Exclusive: Misfeasance case paves way for robodebt action
A damning judgement of ‘highhandedness or cynical disregard’ by the Medicare watchdog has established a new front for civil litigation of public servants named in the robodebt royal commission.
The former director of the Medicare watchdog has been found to have engaged in misfeasance in public office in an “extraordinary and rare” judgement that legal experts say could help win future cases against public servants, including those involved in robodebt, who knowingly or recklessly abused their power to cause harm.
On December 19, Supreme Court of Queensland Justice Rebecca Treston awarded ophthalmologist David Kitchen almost $2 million in damages, including $100,000 in exemplary damages, after he was pursued for investigation by the then head of the Professional Services Review (PSR), Julie Quinlivan.
Professor Quinlivan, vested with significant power as the head of the federal government agency that is supposed to root out “inappropriate practice” in Medicare billing, was found to have acted with “highhandedness or cynical disregard” for Kitchen’s rights when she knowingly and recklessly failed to follow her own legislation in referring him to a committee for serious investigation.
Under the law, Quinlivan was required to have regard to submissions made by Kitchen in response to her initial inquiries in 2018. The court found she was in possession of the 929 pages of documents and attachments for just 17 minutes before advising her staff that she had already made up her mind to refer the matter to an investigative committee.
“I consider it is right to make a substantial award of exemplary damages in this case,” Justice Treston wrote in her decision.
“The Director of the PSR is in a position of significant authority in the exercise of powers over medical practitioners. With such power, comes responsibility. The need for medical practitioners to comply with the Director’s demands, or risk losing their right to practice gives the Director a power to be exercised cautiously, thoughtfully and, I suggest, sparingly.
“Here, the Director did none of those things. She proceeded with reckless disregard of the consequences for the plaintiffs and in doing so failed the test of public probity.”
Misfeasance in public office is a civil tort, but it is designed to hold “wrongdoers” personally responsible, even if they are still government employees, because the conduct in question goes beyond legislated power. Judges are not required to award exemplary damages but, as Treston noted in her decision, when they do it is to serve a “penal” purpose and “as a punishment to the guilty” to deter similar behaviour in the future.
In making this finding, Treston has also put other senior public servants on notice.
“Misfeasance in public office claims are extraordinarily difficult to make out, because of the high legal standard required,” one lawyer with experience in the specialised field tells The Saturday Paper.
“It is not for nothing that they are so infrequently litigated. That makes this a very significant decision and may provide guidance for plaintiffs in future misfeasance claims.
“The judgement is highly critical of the defendant’s conduct, particularly given the significant authority exercised by the director of the Professional Services Review agency. As the trial judge said, ‘With such power, comes responsibility.’ It is rare to see a judgement so critical of public sector conduct – going so far as to find that the director ‘failed the test of public probity’ in her conduct.”
Jennifer Kanis, principal lawyer with Maurice Blackburn’s social justice practice, told The Saturday Paper the decision shows misfeasance in public office is a “viable cause of action and not merely a tort existing in textbooks”.
“The number of litigated misfeasance in public office cases is small, and this decision is important because it clearly sets out the principles of the tort, which will be of interest to anyone considering future litigation,” she says.
“Justice Treston was clear that this was not a case of targeted malice, but rather that the director both knew that she was acting outside her powers and was recklessly indifferent to the harm her decision was likely to cause. While the decision turns on the facts it shows that courts will compensate individuals for harm which has occurred by such behaviour.”
More than half a decade has passed since the last major finding of misfeasance in public office. That case, brought in 2020, related to former Labor agriculture minister Joe Ludwig’s decision to suspend the live export cattle trade to Indonesia almost overnight in 2011, despite failing to get specific legal advice on whether such a blanket ban was legally valid.
Ludwig, however, was a government minister.
The robodebt saga revealed in ugly detail just how instrumental senior public servants can be, not only in prosecuting their own departmental or professional agendas but also in making thousands of decisions that affect the lives of Australians.
Paper trails of these decisions, if there are any, never ordinarily see the inside of a minister’s office, but the outcomes can be significant.
The Saturday Paper understands major law firms have been working on potential misfeasance in public office cases to be brought against robodebt officials. Former Department of Human Services secretary Kathryn Campbell, for example, was found by royal commissioner Catherine Holmes to have “misled cabinet” about the legal and policy status of the proposal when it first came up for decision. If there is a proper basis for such a civil claim, The Saturday Paper is not suggesting Campbell acted in bad faith or that a court would find she engaged in misfeasance in public office.
Critical to the success of any case – and the reason matters are notoriously difficult to run, let alone win – is proving the state of mind of the public officer.
“Pleading bad faith is difficult, because the pleading rules require details, and professional conduct rules forbid practitioners supporting obviously baseless allegations,” UNSW Sydney emeritus professor of law Mark Aronson wrote in a 2015 research paper.
“Proving bad faith is even more difficult. Where they have a choice, the courts are strongly disposed to believing that bureaucratic error was caused by genuine mistake, even incompetence, rather than by bad faith.”
In his original judgement summary, approving the first class action settlement for robodebt victims in November 2020, Federal Court of Australia Justice Bernard Murphy took that same approach, notably because the Commonwealth chose to end the proceedings before the evidence was fully tested.
“Ministers and senior public servants should have known that income averaging based on ATO data was an unreliable basis upon which to raise and recover debts from social security recipients,” he wrote.
“However, it is quite another thing to be able to prove to the requisite standard that they actually knew that the operation of the Robodebt system was unlawful.
“There is little in the materials to indicate that the evidence rises to that level. I am reminded of the aphorism that, given a choice between a stuff-up (even a massive one) and a conspiracy, one should usually choose a stuff up.”
Discoveries during the Royal Commission into the Robodebt Scheme upended that status quo and last year law firm Gordon Legal won the right to revisit the class action settlement because new evidence had come to light that public servants and the government did, in fact, know the scheme was illegal when it began.
The pure compensation in the settlement was increased from the $112 million offered in 2020 to the largest in Australian history, a total of $587 million. The settlement was in addition to the repayment of more than $750 million in money recouped from unlawful debts and the dropping of another $750 million in debts being pursued.
One lawyer familiar with tort law and government practice tells The Saturday Paper that the recent addition to the misfeasance case law in the Medicare matter, combined with the revelations of robodebt, could make the judiciary more amenable to future cases.
“In many ways we simply haven’t tested the boundaries of what the tort of misfeasance actually is, because it just never gets very far, often not even before an actual court,” the lawyer, who did not wish to be named, says.
“But this is a very interesting development when you piece it together with robodebt, because, a bit like defamation law, the pendulum seems to be swinging toward accountability, slowly. When there are so few decisions in an area, every new one means something chunky. And this was a big wallop that should sound a warning to public servants everywhere.
“It may even set up a new dynamic between top bureaucrats and their ministers if they think there is a new threat from the courts, rather than simply from being sacked by the government.”
At the end of last year, Employment and Workplace Relations Minister Amanda Rishworth appeared to sensationally sack the secretary of her department, Natalie James, by announcing the end of her tenure without notice. For the avoidance of doubt, The Saturday Paper is not suggesting James acted in bad faith or engaged in misfeasance in public office.
James had been instrumental at the Department of Employment and Workplace Relations in dealing with a years-long crisis that developed under the Coalition-era welfare compliance framework, kept in place by Labor, which resulted in thousands of cancellations and suspensions that either broke the law or were considered legally unsound.
It was James who was responsible for responding to a series of independent reviews, including two damning investigation reports from the Commonwealth Ombudsman about the legality of the compliance system.
Multiple reviews maintain there cannot be any assurance over the whole of the system, prompting figures familiar with James’s work to speculate about whether she was terminated for giving advice that was too frank to a government that did not want to abandon the regime of welfare penalisation.
No reason has been given for her departure.
Compliance functions of government are particularly ripe for error, as history has shown, and the misfeasance case against Professor Julie Quinlivan has highlighted the irony of a regulator that failed to keep appropriate records.
In defending herself, Quinlivan attempted to argue she had indeed read Dr Kitchen’s submission and “some” or “most” of the attachments totalling 929 pages, but at no point since early 2019, when Kitchen wrote to the PSR advising he was going to challenge the decision in the Federal Court of Australia, has she been able to point to any evidence that she had the pages printed.
They were emailed to her only 17 minutes before her fateful decision. Quinlivan gave evidence about people who might have printed the documents for her to take home and read but called none of them as witnesses. Nor did she call any members of the PSR’s IT department whom, she claimed, had lost the printer metadata in an office upgrade.
Justice Treston said at times Quinlivan’s evidence “smacked of embellishment” and that her story changed between court hearings on the validity of the decision in the Federal Court of Australia and the issue of misfeasance in the Supreme Court of Queensland. There was even discrepancy between her written affidavits and oral testimony in the same case.
“She had as much ‘motive to falsify’ then as she does now, because on both occasions her conduct was being called into question,” Treston wrote.
“For a person of her education and experience, the Director’s evidence was decidedly unimpressive.
“On other occasions she was non-responsive and evasive on a range of issues including her understanding of the duty of disclosure, document retention generally, her understanding of legal process in circumstances of her having been a member of the AAT, her understanding about the need to narrow the scope of matters referred to the Committee so as not to waste the doctor’s and the Committee’s time and resources, and her understanding of the consequences of a referral, to name just a few.”
Her version of events was flatly rejected by Justice Treston, not least because, as far back as October 2020, her team sought legal advice about how to comply with an order for disclosure in the Federal Court of Australia. Counsel asked for every document available and later gave blunt advice that “the director failed to follow the legislation”. The advice said a court would likely find as much, unless new information came to light.
The PSR’s counsel was given no documentary evidence and no instructions from the director’s solicitor to suggest she had done what she later pleaded to having done: her job.
Quinlivan did not respond to a request for comment but is appealing against the decision.
This article was first published in the print edition of The Saturday Paper on January 31, 2026 as "Exclusive: Misfeasance case paves way for robodebt action".