Prince Alfred College Incorporated v ADC [2016] HCATrans 89 (15 April 2016)

Last Updated: 18 April 2016

[2016] HCATrans 089

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Adelaide No A31 of 2015

B e t w e e n -

PRINCE ALFRED COLLEGE INCORPORATED

Applicant

and

ADC

Respondent

Application for special leave to appeal

BELL J
NETTLE J
GORDON J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 15 APRIL 2016, AT 9.50 AM

Copyright in the High Court of Australia

MR M.C. LIVESEY, QC: If the Court pleases, I appear with MR I.L. MAITLAND, for the applicant. (instructed by Wallmans Lawyers)

MR R.A. CAMERON: May it please the Court, I appear with my learned friend, MR J.B. TEAGUE, for the respondent. (instructed by Astrid Macleod Solicitor)

BELL J: Thank you. Yes, Mr Livesey.

MR LIVESEY: If the Court pleases, 13 years ago, this Court in Lepore’s Case decided six different approaches to the determination of the question whether a school should bear vicarious liability for the sexual abuse inflicted on its students. Although the decision of Chief Justice Gleeson regarding the scope of employment is often cited, there remains no consensus and no ratio.

The need for clarity has become acute. In my submission, the royal commissions in Victoria and South Australia, and particularly the Commonwealth Royal Commission into Institutional Responses to Child Sexual Abuse and in its Redress and Civil Litigation Report, have highlighted that a clear statement of the relevant legal principles is required. As the redress report points out, leaving aside Justice McHugh’s reliance on non-delegable duty, three of the Justices in Lepore’s Case found that sexual abuse could be conduct in the course of employment and three found that it could not.

In response, the redress report advocates legislation, including the imposition of a non-delegable duty, which it proposes be applied prospectively. In consequence, even if that step is taken, there remains a need to resolve the proper approach to the determination of vicarious liability at common law. The approaches that have received the closest attention in the years since Lepore’s Case remain Chief Justice Gleeson’s approach to the close connection with employment and also the approach of Justices Gummow and Hayne. It is arguable, in my submission, that their Honours’ approach pays closer regard to the decision of the High Court in Deatons v Flew.

If I might invite the Court to take up very briefly Lepore’s Case at page 591, at the foot of paragraph 231, their Honours, after having cited Justice Dixon’s decision in Deatons Case, identify two elements which, they explain, are important:

First, vicarious liability may exist if the wrongful act is done in intended pursuit of the employer’s interests or in intended performance of the contract of employment. Secondly, vicarious liability may be imposed where the wrongful act is done in ostensible pursuit of the employer’s business or in the apparent execution of authority which the employer holds out the employee as having.

In my submission, on any view close attention is directed to what the employee is actually employed to do or what the employer has actually held the employer out as having authority to do. That is made explicit and clear in the passage I have just cited and it is also made explicit in Chief Justice Gleeson’s decision at paragraphs 74 and 84 where he refers to the tasks set by the employer, and at 84, in particular, in remitting the Queensland case he identified the need for evidence about the functions of a school master in Queensland in 1965. This highlights the error of principle made by the Full Court in this case.

Briefly, the abuse took place in dormitories at night, after lights out, as well as enclosed rooms, as well as off the school premises. On the basis of evidence of what the plaintiff and two boys said when middle aged men, if not older than that, half a century later, particularly about what they saw the perpetrator doing, the trial judge, Justice Vanstone, accepted that primary responsibility for care in the dormitories in 1962 was left in the hands of the prefects with only casual oversight from the boarding housemasters.

NETTLE J: But these are factual issues. These are factual questions which were overturned by the Full Court.

MR LIVESEY: With respect, they were not. What the Full Court did is ignore these findings and at a high level of generality, too high a level of generality, draw the conclusion that because there was supervision of the boarding house at night, really falling into the fallacy that Chief Justice Gleeson exposed – care is not enough – because of that degree of supervision at night, even though actual duties did not require going into the boarding house – no evidence that anyone needed settling, no evidence that this was ever done on any particular occasion by any other boarding housemaster – simply this fellow, this perpetrator using this, as I quote, “to hide his wrongdoing”.

NETTLE J: Put aside the question of whether there was sufficient basis to draw the inference which the Court of Appeal did, did they not faithfully follow the close connection or significant connection tests postulated in Lepore?

MR LIVESEY: No, they did not. First, Justice Peek, with whom Chief Justice Kourakis agreed – well, he said he agreed in principle although as to the application he seems to have disagreed, he found a much narrower basis – that is to say, only the misconduct in the boarding house after lights out. Chief Justice Peek said - - -

GORDON J: You mean Kourakis.

MR LIVESEY: - - - that of the six approaches Chief Justice Gleeson’s approach was to be preferred to the stricter test of Justices Gummow and Hayne because, he said, it was the right one. He described Chief Justice Gleeson’s approach as, in effect, a call to arms to Australian courts. Justice Peek drew the analogy, rejected by Justices Gummow and Hayne, that one can draw some sort of analogy between caring for children and caring for fur coats and sacks of potatoes. Quite apart from being offensive, it is incorrect, with respect.

The next thing he did is he disregarded the findings made and said that because there was authority to supervise overnight there must have been in effect his finding, therefore the employer was vicariously liable. Chief Justice Kourakis did much the same thing. He said there was no evidence that the school ever prevented this particular housemaster from going into the dormitory at night, overlooking the evidence that those in authority were either dead or unable to give evidence.

He said that because he must have been authorised to enter for some legitimate purpose, therefore when he did enter for an illegitimate purpose, there was vicarious liability. With respect, that is not a faithful regard to the principles described in Lepore’s Case, whichever one of the six approaches is adopted.

BELL J: I think the primary judge considered that the observance of the boy showering and the entry into the dormitory at night was unauthorised.

MR LIVESEY: She did, and the effect of her finding was that this was a frolic. This was not something that any master was otherwise required to do. No other master did it. This was a case based on a very narrow factual basis. There was evidence from the plaintiff and two other men and otherwise it was a matter of inference. No other master did what Bain did. That is important. All of those who gave evidence about what they saw in this boarding house in 1962 said none of the other masters did this. It was only the perpetrator who did this.

In my respectful submission, the trial judge’s finding in those circumstances is really unimpeachable. She went further. She said even if she were of the view that it had somehow been sanctioned, what he did went so far beyond what he was authorised to do that there could be no finding of vicarious liability and she expressed those views particularly at paragraph 175:

although . . . when rostered on duty –

his role:

involved responsibility for and overall supervision . . . that is very far from amounting to a duty to engage in intimate physical behaviour -

She went further and said at page 38, paragraph 179, that even if she were wrong about her conclusion:

I find that notwithstanding that the relationship between boarding house master and boarding student would likely be a closer one that that of a day student . . . the ordinary relationship was not one of intimacy and the sexual abuse was so far from being connected to Bain’s proper role that it could neither be seen as being an unauthorised mode of performing an authorised act, nor in pursuit of the employer’s business, nor in any sense within the course of Bain’s employment.

She rejected the finding of vicarious liability. With respect to the Chief Justice, he appears to have ignored those findings and criticised at application book 69 the judge’s highlighting of the absence of evidence of what the perpetrator was required to do or what his designated role was, in effect, rejecting what Chief Justice Gleeson had highlighted and rejecting what Justices Gummow and Hayne had said was important and central to the inquiry. His approach – that is to say the Chief Justice’s approach – was at a very high level of abstraction providing, he says at paragraph 18, one could say that he was acting in “the ostensible performance of that responsibility”, not his duties, then that was enough to find vicarious liability.

In my submission, that is a very clear error. If this approach, the approach of Justice Peek, and the Chief Justice are correct, whenever one concentrates on what a perpetrator actually does, however covert, however insidious it might be, however it may be shielded from the gaze of the employer and providing the perpetrator can say that in some limited respect or in some general respect the perpetrator was acting in the course of his authority, then the employer will be liable.

One can posit many examples on a school teacher taking a student into a shed. There are many other examples where, although acting in accord with the ostensible authority of the employer, in truth what the employee is doing is on a frolic and that is what this case exposes – that this perpetrator was on a frolic, he was not acting in accord with any approved duty or responsibility, he was doing that which no other master did. In my submission, this case provides a very clear opportunity at a very good time to clarify the many questions which have been left unanswered by Lepore’s Case.

Can I move now to the question of an extension? I accept that if my argument is accepted in relation to the first point, the second point does not arise, but with respect and frankly it is very likely that in many of these historic sexual abuse cases extensions of time are likely to bedevil the courts. The Chief Justice is the decision that one must pay closest regard to. That is because Justice Gray seems to have gone off, with respect to him, on a tangent and found under the second limb of section 48(3) that it was the defendant’s conduct in 1962 which prevented the plaintiff from commencing his proceedings in 2008. No other judge agreed with that.

So far as Justice Peek is concerned, with respect to him remarkably he decided the question of an extension in one sentence and without explanation and that can be found at application book –

GORDON J: Page 158.

MR LIVESEY: I am grateful, thank you. So it is completely unclear on what basis Justice Peek decided the question of an extension. The Chief Justice found that because the trial judge unduly narrowed the focus onto the duties set by the employer, she erred. With respect, he is wrong in that because all she was doing was faithfully following this Court’s decision in Lepore’s Case, and it is only by going to the very high level of generality at which he resolved the case that he found that there was no prejudice sustained by my client.

But in doing that, he ignored his own observation at paragraphs 5 and 13 - application book pages 66 and 68 – that there was no evidence led that the perpetrator was prevented from going into the dormitory after lights out. That, it seems to me, in my respectful submission, highlights the prejudice sustained even at the high level of generality adopted by the Chief Justice.

GORDON J: Do you rely upon the fact that the Chief Justice does not seem to address the second part of section 48?

MR LIVESEY: Yes, with respect. With all due respect to the Chief Justice, it is a lopsided approach to the resolution of the question of an extension of time and, particularly in relation to the exercise of discretion his Honour went so far as to say that undoubtedly there are going to be difficulties because in this case it was proved that the plaintiff complained in a very general way until he saw a particular psychologist in 1996 and 1997.

After that date all of his complaints accorded with the posttraumatic stress disorder criteria; general complaints, regimented complaints complying with the DSM criteria. The defendant complained that it was denied the opportunity of exploring that because the psychologist had destroyed his notes. Justice Vanstone accepted that and said that that was a very material prejudice. Chief Justice Kourakis dealt with that with a wave of the hand by suggesting one simply takes a conservative approach to the assessment of damages. One reduces the damages. With respect, that is unprincipled, it is unprecedented and it is inappropriate.

So far as the weight given to the fact that the school provided compensation in 1996 and 1996 and paid for the plaintiff to receive legal advice about whether to sue the school, on the basis of which he decided not to sue the school but to sue the perpetrator, the Chief Justice said that was to be afforded little weight. He said that it was a mark of this illness that a victim will not pursue the perpetrator. Of course, in making that very statement he ignored the evidence before the trial judge, accepted by the trial judge, that this particular plaintiff sued the perpetrator. He sued the perpetrator, took him to court, recovered compensation.

Admittedly, it was not as much as he might have recovered from the school, but he recovered compensation nevertheless, and it was on the basis of sound, as the trial judge found it, competent legal advice, that he elected not to pursue the school. All that happened is that he changed his mind 10 years later. In my respectful submission, the trial judge was entitled to give that fact very great weight when exercising her discretion, and for this additional reason the Chief Justice’s intervention is both unprincipled and unwarranted. In my respectful submission, this is a case which requires special leave to appeal.

BELL J: Thank you, Mr Livesey. Mr Cameron.

MR CAMERON: May it please the Court, in our submission this is not a suitable vehicle to review the questions that have been canvassed fully the Court in Lepore’s Case. Here the Full Court very carefully considered the evidence in great detail and carefully addressed the various approaches that the various judges in Lepore looked at and applied those various approaches very carefully to the facts of the case and, in our respectful submission, the applicant in this application cannot demonstrate any particular or identifiable error in the reasoning of the Full Court.

BELL J: One of the matters that, as I understand it, the applicant puts in support of the application is that there are differences of approach in the reasons in Lepore and here one sees members of the Full Court applying, on one view perhaps, an analysis consistent with Chief Justice Gleeson, when on another view the joint reasons of Justices Gummow and Hayne may have suggested a different result.

MR CAMERON: Yes. We accept the first point about Lepore, your Honour. When one goes to the careful analysis of the factual substratum in the case and the result, it is our submission that whatever test is used, the Full Court got the result right, and for that reason, in our submission, it is not an appropriate vehicle to look again at the disparate approaches of the justices in Lepore.

NETTLE J: But the Full Court’s approach would not align with the Gummow/Hayne approach in Lepore, would it, or - - -

MR CAMERON: Yes, it - - -

NETTLE J: - - - still less with Justice Callinan.

MR CAMERON: Not with Justice Callinan, no, but it does, in our submission, follow closely the analysis of Justices Gummow and Hayne, and that is best exemplified in Justice Gray’s reasoning, your Honour, at paragraph 128 at page 105 of the application book where his Honour very directly addresses that question, although not specifically by citing at that particular point Justices Gummow - - -

GORDON J: One of the problems you have got though is that you have got the Chief Justice and Justice Peek, with the Chief Justice saying he adopts the principles outlined by Justice Peek and he ends up with a different result. That is the difficulty. Even if you are right about the principles being in effect carefully set out, we have got two different results on the same facts.

MR CAMERON: Yes.

GORDON J: So, is the test wrong or is it the application of the facts?

MR CAMERON: No, the submission that we would put very forcefully, your Honour, is that whatever test is applied on the particular facts of this case, their Honours arrived at the correct result. Here the abuse was perpetrated in the course of Bain doing the very thing that he was employed and entrusted to do. The applicant clothed Bain with supervisory authority in the boarding house. The circumstances were characterised by trust, vulnerability and reliance.

He was placed in a position of such power and intimacy that what he did could fairly be regarded as so closely connected with his responsibilities as a boarding house master as to be regarded as in the course of his employment, and we refer in particular to the passages in Lepore in Justices Gummow and Hayne’s judgment at paragraph 239. Here Bain’s conduct was done in the ostensible pursuit of his employer’s business and in the apparent execution of the authority which the applicant held Bain out as having.

GORDON J: The difficulties – their Honours went on to say that sexual misconduct would very rarely fall within that last category which you rely on.

MR CAMERON: But in the particular circumstances of this case they found that it did, and here the boarding house masters were expected to have a great amount of time with the boys. Bain was responsible for the supervision of the boys in the boarding house. He abused the intimacy of the relationship formed between the boarding house master in loco parentis and a child boarder, the trust and confidence that was thus engendered, the power conferred on Bain in relation to the child, the child who was highly reliant and dependent on Bain and thus vulnerable.

Thus the applicant in these proceedings had clothed Bain with the ostensible, if not actual, authority to discharge its duty in loco parentis. He was clothed with the authority that if it was abused it would cause great harm and it is our submission that in the result in the case, the school was vicariously liable for their breach of duty by the very servant they had employed to take care of the plaintiff, by the vicar that they had chosen to perform it, if we take up the words of Lord Justice Diplock in the case that is referred to in our short summary of argument, your Honours.

BELL J: Do you wish to put anything on the extension question?

MR CAMERON: Yes, just very briefly, your Honours. On the question of time, as Justice Gray explained, he looked at the entitlement to an extension of various alternative bases and fully canvassed the provisions in the legislation.

BELL J: I do not think his Honour’s approach was that followed by the Chief Justice.

MR CAMERON: No.

BELL J: It is, perhaps, a little unclear what approach Justice Peek adopted.

MR CAMERON: Justice Peek hardly addressed the question at all. The Chief Justice was fairly brief in his analysis but, in the result, the decision, in our respectful submission, was undoubtedly correct and the right result.

So it is not an appropriate vehicle for the questions to be considered in this Court. There is no evidence - - -

BELL J: It is put against you that to overturn the discretionary determination of the primary judge respecting an aspect of prejudice on the basis that one might simply give a more modest award of damages is a wrong approach in principle.

MR CAMERON: That is, perhaps, a comment that one does not normally see in this context, your Honour, but when one looks at the legislation and the result, it is our submission that applied to the totally of the evidence that the court very carefully analysed, and it is fully analysed in Justice Gray’s judgment, the intermediate appellate court, fulfilling its duty, arrived at the undoubtedly correct result on the totality of the facts in this particular case, except that along the journey there might be a passage here or there the court might take issue with, but in the ultimate outcome, in our respectful submission, the correct result was achieved and, therefore, this is not an appropriate vehicle for the Court to look at the interesting questions that might otherwise arise.

On the question of prejudice, Justice Gray dealt with that at paragraph 91 at application book 85 and the Chief Justice dealt with that briefly at paragraph 70. So, in essence, for those reasons, your Honours, it is our respectful submission that it is not an appropriate vehicle and the application should be refused.

BELL J: Thank you, Mr Cameron. Yes, Mr Livesey.

MR LIVESEY: If the Court pleases, as to the first part of the case, it is accepted that these are hard cases, but as Justices Gummow and Hayne pointed out in 242 in the Lepore’s Case, that does not require that one lose sight of the need to observe principle rather than follow policy. My friend says that he accepts that there are differences in Lepore’s Case but the facts and the outcome suggest the plaintiff must win. Your Honour, Justice Gordon, points out that there are two approaches. With respect, it is worse than that. There are three approaches.

Justice Vanstone had very careful regard to Chief Justice Gleeson’s approach. She had carful regard to the approach of President Allsop in Withyman’s Case and she found that there was no vicarious liability. As against that, we have Justice Peek finding vicarious liability for all of the wrongdoing – wherever it may have occurred. We have the Chief Justice’s finding – it found only in respect of the conduct at night in the boarding house after lights out.

So far as the time point is concerned, my friend says again that one tests that by the result. With respect, that is not the approach. Primary responsibility for the decision was reposed in Justice Vanstone. She applied the authorities in an entirely appropriate way. She had regard to the fact that the material fact which is the trigger for the exercise of discretion was easily overstated. It was a medical report about which the plaintiff knew most of what was already contained in it.

So far as the exercise of discretion is concerned, again she had a textbook approach to the determination of prejudice. What my friend says really cannot be sustained because when one looks at the three decisions in this Full Court, we have one about which there is no explanation, we have another which is off on a tangent based on the defendant’s conduct and we have a third which is tainted by error. In my respectful submission, this is clearly an appropriate case to correct the wrongful intervention and overturning of Justice Vanstone’s exercise of discretion.

BELL J: Thank you, Mr Livesey.

Yes, there will be a grant of special leave in this matter. What is the estimate?

MR LIVESEY: The estimate would be in the order of half a day, but I have not spoken with my friend. It is possible that he has a different view, but it would be less than a full day.

BELL J: Less than a full day.

MR CAMERON: Might we be heard on the terms as to special leave, your Honour?

BELL J: Yes.

MR CAMERON: As we understand it, there is an insurer interested in the outcome of this case because of what might be thought to be general consideration, so we would seek an undertaking that the orders of the Full Court as to costs not be disturbed and the respondent have costs in this Court, in any event. May it please the Court.

BELL J: Yes.

MR LIVESEY: With respect, that is not sought in the respondent’s outline. But, in any event, on my instructions, it is true that there is an insurer behind the school but it is an insurer in run-off and, on my instructions, it has only two cases. This is very far from being a case which is of wide moment to this particular insurer, unlike tax cases or other

insurance cases where one has a test case which is of utility to that particular insurer requiring the court in an appropriate setting to require that undertakings of that kind be given.

BELL J: Yes, Mr Cameron, we are not minded to condition the grant. Do I take it you agree with Mr Livesey’s estimate?

MR CAMERON: Yes, your Honours. Our estimate is that it is certainly no more than a one-day case and hopefully it can be disposed of in less than a day, your Honours.

BELL J: Thank you. Gentlemen, if I can get those who instruct you to collect the directions from the Registry.

MR LIVESEY: As your Honour pleases.

BELL J: Yes, thank you.

AT 10.19 AM THE MATTER WAS CONCLUDED