General Steel Industries Ltd v Commissioner for Railways

THE RESPONDENT'S CONTENTIONS The respondent contends: (1) this Court has no jurisdiction to hear and determine any of the applicant's claims, (2) the respondent is not the person who can be liable in respect of any of the applicant's claims, and (3) having regard to all the material before me, the applicant's claims for abuse of process claim and the malicious prosecution claim cannot possibly succeed, and should be dismissed summarily.

THE EVIDENCE The applicant and the respondent adduced evidence which was, in large measure, consistent. It is possible to discern on this application a fairly detailed history of events which is either common, or is so clearly correct that it has not been contested. In this section of my reasons, I shall make findings based upon that evidence. Where there is a contentious issue, I will simply note the issue and refer to it when considering the applicant's three claims and the contentions of the respondent in respect of them. The applicant received benefits under the Social Security Act 1947 and then under the Act between, at least, 1988 and May 1993. He was casually employed for some of that period, in particular for much of the period between 1 November 1990 and 26 March 1992. As a result of a review of his entitlements during that latter period, a delegate of the respondent formed the view that he had been overpaid $3,245.01 as he had not accurately and sufficiently declared his casual earnings. After being advised of that asserted overpayment, the applicant was invited by letter sent on 21 January 1993 to attend an interview. He was then informed of the possibility of prosecution for offences against the Act, that the interview was not compulsory, and that it provided him with the opportunity "to advise of any factors which may affect the decision to take legal action". The interview took place on 4 February 1993. It was recorded. The internal report generated at the time includes a pro forma checklist clearly designed, inter alia, to indicate whether the interviewee made admissions helpful to proof of the suspected offences. It also included a recommendation that prosecutions be instigated for thirty-two alleged offences against s 1347 of the Act. That report was referred to a more senior prosecutions officer for review, and that officer supported the recommendation. That further report was then referred to the Officer In Charge of Prosecutions, Debt Management and Prosecutions (South). By report dated 2 April 1993, that officer also supported the recommendation. In accordance with normal procedures, the Area Manager (South) of the Department of Social Security then provided to the DPP a brief for perusal and opinion. Although the brief itself is undated, it was received by the DPP as acknowledged at least by 8 April 1993. There was at the time an internal standard within the Department of Social Security for referral of prosecution cases to the DPP of forty-two days from the date an overpayment is raised by a particular region with the Debt Management and Prosecutions Section. The standard may not have been met in this particular instance. It is not asserted that that standard has any legislative or regulatory status. There were internal guidelines within the Department of Social Security as to the classes of overpayment cases to be referred to its Prosecutions Section. At least from 16 October 1992, it was required that all cases with overpayments in excess of $2,000 should be so referred. By instruction given on 8 March 1993, the figure was changed to $4,000. (The instruction is more detailed than that, but that description suffices for present purposes). No memoranda of Officers of the Department of Social Security pertaining to the applicant refer to that change in the guidelines. The DPP considered the brief submitted as described above, and on 5 October 1993 forwarded to the Regional Manager - Area South of the Department of Social Security an Information and Summons for execution. That Information was made by an officer of the Department on 11 October 1993 before a Justice of the Peace. It was expressed to be on information of the Department of Social Security, and alleged thirty-two offences of knowingly obtaining payment of an instalment of unemployment benefit under the Act, part of which was not payable, contrary to s 239(1)(b) of the Social Security Act 1947 and now s 1347 of the Act. That Information was not served on the applicant. As a result of legislative changes, a Complaint and Summons alleging the same offences as the Information was made on 4 February 1994. It was that Complaint which was served on the applicant. The applicant through his solicitors sought copies of the declaration forms submitted for the benefits paid. The request was conveyed to the relevant officer of the Department of Social Security. Apparently, only two of the forms were still available. The DPP then informed the Department of Social Security by letter of 5 May 1994 that the charges were to be withdrawn. The DPP was of the view that there was insufficient evidence to support charges of knowingly obtaining payment of unemployment benefits, as only two forms were available, and on one of those forms the applicant had over-declared his earnings. A comment in that letter suggests the problem of lack of those forms was a not uncommon problem. The DPP at the time indicated that the available evidence was sufficient to support charges of recklessly making false statements, contrary to s 1346 of the Act. Under s 1350 of the Act, the penalty for breaches of s 1347 is the same as for breaches of s 1346. The complaint was then withdrawn. Finally I note that there is some, albeit slight, evidence in support of the applicant's claim that the prosecution of the complaint, to the extent it proceeded, aggravated distress and anxiety suffered by him. That evidence is sufficient, in my view, to show an arguable case of damage and loss if the issue were whether he had a basis for establishing damage as an element in any of the causes of action claimed.

JURISDICTION The respondent says this Court has no jurisdiction to hear the applicant's claims because each is not capable of being cross-vested to the Court under the Jurisdiction of Courts (Cross-Vesting) Act 1987 (SA) ("the SA Cross-Vesting Act") and each is not within the accrued or pendent jurisdiction of the Court under s 32; cp Fencott v Muller (1983) 152 CLR 570, and each is not within the primary jurisdiction of the Court. The Court is created by the Federal Court of Australia Act 1976 (Cth). Section 19(1) of the Federal Court of Australia Act 1976 gives to the Court such original jurisdiction as is vested in it by laws made by the Parliament of the Commonwealth. Legislation thus defines and circumscribes the jurisdiction of the Court: Elna (Aust) Pty Ltd v International Computers (Aust) Pty Ltd (1987) 14 FCR 461. The Court may, under the Constitution, be granted such jurisdiction as ss 75 and 76 permit: s 77. It might therefore, under s 75(iii), be given jurisdiction in matters in which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party. It might also, under s 76(ii), be given jurisdiction in matters arising under any laws made by the Parliament of the Commonwealth. No such general jurisdiction has been given to it. The applicant does not assert any law which directly gives to the Court jurisdiction in respect of the debt claim, or the abuse of process claim, or the malicious prosecution claim. I have reached the view that this Court has no jurisdiction to entertain the debt claim. Submissions did not identify any direct legislative grant of jurisdiction. I am not aware of any such grant of jurisdiction. The Court has certain jurisdiction to review administrative decisions under the Administrative Decisions (Judicial Review) Act 1977 (Cth) and under the Administrative Appeals Tribunal Act 1975 (Cth), but the applicant does not seek to invoke either of those Acts. The applicant did take advantage of the administrative review procedures available to him in respect of the debt claim. The decision that an overpayment had occurred, and was recoverable, under s 1224 of the Act, was first made by a delegate of the respondent on 25 August 1992. The applicant sought internal review of that decision. On 25 March 1994, an Authorised Review Officer affirmed it, and on 8 June 1994 it was affirmed also by the Social Security Appeals Tribunal but subject to adjusting the recoverable amount to $3,206. On 4 July 1994, the applicant applied to the Administrative Appeals Tribunal ("the AAT") to review the decision but the AAT on 7 November 1994 also affirmed the decision. No appeal was brought from that decision. On 27 June 1997, the applicant applied to the AAT to review the decision of the respondent "not to allow a review of validity of overpayment recovery due to lack of worth". The AAT determined that it did not have jurisdiction to hear the application, and dismissed it. No appeal under the AAT Act has been brought from that decision. In my judgment, the associated or accrued or pendent jurisdiction granted by s 32 of the Federal Court of Australia Act 1976 does not assist the applicant. There is no other matter or matters in which the Court's jurisdiction is properly involved to which it might be said that the debt claim is associated. Nor, in my judgment, is there any occasion for the exercise of the jurisdiction sought to be invoked from any implied incidental power of the Court: cp Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457. The only identified legislative source of jurisdiction is s 4(1) of the SA Cross-Vesting Act. It gives to the Court original and appellate jurisdiction with respect to "State matters". The term "State matters" is defined in s 3 of that Act as follows: "(a) a matter in which the Supreme Court has jurisdiction otherwise than by reason of a law of the Commonwealth or of another State; or (b) a matter removed to the Supreme Court under section 8". It is accepted that the Supreme Court of South Australia has jurisdiction with respect to the debt claim. If s 4(1) applies, this Court has jurisdiction to entertain the debt claim: s 9(2) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth). The respondent contends that the proceeding is improperly instituted against the 'Secretary, Department of Social Security' and that it should be against the Commonwealth of Australia. Section 1224 of the Act shows that the overpayment asserted was recoverable by the Commonwealth as a debt. In the events which happened, that asserted overpayment was thus recovered by the Commonwealth. I agree that, in respect of the debt claim, the appropriate respondent is the Commonwealth. The Department of Social Security is not separately created as a juristic entity under the Act. It is an administrative department of the Commonwealth, established under s 64 of the Constitution pursuant to Administrative Arrangement Orders of the Governor-General as in force from time to time, and described in accordance with Orders made from time to time by the Governor-General under s 19B of the Acts Interpretation Act 1901. The Secretary of the Department of Social Security is charged with the general administration of the Act: s 1295, and the person occupying that office in the general administration of the Act would be responsible for having steps taken for the Commonwealth to recover an overpayment under s 1224 of the Act. I would, if it were useful, provide the applicant with the opportunity of applying to amend this proceeding, or to add the Commonwealth as a party, rather than dismiss it on any misdescription or misapprehension as to the appropriate respondent to the debt claim. But, in my view, no purpose would be served by doing so. Whether the respondent is the Commonwealth or a named person, liability in respect of the debt claim will rest on the Commonwealth or that person sued on behalf of the Commonwealth: s 75(iii) of the Constitution. The High Court of Australia has original jurisdiction in respect of such claims. Under s 39(2) of the Judiciary Act 1903 (Cth), that jurisdiction may be exercised by the Supreme Court of South Australia. It is a jurisdiction which arises by reason of the law of the Commonwealth, and not jurisdiction which arises "otherwise than by reason of a law of the Commonwealth". It follows, therefore, that the exercise of that jurisdiction by the Supreme Court of South Australia would not be with respect to a State matter, as defined in the SA Cross-Vesting Act. Consequently, it is not a matter capable of cross-vesting to this Court and the Court has no jurisdiction to entertain it: Kodak (Australasia) Pty Ltd v Commonwealth (1988) 22 FCR 197; Courtice v Australian Electoral Commission (1990) 21 FCR 554; Bond v Sulan (1990) 26 FCR 580; NEC Information Systems Australia v Lockhart (1992) 108 ALR 561 at 567. The claim for abuse of process, and the claim for malicious prosecution, may be dealt with together. The applicant does not presently apply for any amendment to his application. He does not seek to join the DPP as a respondent. The objection to jurisdiction will succeed if the claim is as presently expressed, or is against each of the officers of the Department of Social Security involved in the process leading to the brief delivered to the DPP in their capacity as officers of the respondent, and for whose conduct ultimately the respondent or the Commonwealth will be liable as they are then sued on behalf of the Commonwealth: see Groves v Commonwealth (1982) 150 CLR 113. The reasons for that conclusion are the same as the reasons for upholding the objection to jurisdiction in respect of the debt claim. If, on the other hand, those officers were to be added as respondents in their own names and sued as individuals, then the causes of action alleged against them would be justiciable in the Supreme Court of South Australia but not by reason of the Judiciary Act 1903 (Cth). They would be "State matters" which were capable of being heard in this Court: see Tribond Developments Pty Ltd v Attorney-General for South Australia (1997) 73 FCR 153. The respondent did not develop submissions as to which of those alternative positions is the correct one. The respondent accepted that it is arguable that conduct by one or more of those officers, sufficient to give rise to the abuse of process claim or to the malicious prosecution claim, might expose those officers to personal liability. In other words, if the applicant sought to amend the proceedings by adding those officers and sued them in their personal capacity, it was accepted then that the claim should not be dismissed on grounds of want of jurisdiction. It would ultimately be a matter for trial as to whether that claim was made out against any one or more of them. So long as the abuse of process claim, and the malicious prosecution claim, are maintained against the present respondent, even if personally named, then clearly the liability would arise only because the respondent, charged with the administration of the Act, was liable for the acts of officers. The respondent would be sued as representing and on behalf of the Commonwealth. There is no allegation that the respondent personally played any role in the events leading up to the brief being delivered to the DPP. In its present form, I conclude that the Court has no jurisdiction to entertain it. It is unnecessary therefore to consider whether, even if jurisdiction existed, the claim is properly made and is sustainable against the respondent as presently described. I am reluctant to dismiss the claim on that basis, without the applicant being given the opportunity of applying to add or substitute as individual respondents the officers involved in the process leading up to referral of the brief to the DPP. I do not wish to be taken as indicating that such an application can be made, or would succeed. I should however give the applicant that opportunity only if it were meaningful to do so. If the respondent persuades me that, even in the event of such a change in the named respondents, these two claims could not possibly succeed, then there is no purpose in doing so. THE ABUSE OF PROCESS CLAIM THE MALICIOUS PROSECUTION CLAIM I have referred above to the applicant's allegations and the uncontroverted evidence. The applicant, in the course of submissions, indicated that he did not in reality seek to distinguish the abuse of process claim from the malicious prosecution claim, except to the extent that he invoked separately the tort of misfeasance in public office. It is therefore necessary only to address that tort and the claim for malicious prosecutions. The tort of misfeasance in public office has recently been considered in Sanders v Snell (1997) 73 FCR 569. In the joint judgment of the Full Court (Wilcox, O'Loughlin and Lindgren JJ), at 588-594 reviewed recent decisions concerning this tort, including of course the decision of the High Court in Northern Territory of Australia v Mengel (1995) 185 CLR 307. The elements of the tort are: "(i) an invalid or unauthorised act; (ii) done maliciously; (iii) by a public officer; (iv) in the purported discharge of his or her public duties; (v) which causes loss or harm to the plaintiff." (per Deane J in Mengel at 370). In my judgment, the applicant has no prospect of succeeding in this cause of action. No invalid or unauthorised act is alleged in the statement of claim. It is not asserted that it is not part of the duties of the respondent, through the three officers referred to above, to investigate suspected cases of overpayment of benefits and to consider the possibility of prosecution, and if appropriate to prepare a brief for submission to the DPP. There is also no evidence which is capable of leading to the finding that any one of those officers did not properly have that responsibility and was not endeavouring to fulfil it. The applicant must also fail to make out malice on the part of any of those three officers. It is arguable that the element of malice is satisfied by reckless indifference in the conduct of an office to the exercise of the power, as well as to conscious and deliberate intention to cause harm: see the reasons of Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ in Mengel at 347. Even assuming that lower threshold, in my view the applicant has no prospect of meeting it. I have discussed the evidence on that topic in detail when considering below the claim based on malicious prosecution. For the reasons which appear in that part of my reasons, I conclude that there is no evidence from which it could be concluded that any of the three officers took the steps, which each took leading to the referral of the brief to the DPP, with malice, as I have identified the arguable meaning of that expression. The applicant acknowledged that, at that point, no loss was caused to him. However, I do not decide adversely to him on the basis of that concession. I think it is arguable that, if the other elements of the tort were made out, the prosecution itself, its withdrawal, and the injury which he alleges as a consequence, may in the relevant sense be said to be caused by that earlier conduct: March v E & M H Stramere Pty Ltd (1991) 171 CLR 506. The elements of the cause of action for malicious prosecution are: (1) institution of criminal proceedings by the respondent, (2) termination of those proceedings in favour of the applicant, (3) absence of reasonable and probable cause for the institution of those proceedings, and (4) malicious intent, or a primary purpose for instituting the proceedings other than that of carrying the law into effect. See generally, Fleming, The Law of Torts, LBC 8ed (1992), at 609-624. There is some debate as to whether the provision of information to an independent prosecuting authority can constitute the 'initiation' of proceedings for the purposes of the tort of malicious prosecution. The House of Lords in Martin v Watson [1996] AC 74 held that the provision of information by an informant to a public prosecuting authority with malice and knowing the information is false may constitute a sufficient "setting in motion" of the prosecution so as to be satisfy the first requirement above. In Commonwealth Life Assurance Society Ltd v Brain (1935) 53 CLR 343, Dixon J at 379 said: "The rule appears to be that those who counsel and persuade the actual prosecutor to institute proceedings or procure him to do so by dishonestly prejudicing his judgment are vicariously responsible for the proceedings. If the actual prosecutor acts maliciously and without reasonable and probable cause, those who aid and abet him in doing so are joint wrongdoers with him". There are a number of recent authorities on the topic, discussed for instance in Woollard, 'The Civil Liability of Complainants' (1995) 3 Tort Law Review 93, and Woollard, 'Malicious Prosecution: Qualifying as the Prosecutor' (1996) 4 Tort Law Review 23. For the purposes of this application, I should adopt the lowest arguable legal standard to determine whether the applicant has any such prospect of satisfying it. In my view, that indicates that the officers of the respondent involved in the process of the decision to submit the brief to the DPP may be liable for malicious prosecution, notwithstanding that ultimately the decision to prosecute was made by the DPP. At the least, it is however necessary that one or more of them provided information which that person knew to be false. There are significant public policy reasons why the provision of information to a public prosecuting authority should not be discouraged by exposing the informant to potential liability for malicious prosecution without good reason: see Martin v Watson (above). The applicant, in my view, has no prospect of proving this element of the tort. The process of preparing and presenting the brief involved: · the interviewing officer preparing a recommendation, · the review of that decision by the Officer In Charge of Prosecutions for the relevant area, · the preparation of the brief and its presentation to the DPP by the Area Manager and, in submissions, the applicant identified each of the three officers involved in those steps by name. There is, in respect of each of those officers, no evidence upon which it could be found that any of them acted dishonestly in any sense. The applicant has made much of the statement that he would be informed before any action was commenced. I assume in his favour that such a statement was made. In my judgment, that could not indicate that that officer forwarded his recommendation believing that its contents were not true. The applicant has also stressed that the DPP did not pursue the prosecution. The identified reason is the lack of supporting documentation. The routine internal processes of the respondent did not cause that aspect to emerge in the investigation. Those processes focussed upon other means of proof. The information available was regarded as sufficient to warrant the recommendation. The DPP also apparently made the decision to prosecute without that documentary feature being considered. It is not for the Court to comment upon the adequacy of the evidence available for the prosecution, but it is clear that there is no material to indicate that those officers did not regard the material as adequate. Counsel for the respondent submitted, and was able to submit, that the available evidence was adequate to support the prosecution notwithstanding the decision of the DPP and the reason for it. The applicant has not identified any matter necessary to be proved for the prosecution to succeed which was not in fact the case. Nor has he identified any such matter about which there is any evidence to suggest that any of the three officers of the respondent knew, or believed, that the matter was not in fact the case. As noted above, the DPP's decision was made in relation to s 1347 of the Act but the DPP did also consider the evidence available adequate to sustain charges of breach of s 1346 of the Act. In addition, in my judgment, there is no evidence which could lead to the conclusion that any one or more of those three officers procured the prosecution without reasonable and probable cause for the action they each took. Brain's case (above) suggests that there are both objective and subjective components to this compendious concept. There is no evidence which could lead to the conclusion that any of those three officers did not believe that there was material indicating guilt on the part of the applicant which should be brought to the attention of the DPP. There is also no evidence which could lead to the conclusion that any of those three officers could not reasonably have believed that the material available, including the applicant's admissions, warranted such action. I have not overlooked that apparently the primary declarations of the applicant were no longer retained, but there is nothing to indicate that the respondent's processes at that point did or should have drawn attention to that matter. It is not the law that those officers be exposed to malicious prosecution for not having made that enquiry at that time. Similar reasoning leads me to the conclusion that there is no evidence from which a conclusion of malice or improper purpose, that is the fourth of the elements of the cause of action, on the part of any of those three officers could be made out: Trobridge v Hardy (1955) 94 CLR 147 at 163-165. CONCLUSION I have not had to decide whether, at the time of the initial interview, the applicant was told that he would be given an opportunity to comment before any recommendation to prosecute was made. The evidence presently points to that having been said. I have assumed in the applicant's favour that that occurred. If that were so, it is understandable that the applicant now considers that the implementation of that statement may have enabled him to divert the respondent from the course of prosecution earlier, and so have been spared the anxiety and distress of which he complains. However, for the reasons set out above, I have concluded that despite that matter, the applicant has no prospect of succeeding in his application in this Court and that I should now dismiss it. Accordingly, I consider that I should exercise my power under O 20 r 2 of the Rules. I dismiss the application. I certify that this and the preceding fourteen (14) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

Associate: Dated: 25 September 1998 Applicant appears in person

Solicitors for the Respondent: Australian Government Solicitor

Hearing Dates: 20 August 1998, and 18 September 1998