The latest from the Federal Court: July 2017

TORT LAW

Misfeasance in public office – elements of the tort – whether complaint to regulators was exercise of power attached to public office

In Nyoni v Shire of Kellerberrin [2017] FCAFC 59 (13 April 2017) the Full Federal Court by majority allowed an appeal in part. The successful appeal ground concerned the tort of misfeasance in public office. The other appeal grounds, which raised issues such a trespass and misleading or deceptive conduct, failed.

The appellant, Mr Nyoni, was a pharmacist who operated the only pharmacy in Kellerberrin, Western Australia.

He contended that Mr Friend, the Chief Executive Officer (‘CEO’) of the Kellerberrin Shire Council (‘Shire’), provided false information about the pharmacy to the Pharmaceutical Council of Western Australia and the Western Australian Department of Health in order to have to take action against Mr Nyoni with the effect of causing him to cease operating the Kellerberrin pharmacy and ultimately be replaced by another pharmacist.

The primary judge dismissed the claim of misfeasance in public office on the basis that Mr Friend was not exercising the powers attaching to his public office of CEO when making the complaint about Mr Nyoni’s conduct to the regulatory bodies (at [66]).

The key issue in the appeal concerning misfeasance in public office was whether the primary judge was correct to hold that Mr Friend did not exercise the powers attaching to his public office of the Shire’s CEO when making his complaint to the regulators.

The majority of Full Court (North and Rares JJ) undertook a detailed examination of Australian and overseas jurisprudence regarding misfeasance in public office (at [76]-[100]). This included the High Court authorities of Northern Territory v Mengel (1995) 185 CLR 307 and Federal Commissioner of Taxation v Futuris Corporation Ltd (2008) 237 CLR 146. The joint judgment of North and Rares JJ explained at [97]: ‘The elements of the tort of misfeasance in public office have been crafted carefully to ensure that they do not encompass the negligent or unintentional acts or omissions of a public official.

The tort requires, first, a misuse of an office or power, secondly, the intentional element that the officer did so either with the intention of harming a person or class of persons or knowing that he, she or it was acting in excess of his, her or its power, and, thirdly, that the plaintiff (or applicant) suffered special damage or, to use Lord Bingham’s more modern characterisation, “material damage” such as financial loss, physical or mental injury, including recognised psychiatric injury (but not merely distress, injured feelings, indignation or annoyance): see Watkins [2006] 2 AC at 403 [7], 410 [27]’.

North and Rares JJ found that each of these elements was established. Based on the primary judge’s findings, Mr Friend acted for an ulterior and improper purpose of intending to injure Mr Nyoni (at [75] and [118]). Further, the making of the allegation by a public officer or body, such as Mr Friend or the Shire, to another government agency or authority with regulatory powers over a person in Mr Nyoni’s position should be presumed (as it would in cases of slander) to cause sufficient material or actual damage to support the action of misfeasance in public office (at [101]).

Although Mr Friend did not have power in his capacity as the Shire’s CEO to direct the regulator’s actions, the majority held that the position of CEO included the power to make complaints to other governmental authorities about matters directly affecting the interests of the Shire (at [106]).

In an analysis of the law at [109], the joint judgment stated: ‘The tort of misfeasance in public office involves a misuse of the power of the office. The officer must either intend that misuse to cause harm (whether or not the exercise of the power is within its scope) or know that he or she is acting in excess of his or her power: Mengel 185 CLR at 345. That is, depending on the officer’s state of mind in exercising the power, the misuse can be one that would be within the power (ie a use that, if coupled with an intention to use it that was not to cause harm, would be lawful) or in excess of the power (i.e. a use for which, in essence, there is no power because the officer knows that the act is beyond – in excess of – the power).

Nonetheless, it is necessary to establish that the alleged misfeasance is connected to a power or function that the officer has by virtue, or as an incident, of his or her public office’.

The majority distinguished cases involving false reports to superiors (such as Emanuele v Hedley (1998) 179 FCR 290) on the basis that Mr Friend’s exercise of his power was complete upon making the complaint, and that the regulatory bodies were not superiors (at [111]-[114]).

The majority judges remitted the assessment of damages, including aggravated and or exemplary damages, to the primary judge who had the advantage of seeing and hearing the witnesses over a lengthy trial (at [119]).

Justice Dowsett dissented. His Honour found that it had not been demonstrated that safeguarding the availability of pharmaceutical services in Kellerberrin was part of the Shire’s function, let alone the function of its CEO (at [164]-[165]). Further, Dowsett J held Mr Friend’s conduct to be no more performed in public office than the reporting of a conversation to a superior as in Emanuele (at [165]).