FEDERAL COURT OF AUSTRALIA

Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No 2) [2010] FCA 404

Citation:	Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No 2) [2010] FCA 404

Parties:	POLAR AVIATION PTY LTD and CLARK ANDREW BUTSON v CIVIL AVIATION SAFETY AUTHORITY, TERRENCE FARQUHARSON, GARRY PRESNEILL, ROBERT COLLINS, JIM MARCOLIN, PETER JOHN and ALAN COOK

File number:	VID 677 of 2009

Judge:	KENNY J

Date of judgment:	29 April 2010

Catchwords:	LIMITATION OF ACTIONS – Limitation Act 1935 (WA) s 47A – Whether appropriate to grant leave to file proposed proceeding under s 47A(3) – Delay of nearly three years between applicants’ solicitor’s realization that applicants had potential claim against respondents and filing of application seeking leave not occasioned by mistake or reasonable cause where delay attributed to solicitor’s unawareness of s 47A and its potential application – Solicitor’s ignorance of statute’s existence not reasonable cause or “mistake” in the relevant sense – Existence of pre-application discovery proceeding insufficient explanation for delay under the circumstances – Absence of material prejudice to potential respondents not established – Weakness of proposed causes of action weighed in favour of denying leave – Leave not appropriate PRACTICE AND PROCEDURE – Declaratory relief – Declaratory relief inappropriate in the circumstances of the case

Cases cited:	Polar Aviation Pty Ltd v Civil Aviation Safety Authority [2010] FCA 367 Smith v Australian National Line Ltd (1998) 159 ALR 431 British American Tobacco Australia Ltd v Western Australia (2003) 217 CLR 30 Hamilton v Merck & Co Inc (2006) 66 NSWLR 48 John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 Posner v Richards [1986] WAR 1 Matheson v Commissioner of Main Roads (2001) 25 WAR 269 Baker v Shire of Albany (1994) 14 WAR 46 Pilbara Iron Ltd v Bonotto (1994) 11 WAR 348 Repacholi Aviation Pty Ltd v Civil Aviation Safety Authority (2009) 263 ALR 93 Perry v City of Armadale [2004] WASC 167 Hughes v Minister for Health [1999] WASCA 131 Quinlivan v Portland Harbour Trust [1963] VR 25 Murray v Baxter (1914) 18 CLR 623 Stevens v Motor Vehicle Insurance Trust [1978] WAR 232 Bingham v England (1996) 17 WAR 226 Victorian Railways Commissioners v Casaccio [1961] VR 157 Sutherland Shire Council v Heyman (1985) 157 CLR 424 Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540 Sullivan v Moody (2001) 207 CLR 562 Pharam-a-Care Laboratories Pty Ltd v Australia (No 3) [2010] FCA 361 Australian Wool Innovation Ltd v Newkirk [2005] FCA 290 Australian Competition and Consumer Commission v Australia and New Zealand Banking Group Ltd [2008] FCA 1623 Ducker v Western Australia [2006] WASCA 93 Dodoro v Knighting (2004) 10 VR 277 Bond v Sulan (1990) 26 FCR 580 John Robertson & Co Ltd v Ferguson Transformers Pty Ltd (1973) 129 CLR 65 Hamilton v Merck & Co Inc (2006) 66 NSWLR 48

Date of hearing:		23 April 2010

Place:		Melbourne

Division:		GENERAL DIVISION

Category:		Catchwords

Number of paragraphs:		102

Counsel for the Applicants:		Mr P G Nash with Mr P W Lithgow

Solicitor for the Applicants:		Maitland Lawyers

Counsel for the Respondents:		Mr I Harvey

Solicitor for the Respondents:		Blake Dawson

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION

BETWEEN:

POLAR AVIATION PTY LTD

First Applicant

CLARK ANDREW BUTSON

Second Applicant

AND:

CIVIL AVIATION SAFETY AUTHORITY

First Respondent

TERRENCE FARQUHARSON

Second Respondent

GARRY PRESNEILL

Third Respondent

ROBERT COLLINS

Fourth Respondent

JIM MARCOLIN

Fifth Respondent

PETER JOHN

Sixth Respondent

ALAN COOK

Seventh Respondent

JUDGE:	KENNY J
DATE OF ORDER:	29 APRIL 2010
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. In so far as necessary, leave be refused the applicants to bring an action in accordance with the proposed statement of claim filed in court on 23 April 2010.

2. The application filed on 16 September 2009 be dismissed.

3. Short submissions on costs, including the costs of the respondents’ motion of 20 October 2009, be filed and served by:

(a) the applicants, on or before 4 pm on 3 May 2010;

(b) the respondents, on or before 4 pm on 12 May 2010; and

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 Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION

BETWEEN:

POLAR AVIATION PTY LTD

First Applicant

CLARK ANDREW BUTSON

Second Applicant

AND:

CIVIL AVIATION SAFETY AUTHORITY

First Respondent

TERRENCE FARQUHARSON

Second Respondent

GARRY PRESNEILL

Third Respondent

ROBERT COLLINS

Fourth Respondent

JIM MARCOLIN

Fifth Respondent

PETER JOHN

Sixth Respondent

ALAN COOK

Seventh Respondent

JUDGE:	KENNY J
DATE:	29 APRIL 2010
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

A. introduction

1 In a judgment delivered on 16 April 2010, the Court held that it had jurisdiction to hear and determine an application filed on 16 September 2009 by Polar Aviation Pty Ltd (‘Polar’) and Polar’s director, Clark Andrew Butson. Two issues are said to arise on this application. First, does s 47A of the Limitation Act 1935 (WA) (‘the Limitation Act’) apply to the action for damages that the applicants wish to bring in this Court against the Civil Aviation Safety Authority (‘CASA’) and some of its officers? Secondly, if it does, should the applicants be granted leave pursuant to s 47A(3) of the Limitation Act to bring the action?

2 The respondents contend that, absent leave under s 47A(3), s 47A of the Limitation Act applies so as to bar the applicants’ proceeding and that leave should not be granted. The applicants’ primary position is that s 47A of the Limitation Act does not apply, but that, if it does, then the Court should grant leave to bring the proceeding.

3 The action is briefly described in the application, which states that the applicants propose:

… to issue proceedings for damages against the respondents in respect of the respondents’ purported exercise of powers pursuant to the Civil Aviation Act 1988 (‘the Act’) and the regulations and orders made thereunder (‘the Regulations and Orders’) alleging:

1. The respondents have wrongfully and in breach of the Act, the Regulations and Orders infringed the rights given to the applicants by and pursuant to the Act, the Regulations and Orders.

2. Misfeasance in office.

3. Negligence in purported exercise of the respondents’ powers under the Act, the Regulations and Orders.

4 An affidavit sworn on 31 August 2009 by the applicants’ solicitor, Edward John Maitland, accompanied the application. Exhibited to Mr Maitland’s affidavit was “the draft statement of claim proposed to be filed in this proceeding”. The applicants relied on a second version of this pleading at the hearing of the respondents’ motion on 30 November 2009. At the recent hearing on 23 April 2010, with the respondents’ consent, the applicants relied on a third version of the pleading. For present purposes, there is little material difference between the second and third versions of the draft pleading. The general nature of the claims that the applicants wish to make is discussed in my earlier reasons for judgment: see Polar Aviation Pty Ltd v Civil Aviation Safety Authority [2010] FCA 367. I shall not repeat that discussion.

5 In support of their application for leave, the applicants relied on three affidavits of Mr Maitland – one of 31 August 2009 (just mentioned) and others of 16 April 2010 and 23 April 2010 – although not on paragraphs 9 and part of paragraphs 14, 24(b) and 26 of Mr Maitland’s affidavit of 31 August 2009 or on paragraph 8 of Mr Maitland’s affidavit sworn on 16 April 2010. In opposition, the respondents relied on the affidavits of their solicitor, Navid Farsi Manuchehri sworn on 19 October 2009 and 21 April 2010, and the affidavit of Leon Magistro sworn on 21 April 2010 (to which little, if any, reference was made in argument).

6 The applicants did not read and rely on an affidavit sworn on 29 September 2009 by Mr Butson. Instead, the applicants and the respondents agreed upon a chronology of certain events.

B. Parties’ submissions

Application of the Limitation Act

7 The applicants advanced two central arguments in support of their position that s 47A did not apply to the proposed action. First, they argued that the provision did not apply to claims in respect of acts that were done “in pursuance or execution or intended execution of” a Commonwealth Act or “in respect of [a] neglect or default in the execution of” a Commonwealth Act. The applicants submitted that s 47A was only intended to consolidate the various limitation and notice statutes applicable to Western Australian public authorities in existence at the time of its enactment, and that the statute should therefore not be construed to apply to actions arising under Commonwealth legislation. In support of this construction, the applicants cited legislative history, relying particularly on Pidgeon J’s historical analysis in Smith v Australian National Line Ltd (1998) 159 ALR 431. They stressed that s 47A’s reference to “an Act” was limited under the Interpretation Act 1984 (WA) to an Act of the Western Australian Parliament and argued that this limitation should be taken into account in construing the whole of the provision.

8 Secondly, the applicants contended that CASA was to be regarded as “the Commonwealth” for purposes of s 64 of the Judiciary Act 1903 (Cth) (‘the Judiciary Act’), because it was a statutory body responsible to the Minister and performing an essentially governmental function. Accordingly, the applicants argued, even if s 47A could apply to the proposed action, CASA’s rights in litigation must be the same as those of an ordinary citizen. Citing passages from the judgments of Gleeson CJ and Kirby J in British American Tobacco Australia Ltd v Western Australia (2003) 217 CLR 30 (‘British American Tobacco’), the applicants submitted that s 47A was therefore inapplicable to CASA, as applying the provision would accord CASA special rights not accorded an ordinary citizen.

9 In a second set of submissions (developed at the hearing), citing Hamilton v Merck & Co Inc (2006) 66 NSWLR 48, the applicants contended that the notice and leave provisions of s 47A were procedural rather than substantive and, therefore, under John Pfeiffer Pty Ltd v Rogerson (‘John Pfeiffer’) (2000) 203 CLR 503, they would not apply to a proceeding brought in the Victoria Registry of this Court.

10 In opposition, the respondents relied on John Pfeiffer and on ss 5 and 6 of the Choice of Law (Limitation Periods) Act 1993 (Vic) for the proposition that s 47A applied to the applicants’ proposed action. The respondents submitted that s 47A covered acts performed under Commonwealth legislation by Commonwealth instrumentalities such as CASA. They argued that the words “orof any public duty or authority” in 47A(1) indicated a legislative intent to treat acts pursuant to a public duty, by a governmental authority that was not a Western Australian authority (such as CASA), as equivalent to acts performed pursuant to Western Australian legislation. According to the respondents, s 47A drew “a distinction between a body politic that is representative of the Crown,” to which it does not apply, and “an instrumentality or an agency which may be an agent of the Crown”, to which it does apply. Referring to the definition of “person” in s 3 and citing Posner v Richards [1986] WAR 1, the respondents said further that s 47A applied here “on both a literal and purposive interpretation” since the provision was intended to apply to “all persons who are in some sense public authorities”. They contended s 64 of the Judiciary Act did not deprive CASA of the benefit of s 47A because the provision afforded protection to all persons performing public duties, irrespective of whether they were Commonwealth instrumentalities or officers of such instrumentalities. That is, the protection of s 47A was not given on the basis of CASA’s status as a government instrumentality and, thus, so the respondents said, s 64 has no operation here.

Whether leave should be granted

11 The applicants submitted that the Court’s discretion to grant leave under s 47A is enlivened when one of the three conditions was satisfied: the delay was occasioned by mistake; the delay was occasioned by reasonable cause; or the prospective respondents were not materially prejudiced by the delay. The applicants argued that the delay in bringing the action was occasioned by mistake or other reasonable cause. There was some inconsistency in the applicants’ cae with regard to the date by which their solicitor should reasonably have realized, and did realize, that the applicants had a potential cause of action against the respondents. Although the applicants’ solicitor, Mr Maitland, did not specify the date at which he became aware that a cause of action was available, a reading of his affidavits suggests that that date was in November 2006. The applicants said in written submissions, however, that the existence of a cause of action was ascertainable in February 2005. Mr Maitland further deposed that he was unaware of the potential application of s 47A until March 2009, and that he was thereafter of the view that the provision did not apply to the proposed causes of action. The applicants also argued that the respondents were not prejudiced by the delay because they were notified of the nature of the applicants’ claims and the applicants’ intention to seek damages by a November 2006 letter from the applicants’ solicitors to the respondents’ solicitors. The applicants submitted that once these two factors enlivened discretion, there were no considerations weighing against leave.

12 The respondents submitted that the applicants had not discharged their burden of establishing that leave should be granted. They argued that there remained significant periods of time in which the delay in bringing the action was not explained; and the applicants had not shown that the delay was occasioned by mistake or other reasonable cause. They also argued that they were materially prejudiced by the delay, particularly as the individual respondents had moved to new positions since the actions complained of, and none of them had a particularly detailed recollection of the relevant events. They observed that there was no evidence from the applicants’ side that the applicants’ books and records were still available. The respondents finally submitted that, even if the Court’s discretion was enlivened, it would not be just to grant leave because none of the causes of action in the proposed statement of claim were tenable.

C. CONSIDERATION

13 For present purposes, it suffices to say that the effect of s 47A(1) of the Limitation Act is that, in the absence of consent or leave, no action can be brought against a 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, unless the action is brought (on notice) within one year from the date on which the cause of action accrued. The effect of s 47A(2) and (3) is that, with consent or leave, such an action may be brought at any time within six years from date on which the cause of action accrued, but not thereafter.

14 The applicants conceded that, if s 47A applied to the proposed action, their claims were outside the initial one-year limitation period: see s 47A(1). The applicants agreed that, if s 47A applied, they needed the leave of the court before bringing their action, absent the respondents’ consent (s 47A(2)). Such consent was not forthcoming. As noted in earlier reasons for judgment, leave cannot be granted retrospectively: see Matheson v Commissioner of Main Roads (2001) 25 WAR 269 (‘Matheson’); also Baker v Shire of Albany (1994) 14 WAR 46 at 57 and Pilbara Iron Ltd v Bonotto (1994) 11 WAR 348 at 354-5.

15 Whether or not s 47A applies to the proposed action, or part of the action, might well be thought to be the first question to arise for determination, for only if it does will the applicants require a grant of leave. For reasons that appear below, I do not propose to approach the matter in this way. Instead, I first determine whether, assuming s 47A applies, there should be a grant of leave to the applicants under s 47A(3).

The Question of Leave

16 The following discussion is predicated on the assumption that s 47A of the Limitation Act applies to the action that the applicants wish to bring: compare Repacholi Aviation Pty Ltd v Civil Aviation Safety Authority (2009) 263 ALR 93 (‘Repacholi’) at 123 [140]. Under s 47A(3), the Court may grant leave (with or without conditions) if it thinks it just where it considers that:

(1) the delay was occasioned by mistake; or

(2) the delay was occasioned by any other reasonable cause; or

(3) the prospective defendant is not materially prejudiced in its defence or otherwise by the delay.

If the Court is satisfied of any of (1), (2) or (3), then the Court may grant leave if it considers it just to do so: see Matheson at 274 [18].

17 Subsection 47A(3) provides that:

(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.

18 There is some difficulty in this case in identifying the date on which a relevant cause of action may have accrued. Referring to paragraphs [21] and [24] of the proposed statement of claim, the applicants submitted that the first alleged wrongful act capable of giving rise to a cause of action was “the excessive demands following the May 2004 audit” and that the second act capable of giving rise to a cause of action occurred on 7 December 2004. I proceed on the basis that the applicants are correct in this submission, although, at this point in the proceeding, it is impossible to determine whether or not, in truth, any of the alleged causes of action accrued on these dates. The respondents in fact submitted that no cause of action could have accrued against the individual respondents prior to January 2005, because that was when regulatory action was taken to cancel Polar’s air operator’scertificate (‘AOC’).

19 As already noted, the applicants argued that the delay was due to their solicitor’s mistake or other reasonable cause. In the alternative, they argued that the respondents would not be materially prejudiced by the grant of leave.

20 The word “mistake” is in common English usage, meaning “[a] misconception about the meaning of something; a thing incorrectly done or thought; an error of judgment” (OED) or “an error in action, opinion or judgment”; “a misconception or misapprehension” (Macquarie Dictionary). The meaning of “other reasonable cause” is well-established: see Perry v City of Armadale [2004] WASC 167 (‘Perry v City of Armadale’) at [20] per Le Miere J and Hughes v Minister for Health [1999] WASCA 131 (‘Hughes v Minister for Health’) at [42]- [44] per Malcolm CJ (with whom Pidgeon and Steytler JJ agreed), citing Quinlivan v Portland Harbour Trust [1963] VR 25 at 28 per Sholl J, who said that the expression “reasonable cause”:

… means to refer to a cause which a reasonable man would regard as sufficient, a cause consistent with a reasonable standard of conduct, the kind of thing which might be expected to delay the giving of notice by a reasonable man.

21 In written submissions, the applicants said:

The failure to comply with the provisions of s 47A(1) was due to the inability to properly allege a cause of action until February 2005 and the fact that the legal advisers of the applicant were unaware of the content of s 47A. Taking the first cause of action as arising in May 2004, the delay until February 2005 was due to “other reasonable cause”. The delay from that time was due both to mistake and “other reasonable cause”.

22 Although the applicants’ written submissions are put on the basis that a cause of action could have been alleged after February 2005, Mr Maitland’s evidence suggests that it was not until November 2006, well after the year referred to in s 47A(1) had expired, that he formed the opinion that the applicants had a cause of action against CASA and its officers. In his affidavit of 31 August 2009, Mr Maitland explained that “it was only when the matters occurring in 2004 were seen in the context of later events in 2005 and 2006 that [he], as [the applicants’] legal adviser … formed the view that there was a clearly viable cause of action against CASA and the relevant officers”. Mr Maitland added that “[i]t was the formation of this view that caused [him] to write to CASA on 9 November 2006”. For reasons that will become clear below, nothing turns on this inconsistency.

23 In order to appreciate Mr Maitland’s statement that he did not form a view about the viability of any action until events occurring in 2005 and 2006, it is necessary to refer to the contents of the 9 November 2006 letter written by him to the Office of General Counsel, Civil Aviation Safety Authority, Canberra.

24 The letter of 9 November 2006 referred to Polar’s application, in May 2004, for an AOC; the conduct by CASA flight operations inspectors of an operational ‘audit’ of Polar during that month; and to heated arguments between one of the inspectors and Mr Butson in the course of the audit. The letter asserted that, thereafter, CASA flight operations inspectors issued 14 requests for corrective action (‘RCA’) in relation to various minor matters. From this point, according to the letter, there were numerous contentious dealings between the applicants and CASA officers, including another audit in November 2004. The letter recorded that the “stated purpose … was said by CASA to be [to] determine the progress of the implementation of operational procedures and changes to the Polar Operations Manual”; but that the “real purpose of the so-called ‘audit’ was to find further fault”. More disputes followed, including the cancellation, in January 2005, of Polar’s AOC and other approvals related to the conduct of the flight operations business.

25 In January 2005, Polar and Mr Butson made an application to the Administrative Appeals Tribunal (‘AAT’). The November 2006 letter stated that:

On 21 January 2005, [the applicants] sought an agreement from CASA to allow the Polar operation to continue pending the Review by the AAT, and an assurance that CASA would re-issue the Polar AOC upon its expiry on 31 January 2005. Mr Terence Farquharson of CASA ... advised that CASA would not consent to Butson continuing as Chief Pilot and Chief Flying Instructor pending the Review, and that [the applicants] would have to seek the approval by CASA of an alternative Chief Pilot before operations could continue at Polar.

On 31 January 2005, the day of the expiry of the AOC, Farquharson advised that he did not have the power to issue an AOC but that he would be prepared to recommend to the Delegate that CASA issue an AOC for 3 years from 31 January 2005 if Polar was prepared to enter into an enforceable undertaking on terms dictated by CASA and if Butson and Polar would waive their rights to appeal to the AAT for a Review of the CASA Decision made on 14 January 2005. Polar declined to enter into the enforceable undertaking.

26 The letter recorded that CASA refused Polar’s AOC and that, on 4 February 2005, Polar applied to the AAT for a stay. On 11 February 2005, the AAT made the stay order that Polar sought in respect of the cancellation of Polar’s AOC. In April 2005, CASA unsuccessfully challenged the AAT’s decision in this Court and, on 8 August 2005, the AAT determined that Polar’s AOC and Mr Butson’s chief flying instructor approval should not be cancelled. According to the letter, relations between CASA and the applicants continued to be difficult and, ultimately, the applicants made a further application to the AAT in November 2005. Before the further AAT hearing, CASA conducted another audit, this time for the renewal of Polar’s AOC, although, so the letter said, “the substantive intent of the so-called ‘audit’ by CASA was for the purpose of ‘trawling’ through the operational records of Polar seeking to find as many faults as possible, no matter how small, which could be used adversely as evidence against Polar for the imminent hearing in the AAT”.

27 According to the November 2006 letter, the final AAT determination was favourable to the applicants. Notwithstanding this, there were, so the letter said, further show cause notices issued by CASA to Polar, as well as a notice of proposed action, and a special audit. Finally, the letter noted that, in September 2006, CASA issued an AOC to Polar for a further three years and that, in October 2006, Mr Butson was advised that he had successfully completed the chief pilot assessment process.

28 The letter of 9 November 2006 concluded as follows:

The above conduct by CASA in relation to our clients since January 2005 constitutes strong evidence of abuse of process by CASA (and in particular the West Area office) to wrongfully force the closure of the safe and successful general aviation operations conducted by Polar and Butson.

On our instructions, CASA has wrongfully singled out and targeted our clients.

There never was any proper basis for CASA to attempt to shut down Polar.

It should be kept paramount in CASA’s consideration of the operations of Polar that shortly after the AOC was cancelled on 14 January 2005, Farquharson was prepared to approve an AOC for the normal 3 year period, on the conditions that an enforceable voluntary undertaking [‘EVU’] be provided and other AAT proceedings be withdrawn.

…

We have instructions to seek compensation from CASA for the loss and damage suffered by our clients resulting from the unwarranted actions by CASA and certain of its officers.

On the evidence, it would appear that our clients have a strong case against CASA and against some of its officers.

…

Please TAKE NOTICE that if we do not receive a satisfactory response from you at the expiry of 7 days, we are on firm instructions to commence civil proceedings against CASA and certain of its officers without further notice.

By letter dated 15 November 2006, the Manager, Legal Branch, CASA, denied that CASA had any liability to the applicants.

29 With the applicants’ November 2006 letter in mind, it is possible to understand (without necessary accepting) the applicants’ written submission that:

The events of January and February 2005, where CASA and Mr Farquharson made a complete volte face in relation to the grant of Polar Aviation’s AOC, put the previous actions of CASA in context and at that stage a reasonable solicitor would consider that there was a viable cause of action not only in relation to the events of January and February but also in relation to the earlier actions of CASA.

30 Both the applicants’ written submissions and Mr Maitland’s November 2006 letter treat the events of January and February 2005 as pivotal in illuminating the existence of a cause of action. Though Mr Maitland’s affidavit evidence refers to “the context of later events in 2005 and 2006” as playing a role in his realization that the applicants had a viable cause of action, these events are not identified, and, from my reading of the evidence, there are no later events that stand out as particularly significant in this regard. I am prepared to accept, for present purposes, that, as the applicants submitted, “the real potential for a claim did not emerge until February 2005”. Considering that the potential for a claim might not be grasped immediately after it “emerged”, however, I accept that a reasonable person, having Mr Maitland’s legal experience and qualifications and being relevantly acquainted with the applicants’ legal affairs, would not necessarily have formed the opinion that the applicants had a tenable cause of action against CASA and its officers before May or December 2005 (that is, before one year after the cause of action had accrued on the applicants’ view). If this is accepted, then, so far as the applicants and their solicitor were concerned, the occasion to give notice under s 47A(1) and bring an action did not arise until after the expiration of the one-year notice period provided by the statute.

31 Of itself, this does not, however, explain the failure to advert to the proposed action until November 2006. As the letter of 9 November 2006 indicates, the applicants and CASA were engaged in proceedings before the AAT between January 2005 and March 2006. Notwithstanding that the “volte face” on CASA’s part allegedly took place early in 2005, I would accept that it was reasonable for the applicants to delay instituting their proposed action until the resolution of the AAT proceedings. Accordingly, until November 2006, I would accept that there was reasonable cause for the delay in bringing the action. For present purposes, I would not regard the delay between the end of the AAT proceedings and the letter of 9 November 2006 as material.

32 A significant difficulty with the applicants’ case at this point is that there was a further delay of almost three years before the applicants made their current application for leave to bring their action. For the reasons stated below, the applicants have not shown that this further delay was occasioned by mistake or other reasonable cause.

33 As the respondents noted, there were significant periods of time in which no steps were apparently taken and no explanation offered for the apparent inaction. These periods are: (1) from November 2006 to June 2007; and (2) from June 2007 to 28 April 2008. There are other periods when steps were apparently being taken, although not at a fast pace. Thus, in his affidavit of 31 August 2009, Mr Maitland deposed that the applicants had difficulty in filing an application for substantive relief, which was prepared in June 2007, because the applicants were unable to identify the individual officers of CASA “who were concerned with the contemplated litigation”. An application in April 2008 under the Freedom of Information Act 1982 (Cth) proved unhelpful. The result was that, on counsels’ advice, in September 2008, the applicants applied to the Supreme Court of Western Australia for pre-action discovery of documents held by CASA “to identify the decision maker or makers and those upon whose advice the decision maker or makers relied in relation to the decisions of [CASA]”, which, generally speaking, are the decisions referred to in the proposed statement of claim. The summons for pre-action discovery named only CASA (and not Mr Farquharson, as the applicants suggested in their written submissions). Mr Maitland stated that, on 10 March 2009, an “informal agreement was reached … whereby the [r]espondents agreed to provide documents which contained information which would identify the relevant decision-makers of CASA relevant to the proposed litigation”. On 1 April 2009, the applicants received some documents as a result of this agreement, although there was subsequently further correspondence with the respondents’ solicitors from Mr Maitland seeking additional information, including as to whether or not the respondents’ solicitors would accept service on behalf of CASA and individual respondents to a proposed action.

34 By itself, the pre-action discovery application does not explain the delay in bringing the action. This is because, first, the status of CASA as a potential litigant was unaffected by the application. As the respondents’ counsel said, the proposed action against CASA for breach of statutory duty (and, indeed, for negligence) might have been brought at any time after November 2006. Secondly, the application for pre-action discovery apparently proceeded slowly. Thirdly, perusal of the documents exhibited to Mr Maitland’s 31 August 2009 affidavit showed that, as at November 2006, the applicants knew the names of each of the individual respondents and their roles as relevant decision makers. The pre-action discovery application added little or nothing to this sum of knowledge, and the proposed action for damages was not dependent on the outcome of this application. In other words, the applicants could have brought the proposed action against all the present respondents at any time after the letter of 9 November 2006.

35 This conclusion is confirmed by reference to some other matters. The applicants’ counsel stated in argument that Mr Farquharson and Mr Presneill gave evidence before the AAT at the hearings prior to November 2006. Their roles as decision makers or otherwise had been the subject of evidence. The correspondence with Mr Butson and his lawyers (which was exhibited to Mr Maitland’s affidavit of 31 August 2009) showed that the applicants knew in mid 2004 of the involvement Mr Farquharson (as Area Manager, West Area, CASA). In 2004, they also knew of the involvement of Mr Peter John (as Manager, Business Development, Regulatory Services Branch and delegate) and Mr Presneill (as Flying Operations Inspector, West Area); and, at least in January 2005, of the involvement of Mr Marcolin (at that time General Manager, General Aviation Operations). By April and June 2006 respectively, the correspondence showed that Mr Butson must also have been aware of the involvement of Mr Robert Collins (then Group General Manager, General Aviation Operations Group) and Alan Cook (then Operations Manager, General Aviation Operations Group and delegate). That is, the correspondence in the hands of the applicants clearly identified the individuals within CASA who took responsibility for the acts about which the applicants complained.

36 Leaving aside the applicants’ argument about mistake, I would reject their submission that the delay in bringing the action was occasioned by reasonable cause after November 2006. The existence of the pre-action discovery proceeding does not constitute reasonable cause, and nor does Mr Maitland’s failure to advert to s 47A after November 2006 or, particularly, after his receipt of the October 2008 letter from Mr Manuchehri discussed below.

37 The applicants argued that the delay was due to mistake or other reasonable cause because, first, the applicants’ solicitor knew nothing of s 47A and, secondly, when he became aware of it, he did not consider that the provision applied to an action of the kind proposed. In written submissions, the applicants said that “the applicants’ legal advisers became aware of the possible application of section 47A” in March 2009 and “by that time, it was far too late to comply with the requirements of s 47A(1)”. This submission found support in the second affidavit of Mr Maitland sworn on 16 April 2010, in which it was said:

At the time I received instructions from the Applicants to seek compensation from CASA for damages resulting from the actions of the Respondents … I was unaware of section 47A of the [Limitation Act].

I first learned of the existence of section 47A … on 9 March 2009 during the hearing of an Application in an unrelated matter, Repacholi Aviation Pty Ltd & Or v Civil Aviation Safety Authority & Or … which was before a Master of the Supreme Court of Western Australia ….

Mr Maitland deposed that he then made inquiry of counsel involved in the matter, who also said that they had not previously heard of the provision. He also inquired of his firm’s Perth agents, who expressed the view that the provision did not apply to Commonwealth agencies or their officers.

38 The precise date on which Mr Maitland became aware of s 47A of the Limitation Act was also the subject of some evidence from the respondents. Exhibited to Mr Manuchehri’s affidavit of 21 April 2010 was a letter from him to Mr Maitland and the Perth agent dated 3 October 2008. Although written in the Repacholi matter, the letter specifically mentioned s 47A, saying that it provided “protection” against any cause of action accruing before 15 November 2005. If Mr Maitland read the letter properly, then the existence of s 47A and the first respondent’s likely reliance on it would have come to his attention in October 2008. I accept that Mr Maitland received a letter from Mr Manuchehri in October 2008, which ought to have alerted him to s 47A and the first respondent’s approach to the provision at that time.

39 Mr Manuchehri’s reference to this letter led Mr Maitland to swear a third affidavit on 23 April 2010, in which he said:

When I read the reference to the Limitation Act [in Mr Manuchehri’s letter] I presumed that this particular statute was the same as the Statutes of Limitations in force in all other States of Australia, which impose a limitation period of 6 years within which to bring a proceeding. I gave no further consideration to the section at that time because I thought it irrelevant.

… At the time I swore [my previous] affidavit and as at 9 March 2009 I was not conscious that s 47A had been mentioned in the letter … I certainly had no knowledge of the content or the ambit of s 47A prior to 9 March 2009.

If Mr Maitland is to be believed, Mr Maitland did not become aware of the provision and the respondents’ reliance on it for another five months. I have some difficulty in accepting Mr Maitland’s account, but, ultimately, I doubt that anything turns on whether he became aware of these matters in October 2008 or March 2009.

40 Whether Mr Maitland knew about s 47A in October 2008 or March 2009, his failure to act in conformity with s 47A(1) was not attributable to his failure to advert to this provision. As already indicated, I accept that this failure was attributable to reasonable cause. If the reference to “the delay in bringing the action” in s 47A(3) is to be construed as a reference to the failure to bring the proceedings within the year, then a condition for the grant of leave in s 47A(3) would be satisfied: compare Murray v Baxter (1914) 18 CLR 623 (‘Murray v Baxter’). As appears below, even if this were a proper construction, I would nonetheless reject the application for leave on discretionary grounds.

41 No party argued for such a construction, however, and all parties treated the reference to “the delay in bringing the action” as a reference to the entire period of the delay until the application for leave in September 2009. This approach is consistent with Western Australian authorities: see Matheson at 280 [47]. If I approach the matter on this basis, I accept that there was a reasonable cause for the delay until around the end of November 2006. As already stated, I reject the applicants’ submission that they established that the delay in bringing the action after November 2006 was occasioned by reasonable cause, independently of mistake. Having considered the totality of the evidence, I also reject the applicants’ submission that they have established that, after November 2006, the delay in bringing the action was occasioned by mistake. I accept that, for the purposes of s 47A, a mistake may be a mistake of law, and that there is no requirement that the mistake be a reasonable one: see Murray v Baxter at 629 and Hughes v Minister for Health at [42]. Further, I accept that a mistake of an applicants’ legal advisers can be a relevant and operative mistake for these purposes: see Hughes v Minister for Health at [44], citing Stevens v Motor Vehicle Insurance Trust [1978] WAR 232. I do not accept, however, that the delay in bringing the action in this case was ‘occasioned’ by mistake. Mr Maitland’s evidence is that he did not know of s 47A of the Limitation Act until March 2009 and that, if it applied, the applicants were required to bring the action within the year referred to in s 47A(1), or, absent consent, seek leave under s 47A(3) within six years. I would not regard absolute ignorance of the provision as a ‘mistake’ in the relevant sense. The difference between ignorance and mistake is explored and explained in Murray v Baxter at 630-32. Had Mr Maitland known of the provision and wrongly believed it did not apply, then that would be a mistake. But, on Mr Maitland’s account, this situation arose only after March 2009. Even if total ignorance of a provision could constitute a ‘mistake’ for present purposes, there is no evidence that Mr Maitland’s ignorance of the provision ‘occasioned’ the delay in bringing the action. There is no evidence to support the proposition that the applicants would have conducted the matter any differently had their legal advisers been aware of the provision at some earlier date. There is, indeed, no evidence that explains the applicants’ change of approach, as reflected in their decision to bring the present application. In these circumstances, I reject the applicants’ submission that they have established that the whole of the delay in bringing the action was occasioned by mistake or other reasonable cause.

42 Perhaps the applicants might have proceeded with greater expedition in making their pre-action discovery application had they adverted to s 47A; and perhaps, they might have chosen to institute the proceeding without pursuing the pre-action discovery application at all. This is, in the present case, little more than speculation. There is no evidence to indicate what precisely the applicants were likely to have done had they known of s 47A and its asserted operation earlier.

43 The applicants also argued that the prospective respondents were not materially prejudiced in their defences or otherwise by the delay. I reject this submission for the reasons that follow.

44 In Perry v City of Armadale at [23], Le Miere J said:

The relevant time for considering the issue of prejudice is the period between the date of the cause of action arising and the date of the application for leave to bring the action …The defendant bears an evidentiary onus which it must discharge as to material prejudice, but if it does so, the ultimate onus to show the absence of material prejudice rests upon the plaintiff ….

Comparison with Repacholi

65 The applicants in Repacholi, Repacholi Aviation and its director Mr Repacholi, argued that a variety of administrative actions by CASA were outside CASA’s statutory powers; and sought to found claims for breach of statutory duty and negligence against CASA, as well as claims for misfeasance in public office against various officers, on those actions. The applicants had filed an amended statement of claim naming CASA and Mr Farquharson, the second respondent here, as the only respondents, and sought leave to file a proposed further amended pleading naming additional officers as individual respondents. The respondents opposed leave and filed an application seeking summary judgment or an order striking out the amended statement of claim. The description of the claims below is drawn from [51] – [76] of the judgment, which appear to refer to the proposed pleading rather than the pleading on file. In any event, it appears that the only significant difference between them was the addition of the misfeasance claims.

66 McKerracher J ordered the amended statement of claim be struck out and denied leave to file the proposed further amended statement of claim. His Honour concluded that “the only claim capable of surviving would be a claim in negligence against CASA, not against its individual officers”, and granted the applicants leave to file a further amended pleading consistent with the reasons for judgment: see Repacholi at 130-1 [169] – [171].

67 The actions relied on by the applicants in the proposed pleading were several:

· First, CASA was said to have failed to conduct an investigation into the cirumstances surrounding a takeoff executed by the individual applicant, Mr Repacholi, which formed the basis for a notice suspending Mr Repacholi’s pilot licences, and/or to have failed to complete the investigation promptly. This was said to be a contravention by CASA of an obligation purportedly arising under the Civil Aviation Regulations 1988 (‘CAR’) reg 286(2): Repacholi at 107 [51]. A second show cause notice was also said to be in breach of this obligation: Repacholi at 107 [52]. The applicants here do not seek to allege violation of a duty under CAR 286(2).

· A third notice cancelling Mr Repacholi’s pilot licence was also said to be outside statutory power, on the ground that there was no authority to cancel the licence until Mr Repacholi had been issued and given the opportunity to respond to a show cause notice, as purportedly required by CAR 269(3): Repacholi at 107 [55]. The applicants here apparently rely on the same interpretation of CAR 269(3), at paragraph [66] of the proposed statement of claim. Without ruling on the issue, McKerracher J expressed doubts (at 112 [84]) about the interpretation of CAR 269(3) put forth by the applicants in Repacholi.

· In regard to these three notices, the applicants also averred that CASA and its officers lacked sufficient information, and conducted inadequate research regarding the relevant takeoff procedure: Repacholi at 107 [55], 108 [57]. They further relied on language from an AAT decision regarding the matter: Repacholi at 107-8 [56], [58]. It was said that each of the three notices was made in excess of authority of CASA and the individual respondents, in breach of CASA’s statutory duty and in breach of its duty of good faith, or negligently.

· The proposed pleading further alleged that CASA granted a Mr Hampton a limited approval as Repacholi Aviation’s chief pilot, excluding approval as to charter operations, despite the fact that Mr Hampton possessed the required qualifications for such operations: Repacholi at 108 [61]. Although the allegations in the proposed statement of claim in the present matter relate in part to chief pilot approval, they do not specifically concern qualifications for charter operations.

· The applicants also alleged a breach by CASA of a duty to assess Mr Repacholi’s suitability as chief pilot before refusing to approve him as chief pilot, in accordance with cl 1.3 in App 1 of CAO 82.0: Repacholi at 108-9 [63] – [65]. The proposed statement of claim in the present matter refers to CAO 82.0, but the reference is to a different section, and the applicants do not complain of a failure to assess. CASA is alleged to have acted in breach of statutory duty and in breach of its duty of good faith.

· Finally, the applicants complained of a request by CASA for disclosure of certain medical information related to Mr Repacholi and a suspension of his medical certificates (see 110-11 [68] – [72]), which find no parallel in the present action. There were further notices of which the applicants in the case complained.

68 On the basis of these matters, the applicants in Repacholi alleged that CASA and its officers took action that was beyond power; that CASA and its officers were in breach of statutory duty in circumstances in which they knew that the actions were outside their power or acted recklessly with regard to whether the actions were within their power or not, and acted with intent to harm the applicants: Repacholi at 111 [73]. The actions complained of were also said to constitute negligence, and the applicants claimed damages on this account and for breaches of duty of good faith, breaches of statutory duty; and misfeasance in public office: Repacholi at 111 [75].

Negligence

69 Because of the approach taken by his Honour, the Repacholi decision is most directly helpful in regard to the proposed negligence claims. After surveying the authorities, McKerracher J concluded (at 127 [151]) that, although the claim was inadequately pleaded, “it [was] not possible to conclude that a claim in negligence [was] not open”. In reaching this conclusion, McKerracher J did not find it necessary to engage in a detailed analysis of the particular statutory functions alleged to have been performed without reasonable care. Rather, he relied on general principles, citing, inter alia, Mason J’s statement in Sutherland Shire Council v Heyman (1985) 157 CLR 424, 458-59 that “[i]t 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”.

70 Acknowledging that the inquiry was “multi-faceted” (at 124 [145], quoting Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540 at [149] per Gummow and Hayne JJ), his Honour was not prepared to conclude at the strike out stage that a common law cause of action against CASA for negligence in the exercise of its statutory duties was unavailable. Though McKerracher J’s discussion of the issue was limited by the material before him, he observed (at 126 [146]) that “[t]he nature of the control exercised by CASA over the conduct of flight and air operations is substantial” and “the degree of vulnerability of those conducting operations under the auspices of the air operations regime administered by CASA is significant”, indicating that these considerations might support the existence of cause of action in negligence.

71 McKerracher J’s conclusion that the applicants should be afforded a further opportunity to formulate a negligence claim against CASA was primarily based on the nature of the relationship between CASA and the air operators it regulates. These considerations were not particular to the facts in Repacholi and apply equally to the present case. Considering the low standard applicable on a leave application under s 47A, subject to matters mentioned immediately hereafter, I would not regard the applicants’ negligence claim against CASA as patently untenable in the sense that the pleading does not disclose a legally recognized claim.

72 The respondents’ submissions particularly addressing the negligence cause of action were brief. Counsel for the respondents acknowledged the difficulty that McKerracher J’s judgment might present for the respondents’ position with respect to the negligence claim, but submitted that a distinction could be drawn on the basis that in Repacholi “there was at least a clear enough indication that a pleading in negligence was being advanced”, while there was, in his submission, no such indication in the proposed pleading here. Counsel drew attention to paragraph [15(a)] of the proposed statement of claim, which alleged that CASA and its officers owed the applicants “a common law duty to exercise CASA’s statutory powers with reasonable care, having regard both to the purpose for which those powers were conferred and to the interests of Butson and Polar Aviation as persons affected by the exercise of such powers”, which counsel conclusorily asserted “d[id] not in fact formulate a duty in negligence”.

73 For the purposes of this leave application, I would reject the respondents’ submissions position regarding the negligence claim. Without expressing any view as to the correctness of the formulation of the duty, it is clear that the applicants intend to allege that a duty of care was owed to them and that duty negligently breached. This is a fair reading of the claim as a whole, and is underscored by paragraph [171(h)], which alleges that the respondents “acted negligently and in breach of the duty set out in paragraph 15(a) . . . .”

74 In written submissions, the respondents asserted, without analysis, that Sullivan v Moody ((2001) 207 CLR 562 (‘Sullivan v Moody’) established that the negligence claim must fail. This argument was not developed at hearing. McKerracher J apparently rejected a similar argument and, under the circumstances, I do not considerate appropriate to deal with it further.

75 Nonetheless, while I accept in light of Repacholi that a claim in negligence against CASA might well be properly pleaded in the appropriate circumstances, I have substantial doubts, based on the available material, about the viability of a negligence claim in the applicants’ particular circumstances. The absence of material facts in the pleading, which I discuss below in connection with the misfeasance claims, means that the precise content of the duty allegedly owed to the applicants remains undeveloped. As pleaded, the duty is currently formulated at an unsatisfactory level of generality: see Pharam-a-Care Laboratories Pty Ltd v Australia (No 3) [2010] FCA 361 at [99] quoting Australian Wool Innovation Ltd v Newkirk [2005] FCA 290 at [24] and Australian Competition and Consumer Commission v Australia and New Zealand Banking Group Ltd [2008] FCA 1623 at [2]. In this regard, I note that the reasons in Repacholi indicate that in that case there was at least some attempt to give content to the alleged duty by reference to an obligation to collect information regarding takeoff procedures: see Repacholi at 108 [57]. This lack of specificity indicates that, in truth, in the applicants’ case, the negligence claim against CASA is very largely speculative.

76 I note here that I do not understand the proposed statement of claim to allege claims for negligence, or for breach of statutory duty, against the individual respondents. While the statement of claim often fails to distinguish between the various respondents (as I have emphasized elsewhere, it is far from unproblematic), I understand that the only claims alleged against the individual respondents are claims for misfeasance in public office. This was the understanding conveyed during the respondents’ oral submissions, and counsel for the applicants did not challenge it.

Breach of statutory duty

77 As noted, not all of the statutory provisions relied on here overlap with the provisions relied on by the applicants in Repacholi. However, it appears that the general formulation of the breach of statutory duty claims was more or less the same in both matters. Here, the proposed claim alleges at paragraph [15(b)] that the respondents owed

a statutory duty to exercise CASA’s powers:

(i) in accordance with the provisions of the legislation governing such exercise and performance;

(ii) reasonably and in good faith for the purposes for which, those statutory powers were given and not for collateral purposes;

(iii) in such a way as not wrongfully to infringe the rights or privileges held by Butson and Polar Aviation under the provisions of the Act or the regulations and orders made thereunder.

78 In Repacholi, according to McKerracher J’s reasons at 127 [153], “[t]he general assertion of the applicants [was] 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[s] of legislation governing such exercise and performance and in accordance with good faith”.

79 McKerracher J stated that he was “unable to accept that there is a valid basis established for a claim in damages for breach of statutory duty”, adding “[t]hat is because there is no indicia in the statutory regime that such a claim could lie”: Repacholi at 128 [162]. It is not entirely clear whether his Honour meant that the applicants had failed to make a sufficient case for the existence of a statutory cause of action, or that, having examined the Civil Aviation Act 1988 (Cth) (‘CAA’), he was of the opinion that no such cause of action could ever be established.

80 Although the language of part of the judgment preceding the conclusion at 128 [162] indicates that he had the former proposition in mind, regard to the whole of his Honour’s reasons on this point is supportive of the latter conclusion. Thus, at 127 [154], McKerracher J stated that “[n]o statutory provision encapsulating th[e] obligations [alleged to exist by the applicants] has been identified” (emphasis added). The larger part of his Honour’s discussion, however, (at 127 [156] – 128 [161]) focused on the authorities supporting the principle that a private action for breach of statutory duty is unavailable where a statutory scheme provides an administrative remedy. The main thrust of his analysis was that a claim for breach of statutory duty would be unavailable to the applicants because of that principle. In stating his conclusion, however, McKerracher J referred not to the availability of an administrative remedy but to the absence any positive indicia in the statutory scheme supporting a cause of action for breach of statutory duty. Also, in the course of his analysis, his Honour referred (at 127 [155]) to the principle “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 [the] statute to prevent”, although his Honour did not comment on the application of the principle to the case at hand.

81 Ultimately, since McKerracher J’s conclusion was necessarily limited by the state of pleadings before him, I understand his Honour to be saying that, while a claim for breach of statutory of duty under the CAA could likely never be established, such a claim was in any event not established on the material before him. This accords with his Honour’s statement at the beginning of the judgment that “[a]s a general observation . . . 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”: Repacholi at 96 [11].

82 Similar considerations apply here. I share McKerracher J’s scepticism about the viability of a claim for breach of statutory duty under the CAA, particularly in light of the authorities regarding the existence of an administrative remedy cited in Repacholi. I do not consider that the reference in the proposed pleading to the Commonwealth Authorities and Companies Act 1997 (Cth) adds much to the analysis.

83 I would not, however, express a definitive view on the matter. First, it is unnecessary to do so; it is sufficient to observe that the tenability of the claim for breach of statutory duty is doubtful. In written submissions, the respondents argued that Repacholi was determinative of the issue. As explained above, I would reject this submission. The respondents’ counsel’s oral submissions touched on this particular claim only briefly, asserting in a conclusory way that the statutory duty as pleaded by the applicants in paragraph [15(b)] of the statement of claim was “untenable”, and that there was “no such duty”. Counsel’s oral submissions mentioned Sullivan v Moodyin passing, but otherwise did not take the Court to any authority in support of his assertions regarding the statutory duty claim. In reply, counsel for the applicants said almost nothing on the point, partly on account of time constraints and partly because, being a leave application, he had not anticipated that the respondents would advance a challenge to the proposed pleading.

84 Nonetheless, the apparent weakness of the breach of statutory duty claim in light of Repacholi is a further factor that would weigh against a grant of leave.

Misfeasance in public office

85 In Repacholi, McKerracher J concluded that the existing misfeasance claims should be struck out and the proposed misfeasance claims not allowed. He gave his reasons for this conclusion at 130 [167] – [168]:

The applicants’ allegation[s] 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.

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.

86 As McKerracher J’s conclusion with regard to the misfeasance claims was based on the absence of supporting facts in the particular pleadings before him, the judgment in Repacholi is least directly helpful with regard to the misfeasance claims here. I therefore cannot accept the respondents’ submission that to the extent reliance should be placed on Repacholi, McKerracher J’s rejection of the misfeasance claims should carry the greatest weight. The situation is rather the opposite. Nonetheless, McKerracher J’s reasons do highlight an area in which the proposed statement of claim may be problematic.

87 The applicants here have, of course, already pursued pre-action discovery. It is fair to say, however, that to the extent the proposed pleading alleges facts supporting an inference of misconduct, the applicants’ case remains almost entirely circumstantial. Other than non-contentious allegations detailing the individual respondents’ roles as signatories to the various notices and other instruments issued to the applicants by CASA, there are few facts pleaded regarding the individual respondents. The primary thrust of the applicants’ case seems to be that CASA, through its officers, proceeded with action against the applicants despite the fact that they had effectively rectified all the alleged deficiencies identified by CASA in the various notices or other instruments issued to them, with the exception of a requirement related to competency based training which was not enforced against other operators of flying schools; and that, when a “special audit” of Polar’s operations by officers from a different branch of CASA was conducted, only minor non-compliances were uncovered, and the licences were thereafter restored.

88 This, in essence, seems to be the applicants’ basis for the allegations that Mr Butson’s and Polar’s various approvals and licences were cancelled in circumstances in which the individual respondents knew or should have known that the cancellations were beyond their authority; and that the respondents acted discriminatorily and with an intent to harm the applicants or with reckless indifference to the possibility of harm to the applicants: see, e.g., [170]-[179] of the proposed statement of claim. All of the individual respondents are said to have committed misfeasance in public office, although the misfeasance of Mr Cook is not specifically said to have resulted in damage to the applicants. It is almost immediately apparent that the problems identified by McKerracher J with regard to the misfeasance pleading in Repacholi are very likely in the pleading proposed here.

89 Having said this, although the proposed statement of claim is again less than clear, there appear to be some other matters on which the applicants may rely to support an inference of misconduct. First, the proposed pleading alleges that, during the May 2004 audit of Polar, “a heated, though technical, argument” developed between Mr Butson and a CASA inspector; and that following the audit CASA and Messrs Farquharson and Presneill placed demands on the applicants that were “much more stringent, technical, oppressive and ‘nit picking’” than prior demands, and which were unrelated to air safety and outside CASA’s authority: see paragraphs [21] and [22]. It is unclear whether the applicants intend to say that there was a causal nexus between the “heated argument” and the subsequent toughening of demands. As things currently stand, there would appear to be nothing to support this proposition, which would be purely speculative. It is not alleged that any of the individual respondents were aware of the disagreement; and the inspector said to have been involved in the argument is unidentified. The notion that a technical argument could ignite a desire by any respondent to injure the applicants is seemingly implausible.

90 Secondly, according to the proposed pleading, certain of the demands placed on the applicants were different from those placed on other air operators. A request for corrective action issued by CASA on 7 December 2004 is alleged to have been “unique in that no other RCA of this type and extent has at any time been issued to any other general aviation operator in Australia”: see paragraph [24]. As noted, the competency based training requirement is said to have gone unenforced against most other operators. Again, the proposed pleading does not explicitly put this allegedly differential treatment forward as the basis for an inference of misconduct. If the allegations are intended to be used in this manner, they do not provide very firm ground for such an inference. Notably, there is no allegation that the treatment accorded other operators was in accordance with a policy of CASA which was not applied in the applicants’ case.

91 Thirdly, on the day preceding an audit in November 2004, Mr Presneill is alleged to have told two pilots to “get some rest because you are in for a roasting from CASA”: see paragraph [43]. This allegation could certainly form a piece of a misfeasance case against Mr Presneill. On its own, however, it is flimsy. As to the individual respondents other than Mr Presneill, its value to the applicants is negligible.

92 The respondents’ submissions, particularly their oral submissions, concerning the weakness of the misfeasance claims were very general, with counsel for the respondent reading the statement of claim aloud to the Court and asserting that there were “no material facts pleaded whatsoever” that would support a misfeasance claim. As to the argument that taking action despite allegedly appropriate corrective measures on the applicants’ part evinced misconduct, the respondents’ counsel contended that this argument was “at its highest . . . an allegation of jurisdictional error by a primary decision-maker” which “cannot . . . ground any allegation as pleadings of material fact in misfeasance”. This may be so, but without further elaboration I could not reach this conclusion.

93 Nonetheless, if the factual basis for the allegations of misconduct and intent in the proposed statement of claim are more developed than that in Repacholi, they are only slightly so. The misfeasance claims, as pleaded in the proposed pleading, remain very weak. As in the case of breach of statutory duty, it is unnecessary to reach a definitive conclusion on their viability, and I would not do so for the reasons stated with regard to breach of statutory duty. Bearing in mind the weakness of these misfeasance claims, coupled with the prejudice to the individual respondents in their defences if leave were granted, I do not think it would be just to grant such leave with respect to the claims against the individual respondents.

94 Furthermore, bearing in mind the prejudice to CASA in defending itself that a grant of leave would entail and the clear weakness of the breach of statutory duty claim, I do not think it would be just to grant leave with respect to this claim against CASA. Whilst the cause of action in negligence against CASA is not as doubtful, the absence of a clearly pleaded factual basis for the allegations supportive of a negligence claim means that it is difficult to avoid the conclusion that a negligence action, if brought, would be other than speculative. This, coupled with prejudice to CASA of the kind already mentioned, would not lead me to conclude that it would be just to grant leave to the applicants to bring an action in negligence against CASA.

95 Referring to the observation in Matheson at 282 that another factor bearing on the discretion was the question whether the prospective plaintiff would be materially prejudiced by the incapacity to pursue the action, the respondents noted the uncertainty discussed earlier in these reasons as to the date on which relevant causes of action actually arose, and, in particular that any action against the individual respondents might not have accrued before January 2005. I doubt, however, that much turns on this in the present context since, whichever way the matter is approached, the applicants have not acted in conformity with s 47A(1) and would therefore need leave under s 47A(3) to bring their action.

96 For these reasons, I would refuse leave if, contrary to my earlier conclusions, the applicants had shown that the delay in bringing the action was occasioned by mistake or other reasonable cause, or that the prospective respondents were not materially prejudiced.

The Second Proceeding

97 The respondents argued that the continuation of the present proceeding was an abuse of process and the applicants were required to make an election as to whether to continue with this proceeding or a second proceeding that they had recently begun.

98 The circumstances in which the second proceeding (No 255/2010) was instituted are set out in Mr Maitland’s affidavit of 16 April 2010. In substance, Mr Maitland deposed that he obtained instructions to file and serve an originating application and statement of claim “[o]ut of an abundance of caution and to protect the rights of the applicants against the impending expiry of the six year limitation period” and because no judgment had been delivered on the respondents’ motion. At the hearing, the parties agreed that a copy of the statement of claim filed in this second proceeding should be filed in this proceeding as the proposed statement of claim for the action the subject of the leave application.

99 Nothing has apparently happened in proceeding No 255/2010 beyond the filing and service of an application and statement of claim. It is true, as the respondents say, that the applicants cannot have two proceedings in the Court in which the same causes of action are run against the respondents. The Court would not permit the applicants to proceed with both. The explanation for the current situation lies in the applicants’ uncertainty about the effect of s 47A on its proposed action and their solicitor’s desire to preserve their position. The applicants acknowledge that they cannot proceed with two proceedings; and, plainly, one or other of them must come to an imminent end. So far as the present matter is concerned, however, the issue – whether leave is need and, if so, should be granted – is no less live now than before the second proceeding was instituted. Having reached the conclusion that leave should not be granted, the current proceeding will be dismissed. What will happen in the second proceeding remains to be seen.

Application of s 47A

100 As well as seeking the grant of leave to bring their action, the application sought a declaration that s 47A does not apply to the proposed proceeding. Declaratory relief is, however, discretionary. In all the circumstances, I consider that it would be inappropriate to grant declaratory relief on this application. The present application was made because the applicants apparently accepted that, under s 47A of the Limitations Act, leave to file outside the limitation period cannot be granted nunc pro tunc: see Polar Aviation Pty Ltd v Civil Aviation Authority [2010] FCA 367 at [15]. Essentially, the applicants’ concern was that the limitation period would expire without their making application for leave to bring their action and obtaining leave (though, as noted above, the applicants later initiated a separate proceeding as a fail-safe measure). I have concluded that I would not grant the applicants leave assuming s 47A of the Limitation Act applied to the proposed action, and it is, practically speaking, unnecessary to rule on the applicability of the statutory provision. The result would be the same irrespective of my ruling on the issue. My conclusion that leave should not be granted means that the applicants’ former concern must be put aside. The requirement to obtain leave prospectively need no longer concern the applicants because they cannot obtain leave in any event. There is thus no longer a live controversy regarding the application of s 47A in the present matter. In any case, this controversy can more appropriately be dealt with in a proceeding in which the question directly arises, as it will in proceeding VID 255/2010. The application for leave was, moreover, an interlocutory application (see Ducker v Western Australia [2006] WASCA 93 at [18] citing Dodoro v Knighting (2004) 10 VR 277 at 279 [3], [6], 283 [23], 285 [32], and 287 [43]), in which it would be inappropriate to grant a final remedy in the nature of declaratory relief: see Bond v Sulan (1990) 26 FCR 580 at 591 per Gummow J.

101 I consider this approach preferable in light of the argument on the applicability question in this matter, which was somewhat incomplete relative to the difficulty of the issue. For the benefit of the parties and the Court, I will highlight some of the issues which it would have been helpful to have more fully developed. First, although counsel for the respondents addressed the issue inconclusively during oral submissions in reply on the respondents’ motion, the question of how precisely s 47A might be ‘picked up’ by a Court sitting in Victoria and exercising federal jurisdiction was not really explored. The question in this regard is whether or not the provision has been made applicable by a law of the Commonwealth. The parties referred in passing and rather indiscriminately to ss 79 and 80 of the Judiciary Act with little, if any, discussion of whether one or the other was the relevant provision; and, assuming it was s 79, then the statutory language of the Choice of Law (Limitation Periods) Act 1993 (Vic) was not examined at all. The terms of s 5 of the Victorian Act, when considered by reference to the proposed action, create some issues in need of elucidation. Counsel did not direct any attention at all to these issues. Furthermore, no attention was given to the manner in which s 79 of the Judiciary Act might ‘pick up’ relevant State law. This point too was not without difficulty. Counsel on both sides addressed most of their argument to the State courts’ construction of s 47A, but there may be constitutional considerations bearing on the construction of the provision, such as those mentioned in John Robertson & Co Ltd v Ferguson Transformers Pty Ltd (1973) 129 CLR 65 at 84 and 87 and in Hamilton v Merck & Co Inc (2006) 66 NSWLR 48 at 73. The submissions of both parties were silent on issues of this kind. Whilst the applicants relied on s 64 of the Judiciary Act and the brief, somewhat opaque, comments of Gleeson CJ and Kirby J in British American Tobacco, neither side developed any moderately referenced argument about s 64 or the High Court’s decision in British American Tobacco. Apart from the matters to which I have already referred, the paucity of argument provided no satisfactory basis for considering the question raised.

D. Disposition

102 For these reasons, in so far as leave to bring an action is necessary, I would refuse the applicants such leave, and dismiss the application. I would further order that short submissions on the disposition of the costs of the proceeding, including the respondent’s motion of 20 October 2009 be filed and served by:

(a) the applicants, on or before 4 pm on 3 May 2010;

(b) the respondents, on or before 4 pm on 12 May 2010; and

I certify that the preceding one hundred and two (102) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny.

Associate:

Dated: 29 April 2010

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