Neilson v City of Swan [No 2] - [2007] WASC 278

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: NEILSON -v- CITY OF SWAN [No 2] [2007] WASC 278

CORAM: TEMPLEMAN J

HEARD: 5 NOVEMBER 2007

DELIVERED : 27 NOVEMBER 2007

FILE NO/S: CIV 1341 of 2002

BETWEEN: MARK JAMES NEILSON
LISA JEAN LOGGIE
Plaintiffs
AND
CITY OF SWAN
Defendant

Catchwords:

Practice and procedure - Misfeasance in public office, negligence, breach of statutory duty - Judicial review statutebarred - Whether allegation of bias arguable - Whether arguable that misfeasance by presentation of deficient report - Whether damages arguably available for unlawful approval of development plans - Whether exemplary or aggravated damages arguably available for conscious wrongdoing as alleged

Legislation:

Nil

Result:

Statement of claim substituted according to [51]

Category: B

Representation:

Counsel:

Firstnamed Plaintiff     :     In person
Secondnamed Plaintiff :     No appearance
Defendant:     Mr G A Rabe

Solicitors:

Firstnamed Plaintiff     :     In person
Secondnamed Plaintiff :     No appearance
Defendant:     Mullins Handcock

Case(s) referred to in judgment(s):

Neilson v City of Swan [2003] WASC 20
Neilson v City of Swan [2003] WASC 20 (S)
Neilson v City of Swan [2006] WASCA 94

TEMPLEMAN J: The plaintiffs in these proceedings contend that the defendant, as the relevant planning authority, acted unlawfully in approving an Outline Development Plan (ODP106) on 10 February 1999. The plaintiffs contend also that the approval process involved the defendant in misfeasance in public office, negligence and breach of statutory duty.
The background and history of the matter are set out in my reasons in two previous decisions, each entitled Neilson v City of Swan and having citations [2003] WASC 20 and [2003] WASC 20 (S) respectively. They are summarised also in the reasons of Buss JA in Neilson v City of Swan [2006] WASCA 94.
The reasons referred to above were given respectively in relation to an application by the defendant to strike out substantial parts of the plaintiffs' statement of claim (the 2005 statement of claim), and in an appeal against my decision that the defendant's strike‑out application should succeed.
The plaintiffs now seek to replead. They have filed a minute of amended statement of claim dated 19 March 2007.
The plaintiffs are not represented. They have not made a formal application for leave to amend. However, I will regard the new pleading as an application. I shall refer to it as 'the 2007 statement of claim'.
The defendant contends that the 2007 statement of claim is defective in certain respects. The defendant identifies a number of paragraphs which have been amended or repleaded and to which objection is taken under O 20 r 19(1) of the Rules of the Supreme Court 1971 (WA). I will deal with each of these paragraphs in turn.

Paragraph 7(3)

In par 7 of the 2007 statement of claim, the plaintiffs allege that the approval of ODP106 by the defendant was unlawful on a number of grounds. In par 7(1), the plaintiffs allege that the defendant breached certain clauses of the relevant town planning scheme (TPS9). In par 7(2), the plaintiffs allege that the defendant denied them natural justice when approving ODP106. The plaintiffs set out a number of bases on which that allegation is said to be founded. Then, in par 7(3), the plaintiffs allege:
The City of Swan had regard to irrelevant considerations in that it approved ODP106 on grounds that included economic development of Gidgegannup, whereas this was not a proper planning consideration for land in the Landscape zone or in the Landscape 3 precinct of the GRS.
The defendant submits that this paragraph introduces for the first time a new ground of alleged unlawfulness in support of the declaratory relief claimed. That is, a declaration that the defendant 'unlawfully approved ODP106'.
In the 2005 statement of claim, the plaintiffs made precisely the same allegation as that now pleaded in par 7(3). However, they did so in support of an allegation that the defendant denied them natural justice when approving ODP106.
In my reasons in Neilson v City of Swan [2003] WASC 20 (S), I said:
The taking into account of irrelevant considerations is a ground on which an administrative decision may be reviewed. However, that is not what is sought in the present case: and the taking into account of irrelevant considerations has no bearing on the question of natural justice. [7]
For those reasons, I disallowed par 7(2)(b). The plaintiffs did not appeal against that part of my decision.
I take the same view in relation to the new par 7(3) as a separate cause of action. The allegation is embarrassing because the plaintiffs have not sought judicial review of the defendant's decision, and it is now too late to do so. Any such cause of action would be statute‑barred by s 47A of the Limitation Act 1935 (WA). Further, since the plaintiffs are claiming only declaratory relief (that is, an equitable remedy), the new claim would be barred by s 27 of the Limitation Act 2005 (WA).

Paragraph 10

This paragraph contains an allegation of misfeasance in public office by Mr Martin Richardson, who is alleged to have been the defendant's principal planner and subsequently, its executive manager, strategic community planning services.
The pleading is in the following terms:
10Mr Martin Richardson misfeased in public office in that he:
(1)held a public office at all relevant times for the purposes of this Statement of Claim as the City of Swan's Principal Planner and subsequently Executive Manager Strategic Community Planning Services
(2)abused his office in that in the purported discharge of his office he:
(a)failed to bring the advice of the Department of Environmental Protection dated 9 February 1999 to the attention of Councillors after its receipt, despite the City of Swan having sought the advice and despite Mr Richardson having provided a memo to the Council dated 10 February 1999 advising that he would advise the Council if the Department did comment and as a result the Council of the City of Swan failed to require adequate visual impact assessment of the proposed ODP106 on the Plaintiffs' property Lot 341.
(i)In the circumstances, Mr Richardson was under a duty to bring the written advice to the attention of the Councillors promptly after its receipt
(ii)Mr Richardson appreciated that he was under that duty but nevertheless made a conscious decision not to act, or was recklessly indifferent to his duty
(iii)Mr Richardson decided not to bring the Department of Environmental Protection's written advice dated 9 February 1999 to the attention of Councillors with intent to injure the applicants or in the knowledge that such injury would be the natural and probable consequence of his act or was recklessly indifferent to that consequence
(b)provided to the council of the respondent on 10 February 1999 a biased and deficient assessment of the Plaintiffs' written submission dated 10 December 1998 in relation to ODP106 as set out in paragraph 7(2)(b)(vii)
(i)In the circumstances, Mr Richardson was under a duty to bring an unbiased assessment to the Council
(ii)Mr Richardson appreciated that he was under that duty but nevertheless made a conscious decision not to do so, or was recklessly indifferent to his duty
(iii)Mr Richardson decided not to bring an unbiased assessment to the attention of Councillors with intent to injure the applicants or in the knowledge that such injury would be the natural and probable consequence of his act or was recklessly indifferent to that consequence
(c)provided to the Council of the respondent on 10 February 1999 a report in relation to ODP106 that was not in accordance with the requirements of TPS 9 as set out in paragraph 7(1) of this Statement of Claim:
(i)In the circumstances, Mr Richardson was under a duty to bring an unbiased report to the Council
(ii)Mr Richardson appreciated that he was under that duty but nevertheless made a conscious decision not to do so, or was recklessly indifferent to his duty
(iii)Mr Richardson decided not to bring an unbiased report to the attention of Councillors with intent to injure the applicants or in the knowledge that such injury would be the natural and probable consequence of his act or was recklessly indifferent to that consequence
(3)caused damage in that the actions described in paragraph 10 above:
(a)contributed to the Plaintiff Loggie's psychiatric shock and Mr Richardson was aware of the Plaintiff Loggie's duress as set out in the Particulars of Foreseeability below
(b)led to the Applicant Neilson suffering diminution and loss of the companionship of his wife
(c)decreased the Plaintiffs' enjoyment of Lot 341 due to the manner in which the City of Swan, its staff and Councillors have performed their functions and also due to the adverse impact on the amenity of the Plaintiffs' property from development works approved under ODP106 such as several kilometres of high security fence surrounding Lot 504 which borders the Plaintiffs' property
(d)decreased the value of Lot 341 through the current and future adverse effects on its rural amenity from the approval of ODP106. Preliminary works have been underway on a daily basis for several years including extensive earthworks, construction of extensive bitumen roads and erection of a 2.1 metre high industrial security fence on shared boundaries with the Plaintiffs' property. The large number of tin‑shed style accommodation units, the large number of projected daily visitors and the large number of smoke‑emitting wood burning stoves approved by the City of Swan for the tourism resort in the narrow valley that the Plaintiffs' occupy will further reduce the amenity and value of the Plaintiffs' property when the resort is completed.
This pleading replaces par 13 of the 2005 statement of claim which is set out in full in the judgment of Buss JA: [2006] WASCA 94 at [22]. In that pleading it was alleged that Mr Richardson had 'performed an invalid exercise of power or purported exercise of power' in relation to several specified matters. These were set out in par 13(2)(a), (b), (c), (d) and (e). These matters were alleged failures on the part of Mr Richardson to take various actions which the plaintiffs contend he should have taken in order to protect their rights or to provide proper information to the defendant.
As Buss JA said in his judgment:
The applicants [plaintiffs] plead an omission as distinct from an act. The applicants' characterisation of this failure to act as 'an invalid exercise of power or purported exercise of power' is therefore misconceived. [88]
Buss JA went on to say:
In my opinion, the alleged omission pleaded in par 13(2)(a), in the context of par 13 as a whole, does not disclose a reasonably arguable cause of action, in that:
(a)it is not alleged that, in the circumstances, Mr Richardson was under a duty to bring the written advice to the attention of the councillors promptly after its receipt;
(b)it is not alleged that Mr Richardson appreciated that he was under that duty, but nevertheless made a conscious decision not to act; and
(c)it is not alleged that Mr Richardson decided not to bring the written advice to the attention of the councillors with intent to injure the applicants or in the knowledge that such injury would be the natural and probable consequence of his failure to act.
See Three Rivers (No 3) per Lord Millett at 236 ‑ 237 in relation to omissions which may constitute the tort. [89]
The passage to which Buss JA referred is set out in full at [47] of his Honour's reasons. However, it will be convenient to repeat it here. Lord Millett said:
The parties are agreed that there is no conceptual difference between sins of omission and sins of commission. This may be so; but factually there is a great difference between them. It is no accident that the tort is misfeasance in public office, not nonfeasance in public office. The failure to exercise a power is not in itself wrongful. It cannot be equated with acting in excess of power. The tort is concerned with preventing public officials from acting beyond their powers to the injury of the citizen, not with compelling them to exercise the powers they do have, particularly when they have a discretion whether to exercise them or not. There seems to be only one case in the books where a failure to exercise a power gave rise to the tort: R v Dytham [1979] QB 722, 727G, where Lord Widgery CJ said in terms that the neglect must be 'wilful and not merely inadvertent'. Ferguson v Earl of Kinnoull (1842) 9 Cl & Fin 251 and the cases there cited were all cases of wilful breach of duty. Henly v Lyme Corpn 5 Bing 91 was in my opinion a case of breach of statutory duty, not of misfeasance in public office.
In conformity with the character of the tort, the failure to act must be deliberate, not negligent or inadvertent or arising from a misunderstanding of the legal position. In my opinion, a failure to act can amount to misfeasance in public office only where (i) the circumstances are such that the discretion whether to act can only be exercised in one way so that there is effectively a duty to act; (ii) the official appreciates this but nevertheless makes a conscious decision not to act; and (iii) he does so with intent to injure the plaintiff or in the knowledge that such injury will be the natural and probable consequence of his failure to act. (236 ‑ 237)
The plaintiffs say that their 2007 statement of claim 'has been formulated based on the 2006 decision of the Court of Appeal': submissions [2]. Thus, in par 10(2)(a), the plaintiffs have alleged that Mr Richardson was under a duty to bring to the attention of the defendant's councillors, the advice provided by the Department of Environmental Protection (DEP). The duty is said to arise from the fact that Mr Richardson said he would do so.
That, I think, is arguably a sufficient identification of a 'public duty' for present purposes.
Assuming that the DEP's advice was that there had been no assessment of the visual impact of the proposed development on the plaintiffs' property, there is, I think, arguably an inference that Mr Richardson's failure to discharge the duty he arguably owed, was deliberate and was intended to cause some detriment to the plaintiffs; or arguably, was reckless, both as to the discharge of the duty and as to the possible consequence to the plaintiffs.
In my view, these propositions answer the defendant's submission that par 10(2)(a) does no more than plead a breach of duty which might be categorised as incompetence. The character of the allegation has changed from that pleaded in par 13(2)(a) of the 2005 statement of claim, where that was the case.
The defendant points to the allegation pleaded in par 7(1)(b)(ix) of the 2007 statement of claim that the approval of ODP106 by the defendant was unlawful by reason of breaches of cl 2.3.8.1 of TPS 9, including a failure to consider the DEP's advice of 9 February 1999.
The defendant submits that any discretion Mr Richardson had, to provide the advice to councillors, was 'necessarily subordinate to the pleaded duty that the defendant itself had', to consider the advice before approving ODP106.
It is now the plaintiffs' case that Mr Richardson had no discretion: that having said he would provide any report received subsequent to the meeting of 10 February 1999, he was under a duty to do so.
In any event, as it seems to me, any misfeasance in public office by Mr Richardson (for which it is alleged in par 6 of the 2007 statement of claim, the defendant would be liable vicariously) would ground a different cause of action from that pleaded in par 7.
Paragraph 10(2)(b) of the 2007 statement of claim replaces par 13(2)(d) of the 2005 version. It was there alleged that in a number of respects, Mr Richardson had failed to provide the defendant with all the information 'necessary to perform [its] functions'.
In the Court of Appeal, Buss JA said that in par 13(2)(d) the plaintiffs had pleaded 'an omission as distinct from an act': and that their characterisation of this failure as 'an invalid exercise of power or purported exercise of power' was therefore misconceived.
In the new par 10(2)(b), the plaintiffs allege that Mr Richardson 'was under a duty to bring an unbiased assessment' of the plaintiffs' submissions dated 10 December 1998, to the defendant's council, but that he provided the council with 'a biased and deficient assessment', as set out in par 7(2)(b)(vii).
That paragraph refers to 'the staff report to council', rather than to an assessment produced by Mr Richardson personally, although it does contain a suggestion that he might have been an author.
Accepting for present purposes that par 7(2)(b)(vii) contains an accurate analysis of the report to council, the allegation that it was biased and deficient is arguably justified.
It is then alleged in par 10(2)(b), in essence, that Mr Richardson knew he was under a duty to bring an unbiased assessment to the defendant's council; that he either decided not to do so or was recklessly indifferent to that duty, and that he took that course either with the intent of causing detriment to the plaintiffs or was recklessly indifferent to that consequence. This allegation carries the inference that whether or not Mr Richardson was the author of all or part of the report, he knew it was a biased report.
These allegations are no longer of an omission, or failure to act, but of a positive action which, if the allegations of bias and deficiency are made out, does, I think, arguably give rise to an inference of misfeasance in public office.
The essence of the allegation pleaded in par 10(2)(c) of the 2007 statement of claim is that Mr Richardson 'misfeased in public office in that he … abused his office in that in the purported discharge of his office he … provided to the Council of the [defendant] on 10 February 1999 a report in relation to ODP106 that was not in accordance with the requirements of TPS 9 as set out in paragraph 7(1)'.
Paragraph 7(1) contains a number of allegations about breaches by the defendant itself of TPS 9.
As I understand it, the inference the plaintiffs seek to draw from the allegations in pars 10(2)(c) and 7(1) is that Mr Richardson was responsible for the defendant breaching TPS 9 because he produced to the defendant's council, a report which, to his knowledge, did not address properly the requirements of TPS 9.
It is alleged further in par 10(2)(c) that:
(i)In the circumstances, Mr Richardson was under a duty to bring an unbiased report to the Council
(ii)Mr Richardson appreciated that he was under that duty but nevertheless made a conscious decision not to do so, or was recklessly indifferent to his duty
(iii)Mr Richardson decided not to bring an unbiased report to the attention of Councillors with intent to injure the applicants or in the knowledge that such injury would be the natural and probable consequence of his act or was recklessly indifferent to that consequence
I understand the allegation that Mr Richardson was under a duty to bring an unbiased report to the defendant to mean a report which did address all the issues raised by ODP106 in relation to TPS 9.
Having regard to the allegations pleaded in par 10(2)(c)(ii) and (iii), and the basis on which I think par 10(2)(c)(i) is drawn, I consider that par 10(2)(c) arguably discloses a cause of action.
The defendant points out that there is no allegation as to the respects in which the report was not in accordance with TPS 9. However, that is a defect which could be cured by the provision of particulars.
The defendant submits also, that because the pleading contains no allegation that Mr Richardson's report caused the defendant to approve ODP106, and because he could not have known what would be the outcome of the council's deliberations, any contention that his conduct amounted to an abuse of power, or caused harm to the plaintiffs, cannot succeed.

I do not accept that submission.
Viewing the matter objectively, I think it arguable that a person who deliberately abused the powers of his office to present an inadequate report to a decision maker, in the hope of securing an adverse decision, would have committed a misfeasance, whether or not the decision was adverse. If it was not adverse, there would be no cause of action because the person the subject of the decision would have suffered no loss.
As I understand it, the gravamen of the allegations in par 10(3) is that the alleged wrongful conduct of Mr Richardson (for which the defendant is alleged to be vicariously liable) has caused the plaintiffs the damage referred to, because it was that conduct which resulted in the defendant approving ODP106, when it should not have done so.
Large questions of remoteness and foreseeability will no doubt be raised by pars 10(3)(a) and (b), but that does not justify the disallowance of the pleading.
Paragraph 10(3)(c) is somewhat obscure. The reference to 'the manner in which the City of Swan, its staff and Councillors have performed their functions' is far too vague to be permitted. I therefore consider that those words (and the following four words) should be deleted. The claim would then be confined to a decrease in the plaintiffs' enjoyment of their property, due to the adverse impact on its amenity, etc. That, I think, is sufficiently arguable.

Paragraph 11

In my view, this paragraph should not be allowed to stand. I accept the defendant's submission that par 7 does not plead a cause of action entitling the plaintiffs to damages: only to a declaration. And insofar as par 11 is based on par 10, it involves a duplication. That is because pars 10(3)(a) and (b) cover the same ground.

The claim for aggravated and exemplary damages

In their prayer for relief the plaintiffs seek aggravated and exemplary damages. The authorities referred to in Seaman on Civil Procedure in Western Australia at [20.9.7] and [20.9.7A] provide examples of the circumstances in which such damages may be awarded. In essence, exemplary damages may be appropriate where there has been conscious wrongdoing by a defendant in disregard of the plaintiff's rights. Aggravated damages may be appropriate where the defendant's improper conduct has in some way aggravated the loss or damage suffered by the plaintiff: by causing some emotional trauma, for example.
The rules in relation to such a claim require that it 'must be specifically pleaded together with the facts on which the party pleading relies': O 20 r 9(3) of the Rules of the Supreme Court.
The defendant submits that no facts have been pleaded from which it could be argued that Mr Richardson's alleged conduct could provide a basis for aggravated or exemplary damages. However, on the view I take, the 2007 statement of claim does, I think, provide an arguable basis for the claim.

Conclusion

For the reasons set out above, I will allow the 2007 statement of claim to stand as a substituted statement of claim, subject to the deletion of par 7(3), the words in par 10(3)(c) referred to above and par 11.