Obeid v Lockley [2018] NSWCA 71

Misfeasance in public office been described as a nebulous and ill-defined tort: “its edges are blurred, there are several gaps, and a lot of the detail remains to be filled in.” [1]

On 12 April 2017 the NSW Court of Appeal dismissed an appeal by Mr Edward Obeid and other members of his family. In their judgment, Bathurst CJ, Beazley P and Leeming JA go some way towards filling in some ‘gaps’. The Court of Appeal has:

  1. Adopted a broader interpretation of who is a ‘public officer’ for the purpose of the tort; and
  2. In the face of two conflicting lines of authority, confirmed that the relevant mental element is that the defendant must be either aware of or recklessly indifferent to any risk of harm caused by their unlawful actions (as opposed to the harm being reasonably foreseeable).

The High Court may yet have the final word.

Background

Mr Obeid is a former NSW politician now serving a custodial sentence after a jury found him guilty of misconduct in public office.

The charges that ultimately led to Obeid’s conviction and incarceration arose from an ICAC investigation that ran from 2011 and 2013. Mr Grant Lockley and Mr Paul Grainger, (the ‘respondents’), were members of the staff of ICAC involved in that investigation. On 23 November 2011 the respondents participated in the execution of a search warrant at property related to the Obeid family on which certain documents were found and filmed by ICAC.

Trial

In 2015 Mr Obeid and other members of his family (the ‘appellants’) commenced proceedings in the Supreme Court of NSW, alleging that the respondents had committed the tort of misfeasance in public office in relation to the execution of the search warrant, and the filming of certain documents which was allegedly outside the terms of the search warrant. It was alleged that the unlawful filming of those documents had caused damage to the appellants, particularly reputational damage after a Sydney Morning Herald article was later published.

In 2016 the trial judge Justice Hammerschlag found against the Obeids and gave judgment for the respondents. The trial judge found that the filming of certain documents was outside the terms of the search warrant and unlawful. However, he dismissed the claim for misfeasance on the basis that the respondents were not “public officers”. He also found that the respondents were not aware of or recklessly indifferent to any risk of harm to the appellants.

Judgment

The appellants appealed to the Court of Appeal. The respondents put on a notice of contention challenging the finding that the filming of the documents was outside the terms of the search warrant.

The matter was head on 4 and 5 September 2017. Bathurst CJ wrote the lead judgment, Beazely P and Leeming JA agreeing.

What is a ‘public officer’ for the purpose of misfeasance?

At first instance, the trial judge found that the respondents were not ‘public officers’ for the purposes of the tort, on the basis that their authority to enter the premises and search for and seize documents stemmed from their having been named in the warrant authorised by a Court, and not from any position which they occupied in relation to ICAC. Because the respondents were not exercising a power derived from their official position, the “hallmarks of public office are absent.” The appellants challenged that finding in the Court of Appeal.

Bathurst CJ canvassed all of the Australian authorities and concluded that they demonstrated two matters:

“First, the tortfeasor must be a “holder of a public office”. Second, the act complained of must be the exercise of a public power. However, the cases provide no clear statement of what constitutes the “holding of a public office”, or whether the power exercised has to be “attached” to the public office, or whether it is sufficient that the public officer by virtue of their position is entitled or empowered to perform the public acts in question. However, in my view, the power does not have to be expressly attached to the office.”

Given the ambiguity as to what constitutes “holding a public office”, Bathurst CJ turned to British authorities. He noted that British courts have generally held a “broad view” as to what constitutes a public office. He concluded that the British conception of a ‘public office’ should be followed:

[113]: “It may be that, on the present state of the authorities in this country, the concept of “public office” is not as broad as suggested in some of the more recent United Kingdom authorities. The concept clearly would not include all public employees, particularly those with minimal responsibilities. However, it does not seem to me that the tort of misfeasance in public office is confined only to a person appointed to a particular statutory office which expressly confers statutory powers and responsibilities … Such a narrow definition of “public officer” would defeat the rationale of the tort as expressed by Lord Steyn in Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1 at 190, that “executive and administrative power ‘may be exercised only for the public good’ and not for ulterior or improper purposes”.

[114] In these circumstances, it seems to me that a “public officer” would at least include persons who, by virtue of the particular positions they hold, are entitled to exercise executive powers in the public interest. If such an entitlement is conferred on them and they misuse the power, they may have committed the tort and be liable for damage which results from their conduct.”

Applying this test, His Honour found that the respondents were holding a public office for the purpose of the tort. The respondents had exercised powers under the ICAC Act to apply for and then execute the warrants.

Leeming JA agreed with Bathurst CJ, adding that (at [208]): “it is neither necessary nor appropriate to express a concluded view on the metes and bounds of who is a public officer for the purposes of the tort.” Leeming JA cited with approval the comments of Professor Aronson, who commented that:

“Not all public servants fall within the scope of the misfeasance tort, even though their salaries come from public funds, and even though they may be ‘officers’ for administrative purposes and have to take an oath on appointment. A person might be a public employee but not a public officer. There is in fact no single definition of ‘public officer’ across all contexts”: M Aronson, “Misfeasance in Public Office: A Very Peculiar Tort” (2011) 35 MULR 1 at 43.”

Leeming JA was content with Bathurst JA’s finding that the ICAC officers were ‘public officers’ for the purpose of this case.

Does the reasonable foreseeability of harm to the plaintiff establish malice by the defendant?

At trial, the primary judge found that it was not open to attribute to the respondents recklessness with respect to causing any damage to the appellants. The appellants challenged that conclusion, arguing that the mental element of the tort would be satisfied if the harm was foreseeable. The appellant’s submission relied on Northern Territory v Mengel (1995) 185 CLR 30, where the majority held that: “liability requires an act which the public officer knows is beyond power and which involves a foreseeable risk of harm.”

Bathurst CJ noted that this argument had not been raised in this form at first instance, and for that reason alone he would dismiss it. However, he went on to give it consideration in any event.

After reviewing the authorities, Bathurst CJ did not accept that the foreseeability of harm was sufficient to satisfy the relevant mental state. He reaffirmed that the correct test was actual knowledge by the defendant that harm would occur to the plaintiff, or reckless indifference to that possibility. He held:

At [157]: “An approach which requires a plaintiff to establish that they were likely to suffer harm and that the defendant was either aware of or recklessly indifferent to that risk strikes a correct balance between, on the one hand, the inappropriate imposition of liability on public officers which may deter them from exercising powers conferred on them to be exercised in the public interest, and on the other hand, the protection of persons affected by misuse or abuse of public power.”

In reaching this conclusion, Bathurst CJ noted that he was conscious of his obligation to follow seriously considered dicta from the High Court, but distinguished the present case from Mengel on the basis that he did not consider the High Court in that case were stating by way of dicta that a reasonably foreseeable risk of harm was sufficient in all circumstances.

Bathurst CJ noted that his preferred approach was supported by overseas authority which he found persuasive:

At [171]: “In Three Rivers, each member of the House of Lords stated that reasonable foreseeability of harm was insufficient for the purpose of the tort: at 195 (Lord Steyn); 197 (Lord Hope); 222-223 (Lord Hutton); 230-231 (Lord Hobhouse); 236 (Lord Millett). Lord Hobhouse suggested at 231 that the “use of the words foreseen or foreseeable is to be avoided” because they are “concepts borrowed from the law of negligence”, while the tort of misfeasance in public office concerns deliberate acts. The New Zealand Court of Appeal has reached the same conclusion: Garrett v Attorney-General [1997] 2 NZLR 332 at 349.”

Applying the test, Bathurst CJ found that for the appellants to succeed it was necessary for them to establish that the respondents were aware that filming documents during the search warrant would cause harm, or were recklessly indifferent to such harm. They had failed to do so and the appellant’s appeal failed.

There may potentially be an appeal to the High Court on this issue.

Implications for public servants

Claims for misfeasance in public office are rarely brought and even more rarely succeeded on. Administrative law remedies and the tort of negligence or other intentional torts, generally provide an easier path for plaintiff’s who take issue with the actions of public servants.

This decision may make it easier for plaintiff’s to bring misfeasance actions, as the Court of Appeal has, following the United Kingdom, adopted a broader construction of who is a “public officer” for the purpose of the Court. Although the Court of Appeal has quite deliberately refrained from providing a final definition of who is a “public officer”, as opposed to employee, the Court has recognised that the category of public officers is broader than persons with explicit powers granted by statute. Until there is further clarity, it appears that all senior public servants might potentially be open to be sued.

Public servants who are potentially ‘public officers’ may take some comfort from the fact that the Court of Appeal has recognised that the element of malice requires a finding of knowledge of or recklessly indifference to any risk of harm.

Both of these issues might potentially be raised again in the High Court. If an appeal is brought by either party, this matter will be one to watch.