Macksville and District Hospital v Mayze

[1988] HCATrans 25

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No Sll6 of 1987

B e t w e e n -

THE MACKSVILLE AND DISTRICT

HOSPITAL

Applicant

and

GRAHAM RICHARD MAYZE

Respor!dent

Application for special leave to

appeal

MASON CJ

DEANE J

TOOHEY J

Macksville

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 19 FEBRUARY 1988, AT 12.41 U\M ~

\

Copyright in the High Court of Australia

S1Tl3/l/SH 1 19/2/88

MR R.D. GILES± QC:  May it please the Court, I appear with

my earned friends, MR J.L.B. ALLSOP, and

Mr J.P. WALLACE, for the applicant. (instructed

by Harrington Maguire & Co).

MR G. RUNDLE:  May it please the Court,in that matter I

appear for the respondent. (instructed by

Lane & Lane).

MASON CJ:	Mr Giles.
MR GILES:	Your Honours, the proposed appeal concerns two

matters. The first, which we submit is a matter

of general application and general importance, is

whether if the determination of a body, having the

power to affect the rights of people, is found to

have been made in breach of the rules of natural

justice. It automatically follows that the person

affected by that determination has a right to

damages.

MASON CJ:  But that question is not yet involved in the

proceedings, is it?

MR GILES:  It is in the sense which I explain now, Your Honour,

we submit. It is involved for this reason that,

at first instance, Mr Justice Needham found that
the applicant's determination was void and went on

as if it followed automatically to declare that the

respondent was entitled to damages for wrongful

revocation of his appointment as a practitioner.

MASON CJ: Well, he directed an inquiry as to damages.

MR GILES:  And he directed an inquiry but he did make that

declaration -

MASON CJ:  The Court of Appeal did not treat that as a

determination of entitlement to damages, did it?

MR GILES: Well, Your Honour, they did in this sense.

The learned president who, on this issue, was in

favour of the applicant, considered that there

should have been no inquiry because there was no

question of damages to be inquired into. So

His Honour therefore did determine in favour

of the applicant that, implicitly, there should

have been no declaration of a right to damages.

The majority, Mr Justice Mahoney with whom

Mr Justice Priestley agreed, determined that point in the sense that they said, "Well, damages may

arise in a number of possible ways". His Honour Mr Justice Mahoney speculated - that is my word, of course, "speculated" - and said, "But whether

or not that is so, as a matter of fact and law,

is a matter for the master to decide".

SlT13/2/SH	2	19/2/88
Macksville

Now, what we would submit that amounted to

was the majority of the court below really declining

to deal with the complaint that no declaration of a

right to damages should have been made because it

was implicit in that that there may be, at the very

least, a right to damages.

MASON CJ:  Was the question of entitlement in law to damages

or denial of natural justice argued before

Mr Justice Needham?

MR GILES:  It does not appear from His Honour's reasons that

it was argued. It appears that His Honour simply
concerned himself and the parties simply concerned

themselves with whether or not the decision of the

body was vitiated. His Honour having determined

that it was, it then appears to have been simply

taken that the declaration as to damages followed.

MASON CJ:  But it seems extremely unlikely that a judge of

Mr Justice Needham's experience would decide that

question, after all it is a controversial question,
without saying a word about the reasons for coming
to that conclusion if, in fact, it had been argued

before him.

MR GILES: Well, Your Honour, yes, ii it had been argued, we

entirely take Your Honour's point, one would expect

His Honour to have adverted to the argument.But that,

in essence, is our complaint, that His Honour made

the declaration that there was an entitlement to

damages when that was really not a matter in issue

before His Honour and that the majority in the

Court of Appeal, again, really did not determine

the question whether there was an entitlement to

damages.

MASON CJ:  But why should this Court embark upon this question

when it is, as it were, without the slightest assistance,

on the part of the courts below in terms of resolving

the question.

MR GILES:  Because the applicant is otherwise left with a

declaration against itself that there is a right to

damages. The applicant is going to be exposed to

what Your Honours may, we would submit,
presume will be a fairly lengthy and complicated

inquiry before the master and thatthat alone is sorrething

which the applicant should never be subject. That,

of course, looks to the applicant's position but

it also, as a more general matter, is relevant to

the position of any other body which makes a

determination in denial of the rules of natural

justice.

MASON CJ: But, when the master looks at the judgments in the

Court of Appeal, is he not going to take it that the

question of entitlement to damages in law is an entirely

open question for him?

S1Tl3/3/SH	3	19/2/88
Macksville

MR GILES:  Your Honour, one of the applicant's difficulties

which we put before this Court is that the master

may or may not take that view. The master may say

there is a declaration of entitlement to damages

which holds good. True it is that Mr Justice Mahoney

has said just what the damages are and the legal heads

under which they follow is a matter to be determined

by the master but the master must start, we would

submit, from the proposition that there is a right

to damages. That is the difficulty which we foresee

and, in that way, seek to answer Your Honour's point.

MASON CJ: Mr Giles, I see it is after a quarter to one. Perhaps

we might adjourn now and resume at 2.15 pm.

MR GILES: Certainly, Your Honour.

LUNCHEON ADJOURNMENT 12.49PM

UPON RESUMING AT 2.18 PM:

MASON CJ: Yes, Mr Giles. There certainly seems to be a

disconformity between the reasons for judgment of

Mr Justice Mahoney with which Mr Justice Priestley

agreed and the failure to set aside declaration 2

but why should it not go back to the Court of Appeal so that the court can reform its order and eliminate

this disconformity?

MR GILES:  Your Honour, if the result of that were that the

declaration 2 be set aside, then, of course, the present

applicant would have no complaint as to that.

MASON CJ: Yes, well, we might inquire from the respondent and

see what the respondent's attitude is to that.

MR GILES:  Indeed. Your Honours, at the risk of re-opening

the matter of that declaration 2, could I seek to,

perhaps, encapsulate the submissions that we put on

that.

MASON CJ: Yes.

MR GILES: It really involves two stages: one, addressing the

question of a point of general importance, the second

addressing the question which I have not explicitly

adverted to of interests of administration of

justice in the particular case.

As to the first of those, we would submit that

it can be put this way. That a declaration,

declaration 2, has been made that the respondent is

entitled to damages. It was made by

SlT13/4/SH	4	19/2/88
Macksville

Mr Justice Needham as a declaration that flowed from the declaration that the determination was

void, it having not been held void because made

without conferring natural justice. The majority
in the Court of Appeal left that declaration

standing and they did so in circumstances in

which we submit it was indicated that some
damages flowed and the only real question was

how much and under what heads. That, we would

submit, is incorrect as a matter of general

principle and that is where we say the matter

of general importance arises.

The second stage, the one which I have not

explicitly adverted so far is this,. that as a

consequence of declaration 2 remaining and the

referral to the master therefore remaining, there

will be, we would submit, two things. First of all,

there will be an inquiry which will be, no doubt,

of some length and expense which, we would submitf

should not occur at all but, in particular, secondly,

there will be an inquiry in which the master could
hardly do anything but consider that he was bound
by the declaration that there was an entitlement
to damages and he would, really, only address

himself to what heads, as a matter of law, for

example, remoteness questions may come into it

and how much. That will have come about in a

situation where Mr Justice Needham did not consider

whether the declaration as to damages did flow as

an inevitable consequence and where the majority

of the Court of Appeal, in our respectful submission,

really did not address that question either and it

would be most unfortunate if the applicant were left

in the position where, through what with the greatest of

respect we submit would be some default of attention to

the matter, he was inflicted with the inquiry. That is

a situation, we submit, where the interests of the

administration of justice would make it appropriate for the Court to intervene in the particular case -

for this Court to intervene by reconsidering the

judgments.

May I then go to the second matter which, we

say, is raised by the proposed appeal. That is the

application of one of the principles for which the

decisions in TWIST V RANDWICK MUNICIPAL COUNCIL and

REG V MARKS in this Court stand,. namely, that the existence of a statutory right of appeal may indicate

a legislative intention that the only right of redress

against failure to confer natural justice is by way

of that statutory appeal. That is a principle which

was recently recognized and applied both at first

instance and by one member of the Full Federal

Court in the MARINE HULL AND LIABILITY INSURANCE CO

LIMITED V HURFORD & ANOR, (1985) 10 FCR 234.

SlT13/5/SH	5	19/2/88
Macksville

In the present case, the PUBLIC HOSPITALS ACT

provides a right of appeal and the scheme of that

right of appeal is set out at some length in the

judgment of the learned president below. It is a

right of appeal from decisions of the board of a

hospital, not just upon the termination of

appointment which this case involves, but also

upon the appointment, the re-appointment, decision

not to re-appoint and the suspension as well as

the termination of a visiting practitioner. The

affidavit in support of the appeal indicates that

there are over 200 public hospitals operating under
that regime and we would invite the Court to take
the view that there must be numerous decisions of
the nature I have indicated being made and, as to

a number of them, one can expect that the practitioner

considers himself aggrieved and the question is,

what are his remedies?

In the Court of Appeal, the learned president did deal with the matter at some length. The learned

president states that there were cogent reasons to

support a conclusion that the provision of the

statutory appeal must be taken to exclude the

provision of prerogative relief. His Honour set

out those reasons and expressed that conclusion

at page 70 of the application papers but His Honour

then went on to conclude that for other competing

reasons,which His Honour also enumerated, His Honour

thought that in fact there was no such exclusion.

So, it was a matter where, clearly, we would submit,

His Honour saw merit in the applicant's favour and

balanced matters and came down against the applicant.

Unfortunately, although it was one of the arguments

of the appellent's below, the other members of the

Court of Appeal do not appear to have addressed that

point. Rather, they addressed the cognate but quite

different point whether there was a legislative

intention that the need to confer natural justice

was excluded, not the remedies aspect of it. So that there is the unfortunate result that, of the	members of the Court of Appeal, only one member did
deal with the point which the present applicant sought to argue and that member of the Court of Appeal, the learned president, although he found against the applicant on it, recognized strength in the applicant's
arguments. We would submit that it would be most
undesirable to leave the matter in that state; that
it is a point of general importance because of the
number of public hospitals subject to this regime
which must make decisions in relation to visiting
practitioners. It is of importance, we would submit,
both to the hospitals and also to the practitioners
to know where a dissatisfied practitioner may go and,
further, in the course of that consideration, this
Court, if it did enter upon the matter, would have

S1Tl3/6/SH	6	19/2/88
Macksville

the opportunity to, perhaps, clarify the scope

and application of this aspect-of this principle

of the TWIST and MARKS decisions. That, we
therefore respectfully submit, does give rise

to a matter of general importance. Again, we

submit, secondly, that it would be unfortunate

if the present applicant were left with a decision

against him on the point arising essentially from

a failure of two members of the Court of Appeal

to address the point and that that gives rise to

the interests of the ad~inistration of justice in

the particular case calling for this Court as, really,
the only thing that the applicant can do, reconsidering

those judgments. That is the way in which we seek to

put the second matter, the subject of the proposed

appeal, again, both on an aspect of general
importance and on an aspect of the interests of

justice in the particular case. If the Court

please, those are the reasons why we would submit

it is appropriate in this case to grant leave to

appeal on both the matters which are sought to be

raised.

MASON CJ: Yes, thank you, Mr Giles. Yes, Mr Rundle.

MR RUNDLE:	Thank you, Your Honour.
MASON CJ:	Mr Rundle, what do you say, first of all, about

declaration 2? As I read the judgment of

Mr Justice Mahoney in which Mr Justice Priestley

concurred, he was clearly of the view.that

reflect that point of view would have been to set aside declaration 2 as,

entitlement in fact and law to damages for denial the appropriate order to

of natural justice was still an open question.

SH indeed, the president did.

MR RUNDLE: Your Honour, the president approached it on a

different basis.	The president approached it on
the basis that it could have been dealt w4 th in

another proceedings. Mr Justice Mahoney c0nsidered

that the issue as to whether any damages would flow

would have to be determined by the master.	Now, the
president did not approach it that way at all.	It

would be my submission that the manner in which

order 2 is presently framed - or the declaration 2 -

would still entitle the master to have a general

inquiry as envisaged by Justice Mahoney and that

if there were any difficulties to the extent or

scope of that inquiry, he, as Justice Mahoney

suggested, could come back to the trial judge for

directions.

The part I would take Your Honour to is page 96

of Justice Mahoney's judgment in the last paragraph

where he says:

SlT13/7/RB	7	19/2/88
Macksville

I am satisfied therefore that it was proper

that the judge directed an inquiry as to

damages. Whether a basis for damages can

be established in fact or in law is a matter

to be determined during that inquiry.

}'JASON CJ:  But you see the problem about that is that

Mr Justice Mahoney at no stage refers to the

existence of a declaration. He seems to treat the

matter as one in which an inquiry as to damages

has been directed only, and as long as he manages to

make clear that these matters are open on the

inquiry, then that	sufficiently disposes of the
order at first instance.	But neither he nor

Mr Justice Priestley seem at any stage to indicate that they are aware that there was a declaration in

the form of declaration 2. And that is the

stumbling block.

MR RUNDLE: Your Honour, it depends if one interprets the

declaration as saying that there is damages available

so therefore $1 is up in the cash register till, if I

could use that analogy. It would be my submission

that Justice Mahoney has approached it in the manner
that damages is something which has to be assessed;

damages can only be awarded by the appropriate

principles of law or fact being applied.

DEANE J:  But what if the result of the inquiry was that on

appropriate principles of law the plaintiff was not

entitled to damages for wrongful revocation of his

appointment, would the master - if you ':hen go to page 4 0,

order 2 is that"the plaintiff is entitled to damages" -
would the master then make order 3,"the plaintiff is

not entitled to damages"?

(Continued on page 9)

S1Tl3/8/RB	8	19/2/88
Macksville

MR RUNDLE:  Your Honour, I would say that the master would,

if he came to that conclusion, report back to

the judge that on his inquiry no damage was

suffered by the plaintiff.

DEANE J:  What I said to you was: what it in accordance

with principles of law, the plaintiff was not

entitled to damages?	A finding to that effect
would be in the teeth of declaration 2 -	which

really means, does it not, that on your approach

the ~uestion on this aspect of the application

is, 'What is the best way of getting rid of

declaration 2 11 ?

MR RUNDLE:	Your Honour, I take what Your Honour has put as regard to the approach that appears to be -
that order 2 should mostly be framed in terms that
entitle it to an inquiry into damages.
DEANE J:	You do not need it because you have an order
for the inquiry.

MR RUNDLE:  Yes. Then, going to Your Honour's next point

as to the appropriate way: quite clearly the
Court of Appeal would be the appropriate forum

for that matter to be aired in.

MASON CJ: That was the point I was going to raise. It

seems that really it is inappropriate that this

Court should be called upon to clean up the Augean

stables.	Why does not the matter go back to
the Court of Appeal?	Why cannot an application

be made to the Court of Appeal so that it can

amend its order so that there is no disconformity

between the reasons in Mr Justice Mahoney's judgment

and the actual order of the Court - there certainly

being, at least, a problem in determining what

the orders mean in the light of the reasons that

have been given.

MR RUNDLE:  Yes, Your Honour.

MASON CJ:  I should have thought, for my part, that if

the matter were taken back to the Court of Appeal,

as far as the application book is concerned no

formal order seems yet to have been taken out,

the Court of Appeal could deal with the matter

appropriately. Otherwise, it seems to me there

is a problem: that is, that there is a formal

declaration of legal entitlement to damages in

the circumstances of the case. That may mean
that the only way out would be to grant special

leave to appeal so that we could look at the

propriety of this particular declaration.and

that would be a most unhappy event.

SIT14/l/SDL	19/2/88
Macksville
MR RUNDLE:	That would involve Your Honours embarking on a

course of determining what facts - - -

MASON CJ:  No, it would not. I do not think it would involve

that at all.	It might merely involve looking
at whether or	not it was right for the Court
of Appeal not	to set aside the declaration, having
regard to the	reasons which they published.

MR RUNDLE:  Your Honour, I would think that the more appropriate

matter would be to put it back to the Court of

Appeal to consider it, with great respect.

MASON CJ:	Yes.
MR RUNDLE:	Your Honour, if I could pass on to the second

point, the natural justice point. My learned

friend seeks to suggest or import that there

is a two-question test to be put and even in attempting to put that he does not point out

whether the learned president was wrong in coming

to the conc.lusion which he did.

The president, at page 70 and following, gives

his very reasons why he feels that the legislative

structure did not attempt to deprive the right

to go to the courts for relief. They are persuasive

reasons and the applicant in these proceedings

has been unable to advance any matters which

would suggest that the learned president was
wrong. In fact, what the applicant would seem

to be suggesting is that, relying on MARKS and

MARINE HULL, of attempting to say that

the tribunal which would be set up under the

auspices of the Minister would be of the same
quality as the tribunal~ though not court~ were

in the MARINE HULL and the MARKS factual situation.

It would be the respondent's submission

that without the applicant showing that there

was some underlying flaw in the reasoning of

the president that his interpretation cannot

be said to be wrong and that the question as

to whether or not there is a two-question test

or just a one-question test thrown up by TWIST

is a matter which need not be decided in this
instant case.

The question of importance my friend has

put some emphasis on: it is a situation,
Your Honours, where though there may be 200-odd

public hospitals in New South Wales the situation

which gave rise in this instant case, in the

respondent's submission, is not in the usual

or the norm. I would have no further matters

to put to Your Honours.

SIT14/2/SDL	10	19/2/88
Macksville

MASON CJ:  Thank you, Mr Rundle. Yes, Mr Giles? Am I

right in thinking that a formal order has not

been taken out in the Court of Appeal?

MR GILES:  So far as our side is aware, Your Honour, it

appears that that is the position.

MASON CJ:	Do you agree with that, Mr Rundle?
MR RUNDLE:	I understand that is the case, yes, Your Honour.
MASON CJ:	Yes.
MR GILES:	Your Honours, there are only two matters to

which I would advert in answer to my learned

friend's submissions: the first is perhaps

unnecessarily to draw to Your Honours' attention

that the notes of appeal below appealled against

declaration 2 - against the making of declaration 2 -

not against the ordering of the inquiry. That

appears from page 42, line about 17, of the

application papers.

MASON CJ:  There seems to be the variation in all this:

I notice when we look at your proposed grounds

of your draft notice of appeal, all your efforts

are directed against the inquiry as to damages

rather than the declaration.

MR GILES:	They were not below, Your Honour.
MASON CJ:	I know, but I am merely saying that one cannot

take too much from the precise form in which these

documents are cast.

DEANE J:	Does that mean that you cannot take any credit
for the president deciding that the order for
the inquiry should be set aside? You did not ask
for it.

MR GILES:  Your Honour, I cannot recall whether I had any

hand in the draft notes of appeal. If I did,

then I am to blame for its inadequacy.

Your Honours, the other matter, my learned

friend, in dealing with what one might call the it, the facts of the present case were not typical.

One may hope that that is so but that is not

to the point because the point of principle which

is raised does not depend on the particular facts

on which the tribunal decides; the point of

principle is simply assuming that the practitioner

is dissatisfied with its decision, does he have

a right to challenge it by seeking prerogative

relief or are his remedies limited to the statutory
right of appeal. That is so no matter what the

11

SIT14/3/SDL	19/2/88
Macksville

facts are subject, of course, to them being facts

which would give rise to a prerogative relief.

Those are the only matters on which I would

seek to respond to my friend's submissions.

MASON CJ:  The applicant seeks to raise two questions in

its proposed appeal to this Court:  the first

question, one of considerable importance, is

whether damages are recoverable for denial of
natural justice. In other circumstances this

question might attract a grant of special leave

to appeal. However, here, the majority in the

Court of Appeal took the view that this question did not arise on the appeal to that Court and

expressly left open the question for determination

subsequently in the proceedings. For that reason

we would not grant special leave to appeal on

this ground. This aspect of the case involves

a technical difficulty. The Court of Appeal,

though intending that the Master should consider

whether the respondent had an entitlement in

fact and law to damages for denial of natural

justice, failed in the orders which it pronounced,

to set aside a declaration made by Mr Justice Needham

at first instance. That declaration, declaration 2,

was in these terms:

the plaintiff is entitled to damages

for the wrongful revocation of his appointment

as a visiting practitioner to the defendant. In this respect there is an obvious disconformity

between the orders announced and the court's

reasons. The Court of Appeal should be approached

with a view to amending its order by setting

aside that declaration.

The second question which the applicant

raises is whether the provisions of Part VIB

of the PUBLIC HOSPITALS ACT of New South Wales,

by providing a right of appeal from the hospital's	decision to an appellate tribunal, exclude judicial	review of the decision made by the hospital.
On this aspect of the matter the Court does not consider that the view expressed by Mr Justice Kirby
in the Court of Appeal is attended with sufficient doubt to justify the grant of special leave to appeal. The application is therefore refused.

MR RUNDLE:	With costs, Your Honour?
MASON CJ:	Yes, Mr Giles?
MR GILES:	I would make two submissions, Your Honour, one - and

I hope I will not be taken as canvassing what

Your Honour just pronounced - is that it may

be appropriate, we would submit, rather than

SIT14/4/SDL	12	19/2/88
Macksville

dismiss the application for special leave now, to

stand it over just in case, on application to

the Court of Appeal, the Court of Appeal takes

a course which may cause the applicant to feel

the need to bring the matter back to this Court.

MASON CJ:	But that is hardly likely, is it?
MR GILES:	I think it hardly likely, Your Honour. I am,

perhaps, being unduly cautious but I felt obliged

to put that to Your Honours.

MASON CJ:  I would have thought it is extremely unlikely.

We can perhaps overcome this problem by reserving

liberty to apply and, by reserving liberty to

apply, we identify that there is the possibility

if events do not proceed as we imagine they would in the Court of Appeal, that you could come back.

MR GILES:  I would be most grateful to Your Honour. On

the question of costs, I would submit that the matter of referral back to the Court of Appeal has, we would submit, justified at least bringing

this matter to this Court and that the appropriate

order would be perhaps that no order for costs

be made on the application.

MASON CJ:  But one would have thought that the first and

obvious step would be to approach the Court

of Appeal rather than this Court.

MR GILES:  Your Honour, it is not easy to answer that other

than by saying that when the Court of Appeal

has pronounced its decision and made its orders -

MASON CJ:  But it is well known that the orders pronounced

by a court are always capable of reformation

until a formal order is taken out.

MR GILES: I cannot dispute that, Your Honour. If

Your Honour pleases.

MASON CJ:  Yes. Do you want to say anything on reserving

liberty to apply?

MR RUNDLE:	No, Your Honour.
MASON CJ:	Very well. There will be liberty to apply as

I have indicated and the application will be

dismissed with costs.

AT 2.51 PM THE MATTER ADJOURNED SINE DIE

SIT14/5/SDL	13	19/2/88
Macksville