CGU Insurance Ltd v AMP Financial Planning Pty Ltd
[2006] HCATrans 534
[2006] HCATrans 534
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Melbourne Nos M127 of 2005 and M89 of 2006
B e t w e e n -
CGU INSURANCE LIMITED
Applicant
and
AMP FINANCIAL PLANNING PTY LTD
Respondent
Applications for special leave to appeal
KIRBY J
HAYNE J
CALLINAN J
TRANSCRIPT OF PROCEEDINGS
AT MELBOURNE ON FRIDAY, 29 SEPTEMBER 2006, AT 10.17 AM
Copyright in the High Court of Australia
MR A.J. MYERS, QC: May it please the Court, I appear with MR C.M. CALEO for the applicant. (instructed by Deacons)
MR N.J. O’BRYAN, SC: If the Court pleases, I appear with MR P.D. CRUTCHFIELD for the respondent in both applications. (instructed by Minter Ellison)
KIRBY J: Yes, Mr Myers.
MR MYERS: As my learned friend said, there are two applications for special leave, your Honour. In the earlier application, that is, M127 of 2005, there is also an application to amend the application for special leave. We see that that is opposed, but our friend’s outline of argument is directed to the two additional questions that are mentioned in the amended application.
KIRBY J: Mr Myers, can I just raise a point with you, only for myself, and that is this. On one view the matter that you want to raise is interlocutory to the substantive issues in the proceedings between the parties. If you could convince me that you lost forever points that could be determined by this Court now or that that determination would substantially shortcut what would otherwise be the conclusion of the substantive argument between the parties, then I think you would not have me with you, but I would want, for my own part, to be satisfied that you would be locked out of some points if we were to refuse special leave now that otherwise in the normal way you could bring up after a trial.
MR MYERS: At least, your Honour, in relation to the issues of construction, we are locked out forever if we do not get leave.
HAYNE J: Construction of what?
MR MYERS: Of the policies, your Honour. There were three questions about the meaning of the policies – without going into them, that does not matter really – and the learned trial judge decided them adversely to my client CGU. There was a cross‑appeal in relation to these three questions and the Full Court did not deal with the three questions. As we say, they mistakenly thought that they only went to questions of costs. They did not go to questions of costs; they went to a point of substance. But the Court of Appeal refused to reopen their decision when we made an application for them to do so to deal with the points of construction.
Now, if the matter goes back to the trial judge, as has been directed, then he has already decided those questions against us. There is no way of raising them again.
KIRBY J: I realise that, but, as I understand the principles, every interlocutory point which is raised on the way to a final decision is available to be taken at a higher level of appeal in the event that you finally are discontented with the outcome at the trial. In other words, you save up your interlocutory points and you can come here if you are still discontented or, for example, if the matter is not settled or goes away and that that is a reason why appellate courts, and especially this Court, are rather loath to give leave on matters which are interlocutory to the substance of the matter.
MR MYERS: Well, your Honour, I am not wanting to argue against the position of my client, however ‑ ‑ ‑
KIRBY J: Is that not the correct legal principle? I think this Court has said it many times.
MR MYERS: Well, with respect, it is not strictly interlocutory because there has been a final decision by the learned trial judge on these questions of construction and ‑ ‑ ‑
KIRBY J: Yes, but that is ancillary to the way you conduct the trial and therefore ‑ ‑ ‑
HAYNE J: It was judgment for one party, was it not, at trial, Mr Myers?
MR MYERS: Yes, there was judgment for one party and that was overturned.
HAYNE J: It was judgment at trial?
MR MYERS: Yes.
HAYNE J: Appeal?
MR MYERS: Yes.
HAYNE J: Limited ‑ ‑ ‑
MR MYERS: Remitter.
HAYNE J: ‑ ‑ ‑ issue on retrial? It is not evident to me it is interlocutory.
CALLINAN J: Mr Myers, can you tell me what the position was on the estoppel? Has there been a conclusive finding against you on the estoppel issue?
MR MYERS: There has not been probably, although by the ‑ ‑ ‑
CALLINAN J: I must say I thought there may have been the way I read it.
MR MYERS: Well, the terms of the remitter require the learned judge to deal with the estoppel in a certain way which is inconsistent with the way in which he dealt with it. So to that extent there has been a final decision against us, but the matter of estoppel has not been finally determined.
CALLINAN J: But in a different and more limited way from the way in which ‑ ‑ ‑
MR MYERS: A completely different way from the way in which it was pleaded and the way in which the learned judge dealt with it.
HAYNE J: And with retrial of evidence or without?
MR MYERS: Well, it is not clear, your Honour. We will be saying, if it comes to the point, there is no fresh evidence. It was not a matter that was raised before the Full Court and it has just been sent back to the trial judge to do some things that it is said that he did not do – incorrectly I might say. He did do them, but it is said that he did not do them – at the trial. So we would say no fresh evidence.
But to put not too fine a point on it, the matter is a mess and it is a mess essentially because the respondent at the trial pleaded the particular estoppel, then said in its opening that it was not proceeding with it – I am sure it is not contested; it is clear in the court books – then had a change of mind. The estoppel that was argued before the trial judge maybe went outside the pleadings. We vociferously said that the matter should be dealt with just according to the pleadings. The trial judge dealt with it more or less according to the pleadings. He framed the estoppel more or less according to the pleadings. But then when it came to the Court of Appeal they dealt with the estoppel in a completely different way. One sees that from the terms of the remitter on page 274.
HAYNE J: It seems to be treated as though it has been a trial of separate issues at first instance, which it was not, as I understand it.
MR MYERS: It was not, your Honour.
HAYNE J: It was trial of action which led to judgment and which is overturned on appeal – you would have it wrongly overturned – then remitted as though it is a trial of separate issues.
MR MYERS: I accept that, your Honour.
CALLINAN J: Mr Myers, something I should have said at the outset. I have a very modest shareholding in AMP. I do not know whether that makes ‑ ‑ ‑
HAYNE J: I too am the beneficiary of the demutualisation.
MR MYERS: I am sorry to hear they are modest, your Honours. We have no objection.
KIRBY J: Alas, I do not.
MR MYERS: The other issue is this entire question of what the evidence stands for because again, as is clear from the materials, counsel for AMP said that AMP was not tendering this enormous body of documents that related to internal investigations about the claim for proof of any of the facts contained in it. The remitter requires the trial judge, apparently, to look at this evidence as though it is in for the truth of the facts contained in it, and that is completely opposed to the way in which the trial was conducted.
HAYNE J: Can I follow out two aspects of it which I am sure diverts you from the argument. One, where do I find the final order of the Full Court remitting and then, secondly, which may not be unrelated to that apparently innocent question, why do we need both applications? First, where do I find the final order?
MR MYERS: The final order, 292. Well, my learned junior is saying 287 and he is correct in that too.
HAYNE J: All you have is matter remitted.
MR MYERS: But they never set out, your Honour ‑ ‑ ‑
HAYNE J: It is not immediately apparent to me what that means.
MR MYERS: Well, your Honour, you have to go to page 274 to see what it is intended by that. It is not part of the order, but it is stated in the conclusion of Justice Emmett:
The appeal should be upheld . . . The matter should be remitted to the primary judge for further consideration, in the light of these reasons, of the following questions in relation to each of the investor demands referred to in the S.C. Schedule:
.whether AMP was induced by CGU’s conduct to assume that, if it settled that demand on reasonable terms, it would not be required to establish by admissible evidence that it was legally liable –
and so on. There were four issues and they are not set out in the order, your Honour.
HAYNE J: We do not know whether that is retrial or not?
MR MYERS: No, that is so. Now, why are the two special leave applications ‑ ‑ ‑
KIRBY J: Now, can I just ask you again, if it were the case that you were not closed out from these arguments but remitted to trial, inconvenient and perhaps costly and time consuming though that would be, had the right to save those points up for determination ultimately by this Court if you were still discontented, would that not be a more efficient way for this Court to become engaged with this matter than to take up a disjoined issue at this stage prolonging the skirmishes as distinct from dealing with the matter totally in the end?
MR MYERS: Well, if we are entitled to appeal to this Court, then this Court will be able to dispose of the matter entirely upon our arguments.
KIRBY J: Yes, but that is if it favours your submissions, but if it does not favour your submissions, it has to go back to the remitter anyway.
MR MYERS: Yes, it would.
KIRBY J: Then some new points may arise in the remitter and the proceedings in the Federal Court of an evidentiary or estoppel kind and then you come up the tree again and this Court’s time is taken up once again. You must admit since I first met you, Mr Myers, I have learned the danger of separated issues. I am not blaming you personally for this, but I have just grown a little wiser in age.
MR MYERS: I took it as praise, your Honour
CALLINAN J: It nearly always – it nearly always creates a disaster. I do not know why judges persist in doing it when facts of any kind are in issue.
MR MYERS: Well, I have said what I have said in answer to the learned presiding judge I think and what is convenient for this Court is a matter upon which I cannot presume to make submissions, but certainly my client desires to have this sorted out by the High Court.
KIRBY J: We understand that. The question is, is that the most efficient way for the time of this Court to be engaged given that on one eventuality it goes back and then there will be fresh issues in the proceedings at trial?
MR MYERS: Well, if it goes back, my client loses the opportunity, we say, to argue the points of construction.
KIRBY J: That is the question.
MR MYERS: And has to deal with this issue of estoppel on a basis that is incorrect, we say.
KIRBY J: No. If my understanding of the law is right that every point that is raised in the course to final judgment of all matters in contest between the parties is saved up to be advanced ultimately in this Court, then you are not put out. You just deal with it in an efficient way in the final Court of the nation.
MR MYERS: If your Honour pleases, I have the apprehension, fear that is – and I am not encouraging my opponent in saying this – that we will get before the trial judge and he will say, “I want to lead more evidence. I want to put different evidence on”, and there will be effectively another trial of one of the issues on a basis that is ‑ ‑ ‑
KIRBY J: Exactly, that is exactly my concern, that then we have a trial, a possibly enlarged trial, and then new issues, you challenging the right of the judge to do it and then you come up the ladder again and our time in this Court is taken up twice. It is not an efficient use of the Court’s time.
CALLINAN J: But you have never had a trial in those circumstances on estoppel, for example, as pleaded and you will not be able to have it.
MR MYERS: That is right. Why are there two special leave applications? Well, the second special leave application deals with issues that arise only out of the judgment of the Full Court on 8 June. That is to say, whether the Full Court was correct in refusing to determine the construction points and the Full Court refused to determine the construction points because in argument it was suggested that there should have been a notice of contention. We say that that is wrong, but even if we were wrong about that ‑ ‑ ‑
HAYNE J: The draft notice in M89 at pages 340 to 341 seems to focus upon what might pejoratively be termed simply the procedural question of whether they should or should not have reopened. Where do I find in the draft notice tendering to this Court the questions of construction or anything of that kind? That is, are we left in M89 with what is essentially a procedural spat?
MR MYERS: Excuse me, your Honour, I am just trying to find ‑ ‑ ‑
HAYNE J: M89, 340 to 341 is the draft ‑ ‑ ‑
MR MYERS: Thank you. In substance, from a certain point of view, your Honour, yes, they are procedural matters. The point of substance behind it is that the questions of construction have not been determined and will never be determined by an appeal court.
HAYNE J: But it seems to me that leaves you in this awkward position, Mr Myers: either you have a deeper, more radical complaint about what has happened in the Full Court which I do not think is presently articulated in your notices of appeal or we are left with a procedural fight and the difficulty to which Justice Kirby has referred, that issues are still alive sufficiently that, if they do emerge, they will come up to us eventually.
MR MYERS: Well, if the matter came up to your Honours, one of the questions which would be argued would be whether this issue of reasonableness is in any way relevant to any matter and, if it is, how it should have been determined by the Full Court.
HAYNE J: So your complaint, it seems to me, may be in part the Full Court’s order, if it were to be sustained, should have been for general retrial?
MR MYERS: No, your Honour. Our complaint is that the Full Court has dealt with a different estoppel than the one that was pleaded and decided by the learned trial judge, and he decided it, quite correctly, adversely to AMP. Furthermore, the Full Court have misunderstood the effect of the evidence. There is no need for a retrial because if those errors are corrected, there would have been no remitter. So in a sense we are at one level contending that the issue is that there should not have been a remitter. I do not know whether I have answered your Honour’s question, or maybe just increased puzzlement.
Certainly there are differences between the parties about the effect of the law and they were argued before the learned trial judge. Our complaint about the Full Court is simply that they have decided a different sort of case about evidence that was not before the trial judge and there should not have been a remitter.
HAYNE J: Would you on appeal, if leave were to be granted, want to say that Justice Gyles was right or wrong?
MR MYERS: We would say he was right.
HAYNE J: And complete?
MR MYERS: Yes.
KIRBY J: He, of course, took the view in the second application which was contrary to what you are submitting on us.
MR MYERS: Yes.
KIRBY J: He agreed with the order of the court in respect of which the second application is made. That was a unanimous opinion of the court.
MR MYERS: Yes, indeed. He said that the issues of construction were not before the Full Court. Now, the parties both said to the Full Court they were before the court and the only difference was whether a notice of cross‑appeal or a notice of contention should be employed.
KIRBY J: Yes. Is there anything else you want to say?
MR MYERS: No, thank you, your Honours.
KIRBY J: What do you say, Mr O’Bryan? Do you accept that all points are saved up and can be raised in any ultimate appeal to this Court, including the points that are urged on us in these applications?
MR O’BRYAN: Yes, absolutely, your Honour.
HAYNE J: So you accept that the order is order, what, for general retrial?
MR O’BRYAN: No, that does not follow, your Honour. The remitter is of the questions at paragraph 154 ‑ ‑ ‑
HAYNE J: To be determined on what evidence? The evidence called at trial or fresh evidence?
MR O’BRYAN: The evidence which the trial judge admits into evidence on the remitter, your Honour.
KIRBY J: But you must admit that is pretty unsatisfactory, because the order, which is the manner in which appellate courts speak to primary judges, is in total generality.
MR O’BRYAN: It is, your Honour, and that might be regarded as a defect in the order, but it is submitted, your Honour, that the parties are not in any doubt as to what has been remitted.
HAYNE J: Let me into the secret, Mr O’Bryan. I am in doubt. What has been remitted?
MR O’BRYAN: What has been remitted are the questions in paragraph 154 of Justice Emmett’s decision on page 274 of volume 1 of the application book in M127.
HAYNE J: Yes, and to be determined in what fashion?
MR O’BRYAN: They will be determined, your Honour, in the fashion that the trial judge determines them when the matter is remitted to him. Your Honour, it is not ‑ ‑ ‑
HAYNE J: What would your contention be now about how the trial judge might do that?
MR O’BRYAN: Your Honour, I submit that that is not an appropriate question, but because it comes from your Honour I will endeavour to answer it. We do not have the remitter yet, so we have not had the opportunity to even discuss the matter.
CALLINAN J: Where do I find the questions? I am sorry, Mr O’Bryan.
MR O’BRYAN: Page 274, your Honour, paragraph 154, “The matter should be remitted” – this is at line 25.
KIRBY J: Which paragraph are you reading?
MR O’BRYAN: Paragraph 154, your Honour, in the volume which is M127 of 2005,…..halfway down that page under the heading “CONCLUSION”. It is the paragraph that my learned friend took you to. Neither side is any doubt that this is…..these are the questions:
The matter should be remitted to the primary judge for further consideration, in the light of these reasons, of the following questions in relation to each of the investor demands –
and there were 63 of them…..
KIRBY J: But on the face of things that would be a remitter on the basis of the record, would it not?
MR O’BRYAN: Yes, highly probably, your Honour.
KIRBY J: You would not, save for exception or special reasons, be entitled to bring fresh evidence or new evidence?
MR O’BRYAN: Highly probably not, your Honour, highly probably not.
KIRBY J: Certainly within the four corners of Justice Emmett’s reasons he does not make any reference to you having a second bite of the cherry.
MR O’BRYAN: No, that is right.
CALLINAN J: But it would be subject to ordinary principles. You can make an application, either party could make an application to amend their pleadings or to have fresh evidence introduced or to ask for leave to call rebuttal evidence.
MR O’BRYAN: Absolutely, your Honour, and that is why, while I do not, of course, refuse to answer Justice Hayne’s question, I submit it is not an appropriate question on this occasion because we are not there yet. We are not back down at the bottom of this ladder and ‑ ‑ ‑
CALLINAN J: But that is one of Mr Myers’ complaints. Nobody quite knows where they are.
MR O’BRYAN: No, with respect, your Honour, we know perfectly well where we are. We have an order remitting the matter to the trial judge because of the unsatisfactory resolution of the matter in the eyes of the majority of the Full Federal Court and the questions are clear. They are in this paragraph. Whether that results in an interlocutory state of affairs or not is not really necessary to determine. It is utterly incomplete.
KIRBY J: It may be because the principle that I have expressed of being entitled to raise matters in later proceedings is a principle which is very much connected with the interlocutory character of the earlier orders.
MR O’BRYAN: Yes, but your Honour is now again well ahead of the game, with respect. Mr Myers submitted to you repeatedly, “We are shut out”. He did not give you any basis for that submission and there is none, your Honour, because ‑ ‑ ‑
HAYNE J: Why not? There was a trial and there has been an appeal and what has gone back is a very limited question: why is he not shut out from everything except the limited question that is remitted?
MR O’BRYAN: Because, your Honour, he has not raised any issue which may or may not give rise to a shut out. We have to go back to Justice Heerey. We get a decision from Justice Heerey. The loser from that decision may not appeal – may not appeal. The matter may never go forward past that point. For that reason it is entirely inappropriate, it is submitted, that the matter comes before this Court for an appeal when it may finish in a few months time at a trial in respect of which the loser does not appeal. Assuming the loser does appeal, it then goes to the Full Federal Court, someone loses there and they may not appeal. The matter again will never come before this Court. It is at this point in its history bristling with hypothetical incomplete questions and ‑ ‑ ‑
KIRBY J: That may be true, but having allowed the matter to get so far up the first step in the ladder and now into the second step, may it not be more efficient, the matter having come this far, and the point, if good for Mr Myers, being fatal to your claim, that the matter should be dealt with by this Court? In other words, is that not, given how far it has gone, a more efficient way in which the whole matter can be dealt with, at least at this stage?
MR O’BRYAN: I am sorry, to which of Mr Myers’ questions, in which appeal, does your Honour regard the matter as being fatal to our case? There is a host of questions.
KIRBY J: If he can restore Justice Heerey’s orders, then at least so much of the matters that were dealt with by Justice Heerey are concluded.
MR O’BRYAN: Well, to do that, your Honours, we would have to convince this Court that the decision of the Full Federal Court in relation to the inadequacy of Justice Heerey’s consideration of the estoppel claims raised at the trial was wrong. For practical purposes, much of that relates to matters of practice and procedure in respect of which this Court would never interfere because section 35A could not be satisfied in respect of those matter, your Honours.
Your Honour, if the point you make were true, this Court would interfere in any case in which an intermediate appellate court remitted a matter back to the trial judge and the loser in respect of the intermediate appeal would be satisfied…..have the matter immediately reviewed by this Court. It follows from the remitter that the Full Federal Court had concluded, and we respectfully submit it quite rightly concluded, that the matter was not properly addressed below. Even Justice Gyles, who was in the…..He only dismissed the appeal on the basis that he went further forward, found a point which he regarded, point 9, as conclusive against us, a point arising out of section…..of the Corporations Act, and said that is the point, you know, in respect of which I would have….., but all three judges in the Full Federal Court expressed dissatisfaction with Justice Heerey’s addressing of the estoppel claims and the evidence relevant to them – all of them.
HAYNE J: Can I just understand that. It was your appeal in the Full Court?
MR O’BRYAN: Yes, your Honour.
HAYNE J: Does it follow that those issues determined by Justice Heerey in favour of CGU remain unaffected by the appeal, save for the estoppel issue that is remitted?
MR O’BRYAN: Yes, that is right.
HAYNE J: So all that is to go back is the estoppel issue? All other issues are regarded as concluded against you; is that right?
MR O’BRYAN: Your Honour, Justice Heerey concluded the questions of construction to which my learned friend referred in our favour. So the questions that were determined against us were the questions of estoppel and the good faith question which is wrapped up in ‑ ‑ ‑
HAYNE J: The Full Court not having passed upon the construction issues, those remain alive in Mr Myers’ favour; is that right? But questions concluded against you at trial remain concluded against you on the remitter?
MR O’BRYAN: I do not think there are any such questions remaining, your Honour, because there is only the estoppel and good faith questions wrapped up in paragraph 154 and the construction questions. Those are all the questions which Justice Heerey addressed and he concluded the construction ‑ ‑ ‑
HAYNE J: Then the construction issue is at large when it goes back or is not yet determined in your favour; is that right?
MR O’BRYAN: Justice Heerey determined it in our favour and the Full Federal Court ‑ ‑ ‑
HAYNE J: There is no decision of a Full Court determining that against Mr Myers?
MR O’BRYAN: No, that is right.
HAYNE J: Therefore, if it comes up the pile again, do you accept that the construction issues are open for debate in the Full Court of the Federal Court of Australia?
MR O’BRYAN: Probably only with the leave of that court, your Honour, but, yes.
HAYNE J: Why with leave if they have not been determined by the Full Court?
MR O’BRYAN: Well, it will depend upon the nature of the appeal that emerges from any decision of Justice Heerey assuming, of course, that that decision is adverse to CGU, which it may or may not be. The decision of Justice Heerey might be adverse to us and we may not appeal it.
HAYNE J: If you will not grapple with the question, Mr O’Bryan, do not trouble yourself, but the question is clear.
MR O’BRYAN: Your Honour, in my submission, the only thing that could prevent CGU from raising and having addressed by the Full Federal Court that question would be a plea of estoppel by us, an Anshun estoppel.
KIRBY J: But in your submission, the construction issue, the good faith issue and the estoppel issue would all be alive in a later application to this Court after the remitter before the single judge of the Federal Court following the order of the Full Court as we are now reviewing?
MR O’BRYAN: Most definitely, your Honour, on the assumption that the losers appeal all the way back up the ladder again.
KIRBY J: I must admit that I thought there is Privy Council and High Court authority to that effect that is designed to prevent courts like this having to deal twice with issues, that you can save them up and come back to us.
MR O’BRYAN: At least twice, your Honours, because there is always the possibility that something else will go wrong at the trial level and the Full Federal Court might remit it again and another application for leave to appeal to this Court is made.
KIRBY J: How much is involved in this claim? It is a matter of millions, is it not?
MR O’BRYAN: The nominal value of the claims about five years ago was $3.5 million and with interest running to date – and I am handed a bit of paper that puts it at about $5 million today, in round numbers, your Honour. So it is a substantial sum for us here – well, some of us here – but not for the litigants.
KIRBY J: You are beginning to persuade me that it is a matter that we should deal with. A lot of money involved, interesting questions, insurance law that we do not look at often enough, estoppel, good faith.
MR O’BRYAN: No doubt, there are a lot of very interesting questions.
KIRBY J: The good faith on behalf of the insurer is not a matter that this Court has ever passed upon.
MR O’BRYAN: Absolutely right.
KIRBY J: And that is an interesting question.
MR O’BRYAN: But, your Honours, it would be fatal for this Court to deal with it without a proper, firm, factual foundation at the trial level and at an intermediate appellate court level. It will be a shambles, your Honours.
HAYNE J: I accept it may be a shambles, Mr O’Bryan, given the way it has been conducted, but the only issue that is going back is estoppel, is it not?
MR O’BRYAN: No.
HAYNE J: What does that have to do with ‑ ‑ ‑
MR O’BRYAN: No, and good faith, your Honour. All of the questions in 154 are going back. The utmost good faith question is amongst them. There are four matters in that paragraph: the settlements, the reasonableness of them, the reliance upon them, whether there is a breach of section 13. They are all going back.
CALLINAN J: Whose suggestion was it that there be a limited trial?
MR O’BRYAN: It was never a suggestion from anybody that there be a limited trial, your Honour.
HAYNE J: There was not, was there?
MR O’BRYAN: No, there was not.
HAYNE J: It was trial of action.
MR O’BRYAN: It was trial of action and certainly ‑ ‑ ‑
CALLINAN J: Who decided upon the questions? Are there not some questions posed by the trial judge at the beginning?
MR O’BRYAN: Justice Heerey decided them. I think they were taken…..from submissions that CGU made but you will see – if you look at the transcript…..
KIRBY J: The finger has been pointed at you, Mr Myers.
MR O’BRYAN: Well, they are seeking these questions as posed to the judge. The judge asked us to pose questions. We did.
CALLINAN J: The judge asked you to pose questions.
MR O’BRYAN: Yes, for the purposes of a complete judgment though, your Honour. It was not limited questions. It was all of the questions that we submitted the proceeding gave rise to…..He chose the list that CGU had…..and in doing so, as we submitted in the Full Federal Court, he missed out large areas of our case, including…..estoppel and we ended up…..and that was the basis of the appeal, and the Full Court agreed. Even Justice Gyles agreed…..dissented…..We also urged the court, your Honours, on the hearing of the appeal to decide the case, because all the materials before that court – we had tendered all of the 30 volumes…..at trial ‑ ‑ ‑
KIRBY J: Thirty volumes you say?
MR O’BRYAN: Thirty volumes, your Honour, but 25 or so of those 30 volumes contained all of the primary material ‑ ‑ ‑
HAYNE J: Yes, exactly. There is not that amount of discrimination which it is incumbent on parties to engage in in the privacy of counsels’ chambers and solicitors’ offices not in the courtroom.
CALLINAN J: I entirely agree with Justice Hayne. We see it time and time again, agreed books of documents, nobody has ever had a proper look at them, there has never been any assessment of relevance, admissibility, probative value. They are just completely ignored.
MR O’BRYAN: Your Honours, I looked at every page in every document. The fundamental question at this trial was, or one of the fundamental questions, were these settlements reasonable and was the principle in Unity Insurance v Rocco Pessano…..were those principles enlivened in this case, and that requires ‑ ‑ ‑
KIRBY J: There was a step before that with the insurer constantly saying, “Well, you go ahead according to the protocol, but we are keeping reserved our entitlements under the policy”.
MR O’BRYAN: Yes, a different set of issues, a different set of issues.
KIRBY J: So, if that is a good point, then you do not really get to the good faith, the estoppels and all the other points. It is a knockout.
MR O’BRYAN: No, I am sorry, your Honour, the estoppel trumps that point. The estoppel trumps that point.
HAYNE J: And what is the estoppel?
MR O’BRYAN: The estoppel is, if the insurer says to you, “Treat yourself as a prudent uninsured”, that is to say, ignore the policy, “and here is a protocol which we agree with you for the resolution of these claims. You go away with your lawyers and advisers. You investigate these claims. You do a report. Give us the report. We will come and look at these primary source documents”, which were the ones in the 24 or 25 volumes of material, “and we will make an assessment and we will instruct you whether to settle or to fight these cases”. That is exactly what happened in ‑ ‑ ‑
KIRBY J: But all of that was subject to their reserving their rights under the policy.
MR O’BRYAN: I am sorry, your Honour, it ‑ ‑ ‑
KIRBY J: How can the estoppel of general principles of law override that specific reservation?
MR O’BRYAN: Because CGU never said, until Mr Myers opened its case at trial, “We will demand you go away and settle these as a prudent uninsured…..
HAYNE J: No, it did not say, “Go away and settle these”. It said, “Act as a prudent uninsured”. It did not say, “Go away and settle them”.
MR O’BRYAN: Well, your Honour, we submitted that the proper understanding of what AMP was instructed to do was investigate the claims, do the reports, submit the material to CGU, all of which was done. CGU then would investigate itself and the instructions whether to settle or not settle…..CGU did nothing with that. It simply sat on the materials and said nothing knowing that AMP was being pressured by ASIC, by the investors themselves who were making these claims to resolve them urgently.
Now, in those circumstances, your Honours, it is submitted it was a strong estoppel case because it was never said to AMP at any point, “We at the trial of any case in which you seek indemnity in respect of this insurance policy are going to submit that you have to prove by ‘admissible evidence’, that is to say, by calling all of these people with whom you have settled, and tendering all this material in the ordinary way, the existence of the underlying liabilities and also prove to the judge on these 63 separate occasions”, because that is how many investors there were, “that you would have won a trial of an action had they brought it against you”.
KIRBY J: All right. Well, you have made that point. Keep a little time for dealing with the separate issues in the two applications, please.
MR O’BRYAN: Well, your Honours, they are very closely wrapped together.
KIRBY J: Do you agree, therefore, that we either grant special leave on both or we refuse special leave on both?
MR O’BRYAN: Yes, and you should refuse them on both because none of the principles of section 35A could possibly be satisfied in this case.
KIRBY J: You do not want to advance an argument that because of the unanimity and the issues in the second application that that is in a separate case and you would refuse on that even if you granted on the first?
MR O’BRYAN: You would do that as well, your Honours. The second case is hopeless ‑ ‑ ‑
KIRBY J: You have said two different things in the space of one minute.
MR O’BRYAN: I am sorry, your Honour, you should refuse them both.
KIRBY J: That is even a record for this Court.
MR O’BRYAN: You should refuse them both on the same principles, but if by chance you were convinced that it was appropriate for this Court to grant leave in respect of this case at the point that it has reached in respect of the first, you would, nevertheless, refuse the second. Why? Because at the hearing of the applications to reopen Mr Myers was invited expressly by the court to put on the notice of contention and he gave a clear indication to the court at the early phase of that hearing that that is exactly what he intended to do. But I refer your Honours in that regard to what is in the volume M89 at page 359 which is at the back of the M89 volume. This is
the hearing of the reopening application in June. Halfway down page 359 Justice Moore asked Mr Myers:
MOORE J: Is this right: had his Honour not discounted as it were the costs in the order he made, you would not have had a vehicle whereby you could have raised these matters by way of cross‑appeal?
MR MYERS: Well, we would have raised them by notice of contention in that event.
GYLES J: Well, why weren’t they?
The discussion goes on about a notice of contention. Now, a little later on Mr Myers was expressly invited to put on that notice of contention having given an indication that he would indeed do so. You will see on page 361, towards the bottom of the page, line 42, all still dealing with this notice of contention point:
MR MYERS: If we are at fault we do apologise to the court but we think that an error occurred here and if it be necessary we are prepared to take the blame for the error.
Then further on ‑ ‑ ‑
KIRBY J: I notice that the red light has come on.
MR O’BRYAN: I am sorry, your Honour, I will just give you one last reference.
CALLINAN J: Where is this all leading?
MR O’BRYAN: It is leading to the proposition, your Honours, that the case was conducted below in relation to this costs question on a particular basis. Mr Myers was given the opportunity, invited to put on a notice of contention which the court concluded it was necessary to put on to raise that point and it is perfectly clear, if you read the passages from this transcript, that had that notice of contention been put on, the court would have dealt with the point and Mr Myers refused to do so. So an election was made below which is binding and final and it was on that basis that that court dismissed the application and it was right to do so.
KIRBY J: Yes, thank you very much, Mr O’Bryan. Yes, Mr Myers.
MR MYERS: A few matters. First, we say in response to one of the submissions of our learned friend that the judgment of Justice Heerey was a final judgment and if the matter goes back to him, all we will be able to deal with on appeal, if there is a decision adverse to us, is what is now decided or afterwards decided by Justice Heerey.
KIRBY J: I just do not think that is conformable to the authority of the Privy Council and this Court. I think you save points up until you get to the final court and that that is conceded by your opponent and the concession is on the record.
MR MYERS: Well, I did not hear the concession, your Honour, with respect. I heard a lot of statements that were hedged about by, if this happens and if that happens, maybe this and maybe that.
KIRBY J: I did not understand – Mr O’Bryan, please rise in your place and say if you concede that Mr Myers could in a further appeal to this Court from a second decision of the Full Court of the Federal Court raise every point, including out of the first judgment of Justice Heerey.
MR O’BRYAN: He could, your Honour, he could.
KIRBY J: Yes, there you are, you have it, Mr Myers. What is your next point?
MR MYERS: Your Honour has achieved in a moment or two what I have not been able to achieve in years, your Honour.
KIRBY J: That is what you expect in this place.
MR MYERS: The second proposition that I just want to deal with, my learned friend said that Justice Gyles dealt with this question of section 819(4) on a different basis than the learned trial judge. He did not. The learned trial judge dealt with it more or less exactly as Justice Gyles did, and that appears in the judgment at court book page 179 and following. The questions that the judge framed – now, you are going to get two versions from counsel. Those questions were framed by his Honour. They were not framed by us.
KIRBY J: Yes, you do not have to go on about that.
MR MYERS: Thank you. The 24 volumes of documents, we objected strenuously to their tender. There was some argument about it and in the end Mr O’Bryan said they are not being tendered for the truth of the contents, they are just being tendered to show what happened, whatever that means, and that was the basis upon which the trial was conducted. So nothing – none of the statements in those documents constitute evidence.
KIRBY J: For the issues you would be pressing on this Court, would we have to plough through the 24 or 30 volumes?
MR MYERS: No, you would not, your Honour.
CALLINAN J: That is the point. Did anybody ever look at them during the trial?
MR MYERS: No, your Honour.
CALLINAN J: So a few hundred thousand dollars was spent in compiling books that nobody ever looked at for the purposes of the trial.
MR MYERS: The trial judge went to one of them, as appears from his reasons for judgment in paragraphs 23 to 26, just to demonstrate that issues of section 819(4) were not dealt with. So in that respect ‑ ‑ ‑
CALLINAN J: What I said is right.
MR MYERS: Yes.
KIRBY J: Mr Myers, could you help? Do you have a knockout point? In other words, if you succeed on either of these applications, is that the total end of the litigation?
MR MYERS: Yes.
KIRBY J: In what way?
MR MYERS: Because if the remitter should not have been made, then that is the end of the litigation. The only decision against us by the Federal Court is to remit probably these limited matters, these four matters, but to make a remitter to the trial judge and if that was wrong, then we win.
KIRBY J: Is that bound up in your proposition that no estoppel could succeed against the repeated assertion by you that you were relying on your rights under the insurance contract?
MR MYERS: Yes, your Honour, it is.
KIRBY J: That is a relatively short point, is it not?
MR MYERS: Certainly, your Honour.
KIRBY J: But it does raise the issue of the good faith of the insurer and upon that it was felt by the Full Court that there might be a need for more evidence.
MR MYERS: No, the Full Court did not say that, at least not in the conclusion. In the third dot point which adverts to utmost good faith, the matter is still contingent, as we understand it, on a decision that the insured acted reasonably or settled on reasonable terms. So that if either the question whether the insured settled on reasonable terms is irrelevant, which we say it is, or, as we also say, if it is not irrelevant, the insured did not settle on reasonable terms, we would succeed.
KIRBY J: Yes. The Court will adjourn briefly to consider the course it will take in this application.
AT 11.03 AM SHORT ADJOURNMENT
UPON RESUMING AT 11.06 AM:
KIRBY J: There will be a grant of special leave in each of these applications. The applications will be listed before Justice Hayne when directions will be given both as to the content of the appeal book and the future determination of the matter by the Court. The listing before Justice Hayne will be notified to the parties and the Court will expect that the parties assist the Court to deal with the matters efficiently.
AT 11.07 AM THE MATTERS WERE CONCLUDED
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