M. B. P. (SA) Pty Ltd v Gogic

[1990] HCATrans 267

Al1t -!J , AUSTRALIA, 1.!-->},~)'$-««:--'-.._

IN THE HTGH COURT OF AUSTRALIA

Office of the Registry

Adelaide No A16 of 1990

B e t w e e n -

M.B.P. (S.A.) PTY LTD

Applicant

amd

ZVONINIR GOGIC

Respondent

Office of the Registry

Adelaide No AlO of 1990

B e t w e e n -

M.B.P. (S.A.) PTY LTD

Applicant

and

ZVONINIR GOGIC

Respondent

MASON CJ
BRENNAN J

Copyright in the High Court of Australia 6/11/90

DEANE J

DAWSON J .

TOOHEY J
GAUDRON J

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 6 NOVEMBER 1990, AT 10.17 AM

MR T.A. GRAY, OC:  May it please the Court, I appear with my

learned friend, MR S.J. HANUS, for the applicant in

each matter. (instructed by Piper Alderman)

MR T.R. ANDERSON, OC: If the Court pleases, I appear with

my learned friend, MR T.L. STANLEY, for the

respondent in each matter.	(instructed by Duncan
Groom Hannon)

MR G. GRIFFITH, QC, Solicitor-General for the Commonwealth:

If the Court pleases, I appear with my learned

friend, MR G. PARKIN, to intervene for the

Attorney-General for the Commonwealth on the Fisher v Fisher aspect only. (instructed by the Australian

Government Solicitor)

If I can indicate to the Court that after that issue is resolved we would ask to be excused from

the further participation.

MASON CJ: Yes, well is there a Fisher v Fisher issue in the

case now?

MR GRIFFITH: Well, Your Honour, we thought we would wait

and see whether there was but it depends what view

the Court takes, Your Honour. As to wait and see,

we thought also, if it is convenient for the Court,
we would wait until my learned friend, Mr Doyle,
who is also intervening made any relevant

submissions to the Court if that order was

acceptable.

MASON CJ: Yes.

MR J.J. DOYLE, QC, Solicitor-General for the Commonwealth:

If the Court pleases, I appear with my learned

friend, MR D. WALTER, to intervene for the

Attorney-General for the State of South Australia

and only in matter Al0 of 1990 which is the

application for special leave to appeal from the

decision of the Full Court answering certain

questions, although we seek to argue that that is a

ccinpetent application and, as my friend put it, to
argue the Fisher v Fisher point.	(instructed by

the Crown Solicitor for South Australia)

We appreciate that in a sense it could be said that it is all academic because there is now

another avenue although, of course, sometimes if

one does not take the chances presented by having

both matters before the Court, a satisfactory
opportunity to resolve the matter never arises and
so we do invite the Court, with respect, to deal
with both matters but, of course, we are in the

Court's hands on that.

MASON CJ: Yes, Mr Solicitor. Mr Gray?

MBP(2) 2 6/11/90

MR GRAY:  May it please the Court, we were going to suggest

to the Court it might be convenient to, first, hear
the application from Justice Cox and if the Court

found that a suitable vehicle to decide the point

my client wishes decided, then we would not be

concerned with the other application.

If it was convenient to the Court, we would be

quite happy to deal with both matters at the same

time.

MASON CJ: Yes. What about Mr Anderson? What is

Mr Anderson's attitude?

MR ANDERSON:  We are quite happy with that, if the Court

pleases. We would rather have it dealt with in

that way if that is suitable to the Court.

MASON CJ: All right. Now, do you wish to address any

submission in the light of what we now understand

as to the attitude of the parties, Mr Solicitor?

MR GRIFFITH:  Your Honour, our interest in intervening is on

the general issue of the position of reviewing

answers by a Full Court on a case stated, a special

case or a question reserved.

Now, that is an issue, of course, which is

touched upon in the judgment given by the Court

this morning in O'Toole and is one, Your Honour,

where the Attorney is particularly concerned in cases where a constitutional issue arises as in

Smith v Smith.

Your Honour, it is a question for the Court to

determine whether or not it wishes to engage in a

consideration of that general issue which is the

matter which the Attorney for the Commonwealth is

particularly concerned in the context that has been

indicated to the Court that, one way or another, it

is possible to get to the substantive point before

the Court this morning. ·.·

One matter that we take into account in saying

tnat is the issue as we see it is that on a quick perusal of the O'Toole judgment, there would seem

to be, firstly, an operative result to the extent to which one can see that in future litigation if there is a constitutional issue arising on a case

stated heard by a Full Court of a State court or the Federal Court, it is possible to remove that matter into this Court and have the Court determine

that issue but, at the same time, Your Honour, it

does seem to us that there is scope,

notwithstanding that the judgment in O'Toole has

only just been given in this Court, for there to be

a reasoned application for reconsideration of

MBP(2) 6/11/90

the Smith v Smith and, in particular, the

Fisher v Fisher issue itself; that is, that as we

have quickly read the judgments, there seems to be

a balance of opinion in the judgments given today

that in the circumstances of the Fisher v Fisher case construing the provisions of the Family Law Act the answer to the questions were not

determinative of the issue but operated more in an

advisory manner.

Your Honour, that is an issue which, given a

clear field, we would desire at some time to have

an opportunity to seek the leave of the Court to

re-argue that construction but having said that, it

perhaps is the case that the judgment this morning

is distressingly fresh to contemplate this morning,

opening up that wider point, and it would be a

matter which others of the States would have had not opportunity to consider their position. So,

Your Honour, we would flag that as an issue but in

the context that we accept that the judgment given

this morning seems to give an operational result

which does ensure that constitutional issues can be

brought to this Court after they have been

determined on a case stated and that was a matter

of some significance to us in giving rise to our

application to appear today.

MASON CJ: Yes. I suppose one question, Mr Solicitor, is

this: you and the Solicitor for South Australia

and the applicant would be all joining forces in

presenting a submission on that issue.

MR GRIFFITH: That is true, Your Honour.

MASON CJ: Would'Mr Anderson be minded to put a

countervailing submission?

MR GRIFFITH:  I understand that he does not desire to get involved in that issue, Your Honour.

MASON CJ: Well, if that be so this case hardly presents

itself as a suitable vehicle for reconsideration of

earlier authorities.

MR GRIFFITH:  Your Honour, we except that, and also we would

accept that it would be appropriate for the other

States to have an opportunity to consider that.

So, Your Honour, just as in TCN-N, although it

might have been possible to invite the Court to

reconsider section 92 precedents, the parties

adopted the course of not so inviting the Court to

do it, and yet soon after, Your Honour, that matter

was engaged - it may well be, Your Honour, that

given that there is workable result from the

judgment this morning, it will be better to have a

clear field to give rise to the issue of whether or

MBP(2) 4 6/11/90

not the status of a Smith v Smith answer by a Full

Court below can be regarded as more than advisory,

or whether, in due course, Your Honour, the

construction of the Family Court Act and the

Federal Court Act should be accepted that the

opinion is more than advisory.

It effectively makes the decision res judicata

between the parties, which would be our contention.

So that having made our point, we accept

Your Honour's observation as to that.

MASON CJ:  Mr Solicitor for South Australia, do you wish to

add anything to the comments that have been made by

the Solicitor-General for the Commonwealth in
support of the proposition that we should deal with

this question now; that is the Fisher v Fisher

point, having regard to the fact that, as far as

this case is concerned, Al6 seems to be the

suitable vehicle for the determination of the

questions of substance, and there are the

difficulties which were identified in discussion

with the Solicitor-General for the Commonwealth in

attempting to use this case now as a suitable

vehicle for the disposition of the point in which

you are interested?

MR DOYLE:  Yes, well I suppose it is the fuction of the

advocate to be able to take a hint from the Bench,

Your Honour. Only this; our interest is a little

more immediate and a little narrower in that we are

not concerned so much with the matter addressed by

Dr Griffith as the ability of a party to take on

appeal answers given by a Full Court on a question

reserved. He is coming to the matter from a

slightly different perspective, looking at the

constitutional situation and the complications

which can arise when a cause is removed. The

matters may be linked, but we are looking simply at

the very matter which is in issue hear, namely the

ability to bring to this Court answers on a

. q~estion reserved by a trial judge.
. .	Furthermore, that matter is presented fairly

and squarely by Al0 and that matter is before the

Court. However, we accept fully that the Court may be reluctant to embark upon an argument as that

issue in the absence of a party contending the

other way; although on the other hand, again, if

we talk of hints there seem to be distinct hints in

the judgments given this morning that

Fisher v Fisher is at least somewhat shaky on this aspect. And so there are some factors which might make it appropriate for the Court today,

notwithstanding the drawbacks, to grapple with that
issue and without concerning itself directly with

the matter touched on by Dr Griffith - look at the

MBP(2) 6/11/90

narrower question: what is the position when a litigation not dealing with the constitutional

situation and the removal.

So they are the only points I would make in

support of a slightly different proposition that
the Court should, nevertheless, look at that
slightly narrower issue which arises in matter Al0.

TOOHEY J: But it is only a practical proposition, is it

not, if there are matters of substance that the

Court cannot come to grips with except through the

medium of Al0?

MR DOYLE:  In terms of the dispute between the parties, yes,

Your Honour, entirely, and I realize that there is

that problem, that we are seizing on something

which between the parties is no longer really a

live issue because of the other matter. Now, they

can get the real issue as between the parties

resolved in the application for special leave to

appeal from Mr Justice Cox.	So I accept that
fully, Your Honour.	If the Court pleases.

MASON CJ: In the circumstances, the Court is of opinion

that it will now hear argument on Al6.

MR GRIFFITH:  Your Honour, may we be excused?

MASON CJ: Yes, certainly, Mr Solicitor.

MR DOYLE:  And us likewise, if the Court pleases?

MASON CJ: Yes, Mr Solicitor.

MR GRAY:  Might I hand to the Court the precis of argument

of the applicant in regard to Al6?

MASON CJ:	Thank you, Mr Gray.
MR GRAY:	May it please the Court, the issue of law that

arises is this: should an award of interest on

pre-trial non-economic loss be based on commercial
rates, or commercial rates less any inflationary

component?

If the Court pleases, the judges of the New

South Wales Supreme Court and the South Australian

Supreme Court, and the Western Australian Supreme

Courts have all - - -

MASON CJ:	Mr Gray, you may proceed directly to the question of substance.
MR GRAY:	If the Court pleases. The nub of the problem

rests on whether or not the decision of this Court

MBP(2) 6 6/11/90

in Cullen v Trappell was rightly decided. And that

comes down to a consideration of a passage in

Cullen v Trappell in the judgment of

Mr Justice Gibbs, as he then was.

Cullen v Trappell, if the Court pleases, is

146 CLR 1, and the relevant passage appears at

page 21 at point 2 to point 4, and it is the

applicant's respectful submission that there

His Honour erred.

The history of the matter really rests in a

case in New South Wales in Bennett v Jones where

the Full Court in New South Wales had decided that

when dealing with pre-trial non-economic loss if

one was to allow commercial interest it would lead

to double compensation in favour of plaintiff.

That, of course, arises as a result of assessing

damages and the money on the day of trial, thereby

in the award itself, containing an allowance for

inflation; and that if commercial interest was

then applied to that because commercial interest

contains an inflationary component, it would be a

double up of that aspect.

When the High Court considered the matter in

Cullen v Trappell it took up the point from Bennett v Jones and, in particular, suggested that the Full Court in Bennett v Jones in New South Wales had

fallen into error and Justice Gibbs, at page 21,

identified that error by way of analogy suggesting

that it was the same fallacy that had been fallen

into by the Court of Appeal in Cookson v Knowles

and a fallacy identified by the House of Lords in

Pickett v British Rail. Now, with the greatest of

respect _to the court then constituted, it is

suggested that that analysis is incorrect.

To understand perhaps the reason for confusion

it is necessary to discuss Pickett v British Rail.

When one understands the way in which the matter

developed in Pickett v British Rail,one can see

toot it does not support the proposition it is

c£ted for at page 21.

If I might just briefly comment on the facts

of Pickett, in Pickett's case the plaintiff brought

his claim and was awarded £7000 for pain and

suffering and loss of amenities.	He died soon
after judgment and the matter went on appeal.	The

trial judge had allowed, because there was no issue

between counsel at the time, interest on the £7000

at 9 per cent, and the trial judge had been given

that as common ground. So at trial in Pickett

there was no point taken and no argument raised

that to allow commercial interest would over

compensate the plaintiff.

MBP(2) 7 6/11/90

When the matter got to the Court of Appeal in Pickett, the Court of Appeal increased the damages for pain, suffering and loss of amenities from

£7000 to £10,000 but at the same time, for reasons

that are not apparent, it allowed no interest.

When it came to the House of Lords, the issue being

decided was whether or not it was proper to have no

interest or interest on what was a pre-trial

component for pain, suffering and loss of

amenities. The issue did not arise as to what rate

of interest was applicable. It did not arise

because there had been a concession made at trial

by counsel.

So the fallacy being addressed in Pickett was

the fallacy of saying, "Because damages are
assessed in money of the day of trial, therefore

inflation is taken account of, therefore the

plaintiff needs no interest at all", and the Court

of Appeal in Pickett had adopted Cookson v Knowles

that said that and the House of Lords said that

that was fallacious because although the plaintiff

was being compensated for any inflationary

component and was getting money in the real value

of the day, he was getting nothing for loss of use

of the money and he was entitled to interest

compensating for loss of the use of the award,

albeit expressed in real terms taking account of
inflation, and Pickett did not consider the

question of should there be a differential rate.

Now that becomes apparent, if I might give the

Court the reference, in the speech of

Lord Edmund-Davies in Pickett, at page 164. It is

the only part of the decision where the concession

of counsel at trial is recorded. There is a

sentence in Lord Wilberforce's speech

at 151 point 5, where Lord Wilberforce makes it

plain that the only issue under challenge was

interest or no interest and it is really as a

result of a careful study of those two passages

tlfat one can see the limited nature of the

taken out of context and misunderstood in Cullen's authority in Pickett and how, with respect, it was case.

If I can just briefly identify those passages

to the Court. At page 164, Lord Edmund-Davies says

at point 2 of the page under the heading "Interest

on general damages":

Although it was seemingly agreed by both

sides before the learned trial judge that the

sum of £7,000 was to carry interest at

9 per cent ..... the Court of Appeal ordered

that no interest was to be payable upon the

increased sum of £10,000. We have no record

MBP(2) 6/11/90

of what led to this variation in the trial

judge's order, but we were told that it sprang

from the Court of Appeal decision in Cookson v

Knowles -

which, no doubt, then was contemporaneous and

current law. At page 151 point 5, Lord Wilberforce

in his speech having dealt with the fallacy in the

Cookson v Knowles approach:

Increase for inflation -

by assessing at the time of trial:

is designed to preserve the "real" value of

money:

Interest is designed to:

compensate for being kept out of that "real"

value.

Having said that, in the very last sentence

against E, he says:

Apart from the inflation argument no reason

was suggested for interfering with the
exercise of the judge's discretion.

One can understand why, when counsel at trial had conceded 9 per cent as being the appropriate rate

in respect of a pre-trial non-economic component.

It is put, with the greatest of respect, that

Justice Gibbs, as he then was, at page 21 in Cullen

v Trappell, fell into error in his treatment as to

the extent to which Pickett v British Rail went.

Now, having identified, if the Court pleases,

what we respectfully say is a misunderstanding of

Pickett, one can see how that cuts across and flaws

the entire treatment of the court in regard to the

closely reasoned, with respect, judgments in

Bennett v Jones.

If the Court pleases, in a sense the applicant

would wish to adopt and leave for this Court to

read, the reasons of the Full Courts of the States

that suggest that the reasoning in Cullen is

fallacious and in that respect the Court has the

assistance of the unreported judgments in the New

South Wales Court of Appeal in Bryce v Tapalis.

Copies of that unreported judgment are available to the Court.

We would respectfully seek to adopt, in

particular, the reasons and remarks of Your Honour

Justice McHugh in that decision and Justice Mahoney

MBP(2) 9 6/11/90

agreeing with those remarks. The president of the

court, Justice Kirby, took the view that Cullen v

Trappell was distinguishable. That is an argument

that we do not wish to put. Our argument is that

Cullen v Trappell is wrongly decided.

The court returned, in the reasons of

Your Honour Justice McHugh to page 11. The passage

starts at the foot of page 11 and continues through

to page 16 and we respectfully seek to adopt that

passage, in particular to adopt the examples that

Your Honour Justice McHugh uses to demonstrate the

element of double compensation that occurs.	At
that time, the view was taken that Cullen v

Trappell had decided the point directly in issue

and was binding, despite the fact that it led to an

element of double compensation.

If the Court pleases, the South Australian Full Court has dealt with the matter in two

decisions. The first is the case of Wheeler v

Page, 31 SASR 1. Cullen v Trappell was apparently

not cited to the court at that time but the
reasoning of the court is on all fours with the

reasoning in Justice McHugh's decision in Bryce's

case and we invite, again, simply to the pages

where the reasoning is set out in full from pages 3

through to 7 in the judgment of the Chief Justice

where the need for a differential rate we adopt in

regard to pre-trial non-economic loss is set out;

otherwise there is going to be overcompensation.

In effect, it is counting inflation twice in the

plaintiff's favour.

At the same time, the Chief Justice points out

that in another area of damages assessment by way

of contrast, dealing with the discounting of future

losses, when inflation is to be ignored, this Court
in Todorovic saw the need to ignore and extract an

inflationary component and it is suggested that the

logic that lies behind Todorovic is in conflict

w~th the decision in Cullen v Trappell.

The second decision of the Full Court in South

Australia that we say is of assistance is the

decision under appeal in Gogic in Al0. The Court

has those reasons in the application book for Al6

and the reasons commence at page 9 of the

application book, again in the reasons of the

Chief Justice. And the Chief Justice there adheres

to the reasoning in Wheeler, seeks to apply the

reasoning in Bryce but comes to the conclusion that

Cullen v Trappell is binding on the point.

Justice Jacobs in the reasons commencing at

page 18 is the other judgment that seeks to reason

the matter and, in particular, draws attention to

MBP(2) 10 6/11/90

what His Honour Justice Jacobs saw as an

being applied there when contrasted with the

inconsistency in principle between the reasoning in

reasoning in Cullen v Trappell.

The other Full Court authority that the Court might find of some assistance is in the

western Australian Full Court in Brasser's case,

the reference is given in the precis under

number 7. Again, Cullen v Trappell was not

referred to, nor was Wheeler v Page but the

Full Court there applied the same logic approaching the matter from first principles.

Now, if the Court pleases, the suggestion is

made in the judgment of the Chief Justice in Gogic

that in some way the extent of doubling up is

reduced in South Australia by reason of the

practice there and in some areas, the statutory

provisions that provide that interest will not run

prior to the issue of proceedings and the

Chief Justice suggests that some element of the

doubling up is ameliorated by the fact that the

Court does not allow interest between the time of

the tort and the issue of proceedings but that

particular matter is not common throughout all

jurisdictions in Australia and, with respect,

should not, we say, in any way influence the

principle to be adopted.

That particular reason in South Australia

which may have some effect on reducing the doubling

up, for example, does not have application in

New South Wales and, in any view, would only go to

lessen the extent of doubling up rather than

eliminate it.

Now, if the Court pleases, they are the

essential submissions that we put and in a sense we

are in the position of being embarrassed by having

the reasons of the various Full Courts to support

the application that we make and it would not be

appropriate to take the Court's time by reading tliose but would invite the Court's attention to

them.

MASON CJ:  Mr Gray, there are two questions I wanted to ask

you or, perhaps, one question and then to make a

comment. What are you asking us to do? Let us

assume for the moment that we grant special leave

and we allow the appeal.	Now, what orders are you
asking us to make?

MR GRAY:  If the Court pleases, we would respectfully

suggest the appropriate order is to remit the

matter to Justice Cox to reassess interest in the

MBP(2) 11 6/11/90

light of the principles enunciated by this Court.

I can tell the Court this, that His Honour has allowed a simple figure for interest. It is common ground between my friend, Mr Anderson, and myself

as to how that is calculated. What His Honour has

done is taken 11½ per cent over a seven year period

roughly, allowing half the amount of economic loss

less some moneys that have already been paid and

allowing the pre-trial component of pain and

suffering and so by a process of choosing a time,

11½ per cent, applying the Cullen v Trappell

principle, His Honour arrives at $22,000, so it is

- and we can give Your Honours the make up of the

calculation but it does involve bringing into

account some moneys that were paid by a workmens'

compensation insurer at an earlier stage.

His Honour has not exercised a broad

discretion overall. His Honour has applied the

reasoning of Cullen v Trappell as he was directed

to do by the Full Court, of which he was a member,

and one can work it through logically to arrive at

$22,000.

TOOHEY J: But, does that mean the counsel would not be able

to agree on a figure depending upon the outcome of

this application?

MR GRAY:  We think there would be no great difficulty in

counsel agreeing a figure. There may be some

problem with instructions.

TOOHEY J: Yes.

MR GRAY:  We would anticipate, if the Court pleases - I

mean, this matter has been discussed between

counsel and, in the sense that if the Court was

with applicant, what figure should be substituted

and, although counsel are confident they could

agree a figure, there is a difficulty with

instructions.

BRENNAN J: · So, the particular order that you would seek

would be the variation of the judgment by

Mr Justice Cox so far as it relates to interest

only?

MR GRAY:  Yes, and the remission of the matter to

Justice Cox to reassess interest in the light of

this Court's decision.

DEANE J: But, could His Honour do that when there is an

outstanding appeal to the Full Court of the

Supreme Court against the amount of interest on

another point?

MBP(2)	12	6/11/90
MR GRAY:	Yes.	We say that he would have jurisdiction to do

that. He may elect to refer that matter to the

Full Court.

MASON CJ:--That is question 2 in the original stated case so

far unresolved?

MR GRAY:  Yes. The other alternative, if the Court pleases,

would be to refer the matter back to the Full Court

for direction but the Full Court in turn would then

have to deal with Justice Cox's judgment. Again,

counsel have discussed the matter and we thought
the preferable course was to refer it back to

Justice Cox, he to reassess, and if the Court felt that that was not an appropriate way to deal with

it, then the alternative is to refer it back to the Full Court and, perhaps, deal with the matter under Al0 but we see no difficulty, if the Court pleases,

in Justice Cox at the direction of this Court

reassessing interest that may or not lead to an

amendment of the current notice of appeal.

His Honour is only functus officio in so far as he

is still subject to any direction this Court might

provide.

So, that is - our application to the Court is

that it be remitted to Justice Cox to reassess

interest in the light of this Court's reasons.

MASON CJ:  Now, Mr Gray, the other matter was that on the

special leave application undertakings were given

on behalf of your client in relation to costs.

Now, as those undertakings were given, of course, only in relation to Al0, they would have no

application to Al6.

MR GRAY:  My instructions are to extend them to Al6. My

client has a general interest in this matter. It

is of widespread application to the insurance
industry, and my instructions are to extend the

undertaking to costs in Al6. May it please the

Court.

MASON CJ: __ Yes, Mr Anderson.
MR ANDERSON:	If the Court pleases, just on the practical

problems of getting those instructions, Mr Gogic,

as members of the Court may understand, cannot

really understand why his claim for damages arising

out of a work accident has ended up in this Court,

and he does have a neurosis of some considerable

degree, and that is the only reason that stands in

our way as a practicality of obtaining the

instructions that were suggested. I apologize for

that, but I can assure the Court that it is an

ongoing problem.

MBP(2) 13 6/11/90

MASON CJ: Yes. Well, Mr Anderson, it may be possible, none

the less that, in the event, subject to your

arguments, that the appeal were to be allowed, that

counsel could agree on an appropriate form of order

in relation to remitting the matter or sending the
matter back to Mr Justice Cox and if that is

possible, it might be of assistance to us to have

the form of order that counsel can agree upon.

MR ANDERSON:  Yes, Your Honour, I think that is, with

respect, sensible and highly achievable.	I think
that we can do that.	I hand to the Court the

summary of the respondent's argument.

MASON CJ: Yes.

MR ANDERSON: If the Court pleases, in acknowledging the

force of my learned friend's argument in so far as

the appeal courts of both New South Wales and South

Australia have cast severe doubts on the validity

of the reasoning His Honour Justice Gibbs, as he

then was. I feel that, with respect, it may be of

more importance to my client and, indeed, in my

attempts to assist the Court, to perhaps start at
the opposite end and perhaps address the Court with
the practicalities of what the case stated really

is about, to illustrate the point and then attempt

to deal with the issues of the decisions in New

South Wales and South Australia.

I do that by asking the Court at the outset to perhaps, with Al6 appeal book, go to the reasons

given by Justice Cox in relation to the case

stated. That appears at page 3 and I do not want

to trouble the Court with a lot of the preamble,

but the -Court will know from reading that, and from

the decision in Wheeler v Page that as a result of

Wheeler v Page from 1982 the differential rate in

South Australia was applied as a fixed and permanent rule, namely 4 per cent, as representing

the difference between the commercial rate and the

r~te of inflation.

Now, I can best illustrate, with respect, I

think, the point we seek to make by asking the

Court to take into account what has happened

between 1982 and the present time in relation to

the economy and whereas in South Australia that

rate has been fixed at 4 per cent, it is apparent

from the New South Wales decisions that the master

has a scale which I understand is varied from time to time and which I understand has gone as high in

recent years of up to the area of 19 per cent

or so.

The point simply is this, that in South

Australia since 1982, rather than plaintiffs having

MBP(2) 14 6/11/90

been over-compensated or doubly compensated, or

there be an element or double-dipping, as my
learned friend has put, on the basis of the

reasoning behind the differential rate, if one

assumes, and I ask the Court to do so for the
purpose of argument that perhaps inflation was

running throughout that period at 8, even

9 per cent, and that interest rates effectively

reached as high as 18 or 19 per cent, how the

application of a fixed rule, a fixed rule without

any qualification whatsoever, does an injustice to

the plaintiff in those circumstances.

I come at it that way, if the Court pleases,

because, in our respectful contention, all

His Honour Justice Gibbs, as he then was, was doing

when he made the comment in Cullen v Trappel was

effectively attempting to prevent exactly what we

say has happened since 1982. What we say

His Honour was doing was effectively attempting to

establish a base, and if there is to be a base then

it is obvious, with respect, we say, that the base

would be the ordinary commercial rate that is known

by judges.

From that base within the wide discretions

which operate in the award of interest there are so

many variables, and the variables include such

matters as how much of the component of

non-economic loss should bear interest and for what

period and, indeed, in the New South Wales

decision, of which Your Honour Justice McHugh was a

member, the point is made that the New South Wales

legislation gives the very widest of all possible

discretions in that award of interest.

South Australia, on the contrary, although giving the discretion in relation to the award of

interest, fixes the starting point, unless good

cause be shown to the contrary, from the issue of
the proceedings, as distinct from the time when the

course of action arises, and that is why I need to

take the Court from Justice Cox's initial statement

tg, the bottom of page 4 where he raises the very

point that I have been attempting to make at

line 25, and His Honour mentions the very point.

His Honour theri goes on, at page 5 of that

book in between lines 5 and 15, really in a plea

for help, with respect, asking for assistance from

the Full Court as to the way a trial judge should

inform himself of relevant fluctuations in interest

rates and inflation rates and we say, if we go back

to Justice Gibbs, as he then was, in Cullen v

Trappell, that all His Honour was doing was setting

the base. I take the Court to page 21 of the

report in 146 CLR.

MBP(2) 15 6/11/90

As my friend put to the Court, he dealt with

Bennett v Jones. He then, in the middle of

page 21, dealt with the power to award interest in

New South Wales. Firstly, I would ask the Court

to bear in mind, it may not, in some cases, even be

appropriate to dissect. His Honour says that. If

there is a dissection, following the decision of

Callinan referred to at page 21 by His Honour, then
you can dissect in certain ways but, even then, this Court in Fire and All Risks Insurance v page:

the interest ..... should be allowed at ordinary

commercial rates.

McHUGH J: But that is the problem, is it not? I appreciate

the force of the point that you make that the true

rate of interest varies depending upon the economic

climate of the time and it may well be that the

true rate of interest at the present time may be 7,

8, perhaps even higher, per cent, but there is

still this double counting if you were compensated

at ordinary commercial rates, is there not?

MR ANDERSON: With respect, Your Honour, we agree that there

is the potential for double counting and in the

instance, indeed, that Your Honour gave in the New

South Wales decision that illustrates. That is not

the case, we say, in all cases for the reason that,

we say, the Chief Justice in South Australia has

adverted to in this very case. We acknowledge, and

have to acknowledge, with the greatest of respect,

that there is always the risk of double counting. As it so·happens, in more recent times it is most

likely that that will probably occur but that is

not to say that in relation to the principle on

which interest should be assessed that it cannot

sometimes work the other way.

McHUGH J: There are two choices, are there not, assuming

that you accept that there is double counting?	One
is that you may take the commercial rate and
subtract from it the inflationary rate.	The other

Ls, that you attempt to fix a percentage and that is what was done in Wheeler v Page, which is

unsatisfactory, of course.

MR ANDERSON:  We say, with respect, Your Honour, that there

is a third alternative and that that is what,

really, His Honour Justice Gibbs was laying down

without specifically saying so, namely, that

interest should be allowed at ordinary commercial

rates but then within the discretion you work upon

that part of the award upon which - and that

follows, with respect, at the top of page 22 - you

work within the award as to what part of the

MBP(2) 16 6/11/90

non-economic component will bear interest and you

take into account, for instance, when those parts

of the component were suffered by the plaintiff.

It may be, as Your Honours well know, that in

the early stages all of the pain and suffering is sustained and then there is still a long delay to

trial. It may be, on the other hand, that there is

an ongoing process of continuing pain and suffering

or, thirdly, there may be that although there are

minor injuries sustained initially that the pain

and suffering component becomes more pronounced as

at the date of trial.

So we say that within that discretion, under

whichever section it happens to be, section 94 in
new South Wales or section 30c in South Australia,

that the judge can and should use the commercial

rate. It is easy, he knows what it is, and he then

either can apply it to some part of the award or

some or all of part of the period and, indeed, we

say that was the intent of what His Honour

Justice Gibbs, as he then was, was saying at that

stage. We say that perhaps looked at in that

light, there is room for the notions running

alongside of each other.

McHUGH J: But even a commercial rate is not appropriate, is

it, in cases of personal injury? At least, in New

South Wales, the commercial rates that are used are

the rates that commercial people use to borrow

money. Now, it is not necessarily the same rate

that the plaintiff could get, for example.

MR ANDERSON:  I t.ake Your Honour's point. It has been

called various things: it has been called the

commercial rate, it has been called the prevailing

market rate and it has been called, I think by our

Chief Justice, a secure rate for fixed investments.

It has different terminologies but, yes,

Your Honour, there is that difference, I accept

that.

If the Court pleases, what we say has happened

in the Wheeler v Page decision in South Australia

and, indeed, in the Bryce decision in New South

Wales is that all of the reasoning has proceeded,

with respect, upon the basis that only inflatic~

and solely the only possible factor which can

affect the award of interest is inflation and we
say that is not so, with respect. We say that is

how the reasoning proceeds and it assumes various

things. It assumes two things, we say: I have

dealt with one to some extent and that is the fact

that it assumes a continuing true rate of interest

and we say that just is not the case; and that not

being the case, our method, we suggest, is as good,

MBP(2) 17 6/11/90

if not better, because in the public interest it

results in less time wasted in trials which was

really what Justice Gibbs was, we say, with

respect, trying to say, "Don't waste too much time

on this aspect, don't go to the extent of having

expert evidence called in every case as to what the

rate of inflation is and what the particular rate

of secure investment is, use the broad brush and

work within the discretion that you have within

your own statute."

We say that that is the one area that has not been properly followed through, with respect, in

the two Full Court decisions of the States and we

say that it assumes, secondly, only an inflationary

factor and does not have account to what we call

changing or variable judicial attitudes as to the

aspect of award of damages. And if I can

illustrate that point, with scientific progress and

with medical advance, at this point of time, an
assessment of damages for a paraplegic, for
instance, or perhaps for an amputee, would have

totally different considerations as those would

have had 20 years ago because of the advance,

because of the way that someone has been able to

live with the disabilities, because that affects

the trial judge in his assessment of the actual

loss of amenities.

We say that that is a real factor which must be taken into account and we say that Your Honour

Justice Deane, with respect, on a different topic

but on the same reasoning, in Johnson v Perez

covered that very aspect. Johnson v Perez is on

the list, 166 CLR 351, and without taking the Court

in detail to Your Honour Justice Deane's comments,

they start at page 382. I accept that we are

dealing here with quite a different topic but it

was necessary, in the course of dealing with the

topic of the solicitor's negligence in relation to
the non-presentation of the claim within time, in
respect of two claims, indeed, it was necessary to

look at the general principles of assessment and in

course of that consider questions of interest as

we-11.

Your Honour Justice Deane did that at

page 382, in particular, in the paragraph that

commences, "As I follow the argument". I do not

intend reading that to the Court, with respect, but
towards the bottom of that statement, Your Honour
did deal with interest and Your Honour did deal
with the uncertain tax consequences and made
comments, in that context, I accept, in relation to
it being an inappropriate and inadequate means of

compensating for the variable effects of inflation.

MBP(2) 18 6/11/90

Your Honour then went on to say what we are

putting to the Court, and we can do no better, with

respect, than adopt what Your Honour said there in relation to this same topic as to what Your Honour

called "the second main reason". And that was

Your Honour's reasoning in not wishing to

effectively go back in time and look at the various

imponderables in relation to "curial perceptions

and standards" as Your Honour terms them.

Your Honour, with respect, at page 382, where

I started, really set out the speculation involved

in that passage which commences, "As I followed the

argument" - if I can just read that part again:

As I followed the argument, it is common

ground between the parties that the primary

damages assessed by the learned trial judge in

each of the present cases exceeded the primary

damages which would have been awarded if the

value of the barred right of recovery had been

assessed by reference to the amount which

would have been recovered on a hypothetical

hearing of the action as at some earlier time.

Now, that is the point that we seek to make in relation to attempting to use the present situation in a judicial process, or an attempt to do justice

between the parties as distinct from just starting

from a commercial rate easily ascertainable, and

then not getting too tied down, as His Honour

Justice Gibbs says, with the time and evidence

required to establish it, but using the broad

brush.

Now, we say that the reasoning in both

Wheeler v Page and Bryce v Tapalis proceeds on the

basis solely of the question of inflation being the

only impact, and we say that these other matters

which I have just adverted to are also relevant;

and we say it also assumes that there is the "true

rate of interest" as it has been termed continuous

at the same rate throughout the period.	We say
that practicalities show that that has not been the
case.

I move very quickly from Justice Cox having

put this before the Full Court to what the

Chief Justice had to say in the same book in relation to Cullen v Trappell generally, and his

previous decision in Wheeler v Page. His Honour

deals with that generally at pages 10 and 11.

His Honour then, with respect, deals with the point

that my friend, Mr Gray, adverted to in his

summary, and I take the Court to page 13 of

His Honour the Chief Justice's reasons where

His Honour says at line 18:

MBP(2) 19 6/11/90

Probably, however, the use of the commercial

rate is not productive of an unduly inflated

award in most cases in this State because of

the practice, which is obligatory in motor car

cases and normal in other personal injury cases, of limiting interest to the period

after the institution of proceedings. The

element of double compensation involved in
allowing interest at the commercial rate,

including the component which reflects

inflation, on damages assessed on a basis

which already takes inflation into account,

tends to offset the undercompensation of the

plaintiff involved in the inability in the

ordinary case to allow interest in respect of
the period prior to the institution of
proceedings.

With respect, the best that we can do out of that is to say that if there is a valid concern as

expressed by Your Honour Justice McHugh in Bryce, in

relation to the matters that there were relevant

under the discretion in New South Wales, certainly
under the section which we are now dealing with in

South Australia it seems that, in the words of the

Chief Justice, whilst on the one hand you might have
double compensation, on the other hand you might

have under compensation, and we say that again fits

into what we would like to term "the balancing act"

which the judge has to do to achieve justice between

the parties but in a manner as envisaged by Justice

Gibbs as he then was.

We say what the Chief Justice says in the

passage that I have just read to the Court, in the

instant case, is really no more than restating what

we say the general principles are in Cullen v

Trappell. At page 14 it is interesting that

His Honour then goes on to refer back to Wheeler v

Page, where you will see from the part cited at

line 30 he has really said many years before in

1~~2 exactly the same thing, without having

Ctillen,v Trappell being referred to him.	He said
exactly at line 30 of page 14 what I have just put

t6 the Court, he said in the instant case, some

eight years earlier.

His Honour the Chief Justice of

South Australia in Wheeler v Page also referred to the section, of course. Perhaps if the Court would

just look briefly at the section. It is perhaps

easiest found at page 25 of this book as it is set

out in the judgment of Justice Matheson. His

Honour sets out the section - that is

Justice Matheson at page 25 - but the section in

South Australia is as set out. It is:

MBP(2) 20 6/11/90

unless good cause ..... the court shall -

which is different from some of the other sections

in the other States

The interest -

(a) shall be calculated at such rate -

Now, in Wheeler v Page, which the Court has, I

understand, before it, I refer to page 8 of the

report of Wheeler v Page and the Chief Justice's

comments there, in 31 SASR, where His Honour says

in line 3:

As the section appears to authorize a single

rate of interest only -

Now we ask the Court to take that into account in

considering all of this. It is quite obvious that

the Court has to award interest, and it is quite

obvious that the Court has to fix a rate. Up until

Gogic's case that was four per cent, but the

Chief Justice, we say, with respect, seems to be saying that it is a single rate. In other words

there is no room for movement within the South

Australian section that you should have two rates.

That being the case, we say, when it is obvious that something around the commercial market rate

must be used for the economic components that, it

is intended, we say, should also be used in the

fixing of the rate for the non-economic components.

McHUGH J:  Why should you use the commercial rate at all,

for the reasons I mentioned earlier? In an action
for debt it is understandable you use the

commercial rate for various reasons but my

impression is that over the years the true rate of

interest on, say, debentures in a first class stock

would vary within a much narrower range than the
true lending rate in commercial lending because of

the risk in the economy and so on.

MR ANDERSON:  There may be a difference of a per cent or

two, I accept, Your Honour. I do not know, with

respect, what everyone has actually meant in the

various decisions about the commercial rate and

that may well be, with respect, Your Honour's

point. It seems that the best we can do in

attempting to help the Court on this, is to just go

back to the practicalities of anything else and, I think, indeed, Your Honour Justice McHugh in Bryce

did say something along those lines, with respect,

if I can just find the passage. It really is, as I

started with and I make no apology for it, with respect, absolutely essential from our point of

view of trying to maintain the "commercial rate" to

attempt to show the Court what discrepancies,

MBP(2) 21 6/11/90

injustices, et cetera, may follow if that is not

so. In Bryce's case, Your Honour Justice McHugh

dealt with that at page 13 of your reasons where,

at the bottom of page 13 you dealt with what

Your Honour said:

the only two arguments which -

could have been put, were put:

Damages awarded in 1987 have not kept pace

with awards in 1976 when the latter awards
were adjusted for inflation. Secondly, he

argued that it is impracticable to work out

the true rate of interest, that an arbitrary
figure is called for, and that the courts

should simply use the commercial rates - I presume because it was readily available.

Your Honour then went on to say:

In a matter as inexact as the estimation

of general damages, it is virtually impossible

to say whether awards of damages in 1987 have

kept pace with inflationary trends since 1976.

My impression, however, is that in real terms

they have not slipped behind. As to the

respondent's second argument, while it must be

acknowledged that there is a certain degree of

arbitrariness in selecting a true interest

rate, a figure of say 3 per cent seems to me

to be generally fairer than the use of the

commercial rate figures.

McHUGH J:  I was rather looking at it from an investment

point of view, if I remember rightly.

MR ANDERSON:  I think that is so, Your Honour, from

something that follows earlier.

MCHUGH J: Yes.

MR ANDERSON:· But it does illustrate the point, with

respect, as Your Honour puts it, to the inexact

task that it is, and it is for that rate that we

fall back on something as a basis, a starting

point, and we say it must be something
approximating a commercial rate and I say, "a"
commercial rate rather than "the" commercial rate

which applies and we have, we hope, illustrated if

that does not apply how injustice to the detriment

of a plaintiff in the position of my client in this
case can result over the ensuing years.

If the Court pleases, I have attempted to meet the obvious submissions of my friend that he relies

on, two decisions of the Full Courts of two States

MBP(2) 22 6/11/90

with, in effect, a plea or an appeal to

Your Honours to look at what has happened and to

analyse that through and to see really whether

there is any need for Your Honours to say that

Justice Gibbs, as he then was, was wrong. We say

he was not and we say that it is good common sense.

It is in an area where there must be common sense.

It is an area where, in the public interest, there

must be a minimum of fuss in the task of the judge

having to work out something by virtue of the

assistance he is given from the statute and within

the limited assistance he is given by the statute,

we say, the judge is given in South Australia and

in the other States some means whereby he can

balance the scales and use something like a
commercial rate yet, nevertheless, achieve justice

between the plaintiff and the defendant by weighing

all those matters up.

DAWSON J: When you say all those matters, do you include the

inflation rate?

MR ANDERSON:  Yes. I think that has to be included,

Your Honour, because it could - perhaps in a way of

a test, if Your Honour pleases, by perhaps applying

the type of reasoning that was applied by the Court
of Appeal in New South Wales and the South

Australian Court, looking to see what the

difference would be. Then, look at the component

of the award and try and dissect that; look and see

when that component was suffered in the time span

and, really, I am putting it to Your Honour, I

think, on the basis of a cross check rather than an

actual factor in the scales.

DAWSON J: Well, how would you do it in this case?

MR ANDERSON: It is difficult, with respect. It is

difficult to answer that, how you would do it in

this case. You would go back to the time of the

accident. You would look at the injuries. You

would follow that through. You would know that

there was an initial injury of a hernia.

~now that at a later stage a neurosis developed You would

·which was still causing problems at the time of

trial. You would look at the South Australian

statute and you would day, "By that statute we can

only award interest from the date of the issue of

the proceedings" and then check that as against

what sounds fair in relation to 1978 money terms

with - I am not sure which year it even was finally

decided but whatever year it was, terms and attempt

to do that. Perhaps it is difficult but a

balancing act, as I have termed it.

DAWSON J: But, how would you deal with inflation in that

exercise?

MBP(2) 23 6/11/90

MR ANDERSON:  We say that you would take inflation into

account in that exercise in the way that we suggest

that it should be taken into account only by

looking at what has happened in relation to awards.

That is why we say that the other decisions which

proceed solely on the basis of the criticism of the

commercial rate on the basis of inflation do not

take into account what we say happens in awards the

the judge would use his own knowledge of what has

happened in relation to awards between, for

instance, 1978 and the time of judgment.

This is obviously a bad case on its facts as

distinct from perhaps the case of some particular

development in medical science; a bag case on its

facts, I accept, but you take a case, with respect,

Your Honour, where you have. the situation of rapid

advancement; something new found in relation to a

limb replacement, and look at the loss of amenities
that that person has at the time of trial and look

how long he has suffered with that from the time of the - when the cause of action arose. Weigh it up; see if justice is being done; see if you applied

inflationary or consumer price index criteria as,

indeed, His Honour Justice McHugh did in his

example in Bryce; see what that comes to and put it

all in the scales.

So, I am afraid, with the greatest of respect, that I am left with that. I have to say that it is

a difficult task on the facts of this case. It is

not very helpful.

DAWSON J: But, if you assume that there are no advances in

medical science and that the award of damages here

was merely more than it would have been at the time

of the accident because of inflation, what do you

do with inflation then?	Do you reduce the rate of
interest?

MR ANDERSON:  Not necessarily, Your Honour. What you do in

that case, I think, is, you have got your award,

you have got your inflation and then you have got

to put into the scales, if your are the trial

judge, Your Honour, your own impression as to what

has happened to awards in that time.

DAWSON J: All right, but what if my impression is that the

interest rate, because of inflation, has generally

been about five or six per cent above the true

interest rate over the whole time? What do I do

then?

MR ANDERSON:  I would then say to Your Honour, if you form

that impression as the trial judge, you would then

go about the task of saying, "Well, aside from

inflation and aside from the true interest rate,

MBP(2) 24 6/11/90

let me compare the way that this particular injury

has been dealt with by myself or by other judges as

at the date of the cause of action arising

following it through to the date of judgment", and
~1 there has been a levelling off of awards, or if,

indeed, there has been a tempering of awards - - -

DAWSON J:	We are assuming in this case perhaps there is an argument that there has not been, that perhaps the increased amount only represents inflation.
MR ANDERSON:	In that case, Your Honour, all you can do, with respect, is to apply what you think is the
answer but -

DAWSON J: Is that to reduce the rate of interest by the

inflation component?

MR ANDERSON:  It may be, Your Honour, but, you see, with

respect, that is where we say that the system and

the public interest falls into disrepute if each
time that process has to be - the judge has to be

assisted in that process by evidence which we say

you would have to be in the example you are

instancing. With respect, whilst Your Honour might

be informed as a trial judge with current

commercial rates, it is doubtful whether

Your Honour would be informed, with respect again, of the consumer price index, the actual rate of

inflation that any particular time - take a seven

year span between cause of action and judgment,

that would require some form of evidence, probably

- it would be expert evidence, and we say that that

is why Your Honour would not be able to embark on

the exercise that you are suggesting, with respect.

McHUGH J:  Not necessarily, Mr Anderson, what is done in New

South Wales, for example, is that there is a

practice note that sets out the rates of interest

applicable for different years - it varies from year to year. There would be nothing to stop a supreme court issuing a practice note for

·particular rates of interest, as a guide, knowing

that ordinarily they would be followed.

MR ANDERSON:  That may well be the answer to some extent or

to the whole extent in New South Wales,

Your Honour, I accept that and, indeed, it is

obvious from the New South Wales cases that that

does cause somewhat less of a problem than the

situation that we have been encountering since

1982. That may be an answer, with respect.

McHUGH J: In fact, if you look at the practice note you see

that the interest rate is varying quite

dramatically over a seven or eight year period.

MBP(2) 25 6/11/90

MR ANDERSON:  I am not familiar with them, entirely,

Your Honour, but I did notice in the newest edition

of Professor Luntz's work that he mentions them

there and I think he said that they went up to over

19 per cent in fairly recent times. I was aware of

some variation.

DEANE J:  You say there would be a problem in South

Australia there because, as I follow it, you say

the Chief Justice has held that there can only be

one rate?

MR ANDERSON:	Yes, I say that.
DEANE J:	Or has indicated?
MR ANDERSON:	Yes, Your Honour, I have used that for that

purpose to illustrate that, yes.

BRENNAN J: Then, if your argument is essentially a swings

and round-abouts argument - - -

MR ANDERSON: It is, Your Honour, I make no apology for

that, with respect.

BRENNAN J: - - - I suppose, sometimes, the swing in one

award might be different from the swing in the

next. In particular, the component of pre-trial

economic loss so that if it is right that there can

be only one rate of interest applicable in the given case it means that either the swings and

round-abouts cannot be taken into account in any

way from case to case if there is a generally

applicable rate prescribed?

MR ANDERSON:  Your Honour, what has been done, it seems, if

someone has felt themselves bound by applying one

rate only is to attempt to, within the division of
the award, either take the rate - in other words,
the rate is there - for some part of the period,
not necessarily the whole of the period, not

necessarily the whole of the amount, and that was

d6ne in the case that we put on the list by

Justice O'Leary in the Northern Territory Supreme

Court, Volmer is the name of the case.	It is in my
summary here.	Volmer v Northern Territory
Electricity Commission.	We say that is merely a

practical example of applying Justice Gibbs's

reasoning to the facts of that case.

BRENNAN J:	What does that mean, that if you have a rate that a judge thinks is too high for the case that
you adjust it by saying, ttI'd better apply that
rate but I'll apply it for a lesser time.tt?
MR ANDERSON:	I may apply it for a lesser time or I may

apply it on a lesser part of the component. And we

MBP(2) 26 6/11/90

see, immediately, that that gets into the area

again of speculation but the award of interest is a

very very much a swings and round-abouts

performance, we say, and that that may be

c6nsistent with the general principles in all the

statutes attempting to do justice between the

parties.

We do ask the Court to bear in mind that we

say there is an element, not only of making sure

that justice is done to the plaintiff but that

defendants are affected by whatever the judicial

attitude is in relation to delays and the holding

on to their money. Take, for instance, the

situation in South Australia from the opposite side

of the coin from 1982 to the present time. There

really has not been, we would say, a lot of

discouragement to defendants in relation to delay

or generally getting on with things by virtue of

that 4 per cent.

DEANE J:  Why should you not read "shall be calculated such

rate" in section 30c as including the plural as

meaning "such rate or rates"?

MR ANDERSON: Well, for no reason, Your Honour, other than

it appears that the Chief Justice was interpreting

it that he was bound by a single rate.

DEANE J:  Can you give me the reference to that again? I

know you - - -

MR ANDERSON: Certainly, Your Honour, pages 8 and 9 of

Wheeler v Page, 31 SASR. I put it to the Court as

just another of the factors that have obviously

influenced the South Australian court. At page 8

in particular, to answer Your Honour Justice Deane,

His Honour merely says in line 3:

As the section appears to authorize a single

rate of interest only.

DEANE J :- :ft is a very ten ta ti ve view as expressed.
MR ANDERSON:	It is certainly not a lot stronger than

tentative, with respect, Your Honour.

DEANE J: It may be necessary.

MR ANDERSON:  Yes. The Court should know, however, that in

fairness the rate, or the period et cetera, that

aspect of the component that should be dealt with

by way of interest in South Australia - if you turn

over in the book from pages 25 to 26 subsection (3)
gives the court a power to award a lump sum in lieu

of interest.

MBP(2) 27 6/11/90

DEANE J:  Which means that you can do the calculation and

award the result.

MR ANDERSON:  You can avoid the processes, and I was obliged

- to point that out to the Court, that there is that proviso in subsection (3).

TOOHEY J:  Mr Anderson, what is the practice in South

Australia with liquidated claims where interest is

involved? I assume there is just one rate.

MR ANDERSON:  Yes, there is, Your Honour. That is at

page 25 again, section 30c(2).

TOOHEY J: Yes, I appreciate where the source is to be

found. I was asking you the practice.

MR ANDERSON:  The practice, as I know it, Your Honour, is

one rate.

TOOHEY J: Is that thought to be because the statute demands

it or because common sense demands it?

MR ANDERSON:	I think it is the latter, Your Honour.
BRENNAN J:	Has there been any decision in South Australia, or perhaps any practice in South Australia, which
would indicate that the function of settling the
rate of interest is a function to be performed by
the court on each occasion, as distinct from applying some generally applicable standard which the supreme court as a whole applies?
MR ANDERSON:	I think the answer to that lies in - going back to Wheeler v Page again, Your Honour - and if
you will just pardon me for a minute I will see if I can assist you by finding that reference. Aside
from that, the answer to Your Honour's question is
I am not aware of any.

BRENNAN J: Well, what has been happening, in fact?

MR ANDERSON:	t}je trial, the judge usually asks, "Now, in It has just been - in relation to the end of	r~lation to interest, what does counsel submit in
relation to what rate I should use for economic
loss?"  And counsel for one side says 11 per cent,
and counsel for the other side says 13 per cent,
and His Honour sometimes fixes 12. But it is
really an agreement between the parties. If
agreement cannot be reached - and it has just
varied - since 1982, I can inform the Court that it
has just varied - depending on perceptions, not
just from the judge, but of -

BRENNAN J: Not only from time to time but from judge to

judge?

MBP(2)	28	6/11/90
06/TT/ST	C:	.:ra+UTIH

MR ANDERSON:  Yes, Your Honour, there have been some judges

who have broken new ground and I can remember when,

I think, the prevailing rate if I can call it that,

i~ recent decisions was 12 per cent, one judge
-awarded 14 per cent and then, once he did that,

another two or three judges did it so there has

been a lot of flexibility and not a uniform

approach in relation to the actual rates,

Your Honour. Of course, in relation to the non-

economic loss, everyone since Wheeler v Page, has

just worked on 4 per cent.

MASON CJ: Well, the answer to the question asked appears at

the foot of page 6 of the Chief Justice's judgment

in Wheeler v Page, where he says:

The rate of interest -

is -

in the discretion of the trial judge.

The statute so places it.

MR ANDERSON:  Yes, thank you, Your Honour.

MASON CJ: But, then, he goes on to, as it were, deal with a

rate which could be said, in the circumstances, not

to be an inappropriate rate.

MR ANDERSON:  Yes, that is the reference I was looking for,

I am advised, Your Honour.

MASON CJ: But, he goes on to say, of course, a trial judge

has a discretion to depart from it.

MR ANDERSON: Yes.

DEANE J:  How does it work on the view against you? Assume

the commercial rate is 16 per cent and there is a consistent underlying rate of inflation of 10 per

.. qent. What would be the answer to the appropriate

·rate adjusted for inflation?

MR ANDERSON:  I am not sure whether Your Honour is putting

the question to me on the basis of a certain

situation at a certain point of time; namely, at

the time when judgment is being entered.

DEANE J: Well, say, when judgment - say, for the relevant

period, from institution of writ to judgment?

MR ANDERSON: Perhaps, on the facts of this case,

Your Honour, it would take a period of - say, a

long period of 7 years or something like that.

MBP(2) 29 6/11/90

DEANE J: Well, I do not know - when interest has been

allowed, the institution of proceedings to

judgment; assume that there is a consistent

commercial rate of 16 per cent and a consistent

inflation rate of 10 per cent. What would be the adjusted rate on the approach being taken against

you?

MR ANDERSON:  On the reasoning of the Chief Justice in

South Australia?

DEANE J: Yes.

MR ANDERSON: Six per cent.

DEANE J: Well, does that not allow an advantage to the

plaintiff and that you are getting the adjusted

rate on the whole of the verdict instead of on the

increasing amounts?

MR ANDERSON: It would, on that scenario, Your Honour, yes.

DEANE J:  Which means that on one approach, the adjustment

is done wrongly and is too favourable to the

plaintiff?

MR ANDERSON:  Yes, I accept that, Your Honour, and as events

have occurred in the time that we are dealing with
over the frame of when Mr Gogic's claim was

instituted, to the time of judgment, that may well

be - - -

DEANE J:  I was not suggesting we got into that actual

problem.

MR ANDERSON:  No, but I am just saying, Your Honour, from

the facts of this case, it may well be that that

does occur on these facts.

DEANE J: Well, it may well be that if one were against your

submissions that is the sort of imponderable thing

tnat a court cannot go into but the simple

adjustment by subtracting the discerned inflation

r~te is the sort of thing that obviously should be

done.

MR ANDERSON:  Yes, I cannot dispute that, with respect,

Your Honour. Indeed, I cannot put anything useful

further to the Court, if the Court pleases.

MASON CJ: Yes, thank you, Mr Anderson.	Mr Gray.
MR GRAY:	If the Court please, by way of reply, my learned

friend suggested that the discouragement to

insurers and defendants was still a relevant matter and, in his precis, he has referred to that part of

Ruby v Marsh that refers to that. In our

MBP(2) 30 6/11/90

respectful submission, that aspect of that has been

disapproved of by this Court in Batchelor v Burke

amongst others and is specifically taken up by the

Chief Justice in Wheeler v Page, when he explains

how that part of Chief Justice Barwick's reasoning

has been disapproved of and is no longer valid.

So, in so far as my friend put that submission, and

that thread runs through his argument, we would

respectfully suggest that it is misconceived.

So, in so far as my friend put that

submission, and that thread runs through his

argument, we would respectfully suggest that it is

misconceived. If the Court pleases, in terms of
the issue of whether only one interest rate can be

used, in our respectful submission, the proper

construction of section 30c allows for the use of
varying rates. Ultimately there is to be one award

of interest; in arriving at that the Court is free

to use varying rates, either because the words

"rate of interest" includes the plural "interests",

or alternatively by use of the lump sum procedure.

His Honour the Chief Justice specifically

contemplated that matter at the foot of page 7 and

the top of page 8 of his reasons in Wheeler v Page.

The fact of the matter is that since Wheeler v Page

the Court has encountered no difficulty in using

different rates in respect of different heads of

damage. The practice of the South Australian

Supreme Court and other courts has left trial

judges simply doing two calculations rather than

one and it has imposed no practical difficulty. In

the same way as prior to Cullen v Trappell it posed

no difficulty in regard to the New South Wales

courts, where frequently the different calculations

were made, leading to the, ultimately, of course,

one figure by way of assessment. So we would

respectfully join issue with my learned friend's

suggestion that there is some embargo, we suggest,

by reason of the South Australian legislation.

TOOHEY J: : Mr Gray, there appears to be no discretion

conferred by the statute in terms of the. period for

which interest must be assessed, in the sense that

the section reads:

shall be calculated -

in the case of -

an unliquidated claim - from the date of the

commencement of the proceedings to the date of

the judgment.

Is that how the statute is to be read?

MBP(2) 31 6/11/90

MR GRAY:  The Court has in fact taken a discretion by reason

of the final words to subparagraph (2):

or in respect of such other period as may be
fixed by the court.

And the Court has treated that as allowing, in an appropriate case, a discretion as to the period.

TOOHEY J:	I see, yes.
MR GRAY:	Prima facie it is a fixed period, but with a

discretion to depart from that shown good cause,

and there are examples, as the Court will

appreciate, of - - -

TOOHEY J:  Of delay, I suppose in bringing the action to

trial.

MR GRAY:  Of delay, shortening the period. And there have

been some examples where a trial judge has extended

the period back to the time of the tort itself.

There are examples of that, but the discretion

is - - -

TOOHEY J:  The words:

unless good cause -

appear in subsection (1) and I took those to

qualify the making of an award or the non-making of

an award of interest.

MR GRAY:	Yes.
TOOHEY J:	You appear to be using "unless good cause" in order to qualify the period for which interest may
be fixed.
MR GRAY:	Yes, if the Court pleases, we would say, in regard

to interest that the statute has set a primary

p~riod but allowed a discretion to adjust the

period as by the express words under

section 30c(2).

TOOHEY J: Yes, thank you.

MR GRAY:  If the Court pleases, my learned friend suggested

to Your Honours that it was a swings and round-

about matter and it is a question of a balancing act of all sorts of matters and we would ask the Court to take a step back and see where that leaves

the trial judge. He is left with all sorts of

imponderables with the potential for evidence on

all sorts of issues in every case. In our

respectful submission, that is not the answer; the

answer is to get the principles of the matter right

MBP(2) 32 6/11/90

at the start and then matters will simply flow

through.

Your Honour Justice McHugh's reference to the

New South Wales practice of fixing, by way of a

practice direction, interest rates is, of course, a
practice that the United Kingdom courts have
followed for a much longer period and, again,

thereby reduce his arguments.

The practice in South Australia has not been

for the publication of any practice direction but

of course there has been an awareness of the going

tariff and there has been, on my instructions,

unofficially, the equivalent of a practice

direction - - -

McHUGH J:  It is much easier done in a small court than in a

court like the Supreme Court of New South Wales

with 38 judges.

MR GRAY:  The going rate is known and occasionally there

will come a time for an adjustment because of

changing interest rates and one judge will be the

forerunner of the new standard and then all others

fall in line. If the Court pleases, they, with

respect, are the submissions we wish to put by way

of reply.

MASON CJ:  Thank you, Mr Gray. The Court will consider its

decision in this matter and will adjourn until 2.15

pm.

AT 11.51 AM THE MATTER WAS ADJOURNED SINE DIE

MBP(2) 33 6/11/90