The Local Government Act 1995 (WA) gives a local government broad powers to do all things necessary or convenient to be done for the good government of its district and to provide services and facilities. However, local governments and officers should be careful that their actions, although well meaning, do not result in the tort of misfeasance in public office.

 

That tort requires the following to be established:

 

• the misuse of an office or power;

 

• that the officer misused that office or power with the intention of harming a person or class of persons (i.e. maliciously) or knowing that he or she was acting in excess of his or her power; and

 

• the person suffered special damage or material damage such as financial loss, physical injury or mental injury.

 

Nyoni v Shire of Kellerberrin [2017] FCAFC 59 is a recent example of a Shire and its CEO seeking to act in the best interests of its community, but being found to have stepped across this tortious line.

 

In that case, the Shire and the former CEO had concerns regarding Mr Nyoni’s operation of Kellerberrin’s only pharmacy. Following the disconnection of electricity to the pharmacy, the former CEO made a complaint on behalf of the Shire to the Pharmaceutical Council and the Department of Health alerting them to the disconnection. Following the discovery that the disconnection was an error, the former CEO failed to notify these bodies that the disconnection was not due to any fault of Mr Nyoni.

 

The Full Court found that this conduct was part of a continuing campaign by the Shire and the former CEO to persuade the various bodies regulating Mr Nyoni’s pharmacy practice either to withhold benefits from, or impose sanctions against, Mr Nyoni so that he would cease to operate the pharmacy and be replaced by another pharmacist. The former CEO was found to have acted maliciously, an intent also attributed to the Shire as his employer, so as to cause economic and reputational harm to Mr Nyoni. Therefore, the CEO exercising the Shire’s power to make a complaint was for an ulterior and improper purpose and was a misuse of power.

 

The Full Court determined that the damages payable by the Shire and the former CEO personally to Mr Nyoni should be determined by the primary judge. However, this has been deferred pending the outcome of an application for leave to appeal to the High Court.

 

Local governments and officers can take the following lessons from the decision:

• even actions thought to be well meaning and in the interests of the broader community can be tortious depending on the circumstances;

 

• the tort is not limited to express statutory powers of local governments or officers;

 

• local governments are in a special position vis-à-vis individuals and businesses when reporting to other regulatory bodies; and

 

• local governments and their officers should be careful regarding how they report to other regulatory bodies on matters which could harm individuals and businesses.

 

For further information, please contact Graham Castledine or Emily Wilson.

 

Disclaimer: The information contained in this update is not advice and should not be relied upon as legal advice. Castledine Gregory recommends that if you have a matter in relation to which legal advice is required, you consult with your legal adviser.

 

Liability limited by a scheme approved under Professional Standards Legislation.