Vicarious liability of the “Crown” for tortious conduct

CONSTITUTIONAL LAW – Constitution of New South Wales – functions and duties   of Member of Legislative Assembly – whether Member of Legislative Assembly is   “a person in the service of the Crown” – Constitution Act 1902 (NSW); Law   Reform (Vicarious Liability) Act 1983 (NSW), s 8

DAMAGES – assessment of damages – severity of loss as proportion of most   extreme case – uncertainty as to the prospects of full recovery – whether   necessary to assess likelihood of hypothetical future event occurring –   whether error of principle – whether assessment wholly unreasonable – Civil Liability Act 2002 (NSW), s 16

JUDGMENTS AND ORDERS – res judicata and issue estoppel – default judgment –   claim brought against third defendant for alternative and inconsistent causes   of action – first and second defendants vicariously liable for conduct of   third defendant – default judgment entered against third defendant did not   distinguish between causes of action – whether res judicata or issue estoppel   created in relation to either or both causes of action – relevance of   pleadings – whether default judgment can be entered in relation to only one   of alternative causes of action – whether default judgment necessarily and   precisely determined the cause of action for which the third defendant was   liable

TORT – vicarious liability – vicarious liability of the State for conduct of   persons in service of the Crown – tortious conduct of Member of Parliament in   relation to electorate officer – whether Member of Parliament in the service   of the Crown – whether conduct in Member’s capacity as a Member of Parliament   – Law Reform (Vicarious Liability) Act 1983   (NSW), s 8

TORT – vicarious liability – vicarious liability of the State for conduct of   persons in service of the Crown – tortious conduct of Member of Parliament in   relation to electorate officer – whether Speaker of Legislative Assembly part   of executive government – whether Member agent or delegate of Speaker – Law   Reform (Vicarious Liability) Act 1983 (NSW), s 8

WORDS & PHRASES – “involves a matter at issue amounting to or of the   value of” – Supreme Court Act 1970 (NSW), s 101

WORDS & PHRASES – “the Crown” – “person in the service of   the Crown” – Law Reform (Vicarious Liability) Act 1983 (NSW), s 8

DECISION UNDER APPEAL

[2011] NSWSC 508; [2011] NSWSC 842

HEADNOTE

[This headnote is not to be read as part of the   judgment]

In October 1999, the appellant was appointed to   act as an electorate officer in the electorate office of the State Member for   Swansea, Mr Milton Orkopolous (the second respondent).

In these proceedings the appellant alleged that,   whilst working in the second respondent’s office, she was bullied, victimised   and harassed by him, causing her to suffer psychiatric harm which rendered   her totally incapacitated for work. The primary judge found that the second   respondent was liable for damages of $438,613.75 for breach of a duty of care   owed to the appellant and that the appellant’s employer, The Speaker of the   Legislative Assembly, was liable for modified common law damages under the Workers   Compensation Act 1987 for breach of his duties as an employer. The   primary judge held that the State of NSW (the first respondent) was not   liable for the conduct of the second respondent.

The appellant appealed to the Court of Appeal,   contending that the State should be held liable for the second respondent’s   conduct under the Crown Proceedings Act 1988 or the Law Reform   (Vicarious Liability) Act 1983 and that the damages payable by the second   respondent should have been assessed on the basis that his conduct was   intentional rather than negligent, thereby avoiding the limitations on   damages imposed by the Civil Liability Act 2002. The appellant also   claimed increased damages for non-economic loss and challenged a costs order.

The   Court held:

(per Basten and Meagher JJA; Macfarlan JA   agreeing save as to the costs order)

(i)The first respondent’s motion to review a   decision that the appeal was not incompetent should be dismissed with the   first respondent to pay the appellant’s costs of the notice of motion.

(per Basten, Macfarlan and Meagher JJA)

(ii)The primary judge correctly assessed damages   against the second respondent in accordance with the limitations imposed by   the Civil Liability Act 2002.

(per Basten and Macfarlan JJA, Meagher JA   dissenting)

(iii)The State of NSW is liable for the tortious   conduct of the second respondent as it occcured whilst the second respondent   was acting “in the service of the Crown” pursuant to s 8(1) of the Law   Reform (Vicarious Liability) Act 1983.

(per Basten JA; Macfarlan and Meagher JJA contra)

A Member of Parliament is involved in giving   advice or consent on legislation, an essential part of the function of   government, and is thereby performing a function incidental to an   “activity of the Crown” within the meaning of s 8(1)(b) of the Law   Reform (Vicarious Liability) Act 1983. As the tortious conduct of the   second respondent was undertaken in his capacity as a Member of Parliament,   the first respondent is liable for his misconduct.

(per Macfarlan JA; Basten JA not deciding;   Meagher JA contra)

In supervising and controlling the appellant’s   employment in his electoral office, the second respondent acted as the   delegate of the appellant’s employer, The Speaker. As The Speaker was acting   as part of the Executive Government of the State in employing the appellant,   the second respondent, as his delegate, also so acted. The “Crown”   at least includes the executive branch of government. Therefore the second   respondent was acting in the “service of the Crown” pursuant to s 8(1)   of the Law Reform (Vicarious Liability) Act 1983 when acting as The   Speaker’s delegate.

(per Meagher JA; Macfarlan JA agreeing; Basten JA   contra)

A Member of the Legislative Assembly, in   discharging his or her legislative and parliamentary duties is not “a   person in the service of the Crown” for the purposes of s 8(1) of the Law   Reform (Vicarious Liability) Act 1983. The Member cannot be controlled,   directed or interfered with by the State in the discharge of those functions.

(per Meagher JA; Basten JA not deciding;   Macfarlan JA contra)

In supervising or controlling the appellant, the   second respondent was not acting as the agent of The Speaker and thus was not   acting “in the service of the Crown”.

(per Macfarlan and Meagher JJA, Basten JA   dissenting)

(iv)The primary judge’s assessment of the   severity of the appellant’s non-economic loss at 16 per cent of a most   extreme case should not be disturbed as the appellant failed to show any   error of principle or demonstrate that the primary judge’s assessment was   wholly unreasonable.

(per Macfarlan JA, Basten and Meagher JJA   agreeing)

(v)The primary judge’s order limiting the second   respondent’s liability for costs at first instance to those relating to a   half-day hearing should not be disturbed.

Brisbane   Barrister – David Cormack