Court considers vicarious liability, aggravated and exemplary damages and indexation questions in sexual abuse case

The Supreme Court of Victoria has provided a useful discussion on the principles of vicarious liability, aggravated and exemplary damages and indexation in a sexual abuse case where a jury awarded a man nearly A$6 million compensation.

In Adam Kneale v Footscray Football Club [2023] VSC 679, the Plaintiff claimed damages from the Club for injuries, loss and damage he alleged he suffered as a result of being sexually abused by Graeme Hobbs and others between 1984 and 1989.

The Plaintiff's claim

• The Plaintiff alleged Mr Hobbs sexually abused him and trafficked him for abuse by others.
• According to the Plaintiff, much of the abuse took place on game days at the Western Oval, in the Club's administration office in the EJ Whitten Stand.
• The Plaintiff pleaded the Club was liable in negligence, and also that the Club was vicariously liable for Mr Hobbs' assault and battery.
• The Plaintiff claimed compensatory, aggravated and exemplary damages.

Held

Justice Richards was required to rule on the principles of vicarious liability, duty of care and compensatory, aggravated and exemplary damages before deciding on the questions and charge to be put to the jury.

Vicarious liability

Justice Richards determined the Club could not be vicariously liable for Mr Hobbs' assault and battery, so it was inappropriate for the jury to consider that issue.

Justice Richards found, in order for vicarious liability to be established, the role of the tortfeasor (Mr Hobbs) must be so closely tied with the business of the employer (Club) that he was representing the employer.  The extent to which the tortfeasor presented as an emanation of the employer was a central factor in determining whether the relationship was one in which the employer was vicariously liable for the action of the tortfeasor.

According to Justice Richards, other factors to consider were whether the employer had the power to control the work of the tortfeasor and whether the tortfeasor had the right to delegate his or her work to another party.

Justice Richards noted, if vicarious liability could arise given the relationship between the employer and the tortfeasor, there would be a separate question of whether the employer was vicariously liable for the tortfeasor's sexual abuse.  The answer to that question depended on a finding the employer provided an opportunity and occasion for the tortfeasor's wrongdoing by assigning some special role to the tortfeasor vis a vis the Plaintiff, which in turn depended on authority, power, trust, control and the ability to achieve intimacy with the Plaintiff.  

Justice Richards held:

• The relationship between a sporting club and a volunteer was not one to which vicarious liability could attach.
• There was no evidence on which a jury could find the Club vicariously liable for Mr Hobbs' torts because:
       -   Mr Hobbs' roles within the club were informal, undocumented and uncertain;
       -   Mr Hobbs' work was not so interconnected with the business of the Club;
       -   There was no evidence the Club controlled any aspect of Mr Hobbs' work;
       -   There was no evidence the Club clothed Mr Hobbs' with authority to represent it in anything           other than selling tickets and raising funds; and
       -   Mr Hobbs did not wear a Club associated uniform.
• There was no evidence the Club assigned any role to Mr Hobbs vis a vis the Plaintiff, let alone a special role involving authority, power, trust, control of the ability to achieve intimacy with the Plaintiff. 

Aggravated damages

Justice Richards found aggravated damages (to compensate a Plaintiff for increased suffering caused by the circumstances and manner of the wrongdoing) could be awarded to the Plaintiff if the Club had acted with malice or in an insulting or "high-handed" way, either when the tort was committed or afterwards.

Justice Richards held there was no evidence on which the jury could reasonably have awarded aggravated damages because:

• There was no evidence the Club had any notice of the abuse;
• There was no evidence anyone at the Club other than Mr Hobbs knew of the Plaintiff's existence;
• There was no evidence anyone at the Club knew the Plaintiff was the victim or had any means of identifying or contacting him; and
• It was impossible to characterise the Club's indifference as malicious, deliberate, insulting or high-handed.  

Exemplary damages  

Justice Richards found exemplary damages are punitive rather than compensatory and awarded to denounce a Defendant's conduct and deter its repetition where the conduct is deliberate, intentional or in reckless disregard of the Plaintiff's rights.

Justice Richards held there was no evidence on which the jury could reasonably have found the Club's negligence had been deliberate or intentional or involved a reckless disregard of the Plaintiff's welfare for the reasons discussed above.  According to Justice Richards, at most it could reasonably be found the Club ought to have known of the risk and failed to take reasonable steps to respond to it.

Indexation of past economic loss

Justice Richards found the indexation of past loss to allow for inflation gives effect to the cardinal concept of compensation where there is no capacity, such as in Victoria, to award interest from the date the loss is suffered.

Justice Richards held ignoring the effects of inflation by disallowing indexation would not have put the Plaintiff in the position he would have been in but for the Club's negligence and Mr Hobbs' abuse.

Negligence

In paragraph 11 of the Statement of Claim the Plaintiff alleged the Club and Mr Hobbs owed the Plaintiff, as a child attending the premises as a spectator, a duty to take reasonable care for his safety to ensure the Plaintiff was not injured or exposed to unnecessary risk of injury due to being on the premises, including injury as a result of sexual abuse.

In response, the Club admitted it owed a duty to take reasonable care to avoid foreseeable risks of injury of which it knew or ought to have been aware to persons attending the Club premises.

The Plaintiff maintained the Club's admission amounted to an admission of a general duty of care, whereas the Club maintained it was only admitting a duty as occupier of the relevant premises.

Justice Richards held the Plaintiff's pleading and the Club's admission in response went beyond the duty owed as occupier of premises because:

• Sexual abuse was not a risk associated with the state of premises; and
• The duty was alleged to be owed by the Club and Mr Hobbs, with no suggestion Mr Hobbs was an occupier of the relevant premises.   

Lessons

This decision provides a useful summary of the principles of vicarious liability and aggravated and exemplary damages.

It is authority for the need to index past loss to allow for inflation where there is no capacity to award interest from the date the loss was suffered.

Finally, the decision provides a salutary lesson about the need to be very clear when making admissions.

Authors

Cameron Roberts | Partner | +61 3 9641 8696 | croberts@tglaw.com.au

Ash Harding | Associate | +61 3 8080 3623 | aharding@tglaw.com.au