The recent NSW Court of Appeal decision of MTH v State of New South Wales [2025] NSWCA 122 provides critical clarification on the scope of liability of the State of New South Wales in cases involving historical child sexual abuse in foster care, particularly in relation to vicarious liability and the statutory immunities under section 43A of the Civil Liability Act 2002 (NSW) (CLA).
Background
MTH (a pseudonym) became a ward of the state at age four in the late 1960s, placed with foster carers (the Phelans) for around 12 years. A planned adoption with the Phelans fell through due to her birth mother's refusal, and she was later placed in the care of Geoffrey and Sandra Croft in 1979. It was alleged that Mr Croft sexually abused MTH twice and indecently assaulted her three times during this placement. In 2019, Mr Croft was convicted of these offences. He died in 2022.
In 2020, MTH brought proceedings against:
- the State for alleged vicarious liability for the sexual abuse perpetrated by her foster carer, Mr Croft, and its welfare officers for failing to process the Phelan's adoption application in a timely manner;
- the deceased estate of Mr Croft, in respect of his direct sexual abuse of MTH during her placement in his care; and
- Mrs Croft for allegedly failing to prevent or report the abuse that occurred while MTH was living in their household.
First instance decision
The primary judge entered judgments in favour of all three defendants. He found that none of the allegations of abuse had been made out, as he did not accept the plaintiff's evidence. As to the State, the primary judge held:
- the State was not vicariously liable for any conduct on the part of the Crofts because it did not exercise daily control or supervision over them, and was not required to do so
- while the State had a duty to check on a foster child, the nature of the relationship between the State and the foster parent was not one in which the State should be vicariously liable; and
- there was no failure on the part of the State's welfare officers.
Appeal
MTH challenged the first instance decision on several grounds including that the primary judge erred in not finding that the State was vicariously liable for the wrongful acts of the Crofts and welfare workers1.
The Court of Appeal addressed the issue of vicarious liability, reasoning that vicarious liability is a form of strict liability, in that a defendant who is not at fault is held liable for the wrongful acts of another: Bird v DP [2024] HCA 41.
The Court of Appeal confirmed that vicarious liability only applies where there is an employment relationship, and the wrongful acts occur within the scope of the employment: Bird at [46]. In this case, the Court held that Mr Croft was not employed by the State. Rather Mr Croft was simply authorised to act as a foster parent for the period of MTH's placement. Therefore, no employment relationship existed, and the State was not liable for the wrongs of Mr Croft in the basis of vicarious liability2.
As to vicarious liability on the part of the welfare officers, the Court of Appeal held that the primary judge correctly identified that MTH did not allege any acts by the welfare officers that could establish liability3.
Another key issue in this case was the application of section 43A of the CLA, which provides a qualified statutory immunity to public authorities. Under this provision, a public authority is not liable for an act or omission involving the exercise of a "special statutory power" unless the conduct was so unreasonable that no reasonable authority could have acted in the same way.
The State relied heavily on this provision in its defence, contending that the decision to place MTH with the Crofts was an exercise of such a statutory power. It argued that the placement process and decision fell within the protections of section 43A.4
The Court of Appeal ultimately accepted the State's position. It found that none of the impugned actions by the State, including the delay in progressing the Phelans' adoption application and the placement of MTH with the Crofts, met the statutory threshold of being so unreasonable that no reasonable authority would have made the same decisions.5
The Court of Appeal concluded that the State's decision to approve the Crofts as foster carers was not unreasonable because there was no evidence that the State was, or ought to have been, aware of any risk that Mr Croft posed to children in his care. On the contrary, the Court accepted that the usual background checks and inquiries had been undertaken at the time, and that nothing in the placement process suggested a reasonable risk of harm arising from the placement.
Implications
The decision in MTH reinforces the high threshold required to establish public authority liability under section 43A of the CLA. It confirms that unless a public authority decision is shown to be so unreasonable that no reasonable authority could have acted similar, liability will not arise.
The case also affirms that the State is not vicariously liable for the criminal acts of foster carers, as foster parents are not considered employees or agents of the State for the purposes of attributing such liability.
Together, these findings underscore the significant statutory and common law protections afforded to the State in the context of historical child abuse claims.
Footnotes
1.1 MTH v State of New South Wales [2025]
NSWCA 122 [7]
2.2 Ibid [194]
3.3 Ibid [193]
4.4 Ibid [150] and [158] – [160]
5.5 Ibid [164]
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