Striking a balance for the thin blue line: The new torts regime for Victoria Police

The current law

The current law in Victoria founded in s 123 of the Police Regulation Act 1958 states that sworn police members are provided statutory immunity by the State of Victoria (the State) in civil claims where the conduct or omitted conduct is in the course of their duties, and the conduct is reasonably or necessarily done and they have acted in good faith.  Generally, this means that if this statutory immunity is provided and a plaintiff is successful in bringing a legal proceeding in tort against police members that liability and an award of damages is transferred and paid by the State.

The intent of the current law is to give those adversely affected by police behaviour in torts a right of recourse against the State for police members’ wrongs.  However, there are numerous pitfalls with the scheme. One of these is the lack of certainty for claimants, especially those who bring successful claims against individual police members but then struggle to recover damages and have no recourse to obtain money from the State because the members are deemed not to have acted reasonably, necessarily or in good faith.

The current regime has also given rise to a multitude of practical problems, such as:

• the requirement to engage separate legal representation to represent the interests of the State and police members named as defendants in a civil claim;
• significant legal expenses incurred in cases involving split legal representation; and
• difficulties in coordinating and managing claims involving split legal representation. 

The new law

A new legislative scheme under the Victoria Police Act 2013 ( the Act) will soon come into force to overcome the pitfalls with the current scheme. A key aim of the new scheme is to provide people with a level of certainty that the State will be liable if their legal claim against Victoria Police is successful.

Essentially, the new Act provides that a person can bring a police tort claim against the State where a police member or protective services officer (PSO) has allegedly committed a tort in the performance (or purported performance) of their duties.  A 'police tort claim' in the Act includes claims in negligence, assault and battery, false imprisonment and malicious prosecution, as well as detrimental action claims and certain wrongful death actions.

Under the Act, a person is not permitted to make a claim against a police member or PSO personally unless the State denies liability by arguing that an individual member or PSO engaged in 'serious and wilful misconduct'. This aims to protect police members and PSOs that have acted in good faith in the course of their duties from being personally named in court proceedings.

However, if a police member or PSO has engaged in particularly egregious conduct the State can raise the defence of 'serious and wilful misconduct' to defeat the claim. If the State raises this defence, the individual police members or PSOs will be required to be named as individual defendants to the proceeding and these individuals will be required to pay any damages ordered by the court if they are found liable in the proceeding and have also been found to have acted with 'serious and wilful misconduct'.

The meaning of 'serious and wilful misconduct'

The term 'serious and wilful misconduct' is not defined in the Act and has not yet been considered by Victorian courts in the context of policing.  However, guidance can be taken from the Victorian Government, which stated the following in the Second Reading Speech for the Act:

'this means that serious misconduct by police which is deliberate, which extends beyond recklessness, or culpable or gross negligence and which is done with a knowledge that risk of injury or loss may occur, may fall within the concept of serious and wilful misconduct'.

In other jurisdictions, examples of what courts have found to constitute 'serious and wilful misconduct' by police members include:

• falsely imprisoning a suspect, forcing a confession using threats and maliciously prosecuting the suspect based on this confession;
• lying to a police oversight body and not acting on disciplinary files;
• committing multiple acts of larceny; and 
• extorting $10,000 from an alleged child pornographer and making threats to otherwise pursue child pornography charges.

Under the Act, if the State succeeds with its defence of 'serious and wilful misconduct', the State has no right to seek costs against the person bringing the claim. However, the State must pay any damages or costs awarded to a claimant against a police member or PSO, if the Minister is satisfied that the successful claimant is unlikely to recover the money from the police member (or PSO) and has exhausted all avenues to recover the amount.

Time for change

What impact the new regime will have on claimants and Victoria Police remains to be seen. However, as legal representatives for Victoria Police, the VGSO welcomes these legislative changes which will hopefully provide certainty for successful claimants, less stress for members involved in civil litigation, less public monies spent on legal fees and  increased efficiency in the civil litigation process.

If you are in the Victorian Government and would like advice on the new torts regime for Victoria Police, please contact:

Louise Jarrett
louise.jarrett@vgso.vic.gov.au
9247 6798

Monika Pekevska
monika.pekevska@vgso.vic.gov.au
8684 0467

Does that clause have any claws? Re AEU and Public Sector Industrial Relations

The Federal Court’s recent decision in United Firefighters Union of Australia v Country Fire Authority [2014] FCA 17 (UFU v CFA) raises some important issues for public sector employers about the validity of certain clauses being included in industrial instruments.

The United Firefighters Union (UFU) instituted a claim against the Country Fire Authority (CFA) on the grounds that the CFA was not complying with Clause 27 of the Country Fire Authority/United Firefighters Union of Australia Operational Staff Enterprise Agreement 2010 (Agreement). Clause 27 imposed an obligation on the CFA to recruit 342 career firefighters over a six year period. The CFA filed a cross-claim seeking declarations that Clause 27, and a number of other clauses in the Agreement, were invalid on the basis that they were inconsistent with the Melbourne Corporation principle as it was applied in Re Australian Education Union; Ex parte Victoria [1995] HCA 71 (Re AEU).

Melbourne Corporation principle

The Melbourne Corporation principle in the context of UFU v CFA can be expressed most simply as a principle imposed by Australian courts to the effect that the Commonwealth Constitution contains an implied limitation on federal legislative power which prohibits a law from operating to destroy or curtail the continued existence of the States or their capacity to function as governments.

This principle has been applied by the High Court in an industrial context in Re AEU, where it was held that the principle extended to the State's right to determine:

• the number and identity of its employees;
• the term of appointment of those employees; and
• the number and identity of employees it wishes to make redundant.

Arguments

The UFU conceded that the clauses fell within the Re AEU categories. However, they argued that because the CFA, and thereby the State of Victoria, had agreed to the clauses being included in the Agreement, they did not infringe Re AEU because they had not been imposed on the State by the Commonwealth.

The CFA argued that because the clauses in the Agreement were only given effect by certification of the Fair Work Commission (FWC), and because the source of the FWC's power is Commonwealth legislation (i.e. the Fair Work Act 2009 (Cth) (FW Act)), clauses in the Agreement which infringe Re AEU would be invalid and unenforceable on the basis that the FWC had no power to certify them.

The decision

Justice Murphy of the Federal Court agreed with the CFA's submissions and held that the clauses were invalid and unenforceable, even though they had been entered into voluntarily by the CFA. His Honour held that, because '(t)he implied limitation is a recognition that the Constitution is concerned with the federal structure of government in Australia', the important thing to focus on was the limiting effect of the Commonwealth law, as opposed to the fact that the State had agreed to that limitation.

Impact on compliance with your industrial instrument

If the employment relationship in your organisation is governed by an enterprise agreement or workplace determination which has been certified by the FWC in accordance with the FW Act, it may be prudent to conduct a review of the instrument to determine whether any of its clauses fall within the Re AEU categories outlined above.

If a union is purporting to rely on suspect clauses, your organisation may decide to seek a declaration in the Federal Court that the clauses are invalid and unenforceable.

Some common examples of clauses which could infringe Re AEU include:

• Limits on offering fixed-term employment;
• Job security provisions;
• Maintenance of classification provisions;
• No contracting out provisions; and
• Minimum numbers of employees provisions.

Having provided those examples, we recommend that legal advice is sought to address these matters in light of the specific industrial context in which your organisation exists.

There will also be policy considerations to be taken into account. For instance, the nature of the relationship between each organisation and its corresponding union could necessitate the adoption of a particular approach. Moreover, we note that public sector organisations are required to comply with the Public Sector Workplace Relations Policies.

Impact on enterprise bargaining

If your organisation is currently engaged in bargaining for a new industrial instrument, you will need to consider the content, scope and operation of the clauses you are currently negotiating. If any of the clauses could potentially infringe Re AEU, the organisation should request that the union withdraw those claims, as they will fall outside the scope of the FWC's certification powers.

A bargaining representative cannot pursue claims in bargaining that are unlawful or not about permitted matters, and, in light of UFU v CFA, the position previously put forward by unions that the State’s agreement is enough to displace the operation of Re AEU is no longer valid. If a bargaining representative continues to press for the inclusion of matters which are inconsistent with Re AEU in an enterprise agreement, they may leave themselves open to being found in breach of the good faith bargaining requirements of the FW Act.

If you are currently bargaining for a new enterprise agreement, we recommend that you raise your concerns directly with the bargaining representatives during bargaining, and subsequently in writing. If the union with which you are currently negotiating will not withdraw the claims that are believed to be inconsistent with Re AEU, your organisation should consider making an application under s 229 of the FW Act for good faith bargaining orders.

Watch this space

The UFU has appealed Justice Murphy’s decision to the Full Court of the Federal Court. Given the significance of this issue for public sector industrial relations, we suspect that the matter will eventually be considered by the High Court.

If you are in the Victorian Government and would like more information on the effect of UFU v CFA on your specific industrial instrument, please contact:

Matt Garozzo
Solicitor
9032 3006
matt.garozzo@vgso.vic.gov.au

Matthew Minucci
Solicitor
0417 695 188
matthew.minucci@vgso.vic.gov.au

Water law changes in the pipeline

The Water Act 1989 (Vic), one of the longest Acts in the statute book, is under review.  Changes are not expected to significantly impact water users, however, it will change the way the Government manages water so it is important for government officers who work in areas affected by water law or the emergency services (as the review affects flood mitigation infrastructure) to keep abreast of the changes.

The Act provides the framework for allocating surface water and groundwater across Victoria.  It details the Crown’s entitlements to water and private entitlements to water from all rivers, streams and groundwater systems in Victoria, providing Water Authorities with bulk entitlements to water for urban supply or irrigation.  Authorities allocate a volumetric water entitlement to licenced individuals or companies for commercial or irrigation purposes.  It also gives individuals the right to take and use water for domestic and stock purposes.

The Act was developed over 20 years ago when the pressures on the State's water resources were very different.  Its predecessor was enacted in the 1800s to allow the development of irrigation in northern Victoria.  Environmental considerations are a much more recent addition.  In particular, in 2005, the Act pioneered the use of the environmental water reserve, which was designed ‘to set aside a share of water in rivers and aquifers across the State for the environment’. This was the first time that rivers and aquifers gained a legal right to a share of their own water.

The purpose of the review of the Act is to streamline the legislative framework for water management and use.  This includes considering whether changes are needed to implement the Commonwealth's Murray-Darling Basin Plan, released in November 2012.  The review will also implement new water policies adopted by the Government, including the Living Melbourne Living Victoria urban water plan and the land use change policy developed through the Western and Gippsland regional sustainable water strategies.

Currently, we are waiting with baited breath for the release of a discussion paper outlining proposed reforms to the Act and an exposure draft.  An expert panel established by the Minister is preparing this.  A six-week consultation process will occur following the release of the paper.

The discussion paper will consider the following issues:

• Whether the way water resources are managed and allocated can be simplified, without having an adverse impact on entitlements.
• Whether public dams that could present a hazard if they fail should be licensed in the same way as private dams.
• Whether any further refinements to the water corporation governance reforms of 2012 are required.
• Whether the current water service delivery functions and powers of water authorities can provide sustainable and integrated water services.  This includes ensuring the rights to alternative water sources are clear enough to enable greater use of recycled water and stormwater.
• Whether the functions and powers that aim to protect and improve river health, floodplain management and regional drainage are sufficient.  This includes making legislative changes needed to implement the government's response to the Environment and Natural Resources Committee inquiry into floodplain mitigation infrastructure in Victoria, some of which are discussed in the recently released Government’s Response to this inquiry.

If you are in the Victorian Government and require advice about how the water law reforms could affect your area, please contact:

Eliza Bergin
Principal Solicitor
t 8684 0267
eliza.bergin@vgso.vic.gov.au

Deep pockets to no longer cop it

Governments around Australia introduced proportionate liability legislation in the early 2000s to help cut the price of insurance.  They intended to prevent ‘deep pocket’ defendants being held entirely liable for losses to which others contributed.  Yet judges have since interpreted the legislation to allow maximum recovery to plaintiffs.

The High Court has recently handed down a decision that restores the original aims of the proportionate liability regime.  It is good news for a ‘deep pocket’ defendant like the government, as its liability (in a non-personal injury action) is likely to be limited to that for which it is actually responsible, as was always intended by the legislation. 

The decision is Hunt & Hunt v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10. 

Facts

Mitchell Morgan was a lender. Hunt & Hunt were their lawyers. They had prepared a mortgage instrument for a loan from Mitchell Morgan to a Mr Vella and a Mr Caradonna.  The instrument was registered against property owned by Mr Vella alone. Unbeknownst to either the lender or the lawyers, Mr Caradonna had forged Mr Vella's signature on the loan documents and on the mortgage instrument.  Mr Caradonna spent the loaned money and then become bankrupt.

Mitchell Morgan therefore could not recover the money from Mr Caradonna.  Nor could it recover from Mr Vella, as the mortgage instrument was void because of the forgery.  So it turned to Hunt & Hunt…

Trial history

The NSW Supreme Court held that Hunt & Hunt had been negligent in preparing the mortgage instrument. Hunt & Hunt did not appeal this finding.  The issue for the High Court was whether the proportionate liability provisions applied, limiting Hunt & Hunt’s liability to a percentage of the total loss that reflected their culpability.

Justice Young of the Supreme Court had found they did and apportioned only 12.5% of the liability to Hunt & Hunt.  But the Court of Appeal found the provisions did not apply, as the loss caused by Mr Caradonna was different to the loss caused by Hunt & Hunt.  It found that Mitchell Morgan was therefore entitled to recover 100% of its damages from Hunt & Hunt.

High Court

A 3:2 majority of the High Court agreed with the trial judge, finding that the proportionate liability regime under Part 4 of the NSW Civil Liability Act 2002 (which is in all material respects identical to Part IVAA of the Victorian Wrongs Act 1958) applied. 

The Court found that the distinct wrongs committed by Mr Caradonna and by Hunt & Hunt had caused a single economic loss for Mitchell Morgan, being its inability to recover the money lent to Mr Caradonna.  Mr Caradonna and Hunt & Hunt were therefore concurrent wrongdoers, bringing the NSW proportionate liability provisions into play.

The Court clarified that ‘it is not a requirement of proportionate liability that the actions of one independent concurrent wrongdoer contribute to the negligence of another. The question is whether each of them, separately, materially contributed to the loss or damage suffered’. 

In other words, it was enough that Mr Caradonna and Hunt & Hunt had both contributed to Mitchell Morgan’s loss, broadly described as its inability to recover the money that it had advanced.

Implications

This decision will be of significance to solicitors, insurance brokers, valuers, accountants and other professionals whose calling requires them to protect clients from the economic consequences of wrongs committed by others.  Proportionate liability will likely now reduce these professionals’ exposure in many cases.

However, it is important that any government body in negligence proceedings (other than personal injury) identify all possible concurrent wrongdoers. This now includes any person who materially contributed to the loss. It does not matter that each concurrent wrongdoer may have caused the loss in a different way or even that one of the wrongdoers acted fraudulently.

For example, this decision could apply in property damage or economic loss cases that name an emergency service provider as a defendant (assuming a duty of care was owed, which would depend on the circumstances). If a fire fighting authority negligently failed to stop a chemical leak caused by a third party, this decision suggests that the fire fighting authority and the third party would be concurrent wrongdoers.   This means that the fire fighting authority would only have to pay a portion of the total damages, rather than the full amount.  As such, this decision may prove to be good news for emergency service providers in certain classes of proceedings for damages. 

What do you think about this development? Will it achieve the goals of the proportionate liability regime?

For more information on this decision or for advice on your dispute resolution strategy, please contact:

Jon Bayly
Principal Solicitor
t  8684 0223 
jonathan.bayly@vgso.vic.gov.au