Northern Territory v Mengel
129 ALR 11995 - 0419A - HCA
(Judgment by: Mason CJ, Dawson J, Toohey J, Gaudron J, McHugh J)
Between: Northern Territory
And: Mengel
Judges:
Mason CJBrennan J
Deane J
Dawson J
Toohey J
Gaudron J
McHugh J
Subject References:
Tort
Judgment date: 19 April 1995
Canberra
Judgment by:
Mason CJ
Dawson J
Toohey J
Gaudron J
McHugh J
The respondents own two cattle stations in the Northern Territory, Neutral Junction which members of the Mengel family acquired in 1962 and Banka Banka Station which was purchased in 1987. Banka Banka is approximately 200 kilometres north of Neutral Junction and has a slightly higher rainfall. One of the reasons for its purchase was so that cattle could be moved there from Neutral Junction during drought.
The respondents (who can conveniently be referred to as "the Mengels") purchased Banka Banka for approximately $3 million, financing its purchase with a bank loan. They intended to repay $1 million of that loan from the sale of cattle by the end of the 1988 season. However, they were not able to fully realize their selling plans and suffered loss because of action taken by two employees of the Northern Territory Department of Primary Industry and Fisheries ("the Department"), namely, Mr Baker, a stock inspector, and Mr Tabrett, Acting Chief Veterinary Officer and Chief Inspector of Stock for the Northern Territory ("the Inspectors") . It is now clear that there was no statutory or other authority for the acts of the Inspectors notwithstanding that they were furthering the aims of a government-sponsored campaign to eradicate bovine brucellosis and tuberculosis ("the campaign").
The Mengels commenced proceedings in the Supreme Court of the Northern Territory claiming damages against the Northern Territory ("the Territory") and, also, against the Inspectors. For the purposes of this appeal, the claim can be described as one based on the unauthorized acts of the Inspectors. This notwithstanding, the Territory accepts that, if there is any liability on the part of the Inspectors, it is vicariously liable to the Mengels. Presumably, the Territory takes the view that there was de facto authority for the acts in question. [F1]
The campaign
Brucellosis is a disease which affects cattle and humans who come into contact with infected animals or their products. It was widespread throughout Australia in the 1970s and early 1980s but has now been eradicated. The Territory initiated its own campaign to eradicate the disease and this was followed, in the early 1980s, by a national campaign involving inter-governmental agreements between the Commonwealth, the States and the Territory. So far as the Territory is concerned, an agreement was made in 1984 by which the Commonwealth provided financial assistance and the Territory undertook a program as therein specified for the eradication of bovine brucellosis and tuberculosis.
The agreement between the Commonwealth and the Territory envisaged the testing of all herds, and destocking where necessary. The primary method for testing an animal for brucellosis - at least in the Territory - was to analyse serum extracted from its blood. However, healthy animals could sometimes react positively to the test and, in cases of uncertainty, the general practice was to kill those that reacted ("reactors") and to culture parts of their anatomy, a process which took approximately four weeks. The agreement envisaged that compensation would be paid for infected cattle and, perhaps, for cattle that had to be slaughtered for testing. It also envisaged that, at least in some circumstances, restrictions would be placed on the movement and sale of cattle that might be infected, but not that compensation would be paid in the event that loss was suffered as a result of those restrictions.
The legal basis for the campaign
So far as the Territory is concerned, the campaign was carried out, in the main, by means of agreements (known as "approved programs") between the Territory and individual property owners. It seems that most property owners willingly entered into approved programs by which they agreed to have their herds tested and destocked and the Territory agreed to compensate them for infected animals and, perhaps, for healthy animals that had to be slaughtered for testing.
The campaign also had the backing of s 27 of the Stock Diseases Act 1954 (NT) ("the Act"), which authorized the classification of holdings in terms which are also found in the agreement with the Commonwealth. [F2] It provided:
- "(1)
- The Chief Inspector may, by notice in writing to the owner of a holding, in relation to a prescribed disease, give the holding one of the following classifications:
- (a)
- accredited free;
- (b)
- confirmed free;
- (c)
- tested negative;
- (d)
- monitored negative;
- (e)
- provisionally clear;
- (f)
- restricted;
- (g)
- infected; or
- (h)
- not assessed.
- (2)
- The Chief Inspector [F3] may, for the purpose of controlling a prescribed disease, by notice in the Gazette, specify the restrictions which shall apply to and in relation to the movement in, or into, or the sale or purchase in, the Territory of stock, or a class of stock, and, for such purpose, the restrictions may be expressed to relate to the disease status of a holding.
- (3)
- Without limiting the generality of subsection (2), the restrictions specified in a notice under that subsection may include-
- (a)
- a total prohibition on the movement; and
- (b)
- a total prohibition on the sale or purchase, of stock or a class of stock.
- (4)
- A person shall not move, sell or purchase stock in contravention of the restrictions specified in a notice under subsection (2).
- Penalty: $1,000 or imprisonment for 6 months."
Brucellosis and tuberculosis were prescribed diseases for the purposes of s 27.
A notice under s 27(2) of the Act was published in the Northern Territory Gazette on 31 August 1988 ("the Gazette notice") which, so far as is presently relevant, was as follows:
"BRUCELLOSIS
Movement in and Into The Territory
Where cattle or buffalo are from herds with a disease status, in accordance with the national brucellosis and tuberculosis eradication campaign, of-
- (a)
- infected, suspect, restricted or provisionally clear where herds subject to an eradication programme approved for the purposes of that campaign and are-
- (i)
- spayed females or steers - no restrictions and no test required; or
- (ii)
- entire cattle or buffalo - movement permitted for the purpose of immediate slaughter provided cattle or buffalo moved directly to an abattoir;
- (b)
- tested negative, monitored negative, or confirmed free where herds not previously infected - no test required".
Neither the Act nor the approved programs provided for payment of compensation in the event that a property owner suffered loss by reason of movement restrictions flowing from s 27(2) of the Act.
It remains to be noted that the Act conferred other powers which, although not specifically related to the campaign, might be used in an appropriate case. For example, s 42(1)(l) conferred power on an inspector [F4] to:
"order the owner of land, on which are depastured any stock which the inspector has reasonable cause to believe are infected, to prevent any stock from entering or leaving such portion of the land as is specified by the inspector for such period, not exceeding 40 days, as the inspector specifies".
And by s 42(1)(t) power was conferred on an inspector to "seize and detain any stock which have been driven or moved contrary to [the] Act". [F5]
The program for Neutral Junction and Banka Banka
The Mengels entered into a program with respect to Neutral Junction, apparently in 1983 as part of the early campaign initiated by the Territory. It seems that this was treated as an approved program for the purposes of the national campaign and, in February 1985, Neutral Junction was classified under s 27(1) of the Act as "tested negative" for both brucellosis and tuberculosis. Banka Banka was classified as "confirmed free" for both diseases sometime before its purchase by the Mengels in 1987. The Mengels did not enter into any program for Banka Banka.
The terms of the program entered by the Mengels in 1983 suggest that it may have been intended to operate until 1992. However, the program did not specify any action that had to be taken after 1987. At one point in his judgment on the trial of this matter, Asche CJ appeared to be saying no more than that the evidence did not permit of a finding that there was an approved program or, in terms of par.(a) of the Gazette notice, "an eradication programme approved for the purposes of [the national] campaign" current for either of the Mengels' properties in September 1988. However, in other passages, his Honour seemed to assume that there were no approved programs in existence at the time. He approached this issue on the basis that it was for the Territory and the Inspectors to establish that there was an approved program current, rather than for the Mengels to establish that there was not. The justification for this approach is not apparent. In the Court of Appeal Priestley J. proceeded on the basis that the Mengels' herds were not subject to an approved program at the relevant time. Thus this aspect of the case is left in a somewhat unsatisfactory state. However, in the appellants' written submission to this Court it is said that, whereas the Inspectors believed that the imposition of movement restrictions was authorized, the herds "were not at the time 'subject to an eradication programme approved for the purposes of the ... campaign'". The matter must be dealt with accordingly.
The actions of the Inspectors
There were dry conditions at Neutral Junction during the 1987/88 season and about 2,500 head of cattle were moved to Banka Banka. Conditions there were not entirely as hoped and some cattle had to be returned to Neutral Junction. In August or September 1988 the Mengels began a muster on both stations, intending to sell some 4,400 head of cattle. It was important for the sales to take place so that a payment could be made to the bank and, also, so that the lot of the remaining cattle could be alleviated in the prevailing dry conditions. They intended to sell some cattle to the abattoirs and some as breeders. They were hoping to get good prices by selling the breeders at Alice Springs for a southern market. This, they thought, could only be done if the cattle were tested and declared free of brucellosis. It has since emerged that testing was not required, at least if the cattle were sold in the Territory or in Queensland. On 3 September 1988, one of the Inspectors, Mr Baker, came and took blood samples from 95 heifers mustered at Neutral Junction and intended for sale as breeders. These heifers were among those agisted at Banka Banka and returned to Neutral Junction. The samples were sent to Alice Springs for testing. There was one positive reaction.
On 6 September, Mr Baker informed the Mengels of the results of the tests and also informed them that there were restrictions on the movement of their cattle from Neutral Junction and Banka Banka. It is not clear precisely what was said, but Mr Baker intended them to understand, as they did, that there were no restrictions on the movement of spayed females or steers but their breeder cattle could only be moved to an abattoir for immediate slaughter. They also understood, if not then within a day or two, that the restriction would apply until it was established that the reactor was not infected and that that would involve culture testing and would take approximately 30 days. And it is clear that they believed that failure to comply with the restriction would constitute an offence under the Act, although they did not concern themselves with its precise nature or, indeed, with the legal basis for the restriction.
The Inspectors did not think it likely that the reactor was infected. Moreover, they knew of the predicament facing the Mengels if they could not sell their cattle as planned. However, they were of the view that the Act or the approved programs imposed restrictions once a reactor was found in a herd. In this regard, it seems that they assumed that the Mengels were party to a current approved program. As earlier indicated, the Mengels entered into a program for Neutral Junction in 1983, however the trial judge was not able to make a finding that there was an approved program for either property current in September 1988. There is no doubt that, had there been an approved program, the Inspectors would have been obliged to change the status of the cattle to "suspect" to comply with the campaign and, in that event, the cattle would have been subject to movement restrictions in accordance with par.(a) of the Gazette notice.
The Mengels arranged for another blood sample to be taken from the reactor before it was taken away for culture testing and for that sample to be sent to Adelaide where a different test was in use. After discussing the matter with an officer of the Department, they arranged for other cattle to be tested by the Department in the hope that, if there was no further reaction, it would be accepted that the reactor was not, in fact, infected.
On or about 9 September, before the further tests were conducted, the regional veterinary officer, Mr Wilson, made an entry in the Department's computer records indicating that the status of the cattle at Neutral Junction and Banka Banka was "suspect". It is not clear whether the entry was made with s 27(2) in mind or simply for administrative purposes.
Further tests were conducted on 950 animals at Banka Banka on 11 and 13 September. There were 22 reactors. Again, it seems, the Inspectors did not think it likely that the animals were infected. However, they again informed the Mengels that their cattle were subject to the same movement restrictions. The Mengels arranged for further blood samples to be taken from the reactors and for those samples to be sent to Adelaide. However, they refused to hand the reactors over for culture testing until such time as the Department received the results from the culture testing of the first reactor.
By 26 September, a technical officer at the Alice Springs testing laboratory believed it unlikely that the cattle were infected but he wanted to make sure by culture testing. As a result, Mr Tabrett sent a facsimile message to Mr Baker which he, Mr Baker, passed on to the Mengels on or about 30 September and which stated that it was necessary to culture test 13 of the cattle that had reacted positively to serum testing on 11 and 13 September. The message reiterated that the cattle were subject to movement restrictions - in fact, it said they were quarantined. By this time, the Mengels had been informed that the first sample that they had sent to Adelaide had tested negative and, for this and, perhaps, other reasons, they continued to refuse to hand over the reactors. They were eventually handed over to the Department on 25 October.
On or about 7 November the Mengels received information from Adelaide that, for practical purposes, brucellosis could be ruled out. A few days after this, the Department came to the same conclusion and, on 14 November, informed the Mengels that the movement restrictions were lifted.
It remains to be noted that, on several occasions prior to 14 November, the Mengels spoke to the Inspectors and, on 20 October, approached the Minister to see if something could be done to get them out of their predicament. Nothing came of their requests and they complied with the restrictions that had been communicated to them. Thus, they did not sell their breeder cattle as planned and, because of the dry conditions, they had to import feed and arrange for cattle to be agisted. And, to meet their obligations to the bank, they had to sell some of their steers earlier than planned.
The proceedings and the issues in the appeal
The Mengels formulated their claim against the Inspectors and the Territory in several different ways, relying on various causes of action. At first instance, Asche CJ held that they were entitled to succeed on one and only one cause of action, namely, an action on the case based on the decision in Beaudesert Shire Council v. Smith. [F6] His Honour entered judgment for the Mengels in the sum of $305,371 plus interest, holding that they could not recover their losses in full because their refusal to hand over the reactors for culture testing amounted to a failure by them to mitigate the damage caused by the actions of the Inspectors. The Territory and the Inspectors appealed to the Northern Territory Court of Appeal and the Mengels cross-appealed. The appeal was dismissed and the cross-appeal allowed, but only on the question whether damages should have been reduced. The judgment was increased to $425,125 plus interest.
The Court of Appeal rejected an argument that Beaudesert should not be followed and held that the Mengels were entitled to succeed on an action on the case based on that decision. As well, Priestley J. was of the view that they were entitled to succeed on an action on the case "very similar to that on which Beaudesert was based, but not confined to it" which, in his Honour's view, was recognized by Dixon J. in James v. The Commonwealth. [F7] Angel J. agreed generally with the judgment of Priestley J., and with his Honour's analysis of James v. The Commonwealth, but expressed the view that liability rested on a broader consideration, namely, "the place of individual liberty of action within our society under the constitutional principle of the rule of law". Thomas J. agreed with Angel J. and with Priestley J.
In this Court, the appellants argue that Beaudesert was wrongly decided and that there is no cause of action of the kind described in that case. And they say there is no cause of action of the kind identified by Priestley J. or of the kind identified by Angel J. in the Court of Appeal. But if they are wrong on these matters, they argue that none of these causes of action is made out. They make no alternative complaint with respect to the decision of the Court of Appeal to increase damages.
For their part, the Mengels argue that they were entitled to succeed in their action, either because of the decision in Beaudesert or because of the separate causes of action identified by Priestley and Angel JJ. in the Court of Appeal. They contend also that they were entitled to succeed on their claim for misfeasance in public office, the mental element of which is made out, they argue, if the public officer either knows or ought to know that he or she is acting without authority. This claim was rejected by the trial judge, and the Court of Appeal saw no reason to disturb that rejection. The Mengels do not contend that they were entitled to succeed on any of the other causes of action on which they relied at first instance although, in the course of argument, it was asserted that, if it were established that the Inspectors ought to have known that they were acting without authority, that would also entitle the Mengels to succeed in negligence.
Findings no longer in issue
It is now clear that the Inspectors were acting outside the scope of their authority when they informed the Mengels that their cattle were subject to movement restrictions. It is necessary to explain the findings that lead to this conclusion.
The appellants have never suggested any authority for the Inspectors' action other than the Gazette notice. In this regard, they claimed that par.(a) of the notice imposed movement restrictions which the Inspectors communicated to the Mengels. They did not at any stage rely on s 42(1)(l) of the Act, which confers power to impose movement restrictions on cattle which a stock inspector has reasonable cause to believe are infected, apparently because the Inspectors did not think they were infected, or, at least, did not think that likely.
At first instance, Asche CJ construed par.(a) as applying only to herds which were subject to an eradication program, that is, in respect of which there was a current approved program. As earlier indicated, his Honour held that, on the evidence, he could not find that there was an approved program current for either of the Mengels' properties in September 1988 - hence, the finding that the Inspectors had no authority to impose movement restrictions. This finding exposes the error in what the parties thought had happened and in the basis on which the Mengels conducted their case at first instance, namely, that movement restrictions had been imposed by the Inspectors either directly under s 42(1)(l) of the Act or indirectly by changing the status of the Mengels' holdings or herds to "suspect".
The construction which Asche CJ placed on par.(a) of the Gazette notice was confirmed by the Court of Appeal and the appellants now accept that it is correct. They also accept that the evidence did not enable his Honour to make a finding that there was an approved program current at the relevant time. Thus, it is no longer in issue that the Inspectors were acting outside the scope of their authority.
It was said in the course of argument that there was no longer any issue with respect to the finding by Asche CJ that there was no malice on the part of the Inspectors. More precisely, his Honour found that the Inspectors neither knew that they lacked authority for their actions nor intended to harm the Mengels. As they were aware of the predicament which the Mengels faced if they could not sell their cattle as planned, this latter aspect of the finding is, perhaps, better expressed in terms of the Inspectors not being actuated by an intention to harm the Mengels.
The Mengels accept that the Inspectors did not have actual knowledge that they were acting outside the scope of their authority but they argue that the finding leaves open the question whether they had constructive knowledge in the sense that they should have known. And they say that constructive knowledge of that kind is sufficient, in the circumstances, to establish misfeasance in public office.
The principle in Beaudesert
It was held in Beaudesert that "independently of trespass, negligence or nuisance but by an action for damages upon the case, a person who suffers harm or loss as the inevitable consequence of the unlawful, intentional and positive acts of another is entitled to recover damages from that other". [F8] It was on the basis of this principle that Asche CJ found for the Mengels at first instance.
There are two problems in this case which arise out of the statement of principle in Beaudesert. The first concerns "unlawful act". Is it an act forbidden by law or, simply, an unauthorized act in the sense of an act that is ultra vires and void? An analysis of Beaudesert would suggest that it is the former. In that case, Mr Smith, who was licensed to pump water from a waterhole in a river, suffered damage when the defendant Council altered its flow by taking gravel from the river bed. There was a statutory prohibition on the taking of gravel except with a permit which the Council did not have. Thus, the act in question was one forbidden by law. Moreover, it was said in the Court's reasons for judgment that, if what the Council did was actionable at the suit of Mr Smith, "liability must depend upon the broad principle that the Council intentionally did some positive act forbidden by law which inevitably caused damage to Smith by preventing the continuing exercise of his rights as a licensee" [F9] (emphasis added). And the cases in which the issue has since been considered have uniformly favoured the view that the Beaudesert principle applies only to acts forbidden by law. [F10]
The second difficulty relates to "inevitable consequence". As a matter of ordinary language, "inevitable" suggests something that is bound to happen, not merely something likely to happen in the ordinary course. It is convenient to observe at this point that that raises a question as to the relationship between inevitable consequence and foreseeability. It will not often be the case that something that is bound to happen will not also be foreseeable. Yet there is nothing in the facts of Beaudesert, at least so far as they appear in the Court's reasons for judgment, constituting a finding that it was foreseeable that the removal of the gravel would either alter the flow of the river or cause damage to those licensed to pump water from it.
It is not possible to discern from the facts of this case an act forbidden by law which caused harm to the Mengels. Nor is it easy to discern an unauthorized act. At first instance, Asche CJ proceeded on the basis that the act which caused harm was the unauthorized imposition of movement restrictions, but what happened was that the Inspectors told the Mengels that there were movement restrictions when, in fact and in law, there were none. That did not involve an act forbidden by law in any relevant sense. Nor did it require authority in a way justifying its description as "unauthorized".
In the Court of Appeal, Priestley J. identified the unlawful act which caused harm as "purporting to change the status of the properties of persons" (presumably, by the making of the entry in the Department's computer records to the effect that the status of the Mengels' cattle was "suspect") combined with "directing people to do things ... where disobedience to the directions exposes the persons, if the directions are authorised, to personal penalty and the seizure of their property" which, in another part of his judgment, his Honour conveniently identified as "an implied threat of penalty". There are a number of difficulties in this approach. In the first place, the computer entry was made by Mr Wilson, the regional veterinary officer, and not by either of the Inspectors. Moreover, it is difficult to see how the "implied threat" to which Priestley J. referred could be described as a "positive act" for the purposes of the Beaudesert principle. As well, it is far from clear that the making of the computer entry or the making of an implied threat of penalty requires authority in any way that would warrant either being described as "unauthorized". And even if they are properly described as "unauthorized", there is a further difficulty in the notion that they inevitably caused damage. Damage was suffered when the Mengels acted on the basis that their cattle were subject to the movement restrictions communicated to them and, even if it is assumed that that was likely to happen in the ordinary course, there is nothing to suggest that it was bound to happen.
Although it was argued for the appellants that there was no unlawful act on the part of the Inspectors or, alternatively, none that inevitably caused damage, the primary argument was that Beaudesert was wrongly decided. The statement of principle embodied in Beaudesert has been expressly rejected in the United Kingdom [F11] and in New Zealand [F12] and the decision has been widely criticized on the basis that it is neither supported by the authorities cited in the decision nor in harmony with the law relating to tortious liability as it was then or as it has since developed. [F13]
This case aside, there is no reported case in which Beaudesert has been applied. [F14] Prima facie, at least, if Beaudesert does proceed from or does involve an error of principle, it is appropriate for this Court either to reformulate the principle or to indicate that it is no longer good law. In this regard, it is sufficient to note that, apart from the fact that it was a unanimous decision and, perhaps, has not led to any great inconvenience, Beaudesert is a case which satisfies the criteria which determine whether this Court should review or depart from an earlier decision. [F15]
The principle in Beaudesert and earlier authority
It is clear that the principle stated in Beaudesert is one which had neither been formulated nor suggested in earlier cases. Of itself, that is of no particular significance. The common law consists of judicially formulated principles and, necessarily, there is always a first formulation. Moreover, the development of the common law proceeds on the basis of the identification and enunciation of principles that unify and explain earlier decisions. And that is what Beaudesert purported to do.
In Beaudesert, the Court referred to seven earlier cases and concluded that, although "(i)t (was) not ... possible to adopt a principle wide enough to afford protection in all circumstances of loss to one person flowing from a breach of the law by another", there was, nonetheless, "a solid body of authority which protects one persons's (sic) lawful activities from the deliberate, unlawful and positive acts of another". [F16] The seven earlier decisions to which reference was made do provide some general support for that proposition. However, the extent of the support depends, in large measure, on what is involved in the notion of "deliberate, unlawful and positive acts". It is clear that some of the cases involved acts which, although properly described as "deliberate, unlawful and positive", were intentional in the sense that they were directed against the plaintiff or the activity in which he was lawfully engaged and not merely intentional in the Beaudesert sense of an intentional act which inevitably caused harm. The position can conveniently be illustrated by reference to two of the cases referred to in Beaudesert, namely Garret v. Taylor [F17] and Tarleton v. M'Gawley. [F18]
In Garret v. Taylor, as Beaudesert records, the plaintiff succeeded in an action for losing the benefit of his quarries when "the defendant threatened violence to the extent of committing an assault upon employees and customers of the plaintiff ... whereupon 'they all desisted from buying, and the others from working'". [F19] However, the pleadings make it clear that the actions of the defendant were deliberate, not merely in the sense of being intentional, but in the sense of being directed against the plaintiff, it being asserted in the pleadings that the defendant engaged in the acts in question "to discredit and to deprive [the plaintiff] of the commodity of the said mine". [F20]
Similarly, it is clear that the acts considered in Tarleton v. M'Gawley were deliberate in the sense of being purposely directed, if not at the plaintiff, at activities in which he was lawfully engaged. Again as Beaudesert records, it was held in that case "that an action on the case lay against the master of a vessel for purposely firing a cannon at negroes and thereby preventing them from trading with the plaintiff". [F21] It clearly appears from the report of that case that that was done purposely in the sense of "contriving and maliciously intending to hinder and deter [them] from trading". [F22]
Three other decisions referred to in Beaudesert also involved acts which, prima facie at least, would seem to have been directed against the plaintiff or against the activities in which he was lawfully engaged. In The Earl of Shrewsbury's Case [F23] mention is made of a case in which the plaintiff was the Abbot of Evesham who "had a fair in S. with all that belonged to a fair", and the defendant "with force and arms disturbed the people coming to the fair ... by which the plaintiff lost his toll". [F24] And in Carrington v. Taylor, [F25] the defendant disturbed an ancient decoy for wild fowl by firing near it, a fact situation very similar to that involved in Keeble v. Hickeringill. [F26] In that latter case, Holt CJ proceeded on a basis which clearly suggests that what was under consideration were acts directed against a plaintiff or against activities in which he was lawfully engaged. Thus, his Lordship said: [F27]
"where a violent or malicious act is done to a man's occupation, profession, or way of getting a livelihood; there an action lies in all cases".
Reliance was placed on two other cases in Beaudesert , namely Mogul Steamship Company v. McGregor, Gow & Co. [F28] and Whaley v. Laing. [F29] So far as Mogul Steamship is concerned, it is more accurate to say that reliance was placed on an assumption made in some of the judgments in that case. It was held in Mogul Steamship that there was no cause of action for economic loss occasioned by acts done pursuant to an agreement if the acts were done for a lawful object and did not involve unlawful means. It was said in Beaudesert that there was an assumption in some of the judgments in Mogul Steamship, especially those of Bowen L.J. and Fry L.J., [F30] that "had the acts of the defendants been unlawful - even in relation to third parties - and the economic loss to the plaintiffs sprung from such unlawful acts, the plaintiffs would have had their remedy". [F31] Given the decision in Mogul Steamship that the plaintiffs had no cause of action, it is difficult to regard an assumption that there would have been a cause of action in quite different circumstances as an authoritative statement of the law in that regard.
In Whaley v. Laing there is support in the judgment of the Court of Exchequer, and in those of Willes J. and Crowder J. in the Court of Exchequer Chamber, for the proposition that the defendant was liable to the plaintiff for damage occasioned to his boilers in consequence of the defendant's unlawful fouling of a canal from which the plaintiff had permission to feed his boilers. [F32] There was, however, a divergence of opinion on this issue in the Exchequer Chamber where the bench was evenly divided. [F33] In these circumstances, the case is of limited authority.
The cases referred to in Beaudesert do not provide authoritative support for the wide principle there laid down: Mogul Steamship and Whaley v. Laing are of limited authoritative value and the other cases are concerned, in the main, with acts directed against a plaintiff or the lawful activities in which he was engaged and not merely with intentional acts which inevitably caused harm.
Intentional and negligent infliction of harm in the law of torts
It is the intentional element of the cause of action described in Beaudesert that has given rise to most concern. More precisely, it is that the principle as formulated permits of liability notwithstanding that there is neither negligence nor an intention to inflict harm. So far as intention is concerned, the cause of action does not depend on an intention to harm the plaintiff, but on the doing of an act which is intentional and the inevitable consequence of which is to cause loss to the plaintiff. [F34]
It will later be necessary to say something of the action for breach of statutory duty. But putting that action aside, the recent trend of legal development, here and in other common law countries, has been to the effect that liability in tort depends on either the intentional or the negligent infliction of harm. That is not a statement of law but a description of the general trend, the most recent example of which in this country is to be seen in Burnie Port Authority v. General Jones Pty. Ltd [F35] In that case it was held that, subject to one qualification, the special rule in Rylands v. Fletcher [F36] imposing strict liability for the escape of dangerous substances involved in the non-natural use of land had been absorbed in the general law of negligence. The qualification was that there might be cases in which "it is preferable to see a defendant's liability in a Rylands v. Fletcher situation as lying in nuisance (or even trespass) and not in negligence". [F37]
Moreover, developments involving the so-called "economic torts" (which the cause of action described in Beaudesert is sometimes said to be) [F38] have largely proceeded on the basis that liability depends on the intentional infliction of harm. However, the "economic torts" emerged only in the second half of the last century [F39] and, even now, the law in that regard is far from settled. The first development of significance was the recognition, in Lumley v. Gye, [F40] of the tort of intentional interference with contractual rights. Subsequent developments in the United Kingdom have, to some extent, impinged upon the intentional element of that tort. Liability does not depend on whether there is a predominant intention to injure [F41] and it has been held that constructive knowledge of the terms of a contract is sufficient, so that a defendant may be liable if he or she recklessly disregards the means of ascertaining those terms. [F42] But it is still accurate to describe the tort as one that depends on an intention to harm for that is necessarily involved if a person knowingly interferes with the enjoyment by another of a positive legal right, whether such knowledge is actual or constructive.
Other early developments saw the recognition of the torts of intimidation and conspiracy, both of which require an intention to cause economic harm. [F43] More recent developments in the United Kingdom suggest the emergence in that country of a tort of interference with trade or business interests by an unlawful act directed at the person injured, although not necessarily done for the purpose of injuring his or her interests. [F44] It seems to be accepted that this embryonic or emerging tort does not extend to all unlawful acts and that, at least in that regard, it is in need of further definition. [F45] So far as this emerging tort depends on an unlawful act, there is an obvious similarity with the cause of action recognized in Beaudesert. However, there is an obvious difference with respect to intention. The emerging tort requires that the unlawful act be directed at the person injured whereas there is no like requirement in Beaudesert.
The principle in Beaudesert, negligence and the action for breach of statutory duty
As earlier indicated, the decision in Beaudesert has been criticized as not in harmony with the law as it was when the decision was given and as it has since developed. Apart from the economic torts to which reference has already been made, it is sufficient to mention only the relationship between the cause of action described in Beaudesert and two others, namely, the action for negligence and the action for breach of statutory duty.
The Beaudesert principle allows, at least as a matter of legal theory, that there may be liability notwithstanding that, in the circumstances, the plaintiff is under no duty of care to avoid harm to the plaintiff. And liability does not depend on an intention to harm. There may be cases involving breach of a duty of care which fall within the Beaudesert principle but, to that extent, the principle serves no useful purpose. And if there is no duty of care, it is anomalous, to say the least, to hold a person liable for harm which is not intentional and which he or she is under no duty to avoid.
There is an obvious similarity between the cause of action recognized in Beaudesert and the action for breach of statutory duty which also allows that there may be liability regardless of negligence and regardless of intention to injure. But there is some difficulty in reconciling these causes of action by reason that there is no action for breach of statutory duty unless the legislation confers a right on the injured person to have the duty performed. [F46] If no right is conferred, the general rule is that there is no liability in damages. The principle stated in Beaudesert runs counter to that rule, notwithstanding that the limitations on the action for damages for breach of statutory duty were expressly acknowledged in the decision in that matter. [F47] It was that acknowledgment that led Mason J. to conclude in Kitano v. The Commonwealth, rightly in our view, that to succeed in an action on the case based on Beaudesert, a plaintiff "must show something over and above what would ground liability for breach of statutory duty if the action were available". [F48] Nothing in Beaudesert, apart perhaps from the inevitability of damage, suggests what that might be. And as has been seen, there are difficulties with inevitability as a legal concept, particularly its relationship with foreseeability.
Beaudesert should not be followed
The lack of authoritative support for the principle stated in Beaudesert, the difficulties associated with the notions of "unlawful act" and "inevitable consequence", and the further difficulty of reconciling liability under that principle with the limitations upon liability for negligence and for breach of statutory duty and with the general trend of legal development confining liability to intentional or negligent infliction of harm compel the conclusion that Beaudesert should no longer be followed.
The Beaudesert principle should be overruled, not reformulated
Developments in the United Kingdom suggest the emergence in that country of tortious liability for harm caused by an unlawful act (more precisely, some unlawful acts) directed against a plaintiff. It may be that the cases referred to in Beaudesert support an approach which would lead to a similar result in this country. But that is not a matter that falls for consideration in this case. Rather, it was argued on behalf of the Mengels that the principle should be reformulated to impose liability for unlawful acts causing harm when harm is foreseeable and is, in fact, foreseen. Although there are no findings on the matter at first instance, it may be accepted that the harm suffered by the Mengels was both foreseeable and foreseen, given that the Inspectors knew of the predicament that the Mengels faced if they could not sell their cattle as planned.
The reformulation which was advanced on behalf of the Mengels suffers from the same critical defects as the Beaudesert principle. It is not supported by authority, it runs counter to the trend of legal development and, also, counter to the limitations which have been placed on liability for damages flowing from breach of statutory duty. Further, the reformulation serves no useful purpose in cases where there is a duty of care to avoid foreseeable harm and is anomalous in cases where there is not, at least if the plaintiff is not actuated by an intention to harm. Subject to the qualification that there may be cases in which there is liability for harm caused by unlawful acts directed against a plaintiff or the lawful activities in which he or she is engaged, the Beaudesert principle should be overruled.
Misfeasance in public office
It is convenient to consider misfeasance in public office before turning to the separate causes of action identified by Priestley and Angel JJ. in the Court of Appeal, if only for the reason that the former is regarded as "well-established" [F49] and any consideration of extended liability along the lines adopted in the Court of Appeal must depend, to some extent, on whether existing principle is unduly narrow.
It was recognized as recently as 1973 that the precise limits of the tort of misfeasance in public office were then undefined. [F50] In important respects, that is still true. However, the weight of authority here [F51] and in the United Kingdom [F52] is clearly to the effect that it is a deliberate tort in the sense that there is no liability unless either there is an intention to cause harm or the officer concerned knowingly acts in excess of his or her power. There are three cases which are sometimes said to support a wider liability. The first is Brasyer v. Maclean. [F53] That case was referred to by Smith J. in Farrington v. Thomson & Bridgland, which is generally regarded as one of the seminal cases on misfeasance in public office, in connection with the statement that
"in some cases at least, ... it is sufficient that the act was a breach of his official duty, even though it is not shown either that he realized this or that he acted maliciously". [F54]
Brasyer v. Maclean involved a sheriff's false return of rescue upon a writ of capias ad respondendum and it may have been decided on the basis that the sheriff was to be taken as having the same knowledge as the bailiffs to whom he entrusted its execution. Whether or not that is so, the suggestion made in Farrington that Brasyer laid down a general rule extending liability beyond acts intended to cause harm or acts known to be beyond power, has been implicitly rejected in other cases [F55] and explicitly rejected in Pemberton v. Attorney-General. [F56] The other two cases which are sometimes said to support a wider liability [F57] are Wood v. Blair and Helmsley Rural District Council [F58] and McGillivray v. Kimber. [F59] However, liability was admitted in the first case [F60] and there was a strong suggestion that the public officers were motivated by malice in McGillivray v. Kimber. [F61]
One aspect of misfeasance in public office that lacks precise definition is whether, assuming damage, it is sufficient to establish that the public officer knows that he or she is acting without authority or whether there is some additional requirement. For example, it was suggested in Bourgoin SA v Ministry of Agriculture [F62] that there is an additional requirement that damage be foreseeable, and it was said in Tampion v. Anderson [F63] that the plaintiff must be "the member of the public, or one of the members of the public, to whom the holder of the office owed a duty not to commit the particular abuse complained of".
There is a statement in Farrington which might be thought to deny any requirement over and above knowledge that the act is beyond power. It was said in that case that "if a public officer does an act which, to his knowledge, amounts to an abuse of his office, and he thereby causes damage to another person, then an action in tort for misfeasance in a public office will lie against him at the suit of that person". [F64] However, there is no indication as to what is comprehended in the expression "an abuse of his office" and Smith J., whose decision it was, was a member of the Full Court which later stated in Tampion v. Anderson that there was, additionally, a requirement that there be a duty to the plaintiff. Moreover, the act complained of in Farrington, namely, that of ordering the closure of a hotel, was one which, if complied with, would necessarily result in damage.
The cases do not establish that misfeasance in public office is constituted simply by an act of a public officer which he or she knows is beyond power and which results in damage. Nor is that required by policy or by principle. Policy and principle both suggest that liability should be more closely confined. So far as policy is concerned, it is to be borne in mind that, although the tort is the tort of a public officer, he or she is liable personally and, unless there is de facto authority, there will ordinarily only be personal liability. [F65] And principle suggests that misfeasance in public office is a counterpart to, and should be confined in the same way as, those torts which impose liability on private individuals for the intentional infliction of harm. For present purposes, we include in that concept acts which are calculated in the ordinary course to cause harm, as in Wilkinson v. Downton, [F66] or which are done with reckless indifference to the harm that is likely to ensue, as is the case where a person, having recklessly ignored the means of ascertaining the existence of a contract, acts in a way that procures its breach.
It may be that analogy with the torts which impose liability on private individuals for the intentional infliction of harm would dictate the conclusion that, provided there is damage, liability for misfeasance in public office should rest on intentional infliction of harm, in the sense that that is the actuating motive, or on an act which the public officer knows is beyond power and which is calculated in the ordinary course to cause harm. However, it is sufficient for present purposes to proceed on the basis accepted as sufficient in Bourgoin, namely, that liability requires an act which the public officer knows is beyond power and which involves a foreseeable risk of harm.
If misfeasance in public office is viewed as a counterpart to the torts imposing liability on private individuals for the intentional infliction of harm, there is much to be said for the view that, just as with the tort of inducing a breach of contract, misfeasance in public office is not confined to actual knowledge but extends to the situation in which a public officer recklessly disregards the means of ascertaining the extent of his or her power. However, that is not what was put in this case. The argument was that it is sufficient that the officer concerned ought to have known that he or she lacked power.
Once foreseeability is accepted as a requirement in cases based on actual knowledge, it follows that the argument that a public officer is liable for misfeasance if the officer ought to know that he or she lacks power is, for practical purposes, the same as saying that the officer is under a duty not to exceed his or her power if there is a risk of foreseeable harm. Indeed, so much was implicit in the statement of counsel for the Mengels that they were also entitled to succeed in negligence if the Inspectors were liable for misfeasance in public office by reason that they ought to have known that they were acting without authority.
If it were the case that governments and public officers were not liable in negligence, or that they were not subject to the same general principles that apply to individuals, there would be something to be said for extending misfeasance in public office to cover acts which a public officer ought to know are beyond his or her power and which involve a foreseeable risk of harm. But in this country governments and public officers are liable in negligence according to the same general principles that apply to individuals. And, in that context, the argument that misfeasance in public office should be reformulated to cover the case of a public officer who ought to know of his or her lack of power can be disposed of shortly. So far as unintended harm is concerned, the proposed reformulation suffers the same defect in relation to the law of negligence as does the principle in Beaudesert , namely, it serves no useful purpose if there is a duty of care to avoid the risk in question and is anomalous if there is not. And it serves no purpose if the public officer is actuated by an intention to harm the plaintiff for that constitutes misfeasance in public office whether or not the officer knows that he or she lacks authority. [F67]
Negligence
Given that the argument made on behalf of the Mengels with respect to misfeasance in public office extended to an assertion of their entitlement to succeed also in negligence, it is appropriate to note that it is not open to them to make a case in negligence based on the proposition that the Inspectors should have known that their actions were unauthorized. So far as the knowledge of the Inspectors is concerned, the critical information was not the terms of the Gazette notice or, even, the provisions of the Act, but whether there was an approved program current in September 1988. To make good the assertion that the Inspectors should have known that there was not an approved program, it is necessary for there to be a positive finding that there was no approved program. The finding did not go that far. Rather, the ruling was that the evidence did not permit of the contrary finding though regard must be had to what we said earlier concerning the appellants' position on appeal.
The Mengels pleaded negligence both further to and in the alternative to the other claims made by them. The plea of negligence was that there was a duty of care on the part of the Territory and the Inspectors not to "purportedly restrict movement of cattle from either of the [Mengels'] said properties without first ensuring that a reactor beast was subsequently confirmed positive by irrefutable and unmistakable scientific process, and in any event without first ensuring that there was a real possibility that any remaining cattle or class of cattle at Neutral Junction intended for immediate sale were infected with Brucellosis".
The trial judge expressed the view that the question reduced itself to whether the Inspectors acted with reasonable care. He concluded: "In my view and as a question of fact they were not in breach of such duty".
By their notice of contention in the Court of Appeal, the Mengels contended that "[h]is Honour erred in finding that the Appellants did not act unreasonably". Notwithstanding this, the issue of negligence was not contested in the Court of Appeal, but was raised again by the notice of contention in this Court. In the course of argument, counsel for the Mengels conceded that "negligence as such" was not an issue, but referred to his submission that, for the purposes of the tort of misfeasance in public office, constructive knowledge of lack of authority was sufficient - that is, it is sufficient that a defendant ought to have known that he or she was acting without authority. The issue raised by an allegation of constructive knowledge was, he suggested, the same issue as might be raised by a plea of negligence, but as we understood the argument, that issue was raised in the context of misfeasance in public office and not in the context of negligence.
The submission having been rejected that constructive knowledge of lack of authority is sufficient knowledge to constitute the tort of misfeasance in public office, that issue disappears. Having regard to the rejection by the trial judge of negligence as pleaded by the Mengels and their failure to pursue that matter on appeal, the Mengels cannot now succeed upon the ground that the trial judge erred in finding that the Inspectors were not negligent.
The cause of action discussed in James v. The Commonwealth
In the Court of Appeal, Priestley J. considered various remarks made by Dixon J. in James v. The Commonwealth [F68] and, on the basis of those remarks, formulated a cause of action in these terms:
"a plaintiff has an action on the case for damage suffered because in face of an express or implied threat by governmental authority of unlawful interference with the plaintiff's property or of unlawful prosecution of the plaintiff, the plaintiff has felt compelled to refrain, and has refrained, to the plaintiff's loss, from dealing with the plaintiff's goods".
In James v. The Commonwealth, the plaintiff claimed damages on two separate grounds. The first was that the Commonwealth or its officers had induced common carriers to commit a breach of their duty to carry produce which he, the plaintiff, wished to sell, thereby causing him loss. [F69] That is a claim analogous to that considered in Lumley v. Gye [F70] and it was determined by reference to the same principles that determine liability for procuring a breach of contract. [F71] Clearly, what was said on that aspect of the claim can have no direct bearing on this case. However, there are some passages which have an indirect bearing, to which it will later be necessary to refer.
The second basis of the claim in James v. The Commonwealth was that the Commonwealth or its officers compelled the plaintiff to discontinue his trade by unlawful threats that his goods would be seized. In relation to this claim, Dixon J. [F72] adopted the statement in Salmond's Law of Torts [F73] that:
"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".
His Honour approached this aspect of the claim on the basis that, as goods had been seized on earlier occasions, it might be supposed that the Commonwealth had "manifested an intention of seizing the plaintiff's goods if he shipped them". [F74] In the result, however, he found against the plaintiff because he "in fact was not influenced by the fear of seizure and it was not the threats supposed that operated to restrain his trading". [F75] Thus, his Honour had no need to consider, and did not consider, the intentional element of the tort which was clearly recognized in the statement of principle which he adopted.
The cause of action identified by Priestley J. involves no intentional element and, to that extent, is clearly contrary to the principle adopted by Dixon J. in James v. The Commonwealth. There are also difficulties associated with the notion of liability for an "unlawful prosecution" if that extends beyond malicious prosecution or abuse of process. Moreover, there is implicit in the principle espoused by Priestley J. an assumption that the assertion that certain legal consequences will attend a course of action amounts to a threat for the purposes of the principle stated in Salmond's Law of Torts. That assumption cannot be maintained in the face of what was said by Dixon J. in relation to the first aspect of the claim considered in James v. The Commonwealth.
In discussing the claim that Commonwealth officers had induced breaches of the obligations of common carriers, Dixon J. noted that "inducement [was] to be distinguished from advice or persuasion". [F76] In that context, his Honour observed that what had occurred in that case was "an appeal to the law as it was conceived to exist" with "[t]he threat or inducement consist[ing] in a tacit or implied intimation that the claims of the Government might be enforced by resort to legal process". [F77] His Honour went on to state that, in his opinion: [F78]
"it would be an extension of the principle upon which the procurement of breach of duty is made a tort to hold that it covers a mistaken assertion on the part of the Executive Government or its officers that under the law, as they understood it, it is the third party's duty to refrain from compliance with the obligation upon which the plaintiff insists".
The considerations that led Dixon J. to conclude in James v. The Commonwealth that the "intimation that the claims of the Government might be enforced by resort to legal process" [F79] did not amount to procurement or inducement also lead to the conclusion that the mistaken assertion by government officers that, as a matter of law, certain consequences will or might attend a particular course of action does not constitute a threat for the purposes of the principle stated in Salmond's Law of Torts and adopted by Dixon J. At least that is so if the assertion is made bona fide. And it is clear from the written submissions of the parties and the arguments of counsel before this Court that the Mengels did not advance at trial a cause of action based on any threat by the Inspectors to seize the Mengels' cattle nor was there evidence to support any claim based on a threat in relation to the movement restrictions.
James v. The Commonwealth provides no support for the cause of action described by Priestley J. in the Court of Appeal. Nor is there any other principled basis for its recognition. So far as individual government employees are concerned, it would extend personal liability beyond misfeasance in public office or, even, negligence and, in effect, impose liability for an error of judgment. That result is supported by neither policy nor principle. Moreover and of more significance, it would give rise to the same difficulty as does Beaudesert in relation to negligence: if there is a duty of care on the part of government or the individual employee to avoid the harm suffered, it serves no useful purpose; and if there is not, it is anomalous to impose liability for unintended harm that there is no duty to avoid. Thus, the Mengels are not entitled to succeed on the alternative basis formulated by Priestley J. in the Court of Appeal.
It should be mentioned, for the sake of completeness, that it was not argued in this Court that the Mengels were entitled to succeed on the actual cause of action identified in Salmond's Law of Torts and acknowledged by Dixon J. in James v. The Commonwealth, doubtless because of the finding by Asche CJ that the Inspectors did not intend to cause them harm.
Liability based on the constitutional principle of the rule of law
Angel J. was of the view that, in this case, liability attached to the Inspectors and the Territory as "a consequence of the constitutional principle of the rule of law rather than any private tort". His Honour expressed the view that, if harm results, there is liability for unauthorized acts of governments and government officers or, perhaps, some unauthorized acts which prevent the individual from doing what he or she would otherwise be free to do, unless excluded by a statutory provision of the kind discussed in Little v. The Commonwealth [F80] and Board of Fire Commissioners (NSW) v. Ardouin. [F81] It is not entirely clear, but it seems that his Honour may have considered that liability attaches only to acts calculated to cause harm for he described the loss suffered by the Mengels as "foreseeable and foreseen" and spoke of the Inspectors' intention to prevent the movement of their cattle even though "they did not injure the plaintiffs out of spite".
It can at once be said that the principle espoused by Angel J. is not supported by authority. Nor is it supported by principle. Indeed it may well be contrary to statute to assign liability to governments and their officers on a basis not applicable to private individuals. [F82]
Governments and public officers are liable for their negligent acts in accordance with the same general principles that apply to private individuals and, thus, there may be circumstances, perhaps very many circumstances, where there is a duty of care on governments to avoid foreseeable harm by taking steps to ensure that their officers and employees know and observe the limits of their power. And if the circumstances give rise to a duty of care of that kind, they will usually also give rise to a duty on the part of the officer or employee concerned to ascertain the limits of his or her power. In these circumstances, the basis of liability identified by Angel J. in the Court of Appeal encounters difficulties of much the same kind as those which attend the cause of action recognized by Priestley J. So far as acts involving the intentional infliction of harm are concerned, the personal liability of public officers is covered by misfeasance in public office and there is no principled basis either for its extension or for imposing liability on government if there is neither de facto authority nor a duty of care to ensure that the officer observes the limits of power. In other cases, if there is a duty of care to avoid the harm in question, the principle serves no useful purpose; and if there is not, it would be anomalous to hold either the government or the officer concerned liable for harm that there is no duty to avoid.
Conclusion
The appeal should be allowed and the orders of the Court of Appeal of the Northern Territory, other than those relating to costs, be set aside. In lieu thereof, the appeal to that Court should be allowed, the cross-appeal dismissed and the orders of Asche CJ, other than those relating to costs, be set aside and a verdict entered for the defendants. Given the issues in the appeal, no order should be made disturbing the orders for costs below. In accordance with statements made by counsel at the commencement of the hearing, no order should be made as to the costs of this appeal.