FEDERAL COURT OF AUSTRALIA

Scott v Secretary, Department of Social Security [2000] FCA 1241

SOCIAL SECURITY – tort of misfeasance in public office – no intention to cause harm – no private right of action for breach of Social Security Act 1991 (Cth) – no common law duty of care to advise of benefits potentially available – damages in negligence cannot be claimed merely for failure to act with due expedition.

Social Security Act 1991 (Cth)

Sanders v Snell (1998) 196 CLR 329 applied

Wilkinson v Downton [1897] 2 QB 57 referred to

Northern Territory v Mengel (1995) 185 CLR 307 applied

Byrne v Australian Airlines Ltd (1995) 185 CLR 410 referred to

X (Minors) v Bedfordshire County Council [1995] 2 AC 633 applied

Re Fry and Secretary, Department of Social Security (1990) 20 ALD 709 referred to

L. Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) (1981) 150 CLR 225 distinguished

RALPH SCOTT AND SOPHIE SCOTT V SECRETARY, DEPARTMENT OF SOCIAL SECURITY

NO V 31 OF 2000

JUDGES:       BEAUMONT, FRENCH & FINKELSTEIN JJ

DATE:            7 SEPTEMBER 2000

PLACE:          MELBOURNE

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

THE COURT ORDERS THAT:

1. The appeal be dismissed.

2. Costs be reserved.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT

BEAUMONT AND FRENCH JJ:

INTRODUCTION

1                     The appellants, who have at all times acted without legal representation, instituted proceedings (VG 69 of 1997) against the respondent under s 39B of the Judiciary Act 1903 (Cth), claiming that decisions made by the respondent had wrongly deprived (a) the first appellant of Disability Support Pension (“DSP”) payable under the Social Security Act 1991 (Cth) (“the Act”) for the period 1 January 1995 to 24 July 1995 and (b) the second appellant of Wife Pension for the period of 1 January 1995 to 24 July 1995.  The appellants further claimed that the respondent’s Department (a) misled the appellants as to their “most appropriate payments” for the period 1 January 1995 to 24 July 1995 and (b) failed to approve any pension payment for the second appellant for  the period 1 July 1995 to 24 August 1995 until 2 September 1995.  The appellants sought orders by way of judicial review requiring the respondent’s Department to review the first appellant’s Special Benefit (“SB”) under the Act and to grant him DSP for the period from 1 January 1995 or, alternatively, from 19 June 1995.  (SB is a discretionary benefit payable pursuant to the provisions of s 729 of the Act, and is available only to a person who is not able to get any other income support payment.)  The appellants also claimed damages.

2                     A Judge of the Court dismissed the appellants’ application.  The appellants now appeal from this judgment.

THE FINDINGS AND REASONS AT FIRST INSTANCE

3                     In order to understand the issues that arise in the appeal, it will be necessary to refer in some detail to the findings and reasons of the primary Judge.  Some of the findings to be mentioned below were made by his Honour in a related matter (VG 666 of 1996) heard at the same time, in which the appellants were granted relief.  The respondent did not appeal from that judgment, but the reasons given in VG 666 of 1996 were published at the same time as those given in the present matter, and formed part of its background.  That proceeding was an appeal by the first appellant from a decision of the Administrative Appeals Tribunal (“AAT”) rejecting his claim for arrears of DSP for the period 19 June 1995 to 5 October 1995.

4                     For present purposes, his Honour’s material findings and conclusions in VG 666 of 1996 may be summarised as follows:

·                    The appellants came to Australia in 1986 as refugees.

·                    In 1991 the first appellant claimed Invalid Pension, the equivalent of DSP under the 1947 Act.  The Department rejected the claim.  In October 1991, he applied for SB and this was granted.  He received SB from 7 October 1991.  Broadly speaking, SB is payable under s 729 of the Act to persons who can demonstrate need, but who do not qualify for any other pension or benefit.  However, the first appellant was not entitled to DSP (or Invalid Pension, under the 1947 Act) because on arrival in Australia he was permanently incapacitated, and had not completed ten years’ residence.

·                    By an internal Departmental circular dated May 1994, it was noted that the Government was to introduce amending legislation, effective from 1 January 1995, providing that persons with refugee status could have access to DSP notwithstanding less than ten years’ residence.  Persons in receipt of social security benefits at that time would not be automatically transferred to the other pension;  a new claim form would need to be lodged.

·                    On 19 June 1995 the first appellant filled in an SB review form and provided it to the Department.  The form had been sent to him by the Department pursuant to s 760 of the Act which empowers the Department to require a person to whom SB is paid to give the Department a statement about a matter that might affect the payment of the benefit.

·                    On 24 July 1995 the Department wrote to the first appellant stating that since he might be eligible for DSP, he ought to complete the claim form then enclosed.  The first appellant did this, returning the completed form to the Department on 5 October 1995.  As mentioned, he received DSP from that date.  However, he claimed that his entitlement arose on 19 June 1995.  His Honour upheld his claim, thus allowing his appeal from the AAT decision.  As already noted, there is no appeal from this judgment.

5                     The primary Judge then turned to the present matter, and his Honour’s description of its background may be summarised for present purposes as follows:

q                   As noted earlier, the first appellant was granted SB from 7 October 1991.  The Department reviewed the first appellant’s entitlement to SB every thirteen weeks (approximately) until 4 October 1994, when the reviews ceased.  By its internal circular dated 10 May 1994 mentioned above, the Department described the changes in the legislation then proposed.

q                   In September and December 1994, the Department wrote to the first appellant about adjustments to the rate of his SB.  In March 1995, apparently responding to the first appellant’s request for confirmation, the Department wrote to the first appellant confirming that he was entitled to SB and its rate.  On 9 June 1995 the Department wrote to the first appellant informing him that he would be paid SB as from 29 May 1995.  But in none of this correspondence did the Department advise the first appellant of his entitlement to DSP as from 1 January 1995.

q                   As stated above, on 19 June 1995, the first appellant lodged an SB review form, and by letter dated 24 July 1995, the Department advised him that he could be entitled to DSP.  By his reply dated 4 August 1995, the first appellant stated that the DSP claim “was lodged and determined in 1991”.  (A reference to the rejection of the claim for Invalid Pension in August 1991.)  By letter dated 11 August 1995, the Department informed the first appellant that notwithstanding its rejection of his claim in 1991, he might be eligible for DSP because the legislation had changed and his own circumstances may also have changed.  The Department indicated that, provided there was no change in his circumstances, the first appellant would continue to be granted SB until his claim for DSP was determined.  (It appears that the only monetary difference between SB and DSP is that the latter attracts a pharmaceutical benefit of $5.20 per fortnight.)

q                   By letter dated 22 August 1995, the first appellant informed the Department that he would need time to complete the form, and complained about the Department’s delay in advising him of the legislative changes which came into effect on 1 January 1995.  As has been said, the first appellant lodged his completed form on 5 October 1995 and was granted DSP from that date.

q                   In January 1996, the first appellant requested the Department to review the provisional commencement date of his DSP and to change it from 5 October 1995 to 19 June 1995.  The Department refused to change the date.  The first appellant sought review of this decision by the Social Security Tribunal and then by the AAT.  As has been noted, he then appealed to this Court from the AAT decision.

6                     The primary Judge turned next to consider the first appellant’s claim as follows:

¨                  His Honour noted that by their statement of claim, the appellants claimed, in essence, that the Department’s delay in granting DSP was in breach of its common law and statutory duties to the appellants;  and otherwise unlawful intentional conduct amounted to, inter alia, misfeasance in public office.

¨                  As to the appellants’ “extravagant allegations” of malice, bad faith and other intentional wrongdoing, his Honour held them to be “baseless” (para 46).  The Judge said that the Departmental officers who gave evidence were cross-examined “quite skilfully” by the second appellant, and that he was “quite satisfied that those officers, and other officers who dealt with [the appellants], carried out their duties conscientiously and in good faith ... [and] ... in relation to [the second appellant’s] claim, in some respects Departmental officers gave her the benefit of the doubt” (at para 46).

¨                  The trial Judge held (at para 47) that no private statutory cause of action was created by the provisions of the Act relied on by the appellants in this connection.

¨                  His Honour further held (at para 51) that there was “[no] … common law duty of care under which the Department has obligations to inform persons in the position of [the appellants] of potential benefits under the Act”.

¨                  His Honour said (at para 52):

“I have already found in VG 666 of 1996 that [the first appellant] was entitled to payment of DSP from 19 June 1995, the date of his ‘initial claim’.  He did not make any earlier claim because a combination of two factors resulted in both himself and the Department being unaware that he became qualified for DSP on 1 January 1995.  First, for some reason not apparent in the evidence, regular SB reviews were not made from October 1994 to June 1995.  Secondly, the Department’s records did not enable it to identify the SB recipients who were refugees, at any rate until their files were examined in the course of periodic reviews.  The first of these factors hardly indicates any Departmental malice – if anything it had the potential for beneficiaries to receive SB when they were not entitled.  The second factor at worst was something which turned out, in hindsight, to be an administrative inadequacy.”

¨                  The trial Judge went on to say (at para 53), that:

“… the evidence does not support the allegations of intentional, malicious and conspiratorial wrongdoing made in the statement of claim.  There is no basis for a finding that the Department or any of its officers acted with an intention to cause harm to [the first appellant] or knowingly acted in excess of power.  There has been no misfeasance in public office:  Northern Territory v Mengel (1995) 185 CLR 307 at 345.”

¨                  Accordingly, his Honour dismissed the first appellant’s claim.

7                     His Honour then addressed the second appellant’s claim, first making the following findings:

q                   On 28 January 1993, the second appellant claimed DSP.  The claim was rejected on the ground that she did not have an impairment of the level required by that Act.

q                   On 30 August 1994, the second appellant claimed SB.  The claim was rejected on the ground that she was in receipt of Partner Allowance.

q                   In May 1994, the Government announced that from 1 July 1995 Partner Allowance would be available only to persons over forty years of age with little or no recent market experience.  The second appellant was then aged thirty-two.  By letter dated 6 June 1995, the Department confirmed to her that payments would cease as from 1 July, and that if she did not make any alternative claim by then, her social security benefits would end.

q                   The second appellant claimed SB on 30 June 1995.  By letter dated 19 July 1995, rejecting the claim, the Department stated that SB was payable only if no other reasonable means of support existed and no other social security allowance or pension was payable.  The letter stated:

“If you are able to look for work, Job Search Allowance would be your correct entitlement.  If you are unfit to look for work because of a medical condition, either Sickness Allowance or Disability Support Pension may be your correct payment type.  As you have declined to test your eligibility for any of these payments it cannot be determined that you are not entitled to any other Social Security allowance or pension.”

q                   On 26 July 1995, the second appellant spoke with Ms Toni Pedler, an officer of the Department, soon after the second appellant had appealed against the rejection of her claim for DSP made in 1993.  Mr Pedler’s note of their conversation stated:

“[I] stated she had two options.   1. Put in a DSP to retest eligibility for that and we could then grant SL [sic – presumably SB], or 2. Claim JSA (which she doesn’t want to do).  Spoke to Kevin Ryan who is a nominee for Sophie.  Kevin is following up with Sophie about lodging a claim for DSP.  At this stage I haven’t heard anything further.  Sophie did want to appeal against the rejection of Special [sic] but at this stage it’s still under reconsideration as we haven’t heard back from Kevin.

Hopefully she’ll lodge a claim for DSP and make life easier for everyone.”

q                   The second appellant did not then claim DSP or any other benefit.  By letter dated 3 August 1995 she asked that an Authorised Review Officer (“ARO”) review the decision to refuse her SB.  She stated that she was unfit for work, and thus could not apply for a Job Search Allowance (“JSA”);  that she could not apply for SB because her disability was not temporary, it was 70 per cent permanent;  and that she could not apply for DSP because refusal of her earlier (1993) claim was being reviewed.

q                   By letter dated 11 August 1995, the Department informed the second appellant that the decision to reject her claim for SB had been reviewed, but would stand.  However, an ARO had been asked to consider the matter further.  On 14 August 1995, the second appellant applied to the Social Security Appeals Tribunal (“SSAT”) for review of the decision  not to grant SB.

q                   By letter dated 21 August 1995, the second appellant wrote to the ARO, Ms Roberta Chrystal, stating that she had been advised to seek review before the SSAT, rather than lodge a new application for DSP;  and that the claim for SB had been lodged because she needed time to prepare for the SSAT review.

q                   By letter dated 23 August 1995, Ms Chrystal informed the second appellant that she qualified for SB until the outcome of her appeal to the SSAT, against the refusal of DSP, was known.  Payment of SB was backdated to 3 July 1995, the first working day after the date of the second appellant’s claim, and the first working day after the date on which the Partner Allowance had ceased.

q                   In her evidence, Ms Chrystal said that, in arriving at her decision, she “[I]n effect tried to balance these guidelines [in the Departmental Guide] and common sense because I was aware of the financial difficulties being experienced by the applicants”.  His Honour accepted this evidence.

q                   The second appellant did not lodge a new claim for DSP.

q                   On 8 January 1996 the SSAT affirmed the decision made in November 1993 rejecting the second appellant’s claim for DSP.  The second appellant applied to the AAT for review of this decision.  On 9 September 1996, upon the concession of the Department, the AAT decided that the second appellant was entitled to DSP from 28 January 1993.  The second appellant was informed of this by the Department on 6 November 1996.

8                     The trial Judge noted elements of the second appellant’s claim, pleaded essentially as follows.  A breach of a duty of care owed to the second appellant was alleged.  It was said that because the first appellant made his second claim for DSP on 5 October 1995 and “missed the opportunity to be granted DSP from 1 January 1995”, the second appellant “missed the opportunity … to be granted a WP [‘Wife Pension’] from 1 January 1995 and at all” and was “forced to claim the alternative payment from (the Department) from 1 July 1995”.  Additionally, although the second appellant “was qualified either for DSP or SB at that time (from 1 July 1995 till 24 August 1995) and although either DSP or SB was payable to [her] at that time (the Department) intentionally refused to grant either a DSP or a SB to [her]”.

9                     In dismissing the second appellant’s claim, his Honour said (at paras 83 – 85):

“For the reasons already given in relation to [the first appellant’s] case, no duty of care sounding in damages was owed by the Department to [the second appellant].

In any case, Departmental officers have applied the Act properly.  They have sought to do the best they could for her, consistently with their statutory obligations.  In some instances they have made decisions giving [the first appellant] the benefit of the doubt.  I refer in particular to Ms Chrystal’s decision as to backdating of SB, and the decision to concede the AAT appeal.

The allegations of malicious, conspiratorial conduct are completely without foundation.  There was no misfeasance in public office.”

CONCLUSIONS ON THE APPEAL

10                  The appellants advanced many arguments in support of their appeal in their extensive written and oral submissions.  It would be impracticable to attempt to explore at length every one of their complaints.  In the circumstances, we propose to adopt the approach taken by other Full Courts in such situations and to confine our reasons to the issues raised that are both significant and consequential (see, e.g. Western Australian v Ward (2000) 170 ALR 159 at 177 – 178).

(a)               The claim for misfeasance

11                  The tort of misfeasance in public office was most recently considered by the High Court of Australia in Sanders v Snell (1998) 196 CLR 329.  Gleeson CJ, Gaudron, Kirby and Hayne JJ said (at 344):

“Misfeasance in public office is concerned with misuse of public power.  Inappropriate imposition of liability on public officials may deter officials from exercising powers conferred on them when their exercise would be for the public good.  But too narrow a definition of the ambit of liability may leave persons affected by an abuse of public power uncompensated.  The tort of misfeasance in public office must seek to balance these competing considerations.  Not surprisingly, identifying the intention with which the public official acts has a prominent place in striking that balance.”

12                  Their Honours went on to say (at 344 – 345):

“For present purposes it may be accepted that the tort of misfeasance in public office extends to acts by public officers that are beyond power, including acts that are invalid for want of procedural fairness.  But to establish that tort, it is not enough to show the knowing commission of an act beyond power and resulting damage.  As the majority said in Mengel:

‘The cases do not establish that misfeasance in public office is constituted simply by an act of a public officer which he or she knows is beyond power and which results in damage.  Nor is that required by policy or by principle.  Policy and principle both suggest that liability should be more closely confined.  So far as policy is concerned, it is to be borne in mind that, although the tort is the tort of a public officer, he or she is liable personally and, unless there is de facto authority, there will ordinarily only be personal liability.  And principle suggests that misfeasance in public office is a counterpart to, and should be confined in the same way as, those torts which impose liability on private individuals for the intentional infliction of harm.  For present purposes, we include in that concept acts which are calculated in the ordinary course to cause harm, as in Wilkinson v Downton, or which are done with reckless indifference to the harm that is likely to ensue, as is the case where a person, having recklessly ignored the means of ascertaining the existence of a contract, acts in a way that procures its breach.’

For the purposes of deciding Mengel, the majority considered it sufficient to proceed on the basis that the tort requires an act which the public official knows is beyond power and which involves a foreseeable risk of harm but noted also that there seems much to be said for the view that misfeasance extends to the situation of a public official recklessly disregarding the means of ascertaining the extent of his or her power.”

13                  Wilkinson v Downton [1897] 2 QB 57 was an action in tort for nervous shock.  Wright J said (at 59):

“One question is whether the defendant’s act was so plainly calculated to produce some effect of the kind which was produced that an intention to produce it ought to be imputed to the defendant, regard being had to the fact that the effect was produced on a person proved to be in an ordinary state of health and mind.  I think that it was.  It is difficult to imagine that such a statement, made suddenly and with apparent seriousness, could fail to produce grave effects under the circumstances upon any but an exceptionally indifferent person, and therefore an intention to produce such an effect must be imputed, and it is no answer in law to say that more harm was done than was anticipated, for that is commonly the case with all wrongs.”

14                  Speaking of the tort of misfeasance in public office, the majority in Sanders observed (at 346 – 347):

“Again it must be accepted that the precise limits of this tort are still undefined.  It is an intentional tort.  As was said in Mengel:

‘… the weight of authority here and in the United Kingdom is clearly to the effect that it is a deliberate tort in the sense that there is no liability unless either there is an intention to cause harm or the officer concerned knowingly acts in excess of his or her power.’”

15                  In the present case, his Honour made findings of fact which contradicted the existence of any intention to cause harm.  Nor, on those findings, could it be demonstrated that any officer knowingly acted in excess of power, or was recklessly indifferent to the harm that was likely to ensue.  In our view, no basis for appellate interference with those findings has been made out, especially given the advantage his Honour had in seeing the officers give their evidence.

(b)               The claim of a cause of action for damages upon the case

16                  As members of the Court mentioned in argument, the Beaudesert principle was overruled by the High Court in Northern Territory v Mengel (1995) 185 CLR 307 at 344, subject to the qualification “…that there may be cases in which there is liability for harm caused by unlawful acts directed againsta plaintiff….”(at 345) (emphasis added). However, his Honour here found that all officers who dealt with the appellants carried out their duties conscientiously and in good faith. There was nothing in the evidence to suggest that any actions of the respondents were in any way directed against the appellants.

(c)                The claim of a private right of action for breach of statutory duty

17                  The general principles in this area were, as the trial Judge noted (at para 47), explained by Brennan CJ and Dawson and Toohey JJ in Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 424, that is to say, that a cause of action for damages for breach of statutory duty arises where a statute which imposes an obligation for the protection or benefit of a particular class of persons –

“is, upon its proper construction, intended to provide a ground of civil liability when the breach of the obligation causes injury or damage of a kind against which the statute was designed to afford protection.”

18                  The primary Judge went on to refer (at para 48) to the principal speech of Lord Browne-Wilkinson in X (Minors) v Bedfordshire County Council [1995] 2 AC 633 (at 731 – 732) in considering a claim that in breach of its statutory duty, a council had failed to exercise its powers to institute care proceedings under, inter alia, the Children & Young Persons Act 1969 (UK).  The House of Lords there noted that although welfare legislation affecting a particular area of activity does in fact provide protection to those individuals particularly affected by that activity, the legislation is not to be treated as being passed for the benefit of those individuals but for the benefit of society in general;  so that the cases where a private right of action has been held to arise are all cases where the statutory duty has been very limited and specific as opposed to general administrative functions involving the exercise of administrative discretion.

19                  We agree with the trial Judge that the Act is not to be interpreted as indicating an intention to confer a private right of action for a breach of any of its provisions now in question, given especially the existence in the legislation of particular mechanisms for the review of decisions made within the Department.

(d)               The claim in common law negligence

20                  We also agree with his Honour and with Deputy President Burns in Re Fry and Secretary, Department of Social Security (1990) 20 ALD 709 at 711, that there was no general common law duty of care to advise the appellants of benefits that might potentially be available under the Act.

21                  In this connection, the distinction between formality and informality can be important.  In L. Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) (1981) 150 CLR 225 it was held that the Council was under a duty to a purchaser of property to take reasonable care that the information given by the Council in a certificate applied for by the purchaser under s 342AS of the Local Government Act 1919 (NSW).  However, it was further held that the Council owed no duty of care to the purchaser when information as to a road widening proposal was given by an unidentified person and was not confirmed.

22                  Gibbs CJ said (at 236):

“The Council was so placed that others could reasonably rely upon its ability to give accurate information as to any local road widening proposals, and it followed the practice, in the course of exercising its functions of making such information available.  The nature of the inquiry – made by a solicitor, for conveyancing purposes, on a form commonly used and prepared by law stationers – made clear the gravity of the inquiry and the importance attached to the answer.  The Council therefore owed a duty of care to Mr. Carroll’s clients, the appellants, in answering the written inquiry.

It would not, however, have been reasonable for the appellants to have relied on an unconfirmed answer given by an unidentified person in response to an inquiry made over the telephone.  The Council therefore owed no duty of care in making response to such an inquiry.

It is clear from what has been said that the Council, in giving what amounted to a negative answer to Mr. Carroll’s written inquiry, was in breach of its duty of care to the appellants.  The fact that its negative answer was given by the omission to make a positive statement does not affect the question.  The Council may have been entitled in law to decline to give the information sought, although to have taken that course might have rendered it liable to well-merited criticism.  But for the reasons given, if it had wished to decline to give the information, it was bound to say so, because its failure to mention the local road widening proposals in the circumstances amounted to a statement that none existed.”

23                  The position in Shaddock, where the Council was aware of a particular proposal and failed to mention it, may, we think, be distinguished from the position of a Department administering social security legislation.  It is one thing to expect a Department (reasonably) to communicate accurately the general range of benefits available;  it is another to expect the Department to have sufficient knowledge of the personal circumstances of any particular applicant for social security, so as to be in a position to advise the applicant of specific benefits that might be available in his or her personal circumstances.

24                  For completeness, we should mention one matter raised by the appellants in the course of their argument.  They suggested that they could claim damages in negligence for failure to process their claims for pension with due expedition.  We see no basis for such a claim on the facts.  But, in any event, our view is that such a claim, that is, for damages for alleged negligence of that kind, is not sustainable.  It is true that mandamus or a similar form of judicial review will be ordered where a public duty has not been performed within a reasonable time, compelling the specific performance of that function forthwith (see Re Federal Commissioner of Taxation: Ex parte Australena Investments Pty Ltd & Ors (1983) 50 ALR 577 and Thornton v Repatriation Commission (1981) 35 ALR 485).  But, absent a claim for misfeasance (see above), common law damages cannot be claimed merely for failure to act with due expedition.

25                  In our opinion, the appeal fails and ought to be dismissed, with costs.

Associate:

Dated:              7 September 2000

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT

FINKELSTEIN J:

26                  I agree with Beaumont and French JJ save in one respect.  My concern relates to the allegation made by both appellants that the respondent has negligently delayed the processing of their claims.  It may also have a bearing on the allegation made by the second appellant, Mrs Scott, that the respondent was negligent in the manner in which he dealt with her claim for Special Benefit (SB).  This latter matter was not considered by the trial judge, though it was raised in the pleadings.  It arises in the following circumstances.

27                  Mrs Scott had applied for SB on 30 June 1995.  Broadly speaking, SB is payable to a person who can demonstrate that he or she is unable to earn a sufficient livelihood but who does not qualify for any other pension or benefit:  s 729 of the Social Security Act 1991 (Cth).  It is not now in dispute that Mrs Scott was entitled to that benefit.  However, the respondent decided that she was not eligible.  The stated reason was as follows:

“[A] Special Benefit is only payable if no reasonable means of support exist, and no other social security allowance or pension is payable.  If you are able to look for work, Job Search Allowance would be your correct entitlement.  If you are unfit to look for work because of a medical condition, either Sickness Allowance or Disability Support Pension may be your correct payment type.  As you have declined to test your eligibility for any of these payments it cannot be determined that you are not entitled to any other social security allowance or pension.”

28                  Mrs Scott contends that the respondent owed her a duty at common law to process her claim for SB with care.  She complains that by insisting that she lodge applications for a Jobsearch Allowance, a Sickness Allowance and a Disability Support Pension to determine whether she was eligible for SB the respondent was in breach of that duty and, as a result, her medical condition deteriorated.

29                  I should say immediately that I do not accept that the manner in which the respondent dealt with Mrs Scott’s claim for SB was in breach of any duty of care.  No doubt there are various ways to determine whether an applicant for SB satisfies the relevant criteria.  In a case where those criteria include ineligibility for some other pension, the fact of ineligibility may be established by examining the information lodged in support of the claim for the benefit.  Whether it is possible to proceed in that way is dependent upon the provision of sufficient information.  Another approach is to require the applicant to apply for the other benefits and if each application is rejected then the necessary criterion will have been satisfied.  From an administrative standpoint, this may be the most convenient method of dealing with the issue.  But whether or not it is a convenient method, it can hardly be described as a negligent process. 

30                  My concern with the reasons of Beaumont and French JJ relates to the question whether the respondent owed the appellants a duty of care as alleged.  First, it is clear that a common law duty of care may arise in the performance of statutory functions, especially in the manner in which a statutory duty is performed:  X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at 735.  Second, it is clear that in an appropriate case, the existence of a statutory power will give rise to a common law duty to exercise that power: Stovin v Wise [1996] AC 923.  Third, it is clear that even if the statute that imposes the duty does not give rise to a statutory cause of action, the repository of the duty may nevertheless be liable for breach of a common law duty of care.  In East Suffolk Rivers Catchment Board v Kent [1941] AC 74 at 88-89 Lord Atkin said:

“But apart from the existence of a public duty to the public, every person whether discharging a public duty or not is under a common law obligation to some persons in some circumstances to conduct himself with reasonable care so as not to injure those persons likely to be affected by his want of care.  This duty exists whether a person is performing a public duty, or merely exercising a power which he possesses under statutory authority or in pursuance of his ordinary rights as a citizen.”

Lord Atkin was in dissent in the result but not in regard to these comments. 

31                  In my opinion, decisions of the High Court, such as Sutherland Shire Council v Heyman (1985) 157 CLR 424, Pyrenees Shire Council v Day (1998) 192 CLR 330, Romeo v Conservation Commission of the Northern Territory (1998) 192 CLR 431 and Crimmins v Stevedoring Industry Finance Committee (1999) 167 ALR 1, while not establishing a clear principle by which the common law liability of the repository of a statutory power or duty is to be determined, suggest that a duty of care would exist in the present case, both as to the manner in which a claim for a benefit is processed and for the failure to process a claim with due expedition. 

32                  In this regard the following matters would be important.  The respondent’s functions are not inconsistent with the existence of a duty of care.  The respondent is responsible for the general administration of the Social Security Act: s 1295. He must consider each application for a claim and if an applicant satisfies the necessary criteria, he must ensure that the benefit is paid.  Applicants who are entitled to benefits of the kind payable under the Social Security Act are generally in a vulnerable position.  A duty to consider a claim for a benefit and the obligation to process the claim are not legislative in character.  There is no reason in policy why a duty of care should not be owed.  It is reasonably foreseeable that a person who is wrongly deprived of a benefit to which he or she is entitled, or who endures unreasonable delay in the receipt of a benefit, may suffer physical harm. 

33                  I agree with the orders proposed by Beaumont and French JJ.

Associate:

Dated:              7 September 2000