McColley v Commonwealth of Australia
[2014] ACTCA 21
•20 June 2014
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | McColley v Commonwealth of Australia |
Citation: | [2014] ACTCA 21 |
Hearing Date(s): | 19 February 2014 |
DecisionDate: | 20 June 2014 |
Before: | Murrell CJ, Refshauge, Penfold JJ |
Decision: | Appeal allowed, see [1] |
Category: | Principal Judgment |
Catchwords: | APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – Whether trial judge denied procedural fairness by relying on authority not raised with parties PRACTICE AND PROCEDURE – Strike out application – Whether statement of claim disclosed reasonable cause of action – Whether duty of care reasonably arguable – Whether deliberate self-infliction of harm broke causal link PRACTICE AND PROCEDURE – Nature of strike out order – Whether interlocutory or final order – Whether leave to appeal required |
Legislation Cited: | Veterans’ Entitlements Act 1986 (Cth) Civil Law (Wrongs) Act 2002 (ACT) pt 3.1 Supreme Court Act 1933 (ACT) s 37E |
Cases Cited: | Agar v Hyde (2000) 201 CLR 552 AMP General Insurance Ltd v Roads & Traffic Authority (NSW)(2001) 22 NSWCCR 247 X (Minors) v Bedfordshire County Council [1995] 2 AC 633 |
Parties: | Karen McColley (Appellant) Commonwealth of Australia (Respondent) |
Representation: | Counsel: Mr G Stretton SC (Appellant) Mr S Pilkinton SC (Respondent) |
| Solicitors: KCI Lawyers (Appellant) Clayton Utz (Respondent) | |
File Number(s): | ACTCA 54 of 2012 SC 414 of 2011 |
Decision under appeal: | Court/Tribunal: ACT Supreme Court Before: Burns J Date of Decision: 25 October 2012 Case Title: McColley v Commonwealth of Australia Citation: [2012] ACTSC 154 |
THE COURT
Orders
The Court orders that:
(a)The applicant is granted an extension of the time within which to bring an application for leave to appeal.
(b)The applicant is granted leave to appeal.
(c)The appeal is allowed.
(d)The strike out order made by the Supreme Court on 25 October 2012 is set aside.
(e)The respondent’s strike out application filed on 29 February 2012 is dismissed.
(f)If neither party files and serves written submissions in relation to costs by 4pm on 4 July 2014 the respondent is to pay the costs of the strike out application and the costs of the appeal.
Background
Mrs McColley is the widow and personal representative of Gary McColley, who was a veteran of the war in Vietnam. From 1990, Mr McColley received a disability support pension from the Commonwealth Department of Veterans’ Affairs (DVA) under the Veterans’ Entitlements Act 1986 (Cth) (VEA), on the basis of total and permanent incapacity. Mr McColley suffered from a psychiatric illness and had attempted to commit suicide.
In about October 2006, the DVA received an anonymous verbal “tip-off” that Mr McColley was not entitled to a VEA pension. The communication provided no detail about the asserted lack of entitlement. On 23 October 2006, the DVA informed Mr McColley that he was under investigation for possible fraud in connection with his pension. In April 2007 Mr McColley was interviewed by the DVA.
On 5 July 2008, Mr McColley committed suicide by dousing himself in petrol and self-immolating. At that time, he was still under investigation.
A posthumous review established that Mr McColley was entitled to a VEA pension.
Mrs McColley alleges that the DVA should not have conducted an investigation, and that the manner in which the investigation was conducted exacerbated Mr McColley’s vulnerable psychiatric condition and “drove [Mr McColley] to breaking point”.
The trial proceedings
Mrs McColley brought a claim for damages against the Commonwealth, alleging negligence by the DVA in relation to the fraud investigation. Part 3.1 of the Civil Law (Wrongs) Act 2002 (ACT) permits the personal representative of a deceased person to bring such a claim for the benefit of surviving dependents.
The particulars of negligence pleaded by Mrs McColley fell into two broad categories: negligence in deciding to investigate the anonymous “tipoff”, and negligence in relation to the manner in which the investigation was conducted. As to the conduct of the investigation, among other assertions Mrs McColley alleged that, in the context that Mr McColley was psychologically vulnerable, the investigation was attended by unreasonable delays, Mr McColley was not informed about the progress of the investigation, he was not advised of his rights before he was interviewed, and he was not given details of the allegations.
On 25 October 2012, the trial judge struck out Mrs McColley’s statement of claim pursuant to r 425 (1)(a) of the Court Procedures Rules 2006 (ACT) (CPR) on the basis that it disclosed no reasonable cause of action: McColley v Commonwealth of Australia [2012] ACTSC 154. His Honour held that Mrs McColley could not establish that the DVA owed a duty of care to Mr McColley because the alleged duty was incompatible with the DVA’s duty to investigate (at [33] and [35]) and was not coherent with the statutory scheme of the VEA (at [36]), and because a denial of procedural fairness could not found a cause of action for damages (at [37]). Leave to re-plead was refused.
The appeal
The judgment below was given on 25 October 2012. The appellant lodged a notice of appeal on 22 November 2012, 28 days after the judgment was delivered.
Had the strike out order been a final order, Mrs McColley would have had a right of appeal and her appeal would have been filed within the relevant 28 day period: s 37E(2) Supreme Court Act1933 (ACT) (SCA) and r 5405(1)(b) CPR.
However, the strike out order was an interlocutory order: see [20]–[25] below. An appeal against an interlocutory order requires leave of the Court of Appeal: s 37E(4) SCA. The respondent contends that leave should be refused because the proposed appeal cannot succeed.
An application for leave to appeal must be brought within seven days: r 5312 CPR. The respondent consents to an extension of the time within which to bring an application for leave to appeal. The Court will grant an extension of the time for bringing the application for leave to appeal.
For the reasons at [26]–[29] below, the Court will grant leave to appeal.
Fresh evidence on appeal
By consent and with leave of the Court, additional evidence comprising three documents was admitted on the appeal.
Mrs McColley tendered two DVA documents, a DVA “Service Charter” and “DVA Factsheet IP02: If you’re the Subject of an Investigation – Your Rights and Obligations”. The purpose of the tender was to support the contention that the duty of care alleged in the statement of claim was consistent and compatible with the proper conduct of a DVA fraud investigation. The DVA’s “Service Charter” purports to confer on persons dealing with the DVA “a right to ... be treated with courtesy, consideration and respect” and refers to a commitment to deliver services “in a timely and prompt manner” and provide information “of any delays in processing your matters” as well is keeping clients “fully informed of (their) rights and entitlements”. Similarly, the DVA Factsheet IP02 states in part:
How will a person be treated if they are the subject of an investigation?
A person who is the subject of an investigation and who is contacted by us in the course of that investigation will be:
treated in a professional, considerate and respectful manner in accordance with our Service Charter and the Privacy Act;
kept fully informed of their rights and obligations; and
advised of any significant delays in the processing of their matters
(emphasis in original)
The respondent tendered “Commonwealth Fraud Control Guidelines 2002”, a document promulgated by the Minister for Justice and Customs. In part, the Guidelines provide:
Agencies are responsible for preventing and detecting fraud against the Commonwealth ...
Agencies are responsible for investigating routine or minor instances of fraud as set out in Guideline 4. Agencies are to refer all instances of serious or complex fraud involving Commonwealth interests to the AFP ...
Although the dates of the tendered documents do not entirely accord with the dates of the investigation involving Mr McColley, the parties agree that, at the relevant time, documents to the same effect were in existence.
Issues
The appeal raises the following issues:
(a)Was the strike out order an interlocutory order or a final order?
(b)If it was an interlocutory order, should Mrs McColley be given leave to appeal?
(c)What is the proper approach to a strike out application?
(d)Did the statement of claim disclose no reasonable cause of action because the existence of a duty of care is not reasonably arguable?
(e)Did the deliberate self-infliction of harm by Mr McColley necessarily break any causal link between breach of duty and damages?
(f)Did the trial judge deny procedural fairness by relying on the authority of Gruber v Backhouse (2003) 190 FLR 122 (Gruber) when he had not raised the decision with the parties?
Was the strike out order an interlocutory order or a final order?
Mrs McColley submits that, although the trial judge’s order did not explicitly dismiss her claim, that was the intent and legal effect of the order made at [38]; in a practical sense, the order finally determined the proceedings. Other than by way of an appeal, there is no means by which she can assert the cause of action. Consequently, so Mrs McColley contends, the strike out order is a final order rather than an interlocutory order.
Mrs McColley’s contention makes practical sense, but the authorities establish that at least in the absence of a stay or dismissal order, a strike out order is an interlocutory order.
Whether a judgment is an interlocutory judgment or a final judgment depends upon the legal rather than the practical effect of the judgment: Carr v Finance Corporation of Australia Ltd (1981) 147 CLR 246 at 248 per Gibbs CJ.
According to cases such as Hunt v Allied Bakeries Ltd [1956] 1 WLR 1326, and Little v Victoria [1998] 4 VR 596, an order striking out a statement of claim as not disclosing a cause of action is an interlocutory order. In Re Luck (2003) 203 ALR 1 (Re Luck) at [9] McHugh ACJ, Gummow and Heydon JJ said:
An order is an interlocutory order, therefore, when it stays or dismisses an action or refuses leave to commence or proceed with an action because the action is frivolous, vexatious an abuse of process of the court or does not disclose a reasonable cause of action.
In support of her submission that the strike out order was a final order, Mrs McColley relies upon Mickelberg v 6PR Southern Cross Radio Pty Ltd [2001] WASC 267 (Mickelberg) at [32]. That was an appeal against a decision striking out a statement of claim (because it disclosed no reasonable cause of action) and an order that the action be dismissed. Applying Florida Investment Pty Ltd v Milstern (Holdings) Pty Ltd [1972] WAR 148 (Florida Investments), Hasluck J found that the order was a final order. However, Florida Investments appears to be inconsistent with what the High Court said in Re Luck. In any event, the decision in Mickelberg does not assist Mrs McColley because in Mickelberg there was also an order dismissing the action, and that was said to make the order a final order. In this case, the trial judge did not make an order that Mrs McColley’s proceedings be dismissed.
Applying the reasoning in Re Luck, the trial judge’s refusal to grant Mrs McColley leave to re-plead does not affect the conclusion that the strike out order was an interlocutory order.
Should Mrs McColley be granted leave to appeal?
The grant of leave is discretionary. Leave should be granted when a decision is attended by sufficient doubt to warrant a grant of leave and it is in the interests of the administration of justice for leave to be granted in that, if the original decision is wrong, the refusal of leave would result in substantial injustice: Re Luck at [12].
For the reasons that appear below, leave to appeal should be granted because the judgment is attended by doubt. Further, it is in the interests of the administration of justice that leave be granted because the order had the practical effect of finally determining the rights of the parties: Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 (Johnson Tiles) at [43].
The DVA suggests that the decision appealed from may be a discretionary decision, and that the test stated by Dixon, Evatt and McTiernan JJ in House v The King (1936) 55 CLR 499 at 504–505 should be considered.
The Court does not agree. The decision is not a discretionary one; the question of whether a statement of claim discloses a reasonable cause of action is a question of law: see generally Johnson Tiles.
What is the proper approach to a strike out application?
Rule 425 of the CPR relevantly provides:
(1) The court may, at any stage of a proceeding, order that a pleading or part of a pleading be struck out if the pleading–
(a) discloses no reasonable cause of action or defence appropriate to the nature of the pleading ...
At [7]–[9] of the judgment, the trial judge correctly articulated the approach to be taken to a strike out application that alleges that a pleading discloses “no reasonable cause of action or defence”. The relevant principles were conveniently set out by Jagot J in Galovac Pty Ltd v Australian Capital Territory [2010] ACTSC 132. The application is to be assessed on the assumption that every fact pleaded by the plaintiff is true: West v New South Wales [2007] ACTSC 43 (West) at [9]. There is a “very high threshold”: Financial Integrity Group Pty Ltd v Farmer [2009] ACTSC 143 at [12]. There is a need for “exceptional caution” when deciding whether to order that a claim be struck out: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129. A cause of action is “unreasonable” only if it is “bound to fail”: Seven Network Ltd v News Ltd (No 4) (2005) 214 ALR 686.
Connolly J in West at [26] stated: “where there is no binding authority to say that the cause of action is unsustainable... a defendant faces a heavy burden to persuade the trial judge that the claim should be struck out”. If the law is not settled but is still developing then it is inappropriate to decide a novel question on hypothetical facts: X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at 740–741, Johnson Tiles at [50] (French J; Beaumont and Finklestein JJ agreeing).
In Agar v Hyde (2000) 201 CLR 552 at [64], Gaudron, McHugh, Gummow and Hayne JJ stated:
[F]requently the conventional form of pleading in an action of negligence will not reveal the alleged duty with sufficient clarity for a court considering an application for summary termination of the proceeding to be sure that all of the possible nuances of the plaintiff's case are revealed by the pleading. Further, and no less importantly, any finding about duty of care will often depend upon the evidence which is given at trial. Questions of reliance or knowledge of risk are two obvious examples of the kinds of question in which the evidence given at trial may take on considerable importance in determining whether a defendant owed the plaintiff a duty of care.
As the trial judge noted, another way of stating the test is that, before a claim may be struck out, it must be shown to be defective in substance and not merely in the manner in which it has been stated, and it must be “clearly untenable”: Carlisle v Filara Pty Ltd [2002] ACTSC 33 at [16].
The critical issue on the appeal is whether it was open to the trial judge to find that Mrs McColley’s claim that the DVA owed Mr McColley a duty of care to avoid foreseeable injury associated with the decision to investigate and the manner in which the investigation was conducted was “clearly untenable”, despite the absence of binding authority to that effect.
Did the statement of claim disclose no reasonable cause of action because the existence of a duty of care is not reasonably arguable?
The correct approach to the question of whether a duty of care attaches to a relationship involving a statutory (or other government) authority is set out in Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540 at [149] (Barclay Oysters), where Gummow and Hayne JJ said:
An evaluation of whether a relationship between a statutory authority and a class of persons imports a common law duty of care is necessarily a multi-faceted inquiry. Each of the salient features of the relationship must be considered. The focus of analysis is the relevant legislation and the positions occupied by the parties on the facts as found at trial. It ordinarily will be necessary to consider the degree and nature of control exercised by the authority over the risk of harm that eventuated; the degree of vulnerability of those who depend on the proper exercise by the authority of its powers; and the consistency or otherwise of the asserted duty of care with the terms, scope and purpose of the relevant statute. (Citations omitted) (Emphasis added)
In the context of determining whether a duty of care exists in a novel situation, the proper approach to identifying salient features was helpfully summarised in Caltex Refineries (Qld) Pty Ltd v Stavar (2009) 75 NSWLR 649 (Caltex), where Allsop P (with whom Simpson J agreed) made the following remarks at [102]–[103]:
If, however, the posited duty is a novel one, the proper approach is to undertake a close analysis of the facts bearing on the relationship between the plaintiff and the putative tortfeasor by references to the salient features or factors affecting the appropriateness of imputing a legal duty to take reasonable care to avoid harm or injury.
The salient features include:
(a) the foreseeability of harm;
(b) the nature of the harm alleged;
(c) the degree and nature of control able to be exercised by the defendant to avoid harm;
(d) the degree of vulnerability of the plaintiff to harm from the defendant’s conduct, including the capacity and reasonable expectation of a plaintiff to take steps to protect itself;
...
(g) the proximity or nearness in a physical, temporal, or relational sense of the plaintiff to the defendant;
...
(k) knowledge (either actual or constructive) by the defendant that the conduct will cause harm to the plaintiff;
...
(m) the nature and consequences of any action that can be taken to avoid the harm to the plaintiff;
(n) the extent of imposition on the autonomy or freedom of individuals, including the right to pursue one’s own interests;
(o) the existence of conflicting duties arising from other principles of law or statute;
(p) consistency with the terms, scope and purpose of any statute relevant to the existence of a duty; and
(q) the desirability of, and in some circumstances, need for conformance and coherence in the structure and fabric of the common law.
In this case, the trial judge acknowledged the significance of Barclay Oysters and Caltex, but was persuaded that cases such as Hill v Chief Constable of West Yorkshire [1989] AC 53 (Hill) and Tame v New South Wales; Annetts v Australian Stations PtyLtd (2002) 211 CLR 317 (Tame) (which discuss the police “immunity” in connection with the conduct of investigations) dictated that no duty of care attached to the DVA’s investigation of Mr McColley.
In Hill, the House of Lords rejected the proposition that police officers owe a duty of care to members of the public who may suffer injury through police carelessness in failing to apprehend a dangerous criminal, and noted that the conduct of a police investigation involves numerous policy and discretionary considerations, including decisions about the deployment of resources. In Tame, the plaintiff had claimed damages for a psychological condition that she developed some time after a motor vehicle accident when she learned that the police who had completed the accident report had negligently misstated that, at the time of the accident, her blood alcohol level exceeded the prescribed concentration. The High Court determined that the duties of the investigating police were inconsistent with a duty of care to avoid psychiatric injury to the plaintiff, who was a person whose conduct was under investigation.
In Australian Capital Territory v Crowley (2012) 7 ACTLR 142, the Court of Appeal found that police “immunity” covered a situation where, in the course of trying to apprehend a mentally ill man who was armed, the police shot him, rendering him quadriplegic. The Court stated that the principle in Hill was a principle of general application that was not peculiar to the facts under consideration in that case (asserted carelessness in relation to the apprehension of a dangerous criminal), and that the principle applied generally to operational policing, where quick decisions have to be made in difficult circumstances: [286]–[287]. Further, applying Sullivan v Moody (2001) 207 CLR 562 (Sullivan) and Stuart v Kirkland-Veenstra (2009) 237 CLR 215 (Stuart), the Court determined that the imposition of a duty of care would conflict with common law and statutory obligations owed by police to prevent crime and protect the public: [270]–[272] and [287]. The Court considered the matter to be a “classic case for the application of the core principle in Hill and the principle identified in Sullivan v Moody”: [304]. At [273] the Court noted that:
the duties of the police to the community must prevail. That is not to say that a police officer can never owe a duty of care to a suspected criminal, victim or bystander. There will be circumstances where a police officer can discharge the statutory and common law public duties without risk of injury to a suspected criminal, victim or bystander, and in these circumstances, it may be that the police officer will be found to owe a duty of care to any of those classes of person.
It is clear from the “immunity” cases that police rarely owe a duty of care to a suspect because such a duty would fundamentally conflict with their duty to investigate but not that, in an appropriate case, they can never do so: Tame per Gleeson CJ at [26]–[27], Gaudron J at [57], Gummow and Kirby JJ at [231], Hayne J at [298].
The policy basis for the “immunity” is that a duty of care would fundamentally conflict with the duty of police to investigate. Conflict of duties is one of the salient features referred to in Caltex. However, inconsistency may be a matter of degree: Halech v South Australia (2006) 93 SASR 427 at [109] per Besanko J. The “conflict or tension between duties must be placed in the balance with the range of factors pertinent to duty to determine whether a duty of care [exists]”: New South Wales v Paige (2002) 60 NSWLR 371 (Paige) at [105]. Even in the area of police “immunity”, policy must be considered “in the round”, by assessing the considerations both for and against the imposition of a duty of care: Swinney v Chief Constable of Northumbria Police Force [1996] 3 All ER 449 at 464 per Hirst LJ. In that case, the Court of Appeal determined that police “immunity” did not preclude the plaintiff, who was an informant, from alleging that the police owed a duty of care to protect the plaintiff’s identity.
Sullivan was decided shortly before Barclay Oysters. In Sullivan the plaintiffs, who had been exonerated of allegations of sexually abusing their children, had brought negligence proceedings against the medical practitioners who had examined the children and reported to the Department of Community Services that the children appeared to have been sexually abused. The plaintiffs’ claims were struck out as failing to disclose a cause of action. The High Court dismissed the appeal, rejecting the notion that, by itself, foreseeability of particular harm can found a duty of care to avoid that harm: [42]. The Court noted that considerations relevant to the determination of whether a duty of care arose were the need to preserve the consistency in the law, and the statutory scheme that governed the conduct of the relevant relationships: [50]. At [60] the Court (Gleeson CJ, Gaudron, McHugh, Hayne and Callinan JJ) stated:
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... 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. (emphasis added)
In Sullivan, the statutory scheme that underpinned the activities of the respondents was a scheme for the protection of children that required the respondents to treat the interests of children as paramount. The Court determined that the duty of care for which the appellants contended could not be reconciled satisfactorily with the nature of the functions exercised by the respondents or with their statutory obligation to treat the interests of the children as paramount: [62].
In Paige, the appellant had appealed against a finding that it had negligently caused psychological damage to the respondent by the manner in which it dismissed him from his position as a school principal. The NSW Court of Appeal approached the question of duty of care by examining all the salient features of the relevant relationship in the manner later approved in Barclay Oysters. The Court held that an employer’s duty to provide a safe system of work did not extend to providing a safe system of investigation and decision-making in relation to disciplinary matters under the relevant statutes affecting teachers. Spigelman CJ (with whom Mason P and Giles JA agreed on the issue of the existence of a duty of care) applied the reasoning in Sullivan. Against a conclusion that a duty of care existed, his Honour identified the potential conflict between the Director-General’s duty to the public and the school community, and his or her duty to provide a “safe” system of work (at [101]), the general undesirability of inhibiting an investigation into the exercise of a statutory power that protects public interests by imposing “the chilling effect of a risk of civil liability” (at [115]), the comprehensive statutory scheme under which disciplinary investigations were undertaken (at [121]–[124]), and incoherence between the suggested duty and the law of employment and administrative law (at [154]–[155] and [176]–[177]). In favour of the existence of a duty of care, his Honour identified the relationship of employer/employee, the vulnerability of the respondent and the “control” exercised by the appellant. When concluding that there was no duty of care, at [182] his Honour stated:
Nevertheless, the issues of coherence with the law of employment and administrative law, which I have discussed above, together with the elements of incompatibility of duties, are so significant as to outweigh [the considerations favouring the existence of a duty of care].
One of the cases considered by the trial judge was Upton v Centrelink (2009) 68 SR (WA) 46. His Honour concluded that the decision “[did] not assist the plaintiff”. Upton involved a claim in negligence for nervous shock arising from a delay in processing a claim for Centrelink benefits. Sleight DCJ dismissed an application for summary judgment because he considered that it was at least arguable that such a delay could give rise to a claim in negligence, in part because the social security legislation provided no express immunity and claimants were likely to be vulnerable people. Upton is not a binding authority and it is in some respects distinguishable, but it is incorrect to say that Upton does not assist Mrs McColley.
The trial judge also noted the decision of the Federal Court (Beaumont, French and Finklestein JJ) in Scott v Secretary, Department of Social Security (2000) 65 ALD 79 (Scott). In Scott, the appellants had claimed that the Department’s delay in granting a pension was in breach of its common law and statutory duties to the appellants. The Court held that there was no general common law duty of care to advise the appellants of benefits that might potentially be available under the relevant legislation: [20]. At [24] the Court “mentioned” that on the facts in that case there was no basis for a claim of failure to process pension claims with due expedition. Further, the Court observed that “absent a claim for misfeasance ... common law damages cannot be claimed merely for failure to act with due expedition” (emphasis added). Scott does not greatly assist a determination of the present proceedings; in Scott the appellants did not advance a suite of salient features such as those upon which Mrs McColley relies.
When determining whether a duty of care arises, relevant salient features must be identified and weighed. The focus must remain upon “the relevant legislation and the positions occupied by the parties on the facts as found at trial”: Barclay Oysters at [149].
At [14]–[15] of his reasons, the trial judge accepted the Barclay Oysters salient features test. However, his Honour ultimately decided that:
[33] ... What dictates the absence of a duty of care (on the part of police towards suspects) is the nature of the public duty exercised by police, and the incompatibility of that duty with a duty of care towards a suspect. This principle must apply equally to all charged with a public duty of investigating alleged crime. Investigators within the public service frequently perform similar, if not identical, investigatory functions to police, and the same policy considerations relevant to determining whether a police officer owes a duty of care to a suspect in investigating alleged crime apply equally to public service investigators.
...
[35] ...there could be no duty of care towards the deceased by those investigating his entitlements because such a duty is incompatible with their duty to investigate.
[36] I am also satisfied that the posited duty of care would not be coherent with the statutory scheme put in place by the VEA. That Act provides for applications for review of unfavourable decisions made pursuant to the VEA in cases of application for, or review of, entitlements: see New South Wales v Paige (2002) 60 NSWLR 371.
[37] Finally, to the extent that the plaintiff’s claim for damages is based upon a denial of natural justice, the claim cannot succeed. The law has never recognised a cause of action for damages for denial of procedural fairness in the exercise of either statutory or prerogative power: Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 45 per Deane J.
His Honour did not attempt to identify and weigh all the relevant salient features. His Honour did not consider any conflicting or inconsistent duty to investigate as merely one of a number of salient features, albeit a very significant and possibly determining feature, depending upon the degree and nature of the inconsistency. For example, there was no analysis of the extent to which the proposed duty of care could operate without unduly hampering or interfering with a DVA investigation.
Of course, the trial judge did not have the benefit of the DVA’s “Service Charter” and “DVA Factsheet IP02”. Arguably, these documents were not empty aspirational statements, but an acknowledgement by the DVA that a duty to investigate a veteran could sit alongside an obligation to conduct the investigation in a timely and sensitive manner.
Any consideration of salient features must be undertaken in the context of a close consideration of the relevant statutory scheme: Barclay Oysters; Paige at [93] per Spigelman CJ. The trial judge did refer to the relevant legislation, the VEA. He noted (at [30]) that it was arguable that the VEA was directed towards specified classes of people (inferentially, including Mr McColley) rather than the public at large. However, he considered that the fact that Mr McColley may have been part of a special group (and not merely a member of the general public) was overwhelmed by the consideration that the DVA was obliged to ensure that public funds were expended for the purpose for which they were provided. No doubt, one relevant feature (noted by the trial judge at [30]–[31]) is the DVA’s need to ensure that public funds are properly expended. However, in the context of the statutory pension scheme that is designed to protect the welfare of veterans, many of whom may be vulnerable, another relevant and competing feature may be the need to conduct investigations in a sensitive and expeditious manner in accordance with the DVA’s “Service Charter” and “DVA Factsheet IP02”.
His Honour noted the conflicting arguments about whether the investigation of alleged fraud is an exercise of executive power or the performance of a statutory duty under the VEA, and concluded that the origin of the “duty” was “not significant” (at [31]).
The source of any entitlement or obligation to investigate may be a significant “salient feature”. The appellant accepts that the DVA is empowered to investigate possible fraud, but argues that that there is no statutory duty to do so. Section 31(4) of the VEA enables the Commission to review and vary a decision to grant a pension if satisfied that the decision was based on false evidence. Section 181 of the VEA empowers the Commission “to do all things necessary or convenient to be done for, or in connection with, the performance of its functions, duties and powers”. However, a statutory power to act in a particular way does not equate to a statutory duty to do so: Stuart at [112] (Gummow, Hayne and Hayden JJ).
The nature of the DVA’s power or duty to investigate is a “salient feature” that needs to be considered when determining whether the asserted duty of care exists. If there is no duty to investigate all claims of fraud, then it may be arguable (as the appellant contends) that a duty to investigate only arises when there is a reasonable suspicion of fraud and that the DVA is not obliged to investigate an unsupported, anonymous “tip off”. If so, there is less scope for conflict between a duty of care and a duty to investigate.
Under s 135(2) of the VEA, a veteran who is affected by a decision of the Commission to cancel, suspend or decrease the rate of a pension or allowance may seek a review by the Board. Under s 175 of the VEA, there is a further right of review by the Administrative Appeals Tribunal. But there is no statutory right to obtain a review of conduct connected with the Commission’s performance of its functions; the right to review is confined to decisions of the Commission that have a direct financial impact upon veterans. In other words, there is no statutory right to review the conduct in relation to which Mrs McColley alleges that the DVA owed a duty of care. The lack of a statutory review scheme is a matter that may inform the issue of whether a duty of care arises; it is one aspect of the “coherence” consideration.
The DVA cites Stuart per Gummow, Hayne and Heydon JJ at [87]–[88], [112]–[117] as authority for the proposition that the common law of Australia does not recognise a general duty of care to prevent self-inflicted harm. Stuart was a case in which police came across a person who appeared to be contemplating suicide, but did not apprehend him because he did not appear to the police officers to be mentally ill (and therefore they had no power to apprehend him). Later, he committed suicide. The judgment merely acknowledges that, in the context of the common law value of personal autonomy, people are entitled to make their own decisions, “the co-existence of a knowledge of a risk of harm and power to avert or minimise that harm does not, without more, give rise to a duty of care at common law”, and “there is no general duty to rescue”: Gummow, Hayne and Heydon JJ at [88]. At [112], applying Barclay Oysters, their Honours pointed out that “the existence or otherwise of a common law duty of care owed by a statutory authority [or ... the holder of statutory power] ‘turns on a close examination of the terms, scope and purpose of the relevant statutory regime’.” In this case, Mrs McColley does not assert a duty to rescue, or a duty to prevent self-inflicted harm, but a duty to avoid causing harm by deciding to investigate and in the manner in which an investigation is conducted. The case of Stuart does not significantly assist the DVA.
The Court was not referred to any case in which police were found to have owed a duty of care to a suspect in connection with an investigation. Nevertheless, even in connection with police investigations, there is a theoretical possibility that such a duty of care may arise in some situations. In relation to non-police investigations, considerations analogous to those applying to police investigations may apply to a greater or lesser extent. However, the trial judge erred in concluding that the policy considerations underpinning the police “immunity” dictate that there can be no duty of care owed to a suspect in a non-police investigation. As stated above, when determining whether a duty of care arises in any novel situation, the relevant salient features must be identified and weighed. The focus must remain upon “the relevant legislation and the positions occupied by the parties on the facts as found at trial”: Barclay Oysters at [149]. The trial judge did not identify and weigh the relevant salient features in the context of the VEA and the relationship between Mr McColley and the DVA.
On a strike out application, it may be difficult, if not impossible, to conclude that the relevant salient features establish that a plaintiff’s claim is “bound to fail”. One reason is that it is usually difficult to appreciate the complete relationship between the parties until a trial. “The task is one which is fact rich and fact intensive”: New South Wales v Spearpoint [2009] NSWCA 233 at [23] per Allsop ACJ.
The matters before the trial judge did not justify a conclusion that the existence of the duty of care asserted by Mrs McColley was not reasonably arguable and that her claim was therefore “clearly untenable” or “bound to fail”.
Did Mr McColley’s suicide necessarily break any causal link?
Relying on AMP General Insurance Ltd v Roads & Traffic Authority (NSW) (2001) 22 NSWCCR 247 (AMP) and Sarkis v Summitt Broadway Pty Ltd t/as Sydney City Mitsubishi (2006) Aust Torts Reports 81-868 (Sarkis), the DVA submits that, if it did owe a duty to Mr McColley, then the deliberate self-infliction of harm by Mr McColley necessarily broke the causal link.
AMP concerned a deceased who had brought proceedings against his employer in relation to a work injury. Five years later, he suffered stress as a result of being cross-examined during the hearing. He developed depression and committed suicide eight days later. His widow suffered nervous shock, for which she was awarded damages at first instance. The employer and the insurer successfully challenged the decision. The members of the bench differed in their approaches to the appeal. Spigelman CJ expressed the view that causation is not merely a factual question but also a normative one, and that the deliberate self-infliction of harm should generally be seen to break the causal link: [27], but decided the case on the basis that there was no causation in fact: [40]. Heydon JA held that the development of depression and suicide were independent of the employer’s conduct and were not “caused” by it: [153]. Davies AJA held that the cross-examination of the deceased was a novus actus interveniens; the employer’s negligence in failing to provide a safe system of work did not generate the risk that the deceased would be cross-examined as he was, or that he would respond to the cross-examination by suicide: [200].
The factual circumstances in Sarkis were that the deceased had committed suicide several months after sustaining whiplash injuries in a motor vehicle accident. The Court of Appeal determined that, as a matter of common sense, it was not established that the accident caused the suicide: [75]. Rather, the deceased was overwhelmed by other events. The Court found it unnecessary to decide whether the deceased’s suicide itself broke the chain of causation: [76].
Courts have entertained the argument that suicide necessarily breaks a chain of causation. However, this Court was referred to no authority that establishes that, as a matter of law, suicide necessarily breaks a chain of causation. AMP and Sarkis are not authority for the proposition; in the circumstances of those cases, causation was not established.
In this case, it cannot be said that causation is not reasonably arguable. Further, such an argument was not made at first instance; the issue was not explicitly raised in the strike out application, and it was not argued before the trial judge.
Did the trial judge deny procedural fairness by relying on the authority of Gruber?
The failure of a judge to alert the parties to a decision upon which the judge relies may amount to a breach of procedural fairness, depending on the circumstances.
Procedural fairness requires that a party must be directed to the critical factors upon which a decision is likely to turn and must have the opportunity to make submissions in relation to those factors: Commissioner for ACT Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 at 590–592 per Northrop, Miles and French JJ.
During the hearing of the strike out application, neither the parties nor the trial judge referred to the authority of Gruber, and the case was not raised subsequently with the parties.
In Gruber the plaintiff alleged that a police staff psychologist (who was an employee of the Australian Federal Police but not a sworn police officer) and an AFP detective had breached their duty of care in the manner in which they interviewed him in the course of investigating a serious sexual offence. The detective had called the psychologist into the interview room and had remained present while the psychologist interviewed the plaintiff. The interview elicited an allegedly unreliable confession that was ultimately ruled inadmissible in criminal proceedings. Connolly J considered the decisions in Sullivan and Hill. At [41] his Honour observed that the duty of care sought to be established in relation to the detective was “precisely the duty of care rejected unanimously by the High Court” in Tame. In relation to the psychologist, his Honour noted that it would be incongruous if professionals engaged by a police service to assist investigating officers were subject to a duty of care although the police officers themselves were subject to no such duty. His Honour said:
[41] The public policy basis for the absence of the duty of care does not turn on the status of the person as a sworn police officer, but rather on the nature of the public duty being exercised by the police service.
Gruber is a simple extension of the Hill “immunity” to investigating officers who are employed by the police service but are not sworn police officers. It has little to say about public service investigations.
However, at [32]–[33], the trial judge seemingly placed considerable reliance upon Gruber as authority for a broader proposition; that the same public policy considerations relevant to determining whether an investigating police officer has a duty of care to a suspect apply to public service investigators. His Honour concluded at [33] that:
What dictates the absence of a duty of care is the nature of the public duty exercised by police, and the incompatibility of that duty with a duty of care towards a suspect. This principle must apply equally to all charged with a public duty of investigating alleged crime.
Although the trial judge found Gruber to be persuasive, his Honour would have been aware that it was a decision of a single judge and it was not binding. Further, his Honour knew that the ratio of Gruber was confined to the conduct of a police employee in connection with a police investigation.
The case of Gruber was not brought to the parties’ attention and it was important to the trial judge’s conclusion that Mrs McColley’s claim disclosed no reasonable cause of action. However, Mrs McColley did have an opportunity to address the key issue raised by the case. Her counsel made submissions about the incompatibility of duties and whether police “immunity” extends to investigations undertaken by persons who are not police. Her counsel advanced public policy arguments about why, in his submission, different considerations apply to police investigations and public service investigations.
Since we propose to allow the appeal on other grounds, it is unnecessary to determine whether the trial judge erred by failing to bring the decision of Gruber to the attention of the parties. Any denial of procedural fairness that may have occurred will be addressed when the parties have an opportunity to ventilate arguments about Gruber in the course of the proceedings.
| I certify that the preceding seventy-four [74] numbered paragraphs are a true copy of the Reasons for Judgment of the Court. Associate: Date: |
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