Victorian Supreme Court considers prior deed set-off approach and occupational trajectory in historical abuse claim

In awarding damages flowing from a historical sexual abuse claim, the Supreme Court revisits a prior deed and determines various important issues associated with ‘set off’ provisions, analysis of alleged vocational and occupational trajectory in the context of economic loss, interest entitlements and the nature of exemplary and aggravated damages.

In Issue

• Did the defendants hold knowledge of potential risks and/or complaints of sexual abuse made against the alleged perpetrator prior to the relevant period?
• What is a reasonable assessment of damages for amongst other things, pecuniary loss?
• Was an award of aggravated and/or exemplary damages appropriate?
• What are the circumstances in which compensation previously paid to the plaintiff may be set off against damages awarded?

The background

The plaintiff alleged that in the period 1973 to 1974, he was sexually abused by a priest on numerous occasions whilst attending primary school (school) and providing altar boy services (abuse). The plaintiff commenced proceedings in the Supreme Court of Victoria, claiming damages for personal injury suffered as a consequence of the abuse.

Pursuant to the Legal Identity Act,¹ this proceeding was brought against the relevant Orders who appointed the alleged perpetrator to the position of parish priest and managed the school (Revisit Claim). The claim involved a revisit of a prior settlement, noting that in 2000, the plaintiff made a claim for compensation against the defendants in respect of the abuse (initial claim). At the time, the parties entered into a confidential settlement for the amount of $45,000 inclusive of costs (prior deed).

At trial, liability was admitted by the defendants and the parties agreed that the prior deed should be set aside.

The revisit claim arguments

It was not in issue that the plaintiff suffered injury resulting from the abuse. However, there were disputes about whether the plaintiff’s injuries endured for the whole period since the abuse, or subsided only to re-emerge more recently.

The plaintiff left school after unsuccessfully completing form 5, had a wandering work history until his mid-20s, and had worked in rural Mildura, Victoria as a farmer for most of his adult life. He claimed that his education and career were severely disrupted by the abuse and his injuries, and that he was entitled to a substantial award of pecuniary damages measured by the difference between average weekly earnings and his actual earnings.

The plaintiff gave evidence that he did not have a great interest in the farm as a young boy and had no desire to become a farmer. The defendants submitted the plaintiff’s academic achievements were similar to those of his siblings, he was likely in any event to live in the same town and work as a farmer, and the evidence did not establish a substantial prospect that his earning capacity had been affected by the abuse. The defendants submitted, in the alternative that assessment of pecuniary damages should reflect the low probability that the plaintiff’s earning capacity had been negatively impacted by the abuse.

The second defendant also sought to set off the initial claim for compensation against damages assessed in this proceeding. The plaintiff argued there should be no offset due to the breach of a confidentiality clause by the second defendant warranting rescission of the prior deed, the inadequate amount of the initial claim settlement, and the benefit obtained by the defendants under the prior deed.

The decision at trial

The Court accepted that the alleged perpetrator was a prolific abuser of children in parishes to which he was appointed, although it did not accept the plaintiff’s submission that the defendants were aware of this prior to or at the time of the alleged abuse period. Rather, it accepted the defendants only became aware of the alleged perpetrator’s offending in the mid-1990s when formal complaints were made, and criminal prosecutions and sentencing followed.

The Court’s approach to awarding damages was reliant on the plaintiff’s circumstances and his embedded roots in rural Victorian farming.

In calculating the plaintiff’s past and future economic loss caused by the abuse, the Court accepted that the alleged abuse adversely affected the plaintiff’s education and vocational pathway since leaving school at age 17, with a continuing incapacity for alternative work. A difficulty associated with calculating past economic loss was the level of uncertainty associated with assessing the plaintiff’s alternative career path and earnings, particularly given the absence of evidence establishing an actual alternative career path. Given a finding that the plaintiff would have on balance, been a farmer in any event and his work history would have unlikely diverged from actual course, past and future loss calculations were discounted by 40%.

The Court did not award the plaintiff exemplary or aggravated damages, noting that it did not agree the defendants deliberately or recklessly disregarded the plaintiff’s rights in allowing unsupervised contact with the alleged perpetrator. The Court also acknowledged the defendants’ approach of engaging and negotiating the initial claim settlement, implementing schemes to respond to child abuse claims and also systems to prevent future abuse.

Damages were awarded in the total sum of $650,000.² The Court opted against setting off the initial claim settlement against the award of damages, taking into account, amongst other things, that the second defendant had in earlier years breached the confidentiality clause of the prior deed, when details of the settlement were communicated to the plaintiff’s cousin.

Implications for you

This decision is a reminder of the factors which may be taken into account by a Court in considering whether a set-off approach to damages is appropriate. Whilst in this case, the Court accepted that the second defendant’s breach of confidentiality rendered it neither just nor reasonable to take into account the initial claim settlement, each case will be determined on its facts.

Further, the Court’s narrow interpretation to calculating entitlement to interest with respect to section 60 of the Supreme Court Act 1986 (Vic) was confirmed, along with clarification of the following principles in historical institutional abuse claims:

1. the evidentiary onus of proof associated with a claim for exemplary or aggravated damages; and
2. the case-by-case approach towards assessing vocational and earning capacity trajectory in the context of past and future economic loss calculations.

Updated 5 October 2022: An appeal in this matter was recently dismissed.