The Supreme Court on Crown liability in Victoria

In the recent case of Salt v State of Victoria, Keogh J was invited to reconsider the approach that has historically been taken to the imposition of liability in tort on the State of Victoria. The issue arose as a result of an application by the defendant for an order that the plaintiff re-plead her claim for damages to identify a servant or agent of the Crown in respect of whose negligence the State was alleged to be vicariously liable. In making the order sought by the defendant, Keogh J reaffirmed a line of authority in this State that stretches back over half a century.

Section 23(1)(b) of the Crown Proceedings Act 1958 (Vic) provides that ‘the Crown shall be liable for the torts of any servant or agent of the Crown or independent contractor employed by the Crown as nearly as possible in the same manner as a subject is liable for the torts of his servant or agent or of an independent contractor employed by him.’ Historically, it has been held that this provision operates to remove the Crown’s immunity from liability in tort in a ‘restricted form’. In a series of cases, including Hall v Whatmore, Richards v State of Victoria and Lyver v State of Victoria, the Supreme Court has held that under the CPA, the State of Victoria may only be held vicariously liable for the torts of its servants and agents; it cannot be held directly liable for torts in the same manner as a body corporate. The traditional position was most clearly stated by Winneke P in Stubbe v Jensen, in the context of a claim for personal injury damages brought by a public servant against the State:

[T]here is no common law liability in tort imposed upon the Crown. Such liability as the Crown accepts in tort is provided now by the statute, that is, s 23(1)(b) of the Crown Proceedings Act. That liability can only arise vicariously in the sense that the Crown can only be responsible for the negligent acts and omissions of its servants. Such a duty of care, vicarious as it is, cannot in any way be said, I think, to be co-extensive or concurrent with the duty which the common law imposes upon an employer, by way of implied contractual terms, not to expose the employer’s servant to unnecessary risk of injury.

As Gillard J explained in Stockwell v State of Victoria, the result of this principle is that to establish liability against the State, a plaintiff must ‘plead facts which establish that an employee, agent or independent contractor of the Crown, acting in the course and scope of the employment or engagement, was liable to the plaintiff.’ It is not sufficient for a plaintiff to allege that he or she sustained damage as a result of systemic negligence on the part of the State as a political or legal entity.

In Salt, the plaintiff submitted s 23(1)(b) is not the only provision of the Crown Proceedings Act that imposes liability on the State. Rather, the plaintiff submitted that s 25 of the Crown Proceedings Act, which provides that in a proceeding brought under the Act, ‘the rights of parties shall as nearly as possible be the same and judgment may be given and costs awarded on either side and every judgment order or decree shall be subject to the same rights of re-hearing appeal and review, as in a proceeding between subject and subject’, provides an alternative source of liability in tort. In this regard, the plaintiff submitted that s 25 should be interpreted by reference to the construction given to s 64 of the Judiciary Act 1903 (Cth) by a majority of the High Court in The Commonwealth v Evans Deakin Industries Ltd. Section 64 of the Judiciary is drafted in terms that bear a close resemblance to those of s 25 of the Crown Proceedings Act.

Justice Keogh rejected the plaintiff’s submission with respect to the operation of s 25 of the Crown Proceedings Act for two reasons. First, his Honour noted the observation of a majority of the High Court in Blunden v The Commonwealth that ‘the liability of the Commonwealth in tort is created by the common law and that s 75(iii) of the Constitution denies any operation to doctrines of Crown or Executive immunity which otherwise might be pleaded in an action to recover damages in respect of a common law cause of action.’ In his Honour’s view, it followed from this observation that it is far from clear whether s 64 of the Judiciary Act, as opposed to the Constitution itself, in fact operates to remove the Commonwealth’s immunity from liability in tort. Second, his Honour considered that the interpretation of s 64 of the Judiciary Act ‘depends on the specific statutory and historical context within which it sits’; it was not possible to determine the meaning of s 25 of the Crown Proceedings Act by considering the meaning ascribed to similar words in a different legislative context.

Given that the plaintiff in Salt sought to overturn an entrenched principle of Crown liability in Victoria and had initially sought to have questions reserved for the Court of Appeal, the possibility of an appeal from the ruling of Keogh J cannot be ruled out. If leave is granted to appeal, the case may provide an opportunity for the Court of Appeal to reconsider or reaffirm the existing authorities on Crown liability in Victoria.