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Supreme Court of the ACT Decisions |
COURT
IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY HIGGINS JCATCHWORDS
Practice and Procedure - application for summary judgment - application to have causes of action in statement of claim struck out.
Criminal Law - appeal - conviction set aside - abuse of process.
Limitation of actions - leave to amend writ - cause of action not in existence - indorsement to the writ - giving notice of the nature of the claim and causes of action and the relief or remedy claimed - statutory limitations - the rule in Weldon v Neal - whether statement of claim can be amended to plead new causes of action already statute barred - whether all the damages resulting from a wrongful act must be sustained before a cause of action is complete - the distinction between a new cause of action which merely attaches to the facts previously alleged and that which requires amendment or addition to the material facts.
Pleadings - new causes of action - abuse of process - negligence - breach of duty - breach of statutory duty - action on the case.
Malicious prosecution - elements of the tort of malicious prosecution - plaintiff to establish the defendants lack of belief in reasonable and probable cause - malice - improper purpose - termination of proceedings in the plaintiffs' favour - loss and damage suffered by the plaintiff as a result of the defendants' malicious prosecution.
Abuse of process - elements of the tort of abuse of process - the use of legal process for an improper or collateral purpose - what constitutes a right to damages for abuse of process.
Misfeasance in public office - elements of the tort of misfeasance in public office - the deliberate infliction of harm by the exercise of power held by a public officer with the knowledge that the action is beyond his or her powers.
Fraudulent or negligent misrepresentation - misleading and deceptive conduct - loss or damage resulting from misleading and deceptive conduct.
Breach of statutory duty - whether the statute provides for a private right of action for damages resulting from breach of the statute.
Action on the case - whether an unlawful act resulting in loss or damage constitutes a cause of action.
Entrapment - conduct inducing a criminal offence - the court's discretion to exclude evidence of the offence when the commission of the offence was procured by law enforcement officers.
Damages - injury - whether intentional infliction of harm is an independent tort - liability for intentionally, recklessly or negligently causing economic loss - duty of care - proximity - whether a tortious duty of care exists between a lawyer and a client - whether a prosecutor owes a tortious duty of care to an accused - plaintiffs' ability to recover damages for injury sustained whilst engaged in unlawful activity - court's discretion to deny recovery by reference to public policy - public policy considerations - the relationship between the activity causing the injury and the unlawful activity.
Words & Phrases - "prosecutor" - "malice".
Supreme Court Rules (ACT), O4 r1, r2, O23 r28, O24 r1, O29 r4 Crimes Act 1914 (Cth), ss70, 73 Limitation Act 1985 (ACT), s11 Trade Practices Act 1994 (Cth) Salmond's Law of Torts (9th ed) (1936)
Emanuele v Dau (1995) 78 A Crim R 242 Allan John Dau v Guiseppe Emanuele, unreported, Full Federal Court, Gallop, Wilcox and Burchett JJ, 4 December 1995 Weldon v Neal (1887) 19 QBD 394 Halsbury's Laws of England, 4th Ed V45, par 1340 Martin v Watson [1995] 3 WLR 318 Commonwealth Life Assurance Society Ltd v Brain [1935] HCA 30; (1935) 53 CLR 343 Herniman v Smith [1938] AC 305 Mann v Jacombe (1960) 78 WN (NSW) 635 Bardwell v Galvin (1866) 6 SCR (NSW) 91 Barry v Tully (1888) 9 LR (NSW) 476 Brown v Hawkes (1891) 2 QB 718 Rapley v Rapley (1930) 30 SR (NSW) 94 Irving v Carbines [1982] VR 861 Baldry v Jackson [1976] 2 NSWLR 415 Golski v Kirk (1987) 72 ALR 443 Nectaria Nominees Pty Ltd v Commonwealth [1992] ACTSC 128; (1992) 111 FLR 459 Western Australia v Wardley Australia Ltd (1991) 30 FCR 245 Emanuele Management Pty Limited v Elfic Ltd, unreported, Federal Court of Australia, Branson J, 15 November 1994 Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514 Spautz v Gibbs (1990) 21 NSWLR 230 Northern Territory of Australia and Ors v Mengel and Ors [1994] HCA 37; (1995) 185 CLR 307 Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 120 ALR 16 March v E & MH Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506 RCA Corporation v Pollard [1983] Ch 135 O'Connor v Bray [1937] HCA 18; (1937) 56 CLR 464 Maitland "The forms of Action at Common Law", Lecture V1, 65-72 Wilkinson v Downton [1897] 2 QB 57 Rookes v Barnard [1964] UKHL 1; [1964] AC 1129 Beaudesert Shire Council v Smith [1966] HCA 49; (1966) 120 CLR 145 James v Commonwealth [1939] HCA 9; (1939) 62 CLR 339 Hall v Whatmore [1961] VR 225 Business Computers International Ltd v Registrar of Companies [1988] Ch 229 Al-Kandari v J R Brown & Co [1988] QB 665 Giannarelli v Wraith [1988] HCA 52; (1988) 165 CLR 543 Love v Robbins and anor [1990] 2 WAR 510 Grimwade v Victoria, unreported, Supreme Court, Victoria, 21 January 1997 Elguzouli-Daf v Commissioner of Police and McBrearty v Ministry of Defence [1995] QB 335 Ridgeway v The Queen [1994] HCA 33; (1995) 129 ALR 41 Bunning v Cross [1978] HCA 22; (1978) 141 CLR 54 Winter v Commonwealth [1992] ACTSC 120; (1992) 111 FLR 275 Gala v Preston [1991] HCA 18; (1991) 172 CLR 243 Commonwealth v Winter [1993] Aust Torts Reports 62,117 Fabre v Arenales (1992) 27 NSWLR 437 Italiano v Barbaro [1993] FCA 241; (1993) 40 FCR 303 Barac v Farnell [1994] FCA 1389; (1994) 53 FCR 193 Nelson v Nelson [1995] HCA 25; (1995) 184 CLR 538 Bognor Regis UDC v Campion [1972] 2 QB 169
HEARING
CANBERRA, 19-20 December 1996 7:3:1997
Counsel for the Plaintiffs: Mr R Sallis Instructing solicitors: Blake Dawson Waldron
Counsel for the First Defendant: Mr A J Meagher Instructing solicitors: Clayton Utz
Counsel for the Second-Eleventh Defendants: Mr J S Hilton SC Instructing solicitors: Australian Government Solicitor
ORDER
THE COURT ORDERS THAT:DECISION
HIGGINS J
2. A further application for an order to stay proceedings until security for costs is paid and/or to fix a hearing date for trial has been deferred until the result of this application is known.
3. The plaintiffs are, first, Guiseppe Emanuele (Emanuele) and, the second and third, companies controlled by him. The causes of action they allege all derive from the arrest and prosecution of Emanuele on a charge of giving a bribe to the first defendant, Anthony Robert Hedley (Hedley). They each allege financial loss resulting from that arrest, that prosecution and its sequel. According to Mr Sallis, counsel for the plaintiffs, the most significant loss arose following the conviction of Emanuele by Chief Magistrate Cahill on 4 February 1994.
4. That conviction was set aside on appeal, not on the ground that the conviction was in itself wrong in fact or law, but rather on the grounds that, having regard to the manner in which Emanuele came to commit the offence and to the delay in finalising the prosecution, it was contrary to public policy to permit the conviction to stand and an abuse of process to permit the prosecution to continue any further.
5. The facts as found by the Chief Magistrate are those now relied upon by Emanuele to support the causes of action alleged. Those facts are set out in detail in the statement of claim, together with some further inferences of fact which are said to be open from those facts.
6. I have to approach this application on the basis that it would be open to a court in civil proceedings to find proved the primary facts alleged by the plaintiffs and to draw such relevant inferences therefrom as may be reasonably open and which might favour the case the plaintiffs seek to make out.
7. For the purposes of these proceedings, it is assumed that the damage complained of was suffered as alleged.
8. The primary facts are also referred to in my judgment in Emanuele v Dau (1995) 78 A Crim R 242 and in the decision of the Full Federal Court, confirming that decision on appeal, in Allan John Dau v Guiseppe Emanuele, unreported, Gallop, Wilcox and Burchett JJ, 4 December 1995.
The Material Facts 9. The relevant facts commence with the decision of the then Commonwealth Government to sell, by tender, the Belconnen Mall, a shopping complex it then owned. A committee was set up to oversee the tender process. Hedley, then First Assistant Secretary, Department of Territories, was appointed to chair the Committee.
10. In so doing, it may be inferred that he was acting in the course of his employment.
11. Thereafter, Emanuele alleges, there was an allegation made by Hedley concerning a prospective tenderer. Police investigated that allegation under the codename "Operation Bullseye". That is relevant, it is said, because it involved a suggestion by Hedley that the tenderer had sought corruptly to influence him. It was investigated and, whilst no evidence of criminal conduct could be found to corroborate Hedley's allegations, that tenderer was nevertheless excluded from the tender process.
12. The plaintiff contends that this fact supports a view that Hedley set out to entrap Emanuele with a view to achieving a similar result in respect of Emanuele and his companies.
13. Generally, up to October 1985, following Emanuele's expression of interest in becoming one of the tenderers for the Mall, Hedley, it is alleged, behaved in an ingratiating manner towards Emanuele, hinting at his power and influence and activities in relation to property development. That, it is suggested, was designed to predispose Emanuele to the view that Hedley could be persuaded to act corruptly.
14. That process allegedly culminated in a dinner in October 1985 at which Hedley jotted down on the back of a bankcard voucher certain details concerning other tenderers. It is contended that such conduct, being obviously improper and designed to confer an unfair advantage on Emanuele, was intended to confirm the impression that Hedley was prepared corruptly to influence the tender process in Emanuele's favour (the bankcard incident).
15. The next event followed a meeting between Hedley and Emanuele and his associates on 13 November 1985. Hedley reported to his superiors, in particular Mr Enfield, Secretary of his Department, that, following this meeting, one of Emanuele's associates, a Mr Fabrizio, had sounded him out as to whether he, Hedley, would, for reward, facilitate Emanuele's success in the tender process. It was not proved that Emanuele had any prior knowledge of this conversation. Thus it was not necessary for his Worship, the Chief Magistrate, to find whether that conversation happened or not. It made no difference to his Worship's conclusion as to the issue of entrapment by Hedley of Emanuele nor as to whether Emanuele in fact gave a bribe to Hedley.
16. Emanuele alleges that this conversation was fictitious. It was, it is contended, a further step in giving effect to Hedley's objective of excluding Emanuele from the tender process by improper means.
17. I cannot, in these proceedings, express any view as to whether the finding contended for would or would not be made. It is enough that such a contention is seriously arguable. For the purposes of these proceedings, I make that assumption in Emanuele's favour.
18. The report of that conversation led to officers of the Australian Federal Police (AFP) including the second to seventh defendants, being instructed to investigate Hedley's allegation. It further led the Director of Public Prosecutions (DPP), the eighth defendant, to advise, commence and continue the prosecution of Emanuele. The ninth and tenth defendants, successors to the office of DPP, further continued the prosecution process. The eleventh defendant is the employer of each of the defendants. Its liability, if any, is, primarily, vicarious.
19. It is not alleged by Emanuele that any of the second to eleventh defendants had any prior knowledge of the bankcard incident or had any reason to suppose that the Fabrizio conversation was fabricated by Hedley (assuming that be the fact).
20. The AFP defendants (as I will call the second to seventh defendants) advised, directed and/or participated in a covert operation to obtain evidence of the manifestation of Emanuele's suspected intent to offer a bribe to Hedley.
21. At the request of his superiors, the AFP defendants and the then DPP, Hedley was wired up with a listening device as were some of the hotel rooms occupied by Emanuele and his associates.
22. Emanuele contends that the conversations recorded on 27 and 28 November 1985 as a result of this surveillance support the learned Chief Magistrate's characterisation of the process as "entrapment". He further contends that it would be open to infer that the recorded conversations portray Hedley as a corrupt official anxious to receive a bribe so as improperly to ensure Emanuele's success in the tender process. It is conceded that this was a role adopted by Hedley, who was, of course, aware that the conversations were being recorded.
23. As a result of this process of inducement, Emanuele ended up offering a bribe to Hedley and handed over $10,000.00 to him as a down payment for favours to be received.
24. Putting Emanuele's case at its highest, it is that he would not have engaged in the criminal conduct he did but for persuasion by Hedley. That persuasion was constituted by the recorded conversations in the context of the prior conversations and previous conduct of Hedley, particularly the bankcard incident.
25. Prior to him engaging in the recorded conversations with Emanuele, it is conceded by the plaintiffs that the AFP defendants and the eighth defendant had sought to impress on Hedley the need simply to let Emanuele manifest his suspected criminal intent without going so far as to seem to entrap him into committing an offence which he would not otherwise have committed.
26. However, it is alleged against them on behalf of Emanuele that they should have inferred from the recorded conversations that Emanuele had been persuaded to offer a bribe and had not merely been allowed to demonstrate a previously formed criminal intent. For the purposes of this application, that assumption can be made.
27. It is not, however, alleged against the second to tenth defendants that they or any of them were aware that Emanuele had no prior disposition to offer a bribe to Hedley.
28. It is not disputed by the plaintiffs that the second to tenth defendants reasonably concluded on the basis of the recorded material that Emanuele had committed the offence with which he was subsequently charged.
29. Emanuele was charged on 28 November 1985 with an offence against s73(3) of the Crimes Act 1914 (Cth), namely that he, ... did give a Commonwealth officer, namely Anthony Robert Hedley property, namely ... $10,000 ... in order to influence or affect the said Anthony Robert Hedley in the exercise of his duty as a Commonwealth officer. It is unnecessary to detail again the lengthy history and slow progress of the subsequent prosecution.
30. It was not until Hedley was cross-examined that the existence and significance of the bankcard incident was revealed. That was more than five years after the event.
31. The plaintiffs contend that, so far as the case against Hedley is concerned, his denial of any knowledge of the bankcard incident, whilst admitting that the bankcard voucher contained confidential information which had been written by him, affords evidence of consciousness of guilt in "setting up" Emanuele.
32. However, it is not contended that any of the other defendants were aware of or inferred that there was or might have been any such scheme on Hedley's part.
33. Eventually, on 4 February 1994, Chief Magistrate Cahill convicted Emanuele on the charge of bribery.
34. There was no doubt which could seriously have been cast on the correctness of the finding of guilt. Emanuele succeeded on appeal only by reason of the finding of entrapment made by Chief Magistrate Cahill and the denial of a fair trial because of the protracted and disjointed course the proceedings had taken, see (Emanuele v Dau (1995) 78 A Crim R 242).
35. Indeed, Mr Sallis, as I understand him, does not allege that it could reasonably be found that his client was not, in fact, guilty of the offence charged.
36. The finding of guilt followed from the rejection by the Chief Magistrate of evidence from Emanuele that he had offered the bribe without intending that Hedley should perform his duty favourably to him. It was, he claimed, simply a gift exhibiting his generosity. The learned Chief Magistrate unhesitatingly rejected, quite rightly, this palpably untrue statement. There would be no prospect that anyone outside a fantasy world, would believe such a nonsensical claim.
37. The case, therefore, is one in which the plaintiffs claim to be entitled to damages because Emanuele was improperly induced by Hedley to commit an offence which otherwise he would not have committed and for which he was thereafter prosecuted.
38. It is alleged against Hedley that he engaged in the conduct which constituted improper inducement with a view to causing Emanuele and his interests to be excluded from the tender process for the Belconnen Mall. In furtherance of that objective, it is further contended that Hedley made complaint to the authorities of a fabricated conversation casting suspicion on Emanuele and then engaged in the taped conversations with a view to creating the substance to verify the suspicions which he had falsely created. In that endeavour he succeeded.
39. As against the second to tenth defendants, it is not suggested they shared this alleged improper purpose. It is not alleged they, at any time, viewed the matter as other than the legitimate pursuit of an offender, albeit they could reasonably have concluded at some stage during the course of the proceedings that Emanuele had been induced by Hedley to offer a bribe and might not have had such an intention before the taped conversations took place. However, it is not alleged that they in fact did so. They had no view that the Fabrizio conversation was fabricated and had no knowledge of the bankcard incident or other conduct by Hedley which might have induced Emanuele to believe that Hedley was prepared corruptly to influence the tender process, at least until the cross-examination of Hedley was well under way.
40. As the eleventh defendant is alleged to be vicariously liable for any tortious conduct by the first to tenth defendants committed in the course of their employment, it is not necessary to consider its position separately unless and until it is determined that there is an arguable case against one or more of the other defendants.
41. It is necessary, therefore, to consider whether the facts and inferences alleged, insofar as they are seriously arguable, give rise to any and, if so, which cause or causes of action against those other defendants. Insofar as they are unsustainable, these proceedings must be summarily dismissed against all defendants. If that does not follow, then the form of the statement of claim will, nevertheless, fall to be considered. The pleadings are objected to on grounds that they are prolix, plead irrelevant facts and are, simply, embarrassing and confusing. There is also an issue as to whether some causes of action introduced by the amended statement of claim in matter no. SC 769 of 1991 should be struck out by reason of the application of the rule in Weldon v Neal (1887) 19 QBD 394. That issue does not arise in relation to matter no. SC 994 of 1996 which relies only on malicious prosecution. I will, therefore, consider that action first.
Malicious Prosecution - matter no. SC 994 of 1996 - Elements 42. A classic summary of the elements of this tort may be found in Halsbury's Laws of England, 4th Ed V45, par 1340, A malicious prosecution is an abuse of the process of the court by wrongfully setting the law in motion on a criminal charge. To be actionable as a tort the process must have been without reasonable and probable cause, must have been instituted or carried on maliciously and must have terminated in the plaintiff's favour. The plaintiff must also prove damage.
- Who may commit such a tort? 43. To commit such a tort a person must be "a prosecutor" of the criminal charge. The sixth defendant, (Dau) was the informant. The eighth defendant took over the conduct of the prosecution and the ninth and tenth defendants continued it. The second, third, fourth and fifth defendants were AFP officers, superiors of the sixth defendant but it would be purely speculative to conclude that they ordered, counselled or procured the sixth defendant to lay the charge against Emanuele, although it is arguable that they approved of and authorised the covert operation designed to gather evidence against Emanuele. The seventh defendant was an AFP officer, subordinate to Dau. Thus, I am prepared to assume that the sixth, eighth, ninth and tenth defendants can be regarded as "a prosecutor" for the purposes of this tort. The second to fifth defendants do not seem to me as capable of being so regarded.
44. There is, then, the position of the first defendant, Hedley. Hedley's role leading up to the prosecution was that of an informer; directly in respect of Fabrizio and indirectly in respect of Emanuele. He then carried out the role of a police agent in gathering incriminatory evidence. Thereafter he was only a witness in the subsequent proceedings.
45. It is true that, but for Hedley's allegedly false report concerning his conversation with Fabrizio, there would have been no investigation leading to the prosecution of Emanuele. It is also apparent that had the investigation not yielded the clear evidence of Emanuele's guilt that it did, there may well have been no prosecution at all. That evidence, though it came about because of Hedley's solicitations, was no less genuine for that. Indeed, it was cogent to the point of being incontrovertible.
46. There is, it is true, authority that a person who maliciously makes a false complaint to police, may be regarded as a "prosecutor" for the purposes of this tort.
47. The House of Lords so decided in Martin v Watson [1995] 3 WLR 318. The defendant in that case falsely claimed that the plaintiff had indecently exposed himself to her. There was no evidence other than hers which supported those allegations. No evidence was offered when the charges were presented in court. Lord Keith of Kinkel, with whose speech all other Law Lords concurred, endorsed the opinions expressed in the High Court in Commonwealth Life Assurance Society Ltd v Brain [1935] HCA 30; (1935) 53 CLR 343.
48. As a result, their Lordships rejected the previously prevailing view in England that "the prosecutor" needed to have signed the charge sheet or laid the information.
49. The true principle as expressed by Lord Keith at 326-7 is, ...Where an individual falsely and maliciously gives a police officer information indicating that some person is guilty of a criminal offence and states that he is willing to give evidence in court of the matters in question, it is properly to be inferred that he desires and intends that the person he names should be prosecuted. Where the circumstances are such that the facts relating to the alleged offence can be within the knowledge only of the complainant, as was the position here, then it becomes virtually impossible for the police officer to exercise any independent discretion or judgment, and if a prosecution is instituted by the police officer the proper view of the matter is that the prosecution has been procured by the complainant. That also represents the law in Australia as expressed in Brain's case (supra).
50. However, where the prosecutor personally sees or hears those facts which lead him or her to conclude that a prosecution is warranted, the informer's role ceases to be causative of the prosecution. For example, the police officer in Martin v Watson (supra) might have concluded that he would prosecute only if he personally saw the plaintiff exposing himself. Let it be assumed that he saw such an incident. Then, even if the complaint of prior misconduct was false, prosecution for the subsequent incident could not be said in any real sense to have been caused by the original complainant's false report.
51. In this case, the sixth defendant had a taped record of Emanuele committing the offence charged. He did not need to rely on the allegedly false statement about Fabrizio to conclude that he should prosecute. Nor did he.
52. The DPP's decision to take over and then to continue the prosecution was similarly caused by what Emanuele himself had said and done. Hedley's allegedly false prior report of the Fabrizio conversation, whilst corroborative of Emanuele's guilt, was not a matter which made a difference to the decision of whether to prosecute. Indeed, it was, ultimately, held inadmissible against Emanuele.
53. It follows that only the sixth, eighth, ninth and tenth defendants could be regarded in any relevant sense as a "prosecutor". It is not seriously arguable that Hedley is or ever was a "prosecutor".
- Have the proceedings "terminated favourably" to the plaintiff? 54. It is no disqualification that the plaintiff succeeded only on appeal, see for example, Herniman v Smith [1938] AC 305.
55. Nor, subject to its relevance to the absence of reasonable and probable cause, is it a disqualification that the prosecution is dismissed on technical grounds rather than on the substantive merits of the case, see Mann v Jacombe (1960) 78 WN (NSW) 635.
56. Thus, even though the favourable termination of proceedings in this case did not deny the validity of the finding of guilt made by the Chief Magistrate, this element of the tort of malicious prosecution is capable of being established.
- Was there a lack of reasonable and probable cause? 57. It does not follow from a failed prosecution that there has been an absence of reasonable and probable cause. Indeed, the more technical the cause of failure, the less likely is that consequence to be indicative of it, see for example, Bardwell v Galvin (1866) 6 SCR (NSW) 91; Barry v Tully (1888) 9 LR (NSW) 476.
58. So far as the second to tenth defendants are concerned, they heard or read of the conversations which passed between Emanuele and Hedley. Those conversations both evidenced and, with accompanying actions indicated thereby, constituted the offence charged. They could not have entertained any doubt that Emanuele had committed that offence. The only matters of which they were unaware was the prior predisposing conduct of Hedley and the latter's alleged ulterior motive and plan. They were also unaware, if it be so, that the Fabrizio conversation was fabricated. Of those matters, the ninth and tenth defendants and, perhaps the sixth defendant, only gained the opportunity to become aware of that predisposing conduct and to entertain doubt as to the veracity of the report of the Fabrizio conversation during and following Hedley's cross-examination. Then, it seems to me, whilst they might arguably have turned their minds to whether the prosecution was vulnerable to an allegation of entrapment, they could not have been expected to doubt that they had reasonable and probable cause to continue the prosecution. There was no sudden and credible revelation of innocence. Even if they had concluded that the Fabrizio conversation was false, and it is not suggested that they did, no more could follow than that the allegation of entrapment might be more supportable than otherwise.
59. It is, to my mind, not seriously arguable that the second to tenth defendants lacked reasonable and probable cause for the prosecution of Emanuele.
60. Even if Hedley was a prosecutor, his alleged conduct in "setting up" Emanuele would not diminish the fact that Emanuele, by permitting himself to succumb to temptation, had provided even to Hedley, reasonable and probable cause for his prosecution. Further, there is not and could not be said to be evidence of a lack of belief in reasonable or probable cause, see Commonwealth Life Assurance Society Ltd v Brain (supra).
61. The plaintiff would necessarily fail to establish against any defendant a lack of reasonable or probable cause.
- Was there malice? 62. It is not enough that there is a lack of reasonable and probable cause, there must also be malice.
63. That is, there must be an improper purpose. Where the purpose is known it is a question of law whether it is capable of being categorised as improper.
64. It is not even contended that the second to tenth defendants had the slightest doubt about the propriety of the prosecution or had any other agenda to pursue. Even if they were negligent or, even, reckless, in failing to perceive Hedley's allegedly improper motive, they could not be said to have been malicious, see Brown v Hawkes (1891) 2 QB 718. See also Rapley v Rapley (1930) 30 SR (NSW) 94.
65. I am prepared to assume that a desire on the part of Hedley to eliminate Emanuele from the tender process for the Mall would be a sufficient ulterior motive to qualify as "malice", if that was to be achieved by false and misleading conduct towards both Emanuele and his superiors. However, the lack of complicity between any of the second to tenth defendants and Hedley, precludes any finding of malice against them.
66. I do not need to consider whether the eleventh defendant is capable of vicariously sharing the malicious intent of Hedley, but I would assume that to be arguable.
- General 67. It is apparent from the above that, whilst some elements of the tort could be supported if the case made out by the plaintiffs was accepted, there is no defendant against whom the tort of malicious prosecution could arguably be made out.
68. It follows that there will be judgment for the defendants in matter no. SC 994 of 1996.
The rule in Weldon v Neal - Limitation of Actions 69. It is alleged that, amendments which would now assert certain causes of action should be disallowed or struck out on the basis that had they been separately sued upon at the date of that amendment, they would now be statute-barred. It is necessary to identify those causes of action to which that objection is applicable.
- The original pleadings 70. The original writ of summons in matter no. SC 769 of 1991 named additional defendants to those now remaining.
71. That writ was indorsed with claims against Hedley for, (a) Misfeasance in public office between 13 to 28 November 1985; (b) "False and malicious publication" of matter concerning the plaintiffs on 27/28 November 1985; (c) Defamation by reason of matter published on 27/28 November 1985; (d) Fraudulent or negligent misrepresentations on 27/28 November 1985; (e) False and malicious publication of the Fabrizio statement between 13 and 28 November 1985; (f) Defamation of the plaintiffs by publication of the Fabrizio statement on the same date or dates; (g) Damages for "unlawfully causing economic loss" by publication of the statements passing between Emanuele and Hedley on 27 and 28 November 1985.
72. Against each of the other defendants including Hedley, were claims variously for detinue, trespass and conversion, including conspiracy so to do. Those claims allegedly arose out of the planting and use of listening devices in hotel rooms, and the seizing of some documentary evidence, including Hedley's conduct in attending on Emanuele and his associates in their hotel rooms whilst himself wired for sound.
73. The writ was thereafter renewed from time to time to prevent it lapsing. That was done ex parte. Although that seems to have been done as a matter of routine, it should not be thought that renewal is automatic. Nor should it automatically be done ex parte, see for example, Irving v Carbines [1982] VR 861. However, no objection is now taken to that procedure so that it is unnecessary for me to consider the question further.
74. On 3 April 1996, the plaintiffs, by notice of motion, sought leave to amend the writ in various respects.
75. Most of those amendments were purely formal but it was also sought to amend the writ to add the DPP and the Commonwealth as defendants and to add claims for malicious prosecution and abuse of process against such defendants in respect of whom it was desired to continue the proceedings.
76. It is now conceded that the claim for malicious prosecution was not available as at the date of the original writ and should not have been added by amendment. That is because at the date of the original writ, the alleged cause of action was not complete. It is not possible by amendment to add a cause of action not in existence at the date of a writ, see Baldry v Jackson [1976] 2 NSWLR 415.
77. Notwithstanding that, on 9 April 1996, the Registrar, ex parte, granted the plaintiffs' application for leave to make those amendments.
78. On 1 August 1996, the plaintiffs further applied to add as further defendants the successors to the eighth defendant as DPP, Messrs Weinberg QC and Rozenes QC.
79. On 9 August 1996, the second to (then) 21st inclusive and 23rd named defendants applied for summary judgment. They sought separation of the action against them from the action against Hedley.
80. A statement of claim was filed on 21 August 1996. That was within the time allowed by O24 r1 of the Supreme Court Rules (within 14 days after appearance).
81. On 26 September 1996, the application of the second to 21st inclusive and 23rd defendants was amended to include a prayer for the striking out of the statement of claim pursuant to O29 r4. An alternative remedy, striking out portions of it, was sought pursuant to O23 r28 (matters tending to embarrass or delay).
82. There was, on 11 October 1996, an application filed on behalf of the first "plaintiff" [sic - "defendant"] for orders on behalf of the first defendant seeking similar orders. The notice of motion was amended on 16 October 1996 to correct the error referred to.
83. On 16 October 1996 the plaintiffs were granted leave to discontinue the proceedings against all defendants other than those referred to in the title of these proceedings. There are now 11 defendants in each action.
84. The plaintiffs were also granted leave to amend further the indorsement to the writ, subject to the right of the defendants to object to the insertion of causes of action by way of amendment which were out of time when first asserted, relying on Weldon v Neal.
85. The amended writ was not filed until 4 December 1996. The proposed "Endorsement" covers some 28 pages.
86. Order 4 rules 1 and 2 of the Supreme Court Rules (ACT) deal with the content of indorsements. It provides, When to be made 1. The indorsement of claim shall be made on every writ of summons before it is issued, and shall contain a statement sufficient to give notice to the nature of the claim and the cause thereof and of the relief or remedy required in the action, and, in case of non-compliance with this rule, the defendant may apply before appearance to set aside or amend the writ, or for particulars. Contents of indorsement 2. In the indorsement required by rule 1 of this Order, it shall not be necessary to set forth the precise ground of complaint or the precise remedy or relief to which the plaintiff considers himself entitled.
87. On p31 of the amended writ, the remedies sought are set out as required.
88. However, the preceding statements singularly fail to give notice of the causes of action and the nature of the claim or claims. The original indorsement had done so.
89. To give an example, the defendant, Hedley, is alleged to have owed a duty to the plaintiffs to (2.15) "not commit the tort of misfeasance in public office so as to cause loss to the plaintiffs or any of them".
90. Then in para 19 there is an allegation of use of legal process for "a purpose other than that for which it was designed". By para 20 the use of process referred to was said to be "activated [sic]" by malice.
91. Para 21 alleges that the defendants failed in various duties.
92. The Commonwealth is alleged to be vicariously liable for various "torts", whatever they might be.
93. Then follows, in paras 23 and 24, allegations of misconduct and impropriety against Hedley.
94. Paras 25 and 26 plead that this conduct was in breach of various laws, was engaged in for an improper purpose and was an abuse of office and of the court process. Paras 27, 28, 29 and 30 are, fundamentally, argumentative. They should not be part of any indorsement to a writ.
95. It is not until para 31 that the causes of action alleged against Hedley are set out. There are now six. I summarise them. 1. Damages for abuse of process to attain an improper and collateral purpose actuated by malice. 2. Damages for misfeasance in public office. 3. Damages for negligent/fraudulent misrepresentation on 27 and 28 November 1985, (apparently by falsely representing that he was prepared to accept a bribe). 4. Damages for negligence and/or breaches of duties of care, including statutory duties. 5. Damages "on the case" for directing unlawful acts at the plaintiffs so as to cause them damage. 6. Damages for the "tort of negligent or intentional infliction of harm" upon the plaintiffs.
96. The same causes of action, save for 3 above, are pleaded against the second to tenth defendants. The Commonwealth, however, is sued on all six counts, on the basis of vicarious liability.
97. A separate writ was issued on 4 December 1996 claiming damages for malicious prosecution against the now remaining 11 defendants. That indorsement, for only that cause of action, is itself 23 pages long. I have already concluded that that action should be summarily dismissed.
98. It will be observed that the amended indorsement no longer alleges against Hedley, defamation or malicious falsehood whether by virtue of the conversations of 27 and 28 November 1985 or by the publication of the Fabrizio statement. There is similarity between the original causes of action and those now alleged only in respect of (using the numbers referred to above), 2. Misfeasance in public office; 3. Damages for negligent/fraudulent misrepresentation on 27 and 28 November 1985; 6. Negligent or intentional infliction of harm (which may embrace 5).
99. As against the other defendants (including Hedley), there had been causes of action alleging, (a) Conspiracy to commit trespass, (b) Conspiracy to commit detinue/conversion and, against some defendants, trespass and, in the case of the sixth defendant (Dau), detinue/conversion.
100. None of those causes of action is now pleaded against any of the remaining defendants.
101. Insofar as causes of action other than malicious prosecution are now pleaded for the first time in November 1996, it is apparent that they would, if sued upon separately, have been statute-barred, see s11 Limitation Act 1985 (ACT).
102. The second to tenth defendants thus claim that all causes of action alleged against them should be struck out in reliance on the rule in Weldon v Neal. The first defendant claims that all but the three continuing causes of action alleged against him should be struck out on the same basis.
103. In commenting on the effect of Weldon v Neal, Kelly J in Golski v Kirk (1987) 72 ALR 443, 451 stated, In my opinion, a plaintiff should not be allowed to introduce new claims by amendment which in substance amount to the bringing of a new action for claims already barred by statute. However, where the proposed amendments do not change the cause of action but do no more than particularise the facts by which the respondent proposes to sustain it even though the facts sought to be brought forward under the amendment are quite different from those originally alleged, amendment will be allowed. Kelly J did not need to address the situation where, although a new cause of action is sought to be added, it merely attaches a new legal label to the same or substantially the same facts as previously alleged. His Honour did hold that where different acts are relied on to found a claim for breach albeit of the same duty, it is a new claim which ought not be allowed by amendment if it would then be statute- barred.
104. Beaumont J agreed with this view at 455.
105. Ryan J at 457 stated, The distinction is not always easy to draw, especially where, as here, what is contended to be the new cause of action has a number of facts common to that originally pleaded, and attracts the same legal classification such as negligence. I applied the rule in Weldon v Neal in Nectaria Nominees Pty Ltd v Commonwealth [1992] ACTSC 128; (1992) 111 FLR 459, permitting a plaintiff to make an amendment which invoked a section of the Trade Practices Act not previously relied upon but which required no amendment of or addition to the material facts previously relied upon. That approach seemed to me consistent with the decision in Western Australia v Wardley Australia Ltd (1991) 30 FCR 245.
106. However, on any view of it, allegations of trespass, conversion, detinue and conspiracy so to do based on allegations of wrongful installation of listening devices and seizure of allegedly incriminating pieces of paper are totally remote from the causes of action now alleged against the defendants.
107. So far as the second to tenth defendants are concerned, all of the causes of action now complained of are thus apparently out of time and the plaintiffs should not now be permitted to rely upon them.
108. However, Mr Sallis contends that the damage suffered by the plaintiffs, though caused by the conduct complained of which occurred in 1985, was not sustained until Chief Magistrate Cahill recorded a conviction against Emanuele on 4 February 1994. Until then, financiers had continued to support Emanuele's business group.
109. Whether or not that contention can be made good as a matter of fact is not currently material. Certainly, the facts found by Branson J in Emanuele Management Pty Limited v Elfic Ltd, unreported, Federal Court of Australia, 15 November 1994, would indicate that it is not unarguable that the collapse of the Emanuele group of companies was precipitated by that event.
110. There are cases where though all wrongful acts have been done, loss is yet to occur. Such a case was Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514. In Wardley (supra), an indemnity was given as a result of false and misleading conduct. The only form of damage which could follow was, of course, economic. It was suffered when the State of Western Australia became liable under the terms of the indemnity.
111. However, that is not to say that all damage resulting from a wrongful act must have been sustained before the cause of action is complete. A claim for wrongfully causing personal injury is complete when bodily injury is first suffered even though that injury may worsen or facilitate further separate injury.
112. There are two further difficulties facing this contention. The first is that the original indorsement alleges that the plaintiffs had, by then, suffered loss and damage as a result of the wrongs committed by the defendants.
113. If the plaintiffs now seek to withdraw that allegation and instead allege no damage was sustained until 4 February 1994, then a second difficulty would arise. Damage is an essential element of all the torts now complained of. Save for malicious prosecution, it is the suffering of loss and damage that completes those causes of action. Awareness of loss and damage or of the extent of it is not essential. In the case of malicious prosecution, the termination of proceedings favourably to the plaintiffs is necessary to complete the cause of action. There would, usually, already have been loss and damage at that time.
114. If the plaintiffs now seek to allege that the various other torts alleged arising out of the events of 1985 did not give rise to any cause of action until on or after 4 February 1994, then for the same reason that malicious prosecution could not be sued upon in SC 746 of 1991, those torts cannot be sued upon in that action.
115. I would therefore, strike out each cause of action now pleaded against each of the second to tenth defendants. Each of those causes of action would, if separately sued upon, be now statute-barred. It would be impossible by further amendment to save them, even if there was an arguable case supporting them on the material facts as alleged.
116. On that ground alone they must have judgment in their favour in matter no. SC 796 of 1991. The eleventh defendant must also have judgment in its favour insofar as its liability depends on that of the second to tenth defendants
117. So far as Hedley is concerned, the "new" causes of action alleged are, 1. "abuse of process", 4. Negligence, breach of duty, including statutory duties; and 5. Action on the case for damages.
118. Although for reasons elsewhere given herein, I do not consider those causes of action to be maintainable, I would not exclude them on the basis of the rule in Weldon v Neal. The plaintiffs rely for those causes of action on the same material facts or at least a selection of the previously pleaded matrix of facts, as alleged in relation to the other causes of action pleaded. They do not seek to rely on newly alleged material facts to support the new causes of action.
119. Nevertheless, even if it was now open to amend the process in matter no. SC 994 of 1996 so as to allege additional torts causing damage on and from 4 February 1994, for reasons which follow, in my view, the plaintiffs will still fail. I will consider each of the torts alleged in turn.
1. Abuse of Process 120. Reference is made to this tort in Spautz v Gibbs (1990) 21 NSWLR 230, 270-280 per Priestly JA.
121. The first element is the use of legal process for an improper or collateral purpose, even if there was reasonable and probable cause for the issue thereof. Save insofar as improper or collateral purpose might equate with malice, malice as such is not necessary.
122. Vicarious liability aside, the fact that there is no arguable case for a finding that there was any improper purpose on the part of any defendant other than Hedley immediately absolves them from any possible liability under this head of liability, even if the action was otherwise maintainable.
123. Further, the fact that it was one or other of those defendants and not Hedley who set in train or continued the processes of the law would absolve Hedley from any liability for any abuse of process which followed. In any event, the effective cause of the legal process being instituted and continued was not Hedley's original and allegedly false complaint, but the conduct of Emanuele in offering a bribe, even if he was improperly induced by Hedley to do so. The laying of the information might, arguably, have been a consequence of and have served to further or conceal Hedley's alleged improper purpose but neither the informant nor the relevant DPP knew that.
124. The most telling answer to this alleged head of liability is that the purpose of the prosecution was to convict Emanuele of the offence he had committed. The alleged ulterior purpose was Hedley's plan to disqualify Emanuele from the tender process, either by improperly provoking a corrupt offer or by the allegedly false complaint about Fabrizio, or both. A possible consequence of the false complaint could have been the prosecution of Fabrizio or Emanuele or both. No doubt if the authorities decided to prosecute, Hedley would have been a material witness. As it happened, the authorities decided to prosecute only after using Hedley as the means by which further and more incontrovertible evidence of criminal conduct was obtained.
125. Even if the institution and continuance of the legal proceedings against Emanuele served Hedley's alleged improper purpose, he neither initiated nor continued them. Nor was he the effective cause of the institution of those proceedings in the sense that he was the true informant or stood in the shoes of the informant.
126. More particularly, the proceedings were not actually used for the improper purpose in question. As Mahoney JA noted in Spautz v Gibbs (supra) at 234, To deal with a proceeding with an unacceptable object as an abuse of process is one thing: to go beyond that and grant damages for what has been done is another, ... The fact that the proceedings were stayed on the ground that, due to entrapment and delay, it would be an abuse of process to proceed further with them does not entail any right to damages. Neither of those grounds, it may be noted, depended on any finding that the alleged improper and/or collateral purpose to be ascribed to Hedley were being furthered by the proceedings. The process of the court was not abused by those who set it in train. It could not have been abused by Hedley as he did not initiate the proceedings, even in the extended sense of the term "prosecutor" recognised for the purposes of the tort of malicious prosecution.
127. In other words, there is a distinction between the use of process to achieve a collateral purpose, and the characterisation of those proceedings as an abuse of process. An obvious example is the difference between bringing an action to cause a party to act or refrain from acting in a way that that party would otherwise properly be able to do and a vexatious litigant or an action so stale as to be unfairly prosecuted.
128. This cause of action cannot be seriously argued against any defendant.
2. Misfeasance in Public Office 129. The High Court in Northern Territory of Australia and Ors v Mengel and Ors [1994] HCA 37; (1995) 185 CLR 307, 347, has made it clear that misfeasance in public office requires more than, ... an act of a public officer which he or she knows is beyond power and which results in damage. It is a deliberate infliction of harm by the exercise of authority by a holder of public office in purported pursuance of the powers of that office but with knowledge that those powers do not support that exercise of authority.
130. Thus the category of loss, the nature of the act and the intent or, at least, recklessness of the alleged tortfeasor are relevant.
131. Brennan J (as he then was) pointed to the need for the act complained of to be beyond power. Otherwise loss caused by it cannot be said to be unauthorised by law.
132. It may be said that Hedley's conduct in revealing information to Emanuele during the bankcard incident and the alleged fabricated report of the Fabrizio conversation were, as to the first, beyond power and, as to the second, indicative of malice or of intent to cause damage and perhaps recklessness as to other consequences.
133. However, the act beyond power did not purport to be an, ... exercise of some power or authority by a public officer otherwise than in an honest attempt to perform the functions of his or her office whereby loss is caused ... (per Brennan J at 357).
134. Quite to the contrary, it is alleged that Hedley was purporting to act outside of his authority so as to give the impression that he was corruptible.
135. Whatever may be the scope of the private tort of intentional infliction of harm, the tort of misfeasance in public office, even assuming lack of bona fides and intention to injure Emanuele, is not an apt vehicle to impose liability in the circumstances of this case. It is unnecessary to consider the issue of causation in relation to this alleged tort but it does not seem apparent that the act arguably of revealing confidential information was causative of the damage to the plaintiffs. That is the only act of Hedley's which can arguably have been said to have been outside his power as a Commonwealth officer.
136. There is no evidence or arguable allegation of any lack of authority on the part of any of the second to tenth defendants to perform the acts which they did. Nor is there any evidence of an intention to rely on any known lack of authority to cause injury to the plaintiffs. Thus even if the installation of listening devices, for example, had been beyond power, it would not support a view that, absent a discrete tort such as trespass, an action for damages would lie. Even if the defendants had been aware of an illegal obtaining of evidence and it may, of course, be admissible even if so obtained, it does not seem to me that this action would lie.
137. I assume that there is evidence to support a desire on Hedley's part to cause injury to Emanuele. The allegedly false allegation concerning the approach by Fabrizio, apparently on Emanuele's behalf, would have that effect and be evidence that such a consequence was intended.
138. However, the prosecution of Emanuele did not follow and was not the consequence of any power given to Hedley to act so as to report that conversation. He did not purport, for example, to declare Emanuele an ineligible tenderer by reference to some supposed head of executive or legislative power in reliance on that conversation. Nor is that alleged. He simply made an allegation to his superior which, if true, might have indicated a criminal intent on Emanuele's part and led to the exclusion of him and his companies from the tender process. That might have been defamation or injurious falsehood. However, as it did not lead to the exercise by him of any legislative or executive power, it is not malfeasance in public office on his part.
139. This allegation must fail against all defendants.
3. Fraudulent or negligent misrepresentation 140. There is no allegation of any false representation on the part of any defendant other than Hedley.
141. So far as he is concerned, the allegation is that he falsely held himself out to be a corruptible official and falsely reported that Fabrizio had indicated to him that Emanuele was prepared to bribe him.
142. If Emanuele was to allege that any of those false representations effectively caused the Commonwealth to exclude Emanuele as a tenderer, whereby he suffered damage, a good cause of cause of action might be made out.
143. It would be misleading and deceptive conduct, see Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 120 ALR 16.
144. That conduct, insofar as it was a false report to induce the eleventh defendant not to deal with the plaintiffs, could constitute the tort known as injurious falsehood if actual damage resulted. It might also be defamation, though, whether as in Sellars' case (supra), it would also provide a cause of action under the Trade Practices Act 1974 (Cth) is doubtful.
145. However, it does not seem to me arguable that such misleading and deceptive conduct caused the damage of which the plaintiffs now complain.
146. They do not complain of the loss of the chance to tender for the Belconnen Mall.
147. Their complaint is of damage suffered as a result of the prosecution and conviction of Emanuele for bribery. Particularly they claim that the conviction effectively caused the collapse of the Emanuele group of companies.
148. The fact that Hedley was not a "prosecutor" for the purposes of malicious prosecution also entails the conclusion that he did not cause that prosecution. The effective cause of the prosecution was Emanuele himself. He chose to offer Hedley a bribe. Causation is to be adjudged by reference to common sense, not merely an application of a sine qua non test. Nevertheless, "but for" Emanuele's decision to offer a bribe, no prosecution would have followed, see March v E & MH Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506.
149. It follows that the allegations made in the statement of claim provide no arguable basis to support this cause of action.
4. Breach of statutory duty 150. No arguable case can be made that any defendant, again, other than Hedley, breached any statutory duty.
151. It can be argued that Hedley breached various statutory provisions, if, as alleged, he knowingly made false reports to his superiors, to officers of the AFP and to the DPP, and deliberately disclosed, without authority, information it was his duty to keep confidential.
152. However, even if that be accepted, the plaintiffs will have no remedy in damages unless the statute in question evinces an intention to provide for a private right of action as a consequence of breach thereof.
153. If it were otherwise NT v Mengel (supra) would be otiose. Also see RCA Corporation v Pollard [1983] Ch 135. The classic formulation of the law is that of Dixon J (as he then was) in O'Connor v Bray [1937] HCA 18; (1937) 56 CLR 464.
154. There is nothing in any of the statutes referred to by the plaintiffs which remotely suggests a private right of action is intended to be thereby conferred by breach of their provisions unless the conduct constituting that breach also constitutes, or involves, the commission of a tort for reasons other than the breach of statute.
5. Action on the case 155. This pleading is misconceived. An action on the case is a reference to a group of ancient writs, not being real actions, but being in respect of various categories of personal actions in respect of which an analogous case was alleged. There is no separate tort of "an action on the case", see Maitland "The forms of Action at Common Law", Lecture V1, 65-72.
156. There is no general rule that an unlawful act will found a cause of action merely because damage, even foreseeable damage, results, see NT v Mengel, 341-3 and 349-352.
157. There is, therefore, no different or independent cause of action arising under this heading.
6. Deliberate, reckless or negligent injury 158. It is clear that if Hedley, as alleged, set out to injure Emanuele by falsely claiming that he, by his agent Fabrizio, had evinced an intention to bribe him, Emanuele may complain of that intention as an element of some other tort. Indeed, to engage in a wrongful act foreseeing the likelihood of damage flowing is an element of more than one tort.
159. It is true that some support can be found for a proposition that there is an independent tort of intentional infliction of harm, see for example, Wilkinson v Downton [1897] 2 QB 57. That case, however, was one of deliberately causing physical injury. Rookes v Barnard [1964] UKHL 1; [1964] AC 1129 supports the existence of such a tort in the area of economic loss. In that case, however, their Lordships were concerned with and affirmed the existence of a tort of intimidation.
160. Intimidation occurs where A threatens B in order to compel B to act in a way which causes loss to B or to another. The threat must be to do or procure an unlawful act to B's detriment. It will be actionable even if only economic loss was caused.
161. In this case there is no threat or coercion.
162. The proposition that any unlawful act causing damage is tortious, independently of any other tort previously recognised, was supported in Beaudesert Shire Council v Smith [1966] HCA 49; (1966) 120 CLR 145. That case has now been overruled by NT v Mengel which considered not only misfeasance in public office but also the question of liability generally for unlawful acts which are done deliberately, recklessly or negligently so as to cause economic or, at least, non-physical harm.
163. Consideration was given as to whether there would be a cause of action arising from damage suffered pursuant to an unlawful act or threat of an unlawful act by an individual apart from the tort of misfeasance in public office. It was suggested in NT v Mengel, that the existence of such a tort is supported by comments by Dixon CJ in James v Commonwealth [1939] HCA 9; (1939) 62 CLR 339, 374.
164. Those comments approved a statement in Salmond's Law of Torts (9th ed) (1936) 633, Although there seems to be no authority on the point, it cannot be doubted ... that it is an actionable wrong intentionally to compel a person, by means of a threat of an illegal act, to do some act whereby loss accrues to him: for example, an action will doubtless lie at the suit of a trader who has been compelled to discontinue his business by means of threats of personal violence made against him by the defendant with that intention. However, no general liability for damage caused by an unlawful act was supported in NT v Mengel. The majority make it clear that there is no tortious liability beyond that for misfeasance in public office, intimidation, negligent breach of a duty of care or other head of tortious liability. Intimidation and intentional infliction of harm by unlawful acts are the private counterparts of the tort of misfeasance in public office.
165. In the present case, the considerations requiring liability for misfeasance in public office to be rejected also require rejection of any tortious liability for intentional or reckless infliction of harm by means of an unlawful act.
166. That leaves for consideration the question of whether the defendants could be liable in negligence to the plaintiffs in the circumstances alleged. That will depend on whether a duty of care exists in respect of the relevant relationship.
167. I will consider the position of the second to tenth defendants.
- Liability of Investigators/Prosecutors 168. There is no tortious liability towards an accused person for negligently investigating or prosecuting that person. If there was such a cause of action, a prosecutor would be liable for damages notwithstanding that there was no malice and no lack of reasonable and probable cause for the investigation and prosecution in question. That would make malicious prosecution and misfeasance in public office and, indeed, intentional infliction of harm by an unlawful act, otiose. It would also by-pass the torts of defamation and injurious falsehood.
169. Certainly, a duty of care on the part of relevant officials exists towards those who are, for example, in lawful custody so as to protect the latter from physical or mental injury, see Hall v Whatmore [1961] VR 225. However, that is an entirely different relationship from that created when a citizen falls under suspicion of crime and is then prosecuted.
170. The plaintiffs' claim, however, is even more novel than that. They claim that the investigators and prosecutors carelessly failed to notice, (i) that Hedley's evidence as to the Fabrizio conversation was false and thus to conclude that it never happened; (ii) that Hedley had during the conversations of 27 and 28 November 1985 engaged in entrapment by means of false and misleading statements; and (iii) that, when it was disclosed, the bankcard incident evidence, revealed or should have revealed, in conjunction with the knowledge those defendants had of "Operation Bullseye", an improper and ulterior motive for the allegations against Emanuele.
171. That is even more remote a claim than that of a negligent assumption that a prosecution might succeed.
172. Had the investigators and prosecutors concluded, as at 28 November 1985, that Hedley had importuned Emanuele too enthusiastically, there is nothing to suggest that the prosecution would not have been commenced. Nor is it likely, even after Hedley's admissions in cross-examination, that they would have concluded that the prosecution would probably fail and so, discontinue it.
173. All that could be said is that those prosecuting failed to perceive that their case might be defeated on the grounds of entrapment.
174. That, to my mind, is not capable of giving rise to a cause of action against the investigators and prosecutors, even if it could be said that it was a negligent or even reckless conclusion.
175. That view is, it seems to me, amply supported by authority. The notion of "proximity" which governs the question of the existence or not of a duty of care no doubt in some respects was satisfied as between the plaintiffs and the defendants. What the investigators and prosecutors did was likely to be causative of loss to the plaintiffs. Yet it has been held that lawyers engaged in hostile litigation are not, for that reason alone, liable in negligence to an opposing party even though they are quite enthusiastically and deliberately seeking to inflict loss upon that party, see Business Computers International Ltd v Registrar of Companies [1988] Ch 229. That immunity is based on public policy, see Al-Kandari v J R Brown & Co [1988] QB 665. That is a similar basis to that which led the court in Giannarelli v Wraith [1988] HCA 52; (1988) 165 CLR 543 to reject the view that a tortious duty existed between an advocate and his or her own client. A fortiori there is no such duty between an advocate engaged to prosecute and the defendant, see Love v Robbins and anor [1990] 2 WAR 510. Nor is there such a duty to persons who may be damaged because of the prosecution of a defendant, such as an employer, financier or family member.
176. Insofar as the claim goes further and relies on a failure on the part of the prosecutors, including the sixth defendant, to terminate proceedings, though the right to make that decision was formally by then that of the then current DPP, I agree with Harper J in Grimwade v Victoria, unreported, Supreme Court, Victoria, 21 January 1997, that the same public policy would deny recognition of any duty of care so to do, even if the prospects for success of the prosecution had by then become tenuous, see p28 thereof.
177. Insofar as the plaintiffs sue upon negligent acts or omissions preceding the commencement of the prosecution, their task is factually more difficult. It has to be assumed that the investigators and prosecutors, before the prosecution was launched, should have realised that Hedley had an improper or collateral purpose or, at least, that the conversations they had recorded afforded no reasonable basis for a prosecution which could fairly be pursued.
178. I am by no means persuaded that, on the material before them, including "Operation Bullseye" and Hedley having clearly overstepped the guidelines against entrapment, these factors cast any duty on the investigators and/or prosecutor to refrain from prosecuting Emanuele. That is so even if that failure could have been regarded as negligent or even reckless.
179. In Elguzouli-Daf v Commissioner of Police and McBrearty v Ministry of Defence [1995] QB 335, suspects claimed damages for failure of investigators to act promptly and reasonably so as to obtain and act upon exculpatory evidence. The Court of Appeal refused to recognise any such duty of care.
180. therefore, conclude that there is, simply, no relevant duty of care recognised by the law. Not only does the law recognise no duty of care as alleged, the facts alleged do not give rise to any seriously arguable assertion that such a duty was breached. The initial decision was really inevitable given what Emanuele himself had said and done. The continuation of proceedings after Hedley's cross-examination did not diminish the prosecution's primary case. It was reasonably open to conclude that Emanuele would not persuade the learned Chief Magistrate that entrapment had occurred and should lead to the exclusion of the relevant evidence or a stay of the proceedings.
181. In any event, even if a plaintiff could complain of a prosecution for an offence of which he or she was innocent as a tortious wrong, other considerations arise where, as here, Emanuele does not claim that he was not, in truth, guilty of the offence for which he was prosecuted.
182. None of the second to tenth defendants have any arguable cause of action alleged against them under this head.
- Liability of Hedley - The "entrapment" of Emanuele by means of false and misleading statements 183. There is evidence to support the view that Hedley not only misled Emanuele into believing that he was corruptible, but also told outright lies with the same intention. Further, there is evidence that he revealed apparently confidential information for the same purpose both before and during his apparent solicitation of a bribe from Emanuele. He is also alleged to have made a false report of an incriminating statement by Fabrizio implicating Emanuele. The latter report, of course, led to the investigators and prosecutors advising or directing the operation designed to elicit Emanuele's criminal intent.
184. Of course, in any operation such as that which he was then engaged in, the prospective offender must necessarily be misled. It is not improper for that to occur. What is improper, and may lead to the evidence obtained being excluded by reason of such impropriety, is if a police agent, such as Hedley was, engages in unlawful or improper conduct to achieve that end. It should be noted that Ridgeway v The Queen [1994] HCA 33; (1995) 129 ALR 41 was not a case of entrapment. It was a case of police becoming knowingly concerned in an illegal activity with a view to prosecuting a suspected person who was a co-participant. In the present case, it is clearly open for a court to find that there was entrapment. The learned Chief Magistrate so found in the criminal prosecution. That finding was upheld on appeal. For present purposes, both sides accept that such a finding is open in these proceedings.
185. However, it is no defence to a criminal charge that the conduct in question was induced by government officials or police agents, see Mason CJ, Deane and Dawson JJ at 45-47.
186. Conduct inducing a criminal offence may often be unlawful in itself thus enlivening the discretion, held to be "settled law" in Bunning v Cross [1978] HCA 22; (1978) 141 CLR 54, 69, to exclude evidence obtained by means of that unlawful conduct. The exercise of that discretion depends upon an application of public policy. The question is whether, in the particular circumstances of the case, the need to discourage unlawful conduct on the part of those charged with the duty of enforcing the law outweighs the public interest in convicting an offender. The same discretion will arise if the conduct by means of which evidence is obtained, though not unlawful, is improper.
187. In Ridgeway (supra) that discretion was held to be applicable to situations where the offence itself was improperly induced or facilitated by unlawful or improper conduct. As Mason CJ, Deane and Dawson JJ stated at 52, In a context where ancillary offences - such as counselling, being knowingly concerned in, inducing, aiding, abetting and procuring - exist, in one form or another, in all Australian jurisdictions and where no laws exist authorising law enforcement officers to encourage or participate in the commission of criminal offences in order to enable the apprehension and procure the conviction of those whom they believe to be involved in criminal activity, it is likely that conduct which intentionally procures the commission of a criminal offence by another will itself be criminal. None the less, circumstances can conceivably exist in which a law enforcement officer intentionally brings about the opportunity for the commission of a criminal offence by conduct which is not criminal but which is quite inconsistent with the minimum standards which a society such as ours should expect and require of those entrusted with powers of law enforcement. Extreme cases of creating circumstances of temptation under which a vulnerable but otherwise law-abiding citizen commits an offence of a kind which (so far as the police are concerned) he or she otherwise might not have committed provide possible examples. However, that does not preclude police officers and persons acting as police agents, such as Hedley, from engaging in subterfuge and deceit to unmask an offender. As their Honours stated, at 53, The effective investigation by the police of some types of criminal activity may necessarily involve subterfuge, deceit and the intentional creation of opportunities for the commission by a suspect of a criminal offence. When those tactics do not involve illegal conduct, their use will ordinarily be legitimate notwithstanding that they are conducive to the commission of a criminal offence by a person believed to be engaged in criminal activity. It is neither practicable nor desirable to seek to define with precision the borderline between what is acceptable and what is improper in relation to such conduct. The most that can be said is that the stage of impropriety will be reached in the case of conduct which is not illegal only in cases involving a degree of harassment or manipulation which is clearly inconsistent with minimum standards of acceptable police conduct in all the circumstances, including, amongst other things, the nature and extent of any known or suspected existing or threatened criminal activity, the basis and justification of any suspicion, the difficulty of effective investigation or prevention and any imminent danger to the community. A finding that law enforcement officers have engaged in such clearly improper conduct will not, of course, suffice of itself to give rise to the discretion to exclude evidence of the alleged offences or of an element of it. As with the case of illegal conduct, the discretion will only arise if the conduct has procured the commission of the offence with which the accused is charged. It cannot therefore be said that it was improper per se for Hedley to have held himself out as corruptible when speaking with Emanuele on 27 and 28 November 1985. It became improper only if it was calculated to induce Emanuele to commit an offence which he would not otherwise have desired to commit and/or involved unlawful or improper conduct. If Hedley had no duty to tell Emanuele the truth or to refrain from deceiving and misleading him, it seems difficult to see how he could be liable only because his deceit exceeded the bounds of propriety.
188. If Hedley had given confidential information to Emanuele as early as October 1985, to deceive him into believing that he was prepared to "fix" the tender process, then it might be more readily concluded that Hedley's conduct on 27 and 28 November 1985 would be held to have been improperly designed to seduce Emanuele into committing a crime he might otherwise never have considered committing. That view would receive further support if the Fabrizio conversation was a fabrication as is now alleged.
189. Nevertheless, even to make those assumptions in favour of the plaintiffs does not raise a duty on Hedley's part towards Emanuele to refrain from conduct such as is alleged. If Hedley is not liable by reason of allegedly intentionally leading Emanuele into harm, he will not be liable even if he had done so negligently or recklessly.
- Generally 190. Outside of the heads of tortious liability already considered, and absent any present reliance on the torts of defamation or injurious falsehood, I can find no arguable cause of action against any defendant under this heading.
Ex turpi causa non oritur actio 191. There is a further matter. To succeed against any defendant the plaintiffs must rely upon the criminal conduct of Emanuele. Public policy aided Emanuele so as to set aside his conviction and stay further proceedings because of the unlawful and improper conduct of Hedley as found by the learned Chief Magistrate. It was accepted that such conduct, either alone or in combination with the delay in finalising the prosecution, made it contrary to public policy to permit that conviction to stand or the proceedings to be thereafter continued.
192. There are, of course, many situations where, as a result of prosecution impropriety, evidence is excluded and the accused, whether substantively guilty or not, is acquitted or proceedings permanently stayed. However illegal or improper Hedley's conduct was or might be found to have been, it is not Emanuele's case that he himself was innocent of criminal conduct. His case is that he was persuaded by Hedley to commit a crime and as a result of being prosecuted for that crime, he and his companies have suffered loss and damage.
193. It is not unlike a case involving two would-be burglars. Could one of them sue the other for the consequence of being prosecuted on the basis that the other had falsely or carelessly claimed they ran no risk of detection? Could Emanuele have sued Hedley for damages for persuading him to commit a crime if, contrary to the facts of this case, the latter had not been a police agent and both of them had been detected and prosecuted? Had the arrangement been as Hedley represented it to Emanuele, but Hedley had failed to carry out his part of the corrupt bargain, could Emanuele have sued for loss of that bargain?
194. Simply to state these questions illustrates how impossible it is to permit the plaintiffs to claim damages for the consequences of Emanuele's own criminal conduct. Whatever may have been Emanuele's situation had he been innocent and prosecuted on a false complaint supported by false evidence, it is contrary to the public interest that he or his companies should be compensated for the fact that he succumbed to the temptation offered to him to engage in criminal conduct.
195. It is true that not all conduct which is illegal or involves illegality will disqualify a plaintiff from complaining of damage caused as a result of or in the course of that conduct.
196. In Winter v Commonwealth [1992] ACTSC 120; (1992) 111 FLR 275 I reviewed the authorities in relation to the role of public policy in denying recovery to plaintiffs injured whilst engaged in unlawful activity. Gala v Preston [1991] HCA 18; (1991) 172 CLR 243 rejects any general rule of exclusion based on public policy in such a case. The majority, Mason CJ, Deane, Gaudron and McHugh JJ, held that recovery should be denied on the basis of a lack of duty of care, acceptance of risk and the inappropriateness of laying down any standard of care depending on the nature and extent of the illegality and its relationship to the wrong complained of. Brennan J (as he then was) rested his concurrence in the result on the inappropriateness of conceding a duty of care in the case of conduct which was seriously criminal. It was a value judgment, his Honour said, based on, 272, ... the gravity of the offence, the threat to public order or public safety or the infringement of the rights of third parties which the law seeks to prevent, any other mischief at which the law creating the offence is aimed, the penalties prescribed for breach of the law and the effectiveness of those penalties to secure obedience to the law if a duty of care be admitted. In Winter (supra), affirmed on appeal sub nom Commonwealth v Winter [1993] Aust Torts Reports 62,117, a motor cycle rider, fleeing from police seeking to apprehend him for and to prevent the continuance of serious traffic offences was, though substantially contributorily negligent, held entitled to some recovery for bodily injury caused by a negligent act committed by one of the pursuing police. The risk of that negligent act occurring went beyond the risk accepted by the plaintiff in riding at a dangerous speed.
197. Recovery was denied by the New South Wales Court of Appeal to a passenger suing a driver fleeing from police in Fabre v Arenales (1992) 27 NSWLR 437. The driver and passenger had been engaged in stealing goods from premises. They were disturbed and stole a car to escape capture. The vehicle crashed in the course of pursuit as a result of driver error. That was precisely the sort of risk both had accepted.
198. There was a similar result in Italiano v Barbaro [1993] FCA 241; (1993) 40 FCR 303. The facts as found by the appellate court were that the plaintiff was a party to a conspiracy to stage an accident with a view to making a fraudulent claim on the third party insurer. Whilst the conspirators were seeking a suitable place to stage a collision between their two vehicles, they had what may have been an unexpected and probably genuine collision, although the majority of the Court were inclined to the view that it may have been the planned collision. However, on either scenario, the whole Court agreed that recovery of damages should be denied to the plaintiff.
199. Black CJ and Beazley J focussed on the question whether a person engaged in criminal activity and thus injured, is to be excluded only on the basis of acceptance of risk. After referring to the majority judgment in Gala v Preston (supra) at 309, their Honours said, It will be noted that the majority said, in the context of determining whether the requirement of proximity was satisfied, that the relevant factors will include policy considerations and that where the parties are involved in a joint criminal enterprise those factors, that is to say the relevant factors that include policy considerations, will include the appropriateness and feasibility of seeking to define the content of a relevant duty of care. It was with that preface that the majority in Gala then considered whether there was a relationship of proximity between the parties such as to give rise to a relevant duty of care by examining whether it was possible or feasible, or appropriate or feasible, to define an appropriate duty of care in the circumstances of the case. Thus the inherent danger in the enterprise of the kind of injury complained of is not to be regarded as an essential condition for denial of recovery.
200. Whether recovery should be denied by reference to public policy depends on the relationship between the activity causing the damage and the particular criminal activity then in progress or prospect. As their Honours stated at 312, Just as it would, in our view, be inappropriate to weigh the conflicting demands of the criminal activity for a driver and a passenger engaged in driving around suburban streets looking for a person or place to rob, so here the inappropriateness of the process of weighing and adjusting the conflicting demands is underlined by the very serious nature of the criminal activity involved. The majority, Neaves, Burchett and Whitlam JJ, regarded Gala v Preston as requiring the plaintiff to show, once it is proved that he was engaged in a conspiracy at the time to stage an accident of the kind of which he complained, that, 325, ... the plaintiff nevertheless sustained his injuries by the negligence of the defendant, and not as a result of their agreement ... Even if the collision had been adventitious rather than staged, their Honours stated, at 331, that a correct application of the majority view in Gala v Preston would, nevertheless, deny recovery. They said, Common to the joint judgment and each of the other judgments is the view that the previous case law, which the joint judgment restated in terms of proximity, Brennan and Dawson JJ explained, and Toohey J substantially accepted as it stood, did lay down a rule providing a defence applicable to cases of joint participation in serious crime. While the explanations of the rule differed, its effect in cases such as the present was consistently stated in terms which would require the allowance of the appeal [thus denying recovery]. In like manner, it is accepted that not every illegality will avoid a contractual arrangement, see Barac v Farnell [1994] FCA 1389; (1994) 53 FCR 193. Nevertheless, public policy may require modification or non- enforcement of such an arrangement, see Nelson v Nelson [1995] HCA 25; (1995) 184 CLR 538. That is a similar approach, it seems to me, to the situation where an alleged tort involves or arises out of unlawful activity.
201. In relation to the enforcement or otherwise of tortious liability involving criminal conduct, the seriousness of the illegality and the public policy in favour of denying recovery must be weighed against the right said to be violated and the consequences of that violation.
202. Whilst not all of the causes of action alleged by the plaintiffs against the defendants rely on the existence of a duty of care to avoid the injurious results of which the plaintiffs complain, they all allege a relationship between Emanuele's serious criminal conduct and that injury.
203. Whilst breaches of ss70 and 73 of the Crimes Act 1914 (Cth) (bribery of Commonwealth officers) attract no more than two years imprisonment, they are serious crimes striking at the heart of the integrity of public administration. Where the donor and donee of the information or benefit are each determined to act corruptly, detection is difficult. Where only one has a corrupt intent it is to be expected that he or she will only hint ambiguously at his or her intent until satisfied that there is reciprocity. Thus, it is difficult to expose those determined upon such a criminal course of conduct. It is no answer to a charge of offering a bribe to say that it was solicited by the offeree.
204. Ironically, Emanuele's complaint really is that Hedley did not, in fact, intend to pervert the tender process in Emanuele's favour as he pretended but, on the contrary, intended that he be excluded from it. It was, in the vernacular, "a double cross".
205. It is enough to say that, in my view, it would be a "grotesque" result, to quote from the majority in Gala v Preston, if the plaintiffs could be permitted recovery of damages because Emanuele's criminal expectations were frustrated and they suffered loss and damage as a result.
206. In any event, the criminal conduct Emanuele engaged in carried with it the inherent risk of discovery, even if Hedley had been as corrupt as he held himself out to be. It is not appropriate to entertain any complaint by Emanuele or the companies controlled by him that he or they suffered damage, whether by failing to receive the corrupt benefit Emanuele allowed himself to be persuaded to seek, or because he or they suffered from his being subjected to prosecution proceedings and consequential appeals.
207. In my view, public policy alone demands the dismissal of all proceedings against all defendants.
The remedy sought - Order 17 Rule 1 - summary judgment 208. For the reasons stated I would enter summary judgment for each of the defendants against each of the plaintiffs in each of the two actions.
209. I would add that I express no final view as to whether parties such as the corporate plaintiffs could sue for damage caused to them by an alleged malicious prosecution of their key executive. I have assumed that is a seriously arguable proposition. In the analogous situation of defamation of a director or officer of a company, it has been held that the company may have a separate cause of action, see Bognor Regis UDC v Campion [1972] 2 QB 169, 175-6.
- Order 23 Rule 28 - striking out embarrassing etc pleadings 210. If there was any possible cause of action which it was now open to the plaintiffs to rely upon, it would be proper simply to strike out portions of the indorsement and/or the statement of claim which are embarrassing or unnecessary. In my view, most of the indorsement and the statement of claim would fall by the application of that principle. In general terms, I think Mr Meagher's submissions as to the parts objectionable in form are correct.
211. It is, however, unnecessary further to consider that issue.
- Order 29 Rule 4 212. The statements of claim clearly, for the reasons I have adverted to, disclose no cause of action against any defendant in either action. That defect is not capable of remedy by further amendment. The only appropriate course is to enter judgment for each defendant in each action.
213. I order accordingly. I will hear the parties as to costs and the formal disposition of outstanding applications.
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