Etter v State of Tasmania

[2013] TASSC 65

[2013] TASSC 65

COURT:  SUPREME COURT OF TASMANIA

CITATION:              Etter v State of Tasmania [2013] TASSC 65

PARTIES:  ETTER, Barbara
  v
  STATE OF TASMANIA

FILE NO:  1011/2011
DELIVERED ON:  29 October 2013
DELIVERED AT:  Hobart
HEARING DATES:  18 September and 22 October 2013
JUDGMENT OF:  Holt AsJ

CATCHWORDS:

Procedure – Supreme Court Procedure – Tasmania – Practice under Rules of Court – Amendments – Statement of claim – Disclosure of reasonable cause of action.

Supreme Court Rules 2000 (Tas), r427.

Spencer v Commonwealth of Australia (2010) 241 CLR 118 applied.

Aust Dig Procedure [276]

Constitutional Law – The Non-Judicial Organs of Government – The Crown – Administrative Machinery of Government – Statutory Corporations and Bodies Exercising Governmental or Public Functions – Particular Instrumentalities – Other Instrumentalities – Integrity Commission – Instrumentality of the Crown – Whether Chief Executive Officer an Employee of the Crown – Whether Acts or Omissions of Authorised Officers are Acts or Omissions of the Crown.

Integrity Commission Act2009 (Tas), s7(3).

Inglis v Commonwealth Trading Bank of Australia (1969) 119 CLR 334; State Bank of New South Wales v Commonwealth Savings Bank of Australia (1986) 161 CLR 639 and Deputy Commissioner of Taxation v State Bank of New South Wales (1992) 174 CLR 219 considered.

Aust Dig Constitutional Law [113]

REPRESENTATION:

Counsel:
             Plaintiff:  D F Zeeman
             Defendant:  F C Neasey
Solicitors:
             Plaintiff:  Butler McIntyre & Butler
             Defendant:  Director of Public Prosecutions

Judgment Number:  [2013] TASSC 65
Number of paragraphs:  21

Serial No 65/2013
File No 1011/2011

BARBARA ETTER v STATE OF TASMANIA

REASONS FOR JUDGMENT  HOLT AsJ

29 October 2013

1. The plaintiff, the former chief executive officer of the Integrity Commission, has brought an action for damages against the Crown, claiming that, through the Chief Commissioner and certain Board members, duties to her, as an employee, were breached.  Pursuant to the Crown Proceedings Act 1993, s5, proceedings by or against the Crown are to be taken under the name "The State of Tasmania". The plaintiff has applied for an order granting leave to amend her statement of claim.

1. The application is opposed by the defendant on two grounds, which in broad terms are as follows.  Firstly, it is asserted that the claim, howsoever pleaded, is futile as the Chief Commissioner and the Board members were not acting as agents of the Crown in connection with their impugned dealings with the plaintiff.  Secondly, it is asserted that the proposed plea does not disclose a cause of action and is prolix and confusing. 

1. Although I was initially inclined to deal with the first ground discretely, counsel for the defendant informed me that he had made all of the submissions intended to be relied upon on both grounds.  Accordingly, I will deal with the whole of the application. 

1. As to the assertion that the claim is futile, the starting point is that a plea "which is … obviously bad in law will not be allowed".  Commonwealth v Verwayen (1990) 170 CLR 394 at 456, per Dawson J. See also Horton v Jones(No 2) (1939) 39 SR (NSW) 305 at 309 – 310 and Commissioner for Railways v Bielewicz (1963) NSWR 482 at 484. However, a pleading will not be disallowed on this ground in cases of doubt or difficulty or where the pleading raises a debatable question of law. Dey v Victorian Railways Commissioners (1948 – 1949) 78 CLR 62 at 91. It must be very clear that the case pleaded cannot succeed before the plaintiff can be denied access to a trial in the usual way. General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129; Webster & Anor v Lampard (1993) 177 CLR 598 at 602; Agar v Hyde (2000) 201 CLR 552 at 575 – 576 and Spencer v Commonwealth of Australia (2010) 241 CLR 118 at [24].

1. Rule 227 of the Supreme Court Rules 2000 relevantly provides that a pleading is to contain only a statement of all of the material facts, expressed so as to give reasonably explicit notice to any other party of all grounds of action intended to be relied upon at the trial. In some cases the particular legal principles relied upon need to be mentioned so that the requirement for clarity is fulfilled.

1. It is necessary to consider the proposed pleading against the legislative background. 

1. The Integrity Commission Act 2009 (with the exception of s11, which is not relevant for present purposes) commenced on 1 October 2010. The objects of the Integrity Commission are confined to matters of government and are set out in s3. They include the promotion and enhancement of standards of ethical conduct by public officers. The Commission is established by s7. The Commission includes, amongst others, the Board and any member of the Board. Section 7(3) provides that the Commission is a body corporate and "is an instrumentality of the Crown". Section 17 provides for the appointment of a chief executive officer by the Governor on the recommendation of the Premier. The responsibilities of the chief executive officer are set out in s18 and include being responsible to the Board for the general administration, management and operations of the Integrity Commission. Section 12 provides for the appointment of a Board, having the duties set out in s13, including a duty to ensure that the chief executive officer performs the functions of the office and exercises the relevant powers in accordance with sound public administration practice, principles of procedural fairness and the objectives of the Act. Section 8(2) authorises the Commission "to do all things reasonably necessary or convenient to be done in connection with the performance of its functions". Section 15 provides for the appointment of a Chief Commissioner who, by virtue of s14 is a member and chairperson of the Board.

1. In brief summary the core allegations in the proposed statement of claim are as follows.  The plaintiff was appointed as chief executive officer on 31 May 2010 and commenced duties on 15 June 2010.  (Although the Integrity Commission Act 2009 had not commenced, the Acts Interpretation Act 1931, s11, permits such anticipatory appointments.) The appointment was for a term of five years. The plaintiff continued in the position until 7 October 2011. She alleges that the Crown owed duties to her as an employee as a matter of contract, general law and statute. She goes on to allege that these duties were breached in a number of ways, including a failure to establish criteria by which her performance would be assessed; the frustration of her attempts to establish clear delineations between various roles within the Commission; the frustration of her generally in the performance of her duties; the failure to manage her workload and to recognise and deal with work stress and anxiety which she was suffering; unreasonably exposing her to informal performance appraisals and making a suggestion that she should resign. The plaintiff claims that this was repudiatory conduct and that she accepted the repudiation and left her position on 7 October 2011. She claims damages, including damages for the loss of the balance of the term of her appointment and the loss of the opportunity to have her appointment renewed at the end of the initial five year term.

1. The starting point is that the Commission is an instrument of the Crown. 

1. The plaintiff has a good case that the Commission is to be treated as if it were the Crown. 

1. The relevant authorities are Inglis v Commonwealth Trading Bank of Australia (1969) 119 CLR 334; State Bank of New South Wales v Commonwealth Savings Bank of Australia (1986) 161 CLR 639 and Deputy Commissioner of Taxation v State Bank of New South Wales (1992) 174 CLR 219.

1. In Inglis the question arose as to whether the bank was being sued as the Commonwealth or on behalf of the Commonwealth so that it could be determined whether the High Court had original jurisdiction in the action pursuant to the constitution s75(iii).  At p338 Kitto J framed the question as follows:

"The question is rather what intention appears from the provisions relating to the respondent in the relevant statute: is it, on the one hand, an intention that the Commonwealth shall operate in a particular field through a corporation created for the purpose; or is it, on the other hand, an intention to put into the field a corporation to perform its functions independently of the Commonwealth, that is to say otherwise than as a Commonwealth instrument, so that the concept of a Commonwealth activity cannot realistically be applied to that which the corporation does?"

1. The conclusion reached was that the proceedings were within the original jurisdiction of the Court.  Barwick CJ at p336 said that his preferred position was "to regard the matter as one in which the Commonwealth was a party".

1. The opinion of Barwick CJ was accepted by Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ in State Bank of New South Wales v Commonwealth Savings Bank of Australia. There the court said at 652:

"Having regard to all the circumstances, we are satisfied that the State carries on banking through its statutory corporation, the Bank, and that it necessarily follows that the Bank is for this purpose the State of New South Wales."

1. In Deputy Commissioner of Taxation v State Bank of New South Wales the question was whether a Commonwealth sales tax imposed on the property of the bank was a tax imposed on the State of New South Wales contrary to the Constitution. It was held by the Court that the bank was an instrumentality of the State. The court said at 230 – 233:

"Once it is accepted that the Constitution refers to the Commonwealth and the States as organizations or institutions of government in accordance with the conceptions of ordinary life, it must follow that these references are wide enough to denote a corporation which is an agency or instrumentality of the Commonwealth or a State as the case may be. The activities of government are carried on not only through the departments of government but also through corporations which are agencies or instrumentalities of government.

…

In Inglis v Commonwealth Trading Bank of Australia there was a difference of opinion on the question whether the Commonwealth Trading Bank was 'the Commonwealth' or 'a person ... being sued on behalf of the Commonwealth' within the meaning of s75(iii).  However, later, in Maguire v Simpson the Court decided that the Trading Bank was 'the Commonwealth' for the purposes of s64 of the Judiciary Act. That decision established that, in an appropriate context, the words 'the Commonwealth' are wide enough to include a corporation which is an agency or instrumentality of the Commonwealth. By a like process of reasoning, the words 'a State' have a similarly wide meaning. And in Crouch, this Court held unanimously that the Commissioner for Railways was an instrumentality of the State of Queensland for the purposes of s75(iv). The Commissioner was an instrumentality 'through which the executive government of the State discharges an important part of its governmental functions', the conduct of railways being, as a matter of history, a 'very large and important part' of government in this country, a fact recognized in the Constitution itself.

…

The question then is whether the State Bank is discharging governmental functions for the State or, to put it another way, is the State carrying on banking through its statutory corporation, the State Bank. The unanimous decision in State Bank of NSW v Commonwealth Savings Bank of Australia is decisive of that question. There the Court held that an action by the State Bank was a suit by 'a State' for the purposes of s38(d) of the Judiciary Act. In the course of reasoning to that conclusion, the Court, after considering in detail the relevant provisions of the State Bank Act, which have not been amended in any substantial respect, held that 'the State carries on banking through its statutory corporation, the Bank, and that it necessarily follows that the Bank is for this purpose the State of New South Wales'."

See also SGH Ltd v Commissioner of Taxation (2002) 210 CLR 51 at [16].

1. Here the Integrity Commission has been created to discharge governmental functions and the Act specifically provides that the Commission is "an instrumentality of the Crown".  The Commission through its Board and Board members, by virtue of s13, could exercise control over the plaintiff in the performance of her duties.  This is an important consideration in the determination of whether an employee/employer relationship existed.  See Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 24. It follows that the plaintiff has a case that she was employed by the Crown and that the impugned conduct of the Commission, through members of its Board, was conduct of the Crown.

1. I would not disallow the claim as being obviously bad in law, as was pressed upon me by counsel for the defendant.

1. I reject the submission that the proposed plea, as framed, does not disclose a cause of action.  In essence, when read in the context of the legislation, it contains allegations that there was an employee/employer relationship between the plaintiff and the defendant and that the defendant, through its instrument the Commission, engaged in conduct in breach of the duties which an employer owes to an employee with resultant damage.  This is sufficient to constitute a complete cause of action.

1. Although the plea might have been set out more succinctly, more accurately and with greater clarity, the nature of the case is identifiable in the context of the legislation and the basis of the claim has been set out sufficiently to enable the defendant to join issue where appropriate and to enable a fair trial of the action to occur. 

1. Counsel for the plaintiff conceded that the words "officers, employees" in par14 of the proposed statement of claim should not have been included. 

1. There will be an order granting the plaintiff leave to amend the statement of claim in terms of the application with the excision of the words "officers, employees" in par14.