Kemeny v Gergely

[1996] HCATrans 210

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S92 of 1996

B e t w e e n -

TAMAS KEMENY

Applicant

and

FERENC GERGELY

Respondent

Application for special leave to appeal

BRENNAN C J

GAUDRON J
GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON MONDAY, 5 AUGUST 1996, AT 10.54 AM

Copyright in the High Court of Australia

MR P.J. DEAKIN, QC:   If the Court pleases, I appear for the applicant with MS M. S. C. YORK.   (instructed by Nevill & Edwards)

MR D.A. WHEELAHAN, QC:   May it please the Court, I appear with my learned friend, MR K. P. REWELL, for the respondent.  (instructed by Dennis & Co)

BRENNAN CJ:   Yes.

MR DEAKIN:   In this matter, your Honours, it would be unrealistic for the applicant to dispute the fact that the case does, prima facie, involve issues of fact.  Nevertheless, your Honours, we submit that it is a matter which warrants the grant of special leave because it does give rise to an important question of principle central to the interests of the administration of justice throughout Australia, namely, the question as to whether or not a trial judge, in determining disputed issues of fact, is subject to any duty to provide some reasons or grounds for his conclusions.

BRENNAN CJ:   There is no doubt about that, is there?

MR DEAKIN:   Your Honours, we submit that this Court has pronounced on that issue only once, in Osmond’s Case, in obiter comments and that the extent of what was pronounced upon by this Court in that case was limited to the provision of reasons for the decision, and what the Court did not address, and what, as we understand the state of the law, this Court has never addressed is, within a requirement of reasons for a decision being provided, what duty is there on a trial judge to specify within his reasons, his grounds or reasons for determining a particular issue of fact in a particular way.

GAUDRON J:   But does that not just come down to a statement of why the trial judge prefers the evidence of one or more witnesses over that of one or several others?

MR DEAKIN:   Your Honours, obviously the circumstances are infinite in terms of ‑ ‑ ‑

GAUDRON J:   But, in essence, in this case, it comes down to a statement of why the evidence of one lot of witnesses is preferred to that of the others.

MR DEAKIN:   Your Honour is completely correct in that is how the Court of Appeal dealt with the appeal but it is our submission that it is not the correct analysis of the facts because of two reasons, your Honour:  firstly, the trial judge expressly disavowed any reliance upon demeanour, findings of credibility, or the like.

GAUDRON J:   Yes, but I am not ‑ ‑ ‑

MR DEAKIN:   Yes, I understand what your Honour is putting to me.  The second ‑ ‑ ‑

GAUDRON J:   I want to go back to where I was though.  Will it ever be any question other than that; why the evidence of witness A is preferred over the evidence of witness B?

MR DEAKIN:   Your Honours, that will often be a sufficient discharge of what is required.

GAUDRON J:   But will the question ever be more than that?  The reasons that you assert, will it ever be anything more than a reason for the preference of one version of the evidence over another?

MR DEAKIN:   Well, it depends, your Honours, on what is the basis for coming to that conclusion.  There may well be situations where the explanation which we say is called for in the interests of justice requires an express rejection of someone’s evidence for a specified reason.  It will often, as your Honour says, involve a preference for one over the other.  But whatever it involves, what this Court has never determined is whether or not there is some explanation required, some reason being required.

GAUDRON J:   And in this case some was given.

MR DEAKIN:   No, with respect, your Honour, there was not.  The trial judge did not specify any reason for rejection the evidence principally for the purpose of this application of the two non-aligned witnesses.

GAUDRON J:   He did not believe them.

MR DEAKIN:   But he did not say anything to that effect, your Honour.

GAUDRON J:   Do you want it spelt out?  I mean, there will be many an occasion when considerations of discretion will make it preferable that you do not spell it out; it is not necessary.  I mean, in many, many cases it does come down to a preference of one version of the evidence over another.  You do not have to spell it out that you thought one group was not telling the truth, or ‑ ‑ ‑

MR DEAKIN:   Your Honour, we submit that if the interests of justice, namely justice being seen to be done, are to be served, when there are at least two witnesses who are disinterested in the outcome of the proceedings, whose evidence, as in this case, would determine the critical issues going to the liability of the unsuccessful party, then something is required.  It may be what your Honour is putting to me, that an express reference to preferring one witness to the other may be sufficient but, with respect, in this case the trial judge did not provide any such conclusion, nor did he provide any such reason. 

If what your Honour is putting to me is that there may be circumstances in which quite a generalised expression of preference is sufficient, that may well be the case; in which case, your Honours, it is time that this Court pronounced upon it because, to date, no one has addressed the issue as to what a trial judge should do in the discharge of his public function as a fact‑finder.  Your Honour, this case, it is important to understand, involves two other consideration which we do emphasise:  firstly, that there were only two witnesses called before the trial judge which dealt with this issue, namely, the present respondent, the contracting painter, and one of the female witnesses.  All of the other evidence in the case was dealt with by way of transcript from before the Commissioner.  What your Honour puts to me it may have been that he just preferred one witness over the other or one series of witnesses over the other, has inherent difficulties when the trial judge has not had the benefit of hearing or seeing those witnesses.  He has nothing more than what the Court of Appeal had and what the trial judge said, in relation to those two particular witnesses, is limited to that finding which we have set in the submissions, namely, “I think the probability are otherwise”, namely, that although each of them said that the worker had done painting work for them, he was not satisfied that he did do the painting that those two witnesses gave evidence of and he simply says, “I think the probabilities are otherwise” - page 11, line 9.

Now, your Honours, we submit that if it is accepted - and it is inherent in what your Honour has been putting to me - that some explanation is required, whether it is simply an express preference of one witness over the other; an express preference for one side of the case based upon the evidence that the judge has heard over the other; matters not - what is required, and why we submit special leave should be granted, is that this Court has never pronounced upon what duties a trial judge does have in those circumstances.  What your Honour the Chief Justice put to us, namely that it is already clear; it is clear, your Honours, in respect of the provision of reasons but what is not clear and what has never been addressed is, within that obligation to provide reasons, what is the obligation of a trial judge on issues of fact?

GUMMOW J:   Well, I never had any real doubt about it, for eight years, Mr Deakin.

MR DEAKIN:   Your Honour says you have never had any doubt about it, but how are trial judges to know ‑ ‑ ‑

GUMMOW J:   As a trial judge, I mean.  It is a great question of degree and sense involved in all this.

MR DEAKIN:   Again, if your Honour is right, then, is it not about time, with respect, that this Court lay that down, as a matter that trial judges would then understand and appreciate because, your Honours, what they may prefer is what the Privy Council has pronounced upon, namely, that the provision of the decision and the ultimate conclusions is sufficient, because the Privy Council, as Justice McHugh has point out in the Soulemezis Case, has a very different view to that which your Honour Justice Gummow has just put to me as being what is widely accepted in this country, and that view has some support, at least in Victoria.

BRENNAN CJ:   What are these two views?

MR DEAKIN:   The two views ‑ perhaps I should take your Honours to it briefly.  In Soulemezis (1987) 10 NSWLR 247, which is the only case where these issues, as we have researched the matter, have attempted to deal with it, Justice McHugh points out at page 281C that:

I do not think that the decision of the Judicial Committee in Selvanayagam v University of West Indies, ought to be treated as giving any guidance to New South Wales courts on the extent of a judge’s duty to give reasons.   The relevant passage ‑

at 587 of the Weekly Law Reports ‑

is too long to set out.  But it appears that their Lordships concluded that it was sufficient, despite conflicts on various issues of fact, for a trial judge to recite the evidence in detail and state his ultimate conclusion.

And that approach has obtained some support in the Full Court of the Victorian Supreme Court.  We did not unfortunately reproduce this in the bundle but if I can just give your Honours a reference to it ‑ ‑ ‑

GUMMOW J:   It is very difficult to be dogmatic about these matters.

MR DEAKIN:   Your Honours, we accept that it is a very difficult area.

GUMMOW J:   It is all part of day‑to‑day judicial work and experience.

MR DEAKIN:   Yes.

BRENNAN CJ:   Sometimes you would say, “This is the evidence of the plaintiff.  I do not believe a word that comes from his mouth”, full stop.

MR DEAKIN:   Yes.  That would be a sufficient explanation for why the judge determined it the way he did.

BRENNAN CJ:   Even though on the cold face of the transcript it might appear a very cogent sort of evidence.  On other occasions, it might be a question of a document which tends to show the truth of one version against another.  It is so variable.

MR DEAKIN:   We understand, your Honours, that the formulation of what the principle should be is a very difficult matter because it is so variable.

BRENNAN CJ:   When you say, “the principle”, what is the proposition:  in default of enunciation the judgment is erroneous and can be set aside?

MR DEAKIN:   Well, that is the second question that we submit is a further reason ‑ ‑ ‑

BRENNAN CJ:   It is the critical question when you talk about principle, is it not?

MR DEAKIN:   Yes, it is, because there is a conflict in the authorities as to how it should be analysed.  Your Honours are aware from what we have put to your Honours that Pettit v Dunkley, Soulemezis and many other decisions in New South Wales have determined, for the purposes, at least, of New South Wales law, that a failure to provide adequate reasons is an error of law.  That approach has not been accepted in South Australia, at least.  We have given your Honours a reference to it and the case is actually extracted in the bundle, and that is a further area of conflict and a further reason why special leave should be granted because, whatever the formulation of the principle is, it is open still to determine how it should properly be categorised.  This Court in Osmond said no more than the decision that it is an error of law, “broke new ground”.  That cannot provide equivocal support for whether the proposition is correct or not.  So that issue is also open and undetermined at the moment.

BRENNAN CJ:   Osmond was a case dealing with administrative law.

MR DEAKIN:   Absolutely.  It was an administrative law case.  My learned friends have invoked it as having determined this point.  It cannot be so described, in our respectful submission.

BRENNAN CJ:   Here you have got evidence which says that this man did painting in these two places.  You have got that evidence being adverted by the trial judge.  The evidence is contradicted and the trial judge says, “I think the probabilities are in favour of the proposition that he did not paint.”

MR DEAKIN:   Yes.

BRENNAN CJ:   Now, what more do you want?

MR DEAKIN:   We submit that if justice is to be seen to be done, and if a party is entitled, as the authorities make it plain to be entitled, to know the reasons why he lost the case, then when a party brings along two disinterested witnesses such as that, who give this evidence, and who come to court in answer to a subpoena for the purpose of doing so, for a trial judge to do no more than say, “I think the probabilities are otherwise”, is not a sufficient discharge of the public duty which he ‑ ‑ ‑

BRENNAN CJ:   It might be upset by a court having jurisdiction to hear appeals on the grounds of error of fact.

MR DEAKIN:   I am sorry, your Honour, the parties might be?

BRENNAN CJ:   No.  If a court of appeal has jurisdiction to entertain an appeal on a ground of error of fact, then the sparseness of the reasons given below and the seeming independence of the witnesses, might lead that court to a particular conclusion.

MR DEAKIN:   But, your Honours, that raises a very important point also that we rely upon.  This Court has emphasised in the cases that are so often trotted out, Abalos, Devries and the others, that the circumstances in which an appellate court can interfere with findings of fact, is a very narrow gateway indeed.  It requires proof of the advantage of the trial judge having been palpably misused.  If a trial judge is entitled to make critical determinations of fact, without explaining why he does it, then how can an appellate, in the exercise of the statutory right which your Honour has just referred to, to exercise his right of appeal, hope to demonstrate that he has misused the advantage he had, because the judge does not provide any reasons for doing so? 

Your Honour, with respect, it reinforces what your Honour has put to me as further reasons why this Court should spell out why special leave should be granted, to specify (a), what is the nature of the obligation of a trial judge, admitting, of course, that one cannot have absolute generalisations that apply to every case, but one certainly could have a generalisation, formulated in the terms that we have, to provide some reasons or grounds for determinations of issues of fact which are critical to the outcome of the case and evidence which is provided by witnesses, which would determine the outcome of the case, we submit, is a sufficient reason for why a judge should be, as this Court would pronounce upon it, required, in general terms - not in every possible case, but in general terms, required to provide some explanation for why he preferred the evidence of one witness or why he rejected the evidence of the other.

This matter is a simple factual case.  It raises that issue directly and we submit that it is an appropriate matter for special leave to be granted.  We have given your Honours Soulemezis.  I think your Honour may have distracted me at a time when I was going to give your Honour the reference to the Victorian case which adopted a similar approach to the Privy Council.  It is a matter of Sun Alliance Insurance v Massoud (1989) VR 8, at page 19, line 36. It is a judgment of the Full Court, pronounced by Mr Justice Gray, and his Honour says this:

The simplicity of the context of the case or the state of the evidence may be such that a mere statement of the judge’s conclusion will sufficiently indicate the basis of a decision.

Your Honour Justice Gummow referred to your Honour’s experience as a trial judge and, no doubt, in your Honour’s court, the principle was applied.

GUMMOW J:   That is very flattering, Mr Deakin.

MR DEAKIN:   The question is whether all trial judges are sufficiently cognisant of that responsibility and that duty.  At the moment, there is no definitive pronouncement by any court which says it clearly exists and certainly not by this Court.  We submit it is a sufficiently important matter for this Court to pronounce upon, particularly when one bears in mind there are conflicting authorities as to what is the duty of a trial judge, and conflicting authorities as to how one categorises the absence of sufficient reasons in the circumstances.  Your Honours, within Soulemezis, the policy reasons behind such a requirement are set out, and if we could trespass upon your Honours’ time just to refer very briefly to the judgments in that case. Could I just give your Honours very briefly a reference in Soulemezis, (1987) 10 NSWLR, firstly, in the judgment of the President, as he then was, Mr Justice Kirby, where he talks about the requirement of the judge to give reasons so that they can be debated, attacked and defended, and that is an important constraint on the judiciary’s exercise of power.  He says, at 258:

This is a consideration of particular importance in the instant case because of the fact that appeals are limited to questions of law.  That does not exempt the judge from logical and reasoned decisions on questions of fact duly justified where they have been contested.  On the contrary, because the judge is in this respect the final arbiter, and not a juror, the duty to expose his or her reasons, however briefly, is enhanced, not diminished.

And, similarly, in the judgment of Mr Justice Mahoney, forming part of the majority.  He refers to this Court not having pronounced upon the question at 269.  He says that case did not give rise to a need to consider it in detail.  At 274, in a similar position on the page, Mr Justice Mahoney says:

This does not mean that a judge should not state explicitly the reasoning processes which have led him to his conclusions of fact.  He will do this because of his recognition that the parties may need, and may expect to have, an understanding of the basis on which he has arrived at his decision. 

And, finally, Mr Justice McHugh’s judgment.  He sets out the policies behind the reasons why reasons are required, at 279, and ‑ ‑ ‑

BRENNAN CJ:   Just pausing there for a moment, what was said in Osmond’s Case is really all that can be said, is it not?  That is, that:

there was is nothing new in saying that judges are under an obligation to give reasons where that is necessary to enable the matter to be properly considered on appeal.  It has long been the traditional practice of judges to express the reasons for their conclusions by finding the facts and expounding the law ‑ - -

MR DEAKIN:   Yes, “finding the facts and expounding the law” does not cover what we are raising, your Honour.  The finding of fact in this case is ‑ ‑ ‑

BRENNAN CJ:   But “necessary to enable the matter to be properly considered on appeal” does.

MR DEAKIN:   That gives rise to the particular problem that we just referred to from Mr Justice Kirby’s judgment, namely, what happens when the appellant’s rights of appeal are limited to points of law.

BRENNAN CJ:   What is the situation in the present case?

MR DEAKIN:   That is the present case, your Honour, and that is why we read that passage.  This is a point of law case, and that is exactly why the parties should be entitled to know the reasons why the judge decided the issues of fact the way he did, because he has no right to appeal anything other than a question of law, and it is the reasons point which gives rise to the point of law, but if the reasons are not exposed at all for him coming to the views that he did, then the appellate’s rights of appeal are totally negated and the right of appeal is effectively destroyed.  It is for those reasons, we submit, special leave should be granted.

BRENNAN CJ:   Thank you, Mr Deakin.  We need not trouble you, Mr Wheelahan.

The case involves no question of principle which requires elucidation by this Court.  The application seeks to find in the spare reasons for judgment of the trial judge an issue of principle relating to the need to explain why a finding of fact was made.  There is no issue of principle.  The case involves no more than a finding of fact.  For that reason, special leave will be refused.

MR DEAKIN:   If the Court pleases.

MR WHEELAHAN:   Would your Honours consider an application for costs.

MR DEAKIN:   We anticipated it, your Honour.  We have nothing to say on the issue.

BRENNAN CJ:   Yes, very well.  It will be refused with costs.

AT 11.16 AM THE MATTER WAS CONCLUDED