Government liability in negligence.

• Jurisdiction: Australia
• Author: Aronson, Mark
• Date: 01 April 2008

[The tort reform legislation of most Australian jurisdictions includes provisions directed specifically at protecting government defendants from civil liability. The legislation makes it harder to sue for breach of statutory duty, regulatory failure, the exercise of 'special statutory powers', and negligent failure to inspect the roads. These changes reflect an assumption long held at common law that there is something different about alleging government negligence, at least where the government is exercising statutory powers or performing statutory duties. The cases and reformers have long searched for the answer to the question of what that 'something' might be. This article considers the common law, analyses the legislation and then concludes by suggesting that a more principled approach would, in fact, focus on the nature of the functions performed, rather than on the identity of the defendant.]

CONTENTS I Introduction II The Scope of the Legislative Reform III The Common Law's Incompatibility Principle IV Does the Common Law Have Categorical Exclusions? V Getting behind the Common Law Labels VI Switching Resource Issues from 'Duty' to 'Breach' VII The Relationship between Statutory and Common Law Duties VIII Omissions IX Regulatory Failure X Statutory 'Policy' Defences and Wednesbury Unreasonableness XI Conclusion I INTRODUCTION

A V Dicey's conception of the rule of law required governments to be held to account in the 'ordinary' courts according to 'ordinary law'. (1) Although Dicey recognised that there were some laws which applied to government that did not apply to everybody else, his starting point was very modern: wherever possible, the political imperative is to put government on a level playing field with the rest of us. (2) Accordingly, state legislatures in Australia began overturning the Crown's immunity from tort actions in the 1850s. (3) Those statutes which have overturned the Crown's tortious immunity typically state that in actions by or against the Crown (or state) the parties' rights shall, 'as nearly as possible', be the same as in a case between subjects. (4) Gleeson CJ commented in Graham Barclay Oysters Pry Ltd v Ryan ('Graham Barclay Oysters') that:

That formula reflects an aspiration to equality before the law, embracing governments and citizens, and also a recognition that perfect equality is not attainable. Although the first principle is that the tortious liability of governments is, as completely as possible, assimilated to that of citizens, there are limits to the extent to which that is possible. They arise from the nature and responsibilities of governments. In determining the existence and content of a duty of care, there are differences between the concerns and obligations of governments, and those of citizens. (5) The remaining Australian statutes which allow suits against the Crown are silent as to the Crown's subjection to ordinary law being 'as nearly as possible'. They nevertheless have the same effect since that qualification flows not from statute but from substantive principles of the common law. (6)

It has long been difficult to give an account of the common law principles governing the liability of public authorities in negligence. While Dicey's equality principle applies in most cases, the exceptions to that principle have never been clear. Francis Trindade, Peter Cane and Mark Lunney have suggested three methods of approaching any discussion of government liability in negligence: (7)

1 By inquiring as to the source of the defendant's authority to have acted, asking whether it was statutory or not--this approach tends to cast the issues primarily as ones of statutory construction, asking whether the relevant Act can be taken as impliedly excluding a common law duty of care;

2 By asking whether the defendant is a public or private body--the danger of this approach is that it contradicts a fairly fundamental goal of our legal system that, as far as possible, the government's civil liabilities should be determined by the same principles that apply to its subjects; or

3 By considering the nature of the defendant's activity which allegedly harmed the plaintiff--on this approach, one asks whether the activity was public or private, but to do so one then has to seek the reason behind this question since the public-private distinction is otherwise unmanageable. This search for the underlying reason takes one straight back to the starting point, which is the search for the criteria for making exceptions to Dicey's equality principle.

The trouble is that while most people have a sense that governments occasionally warrant different treatment, the commentators have difficulty agreeing on a set of principles to determine when that is the case.

It seems to me that Trindade, Cane and Lunney were making a twofold point (with which I agree). First, none of their three approaches is entirely satisfactory. Secondly, and of at least equal concern, each approach is reasonably open in the current state of the common law. The common law on the liability of government authorities in negligence is remarkably confused. It has some failed attempts at unifying theories, plus a considerable number of more specific observations about particular issues as they relate to government liability. It has a lot of scraps, but very few of these can be safely assigned to the scrap heap.

This article will review the common law principles regarding government liability in negligence and attempt to assess the impact which the 'tort reform legislation' (enacted throughout Australia from the end of 2002) had on those principles. There are considerable differences in the detail of that legislation. This article will concentrate on the provisions of Part 5 of the Civil Liability Act 2002 (NSW) and will indicate where corresponding statutes in other Australian jurisdictions may differ.

Part 5 of the Civil Liability Act 2002 (NSW) deals solely with the tortious liability of public and other authorities, but one could hardly say that it is devoted to the topic. It has done very little to clarify things, but has done a lot more to make things even more unclear. Part 5 is not a codification of the common law, although it has clearly drawn on the cases. Like a bower bird, it picks up some of the common law's baubles from various judgments, but even these are not simply transplanted into the Act. They appear in the Act with puzzling modifications and with even more puzzling changes to their scope of operation. To make sense of Part 5, one has to understand what the scraps originally meant before one can understand what they might mean now. First, however, it is necessary to give a brief outline of the scope of Part 5.

II THE SCOPE OF THE LEGISLATIVE REFORM

The Review of the Law of Negligence: Final Report ('Ipp Report') recommended that a number of provisions be enacted to address or clarify particular problems relating to the liability of public authorities. (8) The report's principal recommendation was the enactment of a 'policy defence' to negligence claims against public authorities. (9) But it wanted to be sure that such a defence would not overreach.

Speaking broadly, the Ipp Report's policy defence focused on two types of negligence actions: (i) complaints concerning the careless allocation of scarce resources; and (ii) complaints concerning the careless formulation of social policy. The report recognised, however, that everyone has to balance scarce resources, and hence it did not want to allow governments to escape liability in negligence merely because they preferred to spend their money in other ways. (10) The report also recognised that its policy defence would overreach if translated into a provision allowing a defence for anything done in the performance of a statutory function, as many statutory functions (such as driving government cars) should be judged by ordinary law. (11) The Ipp Report's real problem, therefore, was to find a way of limiting the applicability of its policy defence, and that is where it provided very little guidance.

Ultimately, the Ipp Report recommended that its policy defence be limited to situations in which the defendant exercises a 'public function'. (12) However, the report declined to define that term, stating that '[t]his should be left for common law development.' (13) The Ipp Report's only hint as to how it understood 'public function' was tantalisingly brief--it was 'a function that required the defendant to balance the interests of individuals against a wider public interest, or to take account of competing demands on its resources.' (14) However, this simply restates the policy defence in overly broad terms without indicating how it might be limited. The report suggested that judges should decide whether it was 'appropriate' to apply the defence to any particular situation, (15) stating that:

It is extremely important to understand that whether any particular function is 'public' in this sense is not a matter of fact or observation but a value judgment which ultimately a court must make. (16) The Ipp Report, therefore, proposed a policy defence but declined to define it. However, it did indicate those for whom the defence should be available. These were to be both corporate bodies and natural persons to the extent that they were exercising public functions. (17) This was in recognition of the fact that government entities are not the only bodies that exercise public functions. (18)

The Ipp Committee intended its policy defence to have a limited effect; it was not to be a total defence. (19) In situations where a court were to regard it as 'appropriate' to apply the policy defence (thus concluding that a 'public function' was involved), the defendant would still be liable if the way it exercised or omitted to exercise its public function was so unreasonable that no reasonable authority would have acted in that way (20)--that is, the Wednesbury...