Abuse Law – Case Law Update – Application regarding fiduciary duties and duties to family members   

At [29], the plaintiffs submitted that a fiduciary duty existed as follows: 

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 that a similar fiduciary duty was owed to children who were altar boys, students, or children attending activities organised by the defendant/s.  

In response to the plaintiff’s pleadings regarding fiduciary duties, the First Defendant made two complaints. Firstly, the First Defendant argued that there is no authority or proper basis for the imposition of the duty, Secondly, the First Defendant argued that, as the Diocese was an unincorporated association, it could not be found capable of owning a fiduciary duty. The First Defendant further submitted that because the plaintiffs had not identified a specific Diocese member who owed a fiduciary duty, their claim as pleaded must fail.  

The Court responded to the defendant’s first complaint at [40] – [42], providing:  

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. 

Nevertheless, the Court ruled at [63] 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.” 

The defendant’s second complaint failed, with the Court providing at [60] 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.”