FEDERAL COURT OF AUSTRALIA

Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No 4) [2011] FCA 1126

THE COURT ORDERS THAT:

1.    The further amended statement of claim dated 29 September 2010 be struck out.

2.    Pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth), the application dated 12 April 2010 for (amongst other things) damages, be dismissed.

3.    The respondents file submissions on costs by 4:30 pm on 5 October 2011.

4.    The applicants file submissions on costs by 4:30 pm on 7 October 2011.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

INTRODUCTION

1    The first applicant in this proceeding, Polar Aviation Pty Ltd (‘Polar’), runs a commercial flight operations business and a flying school in Western Australia. The second applicant, Clark Andrew Butson, is the director of Polar. In order to carry on business, Polar and Mr Butson are required to hold various licences, approvals and certificates under the Civil Aviation Act 1988 (Cth) (‘the CAA Act’).

2    The first respondent, the Civil Aviation Safety Authority (‘CASA’), is established by s 8 of the CAA Act and has various functions, which include the issuing of licences, approvals and certificates under the CAA Act: see s 9. The second to seventh respondents are officers or former officers of CASA allegedly involved in the decisions and conduct of which the applicants complain.

3    The proceeding arises out of a dispute in 2004 - 2006 between Polar and Mr Butson, on the one hand, and CASA, on the other, in the course of which CASA suspended Polar’s Airline Operator’s Certificate (‘AOC’) and Mr Butson’s approval as Chief Pilot and Chief Flying Instructor. The dispute has given rise to other applications in this Court: see Polar Aviation Pty Ltd v Civil Aviation Safety Authority (2010) 267 ALR 530 (‘Polar (No 1)’) and Polar Aviation Pty v Civil Aviation Safety Authority (No 2) (2010) 267 ALR 547 (‘Polar (No 2)’), to which further reference may be made to understand the background to the current proceeding.

4    The respondents (unless otherwise indicated, referred to below collectively as ‘CASA’) have applied to have the whole of the Further Amended Statement of Claim (‘FASC’) struck out pursuant to O 11 r 16 of the Federal Court Rules 1979 (Cth) (‘the 1979 Rules’) (equivalent to Rule 16.21 in the 2011 Rules, which came into force after this application was heard) as disclosing no reasonable cause of action. Alternatively, CASA has applied to have certain nominated paragraphs of the FASC struck out under the same provision as disclosing no reasonable cause of action, or as vague and embarrassing, insufficiently particularised, or otherwise an abuse of the process. Further and alternatively, CASA has applied to have each of the claims for damages dismissed pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) (‘the Federal Court Act’) or Order 20 r 5 of the 1979 Rules (Rule 26.1 in the 2011 Rules).

5    CASA relied on two supporting affidavits of its solicitors – that of Paul Christopher Barker sworn on 17 August 2010, with its exhibits, and that of Graham Peter Thorley sworn on 13 October 2010, with its exhibits.

6    Mr Thorley’s affidavit and the accompanying exhibits showed that, after CASA’s request for further and better particulars, the applicants provided CASA with an affidavit of Mr Butson of 16 August 2010. This affidavit was in similar terms and covered much the same history as an earlier affidavit of Mr Butson, filed in previous proceedings in the Court and described in Polar (No 1). Whilst the precise role of this affidavit may be contested, in the present instance, when considering the application of s 31A of the Federal Court Act, as well as whether there should be leave to re-plead, I have also taken account of Mr Butson’s 16 August 2010 affidavit: compare Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 at 473 (Barwick CJ).

APPLICABLE TESTS

7    Under O 11 r 16 of the 1979 Rules, the Court might at any stage of the proceeding order that the whole or any part of a pleading be struck out where the pleading disclosed no reasonable cause of action or had “a tendency to cause prejudice, embarrassment or delay in the proceeding” or was otherwise an abuse of the process of the Court. Rule 16.21 of the 2011 Rules incorporated these and other grounds for striking out pleadings.

8    In essence, O 11 r 16 (now Rule 16.21) related to the sufficiency of pleadings. In Wride v Schulze [2004] FCAFC 216 (‘Wride’) at [25], the Full Court described the requirements for a pleading in the following terms.

[T]he pleadings must disclose a reasonable cause of action against the party against whom the cause of action is brought and must state all material facts necessary to establish that cause of action and the relief sought. A “reasonable cause of action” for this purpose means one which has some chance of success if regard is had only to the allegations and the pleadings relied on by the applicant.

9    The Full Court in Wride also referred to the principles governing strike-out applications, noting (at [26]) that:

In National Mutual Property Services (Australia) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514, Lindgren J said at 529:

‘In Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd (13 September 1994, Fed C, unreported) Beaumont J quoted with approval the following summary of the general principles governing strike-out applications (at 24, from the editorial note at (1992) 66 ALJ 47 on Lonrho plc v Tebbitt, The Times, 24 September 1991):

“(1)    A ‘reasonable cause of action’ means one with some chance of success if regard be had only to the allegations in the pleadings relied upon by the claimant; in such a case, the claim cannot be struck out: Davey v Bentinck [1893] 1 QB 185.

(2)    The mere fact that the case appears to be a weak one is not of itself sufficient to justify the striking out of the action: cf Wenlock v Moloney [1965] 1 WLR 1238.

(3)    Normally, the power to strike out should be exercised only in plain and obvious cases, where no reasonable amendment could cure the alleged defect: cf Hodson v Pare [1899] 1 QB 455.

(4)    It goes without saying that if a substantial case is involved in the claim, the power to strike out cannot be exercised.

(5)    Where a point of law has to be decided, and the judge is satisfied that this can be done by him appropriately, thereby avoiding the necessity of, and expense in going to trial, he is entitled to determine the point: cf Williams & Humbert v W & H Trade Marks [1986] AC 368.’

Lindgren J continued at 529:

‘For recent House of Lords authority for proposition (3) above see Lonrho plc v Fayed [1992] AC 448 (HL) at 469 (Lord Bridge, with whom all other members of the House agreed).

I accept that this statement summarises some of the general principles applicable.’

10    Thus, it is generally accepted that the power to strike out a pleading under O 11 r 16 (now Rule 16.21) must be exercised with caution and should only be exercised in the plain and obvious case, or, as was said in Energex Limited v Alstom Australia Limited (2005) 225 ALR 504 at 512 [28], the power “should not be exercised unless it is obvious that there is no real question to be tried”.

11    In Repacholi Aviation Pty Ltd v Civil Aviation Safety Authority [2010] FCA 994 at [38], Gilmour J explained how this affected the basic question on a strike-out application:

The question on a strike-out application is not whether the facts pleaded are in themselves sufficient to give rise to a cause of action; rather, the question is whether it would be open to the applicant upon the pleadings to prove the facts at trial which would constitute a cause of action: Pancontinental Mining Ltd v Posgold Investments Pty Ltd (1994) 121 ALR 405 at 414 per Beaumont J citing Mutual Life & Citizens’ Assurance Co Ltd v Evatt (1970) 122 CLR 628 at 631.

12    Notwithstanding the need for caution, where in a strike-out application, a point of law arises, which can appropriately be decided at the interlocutory stage, the judge is entitled to determine the point, thereby avoiding the need for and expense of a lengthy trial. For the reasons set out below, this is a case in which certain points of law should be decided at this stage, since their disposition does not depend on further evidence and findings of fact, and their resolution will limit any future trial.

13    Apart from the Rules, as noted above, CASA also relied on s 31A of the Federal Court Act to seek an order that there be judgment against Polar and Mr Butson with respect to their damages claims. Section 31A relevantly provides:

(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.

(3)    For the purposes of this section, a defence or a proceeding or part of a     proceeding need not be:

(a)    hopeless; or

(b)    bound to fail;

for it to have no reasonable prospect of success.

14    Under s 31A(2), the Court may give judgment for a respondent against an applicant in relation to the whole or any part of a proceeding if the Court is satisfied that the applicant has no reasonable prospects of successfully prosecuting the proceeding or that part of the proceeding. For the purposes of this section, a proceeding or part of a proceeding need not be “hopeless” or “bound to fail” for it to have no reasonable prospect of success. Section 31A does not limit any other powers that the Court may have: see s 31A(4).

15    The High Court considered s 31A in Spencer v Commonwealth (2010) 241 CLR 118 (‘Spencer’). French CJ and Gummow J held that it was inappropriate for the Federal Court in that case to dismiss the proceeding summarily. In a passage on which Polar and Mr Butson relied, their Honours said (at 132 [25]-[26]):

Section 31A(2) requires a practical judgment by the Federal Court as to whether the applicant has more than a “fanciful” prospect of success. That may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue. Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law. But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this Court, the court hearing the application under s 31A could justifiably conclude that the proceedings had no reasonable prospect of success.

Where an application under s 31A requires consideration of apparently complex questions of fact, then the caution uttered by Lord Hope is relevant. The importance of those considerations is amplified if the case involves resolution of issues of law and fact, or mixed law and fact.

16    Hayne, Crennan, Kiefel and Bell JJ agreed that the proceeding was not one in which the Federal Court could be satisfied that the applicant had “no reasonable prospect of successfully prosecuting the proceeding”, although their Honours explained their conclusion a little differently from French CJ and Gummow J. After noting (at 139[53]) that “s 31A departs radically from the basis upon which earlier forms of provision permitting the entry of summary judgment have been understood and administered”, their Honours said (at 141 [60]):

The Federal Court may exercise power under s 31A if, and only if, satisfied that there is “no reasonable prospect” of success. Of course, it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly. But the elucidation of what amounts to “no reasonable prospect” can best proceed in the same way as content has been given, through a succession of the decided cases, to other generally expressed statutory phrases, such as the phrase “just and equitable” when it is used to identify a ground for winding up a company. At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes.

17    Thus, in effect, no hard and fast rule can be laid down as to when summary judgment is available. Much depends on the case at hand. The critical question is that set by the statute – has the moving party persuaded the Court that the opposing party has no reasonable prospect of success?

18    As the above discussion indicates, there is a clear distinction between the operation of s 31A of the Federal Court Act and the strike-out provisions of the Rules. In their joint judgment, French CJ and Gummow J acknowledged this, adopting the following passage in the judgment of Lindgren J in White Industries Australia Ltd v Federal Commissioner of Taxation (2007) 160 FCR 298 (‘White Industries’) at 309 [47]:

[E]vidence may disclose that a person has or may have a ‘reasonable cause of action’ or ‘reasonable prospects of success’, yet the person’s pleading does not disclose this. In such a case O 11, r 16 empowers the Court to strike out the pleading but … s 31A(2) would not empower the Court to give judgment for the respondent against the applicant. A failure after ample opportunity to plead a reasonable cause of action may suggest that none exists and therefore that the applicant has no reasonable prospects of success, but the existence of a reasonable cause of action and the pleading of a reasonable cause of action remain distinct concepts.

See also Imobilari Pty Ltd v Opes Prime Stockbroking Ltd (2008) 252 ALR 41 at 44 [6].

STATUTORY CONTEXT FOR THE APPLICANTS’ CLAIMS

19    CASA’s challenge to the FASC depended on certain propositions about the statutory provisions at the centre of the dispute. These provisions provided the statutory context in which CASA exercised its statutory powers and performed its statutory functions through the making of administrative decisions.

20    In the following discussion, references to the CAA are to the CAA as in force on 23 November 1998 (‘Reprint 4’). For present purposes, there would appear to have been no material difference between the CAA as in force at the time of the actions described in the FASC and Reprint 4. References to the Civil Aviation Regulations 1988 (Cth) (‘CAR’) are to the CAR as in force from 8 December 2004 to 17 June 2005. References to the Civil Aviation Orders (‘CAO’) are to a compilation prepared on 8 August 2005.

21    As CASA submits, the object of the CAA is to establish a statutory regime for maintaining, enhancing and promoting the safety of civil aviation. The long title to the Act and s 3A make this clear. The long title to the CAA states that it is “[a]n Act to establish a Civil Aviation Safety Authority with functions relating to civil aviation, in particular the safety of civil aviation, and for related purposes” (emphasis added). Section 3A of the CAA specifically states that:

The main object of this Act is to establish a regulatory framework for maintaining, enhancing and promoting the safety of civil aviation, with particular emphasis on preventing aviation accidents and incidents.

22    By s 9(1) of the CAA, CASA has the function of:

conducting the safety regulation of the following, in accordance with this Act and the regulations:

(a)    civil air operations in Australian territory; …

23    Section 9(1) then sets out some of the means by which that function may be performed: see s 9(1)(c)-(h), including “developing and promulgating appropriate, clear and concise aviation safety standards” (s 9(1)(c)); and “issuing certificates, licences, registrations and permits” (s 9(1)(e)). These latter instruments include various kinds of pilot licences issued under Part 5 of the CAR and various kinds of Air Operators’ Certificates (‘AOCs’) issued under Part III Div 2 of the CAA.

24    There is an unmistakable emphasis on safety in s 9. Section 9(2) refers to some further functions of CASA as “safety-related functions”; whilst s 9(3) creates yet more functions, including, in s 9(3)(a), “co-operating with the Bureau of Air Safety Investigation in relation to investigations of aircraft accidents and incidents” and, in s 9(3)(e), “promoting the development of Australia’s civil aviation safety capabilities, skills and services, for the benefit of the Australian community …”. Finally, the pre-eminence of safety is statutorily entrenched in s 9A(1) of the CAA, which specifically provides that “[i]n exercising its powers and performing its functions, CASA must regard the safety of air navigation as the most important consideration” (emphasis added).

25    In conformity with the governing statute, the primary importance of safety within this legislative regime is also recognised in the CAR. For example, under CAR 5.09, CASA must issue a flight crew licence to an applicant if, and only if, the applicant meets the prescribed criteria, including that the person “is a fit and proper person to hold the licence”. In determining whether an applicant meets this criterion, CASA must only take into account two matters, including “any other matter that relates to the safety of air navigation”: see CAR 5.09(3)(b).

26    Section 27(1) provides that CASA “may issue AOCs for the purposes of its functions”. As s 27 makes clear, an aircraft cannot fly or be operated for prescribed purposes unless the air operator has an AOC: see s 27(2) and (9). CAR 206 defines certain commercial purposes as prescribed purposes for s 27(9). Such commercial purposes include aerial work, charter operations, and the transporting of cargo or persons generally for hire or reward. An aircraft cannot therefore be operated for these commercial purposes without an AOC. An AOC may only be issued to a natural person or to a body having legal personality: see s 27(2B). An AOC is not transferable: see s 27(8).

27    CASA determines the term of an AOC: s 27(7). Having regard to s 9A (see above), the most important consideration informing CASA’s decision as to the term of an AOC is the safety of air navigation. Further, the power to determine the term of an AOC is apparently exercisable from time to time “as occasion requires”: see Acts Interpretation Act 1901 (Cth), s 33(1).

28    Section 28 of the CAA sets out the circumstances in which CASA can issue an AOC. Under s 28, if a person applies for an AOC, CASA “must issue the AOC if, and only if”:

(a)    CASA is satisfied that the applicant has complied with, or is capable of complying with, the provisions of this Act, the regulations and the Civil Aviation Orders, that relate to safety, including provisions about the competence of persons to do anything that would be covered by the AOC; and

(b)    CASA is satisfied about the following matters in relation to the applicant’s organisation:

(i)    the organisation is suitable to ensure that the AOC operations can be conducted or carried out safely, having regard to the nature of the AOC operations;

(ii)    the organisation’s chain of command is appropriate to ensure that the AOC operations can be conducted or carried out safely;

(iii)    the organisation has a sufficient number of suitably qualified and competent employees to conduct or carry out the AOC operations safely;

(iv)    key personnel in the organisation have appropriate experience in air operations to conduct or to carry out the AOC operations safely;

(v)    the facilities of the organisation are sufficient to enable the AOC operations to be conducted or carried out safely;

(vi)    the organisation has suitable procedures and practices to control the organisation and ensure that the AOC operations can be conducted or carried out safely;

(vii)    if CASA requires particulars of licences held by flight crew members of the organisation—the authorisations conferred by the licences are appropriate, having regard to the nature of the AOC operations”. … (Emphasis added.)

29    Each AOC is subject to the condition that the holder of the AOC “must continue to satisfy CASA in relation to the matters specified in section 28 of the Act”: see CAO, section 82.0.4.4.

30    As CASA submits, the numerous references to “safety” in the CAA, CAR and CAO emphasize that, in issuing AOCs or making regulatory decisions, CASA is obliged by law to accord primacy to the safety of air operations.

31    As stated in s 28BA(1), an AOC has effect subject to a number of conditions. These conditions include “any conditions specified in the regulations or the Civil Aviation Orders”: see s 28BA(1)(b). Section 82.0 of the CAO applies to Air Operators’ Certificates authorising, amongst other things, charter or aerial work operations: see CAO 82.0.1.1. Pursuant to CAO 82.0.5.1, where an operator is required to appoint a Chief Pilot, the CAO impose a condition of the operator’s certificate that the operator will comply with the requirements of Appendix 1 of the section. Under this Appendix, before a person is appointed as a Chief Pilot by an air operator, the appointment must be approved in writing by CASA “after application in writing by the operator”. Also under clause 6 of this Appendix, “an approval may be cancelled or suspended at any time if, in the opinion of CASA, the performance of the Chief Pilot is no longer of an acceptable standard”.

32    Pursuant to s 28BB of the CAA, CASA may impose further conditions on the AOC or vary the conditions of an AOC “at any time”: see s 28BB(1)(b) and (2). Under s 28BA(3), CASA may, by written notice given to the AOC holder, suspend or cancel the AOC if a condition of that AOC is breached.

33    Pursuant to CAR 269(1), CASA may, by notice in writing, vary, suspend or cancel a licence, certificate or authority issued under the civil aviation legislation where CASA is satisfied that one or more of the prescribed grounds exists or exist. These grounds include 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”, or that the holder “is not a fit and proper person” to hold the licence, certificate or authority: see CAR 269(1)(c) and (d). Before taking action under CAR 269(1), however, CASA must issue a notice allowing the holder of the relevant licence, certificate or authority time within which to “show cause” why the foreshadowed action should not be taken: see CAR 269(3).

34    Amongst other decisions, a decision to cancel, suspend or vary an AOC (or a condition of an AOC), or to cancel, suspend or vary a licence is reviewable, on the merits, by the Administrative Appeals Tribunal (‘AAT’): see s 31(1) and (2) of the CAA.

35    It is well established that, in conducting a review of a reviewable decision, the AAT makes a full merits review and stands in the shoes of the primary decision-maker to make “the correct or preferable” administrative decision: see Shi v Migration Agents Registration Authority (2008) 235 CLR 286 at 314 [98] (Hayne and Heydon JJ). Pursuant to s 39 of the Administrative Appeals Tribunal Act 1975 (Cth) (‘the AAT Act’), a party to a proceeding before the AAT is given a reasonable opportunity to present his or her case. Generally speaking, the AAT affords the review applicant a hearing, in which evidence may be given and supporting arguments advanced.

36    At the time with which this case is concerned, the AAT Act provided that, after an application was made to the AAT for review (and subject to s 42D) the decision under review could not be altered otherwise than by the AAT unless: (1) the enactment that authorised the making of the application expressly permitted the decision to be altered; or (2) the parties to the proceeding, and the AAT, consented to the making of the alteration: see AAT Act s 26(1). Nonetheless, where, as in this case, an AOC was cancelled, this Court held that, pursuant to s 41(2) of the AAT Act, the AAT had the power to make an order extending the operation of the AOC until such time as the AAT made its decision on the review application: see Civil Aviation Safety Authority v Hotop (2005) 145 FCR 232 at 233 and 240-243 (Siopis J).

APPLICANT’S FURTHER AMENDED STATEMENT OF CLAIM

37    By their Application and FASC, the applicants claim damages for breaches of duties allegedly owed to them. In particular, Polar and Mr Butson claim that CASA owed them:

1.    a common law duty to take reasonable care in the exercise of CASA’s statutory powers (FASC, par [16(a)]);

2.    a statutory duty to exercise CASA’s statutory powers lawfully, reasonably and in “good faith” for the purposes for which those powers were given (FASC, par [16(b)]);

3.    a common law duty generally to the same effect as 2 above but also involving a common law duty not to exercise CASA’s statutory powers “in such a way as unlawfully and intentionally to interfere with the trade or business” of Polar or Mr Butson (FASC, par [16(c)]);

4.    a common law duty not to act beyond power, intending to cause harm to either Polar or Mr Butson, or knowing that their acts were beyond power and that harm to Polar or Mr Butson was foreseeable, or recklessly indifferent (a) to whether their acts were beyond power and (b) to the likelihood of harm to Polar and Mr Butson (FASC, par [17]).

38    The FASC alleged that these duties arose pursuant to common law, by operation of the provisions of the CAA and the regulations and orders made under the CAA and, in the case of the penultimate duty (par [16(c)]), also by virtue of ss 22-25 of the Commonwealth Authorities and Companies Act 1997 (Cth) (‘CAC Act’). According to the FASC, these duties as pleaded were breached by a series of actions taken under the CAA by the second to seventh respondents acting on behalf of CASA. These actions are stated in various paragraphs of the FASC, including in paragraphs [67], [70], [71], [77], [79], [101], [103], [105], [107], [119], [121], [124], [136], [145], [151], [155], [160], and [169] of the FASC. They are too numerous to set out here. In the FASC, Polar and Mr Butson alleged that the breaches of these duties caused them loss and damage: see paragraph [178].

39    In the FASC, Polar and Mr Butson alleged that the second to seventh respondents were required to exercise “their powers and functions”: (a) with reasonable care and diligence; (b) in good faith and in the best interests of CASA and for a proper purpose; and (c) so as not improperly “to use their position” to cause detriment to Polar or Mr Butson: see FASC par [10].

40    As CASA submitted, a central allegation in the FASC is that the various breaches of duty on the part of CASA and the individual respondents arose from a “pattern of conduct” towards Polar and Mr Butson, “adopted” by CASA and the individual respondents during and following an “operational audit” of Polar by CASA in May 2004: see FASC par [25]. The FASC alleges that, before and during the May 2004 audit, Mr Butson and CASA officers discussed CASA’s requirements concerning Polar’s development of a competency-based training (‘CBT’) syllabus and the provision by Polar and Mr Butson of asymmetric flying training for students of Polar’s flying school. According to the FASC, these matters were the subject of “a difference of opinion” between Mr Butson and various officers of CASA such that the alleged “pattern of conduct” was “strongly influenced by [Mr Butson’s] attitude to CBT and asymmetric flying”: see FASC pars [23], [24], [25(c)].

41    Polar and Mr Butson alleged that the breaches of duty arising from the alleged “pattern of conduct” and constituting “unlawful acts”, included (amongst other things):

1.    CASA issuing a “unique” request for corrective action (‘RCAs’) to be taken by Polar in respect of “deficiencies” that CASA had raised with Polar and Mr Butson as a result of the May 2004 audit: FASC pars [26]-[29] and [32];

2.    CASA (“over the hand” of the second respondent) issuing notices – supplementary notices – to Polar (to show cause why CASA should reissue a fresh AOC to Polar) and to Mr Butson (to show cause why his Chief Pilot’s approval and his approval as Chief Flying Instructor should not be cancelled, suspended or revoked) having regard to the deficiencies that CASA had raised in the RCAs: FASC pars [30]-[37] and [48]-[49];

3.    CASA (by a notice signed by the fifth respondent on the advice and recommendation of the second respondent) cancelling Polar’s AOC: FASC pars [54]-[57];

4.    CASA (by a notice signed by the fifth respondent on the advice and recommendation of the second respondent) cancelling Mr Butson’s approval as Chief Pilot of Polar: FASC pars [58]-[61];

5.    CASA (by a notice signed by the fifth respondent on the advice and recommendation of the second respondent) revoked the approval of Mr Butson as Chief Flying Instructor with Polar: FASC pars [62]-[65];

6.    CASA (by notice signed by the sixth respondent on the advice and recommendation of the second respondent) refusing to renew Polar’s AOC: FASC pars [94]-[97];

7.    CASA opposing Polar’s application to the AAT for a stay of CASA’s decisions cancelling Polar’s AOC and refusing to re-issue an AOC to Polar: FASC pars [106]-[107];

8.    CASA (by a notice signed by the sixth respondent on the advice and recommendation of the second respondent) issuing an AOC to Polar containing a number of conditions relating to the conduct of flying training: FASC pars [117]-[118];

9.    the third respondent (and subsequently the second respondent) writing to the Chief Pilot of Polar and allegedly setting out a false interpretation of a provision of the CAA: FASC pars [127]-[128], [131];

10.    the fourth respondent (by a letter forwarded to Mr Butson) advising that he had refused to recommend (to the Director of CASA) that Mr Butson be “re-appointed” as an Approved Testing Officer of CASA: FASC pars [143]-[144];

11.    the first respondent (by a notice signed by the second respondent) proposing to further suspend or cancel Polar’s AOC and issuing a further supplementary show cause notice to Polar: FASC pars [149], [150] and [151]; and

12.    the first respondent (by a notice signed by the seventh respondent on the advice and recommendation of the second respondent) issuing a notice of proposed action to Polar: FASC pars [158]-[160].

42    This account of the FASC is necessarily incomplete. I accept that, as Polar and Mr Butson submitted, the identification of events set out above must be understood “in the context of the allegations set out in the relevant paragraphs of the [FASC]”.

CONSIDERATION

43    I address the pleaded claims in the following order: (1) negligence at common law; (2) statutory duty; (3) statutory duty of good faith; (4) common law duty not to interfere unlawfully and intentionally with trade or business; and (5) misfeasance in public office.

A:    Common law duty of care -- negligence

44    CASA argued that no common law duty of care is capable of being imposed on CASA or its officers in relation to persons whose conduct they must regulate in the public interest (such as Polar and Mr Butson). CASA also argued that it was appropriate to determine whether or not such a duty of care exists in the present application.

45    In response, Polar and Mr Butson submitted that this case was not an appropriate case for determination of the existence of a duty of care as a preliminary issue. Their counsel submitted that the case was not analogous to other cases in which statutory authorities have been held not to owe a duty of care; and that the statutory context was consistent with a duty of care being owed by the respondents to them. Counsel for Polar and Mr Butson further submitted that the decisions and actions in question were operational rather than policy decisions and actions; and that the decisions and actions were administrative not legislative in character.

46    For the reasons set out below, I have not found it necessary to consider whether or not a duty of care exists by reference to the last-mentioned criteria (whether a decision was in the nature of a policy or operational decision, alternatively of an administrative or legislative character). Whether or not it is appropriate to rule on the existence of a duty of care on the respondents’ present application is a question that must, however, be addressed. As explained below, the answer to this question turns upon the provisions and statutory context in connection with which the alleged duty of care is said to arise.

It is appropriate to consider whether the duty as pleaded exists.

47    In recent years, Justices of the High Court have repeatedly stated that no guiding principle has been found that identifies when an authority is subject to a common law duty of care with respect to the exercise of statutory powers. See Brodie v Singleton Shire Council (2001) 206 CLR 512 (‘Brodie’) at 630-631 [316] (Hayne J); Vairy v Wyong Shire Council (2005) 223 CLR 422 at 445 [67] (Gummow J); and Stuart v Kirkland-Veenstra (2009) 237 CLR 215 (‘Kirkland-Veenstra’) at 260 [131]-[133] (Crennan and Kiefel JJ).

48    In Pyrenees Shire Council v Day (1988) 192 CLR 330 (‘Pyrenees Shire Council v Day’) at 376-377 [125]-[126], Gummow J noted the various criteria by which courts in Australia and England have been thought to apply principles of negligence to local authorities with respect to the discharge of their statutory functions. These criteria have involved distinctions between decisions of an operational character and decisions of a policy nature, between misfeasance and non-feasance, and between statutory powers and statutory duties. The plaintiff’s vulnerability has also been considered relevant, although this factor “has not been universally accepted as a useful analytical tool”: see Kirkland-Veenstra at 260 [133] (Crennan and Kiefel JJ) citing Brodie at 627 [308] Hayne J), emphasizing instead the importance of control: 261-262 [137]-[138].

49    As Gummow J said Pyrenees Shire Council v Day (at 377 [126]):

Some of these distinctions and doctrines are entrenched in the common law of Australia, others are not. All of them ... tend to distract attention from the primary requirement of analysis of any legislation which is in point and of the positions occupied by the parties on the facts as found at trial. This analysis is of particular importance where ... the facts do not fall into one of the classes ... already recognised by the authorities as attracting a duty of care, the scope of which is settled.

See also Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540 (‘Graham Barclay Oysters’) at 597-598 [149] (Gummow and Hayne JJ).

50    Particularly in written submissions, the applicants relied on the absence of guiding principles, the lack of stable consensus about the relevant criteria, and the need to consider “the positions occupied by the parties on the facts as found at trial” (see par [49] above) to support their submission that it was inappropriate to determine, on this application, whether there was a duty of care of the scope for which they contended. At the hearing, senior counsel for the applicants argued that the existence of a duty of care ought not be determined prior to trial and depended on findings of fact as to the precise relationship between CASA and the airline operators and air pilots. The applicants’ senior counsel said that he had in mind that there would be “evidence of exactly how airlines operate, how they are financed, how they are dependent … for their efficient and safe operation on the certainty of being able to continue to operate”.

51    Earlier in these reasons, I set out the applicable tests for an order that a pleading be struck out pursuant to O 11 r 16 (now Rule 16.21) and for summary judgment pursuant to s 31A(2) of the Federal Court Act.

52    Although a court must proceed cautiously in exercising power under O 11 r 16, for the reasons set out below, I consider that this power is appropriately exercised in this case. As appears below, the existence of the duty as pleaded in the FASC is inconsistent with the statutory regime governing CASA, and the setting in which CASA issues, suspends or cancels certificates, licences and other authorities. This is not a case in which the facts as proven at trial would affect the conclusion I have reached. To avoid the necessity of, and expense in going to trial, it seems to me proper to determine the point: compare Commonwealth of Australia v Griffiths (2007) 70 NSWLR 268 at 294-295 [125]-[131]. Further, as regards the evidence to which senior counsel for the applicants referred (see par [50] above), the FASC contained no pleading of any material fact, by reference to which it might be said that such evidence might be relevant and admissible.

53    This case can be distinguished from Repacholi Aviation Pty Ltd v Civil Aviation Safety Authority (2009) 263 ALR 93 (‘Repacholi’) in which McKerracher J held that it was not possible to conclude that a claim in negligence was not open to be made against CASA based on a duty of care in the exercise of its statutory powers – a matter noted by me in Polar (No 2) at [71] ff. (An appeal against McKerracher J’s interlocutory judgment was dismissed by a Full Court (constituted by Gray, Rares and Tracey JJ) on 15 August 2011: see Repacholi Aviation Pty Ltd v Civil Aviation Safety Authority [2011] FCAFC 122.) As pleaded in this case, the alleged duty is formulated at a high level of generality – “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”. This level of generality is unsatisfactory (see Polar (No 2) at [75] and the authorities cited) and exposes the pleaded duty to the fatal observation that it is inconsistent with the statutory regime and, in particular, the due exercise of CASA’s powers under the CAA. In Repacholi, on the other hand, the challenged pleading made some attempt to give content to the alleged duty by reference to an obligation to collect information regarding takeoff procedure: see Repacholi at 108 [57]. Furthermore, in Repacholi, McKerracher J specifically noted, and gave as a reason for his determination on the negligence claim, the fact that “the proposed pleading [was] far from complete”.

The duty as pleaded does not exist.

54    For present purposes, I would commence analysis of whether or not the duty as pleaded in this case exists with the decision of the High Court in Kirkland-Veenstra. The issue for determination in that case was whether or not police officers owed a duty to the appellant and her husband (who had taken his own life) to take reasonable care to exercise powers conferred on them by s 10 of the Mental Health Act 1986 (Vic), in circumstances in which there was a reasonably foreseeable risk of harm to them in the event of a breach of that duty: compare the slightly different formulation at 247 [84]. The issue in Kirkland-Veenstra related to the failure to exercise a statutory power, and not, as in the present case, the manner of its exercise. One difficulty faced by the appellant was that the conditions for the exercise of the power had not been established: see 242 [63] (French CJ), 257 [123], [146] (Crennan and Kiefel JJ). These various factors indicate Kirkland-Veenstra was a very different case from the present. Nonetheless, Kirkland-Veenstra provides some guidance as to the correct approach in a case such as this.

55    In addressing the primary issue, the Court in Kirkland-Veenstra first examined the operation of the empowering provision and the statutory scheme of which it formed part: see, for example, Kirkland-Veenstra 239-240 [53] (French CJ), 244 [75] (Gummow, Hayne and Heydon JJ) and 259 [130] (Crennan and Kiefel JJ). As the applicants’ written submissions in effect noted, this has been the accepted approach in this context for many years: see, for example, The Council of the Shire of Sutherland v Heyman (1985) 157 CLR 424 at 434 (Gibbs CJ noting that statutory provisions were “the setting” in which the alleged acts and omissions were to be considered).

56    Even if it is reasonably foreseeable that harm of the kind allegedly suffered might result from a want of reasonable care on the part of the holder of a statutory power with respect to the exercise of that power, this does not mean that the holder is necessarily subject to a liability to compensate the injured party by way of damages for negligence, if there is such carelessness and such harm results: see Sullivan v Moody (2001) 207 CLR 562 (‘Sullivan v Moody’) at 576 [42]. Kirkland-Veenstra developed this proposition. In their joint judgment in Kirkland-Veenstra, Gummow, Hayne and Heydon JJ said (at 252 [103]) that “in deciding whether the officers owed the asserted duty it is necessary to consider what is the duty which it is said is owed by those who have a specific statutory power, and how is that duty said to arise out of the ‘relationship’ created by the existence of that power”. Their Honours went on to say (at 254 [112]-[113]):

There can be no duty to act in a particular way unless there is authority to do so. Power is therefore a necessary condition of liability but it is not a sufficient condition. Statutory power to act in a particular way, coupled with the fact that, if action is not taken, it is reasonably foreseeable that harm will ensue, is not sufficient to establish a duty to take that action. Rather, as was pointed out in Graham Barclay Oysters Pty Ltd v Ryan, the existence or otherwise of a common law duty of care owed by a statutory authority (or in this case the holder of a statutory power) “turns on a close examination of the terms, scope and purpose of the relevant statutory regime”. Does that regime erect or facilitate “a relationship between the authority [here the holder of statutory power] and a class of persons that, in all the circumstances, displays sufficient characteristics answering the criteria for intervention by the tort of negligence”?

Evaluation of the relationship between the holder of the power and the person or persons to whom it is said that a duty of care is owed will require examination of the degree and nature of control exercised over the risk of harm that has eventuated, the degree of vulnerability of those who depend on the proper exercise of the relevant power, and the consistency or otherwise of the asserted duty of care with the terms, scope and purpose of the relevant statute. Other considerations may be relevant. (Citations omitted.)

See also Kirkland-Veenstra at 259 [130] per Crennan and Kiefel JJ.

57    In Kirkland-Veenstra, Gummow, Hayne and Heydon JJ held that there was no duty of care and that “the factor of control [was] of critical significance” since the appellant’s husband had controlled the source of the risk of harm: see 254 [111], [114]. In this context, their Honours contrasted Kirkland-Veenstra with Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 (‘Crimmins’), in which the Court had held that the Australian Stevedoring Industry Authority owed a waterside worker a common law duty to take reasonable care to protect him from reasonably foreseeable risks of injury arising from his employment by registered stevedores. In Crimmins, the majority of the Court had so held because they perceived there to be a close analogy between the considerations that arose in the case at hand and the considerations that led to an employer being responsible for providing a safe system of work and a safe place of work. I return to the matter of control below.

58    In Kirkland-Veenstra at 259-260 [130]-[131], Crennan and Kiefel JJ took a different approach, relying on the proposition that, in the identification of a common law duty of care with respect to the exercise of statutory powers, “[t]here is agreement that the statutory powers in question must be directed towards some identifiable class or individual, or their property, as distinct from the public at large” (citing Crimmins at 40 [99] (McHugh J); Brodie at 633 [326] (Hayne J); Graham Barclay Oysters at 562 [32] (Gleeson CJ) and 575 [79] and 576 [82] (McHugh J)). Crennan and Kiefel JJ developed their analysis about the importance of control at 262 [138]-[139], observing that “[t]he evident purpose of statutory provisions, which might be utilised to prevent or minimise harm, has been identified as relevant to the existence of a duty of care in cases in this Court”. In this connection, their Honours also drew attention to Gummow J’s observation in Pyrenees Shire Council v Day at 391 [175] that the powers given to the Council had been provided to further the legislative purpose of fire prevention. I also return to the identification of an identifiable class below.

59    Before considering matters of control and identifiable class, it is, however, convenient to discuss the proposition advanced by CASA that, in the present case, the claim for damages for negligence presents a question about “coherence of the law”, as that expression was used in Sullivan v Moody at 581 [55]. In Sullivan v Moody the High Court held that people involved in investigating and reporting upon allegations of sexual abuse of children were not subject to a legal duty to take care to protect those suspected of being the sources of harm, because such a duty would be inconsistent with the proper and effective discharge of their professional and statutory responsibilities in making such investigations and reports. The Court’s decision turned on the proposition (at 580 [53]) that to find a duty of care in that case “would so cut across other legal principles as to impair their proper application”. Cases of this kind, so the Court said, “present a question about the coherence of the law”; and that “[a] duty of the kind alleged should not be found if that duty would not be compatible with other duties which the respondents owed”: see 581 [55]. The Court continued (at 581 [56] and 580 [60]-[61]):

How may a duty of the kind for which the appellants contend rationally be related to the functions, powers and responsibilities of the various persons and authorities who are alleged to owe that duty? A similar problem has arisen in other cases. The response to the problem in those cases, although not determinative, is instructive.

...

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.

60    In W v Home Office [2007] Imm AR 302 (‘W v Home Office’) at 310 Lord Woolf MR (with whom Thorpe and Waller LJJ agreed) adopted a not dissimilar approach when deciding whether the Home Secretary owed a duty of care with respect to the exercise of statutory powers under the Immigration Act 1971 (UK), stating:

It is less likely that a duty of care would be imposed on a person exercising his public duty i.e. even where the statutory duty is being implemented, if:

(1)    potential conflict could arise between the carrying out of the public duty, and acting defensively for fear of an action in negligence being brought;

(2)    where the category of public servant is one similar to the police or Crown Prosecution Service as considered in Hill v The Chief Constable of West Yorkshire [1989] 1 AC 53 and Elguzouli-Daf v The Commissioner of the Metropolis [1995] QB 335, and where:

(a)    the general sense of public duty of such servants is unlikely to be appreciably reinforced by the imposition of liability;

(b)    the recognition of the existence of a cause of action even in quite limited circumstances would [be] likely to lead to the bringing of a substantial number of cases, and a diversion of public servants concerned away from their duties contrary to the general public’s interests; and

(c)    where there are other private law remedies available if there is a deliberate abuse of power, and public law remedies available to challenge decisions.

It seems to us that the application of each of these principles to the situation under consideration is inconsistent with the existence of a duty of care being owed by the immigration officer to the immigrant who has been detained.

61    The first principle to which Lord Woolf MR referred is the same as that identified and applied in Sullivan v Moody. The other considerations to which he referred may also assist in determining whether or not a duty of care exists, depending on the case at hand. In the present case, the last-mentioned factor assumes particular importance. I return to this below.

62    More recently, in Fernando v Commonwealth (2010) 188 FCR 188 (‘Fernando’) at 214, Siopis J referred to Sullivan v Moody and the observations of Lord Woolf MR in W v Home Office to support his determination that the Minister’s statutory power to cancel a visa on character grounds “is, par excellence, a power which is to be exercised in the public interest” and, in consequence, “the inconsistency considerations referred to by the High Court and Lord Woolf MR, apply in respect of the exercise of the ... power, and militate strongly against the existence of a duty of care being owed by the Minister”.

63    In this case, there are a range of factors in favour of a legal duty to exercise CASA’s statutory powers with reasonable care (as the FASC pleaded), including that, generally speaking, the alleged duty related to a positive act, as opposed to a mere failure to act; and that, as the applicants submitted, the applicants “had a relationship with CASA (as licensees and authority holders) that pre-dated the exercise of the power” and had already held various certificates, licences and other approvals under the CAA for some time. In this circumstance, the respondents would have known, or ought to have known, that a lack of reasonable care on their part in suspending, cancelling, or failing to renew an AOC, or approvals as Chief Pilot or Flying Instructor, or other authorisations would prevent Polar and Mr Butson carrying on their business, and that this would result in harm to Polar and Mr Butson.

64    There are, however, factors against the imposition of a legal duty of care. The legal relationship between Polar and Mr Butson, on the one hand, and CASA and its officers, on the other, is not straightforward, and is not analogous to any existing relationship in which a similar duty of care has been found to exist. The FASC does not plead a relationship or position of vulnerability of the kind referred to in the authorities where a duty of care to avoid economic loss has been said to have been owed: see, for example, Woolcock Street Investments Pty Ltd v CDG Pty Limited (2004) 216 CLR 515 at 530 [23] and Precision Products (NSW) Pty Limited v Hawkesbury City Council (2008) 74 NSWLR 102 (‘Precision Products’) at 126-128 [103]-[116]. In any event, Polar and Mr Butson were able to protect themselves against the consequences of the respondents’ lack of care by making immediate application to the AAT and seeking positive orders for the continuation of any AOC certificate, licence or other approval until the AAT reached its decision on the review: see [35]-[36] above. See also State of New South Wales v Paige (2002) 60 NSWLR 371 at 400-404 [156]-[177] and Precision Products at 127-129 [110]-[120].

65    Further, although CASA had statutory power to issue, cancel, suspend or renew the relevant certificates, licences or approvals, CASA did not have unfettered “control” over their issue, cancellation and suspension. Rather, issue, cancellation and suspension were regulated by the CAA. In exercising the relevant statutory powers to issue, cancel or suspend, CASA was subject to the statutory regime established under the CAA, which had as its main aim, “maintaining, enhancing and promoting the safety of civil aviation”. As discussed above, the functions of the CAA were all directed to this end – as s 9A(1) made clear. The legislative regime established under the CAA was a regime to maintain, enhance and promote air safety. The regime established by the CAA required CASA to make air navigation safety the paramount concern: see s 9A(1). Thus, CASA was required by its governing statute to treat air navigation safety as the most important consideration in issuing, cancelling, suspending or renewing any AOC, or approval as Chief Pilot or Flying Instructor.

66    With this in mind, it is difficult to avoid the conclusion that the duty for which Polar and Mr Butson contend – to take reasonable care not to harm them and others in the same class as them cannot be reconciled on any practical basis with CASA’s overarching obligations to make air navigation safety its most important consideration in performing its functions and exercising its statutory powers.

67    This is not to say that a public authority such a CASA cannot be subject to a number of duties. But in the case of a public authority charged by its governing statute with giving primacy to air navigation safety, one would not anticipate that the law would impose on that public authority a legal duty to have regard to the interests of a particular class – here operators of air services businesses or air pilots – where that would in all likelihood impose on the public authority conflicting obligations.

68    That is, CASA’s obligation to place air navigation safety first requires that it be able to do so without the apprehension that it might breach a legal duty to persons in the position of Polar and Mr Butson. The powers conferred on CASA by its governing statute are designed to be exercised in the public interest. The private interests of persons in the position of Polar and Mr Butson may commonly be inconsistent with the statutory imperative to place air navigation safety first. The duty for which Polar and Mr Butson contend is, therefore, inconsistent with CASA’s statutory duties and responsibilities, in the public interest, pursuant to the CAA.

69    It can reasonably be anticipated that the imposition of a duty of care, even if not absolutely inconsistent with CASA’s exercise of relevant statutory powers, would lead CASA and its officers to “act defensively”, as Lord Woolf put it, from an apprehension that otherwise they might be sued for damages in an action for negligence. This state of affairs would not be conducive to an exercise of power in which air safety navigation was the most important consideration.

70    It should also be borne in mind that operators of air services and others in the position of Polar and Mr Butson are entitled to be heard and, in the case of cancellation or suspension, to “show cause” before administrative action is taken against them. Further, the law provides for other remedies, including, in an appropriate case, remedies for misfeasance in public office, relief on judicial review of a relevant administrative decision, and the broad remedies available upon a successful application for review in the AAT. Similar considerations were held by Siopis J in Fernando (at 214 [150]) to militate against the existence of a duty of care in that case. I am of the same opinion in this case.

71    The considerations against the existence of a duty of care lead me to conclude that CASA (and therefore the individual respondents) did not owe the applicants a duty of care of the kind alleged in par [16(a)] of the FASC.

72    The applicants relied on s 22 of the CAC Act in support of an argument that the individual respondents were under a duty to exercise care and diligence with respect to them: FASC, par [10(a)]. Section 22(1) of the CAC provides:

An officer of a Commonwealth authority must exercise his or her powers and discharge his or her duties with the degree of care and diligence that a reasonable person would exercise if he or she:

(a)    were an officer of a Commonwealth authority in the Commonwealth authority’s circumstances; and

(b)    occupied the office held by, and had the same responsibilities within the Commonwealth authority as, the officer.

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

73    This provision does not create a duty to third parties, such as Polar and Mr Butson. Rather, s 22(1) creates a duty that is owed to the authority, here CASA. If this duty is breached, then, since the provision is a civil penalty provision, the officer may become liable to compensate the relevant Commonwealth authority or company for damage suffered by it: see CAC Act, Sch 2, clause 4. The CAC Act specifically limits the persons who can seek civil compensation for damage resulting from a breach of s 22. Only the Commonwealth Finance Minister or a person authorised by the Finance Minister and the relevant Commonwealth entity may apply for a declaration of contravention, a compensation order, or a pecuniary penalty: see CAC Act, Sch 2, clause 6. Sections 23, 24 and 25, to which par [10] of the FASC additionally referred, are also civil penalties provisions subject to the regime in Schedule 2 to the CAC Act.

74    The CAC Act stipulates that the statutory right of compensation does not derogate from any duty or liability that may otherwise exist in respect of the person’s office or employment in relation to a Commonwealth authority or company: see Sch 2, clause 5; also CAA, s 21(1). It therefore does not exclude a duty to a third party such as Polar or Mr Butson if a duty otherwise exists. But nothing in s 22 creates a duty of the kind alleged by the applicants against the second to seventh respondents, or otherwise supports the existence of such a duty.

75    There are other deficiencies in the applicants’ pleading of negligence. As can be seen in the earlier analysis of the applicants’ FASC, the facts alleged in the FASC relate almost entirely to the exercise of statutory powers by CASA and its officers. When the pleading is examined, there is, as the respondents submitted, no express pleading of material facts that could, if proven, establish “the crucial elements of reliance, assumption of responsibility and, most importantly, vulnerability”: see Precision Products at 126 [106] (Allsop P). This pleading is especially important in such a case as this in which the relevant statutory powers are not directed towards the protection of a class of persons or their property, as distinct from the public at large. On the contrary, relevantly here, the CAA expressly provided that the public interest in air navigation safety was to be CASA’s most important concern in any exercise of its statutory powers. In exercising its statutory powers at issue in this case – to issue, cancel, suspend or renew certificates, licences and other approvals – CASA did not necessarily assume responsibility to act in the applicants’ interests. As noted already, the most important consideration in the exercise of the relevant statutory powers was air navigation safety. This meant that the powers would invariably be exercised against the applicants’ interests in a situation where air navigation safety so required.

76    In all the circumstances, it cannot be said to be open to the applicants upon the FASC to prove the facts at trial which would constitute a reasonable cause of action in negligence against the respondents. In so far as the FASC endeavours to plead negligence against the respondents, this pleading should be struck out.

B.    Breach of statutory duty

77    As noted above, Polar and Mr Butson have claimed that CASA owed a common law and statutory duty to them to exercise statutory powers and perform statutory functions: (1) reasonably in accordance with the provisions of the governing legislation; and (2) in good faith. An action for breach of statutory duty, although itself a tort, is distinct from the tort of negligence: see Kirkland-Veenstra at 259 [130] (Crennan and Kiefel JJ). I discuss the “good faith” element subsequently.

78    As counsel for CASA submitted, a claimant cannot succeed in an action for breach of statutory duty unless the claimant can 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 it was the object of the statute to prevent. As Crennan and Kiefel JJ have said, “[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”: see Kirkland-Veenstra at 263 [142]. Their Honours went on to observe that “[t]he existence of a power coupled with a discretion may not suffice for an action for breach of statutory duty. The statute must oblige the exercise of those powers in the circumstances which prevail”. See Kirkland-Veenstra at 264 [144].

79    In Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 424, Brennan CJ, Dawson and Toohey JJ described the action for breach of statutory duty in the following terms:

A cause of action for damages for breach of statutory duty arises where a statute which imposes an obligation for the protection or benefit of a particular class of persons is, upon its proper construction, intended to provide a ground of civil liability when the breach of the obligation causes injury or damage of a kind against which the statute was designed to afford protection. The question is one of the construction of the statute ... (Citations omitted.)

80    It is relatively rare to infer a statutory intention to create a private right of action for breach of statutory duty: see Porter v OAMPS Ltd (2005) 215 ALR 327 at 353 [110] (citing Crimmins at 58), where Goldberg J also noted that “some justices of the High Court have suggested that, at least with federal legislation, it might be expected that any conferral of a private right of action would be done expressly”.

81    The availability of other protections and remedies against a wrongful exercise of power has been treated as a factor militating against the existence of a statutory duty of the kind for which the applicants contend here. In Fernando (at 215 [156]) Siopis J rejected the submission that the Migration Act 1958 (Cth) imposed a statutory duty on departmental officers (sounding in damages at the suit of an immigrant) to act in accordance with that Act and “to continually monitor the legal basis of [his] immigration detention”. Siopis J held (at 215 [158]) that “[i]t [was] not possible to construe [s 501] as intending to confer a right to claim compensation in circumstances where the Minister or his or her officers, fail to exercise that power lawfully”, noting that “there [were] other protections afforded to visa holders affected by this provision of the Migration Act.” These other protections were: (1) an entitlement to procedural protection; (2) administrative law remedies; and (3) the tort of misfeasance in public office in the event of a deliberate abuse of power: see Fernando at 214 [150].

82    In Repacholi, which, as already noted, also concerned the exercise of powers under the CAA, McKerracher J held that the existence of the statutory right of review of the exercise (by the AAT) of statutory powers precluded the existence of a private right for damages: see Repacholi 128 [159]. In the United Kingdom, in Calveley v Chief Constable of Merseyside Police [1989] 1 AC 1228 at 1237, the House of Lords treated the existence of judicial review as indicative of the non-existence of a right to damages for breach of statutory duty where the action for breach arising from the alleged duty would have the effect of raising indirectly the validity of an administrative decision.

83    In the present case, an air services operator or air pilot, such as Polar or Mr Butson, against whom CASA proposes to make, or makes, an adverse decision has various protections and remedies for a wrongful exercise of power. As noted previously, these protections and remedies include: the procedural fairness protections of the CAA; merits review by the AAT; judicial review; and, in an appropriate case, the tort of misfeasance in public office. The availability of these protections and remedies militates against the existence of a statutory duty of the kind propounded by the applicants.

84    The proposition that the relevant provisions of the CAA have been enacted for the benefit of Polar and Mr Butson and require CASA, relevantly, to protect their interests is untenable when the CAA is considered in any detail. Such a duty would, as CASA submitted, be “at odds with the scheme of the Act in general and the exercise and performance of [CASA’s] powers and functions in the public interest, in particular”. The CAA is directed to the public interest in air navigation safety and discloses no legislative intention to confer a private right to sue for breach of statutory duty on Polar and Mr Butson and others whose air operations activities are regulated in the public interest under the CAA. No such right can be implied or inferred from the CAA. This conclusion is consistent with that reached by McKerracher J in Repacholi at 128 [162]. See also Polar (No 2) at 566 [82]-[84].

85    There is, therefore, no statutory or common law duty of the kind alleged in pars [16(b)] and [16(c)] of the FASC, to the extent that these paragraphs plead breach of statutory duty. Furthermore, there is no basis for a claim that the second to seventh respondents were under any personal duty under the Act that would support a cause of action of this kind against them. The pleading of breach of statutory duty should be struck out in accordance with these reasons.

C.    Good Faith

86    The FASC, in par [10(b)], identified s 23 of the CAC Act as imposing a duty of good faith on CASA and its officers. Section 23(1) relevantly provides that:

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).

…

87    Like s 22 of the CAC Act, s 23 does not reveal an intention to accord a private right of action to claim damages for an alleged breach of statutory duty. Like s 22, s 23 is a civil penalty provision governed by Schedule 2. See, in this regard, pars [72]-[76] above.

88    Further, it is plain enough that there is no tenable basis on which Polar and Mr Butson could bring an action in tort against CASA and the other respondents for breach of a general duty to act in good faith. See generally Gimson v Victorian Workcover Authority [1995] 1 VR 209 at 223; CGU Workers Compensation (NSW) Ltd v Garcia (2007) 69 NSWLR 680 at 692-694 [58]-[59], [64],709 [159], 710 [169]-[173]; and Flanagan v Commissioner of Australian Federal Police (1996) 60 FCR 149 at 216.

89    In any event, despite their pleading, Polar and Mr Butson disavowed that they were claiming any separate cause of action based on lack of good faith. The ‘good faith’ element was, according to them, merely part of their pleading of breach of statutory duty. Read in this way, then, my earlier observations about the lack of basis for a claim for damages for breach of statutory duty would apply.

D.    Interference with trade or business

90    As already noted, the FASC, in par [16(c)], claims that CASA and the other respondents owed a duty to Polar and Mr Butson not to interfere unlawfully and intentionally with their trade or business.

91    With respect to this pleading, Polar and Mr Butson can no longer find any support in the principle stated in Beaudesert Shire Council v Smith (1966) 120 CLR 145 (‘Beaudesert’) at 156, to the effect that “a person who suffers harm or loss as the inevitable consequence of the unlawful, intentional and positive acts of another is entitled to recover damages from that other”. As CASA noted, the High Court in Northern Territory v Mengel (1995) 185 CLR 307 (‘Mengel’) at 344-345 overruled the Beaudesert principle. A cause of action based on Beaudesert does not exist.

92    There is no authority for the proposition that interference with trade or business interests by acting beyond statutory power gives rise to a cause of action. Moreover, a reading of the joint judgment in Sanders v Snell (1998) 196 CLR 329 (‘Sanders v Snell’) leads to the conclusion that, where a public authority and its officers are alleged to have wrongfully interfered with private business interests by alleged misuse of statutory power, any liability for damages is governed by the tort of misfeasance in public office, not by a tort of wrongful interference with trade or business interests.

93    In Sanders v Snell, in connection with this tort, Gleeson CJ, Gaudron, Kirby and Hayne JJ said (at 340-341 [28] and [31]).

[The respondent] sought to say that there is a tort of wrongfully interfering with trade or business interests (in this case the respondent’s contractual relations) and that the appellant had committed that tort. …The unlawful means in this case was said to be constituted by the purported exercise of the statutory power to give a direction to the Bureau without first giving the respondent an opportunity to be heard about the matter.

…

The tort that is emerging, or has emerged in the United Kingdom, is a tort of interference with trade or business interests by an unlawful act directed at the persons injured. The element of unlawfulness is essential to the definition of the tort.

94    Noting (at 343 [34]) that “infringement of some right” generally signified what was intended by “unlawful act”, the joint judgment added that “it may be doubted that ‘infringement of some right’ is, or is always, a sufficient description of what is unlawful means for the purposes of the economic torts generally or the tort now under consideration”. The joint judgment continued (at 343-345 [35]-[39]):

The majority judgment in Mengel noted that it seemed that the “embryonic or emerging tort” of interference with trade or business interests by an unlawful act does not extend to all unlawful acts and “at least in that regard, it is in need of further definition” [Mengel at 343]. Their rejection of Beaudesert is, however, consistent with confining what is an unlawful act for the purposes of this tort (if, that is, the tort is to be recognised in this country). It is also consistent with (or at least not inconsistent with) excluding from the definition of what is an unlawful act for this purpose acts whose only “unlawful” aspect is that they are unauthorised in the sense that they are ultra vires and void.

The guidance from authority is necessarily uncertain at the moment; the tort is embryonic or emerging. Considerations of principle, however, provide a more certain guide and require that unauthorised acts of the kind just mentioned are excluded from the understanding of what is an unlawful act for the purposes of this tort. If they are not excluded, the tort of interference with trade or business interests by unlawful act would cover the whole of the field now covered by the tort of misfeasance in public office or would cover that field and much more, thereby extending the liability of public officers very greatly.

Questions of holding public officials liable for acts done apparently in furtherance of their duty raise very different considerations from those that may arise in relation to economic torts committed by private persons. Misfeasance in public office is concerned with misuse of public power. Inappropriate imposition of liability on public officials may deter officials from exercising powers conferred on them when their exercise would be for the public good. But too narrow a definition of the ambit of liability may leave persons affected by an abuse of public power uncompensated. The tort of misfeasance in public office must seek to balance these competing considerations. Not surprisingly, identifying the intention with which the public official acts has a prominent place in striking that balance. … Equating the tort of misfeasance with a tort of wrongful interference with economic interests or subsuming the tort of misfeasance in that latter tort would pay too little regard to the different considerations that we have mentioned.

For present purposes it may be accepted that the tort of misfeasance in public office extends to acts by public officers that are beyond power, including acts that are invalid for want of procedural fairness [Mengel 356-357]. But to establish that tort, it is not enough to show the knowing commission of an act beyond power and resulting damage. …

There would be no work to be done by the tort of misfeasance if what is an unlawful act for the purposes of that tort is the same as it is for the tort of unlawful interference with trade or business interests and if questions of knowledge and intention are to be resolved in both cases according to the same test. … (Emphasis added.)

95    For the reasons referred to in Sanders v Snell, and bearing in mind the “coherence of the law” principle expressed in Sullivan v Moody (in a different but related context) Polar and Mr Butson are, in the present proceeding, confined to the tort of misfeasance in public office, to which I shall shortly turn. For the reasons already stated with respect to ss 22 and 23 of the CAC Act, I would not regard s 24 of the CAC Act, to which Polar and Mr Butson also referred in this connection, as justifying a contrary conclusion.

96    A further difficulty with the tort of wrongful interference, assuming it to exist, is to identify its elements. For this purpose, Polar and Mr Butson relied on the Australian cases of Beach Petroleum NL v Johnson (1993) 43 FCR 1 (‘Beach Petroleum’) and Deepcliffe Pty Ltd v Council of the City of Gold Coast [2001] QCA 342 (‘Deepcliffe’). Although both cases contain judicial recognition of the existence of the tort in Australian law, neither supported the applicants’ case, as Polar and Mr Butson contended. Beach Petroleum can be put to one side on the basis that the relevant observations by von Doussa J were obiter and predated Sanders v Snell; and, in Deepcliffe (at [24]), McMurdo P did no more than restate the effect of Sanders v Snell. Furthermore, in separate reasons for judgment, McMurdo P (at [25]) and Williams JA (at [75]), Helman JA agreeing with both, noted apparent limitations of the tort “to conduct of a private, rather than a public, character”.

97    For the purposes of Australian common law, the elements of the tort of wrongful interference with a trade or business interest were recently stated by Refshauge J in Canberra Data Centres Pty Ltd v Vibe Constructions (ACT) Pty Ltd (2010) 173 ACTR 33 at 52 [139]-[141] (‘Canberra Data’), where his Honour adopted the majority approach, as stated by Lord Hoffman, in OBG Ltd v Allan [2008] 1 AC 1 (‘OBG Ltd v Allan’) at 31-33 [47]-[53]. This approach would require the applicants to plead: (1) a wrongful interference with the actions of a third party in which the applicants have an economic interest; (2) an intention on the respondents’ part thereby to cause loss to the applicants; (3) the acts of interference being actionable by the third party as an interference with its freedom to deal with the applicants; and (4) loss or damage suffered by the applicants.

98    The FASC does not contain a pleading that conforms to these elements; and, in particular, the FASC does not allege that the relevant exercises of statutory power were wrongful because they constituted an interference with the freedom of a third party to deal with the applicants. CASA argued that, if it were open to Polar and Mr Butson to invoke the tort of wrongful interference with trade or business interests, then they would be obliged to plead in accordance with the principles described by the majority in OBG Ltd v Allan. I agree.

99    Referring to the dissent of Lord Nicholls of Birkenhead in OBG Ltd v Allan (especially at 55-56 [152]-[155]) and to the concurring observations of Lord Walker of Gestingthorpe (at 75 [269]), Polar and Mr Butson argued that the majority view (as expressed by Lord Hoffman) in OBG Ltd v Allan was overly restrictive. The applicants also drew my attention to the decision in Berezovsky v Abramovich [2011] EWCA Civ 153 (23 February 2011). I appreciate the contrary perspective; but, bearing in mind that there is a common law of Australia, as opposed to a common law of each Australian jurisdiction (see Farah Constructions Pty Ltd v Say Dee Pty Ltd (2007) 230 CLR 89 at 152 [135]), and that the scope of the tort has been the subject of most careful consideration in the United Kingdom at the highest level, I would not be disposed to depart from the analysis adopted by Refshauge J in Canberra Data, which in turn adopted the analysis of the majority in OBG Ltd v Allan.

100    For the foregoing reasons, the cause of action described as wrongful interference with trade or business interests should be struck out.

E.    Misfeasance in Public Office

101    In Mengel (at 370) Deane J helpfully set out the five elements of the tort of misfeasance in public office, as follows: (1) an invalid or unauthorised act; (2) done maliciously; (3) by a public officer; (4) in the purported discharge of his or her public duties; (5) which causes loss to the parties.

102    Misfeasance in public office is not established merely by showing that a public officer knowingly acted beyond power, and that damage ensued: see Mengel at 347. Rather, as the joint judgment stated (at 345), misfeasance in public office is “a deliberate tort in the sense that there is no liability unless either there is an intention to cause harm or the officer concerned knowingly acts in excess of his or her power”. Further, to quote the joint judgment in the subsequent case of Sanders v Snell (at 345 [38]):

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

103    In Mengel both Deane and Brennan JJ expressed a firmer view than the joint judgment about reckless indifference.

104    Deane J said (at 370-371):

In the context of misfeasance in public office, the focus of the requisite element of malice is injury to the plaintiff or injury to some other person through an act which injuriously affects the plaintiff. Such malice will exist if the act was done with an actual intention to cause such injury. The requirement of malice will also be satisfied if the act was done with knowledge of invalidity or lack of power and with knowledge that it would cause or be likely to cause such injury. Finally, malice will exist if the act is done with reckless indifference or deliberate blindness to that invalidity or lack of power and that likely injury. Absent such an intention, such knowledge and such reckless indifference or deliberate blindness, the requirement of malice will not be satisfied.

105    Brennan J said (at 357):

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

106    CASA conceded that the FASC, in par [17], expressed the elements of the tort, as variously recognised in the reasons for judgment in Mengel and Sanders v Snell. No challenge was made to the applicants’ identification of these elements; and whether or not the tort covered “reckless indifference” was not in issue on this application. Instead, in the case of misfeasance in public office, CASA challenged the pleading solely on the basis that the FASC did “not allege material facts upon which liability under the tort could be established”.

107    As the joint judgment stated in Federal Commissioner of Taxation v Futuris Corporation (2008) 237 CLR 146 at 165 [60], “[a]llegations that statutory powers have been exercised corruptly or with deliberate disregard to the scope of those powers are not lightly to be made or upheld”. Bearing this in mind, an allegation to this effect must be “pleaded specifically and with particularity”: see O 12 rr 2 and 3 of the 1979 Rules and Rules 16.42 and 16.43 of the 2011 Rules; and Banque Commerciale SA, en liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 at 285.

108    This requirement led Flick J, in Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 3) (2010) 267 ALR 494 (‘Pharm-a-Care’) at 512 [66] and [68], to say:

The allegation that a public officer has so abused his office that his conduct constitutes the tort of misfeasance is, self-evidently, a serious allegation. It is an allegation which should be pleaded with sufficient detail that the public officer knows the case being mounted against him.

…

A pleading which alleges a particularly serious matter needs to be pleaded specifically. The example frequently given is that of fraud. Such an allegation must be pleaded precisely … The reasons for this are obvious – if a person is to be charged with doing or writing something which will involve serious consequences, the person is not to be condemned casually or by “inexact proofs, indefinite testimony, or indirect inferences” … And charges of this kind are not to be made unless the person who makes them, in a pleading or otherwise, is satisfied that there is expected to be available the evidence to prove them.

(Citations omitted.)

109    In Pharm-a-Care, Flick J went on to say (at 512 [69]) that the “same approach in respect to the need for specificity in pleadings has been applied in the context of misfeasance”, citing Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1 (‘Three Rivers’) at [49]-[51].

110    In Three Rivers Lord Hope of Craighead at 248 [49] said, “a balance must be struck between the need for fair notice to be given on the one hand and excessive demands for detail on the other”. This is clearly correct. As Lord Millett said (at 291 [185]-[186]):

It is important to appreciate that there are two principles in play. The first is a matter of pleading. The function of pleadings is to give the party opposite sufficient notice of the case which is being made against him. If the pleader means “dishonestly” or “fraudulently”, it may not be enough to say “wilfully” or “recklessly”. Such language is equivocal. A similar requirement applies, in my opinion, in a case like the present, but the requirement is satisfied by the present pleadings. It is perfectly clear that the depositors are alleging an intentional tort.

The second principle, which is quite distinct, is that an allegation of fraud or dishonesty must be sufficiently particularised, and that particulars of facts which are consistent with honesty are not sufficient. This is only partly a matter of pleading. It is also a matter of substance. As I have said, the defendant is entitled to know the case he has to meet. But since dishonesty is usually a matter of inference from primary facts, this involves knowledge not only that he is alleged to have acted dishonestly, but also the primary facts which will be relied upon at trial to justify the inference. At trial the court will not normally allow proof of primary facts which have not been pleaded, and will not do so in a case of fraud. It is not open to the court to infer dishonesty from facts which have not been pleaded, or from facts which have been pleaded but are consistent with honesty. There must be some fact which tilts the balance and justifies an inference of dishonesty, and this fact must be both pleaded and proved.

111    I accept that, as Flick J said in Pharm-a-Care, this is the degree of specificity required with respect to the allegation of misfeasance in public office.

112    CASA argued that the FASC failed to provide the requisite particulars, referring specifically to the particulars to the FASC, in par [17], which broadly speaking, stated:

(a)    the respondents’ knowledge of the limits of their powers is to be inferred from their position and experience;

(b)    the respondents’ knowledge of the likely consequences of their conduct is similarly to be inferred from their position and experience;

(c)    their intention to bring about those consequences is in turn to be inferred from that knowledge, the actions themselves and the “pattern of conduct” set out at FASC, par [25];

(d)    their reckless indifference is to be inferred “from the conduct of CASA and the officers of CASA taken as a whole” as set out in the FASC and from the “pattern of conduct” set out at FASC, par [25].

113    As CASA noted, the FASC repeats this type of formulation at numerous critical paragraphs: see pars [67], [70], [71], [74], [75], [77], [78], [79], [101], [102], [103], [105], [107], [119], [120], [121], [122], [123], [124], [129], [130], [132], [133], [136], [145], [151], [155], [160], [169], [170], [171], [172], [173], [174], [175] and [177].

114    Broadly speaking, the so-called “pattern of conduct” to which the FASC refers is set out in par [41] above. I accept that, as CASA submitted, this “pattern of conduct” is constituted by a series of actions taken by CASA and alleged to be beyond power. At the hearing, senior counsel for Polar and Mr Butson argued that the respondents’ characterization of their pleading was overly simplistic. Senior counsel for Polar and Mr Butson drew attention to pars [84] and [94], in which letters of 31 January 2005 and 4 February 2005 were pleaded, arguing that these letters were supportive of the inferences the applicants sought to draw. Reference was also made at the hearing to various other paragraphs setting out the sequence of related events: see FASC, [83], [101]-[106] (the last-mentioned referring to an application to the AAT for review and stay of decision). These particular paragraphs (discussed further below) and the pleadings read as a whole confirm that, as the respondents submitted, the substance of the applicants’ pleading is that the essential mental element of the tort can be inferred from the sequence of instances of conduct allegedly beyond power.

115    In various paragraphs, including pars [17] and [25], the FASC states that further particulars will be forthcoming after discovery. In this connection, I note that the applicants previously made application for pre-trial discovery in the Supreme Court of Western Australia, but did not pursue that application after CASA provided them with certain documents, some or all of which are mentioned in or exhibited to Mr Butson’s affidavit. The particulars nonetheless remain at a high level of generality.

116    The particulars that Polar and Mr Butson have given are fundamentally deficient for the second reason referred to by Lord Millett in Three Rivers in the passage set out at [110] above. That is, assuming that the particulars give the respondents sufficient notice of the case that the applicants seek to make against them, nonetheless the particulars are consistent with an honest motivation on CASA’s and its officers’ part. The particulars in question might be relied on to justify an inference of a deficient administrative process (compare: Polar (No 2) at [87], [90]), but they do not support an inference that the respondents did any particular act with knowledge that it was beyond power and, even less, that the respondents did any such act intending to cause harm to the applicants or with reckless indifference.

117    I accept that, as senior counsel for the respondents submitted at the hearing, the FASC contemplates that the intention to bring about harm to the respondents, or reckless indifference, is to be inferred from the respondents’ knowledge of the limits of their powers and of the likely consequences of their conduct, irrespective of their motivation. I further accept that, as senior counsel for the respondents submitted, this is too great a leap. It is too great a leap because the challenged conduct was done pursuant to statutory powers and functions; and, in this context, without more, the conduct (and therefore the particulars) are consistent with an honest, good faith (though possibly deficient) exercise of power. As CASA put it in its written submissions, “[t]he critical element of intention is instead alleged to rest only upon an inference drawn from the position and experience of the respondents and the ubiquitous ‘pattern of conduct’”.

118    There is nothing that supports the hypothesis that the respondents had the intention or acted with reckless indifference as claimed in par [17], and this must be established if the cause of action is to be made out. The FASC seeks to fill the gap by reference to the so-called “pattern of conduct”, which scarcely amounts to a pattern at all and, in any event, does not amount to particulars sufficient to support an inference of the mental element of misfeasance in public office. Senior counsel for Polar and Mr Butson relied particularly on the letters of 31 January 2005 and 4 February 2005 (see [114] above) to make good the proposition that relevant intent or recklessness might be inferred from the pleadings and their particulars. I reject this submission. The pleadings reveal no more than that CASA and its officers differed with Polar and Mr Butson as to the correct exercise of CASA’s statutory powers and that, by accepting an enforceable voluntary undertaking under the CAA, the matter might be resolved in conformity with CASA’s understanding of its obligations.

119    Further, the pleadings, as particularised, fall well short of supporting any claim against the individual respondents of misfeasance in public office: compare Polar (No 2) at [89], [91]. Whilst the “pattern of conduct” alleged in the FASC involves numerous acts, all done on behalf of CASA, each act is said only to involve some, or only one, of the individual respondents. The FASC does not allege that any individual respondent engaged in an entire “pattern of conduct” from which any inference of relevant impropriety can be drawn. The pleading as against the individual respondents is thus fundamentally deficient. Even if Polar and Mr Butson were to establish legal error in the relevant exercises of statutory power, this would do no more than support a finding of deficient administration.

120    The deficiency in the applicants’ pleading of misfeasance in public office is not so much a failure to put the respondents on notice as to the manner in which they are said to have abused their public office, but rather a failure to particularise states of mind that would allow the applicants to prove at trial actionable misfeasance in public office.

121    Accordingly, the applicants’ pleading of misfeasance in public office is embarrassing within the meaning of the Federal Court Rules and should also be struck out.

122    There is a further question as to whether the applicants should be permitted another chance to particularise their claim of misfeasance in public office. As McKerracher J said in Repacholi at 130 [168], pre-action discovery was the proper course for these applicants to pursue and would have allowed them, if granted, to obtain sufficient information to decide whether to commence proceedings and, if so, against whom. As already noted, the applicants apparently made an application for pre-trial discovery but chose to abandon it after CASA voluntarily provided documents to them. The applicants’ pleading (though in a different form and for a different purpose) has already been the subject of judicial scrutiny and comment: see Polar (No 2). The applicants have had a number of opportunities in this proceeding to perfect their pleading. The 16 August 2010 affidavit of Mr Butson predated the FASC and does not indicate that any improvement on the current pleading can be made. It seems to me that the applicants have had a sufficient opportunity to plead their case and that, on the material that they presently possess, they cannot improve on what they have done. There is also the question of justice to the respondents to be considered.

123    Senior counsel for Polar and Mr Butson argued that the FASC properly particularised the applicants’ claim of misfeasance in public office. I have found otherwise. Polar and Mr Butson maintained that they would be able to provide further particulars after discovery. They did not suggest that they could provide further particulars before this event. It is, however, apparent from the FASC (and from Mr Butson’s affidavit) that CASA has already supplied them with some documentation. Significantly, there is clearly no postulated basis upon which any of the claims against the individual respondents can be maintained. Having considered the FASC, Mr Butson’s affidavit and the parties’ submissions, I have reached the same conclusion with respect to CASA. Nothing has been shown in the present material to indicate that there is any basis at all for pleading the critical element of intention or reckless indifference.

124    In all the circumstances, it would not be in the interests of justice to permit the action to continue upon the basis that the applicants have a further opportunity to make another and, presumably, different case of misfeasance in public office at some later date after discovery and inspection. I would not, therefore, afford the applicants an opportunity to re-plead.

125    The FASC pleads no cause of action other than those considered in these reasons. Accordingly, the whole of the FASC is struck out. There is nothing in the FASC, the evidence before the court, or the parties’ submissions that might discloses the existence of a cause of action beyond those already discussed. There is no proper basis to grant leave to re-plead. As Lindgren J said in White Industries (at 309 [47]: see [18] above), “[a] failure after ample opportunity to plead a reasonable cause of action may suggest that none exists and therefore that the applicant has no reasonable prospects of success”. This is just such a case. Having regard to the history of the pleading, the evidence, and the parties’ submissions, I am persuaded that Polar and Mr Butson have no reasonable prospect of successfully prosecuting the proceeding. Accordingly, I would give judgment for the respondents against the applicants pursuant to s 31A(2) of the Federal Court Act. I would make orders accordingly.

126    I would also give the parties an opportunity to make submissions on costs.

Associate:

Dated:    30 September 2011