LIABILITY OF PUBLIC AUTHORITIES FOR SHORTFALLS IN ADMINISTRATION
by STEPHEN ARGUMENT* and ANDREW FORBES**
AUSTRALIAN INSTITUTE OF ADMINISTRATIVE LAW
2006 NATIONAL ADMINISTRATIVE LAW FORUM
Administrative Law: Protection of Individual and Community Interests
Surfers Paradise Marriott Resort
22-23 June 2006
We are yet to see whether any civil proceedings will arise out of the findings made by His Honour Justice Davies AO, the Commissioner for the Queensland Public Hospitals Commission of Inquiry (Inquiry). It seems unlikely that this will now occur.
In the late 1990s, the High Court considered a few cases which reviewed the law surrounding the liability of public authorities and officers. This area of law has been described as one of the most difficult,[1] and it is recognised that it will continue to develop. However, few cases have been considered by the superior courts in recent years.
On the basis of the conclusions drawn by the Commissioner, there may have been an opportunity for further consideration of this area, and possible further development. If the potential injured parties have been satisfied by the special arrangements that have been put in place by the Beattie Government, and court proceedings are not commenced, is this "opportunity lost" for administrative law lawyers?
On 30 November 2005, the Queensland Public Hospitals Commission of Inquiry Report[2] (Report) was delivered. While the Report addressed a number of issues within Queensland's health system, it will always be remembered for the complaint which "sparked" the Inquiry, namely the conduct of Dr Jayant Patel, who worked at the Bundaberg Base Hospital from 2003 to 2005.
Despite apparently strong credentials, Dr Patel, an Indian-trained doctor who had worked (and also trained) in the United States for some years, faced numerous complaints about his clinical performance. Dr Patel's clinical results were said to be "100 times worse" than one would expect.[3]
It appears that, when seeking registration in Queensland, Dr Patel deliberately concealed details of his clinical performance in the United States and embellished other aspects. A "negligent omission" by the Medical Board of Queensland failed to identify a notation on Dr Patel's Certificate of Licensure. Although the Certificate was probably internally inconsistent on its face, if further enquiries were made, they would have revealed that Dr Patel had been the subject to previous disciplinary proceedings of this clinical performance. In Oregon, Dr Patel was restricted in performing certain types of surgery, and in New York, he had surrendered his licence to practise. There had also been "a negligent failure by the Medical Board to assess, or to have assessed, (Dr Patel's) qualification and experience suitable for … performing general surgery…".[4]
It was the policy of Queensland Health to conduct an assessment of a practitioner's clinical skills and competence as a condition of any appointment to a position. This was not done. Dr Patel was initially appointed to a position where he would ordinarily be supervised but was promptly elevated to a position whereby "he was subject neither to supervision nor even peer assessment". By appointing Dr Patel in this way, the Deputy Acting Director of Medical Services avoided (he thought) the need to convene an appointment committee.'[5]
The Director of Medical Services who was subsequently appointed also failed, "[i]n breach of his duty to do so", to have Dr Patel's skill and competence assessed during the time that he was employed at the Bundaberg Hospital. This was a breach of the Queensland Health policy and guidelines that had been in force since 2002. To compound the breach, Dr Patel's registration and employment, which was only on a 12 month basis (as his was a special needs appointment), was renewed and extended. [6]
Over 20 complaints, verified by specialists, were made about Dr Patel's performance at the Bundaberg Base Hospital. As would be expected, the seriousness of the complaints varied but some were "extremely grave". The Director of Medical Services, and another administrative officer, "persistently ignored or downplayed the seriousness of these complaints".[7] The Commissioner concluded the "actions and inaction (by the administrative officers towards the complaints) were unresponsive and discouraged complaint"[8] Further, despite the "number and seriousness of the complaints" against Dr Patel, no independent investigation was conducted.[9]
The Commissioner also considered the impact of budgetary constraints:
The hospital budget was fixed on an historical basis, that is based on that of the previous year, with an additional incentive payment based on elective surgery throughput. Up until quite recent times it also provided for a small percentage reduction from the historically fixed budget on the assumption that improved efficiencies would enable that to be achieved. In other words, the budget was fixed as if the hospital was running a business of selling goods or services. Patient care and safety was not a relevant factor.'[10]
It was suggested that District Managers had been sacked for exceeding budget, hence there was an incentive for maintaining a budget. Further, "achievement of the elective surgery target was necessary to obtain maximum funding for the following year, there was considerable pressure on (managers) to achieve that target"[11] Despite Dr Patel's shortcomings, he was "a considerable asset", because he maintained a high throughput, enabling the hospital to achieve its elective surgery target. The administrative officers had a "greater concern with maintaining their elective surgery target than with patient care or safety".'[12]
The Commissioner concluded there had been:
1 a failure by the Medical Board and Queensland Health to verify Dr Patel's credentials and check his past history;
2 a failure by Queensland Health to assess the skill and competence of Dr Patel in accordance with Queensland Health's policy and guidelines;
3 a failure to properly receive and investigate complaints received.
The Commissioner also concluded that budgetary constraints that were placed upon the hospital by Queensland Health also contributed to the outcome.[13]
Scope of this paper
Relying upon the Commission's conclusions, we intend to use these "failures" to review the current state of the law with respect to the civil liability of public authorities and public officers for shortfalls in administration. The principle focus of the paper will be where it alleged that there has been a failure to take action in circumstances where there is an ability to exercise a power or take action. The liability spoken of is one in tort and does not concern those circumstances where an administrative decision is attacked on the basis that it should be set aside or otherwise reviewed.
We should also make a cautionary note that this is intended to be an illustrative or "academic" exercise; no conclusions are directly drawn against Queensland Health, the Medical Board or any other party who had an interest before the Inquiry. Within the scope of this paper, all relevant factors and issues arising out of the Inquiry could not possibly be considered. It should also be remembered that we do not consider the obvious areas of potential liability, namely Dr Patel's direct and personal liability and any vicarious liability of Queensland Health.
The obvious preliminary questions are who is a "public officer" and what is a "public authority"? According to Smith J, in Tahche v Abboud,[14] the terms refer to someone or something holding a specific defined position which is remunerated from public funds, performs public services and owes a duty to the community.[15] The Civil Liability Act 2003 (Qld) defines a "public or other authority" to mean the Crown, local government, or and public authority constituted under an Act.[16]
Historically, public officers and public authorities have been treated differently to private individuals and entities (and it is arguable that continues to be the case). One basis for the immunity traditionally afforded to public authorities has been an adherence to the separation of powers doctrine. [17] The rationale behind this approach is relatively uncontroversial. Public bodies fulfil a duty owed to the community at large, rather than to individuals or classes of individuals. In addition, in carrying out their duties, a public body has to balance competing interests, both legal and practical (including issues such as budgetary constraints).
A fundamental issue that a court has to determine is when it should intervene or be permitted to consider whether a public authority has acted outside or in excess of its powers. In Graham Barclay Oysters Pty Ltd v Ryan[18] (Barclay Oysters), Chief Justice Gleeson stated:
Citizens blame governments for many kinds of misfortune. When they do so, the kind of responsibility they attribute, expressly or by implication, may be different in quality from the kind of responsibility attributed to a citizen who is said to be under a legal liability to pay damages in compensation for injury. Subject to any insurance arrangements that may apply, people who sue governments are seeking compensation from public funds. They are claiming against a body politic or other entity whose primary responsibilities are to the public. And, in the case of an action in negligence against a government of the Commonwealth or a State or Territory, they are inviting the judicial arm of government to pass judgment upon the reasonableness of the conduct of the legislative or executive arms of government; conduct that may involve action or inaction on political grounds. Decisions as to raising revenue, and setting priorities in the allocation of public funds between competing claims on scarce resources, are essentially political. So are decisions about the extent of government regulation of private and commercial behaviour that is proper. At the centre of the law of negligence is the concept of reasonableness. When courts are invited to pass judgment on the reasonableness of governmental action or inaction, they may be confronted by issues that are inappropriate for judicial resolution, and that, in a representative democracy, are ordinarily decided through the political process. Especially is this so when criticism is addressed to legislative action or inaction. Many citizens may believe that, in various matters, there should be more extensive government regulation. Others may be of a different view, for any one of a number of reasons, perhaps including cost. Courts have long recognised the inappropriateness of judicial resolution of complaints about the reasonableness of governmental conduct where such complaints are political in nature.[19]
This represents an orthodox view of the liability of public bodies. It also reflects, in some ways, a "Lawyers Keep Out" approach previously identified by Justice Kirby.[20]
The recent view, however, is that a public authority can be liable, in the same way that a private individual would be liable for negligence. This had been clearly demonstrated in recent times; courts have found public bodies liable.
In Sutherland Shire Council v Heyman[21] (Heyman), for example, the High Court rejected the notion that a public authority was immune from liability for a failure to exercise its powers, finding that public authorities should be treated no differently to any other party.[22]
This was confirmed in Northern Territory of Australia v Mengel[23] (Mengel), where the majority stated that "public officers are liable in negligence according to the same general principles that apply to individuals".'[24] The majority went on to state:
Governments and public officers are liable for their negligent acts in accordance with the same general principles that apply to private individuals and, thus, there may be circumstances, perhaps very many circumstances, where there is a duty of care on governments to avoid foreseeable harm by taking steps to ensure that their officers and employees know and observe the limits of the power.[25]
Neither private individuals nor public authorities are liable for a risk they did not create.[26] A proviso operates in situations where the relevant legislative provision allows the public officer or authority a discretion to act. In those situations, there is, of course, no obligation to act. Otherwise, rather than being a discretionary provision, it would become mandatory. Therefore, a public authority has no duty to protect another merely because they have the legislative power to prevent the harm.[27]
But where the authority has interfered to cause or increase the harm, it will be under a duty. Similarly, if it knows or ought to have known a person relies upon it to exercise its power to protect, the authority will again be under a duty. If it is under a duty, and it has not exercised its power, there may be a breach.[28]
In the circumstances of Dr Patel, the Commissioner concluded complaints were ignored. The authority (or administrative officer) had the ability to investigate, and if necessary suspend, Dr Patel. Could Queensland Health be liable if it has failed to act against Dr Patel to prevent an injury or harm when it had statutory powers to act?
In Mengel, Justice Brennan stated that "[t]here can be no tortious liability for an act or omission which is done or made in valid exercise of a power".[29] Further, there can be no action for a breach of statutory duty unless the relevant legislation confers a right on the injured party to require that the duty of the statutory authority or person be performed. If no right is conferred, generally no liability will follow.[30]
However, in Pyrenees Shire Council v Day (Pyrenees Shire Council)[31], Justice McHugh stated:
The fact that the authority owes a common law duty of care because it is invested with a functional power does not mean that the total or partial failure to exercise that function or power constitutes a breach of that duty. Whether it does will depend on all the circumstances of the case, including the terms of the function or power and the competing demands on the authority's resources.[32]
When considering the issue again a short time later, in Crimmins v Stevedoring Industry Finance Committee (Crimmins),[33] His Honour stated:
[T]he negligent exercise of a statutory power is not immune from liability simply because it was within power, nor is it actionable in negligence simply because it was ultra vires.[34]
It certainly now appears to been settled law that a public authority can be liable for the failure to exercise a power. In Pyrenees Shire Council, Justice Gummow found that a statutory body must exercise its power with reasonable care. Failure to do so in circumstances where the injury would have been prevented, will give rise to liability for damages in common law negligence. The case confirms that the liability of public authorities will be determined by reference to the general principles of negligence. No special rules are to be devised for bodies exercising statutory powers. No special immunity will be afforded to public authorities in this regard.
In Barclay Oysters, Justice McHugh stated:
A public body invested with a discretionary statutory power may be in breach of a common law duty of care if it fails to exercise the power for the benefit of an individual or class of individuals. In these cases, failure to exercise the power given constitutes actionable negligence that sounds in damages. In determining whether a public authority has breached a common law duty by failing to exercise a statutory power, it is essential to examine the words and policy of the legislation. That is because the legislation may indicate that the legislature has legislated to cover the field and excluded all common law duties of care. In other cases, the imposition of the common law duty may be inconsistent with or undermine the effectiveness of the duties imposed by the statute. In some cases, the circumstances of the case - for example, active intervention by the authority or reliance by the plaintiff - may establish a duty of care. But the legislation may give the authority such a wide discretion to exercise the power in question that the tribunal of fact cannot find the failure to exercise the power constituted a breach of the duty.[35]
With respect to the Director of Medical Services' "inaction", could it be said that he was, or should have been, exercising a statutory function? If it cannot be properly characterised as done or not done in the exercise of a statutory function, then no reference should be made to the issues arising from the exercise of the statutory duty.[36] For present purposes, we will not explore this issue. There are some actions criticised by the Commissioner that could be characterised as meeting this requirement.
In considering whether a public body is liable, the courts take into account the public nature of the functions exercised by a public authority. Health is an important political issue and one on which private individuals place much reliance in public authorities. This is reflected in the functions of the Medical Board and Queensland Health. For example, the objects of the legislation which govern the Medical Board include "to protect the public by ensuring health care is delivered by registrants in a professional, safe and competent way" and "to uphold the standards of practice".[37] One of the objects of the Public Service Act is "to maintain… appropriate standards of conduct…"[38].
With this in mind, we should reflect upon the following passage by Justice McHugh in Graham Barclay Oysters Pty Ltd -v- Ryan[39]:
The likelihood of the common law imposing an affirmative duty of care whose content may require the exercise of a statutory power increases where the power is invested to protect the community from a particular risk and the authority is aware of a specific risk to a specific individual. If the legislature has invested the power for the purpose of protecting the community, it obviously intends that the power should be exercised in appropriate circumstances. If the authority is aware of a situation that calls for the protection of an individual from a particular risk, the common law may impose a duty of care. In that situation, failure to exercise the power may constitute negligence.
His Honour, referring to his comments in Crimmins -v- Stevedoring Industry Finance Committee[40], suggested that to determine whether a duty of care existed, the following must be considered:
1 Whether it was reasonably foreseeable whether the act or omission, including a failure to act, may result in injury;
2 Whether the public authority was in a position of control and had the power to control the situation that brought about the injury;
3 The vulnerability of the injured person, in particular whether they had the ability to adequately safeguard themselves;
4 Whether the public authority knew or ought to have known of the existence of the risk of harm to the plaintiff or, in some cases, to a specified class of persons (rather than the general public);
5 Whether the imposition of the duty of care impose liability with respect to the public authority's "core policy-making" or "quasi-legislative" functions;
6 Whether there was any supervening policy reason to deny the existence of the duty of care.[41]
Justice McHugh explained that:
If the first four of these questions are answered in the affirmative and the fifth and sixth questions in the negative, the court will ordinarily hold that the authority owed a duty of care to the plaintiff. Conversely, if any of the first four questions are answered in the negative or either of the fifth or sixth questions are answered in the affirmative, ordinarily no duty of care will arise.[42]
Proximity is no longer the key determining factor.[43] Liability is currently determined by considering all the salient features of the case.[44] With respect to reasonable foreseeability, it is no longer limited by only the far-fetched or fanciful; it has been suggested that a narrower test is now applied.[45] In Barclay Oysters Justice McHugh stated:
In determining whether a defendant should have reasonably foreseen a risk of injury, it is not necessary that the defendant should have foreseen the precise risk of injury or how it occurred. It is sufficient that the risk is one of a class of risk that in a general way the defendant should have foreseen. If the authority should have foreseen the class of risk, a further question arises as to whether the risk could be reasonably disregarded. Reasonable foreseeability involves more than a question of fact. It involves a value judgment. Would a reasonable person in the position of the defendant not only have foreseen that his or her conduct - including omissions - gave rise to risk of injury, but regarded it sufficiently serious to consider what steps should be taken to avoid or reduce it?[46] (references removed)
In Agar v Hyde,[47] the High Court held that the International Rugby Football Board were not liable to two participants who had been injured as a consequence of there being a failure to amend the rules to minimise injury. The class of persons, including the plaintiffs were held not to be within their reasonable contemplation. The High Court held that for a duty of care to be acquired by a Board in these circumstances would be "so unreal as to border on the absurd".[48]
As has been briefly described, these issues will be considered also in the light of other competing factors, such as the primary purpose of the authority and whether any other factors, such as budgetary constraints may lead to a conclusion that no duty of care exists. In Heyman, Chief Justice Mason stated:
[A] public authority is under no duty of care in relation to decisions which involve or are dictated by financial, economic, social or political factors or constraints. Thus budgetary allocations, and the constraints which they entail in terms of allocation of resources cannot be made the subject of a duty of care. But it may be otherwise … when the courts are called upon to apply a standard of care to action or inaction that is merely the product of administrative discretion, expert or professional opinion, technical standards or general standards of reasonableness.[49]
The Civil Liability Act 2003 (Qld) reinforces some of these issues and reverses some of the recent advancement in this area. Section 35 recognises that "the general allocation of financial or other resources by the authority is not open to challenge" and the authority's "broad range of activities" should also be taken into account. These address recent developments, for example, in Brodie v Singleton Shire Council[50] where the High Court reviewed the reasonableness of the Council's raising and spending of money for road repairs. In Barclay Oysters, Chief Justice Gleeson considered that this case required this but stated that such an examination cannot be "at large" as it is a political matter, but if it is to be reviewed, it can only be done so within limits.[51]
Applying the law to the illustration
The Medical Board was required to consider the application for registration by Dr Patel. It had the power under statute to take certain steps but did not do so. It overlooked or failed to discover that Dr Patel had previous disciplinary proceedings against him. The Board could have either placed restrictions on Dr Patel's practice or not accepted the application at all.
Queensland Health was ultimately responsible for assessing whether Dr Patel was suitable for the position. As the Commissioner described, its internal policies and procedures required it to assess Dr Patel's skills and competence. It could have supervised Dr Patel. It was suggested that steps were deliberately taken to avoid this. Queensland Health also had the ability under statute to discipline and suspend Dr Patel.[52]
Giving consideration to the categories outlined by Justice McHugh in Barclay Oysters (and described above), there seems to be much scope for debate:
1 Was it reasonably foreseeable that a failure to properly assess Dr Patel could result in injury?
2 Did the Medical Board and Queensland Health have the power to control the situation that may bring about the injury?
3 Were patients of Dr Patel vulnerable and did not have the ability to adequately safe guard them?
4 Did the Medical Board know or ought to have known of the existence of the risk? Did Queensland Health know or ought to have known? Was there a specified class of persons, rather than the general public, at risk of harm?
5 Does the relevant legislation impose a duty of care as part of its core functions?
6 Are there other policy issues, such as budgetary constraints?
It appears some of the preliminary questions may be quickly answered in the affirmative. However, it also appears others would be contentious to say the least. Could be said the Medical Board, and possibly to a lesser extent Queensland Health, could have contemplated the specific class of persons? With respect to Queensland Health, did the relevant legislation impose a duty which was breached when it was not exercised?
In Barclay Oysters, the claims against the State and the Council were dismissed despite comments that more could have been and should have been done by the State and the Council to prevent the outbreak of the contamination. Pyrenees was distinguished on the basis that the plaintiff was known to the Council who was aware of and had control over the issue complained of.[53] Similarly, the court distinguished Brodie on similar grounds, in particular, that the Council was directly involved in the management of public roads.[54]
Certainly, the "business" of both the Medical Board and Queensland Health is in the management and supply of health services on safe terms (as per Brodie[55]). However, would it be "so unreal as to border on the absurd" (per Agar -v- Hyde[56]) to owe a duty to such a class of persons, namely those who may be patients?
However, it may be worth considering comments made by the High Court in Mengel that government employees or officers would usually be under a duty of care to ascertain the limits of their powers, where the exercise of such powers may cause foreseeable harm. Should they breach this duty, they will be liable in negligence and the government may be vicariously liable in terms of ordinary principles of tort law. The High Court suggested that there may be "very many circumstances" where authorities could be held liable directly for breach of a duty of care to avoid foreseeable harm by taking steps to ensure that their officers and employees know and observe the limits of their powers.[57]
While other options of recovery are open to any injured party, it would seem extremely unlikely that a court would be called upon to consider these issues. It may be an "opportunity lost" to explore the boundaries of this developing area of law. Recent case law in Canada may be the best we have to consider where any future development may lead.
We now consider some recent cases in Canada that have gone against the traditional limitation of liability of public authorities.[58]
The "traditional" approach in Canada is reflected two decisions of the Supreme Court of Canada, Cooper v Hobart (Cooper)[59] and Edwards v The Law Society of Upper Canada (Edwards),[60] both decided in 2001. Both decisions confirm the view that public agencies have only a limited liability to individual members of the public.
In Cooper, the issue was whether the Registrar of Mortgage Brokers (Registrar), a statutory body responsible for licensing investment bodies, owed a private law duty of care to members of the public who suffered loss as a result of participating in investment ventures carried out by a company licensed by the Registrar. While the Registrar suspended the company, the plaintiffs alleged that the Registrar should have acted earlier and that, if the Registrar had done so, their losses would have been significantly reduced.
In a preliminary proceeding, the Supreme Court found that, in the absence of a duty of care, it was not possible for the defendants to be found liable. This would, in turn, have involved finding that a duty of care existed in circumstances where such a duty had not previously been established.
The Supreme Court declined to find that a new duty of care existed. It stated:
In this case, the factors giving rise to proximity, if they exist, must arise from the statute under which the Registrar is appointed. The statute is the only source of his duties, private of public. . . In this case, the statute does not impose a duty of care on the Registrar to investors with mortgage brokers regulated by the Act. The Registrar's duty is rather to the public as a whole. Indeed, a duty to individual investors would potentially conflict with the Registrar's overarching duty to the public.[61]
The Court went on to state:
Even though the Registrar might reasonably have foreseen that losses to investors in [the company] would result if he was careless in carrying out his duties under the Act, there was insufficient proximity between the Registrar and the investors to ground a prima facie duty of care. The statute cannot be construed to impose a duty of care on the Registrar specific to investments with mortgage brokers. Such a duty would no doubt come at the expense of other important interests, of efficiency and finally at the expense of public confidence in the system as a whole.[62]
The Supreme Court found that the statutory framework, which created a scheme to regulate economic activity, in the public interest, could not be seen to create a duty of care to individuals who relied on the public regulation as a measure of security in investing funds.
The decision in Cooper was applied by the Supreme Court in the subsequent decision in Edwards. In that case, the arose from the plaintiffs' participation in an investment scheme that required them, on the advice of a selling agent, to deposit funds into a solicitor's trust account. Significantly, the plaintiffs were not clients of the solicitor. The plaintiffs suffered a loss when they did not receive the investment in relation to which the payment into the trust account was made. They sued the relevant Law Society, contending that it was the duty of the Law Society, upon discovering an unusual use of a solicitor's trust account, to ensure that it was utilised properly, or to warn persons affected that it was not supervising the particular investment activities involving the trust account. The plaintiffs further argued that the Law Society owed a duty not just to solicitors' clients but to the general public.
The Supreme Court of Canada, in a judgment authored by the same judges as in Cooper, rejected the plaintiffs' claim. The Supreme Court stated:
The Law Society Act is geared for the protection of clients and thereby the public as a whole, it does not mean that the Law Society owed a private law duty of care to a member of the public who deposits money into a solicitor's trust account.[63]
As a result, up until 2001, the Canadian Supreme Court was of the view that public agencies could not be found liable for negligence in fulfilling a general statutory function, such as registration.
In 2004, the Supreme Court adopted a different approach to that in Cooper and Edwards, in the decision of Finney v Barreau du Quebec (Finney). [64] In Finney lodged a complaint with the Barreau (ie the equivalent of the Law Society) in relation to the conduct of her solicitor. The solicitor had only been admitted in 1978 and yet, between 1981 and 1987, had been found guilty of disciplinary offences on at least three separate occasions. In 1990 an inspection committee of the Barreau submitted a report that concluded that he was incompetent. In 1992, the Barreau directed the solicitor to complete a refresher course. However, it took until 1994 for the Barreau to take action to have the solicitor struck off. And then only provisionally!!
The solicitor was eventually found guilty of one of the relevant offences and struck off for a period of five years.
The plaintiff had a history of unsatisfactory dealings with the solicitor. Her first complaint was filed with the Barreau in 1991 and there were subsequent (and separate) complaints. She sued the Barreau. Though she was unsuccessful at first instance, she was successful in the Court of Appeal. The Court of Appeal decision was then upheld by the Supreme Court.
It is significant that the plaintiff succeeded despite the fact that the Barreau had a statutory immunity against actions of the kind brought by the plaintiff. In this context, the Supreme Court stated:
An immunity provision such as the one set out in section 193 of the Professional Code is intended to give professional orders the scope to act and the latitude and discretion that they need in order to perform their duties. In the case of duties relating to the management of disciplinary cases, it would be contrary to the fundamental objective of protecting the public set out in section 23 of the Professional Code if this immunity were interpreted as requiring evidence of malice or intent to harm in order to rebut the presumption of good faith. Gross or serious carelessness is incompatible with good faith. It may, therefore, be concluded that, in the case of the exercise of these case management powers, the requirement that the performance or failure to perform an act have been committed in bad faith is not a bar to an action in damages against a professional order that is subject to the Professional Code.
The point here is that the Supreme Court is stating that gross or serious carelessness on the part of a public body can amount to bad faith or, at the very least, something other than good faith. In the particular case, this operated to undo the statutory immunity, on the basis that, having failed to fulfil its public duty, the Barreau (in effect) did not deserve the statutory immunity, because the very purpose of the statutory immunity was to protect the Barreau in the performance of its public duty. A kind of "use it or lose it" approach.
William S Clark, a Canadian commentator, summed up the effect of Finney as follows:
Thus, the decision can be interpreted to suggest that there is a public law duty to an individual when that public body has a statutory obligation to respond to an individual's complaint (or whatever may trigger the body's duty to act). This statutory obligation to act may give rise to civil liability when the body fails to discharge its statutory obligations. In turn, the duty creates an additional public law duty to a member of the public who has had some meaningful interaction with it. This factual matrix gives rise to a duty, on the part of the public body, to act in good faith towards the individual member of the public. If it fails to carry out its responsibilities in "good faith" towards this member of the public, then an action for damages may lie against the public body for a breach of this public law duty. Liability may be thus found even in the absence of a common law duty of care.[65]
It is relevant to also consider the Supreme Court of Canada's subsequent decision in McLelland v Stewart (Stewart),[66] not the least because it involved misconduct by a medical practitioner. In Stewart, it was alleged a medical practitioner had a long history of sexual misconduct in relation to his female patients. In short, he used deception, coercion, manipulation, and also abused the power and trust he possessed as a result of the doctor/patient relationship, in order to sexually assault his patients. It was also alleged that the College of Physicians and Surgeons of British Columbia (College) had knowledge, dating back 20-odd years, of the allegations but had failed to investigate them or otherwise act on them. It was not until 1995 that the College advised the medical practitioner to always offer to his female patients that they have a chaperone present during examinations. A group of the medical practitioner's former patients sued the College for negligence.[67]
Stewart came before the British Columbia Court of Appeal because the College sought to have the matter dismissed, because it disclosed no reasonable cause of action. Though the decision contains no analysis of the issues, the Court of Appeal dismissed the College's application, on the basis of the Supreme Court's (then) recent decision in Finney. Significantly, the Court of Appeal stated that, in the absence of Finney, it would have dismissed the plaintiffs' action in negligence against the College.[68]
Obviously, we do not suggest that the Canadian cases discussed above have no direct application in Australian jurisdictions. What we do suggest, however, is that Finney demonstrates an approach to the liability of public officers and public authorities that should cause public officers and public authorities to be pleased that similar principles are not applied here. The proposition that a statutory immunity will not operate if a public body fails to carry out its responsibilities in "good faith" and that an action for damages may lie against the public body as a result, for a breach of the body's public law duty, is a sobering one.
* Special Counsel, Phillips Fox, Canberra.
** Special Counsel, Phillips Fox, Brisbane.
[1] Kirby J, in Pyrenees Shire Council v Day (1998) 192 CLR 330 at 397.
[2] Available at http://www.qphci.qld.gov.au/.
[3] Report, paragraph 1.13. See also paragraphs 3.415 to 3.420.
[4] Report, Paragraph 1.9. See also paragraphs 3.66 to 3.138.
[5] Report, Paragraph 1.10.
[6] Report, Paragraph 1.11.
[7] Report, Paragraph 1.6. See paragraph 3.181 to 3.282.
[8] Report, Paragraph 1.16.
[9] Report, Paragraph 1.18. See also 3.306 to 3.359.
[10] Report, Paragraph 1.19.
[11] Report, Paragraph 1.20.
[12] Report, Paragraph 1.21.
[13] Report, Paragraph 1.26.
[14] [2002] VSC 42 at [101].
[15] See discussions for example by Alan Robertson SC in his paper "Liability of Public Officers", AIAL Forum No. 34 and Penelope Watson in her article "Private v Public: Negligence and public authorities", Plaintiff Issue 61 February 2004.
[16] Section 34.
[17] An article that considers this is, for example, Doyle, J and Redwood, J, "The Common Law Liability of Public Authorities: The Interface Between Public and Private Law", (1999) Tort Law Review 30, at 34.
[18] (2002) 211 CLR 540.
[19] (2002) 211 CLR 540, at 253-4.
[20] Kirby, M, "Administrative Review: Beyond the Frontier Marked 'Policy - Lawyers Keep Out'" (1981) 12 Federal Law Review 121.
[21] (1985) 157 CLR 424.
[22] See, for example, Mason J's judgment, at 459-61.
[23] (1995) 185 CLR 307 at 356.
[24] (1995) 185 CLR 307, at 348.
[25] (1995) 185 CLR 307, at 352-3.
[26] See McHugh J in Barclay Oysters (2002) 211 CLR 540 at 575-6
[27] McHugh J in Barclay Oysters (2002) 211 CLR 540 at 576
[28] McHugh J in Barclay Oysters (2002) 211 CLR 540 at 576
[29] (1995) 185 CLR 307, at 356.
[30] (1995) 185 CLR 307 at 343-4
[31] (1998) 192 CLR 330.
[32] (1998) 192 CLR 330 at 371. See also Gummow J at 394-5.
[33] (1999) 200 CLR 1.
[34] (1999) 200 CLR 1, at 35. His Honour agreed with the proposition by Doyle QC that there "is no reason why a valid decision cannot be subject to a duty of care, and no reason why an invalid decision should more readily attract a duty of care." See also Robertson, A, "Liability of Public Officers" (2002) 34 AIAL Forum 25.
[35] (2002) at 211 CLR 540 at 574.
[36] See Puntoriero v Water Administration Ministerial Corporation (1999) 199 CLR 575 and Australian National Airlines Commission v Newman (1987) 162 CLR 466.
[37] Section 6 Health Practitioners (Professional Standards) Act 1999
[38] Section 4
[39] (2002) 211 CLR 540 at 576
[40] (1999) 200 CLR 1 at 39
[41] (2002) 211 CLR 540 at 577-578
[42] (2002) 211 CLR 540 at 578
[43] Rejected by the High Court in Hill v Van Erp (1997) 188 CLR 159 and Perre v Apand Pty Ltd (1999) 198 CLR 180
[44] Perre v Apand Pty Ltd (1999) 198 CLR 180
[45] See discussion by K Amirthalingam 'Negligence and public authorities: A pearl in the oyster or another Greek tragedy?' (2003) 11 Torts Law Journal 1
[46] (2002) 211 CLR 540 at 578
[47] (2000) 201 CLR 552.
[48] (2000) 201 CLR 552, at 578 (per Gaudron, McHugh, Gummow and Hayne JJ).
[49] (1985) 157 CLR 424 at 469.
[50] (2001) 206 CLR 512.
[51] (2002) 211 CLR 540 at 554.
[52] Sections 87 and 89 Public Service Act (Qld) 1996
[53] (2002) 211 CLR 540 at 598
[54] (2002) 211 CLR 540 at 598
[55] (2001) 206 CLR 512
[56] (2000) 201 CLR 552
[57] (1995) 185 CLR 307, at 353.
[58] For discussion and analysis of the Canadian cases, see Clark, WS, "Civil liability for administrative inaction and negligent performance of public duty" (October 2005), a publication of the Continuing Legal Education Society of British Columbia that is available at www.cle.bc.ca/cle.
[59] [2001] 3 SCR 537.
[60] [2001] 2 SCR 562.
[61] [2001] 3 SCR 537, at para 43 (per McLachlin CJ and Major J).
[62] [2001] 3 SCR 537, at para 50 (per McLachlin CJ and Major J).
[63] [2001] 2 SCR 562, at para 14 (per McLachlin CJ and Major J).
[64] [2004] 2 SCR 17.
[65] See Clark, WS, "Civil liability for administrative inaction and negligent performance of public duty"(October 2005), publication of the Continuing Legal Education Society of British Columbia, available at www.cle.bc.ca/cle.
[66] (2003) 229 DLR (4th) 342.
[67] It should be noted that the plaintiffs also sued the College for misfeasance in public office but the Court of Appeal allowed the College's application to dismiss that part of the claim.
[68] (2003) 229 DLR (4th) 342, at para 14.