Paper Delivered by Mark A Robinson, Barrister, at a BLEC Conference “Liability in the 1990s: The 7th Annual Liability Law Update” In Melbourne on 2 November 1995 and In Sydney on 8 November 1995

NORTHERN TERRITORY OF AUSTRALIA
v
MENGEL

Paper Delivered by Mark A Robinson, Barrister, at a BLEC Conference
“Liability in the 1990s: The 7th Annual Liability Law Update”
In Melbourne on 2 November 1995 and
In Sydney on 8 November 1995

Today I will look at the High Court of Australia decision in Northern Territory of
Australia v Mengel, delivered 19 April 1995, (1995) 129 ALR 1; 69 ALJR 527. The
decision holds far-reaching applications for the future development of government liability
in Australia both in the areas of public law and private law remedies. It will repay
careful study by government and administrative law lawyers for years to come. The
decision is that of a bench of seven judges with the principal judgment being one by
Mason CJ, and, Dawson, Toohey, Gaudron, and McHugh JJ. Separate judgments were
delivered by Brennan J and Deane J.

The most dramatic, widely published and unanimous finding of the High Court was that
the long-standing principle in Beaudesert Shire Council v Smith (1966) 120 CLR 145 is
now overruled. The principal was that independently of the law of trespass, negligence
and nuisance, and by an action on the case, a person who suffers harm or loss as the
inevitable consequence of the unlawful, intentional and positive acts of another is entitled
to recover damages and it was recently applied by the Northern Territory Court of Appeal
in Mengel’s case (1994) Aust Torts Reports 81-276; 95 NTR 8. In addition, further and
new principles of government liability were created by the Northern Territory Court of
Appeal’s decision. These new principles were either expressly discarded by the High
Court or overruled. The High Court has taken the opportunity to, inter alia:

 reformulate the tort of misfeasance in public office;
 reaffirm the action for breach of statutory duty;
 subsume the vast majority of potential government tort liability to the general
law of negligence as it exists between private parties;
 arguably done away with the last remnants of the action on the case;
 paved the way for new emerging economic torts; and;
 “flagged” a potential new category of a government duty of care by proclaiming
that there may be very many circumstances where there is a duty of care on
governments to avoid foreseeable harm by taking steps to ensure their officers
and employees know and observe the limits of their power. Additionally, the
High Court spoke of a duty on the part of an officer or employee to ascertain
the limits of his or her power.

There is a huge amount of material covered by the High Court’s decision. It will be
studied carefully in the coming years all government and liability law lawyers. In short,
it seems to me that it closes some plaintiff doors, but it also opens others.

The Facts

A neat overview of the facts was provided by Justice Priestley in the Court of Appeal (at
p 61,185) as follows:

“In 1988 a campaign was being conducted throughout Australia by the
Commonwealth, State and Territory Governments to eliminate tuberculosis and
brucellosis in cattle and buffalo. In the Northern Territory, government stock
inspectors, believing they were justified in doing so, told the owners of two cattle
stations that they could not move breeding cattle and that they were under
quarantine. For more than two months the owners did what they were told and
did not move cattle. This meant they did not sell a large number where and
when they had planned. Then the inspectors notified the owners the quarantine
was lifted and they took up again the moving and selling of their stock.”

The campaign was called the Brucellosis and Tuberculosis Eradication Campaign (“the
campaign”). It was administered through agreements made between the government and
individual property owners (called “approved programs”) and the arrangements were
capable of being backed up with statutory powers under the Stock Diseases Act 1954
(NT). The campaign was replete with standard definitions, rules and manuals. It had all
the hallmarks of being a statutory compulsory regulatory scheme of wide application.
However, in truth, it was a largely voluntary scheme. Property owners subjected
themselves to the scheme by entering into an approved program every year or couple of
years.

Neither of the plaintiffs had entered into a current approved program under the scheme
and they were therefore not formally a part of the scheme.

Section 27 of the Act gave the chief inspector of stock wide power to control or prevent
the movement of stock in the Territory to control any prescribed disease. Brucellosis was
a prescribed disease. The chief inspector published a notice in the Gazette on 31 August
1988 which provided, under the heading of brucellosis, as follows:

“Where cattle or buffalo are from herds with a disease status, in accordance
with the national brucellosis and tuberculosis eradication campaign, of –

(a) infected, suspect, restricted or provisionally clear
where herds subject to an eradication program
approved for the purposes of that campaign and are
–

(I) sprayed females or steers –
no restrictions and no test
required; or

(ii) entire cattle or buffalo –
movement permitted for
the purpose of immediate
slaughter provided cattle or
buffalo moved directly to
an abattoir; …” (my
emphasis)

There was no compensation provided for in the Act for loss due to the imposition of
movement restrictions under the Act.

The Main Players

Mr Mengel – lived and worked on cattle station “Banka Banka”.

Mr Klein – lived and worked on cattle station “Neutral Junction”.

The government of the Northern Territory was the first defendant.
The second defendant was Mr Tabrett, the Northern Territory’s Chief Inspector of
Stock.
The third defendant was Mr Baker, a government Stock Inspector.

As at the beginning of September 1988 the plaintiffs wanted to move about 4,400 of their
cattle from their respective properties and sell them. The market was good and they
wished to reduce their debt to the bank by something in the order of $700,000. Mr Klein
moved some cattle (95 heifers) to the Neutral Junction station to be sold in Alice Springs
(which was regarded as “safe region”). The plaintiffs and the government defendants all
believed (wrongly, as it seems) that the movement of cattle within the Northern Territory
required a disease test.

Mr Baker went to the Neutral Junction station to undertake what he thought was a
necessary blood test of the cattle. One of the samples tested positive (a “reactor”). This
only meant that there was a possibility of infection of brucellosis, nothing more. Note
that up until this point, Neutral Junction held the status of “Tested Negative” and Banka
Banka was “Confirmed Free”. The stations were subject to an early approved program
from about 1983 to about 1985.

On 6 September, Mr Baker told Mr Klein of the preliminary result and told him not to
move any breeder cattle from Neutral Junction or Banka Banka except to the abattoir for
slaughter. During the conversation, Mr Baker said things like “you’ll be under
quarantine” and that Banka Banka will “be quarantined now too”.

A regional veterinary officer, Mr Wilson, then consulted the program manual (which had
no statutory force) and changed the computer recorded entry of the plaintiffs’ herds to
that of “suspect” status. The consequence of a suspect status, if it was valid or applicable
to the plaintiffs, would have been:

1 the cattle became subject to movement restrictions;
2 the values of the plaintiffs’ properties and herds were adversely affected.

The inspectors treated the plaintiffs as if the properties were within the scope of
paragraph (a) if the Gazette notice (which the plaintiffs were not as they were not subject
to a current approved program).

On 11 and 13 September 950 Banka Banka cows and heifers were tested. There were 22
“reactors”. Mr Baker said that the Banka Banka property was quarantined. Mr Baker
did not have the statutory power to quarantine. That power was with the Minister or the
Chief Inspector under the Act. Mr Mengel refused to send his 22 reactors to Alice
Springs to be further tested by government officers until certain test results came in. He
conducted his own tests. In order to place some pressure on Mr Mengel and in order to
confirm the appearance of quarantine status, Mr Baker asked Mr Tabrett to send Mr
Mengel a facsimile setting out that the Banka Banka property was quarantined and that it
was necessary to send the 22 reactors on to Alice Springs immediately to be further
tested.

At no time was a formal quarantine imposed on either property. At all times the
inspector truly believed that the herds were more likely than not free of disease. At all
times, the inspectors believed that the plaintiffs were subject to a current approved
program. Needless to say, the cattle were not sold and were all ultimately found to have
been free from disease. The movement restrictions were “lifted” on 14 November. The
plaintiffs received substantially less money for the sale of the cattle many weeks later.
During the period of the delay, the market for cattle declined significantly.

At first instance, the plaintiffs based their claim on the following causes of action
with the following results:

Negligence and misfeasance in public office – plaintiffs failed in negligence as the trial
judge found as a question of fact that the inspectors were not in breach of their duty of
care; and the plaintiffs failed on the ground of misfeasance on public office as the
defendants were found to have acted in good faith and there was no suggestion that the
inspectors knew they were acting without power. It was found they had acted on a bona
fide but mistaken belief that their actions were authorised.

Unlawful interference with property rights – treated by the trial judge as a cause of
action in conversion, plaintiffs failed as no property rights were asserted by the
defendants in there interaction with the Territory inspectors.

Unlawful interference with economic interests – (the ground in James v Commonwealth
(1939) 62 CLR 339, per Dixon J) – plaintiffs failed as the defendants were found to have
acted in good faith.

The Beaudesert principle as an action on the case – plaintiffs succeeded and were
awarded $305,371.

The Court of Appeal judgment was handed down on 12 April 1994. The judges
were Angel, Priestley (from the New South Wales Court of Appeal by arrangement with
the Northern Territory), and Thomas JJ. The main judgment (with which Justices Angel
and Thomas agreed) is that of Priestley J.

In summary, the Court of Appeal held that, as to:

Misfeasance in public office – plaintiffs failed. As to negligence, this ground was not
appealed to the Court of Appeal and was not decided upon.

Unlawful interference with property rights and/or unlawful interference with
economic interests – (the ground in James v Commonwealth) the Court saw no difference
between these two grounds and the plaintiffs might well have succeeded on this economic
tort (as it was substantially reformulated by Justice Priestley) were it not for their success
on the next ground.

The Beaudesert principle as an action on the case – plaintiffs succeeded and were
awarded $425,125.

The Beaudesert Principle Overruled

The principle in Beaudesert Shire Council v Smith (1966) 120 CLR 145 was that
independently of trespass, negligence or nuisance, but by an action on the case, a person
who suffers harm or loss as the inevitable consequence of the unlawful, intentional and
positive acts of another is entitled to recover damages from that other (120 CLR at 155-156).

Action on the Case

The principle was a particular instance of an action on the case. An action on the case is
one of the ancient English forms of action, the need for which was largely done away
with by the Judicature Acts. The action on the case proved to be the “prolific begetter”
of what are today many different causes of action: breach of contract, nuisance, deceit,
conversion, defamation, conspiracy, negligence and other innominate torts.

The action on the case was also seen to be a means for providing a remedy for new fact
situations by the English courts from the fifteenth century to the nineteenth century.

Deane J observed (69 ALJR at p 553D) that in its early development the action on the
case was not concerned to make the act complained of wrongful but was to provide a
remedy for an independently wrongful act. Consequential damage provided the occasion
for, and the foundation of, an action on the case. Initially, however, the writ did not run
unless the act which caused the consequential loss was already wrongful either under
customary law or by reason of some statutory prohibition. He said:

“Those subsequent developments have operated at two distinct levels. First, the
action on the case was, after the fourteenth century, increasingly allowed in cases
where the act was not previously wrongful and the upholding of the writ involved
the recognition of a new wrong. The result was that the general proposition that
an action on the case was a claim for harm or loss sustained as the consequence
of an act which was already independently wrongful or unlawful lost its general
validity. Second, and more important, the evolution of the modern law with its
special rules operating in the more clearly defined areas of established nominate
torts has, to a significant extent, confined and undermined the contemporary
relevance of any general principles which could be discerned as informing the
early evolvement of the action of the case. In the context of those developments,
it is, in my view, impossible to sustain the validity of the Beaudesert proposition
at least in so far as it applies to acts which are not in contravention of the
customary criminal law or some applicable statutory prohibition. In its purported
application to such non-criminal acts, the proposition impermissibly intrudes into
areas now occupied and governed by the principles and the requirements of the
modern law of negligence and other particular torts such as enticement,
conspiracy and intimidation.”

In this way, Deane J has said expressly what I see as implicit in the joint judgment, that
is, that a cause of action based on an the action on the case is probably dead or dead in
the water, as it were, in Australia after Mengel’s Case.

Criticisms of the Beaudesert Principle

There was a large amount of criticism of the Beaudesert decision by Australian and
English courts and by academics. Essentially the criticisms were that the principle and
the terms in which it was formulated were:

 unclear or difficult to understand (not sure what “unlawful” means eg: must the
action already be an actionable tort?);
 seems to be in conflict with the cause of action for breach of statutory duty; and
 the absence of the requirement of intention makes the potential government
liability too wide.

The Court of Appeal accepted that the decision was binding on it and applied it on its
terms as it felt that it was bound to do by precedent (as had Mason J as he was then in
Kitano v Commonwealth (1974) 129 CLR 151 at 174). The Beaudesert case was applied
by general reference to the three elements considered important and applicable by Lord
Diplock in the Privy Council decision in Dunlop v Woollahra Municipal Council (1981) 1
NSWLR 76. They were, whether the:

 acts of the defendants were “positive”; whether

 damage to the plaintiffs was the “inevitable consequence”; and whether

 the actions were “unlawful”.

The Court of Appeal had found that the action complained of must have constituted a tort
or breached some other law to be relevantly “unlawful”. However, in actions on the
case, it was found that it was for the Court to decide whether or not particular action fell
within or should be held to fall within an unlawful category. In the Mengel case, the
facts were such that, although they did not come within an established tort or crime, they
were considered by the Court such as to warrant a finding that they were unlawful or
contrary to law. It was considered that the plaintiffs were not merely relying on the
defendants’ acts being unauthorised, they were also relying on:

1 the pressure exerted on the plaintiffs by the defendants;

2 that the defendants’ claims were backed up by the authority of their official
positions to get the plaintiffs to comply with their view of the position; and

3 the implied threat of penal consequences if the plaintiffs did not do what the
defendants were telling them to do.

The High Court rejected this and held that “unlawful” meant “forbidden by law” (69
ALJR at p 536) in the Beaudesert judgment. “Forbidden by law” probably meant the act
had to be forbidden either by the criminal law or by some specific and direct statutory
prohibition (Deane J 69 ALJR at p 552E). While the majority did not consider the issue
in much detail, Deane J did and concluded that the judges in Beaudesert meant that
“unlawful” also included or encompassed a “tortious infringement or contravention of the
rights of another” (ibid).

The majority found serious problems in the application of all of the essential elements of
the Beaudesert principle. It considered that the concept of “inevitable consequence”
suggested that something was bound to happen, not merely that something was likely to
happen in the ordinary course (69 ALJR at p 535B). The majority said:

“Moreover, it is difficult to see how the “implied threat” to which Priestley J.
referred could be described as a “positive act” for the purposes of the Beaudesert
principle. As well, it is far from clear that the making of the computer entry or
the making of an implied threat of penalty requires authority in any way that
would warrant either being described as “unauthorized”. And even if they are
properly described as “unauthorized”, there is a further difficulty in the notion
that they inevitably caused damage. Damage was suffered when the Mengels
acted on the basis that their cattle were subject to the movement restrictions
communicated to them and, even if it is assumed that that was likely to happen in
the ordinary course, there is nothing to suggest that it was bound to happen.”

Beaudesert overruled

The High Court decided that the Beaudesert principle should no longer be followed
because, in the summary:

There was lack of authoritative support for the principle stated in Beaudesert
(Deane and Brennan JJ did not agree);

There were difficulties associated with the notions of “unlawful act” and
“inevitable consequence”;

There was a further difficulty of reconciling liability under Beaudesert with the
limitations upon liability for negligence and for breach of statutory duty;

There was less need for the principle having regard to the newly reformulated
misfeasance on public office; and

The general trend of legal developments in the common law world confining
liability to intentional or negligent infliction of harm.

The High Court deliberately chose to go one step further than refusing to follow
Beaudesert by declining simply to reformulate the Beaudesert principle and to overrule it
instead. The majority said the suggested reformulation served no useful purpose in cases
where there was a duty of care to avoid foreseeable harm and was anomalous in cases
where there was not a duty of care. The majority referred to developments in the United
Kingdom suggesting in that country there was an emerging tortious liability for harm
caused by an unlawful act or acts directed against a plaintiff (69 ALJR at p 537). In
what appears to me to be a step designed to keep alive some prospect for future
development in the area the majority took the unusual step of rather than simply
overruling Beaudesert, it overruled Beaudesert subject to a qualification expressed in the
following terms: “that there may be cases in which there is liability for harm caused by
unlawful acts directed against a plaintiff or the lawful activities in which he or she is
engaged” (69 ALJR at p 539).

The Tort of Intimidation or Liability Under James v Commonwealth
Per Dixon J’s Judgment

The Court of Appeal found that liability probably also arose in the present case based
upon another type of action on the case based upon the principle discussed by Dixon J in
James v Commonwealth (1939) 62 CLR 339 esp at 366. Priestley J preferred to base the
cause of action on unlawful interference with the plaintiffs’ rights as owners of cattle
rather than the stated traditional base of the cause which was noted by Dixon J and was
founded in the law of intimidation. His Honour said:

“The way the cause of action can be formulated, as a general proposition, is that
a plaintiff has an action on the case for damage suffered because in the face of an
express or implied threat by a government authority of unlawful interference with
the plaintiff’s property or of unlawful prosecution of the plaintiff, the plaintiff has
felt compelled to refrain, and has refrained, to the plaintiff’s loss, from dealing
with the plaintiff’s goods.”

The Court of Appeal did not decide the case on this “new” cause of action on the case,
but based its decision on the Beaudesert principle.

The High Court rejected the formulation of Priestley J above and said that it was clearly
contrary to the cause of action set out by Dixon J in James v Commonwealth that it
involved no intentional element (69 ALJR at p 543). The majority said:

“James v. The Commonwealth provides no support for the cause of action
described by Priestley J. in the Court of Appeal. Nor is there any other
principled basis for its recognition. So far as individual government employees
are concerned, it would extend personal liability beyond misfeasance in public
office or, even, negligence and, in effect, impose liability for an error of
judgment. That result is supported by neither policy nor principle. Moreover
and of more significance, it would give rise to the same difficulty as does
Beaudesert in relation to negligence: if there is a duty of care on the part of
government or the individual employee to avoid the harm suffered, it serves no
useful purpose; and if there is not, it is anomalous to impose liability for
unintended harm that there is no duty to avoid. Thus, the Mengels are not
entitled to succeed on the alternative basis formulated by Priestley J. in the Court
of Appeal”. [my emphasis]

In James v. The Commonwealth, the plaintiff had claimed damages on two separate
grounds. The first was that the Commonwealth or its officers had induced common
carriers to commit a breach of their duty to carry produce which he, the plaintiff, wished
to sell, thereby causing him loss. It was determined by reference to the same principles
that determine tort liability for procuring a breach of contract. The second basis of the
claim in James v. The Commonwealth was that the Commonwealth or its officers
compelled the plaintiff to discontinue his trade by unlawful threats that his goods would
be seized. In relation to this claim, Dixon J adopted the statement in Salmond’s Law
of Torts (9th ed, 1936) that:

“Although there seems to be no authority on the point, it cannot be doubted that
it is an actionable wrong intentionally to compel a person, by means of a threat
of an illegal act, to do some act whereby loss accrues to him: for example, an
action will doubtless lie at the suit of a trader who has been compelled to
discontinue his business by means of threats of personal violence made against
him by the defendant with that intention”.

This is the ground which the High Court majority did not make any comment upon. The
majority simply noted that the original formulation of this ground was not argued before the
High Court (page 543). Justice Deane referred to the ground as the “tort of intimidation” and
said that he regards it as a correct statement of the law (page 555-556). Indeed, Deane J said
further that if the plaintiffs in the present case had been induced to refrain from movement of
their cattle by an express or implied threat of unlawful seizure which was made by the
inspectors with the intention and for the purpose of preventing such movement, they would,
in his view, have been entitled to recover damages for the tort of intimidation (ibid).

The (Short-lived) Rule of Law Ground

Justice Angel in the Court of Appeal (with Thomas J agreeing) formulated an extraordinary
new ground or head of government liability which he said rested on broad considerations,
namely:

“on the place of individual liberty of action within our society under the
constitutional principle of the rule of law.”

The most surprising feature of this new category of public liability was it lay outside the
realm of private torts. His Honour did not make an attempt at precise formulation of the rule.
However, I would have stated it thus:

Where a plaintiff suffers direct foreseeable and foreseen loss as a consequence of
governmental action which was unauthorised by law (and therefore without legal
authority); where the defendant’s orders and deeds which were intended to be relied
upon and were in fact relied on and acted upon causes economic loss the defendant
will be liable in the absence of some specific statutory protection. Malice or spite
on the part of the government defendant is not an element of the principle.

There was no “good faith” provision in the Stock Diseases Act (NT) here, that would have
protected the stock inspector or the chief inspector acting individually against civil suits.
Such a statutory provision would have excluded liability based on this new public tort. These
personal statutory immunity provisions are common in New South Wales, but not so common
elsewhere. The new public tort would have constituted a significant new weapon against
unauthorised government power.

The High Court unanimously said there is no such public tort. The majority judgment stated
that there was no support for the new tort in authority, in principle and said further at page
544A (somewhat ingeniously) that the new tort might be contrary to statute, being the “rights
of parties” provisions which say that in proceedings between the Crown and an individual the
rights of the parties shall be the same as in a suit between subject and subject [see, section 64
of the Judiciary Act 1903 (Cth) and the equivalent provision in the States (except WA) and
the Territories].

A New “Governmental” Duty of Care? Or Negligence Dressed Up With
Nowhere To Go?

The High Court majority’s penultimate paragraph provides a convenient summary of
governmental negligence liability and sounds a warning as to a possible new area or category
of government liability. The Court said (at page 544B):

“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 their power. And if
the circumstances give rise to a duty of care of that kind, they will usually also
give rise to a duty on the part of the officer or employee concerned to ascertain
the limits of his or her power. In these circumstances, the basis of liability
identified by Angel J. in the Court of Appeal encounters difficulties of much the
same kind as those which attend the cause of action recognised by Priestley J.
So far as acts involving the intentional infliction of harm are concerned, the
personal liability of public officers is covered by misfeasance in public office and
there is no principled basis either for its extension or for imposing liability on
government if there is neither de facto authority nor a duty of care to ensure that
the officer observes the limits of power. In other cases, if there is a duty of care
to avoid the harm in question, the principle serves no useful purpose; and if there
is not, it would be anomalous to hold either the government or the officer
concerned liable for harm that there is no duty to avoid.”

This is a critical passage. It can mean or suggest quite a number of things. In the final
analysis, what at first blush to me looks like it might be or contain a possible new
governmental tort of category of duty of care is, in reality, in my view, a statement of the sum
total of the result or impact of the High Court’s decision. I think that a category of
negligence is being described by the Court in circumstances where it is presented as if it were
a self-evident category of negligence. However, I do not recall ever having seen a
formulation of government negligence in quite those terms. It seems to me that the passage
deserves much further consideration and contemplation. It must be tested in the Courts and
so must its limits.

In negligence law, the same general principles that apply to private individuals apply to
government and public officers. So, it follows, that just as it may be said there is a general
duty on a private individual to take steps to ascertain and observe the scope or limits of an
activity which might or could harm someone, so to, is there a corresponding duty of care on
the government (and usually its officers as well) to take steps to ensure that the officers and
employees know and observe the limits of the relevant governmental power. Such a duty has
never been formulated by a common law Court in this manner. On its face, it sends a
formidable warning to government as to the scope of the duty of care if the negligence
alleged involves the use by government of or exercise of statutory, personal or prerogative
power.

Misfeasance in Public Office Reformulated

Immediately prior to the Mengel decision, this tort was committed in Australia when: a
public officer abused his or her office. Abuse of office was an act which is committed:
where the officer knew that he or she had no power to do the act; or, alternatively, where the
officer acted with malice towards the plaintiff with the specific purpose or object of inflicting
harm [Little v Law Institute of Victoria (No 3) [1990] VR 257 at 269 to 271]; and where the
plaintiff is a member or one of the members of the public to whom the officer owed a duty
not to commit the abuse complained of. [Tampion v Anderson [1973] VR 715 at 720.]

Misfeasance in public office was given detailed treatment in all of the judgments in Mengel.
Without going into the detailed reasoning used by the Court, in summary, the Court said that
it was “convenient” to consider whether the principle was “unduly narrow”. They said it was
not. In doing so, they discarded some of the requirements then needed to establish the tort,
eg; that the plaintiff must have been a member of a class to whom the officer owed a duty.

The Court said that the existence of negligence law obviated the need for misfeasance in
public office to be any wider than it presently was. However, in reformulating the tort, the
High Court introduced the concepts of “reckless indifference” and “reckless disregard” into
the tests. While it is not an easy thing to draw from the joint judgment a clear set of
principles or tests for the tort, in my opinion, it would be safe to suggest that the main
elements needed to establish the tort are:

 there is an intention to cause harm by the public officer; or
 there is reckless indifference to the harm that is likely to ensue; or

 the public officer knowingly acts in excess of his or her power; or
 the public officer recklessly disregards the means of ascertaining the extent of his
or her power (pp 539-541).

The Court would not extend the principle to include cases where the officer “ought to have
known” that he or she did not have the power. They implied that this was too close to
negligence law and was not called for as a separate principle.

The Court said it should be borne in mind that misfeasance in public office is a personal tort.
It is personal to the officer who commits the tort and liability will “ordinarily only be
personal liability”. Normally, the Crown employer will not be vicariously liable. The Crown
employer will be liable in two circumstances, the Court said: one; in circumstances of “de
facto authority”, the meaning of which is explained by Dixon J in James v Commonwealth
(1939) 62 CLR at 359-360; secondly, in some cases it might be considered that the Crown
employee was impliedly authorised to commit the act causing loss, as in Racz v Home Office
[1994] 2 WLR 23 at 25-28.

The situation is different in New South Wales and the Crown will probably be vicariously
liable in cases of misfeasance in public office because of the operation of sections 7 and 8 of
the Law Reform (Vicarious Liability) Act (1983) (NSW).

Justice Brennan (as he was then) formulated misfeasance in public office as follows:

“It is the absence of an honest attempt to perform the functions of
the office that constitutes the abuse of the office. Misfeasance in
public office consists of a purported exercise of some power or
authority by a public officer otherwise than in an honest attempt
to perform the functions of his or her office whereby loss is
caused to a plaintiff. Malice, knowledge and reckless indifference
are states of mind that stamp on a purported but invalid exercise
of power the character of abuse of or misfeasance in public
office. If the impugned conduct then causes injury, the cause of
action is complete.” (at p 547B)

Justice Deane held, in summary, (at p 554C) that there were five essential elements which
constituted the tort, namely:

 an invalid or unauthorised act;
 done maliciously;
 by a public officer;
 in the purported discharge of his or her public duties; and;
 which causes loss to the plaintiff.

The critical element discussed in Mengel’s Case was malice. Deane J said malice will exist if
there was:

. Actual intention to cause such injury; or,

. Knowledge of invalidity and lack of power and that it would cause or likely cause
such injury; or,

. The act was done with reckless indifference or deliberate blindness to that
invalidity or lack of power or that likely injury.

In Summary

As for the unintentional torts, such as negligence, trespass, nuisance and breach of statutory
duty – government liability rests on the same general principles that apply to individuals.

As for the torts which might be classified as intentional torts, such as; misfeasance in public
office; negligence (sometimes); the emerging economic torts: including the tort of intentional
interference with contractual rights; interference with trade or business interests by an
unlawful act directed at the person injured; enticement; conspiracy and intimidation; these
are the emerging and developing torts the essential elements of which are “far from settled”..

These new, embryonic and emerging economic torts are crossing over from those of the
traditional intentional economic torts to those of unintentional economic torts.

The action on the case probably has no more room for operation in Australia.

The future development of negligence as it relates to government and the tort of misfeasance
in public office is brighter than ever.

The door is closed, for now, on the issue of liability of government for damages solely for
harm or loss caused by the non-negligent exercise or purported exercise of statutory power.
But as one door closes, others may open. The future, it seems to me, remains bright in the
field of government liability in Australia.

Other Cases and Developments

If there is time, I will discuss some of the cases listed below:

Sutherland Shire Council v. Heyman (1985) 157 CLR 424 (statutory authorities’ negligence;
proximity)

Northern Territory of Australia v. Deutscher Klub (Darwin) Inc. (1994) 84 LGERA 87) (The
German Club Case) (negligence; proximity)

H v Black, (1995) Aust Torts Reports 81-430, Supreme Court of South Australia (Supreme
Court of South Australia on the application of policy issues in proximity to a new class of
claim. A father claimed damages for mental illness against a State Department for
recommending an allegedly inadequate psychiatrist report or further action which he had
hoped would have cleared him earlier of sexual abuse of his daughter claims. The Court
refused to find a duty of care existed)

A decision of the New South Wales Supreme Court in Abigroup Limited v. State of New
South Wales (unreported 18 August 1994) (strike out application by proposed aggrieved
tender bidder; public law damages claimed)

Madden v Madden (1995) 30 ATR 483 (NB Full Court appeal has been heard) (sequestration
of bankrupt for a tax liability; alleged not bona fide assessment; misfeasance in public office
damages sought)

Allstate Life Insurance Co v ANZ Banking Group Ltd (1995) 130 ALR 469 (strike out
application; economic torts, intentional interference with contractual relations; pleading)

Darling Casino Ltd v NSW Casino Control Authority, unreported, NSWSC, Hulme J, 31
May 1995 (strike out application by unsuccessful applicant for the sole casino licence).

[This paper is a revised version of a paper delivered by me at the BLEC Conference, “Government Liability, Issues
in Public Law: 4th Annual Workshop” delivered in Melbourne on 4 May 1995 and in Sydney on 11 May 1995]