Scott v Secretary, Department of Social Security

CONCLUSIONS ON THE APPEAL 10 The appellants advanced many arguments in support of their appeal in their extensive written and oral submissions. It would be impracticable to attempt to explore at length every one of their complaints. In the circumstances, we propose to adopt the approach taken by other Full Courts in such situations and to confine our reasons to the issues raised that are both significant and consequential (see, e.g. Western Australian v Ward (2000) 170 ALR 159 at 177 - 178).

(a) The claim for misfeasance 11 The tort of misfeasance in public office was most recently considered by the High Court of Australia in Sanders v Snell (1998) 196 CLR 329. Gleeson CJ, Gaudron, Kirby and Hayne JJ said (at 344): "Misfeasance in public office is concerned with misuse of public power. Inappropriate imposition of liability on public officials may deter officials from exercising powers conferred on them when their exercise would be for the public good. But too narrow a definition of the ambit of liability may leave persons affected by an abuse of public power uncompensated. The tort of misfeasance in public office must seek to balance these competing considerations. Not surprisingly, identifying the intention with which the public official acts has a prominent place in striking that balance." 12 Their Honours went on to say (at 344 - 345): "For present purposes it may be accepted that the tort of misfeasance in public office extends to acts by public officers that are beyond power, including acts that are invalid for want of procedural fairness. But to establish that tort, it is not enough to show the knowing commission of an act beyond power and resulting damage. As the majority said in Mengel: '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, 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.' For the purposes of deciding Mengel, the majority considered it sufficient to proceed on the basis that the tort requires an act which the public official knows is beyond power and which involves a foreseeable risk of harm but noted also that there seems much to be said for the view that misfeasance extends to the situation of a public official recklessly disregarding the means of ascertaining the extent of his or her power." 13 Wilkinson v Downton [1897] 2 QB 57 was an action in tort for nervous shock. Wright J said (at 59): "One question is whether the defendant's act was so plainly calculated to produce some effect of the kind which was produced that an intention to produce it ought to be imputed to the defendant, regard being had to the fact that the effect was produced on a person proved to be in an ordinary state of health and mind. I think that it was. It is difficult to imagine that such a statement, made suddenly and with apparent seriousness, could fail to produce grave effects under the circumstances upon any but an exceptionally indifferent person, and therefore an intention to produce such an effect must be imputed, and it is no answer in law to say that more harm was done than was anticipated, for that is commonly the case with all wrongs." 14 Speaking of the tort of misfeasance in public office, the majority in Sanders observed (at 346 - 347): "Again it must be accepted that the precise limits of this tort are still undefined. It is an intentional tort. As was said in Mengel: '… the weight of authority here and in the United Kingdom is clearly to the effect that it is a deliberate tort in the sense that there is no liability unless either there is an intention to cause harm or the officer concerned knowingly acts in excess of his or her power.'" 15 In the present case, his Honour made findings of fact which contradicted the existence of any intention to cause harm. Nor, on those findings, could it be demonstrated that any officer knowingly acted in excess of power, or was recklessly indifferent to the harm that was likely to ensue. In our view, no basis for appellate interference with those findings has been made out, especially given the advantage his Honour had in seeing the officers give their evidence.

(b) The claim of a cause of action for damages upon the case 16 As members of the Court mentioned in argument, the Beaudesert principle was overruled by the High Court in Northern Territory v Mengel (1995) 185 CLR 307 at 344, subject to the qualification "…that there may be cases in which there is liability for harm caused by unlawful acts directed againsta plaintiff…."(at 345) (emphasis added). However, his Honour here found that all officers who dealt with the appellants carried out their duties conscientiously and in good faith. There was nothing in the evidence to suggest that any actions of the respondents were in any way directed against the appellants.

(c) The claim of a private right of action for breach of statutory duty 17 The general principles in this area were, as the trial Judge noted (at para 47), explained by Brennan CJ and Dawson and Toohey JJ in Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 424, that is to say, that a cause of action for damages for breach of statutory duty arises where a statute which imposes an obligation for the protection or benefit of a particular class of persons - "is, upon its proper construction, intended to provide a ground of civil liability when the breach of the obligation causes injury or damage of a kind against which the statute was designed to afford protection." 18 The primary Judge went on to refer (at para 48) to the principal speech of Lord Browne-Wilkinson in X (Minors) v Bedfordshire County Council [1995] 2 AC 633 (at 731 - 732) in considering a claim that in breach of its statutory duty, a council had failed to exercise its powers to institute care proceedings under, inter alia, the Children & Young Persons Act 1969 (UK). The House of Lords there noted that although welfare legislation affecting a particular area of activity does in fact provide protection to those individuals particularly affected by that activity, the legislation is not to be treated as being passed for the benefit of those individuals but for the benefit of society in general; so that the cases where a private right of action has been held to arise are all cases where the statutory duty has been very limited and specific as opposed to general administrative functions involving the exercise of administrative discretion. 19 We agree with the trial Judge that the Act is not to be interpreted as indicating an intention to confer a private right of action for a breach of any of its provisions now in question, given especially the existence in the legislation of particular mechanisms for the review of decisions made within the Department.

(d) The claim in common law negligence 20 We also agree with his Honour and with Deputy President Burns in Re Fry and Secretary, Department of Social Security (1990) 20 ALD 709 at 711, that there was no general common law duty of care to advise the appellants of benefits that might potentially be available under the Act. 21 In this connection, the distinction between formality and informality can be important. In L. Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) (1981) 150 CLR 225 it was held that the Council was under a duty to a purchaser of property to take reasonable care that the information given by the Council in a certificate applied for by the purchaser under s 342AS of the Local Government Act 1919 (NSW). However, it was further held that the Council owed no duty of care to the purchaser when information as to a road widening proposal was given by an unidentified person and was not confirmed. 22 Gibbs CJ said (at 236): "The Council was so placed that others could reasonably rely upon its ability to give accurate information as to any local road widening proposals, and it followed the practice, in the course of exercising its functions of making such information available. The nature of the inquiry - made by a solicitor, for conveyancing purposes, on a form commonly used and prepared by law stationers - made clear the gravity of the inquiry and the importance attached to the answer. The Council therefore owed a duty of care to Mr. Carroll's clients, the appellants, in answering the written inquiry. It would not, however, have been reasonable for the appellants to have relied on an unconfirmed answer given by an unidentified person in response to an inquiry made over the telephone. The Council therefore owed no duty of care in making response to such an inquiry.

It is clear from what has been said that the Council, in giving what amounted to a negative answer to Mr. Carroll's written inquiry, was in breach of its duty of care to the appellants. The fact that its negative answer was given by the omission to make a positive statement does not affect the question. The Council may have been entitled in law to decline to give the information sought, although to have taken that course might have rendered it liable to well-merited criticism. But for the reasons given, if it had wished to decline to give the information, it was bound to say so, because its failure to mention the local road widening proposals in the circumstances amounted to a statement that none existed." 23 The position in Shaddock, where the Council was aware of a particular proposal and failed to mention it, may, we think, be distinguished from the position of a Department administering social security legislation. It is one thing to expect a Department (reasonably) to communicate accurately the general range of benefits available; it is another to expect the Department to have sufficient knowledge of the personal circumstances of any particular applicant for social security, so as to be in a position to advise the applicant of specific benefits that might be available in his or her personal circumstances. 24 For completeness, we should mention one matter raised by the appellants in the course of their argument. They suggested that they could claim damages in negligence for failure to process their claims for pension with due expedition. We see no basis for such a claim on the facts. But, in any event, our view is that such a claim, that is, for damages for alleged negligence of that kind, is not sustainable. It is true that mandamus or a similar form of judicial review will be ordered where a public duty has not been performed within a reasonable time, compelling the specific performance of that function forthwith (see Re Federal Commissioner of Taxation: Ex parte Australena Investments Pty Ltd & Ors (1983) 50 ALR 577 and Thornton v Repatriation Commission (1981) 35 ALR 485). But, absent a claim for misfeasance (see above), common law damages cannot be claimed merely for failure to act with due expedition. 25 In our opinion, the appeal fails and ought to be dismissed, with costs. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Beaumont and French.

Associate: Dated: 7 September 2000 IN THE FEDERAL COURT OF AUSTRALIA

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

FINKELSTEIN J: 26 I agree with Beaumont and French JJ save in one respect. My concern relates to the allegation made by both appellants that the respondent has negligently delayed the processing of their claims. It may also have a bearing on the allegation made by the second appellant, Mrs Scott, that the respondent was negligent in the manner in which he dealt with her claim for Special Benefit (SB). This latter matter was not considered by the trial judge, though it was raised in the pleadings. It arises in the following circumstances. 27 Mrs Scott had applied for SB on 30 June 1995. Broadly speaking, SB is payable to a person who can demonstrate that he or she is unable to earn a sufficient livelihood but who does not qualify for any other pension or benefit: s 729 of the Social Security Act 1991 (Cth). It is not now in dispute that Mrs Scott was entitled to that benefit. However, the respondent decided that she was not eligible. The stated reason was as follows: "[A] Special Benefit is only payable if no reasonable means of support exist, and no other social security allowance or pension is payable. If you are able to look for work, Job Search Allowance would be your correct entitlement. If you are unfit to look for work because of a medical condition, either Sickness Allowance or Disability Support Pension may be your correct payment type. As you have declined to test your eligibility for any of these payments it cannot be determined that you are not entitled to any other social security allowance or pension." 28 Mrs Scott contends that the respondent owed her a duty at common law to process her claim for SB with care. She complains that by insisting that she lodge applications for a Jobsearch Allowance, a Sickness Allowance and a Disability Support Pension to determine whether she was eligible for SB the respondent was in breach of that duty and, as a result, her medical condition deteriorated. 29 I should say immediately that I do not accept that the manner in which the respondent dealt with Mrs Scott's claim for SB was in breach of any duty of care. No doubt there are various ways to determine whether an applicant for SB satisfies the relevant criteria. In a case where those criteria include ineligibility for some other pension, the fact of ineligibility may be established by examining the information lodged in support of the claim for the benefit. Whether it is possible to proceed in that way is dependent upon the provision of sufficient information. Another approach is to require the applicant to apply for the other benefits and if each application is rejected then the necessary criterion will have been satisfied. From an administrative standpoint, this may be the most convenient method of dealing with the issue. But whether or not it is a convenient method, it can hardly be described as a negligent process. 30 My concern with the reasons of Beaumont and French JJ relates to the question whether the respondent owed the appellants a duty of care as alleged. First, it is clear that a common law duty of care may arise in the performance of statutory functions, especially in the manner in which a statutory duty is performed: X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at 735. Second, it is clear that in an appropriate case, the existence of a statutory power will give rise to a common law duty to exercise that power: Stovin v Wise [1996] AC 923. Third, it is clear that even if the statute that imposes the duty does not give rise to a statutory cause of action, the repository of the duty may nevertheless be liable for breach of a common law duty of care. In East Suffolk Rivers Catchment Board v Kent [1941] AC 74 at 88-89 Lord Atkin said: "But apart from the existence of a public duty to the public, every person whether discharging a public duty or not is under a common law obligation to some persons in some circumstances to conduct himself with reasonable care so as not to injure those persons likely to be affected by his want of care. This duty exists whether a person is performing a public duty, or merely exercising a power which he possesses under statutory authority or in pursuance of his ordinary rights as a citizen." Lord Atkin was in dissent in the result but not in regard to these comments. 31 In my opinion, decisions of the High Court, such as Sutherland Shire Council v Heyman (1985) 157 CLR 424, Pyrenees Shire Council v Day (1998) 192 CLR 330, Romeo v Conservation Commission of the Northern Territory (1998) 192 CLR 431 and Crimmins v Stevedoring Industry Finance Committee (1999) 167 ALR 1, while not establishing a clear principle by which the common law liability of the repository of a statutory power or duty is to be determined, suggest that a duty of care would exist in the present case, both as to the manner in which a claim for a benefit is processed and for the failure to process a claim with due expedition. 32 In this regard the following matters would be important. The respondent's functions are not inconsistent with the existence of a duty of care. The respondent is responsible for the general administration of the Social Security Act: s 1295. He must consider each application for a claim and if an applicant satisfies the necessary criteria, he must ensure that the benefit is paid. Applicants who are entitled to benefits of the kind payable under the Social Security Act are generally in a vulnerable position. A duty to consider a claim for a benefit and the obligation to process the claim are not legislative in character. There is no reason in policy why a duty of care should not be owed. It is reasonably foreseeable that a person who is wrongly deprived of a benefit to which he or she is entitled, or who endures unreasonable delay in the receipt of a benefit, may suffer physical harm. 33 I agree with the orders proposed by Beaumont and French JJ. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.

Solicitor for the Appellants: The appellants appeared in person

Solicitor for the Respondent: Australian Government Solicitor