APPEALED FROM: MFC v State of Tasmania [2020] TASSC 9

Procedure - Supreme Court procedure - Tasmania - Procedure under rules of Court - Associate Judges - Nature of appeals from Associate Judges.

Supreme Court Civil Procedure Act 1932 (Tas), ss 47 and 191B.

Dey v Victorian Railways Commissioners (1949) 78 CLR 62; Allesch v Maunz [2000] HCA 40, 203 CLR 172, referred to.

Procedure - Civil proceedings in State and Territory Courts - Ending proceedings early - Summary disposal - Generally - Claim not clearly untenable - Application for judgment dismissed - Application to strike-out pleadings in respect of the tort of misfeasance in public office dismissed.

Children, Young Persons and Their Families Act 1997 (Tas), ss 18 and 111.

Northern Territory v Mengel (1995) 185 CLR 307; Sullivan v Moody [2001] HCA 59, 207 CLR 562; Holloway v State of Tasmania [2006] TASSC 60, [2005] TASSC 90; 15 Tas R 127, referred to.

Judgment Number: [2020] TASSC 23

1. This is an appeal against a decision of Holt AsJ of 6 April 2020, refusing to exercise his discretion to dismiss the respondent's action for damages for negligence and misfeasance in public office, with judgment for the appellant, or in the alternative, to strike-out the claim for damages for misfeasance in public office, (MFC v State of Tasmania [2020] TASSC 9).
2. The appellant accepts that to be successful on this appeal there must be demonstrated "some legal, factual or discretionary error" infecting the order made by the Holt AsJ: see Allesch v Maunz [2000] HCA 40, 203 CLR 172 [23].
3. The interlocutory application refused by Holt AsJ was in the following terms:

"The State of Tasmania applies for the following orders:

1. Pursuant to Rule 259 of the Supreme Court Rules 2000, the action be dismissed and judgment be entered for the defendant with costs because the amended statement of claim does not disclose a reasonable cause of action.
2. Alternatively, pursuant to Rule 259, that paragraphs 15 - 26 of the amended statement of claim be struck out because they do not disclose any reasonable cause of action.
3. That the plaintiff pay the costs of this interlocutory application."
4. As Holt AsJ observed at [10] of his reasons for decision, the way in which the appellant's application was framed was such that if the claim for damages for misfeasance in public office was not struck out, the whole of the application stood to be dismissed. However, s 191B of the Supreme Court Civil Procedure Act 1932 provides that in appeals against orders made by the associate judge, the judge hearing the appeal has the same jurisdiction and powers as the Full Court has in hearing an appeal against a decision or order of a judge.
5. In turn, s 47 of the Supreme Court Civil Procedure Act sets out the powers of the Full Court on the hearing of appeals. Those powers are sufficiently wide that in the event of my being satisfied that the order made by Holt AsJ should be set aside, I have power to determine the interlocutory application, whether by way of doing what was sought by the State in the interlocutory application or otherwise.

1. The amended statement of claim in the action pleads the following allegations. In 2013 the respondent and his partner used their home as a foster home for five boys, and on various occasions in January and February 2013, the 14 year old brother of two of the boys in foster care stayed overnight at the home. The child accused the appellant of sexually assaulting him and the respondent reported the allegation to the Department of Health and Human Services (the Department). A police investigation followed which resulted in a decision not to bring charges. The Secretary of the Department was empowered under the Children, Young Persons and Their Families Act 1997 (the Act), s 18, to conduct an assessment as to the circumstances of a child reasonably believed or suspected to be at risk. The task of undertaking the assessment was delegated to an officer of the Department, Ms Helen Marshall. Notwithstanding the decision of the police not to bring charges, about a month after that decision, in June 2013, Ms Marshall published a report which implied that the respondent had sexually abused the child. The result was that the five foster children then in the care of the respondent and his partner, were removed from the foster home as a result of which the respondent suffered economic loss.
2. The pleading includes a claim that in publishing her report Ms Marshall recklessly disregarded the scope of her authority and by so doing engaged in misfeasance in public office. There are other complaints about her conduct which the respondent alleges constitute misfeasance in public office.
3. The pleading in respect of the claim for damages for misfeasance in public office appears at pars 15-26 of the amended statement of claim. There is a separate claim for damages for negligence which is set out at pars 27-50 of the amended statement of claim.
4. It is not expressly pleaded that the appellant is vicariously liable for any negligent act or omission of Ms Marshall, however the State by the written submissions of its counsel, Mr Turner SC, accepts that it is so liable in respect to any such act or omission which is within the scope and course of Ms Marshall's employment, but only where such act/omission did not involve the exercise of any "independent power(s)".
5. Insofar as the claim in misfeasance in public office is concerned, the respondent pleads that the State is liable by reason of the Act, s 111, which is as follows:

(1) A person engaged in the administration of this Act does not incur any personal liability in respect of any act done, or omitted, in good faith in the performance or exercise, or purported performance or exercise, of a function or power under this Act.

(2) A liability that would, but for subsection (1), attach to a person attaches to the Crown."

1. Holt AsJ noted at [8] of his reasons that summary disposition is reserved for clear cases only and that in Dey v Victorian Railways Commissioners (1949) 78 CLR 62, Dixon J (as he then was) said at 91:

"[8] A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury."

"[9] The defendant says that the tort of misfeasance in public office necessarily contains the element of malice so that liability cannot attach to the State under the Act, s 111. As to the claim in negligence, the defendant says that a person conducting a risk assessment for the care and protection of children can owe no duty of care to an alleged perpetrator of abuse, as a duty of care owed to a child is irreconcilable with the existence of a duty of care also being owed to an alleged perpetrator of child abuse. It was submitted that the High Court case of Sullivan v Moody [2001] HCA 59, 207 CLR 562 is directly in point and stands in the path of the plaintiff's negligence claim so that that claim must inevitably be dismissed."

1. His Honour then held as follows at [11]-[14]:

"[11] As indicated earlier in these reasons, the plaintiff's claim for damages for misfeasance in public office includes a component of reckless disregard by the officer of the extent of her power. In particular the pleading includes the following:

'23.2.1 Being recklessly indifferent to whether she was empowered to make the finding of guilt and disseminate it ...'

[12] Recklessness, as opposed to carelessness, on the part of an officer may be sufficient, when combined with the likelihood of resultant harm and the fact of harm, to make good the claim. In Northern Territory v Mengel (1995) 185 CLR 307 the majority said at 347:

'If misfeasance in public office is viewed as a counterpart to the torts imposing liability on private individuals for the intentional infliction of harm, there is much to be said for the view that, just as with the tort of inducing a breach of contract, misfeasance in public office is not confined to actual knowledge but extends to the situation in which a public officer recklessly disregards the means of ascertaining the extent of his or her power.'

[13] Mengel leaves open the possibility that a public officer, albeit in a misguided way, who has engaged in reckless conduct but has been motivated by considerations of public benefit, rather than personal gain or vindictiveness, may be liable for the tort. In such circumstances it may be that, notwithstanding the misfeasance, the action was undertaken in 'good faith' within the meaning of the phrase in s 111. It follows that the claim against the State cannot be summarily dismissed.

[14] In any event, the power to strike-out a claim is discretionary. Pleadings may alter as further information comes to light during the course of a proceeding. In this regard, it is relevant to note that if the officer acted with de facto authority, for example in accordance with departmental protocols or under supervision, the State could be potentially liable on that basis. In Mengel the majority said at 347:

'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 a de facto authority, there will ordinarily only be personal liability'."

"[15] Because of the way in which the interlocutory application has been framed and in light of my finding that the claim against the State in respect of misfeasance in public office cannot be struck out, I do not need to consider the question of whether or not the claim in negligence is untenable. The assessment of that claim will have to await the trial."

1. In written submissions, the appellant says that "the case for the State in this appeal is simple". It says that it is not liable for the tortious acts of its servants which comprise misfeasance in a public office. And its servants, when exercising powers under the Act, owe no duty of care to someone alleged to have harmed a child.
2. For the first of those propositions the appellant relies, in particular on Holloway v State of Tasmania [2006] TASSC 60, 15 Tas R 127. For the second it relies on Sullivan v Moody [2001] HCA 59, 207 CLR 562.
3. As to the appellant's responsibility for Ms Marshall's actions, it is said, as to the tort of misfeasance in public office, that the tort inheres, as an essential element, an absence of good faith and that in consequence, s 111(2) of the Act cannot be engaged. It argues that Holloway is authority for the proposition that misfeasance in a public office cannot be "in good faith". Moreover it is submitted that the State cannot be vicariously liable for the tort because it involves the independent exercise of powers, and the independent discretion rule is such that vicarious liability cannot arise.
4. The appellant submits that in law there is no duty of the kind pleaded or any like duty. It argues that the effect of the proper application of the principles enunciated in Sullivan v Moody is that there can be no duty_._ And it argues if it is wrong about that then any breach of the duty consists of the wrongful exercise of powers, and, given the powers are to be independently exercised, the independent discretion rule is such that vicarious liability cannot arise. However, importantly, the appellant concedes that if there is a duty then s 111 might apply, that is to say that, the negligent exercise of an independent power might be in "good faith", depending on the circumstances.
5. In Sullivan v Moody it was said at 582:

"[60] ... 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.

[62] The duty for which the appellants contend cannot be reconciled satisfactorily, either with the nature of the functions being exercised by the respondents, or with their statutory obligation to treat the interests of the children as paramount. As to the former, the functions of examination, and reporting, require, for their effective discharge, an investigation into the facts without apprehension as to possible adverse consequences for people in the position of the appellants or legal liability to such persons. As to the latter, the interests of the children, and those suspected of causing their harm, are diverse, and irreconcilable."

1. In response, in written submissions, the respondent argues that this case is different from Sullivan v Moody because of the other children involved, to whom duties were also owed. He contends that "an overly risk averse determination of removal of all children upon the mere assertion of sexual misconduct by a child known to be a liar, would injure the other children and not be in their interest".
2. The respondent submits:

"[40] There is, however, a highly principled reason so to confine and thereby define the duty. The reason is that, where one is dealing with other children who benefit from the parental relationship, and the duty to those children provides the basis and rationale for a 'piggy back' duty to the Plaintiff and his partner, the demarcation of the nuclear family itself is also is (sic) the demarcation of the ambit of the parenting benefits inuring to all children. In Sullivan the doctors involved were not intimately interested in preserving child welfare through the encouragement of viable foster families. Furthermore, by reason of the matters in SB, [20-21] at AB45-46, in Sullivan the doctors involved had not created a zone of risk, which zone of risk was defined by the ambit of the nuclear family within which KB was living."

1. The appellant relies on the passage, already set out above in the quotes from Holt AsJ's reasons, from Northern Territory v Mengel (1995) 185 CLR 307 at 347, namely:

"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."

1. And the appellant points out that the plurality also noted at 347, as to the mental element of the tort of misfeasance in public office, that:

"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 it 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, namely, that liability requires an act which the public officer knows is beyond power and which involves a foreseeable risk of harm. If misfeasance in public office is viewed as a counterpart to the torts imposing liability on private individuals for the intentional infliction of harm, there is much to be said for the view that, just as with the tort of inducing a breach of contract, misfeasance in public office is not confined to actual knowledge but extends to the situation in which a public officer recklessly disregards the means of ascertaining the extent of his or her power. However, that is not what was put in this case." [Emphasis added.]

1. The appellant submits that Ms Marshall was exercising independent powers as the delegate of the Secretary of the Department and had no power to make an assessment outside of s 18 of the Act. It is submitted that in order to make the assessment she had to form a view - she had to be "satisfied" that a child was "at risk". She had to form a state of mind in order to exercise the power. She could not be compelled or directed to either form that state of mind or to exercise the power. The appellant submits that therefore, the independent discretion rule must apply and that the circumstances in this case are no different, conceptually, to those in Holloway (above).
2. In Holloway, in a passage later approved by the Full Court on appeal, Evans J said:

"[11] The indemnity provided to the Commissioner by s 52(1) is conditional upon his liability being for an act or omission done or made 'in good faith'... Whilst the words 'in good faith' are often used in statutes and rarely defined, they are almost invariably construed as meaning honestly. See, for example, Central Estates (Belgravia) Ltd v Woolgar [1971] 3 All ER 647, Denning MR at 649, Phillimore LJ at 650 and Megaw LJ at 651. In some instances good faith has been construed as requiring more than honesty, Mid Density Developments Pty Ltd v Rockdale Municipal Council [1993] FCA 408; (1993) 44 FCR 290 at 298 - 300 and Barrett v State of South Australia (1994) 63 SASR 208. I am not aware of any instance where it has been held that a requirement of good faith was satisfied by less than honest behaviour. I have no hesitation in concluding that within s 52 the words 'good faith', at the very least, required that the act or omission in question be done or made honestly. However, as explained in par 10, for the plaintiffs to establish liability against the Commissioner for the tort of misfeasance in public office, they must prove that his conduct was otherwise than an honest attempt to perform the functions of his office. Such conduct would not be in good faith for the purpose of s 52." [Emphasis added.]

1. Holloway does not decide that, in the context of Mengel leaving open the possibility of recklessness committed in good faith, the mental element that must be proved must be referable to conduct that "was otherwise than an honest attempt to perform the functions of [the] office". The respondent should not be prevented from arguing that Holloway should be confined to its facts and should have the opportunity of arguing the concepts of Mengel "reckless disregard" and "good faith" with the benefit of the evidence presented at trial as to Ms Marshall's actual state of mind.
2. These things are arguable and the respondent should not be shut out from the opportunity to elicit the necessary evidence to put its best arguments on the existing law, or to argue for a development of the law left open by decided cases.
3. As to Sullivan v Moody, the appellant's argument is strong. However, I accept the respondent's submission that the present case is capable of being distinguished from that case. The categories of duty are not closed, and a novel "piggy back" duty relating to economic loss caused by complaints of child sexual abuse in the particular factual circumstances of this case is at least arguable.
4. As Dixon J postulated in Dey (above), a case must be "very clear indeed" in order to justify the summary intervention of the Court to prevent a plaintiff from submitting his or her case for determination by the Court, at first instance, and, subject to any order for security for costs, on appeal. In this case where, almost axiomatically from the 43 pages of closely reasoned written argument on both sides, this case is not a "very clear case" and Holt AsJ did not err in exercising his discretion as he did. I detect no "legal, factual or discretionary error" infecting the order made by his Honour.