Obeid v Lockley

Container Terminal Management Services Ltd (1999) 165 ALR 409; [1999] FCA 1101 Meandarra Aerial Spraying Pty Ltd v GEJ & MA Geldard Pty Ltd [2013] 1 Qd R 319; [2012] QCA 315 Milroy v Lord (1862) 4 De GF&J 264 Mullett v Nixon [2016] VSC 512 Neilson v City of Swan (2006) 147 LGERA 136; [2006] WASCA 94 Northern Territory v Mengel (1995) 185 CLR 307; [1995] HCA 65 Nyoni v Shire of Kellerberrin [2017] FCAFC 157 Obeid v The Queen (2015) 91 NSWLR 226; [2015] NSWCCA 309 Okwume v Commonwealth [2016] FCA 1252 Perrett v Williams [2003] NSWSC 381 R v Bembridge (1783) 3 Dougl 327; 99 ER 679 R v Bowden [1996] 1 WLR 98 R v Cosford [2014] QB 81 R v McCann [1998] 2 Qd R 56 R v Quach (2010) 27 VR 310; [2010] VSCA 106 R v Whitaker [1914] 3 KB 1283 Re Baden's Deed Trusts (No 2) [1973] Ch 9 Re Baden's Deed Trusts [1971] AC 424 Re Lambie [2018] HCA 6 Rush v Commissioner of Police (2006) 150 FCR 165; [2006] FCA 12 Sanders v Snell (1998) 196 CLR 329; [1998] HCA 64 Sanders v Snell (No 2) (2003) 130 FCR 149; [2003] FCAFC 150 Shaw v Thomas [2010] NSWCA 169 Society of Lloyd's v Henderson [2008] 1 WLR 2255 South Australia v Lampard-Trevorrow (2010) 106 SASR 331; [2010] SASC 56 Spencer v Commonwealth (2015) 240 FCR 282; [2015] FCA 754 Sykes v Cleary (1992) 176 CLR 77; [1992] HCA 60 Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1 Valeriani v Gibson [1963] NSWR 1430 Wyong Shire Council v Shirt (1980) 146 CLR 40 at 48; [1980] HCA 12 Texts Cited: M Aronson, "Misfeasance in Public Office: A Very Peculiar Tort" (2011) 35 Melbourne University Law Review 1 M Aronson, "Misfeasance in Public Office: Some Unfinished Business" (2016) 132 Law Quarterly Review 427 Tina Cockburn and Mark Thomas, "Personal Liability of Public Officers in the Tort of Misfeasance in Public Office - Part 1" (2001) 9 Torts Law Journal 1 at 7-8 P Finn, "Public Officers: Some Personal Liabilities" (1977) 51 Australian Law Journal 13 Category: Principal judgment Parties: Edward Moses Obeid Senior (first appellant) Moses Edward Obeid (second appellant) Paul Edward Obeid (third appellant) Edward Joseph Obeid Junior (fourth appellant) Grant Lockley (first respondent) Paul Grainger (second respondent) Representation: Counsel: G Reynolds SC with D Hume (appellants) P Braham SC with R Scruby (first respondent) E Cheeseman SC with S Patterson (second respondent)

Solicitors: Deutsch Partners (appellants) Henry William Lawyers (first respondent) Crown Solicitor's Office (second respondent) File Number(s): 2016/317346 Publication restriction: Nil Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Common Law Citation: [2016] NSWSC 1376 Date of Decision: 27 September 2016 Before: Hammerschlag J File Number(s): 2015/201089

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

[This headnote is not to be read as part of the judgment] Operation Jasper was an investigation conducted by the Independent Commission Against Corruption (ICAC) into the circumstances surrounding a decision made in 2008 by Mr Ian Macdonald, the Minister for Primary Industries and Minister for Mineral Resources at the time, to grant a coal exploration licence referred to as the "Mount Penny tenement". Part of the investigation involved an examination of the activities of Locaway Pty Ltd, a company associated with the Obeid family. Mr Grant Lockley and Mr Paul Grainger were members of the staff of ICAC appointed under s 104(1) of the Independent Commission Against Corruption Act 1988 (NSW) (the ICAC Act) who were involved in Operation Jasper. On 23 November 2011, Mr Lockley and Mr Grainger participated in the execution of a search warrant at premises occupied by Locaway. The execution of the warrant was recorded on video. A number of documents were seized during the execution of the warrant. Two documents, referred to as the "Solicitor-General's Advice" and the "Heads of Agreement", were not seized but instead had their contents recorded on video. On 1 February 2013, during a public inquiry for Operation Jasper, senior counsel assisting ICAC provided Mr Moses Obeid with a physical copy of the Heads of Agreement and cross-examined him on it. He also tendered a redacted version of the Heads of Agreement to ICAC. A suppression order was made by ICAC in respect of the unredacted version of the Heads of Agreement shown to Mr Moses Obeid. Only the redacted version of the Heads of Agreement was made public. An article was published in the Sydney Morning Herald on the following day about the inquiry and the cross-examination of Mr Moses Obeid on the Heads of Agreement. Mr Edward Obeid Senior, Mr Moses Obeid, Mr Paul Obeid, and Mr Edward Obeid Junior (the appellants) brought proceedings in the Supreme Court of New South Wales claiming that Mr Lockley and Mr Grainger (the respondents) had committed tort of misfeasance in public office. They claimed that the respondents were "public officers" for the purpose of the tort. The appellants claimed that the respondents lacked power under the warrant to record the Solicitor-General's Advice and the Heads of Agreement on video and that the respondents were aware of or were recklessly indifferent to the absence of power and to a risk that the appellants would suffer harm. The appellants claimed to have suffered harm by reason of the publication of the article in the Sydney Morning Herald since the claims in the article were based only upon the redacted version of the Heads of Agreement. The trial judge dismissed the claims on the basis that the respondents were not "public officers". He also found that the respondents were not aware of or recklessly indifferent to and could not have reasonably foreseen any risk of harm to the appellants and that the harm relied upon by the appellants was too remote to have been caused by the respondents. However, he found in favour of the appellants that the respondents knew that the Solicitor-General's Advice and the Heads of Agreement fell outside their powers under the warrant. The appellants appealed from the findings of the trial judge which were adverse to them. The respondents each filed notices of contention in relation to the finding of the trial judge which was adverse to them. The issues on appeal were: 1 Whether the respondents were "public officers" for the purpose of the tort of misfeasance in public office (Grounds 1(a)-(e)); 2 Whether the respondents were aware of, recklessly indifferent to, or could have reasonably foreseen a risk of harm to the appellants (Ground 1(f)); 3 Whether the conduct of the respondents caused damage to the appellants (Ground 1(g)); 4 Whether the respondents exercised a public power by causing the Solicitor-General's Advice and the Heads of Agreement to be recorded on video (Notices of contention); 5 Whether the respondents were aware that recording the Solicitor-General's Advice and the Heads of Agreement fell outside their powers under the warrant (Notices of contention); and 6 Whether the trial judge erred in granting the appellants leave to amend their pleading to allege a new basis upon which the recording of the Heads of Agreement was alleged to have contributed to ICAC obtaining the version of the Heads of Agreement which was used to cross-examine Mr Moses Obeid (Notices of contention). The Court (Bathurst CJ, Beazley P and Leeming JA) held, dismissing the appeal: "Public officers" (Grounds 1(a)-(e)) (i) For the purpose of the tort of misfeasance in public office, a "public officer" at least includes a person who, by virtue of the particular position they hold, is entitled to exercise executive powers in the public interest. The powers exercised do not need to be expressly attached to the position which they hold: [103], [114]-[115] (Bathurst CJ); [206] (Beazley P); [208] (Leeming JA). Northern Territory v Mengel (1995) 185 CLR 307; [1995] HCA 65; Sanders v Snell (1998) 196 CLR 329; [1998] HCA 64; R v McCann [1998] 2 Qd R 56; Cannon v Tahche (2002) 5 VR 317; [2002] VSCA 84; Sanders v Snell (No 2) (2003) 130 FCR 149; [2003] FCAFC 150; Leerdam v Noori (2009) 227 FLR 210; [2009] NSWCA 90; Obeid v The Queen (2015) 91 NSWLR 226; [2015] NSWCA 309, considered. (ii) The respondents were public officers. They were both employed as members of staff under s 104(1) of the ICAC Act and were designated as "senior investigators" with the powers assigned to that position by the ICAC Act. They executed the warrant in this capacity, which involved the exercise of public power. They were obliged to carry out their duties in this position in the public interest: [116]-[119] (Bathurst CJ); [206] (Beazley P); [208]-[212] (Leeming JA). Awareness of, reckless indifference to or reasonable foresight of a risk of harm (Ground 1(f)) and causation (Ground 1(g)) (iii) The appellants should not be permitted to raise a case on appeal on a basis different from that upon which they relied at trial. The possibility that the respondents could have conducted their cases differently, including by adducing further evidence, if the appellants had made different submissions at trial cannot be discounted: [151] (Bathurst CJ); [206] (Beazley P); [213] (Leeming JA). Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33, referred to. (iv) On the basis that the case was put at trial, the primary judge did not err in concluding that any reputational harm caused by the publication of the article in the Sydney Morning Herald was not reasonably foreseeable and was not caused by the acts of the respondents due to the intervening acts by senior counsel assisting ICAC in only tendering the redacted version of the Heads of Agreement and by ICAC in making a suppression order in relation to the unredacted version of the Heads of Agreement: [151]-[152] (Bathurst CJ); [206] (Beazley P); [213] (Leeming JA). (v) Even if the appellants were permitted to raise a different case on appeal, it was necessary for them to establish either that the respondents were aware that the appellants were likely to suffer reputational harm or that they were recklessly indifferent to the fact that the appellants were likely to suffer reputational harm. It was not sufficient for the appellants to establish that it was reasonably foreseeable that they were likely to suffer reputational harm: [153] (Bathurst CJ); [206] (Beazley P); [242] (Leeming JA). South Australia v Lampard-Trevorrow (2010) 106 SASR 331; [2010] SASC 56, not followed. Northern Territory v Mengel (1995) 185 CLR 307; [1995] HCA 65; Sanders v Snell (1998) 196 CLR 329; [1998] HCA 64; Sanders v Snell (No 1) (1997) 73 FCR 569; [1997] FCA 229; Sanders v Snell (No 2) (2003) 130 FCR 149; [2003] FCAFC 150; Cornwall v Rowan (2004) 90 SASR 269; [2004] SASC 384, considered. (vi) The appellants failed to establish that the respondents were aware of or recklessly indifferent to the fact that the appellants were likely to suffer reputational harm. There was no evidence that the respondents read the Solicitor-General's Advice or the Heads of Agreement or knew that they would be used in a public inquiry or were recklessly indifferent to that fact: [173]-[175] (Bathurst CJ); [206] (Beazley P); [243] (Leeming JA). (vii) The appellants failed to establish that there was a causal connection between the execution of the warrant and the harm alleged by the appellants. It was not shown that it was more likely than not that the recording of the Heads of Agreement on video contributed to ICAC obtaining the version of the Heads of Agreement which was used to cross-examine Mr Moses Obeid: [244]-[251] (Leeming JA). Exercise of public power (Notices of contention) (viii) The respondents exercised public power by causing the Solicitor-General's Advice and the Heads of Agreement to be recorded on video. The fact that they did not make the recording themselves does not mean that they did not exercise that power: [194]-[195] (Bathurst CJ); [206] (Beazley P); [258] (Leeming JA). Awareness of absence of power (Notices of contention) (ix) The respondents were aware that the Solicitor-General's Advice and the Heads of Agreement fell outside the scope of their power of seizure under the warrant. It was apparent on the face of the documents that they did not relate to the matters the subject of investigation under Operation Jasper. There was no evidence to justify any other basis for seizure of the documents: [196]-[200] (Bathurst CJ); [206] (Beazley P); [258] (Leeming JA). Leave to amend pleading (Notices of contention) (x) It is unnecessary to express an opinion on this ground given the conclusion reached on the other grounds in this appeal: [201] (Bathurst CJ); [206] (Beazley P). (xi) The appellants should not have been permitted to amend their pleading during the trial to insert a paragraph which alleged a new basis upon which the recording of the Heads of Agreement on video was said to have contributed to ICAC obtaining the version of the Heads of Agreement which was used to cross-examine Mr Moses Obeid: [252]-[257] (Leeming JA).

Judgment

1. BATHURST CJ: By an investigation known as "Operation Jasper", the Independent Commission Against Corruption (ICAC) conducted an investigation into the circumstances surrounding a decision made in 2008 by Mr Ian Macdonald, the Minister for Primary Industries and Minister for Mineral Resources at the time, to grant a coal exploration licence referred to as the "Mount Penny tenement", located in Bylong Valley in New South Wales. ICAC found that each of Mr Macdonald, Mr Edward Obeid Senior and Mr Moses Obeid engaged in corrupt conduct in connection with the granting of the Mount Penny tenement. It also made adverse credibility findings against Mr Edward Obeid Senior, Mr Moses Obeid and Mr Paul Obeid. The first, second and third appellants in this appeal are Mr Edward Obeid Senior, Mr Moses Obeid and Mr Paul Obeid respectively. ICAC made no findings of corrupt conduct or adverse credibility against the fourth appellant, Mr Edward Obeid Junior.
2. The first and second respondents in this appeal are Mr Grant Lockley and Mr Paul Grainger, both of whom were employed by ICAC in 2011 and participated in the execution of a search warrant at premises in Birkenhead Point, Drummoyne, Sydney, occupied by Locaway Pty Ltd (Locaway), a company associated with the Obeid family. The appellants contend that, in executing the warrant, and in particular, in causing the contents of certain documents at the premises to be recorded on video, the respondents committed the tort of misfeasance in public office, as a result of which the appellants suffered damage.
3. The appellants brought proceedings in the Common Law Division of the Supreme Court against the State of New South Wales, ICAC, the Commissioner of ICAC, senior counsel assisting ICAC in relation to Operation Jasper, and the respondents. The appellants sought to set aside the findings of corrupt conduct and adverse credibility made against Mr Edward Obeid Senior and Mr Moses Obeid, and the finding of adverse credibility made against Mr Paul Obeid. The appellants also alleged, on various grounds, that the defendants were liable to them in damages for the alleged commission of the tort of misfeasance in public office. The proceedings at trial were confined to issues of liability, with an assessment of damages to be conducted at a separate hearing.
4. The primary judge dismissed the proceedings. The appellants have only appealed against the dismissal of the proceedings against Mr Lockley and Mr Grainger, in relation to the alleged commission of the tort of misfeasance in public office.

The issue of the warrant

1. As I have indicated, Operation Jasper was an ICAC investigation into the circumstances surrounding the grant of a coal exploration licence in respect of the Mount Penny tenement by Mr Macdonald.
2. On 22 November 2011, in connection with Operation Jasper, Mr Lockley applied for a warrant to enter the premises "known as Locaway Pty Limited, Suite 501-501A, Henry Lawson Business Centre, Roseby Street, Drummoyne, Sydney" (the premises) and to search for and seize certain documents. In the application, Mr Lockley described himself as a "Senior Financial Investigator" and swore that he was an officer of ICAC authorised to apply for a search warrant under s 40(4) of the Independent Commission Against Corruption Act 1988 (NSW) (the ICAC Act).
3. The application set out in some detail the nature of the investigation and enumerated the documents which were to be searched for and seized. The broadest category of documents included in the application was "any correspondence, notes, accounts and financial records … that are connected with" Operation Jasper.
4. The warrant was issued on 22 November 2011. It authorised a number of persons, including Mr Lockley and Mr Grainger, to execute the warrant. The authorisation, so far as it is relevant, was in the following terms: "1. to enter the premises known as Locaway Pty Limited, Suite 501-501A, Henry Lawson Business Centre, Roseby Street, Drummoyne, Sydney in the State of New South Wales, being an office ('the premises') and 2. to search for records and documentation relating to Locaway Pty Ltd, United Pastoral Group Pty Ltd, Mincorp Investments Pty Limited and Desert Sands Holdings Limited (including correspondence with shareholders of Mincorp Investments), Justin Kennedy Lewis Pty Limited, Geble Pty Ltd, Justin Kennedy Lewis Trust, Mona Plains Trust, Elbeg Unit Trust, financial records relating to the disbursement of funds to the shareholders of Mincorp Investments relating to the sale of shares in Loyal Coal Pty Limited, any record that identified the directors, shareholders or bank accounts of Desert Sands Holdings Limited and any correspondence, notes, accounts and financial records, whether in paper, computer or electronic form, computer tapes and any magnetic, electronic or other computer storage medium containing relevant information and any hard copy printout of any such information, connected with the matter that is being investigated under the Independent Commission Against Corruption Act concerning allegations or complaints of the following nature that: in about November 2007, former government minister Edward Obeid misused confidential New South Wales government information to enable his family company, Locaway Pty Ltd, and at a later date, Justin Kennedy Lewis Pty Ltd and Geble Pty Ltd, to purchase property within a potential mine licence area in the Bylong Valley prior to the awarding of exploration licenses; and that between May 2008 and June 2009, former government ministers Edward Obeid and Ian Macdonald misused confidential New South Wales government information by disclosing it to (Paul) Gardner Brook, who used that information to assist a company, Monaro Mining NL to secure exploration licences from the New South Wales government. and to seize any such documents or other things found in or on the premises and deliver them to the Independent Commission Against Corruption. … In executing this search warrant the applicant may exercise the powers provided by the Law Enforcement (Powers and Responsibilities) Act 2002 and any other Act named above. These include the following powers: … (b) to use any persons necessary to assist in the execution of this warrant, … (e) to operate electronic and other equipment brought to the premises or at the premises to examine a thing found at the premises, … (i) to seize a document or other thing that the person executing this search warrant believes on reasonable grounds to be evidence that would be admissible in the prosecution of a person for an indictable offence against the law of the Commonwealth, a State or a Territory, and the first-mentioned person believes on reasonable grounds that it is necessary to seize the document or other thing in order to prevent its concealment, loss, mutilation or destruction, or its use in committing such an offence, (j) to retain a document or other thing seized pursuant to this search warrant if, and for so long as, its retention by the Commission is reasonably necessary for the purposes of the investigation. If the retention of the document or other thing by the Commission is not, or ceases to be, reasonably necessary for such purposes, the Commission shall cause it to be delivered to the person who appears to the Commission to be entitled to possession of the document or other thing, or the Attorney General or the Director of Public Prosecutions, with a recommendation as to what action should be taken in relation to the document or other thing."

The execution of the warrant

1. Mr Lockley and Mr Grainger participated in the execution of the warrant at the premises on 23 November 2011. Several other persons authorised to execute the warrant also participated. The execution of the warrant was recorded on video by Mr Darren Curd (the Video Recording), who was another person authorised to execute the warrant. A number of documents were seized during the search of the premises. Some documents were not seized but instead had their contents recorded on video by Mr Curd. It was the recording of the contents of two of these documents which were not otherwise seized which formed the basis of the claims against Mr Lockley and Mr Grainger.
2. The first document was described by the primary judge as a written advice from the Solicitor-General of New South Wales to the Crown Solicitor on behalf of the Minister for Infrastructure, dealing with "a question of compliance with government guidelines for privately financed projects with respect to a proposal by Australian Water Holdings Pty Ltd concerning the Rouse Hill development area and the North West Growth Centre" (the Solicitor-General's Advice).
3. The second document was dated 4 November 2010 and was entitled "Heads of Agreement - Australian Water" (the Heads of Agreement). It was described by the primary judge as being "an agreement between parties described as the Obeid Family Trust and Nicholas Anthony Di Girolamo, and provides for the sale by Di Girolamo to the Obeid Family Trust of shares in Australian Water Pty Ltd and Australian Water Holdings Pty Ltd" for $3 million. From its coversheet, the primary judge noted that it appeared to have been prepared by a law firm called Lands Legal.
4. The Heads of Agreement included the following provisions: "General Terms 1 Sale of Shares 1.1 Sale In consideration of payment by the Purchaser to the Vendor of the Purchase Price in accordance with clause 1.2, the Vendor agrees to transfer the Shares to the Purchaser on Monday 8 November 2010. On that date the Vendor must deliver to the Purchaser share certificates for the Shares. 1.2 Purchase Price The Purchase Price is payable as follows: 1. On Monday 8 November 2010 - $1,000,000 2. No later than 31 March 2011 - $2,000,000 ………….. 3 Interest and Consultancy 3.1 Interest The Vendor shall pay to the Purchaser a return of no less than $300,000 per annum payable monthly in advance on the first day of each month as interest on the investment made by the Purchaser pursuant to this agreement. This payment shall commence at the time the payment referred to in clause 1.22 is made. If these payments are not made on the due date, the payment shall increase to $360,000 per annum as a genuine loss suffered by the Purchaser for the payment being late. 3.2 Consultancy The Vendor shall procure that the Companies enter into a consultancy agreement with an entity nominated by the Purchaser on the following terms: (a) Ten (10) years with two subsequent options of ten (10) years each or as mutually agreed (b) $350,000 per annum plus GST payable monthly in advance (c) Commencing at the time the payment referred to in clause 1.22 is made (d) Other such terms as are appropriate for such agreements."

Subsequent events

1. On 17 December 2012, Mr Grainger sent an email under the heading "Operation Credo" to Ms Meaghan Fleeton, whom the primary judge described as "a Principal Lawyer with ICAC". Mr Grainger requested that a summons under s 35 of the ICAC Act be prepared requiring Lands Legal to produce the following documents: "A full unedited copy of all documents and records (including electronic communication) in the possession or control of Lands Legal which relate to Australian Water Holdings and/or the Obeid Family Trust and/or Nicholas Gi Girolamo and/or Eddie Obied Snr, Eddie Obied Jnr, Paul Obied, Moses Obied oe Gerrard Obied [sic]."
2. Operation Credo was an ICAC investigation into, amongst other things, an allegation that Mr Edward Obeid Senior and Mr Moses Obeid held an interest in Australian Water Holdings and that they exercised influence in the outcome of contract negotiations between Australian Water Holdings and Sydney Water Corporation for financial benefit.
3. On 19 December 2012, Ms Fleeton forwarded a memorandum (the Fleeton Memorandum) to the Commissioner of ICAC recommending that he sign a summons to produce under s 35 of the ICAC Act addressed to Lands Legal (the Lands Legal Summons). The Memorandum contained the following remarks: "1. The purpose of this minute is to recommend you sign the attached section 35 summons to attend and produce documents addressed to Sevag Chalabian, Solicitor Director of Lands Legal. … 11. Current preliminary investigations have revealed that Mr E Obeid and Mr M Obeid have an interest in AWH through Gregory Skehan ('Mr Skehan') and Mr Joseph Georges ('Mr Georges'). Mr Skehan acts as Mr E Obeid's lawyer and is also a director of AWH. Mr Georges, a close associate of Mr E Obeid holds a large stake in AWH which was purchased through JMG Corp Pty Limited. It is also believed that Mr M Obeid acted in a paid consulting role to AWH during 2008. During a search warrant conducted on Mr E Obeid's business premises in November 2011 a number of AWH documents were located but were not seized. 12. Further enquiries have revealed that Mr Obeid had a controlling interest in AWH. In November 2010 a 'Heads of Agreement' revealed that Mr Nicholas Di Girolamo ('Mr Di Girolamo'), current Executive Chairman of AWH, paid an amount of $3,000,000 to the Obeid family trust. It is unclear what this money was intended for but the Heads of Agreement detailed that an agreement existed between 'The Obeid Family Trust' and 'Nicholas Di Girolamo' and 'AWH'. This agreement might have involved a share transfer from the Obeid family Trust to Mr Di Girolamo. The Heads of Agreement was drafted by Lands Legal. Sevag Chalabian and Andrew Wennerborn are the Solicitor Directors of Lands Legal."

The pleaded case

1. In their second further amended statement of claim (the statement of claim), the appellants pleaded that both Mr Lockley and Mr Grainger were holders of public office. They pleaded that both Mr Lockley and Mr Grainger "examined the Heads of Agreement and formed the opinion that it fell outside the scope of [the warrant] and could not lawfully be seized, copied or read further", but notwithstanding, they instructed Mr Curd to record the contents of the document on video. They pleaded that the conduct was "an unauthorised and unlawful copying or recording of a document that was not authorised by, and was in excess of the powers conferred upon them by, [the warrant] and the ICAC Act". They pleaded that this act of Mr Lockley and Mr Grainger was "intended to cause … damage, reputational, and financial harm" to the appellants, or that, alternatively, Mr Lockley and Mr Grainger were "recklessly indifferent" as to whether the act would do so. Contrary to the manner in which the case was put in this appeal, the statement of claim did not assert liability on the basis that the stated harm was reasonably foreseeable. However, no point was taken by the respondents in respect of this matter.
2. The pleading against Mr Lockley and Mr Grainger in respect of the Solicitor-General's Advice was in similar terms.
3. The appellants claimed that, as a result of the conduct of the defendants in the proceedings, including Mr Lockley and Mr Grainger, the appellants suffered loss and damage, including "reputational harm".
4. No material facts were pleaded against Mr Lockley and Mr Grainger to demonstrate how causing the recording of the contents of either the Solicitor-General's Advice or the Heads of Agreement on video caused the appellants to suffer loss and damage. By contrast, in the claims against ICAC and the Commissioner of ICAC in relation to the Heads of Agreement, it was asserted that the making of the suppression order in respect of the unredacted version of the Heads of Agreement, and not the redacted version, was done knowingly in excess of power with the knowledge that it would be "likely to cause damage, reputational and financial harm" to the appellants. Relevantly, it was particularised in the statement of claim that "the natural consequence of there being unequivocal evidence of members of the Obeid family having an equity interest in Australian Water [that is, the consequence of the redaction of cl 3 of the Heads of Agreement] was that it portrayed Moses Obeid as having lied in giving evidence and that was not the case". However, no particulars of loss or damage in relation to the Solicitor-General's Advice were provided even in respect of the claims against ICAC and the Commissioner of ICAC.

The primary judgment

1. The primary judge first discussed generally the legal principles concerning the tort of misfeasance in public office. He stated that it was an intentional tort which was constituted by "an act done by a public officer in excess of authority, with the intention of causing harm to a plaintiff, or which the officer knows, or ought to know is beyond power, and which involves a foreseeable risk of harm". He stated that the mental element of the tort was satisfied if "the public officer engages in the impugned conduct with the intention of inflicting injury, or with the knowledge that there is no power to engage in that conduct and it is calculated to produce injury, or where the officer acts with reckless indifference as to the existence of power to support the impugned conduct".
2. The primary judge stated that there was some "uncertainty as to whether it is sufficient that the official knew that the act was beyond power and that there was a foreseeable risk of harm, or whether it is necessary that the officer actually foresaw a risk that the conduct was likely to harm the plaintiff but proceeded not caring about that risk". He stated that he was inclined to the second, "more stringent" of the two alternative tests, but said that it was not necessary for him to express a concluded view on the matter.
3. The primary judge stated, referring to the decision of the Victorian Court of Appeal in Cannon v Tahche (2002) 5 VR 317; [2002] VSCA 84 and the decision of this Court in Leerdam v Noori (2009) 227 FLR 210; [2009] NSWCA 90, that the tort was "principally concerned with the abuse by the holder of a public office of a public power or one which must be exercised for the public good and which is attached to the office".
4. The primary judge stated that both Mr Lockley and Mr Grainger were appointed under s 104 of the ICAC Act as "members of staff" of ICAC. He described their functions in the following terms at [307]-[308]: "[307] Lockley was a senior financial investigator whose role, as described in his position description, was to investigate suspicions or allegations of corruption with an emphasis on financial aspects, preparing reports, assisting in preparing briefs of evidence for criminal or disciplinary offences and providing high level financial investigative advice. He reported to Fox as Chief Investigator and no-one reported to him. [308] Grainger was a senior investigator whose role, as described in his position description, was to support the Chief Investigator by providing advice and leading, managing and mentoring investigation staff to ensure allegations of corrupt conduct are thoroughly investigated and where appropriate, to coordinate and prepare briefs for public inquiries to be conducted by the Commission and coordinate and prepare criminal briefs for referral to the DPP for consideration of criminal public prosecutions. He too reported to Fox."

The appeal

1. In their amended notice of appeal, the appellants challenged the primary judge's conclusion that the respondents were not public officers, his conclusion that the respondents "did not know, were not reckless as to whether and could not reasonably have foreseen their videotaping of the documents would or might cause damage to the appellants", and his conclusion on causation and damage.
2. By his amended notice of contention, Mr Lockley contended that the primary judge erred in holding that Mr Lockley participated in directing or otherwise causing Mr Curd to record the contents of the Heads of Agreement on video, that the Solicitor-General's Advice and Heads of Agreement were not covered by the warrant, and that Mr Lockley knew that they were not so covered. Mr Lockley further contended that the primary judge erred in concluding that his conduct in relation to Mr Curd was an exercise of power, that he caused Mr Curd to do something in excess of power, and that Mr Lockley knew this to be the case.
3. In relation to causation, Mr Lockley contended that the primary judge erred in concluding that the information obtained from recording the contents of the Heads of Agreement on video was used by ICAC in drafting the Fleeton Memorandum and the Lands Legal Summons, and that the version of the Heads of Agreement produced on that Summons was used in the cross-examination of Mr Moses Obeid.
4. Finally, Mr Lockley contended that the primary judge erred in concluding that, if he was otherwise liable, he was not entitled to protection from liability by virtue of s 109 of the ICAC Act.
5. Mr Grainger also filed an amended notice of contention. Generally speaking, it raised the same issues as those in Mr Lockley's amended notice of contention. However, he added the contention that the primary judge erred in holding that, for the purpose of the tort of misfeasance in public office, constructive knowledge was sufficient to "establish that an alleged tortfeasor knew he or she was acting in excess of power" and also that the primary judge erred in drawing an inference against him in accordance with Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 (Jones v Dunkel inference). He also contended that, if it was found that he had acted unlawfully, then the Court should refuse the declaratory relief sought by the appellants as a matter of discretion.

The legislation

1. Part 2 of the ICAC Act provides for the establishment of ICAC. Section 4(3) provides that ICAC's functions are exercisable by the Commissioner of ICAC, and that "any act, matter or thing done in the name of, or on behalf of, the Commission by the Commissioner, or with the authority of the Commissioner, shall be taken to have been done by" ICAC.
2. The expression "public official" is relevantly defined in s 3(1) of the ICAC Act as follows: "public official means an individual having public official functions or acting in a public official capacity, and includes any of the following: … (g) an officer or temporary employee of the Public Service or the Teaching Service, … (i) a person in the service of the Crown or of a public authority, … (l) the holder of an office declared by the regulations to be an office within this definition, (m) an employee of or any person otherwise engaged by or acting for or on behalf of, or in the place of, or as deputy or delegate of, a public authority or any person or body described in any of the foregoing paragraphs."
3. Section 5(1) provides for the appointment of a Commissioner, and s 5(2) provides that the Commissioner "has and may exercise the functions conferred or imposed on the Commissioner by or under [the ICAC Act] or any other Act". Section 6 provides for the appointment of Assistant Commissioners.
4. Part 4 of the ICAC Act defines the functions and powers of ICAC. Sections 40 and 41 deal with search warrants. They are in the following terms: "40 Issue of search warrant (1) An authorised officer to whom an application is made under subsection (4) may issue a search warrant if satisfied that there are reasonable grounds for doing so. (2) The Commissioner, on application made to the Commissioner under subsection (4), may issue a search warrant if the Commissioner thinks fit in the circumstances and if satisfied that there are reasonable grounds for doing so. (3) Search warrants should, as far as practicable, be issued by authorised officers, but nothing in this subsection affects the discretion of the Commissioner to issue them. (4) An officer of the Commission may apply to an authorised officer or the Commissioner for a search warrant if the officer has reasonable grounds for believing that there is in or on any premises a document or other thing connected with any matter that is being investigated under this Act or that such a document or other thing may, within the next following 72 hours, be brought into or onto the premises. 41 Authority conferred by warrant (1) A search warrant authorises any member of the Police Force, or any other person, named in the warrant: (a) to enter the premises, and (b) to search the premises for documents or other things connected with any matter that is being investigated under this Act, and (c) to seize any such documents or other things found in or on the premises and deliver them to the Commission. (2) A member of the Police Force, or a senior Commission investigator, named in and executing a search warrant may search a person found in or on the premises whom the member of the Police Force or senior Commission investigator reasonably suspects of having a document or other thing mentioned in the warrant. (3) In this section: senior Commission investigator means an officer of the Commission who is designated by the Commissioner as a senior investigator and who is issued by the Commissioner with means of identification as such a senior Commission investigator."

Were Mr Lockley and Mr Grainger "public officers" for the purpose of the tort? - Grounds 1(a)-(e)

a The appellants' submissions

1. The appellants advanced four propositions in support of its submission that Mr Lockley and Mr Grainger were "public officers" for the purpose of the tort of misfeasance in public office.
2. First, the appellants submitted that "members of staff" of ICAC appointed under s 104(1) of the ICAC Act, such as Mr Lockley and Mr Grainger, were "public officers" by virtue of that appointment. Drawing upon Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1 at 229-230, they submitted that the concept of "public office" is "broad" and should be understood in a "relatively wide sense" and that it applied to "those vested with governmental authority and the exercise of executive powers".
3. The appellants submitted that it was established that the class of public officers includes at least "every one who is appointed to discharge a public duty, and receives a compensation in whatever shape", quoting from Henly v Mayor and Burgesses of Lyme (1828) 5 Bing 91 at 107; 130 ER 995 at 1001, and that it also includes at least any person who "discharges any duty of which the public are interested", quoting from R v Whitaker [1914] 3 KB 1283 at 1296.
4. In relation to Mr Lockley and Mr Grainger, the appellants submitted that they were both "appointed" as "members of staff" of ICAC, which made them "officers" of ICAC under s 3(1) of the ICAC Act, and that this was the "language of office". Support for this proposition was also drawn from the fact that they were both "senior investigators", which was a position specifically referred to in s 41(3) of the ICAC Act. The appellants also submitted that Mr Lockley and Mr Grainger both fell within the description of "public official" in s 3(1) of the ICAC Act by reason of their appointment under s 104(1). Senior counsel for the appellants referred to the "functions and duties" assigned to the respondents in their position descriptions. He submitted that these "functions and duties" could be described as functions of a "public nature". He also noted that both Mr Lockley and Mr Grainger had powers deriving from s 41 of the ICAC Act.
5. In these circumstances, the senior counsel for the appellants submitted that the primary judge was incorrect to state that "the hallmarks of public office are absent" and that any powers exercised by the respondents were not powers which they had from any official position to which they were assigned. He submitted that what was said by Spigelman CJ in Leerdam v Noori (2009) 227 FLR 210; [2009] NSWCA 90 at [16] did not support the reasoning of the primary judge, since Spigelman CJ, in stating that the "concept of an 'officer', in the context of liability for abuse of power, connotes an official position to which continuing functions and duties were assigned", was using the word "connote" in the sense of something "commonly associated" with the position, but not a "sine qua non of its existence". He submitted that, in any event, continuing functions and duties were assigned to the respondents' positions.

b The respondents' submissions

1. Mr Lockley, referring to s 104 of the ICAC Act, pointed to the fact that, as a "member of staff" of ICAC, he was employed at the discretion of the Commissioner of ICAC and taken to be an employee of the Crown.
2. Mr Lockley noted that the Commissioner of ICAC fixed his terms and conditions of employment in a contract of employment. He also noted that he reported to Mr Fox, the Chief Investigator, and that nobody reported to him. He pointed to the fact that his contract stated that he had no "general supervisory or managerial responsibilities".
3. Mr Lockley submitted that none of the matters referred to by the appellants were indicative of "an office of any kind", and that his position had "none of the indicia referred to in the authorities". He submitted that his duties were not "public", but rather, that his duties were owed to ICAC. He also submitted that his position was not an "office" in any relevant sense.
4. Mr Lockley submitted that there was no significance that he was "appointed" as a "member of staff" under s 104, since he submitted that "appointment" simply referred to the employment of staff. He submitted that the Commissioner of ICAC had not delegated any of his powers to him, and that the fact that he fell within the definition of a "public official" in s 3(1) of the ICAC Act was immaterial, since the definition encompassed numerous persons who were not "public officers" for the purposes of the tort of misfeasance in public office.
5. Senior counsel for Mr Lockley stated that the authorities showed that there was a concept of "independence of action or independence of power that is associated with public office". He said that the only duty which Mr Lockley and Mr Grainger had was "to do what they were told". He submitted that, for there to be a "public office", there had to be a power attached to the office and the conduct had to occur in the exercise of the power. It was submitted that there was no sense in which Mr Lockley's powers were "attached to" or "an incident of" his office.
6. Mr Lockley also submitted that he did not hold a public office "merely by virtue of being named in a [warrant]". He submitted that the powers conferred by the warrant were "very limited in scope and duration" and were only "public" in the sense that they had "their ultimate source in an act of the Executive done pursuant to legislation". Senior counsel for Mr Lockley submitted that all the warrant did was to provide a statutory entitlement to enter the premises, as a substitute for Locaway giving permission to enter the premises, and that if the warrant were executed beyond power, then the conduct of those executing the warrant would be a trespass.

c Consideration

1. In Northern Territory v Mengel (1995) 185 CLR 307 at 370; [1995] HCA 65 (Mengel), Deane J accepted the statement by Lord Diplock in Dunlop v Woollahra Municipal Council [1982] AC 158 at 172 that the tort of misfeasance in public office was "well-established", while acknowledging that there were "latent ambiguities and qualifications of which account must be taken in determining whether a particular element is present in the circumstances of a particular case". One of the elements stated by Deane J was that the act was done by a public officer "in the purported discharge of his or her public duties". Nothing to the contrary was said in the majority judgment, while Brennan J at 357 described the tort as consisting of the "purported exercise of some power or authority by a public officer otherwise than in an honest attempt to perform the functions of his or her office whereby loss is caused to a plaintiff".
2. In Leerdam v Noori (2009) 227 FLR 210; [2009] NSWCA 90 (Leerdam), Spigelman CJ stated at [3] that there was "no authoritative statement of a test for determining what constitutes a public officer for the purposes of the tort" of misfeasance in public office and that none was needed. His Honour made this statement in the context of the following remarks at [3]-[7]: "[3] The concept of 'public office' or 'public officer' appears in various legal contexts, both statutory and at common law. (See the summary of the wide range of case law by Byrne J in R v McCann [1998] 2 Qd R 56 at 67-74). There is no authoritative statement of a test for determining what constitutes a public officer for purposes of the tort of misfeasance. Nor is one needed. In almost all cases the answer will be obvious. (See Society of Lloyd's v Henderson and Others [2007] EWCA Civ 930; (2008) 1 WLR 2255 at [23]. The most detailed consideration of Australian authorities is T Cockburn and M Thomas 'Personal liability of public officers in the tort of misfeasance in public office' (2001) Torts Law Journal 80, 245.) [4] Where there is any doubt about whether a particular person occupies a 'public office' for purpose of the tort, it will ordinarily be enough to approach the matter on the basis that the tort is 'concerned with' the 'misuse' or 'abuse' of public power (Sanders v Snell [1998] HCA 64; (1998) 196 CLR 329 at [37]) or that the tort is 'concerned with performance of public duties' (Sanders v Snell at [39]). There is no relevant difference, as these citations from the joint judgment in Sanders v Snell indicate, between authorities which use the language of 'duty' and those which use the language of 'power'. The formulation 'abuses his office' is to be found in the foundational authority Henly v The Mayor and Burgesses of Lyme (1828) 5 Bing 91 at 107; (1828) 130 ER 995 at 1001. [5] As Macfarlan JA shows, the joint judgment of the Victorian Court of Appeal in Cannon v Tahche [2002] VSCA 84; (2002) 5 VR 317 does suggest that the identification of a relevant power attached to a public office is an 'essential element of the tort'. (See eg at [53] and [61]). Nevertheless, their Honours also discuss, without criticism, other cases which indicate that the existence of a public duty, and other incidents of a particular office, may appropriately be considered. (See eg at [50]-[52]). [6] I do not understand their Honours to lay down a test of universal application for determining when a position is a public office for purposes of the tort. The identification of a power to act, which has or has not been exercised, is a necessary step in determining whether the conduct complained of occurred in purported performance of the functions of a public office. The relevant consideration is the link. [7] As Lord Bridge put it in Calveley v Chief Constable of Merseyside [1989] AC 1228 at 1240: ' … the tort of misfeasance in public office … must … involve an act done in the exercise or purported exercise by the police officer of some power or authority with which he is clothed by virtue of the office he holds …'"

Recklessness and foreseeability of harm - Ground 1(f)

Causation - Ground 1(g)

1. It is convenient to deal with both of these grounds together.

a The appellants' submissions

1. The appellants referred to the conclusion of the primary judge, which I have noted at [46] above, that it was "not fairly open to attribute to [the respondents] recklessness with respect to causing any damage". They submitted that this conclusion was erroneous for three reasons. First, "the relevant mental element is satisfied if the kind of harm suffered is foreseeable". Second, whether the test was foreseeability or recklessness, "the stricter test was satisfied", as the appellants were "recklessly indifferent that reputational harm would ensue" from their conduct. Third, if the test was whether a risk of harm was foreseeable, the primary judge ought to have held that this test was satisfied.
2. In submitting that a public officer will be liable if the officer knows that the act in question is beyond legal power and there is a foreseeable risk of harm, as distinct from knowledge of a risk of harm or reckless indifference to a risk of harm, senior counsel for the appellants submitted that, in Mengel, the majority was prepared to proceed on the basis that foreseeability of harm was sufficient for the purpose of establishing the tort. They referred to the following comments by the majority at 347: "It may be that analogy with the torts which impose liability on private individuals for the intentional infliction of harm would dictate the conclusion that, provided there is damage, liability for misfeasance in public office should rest on intentional infliction of harm, in the sense that that is the actuating motive, or on an act which the public officer knows is beyond power and which is calculated in the ordinary course to cause harm. However, it is sufficient for present purposes to proceed on the basis accepted as sufficient in Bourgoin [SA v Ministry of Agriculture, Fisheries and Food [1986] QB 716], namely, that liability requires an act which the public officer knows is beyond power and which involves a foreseeable risk of harm."
3. However, that passage must be considered in the context of the paragraph which immediately preceded it, which was in the following terms: "The cases do not establish that misfeasance in public office is constituted simply by an act of a public officer which he or she knows is beyond power and which results in damage. Nor is that required by policy or by principle. Policy and principle both suggest that liability should be more closely confined. So far as policy is concerned, it is to be borne in mind that, although the tort is the tort of a public officer, he or she is liable personally and, unless there is de facto authority, there will ordinarily only be personal liability. And principle suggests that misfeasance in public office is a counterpart to, and should be confined in the same way as, those torts which impose liability on private individuals for the intentional infliction of harm. For present purposes, we include in that concept acts which are calculated in the ordinary course to cause harm, as in Wilkinson v Downton [[1897] 2 QB 57], or which are done with reckless indifference to the harm that is likely to ensue, as is the case where a person, having recklessly ignored the means of ascertaining the existence of a contract, acts in a way that procures its breach."

b Mr Lockley's submissions

1. In relation to whether foreseeability of a likely risk of harm was the relevant test for the mental element of the tort, Mr Lockley submitted that Lampard-Trevorrow was incorrectly decided. He submitted that the reasoning in Mengel did not support the result in Lampard-Trevorrow, but rather, favoured a test of knowledge of a risk of harm or reckless indifference as to a risk of harm. He submitted that Lampard-Trevorrow was inconsistent with the decisions of other intermediate appellate courts, referring to Neilson v City of Swan (2006) 147 LGERA 136; [2006] WASCA 94, Sanders v Snell (No 1) (1997) 73 FCR 569; [1997] FCA 229, Sanders v Snell (No 2) (2003) 130 FCR 149; [2003] FCAFC 150, Cannon, and Cornwall.
2. Mr Lockley submitted that, even if foreseeability was the appropriate test, it was not made out in this case. He referred to the fact that it was no part of the appellants' case that the Heads of Agreement or the Solicitor-General's Advice themselves indicated that the appellants may have been involved in "corrupt or illegal conduct". In relation to whether the risk of harm was foreseeable, he submitted that the sequence of events asserted by the appellants to be foreseeable was speculative and did not rise above conjecture, since there was "nothing apparently untoward about the documents". Mr Lockley submitted that the Video Recording showed that he only saw the Share Transfers, and did not see the Heads of Agreement or the Solicitor-General's Advice, and was only told that the Solicitor-General's Advice related to a public-private partnership with Australian Water Holdings.
3. Senior counsel for Mr Lockley emphasised that Mr Lockley could not have foreseen any particular consequences of the recording of the contents of the documents on video, saying that there was nothing in the Heads of Agreement that suggested that harm was "a likely or foreseeable consequence" of its disclosure to ICAC.
4. Mr Lockley submitted that the same considerations showed that he was not recklessly indifferent to a likely risk of harm to the appellants.
5. In relation to causation, Mr Lockley emphasised that the appellants put their case on causation at trial in the manner I have set out at [47]-[48] above, referring in particular to what was said by the then senior counsel for the appellants at trial in his closing written submissions: "A person reading the article would be left with the clear impression that there was no doubt that the 'secret shareholding' was proved by the document. That impression could not have been conveyed by any responsible journalist with access to the unredacted version of the Heads of Agreement. While there possibly would have been some sort of article in any event, that article would have almost certainly been different. It ought to be inferred that the press would have sought accurately to report the events of the day, including the fact that there were clauses in the Heads of Agreement consistent with Moses Obeid's evidence to the effect there was a loan and not a holding of shares. Questions of degree as to these matters are to be determined at a second hearing."

c Mr Grainger's submissions

1. Mr Grainger submitted that an element of the tort of misfeasance in public office is that "the tortfeasor acted 'maliciously'". He submitted that a "malicious state of mind" was necessary both in relation to the unlawfulness of the tortfeasor's conduct and in relation to the harm alleged to have been caused.
2. Mr Grainger submitted that the majority judgment in Mengel does not "evince a preference for the view, let alone decide, that it is sufficient to prove that the harm suffered was reasonably foreseeable". He submitted that the decision of the High Court in Sanders v Snell did not take the matter any further. As with Mr Lockley, he submitted that a number of intermediate appellate courts had applied the "more stringent test". He also submitted that first instance cases such as Perrett v Williams [2003] NSWSC 381 did not decide to the contrary. In these circumstances, he submitted that Lampard-Trevorrow should not be followed.
3. Further, Mr Grainger submitted that reckless indifference to the risk of harm was not established. He submitted that the appellants should not be permitted to change their case from the manner in which it was conducted at trial by relying on the foreseeability of the risk of harm. He also submitted that the appellants' case depended on the proposition that "reputational harm is a natural consequence of an investigation because that might lead to a public inquiry, or it is a natural consequence of the execution of a warrant, because that leads to or is part of an investigation that might lead to a public inquiry". He submitted that the appellants failed to demonstrate "how it could properly be found that the likely or probable outcome" of the unlawful conduct alleged was reputational harm.
4. Mr Grainger submitted that his comment referring to the Solicitor-General's Advice, "interesting why they would have this", could not lead to an inference of reckless indifference. He also submitted that there was no "malice" in any relevant sense where there was "no evidence of any intention that any subsequent investigation and any public inquiry would be conducted otherwise than according to law".
5. Mr Grainger submitted that the same considerations showed that the risk of harm to the appellants was not reasonably foreseeable.
6. In relation to causation, Mr Grainger pointed out that Mr Moses Obeid was cross-examined on the unredacted version of the Heads of Agreement and that, before being shown the document, he "denied that the Obeid family had an interest" in Australian Water Holdings. After being shown the document, Mr Grainger noted that Mr Moses Obeid did not say that the Heads of Agreement was a loan agreement, but rather, that he thought that the deal had been "superseded" by a loan agreement.

d Consideration

1. At trial, the appellants did not rely on the proposition that they suffered reputational harm which was caused solely by the publication of the redacted version of the Heads of Agreement, as opposed to the publication of the SMH Article, or that this was a risk of harm to which the respondents were recklessly indifferent, or alternatively, which was reasonably foreseeable. By contrast, their case at trial was one which was dependent upon the making of an order suppressing the unredacted version of the Heads of Agreement and the subsequent publication of only the redacted version. It was essential to their case against ICAC and the Commissioner of ICAC that it be put in this manner, for the reason identified at [142] above.
2. The primary judge was correct in concluding that reputational harm caused in this fashion was not reasonably foreseeable and that the making by ICAC of the order under s 112(1) of the ICAC Act suppressing the unredacted version of the Heads of Agreement and the decision by senior counsel assisting ICAC to tender only the redacted version of the Heads of Agreement broke the chain of causation. The respondents submitted that they argued the case at trial in response to the submissions put by the appellants at trial. The possibility that the respondents could have conducted their cases differently if the appellants had made different submissions at trial (for example, by the respondents electing to give evidence) cannot be discounted. Therefore, the appellants should not be permitted to raise a different case on appeal: Coulton v Holcombe (1986) 162 CLR 1 at 7-8; [1986] HCA 33. For this reason alone, grounds 1(f) and (g) in the amended notice of appeal have not been made out.
3. Even if, as the appellants contended, they were entitled to put their case on this appeal on a new basis because it was not inconsistent with the pleadings, then, in my opinion, they still would not be entitled to succeed. This is because, in my view, it was necessary for them to establish either that the respondents were aware that the appellants were likely to suffer reputational harm, or that they were recklessly indifferent to the fact that the appellants were likely to suffer reputational harm. It is not sufficient for the appellants to establish that it was reasonably foreseeable that they were likely to suffer reputational harm. This is for the following reasons.

The amended notices of contention

1. In light of my conclusion that the primary judge was correct in his findings on whether the appellants had established the mental element of the tort of misfeasance in public office and whether the appellants had established causation, and that the appeal should therefore be dismissed, the matters raised by the amended notices of contention can be dealt with relatively briefly.

a Mr Lockley's submissions

1. Mr Lockley submitted that, whether or not he caused Mr Curd to video the documents, he did not exercise any power, "let alone a public power". He submitted that merely "to cause something to happen is not to exercise a power".
2. Mr Lockley also submitted that the finding made by the primary judge at [325] that he knew that he was acting in excess of power was erroneous. Mr Lockley submitted that the primary judge did not focus on the relevant question of whether he knew that causing Mr Curd to record the contents of the documents on video was outside the scope of the power. Mr Lockley submitted that the primary judge erred in stating that he and Mr Grainger "videoed" the entire contents of the documents, when in fact it was Mr Curd who recorded the contents of the documents on video, not Mr Lockley and Mr Grainger.
3. Mr Lockley submitted that the primary judge's finding as to his state of knowledge outlined in the preceding paragraph was based on three matters. First, Mr Lockley was told that the Solicitor-General's Advice related to Australian Water Holdings. Second, his comment that "it doesn't relate though does it?". Third, the Heads of Agreement "on its face" concerned Australian Water Holdings. It was submitted that the primary judge proceeded on the unjustified premise that, if Mr Lockley knew the documents could not lawfully be seized by physically taking them into possession, then he knew that their contents could not lawfully be recorded on video. It was submitted that the primary judge drew a Jones v Dunkel inference against Mr Lockley, Mr Grainger and Mr Curd "as though they were one person".
4. Mr Lockley emphasised that he never saw the Solicitor-General's Advice during the execution of the warrant.
5. Mr Lockley also submitted that the Heads of Agreement fell within the scope of the warrant. He submitted that the Heads of Agreement could relate to Locaway, as the purchaser in the Heads of Agreement was described as the "[Obeid Family Trust]", and Locaway was the trustee of the "Moona Family Trust", which was referred to in the warrant as the "Mona Plains Family Trust". He submitted that, "in circumstances where the appellants did not lead any evidence that Locaway was not a party to the Heads of Agreement, the appropriate inference was that the Heads of Agreement fell within the scope of [the warrant]".

b Mr Grainger's submissions

1. Mr Grainger contended that neither he nor Mr Lockley requested Mr Curd to record the whole of the contents of the Heads of Agreement on video. Like Mr Lockley, he contended that asking Mr Curd to record the contents of the documents on video was not an exercise of public power.
2. Mr Grainger also contended that the appellants had not excluded the inference that Mr Grainger believed that the Solicitor-General's Advice "might be appropriate to seize, and asked Mr Curd if he would video each page of the compilation contemporaneously in situ pending a final decision, to assist on obtaining [sic] 'reliable evidence of evidentiary items being located'". Mr Grainger also contended that the appellants had failed to exclude the inference that he had, at least temporarily, formed the reasonable belief necessary to trigger the power to seize the documents under s 47 of the ICAC Act, on the basis that it would be admissible in a prosecution for an indictable offence. He submitted that the primary judge erred in stating that no such offence had been identified. Mr Grainger referred to his closing submissions at trial, where reference was made to the common law offence of misconduct in public office, and the statutory offences of receipt of stolen property and larceny by a person employed in the Public Service under ss 188 and 159 of the Crimes Act 1900 (NSW) respectively. He submitted, without elaboration, that these two inferences not only related to the Solicitor-General's Advice but also to the Heads of Agreement.
3. Like Mr Lockley, Mr Grainger submitted that the appellants had not excluded the possibility that the Heads of Agreement fell within the warrant.
4. Mr Grainger also submitted that the primary judge should have held that the appellants failed to establish that his conduct was unlawful. He referred to the primary judge's remarks that a "cursory glance" at the documents made it clear that they were not covered by the warrant and that "this must have been obvious" to Mr Grainger. He submitted that this was a finding of "constructive knowledge", which he submitted that the majority in Mengel at 347-348 had said was insufficient. Mr Grainger repeated his submission that other inferences were available, namely, that the contents of the documents were recorded on video pending a decision as to whether they could be seized, or that he believed that they could be seized under the extended seizure power in s 47 of the ICAC Act.

c Consideration

1. Both Mr Lockley and Mr Grainger contended that causing Mr Curd to record the contents of the documents on video was not an exercise of public power. This argument has no merit to the extent that it is based on the proposition that directing Mr Curd to record the material on video, as distinct from doing it themselves, meant there was no exercise of public power. If, as I have concluded at [118] above, the respondents were public officers, then the fact that they exercised a power by directing or causing someone else to exercise the power, particularly when it is clear that they could have exercised the power themselves, does not mean that they did not exercise the power.
2. In addition, Mr Grainger contended that no express request was made to Mr Curd to record the whole of the contents of the Heads of Agreement on video. In relation to the Solicitor-General's Advice, the transcript of the Video Recording makes it clear that there was an express direction to record the whole of the contents of the document. So far as the Heads of Agreement were concerned, the position is not quite as clear. The transcript of the Video Recording shows that Mr Grainger stated "Video" in response to Mr Lockley's question "What do you want to do with that?", and that Mr Lockley then said "Video that front page, these pages". However, whatever the precise terms of what was said, Mr Curd apparently took these comments as a direction to record the whole of the contents of the Heads of Agreement on video and neither of the respondents suggested that he should not do so. In the relevant sense, both Mr Lockley and Mr Grainger caused Mr Curd to record the contents of the documents. This ground of the amended notices of contention has not been made out.
3. Both Mr Lockley and Mr Grainger also submitted that the primary judge failed to focus on a relevant question, which they said was whether they knew that recording the contents of the documents on video, as distinct from seizing them, was unlawful. There is no basis in the evidence for the distinction between those two states of knowledge, which apparently involves the proposition that experienced "senior investigators" believed that they had carte blanche to record the contents of any document on video which fell outside the scope of the warrant.
4. Both Mr Lockley and Mr Grainger submitted that the Heads of Agreement fell within the scope of the warrant. I do not think that this conclusion is available. The Heads of Agreement did not refer to the "Moona Family Trust", as distinct from the "Obeid Family Trust". In these circumstances, there was no basis for the drawing of the inference that Locaway was a party to the Heads of Agreement such that they would fall within the warrant.

Conclusion

1. Mr Lockley and Mr Grainger were public officers. The power conferred on them by the warrant to seize documents was a public power. In the course of executing the warrant, Mr Lockley and Mr Grainger caused Mr Curd to record the contents of the Solicitor-General's Advice and the Heads of Agreement. Mr Lockley and Mr Grainger knew that neither document fell within the terms of the warrant, and therefore knew that any seizure of the documents, such as by recording their contents on video, was beyond power.
2. If the appellants were permitted to put their case on a basis on which they did not rely at trial, I would have found that Mr Lockley and Mr Grainger were neither aware that it was likely that the appellants would suffer harm as a result of recording the contents of the documents on video nor were they recklessly indifferent to that possibility. Further, it was not established that it was reasonably foreseeable that it was likely that the appellants would suffer harm, even if this were the appropriate test for the mental element of the tort. Therefore, the appellants' claim against the respondents must be dismissed.
3. In the result, I would make the following orders: 1. Appeal dismissed. 2. Appellants to pay the respondents' costs of the appeal.
4. BEAZLEY P: I have had the advantage of reading in draft the reasons of the Chief Justice and Leeming JA.
5. I agree with the reasons of the Chief Justice and the orders he proposes. Given the extensive review of the case law undertaken by his Honour, as well as by Leeming JA, any additional observations by me would be essentially superfluous. I would only say that I consider the question of whether Mr Lockley and Mr Grainger were "public officers" to be finely balanced. In the result, however, I am satisfied for the reasons given by the Chief Justice that each was a public officer for the purposes of the tort.
6. LEEMING JA: I have had the very substantial advantage of reading the judgment of the Chief Justice in draft. I agree with his Honour that the appeal should be dismissed with costs, for the reasons he gives, and also for the further reasons contained below.

Were the respondents "public officers" to whom the tort applied (appeal grounds 1(a)-(e))?

1. I agree with the Chief Justice, for the reasons he gives, that Messrs Lockley and Grainger were public officers for the purpose of the tort of misfeasance in office. I also agree with his Honour that it is neither necessary nor appropriate to express a concluded view on the metes and bounds of who is a public officer for the purposes of the tort. I note that the Court did not hear full argument on the issue. Part of the appellants' submissions, which sought a relaxation of the test to any repository of public power, were admittedly only advanced formally. That submission is a large one, and would be contrary to familiar distinctions, drawn in this context, between the concepts of office and employment: see P Finn, "Public Officers: Some Personal Liabilities" (1977) 51 ALJ 313 at 314, referring to Ex parte Kearney (1917) 17 SR (NSW) 578. To that might be added the observation made by Windeyer J in a very different context in Marks v Commonwealth (1964) 111 CLR 549 at 566; [1964] HCA 45: "The distinction between officers, who are appointed to an office and soldiers, who are enlisted into the ranks and have a military status but not an office was always fundamental".
2. Professor Aronson has noted that: "Not all public servants fall within the scope of the misfeasance tort, even though their salaries come from public funds, and even though they may be 'officers' for administrative purposes and have to take an oath on appointment. A person might be a public employee but not a public officer. There is in fact no single definition of 'public officer' across all contexts": M Aronson, "Misfeasance in Public Office: A Very Peculiar Tort" (2011) 35 MULR 1 at 43.
3. To similar effect, in R v McCann [1998] 2 Qd R 56 at 67 Byrne JA said that "Words like office and officer are of variable import". The truth that the scope of the term will depend on context extends to its use in the Commonwealth Constitution, including in s 44(iv) and s 75(v). In Sykes v Cleary (1992) 176 CLR 77 at 95-97; [1992] HCA 60 and in Re Lambie [2018] HCA 6 at [21]-[28] the High Court has given a broad construction to "office of profit under the Crown" by reason of the important purpose served by s 44(iv), namely, the importance of a politically neutral public service, and the avoidance of a conflict between parliamentary duty and pecuniary interest. In decisions on the scope of s 75(v) culminating in Graham v Minister for Immigration [2017] HCA 33; 91 ALJR 890 at [38]-[65], the High Court has again favoured a broad construction for the term "officer of the Commonwealth", relying on the fundamental principle that all power of government is limited by law.

Recklessness and foreseeability of harm (appeal ground 1(f))

1. I agree with the Chief Justice that this ground is not made out. I agree with his reasons, but would go further.
2. First, I wish to elaborate why I agree that the appellants cannot fairly be permitted to run the case this way for the first time on appeal. The decision not to call parties whose conduct is alleged to have been both unlawful and tortious must be a paradigm case which attracts what was described in Coulton v Holcombe (1986) 162 CLR 1 at 7; [1986] HCA 33 as "long-established principles of great importance". The trial is not a "preliminary skirmish"; it is the occasion where ordinarily the parties' evidence and submissions are advanced and adjudicated, and if "evidence could have been given which by any possibility could have prevented the point from succeeding", the point cannot be taken afterwards.
3. The appellants candidly acknowledged that this had not been put at first instance. It was said, however, that the case sought to be advanced on appeal was available on the pleadings, and that there was nothing to prevent parties from narrowing their cases on appeal. True it is that the plaintiffs had pleaded that Messrs Lockley and Grainger by their conduct "intended to cause, alternatively recklessly indifferent to whether it would cause, damage, reputational and financial harm to the plaintiffs" (second further amended statement of claim, paragraphs 25(o), 60(o)), and included as a particular of damage that "Each plaintiff had suffered reputational harm by reason of the conduct of and reporting of each of the ICAC operations referred to in this Statement of Claim" (paragraph 365(a)). But a widely pleaded case may be narrowed by the way it is opened and by the answers given to questions from the Court and by the course thereafter taken. That may occur where counsel specifically limits a case to a narrower issue. In days of jury trials, this was regarded as exceptional: see Valeriani v Gibson [1963] NSWR 1430 at 1434-1435. In modern civil litigation, where parties, lawyers and the court are subject to s 56 of the Civil Procedure Act 2005 (NSW), there is every reason to think it will occur less infrequently. I think it occurred in the present case.
4. The plaintiffs' oral opening focussed attention on the suppression order made as to part of the Heads of Agreement, including their allegation that there was no rational basis for making that order. It was put that Mr Moses Obeid was asked questions during a public hearing: "for no purpose other than embarrassing and humiliating the witness to make him look like a liar and yet, when one now in the cold light of day compares the redacted and the unredacted version, what the witness was saying was actually consistent with the document".

Causation (appeal ground 1(g), notices of contention, grounds 5 and 7)

1. The appellants by ground 1(g) challenged the primary judge's conclusion that damage was too remote, and by their notices of contention, the respondents challenged the inference drawn by the primary judge, favourable to the appellants, that the video was used in formulating the Fleeton memorandum. On balance I am unpersuaded that there was a causal connection between the execution of the search warrant and the reputational harm of which the appellants now complain. This turns on the Fleeton memorandum, which was the basis for the issuing of a summons to produce documents to Lands Legal, and which is sufficiently reproduced in the reasons of the Chief Justice.
2. Ms Fleeton was not compellable, nor were other ICAC documents available at trial. The primary judge expressed his conclusion on causation by way of inference based on what was contained in Ms Fleeton's memorandum itself (at [345]-[346]), and this Court is in no worse position as to the inferences which may fairly be drawn from the document.
3. It is true that the final sentence of paragraph 11 of that memorandum makes it plain that "a number of AWH documents were located but were not seized". That paragraph does not refer to the videoing of any documents. It is possible that the reference to "located" is a reference to the documents which were captured on video-recording, but that is not the only possibility. "Located" is an unusual word to describe a document whose pages were recorded on video. I respectfully disagree with the statement by the primary judge at [346] that it can be "safely inferred" that the reference is to the videoing of the Heads of Agreement.
4. The memorandum is to be read as a whole, and the following paragraph of the memorandum tells against Ms Fleeton having access to a copy of the Heads of Agreement. That paragraph contains the following statements: 1. That "further" inquiries had revealed the Obeids' interest; 2. The erroneous statement that Mr Di Girolamo had paid $3 million to the Obeid Family Trust (in fact Mr Di Girolamo, according to the Heads of Agreement, was the vendor); 3. The Heads of Agreement was said to detail an agreement between "The Obeid Family Trust' and 'Nicholas Di Girolamo' and 'AWH'" - but the Heads of Agreement was bipartite, and the purchaser was "[Obeid Family Trust]"; 4. Ms Fleeton states that "the agreement might have involved a share transfer from the Obeid Family Trust to Mr Di Girolamo" (emphasis added). But the first document in the video was the executed (although without naming the transferee) share transfer, and, of course, the transfer was from Mr Di Girolamo to the [Obeid Family Trust].

Leave to amend (notices of contention, grounds 4 and 9)

1. On the fourth day of the hearing, at the conclusion of the parties' evidentiary cases (final addresses commenced the following day) the plaintiffs were granted leave to amend to include a new allegation, paragraph 27C: "Information obtained from the videoing of the Heads of Agreement was used by ICAC: (a) in the course of deciding to issue the Summons to Produce; and (b) further, and alternatively, for the purpose of preparing the Summons to Produce."
2. The decision of the primary judge was the subject of brief ex tempore reasons. His Honour flagged the possibility of expanded reasons being delivered when he produced his judgment, but that did not occur (it does not appear from the materials that his Honour was asked to provide further reasons). The reasons materially turn upon his Honour's conclusion that "the defendant suffered no real prejudice by the grant of the amendment".
3. Very considerable deference must be given to the decision of the primary judge on an application such as this. The primary judge will ordinarily be far better placed than an appellate court to exercise the discretion involved in granting or refusing a late amendment (or doing so on terms). And I bear in mind that this was fiercely fought litigation of an unusual nature involving very serious allegations made against a swathe of parties. The difficulties in managing such litigation should not be underestimated. Even so, I have concluded on balance that those reasons were attended by material error of fact, sufficient to amount to House v The King error.
4. The correspondence tendered on that application was admitted by the primary judge for all purposes on the amendment application (although a limiting order confining the use of those documents to non‑hearsay purposes was made when it were tendered in the trial). The correspondence thus sustained the finding that at the date the summons was issued to Lands Legal, ICAC had other copies or versions of the Heads of Agreement available to it. If so, that went directly to causation.
5. However, the correspondence also established that the respondents suffered real prejudice in seeking to advance that case. The essential difficulties were the obligation of confidentiality imposed by s 111 of the Independent Commission Against Corruption Act, the fact that Ms Fleeton had left the organisation and the potential for her advice to be the subject of a claim for privilege. The correspondence referred to the need to reach a "framework for resolving" those issues, which would inevitably take time. That evidence was inherently plausible, and I did not understand it to be controverted.

Other aspects of the notices of contention

1. I agree with what the Chief Justice has written about other aspects of the respondents' notices of contention. Both respondents also relied on the immunity conferred by s 109 of the Independent Commission Against Corruption Act. The submissions were brief and not elaborated orally. In light of the above, the point does not arise. I do not think it is appropriate to express a view on this point, which could be important in other litigation in which it matters.

Orders

1. For the reasons given by the Chief Justice, and for these further reasons, I agree that the appeal should be dismissed with costs.

Amendments 13 April 2018 - [155]change "or an act on" to "or on an act" [162] change "Mullet" to "Mullett" [162] change citation from "[121]" to "[122]" [165] change "of its existence" to "as to its existence" [225] change "1996" to "1998" 14 June 2019 - Coversheet and [242(6)] - reported reference to Jones (Liquidator) v Matrix Partners Pty Ltd added. Headnote - holding (ii), "[212]" changed to "[208]-[212]". [17] - hyphen added to "Solicitor-General". [75] - "FCAFC 157" changed to "FCAFC 59". [98] - pinpoint reference "323-324" changed to "72-74". [140] - "[46]-[47]" changed to "[47]-[48]". [142] - "[183175]" changed to "[183]". [156] - "[32]" changed to [42]". [210] - "[67]" changed to "67". [233] - "critical" added before "second", "critical" removed before "passage". [242(4)] - "223-3" changed to "222-223". [247] - "Obeid's" changed to "Obeids'". [253] - "appeal" changed to "appear". [256] - "11" changed to "111". DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 June 2019