Innes v Commonwealth of Australia

[2015] HCATrans 292

[2015] HCATrans 292

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Canberra  No C8 of 2015

B e t w e e n -

BARRY CHARLES INNES

Applicant

and

COMMONWEALTH OF AUSTRALIA

Respondent

Application for special leave to appeal

FRENCH CJ
KEANE J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 13 NOVEMBER 2015, AT 9.30 AM

Copyright in the High Court of Australia

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friend, MR R.J. DAVIS, for the applicant.  (instructed by Snedden Hall and Gallop Lawyers)

MR P.C.B. SEMMLER, QC:   May it please the Court, I appear with my learned friend, MR M.J. O’MEARA, for the respondent.  (instructed by Australian Government Solicitor)

FRENCH CJ:   Yes, Mr Walker.

MR WALKER:   Your Honours, in our submission, an error, serious in principle and very drastic in consequence for our client, has occurred in the Court of Appeal of a kind which should excite this Court’s interest in correcting an important error of principle.  It is not just in the rarefied world of superannuation, which for Commonwealth employees may loom large in this city, but may not dominate the jurisprudence generally.  It is not just in that area that the error of principle would operate.

In a nutshell, we submit, this is an inquiry about the way in which the robust, unalterable common law requirement for there to be loss – that is, in a relevant sense for a person to be able to show that they are worse off than they would have been but for the wrong – has occurred so as to then trigger where they are applicable, as they are universally, limitation periods in the absence of special circumstances.  So stated, the problem is obviously one that transcends a statutory scheme of superannuation.

By hypothesis, given the way in which the argument was set up, with facts agreed for its purpose, the Commonwealth is responsible for negligently failing to advise someone whom it should have advised better than it did of the possibilities of benefits to be gained under membership of the scheme.  The hypothesis is that that failure occurred.  It is a failure to give advice rather than the giving of wrong advice. 

The counterfactual, to use the jargon, is, of course, what would have occurred had the advice been given in accordance with the standard of care.  On that hypothesis, according to the agreed facts, there can be no doubt whatever that there would have been the exercise of – I will call it the section 137 election about which your Honours have read, which would have the effect, to use the language of the statute, of deferring a benefit.  But, the entitlement – again, to use another loaded expression to be found in the reasons below – upon that election, is to be paid in the future commencing upon certain contingencies which would include, for example, survival.

FRENCH CJ:   Had he been a member of the scheme at the time of redundancy, he would have had a legal right under the scheme as at the date of redundancy - 5 April 1993.

MR WALKER:   That is correct.

FRENCH CJ:   He has lost that ‑ he has lost the opportunity for that.

MR WALKER:   It is precisely the language of opportunity that signifies the error of principle commencing.

FRENCH CJ:   Does Wardley really fit into this?

MR WALKER:   Only in the most general sense, your Honour, only in the most general sense.  Wardley fits – and your Honours have seen how we invoked it ‑ ‑ ‑

FRENCH CJ:   Because I might have been with you on Wardley, but others took a different view.

MR WALKER:   Your Honours see how we invoked it and, indeed, your Honours can see the way the matter was argued in Cornwell in this Court.  At a very general level, yes, this has to do with contingencies and those which do or do not operate in such a way as to assign or allocate the time of loss to one rather than another point – to a later point in most of these arguments.

This is not the loss of a commercial opportunity, a Chaplin v Hicks, proof on balance of probabilities that you had a valuable chance and now simply assess on the possibilities what the worth of that was.  That was a fallacy, identified and exposed by this Court in Cornwell.  This is rather, when one looks at the statute, a far simpler proposition.  On the counterfactual, had he been advised properly, an election would have been made, which, as the language of deferred benefits indicates, means that you had nothing at that point.

To use the Chief Justice’s question, you had a right to make the election and on the agreed facts it would have been made, the result of which is that it would not be possible at all to say you are worse off if you did not have that right because your payment lay in the future, a future which itself has contingencies of a kind that do not lend themselves to ascertainment in relation to the identification of there being any loss at all.

KEANE J:   Mr Walker, the difficulty that I am having, I must say, with this counterfactual approach to identifying the date of loss is that on the counterfactual, which assumes full advice, there is no loss at all.  The counterfactual is that he is properly advised.  There is no cause of action on the counterfactual, so that it makes no ‑ ‑ ‑

MR WALKER:    No, no, of course not.

KEANE J:   So that it makes no sense to ask when has he suffered a loss because, by hypothesis, he has not - the loss occurs in the real world.

MR WALKER:   The opposite of the counterfactual, what actually happened, is that he did not get anything.

KEANE J:   That is right.

MR WALKER:   Question:  when can it be said that fell in?

KEANE J:   He did not get anything in 1993 upon his retirement.

MR WALKER:   No, you need to ask the question, hence the usefulness of the concept of counterfactual – you need to ask the question whether you would have been worse off had the breach of duty not occurred.  Now, an analogy which perhaps illustrates in another very common and familiar context can come from another way in which one might suffer loss for advice not being given.  Medical advice is not given which would have presented a choice.  Go under the knife now, or wait and see.  If a plaintiff sues, saying, “I have suffered a loss because you did not give me the advice which would presented a choice – go under the knife now, or wait and see” and it is proved on the balance of probabilities that the plaintiff would have waited to see, it could not be said that at the time when the surgery not chosen would have occurred he was worse off, far from it.  The defendant would be able to say, you sue me, and you cannot say that you are worse off for not having the surgery because it has been proved that you would not have had the surgery.

The same is true here.  If the boot was on the other foot, and we had sued straight after 5 April 1993, having elected, say, or that is having notified that we would have elected, it had been proved that we would have elected, that which is agreed as a fact in this case for the counterfactual, the defendant would of course have said you have suffered no loss.  You cannot show you are worse off, because you are not due to be paid anything until sometime in the future and there are contingencies to be met in order for that to fall in. 

So, it is, in our submission, a really quite important basic question about how do you deal with choices that are made, sometimes by a plaintiff, sometimes for a plaintiff – does not matter which – that is, where there are forks in the road in what would have happened but for the defendant’s wrong.  As to those past forks in the road, they will be treated as the fact.  So, he would have chosen to defer. 

That means that in the counterfactual, had he been given the advice, he would not have got anything.  That is why you cannot say he is worse off.  If you cannot say he is worse off, that is, it would be merely the speculation of a kind this Court said was inappropriate in this area of discourse in Cornwell, if you cannot say he was worse off at that point then there is no loss and if there is no loss there is no accrual of cause of action.

KEANE J:   Why is he not worse off because he has nothing to defer in 1993?

MR WALKER:   That is in a sense that does not fit what we submit is the common law need to show a loss in the sense of being worse off.  Being deprived of a choice may or may not in commercial opportunity ‑ ‑ ‑

KEANE J:   No, it is not being deprived of a choice.  It is not having an entitlement which one may choose to defer. 

MR WALKER:   Your Honour appreciates that the point we seek special leave for is to ventilate what we submit is the error in treating there being a difference of substance between the phrasing that your Honour has asked me to consider and the way we put it because, in our submission, whatever phrasing is used what is being pointed out is if you had had the advice you would have had an election.

No one, we think, is suggesting that one flies in the face of Cornwell and says that in itself is a thing of value which, if lost, constitutes a loss so as to start time ticking.  Rather, as your Honour puts it, it might be said against us that it is not the loss of a choice, which would present difficulties, or should present difficulties in light of Cornwell, but rather the loss of an entitlement which you were able to make a choice against.

KEANE J:   Yes.

MR WALKER:   My point is simply this.  That is like being deprived of the chance of having the operation which you would not have had.  That is not a loss.  You cannot be said to be worse off.

KEANE J:   I am not sure about the analogy, because what we are actually talking about is the situation that there was an entitlement in relation to which your client could elect either to defer, or to take payment of.  It seems to me that the loss is that at the time when your client could have deferred – or could have taken the payment, there was nothing by way of benefit that should have been there, had he been properly advised.

MR WALKER:   Well, it would not have been there; that is the point, on the facts.  For a start, your Honours appreciate that the benefit at that earlier stage compared with the position of not having made contributions, et cetera, is highly speculative as to whether it would produce anything in the nature of what I will call “financial loss”. 

But leave that “balance sheet” approach aside at the moment.  Concentrating on what the gist of our complaint is, that there was a statutory entitlement, and the hypothesis of the argument is that there was a duty of care owed to us to advise us about it - that breached, then of course, as in any case about omitted advice, the plaintiff has to prove that the plaintiff is worse off for not having had the advice, which always means on the counterfactual proving on the balance of probabilities what would have happened had the advice been given properly. 

Now, where the advice is about making a choice, be it surgery or waiting, be it taking the very small sum or accumulating – in effect, deferring – for retirement remuneration, in our submission, precisely the same substantive consequence follows, namely, you cannot show that you are worse off if you have shown that you would not have taken anything – you would not have the operation, you would not take that piece of money.

In our submission, what, if I may put it this way, lurks behind some of the argument against us, and perhaps – I say this more definitely – the reasoning by which we suffered failure below is some sense of unease about a cause of action maturing by the suffering of loss according to an act of volition on the part of the plaintiff.

That, in our submission, raises a question of considerable abstract importance.  Nothing abstract is appropriate of special leave without concrete facts.  This case presents neat, clean concrete facts to explode what we submit is a misleading notion that there cannot be in the proof of facts to show that a plaintiff was worse off for the breach of duty anything which depends upon the volition of the plaintiff – a choice.

KEANE J:   Is this your point that there is an agreed fact about this?

MR WALKER:   Yes, there is.

KEANE J:   Yes.

MR WALKER:   The point ‑ ‑ ‑

FRENCH CJ:   It would have, yes.

MR WALKER:   It is neat and clean.  It is there.  This is not an area where assessment of prospect – including below 50 per cent – had anything to do with it.  The parties are agreed, I think, in principle on that and that is clear from Malec in its particular application in Cornwell.  So, here is the agreed fact that if the advice had been given he would have been made aware of the right to elect and he would have elected.

FRENCH CJ:   Can I just drop this into the statutory scheme?  I am looking at paragraph 16 at 147 in the respondent’s submissions.

MR WALKER:   Yes, your Honour.

FRENCH CJ:  

on his voluntary redundancy on 5 April 1993 Mr Innes would have been “entitled” to an early retirement benefit under s 59 of the 1976 Act. 

MR WALKER:   But for ‑ ‑ ‑

FRENCH CJ:   Yes.

MR WALKER:   ‑ ‑ ‑ an election.  That 59 ceases to be available or applicable if there is an election.

FRENCH CJ:   Well, what happens ‑ ‑ ‑

MR WALKER:   You can go from one stream to another.

FRENCH CJ:   Is it defeated?

MR WALKER:   Yes.

FRENCH CJ:   Is it there and then your election means you acquire a different right?

MR WALKER:   I cannot deny this – and it is in the nature of an election – indeed, it really is my case.

FRENCH CJ:   Yes.

MR WALKER:   But, I have to accept the good and the bad.  It is certainly true that if we had not elected, the things that follow upon the election do not happen.  That is a truism, of course.  That would have been either 59 or 62, it does not matter which.

FRENCH CJ:   So, you have right A without election and right B with election.

MR WALKER:   Yes.

FRENCH CJ:   You lost right A because you did not join the scheme and you lost the opportunity to acquire right B, but that, as I understand the opportunity argument, is down the track.

MR WALKER:   Your Honours appreciate that I jib somewhat at the notion that we lost right A.

FRENCH CJ:   Well, you never acquired it.

MR WALKER:   We never got it.

FRENCH CJ:   Yes.

MR WALKER:   What we prove is that we lost right B which did not mature until a time within the statute of limitations.  How do we do that because it is like losing the benefit of the surgery that the patient would not have had – that is no loss.

FRENCH CJ:   The question, I suppose, then is does it matter if there were an accrued right A ‑ ‑ ‑

MR WALKER:   No.

FRENCH CJ:   ‑ ‑ ‑ at the point of redundancy if the fact is you have lost right B which arises down the track.

MR WALKER:   That is correct.  It is not for the defendant, with respect, to pile counterfactual on counterfactual, to say yes, yes.  It is true you would not ‑ ‑ ‑

KEANE J:   Except that if you have lost right A, you have a complete cause of action.  Once you have suffered loss ‑ ‑ ‑

MR WALKER:   That is why, as your Honour appreciates, I jib at saying we lost right A.  We never had it.  We never had it.  On the counterfactual, we would never have had it.  So, on the factual, we never had it.  On the counterfactual, we would not have had it.  So if you can say that about a thing on both sides of the comparison, how can one say one has lost it?

FRENCH CJ:   Sorry, I just want to understand this.  On the counterfactual, that is, you entered the scheme and you would have elected ‑ ‑ ‑

MR WALKER:   That is right.

FRENCH CJ:   ‑ ‑ ‑ but you entered the scheme at the point of redundancy, you had a choice and that choice was to exercise right A.

MR WALKER:   To take right A, yes.

FRENCH CJ:   Take right A, which was there, or elect and go down the track to right B.

MR WALKER:   That is correct.  I certainly do not jib at that.  That is our case in truth, but my point is that that does not mean I have lost right A, because we are not valuing that choice.  This is not like a Chaplin v Hicks.  That is not the loss in question.  The loss is of the benefit we would have had but for the wrong, and on the facts the benefit we would have had but for the wrong was never A, it never got into the picture, it was B.  That is why it is not true to say that we lost benefit A.  We cannot be said – and it is really not for the defendant to thrust on us and say, “Look, though you never wanted it, though you would have taken steps to mean you never had it, you did lose it, and look, now you’re too late to sue and you can’t get anything”.

In our submission, there is an intuitive recoil at the notion that the defendant can characterise us as having lost something that we never had and on the facts would never have had, could never have had, all for the purpose, self‑evidently, of invoking a period – if the boot was on the other foot and we had sued at that point, having made the election, as we say we would have made, imagine with what derision the defendant would have met the claim that we should be given damages based upon the fact that we did not have benefit A.  May it please the Court.

FRENCH CJ:   Thank you, Mr Walker.  Yes, Mr Semmler.

MR SEMMLER:   Your Honours, there is no error of principle in the Court of Appeal’s decision.  The principles in relation to claims of this kind in respect of lost or diminished benefits under the federal superannuation legislation were settled in Cornwell and what the Court of Appeal did was strictly to apply what this Court said in Cornwell.  In Cornwell the nature of the interest infringed, in accordance with what was said in Wardley, was identified not as the receipt or payment of the benefit.  It was identified as the entitlement to the statutory benefit.

The Court in Cornwell, your Honours will recall, was at pains to differentiate between what was alleged to be the loss, that is, the lesser benefit that Mr Cornwell received on his eventual retirement.  The Court said to speak simply of a retirement benefit and its value is to obscure the nature of the economic loss involved and what the respondent stood to enjoy upon retirement was an entitlement conferred by federal statute law. 

Now, the Court, having said that in Cornwell, the Court of Appeal strictly applied what was said.  In the search for the actual damage which initiates the tolling of the limitation statute, the court searched for that entitlement and it found it on 5 April 1993.  In Cornwell, the Court was dealing with a case of a man whose only entitlement, his first entitlement, fell in when he actually retired.  But the Court in Cornwell also anticipated situations where the entitlement might fall in before the retirement of the person in question.  It might fall in by reason of the satisfaction of a number of statutory contingencies.  The Court, at paragraph 33 of the judgment in Cornwell, identified those various contingencies as including, amongst other things, an early retirement benefit.  The Court said:

Likewise, the entitlement to an ‘early retirement benefit’ depended upon satisfaction of various temporal and other criteria for voluntary or involuntary early retirement -

That is precisely the situation that the Court of Appeal was dealing with in Mr Innes’ case.  That is, by reason of section 58 of the 1976 Act he ceased eligible employment and was entitled under section 59 to early retirement benefits.  Just going back to Cornwell the Court talked about the need, in the search for actual damage, to look for the satisfaction of any applicable statutory contingency.  Earlier, at paragraph 19, it talked about looking for when a statutory entitlement arose. 

So it is not just the particular entitlement that the person who alleges negligence may suggest to the court.  It is rather a more objective inquiry than that:  when did an entitlement arise?  In this case the entitlement arose on 5 April 1993 when Mr Innes became entitled to early retirement benefits.  This entitlement was not a potential entitlement; it was not a contingent entitlement.  The language of section 59 is clear and unambiguous.

He satisfied that language because he had not reached the age of 60.  He ceased to be an eligible employee by reason of early retirement and, in those circumstances, the statute said he is entitled to the various – or one of the various – benefits that were listed in section 59. 

Now your Honours, with respect, the fallacy in my learned friend’s argument is to, in effect, ignore the fact that the entitlement had arisen before the election which my learned friend says Mr Innes would have made.  When I say “election”, that is the election under section 137 to defer the payment of the benefits under the entitlement.  What my learned friend needs to, as it were, skate over in his argument is that when it is a question of whether a limitations statute has been engaged because proceedings have been commenced on a cause of action which arose more than six years ago, the search is for the relevant loss.

The relevant loss was identified in Cornwell as being the entitlement, that is, when is the first time when the contingencies are satisfied to entitle someone to any benefit?  Those contingencies were satisfied on 5 April.  What happened after that is not relevant to the limitation inquiry, because strictly applying what this Court said in Cornwell, there was actual loss when that entitlement arose, and it did arise – it was not a question of – it has been put in my learned friend’s written submissions that it was some kind of a, as it were, choice between that entitlement and some other entitlement.  It was not.  There was no choice, nothing, no act of Mr Innes could alter the force of the statute and the effect of the statute which said once you satisfy these conditions an entitlement arises.

FRENCH CJ:   So, in terms of my rather simplistic “right A and right B” analysis, you would say that at the time of his retirement, he had right A with an option embedded in it to go to the deferment track?

MR SEMMLER:   Well, no – we would put it differently, your Honour.

FRENCH CJ:   Yes.

MR SEMMLER:   Once he satisfied the criterion of section 59, right A arose.  It crystallised, and ‑ ‑ ‑

FRENCH CJ:   I understand that ‑ ‑ ‑

MR SEMMLER:   But it is not the ‑ ‑ ‑

FRENCH CJ:   But attached to it ‑ ‑ ‑

MR SEMMLER:   ‑ ‑ ‑ the choice is not embedded within it.  The choice comes within ‑ ‑ ‑

FRENCH CJ:   But attached to it is the contingency of an election to defer.

MR SEMMLER:   Well, it is not strictly attached.  It is a separate matter arising under section 137.

FRENCH CJ:   Yes, but it is all part of the one statutory scheme.

MR SEMMLER:   It is.

FRENCH CJ:   Yes.

MR SEMMLER:   That is true, but the point that I seek to make is that it has been the law for a long while that limitation periods commence when actual damage is suffered.  This Court said in Cornwell actual damage is suffered – actual damage, not contingent damage, not anything else, but actual damage is suffered when a right arises, when the entitlement falls in.  The entitlement inevitably, in this case, had to fall in before the election under section ‑ ‑ ‑

FRENCH CJ:   It does not matter to your case, does it, that the entitlement that comes into existence in April 1993 is linked under the statutory scheme to a mechanism to choose to take a later entitlement.

MR SEMMLER:   It is irrelevant, we would say.  That choice after the entitlement has arisen, because it had to have arisen for the choice to be made - you cannot preserve something that does not exist.  Once the entitlement arose that is it, so far as limitation inquiries are concerned.  This Court has said actual damage is suffered on the arising of that entitlement and whatever may be within choice B is not relevant to the limitation inquiry. 

It is not a question of what would have happened if the plaintiff had sued in 1993.  My learned friend referred to that a couple of times.  That is not a relevant question.  In the written submissions, it is said, well, look, how would you quantify the loss, how could the plaintiff sue in 1993?  That is not a relevant question either.  The relevant question is when does loss arise? 

In a case - I have copies if your Honours want to see it – in a case where the reasons were handed down by this Court in early October of this year, Alcan Gove v Zabic, that was a case of mesothelioma where the damage was caused many years – a long while before the plaintiff knew about it, before anybody could know about it.  It would have been impossible to sue when the first damage arose, when actual damage arose - no one could know.  But this Court, nevertheless, applied orthodox principles to say, well, that is when the limitation period began, that is when the cause of action accrued, as it were. 

Similarly, in this case, the inquiry is not, well, how would you plead it, what would you say, would you be laughed at by the defendant?  No, the inquiry is was there actual damage?  The section 59 entitlement was not conditional on the absence of an election to defer.  There was nothing in the requirements of section 59 which says you must not be 60, you must have been – ceased to be an eligible employee by reason of early retirement and you must not make an election to defer. 

That is not one of the criteria, so the entitlement falls in before.  It has to be before this election that my learned friend says and it must be accepted on the facts of this case would have been made.  The loss is, in our respectful submission, not dependent on an act of volition of the plaintiff because that is the way my learned friend put it.  He said, well, lurking behind the submissions was a concern that somehow or other the loss is dependent upon an act of volition of the plaintiff. 

That is not the respondent’s answer to this.  The respondent’s answer is the act of volition, that is, I know I have got an entitlement or an entitlement has accrued but I would have deferred it – that comes after the actual damage has been suffered because the entitlement has arisen.  What ‑ the plaintiff is worse off, as I think your Honour Justice Keane said, he is worse off because he had nothing to defer at that stage. 

Something had to have arisen.  Some right or entitlement had to have arisen.  It did arise under section 59 and he was worse off because he did not have that entitlement.  He could have taken the benefits immediately or, if he wanted to, could have elected to defer.  It was not a choice between sections 59 and 137 in the sense that you get to 5 April and you decide shall I have the benefits or whatever - I am entitled, your Honour, to section 59; or should I defer?  There was no choice.  The statute operated independently of any act of volition.  The entitlement arose, actual damage occurred, the statute limitations commenced, but there was a right to elect to defer, which is not relevant to the limitation inquiry.

In my learned friend’s submissions and in written submissions – and he briefly referred to it in oral submissions – he talked about the “balance sheet” approach, that is, was Mr Innes’ entitlement on 5 April 1993 something that was of value to him – that is, more than negligible value, which is the test for actual loss which triggers the commencement of the limitation period.  The Court of Appeal certainly found that it was; it was not a negligible or minimal loss, and the fact is his loss was like the loss in Cornwell.

There is no doubt Mr Cornwell suffered a loss, even though when this Court heard the limitation argument in Mr Cornwell’s case, damages had not actually been assessed.  Here also, of course, damages had not been assessed, but there is an overwhelming inference that that entitlement to an early retirement benefit was more than constituted something that was more than negligible.  He was worse off to an extent that was more than negligible.

If the alleged negligence had not occurred, he would have been contributing to a scheme for over two decades, and he would have had an entitlement to early retirement benefits which, compared to simply not contributing the amounts to the scheme, would have been a benefit of some significance.  Indeed, that is the reason why claims such as this are brought, because the loss of ability to contribute to Commonwealth superannuation ultimately leads to a significant loss which can be compensated in damages.

Your Honours, there is no error of principle, as I said at the outset.  The question of whether actual loss has been suffered in this kind of case has been answered by Cornwell’s Case.  All that the Court of Appeal did was to apply the principles of law strictly that were laid down in Cornwell’s Case; that is, when does any entitlement arise? 

The facts are different in this case, of course, because Mr Innes did not leave the workforce in 1993 – he went on to other employment – but the principles remain the same and are applicable to his case, which was one of the circumstances, as I have already said, identified in the Court of Appeal’s judgment as being another situation in which an entitlement might fall in, that is, early retirement benefit entitlement.

So, the Court of Appeal’s decision applied orthodox principles laid down by this Court.  It has long been recognised that time begins to run when actual damage is suffered – this is for the purposes of the assessment of whether a limitation period applies – time begins to run when actual damage is suffered even if the plaintiff is not aware of it. 

That goes back to cases like Cartledge v Jopling, Hawkins v Clayton and, as most recently on 7 October this year as was affirmed by this Court by Alcan Gove v Zabic, a case, as I have already said, where it was impossible for anyone to know that damage had been suffered at that time.  It is an objective inquiry.  It is not dependent upon the act of volition of the person involved.  It is an inquiry as to when damage actually occurred.

FRENCH CJ:   It is a bit hard to transpose that sort of fact‑based case into a case involving accrual of legal entitlements.

MR SEMMLER:   That is true.  I accept that, your Honour.

FRENCH CJ:   It is stretching the analogy.

MR SEMMLER:   But the principle is clear.  If there is a perceived injustice in this – in the situation in which someone like Mr Innes finds himself – and that was referred to in the Court of Appeal’s judgment – and the perceived injustice in the case of persons suffering from mesothelioma was also referred to by this Court in Alcan, in our respectful submission, the

solution is not for this Court to interfere with well‑established principles that go back decades.  The solution would be a legislative solution. 

In some parts of this country, there are extension of time provisions that will apply to losses of this kind – pure economic losses of this kind in South Australia and the Northern Territory.  As this Court said in the Alcan Case, the remedy is in the statute.  In our respectful submission, that is where the remedy should lie.  These principles are so fundamental, so well established, that they ought not to be interfered with.  In our respectful submission, there was no error in the judgment of the Court of Appeal. 

FRENCH CJ:   Yes, thank you, Mr Semmler.  Yes, Mr Walker.

MR WALKER:   Your Honours, this case, like Cornwell’s Case, of course, is about economic loss.  That is where, at a high level, it draws upon the thinking in Wardley as the Court did in Cornwell. 

FRENCH CJ:   I do not think Alcan has much to do with this. 

MR WALKER:   Your Honour anticipates my next sentence – and the cellular or subcellular damage that was at the bottom of the decision in Zabic has nothing to do with this.

KEANE J:   What do you say to Mr Semmler’s point that the reasoning in paragraph 33 in Cornwell is against your argument?

MR WALKER:   That properly understood, it being in the same set of reasons as paragraph 38, its claim that the proper conclusion is that the working through of those contingencies – and I would add to that, according to the facts of the case – is indeed how one ascertains when a loss has occurred in the sense of being worse off.  Contingencies dominate the exposition of the scheme in 33.  Then, in 38, in expressing conclusions concerning accrual of the cause of action, among those contingencies was, as you recall in Cornwell, the closure of one scheme and possibilities of entering into a new scheme was like an election.

The Commonwealth said, “By reason of our wrong in Cornwell, you lost forever opportunities that would have arisen upon the closure of one scheme and the right to go into a new scheme”.  It is on all fours with what they say about the section 59, section 137 divergence of possibilities in this case.  What this Court said in paragraph 38 of Cornwell about that contingency and how it related to loss was that it would have been a “matter of speculation” – in context that means that is why it did not amount to an ascertainable loss – and they described it thus:

However, whether in 1976 the respondent would have been better or worse off had he invested elsewhere the contributions he otherwise would have placed for units under the 1922 Fund arrangements is a matter of speculation.  He could not be said  . . . to have sustained loss of a commercial opportunity which had some value –

So it is not a loss of opportunity case and that is when my learned friend says, as he said today to your Honours, that my client was worse off because he had nothing to defer - that is what he said today - that is saying he is worse off because he lost a choice and that is the very thing that this Court said in Cornwell - that does not mean that you suffered the loss that triggers the time. 

In this case we know how the choice would have been exercised.  In Cornwell’s Case it did not matter because it would only have been a matter of speculation as to whether, for an economic loss case, there was an ascertainable diminution – that is, being worse off.  It is for those reasons, in our submission, that this case most certainly does raise matters of principle going beyond a statutory scheme, but of course the statutory scheme in itself, as you have seen from the evidence put on for the purposes of special leave, has considerable importance beyond simply the drastic effect it has upon my client.  May it please the Court.

FRENCH CJ:   Thank you, Mr Walker. 

In our opinion, the decision of the Court of Appeal involved an application of settled principles which is not attended by sufficient doubt to warrant the grant of special leave.  Special leave will be refused with costs.

AT 10.15 AM THE MATTER WAS CONCLUDED