints of the kind made by [the former student], or dealing with them, or that he could not recall any such things ever having occurred'.
His Honour determined that the defendant had specific warning of the risk posed to students by the perpetrator in the House of Guilds, or at the very least was in the position to investigate matters reported by the former student, which would likely have led to the specific understanding of that risk.
Further, his Honour determined that the provision of a full-time warden and a system of rostering and supervision within the House of Guilds was not an adequate response to this specific risk, particularly in circumstances where it was not evident that the workshop was constantly supervised by the warden and/or a supervising teacher. Several witnesses gave evidence that teachers and the warden might be away from the room for periods of time attending to other duties.
Finally, his Honour considered the very conception of the House of Guilds placed students in a vulnerable position to this specific risk in circumstances where adult outsiders could attend the House of Guilds upon payment of a membership fee. Witnesses, including the responsible teacher, gave evidence that the perpetrator did no woodwork or any other such projects of his own (as far as they could recall), which should have been the primary, if not only, reason he was there. Accordingly, such circumstances, ‘do not bespeak of a system of supervision attuned to monitoring and responding to the foreseeable risks presented’.
His Honour determined that the appropriate response to this specific risk was that the defendant should have either excluded the perpetrator from the House of Guilds or watched over him ‘like a hawk’.
The defendant was found to have breached its duty of care to the plaintiff by failing to apprehend the importance of the former student’s complaint, which included not emphasising the potential immediacy of that risk to its teachers. The system of supervision and monitoring as formulated and executed was also inadequate.
To what extent is the defendant liable to the plaintiff?
The defendant contended that it was not responsible for any abuse that occurred outside the House of Guilds, namely, in places such as the perpetrator’s car, his home and on one occasion, the plaintiff’s home, on the basis that it was in no position to exercise control over whatever happened outside its premises.
His Honour rejected this proposition as none of the cases the defendant sought to rely upon were analogous to the current claim. In those cases, the injury occurred either entirely off the premises of the school,5 or outside of school hours.6 In the current case, evidence was led by the plaintiff that the perpetrator commenced the abuse in late 1988 within the House of Guilds over the course of several months. Towards the end of the first term in 1989, the abuse progressed to the perpetrator’s vehicle, home and somewhere else at least on one occasion.
Consequently, several months of grooming within the confines of the House of Guilds initiated a process of continuing abuse in the perpetrator’s car or home. This process took place on more than 50 occasions until it ceased in mid-1990.
If the defendant had heeded the complaints of the former student or properly supervised the activities of the perpetrator, ‘it would not have taken much in the way of imagination to be apprehensive of the conduct in the nature of the abuse might be occurring outside the premises of the school’.
Accordingly, his Honour was not persuaded that here was any new evidence or ‘intervening gross negligence’ that broke the chain of causation. Moreover, the medico-legal psychiatric expert was adamant that the abuse occurred on a ‘continuum’ and his Honour accepted this opinion as it aligned with the distress of the plaintiff which was evident when he gave his evidence.
Moreover, his Honour did not accept that the plaintiff’s parents were at fault as there was no evidence that his parents knew or ought to have known that the perpetrator was a specific threat to their son. If anyone were to know of this specific threat, it was the defendant, who should have informed the parents, but they did not.
His Honour determined that the defendant must bear the liability for the abuse that took place not only at the House of Guilds but also in the perpetrator’s car and at his home, as it was unlikely this would have progressed without the initial months of grooming in the House of Guilds. His Honour rejected the defendant’s submission that the liability of the defendant should be reduced by 65-75% on the basis that the plaintiff’s parents owed and breached a duty of care, which although not pleaded was ‘floated’ during the defendant’s final written and oral submissions.7
Issue 3 (Quantification of damages)
Pain and suffering
The plaintiff was awarded $300,000 in general damages for his pain and suffering. It was not contested that as a result of the childhood sexual abuse, he developed PTSD and generalised anxiety disorder.
Evidence was led by the plaintiff, along with his former work colleagues and supervisors, and his immediate family, including his wife. In general, all witnesses noted concerns with the plaintiff’s controlling or difficult behaviours and distress, in particular from 2004 when the plaintiff began taking on more managerial roles, leading to struggles with business related travels. His then treating psychologist at the time reported ‘debilitating anxiety and panic… especially when he was required to travel’.
Further, the plaintiff’s current treating psychologist opined that the plaintiff, ‘continues to experience many of the resulting consequences of having been a victim of child sex abuse’ and that his symptoms had been severe when she first saw him in 2019. The psychiatric expert further opined that the adoption of a façade by the plaintiff, ‘relates strongly to his [the plaintiff’s] very prominent sense of shame in relation to the abuse… [and] the façade really defends him [the plaintiff] against being shown to others'.
His Honour accepted that the abuse had a profound effect on the plaintiff from his adolescence, affecting many aspects of his emotional development leading to the formation of a façade of bravado to protect an ‘internally corrosive secret’ until it shattered in mid-2019 following his retrenchment. It was considered likely that the plaintiff will continue to suffer for the rest of his life and will ‘always be and have been damaged’.
Part VB of the Wrongs Act
The defendant pleaded that pt VB of the Wrongs Act 1958 (Vic) (Wrongs Act) was not applicable. Part VB of the Wrongs Act partially alters the common law in relation to damages that may be awarded for personal injury claims.
Of relevance to the present claim, s 28I of the Wrongs Act states that a discount rate of 5% is to be applied to damages for future economic, as opposed to the common law rate of 3%. A discount rate of 5% is more favourable to a defendant.
Pursuant to s 28C(2)(a) of Wrongs Act, pt VB does not however apply to:
‘an award where the fault concerned is an intentional act that is done with intent to cause death or injury that is sexual assault or other sexual misconduct.’
The defendant submitted that the relevant fault, meaning the act or omission constituting sexual assault or sexual misconduct, must be that of the defendant, which was not the case here. It was therefore contended that pt VB is not excluded and applies to the present award of personal injury damages. His Honour rejected this submission and held that it was unnecessary to specify who committed the act of omission constituting sexual assault or sexual misconduct. It was sufficient that sexual misconduct or sexual assault occurred.
In the circumstances it was held that the provisions of pt VB of the Wrongs Act were excluded.
Past economic loss damages
The plaintiff tendered a report from a forensic accountant, who assessed the plaintiff’s past economic loss on the basis that the plaintiff would have, ‘simply ploughed through his commerce degree and, at the age of about 20, set upon the career in sales and ultimately management’.
His Honour did not accept this assessment as it overlooked the personal circumstances of the plaintiff including, ‘the influence of intervening maturity and perspective as the plaintiff approached his mid to late twenties’, the completion of his university degree in commerce and more importantly, the influence of his wife.
Evidence was given by the plaintiff’s wife that she encouraged her husband to seek out more ‘professional’ employment following the completion of his commerce degree in 2000, as opposed to remaining the general manager of a local pub. The plaintiff gave evidence that he was reluctant to leave his position at the pub as he felt safe there and did not follow through until 2004, when he found a position with a beverages company. His Honour accepted that, but for the abuse, the plaintiff would have likely sought ‘professional’ employment in about 2001.
Having regard to the above, his Honour decided that loss of a head start in seeking more ‘professional’ employment was best compensated by two years’ worth of salary at a senior level prior to his 2019 breakdown totalling $240,000 per annum (plus superannuation), which was the equivalent of his earnings with his subsequent employer prior to his retrenchment.
Further, his Honour concluded that the combination of the plaintiff’s retrenchment in 2019 and the effects of the abuse rendered the plaintiff unable to work during the period mid-2019 to October 2021. Relevantly, his Honour noted that absent the abuse, the plaintiff would likely have found similar work in a similar role, noting that he was headhunted for his last position, demonstrating his experience and expertise in management and sales.
The plaintiff was awarded four years’ worth of senior earnings for his past loss totalling $676,583.05.
Future economic loss damages
His Honour considered that absent the abuse, the plaintiff was likely to work until retirement age of 67 or shortly thereafter having regard to his wife’s age, noting that she is two years older than him.
However, his Honour was not convinced that it was an aspiration of the plaintiff to reach director level in sales and management, thereby earning $300,000 per annum (plus superannuation). The overall impression was that it appeared, ‘more likely that the plaintiff would have remained in management positions of the kind he has held in the years leading up to 2019 and then beyond to about normal retirement age’. His Honour accepted the forensic accountant’s assessment of $250,000 per annum (plus superannuation) as the most appropriate assessment.
His Honour rejected the defendant’s submission that the plaintiff would return to work in similar positions in two to three years.
His Honour accepted the medical evidence that the plaintiff was unlikely to return to any kind of senior executive position, due to the fragility of his mental and emotional wellbeing. He opined that if the plaintiff were to return to work, it would be within five to ten years from current. His Honour determined the plaintiff would likely return to work 6 years from current but to a lower level of work with less stress, for example, as a sales representative with less managerial responsibilities, earning approximately $80,000 per annum (plus superannuation).
The defendant contended for a ‘very significant’ reduction in damages by reference to Malec v Hutton,8 that is, that future economic loss damages should be reduced having regard to of the plaintiff’s pre-injury condition. However, the decision does not elaborate on what the plaintiff’s pre-injury condition was said to be and no apportionment was made for Malec v Hutton.
A discount of 20% was applied for the vicissitudes of life (slightly higher than the usual 15%), in light of the residual possibility the plaintiff may retire early and the natural career movement for a person in sales and management carrying risks of redundancies and periods of employment, leading to an award of $1,634,995.20 for future economic loss.
Medical and like expenses
Past medical and like expenses were calculated in the sum of $1,361 and for the future in $19,380.
Orders
The plaintiff was awarded $2,632,319.25 in damages.
Implications
The case is significant for a number of reasons, not least that the award of damages is, at the time of publication, the highest awarded by a court in an institutional abuse case in Australia.
In contrast to a recent New South Wales decision, which left open a possibility that an institution may be vicariously liable for the acts of a volunteer,9 O’Meara J interpreted the reasoning in Prince Alfred College to require, as a pre-condition of a finding being made of vicarious liability, an employee-employer relationship.10
In an educational context, the case highlights that a school can be held directly liable for abuse that occurs both on and off its premises, where the abuse that occurred off premises can be attributed to the school creating the opportunity and the occasion for the abuse to manifest.
Finally, and as also illustrated by another recent Victorian decision,11 although there may be cause for concern with the magnitude of damages awarded in this case, insurers and institutions can take comfort that the courts will consider thoroughly all quantum related issues, the unique facts of each case and apply appropriate discounts for economic loss where appropriate.
1 PCB v Geelong College [2021] VSC 633
2 (2016) 258 CLR 134.
3 Prince Alfred College Incorporated v ADC (2016) 258 CLR 134 at [81].
4 Defendant’s Defence dated 25 June 2020.
5 The Trustees of the Roman Catholic Church for the Diocese of Bathurst v Koffman (1996) Aust Torts Reports 81-339, Graham v State of New South Wales [2001] NSWCA 248 and Bradford-Smart v West Sussex County Council [2002] EWCA Civ 07.
6 Geyer v Downs [1977] HCA 64.
7 The plaintiff’s parents were not joined as parties to the proceedings nor were they called to give evidence.
8 Malec v J.C. Hutton Pty Ltd (1990) 169 CLR 638.
9 Plaintiffs A, B, C & D v Bird, Clancy and Little Pigeon t/as Footprints Childcare Centre [2020] NSWSC 1379.
10 PCB v Geelong College [2021] VSC 633 at [303].
11 Lonergan v The Trustees of the Sisters of Saint Joseph and Anor [2021] VSC 651.
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