FEDERAL COURT OF AUSTRALIA

Repacholi Aviation Pty Ltd (ACN 009 054 022) v Civil Aviation Safety Authority [2009] FCA 1487

PRACTICE AND PROCEDURE – application for dismissal of proceedings under s 31A of the Federal Court of Australia Act 1976 (Cth) – alternatively for the statement of claim to be struck out – whether reasonable cause of action disclosed – whether Court has jurisdiction – whether matter ‘arising under any laws made by the Parliament’ – whether s 47A of the Limitation Act 1935 (WA) applies – whether causes of action statute barred

TORTS – proceedings against Civil Aviation Safety Authority (CASA) and officers of CASA – alleged negligence in performance of statutory duties – existence and scope of duty of care – whether statutory duty of care owed by CASA or its officers – whether common law duty of care owed by CASA or its officers not to cause economic loss - whether misfeasance by officers of CASA – whether private right of damages available to applicants

Administrative Appeals Tribunal Act 1975 (Cth) ss 41, 43(1)(c)(ii), 43(6)

Administrative Decisions (Judicial Review) Act 1977 (Cth) s 9

Civil Aviation Act 1988 (Cth) ss 3A, 8, 9, 9(1), 9A(1), 27(1), 27(2), 27(7), 27(9), 28BA-28BF, 28BA(3), 28BB(1), 28BB(2), 84B

Commonwealth Authorities and Companies Act 1997 (Cth) ss 23, 84C

Federal Court of Australia 1976 (Cth) s 31A

Judiciary Act 1903 (Cth) ss 38(e), 39B(1A)(c), 64, 79

Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) s 4

Limitation Act 1935 (WA) s 47A

Federal Court Rules O 20

Civil Aviation Regulations 1988 regs 157, 166, 268, 268(1), 268(2), 268(3), 269, 269(1), 269(1)(c), 269(1)(d), 269(3)

Civil Aviation Safety Regulations 1998 regs 67.230, 67.230(1)(a), 67.230(1)(b), 67.230(1)(e), 67.240(1), 67.260

Alcoa of Australia Ltd v State Energy Commission (WA) (1995) 17 WAR 112

Austral Pacific Group Ltd v Airservices Australia (2000) 203 CLR 136

Bailey v Minister for Education [2000] WASC 50

British American Tobacco Australia Ltd v Western Australia v (2003) 217 CLR 30

Buck v Bavone (1975) 135 CLR 110

Calveley v Chief Constable of Merseyside [1989] 1 AC 1228

Cannon v Tahche (2002) 5 VR 317

Carioca Pty Ltd v Water Authority of WA (Supreme Court, Master Bredmeyer, 11 April 1995, Supreme Court Library Number 950168)

Civil Aviation Safety Authority v Coburn (1996) 24 AAR 389

Commonwealth v Griffiths(2007) 70 NSWLR 268

Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955

Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297

Gimson v Victorian WorkCover Authority [1995] 1 VR 209

Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540

Jones v Department of Employment [1989] QB 1

LNC Industries v BMW (Aust) Pty Ltd (1983) 151 CLR 575

Macteldir Pty Limited v Dimovski [2005] FCA 1528

Maguire v Simpson (1977) 139 CLR 362

Matheson v Commissioner of Main Roads (2001) 25 WAR 269

Minister for Education v Bailey (2000) 23 WAR 149

Murdesk Investments Pty Ltd v Roads Corporation [2005] VSC 39

Northern Territory v Mengel (1995) 185 CLR 307

Park Oh Ho v Minister for Immigration and Ethnic Affairs (1989) 167 CLR 637

Pedersen v Young (1964) 110 CLR 162

Posner v Roberts [1986] WAR 1

Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355

Pyrenees Shire Council v Day (1998) 192 CLR 330

R v YZ (1999) 162 ALR 265

Renmark Hotel Inc. v Federal Commissioner of Taxation (1949) 79 CLR 10

Repacholi v Civil Aviation Safety Authority [2002] AATA 196

Scott v Pedler [2004] FCAFC 67

Scott v Secretary, Department of Social Security (2000) 65 ALD 79

Skyways Pty Ltd (In Liq) v Commonwealth (1984) 57 ALR 657

Smith v Australian National Line (unreported, Supreme Court of Western Australia, 27 August 1996)

Smith v Australian National Line Ltd (1998) 159 ALR 431

State Energy Commission (WA) v Alcoa of Australia Ltd (1996) 17 WAR 131

Stuart v Kirkland-Veenstra (2009) 237 CLR 215

Sullivan v Moody (2001) 207 CLR 562

Sutherland Shire Council v Heyman (1985) 157 CLR 424

Thompson v Randwick Corporation (1950) 81 CLR 87

Three Rivers District Council v Bank of England (No 3) [2000] 2 WLR 1220

Trade Practices Commission v Manfal Pty Ltd (No 2) (1990) 27 FCR 22

Wang v Secretary, Department of Employment and Workplace Relations [2006] FCA 898

Westminster Corporation v London and North Western Railway Co [1905] AC 426

X v South Australia (No 3) [2007] SASC 125

REPACHOLI AVIATION PTY LTD ACN 009 054 022 and GERALD KEITH REPACHOLI v CIVIL AVIATION SAFETY AUTHORITY and TERRY FARQUHARSON

WAD 51 of 2009

MCKERRACHER J

11 DECEMBER 2009

PERTH

THE COURT ORDERS THAT:

1.                  The amended statement of claim be struck out.

2.                  The minute of proposed further amended statement of claim be disallowed.

3.                  The applicants have six weeks to file and serve a further amended statement of claim reflecting these reasons, the filing and service of which is without prejudice to the respondents’ right within 28 days to challenge that pleading.

4.                  The applicants are to pay the respondents’ costs of the motions in any event.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

REASONS FOR JUDGMENT

INTRODUCTION – THE MOTIONS

1                     For several years, relationships between the applicants and the respondents have been strained.  For a variety of reasons, the first respondent (CASA) has taken a significant number of disciplinary measures against the applicants.  The applicants in turn have challenged those decisions on several occasions - and with some success.  As a result, the applicants wish to pursue somewhat novel claims in damages against CASA and certain of its officers seemingly for loss sustained in the applicants’ business activities, that is, economic loss. 

2                     The applicants move to amend their statement of claim.  At present, the applicants rely upon an amended statement of claim against CASA and the second respondent (Mr Farquharson).  They wish to join four individuals as respondents.  Mr Farquharson and the other four individuals identified in the minute of the proposed further amended statement of claim were (at relevant times) officers of CASA. 

3                     The applicants seek to pursue against the respondents and/or the proposed respondents claims in damages in a variety of proposed causes of action.  The applicants contend that CASA has breached the Civil Aviation Act 1988 (Cth) (CAA) and the Civil Aviation Regulations 1988 (CAR) in several ways.  The consequence of those breaches has been, it is argued, that the respondents are liable in damages to the applicants for breach of statutory duty, breach of a duty of care and in the case of the individual or proposed individual respondents, for misfeasance in office. 

4                     Leave to amend is opposed.  Further, CASA and Mr Farquharson move for orders pursuant to O 20 of the Federal Court Rules (FCR) and s 31A of the Federal Court of Australia 1976 (Cth) (FCA) for judgment in relation to all or any of the applicants’ claims, alternatively, the striking out of the existing amended statement of claim. 

5                     On numerous bases, the respondents contend that the existing and proposed causes of action which the applicants seek to pursue are so untenable that the proceeding should be dismissed forthwith. 

6                     Broadly speaking, the applicants plead that in exercising its powers and functions CASA has a common law duty of care which requires that it comply with the legislative and regulatory scheme so as to ensure its actions do not cause economic harm to entities whose conduct it regulates (including the applicants).  The applicants argue that CASA has breached that duty in consequence of which the applicants have sustained actionable loss and damage.

7                     Secondly, the applicants argue that CASA owed them a statutory duty to exercise its powers only in accordance with the provisions of the civil aviation legislation.  It is argued that CASA breached that duty in consequence of which the applicants have sustained recoverable damage. 

8                     Thirdly, it is asserted in a manner which will require some examination that there has been misfeasance in office by the present and proposed individual respondents against whom the applicants seek to advance such a claim. 

9                     CASA contends that each one of the claims sought to be made by the applicants is dependent upon a determination that particular administrative decisions made under the civil aviation legislation (such as granting or refusing to grant or cancelling or suspending a licence, authorisation or certificate) was invalid and/or ultra vires.  The applicants accept that this is the nature of the claim which is pursued.  However they contend that even if the breaches were not established, but a failure to act in good faith was established, that they would be entitled to relief. 

10                  In either event, CASA rejects any assertion that there was any statutory breach and, in particular, denies any suggestion of having misconstrued or misapplied relevant provisions. 

11                  As a general observation in relation to this litigation, despite a significant number of attempts to formulate a statement of claim and much activity opposing any claim, both the claim and the opposition to it are not sufficiently crystallised to enable any sound conclusions to be formed as to the survival of any part of it.  The claim as presently proposed can not survive but equally it can not be said, at present, that the entirety of the claim should be dismissed.  Accordingly a limited opportunity to re-plead will be allowed but unless and until adequate and proper material facts can be pleaded, substantial parts of the claim will not be permitted. 

RELEVANT CONSIDERATIONS FOR SUMMARY DISMISSAL

12                  The primary basis for pursuit of the motion for dismissal of the proceeding is pursuant to s 31A FCA.

13                  That section relevantly provides as follows:

31A     Summary judgment

…

(2)        The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

(a)        the first party is defending the proceeding or that part of the proceeding; and

(b)        the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.

14                  There have been numerous decisions dealing with the proper approach on a motion of this nature.  A convenient collection of the relevant principles is set out by Gilmour J in Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955 at [5]-[6] where his Honour said:

5          Section 31A lowers the bar for obtaining summary judgment: White Industries Australia Ltd v Commissioner of Taxation (2007) 160 FCR 298.  The second reading speech of the Migration Litigation Reform Bill 2005 which introduced s 31A stated that its purpose was to strengthen “the power of the courts to deal with unmeritorious matters by broadening the grounds on which federal courts can summarily dispose of unsustainable cases”: Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 70 IPR 146 at [45]; Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd [2008] FCAFC 60 at [124].

6          Success under s 31A does not require a demonstration that the case is hopeless or bound to fail.  The following principles are of general application to an application under s 31A:  

(a)        the Court must be very cautious not to do a party an injustice by summarily dismissing proceedings;

(b)        the Court ought not dismiss a claim based on a predictive assessment of prospects, where it is possible that if the claim went to trial, it may succeed;

(c)        in a case where evidence can give colour and content to allegations, and where questions of fact and degree are important, the Court should be more reluctant to dismiss a proceeding on the face of a pleading;

(d)        it is not Parliament's intention to require the Court to engage in lengthy and elaborate trials on an interlocutory basis for the purposes of determining whether or not a proceeding has no reasonable prospects of success.  It may be necessary for the opposing party to provide no more than an outline of evidence, sufficient to show that there is a genuine dispute, to prevent the summary application becoming a trial;

(e)        if there is a real issue of fact or law to be decided, and the rights of the parties depend upon it, it is obviously appropriate that the matter goes to trial.  It cannot be said that where there is a real factual dispute and that factual dispute must be resolved to determine whether the claim succeeds that there is ‘no reasonable prospect of success’;

(g)        it ought not be used to shut out proceedings where, on a proposition of law, there may be room for doubt.  On questions of law, an inquiry as to their merit should not be for the purpose of resolving them and also not simply to determine whether the argument is hopeless, but in order to decide if it is sufficiently strong to warrant a trial;

(h)        evidence of an ambivalent character will usually be sufficient to amount to reasonable prospects;

(i)         in determining if there are real issues of fact in issue so as to preclude summary judgment the courts must draw all reasonable inferences in favour of the non-moving party. 

See Genovese v BGC Construction Pty Ltd [2007] FCA 923 at [5]; Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 70 IPR 146 at [42]-[48]; Hicks v Ruddock (2007) 156 FCR 574 at [13]; Bond v Barry (2007) 73 IPR 490 at [46]; Commonwealth Bank of Australia v ACN 000 247 601 Pty Ltd (in Liq) (formerly Stanley Thompson Valuers Pty Ltd) [2006] FCA 1416 at [30]; Fortron Automotive Treatments Pty Ltd v Jones (No 2) [2006] FCA 1401 at [21]; Jefferson Ford Pty Ltd v Ford Motor Company of Australia Limited [2008] FCAFC 60.

THE HISTORY

15                  The facts which follow emerge from affidavit evidence relied upon by the parties as well as the proposed amended pleading.

16                  The second applicant (Mr Repacholi) is a Director of the first applicant (Repacholi Aviation).  Mr Repacholi held a commercial and private pilot licence and prior to March 2002 was the Chief Pilot of Repacholi Aviation.  Repacholi Aviation prior to 2002 held an Air Operator’s Certificate (AOC) which authorised it to conduct charter operations throughout Australia.

17                  On 5 March 2002, CASA served a notice in writing pursuant to CAR 268(1) suspending the pilot’s licences held by Mr Repacholi, pending investigation.  On the following day, Mr Repacholi applied to the Administrative Appeals Tribunal (the AAT) for a stay of CASA’s decision.  On 14 and 15 March 2002, that application was heard and refused (Repacholi v Civil Aviation Safety Authority [2002] AATA 196).

18                  Shortly after, in March 2002, Repacholi Aviation submitted to CASA an ‘Application for approval of Appointment’ of Mr Frederick Darrel Hampton as Chief Pilot of Repacholi Aviation.  Mr Hampton, however, was assessed by CASA as being ‘unsatisfactory for charter ops’.  Nevertheless, he was assessed as being suitable as a Chief Pilot in relation to agricultural operations.  An AOC was issued to Repacholi Aviation authorising aerial work operations only with the approval of Mr Hampton as Chief Pilot of Repacholi Aviation.  This occurred on 3 April 2002.

19                  In the meantime, on 28 March 2002, CASA issued a notice to Mr Repacholi allowing him 28 days within which ‘to show cause’ why his licences should not be varied, suspended or cancelled on the basis of the facts and circumstances set out in the notice.  It is unnecessary for present purposes to recite the content of that notice.  By it, CASA’s General Manager, General Aviation Operations (Mr Ogilvie) (a proposed third respondent) also notified Mr Repacholi of the operation of CAR 268(3).  He advised that the effect of that provision was that the licences held by Mr Repacholi remain suspended during the ‘show cause’ period. 

20                  There is a debate about whether or not at this time objection was taken or voiced by Mr Repacholi to the terms of the ‘show cause’ notice.  What is common ground, however, is that on 6 May 2002, Mr Repacholi through his solicitor responded to the notice and requested CASA to ‘lift the suspension’. 

21                  By a further notice of 19 June 2002, however, CASA notified Mr Repacholi that grounds existed which justified cancellation of his pilot licences in accordance with CAR 269.  In doing so, CASA asserted that it had carefully considered all the evidence in the matter including Mr Repacholi’s written response to the show cause notice. 

22                  There is a dispute as to whether or not there was such careful consideration. 

23                  Mr Repacholi then sought review of that decision to cancel his licences.  Over a five day period in September and November 2002 the AAT heard evidence and argument on the review and delivered a decision on 18 June 2003. 

24                  The AAT concluded that notwithstanding contravention of reg 157 and reg 166 of the CAR in January 2002, Mr Repacholi’s pilot licences should not be cancelled pursuant to CAR 269. 

25                  There were then communications between the applicants and CASA.  On 14 November 2003, Repacholi Aviation sought CASA’s approval of the appointment of Mr Repacholi as its Chief Pilot.  The parties agreed that an assessment of Mr Repacholi should be undertaken by the Vic/Tas office of CASA at Moorabbin in Victoria.  On 4 February 2004, CASA wrote to Repacholi Aviation advising of its refusal to approve Mr Repacholi as the appointed Chief Pilot of Repacholi Aviation. 

26                  Repacholi Aviation then pursued a further application for review of CASA’s latest decision.  This application was heard before the AAT over four days in December 2005.  The AAT delivered its decision on 30 June 2006 setting aside CASA’s decision and remitting the matter to CASA for reconsideration in accordance with s 43(1)(c)(ii) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act). 

27                  That application before the AAT was filed on 10 February 2004.  Well before it was heard, on 23 September 2004, CASA by its Principal Medical Officer gave a direction to Mr Repacholi under reg 67.230 of the Civil Aviation Safety Regulations 1998 (CASR) to authorise disclosure of medical information to CASA. 

28                  Mr Repacholi refused to comply with the direction.  Correspondence ensued.  CASA suspended Mr Repacholi’s medical certificates pursuant to the power contained in CASR 67.240(1) by a notice dated 27 October 2004.  Two days later, by letter dated 29 October 2004, Mr Repacholi through his solicitors informed CASA that an application for an injunction was being pursued in the Victoria Registry of this Court.  Negotiations ensued between the solicitors for the respective parties on that day. 

29                  CASA then temporarily withdrew the suspension of Mr Repacholi’s medical certificates until 4 November 2004 so as to enable him to complete some urgent crop spaying in rural Western Australia.  In the interim, the motion for an injunction came before North J.  His Honour granted an interim restraining order adjourning the application until 5 November 2004 ‘for the purpose of the respondent providing … evidence as to the serious affect (sic-effect) on aviation safety resulting from the psychiatric treatment’ of Mr Repacholi. 

30                  On the following day (4 November 2004) CASA revoked the suspension of Mr Repacholi’s medical certificates.  The Court, by consent, made orders setting aside the interim injunction and dismissing the proceedings. 

31                  Subsequently, there were several requests made by or on behalf of Mr Repacholi for Repacholi Aviation’s AOC to be reinstated ‘back to the original status’.  Precisely what happened in relation to each such request is not presently clear but ultimately, in any event, there was no complete reinstatement.  The only application expressly or formally sought on behalf of Repacholi Aviation was to add a Flying School authorisation (for agricultural operations only) to the AOC of Repacholi Aviation. 

STATUTORY FRAMEWORK

32                  There is pursuant to the CAA a statutory scheme focusing on the safety of civil aviation.  By s 3A of the CAA the main object of the Act is described as being that of establishing a regulatory framework for maintaining, enhancing and promoting the safety of civil aviation with particular emphasis on preventing aviation accidents and incidents.  CASA has the function of conducting the safety regulation of the CAA and the means by which it does so include the issuing of certificates, licences, registrations and permits (s 9(1)).  It is also empowered to issue various authorisations under the CAA.  Those include various kinds of pilot licences issued under Pt 5 of the CAR.  It also issues various kinds of AOCs.  These are provided for under Pt III Div 2 of the CAA. 

33                  There is little doubt that the safety of air navigation is the most important consideration under the CAA (see s 9A(1)).  This is also reflected under subsidiary provisions.  

34                  The applicants were involved in flying for commercial purposes.  By s 27(1) of the CAA, CASA is entitled to issue AOCs for the purpose of its functions under the Act.  An AOC is required to fly or operate for prescribed commercial purposes (s 27(2) and (9)).  It is for CASA to determine the term of an AOC (s 27(7)). 

35                  Section 28BA to s 28BF CAA at materials times provided:

28BA  General conditions

(1)        An AOC has effect subject to the following conditions:

(a)        the condition that sections 28BD, 28BE, 28BF, 28BG and 28BH are complied with;

(aa)      the conditions subject to which the AOC has effect because of section 28BAA;

(b)        any conditions specified in the regulations or Civil Aviation Orders;

(c)        any conditions imposed by CASA under section 28BB.

(2)        If a condition of an AOC referred to in paragraph (1)(a) or (aa) is breached, the AOC continues, despite the breach, to authorise flights or operations to which the condition relates.

(2A)     If a condition of an AOC referred to in paragraph (1)(b) or (1)(c) is breached, the AOC does not authorise any flight or operation to which the condition relates while the breach continues.

(3)        If a condition of an AOC is breached, CASA may, by written notice given to its holder, suspend or cancel:

(a)        the AOC; or

(b)        any specified authorisation contained in the AOC;

whether or not the breach is continuing.

(4)        Before making a decision under subsection (3), CASA must:

(a)        give the holder of the AOC a notice setting out the reasons why CASA is considering making the decision; and

(b)        allow the holder of the AOC to show cause, within such reasonable time as CASA specifies in the notice, why CASA should not make the decision.

(5)        If CASA makes a decision under subsection (3), the notice of its decision must include a summary of section 31A. However, a failure to include such a summary does not affect the validity of the notice.

28BAA            Certain conditions for grant of AOC also have effect as ongoing conditions on the AOC

            An AOC has effect subject to the condition that CASA remains satisfied as mentioned in paragraphs 28(1)(a) and (b) in relation to the operations that are covered by the AOC.

28BB  CASA may impose and vary AOC conditions

(1)        CASA may:

(a)        at the time of issuing an AOC, impose conditions by specifying them in the AOC; and

(b)        at any time after the issue of an AOC, give a written notice to the holder of the AOC, imposing conditions, or further conditions, on the AOC.

(2)        CASA may at any time give a written notice to the holder of an AOC, varying any of the conditions of the AOC that were imposed by CASA. A variation may be made:

(a)        on the application of the holder of an AOC; or

(b)        on CASA’s own initiative.

(3)        An application for variation must:

(a)        be in writing; and

(b)        set out the variation sought and the reasons why it is sought.

(4)        Section 27AD applies to an application under this section in the same way that section 27AD applies to an application for an AOC.

28BC  Limits on CASA’s powers in relation to suspension, cancellation and AOC conditions

(1)        CASA must not:

(a)        impose or vary a condition of an AOC that:

(i)         is not a mixed authority AOC; and

(ii)        authorises the operation of a foreign registered aircraft on regulated domestic flights; or

(b)        impose or vary a condition relating to the authorisation of the operation of a foreign registered aircraft on regulated domestic flights that is contained in a mixed authority AOC;

except to ensure that the aircraft’s operation, maintenance and airworthiness are of a standard that CASA considers necessary in the interests of the safety of air navigation.

(1A)     CASA must not suspend or cancel an AOC of the kind to which paragraph (1)(a) applies or an authorisation of the kind to which paragraph (1)(b) applies except:

(a)        to ensure that the aircraft’s operation, maintenance and airworthiness are of a standard that CASA considers necessary in the interests of the safety of air navigation; or

(b)        as provided by subsection (1B).

(1B)     Subject to subsection (1C), CASA may suspend or cancel an AOC of the kind to which paragraph (1)(a) applies or an authorisation to which paragraph (1)(b) applies if the condition of the AOC or the condition relating to the authorisation, as the case may be, that section 28BI is complied with has been breached.

(1C)     To the extent that an AOC, or an authorisation contained in a mixed authority AOC, authorises carriage by air that is not covered by Part II, III or IV of the Civil Aviation (Carriers’ Liability) Act 1959, CASA does not have power to suspend or cancel the AOC or authorisation because of a breach of the condition that section 28BI is complied with unless the holder of the AOC is:

(a)        a trading corporation formed within the limits of the Commonwealth (within the meaning of paragraph 51(xx) of the Constitution); or

(b)        a foreign corporation within the meaning of that paragraph; or

(c)        a corporation formed in a Territory. 

(2)        CASA must not:

(a)        impose or vary a condition of an AOC that does not authorise the operation of a foreign registered aircraft on regulated domestic flights; or

(b)        impose or vary a condition of a mixed authority AOC relating to any authorisation of an operation (other than the operation of a foreign registered aircraft on regulated domestic flights) that is contained in a mixed authority AOC;

except to ensure compliance with the provisions of this Act, the regulations and the Civil Aviation Orders, relating to safety.

(2A)     CASA must not suspend or cancel an AOC of the kind to which paragraph (2)(a) applies or an authorisation of the kind to which paragraph (2)(b) applies except:

(a)        to ensure compliance with the provisions of this Act, the regulations, and the Civil Aviation Orders, relating to safety; or

(b)        as provided by subsection (2B).

(2B)     Subject to subsection (2C), CASA may suspend or cancel an AOC of the kind to which paragraph (2)(a) applies or an authorisation to which paragraph (2)(b) applies if the condition of the AOC or the condition relating to the authorisation, as the case may be, that section 28BI is complied with has been breached.

(2C)     To the extent that an AOC, or an authorisation contained in a mixed authority AOC, authorises carriage by air that is not covered by Part II, III or IV of the Civil Aviation (Carriers’ Liability) Act 1959, CASA does not have power to suspend or cancel the AOC or authorisation because of a breach of the condition that section 28BI is complied with unless the holder of the AOC is:

(a)        a trading corporation formed within the limits of the Commonwealth (within the meaning of paragraph 51(xx) of the Constitution); or

(b)        a foreign corporation within the meaning of that paragraph; or

(c)        a corporation formed in a Territory. 

(3)        The financial position of the holder of the AOC is one of the matters that CASA may take into account in forming a view for the purposes of subsection (1), paragraph (1A)(a), subsection (2) and paragraph (2A)(a).

(4)        In this section:

mixed authority AOC means an AOC authorising:

(a)        the operation of a foreign registered aircraft on regulated domestic flights; and

(b)        other operations.

28BD  Compliance with civil aviation law

            The holder of an AOC must comply with all requirements of this Act, the regulations and the Civil Aviation Orders that apply to the holder.

28BE   Duty to exercise care and diligence

(1)        The holder of an AOC must at all times take all reasonable steps to ensure that every activity covered by the AOC, and everything done in connection with such an activity, is done with a reasonable degree of care and diligence.

(2)        If the holder is a body having legal personality, each of its directors must also take the steps specified in subsection (1).

(3)        It is evidence of a failure by a body and its directors to comply with this section if an act covered by this section is done without a reasonable degree of care and diligence mainly because of:

(a)        inadequate corporate management, control or supervision of the conduct of any of the body’s directors, servants or agents; or

(b)        failure to provide adequate systems for communicating relevant information to relevant people in the body.

(4)        No action lies, for damages or compensation, in respect of a contravention of this section.

(5)        This section does not affect any duty imposed by, or under, any other law of the Commonwealth, or of a State or Territory, or under the common law.

28BF   Organisation, personnel etc.

(1)        The holder of an AOC must at all times maintain an appropriate organisation, with a sufficient number of appropriately qualified personnel and a sound and effective management structure, having regard to the nature of the operations covered by the AOC.

(2)        The holder must establish and maintain any supervisory positions in the organisation, or in any training and checking organisation established as part of it, that CASA directs, having regard to the nature of the operations covered by the AOC.

36                  A position known as Chief Pilot is required to be established under the CAA and Civil Aviation Order 82.0 (CAO 82.0) by the holder of an AOC.  The AOC holder must comply with the provisions of Appendix 1 to CAO 82.0, the effect of which is that before a person is appointed as a Chief Pilot the appointment must be approved in writing by CASA ‘after application in writing by the operator’. 

37                  As indicated by these provisions, CASA has wide powers including the power to vary the conditions of an AOC at any time (s 28BB(1) and (2)).  Further, and pertinently to the facts described below, CASA may by written notice given to the holder of the AOC suspend or cancel the AOC if a condition of that AOC has been breached (s 28BA(3) of the CAA). 

Suspension and Cancellation of Pilot Licences

38                  In addition to those statutory powers, CASA may by notice in writing vary, suspend or cancel a licence, certificate or authority issued under the legislation if it is satisfied that one or more of the prescribed grounds exists (CAR 269(1)).  Included amongst those grounds is the ground that the holder of the licence, certificate or authority has failed in his or her duty with respect to any matter affecting the safe navigation or operation of an aircraft (CAR 269(1)(c)).  Similarly, if the holder ‘is not a fit and proper person’ to hold the licence, certificate or authority, the power under CAR 269(1) may be exercised (CAR 269(1)(d)).  However (and relevantly to the present situation), before any action is taken by CASA under those provisions, it must issue a notice to the holder of the relevant licence, certificate or authority permitting the person time within which to ‘show cause’ why regulatory action as foreshadowed should not be taken (CAR 269(3)). 

39                  One of the provisions falling for consideration in these proceedings is the preceding regulation, CAR 268 which as at 2002 permitted CASA by notice in writing served on the holder of the licence, certificate or authority to suspend that licence, certificate or authority where CASA had reason to believe that facts or circumstances existed which would justify regulatory action and where ‘there may be a serious risk to air safety if the licence, certificate or authority were not suspended’.  CAR 268 deals with suspension rather than the possibility of cancellation.  However, at the same time, it does not contain the requirement in CAR 269(3), to first issue a ‘show cause’ notice.  CAR 268 appears to be directed to the taking of prompt action in appropriate circumstances when it has ‘reason to believe’ there may be risk to air navigation safety.  CAR 269 appears to apply when it is ‘satisfied’ (from whatever source of knowledge) that problems exist. 

40                  For an appreciation of the arguments in relation to this topic, it is necessary to set out the provisions of CAR 268 and CAR 269 as at March-June 2002.  Those provisions were as follows:

CAR 268:

Suspension of licence, certificate or authority pending investigation

(1)        Where CASA has reason to believe:

(a)        that there may exist facts or circumstances that would justify the variation, suspension or cancellation of a licence or certificate or an authority on a ground specified in regulation 269; and

(b)        that there may be a serious risk to air safety if the licence, certificate or authority were not suspended;

CASA may, by notice in writing served on the holder of the licence, certificate or authority, suspend the licence, certificate or authority.

(2)        Where CASA suspends a licence or certificate or an authority in pursuance of subregulation (1), CASA shall forthwith investigate the matter, and the suspension shall cease upon the completion of the investigation or at the expiration of 28 days from and including the date on which the suspension took effect, whichever is the earlier, but without prejudice to the powers of CASA under regulation 269.  

(3)        Where:

(a)        CASA, upon the completion of an investigation under this regulation, gives to the holder of the licence, certificate or authority a notice under subregulation 269(3); and

(b)        the suspension of the licence, certificate or authority under this regulation had not ceased before the completion of the investigation;

the licence, certificate or authority shall remain suspended during the time specified by CASA in that notice as the time within which the holder of the licence, certificate or authority may show cause why the licence, certificate or authority should not be varied, suspended or cancelled under regulation 269.  (emphasis added)

CAR 269:

Variation, suspension or cancellation of licence, certificate or authority

(1)        Subject to this regulation, CASA may, by notice in writing served on the holder of a licence or certificate or an authority, vary, suspend or cancel the licence, certificate or authority where CASA is satisfied that one or more of the following grounds exists, namely: 

(a)        that the holder of the licence, certificate or authority has contravened, a provision of the Act or these regulations, including these regulations as in force by virtue of a law of a State;

(b)        that the holder of the licence, certificate or authority fails to satisfy, or to continue to satisfy, any requirement prescribed by, or specified under, these regulations in relation to the obtaining or holding of such a licence or certificate or an authority;

(c)        that the holder of the licence, certificate or authority has failed in his or her duty with respect to any matter affecting the safe navigation or operation of an aircraft;

(d)        that the holder of the licence, certificate or authority is not a fit and proper person to have the responsibilities and exercise and perform the functions and duties of a holder of such a licence or certificate or an authority; or

(e)        that the holder of the licence, certificate or authority has contravened, a direction or instruction with respect to a matter affecting the safe navigation and operation of an aircraft, being a direction or instruction that is contained in Civil Aviation Orders.

(2)        A notice under subregulation (1) shall set out the grounds for the decision.

(3)        Before taking action under this regulation to vary, suspend or cancel a licence or certificate or an authority, CASA shall:

(a)        give notice, in writing, to the holder of the licence, certificate or authority of the facts and circumstances that, in the opinion of CASA, warrant consideration being given to the variation, suspension or cancellation of the licence, certificate or authority under this regulation; and

(b)        allow the holder of the licence, certificate or authority to show cause, within such time as CASA specifies in that notice, why the licence, certificate or authority should not be varied, suspended or cancelled under this regulation.

(4)        The time specified by CASA in the notice under subregulation (3) as the time within which the holder of the licence, certificate or authority may show cause why the licence, certificate or authority should not be varied, suspended or cancelled under this regulation shall be a time that is reasonable in all of the circumstances of the particular case.  (emphasis added)

41                  Regulation 67.230 of the CASR provides:

67.230CASA may require medical examination of certificate holders

(1)        If it is necessary, in the interests of the safety of air navigation, for the holder of a medical certificate to demonstrate:

(a)        that he or she continues to meet the relevant medical standard; or

(b)        that holding the certificate does not adversely affect the safety of air navigation;

CASA may direct the holder to do any 1 or more of the following:

(c)        submit to an examination carried out by a medical practitioner, specialist psychiatrist, clinical psychologist, audiologist, optometrist, orthoptist, orthotist, occupational therapist, specialist prosthetist or a practitioner of another kind specified in the direction;

(d)        submit to an examination or test by a person (not necessarily a medical practitioner) expert in the safe performance of the particular activity to which the medical certificate relates;

(e)        authorise the disclosure to CASA of any information about the holder, held by a person, organisation, body or authority referred to in subregulation (4), that may help CASA to decide whether:

(i)         the holder continues to meet that medical standard; or

(ii)        the holder’s holding the certificate may adversely affect the safety of air navigation.

(2)        For paragraph (1) (c), CASA may nominate a particular practitioner, of a kind mentioned or referred to in that paragraph, who is to carry out the examination.

(3)        For paragraph (1) (d), CASA may nominate a particular person who is expert in the performance of the activity concerned to carry out the examination.

(4)        For paragraph (1) (e), the persons, organisations, bodies and authorities are as follows:

(a)        a medical practitioner, specialist psychiatrist, clinical psychologist, audiologist, optometrist, orthoptist, orthotist, occupational therapist, specialist prosthetist or similar practitioner who has examined or treated the holder;

(b)        any other person or organisation (including a hospital) that has made a physical, psychological or psychiatric examination of the holder;

(c)        any other person or organisation (including a hospital) that has treated the holder for a medically significant condition;

(d)        an employer (including a former employer) of the holder;

(e)        any other person, organisation, body or authority (including a police force or police service and, subject to Part VIIC of the Crimes Act 1914, a court) that holds information relevant to deciding whether the person’s holding the certificate may adversely affect the safety of air navigation. 

42                  Finally, as a crucial balance to the exercise of these powers, many decisions taken by CASA in relation to an AOC will be reviewable on their merits on application to the AAT.  As with other decisions of the AAT, it conducts a full merits review, standing in the shoes of the decision-maker to make ‘the correct or preferable’ administrative decision on the evidence before the AAT.  An additional power conferred on the AAT under s 41 of the AAT Actis to stay the operation of a reviewable CASA decision or otherwise to make a positive order in favour of an applicant before the AAT. 

ORIGINAL PROCEEDINGS

43                  Actions against CASA were originally commenced in the Supreme Court of Western Australia in negligence.  By writ of summons dated 17 June 2008, the applicants initiated proceedings in that Court against CASA and its then Area Manager, Western Region, Mr Farquharson.  Damages were sought for losses allegedly suffered by reason of acts and omissions of CASA and/or Mr Farquharson in the exercise of powers under the relevant legislation.  The causes of action were related to alleged breaches by CASA occurring through the period from 2002-2007.  There were exchanges of correspondence between the solicitors for the parties.  These exchanges gave rise to various revised versions of the statement of claim.  The proposed amended statement of claim which is now before this Court is the culmination of those amendments and appears to be the seventh version of the pleading. 

44                  The current proposed pleading, however, was preceded by a summary judgment application brought before Master Sanderson in the Supreme Court of Western Australia on 9 March 2009.  In those proceedings, the respondents contended that the applicants were in substance seeking judicial declarations as to the validity or otherwise of decisions or instruments made by CASA in circumstances in which s 9 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act) may apply to preclude such a review by State Supreme Courts.  The submissions for the respondents also pursued the argument which is presently raised that the applicants were seeking common law damages based on impermissible de‑facto claims for judicial review of administrative action.

45                  The learned Master indicated that he was disposed to transfer the proceeding or the action to this Court pursuant the Jurisdiction of Courts (Cross-Vesting) Act 1987 (WA).  Accordingly, the applicants formally so applied for such transfer.  The respondents inform the Court (and the applicants do not suggest otherwise) that the respondents did not oppose the transfer nor concede that any version of the applicants’ variously amended drafts of the statement of claim at that stage raised a federal ‘matter’ enlivening the jurisdiction of this Court.  It is contended now for the respondents (amongst other arguments), that this Court does not have jurisdiction to determine the claims advanced by the applicants.  I will deal with that argument in due course. 

EVIDENCE IN SUPPORT OF THE PROPOSED PLEADING

46                  In addition to a minute of proposed further amended statement of claim, the parties have invited the Court to consider many pages of documentary and affidavit material. 

47                  In large measure the material from the respondents is intended to show that CASA and its officers at all times acted reasonably and within the letter and spirit of the laws which the applicants contend were breached. 

48                  For the applicants the material is designed to convey not only the contrary impression but also that there is a reasonable basis for their claim in light of evidence before the AAT, the conclusions of the AAT and the continual opposition by CASA to Repacholi Aviation’s AOC status being restored.  These factors, it is said, suffice to form a reasonable basis from which to infer that the alleged breaches and bad faith will be established after discovery.

49                  Each party accepts that factual material may be considered on an application of this nature.  However, if the legal submissions of the respondents are correct then the content of this material is largely, if not wholly, irrelevant.  That is, the respondents’ current arguments do not depend on the determination of a factual contest. 

50                  If the legal submissions are not correct, then in the circumstances of this case, expression of views at this very early stage in relation to what may be inferred from a complex and lengthy history of disputation would not be possible and would, in any event, be unhelpful and inappropriate. 

THE CLAIMS – IN DETAIL

51                  The proposed pleading is essentially in chronological format.  Having established the formalities, the applicants first raise a 5 March 2002 notice of CASA issued by it under s 268(1) (the first notice) to suspend Mr Repacholi’s pilot licences pending investigation after a takeoff executed by him at Jandakot Airport in Western Australia, on 10 January 2002.  The complaint in relation to the notice which was served on Mr Repacholi is a failure on the part of CASA to comply with its statutory obligation under CAR 268(2) to conduct ‘an investigation’ into the facts and circumstances associated with the takeoff and to complete the investigation promptly. 

52                  The next matter raised is a second notice on 28 March 2002 (the second notice) pursuant to which CASA purported (pursuant to CAR 268(3)) to further suspend the pilot licences held by Mr Repacholi and to require him to show cause why his pilot licences should not be varied, cancelled or suspended.  Again, it is alleged that there was a failure to conduct a proper investigation as required by CAR 268(2) such that the second notice was void and ineffective. 

53                  In addition to the invalidity, it is asserted that the second notice was contrary to the provisions of the statutory regime governing the operations of CASA and took place in circumstances where the signatory to the notice, Mr Ogilvie acting on instruction from Mr Farquharson, knew or ought to have known that its service was not authorised by law and was beyond each of their respective powers and beyond power of CASA. 

54                  The next matter raised is a third notice of 19 June 2002 (the third notice) by which CASA purported (pursuant to CAR 269) to cancel the pilot licences including the commercial pilot’s licence held by Mr Repacholi.  That notice was signed by Mr Frew.  The applicants complain that in respect of that notice, there was no power ‘or jurisdiction’ on the part of CASA to cancel the pilot licences until Mr Repacholi had first been served with and given an opportunity to answer a valid ‘show cause’ notice (CAR 269(3).  The complaint is that at no time was Mr Repacholi served a valid show cause notice such that the cancellation under the third notice was void and ineffective.  

55                  Certain conduct of officers of CASA is also raised in relation to the third notice.  Each of the three notices was allegedly made without conducting an investigation or without proper inquiry or without knowledge of the planning and preparation undertaken by Mr Repacholi for the purpose of conducting a takeoff.  It is said that CASA and the relevant officers should have been aware of the fact that ‘similar takeoff operations were commonly conducted in the United States of America’ and had insufficient information regarding the takeoff operation as a whole.  It is said that the notices were, in the case of the second and third notices, made ‘without jurisdiction’; made in excess of authority of individual persons; were knowingly made in excess of authority; were made in breach of CASA’s duty of good faith; or, alternatively, made negligently. 

56                  It is next pleaded that on 18 June 2003 in proceeding W2002/217 between Mr Repacholi and CASA, the AAT set aside the decision to cancel Mr Repacholi’s pilot licences and in substitution, therefore, decided that the licences not be cancelled and held that the cancellation of his pilot licences could ‘only be regarded as grossly excessive and unreasonable and, therefore, highly inappropriate’. 

57                  On the basis of those matters, it is asserted that the cancellation of Mr Repacholi’s licences constituted a breach by CASA of its statutory duty to him; and a breach of its duty of good faith to him.  It was also allegedly negligent in that CASA ought to have been aware but was not aware of the overseas practice relating to takeoffs of the kind the subject of the suspension and cancellation.  Allegedly, the decision to cancel was taken after insufficient research, on insufficient information and without proper inquiry as to ‘existing and accepted practice’ in relation to such takeoffs.  The decision to cancel was also allegedly taken with insufficient information and without proper inquiries as to the details of and preparation for the takeoff by Mr Repacholi and others. 

58                  The applicants then embrace language similar to that used in the AAT contending that the decision to cancel Mr Repacholi’s pilot licences was in the circumstances, grossly excessive and unreasonable.  They say, further, it was made without jurisdiction and contrary to provisions of the statutory regime governing the operations of CASA.  They say it was in excess of the authority of the individuals who served the notices and made in circumstances where they knew the decision was not authorised by law and was one that they had no power to make; or alternatively, was made by each of them recklessly, not caring whether the decision was authorised by law or was within power.

59                  The applicants go on to plead that by reason of the wrongful suspension of Mr Repacholi’s pilot licences by the first and second notices, Repacholi Aviation sought approval of CASA for appointment of Mr Fred Hampton as its Chief Pilot.  On 3 April 2003, Mr Repacholi (whose appointment as Chief Pilot of Repacholi Aviation had been approved by CASA on 10 February 1994) and who had acted in that capacity since that date ‘stepped back’ as Chief Pilot on Repacholi Aviation.

60                  On the same date, CASA approved Mr Hampton as Chief Pilot of Repacholi Aviation but assessed him as suitable only for ‘aerial work - initially Ag Ops’ and as not suitable for charter operations. 

61                  The applicants complain that by reason of the limited form of this approval of Mr Hampton, CASA renewed Repacholi Aviation’s AOC in terms excluding charter operations even though, as at the date of his approval, Mr Hampton had the qualifications required for appointment as Chief Pilot of a company carrying out charter operations.  It is complained that in those circumstances, CASA was under a statutory duty to Repacholi Aviation to approve the appointment of Mr Hampton as Chief Pilot without in any way amending Repacholi Aviation’s AOC.

62                  It is then pleaded that on 25 June 2003, following the decision of the AAT to set aside the cancellation of Mr Repacholi’s pilot licences, the solicitors for the applicants wrote to CASA requesting reinstatement of Mr Repacholi as Chief Pilot of Repacholi Aviation and the reinstatement of the charter operations on Repacholi Aviation’s AOC.

63                  On 1 September 2003, Repacholi Aviation made a written application to CASA for approval of the appointment of Mr Repacholi as Chief Pilot of the company.  That application was sent by facsimile transmission and by a facsimile of the same date, the Flying Operations Inspector of CASA requested a formal application for approval of Mr Repacholi’s appointment be filed so that his suitability could be assessed.  Following this, on 14 November 2003, Mr Repacholi and the company made a further and formal application to CASA for approval of the appointment of Mr Repacholi as Chief Pilot of the company.  That application was signed by Mr Repacholi and forwarded under cover of a letter from Mr Dennis Repacholi on behalf of Repacholi Aviation.  The applicants plead that in those circumstances CASA was under a duty to consider the application for approval of Mr Repacholi as Chief Pilot of the company on its merits and to assess and examine him in accordance with par (b)-(d) of cl 1.3 in Appendix 1 of CAO 82.0. 

64                  Clause 1 in Appendix 1 of CAO 82.0 (as at 8 September 2005) provides as follows:

Appendix 1

1          Approval of Chief Pilot by CASA

1.1       A person must not be appointed as, or act as, a Chief Pilot unless the person’s appointment has been approved in writing by CASA after application in writing by the operator.

1.2       The application must include the following details in relation to the person:

(a)        current licences, ratings and endorsements held;

(b)        total flight time, total time as pilot in command and, where applicable, total instrument flight time and multi-engine aircraft experience;

(c)        a comprehensive outline of flying history, including experience in commercial operations.

1.3       The appointment may be approved only if the person has:

(a)        in the opinion of CASA, maintained a satisfactory record in the conduct or management of flying operations; and

(b)        been assessed, by an examiner appointed by CASA, as suitable to carry out the responsibilities of a Chief Pilot; and

(c)        passed an oral examination, conducted by an examiner appointed by CASA, covering the regulatory requirements for the safe conduct of commercial operations; and

(d)        passed a flight planning, loading and performance examination, conducted by an examiner appointed by CASA, based on the operator’s most complex aircraft; and  (emphasis added)

(e)        if required by CASA — flown with a person nominated by CASA to demonstrate his or her suitability for appointment.

1.4       CASA must:

(a)        give written notice of the approval, or refusal of approval, to the operator and to the person; and

(b)        if CASA refuses to approve the appointment — include in the notice the reasons for the refusal.

1.5       An approval:

(a)        relates only to the operator mentioned in the notice of approval; and

(b)        may be subject to conditions mentioned in the notice of approval; and

(c)        remains in force:

(i)         for the period mentioned in the notice of approval; or

(ii)        if no period is mentioned — while the person maintains a satisfactory standard of performance.

65                  The applicants then raise a complaint in respect of the fourth notice, this being a notice from CASA dated 4 February 2004.  The applicants say that by the fourth notice CASA wrongfully, in breach of its common law duty to Mr Repacholi and the company and in breach of its statutory duty to Mr Repacholi and the company, in breach of its duty of good faith and without assessing and examining Mr Repacholi in accordance with par (b)-(d) of cl 1.3 in Appendix 1 of CAO 82.0, refused to approve the appointment of Mr Repacholi as Chief Pilot of Repacholi Aviation. 

66                  Complaints are made against the individuals involved on the basis that the request was made without giving any true consideration to the application; without making any proper assessment of Mr Repacholi’s qualifications to be appointed as Chief Pilot; made in breach of CASA’s duty of good faith and the duty of good faith of Mr Farquharson and one of the other individuals it is proposed to join in the amended pleading which the applicants seek to have leave to file.  It is said that the fourth notice was made without assessing and examining Mr Repacholi in accordance with the requirements of cl 1.3 and without jurisdiction in circumstances where the two individuals knew the decision was beyond power; or alternatively, was made recklessly, not caring whether it was a decision within power. 

67                  There is then pleaded a further proceeding in the AAT on 30 June 2006 (proceeding number W2004/44) in which the AAT delivered its decision and ordered that Mr Repacholi be assessed and examined by an examiner appointed by CASA based in a regional office of CASA other than the Perth Regional Aviation Field Office (formerly known as the West Office Area).  As a result of assessments carried out pursuant to the AAT’s determination, Mr Repacholi’s appointment as Chief Pilot of Repacholi Aviation was approved by CASA on or about 19 December 2006.  It is pleaded that in breach of its duty of good faith and in breach of its statutory duty to the company, the appointment of Mr Repacholi as Chief Pilot of the company and despite ‘numerous requests’ CASA failed or refused to reinstate ‘charter operations’ on the AOC held by Repacholi Aviation.

68                  The fifth action of which complaint is raised is a direction contained in a letter of 23 September 2004 by CASA to Mr Repacholi to authorise the disclosure to CASA of certain information, namely:

to authorise the disclosure to CASA of any Information about you, held by a person, organisation, body or authority (including but not limited to a hospital, medical practitioner, specialist psychiatrist, clinical psychologist) who has examined or treated you and made a psychological or psychiatric examination of you.

Mr Repacholi was also directed to authorise the heath insurance commission ‘to release your Medicare claiming history and pharmaceutical benefits scheme history including prescribing doctors’ names and pharmacy details’. 

69                  Conspicuously, this direction was wholly unlimited in point of time. 

70                  A new individual officer signed this document and it is also sought to join that individual as a respondent.

71                  The applicants complain that the direction which purported to be made pursuant to CASR reg 67.230(1)(e) was made in circumstances which did not satisfy the requirements of reg 67.230(1)(a) or (b) and was therefore not authorised by par (e).  Further, it related to information the disclosure of which did not satisfy the requirements of that paragraph and was not authorised by or under any other legislative provision.  It is said, therefore, that the direction was void and ineffective and made without jurisdiction. 

72                  The next notice (the fifth notice but the sixth matter of which complaint is made) was issued on 29 October 2004 when CASA issued a notice of suspension of the class 1 and class 2 medical certificates held by Mr Repacholi based on his failure to comply with the direction.  That notice, it is said, was signed by the same individual who signed the direction and appears to have been issued on the advice and recommendation of a further individual whom it is not sought to join as an additional respondent.  Once again, it is contended that the decision to suspend the medical certificates was made in breach of CASA’s statutory duty; was made without ‘jurisdiction’; was made without reasonable grounds; was known by the author to be made without ‘jurisdiction’; or alternatively, made recklessly, not caring whether it was or was not a decision within the power and was made negligently in that Mr Repacholi had failed to comply with a direction which was invalid and in which CASA and the individual concerned ought to have known was invalid and in circumstances where there were no grounds or reasonable grounds for the suspension of the medical certificates. 

73                  It is said, therefore, that CASA and all the various individuals involved in serving the various notices acted beyond power in circumstances where they knew that they did not have the power to suspend the pilot licences pursuant to CAR 268(3) on 28 March 2002 in the absence of an investigation; cancel the pilot licences; refuse to approve the appointment of Mr Repacholi as Chief Pilot after 10 February 2004; refuse or fail to consider in early 2007 the application by the company to reinstate ‘charter operations’ on its AOC; and to issue a notice of suspension of the class 1 and class 2 medical certificates held by Mr Repacholi.  It is therefore asserted that the individuals and CASA were in breach of the statutory duty and acted ‘without jurisdiction’ in circumstances where they knew that the acts were in excess of ‘jurisdiction’, or alternatively, acted recklessly, not caring whether they had the power to act and exercised such statutory powers they did have for the purpose of and with the intent of injuring Mr Repacholi and/or Repacholi Aviation by the exercise and purported exercise of the statutory powers.

74                  Those matters are said to constitute, on behalf of each of the individuals, misfeasance in public office.

75                  The applicants say that they have suffered damage by reason of the unlawful actions of the respondents; the negligence of the respondents; the breaches of duty of good faith; the breaches of statutory duty; and the misfeasance in office.

76                  I propose now to look at some specific matters raised in the proposed pleading before addressing the broader legal principles which arise. 

The First Notice

77                  The first notice related to an unconventional form of takeoff executed by Mr Repacholi at Jandakot Airport on 10 January 2002. 

78                  The applicants contend that CAR 268(2) required that CASA upon giving the first notice to Mr Repacholi ‘investigate the matter’ forthwith.  Therefore it is contended that from the date of giving the notice CASA owed Mr Repacholi a statutory duty forthwith to conduct an investigation into the facts and circumstances associated with the takeoff and to complete that investigation promptly.  This they say is because the effect of CAR 268(2) would be that the suspension of his licence would cease on completion of the investigation required under that subsection or upon the expiration of 28 days from the date on which the suspension took effect, whichever was the earlier.  It is said that in breach of its statutory duty, CASA did not conduct an investigation in relation to the facts and circumstances associated with the takeoff either forthwith or at all and did not complete any investigation of the facts and circumstances associated with the takeoff. 

79                  Although CASA strongly denies that there was no investigation and seeks to rely upon evidentiary material to make it clear that there was an investigation, it also submits that the applicants have misconstrued the statutory effect of the provisions in CAR.

80                  For CASA it is argued that in the circumstances set out in CAR 268(1), CASA may by notice in writing suspend a pilot licence.  Where it does so it must forthwith investigate the matter.  However, CASA argues that the fact of investigation by reason of CAR 268(2) only provides a reference point for the expiration of the suspension under CAR 268(1) on a basis that is ‘without prejudice’ to CASA’s power under CAR 269.  That power, CASA contends, can be exercised independently of any action taken pursuant to CAR 268.  CAR 268(3), it is contended, provides a legal consequence or particular effect in relation to the suspension of a licence resulting from the exercise of CAR 268(1), namely, by operation of law not by operation of any further decision of CASA. 

81                  CASA says the undisputed facts are that CASA made a decision to suspend on 5 March 2002.  Repacholi Aviation unsuccessfully sought a stay of that decision in the AAT on 6 March 2002 and a show cause notice was issued on 28 March 2002 providing Mr Repacholi with 28 days within which to show cause; Mr Repacholi responded to that notice on 6 May 2002 and CASA took action on 19 June 2002 to cancel Mr Repacholi’s license.  In those circumstances, CASA argues the notice of 28 March 2002 cannot be held to have been ‘invalid and ineffective’ and there can be no jurisdictional error attending its making. 

82                  CASA contends that even if one assumes a technical failure to follow the procedure under CAR 269(3) before the issue of a show cause notice, that failure could not result in ‘invalidity’ or unlawfulness of the regulatory action in fact taken:  Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355. 

83                  However, the applicants contend that this is the wrong construction of the relationship between CAR 268 and CAR 269.  Senior counsel for the applicants contends that CASA can take one of two courses if it thinks there are circumstances that would justify suspension.  It may suspend the license or certificate for the purpose of an investigation or it can direct under CAR 269 to issue a show cause notice.  Senior counsel argues that if one looks at CAR 268(2), the words ‘without prejudice to the power of the Authority under reg 269’ only qualify the words ‘shall cease upon the completion of the investigation or at the expiration of 28 days’.  CAR 268 contemplates that the issue of a show cause notice under CAR 269(3) shall occur after the investigation under CAR 268(2) has been completed not prior to the completion.  The reason for that, it is submitted for the applicants, is that there would be no point in giving CASA an obligation to investigate while at the same time permitting it to suspend or cancel.  CASA chose to proceed under CAR 268 therefore it had an obligation to complete the investigation.  Until the investigation was completed, the power to give a show cause notice did not exist. 

84                  At this preliminary stage I have doubts about the applicants’ argument.  On the face of the statute it seems to me that CASA can go straight to CAR 269 in an appropriate case.  However, I would not be prepared to conclude at this summary stage that this argument as to the interaction of the two regulations is sufficiently lacking in merit so as to warrant a dismissal of so much of the proceeding as depends upon it.  As observed in Dandaven, s 31A FCA ought not be used to shut out proceedings where there may be room for doubt on a proposition of law.  By declining to strike out this aspect of the pleading, alternatively permitting the argument to be ventilated by allowing this portion of the amended pleading, I should not be taken to be endorsing the argument.  I express no view at this stage as to its strengths other than to say I could not conclude that it was unarguable.  Whether it grounds a cause of action, however, is a separate question which I address below.

Relevance of the AAT proceedings

85                  The respondents take objection not only to evidence of the observations of the AAT (and of evidence given in the hearing) but also to the reliance in the pleading of conclusions or remarks of the AAT in its determination.  It would appear that the main purpose of referring to the AAT proceedings by the applicants is to show that on a merits review of the decisions taken by CASA, the AAT disagreed with CASA’s decision, in one instance, it seems, particularly strongly.

86                  The fact that there is in existence a provision for review of administrative decisions taken by CASA, illustrates the availability of an adequate (and arguably sufficient) remedy for an aggrieved person affected by an adverse regulatory decision made by CASA. 

87                  For the respondents it is argued that because s 43(6) of the AAT Act has the effect that the substituted decision made by the AAT replaces the decision of CASA, there is no decision of CASA in existence capable of causing any relevant loss or damage to the applicants. 

88                  I do not find this argument compelling but I will not resolve it at this stage.  But, in any event, the observations, comments and findings of the AAT, as distinct from its decision, are not relevant to and cannot be afforded any weight in determining whether there is sufficient evidence of any invalid act for the purpose of mounting a claim based on allegations of misfeasance, breach of statutory duty or even negligence. 

89                  The applicants have conceded in argument that the AAT did not consider the lawfulness of the decisions made by CASA but was rather considering the merits of the decisions.  It is difficult to see how any observation made by the AAT is capable of being relied upon for the purposes of some separate pleaded cause of action for unlawful conduct of CASA. 

90                  Given the considerable body of evidence the parties have sought to adduce, I can take this material to be no more than part of the history that the applicants wish to set out.  Observations made by the AAT cannot have any binding effect on this Court or constitute a necessary fact to be proven in a proposed claim in damages.  I would not decline to admit the affidavit evidence or the pleading on this topic provided it is for the limited basis of outlining the history.

Approval of Chief Pilot

91                  As to the refusal to approve the appointment of Mr Repacholi as Chief Pilot of Repacholi Aviation on 4 February 2004, it is contended that this refusal was done without assessing him in accordance with the pars (b)-(d) of cl 1.3 in Appendix 1 to CAO 82.0. 

92                  In relation to this aspect of the matter, CASA complains that the pleading is embarrassing because the provisions alleged were not the provisions in force as at 4 February 2004.  Rather, cl 5.1 of Appendix 1 to CAO 82.0 applied.  Secondly, no material facts are pleaded to support the conclusions asserted in the pleading.  Rather, such evidence as there is, discloses that the assessment of the suitability of Mr Repacholi to be approved as Chief Pilot of Repacholi Aviation was made by CASA under the applicable CAOs as in force as at February 2004.  CASA argues that the criteria identified in cl 5.1 are conjunctive, that is, a nominee chief pilot must satisfy all of the four identified criteria.  On the face of cl 5.3, it was open to CASA to terminate the assessment process if the nominee failed to meet any one of the criteria listed in cl 5.3 without proceeding to consider other criteria.  On the evidence, CASA argues that it applied the prescribed criteria to form the view that Mr Repacholi did not have a satisfactory record in the conduct or management of flying operations and was considered not suitable to carry out the responsibilities of a chief pilot. 

93                  Once again, I do not consider that it is possible to determine the correctness or otherwise of CASA’s detailed submissions in the absence of a determined factual framework established from appropriately tested evidence.  Whether the applicants’ complaints, even if correct, would ground a cause of action, is another question. 

Refusal to Reinstate Charter Operations – and Bad Faith Generally

94                  CASA complains that the bold assertion that it has wrongfully refused and failed to reinstate charter operations on Repacholi Aviation’s AOC is defective.  CASA complains that as with certain other paragraphs, it simply pleads a conclusion rather than any material facts which might sustain some duty to ‘reinstate’ charter operations.  In any event, CASA relies upon an application for variation of Repacholi Aviation’s AOC made on or about 12 July 2007 in which Mr Repacholi expressly stated that he was not proposing to add charter operations to the company’s AOC. 

95                  In relation to the allegation that CASA ‘specifically intended’ to harm Mr Repacholi, it is submitted by CASA that no material facts have been pleaded from which such an intention can be inferred and the pleading should be struck out as being vexatious and defective.  Nor is it evident that it gives rise to any civil remedy for a breach. 

96                  In relation to this topic generally, the applicants say that they anticipate, with the benefit of discovery, they will be in a better position to prove the bad faith which they now assert. 

97                  I cannot accept that this approach is permissible.  There are no material facts identified to support any of the bad faith pleas.  Those pleas will not be permitted. 

Other Alleged Breaches

98                  A very general alleged breach is then pleaded to the effect that because Mr Hampton had the qualifications required for appointment as Chief Pilot of a company carrying out charter operations, CASA was in breach of its statutory duty to appoint Mr Hampton as Chief Pilot in a general sense as being suitable only for ‘aerial work - initially ag ops only’ as distinct from charter operations.  No material facts at all are pleaded to supplement these bald assertions.

Suspension of Mr Repacholi’s Medical Certificates

99                  The applicants plead that on 29 October 2004, CASA issued a Notice of Suspension of the class 1 and class 2 medical certificates held by Mr Repacholi (‘the fifth notice’) after he failed to comply with an earlier direction.  That direction was contained in a letter dated 23 September 2004 from CASA by which it directed him to authorise the disclosure to CASA of certain information.

100               It is conspicuous that the direction was totally unlimited in point of time. 

101               The applicants claim that the direction which is purportedly made pursuant to CASR 67.230 did not satisfy the requirements in CASR 67.230(1)(a) or (b) and was therefore not authorised by subpar (e) and related to information, disclosure of which did not satisfy the requirements of CASR 67.230(1)(e) or was otherwise unauthorised. 

102               The applicants contend that the direction was void and ineffective.  As a consequence the fifth notice was in breach of CASA’s statutory duty, made without jurisdiction, made without reasonable grounds and was made knowingly without jurisdiction or, alternatively, recklessly. 

103               A claim in negligence is also made.  It is contended that all of the officers of CASA to whom reference is made knew that they never had the power in the relevant circumstances to suspend the pilot licences of Mr Repacholi, to cancel the licences, to refuse to approve the appointment of him as Chief Pilot after 10 February 2004, to refuse or fail to consider in early 2007 Repacholi Aviation’s application to reinstate charter operations and to issue a notice of suspension of the medical certificates.  There is no foundation for the bad faith plea.

104               In relation to the allegation that the direction given to Mr Repacholi was not authorised by legislation and was knowingly made without ‘jurisdiction’, CASA complains that no material facts have been pleaded by reference to which it may be said that a particular common law duty to the applicants or either of them was owed by the respondents or any of the proposed respondents.  To that extent, CASA complains that the pleadings are embarrassing in that the scope and content of any particular duty is not identified or particularised.  It is not known whether an allegation of breach of duty is made against CASA or Mr Farquharson or both.  

105               The relevant correspondence between CASA and Mr Repacholi on the issue indicates that Mr Repacholi considered the notices to be unreasonable and unjustified because they were not required ‘in the interests of air safety’.  That correspondence contains CASA’s explanation as to why it considered it to be in the interests of air safety to issue the notices, namely, because CASA had received information that Mr Repacholi was receiving psychiatric treatment. 

106               CASA also submits that the evidence that is presently before the Court explains why CASA considered the basis for the notice to have supported the exercise of the power in CASR 67.230 and CASR 67.260 whereas the proposed amended statement of claim pleads no material facts to support the conclusion which it expresses.  CASA is accordingly unable to determine whether it has any case to meet and any pleading against any proposed individual in relation to the allegations raised by the applicants is said to be wholly vexatious. 

107               On this topic, CASA contends that the ambiguity of the allegations indicates the assertion is at best an attempt to raise merits issues of a kind that the applicants could have agitated in the AAT.  Specifically, in relation to the refusal to reinstate the charter operations, CASA says this is no more than a pleading of a conclusion without any material facts supporting it.  There may be force in this submission by CASA but, again, I am not prepared to resolve these issues at a time when there is not even a suitable pleading let alone evidence. 

JURISDICTION

108               The jurisdictional argument advanced by CASA in the Supreme Court of Western Australia was put on a different basis from that advanced in this Court.  Nevertheless the argument is still advanced that as every complaint depends upon an alleged breach of civil aviation legislation, the appropriate avenue for pursuing such a complaint was an appeal from the various decisions of the AAT. 

109               On the topic of federal jurisdiction, the respondents had originally submitted in the Supreme Court that s 9 of the ADJR Act forbids Supreme Court judicial review of certain federal actions.  Section 9 of the ADJR Act is directed to State courts, providing as follows: 

9          Limitation of jurisdiction of State courts

(1)        Notwithstanding anything contained in any Act other than this Act, a court of a State does not have jurisdiction to review:

(a)        a decision to which this section applies that is made after the commencement of this Act;

(b)        conduct that has been, is being, or is proposed to be, engaged in for the purpose of making a decision to which this section applies;

(c)        a failure to make a decision to which this section applies; or

(d)        any other decision given, or any order made, by an officer of the Commonwealth or any other conduct that has been, is being, or is proposed to be, engaged in by an officer of the Commonwealth, including a decision, order or conduct given, made or engaged in, as the case may be, in the exercise of judicial power.

Note:      This subsection has effect subject to the Jurisdiction of Courts (Cross‑vesting) Act 1987 and to subsection 1337B(3) of the Corporations Act 2001.

(2)        In this section:

decision to which this section applies means:

(a)        a decision that is a decision to which this Act applies; or

(b)        a decision of an administrative character that is included in any of the classes of decisions set out in Schedule 1.

review means review by way of:

(a)        the grant of an injunction;

(b)        the grant of a prerogative or statutory writ (other than a writ of habeas corpus) or the making of any order of the same nature or having the same effect as, or of a similar nature or having a similar effect to, any such writ; or

(c)        the making of a declaratory order.

(4)        This section does not affect:

(b)        the jurisdiction conferred on the Supreme Court of a State by section 32A of the Federal Court of Australia Act 1976; or

(c)        the jurisdiction of a court of a State in respect of any matter that is pending before it at the commencement of this Act.

110               That submission does not now need to be addressed as the claim has been brought in this Court. 

111               However, the respondents also contend that every claim sought to be agitated by the applicants is dependent upon a determination that particular administrative decisions made under the CAA, that is, to grant or refuse to grant or to cancel, suspend or revoke a license, approval, authorisation or certificate were ‘invalid’ and/or ultra vires.  The respondents reject the assertion that they misconstrued or misapplied relevant provisions of the civil aviation legislation.  In any event, and more importantly for present purposes, they contend that an order for damages is not an appropriate remedy for an administrative action:  Park Oh Ho v Minister for Immigration and Ethnic Affairs (1989) 167 CLR 637.  (While this may be correct, that does not mean a claim for damages for negligence is necessarily unavailable). 

112               The applicants’ argument is that the proceeding is a proceeding ‘arising under an Act of the Commonwealth Parliament’ and is thereby by virtue of s 39B(3A)(c) (sic s 39B(1A)(c)) of the Judiciary Act a matter in which the Federal Court has jurisdiction.  Little argument was advanced on this contention from either party.  The argument appears to be that because the complaints of the applicants turn on alleged contraventions of Federal Acts, that the complaints satisfy the requirements of the jurisdictional provision on which reliance has been placed.  However, a mere colourable connection is insufficient.  There is a distinction between the notion of a Federal statute ‘lurking in the background’ on the one hand and the right or duty in question owing its existence to a Federal statute. 

113               However, I would not be prepared to conclude at this stage that none of the claims advanced could arise ‘… under any laws made by the Parliament’.  I am mindful that there are cases in which there are claims for damages for breach of contract or relief for breaches of trust when the property concerned owes its existence due to Federal law.  Put on a broad basis, the applicants claim on this issue is that the licences which should have been granted or should not have been withheld are licences which owe their existence to the legislation which CASA is obliged to administer.  As aviation operating licences can be created by no means other than application of Federal written law, it is at least arguable that this proceeding arises under an Act of the Commonwealth Parliament and that this Court has jurisdiction. 

114               In Macteldir Pty Limited v Dimovski [2005] FCA 1528, Allsop J considered an application for costs orders against a solicitor and barrister based on alleged incompetence by those practitioners in propounding a notice of motion on behalf of the company in an earlier proceeding to enforce an agreement between the parties which resolved claims by the company of breach of copyright.  His Honour found that the enforcement of a contract to settle a case (at least between the parties to the suit) concerning rights owing their existence to Commonwealth law fell within s 39B(1A)(c) of the Judiciary Act.  Allsop J said (in describing LNC Industries v BMW (Aust) Pty Ltd (1983) 151 CLR 575):

There was no provision investing federal jurisdiction.  There was no issue for decision under Commonwealth law.  The matter, however, was one of federal jurisdiction, as arising under a law of the Parliament.   This was so because the subject matter of the contract and of the trust was property owing its existence to Commonwealth law – a quota for the importation of cars under the Customs Act 1903 and Customs Regulations.  Gibbs CJ Mason, Wilson, Brennan, Deane and Dawson JJ said the following at 581 (Murphy J agreeing at 582-83):

…A claim for damages for breach or for specific performance of a contract, or a claim for relief for breach of trust, is a claim for relief of a kind which is available under State law, but if the contract or trust is in respect of a right or property which is the creation of federal law, the claim arises under federal law. The subject matter of the contract or trust in such a case exists as a result of the federal law. …

115               In a clear case, jurisdiction can and arguably should be determined at an early stage.  This case is anything but clear. 

116               As to the remaining aspects of the proposed claim (after these rulings) I consider this Court has jurisdiction as the claims, or at least part of them, are in respect of the licences which owe their existence to laws of the Commonwealth Parliament. 

LIMITATION ISSUES

117               When this matter was before the Supreme Court of Western Australia, CASA raised s 47A of the Limitation Act 1935 (WA).  That Act was replaced by the Limitation Act 2005 (WA).  However, most of the causes of action pleaded accrued prior to 15 November 2005 when s 47A of the Limitation Act 1935 (WA) was in operation. 

118               Arguably, the only claim that has arisen after 15 November 2005 is the broad assertion that CASA and the named respondents in early 2007 refused or failed to consider an application by Repacholi Aviation to reinstate ‘charter applications’ on its AOC. 

119               Section 47A relevantly provides as follows:

47A.    Protection of persons acting in execution of statutory or other public duty

(1)        Notwithstanding the foregoing provisions of this Act but subject to the provisions of subsection (2) and (3), no action shall be brought against any person (excluding the Crown) for any act done in pursuance or execution or intended execution of any Act, or of any public duty or authority, or in respect of any neglect or default in the execution of the Act, duty or authority, unless —

(a)        the prospective plaintiff gives to the prospective defendant, as soon as practicable after the cause of action accrues, notice in writing giving reasonable information of the circumstances upon which the proposed action will be based and his name and address and that of his solicitor or agent, if any; and

(b)        the action is commenced before the expiration of one year from the date on which the cause of action accrued,

and for the purposes of this section, where the act, neglect, or default is a continuing one, no cause of action in respect of the act, neglect, or default accrues until the act, neglect or default ceases but the notice required by paragraph (a) may be given and an action may thereafter be brought while the act, neglect or default continues.

(2)        A person may consent in writing to the bringing of an action against him at any time before the expiration of 6 years from the date on which the cause of action accrued whether or not the notice as required by subsection (1) has been given.

(3)

(a)        Notwithstanding the foregoing provisions of this section application may be made to the Court which would but for the provisions of this section have jurisdiction to hear the action, for leave to bring an action at any time before the expiration of 6 years from the date on which the cause of action accrued, whether or not notice as required by subsection (1) has been given to the prospective defendant.

(b)        Where the Court considers that the failure to give the required notice or the delay in bringing the action as the case may be, was occasioned by mistake or by any other reasonable cause or that the prospective defendant is not materially prejudiced in his defence or otherwise by the failure or delay, the Court may if it thinks it is just to do so, grant leave to bring the action, subject to such conditions as it thinks it is just to impose.

(c)        Before an application is made under the provisions of paragraph (a), the party intending to make the application shall give notice in writing of the proposed application and the grounds on which it is to be made to the prospective defendant, at least 14 days before the application is made.

(4)

(a)        In this section person includes a body corporate, Crown agency or instrumentality of the Crown created by an Act or an official or person nominated under an Act as a defendant on behalf of the Crown.  (emphasis added)

(b)        This section is to be construed so as not to affect the provisions of the Crown Suits Act 1947.

…

120               CASA contends that at its highest the applicants’ permissible claims are based on an allegation that CASA was under a duty of care in exercising its statutory powers and in performing its statutory function pursuant to the CAA.  I tend to agree.  CASA contends that s 47A extends to agencies and instrumentalities created by Commonwealth legislation:  Smith v Australian National Line Ltd (1998) 159 ALR 431.  (The Full Court’s decision in Smith was the subject of appeal to the High Court but was overturned only in relation to constitutional issues unrelated to s 47A).  CASA contends that the provision is in wide terms which extend to cover the acts or omission complained of by the applicants.  Those acts or omissions did not arise from the exercise of a power that was only incidental to the public duties of CASA.  No notice has been given by the applicants as required by s 47A and no application has been sought for an extension of time within in which to give a notice.  As such, CASA contends that the applicants’ claims are statute barred. 

121               For the applicants it is argued that when s 47A speaks of ‘an Act’ it is referring to an Act of the West Australian Parliament:  Interpretation Act 1984 (WA), s 5.

122               The applicants contend that the causes of action pleaded by the applicants are brought in respect of acts which if done pursuant to any Act are done in pursuance or in execution or intended execution of a Commonwealth Act or in respect of a neglect or default in the execution of duties and authorities stemming from a Commonwealth Act. 

123               The applicants also contend that even if s 47A could by its terms apply to the present proceeding, its operation would be prevented by reason of conflict with s 64 of the Judiciary Act. 

124               Section 64 and s 79 of the Judiciary Act respectively provide as follows:

64        Rights of parties

In any suit to which the Commonwealth or a State is a party, the rights of parties shall as nearly as possible be the same, and judgment may be given and costs awarded on either side, as in a suit between subject and subject.

79        State or Territory laws to govern where applicable

(1)        The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.

(2)        A provision of this Act does not prevent a law of a State or Territory covered by subsection (3) from binding a court under this section in connection with a suit relating to the recovery of an amount paid in connection with a tax that a law of a State or Territory invalidly purported to impose.

(3)        This subsection covers a law of a State or Territory that would be applicable to the suit if it did not involve federal jurisdiction, including, for example, a law doing any of the following:

(a)        limiting the period for bringing the suit to recover the amount;

(b)        requiring prior notice to be given to the person against whom the suit is brought;

(c)        barring the suit on the grounds that the person bringing the suit has charged someone else for the amount.

(4)        For the purposes of subsection (2), some examples of an amount paid in connection with a tax are as follows:

(a)        an amount paid as the tax;

(b)        an amount of penalty for failure to pay the tax on time;

(c)        an amount of penalty for failure to pay enough of the tax;

(d)        an amount that is paid to a taxpayer by a customer of the taxpayer and is directly referable to the taxpayer’s liability to the tax in connection with the taxpayer’s dealings with the customer.

125               It is contended for the applicants that the Limitation Act has no application as s 64 of the Judiciary Act precludes CASA from receiving any special rights not afforded to ordinary citizens.  CASA argues that the practical effect of s 64 and s 79 of the Judiciary Act on State limitation Acts is to require courts to apply without any altered meaning any relevant limitations Acts to the Commonwealth instrumentality as though they were a subject (Maguire v Simpson (1997) 139 CLR 362 at 376-377).  (See also Smith 159 ALR 431 at 453).

126               The applicants contend that CASA is an emanation of the Commonwealth of Australia.  CASA is a body effectively performing what is a governmental function as:

(a)        CASA is a body corporate which may be sued in its corporate name (s 8) but it is also a body to which the Commonwealth Authorities and Companies Act 1997 (Cth) (the CAC Act) applies: s 84C;

(b)        the director of CASA is to be appointed by the Minister after receiving a report from the secretary.

(c)        the Minister may give CASA written directions as to the performance of its functions or the exercise of its powers.  CASA must comply with such directions: s 12;

(d)        CASA must report to the Minister or to the secretary of the department in accordance with arrangements specified by the Minister: s 12D;

(e)        the director is under the Minister to manage CASA: s 84A;

(f)         the director holds office during the Minister’s pleasure: s 89; and

(g)        the Minister is the employing body for the director for the purposes of the Remuneration Tribunal Act 1973 (Cth) (s 84(3)).

127               The applicants argue that s 79 of the Judiciary Act provides that the laws of each State or Territory including the laws relating to procedure, evidence and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.  However, by s 64 of the Judiciary Act in any suit to which the Commonwealth or a State is a party, the rights of the parties shall as near as possible be the same and judgment may be given and costs awarded on either side, as in a suit between subject and subject.

128               The applicants contend that by reason of the fact that it is an emanation of the Commonwealth, effectively performing what is a governmental function, CASA, is for the purposes of s 64 of the Judiciary Act, ‘the Commonwealth’.  See Maguire and Austral Pacific Group Ltd v Airservices Australia (2000) 203 CLR 136 at 153.  By virtue of that section CASA’s rights in litigation are equated to those of the ordinary citizen not to the rights of ‘a very particular kind of defendant’: see British American Tobacco Australia Ltd v Western Australia v (2003) 217 CLR 30 at [25] per Gleeson CJ.

129               At first instance in Smith v Australian National Line (unreported, Supreme Court of Western Australia, 27 August 1996), Ipp J considering the limitation point as a preliminary issue in an action for damages for personal injuries brought against the defendant, ANL accepted that it was well established that State legislation cannot bind the Commonwealth.  But followed what was said by the Full Court of this Court in Trade Practices Commission v Manfal Pty Ltd (No 2) (1990) 27 FCR 22 by Wilcox J (with whom Northrop J agreed) observing at 31 that to the extent ‘that there is no interference with the property, revenue or prerogatives of the Commonwealth or with the performance of Commonwealth statutory functions, Commonwealth instrumentalities are bound by relevant State laws’.  Section 47A properly understood, confers benefits.  It does not therefore ‘bind’ the Commonwealth in that sense.  Further, arguably, as the section does not in any way interfere with ‘property, revenue or prerogatives of the Commonwealth or with the performance of Commonwealth statutory functions’ there is no inconsistency between s 47A and any Commonwealth legislation.  Accordingly, CASA was entitled to the benefit of s 47A of the Limitation Act which it has not received. 

130               At first instance in Smith v Australian National Line, Ipp J, having considered Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 at 301 and Pedersen v Young (1964) 110 CLR 162 at 165, held that s 47A is ‘applied by force of Commonwealth law, and not by its own force as a State law’:

The purpose of s 47A(4) is plain.  It is to ensure that the phrase “excluding the Crown” in s 47A(1) is not construed as having the effect of excluding the entities referred to in s 47A(4)(a) from the protection afforded by s 47A(1).  In other words, the intention is that, while the Crown is excluded from the operation of s 47A(1), “a body corporate, Crown agency or instrumentality of the Crown created by an Act or an official or person nominated under an Act as a defendant on behalf of the Crown” is not excluded.  Such entities are to be regarded as persons for the purposes of s 47A(1).  It does not follows from this conclusion that a “person” in s 47A(1) is limited to the emanations of the Crown referred to in s 47A(4).  Were that to be so, s 47A(1) would only confer protection on Crown agencies or instrumentalities for the acts described in the section.  Several cases over a very lengthy period demonstrate that limitation provisions such as those contained s 47A(1) apply to entities other than Crown agencies and like bodies:  see, for example, the cases cited in Webster v Lampard(1993) 177 CLR 598 at 605.

131               In British American Tobacco Australia Ltd, it was argued that s 64 of the Judiciary Act, if it applied to the proceedings, rendered s 47A of the Limitation Act applicable to defeat the appellant’s claim.  Gleeson CJ (at [25]) observed:

Section 47A deals with a suit against a very particular kind of defendant …  If s 64 were to operate in the present case, it would not do so by putting the Government of Western Australia in the place of an agent of the Government of Western Australia; it would do so by putting the Government of Western Australia in the place of an ordinary citizen. Section 64 speaks of rights in a suit between subject and subject; not rights in a suit between subject and Crown agent.

132               The Chief Justice went on to say that it was ‘unnecessary to decide whether the language of s 47A otherwise covers the cause of action here asserted by the appellant; it suffices to note that it is at least arguable that it does not’.  (The appeal was on a limitation act based summary judgment in favour of the State dismissing an action for monies had and received by the State in respect of an invalidly imposed ‘tax’).

133               The Limitation Act stipulates that s 47A applies to any act done in pursuance or execution or intended execution of any Act, or in the line of any public duty or authority.  The use of ‘or’ evinces a Parliamentary intention to distinguish between acts performed pursuant to a Western Australian statute (that is to say, an ‘Act’) and acts performed in pursuance of public duty or authority and affords equal protection to acts falling in either category.  CASA further argues that the acts in question were acts performed in pursuance of public duty or authority as contemplated in s 47A Limitation Act.  In terms of its scope and operation, s 47A was intended to mirror the equivalent provision contained in the English Public Authorities Protection Act 1893 (Imp) (UK):  see Smith 159 ALR 431 at 435, 444 and 448.  In the context of the English Act, Australian courts have recognised that these words are directed to the carrying on of ‘some undertaking of a public nature for the benefit of the community or of some section or geographical division of the community’:  Renmark Hotel Inc. v Federal Commissioner of Taxation (1949) 79 CLR 10 at 16 and 18.  It is not necessary, according to Smith 159 ALR 431, that the public duty or authority be one of or in relation to the State of Western Australia (at 447-448). 

134               CASA contend that additionally, on both a literal and purposive interpretation of s 47A Limitation Act, the section is capable of applying to Commonwealth entities for the following further reasons:  On a literal approach, the definition of a ‘person’ in the Limitation Act ‘includes a body corporate’ (by s 3).  The use of the word ‘includes’ extends rather than restricts the definition of person.  There is no definition of ‘body corporate’ in the Interpretations Act 1984 (WA).  It would be reasonable though to treat CASA as a body corporate as its own legislation reflects in s 8 CAA and see also Alcoa of Australia Ltd v State Energy Commission (WA) (1995) 17 WAR 112.

135               Perhaps more importantly on a purposive approach, the term ‘person’ was used in the English Act on which s 47A was modeled.  It would be reasonable to expect that the term person should apply to all ‘persons who are in some sense public authorities’:  Posner v Roberts [1986] WAR 1.

136               CASA argues that acts performed in pursuance of a positive or proactive statutory duty imposed on an entity are generally considered acts performed in the exercise of a primary statutory function rather than pursuant to any incidental or ancillary power (State Energy Commission (WA) v Alcoa of Australia Ltd (1996) 17 WAR 131 at 137-138 and 157).  As the conduct was conduct which occurred in the active pursuit of positive obligations imposed on CASA by s 9 of the CAA, CASA argues that s 47A Limitation Act would protect any such acts.  CASA also contends that the approach taken by the Supreme Court of Western Australia to s 47A Limitation Act in misfeasance cases is that the provisions will apply equally to those provisions:  Carioca Pty Ltd v Water Authority of WA (Supreme Court, Master Bredmeyer, 11 April 1995, Supreme Court Library Number 950168), Bailey v Minister for Education [2000] WASC 50 and on the Court of Appeal, Minister for Education v Bailey (2000) 23 WAR 149 (at [8]). 

137               In summary, CASA’s submission is that to decline to apply s 47A Limitation Act to the present case would be inconsistent with intended policy embodied in the Act.  The policy is simply that after the 12 month stipulated period that:

the justice of every case will be best served by not permitting a dilatory plaintiff to ventilate a cause of action against a prospective defendant, no matter what merits his case may be seen objectively to possess.  It is at that point that potential injustice to a plaintiff is by the statute outweighed by the interests of the prospective defendant not to be further exposed to the expense and inconvenience of defending an action and not to be exposed to the liability which might arise.

(Matheson v Commissioner of Main Roads (2001) 25 WAR 269 (at [25]). 

138               The applicants contend that as CASA is an emanation of the Commonwealth effectively performing what is a governmental function, it is for the purposes of s 64 of the Judiciary Act,the Commonwealth.  Accordingly, CASA’s rights in litigation are equated to those of the ordinary citizen not to the rights of ‘a very particular kind of defendant’ as explained in British American Tobacco Australia Ltd (at [25]) per Gleeson CJ.  The specific submission of the applicants is that neither the Crown in the right of the State nor the Crown in the right of the Commonwealth can have the benefit of s 47A Limitation Act.  For this purpose it is said that CASA is the Crown in the right of the Commonwealth. 

139               Even if this were not so, the remaining argument for the applicants is that assuming s 47A does apply in respect of the action against the individual respondents, it cannot affect the claim insofar as it relates to misfeasance in office as misfeasance in office does not involve an act falling within s 47A Limitation Act because it involves an act which is done otherwise than in pursuance of execution or intended execution of the relevant power and it involves not only a failure or neglect in the performance of a duty but the willful doing of an act outside the ambit of the execution of the duty.  There are no material facts pleaded which are satisfactorily capable of supporting a claim of misfeasance in public office and accordingly, that aspect of the claim will not be allowed in any event.  It follows that to the extent the limitation argument depends on the misfeasance claim, it cannot be considered. 

140               On present indications I consider there is force in the submission by CASA that the pre-2005 causes of action which the applicants would seek to ventilate are statute barred.  It is possible, however, that they are capable of being protected by the combined operation of s 64 and s 79 of the Judiciary Act or possible that the State Act does not apply in the first place but that depends on what is left of the pleading.  Once again, it is too early to reach a conclusion because the majority of the proposed pleading will not be allowed and the present statement of claim will be struck out.  What will be left after that time may or may not be a statute barred claim but I do not propose to speculate at present. 

141               I have, however, set out the current state of the arguments as I understand them, both for completeness and in anticipation that their more elaborate development in oral argument may be taken into account in a future pleading, if any.  In my view as will be seen, there is no basis for a claim founded on breach of a statutory duty either against CASA or the individuals and there is no basis for a claim in misfeasance. 

142               As will be evident, I do consider that, at least in theory, there is available, a claim in negligence.  A claim in negligence may import as a particular of the duty owed, reference to the statutory criteria by which a duty should be discharged and/or it may refer to a failure to comply with a statutory obligation as being part of the breach of the duty which is owed.  That is a different concept from suing for damages on the basis of breach of a statutory duty.  On the material facts pleaded to date and foreshadowed in the proposed statement of claim in the minute under consideration, there is no such claim available. 

DUTY OF CARE – PURE ECONOMIC LOSS

143               In Sutherland Shire Council v Heyman (1985) 157 CLR 424 at 458-459 Mason J (as his Honour then was) stated (footnotes omitted):

It is now well settled that a public authority may be subject to a common law duty of care when it exercises a statutory power or performs a statutory duty. The principle that when statutory powers are conferred they must be exercised with reasonable care, so that if those who exercise them could by reasonable precaution have prevented an injury which has been occasioned, and was likely to be occasioned, by their exercise, damages for negligence may be recovered (Caledonian Collieries Ltd. v. Speirs; Benning v. Wong) has been applied mainly to private Acts. However, it has been frequently applied in Australia to public authorities, notably public utilities, exercising powers under public statutes: Sermon v. Commissioner of Railways; Essendon Corporation v. McSweeney; Metropolitan Gas Co. v. Melbourne Corporation; South Australian Railways Commissioner v. Barnes; Cox Bros. (Australia) Ltd. v. Commissioner of Waterworks; South Australian Railways Commissioner v. Riggs; Voli v. Inglewood Shire Council; Birch v. Central West County District Council. While some early statements of the principle suggest that the power given by statute is conditioned upon it being exercised without negligence so that negligent exercise amounts to an excess of authority (McSweeney; Metropolitan Gas Co.), the better view has always been that the cause of action in negligence arises under the principle by virtue of a breach of a duty of care existing at common law: Geddis v. Proprietors of Bann Reservoir; London and Brighton Railway Co. v. Truman; Fullarton v. North Melbourne Electric Tramway and Lighting Co. Ltd; East Suffolk Rivers Catchment Board v. Kent; Riggs. And at least since the decision in Fisher v. Ruislip-Northwood Urban District Council and Middlesex County Council, it has been generally accepted that, unless the statute manifests a contrary intention, a public authority which enters upon an exercise of statutory power may place itself in a relationship to members of the public which imports a common law duty to take care. 

144               So, for example, see Skyways Pty Ltd (In Liq) v Commonwealth (1984) 57 ALR 657 where it was held in the Supreme Court of New South Wales (per Lusher J) that a duty of care could be owed by the Commonwealth under the Air Navigation Act 1920 (Cth) arising from the circumstances in which a mid-air collision in airspace under the supervision and control of the Commonwealth occurred.  A duty of care had been held in cases such as Pyrenees Shire Council v Day (1998) 192 CLR 330.

145               In Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540, Gummow and Hayne JJ (at [149]-[154]) held (footnotes omitted):

149       An evaluation of whether a relationship between a statutory authority and a class of persons imports a common law duty of care is necessarily a multi-faceted inquiry. Each of the salient features of the relationship must be considered. The focus of analysis is the relevant legislation and the positions occupied by the parties on the facts as found at trial. It ordinarily will be necessary to consider the degree and nature of control exercised by the authority over the risk of harm that eventuated; the degree of vulnerability of those who depend on the proper exercise by the authority of its powers; and the consistency or otherwise of the asserted duty of care with the terms, scope and purpose of the relevant statute. In particular categories of cases, some features will be of increased significance. For example, in cases of negligent misstatement, such as Tepko Pty Ltd v Water Board, reasonable reliance by the plaintiff on the defendant authority ordinarily will be a significant factor in ascertaining any relevant duty of care.

150       The factor of control is of fundamental importance in discerning a common law duty of care on the part of a public authority. It assumes particular significance in this appeal. This is because a form of control over the relevant risk of harm, which, as exemplified by Agar v Hyde, is remote, in a legal and practical sense, does not suffice to found a duty of care.

…

153       As Lindgren J observed in the Full Court, the relationship between the Council and the oyster consumers is indirect; it is mediated by intervening conduct on the part of others. Between the Council on the one hand and the oyster consumers on the other, there stands, in the present case, an entire oyster-growing industry comprising numerous commercial enterprises, each of which, in pursuit of profit, engages in conduct that presents an inherent threat to public safety. That threat arises from the insusceptibility of oysters to effective and reliable tests to identify contamination of the type that eventuated here.

154       In broad terms, the Council's statutory powers enabled it to monitor and, where necessary, to intervene in order to protect, the physical environment of areas under its administration. However, the conferral on a local authority of statutory powers in respect of activities occurring within its boundaries does not itself establish in that authority control over all risks of harm which may eventuate from the conduct therein of independent commercial enterprises.  …

And McHugh J said (at [84]-[85]) (footnotes omitted):

84        Where a plaintiff claims that a public authority owed him or her an affirmative duty of care in a situation that has not yet been recognised by the common law, the court must examine a number of matters to determine whether the duty existed. I pointed to these matters in Crimmins v Stevedoring Industry Finance Committee:

.           Would a reasonable public authority reasonably foresee that its act or omission, including a failure to exercise its statutory powers, might result in injury to the plaintiff or his or her interests?

.           Was the authority in a position of control and did it have the power to control the situation that brought about the harm to the injured person?

.           Was the injured person or his or her interests vulnerable in the sense that the injured person could not reasonably be expected to adequately safeguard himself or herself or those interests from harm?

.           Did the public authority know, or ought it to have known, of an existing risk of harm to the plaintiff or, in some cases, to a specific class of persons who included the plaintiff (rather than a risk to the general public)?

.           Would the imposition of the duty of care impose liability with respect to the defendant's exercise of "core policy-making" or "quasi-legislative" functions?

.           Is there any supervening policy reason that denies the existence of a duty of care?

85        If the first four of these questions are answered in the affirmative and the fifth and sixth questions in the negative, the court will ordinarily hold that the authority owed a duty of care to the plaintiff. Conversely, if any of the first four questions are answered in the negative or either of the fifth and sixth questions are answered in the affirmative, ordinarily no duty of care will arise.

146               The nature of the control exercised by CASA over the conduct of flight and air operations is substantial.  Equally the degree of vulnerability of those conducting operations under the auspices of the air operations regime administered by CASA is significant.  It is also to be noted that in Northern Territory v Mengel (1995) 185 CLR 307, Mason CJ, Toohey, Gaudron and McHugh JJ (at 348) held:

If it were the case that governments and public officers were not liable in negligence, or that they were not subject to the same general principles that apply to individuals, there would be something to be said for extending misfeasance in public office to cover acts which a public officer ought to know are beyond his or her power and which involve a foreseeable risk of harm. But in this country governments and public officers are liable in negligence according to the same general principles that apply to individuals.

147               The respondents contend that no cause of action in negligence can lie against a body such as CASA because CASA does not owe a duty of care to persons in the position of the applicants.  In that regard CASA relies on Commonwealth v Griffiths (2007) 70 NSWLR 268 at [125]-[131].  The applicants contend that Griffiths turns on a finding that the Australian Government Analytical Laboratories in carrying out the role of analysing a substance seized by the police and alleged to be a prohibited drug was playing an ‘integral role in law enforcement’ such that the statutory role and the duties of the statutory role were inconsistent with a common law duty of care owed to persons who might be affected by their actions.  In one sense there may be a parallel with CASA’s role in that regard.  In Sullivan v Moody (2001) 207 CLR 562, the High Court said (at [60]):

The circumstance that a defendant owes a duty of care to a third party, or is subject to statutory obligations which constrain the manner in which powers or discretions may be exercised, does not of itself rule out the possibility that a duty of care is owed to a plaintiff. People may be subject to a number of duties, at least provided they are not irreconcilable. A medical practitioner who examines, and reports upon the condition of, an individual, might owe a duty of care to more than one person. But if a suggested duty of care would give rise to inconsistent obligations, that would ordinarily be a reason for denying that the duty exists. Similarly, when public authorities, or their officers, are charged with the responsibility of conducting investigations, or exercising powers, in the public interest, or in the interests of a specified class of persons, the law would not ordinarily subject them to a duty to have regard to the interests of another class of persons where that would impose upon them conflicting claims or obligations.

148               In Griffiths the Court said (at [125]-[126]:

Alleged duty of care of AGAL: the Sullivan v Moody issue

125       Mr Griffiths' primary argument in respect of the question whether AGAL and Mr Ballard owed a duty of care was that that question could not be determined summarily. It was submitted that the relationship and the nature of the arrangements made between AGAL and the New South Wales police needed to be examined to determine whether the work undertaken by AGAL in relation to the analyses conducted by Mr Ballard was such as to give rise to a duty of care and if so, what the scope of that duty was. As Gummow J remarked in Roads and Traffic Authority (NSW) v Dederer (2007) 81 ALJR 1773 at 1784 [43]; 238 ALR 761 at 772 [43]: "... duties of care are not owed in the abstract. Rather, they are obligations of a particular scope, and that scope may be more or less expansive depending on the relationship in question".

126       AGAL contends that it owed no duty of care to Mr Griffiths. It was submitted that the duty of care as alleged against it was, properly characterised, a duty to control Mr Ballard's exercise of the statutory power given to him under s 43 of the Drug Misuse and Trafficking Act to undertake analysis of the seized substances and to issue a certificate of analysis. It was submitted that no such duty existed: see Sullivan v Moody (especially at 580–582).

149               The applicants argue that the question as to whether the statutory duty is inconsistent with the existence of a common law duty of care requires careful analysis of the precise statutory function being performed at the relevant time and the mere fact that the defending party is subject to a statutory obligation constraining the manner in which powers or discretions may be exercised does not of itself rule out the possibility that a duty of care is owed to a claimant (see Sullivan v Moody). 

150               In Stuart v Kirkland-Veenstra (2009) 237 CLR 215 the Chief Justice also pointed out that where a body has a statutory power and exercises it in a way that is inconsistent with a duty of care, any claim is really a claim for damages for negligence.  His Honour observed (at [48]) (footnote omitted):

That is so, and remains so, notwithstanding the considerable body of jurisprudence on the tortious liability arising out of the exercise or non-exercise of statutory powers. The Court at all times is concerned with the application of "private law notions of duty", albeit they are applied in the field of the exercise of powers under public statutes.

151               In my view, it is not possible to conclude that a claim in negligence is not open.  Especially when  the proposed pleading is far from complete. 

152               There is nothing in principle in the pleading which would render the cause of action the applicants propose to pursue as one which should be entirely struck out.  At present it is inadequately pleaded.  I would not be prepared at this stage to strike out the negligence plea. 

BREACH OF STATUTORY DUTY

153               The general assertion of the applicants is that the respondents and prospective respondents owed a statutory duty to them to exercise statutory powers and perform statutory functions in accordance with the provision of legislation governing such exercise and performance and in accordance with good faith. 

154               No statutory provision encapsulating those obligations has been identified. 

155               It appears, however, to be common ground that for a claimant to succeed in an action for breach of statutory duty, he or she must establish that he or she was a member of the class of individuals that the statute was intended to protect and that the injury was of a kind which was the object of a statute to prevent. 

156               But more importantly, from the respondents perspective, the dominant argument is that if the action for breach of statutory duty would have the effect of indirectly raising the correctness of an administrative decision, no action for breach of statutory duty would lie as the decision is more suitable for judicial review:  Calveley v Chief Constable of Merseyside [1989] 1 AC 1228.  Each of the claims in breach of statutory duty is based on an alleged breach of regulation which for the purposes of the present argument may be assumed to be a correct interpretation although as indicated elsewhere in these reasons, the interpretation is challenged by the respondents. 

157               CASA submits that the statutory scheme being of essentially public character does not disclose a legislative intention to accord to the applicants or persons such as the applicants a private right to sue for any breach of ‘public’ statutory duty.  As noted in Stuart v Kirkland-Veenstra by Crennan and Kiefel JJ (at [142]), ‘[t]he requirement of legislative intention concerning the availability of a cause of action has been regarded as the defining feature of the action for breach of statutory duty’.  The statute, in effect, must ‘oblige’ the exercise of powers in the circumstances which prevail and do so in a specific or relevant way. 

158               Breaches which constitute an exercise of powers in a way that was either contrary to the views of the party affected by the decision or contrary to the merits or the interests of the applicants, could never, taken alone, constitute a breach of a statutory duty to ground a private cause of action in damages:  Murdesk Investments Pty Ltd v Roads Corporation [2005] VSC 39 (at [20]).

159               There is no private right for damages arising from the exercise of administrative powers when there is a statutory right of review of such exercise.  As established in Jones v Department of Employment [1989] QB 1 (at 22 and 25), where an exercise of statutory power is subject to a right of review and the decision-maker exercises the power in good faith, the exercise of the power will not give rise to a common law duty of care: see also X v South Australia (No 3) [2007] SASC 125 (at [189] and [196]) and Gimson v Victorian WorkCover Authority [1995] 1 VR 209. The theory behind this principle is that even if some ‘negligence’ has been proven, it can be cured by an appeal process. The existence of the appeal process is sufficient to remove reliance on breach of any duty of care.

160               This Court has reached similar conclusions in Scott v Secretary, Department of Social Security (2000) 65 ALD 79, Scott v Pedler [2004] FCAFC 67 and Wang v Secretary, Department of Employment and Workplace Relations [2006] FCA 898. In Scott v Secretary, in the joint judgment of Beaumont and French JJ at [19] they said:

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.

161               The conclusion was cited with approval by the Full Court in Scott v Pedler (at [93]). Conti J further stated at [101]:

101       The authorities which have been cited in these reasons reveal a confined or restricted availability of any viable causes of action for damages at the instance of persons claiming to have been injured by the exercise of administrative power. So much has been exemplified by the High Court decisions in Crimmins, Sullivan, Graham Bailey Oysters and Shaddock, and by the majority judgment of the Full Federal Court in the earlier Scott litigation. ...

162               I am unable to accept that there is a valid basis established for a claim in damages for breach of statutory duty.  That is because there is no indicia in the statutory regime that such a claim should lie. 

MISFEASANCE IN PUBLIC OFFICE

163               In Three Rivers District Council v Bank of England (No 3) [2000] 2 WLR 1220 at 1230 Lord Steyn said of misfeasance in public office that:

The rationale of the tort is that in a legal system based on the rule of law, executive or administrative power “may be exercised only for the public good” and not for the ulterior and improper purposes. 

164               The ingredients of the tort are that:

(a)        the ‘defendant’ must be a public officer;

(b)        the impugned conduct must be the exercise or the purported exercise of power as a public officer;

(c)        there must be malice in the exercise of the power.  In other words, the power must be exercised for an ulterior purpose, with the intention of injuring the plaintiff.  It is sufficient for the purpose if the public officer acts with knowledge that he has no power so to act or recklessly disregarding whether he has such power and knowing that his or her action will injure the plaintiff or a class of people which includes the plaintiff or if there is reckless indifference to the probability of causing injury to the plaintiff;

(d)        the plaintiff must have sufficient interest to found a legal standing to sue;

(e)        the wrongful act causes the plaintiff’s injury;

(f)         the damage must not be too remote.

See also Mengel at 347. 

165               The applicants argue that there is misfeasance in office where a person uses the power of his or her office not for the purpose for which it was given but for a collateral purpose, namely, to cause harm to a person subject to that power.  The applicants claim they were members of the public to whom the respondents owed a duty to exercise their power legitimately, namely, only in the public interest and not for an ulterior purpose (Cannon v Tahche (2002) 5 VR 317 at [28])).  Similarly, the applicants argue that CASA and its officers owed the applicants a duty to exercise their statutory powers in good faith, reasonably and for a proper purpose, a duty stemming both from statute and from common law.  Under statute, the provision in s 23 of the CAC Act provides:

23        Good faith—civil obligations

Good faith—officers

(1)        An officer of a Commonwealth authority must exercise his or her powers and discharge his or her duties:

(a)        in good faith in the best interests of the Commonwealth authority; and

(b)        for a proper purpose.

Note 1:   This subsection is a civil penalty provision (see Schedule 2).

Note 2:   Section 187 of the Corporations Act 2001 deals with the position of directors of wholly owned subsidiaries of Commonwealth authorities.

Note 3:   Section 27A makes provision for persons who are also APS employees or Agency Heads.

(2)        A person who is involved in a contravention of subsection (1) contravenes this subsection.

Note 1:   Section 5 defines involved.

Note 2:   This subsection is a civil penalty provision (see Schedule 2).

Note 3:   Section 27A makes provision for persons who are also APS employees or Agency Heads.

166               Moreover, under s 84B of the CAA, the director of CASA has the function of ensuring that CASA performs its functions in a proper, efficient and effective manner.  The applicants argue that the common law duty to exercise statutory powers in good faith, reasonably and for a proper purpose appears from the following cases:  Buck v Bavone (1975) 135 CLR 110 at 118 per Gibbs J (as his Honour then was) where it was held that where a public body is invested with statutory powers it ‘must act in good faith; it cannot act merely arbitrarily or capriciously.’  Reliance is also placed on Westminster Corporation v London and North Western Railway Co [1905] AC 426 at 430 and Thompson v Randwick Corporation (1950) 81 CLR 87 at 105.

167               I accept the respondents’ submissions that the pleading of misfeasance and/or lack of good faith should be struck out.  The applicants’ allegation of misconduct by individual CASA officers who have made administrative decisions or are the signatory of various instruments are totally speculative.  They are allegations without foundation.  There is no factual basis pleaded for the assertions and the frank concessions made in the course of argument by senior counsel for the applicants makes it clear that the applicants have no material at present on which they can properly bring a claim against officers of CASA for acting in bad faith or, alternatively, acting recklessly.  These pleadings are simply accusations made which on their face are vexatious.  If the pleading survives and if discovery is given and additional material comes to light, the position may theoretically change.  For present purposes, however, there is no basis upon which any of the claims against the individual officers can be maintained.  All of the claims against the individuals in this proceeding will be struck out and/or disallowed in terms of any existing application to amend. 

168               The applicants have not sought pre-action discovery but have simply instituted the proceedings.  Pre-action discovery would have facilitated not only expedition but the potential elimination of claims which without such discovery cannot properly be made.  The proper course for the applicants in these proceedings was to pursue pre-action discovery to allow them, if granted, to obtain sufficient information to decide whether to commence proceedings and, if so, against whom.  The High Court has recently reinforced the proposition that an application for leave to amend a pleading should not be approached on the basis that a party is, in effect, automatically entitled to raise an arguable claim subject to payment of costs by compensation.  There is no such entitlement. 

CONCLUSION

169               The outcome of this analysis in its entirety is that the only claim capable of surviving would be a claim in negligence against CASA, not against its individual officers.  An entire re-pleading is necessary – there is no point in trying to save bits and pieces of the minute. 

170               I propose granting a period of six weeks within which the applicants can file an amended minute which should take into account the substance of these reasons.  That minute will stand as the further amended statement of claim.  Filing that amended pleading will not preclude CASA from challenging the pleading.  CASA should have the costs of this motion and any costs thrown away in any event.

171               I will order that:

1.                  The amended statement of claim be struck out.

2.                  The minute of proposed further amended statement of claim be disallowed.

3.                  The applicants have six weeks to file and serve a further amended statement of claim reflecting these reasons, the filing and service of which is without prejudice to the respondents’ right within 28 days to challenge that pleading.

4.                  The applicants are to pay the respondents’ costs of the motions in any event. 

Associate: 

Dated:         11 December 2009