Annetts & Anor v Australian Stations Pty Limited P97/2000

[2001] HCATrans 629

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S83 of 2001

B e t w e e n -

CLARE JANET TAME

Appellant

and

JOHN MORGAN

First Respondent

STATE OF NEW SOUTH WALES

Second Respondent

Office of the Registry
  Perth  No P97 of 2000

B e t w e e n -

LESLIE ANNETTS and SANDRA ANNETTS

Applicants

and

AUSTRALIAN STATIONS PTY LIMITED

Respondent

Application for special leave to appeal

GLEESON CJ
GAUDRON J
McHUGH J
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 4 DECEMBER 2001, AT 10.21 AM

Copyright in the High Court of Australia

________________

MR P.C.B. SEMMLER, QC:   May it please the Court, I appear with my learned friend, MR N.J. MULLANY, for the appellant in the first matter.  (instructed by Herbert Weller)

MR B.H.K. DONOVAN, QC:   May it please the Court, I appear with MR S.C. FINNANE, for the respondent in that matter.  (instructed by I.V. Knight, Crown Solicitor for New South Wales)

MR B.W. WALKER, QC:   May it please your Honours, I appear with my learned friend, MR G.M. WATSON, for the applicants in the second matter.  (instructed by Brezniak Neil‑Smith & Co)

MR D.F. JACKSON, QC:  May it please the Court, I appear for the respondent with my learned friend, MR N.J. MULLANY, for the respondent in that matter.  (instructed by Deacons Lawyers)

GLEESON CJ:   Mr Semmler, before we commence, I should mention that we have been giving some consideration to the order of proceedings and, subject to any submissions that counsel want to make to the contrary, it appears convenient to hear you first for the appellant in Tame, Mr Walker then for the applicant in Annetts, Mr Donovan then for the respondent in Tame, and Mr Jackson for the respondent in Annetts.  Is that a convenient course?

MR SEMMLER:   It is so far as we are concerned, your Honours.

GLEESON CJ:   Very well.  There was a question that occurred to us in relation to the representation of the parties and the written submissions that we have read.  You junior, Mr Mullany, is appearing for the respondent in Annetts.

MR SEMMLER:   That is correct, your Honour.

GLEESON CJ:   Have you and he given consideration to his position in relation to the submissions that have been made?

MR SEMMLER:   Your Honours, we have.  Our concluded view was that there should not be a problem.

GUMMOW J:   Are the clients aware of this?

MR SEMMLER:   My client is aware of it.

KIRBY J:   Does it not raise the possibility that counsel would be wishing to put arguments on the principles that would be in conflict with the arguments that he is putting in the other case?  Counsel should not be in a position of embarrassment and the Court should not be in a position of embarrassment.

MR SEMMLER:   Yes, that is perfectly correct, your Honour.  Certainly, I proposed in this appeal for Mr Mullany to deal with one aspect of it, to follow me and deal with the question of shock.  As I understand ‑ ‑ ‑

KIRBY J:   I do not think it is a question of the oral argument, it is a question of the record.

MR SEMMLER:   Yes.  If your Honours are sufficiently concerned about this, I can certainly speak to ‑ ‑ ‑

GLEESON CJ:   It is a matter, really, for you and Mr Jackson, as well as for Mr Mullany.

MR SEMMLER:   Yes.  Your Honours, from our perspective, from the perspective of the appellant Tame, we do not have a problem with it.  I am not sure about Mr Jackson’s position.

GLEESON CJ:   Well perhaps you and Mr Jackson and Mr Mullany might give the matter further consideration and let us know what conclusion you come to.  Yes, Mr Solicitor.

MR JACKSON:   Your Honours, may I say one thing before - your Honours, one aspect of the matter to which your Honours have adverted is that it may be convenient, and I say no more about it, for the cases to be dealt with one by one as distinct from the order in which your Honour had indicated.  Your Honour, I do not have any personal objection to the Court dealing with them in the manner in which they were indicated, but they do give rise under two separate cases in which perhaps slightly different considerations would apply.

GLEESON CJ:   Well, then, you raise as a reason why we should deal with the matters sequentially rather than in the order that I originally proposed, the position in which Mr Mullany finds himself.

MR JACKSON:   Yes, your Honour.  Could I just say I appreciate entirely the issue that your Honour has raised and it is a matter to which I have discussed with Mr Mullany.  Could I say, however, your Honours, in relation to it that the two cases, of course, until they were listed together by the Court - and it was appreciated, of course, one gathers from the special leave transcript, that the two matters would be listed together, but they were two quite separate cases, which might have been heard at quite different times by the Court and it may be that the ‑ ‑ ‑

GLEESON CJ:   Very well, we will deal with them sequentially. 

McHUGH J:   Just before you do, one matter that is a little concern, Mr Jackson, is that in paragraph 47 of your submissions, which is signed by Mr Mullany, as well as yourself, you urge that reformulation of principle on which the applicants’ case depends should be left to Parliament at this stage.  Now, a different view is taken in the appellant’s submissions in the other case:  it is an urging of us to reform the law.  There does appear to be a real conflict between those two stances. 

MR JACKSON:   Your Honour, could I say that it may well be that the issue of any conflict is resolved by the time we come to speak. 

GLEESON CJ:   Thank you.  Yes, Mr Semmler. 

MR SEMMLER:   Thank you, your Honour.  Your Honours, as I have already indicated, if it is convenient to the Court, I propose to deal with all of the grounds of appeal, except for (f) and (g), which relate to the sudden shock requirement.  My learned junior, Mr Mullany, will follow me and deal with that issue.  So far as the notice of contention is concerned, we would propose, if it is convenient to the Court, to deal with that at this stage, rather than in reply.  I shall deal with all of the aspects of that, except for grounds 4 and 5 of the notice of contention, which deal with the question of the means of communication, which is related to the shock requirement and the proximity in time and space in ground 4. 

GLEESON CJ:   Mr Semmler, before you commence your argument, can I raise a matter which is, in a sense, procedural.  As I understand it, the facts relating to the alleged negligent conduct appear on pages 728 and 729 of volume 4 of the appeal book. 

MR SEMMLER:   Yes, your Honour. 

GLEESON CJ:   The first respondent is Constable Morgan and the second respondent is the State of New South Wales, which is said to be vicariously liable for Constable Morgan. 

MR SEMMLER:   Yes. 

GLEESON CJ:   In fact, Constable Morgan does not appear to have done anything wrong. 

MR SEMMLER:   That is correct. 

GLEESON CJ:   The mistake was made by Acting Sergeant Beardsley, who filled in some parts of this report that Constable Morgan had left in blank, and then, apparently, a couple of months later, Acting Sergeant Beardsley noticed the mistake and whited out the offending entry. 

MR SEMMLER:   That is correct. 

GLEESON CJ:   The proceedings have been conducted so far, have they, on some kind of convention that it does not matter that the defendant was Constable Morgan as distinct from Acting Sergeant Beardsley? 

MR SEMMLER:   Yes, your Honour.  From the time of the verdict of Judge Garling, there should have been a verdict for Constable Morgan because he clearly was not to blame.  However, as it turned out, he became an appellant in the Court of Appeal and he remains on the record as a respondent in these proceedings.

GLEESON CJ:   So it is really the second respondent’s vicarious responsibility for the negligence of Acting Sergeant Beardsley?

MR SEMMLER:   That is correct, your Honour.

GLEESON CJ:   The other question that I wanted to ask you that may be more substantive is this:  the negligence consisted in the manner in which a report into a motor traffic accident was prepared?

MR SEMMLER:   That is correct.

GLEESON CJ:   I presume that report was prepared, amongst other things, for the purpose of somebody making a decision whether somebody should be prosecuted for a criminal offence?

MR SEMMLER:   Certainly there was evidence that it is taken into account in relation to matters such as that.  Whether the report itself is critically necessary to that process is unclear from the evidence.

GLEESON CJ:   I have not seen any reference in any of the written submissions to the question whether the decision that this Court recently gave in Sullivan v Moody has any bearing on whether or not a person who makes a report for the purposes of deciding whether criminal proceedings should be taken against somebody referred to in that report owes a duty to take reasonable care not to cause psychological harm to the person the subject of the report.

MR SEMMLER:   The Sullivan v Moody decision has been referred to, I think, by ‑ ‑ ‑

GLEESON CJ:   Yes, but in a different context.

MR SEMMLER:   Yes.

KIRBY J:   It is footnoted in your submissions, I think.

GLEESON CJ:   It is referred to, but that aspect – indeed, which was the main aspect of the decision of Sullivan v Moody – does not seem to have attracted the attention of anybody.

MR SEMMLER:   I think the answer to your Honour’s concern lies in the fact that there is no clear evidence in this case - indeed, it would be surprising, we would suggest - that the completion of this traffic accident report is a critical ingredient in the question of whether or not a particular person involved in an accident is to be charged with a criminal offence.  There is no clear evidence to that effect.  Indeed, the weight of the evidence was really that it is more for the purposes of insurance, for the purposes of third parties making decisions about whether compensation should be paid, that these reports are completed, and presumably also for statistical purposes.

GLEESON CJ:   This was actually a hit‑and‑run accident, was it not?

MR SEMMLER:   No, it was a collision between two vehicles.

GLEESON CJ:   Yes, and then the person who really was drunk took off.

MR SEMMLER:   That is correct.  In answer to your Honour’s question, I do not think that it can be said from the evidence in this case that the P4 form, which is really a record, I suppose, of what occurred, is an important ingredient in the question of who should be charged.

GLEESON CJ:   What prompted me to ask the question is that I see that Constable Morgan is described on page 728 as “the investigating officer”.

MR SEMMLER:   Yes.  He was certainly the person who made inquiries about – he interviewed the appellant.  He made inquiries about the accident.  Your Honours, I think I would be correct in repeating that, in fact, the report is more of a bureaucratic document, a document intended simply to record information.  Other decisions in relation to the accident and who was involved and who should be charged are taken separately.

GLEESON CJ:   What page is the report?

GAUDRON J:   Yes.  It is not a question of whether it is simply a bureaucratic report.  I mean, these forms are filled in for a purpose and I do not imagine that their primary purpose is to satisfy the needs of insurers.

MR SEMMLER:   It is at 525, your Honour, the P4 itself, in volume 3.  In answer to your Honour Justice Gaudron, the purpose of these reports was discussed by three police witnesses who were called whose evidence is found in volume 2, commencing with Constable Morgan at 352 but perhaps more relevantly discussed by Mr Houlton, who is the Deputy Director of the Services Infringement Processing Bureau at the police department.  His evidence commences at page 405 of volume 2.  He is the head of the unit to which the P4 reports are sent.

GLEESON CJ:   What is that unit?

MR SEMMLER:   It is the Accident Information Unit.  It is at 405, line 26.  He indicated at 406, line 33:

that the information that your unit holds and collates about traffic accidents can have important consequences –

It is a “matter of public record”.  His evidence more goes to the importance of the information being correct than to the ‑ ‑ ‑

CALLINAN J:   What about page 407, line 20?

MR SEMMLER:   Yes, I think that is the closest that the evidence comes to ‑ ‑ ‑

CALLINAN J:   This must be the foundation document for any further investigation with a view to prosecution, must it not?

MR SEMMLER:   Your Honour, that is not clear from the evidence.

CALLINAN J:   Why is it not clear from that?  “Some of the information contained within the report is used in criminal proceedings”.  “Yes, I believe there is.”

MR SEMMLER:   Your Honour, that is certainly what he said.

CALLINAN J:   As Justice Gaudron put to you, the police department is unlikely to be performing a service for the insurance industry.

MR SEMMLER:   That may not be the purpose, perhaps, of the compiling of the reports and their filing but indeed it is one of the major uses to which such reports are put, it would seem.  There were, I think, 80 something thousand of these reports prepared in 1991, the year of this accident, and about 32,000 applications were made for them, presumably by parties to the accident.

CALLINAN J:   You tell me whether this is correct, but would not most prosecutions for mere traffic offences depend upon the decision of fairly low ranked officers?  A sergeant or a constable of police would make a decision, would he or she not, whether to prosecute for a traffic offence?

MR SEMMLER:   Your Honour, that is what we do not know from this evidence.

CALLINAN J:   They have authority to do it, there is no doubt about that.

MR SEMMLER:   Yes.

CALLINAN J:   All police officers have authority, is that not right?

MR SEMMLER:   Yes.  We do not know, for instance in relation to serious criminal offences, where the decision is taken and by whom.  It is not clear from this evidence.

CALLINAN J:   But it could be taken by any police officer at all.  It is within a police officer’s ordinary authority.

MR SEMMLER:   Yes, we would accept that.  Your Honour, the answer to your Honour’s concern is that it really was not sufficiently explored as to the role of this document in the decision.

GAUDRON J:   You are the plaintiff.

MR SEMMLER:   Yes, your Honour.

GAUDRON J:   And what you have is a document/communication as the basis of your claim in negligence.  If there is a defect, it must be rebound to your side of the Bar table I think, must it not?

MR SEMMLER:    Yes.  Well, we would accept that.  In any event, your Honours, perhaps if we could come back to the Sullivan v Moody issue.

KIRBY J:   Could I just ask two little questions arising out of this ‑ ‑ ‑

MR SEMMLER:    Yes.

KIRBY J:   The first is, do I take it that the Law Reform (Vicarious Liability) Act 1983, which Justice Mason deals with on 786, overturned the Enever doctrine and establishes the vicarious liability of the State for the actions of the police constable, and that is not in dispute?

MR SEMMLER:    Yes.  There is no dispute that the State of New South Wales is liable for the carelessness of Acting Sergeant Beardsley.

KIRBY J:   The second question is, what are we now to do about Constable Morgan?  Justice Mason points out that he is destined to enter the law reports in respect of something never involved him indirectly ‑ ‑ ‑

MR SEMMLER:    Yes, perhaps the case should properly be described as ‑ ‑ ‑

KIRBY J:   I am not concerned of the title, but I am concerned - is he really a proper party or is it too late to remove him now?  He was the appellant in the Court of Appeal and he is the first appellant here?  It seems all very odd.

MR SEMMLER:    Your Honour, perhaps he really should not be a party.

KIRBY J:   Perhaps you can give thought to that and at some stage tell us whether he should be removed from the record or not.

MR SEMMLER:    Perhaps the proper course would be to amend the notice of appeal ‑ ‑ ‑

GLEESON CJ:   What did Judge Garling do?  Did he enter judgment against Mr Morgan?

MR SEMMLER:    Yes, he did, your Honour.

GLEESON CJ:   Well then, he is a proper party if he has a judgment against him.  He has to get rid of it by a process of appeal.

MR SEMMLER:    But it was a judgment in his favour.

KIRBY J:   He got rid of it in the Court of Appeal and the question is, are you seeking to restore it against him?

MR SEMMLER:    Yes, well, strictly, your Honour, we ‑ ‑ ‑

KIRBY J:   You have to give some thought to that, I think.

MR SEMMLER:    Yes.

GLEESON CJ:   Where is Judge Garling’s order?

MR SEMMLER:    Page 744 of volume 4.  It is a judgment against the defendant.  It is not clear against ‑ ‑ ‑

GLEESON CJ:   There seems to be some words omitted from my copy of this judgment.

MR SEMMLER:    The critical paragraph would be paragraph 1, “The Plaintiff recover against the Defendant”, the word “as” has been struck out.

GAUDRON J:   But he has called the first defendant in the order.

MR SEMMLER:   Yes.

GUMMOW J:   Presumably someone in the New South Wales District Court actually checks these orders before they sign them.

MR SEMMLER:   Well, your Honours, perhaps we could give some thought to that.  Your Honours are quite correct, with respect ‑ ‑ ‑

GUMMOW J:   It is gibberish.

MR SEMMLER:   ‑ ‑ ‑in observing that he should not be here.

KIRBY J:   But you will have to be a little careful, because if you succeed in the appeal, then normally that would mean the restoration of the orders of the primary judge and those orders rest on the reasoning of the primary judge and I just do not quite know where it all leads.

MR SEMMLER:   Yes.  We will give that some careful thought, your Honour.  Your Honours, could I commence with ground 2(a), our first ground of appeal.  Our submission is that at the start of the 21st century it is no longer appropriate for Australian courts to treat psychiatric injury as fundamentally distinct from physical injury and in consequence to impose special limitations on recovery for psychiatric injury which do not apply to other personal injury claims.

McHUGH J:   Why not?

MR SEMMLER:   Well, your Honours, could I summarise the reasons and then deal with them in turn.  Your Honours, the past approach whereby these species of injury are treated differently, in our submission, is founded on both ignorance and fear – and I mean no disrespect to the courts in the past – ignorance of the true nature of psychiatric illness and fear of the consequences if it is afforded parity with physical injury.  Your Honours, while some judges in the past ‑ ‑ ‑

McHUGH J:   But you could make the same argument about duties of care in relation to economic loss.  I mean, the fact is that psychiatric injury is different and does pose different problems.  Now, let it be accepted that all your criticisms about foreseeability are absolutely correct.  Surely you need a control device or control devices of some kind.  In the field of public duties, in the field of economic loss, the court has said that reasonable foreseeability cannot be the sole criterion of a duty of care and the courts have struggled in the area of nervous shock to control the raw application of foreseeability, you would say – and I tend to agree with you – unsatisfactorily, but that does not mean that even if you accept your arguments about reasonable foreseeability, that that is the end of the matter.  It seems to me – and your submissions do not deal with this – that one has to consider what other control devices are available or to be used or should not be used.

MR SEMMLER:   Your Honour, we accept that sound policy may, in an appropriate case, dictate that something more than reasonable foreseeability should determine whether a duty of care arises in a psychiatric injury case.

HAYNE J:   What does that mean?  It is a proposition of absolutely no content.

MR SEMMLER:   Yes, your Honour.  Perhaps it should be regarded in the same way as the courts are now regarding the concept of proximity, in that it can only really be determined when one has a case where sound policy reasons come to the ‑ ‑ ‑

HAYNE J:   “Sound policy reasons” is a proposition of no content.  What is the content that you seek to attribute to it?  “Sound policy reasons” is voodoo language.

MR SEMMLER:   Your Honour, our submission is in this case there are no such reasons, and that is the case that your Honours are dealing with.

KIRBY J:   So it is a disappearing voodoo?

MR SEMMLER:   It is something that we would accept may well arise in other cases.

GAUDRON J:   There is one policy reason, it seems to me, that to some extent relates to your case and, perhaps more directly, relates to the next case.  Where you are talking about mere communication of distressing information, you have to factor in, I should have thought, the right of people to be informed, their interest in being informed.  I mean, they are really in quite distressing situations such as occurred, perhaps more directly in the second case.  They cannot be kept in ignorance.

MR SEMMLER:   No.

GAUDRON J:   The other matter is that, just as in Sullivan v Moody, this area of the law has to be accommodated to at least co‑ordinate it with the law of defamation, concepts of freedom of speech, and so on.  So, I mean, the policy issues are not entirely at large and I would have thought that a very considerable number of those policy issues actually impinge in your case.

MR SEMMLER:   Yes.  Certainly, your Honour, we would readily embrace the first of those policy issues that your Honour Justice Gaudron identified, that is, the right of people to be informed.  In relation to that, we would invoke what your Honour Justice Kirby had to say in Coates, that this means of communication notion that has, up until now at least, prevented many people from succeeding in claims for psychiatric injury is something that really is completely at odds with modern telecommunications.  To that extent, your Honour, we embrace the policy considerations which, we say, favour recovery in cases where the plaintiff has been told of what occurred because there are rights that people have to be told.

GLEESON CJ:   But the relevant communication in the present case was a communication by a police officer to the police department about the circumstances of a traffic accident.

MR SEMMLER:   That is true, your Honour, but it was also a communication which he and the police department knew would be made to third parties, including people on whom persons in the position of the plaintiff would rely so far as their decisions were concerned. 

GLEESON CJ:   So your proposition – to reduce it to this concrete case ‑ is that in completing a report about the results of an investigation of a motor vehicle collision, a police officer owes a duty to take reasonable care not to cause psychological injury to one of the persons whose conduct is the subject of the report. 

MR SEMMLER:   With respect, that is one way of putting it, but he owes a duty to a foreseeable recipient of that report.  Your Honour talks about conduct that is the subject of the report.  It may be important to focus upon that in the case of someone who is being charged with a criminal offence, because it is apparent from the report that that person was at fault, in a criminal sense.  But it is not an appropriate focus in a case where we are dealing with a completely innocent party in a traffic accident. 

GLEESON CJ:   You say, you are dealing with an innocent party.  One of the consequences of modern life, of being involved in a motor vehicle collision, is that somebody is going to force you to take a breath test. 

MR SEMMLER:   Yes, we would accept that.

GLEESON CJ:   And another of the consequences is that some policeman is going to report to some other policeman on the results of that breath test.  A possible consequence is that you might be charged with a breach of the law.  That is the context in which you say this duty of care to avoid psychological harm arises in the present case:  a policeman reporting to another policeman about the results of a breath test. 

MR SEMMLER:   That is true, but there is a critical distinction here.  If your Honour is, with respect, invoking the principle that was articulated in Sullivan v Moody, the critical distinction is that the person we are dealing with here, who foreseeably will receive this report, was not at fault. 

GLEESON CJ:   She was a suspect.  She was compulsorily breath tested because she was a suspect. 

MR SEMMLER:   At the time when the form was filled in, she was not a suspect.  A mistake was made.  She was not ‑ ‑ ‑

GLEESON CJ:   How did she come to be breath tested? 

MR SEMMLER:   Because she was involved in a motor vehicle accident. 

GLEESON CJ:   That is right.  That is all you have to do:  be involved in a motor vehicle accident and the law compels you to submit to an investigative technique. 

MR SEMMLER:   That is true, your Honour, but, with respect, there is a critical distinction between the time at which she is a suspect and the time at which this form is completed.  She is no longer a suspect when it is completed.  This is a bureaucratic process of recording information, at a time when there is no chance that she will be charged with any criminal offence.  It is a mistake made in a document where she is not a suspect.  At that time, she is not a suspect.  There is no question of a conflicting responsibility, in a sense of discharging the duties of a policeman to properly investigate crime and at the same time looking over his shoulder and being concerned about possible litigation over that same act, because the relevant act has already been performed.  The breath test has been conducted; the results are known; she is no longer a suspect. 

GLEESON CJ:   What happened to Mr Lavender? 

MR SEMMLER:   He was prosecuted, your Honour. 

GLEESON CJ:   As a result of the information that was conveyed in this document? 

MR SEMMLER:   We do not know. 

HAYNE J:   Well, do we not?  At 525, on the report, do we not see what he was charged with? 

MR SEMMLER:   Yes.  Certainly, it records the circumstance, but it is not clear from the evidence that this document is the reason why he was charged.  Indeed, one would expect that it probably was not.  These decisions are taken before the form filling, as it were.  The results are obtained and, no doubt, urgent steps are taken to apprehend and charge and proceed to prosecute the person at fault.  But, in our submission, it is not appropriate to look at this form in the same way that one might look at a recommendation in a form or the communication of information, like in Sullivan v Moody, about possible criminal offences having been committed.  This is an ex post facto completion of material after relevant inquiries have been made and decisions have been taken. 

To come back to your Honour Justice McHugh’s question, the reasons why it is not appropriate for physical injury to be differently regarded from psychiatric injury, or vice versa, is the ignorance and fear that I have referred to.  Although it may be that some judges over the years have recognised that it is not sensible for the law to distinguish between psychiatric and physical injury, the reality is the law has done and has done up until the present time.

GAUDRON J:   Again you say it is not logical but there is some logic, I suggest, and one has to deal with it if one is going to attempt to make any principled exposition of the law.  The law has traditionally respected your physical integrity.  If you are close enough to be physically injured by the careless act of somebody, you can assume proximity is satisfied.  But we are talking about a situation here where, ex hypothesi, there is no physical injury.  The injury occurs some other way.  Thus far sight, presence, et cetera, has perhaps satisfied the proximity criterion.  Proximity is not a new idea, notwithstanding that it has been the subject of angst and debate in the field of economic loss, but there is still the neighbourhood test and it is a test that has to be satisfied in this area in a context at least where people are entitled to information and where you cannot easily shield people from the consequences of information.

McHUGH J:   You have to face up to what Justice Cardozo spoke about in Ultramares Corporation v Touche about persons being liable in an indeterminate amount for an indeterminate time to an indeterminate class.  Take September 11.  It may be that the FBI or the airport controllers were guilty of negligence in allowing people to get on that particular plane.  It may well be that tens of thousands – perhaps hundreds of thousands – of people all over the world have suffered shock as a result of those events.  Is the FBI or the airport to be liable for all the consequences of that?  If not, why not?  What is the principle?  Factors such as indeterminacy, vulnerability, it seems to me, all these matters are matters that have to be considered.  You just cannot treat nervous shock cases as you can physical injury cases.

MR SEMMLER:   But with respect, the answer to the question your Honour has posed is found in the reasons why there is such concern about events such as September 11.  What I am trying to communicate is that it is underlying this kind of question in a psychiatric injury case, which really would not be posed in a physical injury case, is the concern of indeterminate liability.  That is as your Honour has articulated.

McHUGH J:   It is true that in physical injury cases an act of negligence can cause a great deal of harm to a lot of people, large numbers, particularly when it is a fire or an explosion or something, but in the ordinary run of things nervous shock cases are likely to have a much wider spread than physical injury cases.

MR SEMMLER:   Your Honour, with respect, that is true in the sense that people can watch it on television and they do not have to be physically affected by what occurs.  That is quite correct, your Honour.  But there is an important distinction between the ambit of the effect of something that can cause psychiatric injury and whether or not in reality that will provoke a flood of cases, because underlying your Honour’s question, as underlying the questions that have been put in all of the key cases in this area going back for decades, has been this fear of opening the floodgates in psychiatric injury cases.

HAYNE J:   No, it is not.  It is a question of identifying to whom the duty is owed.  Now, portray that as the floodgates, if you will, but is the principle for which you ultimately contend that the duty is owed to anyone in respect of whom this kind of injury is foreseeable?

MR SEMMLER:   Yes, your Honour.

HAYNE J:   Do you nail your colours to that mast?

MR SEMMLER:   No, with the rider that in an appropriate case, of which this is not one, if there are sound policy reasons, then they may constitute a fetter on that.

McHUGH J:   That is Anns.  So you want us to reintroduce Anns into Australian law after we expelled it in Sutherland v Heyman?

MR SEMMLER:   Your Honour, at the present time, with respect, it is really uncertain as to what, in addition to reasonable foreseeability, is to govern the development of the ‑ ‑ ‑

McHUGH J:   I think one thing is certain, Anns does not.

MR SEMMLER:   No.

McHUGH J:   And it has not since Sutherland Shire v Heyman. 

MR SEMMLER:   Your Honour, if I can put it this way, if there are legitimate reasons for imposing a particular constraint upon the duty of care in a psychiatric injury case, then no doubt they will be determined in future cases.

HAYNE J:   That is simply deferring the problem.  It is not answering it.  It is deferring it.

MR SEMMLER:   But, your Honour, one of the reasons, with respect, that proximity is now no longer the unifying principle in this area is for the very reason that, as your Honours have said repeatedly in recent cases, it does not give any practical guidance as to when in a particular case a duty will arise.

McHUGH J:   I know, but that is what we have to – if we are going to change this law, then we have to have some guidance.  In Crimmins I attempted to lay down some principles in that type of case.  I think I tried to do the same in Perre.

KIRBY J:   We all tried to do ‑ ‑ ‑

MR SEMMLER:   Yes.

McHUGH J:   But to simply say that once you can reasonably foresee nervous shock occasioning then liability ensues unless there is some policy reasons just seems to me to be introducing Anns into Australian law.

GLEESON CJ:   And it makes the ambit of potential liability expand with medical knowledge.  The collapse of a major insurance company hurts a lot of people but it does one good thing:  it reminds lawyers of the fact that not all defendants are insured.

MR SEMMLER:   Yes, your Honour, that is correct, but the reason why they are not insured is because the insurer has collapsed.

McHUGH J:   Yes, I know, but it means that there are individuals out in our society today who have very large judgments against them and they cannot pay them and they stare bankruptcy in the face.  We have been acting for 50 or 60 years or more on the basis that really there is an insurer always at the back of it, but as the Chief Justice has pointed out, maybe that is not always the case.

MR SEMMLER:   Yes, but, your Honour, the remedy to that is to have proper surveillance of insurance companies, not to interfere with sound principle and restrict people’s rights simply because of this fear of too many cases and, in some instances, insufficient insurance or ‑ ‑ ‑

GLEESON CJ:   Take the question of principle you wish to raise, that is the distinction between physical injury and psychiatric injury.  Suppose that a negligent driver runs down a man on a pedestrian crossing in a street in Darlinghurst, the street is outside St Vincent’s Hospital and the man who is run down is a heart surgeon and waiting for him, when he does not arrive, is a critically‑ill patient whose wife is attending what was intended to be the operation and when she hears that her husband’s heart surgeon has been seriously injured and the operation cannot go on she suffers anxiety which degenerates into clinical depression.  Does the driver owe her a duty of care and, if not, why not?

MR SEMMLER:   If it is foreseeable that she will suffer as a result of his tort ‑ ‑ ‑

GLEESON CJ:   What do you mean by “foreseeable”? Imaginable?

MR SEMMLER:   If it is not far‑fetched or fanciful ‑ ‑ ‑

GLEESON CJ:   Is the example I gave you far‑fetched or fanciful?

MR SEMMLER:   Your Honour, I do not know the full facts, but from the facts that your Honour has given me, it would not seem to be far‑fetched or fanciful.  In those circumstances, unless the Court considered that there was some legitimate reason for disallowing her right to recover, then she should recover.  We would need to know the full facts.  Similarly, your Honour, with your Honour’s reference to the September 11 events in New York, it may well be that there are some sound reasons why there should be a restriction on recovery there.

McHUGH J:   There may be.  That is what I want to get from you.  What are the principles?  At the moment all we have is a re-run of a 1978 decision, Anns.

MR SEMMLER:   Your Honour, could I just answer your Honour’s question in this way.  First of all, the fear that your Honour would have of virtually unlimited liability – people see these events on television, some of them get shocked and become psychiatrically disturbed.  That is a fear, first of all which, we would say, there are reasons why it is not justified.  Even if it is justified, it is a fear in relation to secondary victim cases.  Mrs Tame’s case is not a secondary victim case.  This is not the occasion to be speculating on that kind of situation.  Mrs Tame was injured ‑ ‑ ‑

McHUGH J:   Yes, it is, because you do not want to apply the traditional law.  You want us to change the law.  If you want us to change the law, then we expect, or at least I do, some assistance in what are the principles that we are to apply that would be of general application.  This Court is not here just to decide a case, important though it is to the particular litigants.  One of its most important functions is to state principles which are of general applications to thousands of cases or cases that are roughly analogous to this case before the Court.

MR SEMMLER:   Your Honour, we accept that and we do wish to be of assistance, but we have just ended an era where this notion of a unifying concept, which does lay down principles of proximity, has just been abandoned.  True, it may be helpful to attempt to reconstruct some edifice that will give specific guidance, but this Court has just finished with demolishing an edifice.

GAUDRON J:   Yes, but we still have to find a neighbour, and although this Court may have said, “proximity will not be the answer”, it has, nonetheless, pointed out a number of indicators which will tell you in a particular case who your neighbour is.  Now, in a case of a nervous shock case, who is your neighbour?  It seems to me reasonably foreseeable that the communication of bad news affecting an individual or any member of his or her family or his or her close associates, could suffer nervous shock upon the communication of that bad news.  That nervous shock could deteriorate into a severe mental illness.

MR SEMMLER:   Certainly, your Honour, that is consistent with modern psychiatry understanding.

GAUDRON J:   Yes, very well.  Now, who are your neighbours?  Who owes the duty of care?  Obviously, policemen, doctors, school teachers and so on communicate such news to people routinely, regularly, on a daily basis.  Did they owe a duty of care to the recipient of bad news?

MR SEMMLER:    They do, your Honour, with respect, just as the police department in this case owes a duty because we are dealing with ‑ ‑ ‑

GUMMOW J:   But how would the duty be discharged?

MR SEMMLER:    By being more careful.

GAUDRON J:   No, well, you are talking about what turns out to be incorrect information.

MR SEMMLER:    Yes.

GAUDRON J:   Let us look at it in the broader scope at the moment.

GUMMOW J:   Often it will be correct.

GAUDRON J:   Most of the time it will be correct and the people will have an interest in being informed, must be informed.

MR SEMMLER:    Well, there are obviously competing considerations that need to be taken into account.  If this Court decides there is this interest in the people being informed, but at the same time there is a conflicting interest in ensuring that they are not subjected to something which might cause psychiatric illness, then that may well be a situation where policy reasons dictate that there is no duty, but that is not this case.

GAUDRON J:   Every time there is an industrial accident or a car accident for which a person is liable in negligence, surely it will be foreseeable that the member of the victim’s family, on being told, could suffer nervous shock and it could develop into a full‑blown neuroses or psychoses.

MR SEMMLER:    With respect, that is correct.

HAYNE J:   And wherever you draw the boundary, those who are most closely interested are going to lie within the boundary, are they not, so that the problem you confront is testing it against the case of the person who is most closely interested in the fate of the victim that is being communicated to them?  Now, you say, repeatedly, “Ah, there may be competing considerations”.  What are they?  What is the competition?  How do you resolve it?

KIRBY J:   The answer to Justice Hayne’s questions is to be found in any of the decisions of equivalent courts which we simply have re‑examined this.  Let us not reinvent the wheel unnecessarily.  As I understand it, from your written submissions, the courts in England, South Africa, and other somewhat exotic places, have revisited this area.

MR SEMMLER:    Yes.

KIRBY J:   Is there anything in the way they have dealt with it that helps the Court come to the controls that obviously will need to be put in place?

MR SEMMLER:    Well, your Honour, our submission is that the trend has been to, in effect, remove the control, certainly in the Barnard’s ‑ ‑ ‑

McHUGH J:   Just as well Justice Kitto is not sitting here when you use the word “trend”, he would have gone off his head.

MR SEMMLER:    Yes, well, it is probably an inappropriate word, your Honour, but I do not know that by referring to cases overseas I am going to answer his Honour Justice Hayne’s question.

KIRBY J:   But the House of Lords did introduce this primary and secondary classification.

MR SEMMLER:    Yes.

McHUGH J:   But you criticise it.

MR SEMMLER:    Well, in some respects it is helpful to Mrs Tame’s case here today.  Indeed, it is very helpful.  She is a primary victim and according to the test, at least enunciated by Lord Oliver in Alcock’s Case, because she is directly affected, she is not a bystander, she would recover.

GLEESON CJ:   Could we just look at this concept of primary victim?  That division into primary and secondary victims seems to apply in a rather different context from that of the present case.  A lot of these psychiatric injury cases were cases where the harm resulted from witnessing or hearing of physical injury to a third party, but that is not this case.

MR SEMMLER:    No.

GLEESON CJ:   Neither Constable Morgan nor Acting Sergeant Beardsley communicated anything to Mrs Tame.  True it is Mrs Tame rang one of them up and complained about it at a later stage but the communication with which we are concerned which involved the negligent conduct, was not a communication to your client.  It was an internal police communication and the contents of it were communicated to your client by her solicitor at the same time as telling her that it was a mistake.  Now, what is the relevant communication?

MR SEMMLER:   Well, it is not so much the communication as the act.

McHUGH J:   Now, what is the act?  It seems to me insufficient attention was given in the Court of Appeal judgment, for example, as to what the act was.  There was a reference to the police service owing a duty.  You are using a description that is not even a legal entity.

MR SEMMLER:   No.

McHUGH J:   And what is the act?  Is it the act of Acting Sergeant Beardsley in writing down on the report “0.14”?

MR SEMMLER:   Yes.

McHUGH J:   So the point is that when he wrote that down he should reasonably have foreseen that that document would be communicated to an insurance company, to its solicitor, and would ultimately be communicated to the plaintiff and that it might affect her.

MR SEMMLER:   Yes, that is correct; that is our case.

GLEESON CJ:   Why is not the cause of action a cause of action against her solicitor?

MR SEMMLER:   Because the clearest psychiatric evidence in this case is to the effect that it was not so much who communicated it as the content of the information of which she became aware.

GLEESON CJ:   But presumably on your principle, her solicitor owed her a duty to take reasonable care, when he communicated to her the contents of that traffic report, not to expose her to psychological harm.

MR SEMMLER:   Yes, that may be, but that is not this case and the evidence was not that the harm was done by reason of the way in which it was communicated.  I know my learned friends in their notice of contention put great store on the fact that there was a conflict.  Mr Weller is said to have said, “Well, you know, they say you’ve been drinking”, but the psychiatric evidence which talks about the chain of causation stresses that it was the fact that someone in authority had effectively said this about her in a document, that was the trigger, as Dr Phillips put it, that caused her to move from one state to another, to a very disordered psychiatric state.  It was that.  This is not a case of communication.  As Justice Brennan said in Jaensch v Coffey, the precise chain of events whereby the nervous shock is caused or results is not of critical relevance.  If it is foreseeable that she will become aware of this information that has been wrongly recorded, that is all that matters.  The fact that it is by medium of a solicitor – as Judge Garling said, it would be expected that the solicitor would communicate this to her and, indeed, Judge Garling went so far as to say he would be careless if he did not.

McHUGH J:   Why then is not the person who reads the auditor’s report owed a duty of care by the auditor?  In Esanda and other cases, this Court and other courts have held that the fact that you know damaging information is going to be delivered to some other person or acted on is insufficient.  Now, why in this particular case?  Why should we distinguish in this case between Esanda and the position of Acting Sergeant Beardsley?

MR SEMMLER:   Well, in this case, psychiatric injury was caused, on the judge’s findings ‑ ‑ ‑

McHUGH J:   Yes, but so does the investor who reads the auditor’s report and goes and buys shares.

MR SEMMLER:   But he is relying upon the error.  He is relying upon the information which is a product of carelessness.  Mrs Tame is not relying on it.  Mrs Tame is injured by reason of the fact that this error is made.  She does not act to her financial detriment.  She does not act in any way in reliance upon this information.

McHUGH J:   I know she does not, but in terms of causal theory there does not seem to me any difference between the two cases.  One is a case, causation is brought about by the reliance, and the other case, causation is brought about by hearing or reading the information, but there is still the causal connection.

MR SEMMLER:   In our submission, what your Honour says and what our learned friend says in invoking these notions of negligent misstatement, this is not a negligent misstatement case.  There is no ‑ ‑ ‑

GLEESON CJ:   It is a defamation case, is it not?  She found out that she had been defamed in a police report and it shocked her.

MR SEMMLER:   Your Honour, she suffered personal injury.

GLEESON CJ:   If she had sued for defamation ‑ ‑ ‑

McHUGH J:   Which she could have.

MR SEMMLER:   Whether she would have succeeded or not and how much she would have recovered ‑ ‑ ‑

GAUDRON J:   Exactly.

MR SEMMLER:   ‑ ‑ ‑ are moot issues but ‑ ‑ ‑

GAUDRON J:   No, it is an important issue.  At the very least it seems to me that the law with respect to communications has to be coherent.  It cannot be different depending on the nature of the injury and there can be no doubt that what was in this report was defamatory and it was published.

McHUGH J:   And Rigby v Mirror Newspaper says she could get damage for the nervous shock caused by reading the material.  So all the damage that she claims in this action could have been claimed in an action for defamation.

GAUDRON J:   And if the actions of Acting Sergeant Beardsley would have fallen within one of the defamation defences, it seems to me that it could not at the same time result in liability for nervous shock because it is a negligent misstatement.

MR SEMMLER:   In attempting to answer your Honour’s questions in relation to that, could I make these submissions.  Mrs Tame, her nervous shock arose not simply because of her concern about her good name or the fact that it had been affected, she believed, by this document.  There is a whole raft of reasons that she gave and that were discussed by the psychiatrist as to why she suffered this injury.  The fact that it was her character that was being brought into question, in her belief, was one, but she also articulated – this is at volume 1, page 34 – that she would get the blame for something that she did not do, if the insurer knew it would not help her, she had a fear about the consequences.  Indeed, I think she went so far as to worry that perhaps something might happen to her as a result of what she knew to be a mistake.  She ruminated about it and she felt guilt – this is at page 46 – that she felt she was being punished for something.

So, your Honours, with respect, I fully appreciate your Honour’s comments about the law of defamation, but, hypothetically, if she had not worried about her character but had been more concerned about these other matters, this issue would not arise.

GAUDRON J:   But it is not a factual matter to which I am directing your attention and on which I am seeking your assistance.  It is a matter of legal principle.  How can it be that your liability for a statement differs depending on whether it is said to be negligent or defamatory?

MR SEMMLER:   Because, your Honour, there are different tests; there are different interests that are protected by the two ‑ ‑ ‑

GAUDRON J:   I know that, but I think this is the problem to which Justice McHugh has drawn attention before.  It is very difficult to see that the law can march in different directions depending on the cause of action unless there is some principled explanation.  I am asking what is the principle that will segregate out defamatory statements which will not result in legal liability and negligent misstatements which will.  What is the legal principle that is going to bring about that result?

MR SEMMLER:   We first respectfully differ from your Honour in categorising what happened as a negligent misstatement with all the law that is attached to that, but a negligent act ‑ ‑ ‑

GAUDRON J:   But you sued in negligence.

MR SEMMLER:   Yes.

GAUDRON J:   What do you call it if it is not a negligent misstatement?

MR SEMMLER:   The concept of negligent misstatement connotes reliance in the way it has been used.

GAUDRON J:   Not necessarily.

MR SEMMLER:   The broader answer to your Honour’s question is, it is not a question of the law going in different directions.  There may be some overlap.  There may be, but the evidence in this case has not explored whether or not she would have been successful in a defamation ‑ ‑ ‑

GAUDRON J:   No, but we have to explore the legal principles.

MR SEMMLER:   Yes.  Your Honour, the answer to the question is that defamation protects a different interest.  Defamation protects reputation.  It does not protect bodily or mental integrity.

GLEESON CJ:   It is interesting the way you put that.  The importance of motor vehicle accident cases and industrial accident cases in the workload of the courts seems to have created an assumption that carelessly inflicted physical harm is the paradigm of harm and that there needs to be some justification for treating any other kind of harm differently from it, but carelessly inflicted physical injury is just one way in which a person can suffer detriment.

MR SEMMLER:   Yes, but our submission would be that in society today, as indeed throughout the centuries, protection from personal injury is a far more important protection to be afforded by the law than protection to reputation.

GLEESON CJ:   A number of things have combined to emphasise carelessly inflicted personal injury as an object of the law’s concern, and not the least of those has been the development of systems of insurance around them, but the harm, for example, that the child of a negligently injured or killed victim of a motor accident may suffer may continue through life and manifest itself in a variety of forms.

MR SEMMLER:   That is our point, your Honour, with respect.  Modern psychiatry – indeed, the community at large – recognises how serious that harm can be, how long lasting.  As Dr Phillips said, the metaphorical emotional scar just does not go away.  Dr Mitchell, the treating psychiatrist, talked about this illness that this lady suffered being the worst kind of illness, physical or mental.  People commit suicide because of the illness that she had and they do not often commit suicide because of physical illnesses.  The pain is so great, that is the end of it.  The community is becoming more aware of this.  The very matter that your Honour the Chief Justice referred to, that is the longitudinal harm of a child caused by the death of a parent, that is the kind of harm that needs to be the subject of compensation, we would say far more important than damage to somebody’s reputation.

GLEESON CJ:   Including financial harm, loss of economic opportunities, emotional fragility?

MR SEMMLER:   To the child?

GLEESON CJ:   Yes.

MR SEMMLER:   Certainly they are important considerations, your Honour, but we are dealing in this case with simply the personal injury involved:  the psychiatric harm.

GLEESON CJ:   When you think about it, the actual decision in Donoghue v Stevenson, which was only by a 3:2 majority anyway, was what would be regarded nowadays as an elementary form of consumer protection.  With all the fuss about it and with all the division in the House of Lords, that case decided that a manufacturer of a product owes a duty of care to a consumer in circumstances where there will be no reasonable opportunity for intermediate examination of the product.  That does not sound like groundbreaking stuff, but it was.

McHUGH J:   And the reason it was was until then you had to find a relationship, usually out of contract or out of physical proximity, and if there was distance between parties, then, in the absence of a contract, there would be no duty owed. 

MR SEMMLER:   Yes, your Honour, and the reason ‑ ‑ ‑

McHUGH J:   And so Lord Atkin introduced reasonable foreseeability of harm. 

MR SEMMLER:   Yes, and true to Lord Atkin’s fundamental principle, people like Mrs Tame should recover.

GLEESON CJ:   There is a question whether Mrs Tame should recover, but you will not forget, will you, that there is also a question whether Sergeant Beardsley should pay?  We happen to have behind Acting Sergeant Beardsley in this case a State Government, but if the principle for which you contend is right, it is not only a question whether Mrs Tame should get some damages.  It is a question whether she should get them from Acting Sergeant Beardsley. 

MR SEMMLER:   Your Honour, our answer to that, with respect, is, why not? 

McHUGH J:   One reason why is that you are sued in vicarious liability.  You cannot attribute expert opinions to Sergeant Beardsley.  Therefore, the question is this:  is there to be attributed to this acting sergeant at Windsor Police Station reasonable foresight that this would cause psychiatric injury?  This policeman, with no medical knowledge. 

MR SEMMLER:   Your Honour, I would readily concede that is the area where, in this case, we are most vulnerable.  Leaving aside whether there are or are not, or should or should not be, additional factors, so far as duty is concerned, there is the question of “Was it reasonably foreseeable?”.  I shall deal with that in a moment, if I may.  Can I come back to your Honour the Chief Justice’s question as to why should the State Government pay?  The answer is because, true to what was said by Lord Atkin, this was reasonably foreseeable harm in circumstances where there are no rational, valid, proper reasons why she should not recover pursuant to that principle. 

GLEESON CJ:   The question is whether the conduct of Acting Sergeant Beardsley should be identified as tortious and sounding in damages.  That is the question. 

GAUDRON J:   When presumably he was under a duty to make a report with respect to the events that happened.  This was not a gratuitous activity on his behalf.  He was under a duty, presumably by reason of his engagement as a police constable or by reason of the orders of the Commissioner, to make this report.  He was making it presumably to a superior officer. 

MR SEMMLER:   He was under a duty, we would say, to do it carefully. 

GAUDRON J:   I know. 

GLEESON CJ:   And he made a slip. 

GAUDRON J:   You see, that is what I was trying to put to you earlier.  In some respects, one knows what action to take to avoid physical injury.  To take an easy example, you keep a lookout, you drive within the speed limit, you obey the traffic signs, you obey the lights and so forth.  It is not so easy to work out what action you can take to prevent shock to somebody. 

MR SEMMLER:   The answer to that question, your Honour, is you do it carefully.  You record the information carefully – accurately.

GAUDRON J:   No, you are talking only about this case.

HAYNE J:   That will not stop shock.  The policeman who comes at the door at midnight to inform the parent of the death of the child – what is the content of the duty you impose on that policeman?  To do it carefully?  What does that mean?

MR SEMMLER:   He is not going to be sued, your Honour.

McHUGH J:   He may be.

MR SEMMLER:   The person who will be sued will be ‑ ‑ ‑

McHUGH J:   I can think of circumstances where you might argue that he could be.

MR SEMMLER:   Well, that is a different case and it may be that there are valid sound policy reasons why there should not be a duty owed by the policeman in communicating bad news, but that is not this ‑ ‑ ‑

GAUDRON J:   Well, exactly.

McHUGH J:   Maybe he should have inquired about the state of health of the person that he is communicating it to.  Maybe he should not have called at a particular time.

MR SEMMLER:   Your Honour, with respect, that may be true and there may be valid reasons, if Mrs Tame had sued her own solicitor, Mr Weller, why this Court would find there was not a duty, but that is not this case.  In answer to the question, coming back ‑ ‑ ‑

HAYNE J:   Therefore, error in the information is critical to your case, is that right?  Because if it is, you tumble over into defamation and all the other related areas, once you say error is critical.

MR SEMMLER:   Error in the information is critical.  That is the breach of duty.

GAUDRON J:   But I should have thought the policeman’s first duty is nonetheless to make the report.  Now, mistakes are always going to happen, unfortunately, but his first duty seems to me to be to the chain of command, at least.

MR SEMMLER:   Yes.  That is true.

GAUDRON J:   To some extent, I can avoid – well, to a large extent I can avoid causing foreseeable harm by not driving at all.  This acting sergeant is in a different position.  He must make the report.

MR SEMMLER:   But if he is going to do it inaccurately, he probably should not do it at all.

GAUDRON J:   He does not have a choice about whether or not he makes the report, it seems to me.  He has a duty to make the report.

MR SEMMLER:   Yes.

GAUDRON J:   His first duty seems to me to be other than to Mrs Tame.

MR SEMMLER:   But, your Honour, all of that is true, with respect, but the critical matter is whether there is some conflicting duty that means that Mrs Tame should not have a duty owed to her.  Now, there is no conflicting duty here.  There is a public interest.  There is a real public interest in people such as policeman completing these reports accurately.  There is no conflicting duty and this is not a case where it can be said, “Well, it is not a Sullivan v Moody Case”.  So, your Honours, to come back to the first ground of appeal, our submission is that damage to the psyche is not, these days, properly regarded as fundamentally different to physical damage.  As long ago as 100 years ago Justice Kennedy in Dulieu v White was prescient in his observation that:

For my own part, I should not like to assume it to be scientifically true that a nervous shock which causes serious bodily illness is not actually accompanied by physical injury, although it may be impossible, or at least difficult, to detect the injury at the time in the living subject.

Now, your Honours, what has happened in the last 100 years is that medical science, psychiatry, and, following in its path, the courts, have more and more recognised that in reality we are dealing with things that are essentially the same.  In this case Mrs Tame’s illness was a ‑ ‑ ‑

GAUDRON J:   No, they are not essentially the same.

MR SEMMLER:   Your Honour, the psychiatric evidence in this case, with respect, was that her illness was – depression is caused by a biochemical imbalance.  It is a lack of a neurotransmitter.

GAUDRON J:   Yes, all of that may be the same but there was no immediate violation of her physical integrity.  The law is used to that and understands it.  The law has over centuries set up other things which it protects – other interests.  One thing it protects is your legal right, or one area which is protected are your legal rights.  That much now emerges, I think, from the decisions in this Court, particularly in the last few years. 

McHUGH J:   But what about the personal autonomy of any human being to be able to say or think what he or she wants to say, unless that person has a good reason for not saying it.  Does that mean that the law is going to impose on persons in addition to the law of defamation and other areas that you have to be careful about everything you say in case it may cause nervous shock to somebody?

MR MULLANY:   It all depends on the circumstances.  The law already does that, your Honour, with respect.  You cannot run around intentionally inflicting emotional – it is very different.

McHUGH J:   That is different.  That was the big exception that Justice Windeyer made in the passage at 407.  Intention, that is one thing.

MR MULLANY:   Yes, he did, but that way the common law prohibits the intentional infliction or reckless disregard of person’s health.  Our submission is the time has now come for reconsideration of the position where carelessness is involved rather than intentional wrongdoing.

GUMMOW J:   Why has the time come?

MR MULLANY:   There have been many developments, your Honour, in a number of respects.

GUMMOW J:   What are they?

MR MULLANY:   There have been medical developments.

GUMMOW J:   Yes, we know about that.

MR MULLANY:   Well, they are not to be lightly dismissed, with respect to your Honour.  Can I refer you to this fact, for example ‑ ‑ ‑

GUMMOW J:   All I am saying to you is they were perfectly well‑known when Pusey was decided.

MR MULLANY:    Not as well‑known.  There have been three editions of DSM since 1980, 3, 3R and 4, in the space ‑ ‑ ‑

GUMMOW J:   Yes, well…..all of that, what other developments are there?

MR MULLANY:    Life is far more demanding now than it has been in the past.

GUMMOW J:   It was much more demanding during the Black Death.  It was much more demanding in the early years of European settlement of Australia.

MR MULLANY:    That is true, your Honour ‑ ‑ ‑

GAUDRON J:   It was not so good before there was refrigeration and electricity which was as late as about the 1940s, in the bush at least.

HAYNE J:   So what have the Romans done for us, Mr Mullany?

MR MULLANY:    Not much, your Honour.

GUMMOW J:   You are really invoking the rise of victim‑hood as a popular response to all sorts of problems.

MR MULLANY:   On the contrary, your Honour.  I know there are people who suggest that.  I know there are people who say the increase in this sort of claim is a reflection of an unhealthy compensation culture, a blame game, and the like.  We prefer to categorise it differently.  We prefer to say that there has been a growing appreciation of an awareness of the real impact that psychiatric injury may have upon a person ‑ ‑ ‑

GUMMOW J:   Well, that is your first point?

MR MULLANY:    It is a development in two respect, your Honour.  It is not only a development in the medical profession, it is a develop - three respects; a development amongst the judiciary and a development amongst the general community.  Rarely a week goes by where we are not confronted by some media report of an horrendous tragedy, Thredbo, Hillsborough, the World Trade Centre, and the like.  We read every other month ‑ ‑ ‑

GUMMOW J:   You have forgotten hat a lot of our ancestors lived through two world wars, Mr Mullany.

MR MULLANY:    Yes, your Honour, and with respect ‑ ‑ ‑

GUMMOW J:   And a number of people who came to this country, settled it, after themselves, who have gone through horrific experiences in actual war theatres.

MR MULLANY:    They have.  War is a good example.

GUMMOW J:   Now, what has changed?

McHUGH J:   The mortality rates were much higher.  People had bereavements, families would lose four and five children.

MR MULLANY:   There is a different attitude which prevails today, can I suggest to your Honour.

McHUGH J:   There certainly is a different attitude in terms of expanding liability or allowing courts to deal with it.  Doctors negligence has been cut back in New South Wales.  Auditors liability has been cut back.  Workers liability is cut back.  Why?  Because the perception is that the legal system is not the proper place for the settlement of these issues.

MR MULLANY:   There are lots of reasons, your Honours.  Can the societal purse afford it and so on, insurance premiums, these kinds of questions.  Everybody knows that.  The question is whether today, in 2001, that 1950s, 1940s “be a man” mentality ought prevail.  The question really should be phrased this way.  If I drive my ‑ ‑ ‑

GUMMOW J:   What sort of a man?

MR MULLANY:   “Be a man” mentality, or woman, your Honour.

GAUDRON J:   “BA”.

MR MULLANY:   “Be a” – not British Airways, “Be a”.

GAUDRON J:   You will have to inform me, I am sorry.

GUMMOW J:   You walked right into that, Mr Mullany.

MR MULLANY:   I did.  The question is ‑ ‑ ‑

GUMMOW J:   The question is what are these other factors that have changed since the times of Pusey?  We have not got very far it seems to me.

MR MULLANY:   I think I have given you three of those, your Honour.

GUMMOW J:   They cut both ways.

MR MULLANY:   They do cut both ways.

GUMMOW J:   Yes, at the very best they cut both ways.

MR MULLANY:   It is a question of finding the right balance between the competing interests, between the defendant who has a right to be able to live a life without unduly worrying about the legal consequences of his or her actions and permitting recovery in tort for those persons harmed by avoidable conduct.  Take the negligent driver example.  Why should the negligent driver, who knows that if he or she fails to take care persons may be physically injured, escape liability for the equally foreseeable result that learning of that accident may bear for a loved one.  It is only when one moves to the secondary sphere that the common law has expressed its concerns in these limitations.

Can I return to the answer I was proffering to your Honour Justice Hayne about content and policy.  The wartime example is a very good one.  One could foresee, or make a strong case for not imposing a duty, leave statutory restrictions aside, on those involved in the negligent infliction of disorder during wartime or perhaps even on peacetime manoeuvres.  Take our crack SAS troupes.  One might suggest that there ought not be recovery for those men psychiatrically injured as a consequence of the collision of the Black Hawk helicopters.  Why?  Because a strong case might be able to be advanced that we need those men to be of a particular hardness, a particular robustness, indeed a higher standard may apply to them in terms of their fortitude.

CALLINAN J:   They are supposed to be trained killers.

MR MULLANY:   Precisely.  If we fail to persuade your Honours about our primary argument, the search then is made for the additional control devises.  I have suggested to your Honours, submitted to your Honours, that it is found in at least three respects; can I suggest a fourth.  Your Honour Justice Hayne postulated that perhaps it could be found in the closeness of the relationship, familial for example ‑ ‑ ‑

GAUDRON J:   Closeness of the relationship between whom?

MR MULLANY:   The tortfeasor, the plaintiff or the secondary and primary victim, as I understood his Honour, spatial or temporal concerns or the question of normal fortitude.  If we are not persuasive on our first argument, can I submit to your Honours that the most appropriate control would be the last of those.

GAUDRON J:   Most appropriate - - -?

MR MULLANY:   Appropriate control.  The reason is this:  it is the reason advanced in Bourhill v Young when the case was in the Scottish Courts and it is the reason advances I understand Dean Pound to be suggesting in the passage your Honour Justice Hayne referred us to.  It is not appropriate, one might say, to compel members of the community to walk around with the highly supersensitive in mind.  Now, we do not shy from our primary submission ‑ ‑ ‑

GAUDRON J:   Why is this?

MR MULLANY:   Because one has to draw a line.

GAUDRON J:   No, one does not just draw a line.  This is not an arbitrary game of judicial law making we are engaged in.  We are looked for a principled answer and is it because it would simply be unreasonable to impose a duty and consequential liability for taking what would be perfectly lawful conduct but for the particular susceptibilities of the person who in the end suffers the shock – we will call it shock – or is it some other principled reason in ‑ ‑ ‑

MR MULLANY:   No, it is that reason, your Honour.

GLEESON CJ:   It would be an intolerable limitation on personal autonomy to make people liable in tort, in those circumstances.

MR MULLANY:   Intolerable.  Correct.  That would be the principled reason if one was persuaded that an additional control was needed.

McHUGH J:   But the other side of the coin is that you are then discriminating against vulnerable people. 

MR MULLANY:   Therein lies the difficulty, your Honours.  In Bourhill v Young when the case was in the Scottish courts, the observation was made that in many cases it would be foreseeable that particularly vulnerable people may be out and about and, as your Honours know, in this area there have often been references to pregnant women who were the claimants in this sort of litigation and they were inappropriately referred to as particularly sensitive and vulnerable.  The suggestion in that case was made and in other footnotes on pages 226 to 227 of “Tort Liability for Psychiatric Damage”, it was suggested that it was plain that persons within that group would be out and about and if they were not protected by the common law, it would be tantamount to asking them to remain indoors.  Therein does, we accept, a difficulty lie.

GLEESON CJ:   Now, Mr Mullany, we are about to adjourn.  This case is going to finish at 4.15 tomorrow or earlier.  How long do you expect to require for the remainder of your argument?

MR MULLANY:   I will be less than an hour.

GLEESON CJ:   We would expect counsel to agree between themselves on a reasonable division of time tomorrow and if you are unable to make that agreement, we will engage in some alternative dispute resolution.  We will adjourn until 10.15 tomorrow morning.

AT 4.19 PM THE MATTER WAS ADJOURNED
UNTIL WEDNESDAY, 5 DECEMBER 2001