Paschke v Secretary, Department of Social Services

Background 7 The background to the impugned order is set out at PJ [1] to [5] and may be briefly stated as follows. 8 Mr Paschke is an aged pensioner. He has filed an originating application starting a representative proceeding under Part IVA of the FC Act against the Secretary, Department of Social Services, the Responsible Authority, Services Australia and the Commonwealth Ombudsman. He disputes the manner and basis upon which Services Australia values assessable curtilage for the purposes of determining whether a person meets the requirements for obtaining an aged pension. He also claims the Ombudsman has failed to comply with s 5(1)(a) of the Ombudsman Act 1976 (Cth) by refusing to investigate the conduct of Services Australia and the Secretary without providing a lawful reason. 9 Mr Paschke seeks to have the assessable curtilage of the group members reassessed and where the assessable curtilage has been overvalued, that compensation, in the form of backpay, be paid. 10 Mr Paschke is in receipt of a (part) aged pension. Before the primary judge, he confirmed that he was not himself claiming any entitlement to any unpaid pension. He was concerned that in the future his pension might be affected if Services Australia persisted with the way in which it values assessable curtilage. 11 The primary judge gave three reasons for dismissing the proceedings: (1) There was no exceptional reason that would justify leave being given to Mr Paschke to have the conduct of representative proceedings even though he is not legally qualified (PJ [10]). (2) Mr Paschke did not have a sufficient personal interest to bring the proceedings as a representative applicant because he is not adversely affected by any decision made concerning his entitlement to the pension. There was no evidence to suggest that he will be adversely affected in the future (PJ [14]-[15], [16]). (3) Mr Paschke's claim as set out in his concise statement for the representative proceedings, that the Ombudsman refusing to investigate was unlawful, did not involve a claim of lack of good faith. The claim is therefore covered by the immunity afforded to the Ombudsman by s 33 of the Ombudsman Act. Mr Paschke did not explain how a representative proceeding might be brought in respect of a claim made by Mr Paschke to the Ombudsman (PJ [20]-[21]).

THE APPLICATION TO THIS COURT 12 The two grounds of the application are expressed as: (1) "Justice is the ground why leave to appeal should be granted" and (2) "Justice for the group members requires that the legal questions posed in the class action are answered by the respondents or their lawyers and ultimately by the Court". Many of Mr Paschke's submissions focussed on the underlying merits of his complaint about the alleged unlawful valuation method for assessable curtilage. The merits of his complaint are not the subject of the application to this Court which is limited to the orders of the primary judge. 13 Mr Paschke's submissions as to why the primary judge erred in dismissing the proceedings may be summarised as follows: (1) Mr Paschke had a sufficient personal interest because his pension payments are (still) worked out by reference to the unlawful valuation method for assessable curtilage and his rights to privacy have been infringed by the unlawful valuation processes. The possibility of future action might affect his entitlements in the future and this causes him distress. (2) The Ombudsman is not immune from suit if it makes a decision without lawful reasons for doing so because that is not acting in good faith. (3) There is no requirement for a self-represented litigant to seek leave to commence a representative proceeding and the primary judge did not give sufficient reasons to explain why Mr Paschke should be precluded from running his case. In particular, Mr Paschke argues that there was no real basis to assume the representative proceeding would necessarily be complex.

consideration 14 Sections 33C and 33D of the FC Act provides: 33C Commencement of proceeding (1) Subject to this Part, where: (a) 7 or more persons have claims against the same person; and (b) the claims of all those persons are in respect of, or arise out of, the same, similar or related circumstances; and (c) the claims of all those persons give rise to a substantial common issue of law or fact; a proceeding may be commenced by one or more of those persons as representing some or all of them. (2) A representative proceeding may be commenced: (a) whether or not the relief sought: (i) is, or includes, equitable relief; or (ii) consists of, or includes, damages; or (iii) includes claims for damages that would require individual assessment; or (iv) is the same for each person represented; and (b) whether or not the proceeding: (i) is concerned with separate contracts or transactions between the respondent in the proceeding and individual group members; or (ii) involves separate acts or omissions of the respondent done or omitted to be done in relation to individual group members. 33D Standing (1) A person referred to in paragraph 33C(1)(a) who has a sufficient interest to commence a proceeding on his or her own behalf against another person has a sufficient interest to commence a representative proceeding against that other person on behalf of other persons referred to in that paragraph. (2) Where a person has commenced a representative proceeding, the person retains a sufficient interest: (a) to continue that proceeding; and (b) to bring an appeal from a judgment in that proceeding; even though the person ceases to have a claim against the respondent. 15 The representative proceedings sought to be commenced by Mr Paschke did not satisfy the requirements of the FC Act. Mr Paschke did not have a claim against each of the respondents. His pension was not affected. The law in Australia does not recognise a general right to privacy independent of the law of tort or breach of confidence: ABC v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199. Mr Paschke's claims were not based on tort or breach of confidence. So too any claim for emotional distress was not connected to a tortious cause of action. 16 The proceedings were not validly initiated because Mr Paschke did not have a sufficient interest to commence proceedings on his own behalf. Accordingly he was unable to commence a representative proceeding because the proceedings did not comply with Part IVA of the FC Act. Because Mr Paschke had no right to initiate the representative proceedings, there was no error in the primary judge's dismissal of the proceedings. 17 There was also no error in the primary judge's refusal to grant leave to Mr Paschke, as a person who is not a legal practitioner, to represent group members. 18 The Court has the inherent jurisdiction to control its own processes and procedures, including in relation to when a person who is not a lawyer may appear on behalf of another person in proceedings before the Court. Lay people do not have the right to act on another's behalf in court proceedings without leave of the Court. As a matter of practice, there is no reason why this principle should not apply with equal force to representative proceedings (which affect the rights of all group members). 19 Representative proceedings under Part IVA of the FC Act should ordinarily be conducted by way of a legal representative having regard to the important duties a lead applicant owes to group members. Group members are bound by the outcome of representative proceedings and the conduct of the proceedings can impact the disposition of group members' rights. This includes the risk to a group member of the detriment of an estoppel operating in a subsequent proceeding outweighing the benefit to that person of participating in the current proceeding: Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; (2015) 256 CLR 507 at [40] (French CJ, Bell, Gageler and Keane JJ). 20 The scheme of Part IVA is that the applicant has the conduct of proceedings on behalf of the class members and has fiduciary obligations to them: Tomlinson at [40] (French CJ, Bell, Gageler and Keane JJ); Dyczynski v Gibson [2020] FCAFC 120; (2020) 280 FCR 583 at [209] (Murphy and Colvin JJ). Such obligations can include providing group members with information and seeking their instructions: Dyczynski at [208]-[210]. The Court relies on lawyers' adherence to their duties as officers of the Court when acting for a representative applicant, without which the Court would itself have to supervise the lead applicant's performance of their fiduciary obligations. As Colvin J said in Wilkinson v Wilson Security Pty Ltd [2022] FCA 756 at [12]: Where, as here, the representative proceedings are being conducted without legal assistance then the Court is placed in a position where, in effect, it is required to supervise the performance by the applicant of his fiduciary obligations in the conduct of the proceedings. The Court is unable to look to the lawyers for the representative applicant as independent officers with duties to the court to perform their obligation to act in the interests of the group members when dealing with the determination of the common questions by proceedings or settlement: as to which obligation, see Kelly v Willmott Forests Ltd (in liquidation) (No 4) [2016] FCA 323 at [220], [308] (Murphy J). 21 There was no error in the primary judge's exercise of his discretion in a matter of practice or procedure. 22 In so far as Mr Paschke's claims against the Ombudsman are concerned: (1) There is no basis on which it might be said that anybody other than Mr Paschke had a claim against the Ombudsman. It was Mr Paschke alone who had made a complaint to the Ombudsman. There is no basis on which Mr Paschke might commence representative proceedings under Part IVA of the FC Act against the Ombudsman. (2) In his concise statement, Mr Paschke had not made any specific claim of a failure on the part of the Ombudsman to act in good faith. Section 33(1) of the Ombudsman Act is therefore engaged. A claim of lack of good faith is not one to be made lightly: Kordan Pty Ltd v Federal Commissioner of Taxation (2000) 46 ATR 191 at 193 (Hill, Dowsett and Hely JJ); cited in Federal Commissioner of Taxation v Futuris Corporation Ltd [2008] HCA 32; (2008) 237 CLR 146 at [60] (Gummow, Hayne, Heydon and Crennan JJ). There is no basis on which Mr Paschke's claims against the Ombudsman can proceed even as a proceeding which is not a representative proceeding.

Conclusion 23 The application for an extension of time and leave to appeal is dismissed. Mr Paschke will be ordered to pay the respondents' costs of the application, to be fixed by way of an agreed lump sum or, in default of agreement, by way of a lump sum fixed by a Registrar. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Anderson, McEvoy and Hespe.