The duty as pleaded does not exist.
54 For present purposes, I would commence analysis of whether or not the duty as pleaded in this case exists with the decision of the High Court in Kirkland-Veenstra. The issue for determination in that case was whether or not police officers owed a duty to the appellant and her husband (who had taken his own life) to take reasonable care to exercise powers conferred on them by s 10 of the Mental Health Act 1986 (Vic), in circumstances in which there was a reasonably foreseeable risk of harm to them in the event of a breach of that duty: compare the slightly different formulation at 247 [84]. The issue in Kirkland-Veenstra related to the failure to exercise a statutory power, and not, as in the present case, the manner of its exercise. One difficulty faced by the appellant was that the conditions for the exercise of the power had not been established: see 242 [63] (French CJ), 257 [123], [146] (Crennan and Kiefel JJ). These various factors indicate Kirkland-Veenstra was a very different case from the present. Nonetheless, Kirkland-Veenstra provides some guidance as to the correct approach in a case such as this.
55 In addressing the primary issue, the Court in Kirkland-Veenstra first examined the operation of the empowering provision and the statutory scheme of which it formed part: see, for example, Kirkland-Veenstra 239-240 [53] (French CJ), 244 [75] (Gummow, Hayne and Heydon JJ) and 259 [130] (Crennan and Kiefel JJ). As the applicants' written submissions in effect noted, this has been the accepted approach in this context for many years: see, for example, The Council of the Shire of Sutherland v Heyman (1985) 157 CLR 424 at 434 (Gibbs CJ noting that statutory provisions were "the setting" in which the alleged acts and omissions were to be considered).
56 Even if it is reasonably foreseeable that harm of the kind allegedly suffered might result from a want of reasonable care on the part of the holder of a statutory power with respect to the exercise of that power, this does not mean that the holder is necessarily subject to a liability to compensate the injured party by way of damages for negligence, if there is such carelessness and such harm results: see Sullivan v Moody (2001) 207 CLR 562 ('Sullivan v Moody') at 576 [42]. Kirkland-Veenstra developed this proposition. In their joint judgment in Kirkland-Veenstra, Gummow, Hayne and Heydon JJ said (at 252 [103]) that "in deciding whether the officers owed the asserted duty it is necessary to consider what is the duty which it is said is owed by those who have a specific statutory power, and how is that duty said to arise out of the 'relationship' created by the existence of that power". Their Honours went on to say (at 254 [112]-[113]):
There can be no duty to act in a particular way unless there is authority to do so. Power is therefore a necessary condition of liability but it is not a sufficient condition. Statutory power to act in a particular way, coupled with the fact that, if action is not taken, it is reasonably foreseeable that harm will ensue, is not sufficient to establish a duty to take that action. Rather, as was pointed out in Graham Barclay Oysters Pty Ltd v Ryan, the existence or otherwise of a common law duty of care owed by a statutory authority (or in this case the holder of a statutory power) "turns on a close examination of the terms, scope and purpose of the relevant statutory regime". Does that regime erect or facilitate "a relationship between the authority [here the holder of statutory power] and a class of persons that, in all the circumstances, displays sufficient characteristics answering the criteria for intervention by the tort of negligence"?
Evaluation of the relationship between the holder of the power and the person or persons to whom it is said that a duty of care is owed will require examination of the degree and nature of control exercised over the risk of harm that has eventuated, the degree of vulnerability of those who depend on the proper exercise of the relevant power, and the consistency or otherwise of the asserted duty of care with the terms, scope and purpose of the relevant statute. Other considerations may be relevant. (Citations omitted.)
See also Kirkland-Veenstra at 259 [130] per Crennan and Kiefel JJ.
57 In Kirkland-Veenstra, Gummow, Hayne and Heydon JJ held that there was no duty of care and that "the factor of control [was] of critical significance" since the appellant's husband had controlled the source of the risk of harm: see 254 [111], [114]. In this context, their Honours contrasted Kirkland-Veenstra with Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 ('Crimmins'), in which the Court had held that the Australian Stevedoring Industry Authority owed a waterside worker a common law duty to take reasonable care to protect him from reasonably foreseeable risks of injury arising from his employment by registered stevedores. In Crimmins, the majority of the Court had so held because they perceived there to be a close analogy between the considerations that arose in the case at hand and the considerations that led to an employer being responsible for providing a safe system of work and a safe place of work. I return to the matter of control below.
58 In Kirkland-Veenstra at 259-260 [130]-[131], Crennan and Kiefel JJ took a different approach, relying on the proposition that, in the identification of a common law duty of care with respect to the exercise of statutory powers, "[t]here is agreement that the statutory powers in question must be directed towards some identifiable class or individual, or their property, as distinct from the public at large" (citing Crimmins at 40 [99] (McHugh J); Brodie at 633 [326] (Hayne J); Graham Barclay Oysters at 562 [32] (Gleeson CJ) and 575 [79] and 576 [82] (McHugh J)). Crennan and Kiefel JJ developed their analysis about the importance of control at 262 [138]-[139], observing that "[t]he evident purpose of statutory provisions, which might be utilised to prevent or minimise harm, has been identified as relevant to the existence of a duty of care in cases in this Court". In this connection, their Honours also drew attention to Gummow J's observation in Pyrenees Shire Council v Day at 391 [175] that the powers given to the Council had been provided to further the legislative purpose of fire prevention. I also return to the identification of an identifiable class below.
59 Before considering matters of control and identifiable class, it is, however, convenient to discuss the proposition advanced by CASA that, in the present case, the claim for damages for negligence presents a question about "coherence of the law", as that expression was used in Sullivan v Moody at 581 [55]. In Sullivan v Moody the High Court held that people involved in investigating and reporting upon allegations of sexual abuse of children were not subject to a legal duty to take care to protect those suspected of being the sources of harm, because such a duty would be inconsistent with the proper and effective discharge of their professional and statutory responsibilities in making such investigations and reports. The Court's decision turned on the proposition (at 580 [53]) that to find a duty of care in that case "would so cut across other legal principles as to impair their proper application". Cases of this kind, so the Court said, "present a question about the coherence of the law"; and that "[a] duty of the kind alleged should not be found if that duty would not be compatible with other duties which the respondents owed": see 581 [55]. The Court continued (at 581 [56] and 580 [60]-[61]):
How may a duty of the kind for which the appellants contend rationally be related to the functions, powers and responsibilities of the various persons and authorities who are alleged to owe that duty? A similar problem has arisen in other cases. The response to the problem in those cases, although not determinative, is instructive.
...
The circumstance that a defendant owes a duty of care to a third party, or is subject to statutory obligations which constrain the manner in which powers or discretions may be exercised, does not of itself rule out the possibility that a duty of care is owed to a plaintiff. People may be subject to a number of duties, at least provided they are not irreconcilable. A medical practitioner who examines, and reports upon the condition of, an individual, might owe a duty of care to more than one person. But if a suggested duty of care would give rise to inconsistent obligations, that would ordinarily be a reason for denying that the duty exists. Similarly, when public authorities, or their officers, are charged with the responsibility of conducting investigations, or exercising powers, in the public interest, or in the interests of a specified class of persons, the law would not ordinarily subject them to a duty to have regard to the interests of another class of persons where that would impose upon them conflicting claims or obligations.
60 In W v Home Office [2007] Imm AR 302 ('W v Home Office') at 310 Lord Woolf MR (with whom Thorpe and Waller LJJ agreed) adopted a not dissimilar approach when deciding whether the Home Secretary owed a duty of care with respect to the exercise of statutory powers under the Immigration Act 1971 (UK), stating:
It is less likely that a duty of care would be imposed on a person exercising his public duty i.e. even where the statutory duty is being implemented, if:
(1) potential conflict could arise between the carrying out of the public duty, and acting defensively for fear of an action in negligence being brought;
(2) where the category of public servant is one similar to the police or Crown Prosecution Service as considered in Hill v The Chief Constable of West Yorkshire [1989] 1 AC 53 and Elguzouli-Daf v The Commissioner of the Metropolis [1995] QB 335, and where:
(a) the general sense of public duty of such servants is unlikely to be appreciably reinforced by the imposition of liability;
(b) the recognition of the existence of a cause of action even in quite limited circumstances would [be] likely to lead to the bringing of a substantial number of cases, and a diversion of public servants concerned away from their duties contrary to the general public's interests; and
(c) where there are other private law remedies available if there is a deliberate abuse of power, and public law remedies available to challenge decisions.
It seems to us that the application of each of these principles to the situation under consideration is inconsistent with the existence of a duty of care being owed by the immigration officer to the immigrant who has been detained.
61 The first principle to which Lord Woolf MR referred is the same as that identified and applied in Sullivan v Moody. The other considerations to which he referred may also assist in determining whether or not a duty of care exists, depending on the case at hand. In the present case, the last-mentioned factor assumes particular importance. I return to this below.
62 More recently, in Fernando v Commonwealth (2010) 188 FCR 188 ('Fernando') at 214, Siopis J referred to Sullivan v Moody and the observations of Lord Woolf MR in W v Home Office to support his determination that the Minister's statutory power to cancel a visa on character grounds "is, par excellence, a power which is to be exercised in the public interest" and, in consequence, "the inconsistency considerations referred to by the High Court and Lord Woolf MR, apply in respect of the exercise of the ... power, and militate strongly against the existence of a duty of care being owed by the Minister".
63 In this case, there are a range of factors in favour of a legal duty to exercise CASA's statutory powers with reasonable care (as the FASC pleaded), including that, generally speaking, the alleged duty related to a positive act, as opposed to a mere failure to act; and that, as the applicants submitted, the applicants "had a relationship with CASA (as licensees and authority holders) that pre-dated the exercise of the power" and had already held various certificates, licences and other approvals under the CAA for some time. In this circumstance, the respondents would have known, or ought to have known, that a lack of reasonable care on their part in suspending, cancelling, or failing to renew an AOC, or approvals as Chief Pilot or Flying Instructor, or other authorisations would prevent Polar and Mr Butson carrying on their business, and that this would result in harm to Polar and Mr Butson.
64 There are, however, factors against the imposition of a legal duty of care. The legal relationship between Polar and Mr Butson, on the one hand, and CASA and its officers, on the other, is not straightforward, and is not analogous to any existing relationship in which a similar duty of care has been found to exist. The FASC does not plead a relationship or position of vulnerability of the kind referred to in the authorities where a duty of care to avoid economic loss has been said to have been owed: see, for example, Woolcock Street Investments Pty Ltd v CDG Pty Limited (2004) 216 CLR 515 at 530 [23] and Precision Products (NSW) Pty Limited v Hawkesbury City Council (2008) 74 NSWLR 102 ('Precision Products') at 126-128 [103]-[116]. In any event, Polar and Mr Butson were able to protect themselves against the consequences of the respondents' lack of care by making immediate application to the AAT and seeking positive orders for the continuation of any AOC certificate, licence or other approval until the AAT reached its decision on the review: see [35]-[36] above. See also State of New South Wales v Paige (2002) 60 NSWLR 371 at 400-404 [156]-[177] and Precision Products at 127-129 [110]-[120].
65 Further, although CASA had statutory power to issue, cancel, suspend or renew the relevant certificates, licences or approvals, CASA did not have unfettered "control" over their issue, cancellation and suspension. Rather, issue, cancellation and suspension were regulated by the CAA. In exercising the relevant statutory powers to issue, cancel or suspend, CASA was subject to the statutory regime established under the CAA, which had as its main aim, "maintaining, enhancing and promoting the safety of civil aviation". As discussed above, the functions of the CAA were all directed to this end - as s 9A(1) made clear. The legislative regime established under the CAA was a regime to maintain, enhance and promote air safety. The regime established by the CAA required CASA to make air navigation safety the paramount concern: see s 9A(1). Thus, CASA was required by its governing statute to treat air navigation safety as the most important consideration in issuing, cancelling, suspending or renewing any AOC, or approval as Chief Pilot or Flying Instructor.
66 With this in mind, it is difficult to avoid the conclusion that the duty for which Polar and Mr Butson contend - to take reasonable care not to harm them and others in the same class as them cannot be reconciled on any practical basis with CASA's overarching obligations to make air navigation safety its most important consideration in performing its functions and exercising its statutory powers.
67 This is not to say that a public authority such a CASA cannot be subject to a number of duties. But in the case of a public authority charged by its governing statute with giving primacy to air navigation safety, one would not anticipate that the law would impose on that public authority a legal duty to have regard to the interests of a particular class - here operators of air services businesses or air pilots - where that would in all likelihood impose on the public authority conflicting obligations.
68 That is, CASA's obligation to place air navigation safety first requires that it be able to do so without the apprehension that it might breach a legal duty to persons in the position of Polar and Mr Butson. The powers conferred on CASA by its governing statute are designed to be exercised in the public interest. The private interests of persons in the position of Polar and Mr Butson may commonly be inconsistent with the statutory imperative to place air navigation safety first. The duty for which Polar and Mr Butson contend is, therefore, inconsistent with CASA's statutory duties and responsibilities, in the public interest, pursuant to the CAA.
69 It can reasonably be anticipated that the imposition of a duty of care, even if not absolutely inconsistent with CASA's exercise of relevant statutory powers, would lead CASA and its officers to "act defensively", as Lord Woolf put it, from an apprehension that otherwise they might be sued for damages in an action for negligence. This state of affairs would not be conducive to an exercise of power in which air safety navigation was the most important consideration.
70 It should also be borne in mind that operators of air services and others in the position of Polar and Mr Butson are entitled to be heard and, in the case of cancellation or suspension, to "show cause" before administrative action is taken against them. Further, the law provides for other remedies, including, in an appropriate case, remedies for misfeasance in public office, relief on judicial review of a relevant administrative decision, and the broad remedies available upon a successful application for review in the AAT. Similar considerations were held by Siopis J in Fernando (at 214 [150]) to militate against the existence of a duty of care in that case. I am of the same opinion in this case.
71 The considerations against the existence of a duty of care lead me to conclude that CASA (and therefore the individual respondents) did not owe the applicants a duty of care of the kind alleged in par [16(a)] of the FASC.
72 The applicants relied on s 22 of the CAC Act in support of an argument that the individual respondents were under a duty to exercise care and diligence with respect to them: FASC, par [10(a)]. Section 22(1) of the CAC provides:
An officer of a Commonwealth authority must exercise his or her powers and discharge his or her duties with the degree of care and diligence that a reasonable person would exercise if he or she:
(a) were an officer of a Commonwealth authority in the Commonwealth authority's circumstances; and
(b) occupied the office held by, and had the same responsibilities within the Commonwealth authority as, the officer.
Note: This subsection is a civil penalty provision (see Schedule 2).
73 This provision does not create a duty to third parties, such as Polar and Mr Butson. Rather, s 22(1) creates a duty that is owed to the authority, here CASA. If this duty is breached, then, since the provision is a civil penalty provision, the officer may become liable to compensate the relevant Commonwealth authority or company for damage suffered by it: see CAC Act, Sch 2, clause 4. The CAC Act specifically limits the persons who can seek civil compensation for damage resulting from a breach of s 22. Only the Commonwealth Finance Minister or a person authorised by the Finance Minister and the relevant Commonwealth entity may apply for a declaration of contravention, a compensation order, or a pecuniary penalty: see CAC Act, Sch 2, clause 6. Sections 23, 24 and 25, to which par [10] of the FASC additionally referred, are also civil penalties provisions subject to the regime in Schedule 2 to the CAC Act.
74 The CAC Act stipulates that the statutory right of compensation does not derogate from any duty or liability that may otherwise exist in respect of the person's office or employment in relation to a Commonwealth authority or company: see Sch 2, clause 5; also CAA, s 21(1). It therefore does not exclude a duty to a third party such as Polar or Mr Butson if a duty otherwise exists. But nothing in s 22 creates a duty of the kind alleged by the applicants against the second to seventh respondents, or otherwise supports the existence of such a duty.
75 There are other deficiencies in the applicants' pleading of negligence. As can be seen in the earlier analysis of the applicants' FASC, the facts alleged in the FASC relate almost entirely to the exercise of statutory powers by CASA and its officers. When the pleading is examined, there is, as the respondents submitted, no express pleading of material facts that could, if proven, establish "the crucial elements of reliance, assumption of responsibility and, most importantly, vulnerability": see Precision Products at 126 [106] (Allsop P). This pleading is especially important in such a case as this in which the relevant statutory powers are not directed towards the protection of a class of persons or their property, as distinct from the public at large. On the contrary, relevantly here, the CAA expressly provided that the public interest in air navigation safety was to be CASA's most important concern in any exercise of its statutory powers. In exercising its statutory powers at issue in this case - to issue, cancel, suspend or renew certificates, licences and other approvals - CASA did not necessarily assume responsibility to act in the applicants' interests. As noted already, the most important consideration in the exercise of the relevant statutory powers was air navigation safety. This meant that the powers would invariably be exercised against the applicants' interests in a situation where air navigation safety so required.
76 In all the circumstances, it cannot be said to be open to the applicants upon the FASC to prove the facts at trial which would constitute a reasonable cause of action in negligence against the respondents. In so far as the FASC endeavours to plead negligence against the respondents, this pleading should be struck out.