Fairfield City Council v Bastow Civil Constructions Pty Ltd

Solicitors: McCulloch & Buggy (Plaintiff) Greenwood Lawyers (Defendant) File Number(s): 2022/261962 Publication restriction: Nil Decision under appeal Court or tribunal: Local Court of NSW Jurisdiction: Civil Citation: N/A Date of Decision: 5 August 2022 Before: Atkinson LCM File Number(s): 2020/362011

Judgment

1. HER HONOUR: The plaintiff, Bastow Civil Constructions Pty Ltd (Bastow), is a civil works company based in Queensland and operating partly in New South Wales. The defendant is Fairfield City Council (Council). The proceedings arise from the Council having impounded a truck owned by Bastow, and subsequently selling the truck at auction. Before the truck was sold, Bastow approached the Council a number of times to recover the truck. Those approaches should have been, but were not, recorded in the Council's Customer Request Management System (CRM).
2. If the Council officers within the section of the Council responsible for selling and/or disposing of impounded items had known about Bastow's approaches, they would not have proceeded to sell the truck. In the absence of any record in the CRM, however, those officers were not aware that Bastow was attempting to recover the truck; and the truck was sold at auction, for a price that Bastow contended was far less than its market value.
3. Bastow brought proceedings in the Local Court for damages, claiming the difference between the market value of the truck and the sale price. Bastow put its claim on two bases. It claimed that the Council owed a statutory duty to act with reasonable care in respect of the sale of the truck pursuant to s 45(3) of the Impounding Act 1993 (NSW) (repealed), and breached that duty. It also claimed in the alternative that the Council was liable in negligence.
4. The Magistrate held that the Council owed Bastow a statutory duty pursuant to s 45(3) of the Impounding Act and had breached that duty. Her Honour also accepted that Bastow had established the elements of negligence, but dismissed the claim on the basis that the Council was protected by what her Honour described as the "defences" in s 43 and s 43A of the Civil Liability Act 2002 (NSW). Her Honour gave judgment for Bastow in the amount of $46,500.
5. The Council has brought the present proceedings pursuant to s 39(1) of the Local Court Act 2007 (NSW), by which a party to proceedings before the Local Court who is dissatisfied with a judgment or order of the Court may appeal as of right to the Supreme Court but only on a question of law, and otherwise with leave (s 40). The Council contends that s 45(3) of the Impounding Act does not create a cause of action and the Magistrate erred in concluding to the contrary. Further, it was necessary for the Act to confer a cause of action on a person in Bastow's position, and there was no such conferral (Grounds 1-4). The Council contends that the Magistrate erred in finding that damages can be awarded under the Impounding Act (Ground 5). Finally, the Council contends that the Magistrate erred by failing to consider whether it had a complete "defence" to Bastow's claim under the Impounding Act pursuant to ss 43 and/or 43A of the Civil Liability Act (Grounds 6-7).
6. Bastow has, in turn, filed a notice of contention which takes issue with the Magistrate's conclusions on the negligence claim. Bastow contends that the Magistrate erred in her approach to, and application of, ss 43 and s 43A of the Civil Liability Act (Grounds 1-2 and 5). In effect, Bastow contends that on the facts as found, it was not open to her Honour to conclude that either section was engaged: s 43 did not apply to actions in negligence, and s 43A did not apply because the liability Bastow alleged was not based on the exercise of, or failure to exercise, a special statutory power. Alternatively, if either provision applied, the acts and omissions of the Council were unreasonable in the manner for which s 43(2) and s 43A(3) respectively provide (Grounds 4, 6 and 8). Bastow also took issue with the adequacy of her Honour's reasons in respect of the applicability of both provisions (Grounds 3 and 7).
7. On the Council's appeal, I accept the Council's contention that s 45(3) of the Impounding Act does not create a cause of action and the Magistrate erred in concluding to the contrary. However, the provision does create an exception to the statutory extinguishment, in s 45(2), of an entitlement on the part of an owner to sue for damages; and on the Magistrate's findings that exception applied. Accordingly, Bastow could bring an action in negligence against the Council.
8. As to Bastow's notice of contention, s 43 of the Civil Liability Act did not apply to the negligence claim, as that action was not one for breach of a statutory duty. Contrary to Bastow's contention, s 43A of the Civil Liability Act applied in the present case. However, the Magistrate erred in concluding that in the circumstances of the present case the exception to the exclusion of liability, in s 43A(3), was not satisfied. It follows that the I would uphold the Magistrate's order giving judgment for Bastow, albeit on the basis of negligence and not breach of statutory duty. The Council's Summons, which sought to set aside the judgment of the Magistrate and instead give judgment for the Council, should be dismissed.

Evidence

1. The Council read an affidavit of its instructing solicitor, Ms Katherine Joy, sworn on 31 October 2022, which exhibited the Magistrate's orders and reasons, the transcript of the hearing before her Honour, and the Council's written submissions below. Bastow read an affidavit of its instructing solicitor, Mr Sean Thomas Greenwood, sworn on 23 November 2022, which exhibited the Further Amended Statement of Claim and the written submissions it filed in the Local Court. The Council's Defence to the Further Amended Statement of Claim was also in evidence.

Background to the decision of the Magistrate

1. The Magistrate set out the background of the matter at [5]-[57] of her Honour's reasons, from which I have adopted the following summary.
2. Bastow carried on a business that included horizontal directional drilling for laying cables and pipe work. In around 2007, it purchased a second-hand truck for approximately $97,000. Bastow used the truck in its business until 2018. During that time, Bastow fitted the truck with a hook lift and regularly serviced the vehicle. The truck was unaffected by major defects and did not break down at any stage: [6].
3. In June 2019, Jason Bastow, the director of Bastow, listed the truck for sale online: [9]. It did not sell, with a number of prospective buyers indicating that they wanted the truck to have a current "brown slip" (the equivalent of a "pink slip" for cars) and to be re-registered: [10]. In about October 2019, Mr Bastow took the truck to GB Truck Centre in Smithfield to get a brown slip, leaving the truck there and returning to Queensland where he was based: [11].
4. GB Truck Centre was owned by Gurvinder (Jack) Singh. Mr Singh carried out the brown slip inspection on the truck, finding it in good condition apart from needing some new tyres. After issuing the brown slip, Mr Singh called Mr Bastow and told him that the truck was ready for collection. Mr Bastow said that he would collect the truck when he had the chance. In the meantime, as Mr Singh did not have space in his workshop to store the truck, he parked it at the end of a nearby cul-de-sac in Smithfield: [13].
5. In about September 2019, an officer of the Council, Raed Salti, first noticed the truck in the cul-de-sac and observed that it had some flat tyres: [42]. He returned a couple of weeks later and marked the tyres. On or about 26 October 2019, Mr Salti returned again and noted that the truck had not moved. He decided to proceed with a preliminary investigation and placed a notice to impound motor vehicle sticker on the front driver's side window: [43].
6. Mr Salti created a record on the Council's CRM in relation to the truck. Having searched the vehicle registration database, he caused a notice of intention to impound to be sent to Bastow's last known address: [44]-[45]. Although the letter was recorded on the CRM as having been sent on 28 October 2019, Mr Bastow and his wife maintained that they never received it: [38], [46].

Bastow's pleaded claims

1. Given the issues raised in the appeal, it is necessary to set out Bastow's pleaded case with some precision. As I have noted above, in its Further Amended Statement of Claim (FASOC), Bastow sought damages on two alternative bases (it abandoned a claim in conversion on the first day of the hearing). First, Bastow contended that the Council owed it "a statutory duty to act with reasonable care in respect of the sale of the truck". It particularised this duty by citing s 45(3) of the Impounding Act: FASOC [3A]. In alleging that the Council breached this duty (FASOC [3B]), Bastow relied on the following: 1. its approaches to the Council between November 2019 and January 2020, to make enquiries about having the truck released or procuring its release: FASOC [3A1]; 2. the policy of the Council to record bona fide enquiries about an impounded vehicle, or attempts to recover such a vehicle, in writing in the CRM (defined as the "Internal Policy"): FASOC [3A2]; and 3. the failure of the Council to record any of the approaches that it made about the truck in the CRM: FASOC [3A3] and [3A4].
2. Bastow alleged that as a result of the Council not recording any of its approaches about the truck, "and breaching the Internal Policy as a consequence", the Council acted without reasonable care, as a result of which it procured the sale of the truck at auction: FASOC [3A5] and [3A6]. As a result of the sale of the truck, Bastow lost ownership and suffered loss and damage: FASOC [3C] and [3D].
3. Secondly, Bastow alleged that "pursuant to the Civil Liability Act 2002 (NSW) [the Council] owed [Bastow] a duty to take reasonable precautions against the risk of it selling an impounded vehicle belonging to an owner, which the owner was trying to recover": FASOC [3E]. In the particulars to that paragraph Bastow contended that the duty was to be "inferred by s 45(3) of the Impounding Act", although it was ultimately put as an action in common law negligence. The allegation that the Council failed to take precautions against that risk of harm relied on the same conduct that Bastow pleaded in its breach of statutory duty claim: FASOC [3E1]. Bastow pleaded that a reasonable person in the Council's position would have taken precautions in the form of recording its approaches in the CRM. Bastow then pleaded (FASOC [3G]): "Further or in the alternative, the defendant's decision to sell the Truck was, in the circumstances, so unreasonable that no authority could have properly considered its sale of the Truck to be a reasonable exercise of its statutory power."

Applicable legislative provisions

1. The claim in negligence involved the provisions of the Civil Liability Act. For the purposes of the appeal, the significant provisions of the Civil Liability Act are ss 43 and 43A, which are contained in Part 5 of the Act. Part 5 applies "to civil liability in tort" (s 40(1)) and its provisions are directed to the liability of "a public or other authority", the definition of which includes a local Council: s 41.
2. Section 43 of the Civil Liability Act provides: 43 Proceedings against public or other authorities based on breach of statutory duty (1) This section applies to proceedings for civil liability to which this Part applies to the extent that the liability is based on a breach of a statutory duty by a public or other authority in connection with the exercise of or a failure to exercise a function of the authority. (2) For the purposes of any such proceedings, an act or omission of the authority does not constitute a breach of statutory duty unless the act or omission was in the circumstances so unreasonable that no authority having the functions of the authority in question could properly consider the act or omission to be a reasonable exercise of its functions. (3) In the case of a function of a public or other authority to prohibit or regulate an activity, this section applies in addition to section 44.
3. Section 43A of the Civil Liability Act provides: 43A Proceedings against public or other authorities for the exercise of special statutory powers (1) This section applies to proceedings for civil liability to which this Part applies to the extent that the liability is based on a public or other authority's exercise of, or failure to exercise, a special statutory power conferred on the authority. (2) A special statutory power is a power - (a) that is conferred by or under a statute, and (b) that is of a kind that persons generally are not authorised to exercise without specific statutory authority. (3) For the purposes of any such proceedings, any act or omission involving an exercise of, or failure to exercise, a special statutory power does not give rise to civil liability unless the act or omission was in the circumstances so unreasonable that no authority having the special statutory power in question could properly consider the act or omission to be a reasonable exercise of, or failure to exercise, its power. (4) In the case of a special statutory power of a public or other authority to prohibit or regulate an activity, this section applies in addition to section 44.

The decision of the Magistrate

1. The Magistrate dealt first with Bastow's claim that the Council was liable to it "under s 45(3) [of the Impounding Act] for the value of the truck": [60]. Although her Honour described the position of both parties as proceeding "on the basis that damages can be awarded under s 45" (at [62]), the Council disputed the correctness of that premise in this Court.
2. In answer to Bastow's submission that it had made contact with the Council on seven different occasions to get the truck back, the Council denied that Bastow had ever contacted it about collecting the truck. The Council pointed in this respect to the absence of any entries in the CRM recording the contact of which the Bastows and Mr Singh gave evidence, with officers of the Council, including Mr Dannaoui and Mr Salti, giving evidence that a record would be made in the CRM if someone made enquiries about a vehicle: [64]. After considering the evidence, her Honour was not satisfied that the CRM or the processes that should have been followed "were as failsafe as the witnesses assert": [68]. To the contrary, her Honour found, at [77]: "I am satisfied on the balance of probabilities that the Bastows/Mr Singh did contact the Council and that whoever dealt with them at the Council failed to record the information on the CRM and pass the information onto the necessary people. Given what has been recorded on the CRM, I am satisfied on the balance of probabilities that had the relevant people been made aware of the efforts being made to recover the truck, then they would have taken steps to halt the auction."
3. Accepting that the Council had a system in place to manage the impounding and sale of vehicles, her Honour concluded that "whatever procedures that should have been followed to ensure that enquiries were put through to the appropriate section did not occur": [80]. Her Honour was satisfied that "in this instance, the Council acted without reasonable care in that it failed to ensure that those who were fielding general enquiries knew about the procedures": [81]. It followed that her Honour was satisfied "that Bastow is not prevented from recovering damages arising from the sale of the vehicle": [82].
4. Turning then to the claim in negligence, the Council had raised a threshold issue to the effect that Bastow could not bring a claim under the Civil Liability Act because of the limitation in the third bullet point in s 45(2) of the Impounding Act: [83]. Her Honour was satisfied that the limitation in that provision did not operate because of her Honour's finding that the Council did not act with reasonable care: [87]. Her Honour referred in that context to the preconditions in "s 43" being satisfied. This was likely a typographical error, and should instead refer to s 45(3) of the Impounding Act, the proper construction of which is in issue on appeal.

The Council's appeal

1. Council's grounds of appeal were directed to two main issues, namely: 1. whether Bastow had a maintainable cause of action pursuant to or by reason of the Impounding Act (Grounds 1-4); and 2. if so, whether there was a defence to any such claim in the Civil Liability Act (Grounds 6-7).

Issue 1: Did the Impounding Act confer a cause of action on Bastow?

1. The Council submitted that nothing in the terms of s 45 of the Impounding Act, or the Act more generally, gave Bastow a cause of action against the Council for breach of statutory duty: PWS [5]-[7]; Tcpt 4.6-8. The Council submitted that s 45(2) of the Impounding Act extinguished any right of action "except as specifically provided by this Act", in the face of which a specific conferral of a right of action under the Act was required. The Council pointed by way of example to the right to recover impounding fees created in s 27 of the Impounding Act and submitted that , by contrast, no such specific conferral was made in s 45(3): PWS [12]; Tcpt 5.10-29.
2. Consistently with that submission, the Council relied on a note to s 24 of the Impounding Act, which described the purpose of s 45 as being to "[provide] protection for people who buy impounded items", rather than to provide any cause of action for persons in the position of Bastow, whose impounded property is sold: Tcpt 4.33-39, 5.5-8. Counsel for the Council also submitted that s 45(3) did not, in its terms, create any basis for a claim to be prosecuted or damages to be awarded: PWS [11], [13]; Tcpt 4.6-16, 29-32.
3. The Council next submitted that even if s 45(3) of the Impounding Act did give rise to a cause of action, on the proper construction of the Act as a whole the only available cause of action was for a breach of statutory duty: PWS [14]. In other words, the Act precluded any cause of action in negligence pursuant to the Civil Liability Act. The Council relied upon what it described as the unambiguous meaning of the words "except as specifically provided by this Act" in s 45(2) of the Impounding Act, which precluded a prospective plaintiff from bringing any claim other than one which was specifically conferred by that Act: Tcpt 6.14-26. That construction was supported, it submitted, by the Magistrate's finding that s 43 of the Civil Liability Act, which is concerned with claims for breach of statutory duty, was engaged: PWS [14].
4. In respect of Ground 5, the Council submitted that the Magistrate erred in finding that the parties had both proceeded on the basis that damages could be awarded pursuant to s 45 of the Impounding Act: see [62]. The Council denied that it had made any such concession and argued that it had always maintained that no cause of action arose under s 45, and thus no damages were available under that section: PWS [16]-[19]; Tcpt 7.10-34.

Construction of 45(3) of the Impounding Act

1. It is well settled that "[t]he starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose": SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34 at [14], citing Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 ("Project Blue Sky") at [69]-[71]; and Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41 at [47].
2. Section 45(1) of the Impounding Act confers protection from liability in damages in relation to particular property, namely, animals or motor vehicles to which s 18 applies. A person who destroys an animal or "otherwise disposes of a motor vehicle under section 18", is not liable for any loss that the owner or any other person has sustained as a result of that action, unless the person did not act in good faith. The same protection is afforded to any impounding authority that authorised the person, subject to the same proviso.
3. Whereas s 45(1) is concerned with particular items, s 45(2) of the Impounding Act applies in relation to an "item" as defined in the Dictionary. The subsection addresses the consequences of the sale or disposal of an item, "under a power conferred by this Act", for: (i) the buyer of the item; (ii) the rights with respect to the item that subsisted before sale; and (iii) the person who was the owner of the item immediately before its sale or disposal. Consistently with the conferral of ownership on the buyer of the item (first bullet point), any pre-existing right, interest, trust or obligation with respect to the item is discharged (second bullet point), and the owner of the item immediately before sale or disposal "ceases to have any claim in respect of the item or any right of action in respect of the sale or disposal except as specifically provided by this Act" (third bullet point).
4. Section 45(3) of the Impounding Act picks up on the latter part of the third bullet point in s 45(2). It is directed at a particular claim, namely, one for damages arising from the sale or disposal of an item, and its purpose is to lift the bar that the third bullet point in s 45(2) otherwise imposes on a person bringing such a claim against an impounding authority. By its terms, a person "is not prevented" from bringing that action provided the person can establish that the impounding authority, or the person who effected the sale or disposal of the item, "did not act in good faith or acted without reasonable care."

Issue 2: Was a "defence" to any such claim contained in the Civil Liability Act?

1. Grounds 6 and 7 of the Summons are formulated on the basis that Bastow had a maintainable cause of action pursuant to s 45(3) of the Impounding Act. For the reasons I have set out above, I do not consider that s 45(3) can be properly construed as conferring such a cause of action. If s 45(3) did confer a statutory duty to take reasonable care, breach of which could sound in damages, s 43 of the Civil Liability Act may have some application. However, it is not necessary to express a concluded view on this issue or these two grounds.

Bastow's notice of contention

1. Bastow's notice of contention raises the following issues: 1. Did her Honour's conclusion that s 43 of the Civil Liability Act applied rest on an erroneous construction and/or application of the provision (Grounds 1 and 2)? 2. If the answer to (1) is "no", on the Magistrate's factual findings, was it open to her Honour to conclude that Bastow had not established the condition in s 43(2) of the Civil Liability Act (Ground 4)? 3. Did her Honour's conclusion that s 43A of the Civil Liability Act applied rest on an erroneous construction of the provision (Grounds 5 and 6)? 4. If s 43A applies, did her Honour err in concluding that the unreasonableness condition in s 43A(3) was not satisfied (Grounds 7 and 8)?

Issues 1 and 2: Application of s 43 of the Civil Liability Act

1. Bastow submitted that s 43 of the Civil Liability Act did not apply to an action in negligence, relying upon what Leeming JA said in Doyle's Farm Produce Pty Ltd v Murray-Darling Basin Authority (No 2) (2021) 106 NSWLR 41; [2021] NSWCA 246 ("Doyle's Farm Produce") at [39] (Bathurst CJ and Bell P agreeing): "…I think it should now be regarded as settled that s 43 applies only to claims for breach of statutory duty as opposed to actions for negligence. That position was stated in Patsalis v State of New South Wales (2012) 81 NSWLR 742; [2012] NSWCA 307 at [87] (subject to the qualification that the point was not fully argued). It was confirmed in McKenna v Hunter & New England Local Health District [2013] NSWCA 476 at [167], and the fact that an appeal was allowed on a different basis does not detract from the correctness of this aspect of the reasoning. It was again confirmed in Electro Optic Systems Pty Ltd v State of New South Wales (2014) 10 ACTLR 1; [2014] ACTCA 45 at [2], [168]-[174], [713]-[714], where the State conceded that the trial judge erred in relying on the section. ..."
2. The Council, on the other hand, submitted that in circumstances where the negligence claim that Bastow pleaded relied solely on a breach of statutory duty further to the Act, her Honour did not err in applying s 43 of the Civil Liability Act. The Council further submitted that s 43 was engaged by virtue of Bastow having pleaded a breach of statutory duty.
3. The difficulty with the Council's submissions is that the Magistrate addressed ss 43 and 43A of the Civil Liability Act in the part of the reasons in which her Honour was considering Bastow's claim in negligence. After considering the application of ss 5B, 5C, 5D and 5E of the Civil Liability Act, her Honour stated at [123]: "As is apparent from the above discussion, the Council might be found negligent in relation to how it handled the disposal of the impounded truck. However statutory defences operate in relation to public and other authorities and these need to be considered before the Council can be found liable."
4. Although her Honour set out ss 43 and 43A of the Civil Liability Act in this context, the focus of her Honour's summary of the applicable principles was s 43A: [128]-[132]. Apart from extracting s 43, Magistrate made only two references to the section in this part of the reasons, namely: (i) in noting the Council's submission that s 43 was engaged by reason of the allegation in the FASOC that the Council owed Bastow a statutory duty to act with reasonable care in respect of the sale of the truck (at [133]); and (ii) in concluding that Bastow had "failed to prove on the balance of probabilities that there was a breach of statutory duty (s. 43)" (at [138]), a conclusion that does not sit at all well with her Honour's award of damages to Bastow for breach of s 45(3) of the Impounding Act. The limited reasoning on s 43 was the subject of Ground 3 of the notice of contention, but rather than constituting a separate error (which, as the Council submitted, was properly a matter for a cross-appeal) it rather tends to support the conclusion that s 43 was not the subject of close consideration.

Issue 3: the Magistrate's approach to s 43A of the Civil Liability Act

Submissions

1. The focus of Bastow's submissions on the notice of contention was s 43A(1), which provides that the section "applies to proceedings for civil liability to which this Part applies to the extent that the liability is based on a public or other authority's exercise of, or failure to exercise, a special statutory power conferred on the authority." Bastow submitted that s 43A(1) required the Court first to identify the basis of its claim for relief in negligence. In its submission, the basis of the claim against the Council was that it "failed to take reasonable precautions against the risk of selling an impounded vehicle belonging to an owner, which the vehicle owner was trying to recover, by failing to act in accordance with its internal policy and record any of Bastow's approaches to it about the Truck in the CRM": DWS [52].
2. Bastow submitted that, properly understood, that claim was not "based on" the Council's exercise of, or failure to exercise, a special statutory power. Rather, the Council's liability was "based on" its record keeping failures, for which the Council required no statutory authority: DWS [56]. At the hearing, counsel for Bastow accepted that the truck was sold pursuant to the Council's statutory power, and it was the sale that caused the loss, but submitted that it was not the exercise of the statutory power in selling the vehicle that was said to be negligent: Tcpt 21.10-20.
3. Bastow accepted that it could be said that the Council's failure to keep records had a connection with its statutory power to sell abandoned vehicles, but submitted that her Honour had ignored the distinction between liability that was "based on" the exercise of a statutory power and liability "involving" a statutory power: DWS [56]. Instead, her Honour had asked whether the relevant failing fell within the Council's exercise of a specific statutory power, which was the wrong question (Ground 5): Tcpt 21.22ff. Bastow contended that on the facts as her Honour found them, the only reasonably available answer was that its negligence claim was not based on the Council's exercise of a special statutory power (Ground 6). Further, her Honour had not provided adequate reasons to explain how she had reached the contrary conclusion (Ground 7).
4. Bastow next submitted that even if s 43A of the Civil Liability Act applied, the Magistrate erred in finding that the Council's acts or omissions were not so unreasonable that no authority having the special statutory power could properly consider those acts or omissions to be a reasonable exercise of its power (Ground 8). To the extent that this ground involved a question of mixed fact and law, Bastow sought leave to raise it, consistently with s 40 of the Local Court Act. Relying on Curtis, Bastow submitted that the question needed to be considered objectively and it was not necessary for it to lead evidence of what a reasonable council would have done in the circumstances: Tcpt 25.40-26.11. In any event, the Council had led evidence from its officers on which Bastow could rely, to the effect that they would have expected the approaches that were made on behalf of Bastow to have been recorded in the CRM: Tcpt 27.10-13.

Consideration

1. The background to the enactment of s 43A was summarised by Allsop P in Precision Products (NSW) Pty Ltd v Hawkesbury City Council (2008) 74 NSWLR 102; [2008] NSWCA 278 ("Precision Products") at [167]-[168] (Beazley and McColl JJA agreeing); see also Doyle's Farm Produce at [79]-[80] (Leeming JA). Allsop P observed in Precision Products that s 43A was inserted pursuant to the Civil Liability Amendment Act 2003 (NSW) in response to the decision in Presland v Hunter Area Health Service [2003] NSWSC 754 ("Presland"). The plaintiff in that case was a psychiatric patient who was released from an institution and proceeded to kill his brother's fiancée. At first instance the plaintiff obtained damages for negligence on the part of the Health Service for releasing him, on the basis that if he had been detained as mentally ill or mentally disordered he would not have killed the victim and suffered the legal consequences of that act.
2. The decision in Presland was overturned on appeal (Hunter Area Health Service v Presland (2005) 63 NSWLR 22; [2005] NSWCA 33). However, the Civil Liability Amendment Act was enacted in advance of the Court of Appeal's decision. In the Second Reading Speech to the Civil Liability Amendment Bill 2003, the Minister for Health described the decision in Presland as having raised "important issues that deserve to be put beyond doubt in legislation": New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 13 November 2003 at 4992-3. The Minister stated: "In a case involving a special statutory power, a public authority will be liable only if its decision is so unreasonable that no public authority having such a power could consider it to be reasonable. It will not affect the exercise of 'operational' functions of agencies, for example, where they are given general functions to provide particular services. The bill makes it clear that this principle covers public authorities as well as individuals, such as psychiatrists in hospitals, who have public official functions."
3. In Precision Products, Allsop P stated that it was "plain" that "the drafter of s 43A was attempting to ameliorate the rigours of the law of negligence": [177]. However, his Honour identified a number of uncertainties in the operation of the section, although they were unnecessary to determine in that case. One such issue was whether s 43A affected the existence or the scope of a duty of care, or whether it constituted a statutory immunity that was engaged at the point of considering whether there is a liability for what would otherwise be a breach of a duty of care, the scope of which was ascertained without consideration of the terms of s 43A: [171]. That issue has been determined in subsequent cases, with s 43A construed as assuming the existence of a duty of care and identifying the standard to be applied in determining breach of that duty: Curtis at [234] and [272]; Bankstown City Council v Zraika; Roads and Maritime Services v Zraika (2016) 94 NSWLR 159; [2016] NSWCA 51 ("Zraika") at [109]; Della Franca v Lorenzato; Burwood Council v Lorenzato [2021] NSWCA 321 at [8], [107], [147].

Issue 4: the application of s 43A(3) of the Civil Liability Act

1. As I noted at [22] above, Bastow pleaded that the Council's decision to sell the truck was, in the circumstances, so unreasonable that no authority could have properly considered its sale of the truck to be a reasonable exercise of its statutory power: FASOC [3G] and see DWS [68]. The Magistrate concluded otherwise. The Council submitted that her Honour was correct to reach that conclusion in the absence of evidence from Bastow on the issue of what a reasonable Council would do in these circumstances. Without that evidence, this Court could also not form a view as to what a reasonable Council would do in these circumstances: Tcpt 12.5-14. Accordingly, the Council submitted, the leave that was required to raise this ground, as an issue of mixed fact and law, should be refused.
2. The onus is on the plaintiff to establish that the public authority acted so unreasonably to reach the threshold set out in in subs 43A(3): Collins at [177]; Watches of Switzerland Pty Ltd v Transport for NSW [2018] NSWSC 1256 at [62]. In Curtis, Basten JA set out the relevant inquiry as follows at [277]-[279]: "The final clause sets a standard. The standard is an act or omission that is 'so unreasonable' that no authority could 'properly consider the act or omission … to be reasonable'. This is a curious form of expression: it is not that the act be so unreasonable that no reasonable authority could do the act, but it may perhaps be assumed that the reference to 'no authority' is a reference to 'no authority acting reasonably'. That conclusion is supported by the reference to an authority which 'could properly consider' the act to be reasonable. That reading should be accepted. The other awkwardness of expression is that the court is required to consider not whether it considers the act (to paraphrase) grossly unreasonable, but rather whether no authority properly considering the matter could consider it to be reasonable. This test has two aspects. First, the identification of the body to be satisfied as to the proper characterisation of the act or omission is not the court but another public authority. That is, it is like the test of apprehended bias in administrative law, which asks not whether the court might think that the decision-maker might not bring a fair and unbiased mind to the task, but whether a fair-minded lay observer might think that the decision-maker might not bring such a mind to the task. With apprehended bias, the identification of the holder of the opinion is understandable; with liability in tort, it is less clear. It means that the court must view the matter through the eyes of a responsible public authority, having particular expertise and functions. (See also the distinction noted in Jamal v Secretary, Department of Health (1988) 14 NSWLR 252 at 262D-F (Kirby P).) The second aspect of the statutory language is that the state of mind of the authority is not identified as one which it would or should hold, but rather one which no authority could hold. In other words, it envisages a range of opinions as to what might constitute a reasonable act or reasonable failure to act, but asks if no public authority properly considering the issue could place it within that range." (Original emphasis.)

Conclusion

1. I have thus upheld the Magistrate's order giving judgment for Bastow on the basis of its claim in negligence. The Council's Summons sought to set aside that order and substitute it with an order giving judgment for the Council. It follows from my reasons that the Summons should be dismissed. Although that result is in Bastow's favour, both parties have had a measure of success on their respective legal arguments, and neither party has had complete success. In the circumstances, it is appropriate to allow the parties an opportunity to be heard on costs with the benefit of these reasons. Accordingly, I will allow a short period of time in which the parties may file and serve written submissions (of no more than two pages), with a view to my determining the issue on the papers. Of course, if the parties are able to reach an agreed position on costs I will receive short minutes in the same period.

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