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Court of Appeal overturns misfeasance


Frana Divich, Heaney and Partners.
Misfeasance in a public office is the common law’s only public law tort. It is unusual because only public officials can commit it.

Over time, the law has developed to protect citizens from the damage that can be caused by public officials exceeding the limits of their authority.

In order to succeed in misfeasance, there must be malice or knowledge that the public official is exceeding their powers. At the very least, there must be reckless indifference. If a decision is made that is outside the public official’s powers, but there was no ill intent, then arguably there is no claim.

The mental element of the tort makes it difficult to prove compared to the tort of negligence, which just requires a departure from what is reasonable. Accordingly, cases of misfeasance in a public office are rare.

In a case called Whangarei District Council v Daisley [2024] NZCA 161 the Court of Appeal considered the mental element of the tort and allowed an appeal against a finding of liability for misfeasance in a public office.

In 2004 Mr Daisley purchased a farm near Whangarei that included a quarry. When Mr Daisley started to work the quarry, the neighbours complained, and the Council visited the farm. The Council told Mr Daisley that he needed a resource consent to extract rock from the quarry.

Mr Daisley asserted that there were existing use rights for the quarry. The Council did not accept that he could prove this and issued abatement and enforcement notices to Mr Daisley and his company, eventually seeking an enforcement order in the Environment Court.

In September 2009 Mr Daisley’s lawyers located a 1988 resource consent in the Council’s records that allowed for quarrying on Mr Daisley’s farm.

The trial Judge found that the Council officers mistakenly presumed Mr Daisley had the burden of proving that the consent existed, and that mistake led them “to conclude that they were not required to look for it.” In respect of the mental element the trial Judge found that although there was tension between council officers and Mr Daisley it had not been proven that the officers knew about the 1988 land use consent and deliberately withheld knowledge of its existence.

It was not in dispute that the Council had corporate knowledge of the consent, however, the Judge held that this could not sustain a finding of malice.

In the High Court, the misfeasance cause of action turned on the question of recklessness. What tipped the scales for the Judge was what he described as the stubbornly obstructive attitude of the Council after the consent was discovered, with the Council failing to even apologise for what it had put Mr Daisley through.

The trial Judge found that this attitude was reckless and punishable. The Council appealed because the trial Judge’s finding of misfeasance was inconsistent with his findings that the Council had not acted in bad faith and had not been recklessly indifferent to the limits of its authority.

The Court of Appeal confirmed that misfeasance requires the Council to know it was doing something wrong. Misfeasance is an intentional tort that has, at its core, a conscious disregard for the interests of those affected by an official decision. In this case the conscious disregard was not present.

The plaintiff argued that recklessness was established by the Council’s failures to keep the 1988 resource consent reasonably available when it archived the paper file, to diligently search for the consent, and to acknowledge the evidence of existing use.

The Court of Appeal did not accept this argument and said there was no evidence about the knowledge of council staff responsible for archiving at the time and, although the council officers were subjectively reckless to the existence of the consent, that did not extend to recklessness with respect to the lawful authority to take enforcement action.

The Court of Appeal thought the trial Judge attached too much significance to the Council’s failure to withdraw the enforcement proceeding after the 1988 resource consent was discovered in its archives. At that time, matters were in the hands of solicitors, not council officers, and resolution was complicated by Mr Daisley’s failure to give his lawyer instructions after the farm was sold (due to pressure by his bank).

This successful appeal is consistent with other New Zealand decisions, which have generally applied a standard that requires a high degree of culpability on the part of a public official. The acts or omissions of the official must go beyond mere negligence or incompetence and involve deliberate misconduct, wilful disregard of duty, or reckless indifference to the consequences of their actions on the plaintiff.

To establish misfeasance in a public office in New Zealand, it must be shown that the public official acted with a high degree of blameworthiness, whether through intentional wrongdoing, wilful disregard of duty, or reckless indifference to the consequences of their actions.

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