Livestock Transport (Sydney) Pty Limited v Commonwealth of Australia

JUDGMENT 1HER HONOUR : Livestock Transport (Sydney) Pty Limited is a horse transport company. It claims to have suffered substantial financial loss as a result of the introduction of equine influenza into Australia in August 2007, which greatly restricted horse movement and transport for a period of time. By these proceedings, Livestock Transport seeks to recover its losses from the Commonwealth of Australia. The claim is based on the allegation that the spread of the virus among horses in various parts of New South Wales and Queensland was due to negligence in the administration of the nation's quarantine system. 2Livestock Transport alleges that a stallion named "Snitzel" from Japan who was received at the Eastern Creek Quarantine Station was infected with equine influenza at the time of his arrival and that the virus subsequently escaped from that facility as a result of the fact that grooms, farriers and private veterinarians attending horses there were not required to take adequate steps to decontaminate themselves upon leaving the facility. It seeks to have the Commonwealth held liable for the consequences of those events as the entity responsible for quarantine in Australia, the occupier of the Eastern Creek Quarantine Station and pursuant to a statutory duty of care alleged to arise under the Quarantine Act 1908 (Cth). 3The Commonwealth admits that it was the occupier of the Eastern Creek Quarantine Station and that it was responsible for quarantine in Australia but denies that it owed any duty of care to Livestock Transport in the circumstances alleged. The Commonwealth also denies that the virus escaped from the Eastern Creek Quarantine Station in the manner alleged, denies breach of any duty owed to Livestock Transport and denies that the company suffered any loss caused by the events alleged. 4Separately, the Commonwealth has pleaded that it cannot be vicariously liable for the allegedly negligent acts or omissions of any of the relevant officers since those persons are immune from suit by operation of section 82(1) of the Quarantine Act (paragraph 52 of the defence). The Commonwealth further pleads that it cannot be liable because any loss suffered by Livestock Transport was caused by reason of the wrongful acts or omissions of public officers which occurred in the course of their acting in the performance or purported performance of a duty imposed by the Quarantine Act (paragraph 53 of the defence). The matter presently before the Court is an application by Livestock Transport to have those defences struck out. The issue to be determined 5Livestock Transport moves under rule 14.28(1) of the Uniform Civil Procedure Rules 2005, which provides: (1) The court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading: (a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or (b) has a tendency to cause prejudice, embarrassment or delay in the proceedings, or (c) is otherwise an abuse of the process of the court. 6It was indicated at the hearing that the only basis on which the relevant parts of the pleading were sought to be struck out was that they disclosed no reasonable defence (rule 14.28(1)(a)). 7The purpose of the rule is not to weed out weak or difficult claims. The power conferred is to deprive a party of the right to have his case determined in the ordinary way. The vice to which such powers are directed is to obviate abuse of the process of the Court in allowing clearly untenable claims to command the resources of the Court. The High Court has recently reiterated what must be demonstrated before the Court will exercise such a power: Spencer v Commonwealth [2010] HCA 28. The joint judgment of Hayne, Crennan, Keifel and Bell JJ in that case emphasises that the test to be applied is not an assessment of the prospect of success of a claim but demonstrated certainty of outcome: at [54] to [55]. 8Livestock Transport submitted that the applicability of rule 14.28 is "mandated" by the principles for case management contained in sections 56 to 58 of the Civil Procedure Act 2005. The written submissions sought to invoke support for that submission from the decisions of the Court of Appeal in Hans Pet Constructions Pty Limited v Cassar [2009] NSWCA 230 and Halpin v Lumley General Insurance Ltd [2009] NSWCA 372. 9Those decisions acknowledge that sections 56 and 57 are "statutorily compulsory" considerations: Hans Pet at [38] per Allsop ACJ, Young and Campbell JJA agreeing; and see Halpin at [24] per Basten JA and at [90] to [92] per Sackville AJA. It does not follow, however, that any particular outcome is mandated by such considerations in any particular case. On the contrary, as observed by Sackville AJA in Halpin at [93], the exercise of powers in conformity with the "overriding purpose" is likely to involve some balancing of competing objectives. 10The particular case management considerations relied upon by Livestock Transport in the present case were the breadth of the present action and the likely cost and length of the hearing. It was suggested that consideration of those matters in the context of "the mandatory consideration in facilitating the just determination of the proceedings" called for resolution of the immunity point at this stage. The submission was expanded in oral submissions with the contention that the Court's obligation under section 56 to seek to give effect to the overriding purpose softens the test stated in General Steel Industries Inc v Commissioner of Railways (NSW) [1964] HCA 69; 112 CLR 125. 11In my view, that submission should be rejected. As already noted, the only basis upon which parts of the pleading are sought to be struck out in the present case is that they disclose no reasonable defence. Considerations of case management of the kind relied upon by Livestock Transport are irrelevant to the determination of that question. The resources of the Court are not the measure of what is arguable in a legal sense. Provided the impugned pleading discloses a case that is tenable in that there is a real question of fact or law to be determined, a party should not be deprived of the right to have it determined in the ordinary way (in accordance with applicable case management principles) only because his opponent faces a lengthy or costly hearing (but cf the tentative view expressed by Young CJ in Eq, as his Honour then was, in Commonwealth v Griffiths [2007] NSWCA 370; 70 NSWLR 268 at [155]). 12The critical issue to be determined in the present application is accordingly whether it is demonstrated that the defences raised are so clearly untenable that they cannot succeed. Parts of the defence objected to 13Paragraphs 52 and 53 of the defence are in the following terms (emphasis added): 52. In further answer to the whole of the Further Amended Statement of Claim, the defendant says that by operation of section 82(1) of the Act, neither the Minister nor the Director nor any officer (as defined in the Act) is liable to any action, suit or other civil proceeding for or in relation to anything done or omitted to be done in good faith (whether negligently or not) by any of them in the performance or purported performance of any function or duty, or the exercise or purported exercise of any power, conferred on any of them under the Act and, in the premises, the defendant cannot be vicariously liable for any of the allegedly negligent acts or omissions of either the Minister or the Director or any officer pleaded in the Further Amended Statement of Claim. 53. In further answer to the whole of the Further Amended Statement of Claim, the defendant says that, if (which is denied) the matters pleaded in the Further Amended Statement of Claim are made out, then: (a) the plaintiff has suffered loss or damage by reason of the wrongful acts or omissions of one or more public officers; (b) any such wrongful act or omission occurred in the course of that officer acting in the performance or purported performance of a duty or duties imposed on that officer by the Act; and (c) the defendant cannot be liable for any such wrongful act or omission. 14As to paragraph 53, the application was confined to sub-paragraph (c) on the assumption that it merely reiterates the defence based on section 82(1) of the Quarantine Act pleaded in paragraph 52. However, that is not the case. Mr Weber, who appeared with Mr Nixon for the Commonwealth, explained that paragraph 53 must be read as a whole and was intended to raise a discrete defence based on the common law principle stated in Little v The Commonwealth (1947) 75 CLR 94 at 114 per Dixon J: that any public officer whom the law charges with a discretion and responsibility in the execution of an independent legal duty is alone responsible for tortious acts which he may commit in the course of his office and that for such acts the government or body which he serves or that appointed him incurs no vicarious liability. 15Livestock Transport nonetheless appeared to maintain an objection to paragraph 53, or at least part of it, and it is appropriate to determine the application on that basis. Basis of the liability sought to be attributed to the Commonwealth 16In order to consider the defences objected to, it is necessary to understand the nature of the Commonwealth's potential liability. Livestock Transport's claim was originally pleaded by reference to the functions and responsibilities conferred on certain officers under the Quarantine Act . The liability sought to be attributed to the Commonwealth was vicarious liability for the acts and omissions of those officers, allegedly deriving from the fact that they were servants or agents of the relevant Minister. 17By an amendment to the statement of claim, all references to vicarious liability were subsequently removed from the pleading of the claim. The claim is now pleaded on the basis of breaches of duty allegedly owed directly by the Commonwealth to Livestock Transport. The duties relied upon are said to rest on the Commonwealth as the entity responsible for quarantine in Australia, the occupier of the Eastern Creek Quarantine Station and under statute (by implication) in the provisions of the Quarantine Act . 18In those circumstances, Livestock Transport contends that the defences raised, being directed to the issue of vicarious liability, answer a case that is not put against the Commonwealth and are no answer to the plaintiff's claim. 19In response to that contention, Mr Weber submitted that the issues raised by the present application should be analysed as a matter of substance rather than form and that the proper legal analysis of the Commonwealth's status as the employer of any quarantine officer who has the protection of section 82 is not altered by the manner in which the plaintiff has chosen to plead its case. 20In my view, it is doubtful whether the removal of the references to vicarious liability in the pleading necessarily precludes that concept from consideration in the case. It is of course open to Livestock Transport to eschew reliance on a claim put on the basis of vicarious liability. However, whether that is what the current pleading says unequivocally is open to debate. Further, care must be taken to ensure that the parties have a common understanding as to what would flow from such a concession. It is tolerably clear from the amended pleading that the case put against the Commonwealth relies on duties allegedly owed directly to Livestock Transport by the Commonwealth. The contention sought to be made by the Commonwealth in its defence, however, is that the conduct complained of occurred in the course of quarantine officers carrying out duties that are imposed on them and not on the Commonwealth. 21The defence may thus be seen to be primarily directed to the issue of duty rather than the issue of liability. Whereas Livestock Transport alleges that a duty of care was owed directly by the Commonwealth, the Commonwealth contends that the negligent acts complained of were committed (if at all) within the scope of the performance of an independent duty cast on the officers in question. 22As explained by Gibbs CJ in Oceanic Crest Shipping Company v Pilbara Harbour Services Pty Limited (1986) 160 CLR 626 at 637, the fact that a person was exercising an independent duty cast by law on him is the circumstance that underpins the principle stated in Little . The question is "whether the person who committed the tort was acting in the performance (or supposed performance) of a duty imposed by law (either by statute or by common law) or whether his authority to act was derived from his employment." 23The proposition that the Commonwealth incurs no vicarious liability for a tortious act committed in the performance of an independent duty imposed by law on a particular officer is an element of that principle. Although the emphasis of the defence (in the context of the way the plaintiff's case is put) will be on the issue whether the relevant duties were those of the Commonwealth, I see no vice in the inclusion of that element in the pleading, if only for completeness. For that reason, I do not think the defence is bad for the fact that it refers to vicarious liability. 24It remains to consider whether the defences pleaded arguably raise any answer to Livestock Transport's claim. Section 82(1) of the Quarantine Act is in the following terms): (1) The Minister, a Director of Quarantine, an officer, an analyst, an authorised person or an approved person referred to in section 75A or 75B is not liable to any action, suit or other civil proceeding for or in relation to anything done or omitted to be done in good faith (whether negligently or not) by the Minister, Director, officer, authorised person or approved person in the performance or purported performance of any function or duty, or the exercise or purported exercise of any power, conferred on the Minister, Director, officer, authorised person or approved person under this Act. 25The question whether the negligent acts and omissions pleaded by Livestock Transport fall within that characterisation is, in my view, critically dependant upon factual issues that will have to be determined at trial. 26Livestock Transport submitted that section 82(1) says no more (relevant to the present claim) than that the Minister and the individual officers specified are protected from suit. It was submitted that the section cannot apply so as to afford any separate protection to the Commonwealth, sued in its own right for breach of a duty owed by it, in the absence of clear words to that effect (citing Coco v The Queen (1994) 179 CLR 427). 27I think that submission misapprehends the Commonwealth's case. Mr Weber did not maintain that section 82(1) confers a separate protection on the Commonwealth in respect of every act or omission referable to the Quarantine Act . The protection conferred by the section turns on the proper characterisation of the act or omission in question and, in particular, whether it was done in good faith in the performance or exercise (or purported performance or exercise) of any power, function or duty conferred under the Act on one of the officers specified in the section. If, on the factual findings of this Court at trial, any proven breach of duty were properly characterised as falling within the scope of section 82(1), the relevant officer would enjoy the protection of the section. 28In my view, there would plainly be a real question to be tried in that event as to whether any separate duty fell on the Commonwealth. Further, notwithstanding the way in which the claim is pleaded, I think an issue could also arise as to whether the protection enjoyed by the individual officer extended to the Commonwealth as his or her employer, given that the Commonwealth can only act through its servants and agents. 29As to paragraph 53, the applicability of that defence is also critically dependent, in my view, on factual issues that will have to be determined at trial. 30For those reasons, I am satisfied that the application must be dismissed. I will hear the parties as to costs.