FEDERAL COURT OF AUSTRALIA

Vatarescu v Commonwealth of Australia for the Agency of Centrelink (No 2) [2012] FCA 165

THE COURT ORDERS THAT:

1.    The application for leave to appeal be dismissed.

2.    The applicant pay the respondent’s costs as agreed or taxed.

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

REASONS FOR JUDGMENT

the APPLICATION

1    This is an application for leave to appeal from orders of the Federal Magistrate Court of 31 May 2011 dismissing the applicant’s application filed on 24 March 2011 on a summary basis and ordering the applicant to pay the respondent’s costs (Vatarescu v Commonwealth of Australia for the Agency of Centrelink (No 2) [2011] FMCA 376).

2    By operation of s 24(1A) of the Federal Court of Australia Act 1976 (Cth) the applicant requires leave to appeal. The reason for this is that the Federal Magistrates Court made its orders on 31 May 2011 pursuant to s 17A(2) of the Federal Magistrates Act 1999 (Cth). Section 17A(2) provides for summary dismissal of proceedings before the Federal Magistrates Court in these terms:

The Federal Magistrates 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    Section 17A(3) of the Federal Magistrates Act is also relevant. It provides as follows:

(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.

4    As the Federal Magistrates Court dismissed the applicant’s proceeding pursuant to s 17(2A) of the Federal Magistrates Act the orders of 31 May 2011 are interlocutory orders (Kowalski v MMAL Staff Superannuation Fund Pty Ltd (2009) 259 ALR 319; [2009] FCAFC 117 at [32] – [44]). It follows that s 24(1A) of the Federal Court of Australia Act applies requiring leave to appeal. Section 24(1A) provides that:

An appeal shall not be brought from a judgment referred to in subsection (1) that is an interlocutory judgment unless the Court or a Judge gives leave to appeal.

5    Judgments in s 24(1) include “appeals from judgments of the Federal Magistrates Court exercising original jurisdiction under a law of the Commonwealth” other than certain excluded matters (s 24(1)(d)).

6    Consistent with the reasoning in Kowalski v MMAL Staff Superannuation Fund Pty Ltd at [44]:

Leave to appeal should only be granted if the Court is of the opinion that the decision of the primary judge was attended with sufficient doubt to warrant its reconsideration by a Full Court and substantial injustice would result if leave were refused, supposing the decision to be wrong (see Décor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 655; (1991) 33 FCR 397 at 398-400).

THE REASONING OF THE FEDERAL MAGISTRATES COURT

7    On 24 March 2010 the applicant filed an application in the Federal Magistrates Court claiming compensation for losses incurred by the applicant as a result of the respondent’s failure to the implement the “relevant legislation” (namely, the Social Security Act 1991 (Cth)) (the Social Security Act) and loss of entitlements as a result of the respondent’s negligent refusal to comply with the relevant legislation, as well as punitive damages for the “repeated and negligent refusals” of the respondent to “implement the terms or conditions stipulated in the relevant legislation for an adequate service by the employment service provider”.

8    On or about 17 August 2010 the respondent filed an application seeking summary dismissal of the application pursuant to s 17A(2) of the Federal Magistrates Act. As noted, on 31 May 2011 the Federal Magistrates Court summarily dismissed the application. The questions in the present application for leave to appeal are whether the decision of the Federal Magistrates Court is “attended with sufficient doubt to warrant its reconsideration by a Full Court” and whether “substantial injustice would result if leave were refused, supposing the decision to be wrong”.

9    As set out in the reasons for judgment in Vatarescu v Commonwealth of Australia for the Agency of Centrelink (No 2) [2011] FMCA 376 at [2], many of the circumstances underpinning the applicant’s application in 2010 were considered in an earlier decision of that Court in Vatarescu v Commonwealth of Australia [2009] FMCA 1041, which was the subject of an unsuccessful application for leave to appeal (Vatarescu v The Commonwealth of Australia for the Agency of Centrelink [2009] FCA 1539).

10    The reasons for judgment in Vatarescu v Commonwealth of Australia for the Agency of Centrelink (No 2) [2011] FMCA 376 included the following:

(1)    “…the current application is presented in terms that confirm a generalised complaint against the Respondent, Centrelink” (at [3]).

(2)    “…, in the current matter he [the applicant] alleges a breach of duty on Centrelink’s part “for negligent implementation of relevant legislation”. His complaints relate most particularly to his Centrelink entitlements being suspended for failing to comply with a Newstart Activity Agreement, and the requirement that he attend a Job Network Member for a reasonable purpose that was notified to him pursuant to s.624(1)(a) of the Social Security Act 1991” (at [3]).

(3)    “Dr Vatarescu contends that he is entitled to relief due to the following [alleged] negligence of Centrelink:

(i)    The Respondent acted negligently by failing to monitor the quality and content of services provided by the Job Network Member;

(ii)    The Respondent acted negligently by failing to ensure the implementation of the relevant legislation and related terms of the activity test;

(iii)    The Respondent refused to comply with the terms of the activity test after these were brought to their attention, particularly, in the letter dated 17 March 2009” (at [4]).

(4)    “I have considerable difficulty seeing (a) what duty was owed by Centrelink to the Applicant, (b) what breach may have occurred in relation to any such duty, and in consequence, (c) what ‘damage’ has been suffered by Dr Vatarescu which he could recover from Centrelink. Certainly, there are no particulars of ‘damage’ other than Dr Vatarescu’s generalised claim that “[h]ad the Respondent implemented the elements of the legislation stipulating a constructive service, the applicant’s commercialisation of a high-tech project would have reached an advanced stage”” (at [5]).

11    After identifying the principles applicable to an application for summary dismissal in orthodox terms (at [40] – [45]), the reasons for judgment of the Federal Magistrates Court continued with an observation at [47] noting “significant concerns about the way in which, and the lack of relevant particularity with which, the Applicant has claimed relief against the Respondent”.

12    At [50], the reasons continued as follows:

In my view, in the circumstances of this case, I do not see that there was any legal duty owed to the Applicant by the Respondent. It is not made out on the materials before the Court. Disgruntlement, even for good cause (which I do not necessarily find here), should not automatically transform into legal entitlement.

13    After quoting aspects of the decision of Stone J in the earlier application for leave at [11] and [12] to the effect that the applicant’s complaints against Centrelink were based on his perception of their administrative incompetence rather than any demonstrable legal error, the Federal Magistrates Court said (at [53]):

Although stated in the context of the then application for judicial review, it seems to me that, in a similar vein, there is no legal basis for the Applicant’s claim in tort.

14    At [54] of the reasons for judgment the following comment appears:

And, by way of comment only, it may be that, following the intimation by the Respondent, either estoppel and or res judicata principles would have not unreasonable prospects of success if the matter was to proceed. In this regard I simply note that there is substantial congruence between the relief sought and the parties in the earlier proceedings, and the matter that is currently before the Court.

15    At [55] of the reasons for judgment the Federal Magistrates Court concluded in these terms:

In forming a ‘practical judgment’ of the facts and documents put before the Court, and having regard to the principles set out by the Full Court of the Federal Court in Jefferson Ford [Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372; [2008] FCAFC 60] and by Sundberg J in Adnunat [Adnunat Pty Ltd v ITW Construction Systems Australia Pty Ltd [2009] FCA 499] in the light of the High Court’s comments in Spencer [Spencer v Commonwealth (2010) 241 CLR 118; [2010] HCA 28], in my view, there is no reasonable prospect of Dr Vatarescu’s application succeeding. In the words of Lord Woolf, quoted by Lord Hope, and cited with approval by the High Court in Spencer, unfortunately, the current matter falls into the category of those that are “not fit for trial at all.”

THE APPLICATION FOR LEAVE

16    The application for leave to appeal contends that the Federal Magistrates Court erred in various ways including: – (i) accepting without question statements made by the respondent about “unspecified guidelines for internal use” overriding legal obligations and that the employment service provider was responsible for complying with and implementing legislative requirements, (ii) disregarding the contents of the relevant legislation, (iii) disregarding the respondent’s clear admissions that it had disregarded the legislation, and (iv) perpetrating a miscarriage of justice based on distortions of material facts and evidence and misrepresentation of the content of the relevant legislation. The application for leave also quotes paragraph 1.3.4.20 of a document entitled “Guide to Social Security Law,” stating that “Australian Government employees have a duty of care to the public when performing their duties…A breach of duty of care can result from negligent advice and/or negligent action”.

17    The application is supported by a draft notice of appeal and submissions in chief and reply. The draft notice of appeal largely repeats the content of the application for leave to appeal. The submissions also repeat this content and annex other material including extracts from the Social Security Act, as well as an explanation of the applicant’s case that, by failing to implement requirements of the legislation as discussed in the guide document “A job seeker’s guide to Job Network”, the respondent breached its duty of care to the applicant and caused the applicant loss and damage described as undermining the applicant’s “efforts to develop economically viable activities” and loss of entitlements. The applicant also filed an affidavit stating that he was still waiting for the respondent to provide legal grounds for certain penalties imposed on him in 2009 and a document assessing the compliance to the activity agreement with the relevant legislation.

18    For its part, the respondent contends that nothing in the application for leave or supporting documents indicates any basis upon which it could be concluded that the decision of the Federal Magistrates Court was attended by sufficient doubt or that, if the decision were assumed to be wrong, the applicant would suffer any substantial injustice if the application for leave is refused.

DISCUSSION

19    As the respondent submitted, the reasons for judgment of the Federal Magistrates Court do not provide any reasonable basis for concluding that the decision leading to the order for summary dismissal of the application is attended by any real doubt. Nor do the circumstances indicate that, even if the decision of the Federal Magistrates Court is assumed to be wrong, a refusal to grant leave to appeal will result in any substantial injustice.

20    Nothing in the application for leave, draft notice of appeal or submissions in support identify any real basis upon which it is said the Federal Magistrates Court erred. To the contrary, there is no reference to the alleged statements which the Federal Magistrates Court is said to have unquestioningly accepted in the reasons for judgment of that Court. The decision of the Federal Magistrates Court was not based on any acceptance, unquestioning or otherwise, of the statements of apparent concern to the applicant. Moreover, no material provides support for the allegations that the Federal Magistrates Court disregarded and failed to apply the relevant legislation and alleged admissions by the respondent in that regard. It is apparent that, whatever the basis for the applicant’s concerns about these matters, it finds no source in the reasons for judgment of the Federal Magistrates Court. The decision of the Federal Magistrates Court, as the reasons for judgment disclose, was not based on the matters that appear to concern the applicant. It was based, and properly so, on consideration of the applicant’s claims (vague and unsupported as they were) against orthodox legal principles about the existence of a duty of care and breach sounding in damages. As the respondent submitted, the applicant’s claims of negligence by the respondent did not rise higher than “vague assertions without any proper particularisation of the facts which might be said to constitute negligence”. It is this lack of any proper identified or identifiable factual foundation which led the Federal Magistrates Court to summarily dismiss the applicant’s claim. The decision of the Federal Magistrates Court in this regard is not attended by any real doubt and certainly not sufficient doubt to warrant the grant of leave to appeal.

21    The applicant’s oral submissions on the leave application also did not assist in establishing a proper basis for the grant of leave to appeal. The applicant filed a further document summarising his case as the “respondent imposed penalties on the applicant under the Social Security Act but failed to produce the legal ground for the penalties”. Apart from repeating the substance of the earlier contentions, this document, and the applicant’s oral submissions, referred to the crucial point as being an inconsistency between the decision of the Federal Magistrates Court that the present proceeding was identical to the earlier proceeding and the fact that, according to the applicant, [22] of the reasons for judgment accepted that “the matter of non-implementation of the relevant legislation by the respondent has not been dealt with, in court”.

22    Paragraph 22 of the reasons for judgment is in these terms:

The 30th November submissions did a number of things. First, and rather disconcertingly in my view, the Applicant contended that her Honour, Stone J “ignored the question of non-implementation of the relevant legislation by the respondent….”. It is not appropriate to slight her Honour’s decision. Respectfully, Stone J dealt with the issues before the Court.

23    It may be seen that [22] does nothing more than record the applicant’s contention about the previous application for leave to appeal which Stone J dismissed. More to the point, the Federal Magistrates Court did not summarily dismiss the present application on the basis that it was the same as the previous application. So much is clear from [54] of the reasons for judgment in which the Federal Magistrates Court took pains to characterise its discussion about the similarities between the two cases as mere comment, rather than a factor upon which the summary dismissal depended. This is demonstrated by the references in [54] to the discussion being “by way of comment only”, as well as the words “it may be that” and “In this regard I simply note that…”. In other words, the similarity between the two proceedings was not material to the summary dismissal. It was based on the lack of any proper identified or identifiable foundation of an action in negligence by the applicant against the respondent.

24    The applicant otherwise submitted that the guidelines on which the respondent relied “do not exist”. As noted, the problem with this submission is that, again, the summary dismissal did not depend on the existence or non-existence of any guidelines.

25    Further, and as the respondent submitted, nothing indicates that the applicant would suffer any substantial injustice if leave is refused. The applicant has had at least two opportunities to formulate a meaningful claim against the respondent, first in 2009 and then in 2011. The applicant has failed to identify facts which, on any view consistent with legal principle, could lead to a finding of negligence against the respondent. As explained to the applicant in 2009, his perception of incompetence does not found any legal cause of action against the respondent.

26    The application for leave to appeal should be dismissed with costs.

Associate:

Dated:    2 March 2012