Federal Court of Australia Paschke v Secretary, Department of Social Services [2023] FCAFC 143 Appeal from Application for leave to appeal: Paschke v Secretary, Department of Social Services [2023] FCA 6 File number(s): VID 107 of 2023 Judgment of: ANDERSON, MCEVOY AND HESPE JJ Date of judgment: 24 August 2023 Catchwords: REPRESENTATIVE PROCEEDINGS – application for extension of time and leave to appeal decision of single judge dismissing representative proceedings brought under Part IVA of Federal Court of Australia Act 1976 (Cth) – whether decision was interlocutory in character – where the representative applicant is unrepresented – where applicant disputes the manner in which the Department of Social Services determines assessable curtilage – whether requirements in Part IVA of the Federal Court of Australia Act 1976 (Cth) satisfied – whether Ombudsman is entitled to rely upon s 33 of the Ombudsman Act 1976 (Cth) as a complete defence to claim – application dismissed with costs Legislation: Federal Court of Australia Act 1976 (Cth) Part IVA, ss 33C and 33D Ombudsman Act 1976 (Cth) ss 5, 33 Federal Court Rules 2011 (Cth) r 35.13(a) Cases cited: ABC v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199 Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 Dyczynski v Gibson [2020] FCAFC 120; (2020) 280 FCR 583 Federal Commissioner of Taxation v Futuris Corporation Ltd [2008] HCA 32; (2008) 237 CLR 146 Johnson Tiles Pty Ltd (ACN 004 576 103) v Esso Australia Ltd [2000] FCA 1572; (2000) 104 FCR 564 Kordan Pty Ltd v Federal Commissioner of Taxation (2000) 46 ATR 191 Plaintiff S164/2018 v Minister for Home Affairs [2018] HCA 51; (2018) 92 ALJR 1039 Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; (2015) 256 CLR 507 Wilkinson v Wilson Security Pty Ltd [2022] FCA 756 Division: General Division Registry: Victoria National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 23 Date of hearing: 8 August 2023 Counsel for the Applicant The Applicant appeared in person Counsel for the Respondents Mr J H Kirkwood SC and Mr C McDermott Solicitor for the Respondents Australian Government Solicitor ORDERS VID 107 of 2023 BETWEEN: WINFRIED PASCHKE Applicant AND: SECRETARY, DEPARTMENT OF SOCIAL SERVICES First Respondent THE RESPONSIBLE AUTHORITY, SERVICES AUSTRALIA Second Respondent COMMONWEALTH OMBUDSMAN Third Respondent order made by: ANDERSON, MCEVOY and HESPE JJ DATE OF ORDER: 24 AUGUST 2023 THE COURT ORDERS THAT: 1. The applicant's application for an extension of time and for leave to appeal is dismissed. 2. The applicant pay the respondents' costs of the application, to be fixed by way of an agreed lump sum or, in default of agreement, by way of a lump sum fixed by a Registrar. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT THE COURT: Introduction 1 This is an application for an extension of time and for leave to appeal brought by the applicant, Mr Paschke, from interlocutory orders made by a judge of this Court dismissing representative proceedings that Mr Paschke had brought under Part IVA of the Federal Court of Australia Act 1976 (Cth) (FC Act). The primary judge's reasons for making the impugned order were contained in reasons for judgment dated 12 January 2023. 2 The application for an extension of time and leave to appeal was listed for hearing together with the hearing of the appeal (if leave be granted). 3 For the reasons set out below, the application for an extension of time and for leave to appeal is dismissed with costs. Applicable principles 4 The orders of the primary judge were interlocutory in character. This is because there was no final determination by the primary judge of the merits of any underlying cause of action relied on by Mr Paschke: Johnson Tiles Pty Ltd (ACN 004 576 103) v Esso Australia Ltd [2000] FCA 1572; (2000) 104 FCR 564 at [42]–[43] (French J, Beaumont J agreeing at [1], Finkelstein J agreeing at [99]); Plaintiff S164/2018 v Minister for Home Affairs [2018] HCA 51; (2018) 92 ALJR 1039 at [11] (Edelman J). Leave to appeal is therefore required by s 24(1A) of the FC Act. An extension of time is also required because the application for leave was not made within 14 days of the date of the order as required by Federal Court Rules 2011 (Cth) r 35.13(a). 5 The principles applicable to an application for leave to appeal from an interlocutory decision are well established. In general, the tests to be applied are: (a) whether, in all the circumstances, the decision is attended with sufficient doubt to warrant its being reconsidered by the Full Court; and (b) whether substantial injustice would result if leave were refused, supposing the decision to be wrong: Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398–400 (Sheppard, Burchett and Heerey JJ). 6 The respondents accepted that the dispositive matters bearing on the exercise of the Court's discretion for both questions (leave to appeal and an extension of time) were the merits of the grounds of appeal. Accordingly, the application for an extension of time was not opposed on any basis different from the opposition for leave to appeal. Background 7 The background to the impugned order is set out at PJ [1] to [5] and may be briefly stated as follows. 8 Mr Paschke is an aged pensioner. He has filed an originating application starting a representative proceeding under Part IVA of the FC Act against the Secretary, Department of Social Services, the Responsible Authority, Services Australia and the Commonwealth Ombudsman. He disputes the manner and basis upon which Services Australia values assessable curtilage for the purposes of determining whether a person meets the requirements for obtaining an aged pension. He also claims the Ombudsman has failed to comply with s 5(1)(a) of the Ombudsman Act 1976 (Cth) by refusing to investigate the conduct of Services Australia and the Secretary without providing a lawful reason. 9 Mr Paschke seeks to have the assessable curtilage of the group members reassessed and where the assessable curtilage has been overvalued, that compensation, in the form of backpay, be paid. 10 Mr Paschke is in receipt of a (part) aged pension. Before the primary judge, he confirmed that he was not himself claiming any entitlement to any unpaid pension. He was concerned that in the future his pension might be affected if Services Australia persisted with the way in which it values assessable curtilage. 11 The primary judge gave three reasons for dismissing the proceedings: (1) There was no exceptional reason that would justify leave being given to Mr Paschke to have the conduct of representative proceedings even though he is not legally qualified (PJ [10]). (2) Mr Paschke did not have a sufficient personal interest to bring the proceedings as a representative applicant because he is not adversely affected by any decision made concerning his entitlement to the pension. There was no evidence to suggest that he will be adversely affected in the future (PJ [14]–[15], [16]). (3) Mr Paschke's claim as set out in his concise statement for the representative proceedings, that the Ombudsman refusing to investigate was unlawful, did not involve a claim of lack of good faith. The claim is therefore covered by the immunity afforded to the Ombudsman by s 33 of the Ombudsman Act. Mr Paschke did not explain how a representative proceeding might be brought in respect of a claim made by Mr Paschke to the Ombudsman (PJ [20]–[21]). THE APPLICATION TO THIS COURT 12 The two grounds of the application are expressed as: (1) "Justice is the ground why leave to appeal should be granted" and (2) "Justice for the group members requires that the legal questions posed in the class action are answered by the respondents or their lawyers and ultimately by the Court". Many of Mr Paschke's submissions focussed on the underlying merits of his complaint about the alleged unlawful valuation method for assessable curtilage. The merits of his complaint are not the subject of the application to this Court which is limited to the orders of the primary judge. 13 Mr Paschke's submissions as to why the primary judge erred in dismissing the proceedings may be summarised as follows: (1) Mr Paschke had a sufficient personal interest because his pension payments are (still) worked out by reference to the unlawful valuation method for assessable curtilage and his rights to privacy have been infringed by the unlawful valuation processes. The possibility of future action might affect his entitlements in the future and this causes him distress. (2) The Ombudsman is not immune from suit if it makes a decision without lawful reasons for doing so because that is not acting in good faith. (3) There is no requirement for a self-represented litigant to seek leave to commence a representative proceeding and the primary judge did not give sufficient reasons to explain why Mr Paschke should be precluded from running his case. In particular, Mr Paschke argues that there was no real basis to assume the representative proceeding would necessarily be complex. consideration 14 Sections 33C and 33D of the FC Act provides: 33C Commencement of proceeding (1) Subject to this Part, where: (a) 7 or more persons have claims against the same person; and (b) the claims of all those persons are in respect of, or arise out of, the same, similar or related circumstances; and (c) the claims of all those persons give rise to a substantial common issue of law or fact; a proceeding may be commenced by one or more of those persons as representing some or all of them. (2) A representative proceeding may be commenced: (a) whether or not the relief sought: (i) is, or includes, equitable relief; or (ii) consists of, or includes, damages; or (iii) includes claims for damages that would require individual assessment; or (iv) is the same for each person represented; and (b) whether or not the proceeding: (i) is concerned with separate contracts or transactions between the respondent in the proceeding and individual group members; or (ii) involves separate acts or omissions of the respondent done or omitted to be done in relation to individual group members. 33D Standing (1) A person referred to in paragraph 33C(1)(a) who has a sufficient interest to commence a proceeding on his or her own behalf against another person has a sufficient interest to commence a representative proceeding against that other person on behalf of other persons referred to in that paragraph. (2) Where a person has commenced a representative proceeding, the person retains a sufficient interest: (a) to continue that proceeding; and (b) to bring an appeal from a judgment in that proceeding; even though the person ceases to have a claim against the respondent. 15 The representative proceedings sought to be commenced by Mr Paschke did not satisfy the requirements of the FC Act. Mr Paschke did not have a claim against each of the respondents. His pension was not affected. The law in Australia does not recognise a general right to privacy independent of the law of tort or breach of confidence: ABC v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199. Mr Paschke's claims were not based on tort or breach of confidence. So too any claim for emotional distress was not connected to a tortious cause of action. 16 The proceedings were not validly initiated because Mr Paschke did not have a sufficient interest to commence proceedings on his own behalf. Accordingly he was unable to commence a representative proceeding because the proceedings did not comply with Part IVA of the FC Act. Because Mr Paschke had no right to initiate the representative proceedings, there was no error in the primary judge's dismissal of the proceedings. 17 There was also no error in the primary judge's refusal to grant leave to Mr Paschke, as a person who is not a legal practitioner, to represent group members. 18 The Court has the inherent jurisdiction to control its own processes and procedures, including in relation to when a person who is not a lawyer may appear on behalf of another person in proceedings before the Court. Lay people do not have the right to act on another's behalf in court proceedings without leave of the Court. As a matter of practice, there is no reason why this principle should not apply with equal force to representative proceedings (which affect the rights of all group members). 19 Representative proceedings under Part IVA of the FC Act should ordinarily be conducted by way of a legal representative having regard to the important duties a lead applicant owes to group members. Group members are bound by the outcome of representative proceedings and the conduct of the proceedings can impact the disposition of group members' rights. This includes the risk to a group member of the detriment of an estoppel operating in a subsequent proceeding outweighing the benefit to that person of participating in the current proceeding: Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; (2015) 256 CLR 507 at [40] (French CJ, Bell, Gageler and Keane JJ). 20 The scheme of Part IVA is that the applicant has the conduct of proceedings on behalf of the class members and has fiduciary obligations to them: Tomlinson at [40] (French CJ, Bell, Gageler and Keane JJ); Dyczynski v Gibson [2020] FCAFC 120; (2020) 280 FCR 583 at [209] (Murphy and Colvin JJ). Such obligations can include providing group members with information and seeking their instructions: Dyczynski at [208]–[210]. The Court relies on lawyers' adherence to their duties as officers of the Court when acting for a representative applicant, without which the Court would itself have to supervise the lead applicant's performance of their fiduciary obligations. As Colvin J said in Wilkinson v Wilson Security Pty Ltd [2022] FCA 756 at [12]: Where, as here, the representative proceedings are being conducted without legal assistance then the Court is placed in a position where, in effect, it is required to supervise the performance by the applicant of his fiduciary obligations in the conduct of the proceedings. The Court is unable to look to the lawyers for the representative applicant as independent officers with duties to the court to perform their obligation to act in the interests of the group members when dealing with the determination of the common questions by proceedings or settlement: as to which obligation, see Kelly v Willmott Forests Ltd (in liquidation) (No 4) [2016] FCA 323 at [220], [308] (Murphy J). 21 There was no error in the primary judge's exercise of his discretion in a matter of practice or procedure. 22 In so far as Mr Paschke's claims against the Ombudsman are concerned: (1) There is no basis on which it might be said that anybody other than Mr Paschke had a claim against the Ombudsman. It was Mr Paschke alone who had made a complaint to the Ombudsman. There is no basis on which Mr Paschke might commence representative proceedings under Part IVA of the FC Act against the Ombudsman. (2) In his concise statement, Mr Paschke had not made any specific claim of a failure on the part of the Ombudsman to act in good faith. Section 33(1) of the Ombudsman Act is therefore engaged. A claim of lack of good faith is not one to be made lightly: Kordan Pty Ltd v Federal Commissioner of Taxation (2000) 46 ATR 191 at 193 (Hill, Dowsett and Hely JJ); cited in Federal Commissioner of Taxation v Futuris Corporation Ltd [2008] HCA 32; (2008) 237 CLR 146 at [60] (Gummow, Hayne, Heydon and Crennan JJ). There is no basis on which Mr Paschke's claims against the Ombudsman can proceed even as a proceeding which is not a representative proceeding. Conclusion 23 The application for an extension of time and leave to appeal is dismissed. Mr Paschke will be ordered to pay the respondents' costs of the application, to be fixed by way of an agreed lump sum or, in default of agreement, by way of a lump sum fixed by a Registrar. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Anderson, McEvoy and Hespe. Associate: Dated: 24 August 2023