ACN009 366 036 Pty Ltd v Dowsett

[2002] HCATrans 195

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth  No P15 of 2001

B e t w e e n -

ACN 009 366 036 PTY LTD

Applicant

and

MERRILYN DOWSETT

Respondent

Application for special leave to appeal

KIRBY J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

FROM PERTH BY VIDEO LINK TO CANBERRA

ON FRIDAY, 31 MAY 2002, AT 1.57 PM

Copyright in the High Court of Australia

MR J.R. LUDLOW:   If the Court pleases, I appear for the applicant.  (instructed by McAuliffe Williams & Partners)

MR G.R. HANCY:   If the Court pleases, I appear for the respondent.  (instructed by Bradford & Co)

KIRBY J:   What do you say?

MR LUDLOW:   Your Honours, in our submission this is one of those unusual cases in which special leave should be granted, not only because it raises an important issue but also because the interests of justice, both generally and in the particular case, warrant the grant of special leave.  I propose to begin my oral submissions on the interests of justice point and then if there is time I will deal with the important issues point, which is dealt with in some detail in the written submissions.

Your Honours, I have two alternative submissions to make in relation to the interests of justice point.  I might describe the first of those as the Hungry Jack’s alternative and the second is the Rodenkovic alternative, after the first two cases in our book.

In the Burger King v Hungry Jack’s Case the applicant succeeded in an application for special leave to appeal on the basis that the trial judge had made a finding of fact in the absence of the evidence that the trial judge described and that the appeal court had interpreted the critical part of the trial judge’s judgment in the manner that it was not reasonably capable of bearing.  In our submission, the same problem arises in this case.  I would like to take your Honours to the relevant passages in this case.  The passage of the trial judge appears on page 9 of the application book at paragraph 23.

KIRBY J:   Which page, I am sorry?

MR LUDLOW:   Page 9, your Honour.

KIRBY J:   Yes.

MR LUDLOW:   Now, we contended that the residual earning capacity of the respondent should be assessed as being $382 net per week on the basis that that was a guide as to the amount of money you could earn in a low paid, light duties occupation, and he referred to the award rate for a grade 3 clerk.  Then there was a submission by the respondent in opposition to that.  Now, the trial judge then said, halfway down the paragraph:

It is of course incumbent upon a defendant in a case where the plaintiff has lost a pre‑accident earning capacity to prove the value of any residual capacity both as to the availability of work and the rate payable for such work.

Now, we submitted to the Full Court, and the Full Court agreed, that that statement was incorrect.  The judge then went on to say, after saying that, “No evidence was adduced”:

The plaintiff lives in Mandurah where there may be less job opportunities than in the Perth metropolitan areas.  I consider the wage rate should be reduced by $100 to take into account such factors.

Now, the problem was that the respondent did not contend that there was any significance in the fact that she lived in Mandurah instead of Perth.  There was no evidence of any such significance.  We were not given an opportunity to deal with it, and there are a number of things we could have done had we been given such an opportunity.  For example, we could have contended that it was too late to raise the issue.  We could have contended that we should have been given the opportunity to lead evidence as to the issue.  We could have contended that we should have been given the opportunity to contend that she ought to have mitigated her loss by moving from Mandurah to Perth.  We were not given any of those opportunities.  The problem is that there was just no evidence about it.  So this was a finding, a discount imposed on the basis of something about which there was no contention, no evidence and no notice.  Now, when we appealed to the ‑ ‑ ‑

KIRBY J:   May I ask, the District Court of Western Australia sits in all parts of the State, does it?

MR LUDLOW:   Yes.

KIRBY J:   There are District Court towns all over the State?

MR LUDLOW:   The District Court sits in Perth and in Bunbury, and Mandurah is on the way between Perth and Bunbury, but there is no District Court in Mandurah.  It is very close to the outskirts of the metropolitan area.

KIRBY J:   I am trying to think of this in terms of New South Wales, where the District Court sits in all parts of the State.

MR LUDLOW:   Yes.

KIRBY J:   At least one would have thought, in the context of my own experience, knowing that it is harder to get a job in a country town, even if a Supreme Court judge does not know it, that one would think that practitioners before a District Court and a District Court judge would know such a thing.  You say that that is not a permissible matter on which a judge could take notice from just general experience?  I mean everybody in Australia talks about the problem of the departure from rural districts and the lack of employment opportunities for the young and other people in rural districts.  Why can a judge not take notice of that?

MR LUDLOW:   Your Honour, as a general proposition what your Honour says may be correct, although perhaps more so for New South Wales than for Western Australia, where in certain parts of the State there are often labour shortages.  For example, in this case the respondent worked for us on a mine site in Wiluna and she was flown in there on a periodic basis and flown out again, simply because there were no people in Wiluna who could do the job.  They had to bring them in from Perth and from Mandurah, which is near Perth.

The other point I would make is that this is a very substantial discount in percentage terms.  It comes to 26 per cent from the starting point.  In our submission, in a situation where there is such a substantial discount it is even more important that we be given an opportunity to comment not only on whether the general proposition is correct, but also on whether the discount should be that large.

HAYNE J:   Now, we speak in terms of discount.  Much of the trial judge’s judgment appears to proceed from the assumption that the damages are capable of accurate mathematical calculation correct to the nearest cent, a proposition which on its face seems to me to be wrong.

MR LUDLOW:   That may be so, your Honour.  I am aware that that is an issue that was raised in the De Sales v Ingrilli Case in which judgment is reserved.  That is certainly a point that ought to be considered further.

Perhaps I can just take your Honours to the relevant passage in the Full Court’s decision, commenting on what the Full Court understood the trial judge to be saying there.  The passage appears on page 28 of the application book.  Now, on that page at paragraph 23 Justice Grove discusses the evidence and what was put to the judge.  The critical passage is the first sentence in paragraph 24, where he says:

As already noted, the extremes of both submissions were rejected and a figure of $282 per week was chosen for guidance purposes.

HAYNE J:   That is to say the trial judge was confronted with arguments, one side suggesting 382 the other side suggesting 200, and the judge took 282.

MR LUDLOW:   In our submission, he did not just do that, your Honour.  He started with our figure and then discounted it by $100 to reflect a matter that had simply not been raised by anyone during the trial.

HAYNE J:   Does this not lead us to the principal difficulty in your path?  The Full Court notes that, at least in terms, the judge has said something that is wrong as a matter of principle.  Is it right to then read what the Full Court has done as it considering for itself whether the damages awarded by the trial judge were damages properly within range?

MR LUDLOW:   Your Honour, the thrust of our submission was that there was a denial of procedural fairness in that there was a discount imposed on the basis that was not disclosed and on which we had no opportunity to comment.

KIRBY J:   We understand that.  We understand how you put it, but there is always a question as to whether, first of all, this Court intervenes and, secondly, whether the Full Court should have intervened because the error that you complain of went somewhere.  You know that in Stead this Court said that sometimes breaches of procedural fairness can be established but they do not go anywhere.  Now, what Justice Hayne has put to you is that if, in fact, the outcome is correct, we sit here to correct outcomes, orders, judgments, not necessarily all the ways that they were reached.

MR LUDLOW:   It goes back to the interests of justice point, your Honour, and this is something I deal with right at the end of the reply.  In this case the assessment was $4,000 more than the threshold of $119,000.  It got over the threshold by a very small amount, in circumstances where if that discount had not been imposed or if it had been only a little bit smaller, then the plaintiff would have received no damages at all – simply none.  The claim would have been dismissed.  So, in our submission, there is a substantial risk of miscarriage of justice in this particular case.  That is why we say this is a suitable vehicle for considering the issue of procedural fairness and for correcting the problem that arose in this case.

KIRBY J:   Now, there was a second point about insurance.  What was the point about that?

MR LUDLOW:   Yes.  Perhaps I could also point out the Rodenkovic argument.  I have referred in my written submissions to a number of recent cases in which the Full Court has dealt with submissions on procedural fairness and has made the point that findings should not be made in the absence of procedural fairness where, for example, extraneous information becomes available to the court.  Those are cases 6 to 8 in the book.

Dealing with the insurance point, that is the point that is raised by the comments of the Full Court at pages 29 and 30.  The Full Court deals with the submission about the evidentiary burden of proof and refers to the judgment of Justice Pidgeon in Abbott v Pacific Industrial.  The court says, “We agree”, but then it refers with clear approval to the statement of Justice Chesterman in the Bugge Case, and that is quoted at the top of page 30 of the application book.

Now, we take issue with what Justice Chesterman says in the first sentence.  He draws a distinction between requiring the plaintiff strictly to prove the loss and making assumptions favourable to the plaintiff on the basis that the defendant is insured.  We say that is the wrong principle.  The principle should be that the problem is awarding the plaintiff not enough because you are requiring too careful a proof, or awarding the plaintiff too much because you are being too lenient about that proof.  This dichotomy discussed by Justice Chesterman in that sentence is just wrong in principle.

KIRBY J:   But is the judge not merely saying that you do not decide all issues in favour of the plaintiff because the defendants are compulsorily insured?  There is criticism – and you will have seen it – even recently and in the public press and even by judges themselves, that the culture of insurance has led to too generous a handout of other people’s money to particular plaintiffs.  Now, is what the Justice Chesterman saying there anything more than you do not resolve these matters just because you know there is a deep pocket that it is going to come out of?  That is all he seems to be saying.

MR LUDLOW:   Perhaps I could refer your Honours to the next two sentences where he talks about where there is an attempt to deceive the court:

In such a case the court does not have to veer so far –

from the first of the two possibilities, but he plainly contemplates that it is possible in principle to make assumptions favourable to a plaintiff who has the burden of proof because of the existence of insurance.  We say that is wrong in principle.

KIRBY J:   It may be that that is something that could be argued, but does it not run against the same wall, that unless it has led to an outcome which is excessive, unless it looks as if it has led to a result and a judgment that is excessive, then the argument is there but it does not lead anywhere?

MR LUDLOW:   Again, our primary argument is about what we say was the denial of procedural fairness.  We say that in this case procedural fairness was particularly important because of the threshold, which the plaintiff only just got over in the end.  She got over by only about 2 per cent.

KIRBY J:   Yes.  Well, they are arbitrary levels.

MR LUDLOW:   Yes.  In the normal case where there is no threshold I would concede that there would be a lot of force in what your Honour is saying, but in this case it was of particular importance because of the threshold and, therefore, there is a substantial risk of miscarriage of justice in this particular case because of the threshold.  That is why this case is an appropriate vehicle to consider the general issue.

KIRBY J:   I would hesitate long before I inferred that the Full Court tinkered with the figures in order to get the plaintiff over the threshold.

MR LUDLOW:   No, we do not contend that the Full Court tinkered with the figures.  The Full Court left the figures alone.  The problem is that the trial judge based his assessment partially on a discount that he did not disclose that he might be making.  That is the point we are making.  If that discount had not been imposed, then the plaintiff would not have got over the threshold.

HAYNE J:   Did you have a full opportunity to put whatever case you wanted to have about what the plaintiff could do by way of alternative employment?

MR LUDLOW:   Our contention was that the plaintiff had failed to mitigate the loss.  The trial judge accepted that.  Our contention was that if she had mitigated her loss, she would have rehabilitated herself into an ability to perform light work.  We referred to the net value of the award rate for a grade 3 clerk as an example of the sort of money you can earn in that sort of job.  Now, there was no contention ‑ ‑ ‑

HAYNE J:   So you set about the task of proof by demonstrating award rates rather than saying, “Look, there’s this job this plaintiff could’ve got”?

MR LUDLOW:   The plaintiff’s case at trial was simply that she was totally incapacitated.  There was no debate between the parties as to what her position would have been had she rehabilitated herself.  There was no contention by the respondent that she was in any way disadvantaged because of problems with the labour market, whether in Mandurah or in Perth or anywhere else.  That just was not an issue on the way the case was fought.  We say that if the judge was going to make this discount, he should have alerted us to the possibility so that we could deal with it.

KIRBY J:   Yes, very well.

MR LUDLOW:   If I could just point out a few of the other cases I have referred to.  The Linsell v Robson Case, which is the basis for the comment of Justice Chesterman in Bugge v REB Engineering.  There are two opposing views ‑ ‑ ‑

KIRBY J:   Both Justice Hayne and I are pretty familiar with these principles and the cases.

MR LUDLOW:   Very well.

KIRBY J:   You do not have on your list a case that I sat in in the Court of Appeal of New South Wales where a judge based his decision on what he saw of the plaintiff limping around at the back of the court.  I felt that he had not brought that to the notice of the parties and that that ought to lead to a retrial because there was a lack of procedural fairness, but the majority of the court said that the net result was within the range and that want of procedural fairness did not lead anywhere.  Now, that is the problem you face in this case it seems to me.

MR LUDLOW:   Your Honour, perhaps I can deal with that.  I can refer your Honours to the case of Klahn v Audeh which is one of our cases, No 7 in our book.  That is an example of a case in Western Australia in which the argument your Honour favoured in the case your Honour is describing was accepted unanimously by the Full Court.  We say that the decision in this case is inconsistent with that case, which represents the general way that the Full Court of the Supreme Court of Western Australia deals with these issues.

I have referred in the index, in particular, to paragraph 17 to 20 of that judgment, which is No 7 in the book.  In my submission, what their Honours are saying there is precisely what your Honour has indicated your Honour said in the case your Honour has just been describing.

KIRBY J:   Yes, but there is no doubt about the principle.  The principle is a judge ought to draw to notice something which is important for the process of decision making, but in the nature of things sometimes that is not done.  Then appellate courts have to ask, “Is it a causative factor in this case?  Does it have a consequence for the outcome of the case or are the orders within the range?  Is the assessment of damages within the range of what the plaintiff was entitled to recover?”

MR LUDLOW:   Yes, your Honour, I agree that that is the proper approach.

KIRBY J:   That, it seems to me, is your problem in this case, because there is no science about the calculation of the damages of the plaintiff.

MR LUDLOW:   I accept that, your Honour.  If the judge had said, “I don’t think either of these figures are right; I think that the defendant’s figure is too high because I’m not convinced that the plaintiff would have been able to rehabilitate herself into full‑time work and I think her figure is low, so I am going to choose a figure in between, and the figure I choose is $300”, then there would be nothing to complain about, but in this case that is not ‑ ‑ ‑

KIRBY J:   He would not have been the first judge to do something like that, because the realities and common experience are that each side, having failed to settle a case, they have come into court and they have pitched their case at the extremes of their propositions, and judges listen to all the arguments and often find that the truth lies somewhere in between.  You could not say that you were shocked and horrified to discover that this particular District Court judge did that.

MR LUDLOW:   The problem we identified is that he made a discount on the basis of something that was not disclosed to us.  Perhaps I can refer to another one of my cases.  This is a recent decision of this Court.  It is a case of Woods v Multi‑Sport Holdings, No 10 in the book, towards the end, paragraph 163, which is part of the judgment of Justice Callinan.  Now, in that case his Honour was talking about judicial notice and making findings of fact on the basis of matters that are not raised in evidence.  I refer in particular to the last two sentences of that paragraph which appears at the top of the page.  He says:

In short, there is always going to be one party who fails in this Court.  It would be unfair and entirely unsatisfactory for such a party to learn, after the event, for the first time, that he or she lost because the Court resorted to extrinsic, allegedly notorious facts with which he or she had no opportunity deal.

Again, I go back to the point ‑ ‑ ‑

KIRBY J:   That is the principle, but the question is, “What is its consequence in this case?”, you see, and you keep saying, “Well, that got them over the line and therefore it has big consequences.”

MR LUDLOW:   Yes.

KIRBY J:   But if you examine that, you then have to question whether or not the quantification of economic loss is as precise as you are suggesting, that if only you had had this opportunity – an opportunity which, by the way, you did not use at trial in the calling of witnesses as distinct from forensic endeavours – you would have been able to get this plaintiff below the mark.  Well, who knows?

MR LUDLOW:   The plaintiff did not plead or seek to prove that there was any significance in the fact that she lived in Mandurah instead of Perth.  In our submission, there just was not anything for us to deal with ‑ ‑ ‑

KIRBY J:   She gave evidence that she lived there and she gave evidence about her working history, so that that was known to the court.

MR LUDLOW:   Her evidence was that she was totally incapacitated, and that evidence was rejected.

KIRBY J:   Yes.

MR LUDLOW:   That is the problem that arose.  Now, we gave the judge some specific figures, so did the respondent.  That was the basis on which the case was fought.  The judge took our figure and then discounted it.  The problem is the non‑disclosure of the discount.

KIRBY J:   Yes.

MR LUDLOW:   Can I just refer very briefly to the final matter I wish to raise, and that is there is a problem here, as I have identified and as the Full Court accepted – there is a problem here with the burden of proof.  The judge said that the burden was on us and the Full Court disagreed.  The very last case in our book, Geraldton Building Company v Cramer is a case in which the Full Court, in a judgment delivered by Justice Owen – and I am referring now to paragraph 30 of the judgment – indicated that Justice Owen at least had:

never seen a definition of “evidentiary onus” with which I have felt particularly comfortable. 

One of the reasons for that, I would submit, is that this Court does not often deal with questions of what is meant by an “evidentiary onus” and what is needed to satisfy it.  In the following paragraph ‑ ‑ ‑

HAYNE J:   Or some of us might say that the concept is not a useful concept at all, but there we are.

MR LUDLOW:   Yes, that is something your Honours might appropriately say in an appeal from this decision.

KIRBY J:   Only if it has led to a substantive miscarriage.

MR LUDLOW:   Yes.  Well, again, I go back to the point about the threshold, your Honour.  That is the really the thrust of it.  Thank you, your Honours.

KIRBY J:   Yes.  You put up a valiant fight, Mr Ludlow.  The Court does not need your assistance, Mr Hancy.

The applicant seeks special leave to appeal against orders of the Full Court of the Supreme Court of Western Australia dismissing his appeal against the assessment of damages to be awarded in an action in the District Court for personal injury. 

As the Full Court rightly pointed out, the statement of the trial judge to the effect that where a plaintiff has lost a pre‑accident earning capacity it is for the defendant to prove the value of any residual capacity is wrong.  Nevertheless, the assessment of damages by the trial judge was not affected by this wrong assignment of the burden of proof.  The Full Court, examining the matter for itself, formed the view that the damages allowed fell within the permissible range.

That being so, an appeal would enjoy insufficient prospects of success to warrant the grant of special leave.  Special leave is, accordingly, refused with costs.

AT 2.18 PM THE MATTER WAS CONCLUDED