FEDERAL COURT OF AUSTRALIA Scott v Pedler [2002] FCA 851 Judiciary Act 1903 (Cth) s 39B Social Security Act 1991 (Cth) ss 729, 1296 Federal Court Rules O 8 r 6(1) Scott v Secretary, Department of Social Security [2000] FCA 1241 referred to Scott v Secretary, Department of Social Security [1999] FCA 1774 referred to RALPH SCOTT AND SOPHIE SCOTT v OFFICER TONI LEE-ANNE PEDLER, DEPARTMENT OF SOCIAL SECURITY, OFFICER JULIE A WILLIAMS, DEPARTMENT OF SOCIAL SECURITY AND AUTHORISED REVIEW OFFICER, ROBERTA CHRYSTAL, DEPARTMENT OF SOCIAL SECURITY V 652 of 2001 GRAY J 4 JULY 2002 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 652 of 2001 BETWEEN: RALPH SCOTT FIRST APPLICANT SOPHIE SCOTT SECOND APPLICANT AND: OFFICER TONI LEE-ANNE PEDLER, DEPARTMENT OF SOCIAL SECURITY FIRST RESPONDENT OFFICER JULIE A WILLIAMS, DEPARTMENT OF SOCIAL SECURITY SECOND RESPONDENT AUTHORISED REVIEW OFFICER, ROBERTA CHRYSTAL, DEPARTMENT OF SOCIAL SECURITY THIRD RESPONDENT JUDGE: GRAY J DATE OF ORDER: 4 JULY 2002 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The applicants have leave to amend the application by adding as respondents Stewart McLeod and Ian Peak. 2. The applicants have leave to amend the statement of claim so as to plead their case against the added respondents. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 652 of 2001 BETWEEN: RALPH SCOTT FIRST APPLICANT SOPHIE SCOTT SECOND APPLICANT AND: OFFICER TONI LEE-ANNE PEDLER, DEPARTMENT OF SOCIAL SECURITY FIRST RESPONDENT OFFICER JULIE A WILLIAMS, DEPARTMENT OF SOCIAL SECURITY SECOND RESPONDENT AUTHORISED REVIEW OFFICER, ROBERTA CHRYSTAL, DEPARTMENT OF SOCIAL SECURITY THIRD RESPONDENT JUDGE: GRAY J DATE: 4 JULY 2002 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 This is an application, by notice of motion filed on 20 February 2002, by which the applicants seek to join additional parties to an existing proceeding. 2 Order 6 r 8(1) of the Federal Court Rules provides: "Where a person who is not a party - (a) ought to have been joined as a party; or (b) is a person whose joinder as a party is necessary to ensure that all matters in dispute in the proceeding may be effectually and completely determined and adjudicated upon, the Court, on application by him or by any party or of its own motion, may order that he be added as a party and make orders for the further conduct of the proceeding." 3 The applicants in the proceeding are a married couple. The existing respondents are three officers of the Department of Social Security ("the DSS"), the third of whom is described as an authorised review officer. They are Toni Lee-Anne Pedler, Julie A Williams and Roberta Chrystal. Paragraph 1 of the notice of motion seeks an order in the following terms: "An order that: officer Stewart McLeod, Department of Social Security authorised review officer Ian Peak, Department of Social Security Minister for Social Security a person being sued on behalf of the Commonwealth Prime Minister a person being sued on behalf of the Commonwealth be added as respondents to the proceeding". 4 As a first step to determining whether the applicants can satisfy the requirement of O 6 r 8 that the proposed additional respondents be persons who ought to have been joined as parties, or whose joinder is necessary, I must examine the nature of the proceeding as it presently stands. 5 By their application, filed on 13 June 2001, the applicants invoke the jurisdiction of the Court pursuant to s 39B of the Judiciary Act 1903 (Cth). They seek relief in the following terms: "1. Declaration, that the request of a person claiming a special benefit for time to prepare the case of rejection of the grant of a pension/ benefit to him/ her, constitutes a good reason, under ss.729 and 1296 of the Social Security Act 1991 (Cth) ('the Act'), for granting to that person the required time and the special benefit. 2. Declaration, that the assessment of impairment of a claimant, under the Impairment Tables, that is made by an officer of the Department of Social Security ('DSS') who is not a medical officer and who has not medically examined that claimant, is ultra vires s.94 + Sch.1B of of the Act. 3. Declaration, that under s.729(2)(a) and (b) of the Act the officer of the DSS is required to attempt to determine the payability of pensions and benefits to the person claiming a special benefit, without the requirement of claims for those pensions and benefits. 4. Declaration, that under s.729(2)(a) and (b) of the Act the officer of the DSS is required to become familiar with the existing evidence of the payability of pensions and benefits to the person claiming a special benefit, without the requirement of claims for these pensions and benefits. 5. Mandatory injunction, issued to the first and second respondent, to become familiar with the existing evidence and to consider the payability of pensions and benefits, under s.729(2)(a) and (b) of the Act, without the requirement of claims for these pensions and benefits from the person claiming a special benefit. 6. Prohibitory injunction, restraining the second and third respondent from assessing the impairment, under the Impairment Tables, of a person claiming a disability support pension. 7. Damages, including aggravated and exemplary damages, awarded against the respondents to the applicants. 8. Interest. 9. Costs. 10. Further or other relief." 6 Section 729 of the Social Security Act 1991 (Cth) ("the Act"), as it stood at the time, provided for the payment of special benefit to a person not receiving any other form of social security pension or social security benefit, provided that the Secretary of the DSS ("the Secretary") could be satisfied as to the satisfaction of certain other criteria. Section 1296 provided : "In administering this Act, the Secretary is to have regard to: (a) the desirability of achieving the following results: (i) the ready availability to members of the public of advice and information services relating to income support; (ii) the ready availability of publications containing clear statements about income support entitlements and procedural requirements; (iii) the delivery of services under the Act in a fair, courteous, prompt and cost-efficient manner; (iv) a process of monitoring and evaluating delivery of programs with an emphasis on the impact of programs on social security recipients; (v) the establishment of procedures to ensure that abuses of the social security system are minimised; and (b) the special needs of disadvantaged groups in the community; and (c) the need to be responsive to Aboriginality and to cultural and linguistic diversity; and (d) the importance of the systems of review of decisions under the Act; and (e) the need to apply government policy, in accordance with the law and with due regard to relevant decisions of the Administrative Appeals Tribunal and the Social Security Appeals Tribunal." 7 For the purposes of dealing with the application for joinder of parties, I am not engaged in the task of fact-finding. The facts so far as I have set them out are those alleged in the statement of claim, as already amended, and the material referred to in the affidavit in support of the application to join additional parties. 8 The existing statement of claim contains an allegation that the respondents owed the second applicant a duty, whether under statute law, common law or otherwise, to decide her claims under the Act with care and with due expedition. 9 The first claim refers to an application made by the second applicant on 28 January 1993 for a disability support pension ("DSP"). It is claimed that, on and after 24 November 1993, the DSS had professional medical opinions confirming that the second applicant suffered permanent, physical impairment greater than 20 per cent under the relevant impairment tables and confirming her continuous inability to work. It is claimed that the DSS did not have any professional medical opinion rejecting that impairment and that inability. On 24 November 1993, the proposed respondent Peak, an authorised review officer, rejected the evidence as to physical impairment, without having professional medical qualifications, making a medical examination of the second applicant or even having seen the second applicant. The complaint is that officers of the DSS who do not have professional medical qualifications and do not make medical examinations are not empowered by the Act to form their own medical opinions about levels of impairment. There are also, by amendment already made, specific allegations that the proposed respondent Peak assessed the second applicant's pain and disregarded several separate losses of function not caused by pain and that it is mandatory to assess every separate loss of function and for such an assessment to be made by a medical officer or practitioner. The allegation is that the existing respondents knew or should have known at all material times that a DSP was payable and should have been granted to the second applicant from 28 January 1993. The rejection of the claim for a DSP by the proposed respondent Peak is said to have been wrong. That rejection and its wrongful continuation by the existing respondents are said to have been in breach of various provisions of the Act, in breach of an alleged duty of care, in breach of the common law and otherwise unlawful. 10 The statement of claim then contains allegations relating to an application by the second applicant for special benefit, made on 30 June 1995. It is unnecessary to detail these allegations for the purposes of the present application. 11 The allegations made against the existing respondents appear to concern their involvement in the alleged denial of DSP to the second applicant after the making of the claim for a special benefit on 30 June 1995. 12 In an affidavit filed in support of the motion, the second applicant referred to a letter from the proposed respondent McLeod, dated 16 November 1993 and a letter of the proposed respondent Peak, dated 24 November 1993. The former letter contained the following passage: "Upon further consideration of your case, it has however been noted that the Commonwealth Medical Officer (CMO), while not finalising your medical assessment, has assessed your presenting physical conditions as having a nil impairment rating. This has been arrived at using all of the medical information that you have provided in support of your claim, your medical examination by the CMO and other specialists as requested by the CMO. Your claim for DSP is therefore rejected on medical grounds due to this nil impairment rating as determined by the CMO." 13 The letter also informed the second applicant that Mr McLeod had referred her case directly to the authorised review officer, who turned out to be Mr Peak. The second letter was from Mr Peak, in that capacity. That letter informed the second applicant that her impairment rating was nil under the impairment tables. It listed the material on which that finding was based. That material included "the report from the Australian Government Health Service (AGHS) dated 6/10/93". 14 The complaint that the second applicant makes about these decisions at least includes the proposition that they were not based on proper medical evidence. In support, she relies on responses received as a result of complaints made in various quarters. One such response is in a letter dated 25 November 1993, from the National Manager, Australian Government Health Service, to a member of the Victorian Parliament. That letter contained the following passage: "The Commonwealth Medical Officers (CMOs) when carrying out an examination and making an assessment as to whether an applicant for a DSP satisfies the legislative requirements for granting such a pension, often need to seek the opinion of specialists to determine the degree of impairment experienced by an applicant. This happened in the case of Mrs Scott's application and copies of some specialist reports were attached by Mr Scott to the letter he sent you. Some difficulty is still being experienced in obtaining all the specialist reports considered necessary by the CMO in Mrs Scott's case. I understand Mrs Scott has expressed some reluctance at attending for all the specialist examinations sought. Regrettably, until all the reports sought have been obtained, it will be most difficult for the CMO to form the opinion required under the legislation to make the necessary recommendation to the Department of Social Security in relation to Mrs Scott's application for the DSP." 15 Another response, written on behalf of the then Minister for Social Security, dated 21 January 1994, contained the following: "With reference to your specific circumstances, I have been advised that you lodged a claim for DSP on 28 January 1993. As part of the assessment process, an examination was arranged with the CMO who found that your total impairment amounted to less than 20 per cent and recommended that you attend a specialist to help finalise the assessment. This referral was arranged by the Australian Government Health Service (AGHS). I understand that you did not attend this interview. This meant that your assessment had to be finalised on the basis of available information." 16 It is by no means clear that the applicants will be successful in challenging in this proceeding the process whereby the second applicant's claim for DSP was dealt with. In particular, the possibility of their establishing a statutory duty, or a common law duty of care, of the kind alleged, appears to be foreclosed by the judgment of the Full Court in the applicants' earlier proceeding against the Secretary of the Department of Social Security. See Scott v Secretary, Department of Social Security [2000] FCA 1241, especially at [19] and [24]. No step has been taken by the existing respondents to strike out any aspect of the statement of claim, however, and it is inappropriate to determine the prospects of success of an existing application on a motion for the joinder of additional parties. On this basis, it must be acknowledged that, if the applicants are to be able to challenge the process, the decisions of Mr McLeod and Mr Peak were an integral part of it. They are therefore persons whose joinder as parties is necessary to ensure that all matters in dispute in the proceeding may be effectually and completely determined and adjudicated upon, within the meaning of O 6 r 8(1)(b) of the Federal Court Rules. To this extent, the applicants' motion must succeed. 17 The attempt to join the other two proposed respondents poses different problems. In the first place, it is not apparent from the notice of motion precisely whom the applicants wish to have added as respondents. The holder of the office of Prime Minister of Australia at the present time is not the person who held that office at the time of the events the subject of this proceeding. There is no longer an office with the title "Minister for Social Security". In any event, the holder of the present equivalent of that office is not the same person as held the office at the time of the relevant events. Each is described in the notice of motion as being sued "as representing the Commonwealth". In the course of the hearing of the motion, I enquired of the second applicant whether the intention was to join any present office-holder or past office-holders. The second applicant's response was that the intention was to join the person who was Prime Minister of Australia at the relevant time and the person who was Minister for Social Security at the relevant time. In that case, it is difficult to see how such persons, who no longer hold any relevant office, could be sued "as representing the Commonwealth". It should also be pointed out that it is neither necessary nor desirable to sue any person "as representing the Commonwealth". To the extent to which the applicants wished to sue the Commonwealth in respect of any difficulties they have had in the application of the Act, they have already chosen to sue the Secretary in an earlier proceeding, in which they were unsuccessful. See Scott v Secretary, Department of Social Security [2000] FCA 1241 and Scott v Secretary, Department of Social Security [1999] FCA 1774. Issues of vicarious liability for the acts or defaults of officers of the DSS have already been canvassed in that proceeding. Issues of that kind that were determined, or that could have been determined, in that earlier proceeding cannot be litigated again in this proceeding. 18 To the extent to which the applicants may wish to join the former holders of the two offices in their personal capacities, it is very difficult to see what cause of action might be open to them. Against the existing respondents, the applicants rely on causes of action such as negligence, breach of statutory duty and misfeasance in public office. They do not appear to contend that the former Prime Minister and the former Minister for Social Security acted with any intention to injure them or with the necessary degree of recklessness, foreseeing injury to them. No breach of statutory duty on the part of those persons is suggested in the material before me. The notion that a common law duty of care arose because those holding political offices acceded to requests for assistance in relation to difficulties experienced with the DSS is, at best, optimistic. When I questioned the second applicant about this, she indicated that the allegation against the former Prime Minister was one of failure to engage personal staff of sufficient calibre to investigate thoroughly and ascertain the correct answer to the problem. To suggest that there could ever be such a duty at common law is fanciful. Even if it be assumed that the answer to any problem was an answer favouring the applicants, there can never be any duty to disregard information supplied by the DSS and find the "right" answer. Any such duty would be at best a duty to act reasonably in the circumstances. Whether even that duty can arise in the light of the elaborate machinery under the Act for challenging decisions must itself be doubtful. 19 For these reasons, no case has been made out for the addition of the third and fourth proposed respondents. The order of the Court will be that the applicants have leave to amend the application by adding as parties Stewart McLeod and Ian Peak and that they have consequential leave to amend the statement of claim. It will be necessary to make orders giving consequential directions, including a timetable for pleadings. It will be necessary to consider whether the normal order that the party applying late for amendment be required to pay the other parties' costs thrown away by reason of the amendment should apply. The question of the costs of the partially successful motion will also have to be dealt with. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray. Associate: Dated: 4 July 2002 Counsel for the Applicants: The applicants appeared in person Counsel for the Respondents: P J Ginnane Solicitor for the Respondents: Australian Government Solicitor Date of Hearing: 12 March 2002 Date of Judgment: 4 July 2002