Ivancic v Zardo

[2005] HCATrans 8

[2005] HCATrans 008

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Canberra  No C7 of 2004
  No C9 of 2004

B e t w e e n -

MATE IVANCIC

Applicant

and

NICK ZARDO

Respondent

Application for special leave to appeal

GLEESON CJ
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 4 FEBRUARY 2005, AT 10.32 AM

Copyright in the High Court of Australia

MR P. WEBB, QC:   May it please the Court, I appear with my learned friend, MR D.R. CAMPBELL, SC, for the applicant.  (instructed by Blumers)

MR P.R. GARLING, SC:   May it please the Court, I appear with my learned friend, MR W.M. FITZSIMMONS, for the respondent.  (instructed by Phillips Fox Lawyers)

GLEESON CJ:   Yes, Mr Webb.

MR WEBB:   Your Honours, this is a case in which we assert there has been a miscarriage of justice calling for the intervention of the Court.  It is based upon the proposition that the reasons of the Court of Appeal give little indication that the applicant’s what we might call primary argument was understood or considered or, alternatively, that the reasons that were given were not proper reasons.

GLEESON CJ:   What is the primary argument exactly?

MR WEBB:   The primary argument was an argument that the trial judge – I know this sounds strange – did not deal with the argument that was put to him at the trial.

GLEESON CJ:   What was that argument?

MR WEBB:   That argument was ‑ ‑ ‑

KIRBY J:   You ultimately get there.

MR WEBB:   I am sorry, your Honour.  I have never run across this situation before.  The primary argument was that on the first day of the hearing the pleadings were amended and narrowed to raise only a particular point under section 66 of the Motor Accidents Act.  That amendment was the subject of explanation by counsel for the plaintiff and we say it is clear from that explanation and a series of other discussions during the course of the trial that the trial was to take a particular course, namely that the plaintiff was not inviting the court to embark upon a particular procedural way of dealing with the issues under the section.

GLEESON CJ:   Is that another way of saying it was all or nothing?

MR WEBB:   No, not quite.  That is how it was described in the Court of Appeal judgment but I do not think that is accurate and I do not think Mr Garling would necessarily agree that that was an accurate summation of his case.

GLEESON CJ:   Can you give us a hint of what the primary submission was, the plaintiff’s case before the primary judge on the issue that we are now concerned with, on the assumption that there had been a fraudulent settlement?

MR WEBB:   Your Honour, it is very difficult to do it in such a constricted way.  What we did in the Court of Appeal was to produce some written submissions which detail what we said in about four pages of summary form were the errors of the trial judge in this particular connection.  There were a number of others, including the way he then conducted what he saw as an examination of this evidence about whether there had been false and misleading representations.

GLEESON CJ:   You would not be seeking to have us overturn the primary judge’s decision that there had been fraud, would you?

MR WEBB:   Your Honour, we say that it did not arise because of the narrowing of the issues.  We say there should have been a judgment for the defendant.  In the course of the written submissions, that is after all the evidence had been in, the judge made an observation that he was not in a position and that it was common ground between the parties that he was not in a position to entertain this examination of the evidence on that question of misleading representations, and yet he went ahead and did it.  Your Honours, I am sorry, can I just come back to where I was.  I appreciate this is only a leave application and I am trying to be as quick as I can because I appreciate you have other matters to deal with today.

GLEESON CJ:   You are going to get 20 minutes whether we have 10 other matters to deal with today, 100 other matters to deal with today or no other matters to deal with today.

KIRBY J:   And in that time you have our undivided attention.

MR WEBB:   I am not sure whether I am grateful, your Honour.

KIRBY J:   It is said that your theory and criticism leads to you walking away with the full verdict even though the finding of fraud has been made and that is not one that is immediately appealing - appears to be just or lawful.

MR WEBB:   That is what Mr Garling says in his submission, your Honour.  Could I just go on to say how things transpired.  There is no proposition from Mr Garling in his submissions to this Court on this application that either the trial judge’s judgment or the judgment of the Court of Appeal dealt with this primary argument.  We take it to be a concession on his part that he cannot find anything.

We say that that is, in terms of an analogous decision in QBE Insurance v Switzerland a basis for there being a miscarriage of justice calling for the intervention of this Court.  That is why I said it is an unusual case.  We are saying that neither the trial judge nor the Court of Appeal dealt with our primary argument.

KIRBY J:   Sometimes arguments are put up which courts do not deal with because they do not have to deal with it.  Some other larger or tangential argument relieves them of the obligation to deal with it.

MR WEBB:   Let me go on, your Honour, and attempt to demonstrate to you why that is not so in this case.  Could I take you first of all very briefly to the section.  It is in the book in a number of places.  Perhaps one of them is page 18.  Section 66(1) provides that the:

section applies to a claimant if it is established that, for the purpose of obtaining a financial benefit, the claimant did or omitted to do anything . . . with knowledge that the doing of the thing or the omission to do the thing was false or misleading.

Section 66(2)(a), which is the relevant section for this factual situation provides that:

a person who has a liability in respect of a payment, settlement, compromise or judgment –

and that is what happened in this case, there was a compromise followed by the entry of a formal judgment –

relating to the claim is relieved from that liability to the extent of the financial benefit so obtained by the claimant –

It is not a situation where, as with the ordinary common law remedy for setting aside a judgment for fraud, the judgment is actually set aside.  The section provides that the liability of the judgment is relieved by the extent of the financial benefit.

The written submissions before the Court of Appeal relevantly begin at page 75.  They record the foreshadowing of the amendment of the statement of claim by reference to another document.  Could I hand up to your Honours an extract from the three versions of the statement of claim which was a document which we used before the Court of Appeal.

GLEESON CJ:   Thank you.

MR WEBB:   The original statement of claim is relatively irrelevant to this submission.  The amended statement of claim came into being as a result of criticism of the original statement of claim by the Court of Appeal in the original Court of Appeal proceedings.  This case has been up and down to the Court of Appeal twice now.  Your Honours will notice that paragraph 16B(b) seeks:

an order that the judgment be set aside –

and I do not want to make any point about that, that is not within the purview of the section –

to the extent of the financial benefit obtained by Ivancic.

The further amended statement of claim which was dated 15 October was the one that was used and foreshadowed on the first day of the trial and you will notice that paragraph 16(b) has been removed and it is clear from what happened in the trial, which was all sound recorded on transcript, that it was deliberately taken out and that follows from what appears on page 75.  The only relief that was sought was a relief from liability to pay the amount of the consent judgment.

No application was then made to deal with the judgment, if I can use that expression, to the extent of the financial benefit obtained by Ivancic.  On page 76 your Honours will see in paragraph 13 that counsel for the plaintiff at 327.11 said that it was:

without contradiction that the only issue before the Master was whether the amount paid represents the extent of the financial benefit because “. . . there was the amendment of the statement of claim to remove the alternative claim.  So it’s simply the lump sum amount, that’s the only issue in the case.  So you are not charged, as the trial judge in Toubia was, with looking at various heads of damage and comparing them and dealing with them seriatim.

GLEESON CJ:   I think we understand that at the proceedings before Justice Connolly the primary submission that you had made was that you did not have to repay anything and the primary submission that the other side made was that you had to repay the lot.  Justice Connolly understood that and said that you are both wrong about that and came to an intermediate view.

MR WEBB:   Can I go on, your Honour.  He said himself – if we can just go forward to the next page – that he did not intend to do that because the evidence did not allow him to, and there is much exchange between counsel and the Master which indicates quite clearly that the aim of the amendment at the beginning of the case was to remove that exercise from what he was to do.

GLEESON CJ:   But he ended up doing it.

MR WEBB:   He said he was not going to do it and then he ended up doing it.  There was no address ‑ ‑ ‑

GLEESON CJ:   How were you disadvantaged by that?  Did you fail to call evidence that you otherwise would have called?  Did you fail to put an argument you otherwise would have put?

MR WEBB:   Yes, your Honour, there was no trial on that issue.

GLEESON CJ:   What was the evidence that you would have called if there had been a trial on that issue?  Evidence of your client, perhaps?

MR WEBB:   Yes, or ‑ ‑ ‑

GLEESON CJ:   Are you telling us that your client would have given evidence?

MR WEBB:   I am not, your Honour.  I am just saying perhaps, but we were not faced with that proposition.

GLEESON CJ:   What would he have said when he gave evidence:  “I admit that I made a fraudulent claim but in truth the real extent of my injuries was as follows”?

MR WEBB:   Your Honour, no, he certainly would not have.  Could I just continue because I have not yet given you the whole picture of what happened at the trial and I am reading from a document which we delivered to the Court of Appeal and which they – none of these submissions or arguments are mentioned in the judgment and they are critical, in our submission, to the outcome of the case.  It was said down a bit further on page 76:

. . . That item by item problem is no longer.”

So it was then very clear that the judge was not being invited to examine the evidence to see what the extent of the financial benefit was.  It was said that the case that was being run was that if the plaintiff’s claim:

was in any way tainted by fraud, the respondent was relieved of the liability to pay the whole amount.

That was what was put as the reason for the amendment of the pleading and the basis upon which this claim was being brought before the trial judge.  Again, at the bottom of page 76 it says that:

it was again confirmed that if the claim was tainted by fraud, the claimant lost the lot, and didn’t get a second bit of the cherry.

GLEESON CJ:   Mr Webb, if you were to get special leave to appeal and you were to succeed in an appeal, what would be the order that you would be asking this Court to make?

MR WEBB:   We would be asking for a judgment, your Honour.

GLEESON CJ:   Not a new trial?

MR WEBB:   No.

GLEESON CJ:   That is rather is unusual, is it not, when the claim is that there has been a denial of procedural fairness?

MR WEBB:   Your Honour, that is so but we say that the issue at trial was so narrow and deliberately made so narrow that there is no reason for a new trial.

GLEESON CJ:   So you disclaim in this application any purpose of having a further hearing on the merits of the matter?

MR WEBB:   Yes, your Honour, and we did that before the Court of Appeal as well.  Mr Justice Gyles asked me that very question.

KIRBY J:   So, Mr Garling’s statement is correct; you then walk away with the entire judgment although fraud has been demonstrated.  I repeat that that is not an appealing outcome to cure an alleged breach of procedural fairness.

MR WEBB:   Your Honour, that, with respect, is a matter arising out of the trial.  We are here to say that there is a miscarriage of justice because this very important argument that we put based upon the late amendment of the pleading and a dramatic narrowing of the issues and the explanation of it in the hearing means that there was to be no trial of those issues, and the trial judge turned around and did it.

KIRBY J:   I appreciate that.

MR WEBB:   Could I just say this, there were no submissions on this question.  Neither side put any submissions on what the judge did.

GLEESON CJ:   What do you mean by “this question”?

MR WEBB:   This question of whether or not there was to be an item by item assessment of the various heads of damage to establish the extent of the financial benefit.  Neither party asked him to do that, with the exception, Mr Garling will tell you ‑ ‑ ‑

GLEESON CJ:   But you do not want the opportunity to do that now?

MR WEBB:   No.  We say ‑ ‑ ‑

GLEESON CJ:   And your client does not want the opportunity to get into the witness box?

MR WEBB:   Your Honour, on the issues that were presented at the trial the judge was not asked to indulge in a trial, the nature of which he did in his eventual judgment.  Could I just go on.  There was no evidence in the case on behalf of the insurer that did this.  There was no attempt to put on evidence to say “This is the extent of the financial benefit”.  There was a situation where the claims manager was allowed over objection to give some evidence along those lines of what his opinion was in relation to what was said to have been some cross‑examination, but that was the sole evidence and that was the limited circumstances in which that occurred.

Over on page 77 there is a series of discussions with the Master about what course he would adopt and then at page 77 his Honour said:

It’s probably common ground that I could not, on the material before me now, make a proper assessment of what - if the matter was being heard as an ongoing case – what Mr Ivancic ought to be awarded as at the date of the settlement.

We responded by saying:

Well, we say that’s the end of the case, and that’s what Mr Stitt conceded in the passage of arms between you . . . “

There was no further address, detailed or otherwise, which said to the trial judge, “You ought to go off and do this thing”.

KIRBY J:   But what do you say to the suggestion that your client was represented by experienced counsel who opened up the issue of partial relief

by the cross‑examination and that that introduced the partial relief claimed and that therefore you should not be all that surprised of the fact that the  matter was then pursued, not on perhaps the strict pleadings, but it would not be the first case that has wandered outside pleadings.

MR WEBB:   Your Honour, firstly, I do not suggest that I am inexperienced.

KIRBY J:   I am just repeating what is on page 124.

MR WEBB:   Yes.  The only basis for the evidence of Mr Nunn of that item by item kind was allowed was in re‑examination – not in‑chief – said to arise from questions asked on a different topic, that is whether he accepted or did not accept the truth of the plaintiff’s allegations, that being an issue – nothing to do with an item by item assessment but having to do with what was presented by that witness’s statement or affidavit.

KIRBY J:   I did not raise that question of your competence offensively.

MR WEBB:   No, your Honour, and I do not take it.

KIRBY J:   On the contrary, I would accept that you are.

MR WEBB:   No, I do not deny it.

KIRBY J:   But it is said that then led to the Court of Appeal and the way it was argued before it, assuming that that was the issue that was being tendered for resolution.  You have to get special leave now, and to do that the question of the injustice, if any, that you have suffered is a matter that is relevant and the suggestion that you could walk away with the entire judgment, although fraud has been shown, is not a very appealing one.

MR WEBB:   Your Honour, can I bring you over to page 78.  These are still in the submissions which are made to the Court of Appeal and in particular to paragraphs 19 and 20.  I do not want to read them out loud, but paragraph 20 asserts, and there was no argument about this in the Court of Appeal, that the judge’s reasons:

contain no discussion of the critical forensic decision . . . the final amendment of the pleadings, or the limited way in which the case was presented at trial.  No reference is made to the primary argument repeatedly put by the appellant.  They do not mention the concessions made by the respondent.

GLEESON CJ:   Thank you, Mr Webb.  We do not need to hear you, Mr Garling.

The Court is of the view that the case does not raise an issue suitable to a grant of special leave to appeal and we are not persuaded that the interests of justice require it.

MR GARLING:   Your Honour, I would seek an order for costs.

GLEESON CJ:   Yes, the application is dismissed with costs.

MR GARLING:   Thank you, your Honour.

GLEESON CJ:   We will adjourn until 11.00 am Canberra time.

AT 10.54 AM THE MATTER WAS CONCLUDED