Lee v Lee & Ors; Hsu v RACQ Insurance Limited; Lee v RACQ Insurance Limited

[2018] HCATrans 241

[2018] HCATrans 241

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B31 of 2018

B e t w e e n -

LIEN-YANG LEE

Applicant

and

CHIN-FU LEE

First Respondent

CHAO-LING HSU

Second Respondent

RACQ INSURANCE LIMITED

Third Respondent

Office of the Registry
  Brisbane  No B33 of 2018

B e t w e e n -

CHAO-LING HSU

Applicant

and

RACQ INSURANCE LIMITED

Respondent

Office of the Registry
  Brisbane  No B34 of 2018

B e t w e e n -

CHIN-FU LEE

Applicant

and

RACQ INSURANCE LIMITED

Respondent

Applications for special leave to appeal

BELL J
KEANE J
NETTLE J

TRANSCRIPT OF PROCEEDINGS

FROM CANBERRA BY VIDEO LINK TO BRISBANE

ON FRIDAY, 16 NOVEMBER 2018, AT 11.07 AM

Copyright in the High Court of Australia

____________________

MR G.W. DIEHM, QC:   Your Honours, I appear with my learned friend, MS M.M. CALLAGHAN, for Lien‑Yang Lee in application B31/2018.  (instructed by Slater & Gordon Lawyers)

MS J.M.N. HEWSON:   May it please the Court, I appear for Mr Chin‑Fu Lee, the first respondent in B31/2018, and the applicant in B34/2018.  (instructed by VBR Lawyers)

MR M. GRANT-TAYLOR, QC:   May it please your Honours, I appear for the second respondent, Mrs Hsu, in B31/2018 and for the applicant, Mrs Hsu, in B33/2018 with my learned friend, MS J.M.N. HEWSON.  (instructed by Littles Lawyers)

MR R.J. DOUGLAS, QC:   May it please the Court, I appear with MR B.F. CHARRINGTON for the third respondent in B31/2018 and the respondent in B33/2018 and B34/2018.  (instructed by Gilchrist Connell Lawyers)

BELL J:   Yes, Mr Diehm.

MR DIEHM:   Thank you, your Honours.  Your Honours, there are - the outline of my submissions this morning, we will start with outlining the two lead points that we rely upon, to then take your Honours to the part of the reasoning of the Court of Appeal that exposes what we submit are the errors that give rise to those lead points and to then take your Honours to the reasons and other parts of the application book that show the error or the errors that we point to in that respect.

As we have set out in our application, there are two particular points concerning the judgment of the Court of Appeal that we submit give rise to special leave questions.  The first, to paraphrase it, is whether the self‑contained path of reasoning is inadequate if it does not deal with a submission that is made on behalf of the party or a party against the particular finding.  In that respect, we have referred to a number of authorities in our application, but we also rely upon this Court’s judgment in DL v The Queen (2018) 356 ALR 197 which was handed down at about the time our application was making its way to the Registry for filing.

Our submission is that on that authority, and the others that we have referred to, the path revealed by the reasons must be one which identifies and engages the key arguments of the parties, particularly with respect to a party against whom a finding is to be made, and rationalises or reasons, with respect, to the submission that is made. 

The second lead point that we point to, concerns the use of the expression “misuse of advantage” or “misuse of the advantage of a trial judge”.  We raise the question as to whether, in fact, that expression may have passed its usefulness because it tends to obscure what the real inquiry is, and that is, in our submission, was there error and, in particular, with respect to findings with respect to credit, whether there is error revealed in the reasons that vitiates the trial judge’s findings of credit, such that the appellate court should not put weight upon them.

With that outlined for the Court, we take your Honours to the particular parts of the reasoning that exposed those matters and it arises really towards the end of the judgment of Justice McMurdo, who delivered the judgment with which the other members of the court agreed.  Can we take your Honours to page 86 of the application book? 

BELL J:   Really, Mr Diehm, it is all that follows, is it not, after his Honour expresses the view that up to that point in his analysis, having identified a number of errors in the primary judge’s reasons, Justice McMurdo says he would have considered it much more likely that your client was not the driver of the vehicle and what you complain of is the balance of the analysis respecting the DNA in light of Dr Grigg’s evidence. 

MR DIEHM:   That is so.  Thank you, your Honour, that is the point.  So his Honour then, after making that observation about the likelihood of the applicant being the driver, says that he has not yet discussed the DNA evidence.  Then the critical paragraphs, in particular, appear to be paragraph [146] and paragraph [149].  In paragraph [146], his Honour noted that:

no blood appeared on the section of the airbag which would have been immediately in front of the driver as it inflated.  But that fact did not prove that the blood on the airbag had not come from the driver. 

His Honour then referenced an explanation by Dr Robertson, an expert witness on blood spatter, as to how the blood could have come from the driver to those other parts of the airbag, and that that could not be readily rejected.  We will come back to that evidence that is referenced by his Honour earlier in the judgment.  In paragraph [149] a similar theme was taken up.  His Honour said:

Given the nature of the appellant’s facial and teeth injuries, it was inherently probable that his blood would be on the airbag if he was the driver.  That probability is not negated, in my view, by the particular locations on the airbag of the blood stains.  If the appellant was in the driver’s seat, the bleeding would have continued after the split second in which the airbag had been fully inflated.  The hypothesis in favour of the respondent’s case –

was to be preferred.  His Honour did go on then in paragraph [152] to acknowledge that:

This factually complex case was very closely balanced. 

He then dealt with the credit submission that had been made in a conclusion which acknowledged:

Although there were limitations upon the use which the judgment could make of the way in which the appellant and his mother gave their evidence, it is not demonstrated that the trial judge misused the advantage –

adopting that expression:

which he had from hearing and seeing the evidence -

They are the relevant parts of the reasons in particular that we point to.  With respect to those reasons, we say they involve two errors, one being a failure to address a critical argument that went against the idea that the blood was readily explicable as being on the airbag by virtue of the applicant being the driver and, secondly, their Honours’ adoption still of the trial judge’s assessment of credit with respect to the applicant and his mother.

The starting point for looking at the question of the inadequacy of the reasons takes us back to page 85 of the application book in paragraph [134].  At the conclusion of that paragraph, his Honour made a finding that overturned in effect a finding made by the trial judge.  The trial judge had proceeded, it was accepted in the appeal and accepted by the respondent, on an erroneous basis that it was the respondent’s case that the applicant had not been wearing a seatbelt when positioned as the driver and what his Honour found at the conclusion of that paragraph was that:

it was more probable than not that the driver was wearing the seatbelt. 

So whoever the driver was was wearing a seatbelt and that was the important finding that then engaged the submissions that had been made on behalf of the applicant to the Court of Appeal both orally and in writing.

We have, because in our submission those matters have not been adequately addressed in the reasons, had extracted and included in the application book two pages from written submissions in the Court of Appeal and two pages from the transcript.  I need only take your Honours to one of each.  If we go then to AB 135, your Honours will see there at the foot of that page paragraph 38 and the emphasis that we put within that particular paragraph as well is that the submission was made that it was:

incontrovertibly established that the seatbelt pretensioner locks the wearer tightly to the seat.

A footnote was given that referenced an exhibit as well as passages from the transcript of evidence, this plainly being Dr Grigg’s evidence that was being relied upon.

Then, with respect to the oral submissions, if I could take your Honours to page 137, and again at the foot of that page, there was, firstly, a question at about line 37 from Justice McMurdo to me about why it mattered, on the applicant’s case, about the finding about the seatbelt being worn by the driver, whoever that was.  My answer appears at the foot of the page.  So, again, that reference, in the same way that the written submissions had done, the particular proposition about the role of the seatbelt pretension.

Now, that was a factor to be combined with the consideration about the operation of the airbags themselves, or the driver’s airbag in particular itself.  In his evidence, Dr Grigg – and it was unchallenged evidence, as was acknowledged by the court – had said that the airbag operated such that it would inflate and deflate in less than a second, indeed, less than half a second from the point of an impact that was sufficient to trigger the airbag’s operation.  His evidence was, too, that the seatbelt pretensioners were operated simultaneously with the airbags.  None of those matters were controversial.

Now, with respect to the question about the operation of the airbag, the court’s reasons that we have taken your Honours to, and it appears elsewhere in the reasons, shows that the court came to terms with the submission about the speed at which the airbag deflated, because the findings of the Court of Appeal proceed in accordance with the submission that was made on behalf of the applicant on the basis that the bloodstaining does not appear on the front surface of the airbag as it faces the driver when it is inflated, but is rather predominantly, though not entirely, on the surface of the airbag that, when it was inflated, would be facing away from the driver – that is, towards the windscreen.

The obvious conclusion that follows from that, in our submission, was – and does not appear to have been doubted by the Court of Appeal – that that bloodstaining came onto the airbag when the airbag had deflated.  Your Honours can no doubt picture an airbag that is inflated but then picture an airbag that is deflated that is still connected to the steering wheel but hanging down from the steering wheel after the event.  That was what the photographs that were in evidence showed.

What our submission is, though, that the Court of Appeal did not grapple with in its reasons was the complementary submission that went with that, based on the evidence of Dr Grigg that is referenced in those submissions to the circumstance that the seatbelt pretensioner operates simultaneously to pull the driver back into the seat and fix and lock into that position as part of the restraint system to stop the driver being propelled forward. 

Now, there was a reference to that evidence in paragraph [64] of the reasons of Justice McMurdo, which appears at AB 71.  The reference to that evidence from Dr Grigg does not go to the language that was used in the submission supported by the citation from the evidence about pulling the person back tightly into the seat but the flavour of it remains the same; that is to say, it tightens and locks the seatbelts to assist in preventing the occupants being thrown forward. 

So, the evidence was acknowledged by his Honour but, in our submission, when it came to those critical reasons in the passages that we have taken your Honours to, there was no grappling with the impact of that evidence and that submission upon the ready assumption by the court that because the applicant would continue to bleed, blood on the airbag would very likely have been his.

Now, another element in that weakness in the reasoning, in our submission, that we should direct your Honours’ attention to - we have referred to it in our written submissions - is that the expert evidence relied upon by the respondent insurer from Dr Robertson was that the explanation for the blood staining was that it involved direct contact between the bleeding part of the body and the airbag itself and, indeed, as was acknowledged in the reasons of the trial judge, though it did not seem to be explicitly mentioned with respect to the findings of the Court of Appeal, Dr Robertson’s evidence was that it was not “drip or splatter” that was involved but rather direct contact with the bleeding source. 

The only other possibility that Dr Robertson contemplated in her evidence was that it was a secondary transfer from an object that had the applicant’s blood upon it, posited by the applicant as being potentially his father’s hands or hand, though Dr Robertson discounted that variably sometimes strongly, sometimes not so strongly in preference for the conclusion that it came from direct contact with the bleeding surface. 

So, our submission was that on the case that was raised by the applicant, what the Court of Appeal had to deal with, with reasons, were the submissions that we have taken your Honours to, and to explain a path of reasoning that showed why, if it was to be the case, that particular submission founded on that uncontroverted evidence was not to be accepted and the court has not done that.

BELL J:   Mr Diehm, can I just inquire about how the matter was put by the parties.  On the third respondent’s case, that your client was the driver, was the suggestion that the driver’s seat had been laid back down and he had been, as it were, pulled through to the back seat by his father in the 60 or perhaps 90 seconds before Mr Hannan arrived or was it that the father had extracted him via the driver’s door or was that open?

MR DIEHM:   It was the former, quite clearly the former.

BELL J:   So, your point in relation to this is, on the unchallenged evidence accepting that he was the driver and wearing the seatbelt, he would have been pulled back, limited contact with the airbag and if pulled backwards through the body of the vehicle, no opportunity for the blood on his face to have made direct contact with the deflated rear of the airbag.

MR DIEHM:   Quite so, your Honour, thank you, and added to that, to the extent it perhaps matters in the context of what we are putting, the submission also is that the plaintiff was a tetraplegic so he was paralysed at that point in time as well.  So there was limited capacity for free movement on his part to explain the blood but as much as he could do, one might suppose, is tilt his head forward at best and that would be unlikely to bring his head into contact with – his face into contact with the airbag. 

Your Honours, with respect to the assessment of credit point, there were two passages in the judgment that dealt with that of the primary judge.  They are at paragraphs [196] and [198] of the judgment which your Honours will find at page 36 of the application book. 

There were two premises that the trial judge rejected the applicant’s evidence and that of his mother in terms of credibility findings.  One was his observation of both of them as being evasive and another one was that the applicant himself was guarded.  His Honour then went on to say in paragraph [198] that in making that assessment he had given all due regard to the difficulties associated with both of them having to give evidence through the assistance of an interpreter.  The applicant did not.

The second matter raised by his Honour in that respect was in the second part of paragraph [194] where he was critical of the mother’s evidence as being “inherently improbable” because of evidence she gave about her husband leaving “through the driver’s door immediately after the collision”. 

The difficulty we point to with respect to the maintenance of that criticism is that at paragraph [135] of their reasons - of Justice McMurdo’s reasons at page 85, his Honour analysed the issue about whether or not the seatbelt was locked which gave rise to the criticism by the trial judge that that evidence was inherently improbable and his Honour considered that at the end of the day it was not possible to conclude whether the seatbelt had, in fact, been unfastened immediately after the collision.  So, the premise for the criticism was removed and yet the Court of Appeal did not acknowledge that weakness.

Our submission is that neither of those criticisms remained open to be relied upon.  The reasons for rejection of evidence on credit grounds were very brief and in the circumstances the Court of Appeal should not have reached any other conclusion than that the trial judge’s assessment of credit should be set aside and the matter dealt with on the basis of analysis of the circumstantial evidence to judge the reliability of the evidence of the applicant and his mother.  In that respect, we submit that there is error as a result of that.

BELL J:   Mr Diehm, if leave were granted, given the issue that you raise respecting the credit of both the mother and the applicant and given its significance, what order do you suggest the Court might make?

MR DIEHM:   Whilst we accept that there might be a premise or an argument for saying that a retrial or at least a rehearing in the Court of Appeal would be needed, our submission is given that finding made by Justice McMurdo that on the evidence so far analysed it was very likely that the applicant was the driver, once those two errors are brought to account that we have referred to, indeed, either of them, it would be open for this Court to instead give judgment for the applicant.

BELL J:   I see.  Yes, thank you.

MR DIEHM:   Thank you, your Honours.

BELL J:   Mr Grant‑Taylor.

MR GRANT‑TAYLOR:   Your Honours, the point was made in both Mrs Hsu’s application and in her response to the application of her son, Mr Lee, that her interests are precisely co‑extensive with those of her son and, that being so, we are content to adopt and rely upon the submissions of our learned friend, Mr Diehm, and we have nothing to add.

BELL J:   Thank you Mr Grant‑Taylor.  Ms Hewson.

MS HEWSON:   I have nothing to add, your Honours, on behalf of Mr Chin‑Fu Lee.  Thank you.

BELL J:   Thank you Ms Hewson.  Yes, Mr Douglas.

MR DOUGLAS:   Yes, may it please the Court.  For the convenience of disposition and argument, could I please refer to the applicant ‑ the first applicant is Mason Lee and to his parents as Mr Lee and Mrs Lee.  It would be convenient if that would please the Court.

BELL J:   Yes, that would be.  Thank you.

MR DOUGLAS:   If I can deal with the second issue raised by my learned friend at the outline of his argument initially, the issue concerning the advantage – I should say the misuse of advantage by the court.  Having regard to the submission that has been put I think it is correct to say that the parties are probably at one as to the proper legal issue at hand in that regard. 

In this particular case, there were two errors that were identified in the Court of Appeal made by the trial judge - the first concerning the fact, which was incorrect, that Mr Mason Lee gave evidence by an interpreter, and the second was that, in fact, the driver, whoever it be, was not wearing a seatbelt. 

Now, your Honours, an identified and corrected error, whether in this or any other appeal, on our submission, in abstract, may well in some circumstances be characterised as consisting of a misuse by a trial judge of his or her advantage as such, but stated we submit that the concept of “misuse of advantage” of a trial judge is treated in the authorities in effect as a judicial tool for an appellate court in finding and correcting error, not as a label for an error so far.  It is, in truth, a tool in that regard.

As referred to by the appellate court here, applying the statements of this Court in Robinson v McDermott, in the event that there was error detection upon appellate review that required the appellate court to make its own findings and to formulate its own reasoning based on those findings.  That, we would submit, is what the appellate court did here but ‑ ‑ ‑

BELL J:   When one turns to paragraph [152] the concluding sentence does not necessarily sit uncomfortably with that submission, does it?

MR DOUGLAS:   In my submission, not so, with respect.  His Honour Justice McMurdo – the Honourable Justice McMurdo, on behalf of the court, was acknowledging that having gone through the evidence it was a factually complex case which was closely balanced.  When it came to the issue concerning the finding of credit, his Honour directly referred to the fact that the trial judge was not impressed with the demeanour of the two witnesses, Mason Lee and Mrs Lee. 

Now, he did not decide the case on that basis.  He went on to make observations with respect to DNA evidence and the competing hypotheses were put by the parties to explain the presence of the blood on the airbag.  I hope I am answering your Honour’s question, Justice Bell.

BELL J:   Well, it is just that his Honour, in the concluding sentence, says that the arguments put on behalf of each of the appellants do not demonstrate error on the part of the trial judge.  It is accepted that in relation to the assessment of the credit of at least Mason Lee, his Honour’s view that Mason was evasive needs to be assessed against a background that his Honour did not remember that Mason gave his evidence without the assistance of an interpreter.

MR DOUGLAS:   Correct.

BELL J:   When one looks at the court doing a review, as is required, consistent with Robinson Helicopters v McDermott, the task is not to inquire whether the decision of the trial judge was wrong in circumstances such as these but to conduct its own review.  Now, I appreciate that one can point to the circumstance of what the Court of Appeal did, but when it came to the ultimate assessment in light of the view the court took of the DNA evidence, it then went on to express a conclusion in terms that it could not be shown that the trial judge’s determination was wrong.

MR DOUGLAS:   Your Honours, can we say two things about that.  The first is that the identification of error in the appellate review process does not entail a discarding of the entirety of the findings of fact made by a trial judge, nor does it entail necessary abandonment, as long as a proper review was conducted, of the ultimate finding of the trial judge.  As it transpired here ‑ ‑ ‑

BELL J:   Plainly it cannot dictate that the ultimate finding is wrong, but the question is the extent to which in these circumstances, including the error going to the assessment of the credibility of Mason Lee, it was appropriate to take into account a view that you could not show the primary judge’s conclusion was wrong.

MR DOUGLAS:   Yes, your Honour, but we say this.  Neither the trial judge nor the appellate court proceeded to make the ultimate finding, namely that Mason Lee was the driver of the vehicle, on the footing merely of the finding of credit in relation to Mason Lee and Mrs Lee.  It went on, importantly, to examine the matter debated extensively at first instance on an appeal concerning the need to explain how it came to be, as was found by the court and is not disputed in this Court, that Mason Lee’s blood was on the airbag in circumstances where, on his case, at all times, even after the accident, he was either in the rear seat of the vehicle or was taken out through the rear door and placed on the ground and attended by others.

BELL J:   The way that it was sought to explain that on Mason Lee’s case was that there was evidence that the father had blood on his hands.

MR DOUGLAS:   Correct.

BELL J:   Dr Lee gave evidence the father had no obvious injuries and there was evidence that the father cradled Mason Lee outside the car and, indeed, was touching his face and evidence that Mason Lee’s face was bleeding.  That was the logical path to a conclusion about how the blood might have got onto the back portion of the deflated airbag.  What is your answer to the lack of a path of analysis to explain why the probability was the contrary in light of Dr Grigg’s evidence and acceptance that the driver of the vehicle was wearing the seatbelt?

MR DOUGLAS:   Two matters about that.  The first is that the competing hypotheses to which I have referred and the complete absence – and this is common ground – complete absence of any evidence adduced by either party but, in particular, the Lee side of the record in respect of how it was that the blood came to be placed by Mr Lee upon the airbag in circumstances whereby he was the only person on our case who could have illuminated that issue in any way, even by evidence to the effect saying, “Well, I wiped my hands on something at some point, but I don’t know what it was”.

The second aspect of the matter, in answer to your Honour’s question, in our submission, the Court, having adverted to the evidence of Dr Grigg at paragraphs [64] and [113] and also referred to the evidence of the forensic pathologist, Dr Robertson, concluded that the blood or the presence of the blood on the airbag was consistent with this gentleman, Mr Mason Lee, proceeding to continue to bleed after the accident.  Our learned friends say, “Well, the evidence of Dr Grigg is that these things deflate”.

What paragraph [149] - or the reasoning in paragraph [149] of the appellate court’s disposition of this matter reveals is that the aftermath of detonation, in our submission, including deflation of an airbag in a vehicle following a collision, is of its nature necessarily attended by uncertainty with respect to what occurs with that airbag upon the initial deflation.

As his Honour found, accepting the evidence – that is, the Court of Appeal found, and his Honour at first instance found, accepting the evidence of Dr Robertson, there is some movement or shifting of the face in relation to the airbag immediately after application and detonation and deflation, and also there was evidence that this gentleman, because of the tetraplegia he suffered, his head would necessarily have been facing forward.  There was evidence that he was a gentleman who wore glasses.  He was wearing clothing obviously at the time, including on the upper portion of his body. 

An airbag, with respect, the fact that it deflates does not mean it falls away, in our submission, as a matter of necessity from body, particularly where it may adhere after what is necessarily the dynamic character of detonation of an airbag within a vehicle.

The surmise that underlies or the presumption that underlies our learned friend’s submission is that after detonation the airbag necessarily just falls away from the person completely without any further application to the person and, in our submission, that is not a proposition which necessarily ought be grounded in the circumstances merely because there is evidence from an expert saying that these things deflate in a very quick period of time.  That is, with respect, our answer, or those are our twin answers to the proposition put by the Court through the presiding judge, Justice Bell.

BELL J:   Thank you.

MR DOUGLAS:   Your Honours, could I mention briefly a matter which was not raised by my learned friend in argument but finds voice in the written submissions.  There were two claims in this particular case, in effect.  There was a claim and a counterclaim and upon the claim it was incumbent upon Mr Mason Lee to prove that in fact Mr Lee, as he pleaded – his father – was the driver of the vehicle.  We would submit, at the very least, on the evidence he did not satisfy that particular requirement of proof. 

There was also a counterclaim, based on fraud, mounted by the insurer against the three persons – Mason Lee, Mr Lee and Mrs Lee – having regard to the fact that substantial funds had been paid in the belief that in fact, after representation, that Mr Lee was the driver.  Now, in that respect, unquestionably, the insurer bore the persuasive onus of proof, not Mr Lee.

But in those circumstances we submit the court having found that in fact it was Mr Mason Lee who was the driver of the vehicle, there is no reason why a finding would not follow in respect of the counterclaim.  We accept that when it comes to a finding of fraud, the authorities of this Court make clear, the seminal case being Briginshaw, the subsequent statement of

authority being Neate, in particular, to the effect that “a finding of fraud will not be made lightly”, to use the language of Neate’s Case.  But, in our submission, in a civil case that does not preclude such finding being made, the evidence otherwise being accepted.  I do not think we can assist you any further, your Honours.

BELL J:   Thank you, Mr Douglas.  We do not need to hear further from you, thank you, Mr Diehm.  There will be a grant of special leave in each of these matters.  What is the likely estimate, Mr Diehm?

MR DIEHM:   My estimate would be half a day, your Honours.

MR DOUGLAS:   Your Honours, I hesitate to say it, but I would have thought a little longer than that.  I would be reluctant to agree to half a day - a little longer, perhaps a full day.

BELL J:   Thank you, Mr Douglas.  Special leave is granted in each of these three applications.  Can I encourage the parties to comply with the directions that may be obtained from the Registry with respect to the preparation of the matter for hearing?

AT 11.45 AM THE MATTERS WERE CONCLUDED