Gray v Motor Accident Commission

[1998] HCATrans 194

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Adelaide  No A36 of 1997

B e t w e e n -

DONALD GRAY

Appellant

and

MOTOR ACCIDENT COMMISSION (formerly State Government Insurance Commission)

Respondent

GLEESON CJ

McHUGH J
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 28 MAY 1998, AT 10.20 AM

Copyright in the High Court of Australia

MR S.W. TILMOUTH, QC:   May it please the Court, I appear with my learned friend, MR G.A. BRITTON, for the appellant.  (instructed by Aboriginal Legal Rights Movement Inc)

MR S. WALSH, QC   May it please the Court, I appear with my learned friend, MR M.F. NEWELL, for the respondent.  (instructed by Finlaysons)

GLEESON CJ:   Yes, Mr Tilmouth.

MR TILMOUTH:   May it please the Court, this morning I intend to address at the start the legislation, the third party scheme in South Australia, then the exemplary damages issue and the application of Watts v Leitch, then the third party compulsory scheme and this Court’s decision in Lamb v Cotogno, and finally, the fourth matter, the issue of general damages.

Your Honours, I have prepared a bundle of legislation for the convenience of the Court in relation to the third party scheme in South Australia.  If I could perhaps - I think that has been placed before your Honours.  It is in a format which reflects, first of all, what the legislation was at the time that this case came before the Court, and behind it is the legislation, in chronological sequence, which shows the status of the Motor Vehicles Act beforehand.

If I can quickly take the Court through the material; it has been culled from various pieces of legislation.  It is an Act which, unhappily, If the Court pleases, has been substantially amended over a long period of time in a piecemeal fashion.  Your Honours, the first part of the legislation is headed, at the top left-hand corner, “Reprint No 21”, which is, as we understand it, the legislation as it applied to the case.  Can I point out some key sections to the Court, without reading them, and then go to the two key provisions 124A and 125A.  Your Honours, as I have said, it is a compulsory third part scheme in South Australia for personal injuries arising out of motor vehicle accidents. 

Section 9, your Honours, which is the first one which appears in these papers, is the duty to register a motor vehicle. Section 101, your Honours, on the next page, is included simply because it shows that any insurer, before they could be a third party insurer, had to be approved by the Minister. As I understand it, your Honours, at this time the State Government Insurance Commission, the respondent, was the only approved insurer; however, your Honours should be aware that since 1995 the third party insurance area has been privatised in South Australia by the SGIC sale Act 1995. I just give that piece of post-history, but at the time, your Honours, there was only one approved insurer, as I understand it.

GUMMOW J:   What has happened to the present respondent?

MR TILMOUTH:   As I understand it, the present respondent in many respects is no longer a corporate entity; it has been......So for our purposes, your Honour, an entity liable to judgment in this matter, if the Court pleases.  I do not think it pretends otherwise.  A new entity, new company, was created by the sale Act.

GUMMOW J:   Yes, but has the purchaser assumed by statute the responsibilities of the respondent?

MR TILMOUTH:   I beg your pardon, I missed that?

GUMMOW J:   Is there some statutory assumption of responsibility by the new body in place of the respondent?

MR TILMOUTH:   Yes, Motor Accident Corporation Commission, if the Court pleases.

GUMMOW J:   No, you are not with me.  In respect of pending actions, is there some substitution by statute of a new body to substitute for the present respondent?

MR TILMOUTH:   Not as I understand it.  Our understanding always has been that the SGIC remain liable in this case and it has never been pretended otherwise in the process of this litigation to the Court.

GUMMOW J:   Well, we have heard that sort of thing before here.

MR TILMOUTH:   At all events, if the Court pleases, section 102 creates the obligation to insure, so that dovetails with nine.  You have to have registration and insurance to put a car on the road, basically.  Section 107, if the Court pleases, at the bottom of that next page, is the indemnity provision, that is to say the approved insurer is required to indemnify, to paraphrase it, the insured person in respect of any liability which the policy purports to cover.  So, that is the indemnity provision, if the Court pleases.  Section 112, which is the next page, also at the bottom, reinforces the indemnity, again to paraphrase it, by providing that a judgment creditor, ie, a plaintiff may enforce a judgment obtained against an insured person direct against the insurer.  That is the effect of it.  So, the person who secures a judgment against an insured person need not enforce it through that insured person, it can go direct to the approved insurer for that purpose.

For our purpose, if the Court pleases, the next provision which relates to this matter is 124A, which is two pages following.  I will explain the history, the background, in a moment, very briefly.  But, 124A applied to this case, if the Court pleases.  What happened, as the Court would know, is that the driver, Mr Bransden, was originally sued, but the SGIC obtained an order under this section that it be the defendant under this section 125A, that it be substituted, and I will explain how that happens.

Under 124A(1) it provides:

Where an insured person incurs a liability against which he or she is insured under this Part and the insured person has contravened or failed to comply with a term of the policy of the insurance -

Then (aa) applies.  That was added in 1993, by the way, as you will see from the later pages:

by driving a motor vehicle, or doing or omitting to do anything in relation to a motor vehicle, with the intention of causing the death of, or bodily injury to, a person -

et cetera.  Just pausing there; that, of course, on the findings in this case applied because there was a deliberate running down.  Then I go to the rider, (a) and (b) are irrelevant for this purpose:

the insurer may, by action in a court of competent jurisdiction, recover from the insured person any money paid or costs incurred by the insurer in respect of that liability.

GLEESON CJ:   So that if there is an award of exemplary damages against the insurer, the insurer can recover that amount from the insured?

MR TILMOUTH:   Precisely.  That is part of our point, when we come later to Lamb v Cotogno and the scheme, that at all times the driver, Bransden, was still liable to SGIC in this case for any award which included ‑ ‑ ‑ 

KIRBY J:   That is the total award.  Not just for the element of exemplary damages.

MR TILMOUTH:   Exactly; which included exemplary damages if properly awarded.

KIRBY J:   Was it revealed whether in this case any proceedings had been brought against the driver by the insurer for the balance of the damage?

MR TILMOUTH:   No, it was not revealed at all.

CALLINAN J:   Mr Tilmouth, I notice in section 124 the word “accident” is used, that is the notice provision.

MR TILMOUTH:   Yes.

CALLINAN J:   I wondered whether that word is used anywhere else and I ask it obviously because an accident would be something different, perhaps, from an event that arose out of a malicious activity.

MR TILMOUTH:   That could be so, if the Court pleases, but, in my submission, on the proper construction of the Act as a whole there was never any intent, as it were, to exclude ,by using the word “accident”, in anything like this.

CALLINAN J:   No, I am really asking do you know whether the word “accident” is used anywhere else.  Is there a statutory form of policy for example as opposed - is a policy actually issued as opposed to simply setting out what the provisions are in the Act.

MR TILMOUTH:   Yes, there is, if the Court pleases, and as I understand it it is a Schedule 4 which we have not provided but which can be given to the Court.  It is a schedule to the Act.  But there was nothing exotic, as it were, in the word “accident”.  It was just a broad word used to - - -

CALLINAN J:   That seems to be the only place in the sections to which you have referred us that it is used.  I am really inquiring whether it is anywhere else.

KIRBY J:   When you real that word in 124 with the contemplation in 124A that it can be action deliberately intentional to cause death or bodily injuries and that recovery has already been made but may secured by the insurer, then reading the two together, “accident” must have a rather special meaning one would think.

MR TILMOUTH:   Indeed.  The policy was, with respect, in 124A, if the driving was bad enough or wanton enough that the general rule that the driver would be indemnified without recourse was replaced by a provision that he should pay for it.

GLEESON CJ:   Well, it depends from whose point of view you look at it.  Something can be accident on the part of the person who is run over which is deliberate on the part of the person who drove.

MR TILMOUTH:   I accept that, of course, but “accident” was never meant in one ‑ ‑ ‑

GLEESON CJ:   From the point of view of Mr Gray, what happened to him was undoubtedly an accident.

MR TILMOUTH:   Yes, although it was deliberate, I accept that.

McHUGH J:   Because it was an unexpected occurrence as far as he was concerned - - -

MR TILMOUTH:   Indeed.

McHUGH J:   - - - which is the ordinary definition of “accident”.

MR TILMOUTH:   Precisely so, and the whole scheme is, with respect, as I said, 124A is a narrow exemption - - -

McHUGH J:   And 124AB talks about:

insured under this Part and the liability arises out of an accident - - -

MR TILMOUTH:   Indeed.

McHUGH J:   - - - which must cover liability under 124 - - -

MR TILMOUTH:   That is right, and your Honours will see 124AB, its very narrow ability to recover by SGIC in the absence of an intentional causing of death or bodily injury.  In other words, the ordinary recourse by the approved insurer was limited, let us say in ordinary accident cases, but under 124A where it was a deliberate matter, it stood quite differently.  At all events, if the Court pleases, 124AA clearly applied here on the findings of the trial judge and, in our submission, plainly, it was always open to the respondent to recover against Bransden by subsequent or concurrent proceeding.  Now, the next step, if the Court pleases, is the question of joinder and there was a joinder in this case.  That is dealt with in 125A which is the next page and that section provided, if the Court pleases, that:

Where an action for damages or other compensation has been commenced in a court against an insured person in respect of death or bodily injury resulting from the use of a motor vehicle the court may, on the application of the insurer, join it as a defendant to the action.

So, as a first step, if the Court pleases, prima facie the only way the insurer can be joined in an action is on its own application.

KIRBY J:   It says “join it”.  That rather implies that you leave the personal defendant as a defendant.

MR TILMOUTH:   Initially it does but, in our submission, the scheme is generally that the first defendant, as it were, drops off or drops out of the litigation.

KIRBY J:   How?  That seems to contradict “join”?

MR TILMOUTH:   I accept what your Honour says, but the later provisions make it clear that the insured person only remains in the litigation for very limited purposes.

GUMMOW J:   For (3)(b).

MR TILMOUTH:   That is right.  Can I just go through the section sequentially for a moment and I will come back to that.  Under (2)(a) or under (2) itself there has to be for that joinder, which is permissive, an “actual or potential conflict of interest” and then under (3), if that is satisfied and the court makes the order:

an insurer has been joined as a defendant to an action ‑

(a)  the insurer will be taken to have directly assumed the liability (if any) of the insured person upon the claim in respect of death or bodily injury and -

judgment must be given against the insurer:

(b)  the insured person remains a party to the action ­

and this is in further answer to your Honour Justice Kirby in particular ‑

only for the purposes of ‑

(i)  defending a claim that is not a claim in respect of death or bodily injury ‑

Probably that applies, if the Court pleases, where a plaintiff also sues for property damage, say damage to the car, in the same proceeding, or ‑

or

(ii)  proceeding upon a counterclaim,

Now, neither of those applied here, and then the rider:

and where there is no such claim or counterclaim, the insured person ceases to be a party to the action;

So by dint of the legislation, if the Court pleases, as in this case, when Bransden was originally sued, when the order for joinder was made by statutory force, he ceased to be a party and the respondent in this case became the defendant to the original proceedings.

McHUGH J:   Having regard to the terms of section 124A, 125A(3)(c) is a little strange, is it not:

the insured person may not be joined as a third party to the action -

I would have expected that in a 124A situation one would have been entitled to join the insured as a third party.

MR TILMOUTH:   Yes, well I accept that.  The legislation does have anomalies, if the Court pleases.

KIRBY J:   But also another anomaly seems to be - I may be wrong - that  (3)(b) keeps the insured person as a party, but only for purposes.  Now did the personal defendant remain as a party or did he drop out?

MR TILMOUTH:   He dropped out in this case, your Honour, both in form as a matter ‑ ‑ ‑ 

GUMMOW J:   What do you mean by “drop out”?

MR TILMOUTH:   He went to gaol, actually, he went down.

GUMMOW J:   .....the court record, what happened?

MR TILMOUTH:   No, he dropped off the court record and the Court can see it from these proceedings, and also, if the Court pleases, he paid ‑ ‑ ‑ 

HAYNE J:   He dropped off by operation of the end of (3)(b):

the insured person ceases to be a party - - -

MR TILMOUTH:   Precisely, and when it came to the appeal to the Full Court, as indeed the special leave application in the appeal to this Court, the only parties ever were, as a matter of record, the two parties now in Court today.  Also, if the Court pleases, under the ‑ ‑ ‑ 

KIRBY J:   Can I just ask on that, is there a potential liability in Mr Bransden for what may be the outcome of these proceedings?

MR TILMOUTH:   Yes, there is.

KIRBY J:   Is he on notice of these proceedings?

MR TILMOUTH:   I presume so, if the Court pleases, but he is certainly ‑ ‑ ‑ 

KIRBY J:   Well, you are the moving party; you would have to give him notice, would you not?

MR TILMOUTH:   Not if he is a party, no.  I cannot answer categorically whether he actually knows of these proceedings, but I can submit, if the Court pleases, under section 124A, which I have already read, he is plainly liable to the respondent for any proceeding which it might bring.

KIRBY J:   So he is liable; he may be affected by the outcome of your argument, but he is not necessarily aware of these proceedings and is not here today.

MR TILMOUTH:   That is true.  Now, if the Court pleases, he played no part in the proceedings in the court below, even though, under section 125A(3)(d) and (e), he had the right to be heard, albeit that he was not a party.

KIRBY J:   But assume he turned up today and asked for leave to intervene to be heard on the basis that he might be potentially affected, one would think the Court would have to consider that very favourably, even though he is not a party.

MR TILMOUTH:   Yes, I accept that, but he played no part in the proceedings right through, if the Court pleases, even though he had the right to be heard and to be represented under (d) and (e) respectively.

Finally, if the Court pleases, although it is irrelevant for this purpose, under (f) there is a provision that:

the insurer may apply to call the insured person -

where this joinder is made and may cross-examine, which is, as we understand it, fairly unique.

Finally, if the Court pleases, under subsection (4):

No judgment or finding of the court in proceedings in which an insurer has been joined as a defendant under this section is binding in subsequent proceedings against the insured person under 124A. 

So, that is a reinforcement of the unfettered right of the respondent, in this case, to sue Bransden for the full amount of any judgment which may result from these proceedings against the SGIC.  If the Court pleases, what we would submit in a line about all of that is that although it is a scheme familiar ‑ ‑ ‑

KIRBY J:   Could you just explain (4) to me?  Does it mean that even though you recover exemplary damages against the insurer, that does not bind as between the insurer and the insured?

MR TILMOUTH:   That would seem to be so.

KIRBY J:   So you have to re-litigate the issue in those proceedings?

MR TILMOUTH:   Yes, indeed.  You cannot, as it were, tender a certificate of judgment of the court or plead issue estoppel, you have to prove your case as before, but, with respect, all that would have to be proved, going back to 124A, in my submission, would be the liability and the dollar amount.

KIRBY J:   That seems to be contradicted by (4), presumably, inserted for natural justice reasons, that once he has dropped out he should not be held bound by the judgment you secure.

MR TILMOUTH:   Perhaps if that person was not represented or heard in the initial proceedings, yes, but, in my submission, the elements of recovery, under 124A, are merely, as the end of that section says, to:

recover from the insured person so much of the money paid or costs incurred by the insurer in respect of that liability.

So, it is really a debt, a statutory debt, which can be enforced.  If the Court pleases, in our submission, although in one sense it is a familiar compulsory third party scheme with indemnity of the insured person, in other respects it is, in our submission, a fairly unique scheme with respect to the attributes that have just been outlined.  In that sense, if the Court pleases, in our submission, it stands quite differently than any other analogous legislation.

Your Honours, I should simply point out that, going to the appeal book, that in page 1.a and 1 itself, your Honours can see that the initial proceedings in April 1983 were taken out against the driver; at page 2.a and following, is in respect of the amended statement of claim upon which the matter went to trial by which an order was made in the District Court - that should be the 25 January by the way, if the Court pleases - that the defendant State Government Insurance Commission be substituted.  That was the order made, although, in some respects, the Act speaks differently, the order was made for substitution.  That is reflected, if the Court pleases, by the amendment on page 2 in para 1(a) of the statement of claim.  There are other amendments made by leave at the time, including the amendment to add exemplary damages, but that is what happened on the record as a result of the application of the sections to which I have just referred.

If the Court pleases, returning to the legislation, which I will not read, but the subsequent pages in the materials that have been submitted to your Honours this morning commence with the 1959 Motor Vehicles Act, that is the original Act in this respect, and simply contains the various amendments since that time to the up to date legislation which I have just taken your Honours through.  So that your Honours can see, in the remaining materials, what the situation was beforehand, before these provisions applied.  I do not go through them, they are simply there in chronological sequence of enactment, if the Court pleases.

If the Court pleases, on that footing, we have undertaken some research and could I simply hand up a schedule of legislation which, on our researches in this area, deals with the question of joinder in other States or Territories and without going through that, your Honours, on our researches at least, as we understand the current position, when it comes to the substitution, as it were, of an insurer for an insured person, there are only two States which provide for that, like the South Australian scheme.

The first is New South Wales, on page 1, but as your Honours can see from section 47A of the Motor Accidents Act, that is only where the insurer seeks to avoid liability to indemnity.  In Queensland, on the other hand, as we understand the current position, which is in the middle of page 2, the situation is that the action must be brought against the insured person and the insurer as joint defendants.  In other words, it is obligatory to sue both, initially.

Apart from that, on our researches, there is no other analogous legislation apart from the obvious fact that in all States or Territories, in one form or another, there is compulsory third party schemes, and in some cases like the Northern Territory, for example, a no fault scheme.  But there is none, in our submission, which bears any analogy in any relevant respect to the legislation in South Australia.

That is the statutory scheme, if the Court pleases.  I come back to that again when I deal with Lamb v Cotogno because it was the Motor Accidents Act 1988 which, in part, was considered by this Court in that case, and which this Court unanimously held, five Judges did not affect the incidence of liability when it came to an award for exemplary damages.

Before I deal with that, could I take the Court to the findings in relation to exemplary damages, and deal with the way in which the trial judge, and then the Full Court, dealt with that issue.  I take the Court, first of all, to the appeal book page 220 where the relevant findings of the trial judge are contained.  This is, by the way, paragraph 5 of our written outline.  Your Honours, at line 11 and following is simply a reflection of the fact that the criminal proceedings and the sentencing remarks of the driver were tendered to the court and used by the parties as evidentiary of the facts.  His Honour refers to that by consent at line 12.  His Honour then found, relying on that material - the plaintiff had amnesia so he could not depose to these events - at line 22 his Honour found:

I am satisfied, as I now find, that on the 9th day of September, 1988 Bransden unlawfully and maliciously caused grievous bodily harm to the plaintiff with intent to do him such harm.  On the evidence before me I find that the circumstances in which the plaintiff was injured are as follows.

The plaintiff was one of a group of aboriginal youths who at the relevant time were using the road as pedestrians at or near the junction of Grange Terrace and Gawler Street at Salisbury.

Salisbury is a northern suburb of Adelaide, if the Court pleases:

The man Bransden was near his car.  The car was stationary.  He was not occupying it.  The group went past and away from Bransden.  Bransden then got in his car and pursued the group driving his vehicle towards them.  He drove directly at two of them on the left‑hand side of the road.  They jumped clear.  The plaintiff was on Bransden’s right.  Bransden changed course and drove his vehicle directly toward the plaintiff.  He did so with the intention of running him down and with the intention of really hurting him.  He succeeded.

I just pause there to point out that on the findings and on those facts, there was not, in any sense, any situation of provocation, as for example in Watts v Leitch or Lamb v Cotogno.  There was nothing at all in the conduct of the plaintiff, himself, which in any way contributed in the damages sense to this injury.  He was just run down - as crude as that, if the Court pleases.  At 221 his Honour then goes on to deal with the question of exemplary damages.  He is discussing that issue.  I do not read that material.

At 222, if the Court pleases, his Honour, after referring to the decision of this Court in Lamb v Cotogno, at line 7, draws this conclusion at the bottom of that page, at line 35:

Having reflected on the submission of counsel, and in the light of the authorities to which I have referred, my conclusion is that there is nothing in the Motor Vehicles Act, 1959, as amended, or the Wrongs Act, 1936, as amended, which prohibits the awarding of exemplary damages.  My further conclusion is that it would be an affront to common sense and to the administration of justice if the plaintiff could otherwise secure an award under that heading if Bransden had remained defendant but is to be deprived of it because, and only because, State Government Insurance Commission has seen fit to become substituted as defendant in the exercise of its statutory right to do so.  I hold therefore that if the plaintiff should otherwise be entitled to an award fro exemplary damages, that award can and should be made, notwithstanding that the defendant is State Government Insurance Commission and not the tortfeasor himself.

I pause there to make the point that we accept and adopt what his Honour has found there.  We submit, particularly, that it would be an affront to commonsense that an award should not be made merely because of the accident, the unrelated fact to the case that the State Government Insurance Commission, on its own application, sought to be joined under the sections to which I have referred.

KIRBY J:   But whilst you hold on to the decision in Cotogno v Lamb, you do not really have to argue that, do you?

MR TILMOUTH:   No.

KIRBY J:   Because, I mean, there were arguments contrary to that in the Court of Appeal of New South Wales, but so long as Cotogno v Lamb stands, the argument against commonsense is that if you have a scheme where all motorists have to pay for this, it is not very reasonable and not very rational.  But that has all been settled by this Court’s decision.

MR TILMOUTH:   Indeed, by five Judges unanimously and by a majority of the Court of Appeal on appeal in that case.  I agree with that.  I only need to ‑ ‑ ‑

KIRBY J:   There was a strong dissent, of course.

MR TILMOUTH:   Indeed, as always, If the Court pleases.  Your Honours, the other point though I make is - and this is not unimportant - is that it is an accident of procedure, as it were, rather than anything substantive that led to this quirk in the end result declining an award.  If Bransden had sued and there had not been the application by the insurer, in my submission, there would have been nothing standing in the path of an award for exemplary damages in this case.  It is clearly an accident that because of the exemptive provisions, the very narrow exemptive provisions, the respondent in this case sought to be joined and, in effect, substituted as defendant.  It had nothing to do with ‑ ‑ ‑

GUMMOW J:   Is there any criminal compensation legislation in force in South Australia?

MR TILMOUTH:   Yes, we do.

GUMMOW J:   Has there been any application under that?

MR TILMOUTH:   No, there has not.  I stood to be corrected, if ‑ ‑ ‑

GUMMOW J:   So, does the existence of that legislation have any bearing on these questions?

MR TILMOUTH:   No, because, if I am correct, you have to exhaust your other remedies.  Even if I am wrong in that, if you succeed here, you have to pay back your compensation.  So, by one route or another, it is of no influence in this case.

KIRBY J:   We had better have reference to those statutory provisions.

MR TILMOUTH:   It is the Criminal Injuries Compensation Act, if the Court pleases.

KIRBY J:   Yes, but what year, what section?

MR TILMOUTH:   I do not have that off hand but I can get it, if the Court pleases, and bring it to the Court’s attention.

KIRBY J:   There were distinctions between this and Cotogno, were there not?  In Cotogno they sued in trespass; you did not.  In Cotogno there was no conviction, I think.  In this case, there was.

MR TILMOUTH:   Your Honours, in Cotogno there is a reference, which I will take the Court to later, and your Honour Justice Kirby’s judgment as President of the Court, where there is a reference to the fact that he was charged, Cotogno was charged on a serious offence, but it is no more Delphic than that.  But it does appear that there was a criminal proceeding.  In Cotogno, of course, this point about the effect of that was not really raised directly; it was the insurance issue.  Could I add that even in vigorous dissent, if the Court pleases, your Honour, as President, said that that fact alone did not preclude, at least in that case, an award of exemplary damages.  I will identify that passage later when I come to it, rather than come in and out of the case.

GLEESON CJ:   Would it have made any difference to the operation of the scheme of compulsory insurance to which you have referred us, if the plaintiff’s cause of action had been framed in trespass to the person rather than negligence?

MR TILMOUTH:   No, not at all.  There is a Full Court decision in South Australia of Venning v Chin, to which I will give the reference in a moment, which has held that a cause of action in negligence can be framed in trespass, but otherwise, the situation is the same.

GUMMOW J:   It would be the other way around, would it not?

MR TILMOUTH:   In my submission, the fact that it is not framed in trespass has no bearing at all on the outcome of this case.  At 223, could I read on, if the Court pleases, going back into the facts, line 6:

On the evidence before me I am satisfied, as I now find, that Bransden’s conduct was wanton and malicious.  To adopt the words of His Honour Bollen J as contained in his sentencing remarks, Bransden’s conduct amounted to a blatant breach of the law.  It was brutal and cowardly.  There were no mitigating factors or anything to excuse it.

His Honour then went on to award $10,000 for exemplary damages, at line 14.

GUMMOW J:   The rationale of all of this is to carry into the civil dispute a finding between other parties.  There is no privity in all of this.

MR TILMOUTH:   No.

GUMMOW J:   A finding in other litigation but at a higher standard of proof, which is to your advantage, I suppose.

MR TILMOUTH:   Indeed it is, and that was brought about simply because, rather than proving the original facts by calling witnesses, the parties by consent simply tendered the record.

GUMMOW J:   Here, unlike Cotogno, we know that this gentleman, on one view of it, is being penalised twice for the same offence.

MR TILMOUTH:   Yes, we do.  He went to gaol for a substantial period.  There is absolutely no doubt about that.  But we know as well that, unlike most of the other cases, there are absolutely no mitigating factors, no provocation, no spontaneity, as in both Watts v Leitch and Lamb v Cotogno.

HAYNE J:   What is the significance you attach to that?

MR TILMOUTH:   Because there is authority for the proposition that you can reduce an award or refuse to award exemplary damages if the plaintiff himself partly contributed to the conduct which led to the proceedings being brought.  In this case there was no such factor whatsoever.  The other significance, if the Court pleases, is that such consideration was relevant in both Watts v Leitch and Cotogno v Lamb.  I will come back to those.

His Honour then asked the question, going back to page 223 at line 25, “Should I make the award?”.  He refers to the argument by the respondent now that an award should not be made and that he has a discretion and refers at line 33 or 34 to Watts v Leitch.  I will come to ‑ ‑ ‑

GUMMOW J:   What does it mean?  What are the integers in the discretion?  It is all very well to say if one has a discretion under a statute and it is open‑ended, the content of the discretion is dictated by the subject, purpose and scope of the statute.  What is the content of the discretion here?  It is not much good saying it is going to be exercised judicially.  Of course it is.

MR TILMOUTH:   Yes.  The content of the discretion, if the Court pleases, is that the Court has a discretion to refuse exemplary damages if the tortfeasor has already been punished.

GUMMOW J:   It is a funny rule of law, it seems to me.

MR TILMOUTH:   In my submission, it is a rule of law that it is a factor ‑ ‑ ‑

GUMMOW J:   Well, it has to be.  It is a rule of the common law.

MR TILMOUTH:   Yes, I agree with that but it is not a rule of law, if the Court pleases, that if he has been punished that you are disqualified automatically.

GLEESON CJ:   But the discretion cuts in at an anterior stage, does it not?  The power to award punitive damages, according to Lamb, is a discretionary power.

MR TILMOUTH:   Yes.

GLEESON CJ:   That appears from the bottom of page 12 and the top of page 13 of the report.  So that the judge below approached the matter upon the basis that this was something relevant to the exercise of his discretion to grant or withhold punitive damages.

MR TILMOUTH:   At that stage at the bottom of page 223, he did, yes, but, in my submission, what in effect he did was to apply it as an automatic or absolute rule that if there has been punishment, that is the end of the matter.  That is where the discretion miscarried, in our submission.

HAYNE J:   What is it then that should inform the exercise of the discretion?  Is it the quantum of the punishment already inflicted?  What informs its exercise?

MR TILMOUTH:   It is more, in my submission, not the quantum or the fact of imprisonment.  It is more the other factors which bear upon the award of exemplary damages, and they are factors not simply of deterrence or to mark the court’s disapproval but they are also factors which are, as it were, subjective to the plaintiff himself.

GLEESON CJ:   Presumably if the power to award punitive damages in the first place is a discretionary power, you have to let us know what you say are the considerations relevant to the exercise of a discretion to award punitive damages in the first place because, whatever those considerations are, they will presumably inform the approach you take to the significance of collateral punishment.

MR TILMOUTH:   Yes.  Those factors were, if the Court pleases, the primary findings which I have read about the wanton and callous nature of this running down.  The second fact that there was no mitigation of that conduct.  It was blatantly bad conduct.  The third factor is that there was nothing at all in any respect in actions or words by the appellant which contributed to that conduct.

GLEESON CJ:   I think I have not made myself clear.  I was not asking what were the facts relevant to the exercise of the discretion to grant or withhold punitive damages.  I was asking what are the principles which govern the exercise of discretion to award punitive damages or, conversely, to decline to award it.

MR TILMOUTH:   Yes.  Can I come to Watts v Leitch in a moment, but the principles, in my submission, are that the court looks at, first of all, its primary findings and decides what the facts are and then it looks at ‑ ‑ ‑

GUMMOW J:   Well, wait a minute.  Here it did not do that.  It looked at what Justice Bollen had said.

MR TILMOUTH:   That is right, and then looked at what Justice Nettlefold had said in Watts v Leitch and said, “Well, he has been punished.  That is the end of it.”  And, in my submission, that was altogether too narrowly looking at the proper basis and effect of an award for exemplary damages.

GUMMOW J:   But all I was asking you, you said the court looks at the facts, and what I am asking you is, facts found by whom?

MR TILMOUTH:   They are facts found by his Honour the trial judge in this case.  It may be that they are based upon the tendered record of Justice Bollen, but nevertheless they are facts in the cause.

GUMMOW J:   It was a jury trial, was it not?

MR TILMOUTH:   No.  No, this is a judge alone.  There are no jury trials in civil in South Australia, if the Court pleases.

GUMMOW J:   No, the criminal trial.

MR TILMOUTH:   The criminal trial, it would have been probably, unless there was a plea of guilty and in this case, from recollection, I think it was.  The information is before the Court.  Yes, I think it was.

GUMMOW J:   So what is treated as findings of fact in criminal proceedings are sentencing remarks, are they?

MR TILMOUTH:   They were treated as findings of fact in this case by consent.

CALLINAN J:   Some Evidence Acts make findings of the plea evidence in civil proceedings.  Is there such a provision in the South Australian Evidence Act?

MR TILMOUTH:   Yes, there is an Evidence Act 1921 which would enable the tender of the conviction.

HAYNE J:   Abolishes Hollington v Hewthorn, does it?

MR TILMOUTH:   Exactly, but it would not have probably been sufficient to prove the underlying facts.  So in this case, as a shorthand method of proof, the court by consent of the parties simply tendered the record and his Honour found ‑ ‑ ‑

GUMMOW J:   Yes.  Now, assume there had not been that consent.

MR TILMOUTH:   You would have to call the other witnesses, the other two young Aboriginal youths, who were on the left‑hand side and who were missed.  You would have to prove it in the ordinary way, in other words.  Yes, there was conviction by jury, by the way, appeal book 170 line 16.  But that is simply a mode of proof, if the Court pleases.  A shorthand method was chosen by the parties and that does not ‑ ‑ ‑

GUMMOW J:   Assume it is not chosen by the parties.  What significance flows from what happened at the trial other than the fact of conviction in exercising this discretion in the civil proceedings?  That is what I am trying to get out of you.

MR TILMOUTH:   In my submission, you would in the first place have to prove it in the ordinary way by calling witnesses to prove the underlying facts which his Honour found at 220 in the passage I read.  His conclusion it was wanton and so on is just another way of restating those basic findings, albeit using words more applicable to the criminal court.

KIRBY J:   Were Justice Bollen’s remarks on sentencing tendered by consent?

MR TILMOUTH:   They were and they were used as evidential of the underlying facts by consent.  So, in my submission, that is the end of that.  The words “wanton and malicious”, “brutal and cowardly” are simply a summary of the basic facts that his Honour has already found at 220.  Now the record of conviction could have gone in as well of, course, by certificate under the Evidence Act as proof of the fact that Bransden was convicted and sentenced, and that would have been a factor which was relevant to the exercise of the discretion to award exemplary damages amongst the other factors I have identified.

KIRBY J:   What is the provision of the Evidence Act under which ‑ ‑ ‑

MR TILMOUTH:   Thirty-three from recollection, if the Court pleases.

GUMMOW J:   What, in favour of the award?

MR TILMOUTH:   I am sorry your Honour.

GUMMOW J:   A discretionary factor militating in favour of making an award?

MR TILMOUTH:   No, the fact of conviction and sentence would have been a factor militating against the making of the order but it would be discretionary and it would not be automatic in operation and my submission here is, when one looks at the way his Honour approached it, he regarded that fact as an absolute bar to the award of exemplary damages, that is where the discretion miscarried.

HAYNE J:   Understanding that, what are the considerations that the judge should have, but did not, take to account?

MR TILMOUTH:   The other findings that I have endeavoured to outline in my three points earlier.

HAYNE J:   Those are the facts that you say cause the discretion to be exercised.  How should the judge argue to the conclusion that an award should or should not be made?

MR TILMOUTH:   He should have then said, “Well, I accept that there is the factor of the conviction and sentence which counts”, as it were, “against the award.  On the other hand, there are the facts that this is as bad a driving as you can get, therefore, this is a very bad example of a case where exemplary damages would be appropriate.  I have nowhere else in my judgment under the rubric of non-economic loss under the Wrongs Act allowed for the fact that this was such bad driving.  There is nothing in here where I have awarded or are being asked to award aggravated damages.  I should consider those factors.  The driving is so bad that it merits an award of exemplary damages.  There is no conduct by the plaintiff”, et cetera.  “Those factors outweigh the factor of the conviction and sentence of the ‑ ‑ ‑”

HAYNE J:   On this argument, should the trial judge have reached that conclusion upon a basis that began, for example, by saying, “I am of the opinion that the defendant has not been punished enough”.  Should he begin by saying, “I regard the plaintiff as being the unfortunate innocent victim of wanton”, et cetera, “conduct, and considering the standpoint of the plaintiff, the plaintiff deserves more”.  What factors does he take to account in his argument to conclusion?

MR TILMOUTH:   In addition to those I have endeavoured to identify, if the Court pleases, he should also have considered those we have tried to identify in the first part of paragraph 11, and that is the fact that an award for exemplary damages is not limited as a matter of law to just factors of deterrence or punishment, but it includes injuries, what I might label “subjective matters to the plaintiff” - injuries to feelings, insult to the plaintiff - this is the first part of paragraph 11 on page 4 of our outline - to remove a sense of grievance, and to reduce the temptation to engage in self help.

KIRBY J:   Well, the last one is a proper concern of criminal punishment, deterrence.

MR TILMOUTH:   That is deterrence to the offender but as I understand that reflection - - -

KIRBY J:   Well, general deterrence is an ordinary principle of sentencing.

MR TILMOUTH:   Yes.

KIRBY J:   To deter the offender and to deter others who might be tempted to act in a similar way.  It is a standard consideration of sentencing.

MR TILMOUTH:   That passage comes from the judgment of your Honour Justice McHugh in the Court of Appeal at 586 in Cotogno v Lamb and, as I understand it, if the Court pleases, the award of damages is an additional award, in this respect, to a plaintiff in an endeavour to stop the plaintiff from exacting his or her own revenge.

KIRBY J:   But does this not illustrate the overlap and the danger of double punishment; it is a fundamental offence to basic principle, that you are potentially punishing the defendant, rendering him liable to punishment, by being sued by the insurer, because you are saying you are getting one judge to say, I do not think he is being punished enough or I think I should award exemplary damages because I believe there should be additional punishment, even though the sentencing judge, with the primary obligation, has considered X to be the proper punishment, I consider it has to be X plus so many thousand dollars.

MR TILMOUTH:   Well, in my submission, the cases do not look at exemplary damages that way and review, as it were, the punishment given out by a criminal judge.  The case is simply ‑ ‑ ‑ 

HAYNE J:   But the question, Mr Tilmouth, is whether they should.  Take, for example, this case, which you say was a very bad case of criminal offending.  Assume that the trial judge, Justice Bollen, had formed that view and had imposed a sentence at the top end of the range.  Take the extreme case, the maximum sentence.  What significance should the civil court have attached, say, to that fact, that this man had been punished to the maximum extent the criminal law permitted?

MR TILMOUTH:   Well, in my submission, none, because that would impermissibly allow the second trial judge to review and substitute, as it were, their own view about the facts of the criminal case, in the civil proceedings.  All that is relevant, in our submissions, on the authorities, is that there has been other proceedings in the criminal court for which the tortfeasor has been punished.

KIRBY J:   You say that the judge in the civil proceedings should not take the criminal punishment into account at all?

MR TILMOUTH:   No, the quantum, as it were, of that punishment, no.

McHUGH J:   Well, there may be an overlap, because the two proceedings are directed to different ends.  For example, in the criminal process one would be taking into account issues such as rehabilitation, likelihood of the offender offending again in that particular respect, whereas one of the issues in exemplary damages is injury to feelings, insult and so on.  Take a case where insulting words are used of a very bad kind, the magistrate might give a bond, might not even proceed to conviction, but in a civil case it might nevertheless, in all the circumstances call for an award of exemplary damages.  So arguably, the fact that you have been punished in a criminal court would not deter a court from awarding exemplary damages in the civil proceedings.

MR TILMOUTH:   Yes, well, with respect, I can see the force of that, even though it runs contrary to my main argument.

KIRBY J:   That undermines then your statement that you do not take them into account.  You say you take them into account, but only as to part, which all shows the artificiality of this, in my respectful ‑ ‑ ‑ 

MR TILMOUTH:   If the Court pleases, the point I make at base is that when one looks at the criminal court, one is essentially looking at factors of punishment and deterrence.  To that extent, whether the tortfeasor has already been punished or punished enough in the criminal court, and the degree of that punishment all go to those two factors which, as it were, are objective or extraneous to the plaintiff.  They deal with the situation of the tortfeasor.  My main point is that nothing that happens in the criminal court really has much to do with the injury to feelings, insults, et cetera.  Those passages are just culls from the decisions of the two courts in Lamb v Cotogno which are subject to the ‑ ‑ ‑ 

HAYNE J:   Is it necessary to distinguish between aggravated damages for injury to feelings, et cetera, on the one hand; and punitive damages which are there simply to punish and deter, or is that a false dichotomy?

MR TILMOUTH:   No, in our submission it is a dichotomy under the one rubric of exemplary damages in this case.  Part of the error, we submit, made by the trial judge in this case, and perpetuated in the Court of Appeal, was that it looked at only the one side i.e. deterrence and punishment, but it did not look at the subjective side to the plaintiff - the insult to feelings, et cetera.

GLEESON CJ:   Just go back a step.  You say that the fact of the punishment was a discretionary factor to be taken into consideration against making an order of punitive damages?

MR TILMOUTH:   In this case, yes.

GLEESON CJ:   Why?

MR TILMOUTH:   On the authorities, it is a matter of law that whether a person has been punished has to be taken into account.

GLEESON CJ:   Yes, but what is the reason for that?

MR TILMOUTH:   The underlying reason appears to be that there is a double punishment.

GLEESON CJ:   Why might, in a particular case, double punishment mean that there should not be an award of punitive damages?

MR TILMOUTH:   Only because, on the authorities, the defendant has been punished twice for the one conduct.  But, in our submission, that hardly arose in this case at all.  There was imprisonment for this misconduct, but there was nothing ‑ ‑ ‑ 

KIRBY J:   Presumably it was open to the judge, Justice Bollen, to impose both imprisonment and a fine, and he chose instead imprisonment, and therefore he chose not to burden the pocket of the defendant, but you are coming along seeking to burden the pocket of the defendant, in a way that the judge with the primary responsibility of punishment did not consider appropriate.

MR TILMOUTH:   No, but only because he misapplied Watts v Leitch, in our submission.

KIRBY J:   I am talking about the sentencing judge.

MR TILMOUTH:   Although there was no fine in the sentencing, it would be very unusual, if not totally exceptional, to have a prison sentence and a fine.

KIRBY J:   It may be, and that is for the reason that deprivation of liberty is regarded as such a serious punishment that you do not have to add to it monetary punishment, and yet that is what you are trying to get the law to do.

MR TILMOUTH:   Or, with respect, because awarding a fine in the criminal proceedings would have been no effect.  There has to be some evidence that the defendant can afford to pay otherwise a fine would be just a futile exercise.

KIRBY J:   On feelings, it is not unknown for judges to say in sentencing, “I take into account the insulting way in which you conducted yourself and the way in which you brought your victim into a denigrating and humiliating situation”.  I have often sat there and seen that in sentencing remarks.

MR TILMOUTH:   That is true, although I do not ‑ ‑ ‑

KIRBY J:   There is no real lack of overlap; there is total overlap between the criminal punishment and the civil punishment.

MR TILMOUTH:   Well, in my strong submission, not in the mind of a plaintiff in these cases.  As his Honour said, at commonsense, it would be an affront to justice if there was not some civil remedy for what would otherwise be compensable.

KIRBY J:   But would that mean that a sentencing judge would have to say, “Now, steady on, one day somebody might come along and seek to recover damages and I’ve got to keep that in mind and, therefore, I’ve got to reduce the punishment that I impose to make sure that you do not double count”.

MR TILMOUTH:   Well, with respect, it could be, which would be an extraneous intrusion into the law of sentencing ‑ ‑ ‑

KIRBY J:   Not if you are aiming to avoid double punishment, which is a pretty fundamental principle of sentencing.

MR TILMOUTH:   Only, with respect, if that double punishment is looked at purely from the point of view of the tortfeasor but not, with respect, if it has also looked at the other elements of an award for exemplary damages which relate to the subjective, as it were, of the plaintiff concerned.

GLEESON CJ:   Did the trial judge in the present case say anything more complicated than this?  It would be a very unusual thing to award punitive damages in a running‑down case, but it is not beyond the bounds of possibility.  This was a particularly bad running‑down case.  On the other hand, the defendant has been subject to very severe punishment by way of imprisonment, “so I’m not going to award exemplary damages”.

MR TILMOUTH:   Well, on one view, of course, that is all he has done.  But, with respect, that simplicity belies actually what has happened underneath the reasoning process.  His Honour has not anywhere expressly adverted to, still less weighed, the other factors which weighed in favour of an award of exemplary damages, and the way he has applied the consideration of the punishment is, in effect, to say, “Well, it is obligatory for me not to award exemplary damages once I have the fact of that punishment before me”.

GLEESON CJ:   Or has he simply said, “In the present case there is a factor which you acknowledge to be a relevant factor against an award of punitive damages which is of such substantial weight, having regard to the extent of the punishment that’s already been imposed, that I will conclude that it outweighs any other possible considerations”?

MR TILMOUTH:   In my submission, no.  A proper exercise of the judicial discretion to award exemplary damages would require the judge to consider factors pro and con.  He has not done that.  He has clearly only considered one factor - that is the fact of the punishment - and nothing else and he has applied it, in my submission, not in a discretionary but in an absolute way.  So that, if the Court pleases, when one goes to page 224 of the appeal book, his Honour is quoting from Watts v Leitch, which he refers to in the previous page.  He refers to page 24 of Justice Nettlefold’s judgment at line 6:

“The defendant has already been punished in the criminal court.  To punish him again would be to punish him twice for the one act.  I should assume that the punishment was appropriate having regard to the facts before the court.”

Those words apply with equal force to the case before me.

At line 19:

In the exercise of my discretion, therefore, and for the reasons which I have endeavoured to give, I do not propose to award to the plaintiff any amount by way of exemplary damages.

So, he has not taken relevant factors into consideration at all, which went the other way, and he has regarded what Justice Nettlefold did in Watts v Leitch as being a bar rather than just a discretionary factor in coming to that conclusion.

GUMMOW J:   But we have to know, and I still do not know, when one talks about a discretion, what are the matters that have to be taken into account which mean that the discretion miscarries if they are not taken into account than those which are permissible to take into account, if any?

MR TILMOUTH:   If the Court pleases, there is no one case which defines exhaustively the factors in the ‑ ‑ ‑

GUMMOW J:   I know that.  That is why the law seems to be in an unsatisfactory condition.  On one view of it, it is why we are here.

MR TILMOUTH:   May it please your Honour, as I have tried to identify what I have submitted the other countervailing factors ‑ ‑ ‑

GUMMOW J:   The reason why I say this is that if the discretion is treatment for some “open sesame” operation, it becomes unappealable.

MR TILMOUTH:   I accept that, but I have endeavoured to identify two errors:  the failure to take into account other relevant considerations and the fact that his Honour ‑ ‑ ‑

GUMMOW J:   You just get the recitation of mantras by trial judges which are unimpeachable.

MR TILMOUTH:   With respect, in this case there were strong countervailing factors based on the primary findings which I have read which were not adverted to in the exercise of the discretion on this point.  In my submission, that is an error, and the other error is by applying rigidly the principle that the fact of punishment may be taken into account.  His Honour said it must be and, in my submission, also said that is the end of the matter, in effect.  That happened in the passage I have just read at page 224, if it happened anywhere.

KIRBY J:   Could you help me on this.  I know it is often said that in awarding damages, that damages, say general damages, are quasi‑discretionary and so on.  It is something I have always felt myself a bit uncomfortable with.  Is there any other area of damages in tort for negligence where the damages are discretionary?  I thought the theory of the common law of tort was that the damages were compensatory and therefore you have a right which is merely to be quantified, which is difficult to quantify, but it is, as it were, not discretionary in nature.  Do you know any other area where damages are discretionary?

MR TILMOUTH:   Not offhand, if the Court pleases.

KIRBY J:   Apart from authority, why is this an exceptional head of common law damages which are discretionary?

MR TILMOUTH:   I cannot answer that question, if the Court pleases.  There is no immediately obvious ‑ ‑ ‑

KIRBY J:   It seems a departure from steady common law principle.

MR TILMOUTH:   Indeed.  Could I add this as well on this case.  At page 223 can I remind your Honours that his Honour at line 4 did conclude that the plaintiff here was entitled to exemplary damages.  The first step had already been reached and resolved in favour of the appellant and there was a prima facie finding that he should qualify.  It was only in the weighing factors when the discretion came later that his Honour decided not to.  In my submission, the fact that he had found that exemplary damages were otherwise appropriate also demonstrates that he misconstrued the weight that should be given to the question of the punishment.

McHUGH J:   I thought the defendant had been punished in Cotogno v Lamb and that appears in my judgment in the Court of Appeal at page 573F:

Furthermore the evidence before the master showed that the appellant pleaded guilty to a serious criminal charge arising out of the events sued upon and was presumably dealt with in accordance with the law upon that plea.

MR TILMOUTH:   Yes.  We have been able to find nothing below that, if the Court pleases, even though in the beginning of your Honour Justice Kirby’s judgment there is reference to previous litigation.  One was on the constitution of a court, I think, in the reported decision and the other we have not been able to get access to, the unreported 9 August 1985.  But in none of the material before us have we been able to ascertain the precise facts.  But it does appear that there was some punishment, although it is not specified.

KIRBY J:   I suppose you can say in Cotogno v Lamb the Court of Appeal in the majority and this Court were on notice that the defendant was punished criminally and assumed that he was but did not think it important to have any regard to what that punishment was.

MR TILMOUTH:   Well, that may be, but could I add this, that there is no express phrase in that case or any other where a judge actually says, “Well, I don’t think the judge awarded enough in the criminal court” or “awarded too much”.  In my submission, none of the cases go to that extent.  They simply regard in a general way the historical fact of the criminal proceedings but consider other factors.

The other point, if the Court pleases, on the Watts v Leitch issue is that when one looks behind Watts v Leitch, it is no authority for the proposition that his Honour purported to say, that it should “apply with equal force to the case before me”, also at page 224. Can I take your Honours briefly to Watts v Leitch (1973) Tas SR 16 to demonstrate that point. Your Honours, the facts, without reading them, are at page 17 but there was an assault in a hotel using a glass which occurred under provocation. It was spontaneous rather than planned or deliberate. The plaintiff had been mocking the defendant in the civil proceedings and it was in the context of the defendant in that case being upset with the plaintiff because of a relationship he had had with the defendant’s wife. In fact, divorce proceedings had just been issued.

So it occurred not only as a spontaneous eruption in a hotel, but it occurred in the background of a domestic situation where there were conflicting emotions and some degree of provocation was involved.  So the facts were quite different on any view, in my submission.  All that Justice Nettlefold did, if the Court pleases, at page 20 was when he considered the question of what damages should be awarded, he had already resolved at the bottom of page 19 and over to 20 that there should be an element of aggravated damages and that is covered as well by his point (3) on that ‑ ‑ ‑

GLEESON CJ:   This was a trial by jury, was it?

MR TILMOUTH:   It is a bit confusing because he talks about the way he should make directions but in the end result his Honour fixes the award at page 24.

GLEESON CJ:   Is he directing himself perhaps?

MR TILMOUTH:   Perhaps, if the Court pleases.  I must confess I was confused as to that aspect but, all the same, whether he is directing himself or a jury, he is, first of all, recognising that in that case there is already an allowance to be made for aggravated damages - page 20 - and at his point (4) in the middle of that page his Honour merely observes:

The fact that the defendant was fined in the Criminal court must be taken into account when considering the question of exemplary damages.  There is no specific authority on this point.

Then his Honour goes on to discuss analogous cases.

McHUGH J:   Now, you did not claim aggravated damages in this case?

MR TILMOUTH:   No.

McHUGH J:   And perhaps that is part of your problem.  Could I take you back to paragraph 11 of your submissions.  I was a bit alarmed when I read the reference to:

Although punitive in nature, such an award retains significant components compensatory to the plaintiff, such as injury to feelings, insult ‑

I thought in Lamb I must have had in mind the distinction between aggravated and punitive damages, but reading page 586 I cannot see anything in my judgment in Cotogno which would support the proposition there, nor can I see anything in 164 CLR at page 9 to support the proposition that those cases are quoted for.  Both judgments make it plain in different parts that there is a distinction between aggravated damages and punitive damages and that aggravated damages go to insult, humiliation and the like and injury to feelings.

McHUGH J:   You can make it an issue by way of discovery and interrogatories.

GUMMOW J:   Yes, plead it.

McHUGH J:   And pleading; you plead your claim.

KIRBY J:   But what is the relevance of it, do you say here?  Is it only that if you sued there is no way you could get it out of the driver and that, therefore, it is not proper to burden you but ‑ ‑ ‑

MR WALSH:   Yes, that is right.

KIRBY J:   Is that the only way in which you use it?

MR WALSH:   No.  The other relevance is to show the illogicality of a CTP fund having to pay exemplary damages ‑ ‑ ‑

KIRBY J:   Please, that is Cotogno.

MR WALSH:   Yes, of course, I accept that.

KIRBY J:   You do not have to convince me of the illogicality.

MR WALSH:   I am sorry, your Honour.

KIRBY J:   But if you want to convince the Court, you have to seek to ‑ ‑ ‑

MR WALSH:   I am sorry, that was the only other - that was the - I raised it in that way initially and it did have the other effect that your Honour just raised in terms of the point of distinction in this case.

CALLINAN J:   Mr Walsh, I put to Mr Tilmouth that on one construction of section 125A, for the purposes of a claim in South Australia, the fact of the existence of a statutory insurer and that the statutory insurer is ultimately liable, it may be irrelevant ‑ ‑ ‑

MR WALSH:   Because it is a chance thing that has happened.

CALLINAN J:   No, because of the language of section 125A, and that was one of the reasons why I was anxious to know whether it was in force at the relevant time.  Do you want to say anything about that, because what I put Mr Tilmouth I think he adopted as part of his argument.

MR WALSH:   It is true that the language that is used suggests that it picks up the liability, as it were, which I presume is the point that your Honour is making.

CALLINAN J:   Yes, exactly, and that was the point I put to Mr Tilmouth.

MR WALSH:   In our respectful submission, the reason why we draw the distinction about the fact that the insurer is the party on the face of the record is because that is a fact that will be taken into account with respect to the issue of what is the public expectation about - or even the plaintiff’s expectation with respect to what is proper in terms of retribution and deterrence as a matter of fact.

CALLINAN J:   At present, I must say it seems to me that a claim for exemplary damages is in fact a claim in respect of bodily injury within the meaning of 125A(3)(a).  If that is right, then the statutory insurer will be taken to have directly assumed that liability.

MR WALSH:   Yes.

CALLINAN J:   That was the proposition I put to Mr Tilmouth which he adopted and which seems to me to be right, with respect, at this stage.

MR WALSH:   If we are liable for exemplary damages, then, as a matter of discretion, as a matter of law, because Lamb v Cotogno is good law, then we pick up that liability.

CALLINAN J:   But if you are liable for them, the nature of your existence as a statutory compulsory insurer, it seems to me, becomes irrelevant; that that excludes the peculiar position which you are in as being a matter to be considered in any way at all.

MR WALSH:   Well, I suppose our response is that that is not seeking to establish that there is in fact, or ought to be, a liability for exemplary damages.

CALLINAN J:   All the other considerations come into play, I am not putting that that is not so, all the other matters, a possibility of punishment and all of those sorts of things, but really the consideration that was debated in Lamb v Cotogno, for the purposes of this statute in your State, it seems to me are irrelevant.

MR WALSH:   Well, we argue for the other reasons that it is not.

GLEESON CJ:   Well, another way of putting the same point is that your client is in no better position than Mr Bransden.

MR WALSH:   Yes, I understand the force of the submission that is being made ‑ ‑ ‑ 

GLEESON CJ:   And Mr Bransden could not have said, I am an insurer, so it does not avail your client to say, I am an insurer.

MR WALSH:   Well, in our respectful submission, the very fact that the insurer is the defendant and is not a wrongdoer is relevant to the determination of whether there should be an award of exemplary damages, albeit that otherwise the insurer must be responsible for the liability of the wrongdoer.

GLEESON CJ:   Another argument available to you is that your client is equally no worse than Mr Bransden, and that it would have been very unlikely that it would have occurred to anybody, if Mr Bransden had sued, that they should deal with this problem by fining him $10,000.

MR WALSH:   Well, may I adopt that with gratitude, your Honour.  The fact of the matter is that the fund is there to a large degree in order to ensure that plaintiffs do not go without compensation, but is not there and it is not intended to be there to provide a fund for the purposes of matters that are properly within the province of the criminal law system.

CALLINAN J:   As a windfall fund, you say.

MR WALSH:   I think in the process of our discussion I have covered all of the issues that we raise in the outline of argument and I will not take you through those issues.  As I said, I would tread warily in the question of whether this Court should decide not to follow Lamb v Cotogno, or even go further, but the common law, as we point out, is a developing thing, a developing creature, and it may be that when one looks at cases like Kars v Kars, where the illogicality of allowing a defendant to have the benefit of a tortfeasor’s contribution to an injured spouse, in other words not have to pay damages with respect to that, which was considered to be something that ought not to be followed, despite the compensatory principle, for past losses anyway, and the fact of the relevance of insurance, in the consideration of that topic, is an illustration, we say, of the way in which the common law can develop and to take into account the changes that occur in society, and particularly in this area, the advent of the motor vehicle and the compulsory third party fund.

When one looks at Kars v Kars and compares it to the decision in Lamb v Cotogno, it may be that we have now reached the stage where this Court could, because of the way in which it has reasoned the issue of insurance in Kars v Kars, reach the conclusion that the time has come to review Lamb v Cotogno.  I think they are the issues that we raise, if the Court pleases.

McHUGH J:   Before you sit down, Mr Walsh, if I could take you back to the issue of damages at page 246 of the appeal book.  Have you any submission to make about the judge’s statement at the last four lines where he says that:

wielding the broad axe, after taking account of all relevant factors and having regard to all relevant contingencies the plaintiff were to be awarded the sum of $45,000 for economic loss which I apportion as to the sum of $15,000 for the past and as to the sum of $30,000 for the future inclusive in each instance of the plaintiff’s loss of a chance.

Now, prima facie that seems an error.

MR WALSH:   Because of the use of the words “loss of a chance”, your Honour?

McHUGH J:   Yes, when he is talking in that particular context.

MR WALSH:   Yes, but, your Honour, in our respectful submission, the learned trial judge was merely using the phrase “loss of a chance” in the context of Malec v Hutton, probabilities and possibilities, and what he had found, in our respectful submission, was that there was obviously a high probability that this person was only going to exercise his earning capacity in the same way in which he can still exercise his earning capacity and, in our respectful submission, that is all that his Honour intended by that.

McHUGH J:   That means that the judge was not satisfied he would ever again exercise his earning capacity but there was a chance that he might.

MR WALSH:   No, that is not what we are putting, your Honour.  What we put ‑ ‑ ‑

McHUGH J:   Well, that must be what it means, must it not?

MR WALSH:   No.  What his Honour has found is that there is a chance that he may not exercise his earning capacity at all but there is a high probability - in our respectful submission, when one looks at the reasoning process, his Honour has found that there is a high probability that if he exercises his - that he will only seek to exercise his earning capacity in the future the same way as he would have but for the accident and he is capable of doing that work.

GLEESON CJ:   Mr Walsh, just before you conclude, we had better bring one matter to a head.  Your reference to Kars v Kars was accompanied by a speculation that it might lead the Court to wish to review Lamb.  Could you let us have your submissions on two questions:  first, if you wish to argue that Lamb was wrongly decided, do you need leave to do that; and, second, if so, do you seek such leave?

MR WALSH:   Yes, obviously we were in error with respect to that issue.  We were contacted and asked if we were arguing that, and informed the Registrar that we were, and no further consideration was given to the question, your Honour.

GUMMOW J:   Evda Nominees said you need leave.  That is generally known; it is not a secret.

MR WALSH:   If we need leave, I do seek leave, your Honour.

GLEESON CJ:   Is that to reopen Lamb only, or Uren as well?

MR WALSH:   I only need to go as far as Lamb v Cotogno, your Honour.

GLEESON CJ:   Thank you.

MR WALSH:   May I get some instructions on that, your Honour?  We rest content to seek leave with respect to Lamb v Cotogno only.

GLEESON CJ:   Thank you.  Yes, Mr Tilmouth.

MR TILMOUTH:   Your Honours, on the question of criminal injuries compensation, this was raised about five minutes ago, and also by Justice Kirby when I addressed, the Act is the Criminal Injuries Compensation Act ‑ ‑ ‑ 

GUMMOW J:   The answer seems to be section 11(2).

MR TILMOUTH:   That is right, which gives the right to recover.

GUMMOW J:   “The Attorney‑General may decline”.

MR TILMOUTH:   That is right.  Also, if the Court pleases, there are other sections within section 11 in relation to recovery from the criminal, but in section 11, basically, in my submission, if the Court pleases, the rights that are given under that section in (2) and (3) are dealing in relation to compensation ‑ ‑ ‑

GUMMOW J:   Section 11A is a statutory subrogation.

MR TILMOUTH:   That is right, and in subsection (3) the Attorney can, where a payment has been made to a claimant under the Act, and that claimant has received subsequently compensation or damages, he can sue for the recovery of that sum.  Under section 11A(4), as it now is, he can also recover from the offender who has been convicted of the offence, the sum paid out for compensation, so there is recovery from both ends of the scale, as it were, and it is simply recovery in a court of competent jurisdiction from either tortfeasor or the victim.

The other point I should make on the Act, is section 8 does have a cap.  It is a complex section which limits recovery to $50,000 and - I beg your pardon, it is section 7(a) and it has, if the Court pleases, for non‑financial loss, one has to sign a numerical value of naught to fifty, so there is another gloss upon the Wrongs Act of principle of naught to sixty.  So, whatever else may be said, given the fact that the non-financial loss has to be assessed at a numerical value running from naught to fifty and is capped at $50,000 anyway, there is always going to be a gap and probably a significant gap between criminal injuries compensation paid to a victim and what a victim is likely to get in an award for damages, whether it be a trespass action or a negligence action.  In any event, the Attorney can recover any monies that the victim receives by compensation under the Wrongs Act, to the extent that there is a payment of criminal injuries compensation and he can pursue, without fetter, the criminal, in any event.

Your Honours, on the question of the general damages and the future, there is something that in reply I wish to put to the Court which perhaps I have not put clearly before and it relates to this issue of the findings in relation to alcoholism and gaoling and so on and perhaps I have not put it clearly before.  Your Honours, in my submission this was dealt with by his Honour and his Honour found that 75 per cent of the plaintiff’s problems were due to the accident and 25 per cent were due to other factors like alcoholism and subsequent misbehaviour.

KIRBY J:   Where is that finding?

MR TILMOUTH:   At 213.  If one goes to 213 at line 24 his Honour says that:

The plaintiff’s cognitive impairment has been assessed by Mr Mark Reid, a forensic and neuro‑psychologist at ten to fifteen percent ‑

that is the 10 to 15 per cent which was referred to during Mr Walsh’s address from the report ‑

The plaintiff was reviewed by Mr Anthony Walsh.  Mr Walsh agreed with the assessment which had been made by Mr Reid.  His view, however, was that not all of it was causally related to the accident because, as he saw it, there were many potential contributors to the plaintiff’s problem.  His opinion was that for that reason approximately 75% of the plaintiff’s cognitive impairment was directly attributable to the accident.  Mr Reid agreed that that was so.  I accept that evidence.

Now, I will show you where that evidence is, and then it goes on to deal with the short‑term memory problem which I have dealt with and which I submitted was taken care of by the school reports.  Now, the evidence of Mr Reid, which his Honour accepted in that 75 per cent finding, if the Court pleases, is at 115 and at the risk of being too isolated in the passage, I commence at line 20 - this is Mr Reid in cross‑examination.  Perhaps I should begin at line 18:

it’s difficult to say with absolute definity what percentage is attributable to what, but given the severity of the head injury in the car accident and given the severity of the alcohol and possible head injuries sustained after that and putting it all together, I have no objection whatsoever to an estimate of something around the order of 75% being attributable to the head injury sustained in the 1988 accident and possibly up to 25% being attributable to other causes, including alcohol abuse, including these possible concussive head injuries in a cumulative manner.

In my submission, when one looks behind the bare finding, it is clear already that his Honour has factored in the question of the subsequent unrelated matters.  When one looks at the later findings in relation to alcohol and his gaoling and so on, his Honour is dealing there only with the submission of the plaintiff’s counsel that 100 per cent of the subsequent conduct was due to the accident.  In other words, his Honour is dismissing in the later findings he made, where he did not believe the plaintiff, the 25 per cent that remained.  Could I also add, if the Court pleases, the passage at 115 that Mr Reid agreed with Mr Walsh, comes from Mr Walsh’s report at 166 of the appeal book, line 6:

The major difficulty here is the differentiation between the enormous number of potential contributors to this problem.  These include his premorbid ability, his difficulty psychosocial history as well as alcohol abuse and numerous mild head injuries sustained in fights.  However, given the severity of this injury, and the report that the majority of his personality changes occurred after the subject accident, I am of the opinion that the majority (approximately 75%) of the deficits reported here are likely to have been caused by this accident.

So, in my submission, the later findings, where the plaintiff was not accepted, related only to the argument that the remaining 25 per cent should also be said to be causally related to the accident.

By the way, without reading, Mr Walsh was cross-examined at page 134 of the appeal book on the school reports, but, as I have already indicated, if the Court pleases, the finding was by his Honour, as a trial matter, at page 219, line 4:

To the extent that their views are at odds I prefer the opinions of Mr Reid (subject to what I have said elsewhere in these reasons) to those of Mr Walsh -

KIRBY J:   Is the result of that that both Reid and Walsh agreed that it was 75 per cent/25 per cent?

MR TILMOUTH:   In the net result, yes.

KIRBY J:   On this matter there is no difference, but they just happen to coincide?

MR TILMOUTH:   That is right, and factoring in already in that the subsequent alcohol abuse and the imprisonment and the like.  So that process has already been determined, with respect, by his Honour in the 75 per cent finding and to reinforce my argument that, when it came to the short‑term memory issue, which turned out to be so important on economic loss, that the school reports were the governing factor, can I also point out at page 219, if the Court pleases, that his Honour went on to deal with that and said, with respect to that, at line 7:

Their respective expertise was accepted without question but Mr Walsh’s opinion, as it seems to me, having regard to the questions that I put to him and his answers thereto that I have quoted ante, is based on facts which have not been proved and indeed which are contrary to the proven facts as appears from the teachers’ comments -

So that reinforces the argument I have already put, that the sine qua non of that finding was no more and no less than the teachers’ reports.

One final matter and a correction, if the Court pleases.  Mr Walsh made the argument, albeit briefly, that perhaps section 35a of the Wrongs Act South Australia precluded exemplary damages.  In my submission, that argument was not only not dealt with in the courts below, but has been dealt with effectively, albeit with different legislation, by this Court in Lamb v Cotogno at page 12 and also the same argument was rejected in New Zealand on comparable legislation in the case I referred to this morning, Donselaar.  And the reference to Donselaar leads me to the correction.  Your Honour Justice Kirby tested me about where Donselaar was authority for the proposition that you could get aggravated damages without a plea.  It does not stand for that.  I stepped too far beyond that case.  In fact on re-reading it, it was pleaded.  It simply stands for the proposition that, on comparable legislation, you still can get exemplary damages, it has not been excluded.  And my point would be, exemplary damages can only be excluded by express reference.  Section 35a may be a Code, but it is not a complete Code.

GLEESON CJ:   What would be a convenient time within which counsel can comply with the requirement concerning the agreed statutory material?

MR TILMOUTH:   Is Friday next week too late, if the Court pleases.

GLEESON CJ:   Very well, 4 pm on Friday of next week.

MR TILMOUTH:   If the Court pleases.

GLEESON CJ:   We will reserve our decision in this matter.

AT 4.20 PM THE MATTER WAS ADJOURNED