Saadat v Commonwealth

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
SAADAT v COMMONWEALTH & ORS
[2025] SASC 59
Judgment of the Honourable Justice Stanley
TORTS - NEGLIGENCE - STANDARD OF CARE, SCOPE OF DUTY AND SUBSEQUENT BREACH
TORTS - NEGLIGENCE - MENTAL OR NERVOUS SHOCK OR PSYCHIATRIC HARM - AT COMMON LAW
TORTS - NEGLIGENCE - MENTAL OR NERVOUS SHOCK OR PSYCHIATRIC HARM - AT COMMON LAW - FACTORS - RECOGNISABLE PSYCHIATRIC ILLNESS
TORTS - NEGLIGENCE - MENTAL OR NERVOUS SHOCK OR PSYCHIATRIC HARM - AT COMMON LAW - DAMAGE AND CAUSATION
CITIZENSHIP AND MIGRATION - MIGRATION - DETENTION AND REMOVAL OF UNLAWFUL NON-CITIZENS - DETENTION - CONDITIONS OF DETENTION
Mr Payam Saadat (the applicant) arrived in Australia as an unlawful non-citizen in December 2000. He sought asylum and was detained pursuant to the Migration Act 1958 (Cth). The applicant brings a claim relating to his detention at Baxter Immigration Reception and Processing Centre (Baxter) in South Australia from September 2002 to April 2005.
The applicant alleges the respondent (the Commonwealth) breached its duty of care to him while he was detained at Baxter, causing him to suffer a recognisable psychiatric injury resulting in loss and damage. He alleges that his psychiatric injury was caused by the conditions of his detention and/or by a failure to treat him for his psychiatric injury at Baxter.
The day-to-day operation and management of Baxter was conducted by contractors. The Commonwealth joined these contractors and their relevant entities by filing third party claims against each of the first to fourth third parties. The applicant does not pursue a claim directly against the third parties.
The foundational factual issue for determination in the primary action is whether the applicant suffered a recognisable psychiatric injury during his time at Baxter or after his detention. The issue that follows is whether any such injury can be attributed to the features or conditions of his detention which are compensable, and/or from a negligent failure to treat him during his detention at Baxter.
These issues must be determined within the context of the applicant’s lawful detention. Pursuant to provisions of the Migration Act 1958 (Cth), any injury, loss or damage attributable to certain features or conditions of his detention are non-compensable and accordingly, the Commonwealth cannot be held liable for such. These features include the mere fact of his detention, the length and indeterminate nature of his detention, his constant fear of deportation and the rejection of his application for a protection visa and his unsuccessful appeals from that decision.
Held (granting the applicant an extension of time in which to bring the primary claim, but dismissing the applicant’s claim and the Commonwealth’s third party claims):
1.The applicant’s evidence is not a reliable basis for making findings of fact. The Court is unable to rely upon his testimony except where it is supported by reliable corroboration, where his evidence is unchallenged, or is consistent with objectively established facts and the apparent logic of events, or where it involves an admission against interest.
2.That the applicant may have been part of a class of detainees which was more vulnerable than the Australian community to suffering mental illness cannot prove that he, in fact, suffered a psychiatric injury.
3.The applicant has not proven that he suffered a recognisable psychiatric injury at Baxter because of a negligent failure to treat him and/or the compensable conditions under which he was detained. The applicant has not proven that the hardships he has suffered since his release from immigration detention are causally linked to any injury incurred at Baxter.
4.The only recognisable psychiatric injury suffered by the applicant while detained at Baxter occurred between August and December 2003. It was caused by, and reactive to, the refusal of his application for special leave to appeal his visa decision to the High Court of Australia. This cause of injury is non-compensable and the Commonwealth cannot be held liable for such.
5.The Commonwealth breached its duty of care to the applicant by confining him in the Management Unit at Baxter for longer than reasonably necessary in March 2003. However, the applicant has not proven that this breach caused him to suffer a recognisable psychiatric injury as a result.
6.The duty owed to the applicant by the Commonwealth was non-delegable. It was a duty to use reasonable care and to ensure reasonable care was taken by the third parties it employed to discharge this duty. The applicant was not owed a more stringent duty and nor did there exist a positive duty to protect the applicant from psychiatric injury in the absence of some evidence he was actually suffering, or at risk of personally suffering, such an injury while he was detained. A non-delegable duty does not extend beyond taking reasonable care to avoid a foreseeable risk of injury. The applicant was not owed an absolute duty to ensure a particular outcome or result.

Migration Act 1958 (Cth) ss 273(1), 197AB, 5, 252A, 252B, 189, 196; Civil Liability Act 1936 (SA) ss 53, 28(1), 24C; Wrongs Act 1936 (SA); Law Reform (Ipp) Recommendations (2004) (SA) clause 1(2); Wrongs (Liability and Assessment of Damages for Personal Injury) Amendment Act 2002 (SA) s 6; Limitation Act (2005) (WA) s 14; Evidence Act 1929 (SA) s 53; Limitation of Actions Act 1936 (SA) s 48; Law Reform (Contributory Negligence and Apportionment of Contribution) Act 2001 (SA), referred to.
Amaca Pty Ltd v Booth; Amaba Pty Ltd v Booth (2011) 246 CLR 36; Behrooz v Secretary, Department of Immigration and Multicultural and Indigenous Affairs (2004) 219 CLR 486; Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520; Chamoun v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (No. 2) [2019] FCA 1520; Chappel v Hart (1998) 195 CLR 232; Collings v Amaroo Pty Ltd & Worker’s Compensation Board of Queensland [1997] QCA 224; Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588; Graham v Minister for Immigration and Border Protection (2018) 265 FCR 634; Hegarty v Queensland Ambulance Service [2007] QCA 366; Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705; McDonald v South Australia; McDonald v Minister for Education and Child Development (No. 3) [2016] SASC 79; New South Wales v Lepore (2003) 212 CLR 511; Poniatowska v Channel Seven Sydney Pty Ltd (No. 2) (2020) 136 SASR 455; SBEG (No 2) v Commonwealth (2012) 292 ALR 29 at 57-58; SBEG v Commonwealth (2012) 208 FCR 235; Secretary, Department of Immigration and Multicultural and Indigenous Affairs v Mastipour (2004) 259 FCR 576; Tabet v Gett (2010) 240 CLR 537, applied.
Amaca Pty Ltd v Ellis (2010) 240 CLR 111; Amaca Pty Ltd v Hannell (1998) 195 CLR 232; Andar Transport Pty Ltd v Brambles Ltd (2004) 317 CLR 424; Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549; Associated Provincial Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223; Astley v Austrust Ltd (1999) 197 CLR 1; Bennett v Minister of Community Welfare (1992) 176 CLR 408; Betts v Whittingslowe (1945) 71 CLR 637; Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; Chester v Waverley Corporation (1939) 62 CLR 1; Cotton On Group Services Pty Ltd v Golowka [2022] VSCA 279; Gulic v Boral Transport Ltd [2016] NSWCA 269; Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465; Hinz v Berry [1970] 2 QB 40; Jaensch v Coffey (1984) 155 CLR 549; King v Philcox (2015) 255 CLR 304; Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44; Kozarov v Victoria (2022) 273 CLR 115; Leichhardt Municipal Council v Montgomery (2007) 230 CLR 22; Lowes v Amaca Pty Ltd [2011] WASC 287; March v E & MH Stramare Pty Ltd (1991) 171 CLR 506; McGhee v National Coal Board [1972] 3 All ER 1008; Minister for Immigration and Multicultural and Indigenous Affairs v B (2004) 219 CLR 365; Minister for Immigration v Li (2013) 249 CLR 332; Minister for the Environment (Cth) v Sharma (2022) 291 FCR 311; Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254; MZYYR v Secretary, Department of Immigration and Citizenship (2012) 292 ALR 659; Naxakis v Western General Hospital (1999) 197 CLR 269; New South Wales v Fahy (2007) 232 CLR 486; Perre v Apand Pty Ltd (1999) 198 CLR 180; Pomeroy v Thwaites Witham Pty Ltd and Krantz (2001) 79 SASR 489; Prince Alfred College v A, DC (2016) 258 CLR 134; Queen Elizabeth Hospital v Curtis (2008) SASR 534; Roads and Traffic Authority v Royal (2008) 82 ALJR 870; Robinson Helicopter Company Inc v McDermott (2016) 331 ALR 550; Rosenberg v Percival (2001) 205 CLR 434; Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262; Sola Optical Australia Pty Ltd v Mills (1987) 163 CLR 628; Whisprun Pty Ltd v Dixon (2003) 77 ALJR 1598; Willmot v Queensland (2024) 419 ALR 623; Wilsher v Essex Area Health Authority [1988] AC 1074; Wolfenden v International Theme Park Pty Ltd [2008] NSWCA 78; Wyong Shire Council v Shirt (1980) 146 CLR 40; Tame v New South Wales (2002) 211 CLR 317; S v Secretary, Department of Immigration & Multicultural & Indigenous Affairs (2005) 143 FCR 217, discussed.
Abdulla v Birmingham City Council (2013) 1 All ER 649; Al-Kateb v Godwin (2004) 219 CLR 562; AMP v Road Traffic Authority & Anor [2001] NSWCA 186; Armes v Nottinghamshire County Council [2018] AC 355; Arnotts Ltd v Trade Practices Commission (1990) 24 FCR 313; Bae v The Queen (2020) 135 SASR 522; Bersee v State of Victoria (Department of Education and Training) (2022) 70 VR 260; Bonnington Castings Ltd v Wardlaw [1956] AC 613; Brookfield Multiplex Ltd v Owners - Strata Plan No. 61288 (2014) 54 CLR 185; Bropho v Western Australia (1990) 171 CLR 1; Bus v Sydney County Council (1989) 167 CLR 78; Cekan v Haines (1990) 21 NSWLR 296; Chapman v Hearse (1961) 106 CLR 112; Coco v The Queen (1994) 179 CLR 427; Commonwealth v Introvigne (1982) 150 CLR 258; Commonwealth v Verwayen (1990) 170 CLR 394; Council of the Shire of Sutherland v Heyman (1985) 157 CLR 424; Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1; Dickinson v Motor Vehicle Insurance Trust (1987) 163 CLR 500; Dietrich v The Queen (1992) 177 CLR 292; Donoghue v Stevenson [1932] AC 562; Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; Erect Safe Scaffolding (Australia) Pty Ltd v Sutton (2008) 72 NSWLR 1; Findlay v State of Victoria [2009] VSCA 294; Fried v National Australia Bank Ltd (2001) 111 FCR 322; Gifford v Strang Patrick (2003) 214 CLR 269; Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540; Harriton v Stephens (2006) 226 CLR 52; Hewitt v Bernhardt (1979) 21 SASR 510; Hillier v Lucas (2000) 81 SASR 451; Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) 247 CLR 613; Imbree v McNeilly (2008) 236 CLR 510; Kondis v State Transport Authority (1984) 154 CLR 672; Koowarta v Bjelke Petersen (1982) 153 CLR 168; Mabo v Queensland (No. 2) (1992) 175 CLR 1; Mannone v Chaplin [1991] 54 A Crim R 163; March v Stramare (1991) 171 CLR 506; McDonald v State of South Australia; McDonald v Minister for Education and Child Development [2017] SASCFC 146; McLean Bros & Rigg Ltd v Grice (1906) 4 CLR 835; McLean v Tedman (1984) 155 CLR 306; Minister for State for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273; Mount Isa Mines Ltd v Pusey (1970) 125 CLR 383; MZYYR v Secretary, Department of Immigration and Citizenship & The Commonwealth of Australia (2012) 292 ALR 659; Nagle v Rottnest Island Authority (1993) 177 CLR 423; Nevin v B & R Enclosures [2004] NSWCA 339; New South Wales v Bujdoso (2005) 227 CLR 1; Northern Sandblasting v Harris (1997) 188 CLR 313; Northern Territory v Mengel (1995) 185 CLR 307; NZYQ v Minister for Immigration, Citizenship and Multicultural Affairs (2023) 97 ALJR 1005; Okwume v Commonwealth [2016] FCA 1252; Owens v Liverpool Corporation [1939] 1 KB 394; Paris v Stepney Borough Council [1951] AC 367; Petrovic v Victorian WorkCover Authority [2018] VSCA 243; Potter v Minahan (1908) 7 CLR 277; Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328; R v Nguyen (2013) 117 SASR 432; Ramsay v Watson (1961) 108 CLR 642; Roads and Traffic Authority v Dederer (2007) 234 CLR 330; Romeo v Conservation Commission of Northern Territory (1998) 192 CLR 431; Roo Roofing Pty Ltd v Commonwealth of Australia [2019] VSC 331; Rosenberg v Percival (2001) 205 CLR 434; Rowe v Transport Accident Commission (2017) MVR 195; Sargood Bros v The Commonwealth (1910) 11 CLR 258; Sellars v Adelaide Petroleum NL (1994) 179 CLR 332; Shaaban Bin Hussein v Chong Fook Kam (1970) AC 942; Storm v Geeves [1965] Tas SR 252 at 255; Sullivan v Moody (2001) 207 CLR 562; Swinton v The China Mutual Steam Navigation Co Ltd (1951) 83 CLR 553; Taylor v Smith (1926) 38 CLR 48; The Queen v Fowler (1985) 39 SASR 440; Triaca v Summaries Pty Ltd [1971] VR 347; Trustees of Roman Catholic Church for Diocese of Canberra and Goulburn v Hadba (2005) 221 CLR 161; Vairy v Wyong Shire Council (2005) 223 CLR 422; Virk Pty Ltd (In Liq) v YUM! Restaurants Australia Pty Ltd [2017] FCAFC 190; VLAH v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 1554; Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; Westina Corporation Pty Ltd v BGC (2009) 41 WAR 263; Wodonga Regional Health Service v Hopgood (2010) 37 VR 284; Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515, considered.

SAADAT v COMMONWEALTH & ORS
[2025] SASC 59
Civil
Contents
INTRODUCTION
CLAIM
The basis of the applicant’s claim
Commonwealth’s defence
ACM’s case on the applicant’s claim
ACM’s defence to the third party claim
G4S’ defence to the third party claim
ISSUES FOR DETERMINATION IN THE PRIMARY ACTION
PRELIMINARY EVIDENCE ISSUES
Evidence admitted de bene esse
Exhibit A109
Epidemiological analysis – long-term detainees
Golden Rules Card

Foundational proposition
Justiciability and coherence
Place of detention is justiciable
Form, character and environment of applicant’s detention is justiciable
Decisions to release persons other than the applicant are non-justiciable

Assessment of the evidence
Delay impoverishes the evidence
No systems case pleaded
LAYOUT OF CURTIN
LAYOUT OF BAXTER
THE APPLICANT’S EVIDENCE
Pre-detention
The applicant’s life in Iran
The applicant flees Iran
The boat trip to Australia

Curtin
The applicant’s detention at Curtin
Curtin medical centre
Application for visa refused
Riots at Curtin
The applicant’s mental state

Baxter
Transfer to Baxter
Early days at Baxter
The applicant’s mental state
Management Unit – December 2002
The fires
Transfer to Red 3
The applicant’s mental state upon release from the Management Unit – January 2003
Transfer to Blue 3
Hunger strike – January 2003
Protest and self-harm incident - 6 February 2003
Acts of self-harm witnessed by the applicant at Baxter
The state of the applicant’s health – February 2003
Escape attempt
Management Unit – March 2003
The Australian government’s agreement with Iran – Memorandum of Understanding (MOU)
Events in March 2003 after the applicant’s release from the Management Unit
Suicide attempt - 11 August 2003
The applicant’s use of marijuana
United Nations application
October 2003 - transfer to White 3
January 2004 - G4S commences management of Baxter
The applicant’s last year in detention
Summary

POST DETENTION
The applicant’s release from detention
The applicant’s post detention employment
The applicant’s post detention health
University studies
Permanent protection visa and Australian citizenship
Relationships
United States trip
The applicant’s marriage
Other anger incidents and mental health problems
Application for a disability support pension

THE APPLICANT’S RELIABILITY AND CREDIT
History given to Dr Raeside
History given to Dr Schirripa
History given to Mr McInerney
Outline of Evidence
Applicant’s affidavits
Examples of unreliable evidence or omissions about specific events
Arrival in Australia
Management Unit
Overdose
Release from detention
Housing Trust
Travel to the United States
Dubai trip
Domestic violence incident
OxyContin and other drug use

Conclusion on the applicant’s reliability and credit
APPLICANT’S CORROBORATIVE LAY WITNESSES
Mahnaz Saadat
Inconsistencies in Mrs Saadat’s Evidence
Corroboration of the applicant’s evidence

Shahin Shahrooei
Conditions at Baxter
Blue 3
White 1
Management Unit
Applicant’s overdose
Release from detention
Corroboration of the applicant’s evidence

Ali Namavar
Arrival at Baxter
Conditions at Baxter
Compound movements
Red 1
Red 3 – 22 January 2003
Blue 3 – 22 January 2003
Red 3 – 10 February 2003
Management Unit – 5 April 2003
Blue 3 – 15 April 2003
After the applicant’s attempted overdose
Post detention
Corroboration of the applicant’s evidence

Shokrollah Paparzadeh
Curtin
Conditions at Curtin
Incidents at Curtin
Baxter
Conditions at Baxter
Management Unit
Blue 3
White 3
Post detention
Corroboration of the applicant’s evidence

Alex Sovi (formerly Ali Reihizadeh)
Curtin
Baxter
Management Unit
Blue 3
Applicant’s escape attempt
Post detention
Corroboration of the applicant’s evidence

Conclusion on corroboration of the applicant’s evidence
THE APPLICANT’S LAY WITNESSES – MEDICAL
Damien McInerney
Mehdi Abiyat
Dr Behzad Shroff
THE APPLICANT’S LAY WITNESSES – SYSTEMS CASE
Harold Bilboe
Father Paul Bourke
Marie Anne Saracino
David Wright
Bobbi Sawyer
Dr Jonathan Phillips
IDAG
Professor Harry Minas
Retired Air Marshal Ray Funnell
Consideration of IDAG Witnesses

Reviews – Lay Witnesses
Dr Michael Bollen
Professor Richard Harding
Michael Palmer
The Falconer Report
The Health Advisory Panel

Reviews – Expert Evidence
Dr Chris Henderson
Amanda Gordon

COMMONWEALTH’S LAY WITNESSES
Greg Wallis
Curtin
Baxter - management
Baxter - layout and facilities
Baxter – medical facilities
Security and incidents

ACM’s LAY WITNESSES
Stephen Monaghan
Diane Rarity
Gerald McCormack
Keith Fyfe
Maureen Hanly
Christopher Burns
G4S’ LAY WITNESSES
Peter Saxon
Tanya Horner
George Rooks
THE PSYCHIATRIC EVIDENCE - APPLICANT
Dr Raeside
Report of 21 June 2011
Report of 18 February 2015
Report of 23 August 2017
Report of 14 December 2018
Report of 8 January 2019
Report of 1 February 2021
Report of 7 July 2021
Report of 7 December 2021
Reports of 14 March 2022 and 15 March 2022
Diagnosis by Dr Raeside
Reliance upon the Outline of Evidence and Summary of Evidence

Professor Jureidini
THE PSYCHIATRIC EVIDENCE - COMMONWEALTH
Dr Schirripa
Report of 8 April 2013
Report of 18 July 2018
Report of 24 August 2020
Report of 28 January 2021
Report of 23 February 2022
Oral Evidence
Assessment of Dr Schirripa’s evidence

THE EXPERT EVIDENCE - ACM
Dr Dilip Kapur
Overdose
OxyContin addiction
Marijuana use
Physical pain

Dr Clarke
4 December 2018 report
3 November 2020 report
19 March 2021 report
15 March 2022 report
Management Unit
Torture and trauma
Reliance on the applicant’s evidence
Assessment of Dr Clarke’s evidence

CONSIDERATION OF THE EXPERT EVIDENCE
FINDINGS OF FACT AND FAILURE TO PROVE ALLEGATIONS OF FACT
Chronology
Pre-detention findings
University studies in Iran

Curtin Findings
Did the applicant hide psychiatric symptoms at Curtin because he feared it would adversely affect his prospects of obtaining a visa?
Was the applicant suffering from a recognisable psychiatric injury at the time of his transfer from Curtin to Baxter?
Was the applicant vulnerable to suffering a recognisable psychiatric illness at the time of his transfer from Curtin to Baxter on 22 September 2002?

Baxter Findings
What occurred during the applicant’s transfer from Red 3 to Blue 3 on 22 January 2003?
What occurred during the protest and self-harming incident of 6 February 2003?
Did the applicant hide psychiatric symptoms while at Baxter because he feared he would be placed in the Management Unit or that it would adversely impact his visa prospects?

The applicant’s placement in the Management Unit between 5 to 13 March 2003
The applicant’s mental health in March 2003
Reliance on DSO notes between the fires and the overdose
Was the overdose on 11 August 2003 a genuine suicide attempt?
Was the applicant suffering from a recognisable psychiatric injury between the suicide attempt on 11 August 2003 and his release from detention?
The applicant’s marijuana use in Baxter
Did the applicant experience insomnia at Baxter?
Does the evidence support a finding that the applicant socially isolated himself towards the end of detention?
Stressors at Baxter
Was the applicant suffering from a recognisable psychiatric injury upon his release from detention?

Post Detention Findings
General medical records
Psychological / psychiatric records
Post-detention psychiatric care
Work, relationships and university studies
Observations by detainee witnesses post detention
The applicant’s OxyContin addiction

DUTY
The Commonwealth’s duty of care
The non-delegable duty of care owed by the Commonwealth
Affirmative duty of care
Standard of care
Reasonable foreseeability
Injury
Is the content of the Commonwealth’s duty of care informed by Australia’s international treaty obligations?
CONTENT OF THE DUTY OF CARE AND BREACH
BREACH
The medical failure to treat case
Breach One
Breach Two
Breach Three
Breach Four
Breach Five
Breach Six

The applicant’s overall case on breach
The Counterfactual
The applicant’s form of detention case
Place of detention
Alternative places of detention
The Commonwealth’s conduct after the fires
Subjecting the applicant to stressors during the course of his detention which caused or contributed to him developing mental illness or vulnerability to mental illness
Other aspects of the applicant’s form of detention case
Interpreters
Counsellors
The temperament of DSOs
Failure to ensure staff were aware of the applicant’s personal history and took it into account when dealing with him
The provision of educational and recreational facilities
The failure to ensure unnecessary force and handcuffing was not used
The Management Unit
The failure to minimise tension at Baxter

CAUSATION
Legal principles
Recognisable psychiatric injury – August 2003
Management Unit - March 2003
Failure to provide access to a psychiatrist or psychologist did not cause any loss
Summary of causation issues
THE COMMONWEALTH’S PLEADING
CONCLUSION ON LIABILITY IN NEGLIGENCE
DAMAGES
CIVIL LIABILITY ACT
EXTENSION OF TIME
THE THIRD PARTY CLAIMS
Legislative framework – Migration Act 1958
The making of the contracts
The Commonwealth’s contractual arrangements with ACM and G4S
The Commonwealth’s causes of action on its third party claims
The third party defences
The Commonwealth’s third party claims in contract
Liability of a guarantor
The indemnity provisions
The Commonwealth’s third party claims in tort
The Commonwealth’s claim that the third parties were in breach of concurrent duties owed to it in contract and tort
Estoppel / waiver / ratification
CONCLUSION
POSTSCRIPT

STANLEY J:
INTRODUCTION

On 16 December 2000 Payam Saadat (the applicant), having entered Australian territorial waters by boat from Indonesia, was taken aboard an Australian Naval vessel near Ashmore Reef. He was processed at Darwin on 22 December 2000. The next day he, along with other passengers on that boat, was transferred to Curtin Immigration Reception and Processing Centre (Curtin) near Derby, Western Australia. The applicant claimed asylum. He was placed in immigration detention while his claim was assessed and determined. He remained in immigration detention until 27 April 2005. During that period, he was detained at Curtin until 22 September 2002 when he was transferred to Baxter Immigration Reception and Processing Centre (Baxter). He remained at Baxter until his release into the Australian community on 27 April 2005 when he was granted a temporary protection visa (TPV).
The applicant claims damages from the Commonwealth for psychiatric injuries he alleges he suffered as a result of the conditions under which he was detained by the Commonwealth at Baxter in breach of the Commonwealth’s duty of care it owed him. In the alternative, he alleges that, as a result of the Commonwealth’s breach of its duty of care, he suffered psychiatric injury caused by the conditions of his detention at Curtin from 23 December 2000 to 22 September 2002, which was aggravated by the conditions of his detention by the Commonwealth at Baxter. He also alleges the Commonwealth breached its duty of care by failing to treat his psychiatric injury while he was in detention.
By reason of the operation of s 14 of the Limitation Act 2005 (WA), any claim by the applicant for damages for injury suffered by him while he was detained in Curtin is statute barred.
The applicant’s entry into Australia was governed by the provisions of the Migration Act 1958 (Cth) (the Migration Act). The Migration Act provides that all unlawful non-citizen entrants into Australia without a lawful right of entry must be detained. This has been a feature of the statutory regime governing the entry of non-citizens or British subjects since shortly after Federation. This was described by Hayne J in Al-Kateb v Godwin.[1]He said:[2]
Since before federation, control of immigration to Australia has had a prominent place in Australian law and politics. In the first year of federation, the Parliament passed the Immigration Restriction Act 1901 (Cth) “to place certain restrictions on Immigration and to provide for the removal from the Commonwealth of prohibited Immigrants”. For more than ninety years, legislation prohibited various classes of person from entering the Commonwealth and made it a criminal offence to enter, or to be found within, the Commonwealth as a prohibited immigrant. For many years, the dictation test was used to exclude persons, or classes of person, whom the government of the day deemed undesirable immigrants. The operation of that test was considered by this Court many times.
[citations omitted].
[1] [2004] HCA 37, (2004) 219 CLR 562.
[2] Al-Kateb v Godwin [2004] HCA 37 at [201], (2004) 219 CLR 562 at 632.
It is not in dispute that the applicant arrived in Australia without legal authorisation. The applicant left Iran and eventually came to Australia via Indonesia and possibly other countries by boat. For the purposes of the Migration Act he was an unlawful non-citizen in this country.
In 1998 the Commonwealth entered into a contract with Australasian Correctional Services Pty Ltd and the GEO Group Australia Pty Ltd (ACM) for the management of detention facilities on behalf of the Department of Immigration and Multicultural Affairs, later known as the Department of Immigration and Multicultural and Indigenous Affairs (DIMIA).[3] When these contracts were entered into in 1998 there were four detention centres in Australia, namely, Port Hedland, Villawood, Maribyrnong and Perth. Relevantly, the two detention centres where the applicant was detained, Curtin and Baxter were not in operation.
[3] The Department had various changes of nomenclature during the relevant period.
The contract required ACM to provide detention services in accordance with industry best practice and the Immigration Detention Standards (IDS). The IDS were expressly incorporated into the contractual framework between the Commonwealth and ACM as a schedule to the detention services agreements. The contract permitted ACM to subcontract services for the delivery of detention services. Subcontracting of those services was subject to demonstration that the subcontractors were capable of providing detention services at the requisite standard. Importantly, pursuant to the contract, ACM provided an express contractual indemnity on its warrant to provide the detention services, whether those services were provided by it or a subcontractor. By the indemnity, ACM agreed to hold the Commonwealth harmless from liability from its provision of detention services pursuant to the contract. Further, ACM executed a deed of guarantee of its obligations, including the indemnity obligation to the Commonwealth. The existence of the indemnity obligation is not in issue in the primary proceedings. However, there is an issue as to whether in respect of the applicant’s claim ACM is obliged to indemnify the Commonwealth.
It is not contested that the applicant was lawfully detained by the Commonwealth pursuant to the relevant provisions of the Migration Act as an unlawful non-citizen.
Both the Commonwealth and ACM emphasise a change in the historical circumstances relevant to unauthorised arrivals that occurred in the period of two or three years immediately preceding the applicant’s arrival in Australia. They point to a dramatic increase in the number of unauthorised arrivals during that period relative to what had occurred previously. These arrivals swamped the existing facilities for detention of unauthorised arrivals. Until 1998 those detention facilities were operated by organs of the Commonwealth executive government, namely, DIMIA.
In 1999 and 2000 the dramatic increase in the number of unauthorised arrivals by non-citizens into Australia led the Commonwealth to open further detention centres and to re-open detention centres previously operated by the Commonwealth but subsequently closed. During this period the Commonwealth detained asylum seekers at Curtin, some 40 kilometres from the town of Derby, and Woomera Detention Centre (Woomera) in the north of South Australia. Subsequently, on 26 August 2002, pursuant to s 273(1) of the Migration Act, the Commonwealth established the Baxter detention centre approximately 12 kilometres from Port Augusta in the State of South Australia. ACM was contracted to operate the detention centres at, inter alia, Curtin, Woomera and Baxter on behalf of the Commonwealth. Baxter commenced operation on 6 September 2002. It was a purpose-built detention facility.
On 27 August 2003 the Commonwealth contracted with Group 4 Falck Global Solutions Pty Ltd (G4S) to manage and operate, inter alia, the Baxter detention centre on behalf of the Commonwealth. On 1 December 2003 G4S contracted with International Health and Medical Services Pty Ltd (IHMS) for the provision of health care services at, inter alia, Baxter. ACM ceased to operate Baxter and G4S assumed the management and operation of Baxter on 19 January 2004. Like ACM, G4S was contractually obliged to observe the IDS. The IDS were re-drafted in the years between the ACM and G4S Contracts and the standards incorporated into the G4S contract differed from the IDS in the ACM contract.
On 6 February 2004 G4S contracted with Professional Support Services (PSS) for the provision of psychological and other counselling services at Baxter.
CLAIM
The basis of the applicant’s claim
Upon his arrival in Australia the applicant claimed asylum and applied for a protection visa. His application was refused and he brought a series of appeals challenging this decision which culminated in the rejection of his application for special leave to appeal in August 2003. Thereafter, until he was granted a TPV and released from Baxter in April 2005, he was at risk of being deported to Iran involuntarily.
The applicant says that while in detention he made repeated requests for medical assistance for various health problems, including insomnia and self-harm, but he did not see a psychiatrist in the entire period of his detention. Eventually he alleges he suffered a Chronic Adjustment Disorder with Mixed Anxiety and Depressed Mood and/or a Persistent Depressive Disorder. He also alleges that he subsequently suffered an opioid dependence as a result of the psychiatric injuries he suffered. He alleges his psychiatric injury is permanent.
The applicant’s case is that he had no prior history of mental illness before arriving in Australia. He alleges that by the time of his transfer from Curtin to Baxter in September 2002 he was, at the very least, vulnerable to suffering a mental illness by reason of the conditions of his detention at Curtin. He alleges that by the time he was released from Baxter in April 2005 he had developed a recognisable psychiatric injury from which he has not recovered. It is his case that his psychiatric injury was caused or materially contributed to by the conditions under which he was detained at Baxter and/or by the failure to treat the applicant for his alleged psychiatric injuries.
There are two limbs to the applicant’s claim. The first is what can be characterised as a failure to treat case and the second is a negligent form of detention case.
The applicant gave evidence that, when in Iran, he was detained and physically tortured by Ettela’at, the secret police, which caused him to flee that country and seek asylum. He said the boat journey to Australia was traumatic. The applicant’s case is that the Commonwealth was aware of this history when it detained him. As a consequence, it knew or ought to have known that he was a vulnerable person who needed to be treated with sufficient care to prevent him suffering psychiatric injury. Instead, it detained him under conditions which rendered it almost inevitable that he would suffer psychiatric injury or that any pre-existing psychiatric injury would be aggravated by the conditions under which he was detained, particularly at Baxter.
He alleges that in 2011 he read a medical report of a psychiatrist, Dr Raeside, and discovered, for the first time, that he had a psychiatric illness and would require the indefinite use of antidepressant medication and ongoing psychological therapy. From reading the report, he ascertained that a psychiatrist considered it likely that he would suffer permanent psychiatric disability with a consequential impact on his work and social life.
The applicant alleges that before and during his detention period the Commonwealth knew or ought to have known that accepted medical opinion held that long-term detention can cause or contribute to mental illness. The applicant alleges that he was vulnerable to suffering a mental illness due to being tortured and detained in Iran and enduring a traumatic voyage in an unseaworthy boat to Australia. However, he also alleges he had not experienced symptoms of mental illness prior to his detention in Australia.
The circumstances under which he was detained at Curtin and Baxter were harsh. It is the applicant’s case that this was deliberately so and that the Commonwealth established detention centres and conducted and managed those centres in a manner which was intended to deter people seeking asylum from coming to Australia for that purpose. The applicant points to particular features of Curtin and Baxter. They were located in remote and inhospitable parts of Australia. The location of these detention centres made visiting difficult. That increased a detainee’s sense of isolation. The rules and procedures adopted by those operating the detention centres added to that sense of isolation. In order for someone to visit a detainee, the detainee had to make a written request for a particular person to visit. Even then, the operator of the detention centre and DIMIA was conferred with discretionary powers, including to refuse visits by both personal and institutional visitors, such as churches, welfare organisations, lawyers and advocacy groups.
The applicant submits the sense of isolation was further exacerbated by the limited availability of telephones. By way of example, at Curtin there were four phones with four outward lines and two inward lines. In circumstances where there were frequently as many as 850 detainees in that centre the queue to get a phone was always long. Further, detainees had to pay for their phone calls. The opportunity to earn money while in detention was limited. There were few paying jobs and the pay was low. He submits that at Curtin there was no access to newspapers, whether Australian or from detainees’ countries of origin, including Iran.
The applicant submits the conditions at both centres were inhospitable. The temperature was very hot during the day and it could be very cold at night. Curtin was frequently overcrowded which strained infrastructure. The showers were inadequate. There were few lavatories and they were disgusting.
He submits that at both centres procuring basic items such as detergent, shampoo and toothpaste was difficult because of the limited availability of such items. Food was bland and unchanging. The applicant described it as tasting terrible. Food could not be obtained outside designated meal hours. Detainees could not make their own meals.
The applicant alleges medical services at Curtin and Baxter were overstretched. The medical and nursing staff were inadequate for the number of detainees who required treatment. Medical centres were swamped by the demand. By way of illustration the applicant said that while at Curtin he suffered a throat infection. Over the course of three months he attended at the medical centre almost 30 times for treatment of this condition. He alleges that it was only at the end of that period that he was given antibiotics. The applicant said he had dental problems which caused him severe pain for which he never received proper treatment. At one stage he suffered a testicular torsion which required surgery. He said that required him to be transported to hospital which involved him travelling in handcuffs and being shackled to a bed while being treated in the hospital.
The applicant submits that while in detention there was little organised activity. Detainees spent interminable days sitting around with nothing to do. Reports provided to DIMIA by the ACM painted a misleading impression of conditions at Curtin. While there was a soccer pitch, the goals had no nets and there was only a single soccer ball. There was always a competition to see who could get the soccer ball. It had to be obtained from a Detention Services Officer (DSO). Even then there was stiff competition as to who could play given there were so many single men detained at Curtin who were interested in playing. That contest itself could become a source of friction between Afghan and Iranian detainees. In any event, play was often confined to the evening when the heat of the day had eased.
The applicant alleges that adult education was virtually non-existent. At Curtin there were few televisions. There were no excursions for single men. The only time the applicant left the detention centres was to travel to hospital for treatment.
The applicant alleges that the management and operation of the detention centres at Curtin and Baxter prioritised security over the wellbeing of detainees. The ambiance was that of a prison. That was contributed to by the attitude of many of the DSOs who were recruited from the prison system which the third parties operated. Detainees and their rooms were subject to arbitrary searches. Systems were highly regimented.
The applicant claims that the Commonwealth failed to conduct any research into the effect of detention, particularly long-term detention, on detainees’ mental health. When offered assistance by the Royal Australian and New Zealand College of Psychiatrists (RANZCP) to undertake such research the Commonwealth declined that offer. These offers were made expressly by a former president of the RANZCP, Dr Phillips, in 2001 and 2002. Such research as was undertaken was publicly debunked and dismissed by the Commonwealth.
The applicant submits that from time to time there were riots and other disturbances, including arson, at Curtin and Baxter. There is ample evidence of detainees self-harming or threatening suicide. The applicant contends that the Commonwealth, rather than recognising such events as symptomatic of desperate people suffering recognisable psychiatric illnesses requiring treatment, characterised these actions as protests designed to manipulate the detention service provider or DIMIA into treating the detainees involved and their claims more favourably. This led to counterproductive responses by the Commonwealth and third parties.
Commonwealth’s defence

The Commonwealth accepts that it owed a non-delegable duty to the applicant to ensure reasonable care was taken of him while he was in detention.
The Commonwealth denies that it has breached its duty of care to the applicant. The Commonwealth submits that it discharged its non-delegable duty of care to the applicant through a range of measures including instituting appropriate contractual arrangements with the third parties, the provision for reports and records, together with a review of those records, the monitoring by the Commonwealth of the third parties’ management of the detention centres and their exercise of appropriate operational discretions on a daily basis as part of the discharge of their duty of care. It contends that reliance on the third parties for the management and operation of Curtin and Baxter did not constitute delegation in these circumstances.
The Commonwealth’s primary defence to the applicant’s claim is that it fails as a matter of fact. The Commonwealth denies that the applicant suffered psychiatric injury even if it was in breach of the duty of care it owed him. Further, the Commonwealth contends that if the applicant suffered psychiatric injury, he has failed to prove it was caused by stressors that existed during the period the applicant was in detention. Rather, it contends it was the result of stressors to which the applicant was subject before and/or after his period in detention. In the further alternative, the Commonwealth says that if the applicant suffered psychiatric injury as a result of its breach of its duty of care, he recovered from that injury. If he did not, any symptoms he now suffers are not caused by any injury he suffered as a result of the Commonwealth’s breach of its duty of care, but are the result of other stressors unrelated to his period in detention or stressors which caused loss and damage that is nonjusticiable.
The Commonwealth further contends that, in any event, the applicant has failed to prove that any breach of its duty of care was causative of loss and damage to him.
In discharging its duty of care, the Commonwealth emphasises that, from time to time, there was a fluctuating balance in resolving the tension between various factors that were to be observed by the Commonwealth and the third parties. Examples being the security of detainees, the necessity of detention, and respect for the cultural integrity of detainees.
In addition, in considering whether a duty of care was breached, the Commonwealth says it is important to recognise the third parties were managing detention centres in the context of unprecedented pressure due to the number of unlawful non-citizens arriving. This resulted in the detention system being swamped in the late 1990s and early 2000s, requiring a process of regular adaptation, modification and improvement in the system of immigration detention.
It contends that, in any event, the applicant’s claim is statute barred. It opposes an extension of time.
The Commonwealth joined as third parties Australasian Correctional Services Pty Ltd, the first third party, G4S Australia Pty Ltd, the second third party, GEO Group Australia Pty Ltd, the third third party and G4S Regional Management (UK & I) Ltd, the fourth third party.[4] The third parties contracted with the Commonwealth at various times relevant to the applicant’s claim, to conduct and manage, inter alia, Curtin and Baxter.
[4] For convenience, throughout these reasons I will refer to the first and third third parties as ACM, and the second and fourth third parties as G4S.
During the applicant’s detention, ACM was contracted for the period up to on or about 19 January 2004 and G4S was contracted for the period from on or about 19 January 2004 until the applicant was released from detention on 27 April 2005. The Commonwealth in its third party claim, contends that if the Commonwealth is found liable to the applicant, that would be a breach of the service obligations to which the third parties are contractually bound triggering a contractual right to indemnity guaranteed by the third parties. In addition, the third parties would be liable in those circumstances to the Commonwealth in negligence. The third parties deny any liability to the Commonwealth. They deny either the existence of a contractual relationship giving rise to a duty of care or the breach of a duty of care. In the alternative, they allege waiver by the Commonwealth of any liability and they plead that the Commonwealth is estopped from bringing any claim against them.
The third parties were selected by the Commonwealth because of their experience and expertise in managing these complex and difficult demands which existed in operating and managing detention facilities.
ACM’s case on the applicant’s claim
Despite the fact the applicant did not directly institute proceedings against them ACM chose to respond directly with a Defence to the applicant’s Statement of Claim, in addition to the Third Party Claim. ACM’s case on the applicant’s claim is that he did not suffer a recognisable psychiatric injury at Curtin. If he did suffer a psychiatric injury at Curtin, it was in the nature of a mild reactive depression in response to his “detention uncertainty”. ACM alleges reactive depression amongst the detainees at Curtin was widespread and largely untreatable. Whatever it was, such an injury at Curtin is not compensable.
ACM submits it had no capacity to control the expectations of detainees at Curtin in respect of their visa applications. This was in the exclusive province of the Commonwealth. Detaining people against their will, over an extended period of time without any certainty as to their future, was potentially detrimental to their mental health. ACM knew and understood this from at least 2002. The Commonwealth was aware of the existence of expert opinion to that effect from an even earlier time.
ACM admits that to the extent that the applicant became, over time, a long-term detainee at Curtin, he became vulnerable, along with all other such detainees, to the development of a psychiatric injury. It accepts that many of hundreds of male detainees at Curtin fell into this category. ACM submits there were not sufficient indicators of the applicant suffering from psychiatric injury at Curtin to justify him being referred either while at Curtin, or when transferred to Baxter, for a full mental health assessment (MHA) by a mental health nurse, a psychologist or a psychiatrist. Further, it contends it is entirely reasonable and consistent with the detection, management and treatment of mental illness in the general population that the level of intervention and treatment will be largely dictated by the particular symptoms, or lack thereof, exhibited by the individual patient. In the presence of symptomatology which might be suggestive of a psychiatric cause, it was reasonable to take a staged approach to diagnosis and treatment which, in the first instance involves screening and, depending on the results of screening, a triage of the patient to more detailed assessment and treatment from other more specialised health professionals if the presenting symptoms indicate that this is necessary. ACM submits that this process existed at both Curtin and Baxter, and at neither centre did the overall presentation of the applicant warrant any greater level of intervention than occurred.
ACM contends that the Commonwealth and ACM committed no actionable breach by failing to conduct full MHAs on the applicant at Curtin and Baxter. ACM submits it acted appropriately in meeting the applicant’s physical health care needs at Curtin.
ACM submits that Baxter was designed and constructed by the Commonwealth as a facility which had the capacity to both keep detainees in, and to keep potential protestors out. It was therefore intended, by design, to be more secure than significantly less structured detention facilities, such as Curtin and Woomera. ACM contends that the fact the applicant, and other detainees, did not like the detention environment at Baxter, is not relevant, or an actionable complaint. Baxter was designed with multiple compounds in order to be able to compartmentalise detainees into smaller and more manageable residential groups or compounds, as the need arose, for the good order and management of the facility. The compounds were identified by colour, red, white and blue, and numbers one, two and three. The previous experience of fire, riots and escapes at places like Curtin and Woomera were taken into account by the Commonwealth at the design stage for Baxter. Further, independent expert opinion provided to the Commonwealth after the fires and riots at Woomera and Curtin (and other detention centres) in 2001 indicated to ACM and the Commonwealth that the detainee cohort should now be assumed to be non-compliant in their attitude toward detention.[5]
[5] Exhibit A228.
ACM submits it was contractually required, as at September 2002, to simultaneously detain persons in an administrative setting and ensure they did not escape, while at the same time providing a reasonable level of service in connection with their physical and mental health.
ACM contends the mere transfer of apparently healthy detainees from one detention centre, in this case Curtin, to another, Baxter, did not of itself automatically trigger a requirement to undertake a full MHA upon their arrival at the new detention centre.
ACM submits the mental health screening process undertaken by ACM upon the applicant’s transfer to Baxter was in accordance with ACM’s Operational Procedures, as approved by the Commonwealth. The process followed by ACM was in accordance with its contract. ACM argues that if that process was somehow defective, any responsibility for that rests with the Commonwealth.
While the IDS sought contractually to impose upon ACM a standard of care which ACM was required to achieve in its treatment of all detainees, including the applicant, the duties ACM owed to the Commonwealth remained at all times contractually based. The applicant does not plead the existence of a duty of care owed by ACM to him and has not brought a claim directly against ACM. It is submitted that the nature and content of any duty owed by ACM to the Commonwealth is informed by and coextensive with, the IDS. ACM submits its duties can rise no higher than those found within the four corners of the contracts.
ACM submits that though its procedures for the transfer of detainees to Baxter were not foolproof in terms of detecting potential mental health problems, such an approach was in all the circumstances, a reasonably sufficient way to identify those requiring further MHAs at that time. ACM contends it cannot be said that it had made no attempt to look after the mental health of detainees or ignored the vulnerability to mental illness which long-term detention could produce.
ACM submits that the applicant’s attempt to make the case that the fact he “flew under the radar” is an indictment of the Commonwealth’s and ACM’s attention to this aspect of detainee wellbeing, should be rejected. In support of this submission, it argues that:
·the Court should find that the applicant did not have a recognisable psychiatric injury during his detention in Baxter;
·even if the applicant’s mental health deteriorated from time to time during his period in Baxter such that it could be classed as a recognisable psychiatric injury, it was an Adjustment Disorder with Depressed Mood which ebbed and flowed according to events. In between times, his condition was not such as to warrant a diagnosis of mental illness;
·whenever the applicant complained of some emotional or psychological issues, those complaints were acted upon. The contemporaneous evidence of the applicant’s level of functioning and social interaction throughout his time in Baxter does not support his claim that he had given up;
·a symptom and complaint based approach to dealing with physical and mental health is an entirely reasonable means by which large numbers of people being held against their will in a detention facility can be cared for; and
·the fallacy in the applicant’s complaint of the failure of ACM to carry out a MHA on the applicant is that it assumes such an assessment would have revealed the existence of a psychiatric injury or resulted in the applicant being treated differently than he was in fact.
ACM contends the applicant was not identified as a person requiring additional mental health treatment and management and, that this was both reasonable and understandable on the evidence. ACM rejects the submission that there should have been some wholesale system of conducting MHAs on detainees which included those who exhibited no symptoms or made no complaints of mental health problems. It argues liability in negligence is to be considered from a prospective position and requires consideration of the appropriate response of the reasonable person in the position of the Commonwealth at the time, rather than with the wisdom of hindsight.
ACM argues there was no breach of duty by the Commonwealth and ACM in not undertaking a full MHA of the applicant upon his arrival at Baxter. To have required this for the applicant, and for all long-term detainees arriving at Baxter at that time, set the standard of care too high.
In the alternative, ACM submits that if the Court finds that a full MHA ought to have been undertaken upon the applicant’s arrival at Baxter, it would not have revealed a psychiatric injury at that time.
ACM accepts that between December 2002 and October 2003 the applicant was exposed to a number of events and stressors at Baxter which potentially had a negative impact on his mental health. In addition to the risk of deportation, ACM from time to time imposed on the applicant, and various other detainees, a higher level of security, and more restricted detention conditions, in order to maintain good order and security at Baxter. ACM submits that to the extent these measures caused or resulted in the applicant developing a psychiatric injury at Baxter, which is denied, such measures were contractually justified and they are also not actionable against the Commonwealth.
ACM rejects the applicant’s submissions,[6] that ACM acted or treated the applicant in an arbitrary, unprincipled or capricious way, without reasonable grounds to suspect that the applicant was a potential risk to good order and security at Baxter. ACM submits instead that it responded reasonably to the extremely difficult circumstances with which it was presented in late 2002 and during 2003 and the treatment of the applicant and other detainees at Baxter must be seen in this context. The applicant’s mental health was only one of the considerations to which the Commonwealth and ACM had to have regard during his detention.
[6] Applicant’s Written Submissions (FDN 681) at [29]-[30].
The December fires in 2002 created a significant risk to detainees and staff. ACM rejects the applicant’s submission,[7] that the fires at Baxter were substantially caused by “detainee dissatisfaction with numerous aspects of ACM’s management” given that the fires were not lit by the entire detainee population.
[7] Applicant’s Written Submissions (FDN 681) at [28].
ACM submits the suspects were Iranian men who had entirely or substantially exhausted their rights of appeal against determinations that they were not refugees and who were facing deportation. ACM submits it had intelligence large scale protests were planned for Baxter at Easter 2003 when Iranian male detainees might be assisted to escape and a high level of vigilance and security was therefore essential to protect the detainee population and the staff at the facility. ACM rejects the contention that the applicant was denied “natural justice” in the aftermath of the fires.
The applicant was suspected of being involved in the lighting of the fires. ACM submits it is irrelevant that he denies any involvement. It was perfectly reasonable to err on the side of caution in terms of the suspects given the expectation of further riots and protests. ACM argues that isolating the examination of particular steps taken in relation to the applicant and looking only at what negative effect that might have had on him ignores the wider duties which ACM had to the safety and good order of the facility.
ACM contends the applicant’s submission that ACM had no proper or reasonable grounds even to suspect him in late December 2002 and January 2003 is not consistent with legal principle and that ACM was privy to evidence or intelligence that the applicant:
·had been seen with a lighter prior to the first fire;
·was known to be friends with another detainee, Ghorbanali, who was suspected of lighting the fires, and/or agitating for more fires;
·occupied a room immediately adjacent to the sources of the first fire, i.e., Ghorbanali’s room;
·was overcome, along with Reza and Ali Namavar, by exposure to smoke, during the first fire;
·had stood in solidarity with other detainees who were together threatening further fires in early January 2003;
·had knowledge of the threat of further fires evidenced by his packing of a bag of personal belongings in anticipation of more fires; and
·continued to associate and socialise with other detainees under suspicion, including being in a room with Ali Namavar when a lighter was discovered.
ACM submits that these matters in combination provided more than ample grounds for ACM to have placed the applicant in the Management Unit in early January 2003; strip-searched the applicant as authorised by DIMIA; and placed the applicant in Blue 3 on 22 January 2003.
To the extent that there were occasions in 2003 when the applicant was either subjected to periods of detention in the Management Unit, or otherwise displayed behaviours not inconsistent with an emerging mental health condition, ACM submits it acted reasonably in undertaking welfare checks on the applicant from time to time, and by monitoring his mood, demeanour and general behaviour. This structure recognised that actions taken for the purpose of maintaining the safety and good order of the facility might have negative effects on detainees who therefore needed to be monitored. ACM argues that the IDS made clear that in certain circumstances, those standards directed at the quality of the detention experience would have to give way to considerations relating to the safety and good order of the facility. ACM rejects the applicant’s submission that it employed “an excessively security-driven regime”,[8] rather, ACM argues it was contractually bound to ensure the safety and good order of the facility in priority to all the other considerations which were articulated in the IDS.
[8] Applicant’s Written Submissions (FDN 681) at [30].
It is submitted that neither ACM nor the Commonwealth committed any breach by not having the applicant referred for a full MHA in 2003. In the alternative, if the Court considers that at some stage in 2003 a full MHA was warranted, ACM submits that, in any event, no psychiatric injury would have been revealed or diagnosed at that time. Further, ACM submits the applicant would not have willingly cooperated with such an assessment due to his suspicion of all persons associated with ACM and his stated fear that the disclosure of any mental health concerns would harm his visa prospects.
Even if a psychiatric injury had been identified and diagnosed, ACM submits that Baxter was not a therapeutic environment and it was not possible to effectively treat any psychiatric injury suffered by the applicant while he remained at Baxter. Further, as the applicant was suspicious and did not trust ACM’s staff, including mental health staff, it would not have been possible for any mental health professional who was perceived by the applicant to be associated with the Commonwealth or ACM to have developed a therapeutic relationship with him at Baxter.

ACM submits the only witness who suggested that a therapeutic relationship was possible in Baxter was Professor Jureidini and his evidence was based on a personal experience, on one occasion, with a youth at Baxter.[9] ACM argues that case was materially different because unlike an ACM engaged psychiatrist, Professor Jureidini was, and would have been perceived as, a psychiatrist who was completely independent from ACM and the Commonwealth.
[9] T 5657.5-7.
ACM relies upon the evidence of psychiatrist Dr Michael Clarke to submit that to the extent the applicant had a psychiatric injury at Baxter, it was an Adjustment Disorder of the kind that fluctuated. ACM argues the fallacy in the applicant’s case is that it assumes the existence of a recognisable psychiatric injury throughout the applicant’s detention in Baxter and beyond, despite the contemporaneous evidence of his functioning and inter-personal dealings with staff and other detainees, which contradicted that assumption.
ACM rejects the applicant’s submission that in 2003 he had “given up” and was in the third stage of mental illness described by Dr Professor Jureidini. ACM submits that Professor Jureidini was neither independent nor credible as an expert witness and his opinions should be rejected. However, even Professor Jureidini accepted, somewhat grudgingly, that the contemporaneous documentation relating to the applicant’s observed level of functioning and inter-personal engagement, socialisation and work meant that he was not in a “given up” state in 2003 and into early 2004.
ACM argues that a MHA carried out in this period would not have revealed that the applicant had given up or was in the third stage.[10] Rather, that the ebb and flow of his emotions in response to various events in 2003 were consistent with normal psychological reactions to such events which might include periods of sadness or depression, but which do not rise to the level of the diagnosis of a psychiatric injury. Further, even if they did, the nature of an Adjustment Disorder is that it is reactive to the relevant event and does not linger in terms of its disabling effect.
[10] In Professor Jureidini’s construct the third stage is when the patient has given up.
Dr Clarke’s diagnosis was that, if it rose to the level of a psychiatric injury, then it was one that was reactive to stressful events experienced by the applicant. These included his general unhappiness with mandatory detention; his exposure to fires; his two periods in the Management Unit; and his concerns about possible deportation, which came to a head upon the refusal of his application to the High Court.
ACM submits Dr Raeside recognised that the initial diagnosis which he made would not be expected to have had a lasting disabling effect. It was only after being asked to make assumptions, which ACM submits on the evidence were and are untenable, that he made a diagnosis of a more severe psychiatric injury. However, as he conceded in his evidence, if those assumptions are not borne out by the evidence, he would revert to his original diagnosis which is not materially different from that of Dr Clarke.
ACM submits it, in conjunction with the Commonwealth undertook various measures at Baxter which, subject to security and good order considerations, were reasonable measures to try and minimise the onset or aggravation of mental health problems. These included the provision of meaningful activities in the form of work opportunities; opportunities for education and recreation, subject to security and good order considerations; and the availability of counselling. Work opportunities were highly sought after as they carried with them small financial benefits. At Baxter the applicant worked in the yard and in the kitchen. He was observed to be a good worker who enjoyed his work. ACM submits the fact that the applicant did not participate in the self-paced education packs made available to him was a matter of his personal choice and ACM could not force him to participate.
To the extent that the Commonwealth and ACM did not conduct educational classes on mental health issues prior to October 2003, ACM submits that the applicant was unlikely to have participated in those classes and therefore, the failure to provide them therefore made no difference.
ACM submits the applicant’s lack of eligibility for occasional visits and activities outside of Baxter due to his security rating did not meaningfully impact on his mental health. Further, even if it did, ACM submits that the failure to provide him with excursions was not negligent. In the context of a detention environment where considerations of the security and good order of the facility are to trump other considerations, the connection between a security rating and the level of freedom enjoyed by a particular detainee by reference to it is both reasonable and understandable.
ACM submits that following the overdose incident in August 2003, the applicant’s observable behaviour was not consistent with a person suffering a mental illness. It contends that the evidence does not support a finding that the applicant consumed a lethal dosage of Tramadol tablets and that, in any event, he denied any suicidal intention when speaking to Ms Rarity. ACM submits that it acted reasonably in monitoring him in the aftermath of this event and that even if he had been referred for psychiatric assessment, there is no reason to think that his treatment would have been different. His subsequent level of functioning contraindicated the existence of an underlying psychiatric injury. As a result ACM contends there was no breach of duty by the Commonwealth or ACM in failing to have the applicant referred for a MHA or review by a psychiatrist at that time.
Further, ACM argues that if a MHA had been done at the time, it would not have revealed a recognisable psychiatric injury and that the evidence of Dr Raeside is fatal to the applicant’s case on this issue. It is reasonable to assume that if the applicant had been referred to a psychiatrist in the aftermath of the overdose he would have given an account of those events in much the same terms as he gave to ACM detention and medical staff, namely, he would have denied that it was a suicide attempt. His relatively quick recovery from the “seizure” gave clinical support that he had not ingested much medication. Dr Raeside agreed that a psychiatrist presented with that picture would have reasonably adopted an approach which kept the applicant under surveillance to see how he was functioning. The contemporaneous evidence of his level of functioning and social and work interaction in the immediate aftermath of the overdose would have satisfied Dr Raeside that no further or more detailed investigation of his mental health was required at that time.
ACM submits that even if a diagnosis was made or ought to have been made at that time, no amount of counselling, reassurance or medication would have changed the applicant’s underlying unhappiness at being in detention, his lack of a visa, and his fear of deportation. The problem remained that no effective psychiatric treatment would have been able to have been provided to the applicant while he remained at Baxter. As such, even if the Commonwealth and ACM had taken additional steps to try and ameliorate the risks of the applicant developing a psychiatric injury, they were unlikely to have been effective.
ACM submits that from August 2003 onwards, the applicant appears to have decided to make the best of his detention circumstances and the ACM observations of him over many months were not consistent with a person suffering from a chronic and serious mental illness requiring a diagnosis of psychiatric injury and treatment or transfer to a mental health facility.
ACM argues the applicant’s fear of deportation would have abated in 2004 when Minister Vanstone announced that no Iranian asylum seekers would be involuntarily deported. Further, ACM submits this partly explains why it was possible for a long-term detainee such as the applicant to have had a better mental outlook thereafter, notwithstanding he remained in detention.
Overall, the submission made by ACM is that based on the contemporaneous observations of the applicant recorded by DSOs employed by ACM and G4S, the evidence does not support a finding that the applicant was suffering a recognisable psychiatric injury when he left Baxter in April 2005 or, in the alternative, if he was, it was due to detention itself and the associated non compensable factors. ACM submits that this conclusion finds support in the evidence of not only Dr Raeside and Dr Clarke but also in the evidence of Professor Jureidini. ACM therefore contends that the applicant’s post detention experiences and difficulties are not causally related to his time in detention.
ACM’s defence to the third party claim
The commencement point of ACM’s defence to the third party claim by the Commonwealth is that it was not responsible for the applicant’s detention. It was not responsible for decisions made in relation to his claim for asylum. It was not responsible for the location of Curtin or Baxter and the design, physical condition and features of those detention facilities. It was not responsible for the length of time the applicant was detained. It was not responsible for the indefinite nature of the applicant’s detention and his uncertainty as to his future or his fear of forced repatriation to Iran. It was only responsible for the provision of detention services for detainees, including the applicant, in Curtin and Baxter between December 2000 and January 2004 in accordance with the IDS.
Detention services are defined in the detention services contract between the Commonwealth and ACM as including guarding, interpreting and translation, catering, cleaning, education, welfare, health services, escort or transport services where not otherwise provided in the contract, and any other services necessary to enable delivery of detention services in accordance with the IDS.
Compliance with the IDS was relevant to the payment to be made by the Commonwealth to ACM for the provision of detention services. A failure to meet the benchmarking standards prescribed by the IDS could result in a reduction in the amount due to be paid by the Commonwealth to ACM under the contract.
For the purposes of ACM’s defence of the third party claim it emphasises its contractual obligation not only to detain detainees who were unlawful non-citizens but to prevent them escaping from immigration detention. ACM contends this is an overriding contractual obligation relevant to meeting criticism that ACM’s approach to managing the detention centres excessively focussed on security. ACM contends that maintaining the security of the detention centres was the paramount contractual obligation imposed on it. In those circumstances ACM submits the treatment of the applicant during his time in detention until January 2004 was neither in breach of the IDS or of the duty of care ACM owed to him.
ACM contends that the duty of care it owed the Commonwealth was congruent with the contractual obligation to comply with the IDS.
ACM contends that the measure or scope of the duty of care owed by the Commonwealth to the applicant is not congruent or co-extensive with the duty of care owed by ACM to anyone.[11]
[11] Romeo v Conservation Commission NT (1998) 192 CLR 431 at 478.
ACM contends there was no breach by it of a duty of care towards the applicant. ACM submits the duty of care in relation to the provision of adequate mental health services was met by the applicant being assessed at various times to determine whether he was at risk of suffering a psychiatric injury. ACM contends that as the relevant inquiry for the purposes of determining whether or not a breach of the duty has occurred is prospective, this approach was reasonable.
ACM submits that the treatment of the applicant, which he alleges constituted a breach of the duty of care owed to him by the Commonwealth, as a result of the specific actions of ACM in managing Curtin and Baxter, did not involve any breach because they were undertaken legitimately for the purposes of maintaining the security and good order of the detention centre, in accordance with the contractual obligations assumed by ACM pursuant to the detention services agreement.
ACM contends its treatment of the applicant was informed by an intelligence based security assessment. Such assessments not only informed decisions about where the applicant would be housed and what restrictions, if any, would be imposed on his freedom of movement, but also whether he would be the subject of random searches of his room for contraband. Searches might include bodily searches as well as room searches. ACM submits this was all part of the obligation to maintain secure control of the detention centre.
ACM submits circumstances of legitimate heightened concern about the security and good order of the detention facilities at Curtin and Baxter lead to a conclusion that more rigorous measures to regain and maintain control of a facility were reasonable from time to time. These considerations were particularly acute following the fires at Baxter in late December 2002 and the intelligence received in January 2003 that there was a risk of further fires.
ACM contends there is no proper basis to find it was negligent in failing to arrange for a psychiatric assessment of the applicant upon his arrival at Baxter given the history he provided to Dr Raeside that he did not suffer any mental illness at Curtin. ACM denies it was negligent in failing to have the applicant assessed by a psychiatrist in the wake of his alleged suicide attempt in August 2003.
G4S’ defence to the third party claim
G4S submits the applicant was detained at Baxter for 464 days during the period it was under the management and control of G4S. G4S contends that from 19 January 2004 until 9 September 2004 the applicant was housed in White 3 From 9 September 2004 to his release on 27 April 2005 he was housed in Blue 2. G4S submits that from 16 November 2004 until his release the applicant worked in the kitchen at Baxter for all but 11 days. The applicant does not allege any specific acts of mistreatment or incidents of self-harm, or time in the Management Unit or Red 1 during the G4S period.
G4S submits that pursuant to the contractual framework that existed between it and the Commonwealth and the presence of DIMIA employees at Baxter, the Commonwealth controlled how Baxter operated. As such, G4S submits the Court should find that it did not owe a separate duty of care to the Commonwealth outside of and inconsistent with the contractual terms which incorporated the IDS.
G4S contends that there is no scope for the operation of a duty of care in the relationship between it and the Commonwealth because, in accordance with the principles set out by the High Court in Brookfield Multiplex Ltd v Owners - Strata Plan No 61288,[12] the nature of the relationship is governed by extensive and comprehensive contractual rights and duties.Those contractual arrangements did not alter the non-delegable duty of care the Commonwealth owed to the applicant. G4S submits that the terms of the contractual arrangements between it and the Commonwealth were not co-extensive with the Commonwealth’s duty of care to the applicant.
[12] [2014] HCA 36, (2014) 254 CLR 185.
Further, G4S contends that its contractual obligation to indemnify the Commonwealth was not triggered as the contract provides for an exclusion of the indemnity obligation where the loss occasioned to the applicant was caused by any negligent act or omission of the Commonwealth, its employees, officers or agents, given the Commonwealth owed the applicant a non-delegable duty of care. In any event, even if the Commonwealth proves a relevant breach by G4S, it submits that the evidence does not prove any breach was causative of loss. G4S contends the evidence does not establish that any breach of the applicable standard of care caused the applicant loss, given the other aspects of detention that are not actionable against G4S such as the fact of detention, with its concomitant loss of liberty and independence; the uncertainty of the duration of detention; the anxiety and resulting uncertainty as to whether the applicant would be deported to Iran; the boredom, frustration and anger resulting from long-term indeterminate detention; and measures taken to maintain the security and good order of Baxter. If the applicant proves that he suffered a psychiatric injury, G4S denies that it resulted from the circumstances of his detention at Baxter for which it was responsible, as opposed to events that preceded and succeeded the applicant’s time in detention.
In any event, G4S contends that by reason of the control the Commonwealth exercised over G4S’ management of Baxter, it has either waived any claim to an indemnity or it is estopped from pursuing such a claim. G4S submits that the Commonwealth so closely monitored and supervised it that the Commonwealth cannot now allege that G4S committed a breach of contract where the Commonwealth had in place mechanisms to monitor and correct any acts or omissions on the part of G4S which otherwise might have constituted a breach of contract. Unlike G4S, the Commonwealth had full access to IHMS and PSS personnel and their records.
In addition, G4S submits that it cannot be liable for contribution as a joint tortfeasor where there is no evidence that the applicant suffered a psychiatric injury in the G4S period, or there is insufficient connection between any post detention mental illness suffered by the applicant and his time in detention during the G4S period.
G4S denies that the applicant was suffering from a recognisable psychiatric injury during the period from 19 January 2004 until his release on 27 April 2005. G4S submits that this is supported by the evidence of the general practitioner, Dr Shroff, who treated him during that period and detected no emotional or mental abnormality. In addition, G4S contends the evidence of contemporaneous records presents a portrait of the applicant functioning as well as could be expected in the context of long-term detention. He was working, socialising and making efforts to maintain his health and physical appearance to find some purpose in his existence at Baxter. G4S submits the evidence does not support a finding that he was suffering a psychiatric injury at the time. Accordingly, G4S alleges that it is irrelevant whether the Court concludes that generally there should have been more mental health nurses working at Baxter or attendances upon the applicant by a psychiatrist, during this period.
G4S denies there was any breach of contract on its part by reason of a failure to provide a greater level of psychiatric services to the applicant. G4S contends that the applicant’s presentation during its period of operation gave no indication that he was in need of mental health treatment. Therefore, the adequacy of the rates of attendance by Dr Frukacz is irrelevant as even if Dr Frukacz had attended more frequently, this would not have resulted in any additional psychiatric treatment of the applicant. ACM submits that the frequency of attendance at Baxter by the medical subcontractors IHMS and PSS was a matter for them rather than being dictated by G4S.
G4S contends that the failure to refer the applicant to a psychiatrist was not a breach of the IDS or the contract. Accordingly, it has not been proved that the applicant was denied access to necessary psychiatric care. The fact the applicant did not receive any psychiatric treatment during the G4S period was not because he was denied access to such treatment but because he gave no signs of requiring it. G4S submits there is no evidence that he asked for a referral to a psychiatrist notwithstanding being seen by general practitioners and nurses during the G4S period.

Courts historically have been reluctant to impose tortious liability in respect of pure economic loss. The end of that exclusionary rule had its genesis in the reasoning of the House of Lords in Hedley Byrne & Co Ltd v Heller & Partners Ltd.[2361] Astley v Austrust Ltd[2362] established clearly the proposition that a party may owe concurrent duties to take care in both contract and tort. However, acceptance that the law can recognise concurrent duties to take care in both contract and tort does not lead to the conclusion that it should always do so. A principal consideration constraining courts from imposing concurrent duties in contract and in tort in cases of pure economic loss is that such losses, particularly in a commercial context, are the kinds of losses that are usually regulated by way of contractual arrangements and, unless one party to the contract is particularly vulnerable, usually involves the parties protecting themselves from such losses by way of contractual warranties.
[2361] [1964] AC 465.
[2362] [1999] HCA 6, (1999) 197 CLR 1.
In Perre v Apand Pty Ltd[2363] McHugh J recognised that economic losses are one of the ordinary risks of business. [2364] Business people frequently take steps to minimise their business or economic losses. Taking these steps will often be a more efficient way of dealing with the risk of these losses than requiring defendants to have regard to the risk that others may suffer economic loss. The economic efficiency of a society requires that the person best able to deal with or avoid the consequences of an economic risk from a cost viewpoint should be responsible for the risk and its consequences. Where another body of law can effectively deal with economic loss, a court should be slow to use the law of negligence to impose a duty of care on a defendant. This is particularly important where to do so would interfere with a coherent body of law in another field.
[2363] (1999) 198 CLR 180.
[2364] (1999) 198 CLR 180 at 226.
Accordingly, courts have exhibited a reluctance to impose a duty in tort where to do so would effectively ignore an existing contractual relationship that should govern the parties’ rights.[2365]
[2365] Brookfield Multiplex Ltd v Owner’s Corporation Strata Plan 61288 [2014] HCA 36, (2014) 254 CLR 185.
In Brookfield Multiplex Ltd v Owner’s Corporation Strata Plan 61288[2366] French CJ said:[2367]
… The nature and content of the contractual arrangements, including detailed provisions for dealing with and limiting defects liability, the sophistication of the parties and the relationship of [the property developer who was the registered proprietor of the land upon which Strata Title apartments were to be constructed] to [the Strata Corporation] all militate against the existence of the asserted duty of care to either [the Developer] or [the Strata Corporation].
[2366] [2014] HCA 36, (2014) 254 CLR 185.
[2367] [2014] HCA 36 at [3], (2014) 254 CLR 185 at 192-193.
In a similar way, Crennan, Bell and Keane JJ held that duties concerning defective works were governed by the terms of contractual arrangements entered into between the parties. After referring to Woolcock Street Investments Pty Ltd v CDG Pty Ltd,[2368] where the High Court held that the general rule of the common law is that damages for economic loss which are not consequential upon damage to person or property are not recoverable in negligence even if the loss is foreseeable. They said:[2369]
These passages accord with the primacy of the law of contract in the protection afforded by the common law against unintended harm to economic interests where the particular harm consists of disappointed expectations under a contract. The common law has not developed with a view to altering the allocation of economic risks between parties to a contract by supplementing or supplanting the terms of the contract by duties imposed by the law of tort.
[citation omitted].
[2368] (2004) 216 CLR 515 at 530.
[2369] Brookfield Multiplex Ltd v Owner’s Corporation Strata Plan 61288 [2014] HCA 36 at [132], (2014) 254 CLR 185 at 192-193.
Subsequently in Virk Pty Ltd (In Liq) v YUM! Restaurants Australia Pty Ltd[2370] the Full Federal Court, hearing an appeal in relation to a contractual dispute between the Pizza Hut franchisor and its franchisee, after citing Brookfield, held that a duty of care was simply inconsistent with the contractual relationship between Yum and each franchisee. The economic interests of the parties were, in relevant respects, governed by the contract between them.[2371]
[2370] [2017] FCAFC 190.
[2371] Virk Pty Ltd (In Liq) v YUM! Restaurants Australia Pty Ltd [2017] FCAFC 190 at [287].
In the ACM period there was a general agreement which governed the operation of all of the detention services facilities managed by ACM supplemented by individual detention services agreements that governed the particular duties of the third party at each detention centre.
The contract by which the third parties proffered an indemnity to the Commonwealth must be construed in accordance with the principles applicable to the construction of indemnity provisions. In Triaca v Summaries Pty Ltd[2372] the Full Court of the Supreme Court of Victoria held that the law of indemnity is concerned to ensure that a surety is not burdened beyond the obligation which he clearly undertakes. As a result the guarantee is strictly construed.
[2372] [1971] VR 347 at 351.
The general ACS (ACM) agreement in clause 13 contains the indemnity given by ACS in favour of the Commonwealth and guaranteed by ACM. The separate contract in relation to Baxter during the ACM period sets out the financial incentives and payment regime for payment for services provided linked to performance, namely, the performance-based fee. The agreement also contains the definition of detention services and annexes and incorporates the Immigration Detention Standards.
By the G4S period the various provisions relevant to Baxter were folded into a single contract. In the G4S period the indemnity granted by G4S is to be found in clause 16 of the contract. It is substantially in the same terms as the indemnity provision in clause 13 of the ACM general agreement but there is a different configuration to the contractual rights and duties in the G4S agreement compared with the ACM agreement. Detention services are set out in Schedule 2 to the G4S agreement which expressly incorporate the Immigration Detention Standards. However, notwithstanding the different formatting the effect of the contractual text, the surrounding circumstances known to the parties and their commercial purposes are essentially the same in the ACM and G4S contracts.
As I have identified earlier, the commercial context in which these contracts were made was the decision by the Commonwealth to contract out the management of immigration detention centres to third party providers possessed of the expertise and experience the Commonwealth lacked to undertake the task statutorily required by the Migration Act.
The contractual framework the Commonwealth entered into was designed to meet the statutory obligations imposed by the Migration Act through the delegation of the thousands of operational decisions that had to be made and implemented by those third parties. Those contractual obligations included the supervision by the Commonwealth of the operation of immigration detention centres by the third party contractors and corresponding reporting obligations on the part of those contractors to the Commonwealth. An important feature of this contractual framework was the requirement for the provision of a general indemnity by the third party contractors in favour of the Commonwealth.
The third parties submit that the indemnity clause only applies in respect of “Damages for which the Commonwealth is or may become liable in respect of or arising from”, inter alia, any default by a third party or any negligent, wilful, unlawful or reckless act or omission of the third party’s personnel or subcontractors in connection with the agreements between the Commonwealth and the third parties, or the exercise or purported exercise of any function or power under the agreements or any service contract, by or on behalf of a third party, including any omission or failure to act by or on behalf of the third party.
The third parties submit that the onus of proof is on the Commonwealth to establish not only the existence of “Damages” but also that the Commonwealth’s liability for such Damages is “in respect of or arising from” any (i) default, (ii) negligent, wilful, unlawful or reckless act or omission of the third party or its personnel or subcontractors in connection with the agreement or any service contract; or (iii) the exercise or purported exercise of any function or power under the agreement or any service contract by or on behalf of the third party including any omission or failure to act by or on behalf of it.
The third parties submit that for the purposes of the indemnity clause, it is the Commonwealth’s liability, not the applicant’s injury or loss, that must arise from or in respect of the relevant default or breach. They submit that this stands in contrast with other cases where the applicable indemnity clause required a causal connection between the contractors acts and the injury to the plaintiff.[2373] If the Commonwealth’s liability arises from its own conduct, the third parties submit that the indemnity clause does not apply.
[2373] See e.g. Leighton Contractors Pty Ltd v Smith [2000] NSWCA 55.
The third parties submit that for the indemnity clause to operate some causal connection must be established between the Commonwealth’s loss and the specific default or breach. They submit a general connection with a third party’s performance of the contract is not sufficient. The connection should be one of substance and should not be remote. The phrase “in respect of or arising from” is a broad expression of causation, but it is not open ended or unlimited. They submit that the use of the phrase in an indemnity clause leads to the conclusion that in the event of any ambiguity the clause should be construed contra proferentem in favour of the third parties. I do not accept this submission.
I accept that the phrase “in respect of or arising from” poses a test wider than that posed by the expression “caused by.” While the former expression requires some causal or consequential relationship between the Damages for which the Commonwealth is liable and the prescribed events, the expression “in respect of or arising from” does not require a direct or proximate relationship which would be necessary to establish that the Damages were caused by one or more of the prescribed events.[2374]
[2374] Dickinson v Motor Vehicle Insurance Trust (1987) 163 CLR 500 at 505; Erect Safe Scaffolding (Australia) Pty Ltd v Sutton [2008] NSWCA 114 at [11] and [38], (2008) 72 NSWLR 1 at 5 and 10; Westina Corporation Pty Ltd v BGC [2009] WASCA 213 at [61], (2009) 41 WAR 263 at 279.
Further, there is no justification to construe the indemnity clause contra proferentem which is a rule of last resort. The phrase “in respect of or arising from” is not inherently ambiguous, rather it is an expression commonly employed in contracts and statutes as the basis for proving causation.
In the alternative, the third parties rely upon the exclusion clause found in clause 13.1(c) of the ACM contract or clause 16.1.3 of the G4S contract. They both provide that the Damages due under the indemnity clause will not be payable to the extent that the Damages were caused by any negligent, wilful, reckless or unlawful acts or omissions of the Commonwealth or the Commonwealth’s breach of the contract.
These provisions provide a carve out from the indemnity in the prescribed circumstances. The third parties submit that where Damages were caused by certain Commonwealth acts, including negligent acts or omissions and breaches of contract, the exclusion clause operates to preclude any liability of the third parties under the indemnity.
The third parties submit that the Commonwealth has a personal and non-delegable duty of care to detainees at Baxter. It is obliged to ensure that reasonable care was taken to avoid harm to the applicant. While certain tasks could be delegated to the third parties, the Commonwealth could not delegate the discharge of its duty of care. Further, there were some duties and functions which were not devolved to subcontractors and which remained the responsibility of the Commonwealth to fulfil and exercise. If reasonable care was not taken, including by the third parties, the Commonwealth was liable for a breach of its own personal and non-delegable duty of care. That is no more than the Commonwealth being held liable for its own negligence in failing to ensure that reasonable care was taken. The third parties submit that any failure by the Commonwealth to fulfil this obligation constitutes a “negligent act or omission” within the meaning of the carve out provision and ex hypothesi the cause of its liability to the applicant and of any Damages due under the indemnity clause.
Accordingly, the third parties submit that the existence of the non-delegable duty of care and its incidents culminate in a situation where, in the case of a detainee’s loss and damage brought about by the negligence of another party to whom the Commonwealth has delegated tasks relating to detainees in its custody, the primary cause of the Commonwealth’s liability for that loss or damage will be the Commonwealth’s breach of its own duty of care owed to that detainee. In other words, the existence of the non-delegable duty results in the liability of the Commonwealth in negligence where it has failed to ensure that reasonable care is taken by its delegates. The Damages having been caused by the Commonwealth’s negligence, the exception to the indemnity in the carve out will be triggered. Further, the carve out provision also encompasses independent acts of Commonwealth negligence that are a direct result of its own negligent act or omission i.e. negligence by the Commonwealth in the classical sense, rather than negligence derivatively made out by third parties’ conduct triggering the Commonwealth’s non-delegable duty of care. In this regard the Commonwealth will be liable for its own independent acts of negligence.
Accordingly, the third parties submit that, even if the Court finds that the indemnity clause applies in relation to the Commonwealth’s liability to the applicant, the carve out provision does not permit the Commonwealth to recoup Damages from the third parties insofar as the Commonwealth was itself negligent. Commonwealth negligence in this context includes breaches of its non-delegable duty of care triggered by the negligence of the third parties, since these constitute breaches of the Commonwealth’s own personal duty to ensure that reasonable care is taken, as well as independent acts of negligence by the Commonwealth. Further, the third parties submit that any doubt regarding the construction of the indemnity clause should be resolved contra proferentem.
The third parties submit this construction still provides ample scope for the operation of the indemnity clause and the carve out. This construction is also consistent with policy considerations. If the contract was construed as indemnifying the Commonwealth against all liability for its own breach of its non-delegable duty of care to detainees there would be significantly less incentive for the Commonwealth to ensure that reasonable care was taken to prevent detainees from suffering psychiatric injury.
As a result, the third parties contend that on the proper construction of the indemnity clause, the Commonwealth must establish that it is liable for Damages to the applicant, that the third party committed some breach or default within the meaning of the indemnity clause and that the Damages were “in respect of or arising from” the breach or default. They submit that the Commonwealth has failed to prove any of these matters.
They submit that even if the Commonwealth has established a relevant breach or default, it has failed to establish that it incurred liability for Damages “in respect of or arising from” such breach or default.
The Commonwealth rejects the third parties’ submissions. The Commonwealth submits that if the construction for which the third parties contend was accepted it would strip from the indemnity much of its commercial purpose. It follows that the Commonwealth rejects the third parties’ submission that the Commonwealth’s construction of the indemnity clause would render the contractual arrangement between the Commonwealth and the third parties uncommercial.
The text, the surrounding circumstances known to ACM and G4S and the purpose of the indemnity clause supports a construction that gives full amplitude to the language of the indemnity given by the third parties. This obligation is separately guaranteed by each of the controlling entities of the third parties. The Commonwealth having contracted out the detention function it previously performed, understandably sought the assurance provided by the terms of the indemnity and guarantee it obtained from the third parties and their controlling entities. They provided the Commonwealth with the surety it required commercially to ensure the performance of the duty of care it owed to those it detained pursuant to the Migration Act. The third parties agreed to an indemnity in terms that provided a broad scope of operation that is consistent with its purpose. I do not accept that it is ambiguous so as to require it be read down. It is unnecessary to read down the relevant contractual terms in order to conform to the principle that a surety should not be burdened beyond the obligation which he, she or it clearly undertakes.[2375] That proposition merely begs the question what terms should be substituted for the agreed text. That can only involve the Court redrafting the terms of the commercial agreements between the Commonwealth and the third parties.
[2375] Triaca v Summaries Pty Ltd [1971] VR 347 at 351.
I reject the third parties’ submission that where the carve out applies because Damages were caused by negligent et cetera acts or omissions of the Commonwealth, its employees, officers or agents or the Commonwealth’s breach of contract, this excludes any right of the Commonwealth to enforce its contractual indemnity. The carve out only operates “to the extent that the damages were caused by” the prescribed events. I accept the Commonwealth’s submission that in those circumstances the condition provides an apportionment regime rather than excluding altogether the indemnity obligation. The only exception to that proposition is where Damages were caused wholly and solely by a prescribed event. In those circumstances the indemnity obligation will not apply. Subject to that qualification, I accept the construction for which the Commonwealth contends.
This is consistent with the breadth of the indemnity agreed between the Commonwealth and each of the third parties that the third party would indemnify and keep the Commonwealth indemnified in respect of all Damages as defined.
The third party agreed to indemnify the Commonwealth against all damages for which the Commonwealth is or may become liable in respect of or arising from prescribed events. The width of the indemnity is consistent with the contract’s overall commercial purpose. I consider the indemnity agreed by the third parties operates according to its express terms.
That said, clause 13.1(b) of the ACS contract and Clause 16.1.2 of the G4S contract provide that reference to “Damages” in the indemnity clause may include without limitation amounts claimed in claims or proceedings by third parties. Those “amounts” must be limited to amounts that are claimed and actually recovered in claims or proceedings by third parties.

In this case the third parties are and were large multi-national corporations perfectly capable of looking to their own economic interests. They were not vulnerable. They entered willingly into contracts with the Commonwealth which included provisions for their protection and upon which they now seek to rely. In my view, if the Commonwealth suffered economic loss by reason of a breach of the contractual obligations of the third parties, it should be confined to whatever remedies are available to it in contract. The Court should not find the existence of a tortious duty of care owed by the third parties to the Commonwealth. To do so would involve the unjustifiable interference of the courts in the commercial arrangements entered into between the Commonwealth and the third parties which involved an extensive assessment of the parties’ rights, duties and obligations for the purpose, inter alia, of protecting their economic interests. Having turned their minds to the issues in consciously and deliberately deciding to allocate the relevant risks between them in the manner set out in the contracts, it would be wrong for the Court to now superimpose a duty of care onto that commercial relationship.
For these reasons I would reject the existence of a concurrent duty of care owed by the third parties to the Commonwealth in tort. The form of the contracts between the Commonwealth and the third parties differed. Notwithstanding the difference in form, the substance of the contracts was essentially the same.
Estoppel / waiver / ratification
In addition, the third parties submit any breach by them was waived by the Commonwealth which, at all material times, accepted the services provided by the third parties and its subcontractors and the Commonwealth is now estopped from alleging otherwise. Even if it is established that a breach or default was caused by a third party, that will be in the nature of a breach of the Commonwealth’s own non-delegable duty of care and therefore, by operation of the carve out, a liability to indemnify the Commonwealth will not arise. Further, they submit the Commonwealth is liable for its own independent breaches of its duty of care to the applicant which are further caught by the carve out.
The third parties submit that if the indemnity clause is engaged on the facts of this case the Commonwealth is estopped from relying on its right to an indemnity where it has otherwise waived its entitlement to do so. In addition, G4S pleads a defence of “sanction”. This appears to be a plea the Commonwealth somehow sanctioned its entire conduct in performance of its detention services contract. The plea appears to be a plea of ratification by the Commonwealth of G4S’ performance of the contract.
Central to these pleas is the proposition that the Commonwealth knew of the negligent acts or omissions which caused or materially contributed to the applicant’s psychiatric injury but took no action to prevent him suffering such injury. In those circumstances the third parties plead that the Commonwealth has either waived its right to call on the indemnity or is estopped from doing so by reason of its ratification of the negligent conduct of the third parties. To the extent that these pleas invoke considerations of unconscionability questions of knowledge on the part of the Commonwealth are necessarily raised. Questions of knowledge are clearly a fact in issue if a legal and evidentiary basis exist for the Commonwealth to pursue its third party claims. In those circumstances the Commonwealth’s “knowledge” of breaches of the Commonwealth’s duty of care which caused or materially contributed to the applicant’s alleged psychiatric injury would be in issue.
As the High Court said in Waltons Stores (Interstate) Ltd v Maher:[2376]
It is essential to the existence of an equity created by estoppel that the party who induces the adoption of the assumption or expectation knows or intends that the party who adopts it will act or abstain from acting in reliance on the assumption or expectation.
[2376] [1988] HCA 7, (1988) 164 CLR 387 at 423.
Further, “waiver” must always be an intentional act with knowledge and the requisite knowledge is the facts material to the election to waive the enforcement of a legal right.[2377]
[2377] Commonwealth v Verwayen [1990] HCA 39, (1990) 170 CLR 394 at 451-452, 472-473.
Finally, ratification of the conduct of an agent can only occur with “full knowledge” of the relevant facts.[2378] It is a well established principle that a principal will not be held to have ratified an act of his or her agent unless, at the time when the principal performed the ratifying act, he or she had full knowledge of the circumstances of the act of the agent, or displayed an intention to ratify no matter what the circumstances.
[2378] McLean Bros & Rigg Ltd v Grice [1906] HCA 1, (1906) 4 CLR 835 at 857; Taylor v Smith [1926] HCA 8, (1926) 38 CLR 48; Fried v National Australia Bank Ltd [2001] FCA 907 at [142]-[144] and [159], (2001) 111 FCR 322 at 361-362, 365.
Accordingly, however the third parties seek to be relieved from a liability to indemnify the Commonwealth, actual knowledge by the Commonwealth of the particular facts and circumstances of the applicant’s case, which would otherwise give rise to liability under the contract prior to any asserted act or silence founding waiver, election, estoppel or ratification is required. That knowledge must be specific to the facts upon which the Commonwealth’s liability to the applicant has been found established by the Court.
The Commonwealth’s case on the third party claims is that all of the potentially compensable complaints made by the applicant, if proved, were the result of operational decisions consisting of acts or omissions of the third parties. For example, the Commonwealth submits any failure by the third parties to satisfy reporting obligations was a breach of contract by them. I accept the submission that by reason of the Commonwealth’s supervision of the third parties’ management of Curtin and Baxter, that did not, of itself, constitute a waiver of the third parties’ contractual liability to the Commonwealth.
The presence of DIMIA officers at Curtin and Baxter evidenced the Commonwealth’s supervision of the operation of its contracts. However, the fact of that supervision did not detract from the reliance the Commonwealth placed on the judgment, decisions and compliance of ACM and G4S with the contracts. The Commonwealth did not delegate the duty of care it owed the applicant. However, the Commonwealth did delegate the discharge of that duty to contractors with greater expertise and experience than its own officers in managing detention centres. I find the Commonwealth took reasonable steps to monitor and regulate the management of those detention centres. Ultimately it did so because it was accountable to the Parliament, and through it to the Australian people, for the management of Baxter and the other detention centres.
The only circumstance in which the applicant might have succeeded against the Commonwealth where the third parties would not have been found liable to indemnify it, at least in part, was if the Court had found in favour of the applicant on a factual basis that did not involve any contractual act or omission by the third parties. The evidence does not establish any conduct giving rise to a contractual breach which did not, in some capacity, involve one or more officers, employees or agents of either of the third parties. The evidence is that it was those officers, employees or agents who overwhelmingly had to deal with the detainees, including the applicant, and it was they who were involved in any contractual act or omission at Baxter, relied on by the Commonwealth. Certainly, there is no evidence that any of the officers, employees or agents of the third parties disclosed to the Commonwealth circumstances complained of by the applicant giving rise to his claim for damages which resulted from a decision of the Commonwealth not to act in circumstances where the failure to do so was a breach of its duty of care. Most allegations made by the applicant are made against officers, employees or agents of the third parties. An exception is the allegation concerning a threat made to a detainee by Mr Wallis during the course of the HREOC inspection at Curtin. There is no evidence that it was witnessed by the applicant or that he had knowledge of it occurring. In any event, as it occurred at Curtin, it cannot be a basis for fixing the Commonwealth with liability to the applicant in damages.
The third parties were prepared, as a term of their contracts, to agree to provide indemnities in broad terms. The capacity to pay those indemnities was guaranteed by controlling entities in the third parties’ global group. The Commonwealth submits that the indemnity provisions in the contracts provide assurance to the Commonwealth that it would be held harmless not only for harm caused to the Commonwealth by third party acts or omissions but harm the Commonwealth suffered merely in respect of the third parties’ operations.
Ultimately, it is unnecessary to decide whether that submission should be accepted or rejected given my conclusion that the applicant’s action must be dismissed.
I have predominantly confined consideration of the third party claims made by the Commonwealth to a consideration of questions of law rather than fact. I am not in a position to make findings, for example, concerning any alleged failure to inform or notify the Commonwealth of issues concerning the applicant where I have not been able to rely on his evidence to make findings of fact. I cannot make findings in relation to the Commonwealth’s third party claims based on hypothetical circumstances that would have enlivened the indemnity claim against the third party claims if the applicant’s claim had succeeded. I cannot posit the factual circumstances that would have founded a successful claim by the applicant against the Commonwealth that may have been critical to the determination of the Commonwealth’s claim against the third parties.
These difficulties highlight the problem in relation to assessing the question of the costs of the third party claims where the applicant has failed on his primary claim.
CONCLUSION
For these reasons, I would grant the applicant an extension of time to 3 February 2012 within which to bring this action but I would dismiss the applicant’s claim. As a result I also dismiss the Commonwealth’s third party actions against ACM and G4S.
I will hear the parties as to costs.
POSTSCRIPT
After the Court reserved judgment in this matter the High Court delivered reasons for its judgment in NZYQ v Minister for Immigration, Citizenship and Multicultural Affairs (NZYQ).[2379]
[2379] [2023] HCA 37, (2023) 97 ALJR 1005.
On 11 December 2023 the solicitors for the Commonwealth wrote to the Court noting that NZYQ had overruled the constitutional holding in Al-Kateb v Godwin.[2380] The Court was advised that the Commonwealth was considering the impact of NZYQ on the matter and in particular, the Commonwealth’s reliance on Al-Kateb and asked the Court to permit time for the parties to consider whether any further argument was required.
[2380] Al-Kateb v Godwin [2004] HCA 37, (2004) 219 CLR 562.
On 13 February 2024 the Commonwealth through its solicitors advised that following the judgment in NZYQ the Commonwealth’s reliance on Al-Kateb should be read to refer to detention being constitutionally permitted until such time as “there is no real prospect of removal of the alien from Australia becoming practicable in the reasonably foreseeable future.”[2381]
[2381] NZYQ v Minister for Immigration, Citizenship and Multicultural Affairs [2023] HCA 37 at [55], (2023) 97 ALJR 1005 at 1018.
On 14 February 2024 the applicant’s solicitors notified the Court that, in light of the judgment in NZYQ, he was considering whether he should amend the submissions made and whether he should seek leave to amend his Statement of Claim. He sought time for this purpose. On 12 April 2024 the applicant’s solicitors filed and served an application for leave to file a revised Statement of Claim alleging that the Commonwealth was liable for damages for unlawful detention of the applicant and seeking to have that claim heard and determined in these proceedings.
On 20 May 2024 the applicant sought leave to withdraw the application. That leave was granted.
As a result, the Court has not considered whether NZYQ should have any effect on the judgment in this matter beyond those submissions made by the Commonwealth solicitors in the letter of 13 February 2024.

[2025] SASC 59

9 May 2025