Blake by his tutor Porter v Norris

[1997] HCATrans 146

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S25 of 1997

B e t w e e n -

PAUL JONATHON BLAKE by his Tutor BRIAN EDWARD PORTER

Applicants

and

WALTER THOMAS PATMORE NORRIS

Respondent

Application for special leave to appeal

GAUDRON J

McHUGH J
GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 6 JUNE 1997, AT 10.23 AM

Copyright in the High Court of Australia

MR D.M.J. BENNETT, QC:   May it please the Court, I appear with my learned friend, MR R.F. MARGO, for the applicant.  (instructed by T.D. Kelly & Co)

MR D.F. JACKSON, QC:   If the Court pleases, I appear with my learned friend, MR C.R.R. HOEBEN, SC, for the respondent.  (instructed by Ferguson Holz)

MR BENNETT:   Your Honours, the issue in this case is one thrown up in many cases in relation to the application of Malec v Hutton:  how does one apply the loss of a chance approach to an injured plaintiff where there are a number of possible levels in a career to which he or she might have risen but for the accident?  It is necessarily an imprecise exercise.  The traditional way is that you either take the most likely career path or career level or, worse still, you take, to use an analogy from another area of law, “the best comparable” and find someone else who is the nearest to the person and then make adjustments.

The other way and the way which, we submit, is in many cases, such as this one, more accurate is to take a weighted average approach.

GAUDRON J:   But you are taking a weighted average of best chances, are you not?  I mean there is many a slip between cup and lip. 

MR BENNETT:   But his Honour dealt with that, your Honour.  His Honour worked out the categories, then applied a conservative standard to each category.  His Honour recognised that the boundaries of the categories were not bright lines and he recognised that there were - - -

GAUDRON J:   That sounds very imprecise.  You are talking about an exercise in compounded imprecision, are you not?

MR BENNETT:   No, your Honour, one is reducing the imprecision.  Perhaps I can start at a different level.  Suppose one has the very simple case of a senior year law student whose career is destroyed by injuries, and that law student had not decided whether to be a barrister, a solicitor or a government solicitor, those being the three basic careers open, and assume that one can assign a percentage chance that each one would have been done.  Surely that is a better approach than to say the most likely - - -

GAUDRON J:   From the general population?  You would have to assign that chance from the general population of graduating law students, would you not?

MR BENNETT:   No, your Honour.  One would look at what the person’s intentions were, what the person’s - - -

GAUDRON J:   By definition, you say, he has not one; he has not decided.

MR BENNETT:   Your Honour, one would look at the various factors which made it more or less likely that the person would decide one or the other. 

GAUDRON J:   Might have decided to go off to some third world country or some remote Aboriginal station to do good work.  It has been known.

MR BENNETT:   That is possible too, your Honour, and one would take that into account, and one might have a number of categories.  The same thing applies in the public service, if a junior public servant is injured or a middle-ranking public servant and one does not know what level he or she would have reached.  We submit that the best way of doing it, where one does have reasonably finite categories, is to apply a weighted average.  If one looks at what happened in this case, the categories were reasonably clear.  There was first the category of superstar which was small and reasonably identifiable number of people; there was the considerable US success, which was colloquially called, the “brat pack” which was also a reasonably clearly identified group of actors:  like the tennis circuit, one knows who is on it and who is not.  One can list them and one can work out the average incomes there.  Then the third category was merely a United States career with a moderate level of success.  His Honour rejected the categories of United States’ career below that as being less than 1 per cent.  The fourth category was Australian career, which was clearly a finite division.  It might have been one; it might have been the other.

Now, within those four, his Honour worked out the range of incomes, took a conservative view.  His Honour heard very considerable evidence on the percentage chances of each of those different careers being followed, and this was evidence, your Honours, from people whose job depends on selecting actors.  The Court of Appeal said that is necessarily a hopelessly indeterminate thing to do.  But these are people who have made their living by doing that and have done it successfully.

GAUDRON J:   And I suppose, have failed once or twice.

McHUGH J:   That is not quite accurate, is it?  I mean, they have not made their living forecasting who will fall into one or other category.  It is just a guess on their part.

MR BENNETT:   Your Honour, the evidence was that it went further than that.  It is a guess in one sense, in the sense that even a legal opinion may be a guess, but these were people, theatrical agents, who selected and introduced actors to producers who want to make films and who find the right person and if they do not find the right person, if they find the wrong person then there is a great mistake, their income suffers.  They are people who have done it successfully for many years.  There was pages of evidence of this.

McHUGH J:   Yes, I know, but the point I am putting to you is that they select among the available talent but who knows what the available talent is going to be in two years, three years, five years, ten years time?  One sees it in sport in particular:  there are budding stars coming along, they are the next Sampras and then a year later they are 150 in the rankings.

MR BENNETT:   Your Honour, one of the problems is that both sport selection and acting selection is something which the community has views on and therefore tends not to see and there is perhaps a degree of expertise involved that is involved but there is a very high degree of expertise, and that was the evidence and that evidence was accepted.

McHUGH J:   But is there expertise in forecasting who will become a top star, who will become a second star.  One only makes a guess.  Nobody makes a living at it.

MR BENNETT:   Your Honour, one does if one is finding actors for films and one is an agent who is representing them deciding who one will represent, what - - -

McHUGH J:   Exactly.  One has a film to make and there are available American, United Kingdom, Australian actors and they select the person they think the public will like but that is a different thing altogether for somebody to say, “Other people who make films, which at the moment we do not know but will be made sometime in the future, are going to select this particular actor and the public is going to like this particular actor” so the process will continue on.

MR BENNETT:   Your Honour, they knew the available talent at the time which is the basic initial competition in the relevant age group.  One of the witnesses was one who had found and selected Mel Gibson and Nicole Kidman and who said this is someone who is in the same category.  Even Foster Joy’s case, even Clark v Ryan recognised that, under the old tests, one can have experience which justifies expertise.  The mere fact that one is predicting something does not mean that it is not a matter of expertise.  A very large number of professions, including medicine and law, involve predictions, involveing looking at the factors and forming a view.

Your Honours, in my respectful submission, it is as much an expertise as anything.  His Honour accepted it as such and accepted all the evidence of it.  What the Court of Appeal says is, “We know that acting is something which is totally unpredictable and we know from - - -”

GAUDRON J:   But it is in some respects.  What about the Hugh Grant factor, for example?

MR BENNETT:   Your Honour, there was 15 per cent allowance for vicissitude - your Honour, that might improve one’s career.

GUMMOW J:   I think you have taken the point, Mr Bennett.

MR BENNETT:   There was a 15 per cent allowance for vicissitudes, and that is analogous to - - -

McHUGH J:   But you have also to look at technology.  One does not even know whether this industry will be the same in 10 years time with the modern technology.  In 1920, you might have said of John Gilbert, the silent movie star, that he would have this wonderful career for the next 25‑30 years.  They bring in talkies; he is a total failure.

MR BENNETT:   One does not know that with a steel worker either, your Honour.  One does not know it with any person practising any occupation but those are things one takes into account.  The point I ultimately make is this:  what one has to do is something which is necessarily imprecise.  It is more imprecise to do it the traditional way.  His Honour said, “On the facts of this case I find the best way of doing it is this.”  The Court of Appeal said, “That method is fundamentally wrong, you may not do it that way.”

McHUGH J:   I must say I am attracted to the method security analysts use all the time, forecasting profits of companies, but their Honours said that in this particular area it is just too imprecise and, at the moment, there seems to be a lot to be said for that point of view.

MR BENNETT:   Your Honour, what was said in fact went further than that.  The ratio passage is at page 112 at line 20 of the application book where Justice Clarke said:

In my opinion such an approach -

ie, a weighted average -

may be appropriate in a case where the possibilities are limited, such as occurs where the question is whether the plaintiff would suffer a later complication from his or her injury -

Just stopping there:  so, it is all right to say, “There are two possibilities or three possibilities that may occur if an operation takes place on this plaintiff.  We will therefore take the damages on each of the three and multiply each by the percentage of 100 which would be appropriate to that chance.”  That is all right but it is not all right, on the other side of the coin, where the person has a range of career prospects, and these career prospects in this case were reasonably tightly defined; more tightly defined than saying, for example, in relation to an injured young barrister, that the barrister may be a successful junior, may be a moderate junior, may not make enough money to pay his or her clerk’s fees, it is more precise than that because these were recognised categories.  Having got the categories, one was able to look at the range of incomes in those categories and work out an average.  If one has a percentage in each of those, that is more accurate than what his Honour did in the Court of Appeal.  What the Court of Appeal did was, having looked at the four percentages found by his Honour, his Honour having found 15, 35, 25 and 25 as the four percentages before the allowance for vicissitudes and so on, his Honour took the lowest of those four, the Australian career, took a comparable who everyone said was not as good an actor or did not have as bright a career prospect as he had, and then said, “We’ll add something on for the others.”, and someone who had no interest in an American career.

Now, how much more imprecise is that than saying, “Well, there’s a 15 per cent chance of this; a 35 per cent chance of this; 25 per cent chance of this” and we look conservatively at each factor and at the incomes in each group.  But the Court of Appeal goes further and says, “You must not do that.  That is a forbidden method in this type of case.”

McHUGH J:   Yes, I know, but if you look at the realities of the case, here is an actor who, with all respect, has only achieved moderate success so far, and you are talking about him earning $38 million discounted over the rest of his life.

MR BENNETT:   No, your Honour, the $38 million was in the 15 per cent chance.

McHUGH J:   No, the damages assessed totalled - economic loss was $38 million, the present value of what he would earn.

MR BENNETT:   But, your Honour, in the top class one was talking about figures of $40 million a year.

McHUGH J:   I know, but to say that he had almost a one in six chance - this actor from Australia who so far has only achieved moderate success has got a one in six chance of becoming another Mel Gibson or another Jack Nicholson.

MR BENNETT:   That was the overwhelming evidence by a number of top people in the industry who, one after the other, came and said he was on the verge of that happening.  There were inquiries in America.  He was about to have the tour.  People in America had sought him out from having seen previous films and wanted to see him.

McHUGH J:   He had a screen test, had he not, an American screen test?

MR BENNETT:   The screen test he had had related to a particular role which he did not get because he was considered too young for the leading actress but even there the evidence was that but for that factor he would have got it.  Your Honour, it is hard to summarise in 20 minutes the whole of the evidence.  This was a 29-day case.  But this was a case where there really was overwhelming evidence of his prospects and how highly he was regarded and how likely he was to succeed, and findings were made to that effect.

McHUGH J:   I know the trial judge made the findings but the Court of Appeal was very sceptical about the whole process.

MR BENNETT:   That involves the Abalos issues.  There is a real question about whether it is appropriate for a Court of Appeal in a case like this to apply that sort of scepticism based very largely on the sort of anecdotal approach which one has when one looks at this area.  But at the end of the day the verdict should not be regarded as surprising.  The figures in the second class, which was the class which he was said to be most likely to get into, the 35 per cent chance, were figures of several million a year.  The figures in the top class at the peak of his career were of the order of $40 million a year and the total allowance was significantly less than that, than one year.  This is someone who has lost from 29 for the rest of his life - obviously there is a going up period and a tailing off period but many years in the middle, and the approach taken is, “You are just not allowed to do it by taking that weighted approach.”

GAUDRON J:   I do not know that that is a fair analysis.  The analysis is made in a particular factual context.  It is made in the context in which it was thought to be speculative.  Most of the options were thought to be speculative, given the stage to which his career had then advanced.

MR BENNETT:   Your Honour, the word “speculative” is really only applying an epithet to evidence which in fact his Honour accepted which was predictive evidence.  Certainly, the degree of strength of predictive evidence is always a matter of subjectivity but his Honour made firm findings about it and the Court of Appeal simply said, “We just don’t accept all this”.  Your Honour, with respect, that is just directly contrary to the Abalos approach.  Bearing in mind how reasonably clear the categories were in this case, we would submit that one is not entitled to do it that way.  The evidence was, I am reminded, that he was at the top of the Australian film industry and the best of the group of up-coming young actors and so on.  The evidence also was that at his stage in his career, at 28, one would not expect him to have earned more up to that stage.  The evidence was overwhelming that he was on the verge of the transition to the very high incomes.

May I just deal quickly with some of the other matters.  Perhaps before doing it, may I just end weighted average by saying this, that if one has to make some sort of prediction about a future career and if there are alternatives, it must necessarily be more accurate in a case where there are finite alternatives which can be pointed to, to apply weighted average approach rather than a best comparable approach, especially where the best comparable is in a category which is less than 50 per cent.  If one takes the law student example with three major career choices, or perhaps four or five, if no one of them is more than 50 per cent, there are going to be far greater inaccuracies in taking the best comparable and then plucking a number from the air and adding it on, which is what the Court of Appeal did, than there would be by going through the exercise.  One has to do the weighted average approach to find the best comparable in any event or to find the most probable career.  One has to work out what the choices are or one cannot get there.

Now, your Honours, the second issue in the case is the Todorovic v Waller issue.  What happened there was - there is another case going through at the moment on which the Court of Appeal has reserved.

GAUDRON J:   We do not need to hear you on Todorovic v Waller at this stage.  What do you say, however, about the two non-special leave points that you identified?

MR BENNETT:   Your Honour, the Abalos issue:  we say this is a case where although lip service was paid to Abalos, with respect, it is a case which would be - where the Court of Appeal dealt with it is directly contrary to what this Court - - -

GAUDRON J:   But it would not have any life of its own, as it were, if the Court were against you on the first point, would it?

MR BENNETT:   Yes, your Honour, because accepting that the Court of Appeal rejected the weighted average approach, that would not entitle it, we would submit, to reject all the other findings for the purpose of working out the best comparable.  They did not take his Honour’s best comparable which was Nicole Kidman, they took a best comparable who was at a very different level, who was Gary Sweet.

Also, the percentage chance becoming a superstar is another example, where the witnesses gave 5 per cent, 20 per cent and 30 per cent; the judge said 15 per cent and Justice Clarke said he thought it was less than 1 per cent.  Now, that is just because of an anecdotal view that it is less than that. 

In relation to the workers’ compensation ground, that arises in any case where there is an injury caused to a third party, so by a third party which is compensable, the employer pays compensation and the employer then is reimbursed by the tortfeasor before judgment is entered.  In that situation, the question whether you make the adjustment for contributory negligence is, we submit, an important one.  It is a question of straight statutory construction.  It would take 15 minutes to argue and show your Honours what the sections say, probably on both sides, and see whether it applies or not, and we submit it is an important question.

Your Honours, it is my respectful submission that that issue is of some importance and is an issue which ought to be allowed to be argued if the other arguments go out.  May it please the Court.

GAUDRON J:   Mr Jackson, we need hear you on the Todorovic v Waller point.

MR JACKSON:   Yes, your Honour.  Your Honours, in relation to that question, the position simply is, in a sense, twofold.  One is that the issue, as my learned friend has said, is in another case in which judgment has not been given in the Court of Appeal and, no doubt, if that were to decide the issue one way or the other and the case came to this Court, this case is one that, no doubt, the result would follow from it.

The second thing is, however, that if one relies on this case as being one that itself merits the grant of special leave in relation to it, then we would submit the answer is that special leave should not be granted.  In that regard, can I take your Honours very briefly - - -

GAUDRON J:   I do not think that really is the point, is it, so much, as protecting the position if the Todorovic v Waller point is reopened.

McHUGH J:   In other words, stand this case over.

MR JACKSON:   Your Honour, so far as that is concerned, we would not object to that course.  I am sorry, I misunderstood what your Honour was putting to me.

GAUDRON J:   Am I correct in thinking that is what is required?

MR BENNETT:   Yes, your Honour, because we would seek to be heard with the appeal in that matter if it was brought to this Court.

GAUDRON J:   Yes.  But for the present moment that need not be decided so long as your position is protected.

MR BENNETT:   Yes, your Honour.

MR JACKSON:   Your Honour, assuming that is the only issue, well then, the application, so far as it relates to that, could be dealt with at that point.

GAUDRON J:   Yes, thank you. 

So far as the proposed appeal is directed to establishing that, in the circumstances of this case, damages should have been calculated by application of a weighted average, the proposed appeal does not enjoy sufficient prospects of success to justify the grant of special leave.

Leaving aside the question raised by reference to Todorovic v Waller, that is the matter raised by ground (d) in the draft notice of appeal, the other issues raised by the application are not matters which, of themselves, would attract the grant of special leave. 

So far as concerns ground (d) in the draft notice of appeal, the application should be stood over, and we apprehend to a date to be fixed rather than by reference to Rosniak in case that matter should not come.  But subject to ground (d) being stood over to a date to be fixed, special leave is refused.  The question of costs is also stood over to a date to be fixed.

AT 10.48 AM THE MATTER WAS ADJOURNED