FM v CareSouth & Anor [2011] NSWSC 1366

Supreme Court New South Wales

Medium Neutral Citation: FM v CareSouth & Anor [2011] NSWSC 1366 Hearing dates: 7 and 8 November 2011 Decision date: 11 November 2011 Jurisdiction: Equity Division - Protective List Before: Bryson AJ Decision: Judgment for defendants Catchwords: CHILDREN and YOUNG PERSONS - Foster care - plaintiff claimed that she had made contractual arrangements with agencies for allowances and the allowances had not been paid as contracted - on review of the facts one contract had expired, one arrangement had been terminated according to its terms - decision on facts - judgment for defendants Legislation Cited: Children and Young Persons (Care and Protection) Act 1998 (NSW) Cases Cited: The Administration of Papua and New Guinea v Leahy (1961) 105 CLR 6 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Texts Cited: Nil Category: Principal judgment Parties: FM (Plaintiff) CareSouth (First Defendant) Department of Family and Community Services (Second Defendant) Representation: L Fermanis (First Defendant) M Allars (Second Defendant) Marriot Oliver (First Defendant) Crown Solicitor (Second Defendant) File Number(s): 2011/229718

Judgment 1These reasons relate to the interests of children. The plaintiff and the children are not to be identified. The plaintiff is to be referred to only by the pseudonym FM. 2The plaintiff sues on her own behalf and as guardian of seven children in her care. The claims relate only to contractual remedies and not to Parens Patriae jurisdiction. These reasons do not evaluate the performance by any of the parties of their duties with respect to the care of the children. 3The plaintiff has been an authorised carer under s 137(1)(c) of the Children and Young Persons (Care and Protection) Act 1998 (NSW), known as the Care Act, since 3 March 2006. Giving this authorisation was not a contractual act by DFCS. 4The plaintiff has the foster care of seven children the eldest of whom was born in January 1997 and the youngest in November 2008. All the children are under the parental responsibility of the Minister for Family and Community Services. The plaintiff shares some aspects of parental responsibility for the four eldest children under orders of the Children's Court at Parramatta dated 10 April 2007. The fifth and sixth children are under the sole parental responsibility of the Minister under final orders of the Children's Court of 19 February 2008. The Minister and the plaintiff share parental responsibility in relation to the youngest child under orders of the Children's Court at Campbelltown of 7 April 2010. The four eldest children have actually been in her care day-by-day since April 2006, the fifth since May 2006 and the sixth since October 2007. The youngest child came into her care in a process completed on 21 May 2010. 5In the pleadings there are matters of detail and narrative which do not really go to the causes of action sued on. 6The plaintiff alleges against CareSouth that the parties entered into a written contract on 1 June 2009 under which DFCS and CareSouth would have the management of the care cases of the children. The document is headed "Foster Carer Agreement". She alleges that they entered into a second collateral agreement on 9 September 2010 for the period from that day to 9 March 2011 and that on 9 March 2011 "the contracts entered into by the parties were reiterated by the parties through specific performance". This second agreement is the Fixed Term Foster Care Agreement. She alleges that she complied with the agreements and that CareSouth terminated the agreement on 2 May 2011, with no reasonable notice nor cause given, and that financial allowances and support were terminated on 31 May 2011. She alleges that she made financial decisions for the short term and long term benefit of the children, and that failure to comply with the contract of June 2009 has resulted in the children losing a home purchased on trust for them, and other losses. 7The Defences filed by the defendants are lengthy, because they deal with many allegations of fact and other matters which found their way into the Statement of Claim, but should be regarded as matters of evidence or of argument. CareSouth's principal defence is denial, in various ways, that the document of June 2009 created a binding contract: CareSouth takes the position that there was no intention to create a legal or contractual relationship. The Defence alleges that the parties were aware from the agreement and surrounding communications that a number of events would have to occur before the agreement of June 2009 could become binding, and that none of them had occurred. It is also alleged that a number of conditions had to be fulfilled before a contractual obligation was incurred by CareSouth. Another defence is that CareSouth acted on a provision of the agreement of June 2009 in giving notice of termination with effect on 31 May 2011. A number of other matters were raised in CareSouth's Defence. 8The principal relief claimed against the Department of Family and Community Services (DFCS) is a declaration that an agreement which the plaintiff alleges she made with DFCS was valid and that the defendants be compelled to give specific performance of the contract until the children turn 18 years of age. Alternatively there are claims for damages and for payment of $65,000 allowances, and for other relief. The claim against DFCS is that it entered into an agreement to transfer the file management of the children to CareSouth on 1 June 2009 and delayed the transfer until 9 September 2010, causing loss and damages. The plaintiff alleges that DFCS agreed to pay private school fees for the children and later failed to pay those fees. 9DFCS's Defence deals extensively with the Statement of Claim. The principal matter of defence, stated in several forms, is denial that there was any contractual agreement or contractual relationship between the parties. It is particularly denied that there was any agreement to transfer case management to CareSouth, and it is contended that DFCS has no power to make an agreement which would be binding contractually. DFCS alleges that on 9 September 2010 the Department made seven Individual Client Agreements (ICAs) with CareSouth about the provision of home care services for each of the children for a period of six months from 9 September 2010, and on the conclusion of those agreements made a further agreement with CareSouth for the period to 30 June 2011 for the purpose of enabling CareSouth to finalise its existing service provision for the children and transition back to DFCS. 10At an early point in the hearing the plaintiff made a submission to the effect that the agreement of June 2009 was void, but she withdrew from that position later. At another point the plaintiff contended in submissions that that agreement or the later agreement was entered into by her under duress; however, there was no substantial evidence that she acted in any circumstances which could be regarded as duress for the purpose of contract law, and there was no pleaded allegation which could form the basis for any issue of duress. 11DFCS decided to hand over case management to CareSouth in 2009, and confirmed this by letter to the plaintiff of 11 June 2009. According to that letter the handover was to take place shortly: but it did not. This decision led to the preparation by CareSouth of the Foster Carer Agreement of June 2009. However the decision was not carried out for a considerable time. CareSouth was instructed by DFCS not to proceed further on 24 June 2009 and again on 7 October 2009. 12On 26 June 2009 an officer of CareSouth stated that CareSouth had been requested to take over case management responsibility, that there had been a number of meetings and that CareSouth was in the very early stages of building a cooperative relationship; that the transfer had yet to be finalised. Liaison would continue. CareSouth sent the plaintiff a copy of the Fixed Term Foster Care Agreement in October 2009 with some discussion of the arrangements if she were to become a CareSouth foster carer. After that, CareSouth took no part in case management until August 2010. 13DFCS has led evidence showing a series of events which explains this delay; which extended in various ways until September 2010. The events included consideration or reconsideration by officers of the Department of the viability of the arrangement and the ability and suitability of the plaintiff to take part in it; this involved obtaining and considering medical opinion on the plaintiff herself. There were proceedings before the Children's Court at Campbelltown dealing with the guardianship of the seventh child, youngest brother of the six then in the plaintiff's care, and these proceedings took some months before they were concluded. The proceedings in the Children's Court relating to the care of the youngest child, and consideration given to the plaintiff's personal suitability, contributed to the lapse of time before case management was placed in the hands of CareSouth. 14There were also proceedings brought by the plaintiff on 7 October 2009, seeking to invoke the Parens Patriae jurisdiction of this court, and these proceedings were disposed of by agreement on 5 February 2010. White J noted "The Court notes that: It is the intention of the First Defendant [DFCS] to transfer to the Second Defendant [CareSouth] the day-to-day casework management of the children [names of children]. The precise details of the transfer to be agreed between the First and Second Defendants." 15The plaintiff contended that this notation and its terms tend to confirm that she had the contractual arrangement with DFCS which she alleges; in my opinion the notation has no such effect. 16The plaintiff deeply feels that this delay was inappropriate, and that it caused significant loss to herself and the children in that greater allowances would have been available if case management of the children's fostering or some part of it had been transferred to CareSouth earlier; these included preschool and school fees, which DFCS does not generally make available. It is likely that if it had been possible for CareSouth to take up case management earlier or to continue with case management for longer she would have received greater allowances. But until September 2010 there was no contractual context in which she had an enforceable entitlement to allowances paid by CareSouth, and except for a limited period of six months there has never been an agreement fixing the rates which CareSouth was to pay. Apart from an agreement which covered only six months until March 2011, there is simply no indication anywhere in the evidence of a contractual commitment by either DFCS or by CareSouth to pay her allowances at any particular rate, or to pay school fees for the children; nothing that the Court could enforce. 17DFCS had no contractual obligation to transfer care to CareSouth, and there was no contractual reason why the Department could not or should not fully consider or reconsider the decision it had reached in 2009 and notified to the plaintiff in June. In the course of good administration DFCS could not fail to consider further facts and circumstances as they occurred. In the context of the Minister's and of DFCS's responsibilities for the welfare of the children, and of the appointment of the plaintiff as their carer, good administration required DFCS officers to think through, obtain information and come to decisions on how events and circumstances should be responded to. 18The Foster Carer Agreement was not signed by or on behalf of DFCS and does not in its terms or in its purport represent an agreement by or on behalf of the Department. I find on the evidence that DFCS had no part in its preparation or in signing it and is most unlikely to have known of its terms when it was prepared and when it was signed. I find that the agreement of June 2009 was made by the plaintiff with CareSouth, that DFCS was not involved, had not known and approved of the agreement in advance and was not aware of its terms or indeed that that it had been made. According to its own terms, it is not an agreement to which DFCS was a party and it imposes no obligation on DFCS. 19The plaintiff contended that a contractual relationship with DFCS is shown by a number of events and circumstances. She asserted that Ms Cook perused the Foster Carer Agreement before there was activity by CareSouth case workers and others on the project of transferring case management. This activity consisted of obtaining execution of the Foster Carer Agreement, and up to 10 attendances by a care worker, before that agreement was signed and until about the end of June 2009. The letter of 11 June 2009 from DFCS confirmed that they would put the transfer into effect. She contended that the notation made by White J shows that there was a binding agreement. None of these facts show that there was a contractual relationship. 20All DFCS's communications in evidence are expressed in terms appropriate for carrying out public administration, and not for entering into contractual relationships. It would be very unusual for a public officer to give a contractual commitment in less than clearly expressed terms relating to management of the care of a child for whom the Minister or the Crown had responsibility, or a contractual commitment about the amount, payment or continuance of an allowance. Observations of McTiernan J in The Administration of Papua and New Guinea v Leahy (1961) 105 CLR 6 at 11 are applicable to the present facts: "... The work done by the Administration was analogous to a social service which generally does not have as its basis a legal relationship of a contractual nature and from which no right of action would arise in favour of the citizen who is receiving the services if the Government acts inefficiently in performing them." 21The plaintiff contended that DFCS should pay damages for the period of delay. She contended that DFCS made a contractual agreement with her to transfer case management to CareSouth. She also contended that there was an implied term that DFCS would use their best endeavours to facilitate the transfer. I reject these contentions, because there was no contractual obligation to make the transfer and there was no breach of contract. 22There is no substantial evidence of any agreement, and little evidence of any arrangement, about the school fees. The letter of 11 June 2009 advises the Department's approval to pay preschool fees for two of the children for several days each week. The letter of 20 September 2010 advises that the Department will pay educational costs for four other children for the remainder of the 2010 school year. There is no evidence that a promise was ever given by DFCS or by any officer of DFCS to pay private school fees for an indefinite future. Some arrangements made for DFCS to pay school fees are confirmed in letters in evidence, but in no case was there any arrangement which was to have effect after the end of 2010. It follows of course, that there is no evidence of a contractual promise or contractual arrangement to pay school fees at any time, in particular after 2010. In her closing submission the plaintiff said that Mr Greg Taylor negotiated the agreement she alleges, but there is no evidence establishing any undertaking or promise given by him about school fees. 23In submissions and in evidence the plaintiff referred to circumstances in which she did not attend a review meeting on 1 June 2009, which she explained by claiming that she did not have effective notice of this meeting. Upon the evidence, her being absent from that meeting did not produce any results adverse to the plaintiff or to the allowances paid to her. 24My conclusion on the claims against DFCS is that there was no contractual agreement with the plaintiff which DFCS breached, and that nothing happened which could be a breach of contract. 25The Foster Carer Agreement was signed on three different dates in June 2009 by a Care Worker and the Area Manager of CareSouth and by the plaintiff. It states in its opening words, "This agreement sets out conditions related to a child ... being placed in my care and my responsibilities to CareSouth for the duration of the placement", and then sets out on two pages a series of statements of what the foster carer understood of the arrangement. It could have no effect unless and until a child was placed in the plaintiff's care by CareSouth. In effect the document lists the heavy responsibilities of the foster carer. It does not list responsibilities undertaken by CareSouth, or contain any promise by CareSouth which could be interpreted as contractual; it only states the understandings of the foster carer of her position. 26The Foster Carer Agreement of June 2009 imposed no obligation on CareSouth to take over case management or to take any other action at an ascertainable time. That agreement could not begin to operate and the plaintiff could not be a foster carer for CareSouth until CareSouth had taken over case management and that did not happen until September 2010. 27One of the matters which the carer states are understood is the following: "Placements can be terminated or concluded for a variety of reasons. If I wish to terminate the placement, I must discuss this with my Caseworker in the first instance. I understand that it is not acceptable to discuss this with the child or young person in my care. Should CareSouth wish to terminate the placement this will be fully discussed with me with reasons given for this decision. Should the child or young person wished to terminate the placement, CareSouth will discuss this with both the child/young person and me. CareSouth will then determine the most appropriate course of action." 28Another matter stated is: "I will receive a tax-free financial allowance to provide for the needs of the child or young person and to assist with the costs of having the child or young person in my care. This allowance is payable to me only for the period of time that the person is in my care." 29The Foster Carer Agreement contains no promise by CareSouth; that is not its nature. Its nature is to set out the foster carer's understanding of her responsibilities for the duration of the placement, with a clear indication that she understands that the placement may be terminated. Its provisions about allowance contain no mechanism by which the amount of the allowance could be determined; that was left to be decided by CareSouth. The absence of any means of determining how much the financial allowance was to be illustrates that it was not intended to give rise to contractually binding obligations. 30The terms of the Foster Carer Agreement show that placements can be terminated or concluded, and that each party can do this. There are various procedural requirements about what a party is to do when termination takes place. In the course of following out the procedure required for CareSouth if it wishes to terminate, reasons are to be given; but there is no requirement that the reasons be objectively valid in some sense which the Court could consider for their sufficiency. What have to be given are CareSouth's reasons for the decision to terminate. 31When DFCS had dealt with its concerns and turned, in 2010, to transferring case management to CareSouth, CareSouth did not have resources to supervise care of these children and had allocated the available resources to other children. This gave rise to the seven ICAs, which made arrangements for CareSouth to have resources particularly for these children. 32CareSouth's relevant activity began again about 17 August 2010, when Mr Wilson of CareSouth had a meeting with the plaintiff. A copy of the Fixed Term Foster Care Agreement was given to the plaintiff; but it was not signed until 5 September 2010. There was nothing hurried or in any way unsatisfactory about the circumstances in which the document was signed. The plaintiff contended to the effect that that agreement was inconsistent with the Foster Carer Agreement of June 2009 and that it should not have been; I see no substance in this. 33DFCS Campbelltown wrote to the plaintiff on 20 September 2010 confirming transfer of case management to CareSouth and said: "As of 9 September 2010, CareSouth has taken over the financial responsibility for the children. ... In line with this new arrangement, Community Services will no longer be providing financial assistance, including child care or school fees for the children in your care". It went on to say "Community Services has been funding educational costs for [the children] and will continue to meet these costs for the remainder of the 2010 school year" and that it was expected that after that time, all future education costs would be met by the plaintiff. 34The ICAs between DFCS and CareSouth for each of the seven children formally transferred case management to CareSouth. This did not involve altering or affecting the orders of the Children's Court relating to parental care. The ICAs were each for a fixed term of six months expiring on 9 March 2011. No further extension of six months was agreed on, but after communications in which CareSouth stated that they were no longer in a position to guide case management, a short-term arrangement was made, to expire on 30 May 2011, to enable CareSouth to finalise their services for the children and transition them back to DFCS's care, and the Department's case management resumed on 29 May 2011. 35The Fixed Term Foster Care Agreement on its own terms was plainly intended to be a bilateral agreement between CareSouth and the plaintiff. It has altogether unmistakable provisions about when it commences and when it concludes, no later than midnight on 8 March 2011. Thereafter it had no operation. This agreement spelt out obligations on both sides and spoke at much greater length than the earlier document. It provided that the placement could be terminated on two weeks' notice. Allowances set out in a schedule totalled $2,395 per week, much more ample than allowances made by DFCS. As Care South and the plaintiff continued to act on the same basis for over two months after 8 March 2011, it should in my opinion be understood that they agreed to act on such of the provisions of the agreement as were applicable to a continuation which either side could terminate on reasonable notice. Reasonable notice was a short period, two weeks or so, such as was in fact given. 36At a meeting with the plaintiff on 2 May 2011 Mr Wilson of CareSouth told her: "CareSouth will no longer be continuing with the agreement. We have decided not to continue with the day to day case work support but are prepared to continue to assist with the provision of a support worker, respite care, contact and mentoring." She asked why and he said: "Our standards for foster care are not being met." 37In the letter of 17 May 2011 CareSouth explained the termination by saying that "As the Individual Client Agreement has lapsed we have formally notified Community Services, and this letter serves to formally notify yourself, that we will cease Casework Support on 31/5/11 and CareSouth carer payments to yourself will cease as of that date". In short, the explanation was that the ICAs had expired and that without the authorisation of DFCS it was not possible for CareSouth to continue to manage these placements. The explanation is in my opinion complete and unanswerable. 38Once the ICAs expired CareSouth's authorisation to be involved in the welfare of the children ended. So did the resources which the ICAs made available to CareSouth. It was simply not possible for CareSouth to continue case management even if it had wished to do so. The Minister had parental responsibility for the children, so DFCS's continuing approval of CareSouth's involvement was necessary, indeed indispensable. If in CareSouth's judgment it wished to terminate the agreement, that decision must be accepted as giving rise to an effective termination. It must be accepted by the Court, and by anyone else who has to address whether the termination was effective, that it was. 39The plaintiff contended that at no stage was the Foster Carer Agreement of June 2009 terminated. There was not any real room for it to have operated while the Fixed Term Foster Care Agreement was in effect, because the latter agreement made detailed provision for almost all important matters, including matters which the earlier agreement had left undefined. But if it had any continuing operation in May 2010, communications from CareSouth to the plaintiff in that month brought about an effective termination according to its terms. 40DFCS continues to make carer allowances and other allowances to the plaintiff, but does so according to its own resources, at its own scale and on its own decisions, not those of CareSouth. There is no breach of any contractual or other legally enforceable obligation to the plaintiff or to the children and the Court cannot take control of DFCS's decisions about allowances. 41There is no evidence and no indication of any agreement to which the children were parties. 42A matter of defence raised by DFCS was a contention to the effect that the Anshun principle prevents the plaintiff from bringing the present claims in that she should reasonably have brought them in the proceedings commenced on 27 October 2009. Although it is not necessary to base my decision on this view I would not have upheld this contention because many of the facts upon which the present claim is allegedly based occurred after those proceedings concluded on 5 February 2010. 43ORDER: I give judgment for the defendants with costs.