The Supreme Court of Victoria has recently handed down its decision in PCB v The Geelong College  VSC 633 (PCB), awarding landmark damages of $2,632,319.25 and reframing the way a defendant ought to approach vicarious liability and economic loss in proceedings concerning historical sexual abuse.
The Geelong College established, owned and operated a building known as the House of Guilds which was a space for students to pursue hobbies and crafts such as woodwork and ceramics. Access to the House of Guilds was available to students as well as other members of the community, provided they paid a membership fee.
The plaintiff, a student at Geelong College, attended the woodworking space at the House of Guilds between late-1988 and mid-1990. Bert Palframan, a community member with no formal relationship with the College was sometimes left to supervise the House of Guilds and occasionally had access to the keys.
The plaintiff alleged that Palframan groomed him and sexually assaulted him on more than 50 occasions, including at the House of Guilds, in Palfaman's car and at the plaintiff's home.
The plaintiff brought proceedings against Geelong College in relation to the alleged conduct of Palframan, alleging that it was the occupier of the House of Guilds, that it owed the plaintiff a duty of care and that it was otherwise vicariously liable for the abuse perpetrated by Palframan.
Geelong College did not contest that it was the occupier of the House of Guilds or that it owed the plaintiff a duty of care. Rather, it argued that it had not breached its duty of care, because:
- it provided a full-time warden and had a system of rostering and supervision within the House of Guilds; and
- prior to the enactment of the Working with Children Act 2005, when the alleged conduct took place, was a 'different time'
The plaintiff submitted that the High Court's decision in Prince Alfred College1 had left the door open for employment-like relationships to attract vicarious liability, and that Palframan ought to be considered in an employment-like relationship as he was so frequently present that there was a perception amongst the students that he was a teacher or a teacher's aide.
The College also submitted that, if I was liable to the plaintiff, it should not be held responsible for damage suffered outside the House of Guilds because:
- it was not in a position to exercise control over what happened on premises other than its own; and
- the abuse occurred as a result of contact between the plaintiff and Palframan that was arranged with the knowledge and permission of the plaintiff's parents.
Duty of care
Justice O'Meara found that there was a foreseeable risk of child sexual abuse 'from the very conception of the House of Guilds' by facilitating contact between students and members of the public. The Court found that the very fact that the plaintiff (including one of the witnesses at trial) were subjected to sexual abuse perpetrated by Palframan over a prolonged period does 'not bespeak the operation of a system of supervision attuned to monitoring and responding to the foreseeable risks presented.'
The Court was also resistant to the argument that the events occurred during a 'different time', and that the College should not be held to the same standard of care to which a school would be held today.
The Court held that, just because the events occurred prior to extensive child protection and safeguarding policies being commonplace, or the implementation of targeted child protection legislation, it does not mean that the risks of child sexual abuse were less foreseeable in the circumstances, with his Honour remarking:
'the unfortunate reality appears more to have been that whilst the risk of sexual abuse was or should have been appreciated at that time, it was neither highlighted by the defendant nor specifically responded to.'
While it is not commonplace for schools and institutions responding to historical abuse allegations to have had child protection and safeguarding policies and procedures in place during the periods of alleged abuse, this decision highlights the importance of a defendant demonstrating that its school had a meaningful system of supervision in place, and not merely one that was commonplace during a 'different time'.
As to the allegation that the College was vicariously liable for the abuse perpetrated by Palframan, on the basis that he was in a employment-like relationship with the College, his Honour dismissed it, affirming that vicarious liability requires:
- the presence of a relationship of employer and employee; and
- a special role that the employer has assigned to the employee.
The Court was not swayed that Prince Alfred College supports the proposition that a 'special role' is sufficient in itself 'untethered to any distinct, assigned or formal relationship between the parties'. There had been no formal directions or assignments to Palframan by the College.
Importantly, his Honour noted that Prince Alfred College concerned an employed boarding master and that 'even in that context, however, a real issue arose as to the basis upon which it might be found that Prince Alfred College ought be found vicariously liable for the criminal acts of its employee'.
This is a significant affirmation of the traditional approach to vicarious liability .
Limitation of obligations
As to the College's submissions that it should not be held liable for damage suffered outside the House of Guilds, this was rejected by the Court, with O'Meara J stating:
'I reject any suggestion that the plaintiff's parents ought be implicated in any blameworthy way in any part of the abuse perpetrated by Palframan.'
The Court held that the abuse outside of the College grounds was facilitated by the College's breach of duty and therefore that:
'It follows that the 'other abuse' is, on the evidence, no more than a consequence of the abuse established in and continued within the House of Guilds until the overall abuse was ceased by the plaintiff refusing Palframan in mid-1990.'
The contentious issues for the assessment of economic loss were:
- the impact of the abuse on the plaintiff's career trajectory; and
- when the plaintiff would be able to return to work (if at all).
The plaintiff worked in food and beverage distribution after years of working in hospitality. He received promotions and before decompensating was earning $240,000 per annum. The plaintiff met his future wife whilst working at the Eureka Hotel, and she encouraged him to seek more 'professional' employment after he completed his commerce degree in 2000.
The plaintiff's evidence was that he 'felt safe' at the pub and did not make the move into a more 'professional' employment for four more years, at which point the plaintiff's career trajectory was relatively linear. His Honour commented that it seemed the plaintiff was 'treading water' during this period.
The Court held that 'the abuse more likely affected the plaintiff's career 'trajectory' by forestalling his transition into more 'professional' employment'' by four years. The plaintiff was therefore awarded $676,583.05 for past economic loss, being his most recent (and senior) salary of $240,000 plus superannuation for each of the four years less tax. No reduction was made for the salary earned during the four-year period.
The Court determined that it was most likely that the plaintiff would return to work in 6 years, but at a reduced earing capacity of $80,000 per annum plus superannuation.
The plaintiff was awarded the difference between his notional future earnings and a salary of $250,000 plus superannuation, being an approximation of the salary the plaintiff would have been earning but for the abuse. In total, that amounted to $2,043,744 for future loss of earnings, constituted by $1,824,888 for future economic loss and $218,856 for future loss of superannuation.
The plaintiff has received a record award of damages for a historical abuse claim in Australia. For school and their insurers, this decision should serve as a warning that the Court is not interested in arguments that attempt to 'pass the buck', and that the Court is willing to hold schools and institutions accountable for sexual abuse well beyond the school gates for failing to maintain a safe environment for its students.
The Court's award for a past economic loss on the basis that the plaintiff's career was forestalled by four years demands defendants pay closer attention to a claimant's employment history. Each period of a claimant's life should be analysed separately and carefully, and defendants should consider in advance if expert medical evidence is required on the likely impact the injury may have had during periods of apparent stagnation.
The key takeaway here is the Court's willingness to award the plaintiff his highest salary, obtained in his mid-40s, for a period of career stagnation that occurred in his mid-20s. This has significant implications for the way past economic loss should be approached by prospective defendants.
Care should be given not to overemphasise a claimant's successes or take a broad-brush approach to past economic loss, but to instead critically analyse each period in a claimant's life and the effect the injury may have had in its totality. Claimants who go on to be successful later in life may now be able to claim significant amounts for past economic loss if they can successfully argue that, but for the abuse, their career trajectory would have commenced earlier.
1> Prince Alfred College Incorporated v ADC (2016) 258 CLR 134 (Prince Alfred College)
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