Lee v James Hardie & Co

[2003] HCATrans 701

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth  No P56 of 2001

B e t w e e n -

PATRICK NITTAN LEE

Applicant

and

JAMES HARDIE & CO PTY LTD

Respondent

Application for special leave to appeal

McHUGH J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

FROM PERTH BY VIDEO LINK TO CANBERRA

ON FRIDAY, 9 MAY 2003, AT 1.47 PM

Copyright in the High Court of Australia

MR N.J. MULLANY:   May it please your Honours, I appear for the applicant.  (instructed by S.C. Nigam & Co)

MR D.R. CLYNE:   May it please the Court, I appear for the respondent.  (instructed by Downings Legal)

McHUGH J:   Yes, Mr Mullany.

MR MULLANY:   The appealable errors we contend were committed below are found at application book pages 73 and 74 at paragraphs 122 to 123 and 128 to 129.  The reasoning the subject of challenge is reproduced for your Honours’ convenience at paragraphs 4 to 5 of the summary.  Two members of the Full Court had reference to considerations of what were described as “logic” in order to diminish substantially conservative awards made by the trial judge for two heads of damage:  future gratuitous care and future medical expenses.

As this and other courts have observed in various contexts, appeals to notions of logic are apt to mask error; they ought raise an index of suspicion and warrant the closest scrutiny.  The appeal to logic alone was what prompted their Honours to interfere with the discretionary judgment arrived at in difficult circumstances following a five-day trial and the evaluation of evidence of an unreliable plaintiff and 13 medical witnesses providing conflicting medical opinion.  That interference had a dramatic consequence in relation to the operation of a local statute, which is referred to in paragraph 2(k) of the summary.

Before I turn to the reasoning of the Full Court, can I tell your Honours this.  The learned trial judge awarded the applicant damages for loss of earning capacity between the time of the accident in July 1997 and the trial in 2000 and thereafter for two years.  The award of loss of earning capacity was so limited because of the likely impact of various factors unrelated to the tort.  Those factors were the applicant’s pre‑existing medical conditions and skills and an anticipated downturn in the respondent’s operations.  His Honour awarded sums for future gratuitous existence in the form of personal function as opposed to housework, and for future medical expenses for the rest of the anticipated life, namely 23 years.  His Honour made no deductions for contingencies in relation to any of those three heads.

That, in our submission, was an approach which was open to his Honour and entirely appropriate in all the circumstances for the reasons which were articulated by the dissentient below, his Honour Justice Wallwork, to whose judgment I will return in just a moment.  The majority, your Honours, were of a different view.  I took your Honours to paragraph 122 at application book page 73 and his Honour Justice Steytler, with whom Justice Kennedy agreed, said this:

it seems to me, with respect, to be logically inconsistent to make an allowance for the provision of gratuitous assistance for the respondent in respect of a loss of personal function for a period stretching beyond that which ended two years from the date of the judgment, having regard for his Honour’s findings that, were it not for the accident, the respondent would, by then, have been in much the same situation as he was at the time of the trial.

In those circumstances, it seems to me, the award in respect of gratuitous services for loss of personal function should also have been only for a period of two years –

What is said there, your Honours, should be read with what is said at paragraph 121.  This reasoning, by reference to logic, led to a second error and a reduction of damages awarded for future medical expenses, an award acknowledged to have been very low to begin with.  The second error is found at paragraphs 128 to 129 on page 74, to which your Honours need not turn.  The same mistake underlies both errors.

At first blush, your Honours, this case might appear to be as unremarkable as Fox v Percy did to his Honour the Chief Justice and Justices Gummow and Kirby at paragraph 46 of that decision. The facts maybe, but a closer analysis reveals the errors identified to be of a character which warrant a grant of special leave, either because they raise a question of general public importance in relation to the assessment of personal injuries or because they produced a manifestly unjust outcome, depriving the applicant of any redress, which outcome should be remedied pursuant to this Court’s visitorial jurisdiction.

Your Honours, we advance four primary submissions.  First, the circumstances entitling the Full Court to intervene did not exist.  The situation with which the Full Court was confronted stands in stark contrast to that with which the New South Wales Court of Appeal was confronted in Fox v Percy.  Secondly, what was said by the majority of the Full Court was advanced by way of statement of general legal principle.  The case cannot be characterised, as my learned friend would have it, as turning merely on the supplementation of findings of fact made by the learned trial judge for alternative findings.  It turns, in our submission, on the application of a principle said to be defined by logic which has no place in Australian law.

Thirdly, on the preferred interpretation, the factual finding said to invalidate the awards made by reference to notions of logic was not made by the learned trial judge.  His Honour did not make a finding that, were it not for the accident, the applicant would have been in very much the same position by no later than two years after the date of judgments.  Your Honours, that issue is dealt with at paragraphs 12 to 13 of the summary.  There is nothing to suggest that the learned trial judge found that the effects of the accident would have subsided and the needs created by the carelessness would have dissipated by that date.  On the contrary, he found that they would not have.  The majority has merged, erroneously we say, the reasoning in relation to loss of earning capacity with that in relation to the needs created for gratuitous services and future medical treatment.  The distinction between the two was something which the learned trial judge was very aware of.

The fourth primary submission, your Honours, is this.  This case is properly to be regarded as exceptional.  The necessity to remedy what transpired below transcends, in our submission, strict requirements for a grant of leave.  To that extent it is like Devries where, as your Honour Justice McHugh emphasised at paragraph 86 of Fox v Percy, this Court had to intervene to restore a finding of negligence even though there was nothing new about the case, as your Honour described it.  It is similar also to Rosenberg v Percival where your Honours intervened to restore the finding of the trial judge reversed by the Full Court of this State, and there are many other examples.

Here, a minor interference by an intermediate court in circumstances which did not permit such action has resulted in the total deprivation of redress for proven negligent conduct and the imposition of significant liability in the form of costs.  Even if your Honours were not persuaded by the primary submission concerning the principal question, this Court’s intervention is called for, in our respectful submission, in light of the special and particular circumstances of the case.

Your Honours, may I develop two of those four submissions, the first two.  The circumstances here did not warrant the intervention of the Full Court.  It could not be said that a serious mistake had occurred in relation to the comprehension or evaluation of the evidence adduced.  There was no incontrovertible evidence which served to rebut the findings made by the learned trial judge.  There was no incontestable objective fact that served to rebut the conclusions arrived at by his Honour.  His Honour did not misapprehend the facts, he did not misapply legal principle, he did not miscalculate the damages, nor did he err in the exercise of his discretion.  The door to appellate review was said to have been opened not by the considerations referred to by this Court in the well‑known trilogy of decisions instructing intermediate courts but by reference to vague notions of logic.

His Honour the Chief Justice and Justices Gummow and Kirby highlighted the distinction between these considerations at paragraph 37 of Fox v Percy [2003] HCA 22, to which I do invite your Honours’ attention. At paragraph 37 of that decision their Honours said this:

In the end, it was not logic and the assessment of probable behaviour in the circumstances that persuaded the majority of the Court of Appeal.  Such considerations might not alone have warranted disturbance of the primary judge’s conclusion.

They did not do so here, in our respectful submission.

It was the objective fact of the skid marks which, to the close of trial, remained unexplained, or insufficiently explained, by the appellant.

Your Honours, there was no equivalent to the skid marks here.

The fact that the applicant was found to have been unlikely to be able to work for more than two years after the trial is not analogous.  There is a marked disparity between those two cases.  That two of the four judges who have examined this case do not consider there to have been any logical inconsistency in the reasoning and approach employed at first instance serves, in our submission, to highlight the real danger that recourse to notions of logic to justify appellate intervention brings.  No logical inconsistency is discernible, in our respectful submission.  The error made by the majority is revealed by the reasoning employed by the dissentient, his Honour Justice Wallwork.  That is set out for your Honours’ convenience at paragraph 6 of the summary.

It was the failure to appreciate that an employee can be incapacitated for work due to non‑tortious causes or unemployed for non‑medical reasons and still require assistance and medical treatment made necessary due to the negligence of the tortfeasor which led the Full Court into error.  As Justice Wallwork observed at paragraph 20 at application book page 54:

There was evidence of the injury to the plaintiff and how it had affected him.

The likelihood of an inability to work as at the date of trial does not lead as a matter of logic inevitably, or in this case, to the conclusion that an injured plaintiff would in any event have required gratuitous care or been forced to expend money on medical treatment.

Your Honours, the flaw in the majority approach is revealed by changing slightly the facts in these circumstances.  Consider this:  a Judge of this Court has high blood pressure, he has a degenerative spinal condition, he has serious renal problems.  He must retire at 70 years of age.  That Judge is 68.  During a visit to Perth in October that Judge is seriously injured, God forbid, in a road traffic accident.  The Judge is from that day confined to a wheelchair.  It is established that the tortious conduct that created a need for personal assistance and medical treatment for the rest of the Judge’s life.  The finding that the Judge would not have been able to earn income after the age of 70 due to the pre‑existing medical conditions and/or compulsory retirement does not in itself disentitle him to damages for gratuitous personal assistance or medical treatment beyond that date, the need for that having been established.

That, however, is the effect of the reasoning of the majority of the Full Court.  It is that approach and not the approach of the trial judge is, we say with great respect, illogical.  Loss in the form of incapacity to earn and loss in the form of the needs for gratuitous assistance and future medical treatment are, of course, quite distinct.  Compensation for the former category of loss does not compensate for the latter.  There is no inevitable, inextricable connection between the different species of loss.

Your Honours, there is an additional vital factor which should not be lost sight of when examining the validity of the interference below, and it is this.  In assessing the claim for future care the learned trial judge had express regard to the issue of onus.  May I invite your Honours’ attention to consider what was said at application book page 33, paragraph 216.  There his Honour said this:

in respect of the likelihood that the plaintiff would have experienced some back symptoms in any event, I do not find that the defendant has discharged its onus in that respect in relation to any need for gratuitous services, given that there is no evidence to that effect, and given that the allowance for services made is, as stated, confined to that for personal assistance.

That is highly material, in our respectful submission, because the respondent had discharged the onus on it in relation to the likely incapacity to earn, as his Honour the learned trial judge recorded at paragraph 174 at application book page 29, but it did not do so in relation to the likely need for gratuitous services.

That the evidence of the applicant and that of his wife was found to be insufficient to establish an entitlement to damages for future housework does not mean that the claim for the other forms of gratuitous care was not made out based on their evidence.  Clearly the learned trial judge thought that it had been.  The respondent produced no evidence to rebut the claim for such relief and the learned trial judge, quite properly, attached significance to the failure.  The majority of the Full Court ignored that important fact and that was erroneous.  Reference to logic does not obviate the requirement to discharge an evidential burden.

I said I wanted to develop two of the four submissions, your Honours.  Can I turn to the second.  The appeal does not, as my learned friends contend, turn simply on the facts.  It turned on the application of a hitherto unknown legal principle.  The majority may be taken to have applied a principle which was seen as disentitling a victim of negligence to an award of damages for future gratuitous care and/or future medical expenses referable to assistance or treatment beyond the date that pre‑existing adverse conditions would have developed so as to prevent employment.  That what was said by the majority was advanced as a statement of legal principle rather than as a supplementation of fact is, in our respectful submission, supported by the approach adopted and the reasoning employed by Justice Wallwork at paragraph 26 on application book page 55.

It is clear from his Honour’s recording of the respondent’s contentions before the Full Court that this issue was presented on its behalf on the basis of the supposed legal principle and that this was how the majority resolved it.  There is, of course, no such principle under the current law.  The decision of the majority marks a significant departure from the current method of assessment of damages for personal injury.

It should not be permitted to stand, and there are two reasons why we say that.  First, there is a danger that it will come to be regarded as good or settled law.  That principle would have general application and its validity is therefore a question of significant national importance.  Secondly, in the absence of intervention by this Court, the applicant will be left without any redress and with crippling liability in circumstances where he should never have been placed in that position.  This has occurred because of a miscarriage which requires correction and a re‑emphasis of the need for intermediate courts to apply fundamental principle governing their interference with discretionary judgments of trial courts.

We are acutely aware of your Honour Justice McHugh’s recent comments concerning the Court’s limited resources, its capacity to entertain appeals and of the need to prioritise matters.  It is true, your Honours, that no one’s liberty is at stake in this case.  The future victim of negligence is, however.  We can tell your Honours that if a grant of special leave were to be given this would be a very short appeal, to be concluded happily within the half day, perhaps even less.  This Court has refused to permit errors of this nature to stand on previous occasions and intervene to restore findings which should never have been disturbed, albeit with a degree of reluctance.  It is our submission, respectfully, that that is a course that should be adopted here.  If it please your Honours.

McHUGH J:   The Court does need to hear you, Mr Clyne.

MR CLYNE:   Thank you, your Honour.

McHUGH J:   This application challenges the statement of Justice Steytler in which Justice Kennedy concurred that, in circumstances where the trial judge concluded that even without the tortiously‑inflicted injury the plaintiff would not have been able to work beyond a period ending two years after the trial, it was logically inconsistent to seek an allowance for the provision of gratuitous assistance beyond that point. 

Contrary to the submissions advanced on behalf of the applicant, that challenge raises no question of law whatever.  The division in the courts below rests on purely factual issues.  Nor are the factual arguments for the applicant so clearly right that this Court should intervene on the ground of a miscarriage of justice in the particular case.  For those reasons, special leave is refused with costs.

AT 2.06 PM THE MATTER WAS CONCLUDED