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MISFEASANCE IN PUBLIC OFFICE, EXEMPLARY DAMAGES AND VICARIOUS LIABILITY - Jim Davis* - 2010Introduction Although misfeasance in public office had been recognised and applied occasionally by State Supreme Courts it was not until 1995 that it was first considered by the High Court of Australia in Northern Territory v Mengel.1 That was followed, in Australia, by the High Courtdecision in Sanders v Snell,2 which added at least some discussion of the tort. The NewZealand Court of Appeal also considered the tort at some length, in Garrett v Attorney-General ,3 and rather more briefly in Hobson v Attorney-General,4 while the House of Lordsspent a considerable amount of time dealing with a variety of issues concerning this tort, in Three Rivers District Council v Bank of England (No 3) .5 However, despite the extent ofdiscussion in those cases, in none of them was the defendant found to have committed the tort; in each case, the respective courts were dealing with matters of principle, rather than considering how those principles might apply to a particular set of facts. In the light both of the fact that this tort has had only a relatively brief exposure to judicial consideration, and that such exposure is relatively recent, it is not surprising that there are some aspects of liability that have not been fully developed. It is my purpose in this paper to consider more fully two of the areas where some doubt remains: (a) the circumstances in which an employer may be vicariously liable for the commission of this tort; and (b) whether such vicarious liability extends to a liability to pay exemplary damages. The reason for considering these two aspects of the tort is that this head of liability is one that can be imposed only on one who holds a “public office” – a phrase which encompassesthose who owe duties to members of the public, and who exercise those powers and functions for the benefit of the public. Hence, the rationale for this liability has been put on the basis that in a legal system based on the rule of law, executive and administrative power must be exercised for the public good, and not for an ulterior or improper purpose.6 However, it is my submission that an employer of such a public officer is likely to be vicariously liable only in limited circumstances, and that such vicarious liability does not extend to the awarding of exemplary damages, with the result that many who have suffered loss by some act of maladministration will be deterred from taking proceedings, as they might find that the public officer who is solely liable does not have the resources to provide the compensation or other damages which have been awarded. The Tort of misfeasance in public office The tort of misfeasance in public office permits an individual to recover for the loss or damage suffered consequent upon action taken by the holder of a public office, if the officer acted maliciously or knew that the action was beyond power and was likely to harm the plaintiff. The action is not confined to positive conduct by the defendant, but includes a deliberate failure to fulfil a public duty cast upon him or her. It must be stressed that this action requires, as one element, some form of intention to cause harm to the plaintiff. It has been argued on occasion that one who suffers financial harm as the direct consequence of administrative action which turns out to be invalid may recover that loss by an action in tort, but that argument has been steadfastly rejected.7 No action lies against a public officer who causes loss by reason of an act which is later found to be without force, so long as the officer acted in good faith and without knowledge of the invalidity.8 Each of the elements of liability need to be considered in turn. However, before undertaking that consideration, it is useful to consider a relatively recent case, in which the action was successful, in order to get an overall view of liability under this tort. A Case study: De Reus v Gray De Reus v Gray 9serves to illustrate many of the aspects of liability under this tort and is,therefore, an excellent vehicle to introduce a discussion of this form of liability. Ms Grey was a single mother of four children who had accrued some $400 of parking fines but, being unable to pay that amount, a warrant was issued for her arrest and imprisonment. The warrant was executed by WPC Pike, who took Ms Gray to the Narre Warren Police Station, where Sgt De Reus, the officer at the “Charge Counter”, said that he wanted Ms Gray stripsearched.WPC Pike carried out this procedure, assisted by a probationary woman constable. Sgt De Reus gave no reason for this search, and Ms Gray said nothing in response to the order for her to be strip-searched, because she thought that if she resisted she would be forced to comply. The search involved Ms Gray being asked to remove all her clothes, which she did. While the clothes were being searched, she was not given any alternative clothing. Furthermore, the search took place, not in a cell or enclosed room, but at the end of a corridor, adjacent to a cell which Ms Gray thought (apparently incorrectly) had some sort of two-way mirror in the door, through which she could be observed. In all, Ms Gray was detained for some three to four hours before being released. On the following morning she returned to the Police Station to do two hours community work, in expiation of her parking fines. She sued for damages for assault and negligence, as well as for misfeasance in public office. She succeeded in all three causes of action. To summarise the elements of the action for misfeasance in public office considered more fully below, the Court accepted that Sgt De Reus was the holder of a public office for these purposes, and the jury found that he either knew that he was not authorised to conduct a strip-search in these circumstances, or recklessly disregarded the means of ascertaining whether he had that power, and that his conduct was likely to cause harm to Ms Gray. Holder of a public office As already mentioned, this tort is capable of being committed only by a person or body who fulfils some public function, but the precise circumstances in which a defendant may come within the ambit of the wrong have yet to be authoritatively determined. One can do little more than provide some examples of those who come either within, or outside, this concept. A public officer includes government employees undertaking duties for the purpose of eradicating diseases in stock,10 a Minister of the Crown either when deciding to withdraw funding from a women’s shelter 11 or when considering whether or not to deport a noncitizen,carrying out coercive duties15 or investigating alleged criminal activity.16 However, the chief executive officer of a government department is not regarded as the holder of a public office for these purposes when exercising managerial functions in relation to the staff of the department.17 The same is true of counsel briefed to prosecute for the Crown and an instructing solicitor, because neither, in the course of performing their duties, exercises any power which might be misused.18 So too a subordinate officer of a government department whose task is to prepare a report on the conduct of a fellow officer is not a public officer for these purposes.19 A body corporate is just as capable of committing this tort as an individual. So, a statutory corporation has accepted that it may be liable, if the other elements of the tort were to be proved,20 and a State, acting through its Ministers, its emanations and its officers has been held liable.21 The same has been held to be true for a local body when exercising a public function such as those relating to town planning.22 But the Society of Lloyd’s, in carrying outits insurance business, is not a public officer for these purposes, as its operations are commercial, not governmental.23 Of course, if it is a group of people that is sued — such as the members of a borough ormunicipal council — to prove the necessary bad faith on the part of all the members of thegroup may be difficult, but certainly not impossible.24 Indeed, it appears that, when a local body is purporting to carry out a power which is for the benefit of the borough or municipality as a whole, it is irrelevant that in the particular instance the power is derived from a lease rather than from legislation.25 Acting in bad faith The second element of this tort which the plaintiff must prove is that the defendant acted in bad faith. This may be established in either of two ways.26 First, that the defendant was motivated by a purpose quite foreign to that for which the public power or duty had been bestowed, and that the impugned conduct was undertaken with the intention of harming the plaintiff.27 Secondly, and alternatively, the defendant’s lack of good faith will have beendemonstrated if the acts or omissions complained of were undertaken in the knowledge that they were beyond power28 or with reckless disregard of that fact, and were likely to harm the plaintiff.29 A matter which has not yet been conclusively determined is the extent to which a defendant who acts in conscious disregard of his or her authority must direct the acts to harming the plaintiff. Despite some judicial observations which may suggest otherwise,30 it is not sufficient that the defendant merely knows that he or she has acted beyond power and that damage has consequently been caused to the plaintiff.31 The High Court of Australia, in Northern Territory v Mengel ,32 inclined to the view that the defendant’s ultra vires acts musthave been carried out with the intention of harming the plaintiff or with reckless indifference to the harm that was likely to ensue,33 while the New Zealand Court of Appeal, in Garrett vAttorney-General ,34 would have limited the tort somewhat, by requiring the plaintiff to showthat the public officer actually knew of the consequences for the plaintiff of the disregard of duty, or was recklessly indifferent to those consequences. Subsequently, the House of Lords, in Three Rivers District Council v Bank of England (No 3),35 agreed with the NewZealand Court of Appeal that it is necessary for the plaintiff to show that the defendant has acted in the knowledge that his or her act would probably injure the plaintiff.36 More recently, the Supreme Court of Canada adopted the same approach as these latter two courts, saying that one element of the tort is that ‘the defendant must have been subjectively reckless orwilfully blind as to the possibility that harm was a likely consequence of the alleged misconduct.’37Whatever precise formulation is eventually decided upon, it may be that Gray J, in Trevorrowv South Australia ,38 read too much into earlier comments of the High Court on this tort. HisHonour concluded39 that the State, through its Ministers, the members of the Aborigines Protection Board and other officers, knew that it was unlawful to remove the plaintiff, a 13 month old Aboriginal child, from his natural family, and place him with a non-indigenous family for long-term fostering, and thus fulfilled the first aspect of liability. But in dealing with the intentions of those who authorised that removal, his Honour said that they either foresaw the risks to the plaintiff’s health from that removal, or ought to have foreseen those risks. 40 Itis not clear that there was a finding of either an intention to harm the plaintiff or reckless indifference to whether harm would ensue. Damage This tort is derived from the action on the case, with the result that the plaintiff must show that loss or damage has been suffered. Hence when a prisoner complained that prison officers had wrongfully opened his correspondence with his legal advisers, the House of Lords held that, although the officers had acted beyond power and in bad faith, the plaintiff could not show that he had suffered material damage and hence his claim was dismissed.41 The damage which is the gist of the action may assume a variety of different forms; it includes the adverse effects of the administrative action on the plaintiff’s person – whetherthe injury is physical42 or psychological43 - or on his or her property44 or reputation.45 Thus a person may sue for the revocation of a licence to sell alcohol46 or to pilot a ship47 or to import turkeys.48 The action also lies for damage resulting from striking a dentist off the register of practitioners,49 forcing the closure of an hotel,50 refusing to acknowledge the legality of a tax minimisation scheme,51 or denying consent to a change of use of land.52 Vicarious liability A plaintiff who seeks redress under this tort, and brings the proceedings against the employer of the perpetrator, faces a number of difficulties in seeking to impose vicarious liability on the employer. First, if the public officer who is alleged to have committed the tort is employed by, or in the service of, the Crown, the latter will not be vicariously liable if the tortfeasor, in the course of committing the acts or omissions which constitute the relevant tort, was carrying out an independent duty cast upon him or her by the law. However, this rule has been abrogated with respect to the conduct of police officers. In all jurisdictions in Australia, and in New Zealand, police officers may render the Crown vicariously liable for torts committed by them in the exercise, or purported exercise, of their duty. Another difficulty which a plaintiff faces, even if the tortfeasor was not exercising an independent discretion, is that vicarious liability still requires that the employee be acting in the course of employment in order to fix the employer with liability. But this tort is committed only when the employee is either using his or her position for a purpose quite foreign to that for which it had been bestowed, or is acting in conscious disregard of his or her lack of authority. In neither case, it may be argued, is the employee’s conduct in the course of employment.The “independent duty” rule, its abrogation for police officers, and the question of whatcomes within the course of employment for these purposes may each be considered in turn. The "independent duty” rule This rule is based on the rather dubious notion that a public employee who is obeying the authority of an Act of Parliament is not at that time subject to the control of the employer, and thus liability ought not to be imposed on that employer.53 These comments were made at a time when the general immunity of the Crown had only recently been removed,54 and it is understandable that a degree of caution was exercised in re-imposing liability on to the Crown. More recently, the rule has come under sustained criticism,55 since it transfers the plaintiff’s loss to an individual who is unlikely to be able to d istribute that loss, rather thanputting the liability on the Crown, where it could be readily absorbed. In view of such comments, it is not surprising that this anomalous rule has been abrogated completely in New South Wales,56 South Australia57 and New Zealand,58 and proposed for abolition in Victoria,59 Queensland60 and with respect to the Crown in right of the Commonwealth,61 although none of those proposals has yet been implemented. In those jurisdictions where it has not been abrogated, the rule has been applied to negative vicarious liability in the case of magistrates,62 legal aid officers,63 Crown prosecutors,64 collectors of customs,65 the Commissioner of Taxation66 and the former Director of Native Affairs in the Northern Territory67 but has not been applied to school teachers68 nor to such statutory office-holders as the Comptroller-General of Prisons69 or the Director of Community Welfare.70 The exception may also apply to a Minister of the Crown in the conduct of his or her portfolio.71 Vicarious liability for police officers At common law, the above “independent duty” rule applied to police officers while carrying out functions special to their appointment.72 However, in all Australian jurisdictions that rule has been abrogated by statute, and the Crown is vicariously liable for torts committed by police officers in the exercise or purported exercise of their duty.73 The legislation for the Commonwealth and Queensland treats the Crown, for all purposes, as a joint tortfeasor with the police officer.74 The legislation in the other jurisdictions provides that if a police officer is alleged to have committed a tort, he or she does not incur any civil liability, and that such liability attaches instead to the State or Territory. However, in all jurisdictions other than New South Wales, that transfer of liability applies only when the police officer was acting in “good faith”, 75 orhonestly76 or “without corruption or malice”.77As a matter of statutory interpretation, this limitation renders it unlikely that the Crown would be vicariously liable for a police officer who had committed the tort of misfeasance in public office. As Evans J, in the Supreme Court of Tasmania, said in Holloway v Tasmania,78 inorder for the plaintiffs to establish liability “for the tort of misfeasance in public office, theymust prove that [the defendant’s] conduct was otherwise than an honest attempt to perform the functions of his office. Such conduct would not be in good faith for the purposes of” thelegislation. This view was upheld on appeal to the Full Court.79 Similarly, in Victoria vHorvath ,80 the Court of Appeal considered that the conduct of a police officer warranting theaward of exemplary damages must necessarily be the antithesis of conduct for which the legislation provides immunity. But as a matter of practice, the State may, if it wishes, concede the point. Thus, in De Reusv Gray ,81 the action for misfeasance in public office which I discussed earlier and in whichthe State was joined with the police officers as a defendant, Winneke P noted that admissions were made by the State “of the relevant facts necessary to transfer to the State any liability incurred by the two police officers … in accordance with [the relevant legislation].” The Course of employment Vicarious liability is established by showing that the alleged tortfeasor (a) is an employee of the defendant; and (b) committed the tort in the course of that employment.82 Assuming that a tortfeasor is, for these purposes, an employee, because he or she is not regarded as exercising an independent duty, it is still necessary to show that the impugned conduct is within the course of employment. Although authority is sparse, it is my contention that the courts in Australia would be unlikely to find that an employee who commits this tort fulfils this requirement. The only High Court comment directly in point is that made by the majority of that Court, in Northern Territory v Mengel ,83 that “although the tort is the tort of a public officer, he or she isliable personally and, unless there is de facto authority, there will ordinarily only be personal liability.” The Full Court in South Australia made the same point, in Rogers v Legal ServicesCommission ,84 that because the tort is one of intention, the employer would not normally beliable unless it had authorised the conduct, at least impliedly, an authorisation which would be difficult to establish.85 The House of Lords appears to be more ready to find vicarious liability. Lord Jauncey, in Racz v Home Office,86 was prepared to concede – for the purposeof refusing to strike out a statement of claim – that if (in that case) prison officers wereshown to have been engaged in a misguided and unauthorised method of performing their authorised duties, that might be sufficient to impose vicarious liability on the respondent.87 It might, however, be argued that if the prison officers’ lack of authority were “misguided”, they would be unlikely to have the necessary knowledge of, or reckless indifference to, that fact, and therefore not be liable in any event. Of course, the whole matter of vicarious liability for deliberate conduct has been considered by the High Court in New South Wales v Lepore.88 But the principles to be derived from thevarious judgments in that case are not easy to state, and do not appear to support a finding of vicarious liability for a tort such as misfeasance in public office. Thus, Gleeson CJ89 and Kirby J90 were of the view that vicarious liability might be imposed if there is a sufficiently close connection betwe en the tortfeasor’s conduct and the type of conduct which he or shewas engaged to perform. But misfeasance in public office is committed when the tortfeasor is either knowingly going beyond what he or she is authorised to do, and acting in such a way as to be likely to harm the plaintiff, or is motivated by a purpose which is quite foreign to that for which the power or duty has been bestowed. In either case, it is submitted, any connection between that conduct and that for which the employee was engaged is no more than temporal. Similarly, while Gummow and Hayne JJ91 were prepared to allow vicarious liability for some intentional torts of an employee, their Honours considered that such liability should not be extended beyond the two kinds of case identified by Dixon J in Deatons Pty Ltd v Flew:92It is suggested that the commission of the tort of misfeasance in public office does not come within either of those kinds of case. Vicarious liability and exemplary damages Since the tort of misfeasance in public office is founded on the ill-will of the defendant, it is one which is peculiarly appropriate for the award of exemplary damages. But the purposes of awarding exemplary damages have been variously described as imposing punishment on the defendant for a high- handed disregard of the plaintiff’s rights, deterring the defendant inorder to prevent him or her from reaping a gain from the wrongdoing, assuaging any feelings on the part of the plaintiff to seek revenge for the hurt done, and marking the condemnation of the court for the defendant’s conduct. 93 Such purposes appear not to be applicable to anemployer whose only connection with the commission of the tort is the fact of employing the tortfeasor. In the light of my submission above, that an individual who commits the tort of misfeasance in public office is unlikely to render his or her employer vicariously liable, it might be thought that any discussion of vicarious liability for exemplary damages is unnecessary. If the employer is not vicariously liable for compensatory damages, I can see no basis for such an employer being liable for exemplary damages. However, I am prepared to concede that that submission as to vicarious liability for compensatory damages may not be correct. If that is the case, and if an employer is vicariously liable for compensatory damages, I submit that there are two bases at least for arguing that such an employer would also be liable for any exemplary damages that may be awarded. Before considering those two bases for the award of exemplary damages against an employer, it is necessary to refer briefly to the legislation mentioned above, which renders governments liable for the torts of police officers. In Relation to police officers Of the legislation discussed above which renders a government liable for the torts of a police officer, four jurisdictions expressly proscribe that liability extending to the payment of exemplary damages. In the Commonwealth and Queensland – where the legislation treats the Crown and thepolice officer as joint tortfeasors – that joint liability does not “extend to a liability to paydamages in the nature of punit ive damages”,94 thereby leaving the police officer as the onlyone liable to pay such damages. In Western Australia, where the Crown is liable, instead of the police officer, for damages arising from the officer’s tortious conduct, if done “without corrupti on or malice”, any such substitution of liability “does not extend to exemplary orpunitive damages.” 95 And in the Northern Territory, where the legislation merely imposesvicarious liability on the Territory for the conduct of police officers, that liability does not extend to one to pay exemplary or punitive damages.96 In both of the two last-named jurisdictions, the individual police officer remains liable for exemplary damages. Despite these provisions, it can scarcely be said that there is any national legislative policy against rendering a government liable for exemplary damages based solely on the conduct of an employee. In the other four States – New South Wales, South Australia, Victoria andTasmania – it appears that if the State is liable for compensatory damages for the conduct ofa police officer,97 it will also be liable for such exemplary damages as may be awarded.98 In Relation to other holders of public office Assuming that the tortfeasor who has committed misfeasance in public office is not exercising an independent duty, and therefore may render his or her employer vicariously liable, and assuming further that, despite having either knowingly gone beyond what he or she is authorised to do, and acting in such a way as to be likely to harm the plaintiff, or being motivated by a purpose which is quite foreign to that for which the power or duty has been bestowed, the tortfeasor is nevertheless found to have rendered his or her employer vicariously liable for any compensatory damages, the question remains whether such conduct may render the employer also vicariously liable for exemplary damages. It is submitted that there are two arguments – each quite separate from the other – whichsupport an employer’s vicarious liability for exemplary damages. The first argument is based on comments of the High Court in New South Wales v Ibbett.99Police officers had trespassed on Mrs Ibbett’s property, and in her action against the State she was awarded exemplary, as well as compensatory, damages in the District Court, an award which was upheld by the Court of Appeal. The State appealed to the High Court, one of its arguments being that it was wrong in principle to “fix the State with vicarious liability for the conduct of persons who are not before the court, who have not been identified, whose conduct is not the subject of allegations in the pleadings, whose conduct has not been investigated at the trial and against whom no specific findings have been made.” 100 Aunanimous High Court rejected the State’s submiss ion, and quoted with approval thecomments of Priestley JA in Adams v Kennedy,101 that the amount of exemplary damagesawarded against the State for the conduct of police officers The court noted that similar views had been expressed by Lord Devlin in Rookes vBarnard ,102 by Lord Hope in Kuddus v Chief Constable of Leicestershire Constabulary('Kuddus') ,103 and by the Federal Court of Appeal in Canada, in Peeters v Canada.104 Thecomments of Lord Hope in Kuddus have since been followed by the English Court of Appealin Rowlands v Chief Constable of Merseyside Police,105 in holding the defendant vicariouslyliable for exemplary damages awarded to a plaintiff who had succeeded in an action for assault, false imprisonment and malicious prosecution. In light of the fact that Kuddus was an action for misfeasance in public office, it might be saidthat the High Court’ s approval of the views expressed there is authority for the propositionthat an award of exemplary damages against the Crown as an employer serves the useful purpose of bringing it home to senior officers in a position of control within the Public Service that conduct meriting the award of such damages by junior officers in public employment will not be tolerated, and that the senior officers must maintain discipline and proper behaviour at all times. The second argument in support of an employer’s vicari ous liability for exemplary damagesdepends upon identifying the theory by which vicarious liability is imposed in any particular situation. There are two such theories. The first is that it is only the acts of the employee – and not hisor her liability – which is imputed to the employer (the so-called “master’s tort” theory); thesecond, a theory of strict liability, would impute to the employer the wrong which the employee has committed in the course of employment.106 It is well known that in DarlingIsland Stevedoring & Lighterage Co Ltd v Long ('Darling Island') ,107 while Kitto and TaylorJJ108 supported the first of these theories, Fullagar J109supported the second. The second theory is now settled law in England110 and, it is suggested, in Australia. Subsequent to the Darling Island case, Windeyer J in Parker v Commonwealth111 said thatan employer “is only liable for the acts or omissions of an employee if the employee would himself be liable”, a view subsequently followed by State courts. 112 More recently, the HighCourt, in Hollis v Vabu Pty Ltd,113 acknowledged the correctness of the view expressed byFullagar J in the Darling Island case, that the “modern doctrine respecting the liability of anemployer for the torts of an employee was adopted … as a matter of policy.In that case, if an employee has committed the tort of misfeasance in public office in such circumstances as to merit the plaintiff being awarded exemplary damages, and if, further, that tort was committed in the course of employment, there is no difficulty in saying that since the wrong of the employee merited the award of both compensatory and exemplary damages, that wrong, and the concomitant liability for damages, is transferred to the employer by the operation of the doctrine of vicarious liability. Furthermore, an award of exemplary damages made against an employer would meet many of the purposes of such an award.114 It would assuage any feelings on the part of the plaintiff for revenge, it would mark the condemnation of the court for the conduct complained of and, as mentioned above, it would fulfil the deterrent purpose by seeking to ensure that senior officers in an organisation maintain discipline and proper behaviour at all times. Conclusion In summary, if an individual (the tortfeasor) has committed misfeasance in public office, the Crown: will not be liable for compensatory damages if:o the tortfeasor is not a police officer, and: was exercising an independent function; or was acting outside the course of employment;o the tortfeasor is a police officer, and the fact of the commission of the tort (havingbeen in “bad faith”) takes him or her out of the protection of the legislation relating to police officers (in SA, Tas, Vic, WA and NT). will not be liable for exemplary damages if:o it is not liable for compensatory damages; oro the tortfeasor is a police officer, and the legislation of the Commonwealth,Queensland, Western Australia or the Northern Territory applies. |
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