Lazarus v Independent Commission Against Corruption

1. [1]

   HIS HONOUR: By a statement of claim filed 31 July 2017 (“the statement of claim”), Sandra Lazarus (“the first plaintiff”), Michelle Lazarus (“the second plaintiff”) and Jessica Lazarus (“the third plaintiff”) (collectively, “the plaintiffs”) brought proceedings seeking the removal of reports in relation to investigations conducted by the Independent Commission Against Corruption (“the first defendant”) and the removal of references to that investigation, compensation, damages and other forms of relief against the first defendant and Michael Kane (“the second defendant”). An affidavit was sworn by the first plaintiff dated 31 July 2017 supporting and verifying the statement of claim (to which there were 17 annexures).

2. [2]

   By notice of motion filed 31 August 2017, the first defendant sought orders that the statement of claim be summarily dismissed pursuant to r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) (“the first prayer for relief”) and, in the alternative, that the statement of claim be struck out pursuant to r 14.28 of the UCPR (“the second prayer for relief”) (“the notice of motion”). An affidavit of Christopher Frommer affirmed 31 August 2017 was read on the motion.

3. [3]

   When the motion was called for hearing on 15 February 2018, the first and second defendants were represented by Ms Joanna Davidson of counsel. The second defendant entered a submitting appearance. No appearance was entered by or on behalf of the plaintiffs.

4. [4]

   The notice of motion had been listed before Johnson J sitting as Duty Judge on 12 February 2018 to hear an application to vacate the date fixed for the hearing of the notice of motion proceedings, namely, 15 February 2018 (based upon a removal application that had been filed in the High Court with respect to separate Court of Appeal proceedings). His Honour dismissed the application and published his reasons: Lazarus and Ors v Independent Commission Against Corruption and Anor; Lazarus v State of New South Wales and Ors [2018] NSWSC 138.

5. [5]

   The first and second plaintiffs appeared before Johnson J to prosecute the application for the adjournment application and to receive the judgment of his Honour. In the final paragraph of his Honour's judgment, he observed "I note that the matters stand listed for hearing before Walton J this Thursday and Friday" (at [31]) (the reference to the Friday listing concerned an applications for, inter alia, for summary dismissal with respect to the proceedings in 2017/247213).

6. [6]

   There is no doubt that the first and second plaintiffs had notice of the hearing for the notice of motion on 15 February 2018. In regard to the third plaintiff, the proceedings before Johnson J proceeded on the basis that the first and second plaintiffs appeared on behalf of the third plaintiff considering the matter involved all three sisters. In any event, as extracted from the applicant’s submissions at [8] below, the third plaintiff was not charged with or convicted of any offences, and no cause of action was pleaded concerning the third plaintiff.

7. [7]

   Upon the motion being called, no appearance was entered by the plaintiffs. Upon application by the first defendant, and in the light of the prior notice of the proceedings, a decision was made to hear the notice of motion proceedings ex parte. By this judgment the notice of motion is determined by the Court.

8. [8]

   The submissions of the first defendant provide a summary of the relevant factual and procedural background derived from the affidavit of Mr Frommer. That summary is properly available having regard to that affidavit and the materials thereto. It is extracted below:

Content of the Statement of Claim

1. [9]

   The relief sought in the statement of claim was in the form of 10 orders numbered 1(a)-(i) and 2(a). Order 3 does not seek any particular form of relief but refers to a concern. The relief sought by the plaintiffs in the first and second paragraphs of the statement of claim are as follows:

2. [10]

   The particulars and pleadings appearing in the balance of the statement of claim do not identify causes of action as such. Nor was it a straightforward exercise to identify the connection between the relief claimed and the 61 paragraphs appearing under the heading “Pleadings and Particulars”. Save for some particular matters to which I will direct attention, it is sufficient to give a flavour of the pleadings by setting out the various headings governing the particulars as follows:

   1. (1)

      “Parties”;

   2. (2)

      “ICAC Investigation”;

   3. (3)

      “Email exchange between Second Defendant (on behalf of First Defendant) and Forensic Document Examiner, Ms Michelle Novotny”;

   4. (4)

      “ICAC Investigation”;

   5. (5)

      “Written correspondence and communications between the First Defendant and the First Plaintiff’s legal representatives”;

   6. (6)

      “Continued email exchange between the Second Defendant (on behalf of the First Defendant) and Forensic Document Examiner, and other communications”;

   7. (7)

      “ICAC Investigation”;

   8. (8)

      “Forensic Document Examination – Mr Chris Anderson”;

   9. (9)

      “Material Particular”;

   10. (10)

       “Protection and Liability – Bad Faith”

   11. (11)

       “The Defendants’ Statutory Duties”;

   12. (12)

       “The First and Second Defendants”;

   13. (13)

       “Contravention of section 307B of the Crimes Act 1900 (NSW) – False and misleading information”;

   14. (14)

       “Contravention of section 307C of the Crimes Act 1900 (NSW) – False and misleading Documents”; and

   15. (15)

       “Contravention of section 315 of the Crimes Act 1900 (NSW)) – Hindering investigation”.

3. [11]

   The principal focus of the statement of claim was amply summarised in the following submission of the first defendant:

4. [12]

   Some particular parts of the statement of claim may be mentioned in that respect. Paragraph 21 of the statement of claim is in the following terms:

5. [13]

   Paragraph 23 relates to Annexure 8 to the affidavit of the first plaintiff in support of the statement of claim. That annexure is an email from the second defendant to Ms Novotny, the handwriting expert, dated 11 January 2011. The first two paragraphs of that email are as follows:

6. [14]

   Attention will also be directed to Annexure 15 of the first plaintiff’s affidavit. This is correspondence from Jan Daly, principal lawyer for the first plaintiff, to the former solicitor for the first plaintiff, Mr Lloyd Hart, in which the following was said:

7. [15]

   The following pleadings then appear in relation to the 11 January 2011 email (at paras 24-27):

8. [16]

   As to those pleadings, particular reference should be made to para 32 of the pleadings which is in the following terms:

9. [17]

   In paragraph 38, the statement of claim refers to the engagement of a “forensic document examiner”, Mr Chris Anderson, engaged by the first plaintiff. There was reference also to some evidence given by Mr Anderson.

10. [18]

    In paras 43 and 44, the plaintiffs recognised that the first and second defendants are not liable if their conduct and actions were “done in good faith” but contended that the actions of the first and second defendant in, inter alia, providing false and misleading information, creating false and misleading documents, hindering the investigation and creating “inherent bias with the investigation” all constituted bad faith. Reliance was also placed upon a breach of statutory duties.

11. [19]

    Paragraphs 48 and 49 of the statement of claim were in the following terms:

12. [20]

    Paragraph 50 deals with a search warrant. Paragraphs 51-61 are in the following terms:

13. [21]

    Reliance was also placed on contraventions of ss 307B and 307C of the Crimes Act 1900 (NSW). (Reference should also be made to contentions regarding the contravention of s 315 of that Act).

14. [22]

    It is from the elements of the statement of claim concerning bad faith that the first defendant made the following submission as to the nature of the pleadings or contentions advanced by the plaintiffs in the statement of claim as follows:

The Contention Regarding the Handwriting Expert

1. [23]

   I pause to deal with the proposition in the statement of claim that the second defendant gave Ms Novotny false and misleading information as to the cessation of her services in the aforementioned email of 11 January 2011 (see [13] of this judgment). The information which was said to be false and misleading was the communication that the first plaintiff had made a partial admission regarding “signatures/handwriting”. That proposition was said to be unmaintainable by virtue of the evidence of the second defendant in Local Court proceedings on 25 September 2014 as extracted in para 32 of the statement of claim (see [16] of this judgment).

2. [24]

   As these pleadings are predicated upon the above extract from the transcript of Local Court proceedings set out in para 32 of the statement of claim (the apparent basis for the pleading), the pleading cannot be sustained.

3. [25]

   The email of 11 January 2011 communicated that the first plaintiff made a “partial admission”. The email also stated immediately thereafter “and the evidence of the witness [sic] now stating that they did not sign the relevant forms” (“the further statement”).

4. [26]

   Whilst the second communication in the email refers to “the witness”, it is clear that the author is not referring to a single person but a number of persons by use of the word “they”.

5. [27]

   There are a number of reasons why the further statement is not a reference to the first plaintiff. This emerges from a simple construction of the email when all of its parts are read consistently. The first paragraph of the extract at [13] above refers to “certain admissions as to signing several of the documents” by the first plaintiff. That must be the partial admission the first plaintiff (partial because the first plaintiff did not admit improperly signing the documents but nonetheless, as I will discuss below, accepted she did so as a requesting officer). The persons referred to in the further statement are persons who did not sign the documents and, in particular, the relevant forms. I agree with the submission of the first defendant that the words “they did not sign the relevant forms” would appear to be a reference to the evidence of medical practitioners whose purported signatures appears on the forms as authorising officers.

6. [28]

   When viewed in this light, the statement in the email is consistent with the evidence that the second defendant gave in the Local Court. The second defendant did not, in my view, depart from the statement in the email that the first plaintiff had given a partial admission. That partial admission was at least that she had signed a relevant form as the “requesting officer”. He also gave evidence that the first plaintiff “believed that the doctors had signed those as the authorising officers”. He confirmed that the first plaintiff had consistently contended that the doctors signed non-order vouchers and maintenance forms which, as indicated in the email, he contended the doctors denied.

7. [29]

   The evidence in the transcript extracted at [16] above does not, therefore, demonstrate the second defendant made a false and misleading statement to Ms Novotny.

Further preliminary matters

1. [30]

   It may also be noted that the statement of claim alleged that the decision not to engage Ms Novotny was made in bad faith and for the purpose of preventing her from providing what was alleged would have been exculpatory evidence. However as earlier noted in the factual background, the first plaintiff’s convictions were in relation to 28 offences of making or using false instruments. Further, I note that Ms Novotny had provided an estimate on 31 October 2010 of upwards of $46,500 for the request of work which had been later revised downwards as a result of a reduced scope of work.

RELEVANT PRINCIPLES

1. [31]

   In support of the notice of motion, the counsel for the applicant placed primary reliance upon the provisions of r 13.4(1)(b) of the UCPR, namely, that the proceedings disclosed no reasonable cause of action. However, the applicant also relied upon r 13.4(1)(c) of the UCPR upon the basis that aspects of the statement of claim represented an abuse of process. It was submitted that, even if the principles of res judicata and issue estoppel had no direct application with respect to the claims against the applicant and Magistrate Keogh, the proceedings may be properly dismissed under r 13.4(1)(c) on the basis that the plaintiffs sought to re-litigate issues that had been determined by this Court.

2. [32]

   The Court, as presently constituted, recently had occasion to consider the principles relevant to summary dismissal applications of the present kind (under r 13.4(1)(b)) in National Australia Bank Ltd v Charlton [2018] NSWSC 157. The applicant in this matter did not raise any different issue of general principle. In the result, I extract and adopt the following principles in determination of the notice of motion:

Prayers 1 (a) and (b)

1. [33]

   The first defendant has power to prepare reports in respect of matters that have been the subject of investigation pursuant to s 74(1) of the Independent Commission Against Corruption Act 1988 (NSW) (“the ICAC Act”) and a duty to furnish reports prepared under s 74 to the Presiding Officer of each House of Parliament pursuant to s 74(4). The first defendant may recommend that a report be made public but the determination of the course taken lies in the discretion of the Presiding Officers of the Houses of Parliament: s 78 of the ICAC Act.

2. [34]

   Prayers 1(a) and (b) seek an order requiring that the first defendant remove “all reports in relation to the ICAC investigation Operation Charity, including any and all Parliamentary reports written and published pursuant to section 74 and 74A of the ICAC Act 1988 (NSW)”, together with an order that the first defendant “remove all official ICAC references to the ICAC investigation Operation Charity, including such references made at the official ICAC website and other official ICAC media/texts”.

3. [35]

   The statement of claim does not disclose any cause of action in relation to the relief sought by these prayers. Further, no basis for jurisdiction to grant the relief is identified by the plaintiffs. As the orders appear to be directed to the first defendant “removing” reports furnished to Parliament, the relief sought is plainly beyond jurisdiction.

Prayer 1(c)

1. [36]

   The statement of claim does not identify any civil penalty regime applicable to the defendants. No such penalty regime exists.

Prayers 1(d) to 1(g) and 2(a)

1. [37]

   The plaintiffs seek "compensation … for adverse actions, personal injuries, harm, stress, illness, mental anguish" (prayer 1(d)), "damages for the personal injuries, harm, stress, illness, mental anguish and adverse actions" (prayer 1(f)) and interest on compensation and damages. There does not appear to be any distinction drawn between the claim for compensation and the claim for damages. Both prayers 1(c) and 1(f) appear to be quantified in aggregate in the sum of $247 million, although the basis for that quantification is not set out.

2. [38]

   The source of the claim for compensation and damages, insofar as it is identified in the statement of claim, has four parts:

   1. (1)

      The carrying out of statutory functions in the course of the investigation of Operation Charity in bad faith. It was claimed that the defendants must exercise their powers and carry out their official duties with care and diligence and, more particularly, had the "duty to fully investigate a matter". This was said to arise under s 73 of the ICAC Act: statement of claim at paras 21, 44 and 48 (“the first part”).

   2. (2)

      A contravention of s 307B of the Crimes Act by providing false or misleading information to Ms Novotny in the email from the second defendant to Ms Novotny of 11 January 2011 (statement of claim at paras 51-54) (“the second part”).

   3. (3)

      A contravention of s 307C of the Crimes Act by producing a false or misleading document, namely the 11 January 2011 email from the second defendant to Ms Novotny (statement of claim at paras 55-58) (“the third part”).

   4. (4)

      A contravention of s 315 of the Crimes Act hindering the investigation by the ICAC into a serious indictable offence, being the "forgery offences" with which the first plaintiff was charged (statement of claim at paras 59-61) by terminating Ms Novotny's services based on a "false and misleading" document produced to her, once again, it would seem, the email from the second defendant to Ms Novotny of 11 January 2011 (“the fourth part”).

3. [39]

   The first defendant’s attack upon these pleadings (and related pleadings such as paras 48 and 49 of the statement of claim) was two pronged. There was a challenge based upon the inadequacy of the pleadings, and, further, a substantive challenge as to whether there is any reasonable cause of action disclosed. As to the first of those considerations, I have dealt with prayers 1(a), (b) and (c). In my view, the defendants are on equally good ground with respect to prayers 1(d)-(g) as the statement of claim does not articulate elements of any tortious action. Nor does it plead any allegation of negligence (which consideration I will return to later in the judgment). That said, the balance of my considerations as to these prayers for relief will affix upon the substantive issues raised by the defendants.

4. [40]

   As to the first part of the summary of the source of the claim for compensation and damages appearing in four parts above, attention may be directed also to paras 48 and 49 of the statement of claim. I will attend to those considerations generally below.

5. [41]

   As to reliance upon a various contraventions of the Crimes Act the defendants were correct to submit that, even if there was a properly articulated pleading, those pleadings do not give rise to a cause of action because the law does not recognise that the commission of a criminal act in and of itself entitles an action for compensation or damages.

6. [42]

   Thus, if the sending of an email from the second defendant to Ms Novotney of 11 January 2011 is alleged to constitute the commission of an offence pursuant to the Crimes Act, those allegations do not give rise to a private cause of action against the defendants of the type agitated in the statement of claim.

7. [43]

   It follows that, insofar as the statement of claim relied upon the alleged commission of offences to ground the plaintiffs’ claims for damages and compensation, it disclosed no reasonable cause of action. For completeness, I repeat my earlier finding that, in any event, the pleadings as to the email being knowingly false and misleading in character cannot be sustained upon the pleadings in the statement of claim because the allegation turns on a characterisation of the second defendant’s evidence in the Local Court on 25 September 2014 (extracted at para 32 of the statement of claim) which I have found on the face of the material pleaded is not available and does not sustain the allegation.

8. [44]

   Those considerations direct attention to the first of the four sources of the claim for compensation and damages described above.

9. [45]

   One such consideration concerned acts of bad faith which as the plaintiff pleaded had a relevant connection to s 109 of the ICAC Act.

10. [46]

    Section 109(1) of the ICAC Act is in the following terms:

11. [47]

    In Sandra Lazarus, Michelle Lazarus and Jessica Lazarus v Director of the Independent Commission Against Corruption [2015] NSWSC 1265, Bellew J considered the effect of s 109(1) on the claims in that case at [40]-[47], holding (at [47]) that s 109 conferred a statutory immunity on ICAC and its officers which operated to prohibit the plaintiffs from advancing their claims as pleaded, except insofar as the plaintiffs alleged that ICAC or its officers acted otherwise than in good faith (those claims were struck out pursuant to r 14.28 of the UCPR).

12. [48]

    In this case, it appears from the statement of claim at para 44 that the plaintiffs accept that they are required to establish bad faith, albeit that there follows a bare allegation that actions of the first and second defendants “must constitute bad faith”.

13. [49]

    Having regard to my earlier analysis of the statement of claim as to whether the 11 January email represented a false and misleading statement (by reference to the transcript of the second defendant’s evidence), the allegation of bad faith as pleaded in the statement of claim cannot be sustained. There are further considerations however arising out of paras 48 and 49 of the statement of claim.

14. [50]

    The pleading thus fails to disclose any reasonable cause of action and is embarrassing.

15. [51]

    Paragraph 48 of the statement of claim claims that the defendants were required to exercise their powers and carry out their “official duties” with “care and diligence”. The duties referred to appear to be principally those under the ICAC Act.

16. [52]

    However, as was held by Wilson J in Lazarus, Lazarus & Lazarus v Kane & Ors [2017] NSWSC 1150 (“Lazarus v Kane”) at [70]-[72], legal questions concerning the authority of an officer of the ICAC to issue a Court Attendance Notice ("CAN"), and the validity of the prosecutions of the first and second plaintiffs in consequence of the CANs in their cases being signed by an officer of the ICAC were litigated with respect of the second plaintiff in Lazarus v New South Wales Director of Public Prosecutions [2015] NSWSC 1116 (“Lazarus v NSW DPP”) at [64]-[91] (leave to appeal was refused: see Lazarus v Director of Public Prosecutions NSW [2016] NSWCA 47), and "[s]ince the legal questions are the same, there is no reason to conclude that the position of [Sandra Lazarus] would be any different to that of [Michelle Lazarus]": Lazarus v Kane at [71].

17. [53]

    In Lazarus v NSW DPP at [77], Garling J found that the DPP took over the prosecution in accordance with the provision of the Director of Public Prosecutions Act 1986 (NSW) on the first occasion the matter was before the Local Court. As Wilson J noted (Lazarus v Kane at [72]), the validity of the CANs and the prosecutions was also considered in Lazarus v Independent Commission Against Corruption (2017) 94 NSWLR 36; [2017] NSWCA 37 (“Lazarus v ICAC (No 1)”), with the arguments advanced by the first and second plaintiffs being rejected.

18. [54]

    It should be observed that the primary issue ventilated before the Court of Appeal was whether the Independent Commission Against Corruption Amendment (Validation) Act 2015 (NSW) (“the Validation Act”) operated in the plaintiffs’ criminal proceedings. The Validation Act inserted Pt 13 into Sch 4 of the ICAC Act following the High Court’s decision in Independent Commission Against Corruption v Cunneen (2015) 256 CLR 1; [2015] HCA 14. Lazarus v ICAC (No 1), McColl, Leeming and Simpson JJA held that the Validation Act was retrospective legislation that applied to all things done or purportedly done by ICAC prior to 14 April 2015, even where they were in issue in pending criminal proceedings (at [101] and [146]). Nonetheless, there was a discussion in the context of questions as to the validity of CANs (at [139]-[143]). Leeming JA ultimately held that even if the CANs were invalid, the Validation Act applied to them in terms (at [143]).

19. [55]

    It follows that the defendants were correct to submit that, in those respects, the statement of claim did not only disclose no reasonable cause of action but it is also embarrassing.

20. [56]

    Before turning to the question of statutory duty per se, I note that the first defendant made a submission that any claim based on a breach of that duty or, for that matter, negligence would be statute barred under the Limitation Act 1969 (NSW) to the extent that it concerned injury and damage said to be experienced by the plaintiffs (as pleaded in prayer 2(a) of the statement of claim) since 28 May 2010. Reliance in that respect was placed upon s 14(1)(b) of the Limitation Act, as to the breach of statutory duty (and ss 50C and 50D of the Limitation Act with respect to any negligence claim brought by the plaintiffs insofar as damages were sought with respect to personal injury). The submissions developed in that respect are set out below and are of some substance but it is unnecessary to ultimately decide the questions raised by the defendants. The submissions are as follows:

BREACH OF STATUTORY DUTY

1. [57]

   The breach of statutory duty which appeared to be pleaded by the plaintiffs appeared in para 21 of the statement of claim. I have earlier extracted that pleading.

2. [58]

   The plaintiffs pleaded, in reliance on s 73 of the ICAC Act, that given the importance of conducting the forensic investigation, contemplated to be conducted through Ms Novotny, the defendants did not fulfil their duty to fully investigate a matter. Further it was contended the defendants failed to provide Ms Novotny with materials she required to complete her examinations.

3. [59]

   A breach of a statutory duty is limited to circumstances where a statute creates a duty as opposed to a mere power to perform certain acts. In Stuart v Kirkland-Veenstra (2009) 237 CLR 215; [2009] HCA 15, the High Court of Australia considered a suit of police officers and the State of Victoria brought by the wife of a man who committed suicide at his home. The action was taken for breach of a duty to take reasonable care to protect his health and her health and safety by failing to exercise a power to apprehend the man and arrange him to be examined under s 10(1) of the Mental Health Act 1986 (VIC).

4. [60]

   The officers in question had found the man in a car park in his car with a hose running from the exhaust pipe to the interior of the car. After questioning, the police officers took no further action. The man left the car park, proceeded to his home and committed suicide whilst sitting in his car with a hose from the exhaust and the running engine. Gummow, Hayne and Heydon JJ discussed the nature and scope of statutory duty at [102] to [106]:

5. [61]

   Of particular significance in the present matter, I refer to the observations of their Honours at [109] to [110]:

6. [62]

   What then is the nature of the duties reposing under the ICAC Act and in particular s 73 of that Act?

7. [63]

   In Waterhouse v The Independent Commission Against Corruption (No. 3) [2015] NSWSC 261 (“Waterhouse”), Garling J considered a claim (in the context of an application seeking, inter alia, orders in the nature of mandamus) that the ICAC Act imposed a duty to investigate on the first defendant. His Honour was not considering a tort action for breach of statutory duty as may arise in the present matter, but I agree with the submission of the first defendant that the authority is nonetheless persuasive in the present context as to the construction of the ICAC Act.

8. [64]

   Garling J found (at [87]) that the ICAC Act “provides for a duty upon the Commission to investigate in only one identified circumstance”, namely, that provided in s 73. His Honour noted that s 73 “suggest[s] the use of language within the Act which conveys the differential meaning of a permissive power and a mandatory obligation” (at [88]). His Honour then proceeded to find that the words of s 20(1) of the ICAC Act (conferring the power to investigate on the first defendant) are “clearly empowering and not mandatory” (at [94]) and that “the Commission is given a very broad discretion as to what it should investigate, providing of course that any investigation deals with appropriate conduct, i.e. corrupt conduct as that phrase is defined” (at [95]). His Honour found that neither s 10 nor s 20 of the ICAC Act imposed any duty or obligation on the first defendant to investigate a complaint made to it (at [96]).

9. [65]

   Returning to the pleadings for compensation and damages as summarised in [38(1)] above, the following difficulties with the claim demonstrating a reasonable cause of action become immediately apparent for the following reasons:

   1. (1)

      Section 73 of the ICAC Act concerns only matters referred to the ICAC by Parliament. The ICAC has a duty to fully investigate such matters: s 73(2). However, there is no allegation in the statement of claim that Operation Charity was a matter referred to the ICAC by the Parliament, nor could such an allegation be made out, Operation Charity not having followed from such a reference.

   2. (2)

      The contention that the defendants failed in their breach of duty to fully investigate in Operation Charity appears to be founded upon the first defendant’s decision not to engage Ms Novotny for various reasons. Even having regard to the breadth of the discretion to investigate conferred by s 20 of the ICAC Act, there is no statutory duty to obtain all expert evidence that might bear upon an issue arising in the course of one of its investigations, irrespective of costs of obtaining that evidence or other relevant forensic decisions.

10. [66]

    In the result, I consider that the statement of claim in this respect discloses no reasonable cause of action for a breach of statutory duty.

11. [67]

    That conclusion is sufficient to dispose of any action arising for a breach of duty as pleaded. Mention should, however, be made to the alternative submission by the first defendant (which I accept) by reference to O’Connor v SP Bray Ltd (1937) 56 CLR 464 at 477-478 and Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 424 as follows:

12. [68]

    There are two other considerations in this respect. First, it would be necessary for the plaintiffs to establish that it was the breach of statutory duty which caused their loss. This raises a particular obstacle to their claim. The first and second plaintiffs have been prosecuted and convicted of their respective offences arising out of or in connection with Operation Charity. In the proceedings concerning the first plaintiff, she adduced her own handwriting expert. There must be a real question as to whether the plaintiffs could establish a causal link between the failure to obtain evidence from Ms Novotny and their alleged injuries, particularly in the case of any injuries that are said to have arising after the first and second plaintiffs’ convictions.

13. [69]

    Secondly, s 43(2) of the Civil Liability Act 2002 (NSW) provides that in an action for breach of statutory duty by a public authority in connection with the exercise of or a failure to exercise one of its functions:

14. [70]

    Having regard to Annexures 8 and 15 of the affidavit of the first plaintiff, setting out contemporaneous and near-contemporaneous explanations of the basis upon which the first defendant decided not to proceed to obtain expert handwriting evidence from Ms Novotny, the plaintiffs' claim for breach of statutory duty could not satisfy the standard of unreasonableness imposed by s 43(2) of the Civil Liability Act.

15. [71]

    Accordingly and having regard to all of the requirements in relation to an action for breach of statutory duty set out above, no reasonable cause of action is disclosed by the statement of claim insofar as the legal source of the plaintiffs' damages claim is said to be an action for breach of statutory duty.

Negligence

1. [72]

   The statement of claim does not contain any express reference to negligence. Further, it is difficult to discern any allegation of negligence from the statement of claim deriving from a duty of care as the nature of any of duty of care is not identified in the statement of claim. On that basis it would seem, notwithstanding the submissions of the first defendant in this respect, unnecessary to deal with the question of negligence.

2. [73]

   However some brief observations may be made as to a potential claim of that character in the present context. In my view, there is a strong basis to accept the contention by the first defendant that any duty of care which might arise in the context of the pleadings, as have been described above, is bad in law such that no reasonable cause of action is disclosed.

3. [74]

   If one were to construct a duty of care as might potentially arise out of the statement of claim, the duty would be presumably pleaded as a duty to the plaintiffs to prevent the injuries that have allegedly suffered by virtue of their position as persons whose conduct was the subject of an investigation by the first defendant in Operation Charity (noting that such a duty would be novel and would attract the operation of the principles as to a novel duty identified by Leeming JA (with whom Macfarlan and Simpson JJA agreed) in Perera v Genworth Financial Mortgage Insurance Pty Ltd (2017) 94 NSWLR 83; [2017] NSWCA 19 at [39]-[46]).

4. [75]

   In Sullivan v Moody (2001) 207 CLR 562; [2001] HCA 59, the following was said about the nature of a duty of care where public authorities or their officers are charged with conducting investigations and/or exercising their powers in the public interest (at [60] per Gleeson CJ, Gaudron, McHugh, Hayne and Callinan JJ):

5. [76]

   As with the investigations the subject of Sullivan v Moody, here the first defendant's functions of investigation and reporting "require, for their effective discharge, an investigation into the facts without apprehension as to possible adverse consequences for people in the position of" the plaintiffs: Sullivan v Moody at [62].

6. [77]

   Section 12 of the ICAC Act provides that “[i]n exercising its functions, the Commission shall regard the protection of the public interest” as "paramount". The interests of the plaintiffs, as persons suspected of corrupt conduct, are divergent from those of the public in respect of the identification of and reporting on corrupt conduct by the first defendant. The imposition of a duty of care to prevent damage of the kind the plaintiffs allege (which would appear from the prayers for relief in the statement of claim to be at least principally mental harm) would conflict with the obligation to regard the public interest as paramount, including when making decisions as to whether to obtain particular expert evidence that a person the subject of investigation by the first defendant may regard as desirable.

7. [78]

   In respect of police officers conducting investigations, in Tame v State of NSW (2002) 211 CLR 317; [2002] HCA 35, Hayne J recognised that (at [298]):

8. [79]

   Accepting that these cases do not concern a duty of care by officers of the first defendant, they nevertheless provide a useful analogy to the position of such investigating officers and indicate the conflicting nature of the first defendant's functions as set out in ss 13 and 14 of the ICAC Act and a duty to prevent damage of the kind the plaintiffs would appear to allege.

9. [80]

   There are further aspects of the first defendant’s submissions as to negligence which I consider to be correct:

CONCLUSION

1. [81]

   For the foregoing reasons, I consider that the statement of claim by the plaintiffs discloses no reasonable cause of action. It is not appropriate to permit a re-pleading of the statement of claim as the pleadings are not amendable to rectification in that way.

2. [82]

   In the circumstances, it is appropriate to grant the first prayer for relief of the notice of motion. The first defendant should also have an order for costs in relation to the motion (per the third prayer for relief). It is unnecessary to rule on the second prayer for relief.

3. [83]

   Submissions were not received with respect to the fourth prayer for relief. It would be appropriate for a further submission to be advanced in that respect by the first defendant indicating whether it was appropriate to hear the plaintiff in relation to that prayer. That consideration can await the making of orders with respect to the first and third prayers for relief of the notice of motion (with any further submissions filed within 14 days of the making of those orders). Costs in that respect are reserved.

DIRECTION

1. [84]

   The first defendant shall bring in short minutes of order reflecting this judgment within 14 days of the publication of this judgment.