Sanders v Snell

[1997] HCATrans 390

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S49 of 1997

B e t w e e n -

WILLIAM WINTON SANDERS

Applicant

and

LISLE DENIS SNELL

Respondent

Application for special leave to appeal

TOOHEY J
GAUDRON J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 12 DECEMBER 1997, AT 9.52 AM

Copyright in the High Court of Australia

MR P.R. GARLING, SC:   If the Court pleases, I appear for the applicant.  (instructed by McIntyres)

MR A.G.H. COOK, QC:   May it please the Court, I appear for the respondent.  (instructed by Adrian Cook, QC)

TOOHEY J:   Yes, Mr Garling.

MR GARLING:   If your Honours please.  This application, we submit, raises three central questions, perhaps not in the order in which we have put them in writing.  May I enunciate them this way.  The first is whether, on an award of aggravated or exemplary damages, prejudgment interest is payable.  In our respectful submission, given the nature of exemplary damages, namely, damages for the punishment of a tortfeasor, it is inappropriate to award interest, interest being in effect a head of compensatory damages.  The punishment is determined at the time the proceedings are heard and judgment is entered and it is inappropriate to calculate back the number of years since the tort occurred and add interest to it.

TOOHEY J:   But if you were trying to get a grant of special leave to appeal, it is not a very likely starter, is it?

MR GARLING:   It is for this reason, your Honour, that this decision of the Full Court of the Federal Court, albeit the question of interest is small in monetary terms, is a decision which is contrary to what the Court of Appeal and the Supreme Court of New South Wales has decided and contrary to single instance decisions following that in the States and Northern Territory and Tasmania.  So that it is, as it stands, the only judgment of a Full Court in which interest has been awarded, so far as my researches can determine, on an award of exemplary damages.

Your Honours, I chose to start with that point because, in my respectful submission, it is a short point.  The point as to the incorrectness of the Full Court is, in our respectful submission, clear and then it is a point which has wide application broadly.

GAUDRON J:   But that point in itself would only get you so far.  Assuming you succeeded, it would get you a limited grant of special leave.

MR GARLING:   Yes, your Honour, step by step.  The second question, your Honours ‑ ‑ ‑

TOOHEY J:   You are now moving to expand, are you?

MR GARLING:   To the next step by which we seek leave, which is the other question which deals with this issue, namely, whether the Full Court was correct to impose on my client, who was acting in the course of his duties as Minister for Tourism on Norfolk Island, an obligation to accord procedural fairness to Mr Snell before issuing the direction which he issued.  Your Honours will appreciate, in short, the background was that Mr Snell was retained by the Tourist Bureau of Norfolk Island on contract.

TOOHEY J:   We are familiar with the factual background, Mr Garling, but that point in itself means nothing unless it is tied to the finding of misfeasance in public office, does it?

MR GARLING:   Yes, your Honour, that is so.  That was the only point of invalidity found by the Full Court with respect to the misfeasance, so that on page 106 of the application book, your Honours, in the judgment of the Full Court their Honours say, at about line 20 on that page:

the only invalidity we are prepared to consider in connection with the claim for misfeasance in public office is Mr Sanders’ denial of procedural fairness to Mr Snell.

So that was the only point upon which the tort turned. 

GAUDRON J:   Has it ever been held that denial of procedural fairness constitutes a misfeasance in public office?

MR GARLING:   Not that I have found, your Honour, but there is a reference in the judgment of the present Chief Justice in Mengel’s Case which could be taken to suggest that such invalidity would be adequate.  I have given your Honours a copy of that judgment, but at page 357 his Honour the Chief Justice said, at about point 7 on the page, on 357, about point 6, he says:

In my opinion, there is no additional element which requires the identification of the plaintiff as a member of a class to whom the public officer owes a particular duty, though the position of the plaintiff may be relevant to the validity of the public officer’s conduct.  For example, the offier’s administrative act may be invalid because he or she did not treat the plaintiff with procedural fairness.  It is the absence of an honest attempt to perform the functions of the office that constitute the abuse of the office.

Your Honours, that is the only reference we can find to a suggestion that what I would call a procedural invalidity as opposed to a substantive invalidity, ie, the absence of any power, may be thought to be adequate.  We would say in respect of that, his Honour is not in fact saying that.

GAUDRON J:   Denial of procedural fairness is not - it has not been held, has it, that denial of procedural fairness is merely a procedural invalidity either, has it?

MR GARLING:   No, it has not strictly, your Honour, but ‑ ‑ ‑

GAUDRON J:   There are decisions in the administrative area to suggest it is in fact a nullity.

MR GARLING:   That is so, your Honour, but the difference in this case is, of course, that the statute or any of the circumstances which are relied upon do not provide expressly for the obligation which the Full Court found that my client did not extend to Mr Snell.  If that obligation existed, it was to be implied by reason of the position of Mr Snell and the fact that my client was a Minister exercising his power under the relevant Act to give a direction.   What, in short, we say with respect to that, your Honours, is this:  if the contracting party, namely, the Tourist Bureau, was not under an obligation to give Mr Snell a right to be heard in these circumstances because it dismissed under the clause which was not for cause, then it would be not appropriate to impose upon a Minister giving a direction that is within the power granted by the Act to impose that obligation on him, for two reasons:  one is there being no express obligation, secondly, because the existence of a contract would mean that to impose such an obligation on a Minister would put the government, in terms of dealing with other parties by contract as opposed to some other arrangement, in a disadvantageous position vis-a-vis ordinary contractual provisions.

TOOHEY J:   Mr Garling, you said there were three points; that is the second.  What is the third?

MR GARLING:   The third point is this, your Honour, is whether exemplary damages are properly available for this tort.  The reason for that is, your Honour, this, that as the majority in Mengel held, this is a tort which has a punitive effect on the individual defendant when one awards compensatory damages, because the individual pays the damages themselves and are usually not indemnified with respect to that.  The question arises, in our respectful submission, whether, given the nature of the tort, exemplary damages are available at all.  They are not available, for example, in torts of deceit; they are not awarded.  Cassell v Broome is authority for that proposition.  We say that, by analogy, this being an intentional tort where the defendant is personally liable, then exemplary damages should not be available at all for this tort. 

TOOHEY J:   Mr Garling, before you go much further, there is a notice of objection to competency of the appeal, which I take it you have seen. 

MR GARLING:   I thought that was to the appeal to the Full Court of the
Federal Court, your Honour. 

TOOHEY J:   I see, yes, I am sorry.  Yes, you are quite right, this is ‑ ‑ ‑

MR GARLING:   But, your Honour, I should say there is a technical - or perhaps more than a technical deficiency; in our application for special leave we were a day late.

GAUDRON J:   You were seven days out of time - or one day late.

MR GARLING:   We were one day late in filing our application for special leave ‑ ‑ ‑

TOOHEY J:   That is what I assumed, wrongly, that it related to.

MR GARLING:   If your Honours were otherwise minded to grant special leave, I would need to have your Honours extend time for filing the application.  But, your Honours - - -

TOOHEY J:   Before you go any further on that, Mr Cook, do you have anything to say about that application?

MR COOK:   I think in view of the things that have been said by the Court on a number of occasions on the such applications, I do not think I can put very much.  I have raised the point, because I felt obliged to do so on behalf of my client; it is a matter for the Court’s determination.

TOOHEY J:   Time is extended.

MR GARLING:   Your Honours, they are the three questions which we raise as being issues of general importance which would give rise to an application for special leave.

TOOHEY J:   Yes, thank you, Mr Garling.  Mr Cook.

MR COOK:   May it please the Court, the present application, of course, relates to the - from the decision of the Full Court to the actions taken by the Minister as a public authority and in issuing a direction which had the effect, as the Full Court said, of removing from Mr Snell his opportunity to work and to carry out his livelihood as the executive officer of the Tourist Burea.  With respect to the court, the court picked up the principle, of course, of the common law that the role that is taken by a public authority in making a decision which adversely affects the interests of an individual, has to be accompanied with the giving of fairness in the sense of the appropriate hearing or the appropriate actions which precede the acting in the way that it is intended to be acted upon.

In this particular case, of course, the Minister determined that he would make a direction under section 15 of the Tourist Bureau Act, which provides him with the opportunity to give such directions as to the conduct of the affairs and the business of the Bureau as he may decide appropriate, and the Bureau is required to carry those directions into effect.  There is nothing in the Act, of course, which in any way prevents him from issuing such a direction and requiring him to not provide the procedural fairness.  In the Judicature Ordinance, which I have provided to the Court, of Norfolk Island, section 10 of that ordinance requires that in dealing with any legal claims, demands, rights, duties or obligations the Supreme Court shall give effect to all the principles existing at common law. 

In my respectful submission, it was the clear obligation of the court in dealing with this matter and in dealing with what the provisions of the Tourist Bureau Act provided for in the exercise of the duties and obligations of the Minister under that Act to have regard to the existing principles of the common law and to have those apply, as they were required to be applied in determining what were actually his obligations.  His obligation was to, in my respectful submission, to the Court is picked up by the Full Court quite adequately in their judgement, and as is respectfully reflected in a number of judgments, both in this country and in England, in relation to the obligation to provide the opportunity to be heard.  There is nothing in the Tourist Bureau Act which in any way clearly takes away from the Minister that obligation.  In my ‑ ‑ ‑

HAYNE J:   Assuming there was that obligation, does a failure to accord procedural fairness found the claim for misfeasance.

MR COOK:   With respect, if it may please the Court, the Full Court, at pages 112 and 113 of the application book, said that:

It is interesting to note that, in the context of discussing the mental element necessary to sustain a claim of misfeasance in office, Brennan J in Mengel cited, as an for example of invalidity, a case of denial of procedural fairness.  His Honour did not say, of course, that all actions that beach an obligation of procedural fairness will constitute misfeasance in public office.  Something more is required.  The additional ingredient was described by Brennan J in words that fit perfectly Mr Sanders’ position on 17 and 18 June 1992:  “the absence of an honest attempt to perform the functions of the office”.

The Full Court found, very clearly - and as I think it would be fair to say that the trial judge also in a number of his findings reflected that there had been a series of actions which were required to be taken into a context of the issue of the direction on 18 June and that all those actions amounted to what they described was the absence of an honest attempt to perform the functions of the office.  Justice Brennan, as he then was, quite clearly, in Mengel’s Case referred to matter of procedural fairness and did, in fact, add what was picked up by the Full Court, in my respectful submission, entirely appropriately, this extra element that has to be taken into account.  The Full Court has, in my respectful submission, not acted in a way which is intended to bring some new development of the law into operation; they have followed an authoritative - - -

GAUDRON J:   It is a statement of a single justice, authoritative, no doubt, but there is no case in which that has been held to constitute misfeasance in public office, particularly in relation to a person employed by another body, is there?

MR COOK:   May it please the Court, I think that this is a most unusual situation which arose in this particular case, from the point of view of the interference, as the Full Court described it, of the Minister in the situation of Mr Snell as an employee of the statutory body, and that he, as it were, interfered in his situation with that board to the extent that he took away his opportunities for him to continue to function as the executive office of that board.  In my respectful submission, his conduct, as it were, which was examined with great care by the Full Court in their judgment, did provide the situation that if he was to act in this way, then he should behave in a way that was going to provide the - carry out the essential obligations as he had as the Minister whose decision was going to adversely affect an individual within the community. 

In my respectful submission, he is required, as the Full Court has said, to give Mr Snell the opportunity to be heard and to state his case.  Even the contract of employment, as such, under which it was suggested that he could act, said that notice of intention to terminate was required to be given, and it is not a notice of termination, but there has to be a notice given that it is intended to terminate.  In Mallock’s Case, which I have provided to the Court, there there was a delay of three weeks before any motion for dismissal could be dealt with, and it was said clearly by the House of Lords in Malloch’s Case that the provision in the statute of providing the three weeks was to provide an opportunity to be heard. 

In my respectful submission, if one examines the contract in this particular case, the appropriate clause being clause 9, it is perfectly clear that what is intended to be provided for the employee was an opportunity to be heard.  If, indeed, the contract requires that opportunity to be given to the employee before he is dealt with - and, after all, the Tourist Bureau was a statutory board, carrying out statutory functions.  They were given power under that Act to employ persons as they thought fit and necessary for the purposes of the board.  That would imply, of course - there was no other provision in relation to their powers of dismissal.  It was the only provision; it was a separate and distinct provision in section 12 of the Tourist Bureau Act, which gave them that power, and it implies, of course, that if they are going to dismiss or terminate the service of an employee, then it implies that he is no longer to be - to be thought to be no longer fit or necessary for the purposes of the Bureau.  In my respectful - - -

TOOHEY J:   Much of this would come with more force, perhaps, if we were in the area of administrative law.  The Full Court chose to fasten on to a particular tort, the tort of misfeasance in public office. 

MR COOK:   Yes.

TOOHEY J:   It is that tort upon which you now rely.

MR COOK:   I do rely on it because I have also, of course, adumbrated the situation that there was the matter which was not allowed to be raised by the Full Court, which I would have respectfully submitted in my application to the Court was amply supported on all the material before the Court, in the pleadings and other exhibits and documents, contentions and issues which were required to be filed, the written submissions that the Court required to be given, which clearly raised the invalidity of the actions of the Minister in revoking the Bureau’s - appointment of members of the Bureau and in appointing a fresh bureau to deal with Mr Snell which was not the prescribed number of persons.  I have raised ‑ ‑ ‑

TOOHEY J:   I am not sure what you mean by that, Mr Cook.  Do you mean there was another issue?

MR COOK:   Yes, there was an issue that was sought to be raised. 

TOOHEY J:   Which was not litigated before the Full Court.

MR COOK:   It was litigated before the Full Court, with respect, your Honour, and sought to be litigated within - but counsel who appeared in the court on that occasion claimed that the issue had not been raised in the court below.  With respect, it had clearly been raised.  In my written application I have pointed to the situation where, on reasonable and careful examination, we clearly see that this issue was raised.  The Full Court said they would not allow it to be raised because they did not think it was clearly enough put forward to the court.  That was, in my respectful submission, quite in error, because careful examination shows it was.  They elected ‑ ‑ ‑

HAYNE J:   Assume all that to be so, Mr Cook; what follows from it?  Assume you are right in all these contention; what follows from it?

MR COOK:   I was raising that, with respect, your Honour, to the point that if that was so, and a consideration of the question of special leave, if that point is able to be taken and to be effective ultimately, then it is a matter which may very well operate in the Court’s mind in deciding that they should not grant special leave.  That is one of the matters that I have raised

HAYNE J:   If the point raised by the applicant calls for a grant of special leave, it would be difficult to resist it by reference to an argument that had not been dealt with by the court below.  That could no doubt come in by way of notice of contention.

MR COOK:   Yes.  If the Court pleases, I appreciate what the Court has said.  The matter was raised by me because I thought it was appropriate that it should be raised at this stage and made quite clear that that would be a ground which would be relied upon in due course, if the Court granted leave.  There is also ‑ ‑ ‑

HAYNE J:   Might I take you back, then, to misfeasance in a public office.  Am I right in understanding that the trial judge did not found his judgment on that tort?

MR COOK:   No, he said it was necessary for him to find on that ground, because he had found against the claim that there had been an inducement of a breach of contract.

HAYNE J:   The Full Court founded its judgment on misfeasance.

MR COOK:   It founded its judgment on misfeasance because it found ‑ ‑ ‑

HAYNE J:   Finding as a fact that there had been an absence of an honest attempt to perform functions of the office, is that right?

MR COOK:   Yes.

HAYNE J:   A finding not made by the trial judge?

MR COOK:   It was a finding, with respect, your Honour, that was open to them because they were then considering the matter as if they had come to it and been in the position of the trial judge.  I respectfully ‑ ‑ ‑

HAYNE J:   Yes, a finding of dishonesty made by a Court of Appeal not found by the trial judge, is that right?

MR COOK:   With respect, there was in the context of the Full Court’s assessment of all that had happened, they found that the behaviour and the conduct on what they found to have taken place was not an honest attempt to perform his office.

TOOHEY J:   That would be an unusual finding for an appellate court if it were to set aside the cause of action or the cause of action which had been held to exist by the primary judge, substitute a new cause of action, albeit one that had been relied upon, which involves findings of dishonesty on the part of the defendant.

MR COOK:   What they found was there was an absence of an honest attempt to perform the functions of the job.  With respect, that may be something quite different to a finding of dishonesty against a person, with great respect.  If you perform a function you can say that has not been performed honestly, in other words, what you have to do has not been done in accordance with a proper regard to the obligations of your office, it is not necessarily a finding of dishonesty against an individual, and I make that point, if I might say so, quite strongly.  Because when one reads the whole of the judgment and sees the various aspects of the matter that the Full Court touched upon and dealt with, that finding by them was a description which they say fitted the type of approach that had manifested itself in the judgment of Mr Justice Brennan, as he then was, in Mengel’s Case. 

In my respectful submission to the Court, the matters which have been raised, of course, on this application for special leave do not, in my respectful submission, warrant the grant of special leave.  Each of these cases where there has been claimed to be a denial of natural justice in the numerous authorities which touch upon these cases, says that each case has to be examined on its own particular sets of circumstances and that it is not really possible to generalise, apart from the establishment of the common law principles which have now been in existence for such a very long time in our legal system.

So far as the tort of misfeasance in public office is concerned, in my respectful submission, what the Full Court found in their determination does

not in any way depart from the principles which, upon a full and careful reading of all the judgments in the Mengel’s Case, permitted the Court to determine the issue as they did determine it.  So far as the matters relating to the interest are concerned, I would respectfully submit that the Court would not grant special leave on that particular ground relating to the imposition of interest on the aspects of the judgment relating to the award of damages, for punitive damages.  The Court did not err in that aspect and I respectfully submit, if one reads the lengthy judgments that they have given on the question of damages and punitive damages, that there has been no error in the way that that issue was dealt with.  I respectfully submit to the Court that this is not a case in which the Court would consider that special leave to appeal should be granted.  May it please the Court.

TOOHEY J:   Thank you, Mr Cook.  Mr Garling, we need not hear from you in reply.  There will be a grant of special leave to appeal in this matter. 

Mr Cook, in the light of that ruling by the Court, you have in contemplation a cross-appeal, do you?

MR COOK:   Yes, indeed.

TOOHEY J:   That ordinarily would be a matter raised on the return of the appeal.

MR COOK:   The return of the appeal?

TOOHEY J:   Yes.

MR COOK:   Yes, may it please the Court, those issues will be raised.

GAUDRON J:   I think you need, in fact, to apply for a grant of special leave if you cross-appeal, do you?

MR COOK:   Am I required now to make that application to the Court, because I have raised the specific matters and I ask for that grant of leave to cross-appeal.

GAUDRON J:   Yes, it is does at the appeal, but you do in fact need to file an application for special leave, I think.

MR COOK:   May it please the Court.

AT 10.20 AM THE MATTER WAS CONCLUDED