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Prince Alfred College Incorporated v ADC [2016] HCA 37

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On 5 October 2016, the High Court allowed an appeal against the Full Court of the South Australian Supreme Court. In doing so, the High Court held that the respondent should not have been granted an extension of time to issue proceedings under Section 48(3) of the Limitations of Actions Act 1936 (SA) to bring his proceedings.

The decision considers the factors relevant to determining whether a Court should exercise its discretion to grant an extension of time to issue proceedings.

 

Background

The respondent was a boarder at Prince Alfred College (“the school”) in the early 1960s.  When the respondent was 12 years old, he was sexually abused by Dean Bain, a housemaster at the college. Once the school became aware of the abuse suffered by the respondent, Bain was dismissed from his employment.

As a result of the sexual abuse he suffered, the respondent started suffering from symptoms of psychological injury in the early 1980s. Despite his psychological symptoms, he was married, had children and ran a successful business.

In 1996, the respondent’s son began attending the school. This caused the respondent to suffer flashbacks and nightmares and as a result he consulted a psychologist. He was diagnosed with post-traumatic stress disorder.

In 1997 the respondent sought legal advice. As a result of this legal advice, the respondent elected not to sue the school. It was agreed that the school would pay for the respondent’s medical and legal fees to that point, and also meet his son’s school fees for the next three years. An important factor in the respondent’s decision not to sue the school was that he considered the school had done the right thing by dismissing Bain.

In 1997, the respondent also commenced proceedings against Bain. In 1999, a settlement was reached, with Bain agreeing to pay the respondent $15,000.00.

The respondent’s condition deteriorated in the early 2000s. He was admitted to a psychiatric clinic. In 2005, the respondent was advised he would not work full-time again.  The respondent approached the school asking for $1 million and a refund of school fees. This was refused.

The respondent issued proceedings against the school in December 2008 in the Supreme Court of South Australia. He alleged that the school was liable in damages to him for breach of a non-delegable duty of care and breach of its duty of care, and that the school was vicariously liable for the wrongful acts of Bain.

When issuing proceedings, the respondent sought an extension of time to bring his claim pursuant to Section 48 of the Limitations of Actions Act 1936 (SA) (“The Act”). Section 48(3) of the Act provides a court with discretion to extend time to commence proceedings if in all the circumstances it is just to do so.  This involved the respondent showing that the school would not be significantly prejudiced as a result of the exercise of the court’s discretion.

 

Supreme Court Decision

At first instance, Her Honour Justice Vanstone, refused to grant an extension of time due to the prejudice suffered by the school by reason of the extraordinary delay in commencing proceedings.  Her Honour considered that the school was disadvantaged due to the absence or death of critical witnesses, and the loss of documentary evidence.

Her Honour also dismissed the respondent’s claim with respect to liability.

 

Full Court Decision

The respondent appealed to the Full Court of the Supreme Court.  The Full Court, comprising of His Honour Chief Justice Kourakis, His Honour Justice Gray and His Honour Justice Peek, allowed the respondent’s appeal.
The Full Court found that the school was vicariously liable. Further, the Full Court held that an extension of the limitation period should have been granted.

 

Appeal to the High Court

Unanimously, the Court held that the primary judge was correct not to have granted an extension of time.

The Court accepted that the respondent had discovered facts material to his case (namely a psychiatric diagnosis made in 2007 that he would never work again) within 12 months of instituting proceedings.  Accordingly, the Court needed to consider whether in all the circumstances it was just to exercise the Court’s discretion and grant an extension of time.

When considering the exercise of the Court’s discretion, the High Court affirmed that the extension of time is not a presumptive entitlement but requires an applicant to show good reasons why the court ought to exercise the discretion in the applicant’s favour, and further when exercising the discretion, a court needs to ensure a fair trial can be conducted on the merits of the case.

The High Court further confirmed that the onus is on the party claiming an extension of time to show that a fair trial may be had, notwithstanding the passage of time. Such an onus is not discharged by saying that the defendant should have been more astute to conserve its own interests by anticipating litigation that did not eventuate until many years after the expiration of the limitation period.

When considering these principles on the present facts, the High Court accepted that the absence of witnesses of the events of 1962 and the circumstances surrounding them caused prejudice to the defendant in mounting its case. In particular, the High Court noted that “because of the dearth of evidence, no conclusion could be drawn about Bain’s role, [which was a] matter critical to the question of vicarious liability”. Without this evidence, the High Court held it was inappropriate to make a finding with respect to liability.

The High Court also placed great significance upon the 1997 meeting, and the fact that the respondent decided at this time not to pursue a claim against PAC.  The High Court commented that:

“where an injured party makes a deliberate decision not to commence proceedings, there must be strong reasons to permit proceedings to be bought against a defendant who reasonably considered that the dispute had been laid to rest.”

The High Court acknowledged that although PAC did not seek a formal release from any claim against it in

1997, the Court considered that there could be little doubt that both sides understood that the arrangements made in September 1997 were to bring any issue between them to an end.

When combining the delay of 11 years between the apparent resolution between the parties that the respondent would not proceed with an action against the school, with the loss of evidence (i.e. lack of documents, and death of witnesses), the High Court considered that a fair trial could not be conducted and therefore the exercise of the discretion was not justified in the circumstances.

The majority also found that, after hearing the evidence and making findings that a fair trial was not possible due to the delay and the dearth of evidence, the primary judge should not have gone on to determine liability.

 

Conclusion

As the cause of action in this matter accrued prior to 1 May 2004, this case did not consider the current provisions of the Limitations of Actions Act 1936.
However, the decision still provides a useful direction as to the relevant considerations for a Court in exercising its discretion, under Section 48 of the Limitations of Actions Act 1936, after the plaintiff has enlivened the jurisdiction

 

This Alert is intended as an alert only. It does not purport to be comprehensive advice. Readers should seek professional advice before acting in relation to these matters.

 

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