Watson, Grant Scott --- "Public law in private law actions: statutory duties, functions and powers under CLAs" [2016] PrecedentAULA 67; (2016) 136 Precedent 45

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PUBLIC LAW IN PRIVATE LAW ACTIONS: STATUTORY DUTIES, FUNCTIONS & POWERS UNDER CLAS

By Grant Scott Watson

Public authorities are not like ordinary people, or even corporate entities. They have the power to do things that ordinary persons cannot. They have responsibilities that ordinary persons do not. In many if not most instances, what they can do and what they are required to do, are governed by statute, and are not merely incidents of things like property ownership or contractual relations. While public or administrative law ordinarily governs the exercise of these statutory duties, functions and powers, they also commonly form the basis for private law actions in tort against public authorities. It is here where private law meets public law.

This article examines recent developments in the law relating to the liability of public authorities for the exercise or failure to exercise statutory duties, functions and powers, as modified by the provisions of some state and territory statutes addressing the liability of public authorities in tort (Civil Liability Acts).^[1] There will be a focus on the provisions of Part 5 of the Civil Liability Act 2002 (NSW) (NSW Act), which goes the furthest of the various Civil Liability Acts in modifying the common law and has had the most appellate consideration; in particular ss43, 43A and 44 of the NSW Act. The writer previously considered these sections in the July/August 2012 edition of this publication^[2] and this should in some respects be read as an update of that article. The provisions relating to allocation of resources,^[3] and those peculiar to roads authorities,^[4] will not specifically be examined.

DUTY OF CARE

Before delving into the statutory provisions, it is first important to note that in many instances public authorities do not owe a duty of care in respect of their statutory duties, functions and powers in any event. In the High Court decision of Stuart v Kirkland-Veenstra,^[5] Gummow, Hayne and Heydon JJ, referring extensively to the earlier seminal decision of the Court in Graham Barclay Oysters Pty Ltd v Ryan,^[6] describe the enquiry to be made in ascertaining whether such a duty exists, as follows:

‘[112] ... Does that regime erect or facilitate “a relationship between the authority [here the holder of statutory power] and a class of persons that, in all the circumstances, displays sufficient characteristics answering the criteria for intervention by the tort of negligence”?

[113] Evaluation of the relationship between the holder of the power and the person or persons to whom it is said that a duty of care is owed will require examination of the degree and nature of control exercised over the risk of harm that has eventuated, the degree of vulnerability of those who depend on the proper exercise of the relevant power, and the consistency or otherwise of the asserted duty of care with the terms, scope and purpose of the relevant statute. Other considerations may be relevant.

[114] In the present matter, as in a number of cases about the exercise of statutory power, it is the factor of control that is of critical significance.’^[7]

In Stuart v Kirkland-Veenstra, a duty of care was found not to arise in respect of the statutory power granted to police officers to detain mentally ill or suicidal persons, principally due to a lack of control over the source of the risk.^[8]

Sometimes, notwithstanding other salient features tending to suggest the existence of a duty, a common law duty of care is simply incompatible with a public authority’s other obligations. In the High Court’s most recent statement on the topic, Hunter and New England Local Health District v McKenna,^[9] a unanimous Court found that the powers, duties and responsibilities of doctors and hospitals relating to the involuntary admission of mentally-ill persons under mental health legislation were inconsistent with a common law duty of care.^[10] Accordingly, a duty was not owed to the relatives of a man killed by a discharged psychiatric patient in deciding that the powers given by the Mental Health Act 1990 (NSW), which had been used to detain the patient, should no longer be used to prevent him leaving the hospital.^[11] This is especially interesting given that the only stated reason for the enactment of s43A of the NSW Act was to deal with Presland v Hunter Area Health Service,^[12] an albeit quite different case, but also concerning the failure to detain a psychiatric patient under such legislation.^[13] Arguably the McKenna decision has rendered the original stated purpose of the legislature in introducing s43A unnecessary.

Clearly, the existence of statutory powers, and the mere prior exercise of those powers, does not without more create a duty of care. Likewise, the fact that provisions of the Civil Liability Acts seem to assume the existence of a duty of care, such as in s43A of the NSW Act in respect of the exercise or non-exercise of a ‘special statutory power’, does not create one where it otherwise does not exist.^[14] However, in cases where a duty of care can be established, some of the provisions in the Civil Liability Acts will have far greater impact on the liability of public authorities than perhaps was earlier anticipated.

STATUTORY DUTIES AND FUNCTIONS

The tort of breach of statutory duty has been aptly described as having ‘almost no life in this country beyond its original context of workplace injuries’.^[15] The writer has been unable to locate a single recent decision turning on the application of this tort. Notwithstanding this, in all jurisdictions except South Australia and Northern Territory, the Civil Liability Acts include a provision imposing a test akin to Wednesbury^[16] unreasonableness for such actions.^[17] With the exception of the Queensland provision, which given its use of the word ‘function’ in the text of the section (despite the heading) is broader than the others,^[18] these provisions have rarely been applied.

The Queensland provision has been applied more broadly (but not that often) than its counterpart in NSW. In Hamcor Pty Ltd & Anor v State of Queensland,^[19] s36 of the Civil Liability Act 2003 (Qld) (the Queensland Act) was found to apply and the state was found not liable for contamination caused by the use of water on a chemical fire by the fire service in the course of exercising its functions under the relevant legislation. In contrast, s43 of the NSW Act has repeatedly been disregarded by courts as having no application to common law actions based on a breach of duty of care, even where the exercise of statutory powers are involved: Patsalis v State of New South Wales;^[20] McKenna v Hunter & New England Local Health District.^[21]

Perhaps somewhat comparable to the application of s36 of the Queensland Act, the Civil Liability Acts in NSW, Tasmania and ACT also include provisions preventing public authorities from being found liable based on failures to exercise or consider exercising functions to prohibit or regulate activities, unless the functions could have been required to be exercised in proceedings instituted by the plaintiff.^[22] These provisions have still yet to be considered in detail and regularly applied, perhaps due to the fact that in many instances there would be no duty of care in any event.

Basten JA examined s44 of the NSW Act recently in Roads and Maritime Services v Grant.^[23] In obiter, his Honour suggested that, subject to the question of standing to obtain a mandatory order, the section was probably engaged to defeat the plaintiff’s claim in respect of catastrophic injuries sustained in a motorcycle accident argued to have been caused by the failure to erect a ‘keep left’ sign on a median strip.^[24] His Honour also observed that the erection of traffic lights would similarly constitute the exercise of a function regulating an activity and ‘accordingly a road authority could not be liable for a failure either to erect traffic signals, or to consider erecting such signals’.^[25]

The case ultimately turned on other issues and the plaintiff was unsuccessful.

In the recent decision of Bankstown City Council v Zraika,^[26] Leeming JA distinguished Basten JA’s reasoning in Roads and Maritime Services v Grant and found s44 inapplicable to a case involving the alleged failure to impose a condition in a development consent relating to the regulation of traffic, in a case involving a motor accident at an intersection.^[27] Essentially, this was because the function being exercised in that circumstance was merely that of assessing and determining an application for development approval, not the regulation of traffic.^[28] Relevantly, the Council determining the development approval in that case was not the roads authority.

Basten JA’s comments in Roads and Maritime Services v Grant^[29] were obiter, and Leeming JA found that the section did not apply in Bankstown City Council v Zraika,^[30] and so the scope of s44 and its Tasmanian and ACT counterparts remains somewhat uncertain. If it is ultimately applied to roads authority cases in respect of the regulation of traffic, it is potentially very broad, creating yet a further obstacle for plaintiffs in such cases. A plaintiff could only bring an action in that event if he or she had standing, and arguably a proper basis, to bring some kind of public law administrative action.^[31]

SPECIAL STATUTORY POWERS

Where the use of public law has most significantly made inroads into private law tort actions is in the growing application of the ‘special statutory power’ provision in s43A of the NSW Act. No other state or territory has introduced such a provision. The section provides that when the liability of a public authority is based on the exercise or failure to exercise a ‘special statutory power’, being a statutory power of a kind that persons are generally not authorised to exercise without specific statutory authority, the authority is not liable unless it was so unreasonable that no authority having the special statutory power in question could properly consider the act or omission to be a reasonable exercise of, or failure to exercise, its power. The origins of the provision have been dealt with in detail elsewhere.^[32] Like the WA ‘policy defence’ in s5X and the ‘breach of statutory duty’ provisions referred to above, the section appears to impose a test akin to Wednesbury unreasonableness.^[33]

The High Court is still yet to properly deal with the section. In Sydney Water Corporation v Turano,^[34] it commented on its ‘uncertain reach’ and did not apply the section.^[35] In Hunter and New England Local Health District v McKenna,^[36] the Court disposed of the matter at the duty of care stage, rendering consideration of s43A unnecessary.^[37] In the last few years, however, the NSW Court of Appeal has regularly encountered the provision and, alarmingly for plaintiffs and their lawyers, found it to have a much broader application than perhaps was intended. Campbell JA’s analysis (in obiter) in Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Ltd,^[38] that no special statutory power was involved in the failure to install a screen on a bridge because the roads authority owned the bridge,^[39] and because the plaintiff’s case had not relied on the exercise of such a power,^[40] seems a world away from the latest authorities.

The application of s43A is broadening. The question of when liability is said to be ‘based on’ the exercise or failure to exercise a special statutory power has been explored by the NSW Court of Appeal. In some instances, the operation of the section has been excluded. In Gales Holdings Pty Ltd v Tweed Shire Council Bankstown City Council v Zraika ^[41] the section was found not to apply in an action in nuisance regarding stormwater runoff and the operation of the Council’s drainage network. In the Court of Appeal decision in McKenna v Hunter & New England Local Health District,^[42] the section was excluded on the basis that the power pleaded was not in fact exercised because the discharge of the mentally ill person was simply unauthorised. However, contrary to the obiter of Campbell JA in Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Ltd,^[43] in roads authority cases, exclusion is not common. .

In Curtis v Harden Shire Council,^[44] the plaintiff brought an action for damages in respect of the death of his partner in a motor accident caused by loose gravel on the road near some roadworks which were being carried out by the Council. The plaintiff claimed the Council was negligent in failing to provide adequate signage to warn motorists. Basten JA (Bathurst CJ and Beazley JA agreeing) found that such a liability was based on the exercise of a special statutory power within the meaning of s43A, in that ‘traffic control devices’ are not permitted to be installed or displayed under the traffic management legislation without appropriate authority.^[45] His Honour found:

‘This section is clear beyond doubt and reflects the commonsense proposition that only someone with authority could place a regulatory sign beside a road limiting the speed at which vehicles might travel, or otherwise warning of hazards. Questions of judgment are involved: unnecessary signs can cause confusion. Accordingly the placement of such signs involves a power of a kind that persons generally are not authorised to exercise without specific statutory authority.’^[46]

His Honour went on to directly address, and distinguish, the obiter of Campbell JA in Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Ltd,^[47] and various arguments raised or referred to in the nature of courts reading down provisions granting immunities, public authorities exercising powers as landowners, and any distinction between specific and general statutory authority, as having ‘no direct application in the present case’.^[48] It should be noted, however, that the plaintiff was ultimately successful in traversing the s43A(3) test and succeeded in his claim.

Similar reasoning regarding the application of s43A was applied by the Court in the case of Roads and Maritime Services v Grant,^[49] referred to above, regarding the failure to instal a ‘keep left’ sign on a median strip. In that case, the s43A(3) test was not met and, accordingly, the seriously injured plaintiff lost his substantial verdict obtained at trial. Throughout his reasons in that case, Basten JA tellingly refers to s43A as a ‘statutory immunity’. The Court in Rockdale City Council v Simmons^[50] also endorsed this approach to the section, but was able to distinguish the case on the basis that the boomgate that injured the plaintiff cyclist was not a ‘traffic control facility’ under the relevant legislation and, so, no special statutory power was required. A plaintiff therefore needs to very carefully examine the relevant traffic management legislation in order to ascertain whether section 43A applies in such cases. It certainly can no longer be assumed that the section is limited to statutory powers ‘permitting coercive acts or non-consensual rights-depriving acts’.^[51]

Now that s43A is being applied more regularly and broadly, such as to roads authority cases involving signage and other traffic control facilities, there has also been more attention given to the application of what appears to be a public law-styled Wednesbury^[52] unreasonableness test to establish liability in s43A(3). In Curtis v Harden Shire Council,^[53] Basten JA observed that the section does ‘not simply reflect the administrative law principles’. Moving away from any attempt to characterise the degree of unreasonableness necessary to satisfy the test,^[54] and applying the reasoning in Curtis v Harden Shire Council^[55] and Roads and Maritime Services v Grant,^[56] the s43A(3) unreasonableness test can now be broken down into three important elements (paraphrasing Basten JA in Roads and Maritime Services v Grant):^[57]

(1) The assessment of unreasonableness is to be made by a hypothetical reasonable public authority. The body to be satisfied is not the court, but that hypothetical authority.

(2) The test is formulated in the negative, and so it is only satisfied by proof that no public authority (for example, traffic engineer for a roads authority) acting reasonably would have failed to take the precaution identified by the plaintiff.

(3) The section reformulates the standard by which a breach of duty is to be judged. Accordingly, once engaged, the plaintiff needs to establish negligence beyond the statutory threshold to succeed.

The plaintiff in Curtis succeeded in satisfying that test, and the High Court dismissed the Council’s application for special leave to appeal.^[58] Nonetheless, the test clearly remains very difficult to satisfy.

CONCLUSION

Recent developments in respect of the liability of public authorities for the exercise or failure to exercise statutory duties, functions and powers, especially under Part 5 of the NSW Act, point to the growing influence of public law concepts in private law actions. The application of ss43A and 44, for example in roads authority cases, will make proceedings for damages in respect of such duties, functions and powers increasingly difficult. When such provisions apply, they impose something akin to a standard of decision-making by public authorities to what would otherwise be considered negligent acts or omissions. Such a standard arguably displaces the general notion of reasonable care, further extending the reach of public law into private law actions.

Grant Watson is a solicitor in practice at T D Kelly & Co Solicitors, Sydney. PHONE: [phone]. EMAIL: [e-mail].

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^[1] Civil Liability Act 2003 (Qld), Pt 3; Civil Liability Act 2002 (WA), Pt 1C; Wrongs Act 1958 (Vic), Pt XII; Road Management Act 2004 (Vic), Pt 6; Civil Liability Act 2002 (Tas), Pt 9; Civil Law (Wrongs) Act 2002 (ACT), Ch 8; Civil Liability Act 1936 (SA), Pt 6 Div 5.

^[2] Watson GS, ‘Public authorities: statutory duties, functions and powers’ (2012) 111 Precedent 14-21.

^[3] Civil Liability Act 2002 (NSW), s42; Civil Liability Act 2003 (Qld), s35; Civil Liability Act 2002 (WA), s5W; Civil Liability Act 2002 (Tas), s38; Civil Law (Wrongs) Act 2002 (ACT), s110; Wrongs Act 1958 (Vic), s83.

^[4] Civil Liability Act 2002 (NSW), s45; Road Management Act 2004 (Vic), ss102, 103; Civil Liability Act 2003 (Qld), s37; Civil Liability Act 2002 (WA), s5Z; Civil Liability Act 1936 (SA), s42; Civil Liability Act 2002 (Tas), s42; Civil Law (Wrongs) Act 2002 (ACT), s113.

^[5] [2009] HCA 15; (2009) 237 CLR 215.

^[6] [2002] HCA 54; (2002) 211 CLR 540. See especially 596-598 (Gummow and Hayne JJ).

^[7] Stuart v Kirkland-Veenstra, see above note 5, 254.

^[8] Control is often the most critical factor: Crimmins [1999] HCA 59; (1999) 200 CLR 1 at 24-5, 42-3, 61, 82, 104, 116; Brodie v Singleton Shire Council [2001] HCA 29; (2001) 206 CLR 512 at 558-9; Graham Barclay Oysters [2002] HCA 54; (2002) 211 CLR 540 at 596-9.

^[9] [2014] HCA 44; (2014) 253 CLR 270.

^[10] Ibid, at [29]-[33].

^[11] The relatives had previously been successful in the NSW Court of Appeal in navigating the various obstacles of the Civil Liability Act 2002 (NSW) including ss5B, 5O, 43, 43A and were awarded damages: McKenna v Hunter & New England Local Health District [2013] NSWCA 476.

^[12] [2003] NSWSC 254. See NSW Hansard, Legislative Assembly, 13 November 2003, p4992 and 19 November 2003, p5347 (Mr Morris Iemma, Minister for Health).

^[13] That case was also overturned on appeal due to there being no duty of care: Hunter Area Health Service v Presland [2005] NSWCA 33; (2005) 63 NSWLR 22. See also discussion in Watson GS, ‘Section 43A of the Civil Liability Act 2002 (NSW): Public law styled immunity for the negligence of public and other authorities?’ (2007) 15 TLJ 153-78, 155-8.

^[14] See also MM Constructions (Aust) Pty Ltd v Port Stephens Council [2012] NSWCA 417 at [213]- [214] per Basten JA.

^[15] Aronson M, ‘Government liability in negligence’ [2008] MelbULawRw 2; (2008) 32 MULR 44-82, 76.

^[16] Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223. Although see discussion below regarding the test in s43A of the NSW Act.

^[17] Civil Liability Act 2002 (NSW), s43; Wrongs Act 1958 (Vic), s84; Civil Liability Act 2003 (Qld) s36; Civil Liability Act 2002 (WA), s 5Y; Civil Liability Act 2002 (Tas), s40; Civil Law (Wrongs) Act 2002 (ACT), s111.

^[18] Civil Liability Act 2003 (Qld), s36.

^[19] [2015] QCA 183.

^[20] [2012] NSWCA 307 at [87].

^[21] [2013] NSWCA 476 at [167]- [168] per Macfarlan JA.

^[22] Civil Liability Act 2002 (NSW), s44; Civil Liability Act 2002 (Tas), s41; Civil Law (Wrongs) Act 2002 (ACT), s112.

^[23] [2015] NSWCA 138.

^[24] Ibid, [28]-[33].

^[25] Ibid, [29].

^[26] [2016] NSWCA 51.

^[27] Ibid, [95]-[101].

^[28] Ibid, [101].

^[29] [2015] NSWCA 138.

^[30] [2016] NSWCA 51.

^[31] Warren Shire Council v Kuehne [2012] NSWCA 81, [150] per Whealy JA in obiter suggests that standing is all that is required, but no case so far as the writer can ascertain has turned on this point yet.

^[32] Watson GS, see note 13 above, 155-8.

^[33] Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223. Although see below note 51.

^[34] [2009] HCA 42; (2009) 239 CLR 51.

^[35] Ibid, 65.

^[36] [2014] HCA 44; (2014) 253 CLR 270.

^[37] Ibid, [12].

^[38] [2009] NSWCA 263; (2009) 77 NSWLR 360.

^[39] Ibid, 435.

^[40] Ibid, 436.

^[41] [2013] NSWCA 382 [197] (Emmett JA) and [283] (Leeming JA).

^[42] [2013] NSWCA 476 [167]-[168] Macfarlan JA.

^[43] [2009] NSWCA 263; (2009) 77 NSWLR 360, 435-6.

^[44] [2014] NSWCA 314.

^[45] Ibid, [241]-[256].

^[46] Ibid, [248].

^[47] [2009] NSWCA 263; (2009) 77 NSWLR 360, 435-6.

^[48] Curtis v Harden Shire Council [2014] NSWCA 314, [254].

^[49] [2015] NSWCA 138,[34] (Basten JA); [9] (McColl JA); and [185] (Emmett JA).

^[50] [2015] NSWCA 102, [107]-[109] (Beazley P, McColl JA and Barrett JA).

^[51] Aronson M, see above note 15, 78.

^[52] Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223.

^[53] [2014] NSWCA 314, [261].

^[54] See discussion and cases cited in Watson GS, see above note 2, 20.

^[55] [2014] NSWCA 314, [277]-[279] (Basten CJ); [6] (Bathurst CJ).

^[56] [2015] NSWCA 138, [35]-[37] per Basten JA; [9] (McColl JA); and [185] (Emmett JA).

^[57] Ibid.

^[58] Harden Shire Council v Curtis [2015] HCATrans 14.