A convicted paedophile was moved from a sex-offender facility into the same crisis housing as a 15-year-old girl, who the man then preyed on after he hired her as a cleaner.
The girl's mother is suing the State of Victoria after the paedophile had regular access to her daughter, despite the offender himself believing he did not have "the ability to cope" outside custody.
The man had been convicted of having sex with two 14-year-old girls.
The legal action forms part of an explosive series of lawsuits launched by the families of victims of sex offenders, rapists and murderers, including five people killed by offenders released on parole.
The family of one homicide victim is also taking Telstra to court, alleging that the company's triple-0 operators failed to put the desperate calls of a mother through to police on the day she was murdered.
The state's beleaguered parole system is set to come under increased scrutiny as part of the proceedings, which could cost taxpayers millions of dollars if the plaintiffs are successful.
The County Court civil action brings together the victims of five parolee killers – Joanne Wicking, Evan Rudd, Raechel Betts, Sarah Cafferkey and Douglas Phillips – as well as two victims of sex offenders, including the 15-year-old girl.
The recently released paedophile, who had been angry to leave sex-offender facility Corella Place because he believed he wasn't ready, was moved to a block of flats in regional Victoria in 2013.
Soon after, he offered a 15-year-old girl who lived with her mother in the same block of flats $10 an hour to clean his flat.
The girl was soon attending the flat regularly, once visiting when the man and another convicted sex offender were present.
Over three months, from February to April 2013, the man gave the girl a key to his flat, touched her leg, tried to hug her and touch her hair and encouraged her to come over to play Xbox.
He was jailed for eight months in November 2014 for 13 charges of breaching his supervision order.
The girl's mother is suing the State of Victoria, claiming that the registered sex offender had not been properly monitored, despite being on a supervision order.
The woman is also taking action against the accommodation provider for housing the offender in the same block of flats as herself and her daughter.
The paedophile was jailed for four years in 2006 after a Scotland Yard tip-off led the Australian Federal Police to discover his involvement in a child-pornography ring.
Under the code name "Dreaco", the man traded images of pre-pubescent children engaged in explicit sexual acts with a known paedophile in Britain.
He also admitted to having sex with two girls under 16.
Shine Lawyers senior solicitor Paula Shelton, who is acting for the families, said the maximum amount that they could be paid for non-economic damages, such as pain and suffering, was about $525,000, if a breach under the Wrongs Act was proven.
This did not include separate costs, such as those incurred by being unable to work, which could also be significant.
"Some of these people haven't got back to work at all," Ms Shelton said.
The argument which underpins the claims is that the State, and other defendants, had a duty of care to the victims because of their unique knowledge of the offenders and their prospects of rehabilitation.
They also had a responsibility to house them or monitor their lives in the community.
While a person does not generally owe a duty of care to protect another individual from the criminal acts of a third party, Ms Shelton will argue on behalf of the families that as only the State had knowledge about these offenders, they breached a duty of care arising from a special category of relationship.
The duty of care is similar to that which can exist between a school and a student.
The plaintiffs are taking action after a series of killings and rapes by violent offenders who had been given parole and then went on to commit horrific crimes.
Helen Wicking, mother of murdered woman Joanne Wicking, is suing the state government and the Adult Parole Board after her daughter was stabbed to death by Sean Maraffko when he had been on parole for 18 days in 2010.
Ms Wicking is also taking action against Telstra.
In November 2011, Maraffko was jailed for 35 years for the murder.
The Supreme Court court heard that Joanne Wicking called triple-0 crying and screaming for help three times between 4.51pm and 4.57pm on the day she was murdered.
Each time Maraffko informed the call-taker that it had been an accidental call.
In her writ, Ms Wicking said Telstra and the Emergency Services Telecommunications Authority were responsible for "responding to calls to police about the offender's behaviour".
The other five victims are:
Douglas Phillips: killed in 2009 by his parolee son Christopher Phillips, who had been jailed three times for bashing his father.
Evan Rudd: stabbed to death in a Moe car park by Richard Devries, who had 80 criminal convictions and was on parole over assaults he committed in jail while serving time for armed robbery.
Raechel Betts: strangled and dismembered in 2009 by John Leslie Coombes, who was on parole after two previous killings.
Sarah Cafferkey: killed in 2012 by Steven Hunter, who had already served jail time for murder. His parole for kidnapping and assault offences ended less than two weeks before he bashed and stabbed Ms Cafferkey.
Karen Harrison: violently raped at knifepoint by notorious offender Gary Collingwood, who had previously been imprisoned for multiple sex, violence and threat offences.
Corrections Minister Steve Herbert acknowledged the "tragic circumstances" for the seven families involved in the legal action.
He said the parole system had been "comprehensively reformed" as part of a review by High Court Justice Ian Callinan in 2013.
"One cannot begin to imagine their grief," he said in a statement.
Premier Daniel Andrews said that what had happened to families was a "tragedy" but as the matter was before the courts he wouldn't comment any further.
A Telstra spokesman said the death of Ms Wicking was a tragic situation, however they couldn't comment further due to the legal action.
An Emergency Services Telecommunications Authority spokesperson said a review into the incident had led to new guidelines for the handling of triple-0 phone calls.