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Supreme Court 13 May 2011

Donaldson v Commonwealth of Australia

[2011] NSWSC 423

Other
PROCEDURE APPLICATION FOR DEFAULT JUDGMENT NO DEFAULT APPLICATION FOR SUMMARY DISMISSAL PLAINTIFF UNREPRESENTED NO MATERIAL FACTS PLEADED

Citation: Donaldson v Commonwealth of Australia [2011] NSWSC 423
Court: Supreme Court of New South Wales
Date: 13 May 2011
Judge: Davies J

Background

An unrepresented plaintiff filed a Statement of Claim against the Commonwealth of Australia in July 2010, claiming $30 million for alleged breach of contract, breach of statutory duty of care, fraud, and incompetence. The claim arose from the plaintiff's receipt of a Disability Support Pension through Centrelink and, in particular, Centrelink's decision to recover approximately $7,800 in pension payments and impose a preclusion period after the plaintiff received a personal injury damages award of around $76,000 against a retailer in 2009.

The plaintiff had pursued an internal review and appealed through the Social Security Appeals Tribunal and then the Administrative Appeals Tribunal, each of which affirmed Centrelink's original decision. He had not sought judicial review of the AAT's decision. He then commenced these Supreme Court proceedings.

The plaintiff filed a motion seeking default judgment on the basis the Commonwealth had not filed its defence within 28 days. The Commonwealth, for its part, moved to have the proceedings summarily dismissed or, alternatively, the Statement of Claim struck out on the basis that it disclosed no reasonable cause of action.

  • Whether the Commonwealth was in default for failing to file its defence within the required 28-day period, entitling the plaintiff to default judgment.
  • Whether the Statement of Claim disclosed any viable causes of action, including in negligence, breach of statutory duty, or fraud.
  • Whether Parliament or the Commonwealth could be liable in tort for the enactment or operation of Commonwealth legislation.
  • Whether the plaintiff, having been given an opportunity to replead, had cured the deficiencies in the original pleading.

Decision

On the default judgment application: Davies J dismissed the plaintiff's motion. Under Part 16 rule 6(2)(c) of the Uniform Civil Procedure Rules 2005, a defendant ceases to be in default once it files a defence, even if that defence is filed late, provided no default judgment has yet been obtained. The Commonwealth had filed and served its defence before the plaintiff's motion was made, so there was no default.

On the pleading deficiencies: The court found the Statement of Claim was fundamentally deficient. It pleaded virtually no material facts, identified no cognisable duty of care, and included no proper particulars of fraud. Although the court made allowance for the plaintiff's self-represented status and gave him an opportunity to file an amended pleading, the amended version did not correct any of the substantive defects.

On the substantive causes of action: The court held that Parliament owes no duty of care and that the Commonwealth incurs no liability in tort for what Parliament legislates, absent constitutional invalidity. The court also found no basis for a duty of care on the part of Centrelink or the Commonwealth arising from the administration of the social security legislation. It noted that, under the authority of Jones v Department of Employment [1989] QB 1, legislation directing the payment of social welfare benefits is unlikely to give rise to an action for breach of statutory duty, particularly where a comprehensive appeals process exists. The plaintiff had exhausted that appeals process without success.

On summary dismissal: Applying the General Steel Industries test, Davies J concluded that both the pleading and the causes of action the plaintiff sought to maintain were so untenable that they could not possibly succeed. Judgment was entered for the Commonwealth.

Orders Made

  • The plaintiff's Notice of Motion (filed 23 November 2010) seeking default judgment was dismissed.
  • Judgment was entered for the Commonwealth in the proceedings.
  • The plaintiff was ordered to pay the Commonwealth's costs of the proceedings.

Key Takeaways

  • Under Part 16 rule 6(2)(c) of the UCPR, a defendant that files its defence late is no longer in default once that defence is filed and served, provided no default judgment has yet been obtained.
  • Parliament owes no duty of care, and the Commonwealth is not liable in tort for the content of legislation it enacts, in the absence of a finding of constitutional invalidity.
  • A statutory scheme providing social welfare benefits, particularly one that includes a structured internal review and tribunal appeals process, is unlikely to give rise to a private action for breach of statutory duty.
  • Where a self-represented plaintiff is given the opportunity to replead but the amended pleading does not identify any material facts, duty of care, or proper particulars of fraud, summary dismissal under Part 13 rule 4 of the UCPR is available.
  • In dismissing the proceedings, the Supreme Court confirmed that it would not go behind the decisions of the relevant tribunals to recognise unarticulated common law rights overriding Commonwealth legislation as those tribunals had interpreted it.

Legislation and Cases Referenced

Legislation:
- Uniform Civil Procedure Rules 2005 (NSW), Part 13 r 4, Part 14 r 28, Part 16 r 6
- Social Security Act 1991 (Cth), ss 1169, 1170, 1184
- Civil Liability Act 2002 (NSW)
- Administrative Decisions (Judicial Review) Act 1977 (Cth)
- Disability Services Act 1986 (Cth)

Cases:
- General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
- Jones v Department of Employment [1989] QB 1
- Sullivan v Moody (2001) 207 CLR 562