Sunraysia Natural Beverage Company Pty Ltd v New South Wales [2004] NSWCA 16 (10 February 2004)

Last Updated: 18 February 2004

NEW SOUTH WALES COURT OF APPEAL

CITATION: Sunraysia Natural Beverage Company Pty Ltd v State of New South Wales [2004] NSWCA 16

FILE NUMBER(S):

40316/03

HEARING DATE(S): 10 February 2004

JUDGMENT DATE: 10/02/2004

PARTIES:

Sunraysia Natural Beverage Company Pty Ltd (Plaintiff)

State of New South Wales (Respondent)

JUDGMENT OF: Handley JA Giles JA Ipp JA

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT FILE NUMBER(S): SC 13482/01

LOWER COURT JUDICIAL OFFICER: Newman AJ

COUNSEL:

I. Wales SC/A. Fernon (Plaintiff)

I. Mescher (Respondent)

SOLICITORS:

Dibbs Barker Gosling (Plaintiff)

I.V. Knight, Crown Solicitor (Respondent)

CATCHWORDS:

Misfeasance of public office - pleading - no question of principle

LEGISLATION CITED:

DECISION:

1. Leave to appeal granted. The claimant is to file its notice of appeal within 14 days.

2. Appeal allowed.

3. Judgment of Newman AJ set aside. In lieu thereof order that paras 6, 7 and 8 of the statement of claim be struck out with liberty to re-plead.

4. The respondent's notice of motion otherwise dismissed.

5. No order as to costs of the proceedings before Master Harrison, Newman AJ or this Court.

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

40316/03

HANDLEY JA

GILES JA

IPP JA

10 February 2004

SUNRAYSIA NATURAL BEVERAGE COMPANY PTY LTD

v STATE OF NEW SOUTH WALES

Judgment

1 HANDLEY JA: The Court has before it a summons by the plaintiff for leave to appeal from a decision of Newman AJ on 25 March 2003. He ordered that this action be summarily dismissed and allowed an appeal by the State from the decision of Master Harrison dismissing the State's motion to dismiss the action.

2 The statement of claim seeks to plead a cause of action in misfeasance in public office arising from the actions of a Mr John McMahon, an officer of the New South Wales Department of Health, in sending a letter on 9 December 1999 to the Australian Supermarkets Institute threatening prosecution action against its members who stocked the claimant's products in New South Wales.

3 The Court did not feel necessary to call upon Mr Mescher, counsel for the opponent, on a number of points taken by Mr Wales SC for the claimaint. These points were disposed of during argument and do not call for any further discussion in these reasons.

4 The substance of the claimant's claim is pleaded in the amended statement of claim in paras 6, 7 and 8. The Court is not persuaded that the claimant has an arguable case that the action of Mr McMahon in sending the letter was unauthorised in the sense that it lacked any necessary foundation in statute or the general law. However, the claimant has attempted to plead a cause of action in misfeasance of public office on an entirely different basis, namely that Mr McMahon abused his position in sending the letter and in doing so intended to cause harm to the claimant and acted in a way that the law would regard as malicious.

5 On this point the court called upon Mr Mescher. He endeavoured to persuade the court that there was no arguable or triable issue on this limb of the claimant's case but in my judgment he has not succeeded in doing so. It seems to be established both in Australia and in England that there are two limbs to this tort. It is sufficient for present purposes to refer to what Lord Millett said in Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1, 235 with reference to the first limb:

"The first limb, traditionally described as "targeted malice", covers the case where the official acts with intent to harm the plaintiff or a class of which the plaintiff is a member ... In my view the two limbs are merely different ways in which the necessary element of intention is established. In the first limb it is established by evidence; in the second inference.

The rationale underlying the first limb is straightforward. Every power granted to a public official is granted for a public purpose. For him to exercise it for his own private purposes, whether out of spite, malice, revenge, or merely self-advancement, is an abuse of the power. It is immaterial in such a case whether the official exceeds his powers or acts according to the letter of the power ... His deliberate use of the power of his office to injure the plaintiff takes his conduct outside the power, constitutes an abuse of the power, and satisfies any possible requirements of proximity and causation."

6 As at present advised the judgments of the High Court, at least those of Brennan J and Deane J in Northern Territory of Australia v Mengel [1995] HCA 65; (1995) 185 CLR 307, are consistent with this statement by Lord Millett. However, whether this is strictly so or not it is not appropriate for this Court on a strike out application to resolve any such question.

7 In my judgment therefore Newman AJ erred in dismissing the claimant's action. However the Court is satisfied that paras 6, 7 and 8 of the statement of claim cannot be allowed to stand. Paragraphs 6 and 7 attempt to plead the second limb of this tort based upon a purported exercise of a power which the public official does not possess. I have already held that there is no basis on which the action can be allowed to go to trial under that limb.

8 Paragraph 8 on the other hand is open to the construction that it pleads the first limb of this cause of action as described by Lord Millett. It does so in an inappropriate and inartistic way, which should not be allowed to stand. The particulars seem to merge allegations under both the first and the second limbs of this tort. However there is sufficient to make it clear that the pleader was or could have been intending to invoke the first limb. In these circumstances although para 8 should be struck out the claimant should be given leave to amend to replead its cause of action.

9 I would therefore propose that:

1. Leave to appeal granted. The claimant is to file its notice of appeal within 14 days.

2. Appeal allowed.

3. Judgment of Newman AJ set aside. In lieu thereof order that paras 6, 7 and 8 of the statement of claim be struck out with liberty to re-plead.

4. The respondent's notice of motion otherwise dismissed.

10 Both parties have been wrong in the positions they have taken, each party has been partly successful and I would propose that there be no order as to the costs of the proceedings before Master Harrison, Newman AJ or this Court.

11 GILES JA: I agree.

12 IPP JA: I agree.

13 HANDLEY JA: The orders I have pronounced are the orders of the court.

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LAST UPDATED: 13/02/2004