FEDERAL COURT OF AUSTRALIA

Clasul Pty Ltd v Commonwealth of Australia [2014] FCA 1133

THE COURT ORDERS THAT:

1.    Leave be granted to the applicants to amend the further amended originating application in the form of annexure “MPW1” to the affidavit of Murray Patrick Watt affirmed on 8 August 2014.

2.    Leave be granted to the applicants to amend the third further amended statement of claim in the form behind tab 5 of the bundle of materials provided to the Court on 3 September 2014.

3.    The matter be stood over to 29 October 2014 for argument on the question of the costs of the applicants’ amended interlocutory application dated 21 August 2014.

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

REASONS FOR JUDGMENT

1    This is a representative action brought under Part IVA of the Federal Court of Australia Act 1976 (Cth) (“Federal Court Act”), claiming damages against the respondent (“Commonwealth”) for financial losses allegedly suffered following the outbreak of equine influenza in large parts of New South Wales and Queensland in August 2007. The applicants represent 587 group members.

2    The applicants allege that the source of the outbreak was the Eastern Creek Quarantine Station in western Sydney (“Quarantine Station”). It is common ground that equine influenza was brought into Australia by one or more infected horses which arrived at the Quarantine Station on 8 August 2007. It is alleged that, between about 8 and 18 August 2007, the virus was transported out of the Quarantine Station by a visitor who had come into contact with an infected horse, and then left the Station without taking appropriate steps to disinfect themselves or their clothing or equipment. It is alleged that the virus was able to escape from the Quarantine Station as a result of failures on the part of the Commonwealth to impose appropriate conditions on the use and operation of the Quarantine Station or as a result of failures on the part of the Commonwealth Department of Agriculture, Fisheries and Forestry (“Department”) in the management and operation of the Quarantine Station.

3    The applicants allege that the Commonwealth has both direct and vicarious liability for their losses.

4    The direct liability case is that the Commonwealth, as occupier and lessee of the Quarantine Station, owed a duty of care to the applicants and the group members to take reasonable care to prevent an outbreak of equine influenza from the Quarantine Station. It is alleged that this duty of care was breached by the Commonwealth’s failure to impose strict conditions that it ought reasonably to have imposed on entry to, and use of, the Quarantine Station, which breach or breaches caused the claimed losses.

5    The vicarious liability case is based on alleged omissions on the part of seven named Commonwealth employees within the Department, who were responsible at various times for the management and operation of the Quarantine Station. Senior counsel for the Commonwealth, Mr Weber SC, sought to emphasise that the vicarious liability case depends upon distinct findings of negligence on the part of the Commonwealth employees for whose negligence the Commonwealth is vicariously liable.

6    The applicants now seek leave to amend their further amended originating application (“current originating application”) and third further amended statement of claim (“current statement of claim”). Some amendments are not opposed, and leave is granted to make those amendments. However, the application is opposed in relation to amendments which seek to raise the following matters:

(1)    A claim based on the Commonwealth’s vicarious liability for the allegedly negligent omissions of an eighth Commonwealth employee, Mr Graham Turner. Mr Turner was at relevant times employed by the Commonwealth as the Australian Quarantine and Inspection Service (“AQIS”) Regional Manager for New South Wales (“Turner amendments”);

(2)    The introduction of new procedures at the Quarantine Station after the August 2007 outbreak (“New Procedure amendments”).

7    As I understood the submissions of senior counsel for the applicants, Mr Leopold SC, the Turner amendments reflect an attempt to identify the person or persons who failed to ensure the implementation of relevant procedures that would have prevented the outbreak of equine influenza from the Quarantine Station.

8    The Commonwealth opposes the Turner amendments on the grounds that they raise a new cause of action which is time-barred, and which does not arise out of the same or substantially the same facts as the causes of action currently pleaded.

9    The parties agree that the Turner amendments, if allowed, would add an additional cause of action against the Commonwealth. Further, the applicants accept that the new cause of action is time-barred (as is any similar claim that might have been made directly against Mr Turner). However, the applicants contend that the new cause of action arises out of substantially the same facts as the causes of action currently pleaded.

10    As to the New Procedure amendments, the Commonwealth contends that they should not be allowed because they do not contain any allegations material to the pleaded causes of action.

11    The Commonwealth did not tender any evidence in opposition to the application. There is no suggestion that the Commonwealth is prejudiced by the amendments, except to the extent that it would be deprived of a limitation defence.

Proposed amendments

Originating application

12    The proposed second further amended originating application (“proposed originating application”) is annexure “MPW1” to the affidavit of Murray Patrick Watt made on 8 August 2014. Mr Watt is the solicitor for the applicants.

13    The proposed amendments comprise amendments to paragraph 10 of that document, as well as consequential amendments. All proposed amendments in the proposed originating application are Turner amendments.

Statement of claim

14    The proposed fourth further amended statement of claim (“proposed statement of claim”) is behind tab 5 in the bundle of materials provided to the Court at the hearing of the application.

15    The proposed amendments to the current statement of claim comprise:

(1)    Turner amendments, in paragraphs 35(ba), 37A, 147A, 147B, 244A-T, 306A, 311A, 317(ba) and 320A of the proposed statement of claim;

(2)    New Procedure amendments, in paragraphs 128A, 141A-F, 223(r), 242, 262, 282 and 302 of that document;

(3)    The amendments which are not opposed, in paragraphs 7, 27, 124, 125, 126, 307(m), 308(k), 309(i) and 335A.

Circumstances leading to application for leave to amend

Turner amendments

16    The proceedings were initially commenced in the Supreme Court of Queensland in 2009. In April 2013, this Court made orders by which the claim and amended statement of claim filed in the Supreme Court were to stand as the originating application and statement of claim respectively in these proceedings.

17    The applicants filed a further amended statement of claim in May 2013, followed by a second further amended statement of claim in July 2013 and the current statement of claim in August 2013. In the current statement of claim, it is alleged that two named Commonwealth employees (Mr Hankins, and his predecessor Mr Hamid), in their role as manager of the Quarantine Station, were responsible for the implementation of operating procedures and work instructions at the Quarantine Station.

18    On 14 August 2013, the Commonwealth filed its defence to the current statement of claim. According to Mr Watt’s affidavit made on 12 August 2014 and filed in support of the application, up until that time, Mr Watt had expected the Commonwealth to admit that Mr Hankins and/or Mr Hamid were responsible for the implementation of the relevant operating procedures and work instructions. However, this was denied. Consequently, Mr Watt formed the view that the applicants would need to prove which Commonwealth officer was responsible for the implementation of the operating procedures and work instructions. The basis for the formation of this view was not explored at the hearing, but the necessity of identifying the relevant officer or officers with the relevant responsibility appears to be common ground: cf Roe v Minister for Health [1954] 2 QB 66 at 91.

19    Mr Watt then caused steps to be taken which led to the identification of Mr Turner as a Commonwealth employee who, in addition to the employees already named in the current statement of claim, was possibly one of those with the relevant responsibility.

20    In the course of endeavouring to agree facts with the Commonwealth, Mr Watt sought agreement about who, if anyone, was responsible for the implementation of the operating procedures and work instructions. It seems that the parties were unable to agree on relevant facts. I was not informed of the precise ambit of the dispute.

21    The limitation period for actions in negligence arising out of the August 2007 equine influenza outbreak expired by the end of 2013, the applicants each having suffered loss before 31 December 2007.

22    Mr Watt gave the following evidence:

[23] I accept that it would have been possible to apply at an earlier date to make the amendments now sought. However, the process of identifying the significance of Graham Turner… did not occur until after the limitations period had already expired in relation to any cause of action based on the vicarious liability of the Commonwealth for any breach of duty resulting from relevant acts or omissions of Mr Turner. I thought it appropriate to proceed down the path of seeking to address Mr Turner as part of the agreed facts process, as described above, before seeking to amend the [current statement of claim] to introduce allegations concerning Mr Turner. I thought that that was not inappropriate given that that process only began after the relevant limitations period had already expired. Further, the Applicants have already amended their pleading several times and I thought it appropriate to deal with the Turner amendments at a time when a number of amendments could be dealt with in a single “round” as is now sought to be done, rather than deal with each individual amendment each time the appropriateness of an amendment was recognised, given that I could not perceive any prejudice to the Commonwealth by doing so.

New Procedure amendments

23    Mr Watt’s evidence was that the “relevance of the matters [in the New Procedure amendments] occurred to [him] in about February 2014. [He] thought it appropriate that they should be dealt with in the next ‘round’ of amendments.”

24    The reason why the applicants seek to add them was set out in a letter from the applicants’ solicitors dated 1 August 2014, as follows:

The proposed amendments regarding the new procedures implemented at Eastern Creek are relevant as to whether the risk of an outbreak of equine influenza was readily obviated by the Commonwealth. In particular, it is the applicants’ case that the subsequent adoption of those standards show that it was feasible for the Commonwealth to implement the procedures the applicants plead would have prevented the spread of equine influenza from [the Quarantine Station]. The allegations are material facts. They constitute a component of the causes of action relied upon.

Legal principles concerning amendments

Statutory framework

25    Section 59(2B) of the Federal Court Act provides:

(2B)    The Rules of Court may make provision for:

(a)    the amendment of a document in a proceeding; or

(b)      leave to amend a document in a proceeding;

even if the effect of the amendment would be to allow a person to seek a remedy in respect of a legal or equitable claim that would have been barred because of the expiry of a period of limitation if the remedy had originally been sought at the time of the amendment.

26    Section 59(2B) was introduced in 1994 to overcome the rule in Weldon v Neal (1887) 19 QBD 394 (“Weldon v Neal”), following comments made by Toohey J in the decision in Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 (“Wardley”). The history is explained in McGrath v HNSW Pty Ltd (2014) 308 ALR 542 (“McGrath”) at [34] to [38]. In Weldon v Neal at 395, Lord Esher MR (with the concurrence of Lindley and Lopes LJJ) said:

We must act on the settled rule of practice, which is that amendments are not admissible when they prejudice the rights of the opposite party as existing at the date of such amendments. If an amendment were allowed setting up a cause of action, which, if the writ were issued in respect thereof at the date of the amendment, would be barred by the Statute of Limitations, it would be allowing the plaintiff to take advantage of her former writ to defeat the statute and taking away an existing right from the defendant, a proceeding which, as a general rule, would be, in my opinion improper and unjust

27    As explained by Ormiston JA in Agtrack (NT) Pty Ltd (t/as Spring Air) v Hatfield (2003) 7 VR 63 at [27] and following, the precise scope of the rule in Weldon v Neal is not entirely clear. At [31], Ormiston JA noted that the primary difficulty concerned what amendments to factual allegations gave rise to a new cause of action.

28    Part 8 of the Federal Court Rules 2011 (Cth) (“Rules”) is entitled “Starting Proceedings”. Division 8.3 is headed “Amendments to an originating application”. Rule 8.21 provides relevantly:

(1)    An applicant may apply to the Court for leave to amend an originating application for any reason, including:

…

(g)    to add or substitute a new claim for relief, or a new foundation in law for a claim for relief, that arises:

(i)    out of the same facts or substantially the same facts as those already pleaded to support an existing claim for relief by the applicant; or

(ii)    in whole or in part, out of facts or matters that have occurred or arisen since the start of the proceeding.

(2)      An applicant may apply to the Court for leave to amend an originating application in accordance with paragraph (1)… (g)(i) even if the application is made after the end of any relevant period of limitation applying at the date the proceeding was started.

29    Part 16 of the Rules is concerned with pleadings. By r 16.53, unless r 16.51 applies, a party must apply for the leave of the Court to amend a pleading.

30    The applicants rely on r 8.21(1)(g)(i) and r 8.21(2) in relation to the Turner amendments. They contend that the Turner amendments add a “new foundation in law” for the existing claim for relief (being the claim for damages and ancillary relief) that “arises out of substantially the same facts as those already pleaded to support” that claim for relief. The applicants acknowledge that the application is made after the end of a relevant period of limitation, and involves pleading a new cause of action.

31    The parties agree that the Court’s discretion to grant leave to amend a pleading should be exercised conformably with the requirements of r 8.21(1)(g)(i), so that leave to amend the current statement of claim to add the Turner amendments should be granted only if the Court is satisfied that the new foundation in law for the claim for relief, disclosed in the proposed amended statement of claim, arises out of substantially the same facts as those already pleaded to support an existing claim for relief by the applicants. The applicants cited McGrath at [50] and [51] in support of this proposition.

32    There was one point of difference between the parties as to the meaning of r 8.21(1)(g)(i). The Commonwealth contended that the words “claim for relief” refer to a cause of action. Thus, the Turner amendments were said to add a new claim for relief, rather than merely a new foundation in law for an existing claim for relief.

33    Whether the Commonwealth is correct may depend upon what is meant by “cause of action”. In Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 610, Brennan J said:

There is an imprecision in the meaning of the term cause of action, which is sometimes used to mean the facts which support a right to judgment (see per Williams J. in Carter v. Egg and Egg Pulp Marketing Board (Vict.) (1942) 66 CLR 557, at pp 600, 601); sometimes to mean a right which has been infringed (see Serrao v. Noel (1885) LR 15 QBD 549), and sometimes to mean the substance of an action as distinct from its form (see Krishna Behari Roy v. Brojeswari Chowdranee (1875) LR 2 Ind App 283).

34    Arguably in contrast, in Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234 (“Do Carmo”), Wilson J said (in construing the Limitation Act 1969 (NSW)):

The concept of a “cause of action” would seem to be clear. It is simply the fact or combination of facts which gives rise to a right to sue. In an action for negligence, it consists of the wrongful act or omission and the consequent damage: cf. Cooke v. Gill (1873) LR 8 CP 107, at p 116; Read v. Brown (1888) 22 QBD 128, at p 131; Trower and Sons Ltd. v. Ripstein [1944] AC 254, at p 263; Board of Trade v. Cayzer, Irvine & Co. Ltd. [1927] AC 610, at p 617 ; Shtitz v. C.N.R. [1927] 1 DLR 951, at p 953; Williams v. Milotin (1957) 97 CLR 465, at p 474.

35    In Borsato v Campbell [2006] QSC 191 at [8], PD McMurdo J said:

The term ‘cause of action’ was defined in Cooke v Gill as being ‘every fact which is material to be proved to entitle the plaintiff to succeed’, a definition which many judgments have employed in the context of this rule or its equivalent ... But it has not been applied literally, for otherwise any new fact to be added to a plaintiff’s case would be treated as raising a new cause of action which required leave in the context of a rule such as r 376(4). So in Allonnor Pty Ltd v Doran for example, there is an indication of what the Court of Appeal in Thomas v State of Queensland subsequently endorsed as a ‘fairly broad brush comparison between the nature of the original claim and that to which it is sought to be amended’. The dividing line is between the addition of facts which involve a new cause of action and those which are simply further particulars of the cause already claimed, and its location involves a question of degree which can be argued, one way or the other, by the level of abstraction at which the plaintiff’s case is described. (citations omitted)

36    Rule 8.21(1)(g) is concerned with amendments to originating applications. The requirement to state the relief claimed in an originating application is set out in r 8.03 of the Rules. In the context of the Rules, including the separate requirement for pleadings in Part 16, claims for relief required to be included in an originating application generally comprise the orders and remedies sought, including any declarations sought to be made, but do not include the cause or causes of action relied upon, unless that is specifically required by a particular rule or form prescribed under the Rules. Accordingly, in my opinion, the words “claim for relief” in r 8.21(1)(g) should not be understood to refer to the causes of action upon which the applicant relies to support its claim or claims for relief.

37    In support of the Commonwealth’s construction that “claim for relief” should be read widely, Mr Weber SC submitted that it was anomalous to refer to the inclusion of a “new foundation in law for a claim for relief” in an originating process. However, there are numerous forms of originating application which may require the inclusion of details amounting to a “foundation in law for a claim for relief”. An example is form 79 (Originating application under the Fair Work Act 2009 alleging dismissal in contravention of a general protection). Under the heading “Details of claim under the Fair Work Act”, form 79 requires the applicant to “describe each general protection that the applicant claims has been contravened”.

38    Accordingly, while I accept that the Turner amendments involve the addition of a “new foundation in law” for the applicant’s existing claim for relief, I do not agree that the Turner amendments involve the addition of a new claim for relief within the meaning of r 8.21(1)(g)(i).

39    As to the New Procedure amendments, the applicants rely on r 16.02(1)(d) of the Rules which relevantly provides that a pleading must “state the material facts on which a party relied that are necessary to give the opposing party fair notice of the case to be made against that party at trial, but not the evidence by which the material facts are to be proved”.

40     The power to grant leave to amend under r 16.53 is broad, and should be with regard to the overarching purpose set out in s 37M of the Federal Court Act: University of Sydney v ResMed Limited (No 5) [2012] FCA 232 at [14].

Case law relevant to Turner amendments

41    The following relevant propositions were not in contest:

(1)    The rules require the Court to focus on the facts currently pleaded and to determine whether the new legal foundation for the claim arises out of the same, or substantially the same facts: Carter, in the matter of Spec FS NSW Pty Ltd (In Liquidation) [2013] FCA 1027 at [38]; Darcy v Medtel Pty Limited (No 3) [2004] FCA 807 at [30];

(2)    The question is whether the “overlap is so great that the new cause of action can fairly be said to arise out of substantially the same facts as the old cause of action”: New South Wales v Radford (2010) 79 NSWLR 327 at [69], citing Brickfield Properties Ltd v Newton [1971] 1 WLR 862 at 880 (Cross LJ) (“Brickfield”).

42    In Brickfield, the plaintiffs commenced proceedings claiming damages for negligence and breach of duty by the defendant as an architect employed by the plaintiffs in supervising the building of six blocks of flats. By their statement of claim, they alleged negligence in both the design of the buildings and the supervision of their construction. The Court of Appeal agreed that the design claim and the supervision claim each “arose out of substantially the same facts”. Sachs LJ (at 873, with whom Edmund Davies LJ agreed at 879) referred to the fact that there was a single continuing retainer of the defendant architect, and observed that the design would have to be closely examined even if the claim only related to negligence of supervision, particularly having regard to the allegation that the design needed amplification during the construction phase. Cross LJ (at 880) said “So far as I can judge, the facts out of which the new cause of action for negligent design…arises will include many but not all of the facts out of which the cause of action for negligent supervision alleged in the writ arises and will also include further facts which are not relevant to the claim in the writ.”

43    In Draney v Barry [2002] 1 Qd R 145 (“Draney”) at [57], Thomas JA said, in considering a relevantly similar rule:

I do not think that “substantially the same facts” should be read as tantamount to the same facts, and consider that the need to prove some additional facts is not fatal to a favourable exercise of discretion under s 376(4) [of the Uniform Civil Procedure Rules 1999 (Qld)]. If the necessary additional facts to support the new cause of action arise out of substantially the same story as that which would have to be told to support the original cause of action, the fact that there is a changed focus with elucidation of additional details should not of itself prevent a finding that the new cause of action arises out of substantially the same facts. In short, this particular requirement should not be seen as a straitjacket.

44    Thomas JA cited Allonnor Pty Ltd v Doran [1998] QCA 372 (“Allonnor”), in which the Queensland Court of Appeal upheld a decision allowing leave to amend outside the limitation period to plead an additional injury suffered during the course of employment, where similar injuries allegedly arose out of the same activity on the same day. In Allonnor, McPherson JA said:

On any view of what is pleaded, the plaintiff was, at the end of the day in question, left with physical injury to his body, which resulted from the same cause, which was lifting (whether on one or more than one occasion) in the course of the same employment with the same employer. It is not unreasonable to state it in this way, although admittedly it is to some extent a matter of the level of generality at which the proposition is expressed.

45    In Thomas v State of Queensland [2001] QCA 336 at [19] (“Thomas”), the Court said that this passage “may be thought to encourage a fairly broad brush comparison between the nature of the original claim and that to which it is sought to be amended” and that this conclusion accorded with the statement of Thomas JA in Draney set out above. Thomas involved a claim for damages for personal injuries sustained in a road accident. There was a claim of negligence based on an allegation that the defendant was carrying out roadworks on the date of the accident, which was said to have caused red soil to accumulate on the road surface. It transpired that there had not been any roadworks near the site of the accident. The plaintiff sought to amend to identify other acts of negligence which allegedly caused the accumulation of red soil. Leave to amend was refused in relation to amendments which raised allegations of negligence at different times to the period the subject of the original pleading, but allowed amendments alleging different acts of negligence referrable to the period that negligence was originally alleged to have occurred.

46    At [19], the Court said that “the story”, referred to by Thomas JA in Draney, was a “shorthand reference to the matters that the plaintiff has to prove”.

47    A similar expression was used by Davies LJ in Dornan v J.W. Ellis & Co Ltd [1962] 1 QB 583 (“Dornan”) at 593 to 594, although that case was not cited in Draney. In Dornan, the Court of Appeal considered a claim for damages for personal injuries caused by the negligence and/or breach of statutory duty of the defendants, their servants or agents. The original claim particularised the alleged negligence as a failure to provide the plaintiff, a worker employed by the defendant, with means of protecting his eyes against a defective tool. The amendment alleged that the accident had been caused by the negligence of a fellow worker or other servants or agents of the defendants, and that the defendants were therefore vicariously liable. On appeal, the amendment was allowed. Davies LJ, said:

The story that is now set up by the plaintiff is the same story as that set up all along, namely, that the plaintiff lost his eye from a piece of the drill which was being operated by [the fellow worker]. And, as I think, what is now sought to be done is not to make out a new case of negligence, but to persist in the old story and invite the judge at the trial to approach it, to interpret it, from a different angle or aspect. It is a different approach to the same main story of the accident.

48    At 592, Holroyd Pearce LJ said:

The fresh allegations do not introduce a new cause of action, nor, in my view, “a new set of ideas.” The original allegations were not against Stewart: but they were allegations that the defendant company's servants or agents had failed in the provision of goggles and a proper drill. Admittedly that was an allegation of a breach of duty for which the company could not avoid liability under the former doctrine of common employment. But it was all part of the allegation that through lack of proper care of the defendants’ their servants or agents the plaintiff suffered injury. The allegation against the fellow-workman was an extension of the case rather than a new case. It must be a question of degree in each case on its particular facts. I regard this as a difficult case which is near the line. Had the judge considered it as a matter of discretion, and come to the conclusion that, though it was possible for him to allow it, yet taking everything into consideration he ought not to do so, I should not interfere with his discretion in the matter. But he did not deal with it in that way. He took the view that because the amended allegation was against the company in respect of their vicarious liability, whereas the previous claim was not, therefore he could not allow the amendment.

49    In Collins v Hertfordshire County Council [1947] KB 598 (“Collins”), the plaintiff’s widow brought an action against the hospital authority following the death of her husband, a patient at the hospital. The statement of claim alleged that the hospital had a defective and negligent system in the provision of dangerous drugs and also that the defendant was vicariously liable for the negligence of a resident medical officer and a visiting surgeon. At the hearing, an application was made for leave to amend the statement of claim by the addition of a claim that the authority was also vicariously liable for the negligence of a pharmacist employed at the hospital. The amendment was allowed, on the basis (at 622) that the alleged negligence of the pharmacist (which involved different conduct from the conduct of the resident medical officer and the visiting surgeon) was not a new cause of action but was a new particular of the existing cause of action. At 621, Hilbery J identified the cause of action relied upon by the plaintiff as “that the death of the plaintiff’s husband was the result of the negligence of the defendants in and about the conduct of their hospital”.

50    The latter two cases may suggest that the Turner amendments do not involve the introduction of a new cause of action. However, it is not necessary for me to consider this question in any detail for two reasons. First, the parties were in agreement that the proposed amendments sought to plead a new cause of action. Second, the issue for me to decide is whether the applicants’ proposed case based on the vicarious liability of the Commonwealth for Mr Turner’s negligence arises out of substantially the same facts as those already pleaded.

51    In Weston v Publishing and Broadcasting Ltd (2011) 83 ACSR 206 at [592], Ward J expressed the view that the question whether a proposed “new cause of action” arises out of “substantially the same” set of facts is to be answered as a matter of general impression, rather than requiring precise similarity of factual circumstances and it is not necessary that all facts be material to each separate cause of action (citing Brickfield at 880). See also New Cap Reinsurance Corporation v Reaseguros Alianza SA (2004) 186 FLR 175 at [89] and [93].

Consideration

Turner amendments: The facts currently pleaded

52    At a high level of generality, the case sought to be added arises substantially out of the facts currently pleaded. To adapt some of the language of the cases set out above, the story set up by the applicants is that they suffered losses from the outbreak of equine influenza in August 2007, as a result of the negligence of the Commonwealth in and about the operation of the Quarantine Station. That negligence allegedly includes negligence for which the Commonwealth is directly liable and negligence on the part of various Commonwealth employees in the course of their employment.

53    To make out its case based on Mr Turner’s negligence, the applicants seek to rely on a great many of the facts already pleaded, particularly concerning matters going to the existence of a duty of care such as risk of harm, foreseeability and vulnerability, the actual events of the outbreak of equine influenza from the Quarantine Station and the harm allegedly suffered.

54    There is a significant degree of commonality between the alleged negligence of Mr Turner, and Messrs Hankins and Hamid, in that each is alleged to have failed to do the following things:

(1)    Implement the “Live Horses Work Instruction” and the “Operations Manual for Horses” (“Operations Manual”) at the Quarantine Station;

(2)    Check and audit the requirements of the Live Horses Work Instruction and the Operations Manual were being implemented at the Quarantine Station and or take all reasonable steps to ensure that that was occurring; and

(3)    To the extent that they were not already covered by the Live Horses Work Instruction and/or the Operations Manual, take all reasonable steps to ensure that strict procedures of a kind already pleaded were being implemented.

Turner amendments: New and different facts

55    The applicants contend that the only substantially different facts from those already pleaded concern Mr Turner’s actual knowledge as to the operation of the Quarantine Station (see proposed paragraph 147A(a)) and as to a November 2003 review of the “Live Animal Import offices” within the Department. The applicants submitted, and I accept, that these allegations are within a very narrow compass.

56    Mr Turner’s alleged negligence comprises nine omissions, set out in paragraph 306A of the proposed statement of claim. As well as the three omissions set out in paragraph 54 above, it is alleged that Mr Turner failed to do the following things:

(1)    Take all reasonable steps to ensure the Manager and staff of the Quarantine Station were aware of, familiar with and trained in any procedures they were required to follow in respect of the live animal imports and post-entry animal quarantine program for horses;

(2)    Take reasonable steps to implement processes by which he could be assured that AQIS employees at the Quarantine Station knew what work instructions or standard operating procedures applied to their work;

(3)    Take reasonable steps to implement systems to ensure that operating procedures and work instructions were complied with at the Quarantine Station;

(4)    Take reasonable steps to implement systems to ensure that the Live Horses Work Instruction and the Operations Manual were complied with at the Quarantine Station;

(5)    Take reasonable steps to ensure that appropriate officers were auditing compliance with operating procedures and work instructions at the Quarantine Station;

(6)    Take reasonable steps to ensure that appropriate officers were auditing compliance with the Live Horses Work Instruction and the Operations Manual at the Quarantine Station;

(7)    Take reasonable steps to implement adequate processes to alert him of non-compliance with the Live Horses Work Instruction and the Operations Manual at the Quarantine Station.

57    The Commonwealth’s opposition to the Turner amendments emphasised the necessarily different elements of a claim based on vicarious liability. That is, the new case is based on allegations as to Mr Turner’s duty of care, Mr Turner’s breaches of duty and whether Mr Turner’s breaches caused the alleged loss. As to duty of care, the new case will require findings about Mr Turner’s roles and responsibilities, his actual and constructive knowledge and other matters necessary to decide whether he personally owed a duty to the applicants. The Commonwealth contended that a correct analysis makes plain that all of the critical elements of a claim of vicarious liability for alleged negligence of an employee involved consideration of matters unique to that employee. It was contended that the problem with the proposed amendments is of a “quite fundamental nature and inherently caught up with the very concept of vicarious liability”.

58    Ultimately, Mr Weber SC submitted that it is because of the very nature of vicarious liability that the amendment should not be allowed.

59    The Commonwealth referred to the strict liability theory of vicarious liability, according to which the employer’s liability is derived from the imputation of the employee’s tortious conduct to the employer. This was the analysis preferred by Fullagar J in Darling Island Stevedoring & Lighterage Co Ltd v Long (1957) 97 CLR 36, who said (at 57):

The liability is a true vicarious liability; that is to say, the master is liable not for a breach of duty resting on him and broken by him, but a breach of duty resting on another and broken by another.

60    The Commonwealth also referred to the decision of Windeyer J in Parker v Commonwealth (1965) 112 CLR 295 at 300-301. His Honour said, relevantly:

Whether the so-called “vicarious” liability of a master for the tortious acts of his servant arises because the master is answerable for his servant's torts, or because the acts of his servant are imputed to him so as to make him himself liable in tort, has been much discussed and has provoked differing views, judicial and academic: Staveley Iron & Chemical Co. Ltd. v. Jones (1956) AC 627; Tooth & Co Ltd v. Tillyer (1956) 95 CLR 605 and references were given; see also the article by Doctor Glanville Williams in 79 Law Quarterly Review 522 and Darling Island Stevedoring and Lighterage Co. Ltd. v. Long (1957) 97 CLR 36 But, however the principle of liability should be expressed, I think that the Commonwealth is only liable for the acts or omissions of a servant if the servant would himself be liable: cf. Hall v. Whatmore [1961] VR 225, at p 229. In the recent case of Imperial Chemical Industries Ltd. v. Shatwell [1965] AC 656, at p 686, Lord Pearce said: “Unless the servant is liable the master is not liable for his acts; subject only to this, that the master cannot take advantage of an immunity from suit conferred on the servant (Broom v. Morgan [1953] 1 QB 597)”.

61    In Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at [34] and [35], the High Court said:

[34]…In Darling Island Stevedoring and Lighterage Co Ltd v Long, Fullagar J expressed the view, surely correctly, that the modern doctrine respecting the liability of an employer for the torts of an employee was adopted not by way of an exercise in analytical jurisprudence but as a matter of policy. (citations omitted)

62    In Fleming’s The Law of Torts eds. C Sappideen, P Vines (10th ed, Lawbook Co, 2011) at [19.20], the authors state:

According to the generally accepted modern view, the master’s liability is genuinely vicarious and not based on any “constructive” fault of the master. The earlier – untraverseable – fiction that the master was sued for the master’s own negligence in selecting and employing careless servants has long been discarded. The employer’s liability is not based on breach of any personal duty that the employer owed, but on the servant’s tort being imputed to the employer. That this is the true nature of vicarious liability has not been seriously doubted in modern times, despite an occasional unorthodoxy in dealing with certain exceptional situations.

The hallmark of various liability, then, is that it is based neither on any conduct by the defendant nor even on breach of the defendant’s own duty… (citations omitted)

63    As a matter of detail, the Commonwealth noted that unlike all the other Commonwealth employees whose negligence is alleged in the current statement of claim, Mr Turner did not work at the Quarantine Station. As Regional Manager for New South Wales within the Department, his responsibility was considerably wider than merely the Quarantine Station.

Turner amendments: conclusion

64    I am satisfied that the Turner amendments arise out of substantially the same facts as already pleaded. In my view, cases such as Allonor, Draney and Collins tend to support a conclusion that the question is to be determined at the level of generality submitted by the applicants, rather than the Commonwealth.

65    Although I accept the correctness of the Commonwealth’s analysis as to the elements of the new case which the applicants seek to bring, I do not accept that the analysis precludes a conclusion that it arises out of substantially the same facts as the case currently pleaded. In my view, the new case does arise out of substantially the same facts being:

(1)    the harm suffered by the group members;

(2)    the outbreak of equine influenza from the Quarantine Station in August 2007, which is said to have resulted in that harm;

(3)    the circumstances of the management and operation of the Quarantine Station. Those latter circumstances include the very many factual matters relevant to whether one or more Commonwealth employees owed a duty of care to the applicants in connection with the management and operation of the Quarantine Station;

(4)    the alleged failure to implement the Live Horses Work Instruction and the Operations Manual at the Quarantine Station;

(5)    the alleged failure to adopt, or to take all reasonable steps to ensure that, strict procedures were implemented of the kind alleged in the current statement of claim.

66    In this case, the applicants’ case can be fairly characterised as arising out of a single episode, which is the outbreak of equine influenza from the Quarantine Station. The fundamental question is whether the Commonwealth is liable, directly or vicariously, in negligence for the applicants’ losses following the outbreak.

67    In my opinion, the question whether the “overlap is so great that the new cause of action can fairly be said to arise out of substantially the same facts as the old cause of action” is determined by reference to main elements of the cause of action in negligence which are, as Wilson J said in Do Carmo, the wrongful act or omission and the consequent damage. In this case, the alleged damage is identical, and the old and new cases are substantially overlapping as to the alleged wrongful omission or omissions. There is an issue as to which Commonwealth employee or employees, if anyone, was responsible for the alleged wrongful omission or omissions. However, in this case, in my opinion, the introduction of new facts designed to establish the Commonwealth’s liability for all possible wrongdoers in respect of the same damage for the failure to prevent the outbreak of equine influenza in August 2007 does not detract from a conclusion that the overlap between new and old causes of action is so great that it can fairly be said that they each arise out of substantially the same facts.

Discretionary factors

68    In my opinion, discretionary considerations favour the Turner amendments. A central issue in the proceedings is whether there was a failure to implement and ensure compliance with appropriate conditions of entry into and departure from the Quarantine Station. The amendments will facilitate the just resolution of the dispute between the parties according to law by ensuring that the applicants’ claim covers the negligence of all Commonwealth employees for whom the Commonwealth may be vicariously liable in connection with the outbreak of equine influenza that is the subject of the proceedings.

69    The Commonwealth did not dispute the applicants’ contentions that the delay in making the application has been adequately explained and the Turner amendments are unlikely to delay the proceeding, including the trial (for which a date is yet to be fixed).

New Procedure amendments

70    The substantive amendments allege that:

(1)    On or after 24 August 2007, certain written procedures were promulgated in respect of the Quarantine Station (paragraph 128A of proposed statement of claim);

(2)    On 5 December 2007, the Commonwealth issued a standard operating procedure for managing the quarantine risk associated with imported live horses arriving into Australia (paragraphs 141A to 141F of the proposed statement of claim).

71    The issue between the parties is whether the matters pleaded are material facts. It is not disputed by the Commonwealth that the applicants are entitled to adduce evidence, to the extent that it is admissible, as to the matters set out in the proposed amendments. However, the Commonwealth argues that the matters are irrelevant to the applicants’ case as currently pleaded.

72    As to what are material facts, the applicants referred to the decision of French J (as he then was) in Charlie Carter Pty Ltd v SDAEA (WA) (1987) 13 FCR 413 at 417. His Honour there said:

In practice it may be difficult to distinguish between a a “material fact” and a “particular”. Antecedent to that distinction, however, is the definition of the level of generality at which the material facts should be pleaded.

In Ratcliffe v Evans [1892) 2 QB 524 the Court of Appeal comprising Lord Esher MR, Bowen and Fry UJ said at 532:

“ ... it is an ancient and established rule of pleading that the question of generality of pleading must depend upon the general subject-matter.”

Whatever level of generality is adopted in a statement of claim it must, in my opinion, be consistent with the purpose of pleadings, namely to define the issues and thereby inform the parties in advance of the case they have to meet and so enable them to take steps to deal with it - Farrell (formerly McLaughlin) v Secretary of State for Defence [1980] 1 WLR 172 at 179-180 per Lord Edmund-Davies.

There are certain levels of generality of pleading which, while they may bring in all facts necessary to establish a cause of action, are insufficient for the purpose of properly informing the defendant of the case it has to meet. In Bruce v Odhams Press Ltd [[1936] 1 KB 697] it was said to be insufficient merely to allege in general terms a cause of action. The cause of action must be alleged with particularity. Scott LJ at 705 gave the following example:

“For example, it would not be sufficient for a plaintiff in an action of trespass to plead 'the defendant trespassed on my lands and took away and converted to his own use two of my horses' without stating particulars of the time and place when the trespass is alleged to have taken place. A plaintiff must state sufficient particulars of his alleged cause of action which will enable the defendant either to admit it or deny it or otherwise plead a defence to it.”

The sufficiency of the pleading may be judged first by reference to the necessary condition that it disclose a reasonable cause of action and secondly, by reference to the requirement for sufficient particularity that the respondents know in advance the case they have to meet.

73    The applicants contend that the amendments plead facts relevant to the following issues:

(1)    Whether a duty of care was owed;

(2)    The content of any such duty;

(3)    The reasonableness of the standard of care pleaded by the applicants;

(4)    Whether the imposition of a duty of care of the kind alleged by the applicants:

   (a)    Would have interfered unreasonably with the autonomy of any individuals;

   (b)    Consisted of precautions that a reasonable person in the position of the Commonwealth or its employees would have taken; or

   (c)    Would have placed an undue burden on the Commonwealth: cf Caltex Refineries (Qld) Pty Ltd v Stavar (2009) 75 NSWLR 649 at 676 [103] and s 5B of the Civil Liability Act 2002 (NSW) (“Civil Liability Act”).

74    The applicants do not allege that the Commonwealth’s introduction of new procedures is evidence of negligence: cf Civil Liability Act s 5C and Motorcycling Events Group Australia Pty Ltd v Kelly [2013] NSWCA 361 at [193] to [198].

75    As I understood the Commonwealth’s position, it does not dispute that the introduction of the new standard is at least potentially relevant to an issue in the proceedings. In its written submissions, the Commonwealth raised the following three matters:

(1)    The proposed amendments are not material facts, but are simply matters of evidence;

(2)    Section 5C(c) of the Civil Liability Act provides that a post-outbreak step such as those proposed to be pleaded cannot of itself give rise to, or affect liability;

(3)    There is a fundamental disconnect between the proposed pleading of post-August 2007 procedures and the steps which Mr Hankins and Mr Hamid allegedly ought to have take prior to 18 August 2007. The point, as I understood it, was that the duties of care currently pleaded concerned the implementation of existing procedures, a matter to which subsequent procedures was irrelevant.

76    At the hearing, Mr Weber SC conceded that the application should not be determined by reference to the effect of s 5C(c).

77    Mr Leopold SC contended that in the context of the statement of claim, the New Procedures allegations properly constitute material facts. He submitted that their inclusion in the pleading will assist in further defining the issues, as well as informing the Commonwealth of the precise case that will be made against it at trial.

78    There is no suggestion that the New Procedure amendments will give rise to wasted costs, or delay, or will otherwise cause any prejudice to the Commonwealth.

79    Having regard to the “salient features” approach to the determination of the duty of care in a novel case, I accept Mr Leopold SC’s submission that the New Procedure amendments might be treated as material facts.

80    Finally, I am not able to be satisfied from the face of the current pleading that the New Procedure amendments are irrelevant to the case currently articulated because, despite what was put by Mr Weber SC and his junior, Mr Nixon, it is not obvious that the applicants’ case is restricted to complaints about failure to implement existing procedures. For example, there is an allegation of failure to take all reasonable steps to ensure that access to the Quarantine Station out of hours and on weekends was restricted and monitored. It is not obvious that the New Procedure amendments are irrelevant to that allegation.

81    Accordingly, I will also allow the New Procedure amendments.

82    I will hear the parties on the question of costs.

Associate:

Dated:    23 October 2014