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Healey & Ors v Bird & Ors [2022] VSC 823 (on Jade).
The first plaintiff (who had died and so a claim was made by his estate) alleged that he was abused as a student, by a parish priest. Claims were also made by his later partner and by two of their children (the family plaintiffs).
The plaintiffs pleaded the existence of fiduciary duties in the following form:
At all material times, the Diocese, as a constituent part of the Catholic Church, owed a duty to each parishioner, in each of the parishes comprising the Diocese, to act with undivided loyalty in the interests of that parishioner, including by not promoting the interests of the Diocese (and/or of the Catholic Church) at the expense of the interests of the parishioner.
The plaintiffs also pleaded a similar duty to children who were altar boys, students or attending activities organised by the Diocese.
The first defendant made two complaints about the pleaded fiduciary duties. First, that there is no authority or proper basis for the imposition of the duty. Second, that as the Diocese was an unincorporated association it could not be found capable of owing a fiduciary duty. As the plaintiffs had not identified a specific member of the Diocese who owed the duty, the claim as pleaded must necessarily fail.
As for the first argument fiduciary duty issues, the Court noted ([40] – [42]):
There are three hurdles or barriers faced by the plaintiffs in relation to the pleaded fiduciary duty claim. There is overlap between these barriers. The first relates to the content of the alleged duty and the nature of the alleged breach. The plaintiffs’ pleading alleges that the Diocese owed Healy a broad fiduciary duty to act in his best interests, and that this involved an obligation on the Diocese to take certain positive steps in relation to the appointment of parish priests. The content of the fiduciary duties pleaded by the plaintiffs are prescriptive or positive duties to act in the best interests of child parishioners rather than proscriptive or negative duties not to act in conflict with the interests of child parishioners protected by the fiduciary relationship. The authorities support the principle that fiduciary duties are largely proscriptive in nature.Second, while fiduciary duties may coexist with liability in tort, including negligence they have not been accepted when they are pleaded as simply replicating a claim for damages for breach of a common law duty of care. The authorities deprecate pleading fiduciary duties covering the same ground as common law duties of care in order to remedy or perfect a claim that might otherwise be barred, for example because the limitation period has expired, or because some other restriction or difficulty is faced.Third, the harm which the plaintiffs claim Healy suffered and the damages they seek as a result has not been recognised in Australian law as giving rise to an entitlement in equity for breach of fiduciary duties. Fiduciary duties are directed to protection of economic and property interests.
However the Court concluded that “because of the very late stage at which the application was made, what may be the merest possibility of uncertainty about the state of the law, the lack of any significant efficiency or saving that would result from striking out the claim, and the benefit, if the novel claim is to be the subject of appeal, of it being properly pleaded and the evidence being heard, that the pleaded fiduciary claim should not be struck out.” ([63]). However a particular paragraph of the statement of claim was struck out with leave to re-plead as to the interests of the child parishioners said to be protected by the fiduciary relationship and related matters.
The second argument raised by the first defendant failed ([60]). The Court held that it is clearly arguable that an effect of the Legal Identity Act is that liability of an unincorporated association such as the Diocese for damages founded on or arising from child abuse is to be determined as if the unincorporated association was incorporated at the time of the alleged abuse.
As for the alleged duty to the family plaintiffs, the Court said at [72]:
The first defendant’s application to strike out the family duty of care is essentially based on the fact that at the time of the allegedly tortious acts by the Diocese and perpetration of the abuse by Coffey none of the family plaintiffs were in a close and intimate relationship with Healy. The first defendant’s complaint is expressed in a variety of ways. First, that it was not reasonably foreseeable to the Diocese in the circumstances that the family plaintiffs would suffer psychiatric injury. Second, that there was a lack of proximity in both a physical and relational sense between the alleged acts and omissions by the Diocese and the family plaintiffs. Third, that the Diocese had no knowledge, whether actual or constructive, that the alleged acts or omissions in relation to Healy would harm the family plaintiffs. Fourth, that broadening the duty of care to capture unborn children and future partners gives rise to a risk of indeterminacy of liability.
The first defendant also relied on ss 72 and 73 of the Wrongs Act 1958 (Vic).
However as the family duty of care argument was not certain to fail, it was not struck out ([90] – [91]).
The Court also dealt with pleading issues in relation to claims for aggravated and exemplary damages.
This matter appears to be listed for trial commencing 28 February 2023.
[BillMaddensWordpress #2079]
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