Sunraysia Natural Beverage Company Pty Ltd v The State of New South Wales - [2003] NSWSC 190

No judgment structure available for this case.

CITATION: Sunraysia Natural Beverage Company Pty Ltd v The State of New South Wales [2003] NSWSC 190

HEARING DATE(S): 24 February 2003

JUDGMENT DATE:
25 March 2003

JURISDICTION:
Common Law Division

JUDGMENT OF: Newman AJ at 1

DECISION: 1. Appeal upheld; 2. The amended statement of claim bearing the date 30 January 2002 be struck out as disclosing no reasonable cause of action and that the proceedings be dismissed; 3. The plaintiff pay the costs of the defendant.

CATCHWORDS: Strike out statement of claim - Misfeasance in public office

LEGISLATION CITED: Food Act (NSW) 1989 ss 44, 45, Pt 2 22 9-14 incl
Supreme Court Rules Pt 13, r5; Pt 15, r26

CASES CITED: Agar v Hyde (2000) 201 CLR 552
Air Services Australia v Zarb (NSWCA, 26/8/98)
General Steel Industries Inc v Commonwealth Commissioner for Railways NSW (1964) 112 CLR 125
Elliot v Chief Constable of Wiltshire & Ors
Gibson v Parkes District Hospital (1991) 26 NSWLR 9
Hospital Contribution Fund of Australia v Hunt (1982) 44 ALR 365
Jonas v Swansea City Council [1990] 1 WLR 1453
Northern Territoy v Mengel (1995) 185 CLR 307
Sanders v Snell [1998] 72 ALJR 1508
Three Rivers District Council v Bank of England, 2001 2 All ER 513
Three Rivers District Council v Bank of England, 2002 2 WLR 1220
Webster & Anor v Lampard (1993) 177 CLR 598
Wickstead v Brown (1992) 30 NSWLR 1

PARTIES :
Sunraysia Natural Beverage Company Pty Ltd v The State of News South Wales

FILE NUMBER(S): SC 13482/01

COUNSEL: Plaintiff - P. Fernon
Defendant - D. Anderson

SOLICITORS: Plaintiff - Dibbs Barker Gosling
Defendant - I.V. Knight, State Crown Solicitor

LOWER COURTJURISDICTION: Supreme Court

LOWER COURT FILE NUMBER(S): 13482/01

LOWER COURT
JUDICIAL OFFICER : Master Harrison

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Newman AJ

Tuesday, 25 March 2003

13482/01 Sunraysia Natural Beverage Company Pty Ltd
v The State of New South Wales
JUDGMENT

1 HIS HONOUR: This is an appeal pursuant to Pt 60 r 10 of the Supreme Court Rules 1970 from a decision of Master Harrison of 9 April 2002.

2 The learned Master in her decision declined to accede to the defendant State’s motion that these proceedings be either dismissed as disclosing no reasonable cause of action or alternatively that the statement of claim be dismissed or struck out pursuant to Pt 13 r 5 or Pt 15 r 26.

3 By its amended statement of claim which bears the date 30 January 2002 the plaintiff company seeks damages from the defendant State alleging that through its vicarious liability for the acts of a Public Servant it had committed the tort of misfeasance in public office.

4 I should immediately observe that it was not contended on behalf of the appellant State that the learned Master had made any error in the findings of facts that she made nor did she fail to properly direct herself as to the law applicable in relation to applications of this kind. What was contended on behalf of the appellant is that the learned Master should have found that no cause of action lay for the tort of misfeasance in public office and thus should have acceded to the defendant State’s notice of motion.

5 In her reasons the learned Master reviewed the relevant authorities relating to the law involving an application for summary judgment. She correctly relied upon passages in Agar v Hyde (2000) 201 CLR 552, General Steel Industries Inc v Commonwealth Commissioner for Railways NSW (1964) 112 CLR 125 particularly Barwick CJ at 130, Webster & Anor v Lampard (1993) 177 CLR 598. She also adverted to a review of the relevant authorities undertaken by Rolfe AJA in Air Services Australia v Zarb (NSWCA unreported, 26 August 1998). She correctly identified the test imposed upon a party seeking summary judgment as being demanding. In particular she referred to the clear statement of the nature of the test to be applied by the High Court in Webster’s case. There Mason CJ, Deane and Dawson JJ stated at p 602:-

“The power to award a summary judgment must be exercised with exceptional caution and should never be exercised unless it is clear that there is no real question to be tried.”

6 Furthermore, she cited a passage from Master Allen, as he then was, in Hospital Contribution Fund of Australia v Hunt (1982) 44 ALR 365 at 373-374. Master Allen’s observation was quoted with approval by Badgery-Parker J in Gibson v Parkes District Hospital (1991) 26 NSWLR 9 at 35. Relevantly, what Master Allen said was this:

“… I am of opinion that a court at first instance should be particularly astute not to risk stifling the development of the law by summarily throwing out of court actions in respect of which there is a reasonable possibility that it will be found, in the development of the law, still embryonic, that a cause of action does lie.”

7 As I have said it was not contended on behalf of the appellant State that the learned Master misdirected herself in any way in dealing with the appropriate test to be applied in cases such as this. In dealing with this matter I have applied the self same test as that applied by Master Harrison.

8 The plaintiff’s statement of claim alleges that the food branch of the New South Wales Department of Health breached their statutory duties by circularising a letter bearing the date 9 December 1999 to the Supermarkets Institute of Australia threatening prosecution of retailers who continued to offer for sale the manufactured fruit juice products of the plaintiff on the grounds of an alleged breach by the plaintiff of the NSW Food Act. It is the plaintiff’s allegation that as a consequence of that letter supermarket retailers in NSW withdrew the plaintiff’s products from their supermarket shelves resulting in long-term economic harm to the plaintiff.

9 The learned Master dealt with the relevant amended statement of claim as follows:

“14 At paragraph 6 of the amended statement of claim (ASC) it is alleged that in forwarding the letter of 9 December 1999 and in seeking to remove the said beverages from sale, the Crown, through Mr John McMahon, acted ultra vires.

15 Paragraph 6 ASC also pleads that the only express power to remove the said beverages from sale arises from ss 44 and 45 of the Food Act (NSW) 1989. Such power can only arise if the Director General has reasonable grounds to believe such removal is necessary to prevent or mitigate a serious danger to public health. This power was not implemented. According to the plaintiff, the Australian Supermarkets Institute is an Australia wide body and its membership is not limited to New South Wales, and to threaten prosecution against members of an Australia wide body is not implied or otherwise reasonably incidental to the Crown’s power of prosecution.

16 At paragraph 7 of the amended statement of claim the plaintiff pleads that in forwarding the letter and in seeking to remove the said beverages from sale, the Crown, through Mr John McMahon, knew, or alternatively was recklessly indifferent to whether, it was acting beyond the scope of its power under the NSW Food Act 1989 or otherwise. At paragraph 8 the plaintiff pleads that in forwarding the letter and in seeking to remove the said beverages from sale, the Crown, through Mr John McMahon, intended to cause harm to Sunraysia or otherwise acted from malicious intent. The damages are pleaded in paragraphs 10 and 11.

17 Part 2 (ss 9 to 14 inclusive) of the Food Act 1989 (NSW) refers to the unlawful practices of preparation or sale of adulterated or sub-standard food; sale not complying with purchaser's demand; tender or dispatch of food etc adulterated or falsely described; sale of food wrongly packed; food or food packages to be correctly labelled; and false advertising of food. These unlawful practices can be carried out by a person who prepares, sells or tenders or dispatches the food. These sections are intended to place obligations on the manufacturers, distributors and sellers of food and make them liable to prosecution should they fail to meet their statutory obligations.

18 Prior to the 9 December 1999 letter, the subject of these proceedings, there had been correspondence between the plaintiff's solicitor and the defendant. Relevantly on 16 March 1999 the defendant wrote to the plaintiff and drew to its attention to what it considered constituted breaches of the Food Act , namely statements made on the labels of Diet Cran Drink, Diet Lemon Squash, Traditional Australian Blackcurrant, Cranberry Drink and Prune Juice. On 29 March 1999 the plaintiff replied and stated most of the concerns were in the process of being rectified. This letter then referred to the progress of a complaint concerning a competitor and expressed a general view that enforcement of the code was haphazard at best. A letter from the defendant to the plaintiff dated 1 September 1999 concluded by stating "our requirement for your client to redress the breaches indicated in our letter dated 16 March 1999, stands and immediate action is required. Action is also required to remove the reference to the endorsement by the International Diabetes Institute Sunraysia on the new label for Sunraysia Diet Lemon Squash. Failure to comply will result in enforcement action, without further notice." Thus the plaintiff had been given a warning that it was subject to enforcement action without further notice. As previously stated, no orders were made by the Director General.

"44 Making of order

An order under this Division may be made only when the Director-General has reasonable grounds to believe that the making of one or more such orders is necessary in order to prevent or mitigate a serious danger to public health.

45 Nature of order

(b) prohibit the cultivation, taking, harvesting or obtaining, from an area specified in the order, of any food or of any food of a class or description so specified,

(i) for the recall of such of the food as may have been consigned or distributed for sale or sold, or

(ii) for the impounding or isolation of the food, or

(2) In connection with any prohibition or direction mentioned in subsection (1), an order under this Division may specify methods of analysis (not inconsistent with methods prescribed by the regulations) of any food or of any food of a class or description specified in the order.

(3) An order under this Division may prohibit absolutely the carrying on of an activity in relation to food or may permit the carrying on of the activity in accordance with conditions specified in the order.

21 After that letter was sent the defendant took two further steps. The first was that, as forewarned, the plaintiff was prosecuted in the local court for 10 offences under the Act . Two of the offences were proved - see judgment May 2001, Lulham LCM (Ex B)). The second step was that a letter was forwarded to the Australian Supermarkets Institute.

"...
This is to confirm our recent discussions about the range of products marketed by The Sunraysia Natural Beverage Company Pty Ltd.

As discussed, the labelling of these products is in breach of the requirements of the NSW Food Act 1989 and the Food Standards Code. The breaches are detailed in the attachment to this letter.

Sunraysia has been warned, in writing, of these breaches on two occasions, the last on 1 September 1999. In both cases, the company was warned that enforcement action would be taken unless steps were taken to correct the breaches. The company appears to have addressed some of the labelling breaches, but not the major issue of health claims and advice of a medical nature. Further, the company chose to include in their new labels new advice of a medical nature, in the form of a logo from the International Diabetes Institute and a new name - 'Healthstyle', which is in contravention of another clause of Standard A1(19) of the Food Standards Code.

We wish to advise the Supermarket Institute that NSW Health is not prepared to tolerate such a situation and enforcement action will take place. As Sunraysia is based in Victoria, direct action against the company is difficult for NSW Health. Action is therefore likely to be taken against a retail outlet selling the products in question."

10 With one exception the appellant did not argue that the learned Master erred in the above review of the factual and legislative background to the matter. That exception was that the appellant contended that the appropriate sections of the Food Act 1989 which applied to retailers of food products were sections 12 and 13. Those sections are in the following terms:-

“ 12 Sale of food wrongly packed

13 Food or food packages to be correctly labelled

(1) Subject to subsections (3) and (4), every package of food intended for sale must bear a label setting out in such manner as may be prescribed the following particulars:

(a) if there is a standard prescribed for the food and a name has been prescribed to be used in relation to that food, the prescribed name, and in any other case, an appropriate designation,

(b) the name and business address of the manufacturer, the packer of the contents of the package or the vendor and, in the case of imported food, the name and business address of the importer, and

(c) such other particulars as may be prescribed.

(2) If food other than packaged food is displayed for sale it must be labelled in accordance with the regulations.

(3) The regulations may prescribe any food or class of food to which all or any of the provisions of subsection (1) or the provisions of subsection (2) are not to apply or any circumstances in which all or any of the provisions of subsection (1) or the provisions of subsection (2) are not to apply.

(4) Subsection (1) does not, unless otherwise specified in regulations in relation to any particular type of food, apply where the food was packed before or at the time of sale and in the presence of the purchaser.

(5) For the purposes of this section, appropriate designation means a name or description or a name and description sufficiently specific in each case to indicate the true nature of the food to which it is applied.

11 The learned Master dealt with the law relating to the tort of misfeasance in public office as follows:-

“24 In Sanders v Snell [1998] 72 ALJR 1508 at 1517, the High Court observed that the precise limits of this tort are still undefined. In Elliot v Chief Constable of Wiltshire & Ors , Sir Richard Scott The Times Law Reports 5.12.1996 similarly stated that the boundaries of this cause of action had not yet been precisely defined.
25 In Northern Territory v Mengel (1995) 185 CLR 307 at 345 the High Court stated:

"...the weight of authority here and in the United Kingdom is clearly to the effect that it is a deliberate tort in the sense that there is no liability unless either there is an intention to cause harm or the officer concerned knowingly acts in excess of his or her power."

26 In Mengel , the majority of the High Court held that:

"The cases do not establish that misfeasance in public office is constituted simply by an act of a public officer which he or she knows is beyond power and which results in damage. Nor is that required by policy or by principle. Policy and principle both suggest that liability should be more closely confined. So far as policy is concerned, it is to be borne in mind that, although the tort is the tort of a public officer, he or she is liable personally and, unless there is de facto authority, there will ordinarily only be personal liability. And principle suggests that misfeasance in public office is a counterpart to, and should be confined in the same way as, those torts which impose liability on private individuals for the intentional infliction of harm. For present purposes, we include in that concept acts which are calculated in the ordinary course to cause harm, as in reckless indifference to the harm that is likely to ensue, as is the case where a person, having recklessly ignored the means of ascertaining the existence of a contract, acts in a way that procures its breach."

27 This principle was reaffirmed in Sanders .

28 Misfeasance in public office is an intentional tort. Thus, to plead the cause of action of misfeasance in public office, it must be alleged that in addition to the public officer committing an act which he or she knows is beyond power, and results in damage, that ultra vires act must be done knowingly or there must be an intention to cause harm.
29 It has been alleged that an officer acted beyond power which resulted in damage. It has also been alleged that the officer knew that he was acting beyond the scope of his power. Further it has been alleged that the officer acted from malicious intent (paras 6, 7, 10 and 11 ASC). The officer's state of mind is one which can be more appropriately ascertained at trial - see Wickstead v Brown (1992) 30 NSWLR 1 at 11.”

12 Having reviewed the authorities in this manner the learned Master concluded that it could not be said that the plaintiff’s case is clearly untenable or hopeless. Accordingly, she dismissed the notice of motion.

13 In Mengel’s case Deane J, while not agreeing totally with the reasoning adopted by Brennan J and the majority judgment in the case, at p370 set out the elements of the tort of misfeasance in public office. On my reading of the reasons of the court Deane J’s analysis of those elements is on all fours with the reasons of the majority and of Brennan J. At 370 he said:-

“As Lord Diplock observed, in delivering the judgment of the Privy Council in Dunlop v Woollahra Municipal Council, the tort of misfeasance in public office is ‘well-established’. Its elements are: (i) an invalid or unauthorised act; (ii) done maliciously; (iii) by a public officer; (iv) in the purported discharge of his or her public duties; (v) which causes loss or harm to the plaintiff. That summary statement of the elements of the tort inevitably fails to disclose some latent ambiguities and qualifications of which account must be taken in determining whether a particular element is present in the circumstances of a particular case. The critical element for present purposes is malice.

In the context of misfeasance in public office, the focus of the requisite element of malice is injury to the plaintiff or injury to some other person through an act which injuriously affects the plaintiff. Such malice will exist if the act was done with an actual intention to cause such injury. The requirement of malice will also be satisfied if the act was done with knowledge of invalidity or lack of power and with knowledge that it would cause or be likely to cause such injury. Finally, malice will exist if the act is done with reckless indifference or deliberate blindness to that invalidity or lack of power and that likely injury. Absent such an intention, such knowledge and such reckless indifference or deliberate blindness, the requirement of malice will not be satisfied.

Clearly, there was no basis in the circumstances of the present case for a finding of such an intention, such knowledge or such reckless indifference or deliberate blindness against any of the appellants. That being so it follows that the appellants were not liable to the Mengels for misfeasance in public office in the circumstances of the present case. Subject to what is said above, I am in general agreement with the reasons given in the judgment of Brennan J for that conclusion.”

14 In England, the elements of the subject tort were considered by the House of Lords in Three Rivers District Council v Bank of England. Originally, the case came before the House of Lords in an appeal from a decision to strike out the plaintiff’s claim by the primary judge, which decision had been upheld by the Court of Appeal. In that matter, 2002 2 WLR 1220, their Lordships articulated the elements of the tort and deferred a final decision on the facts until after the plaintiff repleaded. Lord Steyn (with whom the other members of the House present substantially agreed) identified the elements of the tort as being (1230-1236):

15 Lord Millet, while basically agreeing with Lord Steyn as to the elements of the tort, made this observation at 1274:

“The tort is generally regarded as having two limbs. The first limb, traditionally described as ‘targeted malice, covers the case where the official acts with intent to harm the plaintiff or a class of which the plaintiff is a member. The second is said to cover the case where the official acts without such intention but in the knowledge that his conduct will harm the plaintiff or such a class. I do not agree with this formulation. In my view the two limbs are merely different ways in which the necessary element of intention is established. In the first limb it is established by evidence; in the second by inference.

The rationale underlying the first limb is straightforward. Every power granted to a public official is granted for a public purpose. For him to exercise it for his own private purposes, whether out of spite, malice, revenge, or merely self-advancement, is an abuse of the power. It is immaterial in such a case whether the official exceeds his powers or acts according to the letter of the power: see Jones v Swansea City Council [1990] 1 WLR 1453. His deliberate use of the power of his office to injure the plaintiff takes his conduct outside the power, constitutes an abuse of the power, and satisfies any possible requirements of proximity and causation.”

16 Insofar as the sixth element is concerned the House of Lords preferred the approach of the primary judge when he stated that the tort might be “knowing at the time (the decision) would probably cause damage to the plaintiff”. In Mengel the majority of the High court (at 347 and 350) used the test that there must be a foreseeable risk of harm at the relevant time. To this extent there appears to be a divergence of view between the High Court and the House of Lords. However, it is not, in my view, a divergence which affects the result of the present case.

17 Following the first decision in Three Rivers the plaintiff did replead its particulars and the matter was once more considered by the House of Lords; 2001 2 All ER 513. The House concluded the plaintiff’s appeal should succeed and denied the Bank’s application for summary judgment. At 526 Lord Hope of Craighead said “the correct test for misfeasance in public office was established by your Lordships’ judgment following the previous hearing of the appeal”. His Lordship then went on to state the essential ingredients of tort which were relevant to an examination of the plaintiff’s new particulars. They included:

18 Lord Steyn (at 516), Lord Hutton (at 550), Lord Hobhouse (at 511) and Lord Millett (at 577) expressed like views.

19 Lord Hope’s first ingredient is the self-same first element in Deane J’s analysis in Mengel which is set out above.

20 While, as I have indicated there is some divergence of view between the House of Lords and the High Court as to the test of remoteness to be applied to the subject tort, there is no divergence as to the necessity of the plaintiff having to establish the invalidity or lack of authorisation when a public servant carries out the act complained about. To this extent the law is in my view well established and is not in a developmental stage. Accordingly, Master Allen’s observation in H.C.F. v Hunt (supra) does not avail the plaintiff here.

21 Indeed, it is the first of those elements which I believe is of importance here. The question to be posed is in my view as follows:-

22 As far as the other elements of the tort are concerned I am of the view that the learned Master did not fall into error in holding that questions involving a public officer’s state of mind are matters for determination at the trial. However, in order to establish the tort a plaintiff must prove all the elements of it not just some of them. Because I am of the view that, as a matter of law, the plaintiff company cannot establish that Mr McMahon’s action in writing the letter of 9 December 1999 can be categorised as an invalid or unauthorised act, I am driven to the conclusion, that, even applying the rigorous test which is applicable to cases such as this, in fact the learned Master erred in concluding that there was a cause of action which should be permitted to go to trial. It follows that in relation to the first element of the tort I am of the view that the plaintiff’s case is clearly untenable.

23 Accordingly, I make the following orders:

Last Modified: 03/31/2003

Actions

Download as PDF Download as Word Document

Citations

Sunraysia Natural Beverage Company Pty Ltd v The State of New South Wales [2003] NSWSC 190

Most Recent Citation

Perhauz & Anor v SAF Properties Pty Ltd & Ors [2007] NSWADT 122

Cases Citing This Decision

1

Perhauz & Anor v SAF Properties Pty Ltd & Ors [2007] NSWADT 122

Cases Cited

6

Statutory Material Cited

2

Agar v Hyde [2000] HCA 41

General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69

CITATION:	Sunraysia Natural Beverage Company Pty Ltd v The State of New South Wales [2003] NSWSC 190
HEARING DATE(S):	24 February 2003
JUDGMENT DATE:	25 March 2003
JURISDICTION:	Common Law Division
JUDGMENT OF:	Newman AJ at 1
DECISION:	1. Appeal upheld; 2. The amended statement of claim bearing the date 30 January 2002 be struck out as disclosing no reasonable cause of action and that the proceedings be dismissed; 3. The plaintiff pay the costs of the defendant.
CATCHWORDS:	Strike out statement of claim - Misfeasance in public office
LEGISLATION CITED:	Food Act (NSW) 1989 ss 44, 45, Pt 2 22 9-14 incl Supreme Court Rules Pt 13, r5; Pt 15, r26
CASES CITED:	Agar v Hyde (2000) 201 CLR 552 Air Services Australia v Zarb (NSWCA, 26/8/98) General Steel Industries Inc v Commonwealth Commissioner for Railways NSW (1964) 112 CLR 125 Elliot v Chief Constable of Wiltshire & Ors Gibson v Parkes District Hospital (1991) 26 NSWLR 9 Hospital Contribution Fund of Australia v Hunt (1982) 44 ALR 365 Jonas v Swansea City Council [1990] 1 WLR 1453 Northern Territoy v Mengel (1995) 185 CLR 307 Sanders v Snell [1998] 72 ALJR 1508 Three Rivers District Council v Bank of England, 2001 2 All ER 513 Three Rivers District Council v Bank of England, 2002 2 WLR 1220 Webster & Anor v Lampard (1993) 177 CLR 598 Wickstead v Brown (1992) 30 NSWLR 1
PARTIES :	Sunraysia Natural Beverage Company Pty Ltd v The State of News South Wales
FILE NUMBER(S):	SC 13482/01
COUNSEL:	Plaintiff - P. Fernon Defendant - D. Anderson
SOLICITORS:	Plaintiff - Dibbs Barker Gosling Defendant - I.V. Knight, State Crown Solicitor

LOWER COURTJURISDICTION:	Supreme Court
LOWER COURT FILE NUMBER(S):	13482/01
LOWER COURT JUDICIAL OFFICER :	Master Harrison