X STATUTORY ‘POLICY ’ DEFENCES AND WEDNESBURY
UNREASONABLENESS
It will be recalled that the Ipp
Report recommended a specific
‘policy defence’ where a judge thought that it was ‘appropriate’ to allow such a
defence (and therefore characterised the defendant’s acts or omissions as the
performance of a ‘public function’).[222] ‘Defence’
was something of a misnomer, since it would not have negated a duty of care.
Rather, it would have lowered the standard of care to Wednesbury unreasonableness
— the relevant act or omission would be in breach of a duty of care only if it
was so unreasonable that no reasonable authority in the defendant’s position
would have behaved in the same way.[223]
Only two states adopted those recommendations from the Ipp
Report, albeit with some changes. As noted above, Victoria has an Ipp-style
policy ‘defence’, but only for road authorities and with no mention of ‘public
function’.[224] WA
has adopted a general ‘policy defence’ for claims based on ‘policy’ decisions
arising out of the performance or non-performance of ‘public functions’. As the Ipp
Report recommended, its effect is
to lower the standard of care to Wednesbury unreasonableness.[225] ‘Public
function’ is undefined, although there is a definition of ‘policy decision’,
which means ‘a decision based substantially on financial, economic, political or
social factors or constraints’.[226] No
other jurisdiction has a specific policy defence, but several have adopted Wednesbury for
specific contexts.
The first context into which Wednesbury has
been imported is the action for breach of statutory duty. That might raise a few
eyebrows in Australia because the action for breach of statutory duty has almost
no life in this country beyond its original context of workplace injuries;[227] it
has been largely the force of precedent which keeps it alive and well in that
area.[228] The Civil
Liability Act 2002 (NSW)
does not apply to employees’ negligence claims against their employers,[229] which
further minimises the practical impact of s
43. That section states that in
actions for breach of statutory duty against public or other authorities,
there is no breach unless the defendant’s act or omission was ‘so unreasonable
that no authority having the functions of the [defendant] could properly
consider the act or omission to be a reasonable exercise of its functions.’[230] It
is fortunate that this section has so little practical effect. It is
unprincipled in two ways. First, it effects a generic reduction of the different
standards of care otherwise imposed by a range of actionable duties and lowers
them so far as to make the action useless. Secondly, it applies only for the
benefit of public defendants and others exercising public official functions.
The same actionable duties lying upon private defendants remain unaltered.[231]
The Ipp Report touched
lightly on the action for breach of statutory duty but its recommendation was
quite different. It recommended that where the standard of care prescribed by an
actionable statutory duty is equivalent to the standard which would apply in
negligence law, then a plaintiff should not be able to outflank the Act’s
limitations on negligence actions by suing on the statute.[232]
Victoria has adopted the Wednesbury standard
for actions against public authori-ties for breach of statutory duty but not
where those duties prescribe an absolute standard of care.[233]
WA has a provision relating to actions against public defendants for breach of
statutory duty but it does not alter the standard of care. It merely requires
that ‘the provisions and policy of the enactment in which the duty is created
are compatible with the existence of ’ a liability for breach per se.[234]
NSW has transplanted Wednesbury into
one more section dealing with the liability of public and other authorities. Section
43A of the Civil
Liability Act 2002 (NSW)
applies to the extent that a claim is based upon the exercise or failure to
exercise a ‘special statutory power’. Where it applies, the standard of care is
reduced to Wednesbury’s level,
so that the defendant will be in breach only where its act or omission 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’.[235] The
section was rushed through Parliament to forestall further claims similar to the
plaintiff’s claim in Hunter Area
Health Service v Presland (‘Presland’).[236]
In Presland, police and others
had forcibly subdued Mr Presland whilst he was in the midst of a violent and
psychotic episode. They took him to a public hospital’s psychiatrist, who
decided to release him, negligently as it was found by the trial judge.[237] The
hospital would have been liable in negligence if he had harmed either himself or
others, and if he or they (respectively) had sued. But this case was unusual
because there was no claim for personal injury or death.
Mr Presland killed another soon after the doctor let him go but his insanity
meant that he was found not guilty. He spent 18 months in detention as a
forensic patient and he sought damages for the greater part of that loss of
liberty.[238] There
was no doubting that the doctor owed a duty of care to Mr Presland, but the
Court of Appeal held (by a majority) that the duty’s scope did not extend to the
sort of loss (namely, loss of liberty) that was the basis of the action.[239] Policy
reasons were given.[240] The
Premier saw the case as an attempt by Mr Presland to profit from his crime.[241] The Civil
Liability Act 2002 (NSW)
already had provisions making it harder for criminals to sue, but Mr Presland
was not a criminal. Those provisions were amended at the same time as s
43A was inserted into the
principal Act. It goes further than discriminating against undeserving
plaintiffs because it ensures that no-one could
again sue the health authorities in certain circumstances unless they could
establish gross negligence. There is nothing in Hansard to explain why the
government thought it fit to lower the doctor’s standard of care to third
parties. The only hint as to why its Bill changed more than just the scope of
the duty of care was a repeated assertion that mental health doctors have a
difficult task because they have to balance clinical and social concerns against
a number of statutory criteria, including a principle of least intrusive medical
intervention.[242]
It is important to understand s 43A’s scope. It applies to ‘special statutory
powers’, which are defined as follows:
(2) A special statutory power is a power:
(a) that is conferred by or under a statute, and
(b) that is of a kind that persons generally are not
authorised to exercise without specific statutory authority.[243]
We know from Hansard that the section was intended to apply to doctors
performing certification roles under the mental health legislation.[244] By
analogy and equally unfortunately, it may also apply in the context of police
watch-houses and prisons, but nothing is certain.
The definition of ‘special statutory power’ talks separately of power and authority.
The idea appears to have been to distinguish statutory authority per se (such as
a statutory corporation’s authority to operate a recreational facility) from
statutes permitting coercive acts or non-consensual rights-depriving acts. If
that is correct, then one of the limits to the section’s scope is that the
defendant must have received statutory authority to act in a way that changes,
creates or alters people’s legal status or rights or obligations without their
consent.[245]
Statutes often prevent ‘persons generally’ from doing things unless they hold a
relevant licence. It might be possible to treat the licence as an ‘authority’
but, without more, the licensee has no ‘power’.
This construction is further supported by the section’s restrictive definition
of ‘special statutory power’ to one that needs specific statutory
authority. McHugh J used that very term in Puntoriero
v Water Administration Ministerial Corpora- tion, which upheld the right to
sue in negligence despite a section immunising an authority from any claim for
loss suffered ‘as a consequence of the exercise of [statutory] power’, where
‘power’ included a reference to a right, authority and duty.[246] The
majority’s approach was to restrict the immunity to the conse- quences of
coercive or non-consensual acts, with the traditional result that it did not
immunise negligence.[247] Section
43A cannot be read down in exactly the same way because its evident intent is to
water down the negligence standard in some situations, which means that it does apply
to negligence actions. However, it might be possible to derive from the need for
a specific statutory
authority a limitation to the coercive or non-consensual act itself, rather than
its accompany- ing acts or omissions. In Mr Presland’s case, for example, a
lower standard of care would apply to the certification function, but not to any
decisions about medication.[248]
In addition to the requirement that a person be authorised to exercise a power,
the definition also requires a comparison between the defendant’s position and
‘persons generally’.[249] The
exact nature of this comparison is unclear. Police have lots of coercive powers
conferred by statute, but private persons still retain vestigial police powers.[250] Teachers
in government schools have prescribed disciplinary powers over their students,
which are different from the powers of private school teachers.[251]
In summary, five jurisdictions — ACT, NSW, Queensland, Tasmania and Victoria —
have adopted the Wednesbury standard
for actions for breach of statutory duty. Victoria also has adopted this
standard for road authorities, while WA is unique in having it as part of an Ipp-style
generic policy defence. Only NSW has it for special statutory powers. The
question which now arises is how Wednesbury might
work in practice.
The English test comes from Lord Greene MR’s judgment in Associated
Provincial Picture Houses Ltd v Wednesbury Corporation,[252] although
there are those on the High Court who would prefer one to cite Dixon J’s
judgment a year later in Avon
Downs Pty Ltd v Federal Commissioner of Taxation.[253] The
grounds of judicial review of administrative action have ebbed and flowed, but
there is one constant. It is not the function of the judicial review court to
deter- mine the merits of the exercise of an administrative power. The court is
limited to deciding whether that exercise was lawful, and it remains lawful even
if the court thinks that it would have been better exercised in another way.
Only the grossest unreasonableness will invalidate the exercise of a statutory
discretion.[254]
This is most commonly expressed as requiring that the decision be so unreason-
able that no reasonable decision-maker in the same position would have made that
decision. Despite its evident circularity, it is that version which has been
transplanted into the tort reform legislation.
Legal transplants are notoriously tricky, and this transplantation is no excep-
tion. Administrative decision-makers must typically exercise their statutory
discretions without any sense of personal self-interest. Indeed, some of the
more pronounced forms of self-interest — such as personal advancement, personal
convenience, personal dislike of the other party, and the wish to make a profit
— might well count against the validity of a purported exercise of public power
without the need to resort to Wednesbury unreasonableness.[255] When
their decisions are measured against Wednesbury,
the court does not balance the decision-maker’s interests against the interests
of the person affected by the decision. Negligence law by contrast tries to
strike a balance between the interests of plaintiff and defendant. The verbal
formula is the same, therefore, but transplanting Wednesbury into
negligence soil will mean that it has a wholly different operation. Before its
transplant, Wednesbury had
nothing to say to decision-makers about being careful to avoid harming others.[256]
It might have been more straightforward to draft the new standard
simply as ‘gross negligence’. The Corporate
Manslaughter and Corporate Homicide Act 2007 (UK)
provides a drafting model. It criminalises deaths caused by the activities of
organisations where the fault lies with poor management or organi- sation by
senior management.[257] There
has to be a breach of one of a number of listed common law duties of care,[258]
and the breach has to be ‘gross’.[259] It
is gross if the relevant conduct ‘falls far below what can reasonably be
expected of the organisation in the circumstances’.[260]
Evidence is rarely led in judicial review cases to establish (or contradict) the
reasonableness of a discretionary judgment on the decision-maker’s part. When it
is led, there are real problems as to how far (if at all) it can include
evidence which is ‘fresh’ in the sense that it was unavailable at the time of
the original decision.[261] That
issue should not be relevant to a negligence court’s assessment of whether the
defendant’s act or omission fell far below what one should reasonably expect of
a defendant authority in the same position.
It is submitted that it should be possible to establish gross negligence even if
there is no hard evidence that a public authority in the same position would
have acted differently. The test is framed in terms of whether no reasonable authority
would have acted as the defendant did. In one respect it is tougher than the
approach taken in Bolam v Friern
Hospital Management Committee,[262] which
asks whether a professional’s behaviour was standard. It is also tougher than
the legislated terms that now apply to professional negligence actions, which is
whether the professional acted according to widely
accepted peer professional
standards that were not ‘irrational’.[263] Whether
all other public authorities would have done what the defendant did is a matter
for evidence. However, whether that would have been reasonable is
surely a normative judgment for the court.