Glass v The Commonwealth

[2004] HCATrans 106

[2004] HCATrans 106

IN THE HIGH COURT OF AUSTRALIA

Registry  No C7 of 2003

B e t w e e n -

ERIC DONALD GLASS

Applicant

and

THE COMMONWEALTH OF AUSTRALIA

Respondent

Application for special leave to appeal

McHUGH J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 2 APRIL 2004, AT 10.47 PM

Copyright in the High Court of Australia

MR E.D. GLASS appeared in person.

MR D.P. O’DONOVAN:  May it please the Court, I appear for the respondent.  (instructed by Australian Government Solicitor)

McHUGH J:   Yes, Mr Glass.

MR GLASS:   Your Honours, the current position with this much litigated matter is that the respondent no longer disputes that its 1979 advice to me was incorrect, that it was negligent in giving that advice, that a commercial opportunity was lost as a consequence and that monetary loss ensued.  The remaining area of contention of whether the court below erred in its assessment of the quantum of loss resulting in an inadequate award.  I have consistently maintained that any assessment, if carried out correctly, will demonstrate when my loss exceeded the jurisdictional limit of the Magistrates Court where this matter was initiated ‑ ‑ ‑

KIRBY J:   The jurisdiction of the Magistrates Court was $50,000.  Is that correct?

MR GLASS:   Plus interest, your Honour, yes.

KIRBY J:   And you have secured a judgment of $39,000-odd.

MR GLASS:   Of $25,000 plus interest.

KIRBY J:   And the interest takes it up to $39,000, is that correct?

MR GLASS:   The interest is on the $25,000, your Honour, making up the total of $39,000.  The difference between the two is the amount of interest up to judgment that was awarded.

KIRBY J:   The margin of difference is not all that much in money terms.  You have had a considerable success in the Court of Appeal below.

MR GLASS:   If the maximum award is made of $50,000 the interest on that, particularly if it is backdated to the date I claim it should be, would result in a total award approaching about $120,000, your Honour, so the difference is significant.  I will argue that the court below has erred in law on the apprehension of facts.  Alternatively, that error can be inferred because the court below has made a wholly erroneous estimate of the component of damages.

McHUGH J:   But why do you say that, Mr Glass?  Just looking at it, this is a loss of chance case and you have a double contingency.  The difference between the $90,000, on which it was found that there was a high probability that you would earn and the $55,000 that you were earning is $35,000.  What were you deprived of on that basis, two years four months?

MR GLASS:   Two years and 109 days.

McHUGH J:   So it is roughly something like about $81,000 pre‑tax.  Take tax out of it, you are back down to $48,000 and then let it be assumed you had a 60 per cent chance of leaving and an 80 per cent chance of earning the $90,000, the double contingency comes down to about 50 per cent or 48 per cent, so the $25,000 seems in the ballpark. 

MR GLASS:   Your Honour, the magistrate found there was a high probability these circumstances would have happened.

McHUGH J:   High probability of earning the money, did he not, and a probability of leaving.  That was my understanding.  At page 95, paragraph 21, line 7, “The salient facts were these” and then dropping down to line 12, “the appellant would probably have retired”, so that is the probability finding and then, down at line 25:

The learned Magistrate unexceptionably found that there was a high probability that [the appellant] could have commanded a remuneration package of $90,000 per annum or more.

MR GLASS:   Yes, I think the way the magistrate found that I almost certainly would have retired at that time if I had received that entitlement and certainly that is the overall impression one would conclude from his judgment.  There were no significant uncertainties.  He found there were low probabilities of any other events occurring.  But the other point, your Honour, is that at trial an argument was made that the correct assessment date was April 1996 which extends the period out to well over four years.  That was the contention put by the respondent.  That was fully argued at trial.  That was accepted that was the basis on which the magistrate made his calculations and that was the basis which was supported by the respondent at the first appeal.  It was only at the court below the respondent decided to argue the basis of the date of assessment. 

McHUGH J:   But, Mr Glass, one of the problems that you have is that there has to be something special about the case.  I mean, there are thousands of cases heard every year in Australia.  We can only hear about 70, and there has to be something special about it.  It is not enough to point to some error.

MR GLASS:   I appreciate that, your Honour.  The three questions of law that arose there were, when the court below in deciding for the March 1994 date rather than the 1996 date gave proper weight to the views of and the advantages held by the hearing magistrate because the magistrate was the one who saw the parties at trial.  The court below has mistakenly believed that I presented my case on the basis of the earlier date, that basis was a changed basis which was argued at trial and was accepted by the magistrate.  There is a very strong authority for that and that is Banque Commerciale v Akhil Holdings Ltd which I think goes back to Mount Oxide Mines of about 1916, where if the case is run on a basis different from that conducted in pleadings then the magistrate is perfectly entitled to depart from the pleadings in reaching his judgment. 

McHUGH J:   Yes.

MR GLASS:   So if the April 1996 date is accepted then the differential becomes considerably greater.  We are not talking about the - I am limited to the amount of my claim but the amount of my loss is considerably greater.  The claim represents only a fraction of the loss.  So for the respondent to now argue that the recoverable loss is limited to March 1994 is a clear departure from the course it adopted at trial in the first appeal and, as Justice Dawson said in Banque Commerciale, a case is determined on the evidence, not the pleadings, and failure to amend the pleadings to reflect the proceedings as they were conducted does not invalidate them.  The court has totally overlooked that authority in overturning the finding of the magistrate.

Further, as I understand it, in Warren v Coombes, before the court below can overturn the magistrate’s finding either error has to be shown in the magistrate’s finding or it has to convince itself that it is in as good a position as the magistrate to make a decision on that.  Clearly, the court below was not because it did not have access to the trial’s transcripts.  It did not have access to the written submissions at the trial.  It could not have been in an equal position to change the decision of the magistrate in that regard.

McHUGH J:   That is not really what that means, that statement of principle.  It is really dealing with witnesses and seeing the witnesses.  Anyway, carry on.

MR GLASS:   That was the main issue concerning the date for assessment of loss, your Honours.  The second main aspect of my appeal was the inadequacy of reasons for judgment.  If it is held that the March 1994 date should hold then there are three questions of law arising:  whether the reasons for judgment adequately explain the loss assessment process adopted by the court; whether error can be inferred because a wholly erroneous estimate has been made; or whether the court has misapplied its own finding by taking post‑1994 factors into account.

On the first of those questions, whether the reasons are adequate to work out what the loss assessment process is, your Honours will have seen an attempt at that calculation placed on the salient findings found by the court and there is a $33,000 figure there per annum compared to the $12,000 figure found by the court.  Even over a two year, 109‑day period that is a figure that is still considerably in excess of the $50,000 limit.

McHUGH J:   The problem about assessing loss of chance is this, Mr Glass, that in Malec’s Case, Justices Deane and Gaudron and myself indicated that in certain circumstances it would be better to deal with it in terms of percentages but Justices Dawson and Brennan did not agree with that.  They expressly rejected it and the view of Justices Brennan and Dawson seems to have been followed in numerous courts since, that is you just pick a figure out of the air in these loss of chance cases.  I find that very unsatisfactory, but that seems to be the generally accepted view these days.

MR GLASS:   But, your Honour, this was a case of a past economic opportunity.  There is no conjecture involved here.  The actual position is certain.  The hypothetical position has to ‑ ‑

McHUGH J:   But by definition it cannot be.  By hypothesis it cannot be, Mr Glass, it is a loss of opportunity case and you have to show what was the opportunity that you lost.  It has not happened so, therefore, the Court has to speculate and you have findings that you probably would have done this and there was a high probability that this would have happened, but it is still a matter of contingency and speculation.

MR GLASS:   Your Honour, the magistrate effectively found there was a low probability that this would not have happened.  Now, according to the Malec situation, Malec does not exclude a 100 per cent probability of it happening.  The magistrate’s findings here suggest that that probability would be very close to 100 per cent and that is, indeed, how he has found on his judgement.  I am not sure that later courts should be getting involved in assessing that probability because a magistrate is clearly in the best position to decide that.

KIRBY J:   Yes, but once you appeal you enliven the powers of the appellate court in the event that a magistrate has made an error and he refused you any damages.  You enliven their power to step in and calculate the damages for themselves, which is what was done.

MR GLASS:   I appreciate that, your Honour.

KIRBY J:   That is a sensible thing to save the building up of costs, of having to go back to another court and have the matter re‑argued there and all the costs that are not secured.

MR GLASS:   Yes, your Honour.  The basis of this appeal is the calculation.  There is no question that the magistrate got it wrong.  There is no question that the judge on appeal got it wrong.  The Full Court of Appeal has pulled a figure out of thin air.

KIRBY J:   Yes, but as Justice McHugh has pointed out, all damages calculations have to take into account various contingencies and in your case the loss of a chance added a double contingency and, therefore, it is a matter of evaluation and evaluation is a very individual consideration and so long as judges stay within the broad parameters that the courts have laid down, this Court would not really become involved in such a matter.

MR GLASS:   Your Honour, the difference between the figure that can be worked out on the basis of what the Full Court of Appeal has stated it has used for doing that calculation is a figure that is very considerably in excess of the 50,000.  There is ample room there to discount the higher figure for probabilities and uncertainties and still arrive at a figure of 50,000.

McHUGH J:   That may be, but it is not a special leave point, Mr Glass.  That is the problem.  Our time is too limited.  We have too many matters pressing on us to take on every case, particularly those concerned with calculation of damages.

KIRBY J:   As you said at the opening of your submission, this is a much litigated case.  You went to the magistrate, you lost there, you took it to the Supreme Court, you had a partial win, you took it to the Court of Appeal and you had a bigger win.  I think you have been watching The Castle.  You think you can come here and get an even bigger win.

MR GLASS:   Perhaps I could just take you to the point of superannuation, your Honour.  Superannuation is unquestionably a matter of considerable public importance.  The court below has stated that it found it impossible to work out the superannuation considerations.  In fact, none of the courts has been able to comprehend the superannuation positions put by either party.  This is a case for a lost economic opportunity.  It has never been argued by me that I have lost superannuation benefits.  That has been a case that has been put by the respondent.

There is a real question as to whether superannuation should be considered at all in this case because, whichever way the superannuation goes, I paid for it at some stage through my earnings, whether it was a transfer value from previous employment or whether it was my current employment or whether it was from the hypothetical civil employment.  Effectively, I had earned it.  It should not be a factor here.

McHUGH J:   Surely the benefit is.  You might as well say that they ought not to take into account the fact that you would have earned $55,000 in wages for the two year four month period that they specify.  It is a very different case from Espagne’s Case upon which you rely.  That is a case between one party and a third party and it was a payment to be made on a contingency.  In this particular case, if the job that you could have gone to carried with it superannuation benefits, free travel, payment of school fees, that would have had to be taken into account on the credit side and, likewise, on the debit side if the Navy paid you that sort of thing it has to be taken into account. 

MR GLASS:   Yes, your Honour, these matters were fully litigated at the Magistrates Court, but if I could just mention some points here.  Redding v Lee, of course, came out very firmly against any superannuation being taken into account against common law damages.  As I understand it, there is a new matter that has come up at this level and special reasons have to be given for your considering it.

McHUGH J:   But in Redding’s Case, once again you are dealing with action between different parties.

MR GLASS:   There are two other cases there, your Honour.  One is the case of Gee v The Commonwealth which was cited to the court below which they totally overlooked or did not consider.  There is no mention there.  There is another case of Davies v New South Wales Government where superannuation, as far as how it should be taken into account between a person and his employer were ‑ ‑ ‑

McHUGH J:   Mr Glass, judges do not, in the Full Court going to a court of appeal, say what they make of it.  They just simply say, do they not, that the question of superannuation makes it difficult to be precise or something to that effect. 

MR GLASS:   But, your Honour, there is no reason why the superannuation should be difficult on the salient points that they have enunciated.  The calculation that I have presented there is a very simple calculation based on the salient points which they said they had used for their calculation.

McHUGH J:   Yes, I know, but they were making a rough estimate of what the loss of your chance should be valued at.

KIRBY J:   It is very hard to be precise in the loss of a chance.  The courts have said that a global calculation is what should be attempted and it is hard to see how you could say you have to be mathematical or scientific.

MR GLASS:   But this is not a personal injury case, your Honour, where some judicial discretion is ‑ ‑ ‑

KIRBY J:   But the principle of damages is the same.

MR GLASS:   Yes, but the calculation here, all the factors have been quantified or they have already been decided.

KIRBY J:   But there is an uncertain element as to what hypothetically you would have earned.

MR GLASS:   As far as the civilian employment is concerned, your Honour?

KIRBY J:   Yes.

MR GLASS:   The magistrate found that to be a high probability in my favour.  All the factors, he found, were in my favour there.  For a higher court to decide that that is something around 50 per cent or even 75 per cent, seems to me a clear movement away from what the magistrate found.

KIRBY J:   But we would not be deciding anything unless we gave special leave and that depends, as Justice McHugh has said, on the case throwing up either some general broad principle of general application or some serious injustice to yourself which requires our intervention. 

MR GLASS:   I guess I would have to rely on the superannuation matter then.  I notice this Court - Justice McHugh was present - refused a special leave application from Roads and Traffic Authority v Cremona way back in September 2002 where it was pointed out there was considerable dissension in the courts as to how superannuation should be assessed and valued.  This is a classic case where that has happened.  It may be time to address that finally because if this case is allowed to stand it is going to introduce another conspicuous legal anomaly regarding superannuation which is going to cause even further confusion in courts.

KIRBY J:   I know this is very important to you and you have put forward very good submissions, if I can say so, better than some we get from very experienced counsel, but the fact is that the difference, the marginal utility of the appeal in your case is very small in money terms.  If we were to take on the superannuation issue in damages we would normally do so in a case where it really had a lot of consequences and, therefore, general application

and that is the problem in your case, it does not really present that element of persuasiveness to bring the case up.  At the most, you could only get 50,000 because you consented to the jurisdiction of the magistrate.

MR GLASS:   I put a ceiling on that because I was hoping that a settlement would be arrived at a far earlier stage than this.

KIRBY J:   Yes, hoping for a settlement from the Commonwealth is often not fulfilled.

MR GLASS:   The other point I would make if I could briefly, your Honour, is that there are possibly others affected by this judgment.  There are other New Zealand ex-servicemen who have joined this scheme during the period when this erroneous policy was practised.  There could be a large number.  There could be a large number from the UK ‑ ‑ ‑

KIRBY J:   That would depend very much on what they were told, whether it was found that there was negligence and the facts and circumstances of the particular case, what was represented to them.

MR GLASS:   Indeed, your Honour, but as I understand it the respondent has made no attempt to advise those people that it changed its policy and maybe they have a ‑ ‑ ‑

McHUGH J:   Yes, I think your time is up.  Thank you, Mr Glass.  We need not hear you, Mr O’Donovan. 

The applicant has enjoyed a measure of success in the Court of Appeal of the Australian Capital Territory and in the Supreme Court of that Territory.  Moreover, at least by this stage, the Commonwealth does not contest the basic elements of the cause of action on which the applicant sued, namely, that he was given negligent advice as to his accrued retirement benefits by those for whom the Commonwealth is liable.  It follows that the issue is now one of the calculation of damages. 

The Court of Appeal awarded the applicant a greater sum than that awarded by the judge in the Supreme Court.  However, the case concerns the valuation of the loss of a chance.  That chance included a double contingency in this case, namely, whether the applicant would have left the service in which he was, and, secondly, as to the amount of remuneration that he would have received outside the service.  We are not convinced that any general principle concerning the law of damages is involved or would be elucidated if special leave were granted. 

Mr Glass contended that there was an important point of principle concerning superannuation and he referred to remarks of mine in Roads and Traffic Authority v Cremona (13 September 2002), in a special leave application, concerning the approach of courts to this matter.  However, it seems to us that questions of superannuation are rather peripheral in a case such as this, which is concerned with a lost chance.  What the Full Court said about it was: 

“It is impossible, by reason of superannuation considerations, to make other than a very rough estimate of this differential but, on a conservative after‑tax basis, about $12,000 pa does not appear unreasonable.”  (Glass v Commonwealth [2003] ACTCA 8 at [23].)

Submissions concerning superannuation, as to how they should be calculated in, say, cases of personal injury, are rather remote from the issues involved in this case; nor do we consider, given the nature of a claim for damages for loss of a chance, that a miscarriage of justice has occurred in this case. 

Finally, the applicant complained about the suggested inadequacy of the reasons of the Court of Appeal.  We do not consider that there is anything in this point, given the nature of the issues, that would justify the grant of special leave to appeal.  Accordingly, the application is dismissed. 

Mr Glass, you ask that no order as to costs should be made, but it is very difficult to see how we could accede to that particular application, much as I sympathise with your position.  You have had a long fight to justify your situation today, but I am afraid the ordinary order is that there is an order for costs against an unsuccessful applicant.  The application is dismissed with costs. 

The Court will now adjourn to reconstitute. 

AT 11.15 AM THE MATTER WAS CONCLUDED