Edwards & Anor v Olsen & Ors

[2004] HCATrans 299

[2004] HCATrans 299

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Adelaide  No A259 of 2003

B e t w e e n -

RAYMOND ARTHUR GEORGE EDWARDS and DEEP SEA ARK (AUST) PTY LTD

Applicants

and

A.M. OLSEN, H.P.C. TRUMBLE, JAMES C. McCOLL, IAN R. KIRKEGAARD, RICHARD A. STEVENS and THE STATE OF SOUTH AUSTRALIA

Respondents

Application for special leave to appeal

HAYNE J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT ADELAIDE ON THURSDAY, 12 AUGUST 2004, AT 10.45 AM

Copyright in the High Court of Australia

MR K.V.BORICK, QC:   If the Court pleases, I appear for the applicant.  (instructed by the applicant)

MR C.J. KOURAKIS, QC, Solicitor-General for the State of South Australia:   If the Court pleases, I appear with my learned friend, MR M.I. BELL, for the respondents.  (instructed by Crown Solicitor’s Office South Australia)

HAYNE J:   Yes, Mr Borick.

MR BORICK:   Your Honours, at page 446 of the application book, paragraph 14 there is a reference to a submission we made, and I will just put it to the Court that no explanation was provided as to why the interests of justice were better served by permitting the formal admissions on which a Full Court had based specific findings and on which the applicants had based their case, should be cast aside on the basis of the alleged professional incompetence of their lawyers. 

I would like to use part of my time this morning to expand on that submission in order to demonstrate, if I can, how the special leave questions that we say are raised, or are said to arise, actually do meld together.

HAYNE J:   Let me go back to two propositions.  First, is the essence of the plaintiff’s case, that had the statutory regime been administered properly, they would have stood to earn more money than, in fact, they did?

MR BORICK:   Yes, your Honour.

HAYNE J:   That was a claim in tort.

MR BORICK:   Yes, your Honour.

HAYNE J:   One wonders how a claim in tort would yield damages that would put the plaintiff in a position of that kind.  Not that they would be recompensed for what they had lost, but they would be put in the position they would have been in by earning more money.  A rather large and novel proposition, I think.

MR BORICK:   The proposition always advanced by the plaintiffs was that, given the nature of his work, the abalone industry, which was dangerous work, having to dive alone with all the attendant dangers, that it had a limited lifespan in it.  He sought, as did many other divers, to be able to use other systems, including trusts, to be able to make maximum use of their skills and their knowledge, for example, skills as to where the abalone were in the wild, how to collect them and certain such other matters.

HAYNE J:   The second proposition is this:  you do not seek to challenge, at least directly, the Full Court or the primary judge’s conclusion that the claims were statute‑barred and there should be no extension of time.  If that is so, how do we ever get to any of the issues that you would seek to agitate?

MR BORICK:   These claims are not statute‑barred because the trial judge said no representations were made.  If that is the case, then there will be nothing to worry about.  But representations were made and they were made in September/October 1980, well before the time limits ran out, so that that point has never been decided and still hinges upon the overall submission which we make here, and obviously the priority submission, that the judgment was attended by a bias.

I would like, if I may, to briefly expand on the submission that I had opened with, that the special leave questions which we say arise do, in fact, meld together.  They meld together in this way.  Firstly, there is a conflict between ‑ ‑ ‑

HAYNE J:   Just go back to this question of statue.  Page 178, paragraph 1010:

In the case of Mr Edwards, the dismissal is on the ground that his proceedings are statute barred.

MR BORICK:   Yes.

HAYNE J:   Yes.

MR BORICK:   Yes, and that has arisen out of his Honour’s findings of fact as to whether or not the statements were made with regard to no trust.  Once it is established that the applicant was told he was not allowed to have trusts, his evidence was that he was told that by the last director, Mr Stevens, in September/October, then the judge’s findings are flawed, right along the line.  The starting point always and the whole issue in this case is whether these representations which we have just been talking about were made.  The trial judge in the court below, in effect, got rid of those by utilising the principle that formal admissions made equated to statements of fact in pleadings and could be set aside in the interests of justice.

Our first major proposition is that that proposition is in conflict with Bass and Hoysted and also the principle of finality, and that for this Court to set aside established law which controls the orderly conduct of civil litigation simply based upon a broad generalised proposition, which I can see no real support for in the law, that the interests of justice can – whatever that expression means, in my submission, is something that this Court should in a sense take on board.

Second, and arising out of the same issue which is the core issue in this case, there is a conflict between the statements or the standards which are normally expected of lawyers conducting important litigation and the standards which were described in this case.  They were described, not by the applicant, by the trial judges, as lawyers playing games, hedging their bets or preparing documents in a scatter gun fashion.  That again, your Honours, in our submission, raises an issue and that should attract the attention of this Court because if, in fact, formal admissions made in a case stated document which was carefully prepared, considered by the Full Court and findings made on that, can simply be set aside on the basis of “My lawyers didn’t get it right” is a proposition again attracting, in our submission, special leave.

HEYDON J:   But leave is commonly given to withdraw formal admissions because some mistake has been made by the legal adviser who made them.  Is that not so?

MR BORICK:   But the principles in Bass, Hoystead and also the policy of finality say no to that, but you have to take a much larger step than just simply say, “Well, look, a mistake was made”, or to rely on something as I have expressed as nebulous as the interests of justice.  Can I put my point another way, which I have not put in the outline, that there is a conflict between the specific proposition that a court can use its inherent jurisdiction to set aside findings, including the sort of findings in this case, if those findings were based on fraud or deception or procedural unfairness, and using procedural unfairness in this case to include incompetent legal conduct by the practitioners. 

There you have a specialised proposition or principle in which the Court would be asked to use its inherent jurisdiction to say there has been a procedural unfairness, and that would have to be proved.  That has to be contrasted with this generalised proposition that you can just set aside formal admissions, of the sort in this case I am referring to, in the interests of justice.

We move from those three conflicts to look at the manner and way in which those conflicts which did exist in this case – the judge had to deal with the principles in Bass and Hoysted, he had to deal with legal conduct and he had to deal with how to set aside these formal admissions, and in the manner and way in which he was able to do that, that did indicate a bias.  In particular, the trial judge had made the decision to disregard what he called the so-called admissions before the lawyer affidavits were ever filed and before any cross-examination of the director defendants on the critical issues.

Against that background, I would like to take your Honours to a passage in the reasons of judgment of Justice Mullighan, starting at page 270, paragraph 194.  His Honour summarises the evidence which was presented to enable the trial judge to work out the circumstances in which the case stated was prepared and started by pointing out that:

Evidence was placed before the learned Trial Judge that the draftsman of the Case Stated, a solicitor employed by the Crown Solicitor, took the view that it should focus on legal questions and that it should not be necessary to deal with factual matters.  He did not seek instructions from the respondent directors.

I will not read the rest of that, but the fact of the matter is that this evidence, the affidavits, only were put into the case during the course of, in effect, the final submissions, it was after the case had closed, but his Honour had clearly made up his mind before that.  Then, in the rest of that paragraph, his Honour Justice Mullighan deals with the fact that each of the director defendants said that they had not given any instructions, which even the trial judge was to say at some point during the argument that that was a pretty extraordinary proposition.

Then, your Honours, at page 271, paragraph 197 – I would like to concentrate on this paragraph.  His Honour started by saying:

It is well established that a party may not be bound by statements of fact in pleadings if to do so would defeat the interests of justice.

Accepting that for a moment, then his Honour went on to say:

There is no reason to take a different view about facts set out in a case stated.

Now, we were not talking about facts set out in a case stated here; we were talking about admissions.  He then said:

No authority was cited to us by Mr Borick, Mr Bell or Mr Murphy to suggest that the factual matters set out in the Case Stated were binding on the parties.

In fact, his Honour was incorrect there.  He was correct in the sense that neither I, Mr Bell nor Mr Murphy cited authority, but Mr Edwards in his arguments had cited Bass and Hoysted and they were before his Honour and the court below.  Justice Mullighan went on to say that:

In my view, the admissions set out in the Case Stated stand no differently than a statement made by a party out of court.  It may be used by the cross-examiner to impeach the credit of the party as a prior inconsistent statement if that is the case and, if accepted by the party that it is true, may be used like any other admission as evidence of the truth of the matter.

His Honour is giving a different reason there, he is turning to the laws of evidence.  I would respond to that by saying that lawyers in their day‑to‑day tasks, particularly when cross-examining, are always in a sense making admissions when they put instructions.  If those instructions are put and are put carelessly and the litigant listens to it without doing anything about it, it causes great difficulty for someone to reopen.  With respect to his Honour’s reference to these admissions becoming similar to statements made out of court, I would submit to this Court that is not an accurate description of them.  Justice Mullighan then went on to say that:

It is not like an admission in pleading which has the consequence that the admitted fact is not in issue.

I find it difficult to understand when his Honour refers to an admission in a pleading and admitted fact just what the distinction he is making there.  Turning to page 272, at paragraph 202 Justice Mullighan observed that:

Obviously the learned Trial Judge concluded that, in all the circumstances, if there was any difference between the facts stated in the Case Stated and those found by him upon consideration of all of the evidence, the latter should be preferred in the interests of justice.  I agree with that approach, particularly when, as in the present case, there is an adequate explanation for any inconsistency.

With respect, your Honours, there was no adequate explanation for the inconsistency because if the adequate explanation is, and it must be, that his Honour had heard evidence from the director defendants, had heard them cross-examined and had heard evidence as to the exact circumstances of how the case stated document was drawn up, then that may explain it, but he did not.  If I now may take the Court to page 341.  I am looking at paragraphs 490 to 492, there his Honour says:

The next question is whether the legal practitioners should have been called.

Your Honours will remember what I told you, right at the very end these affidavits were put in.  The affidavits simply said, “Look, we can’t remember what we did”.  His Honour then went on to say:

Their evidence was only within their own knowledge and was consistent with the evidence of the respondent directors.

With respect, they are consistent in that the director defendants were saying, “Well, I don’t remember giving instructions”, and the lawyers saying “Well, we don’t remember getting any”.  His Honour went on to say:

It is unlikely that cross-examination would have weakened or destroyed their evidence or that their presence in the witness box would have caused the learned Trial Judge to doubt their evidence.

Again, with respect, I have to disagree with his Honour that these were critical witnesses, and it was not either for the trial judge or the court below to make a judgment on what would have happened if, in fact, they had been called to give evidence and had been cross-examined.

So, in the overall result, your Honours, this case is not to do with the interpretation of the Fisheries Act or regulations, the legislation.  It is not to do with the time limits.  It is to do with one fundamental proposition that the admissions were made and they were formally made.  I have put my argument in both the written material and what I have just said to you as to why they should not have been set aside “in the interests of justice” and that that is something that this Court should look at. 

I have attempted to demonstrate to your Honours that this is not a series of questions, a series of scatter gun questions, if you like, that are said to arise in the case.  They do meld together, they do link together, because as you move through the problem the trial judge had with Bass and Hoysted, the problem he had with lawyer conduct, and then to arrive at the principle and to see that he then made up his mind well before he had heard the evidence, then our case on – and it is a fundamental part of our special leave application – our case on bias and that this Court should look again at the broad principles expressed in Johnson and Ramadan, the cases that this Court should look to see whether there is a real distinction between the reasonable observer looking at this and the reasonable observer who has a clear and well‑developed understanding of the legal principles involved in the laws of evidence, and for the other reasons that are put forward, including what I will call Justice Callinan’s point dealing with the trial judge’s involvement which, if we get leave, it will be developed as with all these points.  But for those reasons, the applicant says that he has made out a case for this Court to consider and that special leave should be granted.

HAYNE J:   Thank you, Mr Borick.  We need not trouble you, Mr Solicitor.

There is no reason to doubt the Full Court’s conclusion that, because contentions of actual or apprehended bias on the part of the primary judge would fail, leave to amend the grounds of appeal to that court to raise such matters should be refused.  Nor is the actual decision of the primary judge, that in the particular circumstances of the case the respondents should be at liberty to controvert some admissions made in connection with the statement of a case for the opinion of the Full Court, a decision attended by doubt.

In any event, the applicants seek to make no direct challenge to the primary judge’s conclusion that their claims were statute-barred and that there should be no extension of time.  It follows for these reasons that special leave must be refused and refused with costs.

AT 11.06 AM THE MATTER WAS CONCLUDED