Matthew Ward Price as Executor of the Estate of Leslie Price (Deceased) & Ors v Christine Claire Spoor as Trustee & Ors

[2020] HCATrans 142

[2020] HCATrans 142

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B9 of 2020

B e t w e e n -

MATTHEW WARD PRICE AS EXECUTOR OF THE ESTATE OF ALAN LESLIE PRICE (DECEASED)

First Applicant

DANIEL JAMES PRICE AS EXECUTOR OF THE ESTATE OF ALAN LESLIE PRICE (DECEASED)

Second Applicant

ALLANNA MERCIA PRICE

Third Applicant

JAMES BURNS PRICE

Fourth Applicant

GLADYS ETHEL PRICE BY HER LITIGATION GUARDIAN ERIN ELIZABETH TURNER

Fifth Applicant

and

CHRISTINE CLAIRE SPOOR AS TRUSTEE

First Respondent

KERRY JOHN SPOOR AS TRUSTEE

Second Respondent

MARIANNE PIENING

Third Respondent

FREDERICK PIENING

Fourth Respondent

JOYCE HIGGINS

Fifth Respondent

CHERYL THOMPSON

Sixth Respondent

JOYCE MAVIS COOMBER

Seventh Respondent

ANGUS MACQUEEN

Eighth Respondent

ANGUS MACQUEEN AS TRUSTEE

Ninth Respondent

Application for special leave to appeal

KIEFEL CJ
NETTLE J

TRANSCRIPT OF PROCEEDINGS

FROM BRISBANE BY VIDEO CONNECTION TO MELBOURNE

ON FRIDAY, 11 SEPTEMBER 2020, AT 10.30 AM

Copyright in the High Court of Australia

MR T. MATTHEWS, QC:   If the Court please, I appear with my learned friends, MR D.D. KEANE and MR J.K. CARTER, for the applicants.  (instructed by MA Kent & Associates Solicitors)

MR N. ANDREATIDIS, QC:   I appear with MR A.F. MESSINA and MS S.J. GIBSON on behalf of the respondents.  (instructed by Mullins Lawyers)

KIEFEL CJ:   Mr Matthews, I think there is an extension of time required?

MR MATTHEWS:   Yes there is, your Honour.  The affidavit material filed as part of the application book indicates the difficulties with the new Court portal system that we faced in January this year in having the application filed within the time prescribed.  There were also some concerns as to the formatting of the application, and it is respectfully submitted by the applicants that there would be no prejudice to the respondents were an extension of time granted.

KIEFEL CJ:   Mr Andreatidis, I do not think there is an opposition to the extension, is there?

MR ANDREATIDIS:   Not at all, your Honour.  Not at all.

KIEFEL CJ:   Yes.  The extension is granted, Mr Matthews.

MR MATTHEWS:   Thank you, your Honour.

KIEFEL CJ:   Yes, Mr Matthews.

MR MATTHEWS:   If it please the Court, in Agricultural & Rural Finance v Gardiner (2008) 238 CLR 570, this Court drew a very clear distinction between the doctrine of election and the doctrine of waiver, and hemmed the Court’s earlier judgment in Commonwealth v Verwayen (1990) 170 CLR 394 to its own facts. This case, this application, gives occasion to the Court to clarify the distinction between the doctrine of waiver and that of contracting out.

This case is not about waiver.  It is about contracting out and it is about the application of the principle in Westfield Management Limited v AMP Capital Property (2012) 247 CLR 129, in particular the passage at paragraph 46, which we have set out at page 60 of the application book in the application. That principle, at paragraph 46 of Westfield Management, found earlier expression in the case of Equitable Life Assurance of the United States v Bogie (1906) 3 CLR 878, which is the authority which is not referred to in the application list in Part 5, nor in the applicant’s reply, but is the additional authority which we asked the Registrar to have placed before the Court on Tuesday this week.

At the outset, might we say that having regard to paragraph 2 of our learned friends’ response, there is no factual controversy in this case, it concerns a question of principle.  Although the factual background is set out such that we do not intend to take your Honours to it, can we say simply that the case was advanced on the basis that if the relevant limitation periods in the Limitation of Actions Act 1974 (Qld) applied, they would defeat the plaintiffs’ claim. So much was conceded at the primary judge stage. Your Honours will see that in the application book at page 6 in paragraph [1] of Justice Dalton’s reasons.

Here, the relevant mortgages were entered into in June 1998 for a term of 12 months.  That was extended to July 2000, and there is no issue that they were in default from May 2001.  Sixteen and a half years later, the respondents commenced the proceeding.  Only two of the original four mortgagors remain alive, and of those two one lacks capacity so that she is represented by a litigation guardian properly appointed.

Your Honours, we say that this case engages the special leave criteria set out in section 35A of the Judiciary Act in the following three ways.  First, it raises a question of law of public importance, namely whether or not the Limitation of Actions Act can be contracted out of.  Second, it raises a question that requires this Court to resolve differences of opinion as to that issue, but also as to the precedential status of Verwayen. 

If Verwayen has any precedential status in these circumstances, the Court may also consider whether the change in judicial attitudes to the use of Court resources – that is the expenditure from the public purse in respect of litigation, as reflected in Aon, as opposed to the circumstances pertaining at the time Verwayen was decided, as reflected in JL Holdings, necessitates this Court to adopt a different approach.

Third, the interests of the administration of justice demand intervention by this Court because the refusal of special leave will mean that the applicants cannot rely upon a defence they maintain is available to them.  Those special leave questions, which we say are distilled from the application, are, first, is contracting out of the Limitation of Actions Act lawful or unlawful in principle?

KIEFEL CJ:   The question there is whether or not it is contrary to public policy.  Is that right?

MR MATTHEWS:   That is so.  That is what it boils down to, if the Court please.

KIEFEL CJ:   What do you say is the state of authority in that regard, Mr Matthews, in Australia?

MR MATTHEWS:   I am sorry; I did not quite hear that question.

KIEFEL CJ:   What do you say is the state of authority as to that issue?  I took it that you submit that Verwayen is not conclusive as to whether contracting out is lawful?

MR MATTHEWS:   That is our primary submission.  In Verwayen only four of the Judges addressed the issue before the Court and although the four agreed in the result there was a split of two and two Justices – two relying on estoppel and two relying on waiver.  The other members of the Court did not address the issue which we now raise.  That is why we say this case presents a suitable vehicle for determining a question of principle, namely whether the Limitation Acts are the result of the relevant legislatures applying a public policy that stale claims should not be permitted to be brought.

As we submit, this is a case about contracting out.  If the Limitation Acts contain matters in the public interest as opposed to being purely in respect of a private right then, we submit, the Court should hold that a party cannot contract out of that statute because it is for the benefit of the public.

KIEFEL CJ:   I see the Court of Appeal relied upon the statements in Westfield Management v AMP, to which you have referred.

MR MATTHEWS:   If we can take your Honour to Westfield Management and the paragraph – the relevant paragraph is 46.  Whilst we accept that:

where the statute contains an express prohibition against “contracting out” –

That if:

the provisions of a statute, read as a whole, might be inconsistent with a power, on the part of a person, to forego statutory rights.

Then this Court held that:

It is the policy of the law that contractual arrangements will not be enforced where they operate to defeat or circumvent a statutory purpose or policy according to which statutory rights are conferred in the public interest, rather than for the benefit of an individual alone. 

Our submission is that the Court of Appeal has misconstrued the absence of contracting a permission to contract out, having not been included in the Queensland Act, as falling within that principle.  So that is one of the errors of principle which then permeates the rest of Justice Gotterson’s reasons.   

Can we take your Honours to the additional case we asked the Registrar to place before you on Tuesday, and that is Equitable Life Assurance of the United States v Bogie (1906) 3 CLR 878? This case concerned – and by way of passing, that passage at paragraph 46 of Westfield, although it cites a number of prior authorities, it appears that Bogie was not cited to this Court in Westfield Management. 

We submit that Bogie illuminates the application of the test about what is a statute with a public policy intent. The appellant insurer issued a life insurance policy to the respondent insured. A clause of that policy provided that the insured “waived and relinquished” surrender value required by any statute. Section 22 of the Life Assurance Companies Act1901 (Qld) stated and we quote:

No policy . . . shall [be forfeited] for non‑payment of premiums so long as the premiums and interest in arrears are not in excess of the surrender value ‑

At page 897 in the reasons – the Court was comprised of Chief Justice Griffith and Justices Barton and O’Connor and the two particular passages we take your Honour to, to answer your Honour the Chief Justice’s question as to what the state of authority is in Australia, would be the passage in the judgment of Justice Barton at page 897 and the passage commences about eight or nine lines down after his Honour has referred to the right to waive or agree to waive but says this:

The matter for present purposes is contained in the words juri pro se introducto, for, if the provision is solely for the regulation of a private right, then the person may take advantage of it and not otherwise . . . “But when public policy requires the observance of the provision, it cannot be waived by an individual . . . Private compacts are not permitted either to render that sufficient, between themselves, which the law declares essentially insufficient; or to impair the integrity of a rule necessary for the common welfare; such, for instance, as the enactment which requires the attestation of wills.”  The right of persons to depart from a rule laid down by Statute, if it is purely in the regulation of private interests, and not if it is part of a public policy, has been illustrated in some American decisions –

to which his Honour then referred ‑ ‑ ‑

KIEFEL CJ:   Mr Matthews, given the time, could I interrupt you ‑ ‑ ‑ 

MR MATTHEWS:   Yes, your Honour. 

KIEFEL CJ:   ‑ ‑ ‑ to ask whether there is a threshold question here, namely, whether clause 24 of the mortgage agreements applies to the Limitation Act.  Is that a matter which would necessarily have to be addressed before this question of principle is reached?

MR MATTHEWS:   Yes, your Honour.  We submit that is the case because relevantly clause 24, which is set out at paragraph 14 of the judgment at the application book page 37, we have addressed the construction of the clause at paragraphs 17 to 23 of our submissions in reply, and if contracting out is held to be lawful that matter was also raised by Justice O’Connor in Bogie at page 911 where his Honour said about three‑quarters of the way down the page that it requires very strong words:

to indicate an intention to give up, not only all rights already given by Statutes in existence at the date of the policy, but rights that may be hereafter given by other Statutes.

So, with respect to your Honour the Chief Justice, then that is a threshold question, and a further question that arises which we have included in those questions for which we have sought special leave is that if contracting out is lawful then what is the remedy available to the respondents?  We would submit that if clause 24 is in unambiguous and the strongest terms to permit contracting out then the remedy available to the respondents would be a breach of that warranty. 

NETTLE J:   It has been the law for a very long time, has it not?

MR MATTHEWS:   Yes, your Honour, that is so, and it is our submission that the Court of Appeal erred in holding something quite different. 

NETTLE J:   150 years, or more than that – 170 years now. 

MR MATTHEWS:   Yes, your Honour.  Your Honour ‑ ‑ ‑ 

NETTLE J:   I am sorry to interrupt you, Mr Matthews, do you get anything out of Justice McHugh’s judgment in Brisbane South Regional Health Authority v Taylor?

MR MATTHEWS:  Yes, we do.  It is the passage at pages 552 and 553, which I will have Mr Keane give me, where his Honour says on page 553:

In enacting limitation periods, legislatures have regard to all these rationales.  A limitation period should not be seen therefore as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society.  It represents the legislature’s judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated.

His Honour then continues to explain the purpose material to that case, of section 31 of the Limitation of Actions Act (Qld), which permits the Court to exercise a discretion to extend the period of time for bringing an action in respect of a claim for personal injuries, whether by breach of contract or for tort.

As to whether there is a public interest, there is quite an old authority, to which we have referred in our written application, called the Marquis Cholmondeley v Lord Clinton.  We would like to conclude by taking your Honours to a very short passage at page 577 of the report.  It is actually in the English Reports, volume 91 to 92 at page 577, where Master of the Rolls Plumer, in referring to the then 20 years statute of limitations for the bringing of an action as to title to…..for adverse possession said, about two‑thirds of the way down the page:

The public have a great interest, in having a known limit fixed by law to litigation, for the quiet of the community, and that there may be a certain fixed period, after which the possessor may know that his title and right cannot be called in question.

That statement of principle is, in our respectful submission, perfectly consistent with what Justice McHugh said in Brisbane South Regional Health Authority v Taylor.  Unless there is anything further with which we can assist the Court, they are our submissions.

KIEFEL CJ:   Thank you, Mr Matthews.  Yes, Mr Andreatidis.

MR ANDREATIDIS:   As to the threshold question, your Honours, the Court of Appeal, in our submission, was correct and this is not an appropriate vehicle in which leave should be granted in respect of that threshold question, which is one of the special leave questions and, in any event, it is not shown that a clause in that form is one that is widely used.  So for the same reasons it is submitted that this is not an appropriate vehicle.

If I could then move to special leave question number 1, which is the public policy ground.  In our submission, the state of the law in Australia requires…..on the contract as to whether it contradicts public policy.  To demonstrate for it to be unlawful one or several things have to be shown, either that the express language in the statute prohibits the contract and, in our submission, nothing in the Limitations Act does so in terms of the statutory bars, that there is something in the language of the Act that impliedly prohibits the contract.  Again, in our submission, there is nothing in the language in respect of the statutory bars which demonstrates that is the intention.

The third aspect is whether there is some – again, by reference to the language of the Act – matter of public policy which indicates that the contract is one that is contrary to public policy and one that is not capable of being renounced.

In our submission, the state of authorities in Australia do not need clarification because it is clear that the statutory bars are at the option and at the sole option of defendants capable of being renounced and that it follows that, because it is capable of being renounced at the sole option of the individual, that that right that is conferred by the statutory bars is a personal right and not one for the overall public interest to the community.  That, in our submission, is bolstered by several aspects of the policy, all of which are reflected in the language of the Act. 

The statutory bars do not go to jurisdiction.  They confer a personal right and if it were not so, in our submission, the statute would not confer the choice to be solely that of the individual defendant.  It is long recognised that the words “shall not be brought” that are used in the statutory bars are not to be taken literally.  They give the defendant the choice to plead or not to plead, but if they want the limitation defence to be raised they must plead it.

In Brooks, taking from Justice Windeyer, which is the passage that has been discussed, his Honour noted that anyone can renounce a right conferred for their sole benefit, but you cannot renounce a right that is conferred for the benefit of society.  In our submission, it is a matter of principle that the individual can renounce their right to plead the statutory bars and it follows that the policy reflected in the Act is for the individual and the individual alone, and not for the greater good of society at large.

It is procedural, not substantive – that again is a well‑recognised principle in Australia.  It bars the remedy, not the right.  The cause of action itself is not extinguished and unless the plea is raised at the choice of the defendant, it does not arise for consideration by the Court.

We point to each of those matters as underscoring the policy reflected in the Act, and why it is not against the public interest for a party to be permitted to contract out of the statutory bars, whether that be prior to or after the accrual of the cause of action.

In our submission, the reliance that the applicants place on Aon and the Equitable Life decision do not assist them.  First, each of those cases are concerned with entirely different statutory contexts and frameworks and in relation to both of them it can be seen from the reasons that what was found, in effect, or relevantly for today’s purposes at least, is that it was not an individual right.  There was not something that the party could choose to do.  It was an underscoring public interest.

So taking Aon, for example, that, as your Honours are obviously very familiar with, was about court rules which require parties to act in a timely way, deal with the real issues, et cetera.  There is no choice in that for the defendant or for the plaintiff.  They are obliged to act in accordance with those procedural words. 

It is not for the defendant, for example, to choose to go slow and, having made that choice, there is nothing the court can do about it.  That is in sharp contrast to the statutory bars.  Once the defendant has made the choice as an individual to not make the plea then that is it.  It is not for the court to then intervene and say well, hang on, as a matter of discretion we are going to direct that the limitation period be pleaded and enforced.  That is not the way it works.

That underscores again, in our submission, what the true public policy reflected in the Act is and why, as a matter of principle, even though there are no cases at the High Court level that we have been able to find or, indeed, anywhere, that deal with the particular question of contracting out of the operation of the statutory bars prior to the accrual of cause of action, in our submission, that is entirely consistent with the text, the policy and the purpose of the Act.

As to not the way the question is framed – not the way the question is framed, but the way it is put against us in the submissions, your Honours, is that at the time the contract was entered into it was not possible for the applicant to know what cause of action would accrue in the future.  Now, that proposition might be right if this was a waiver case and as our learned friends have accepted, this is not a waiver case, it is not a case about choices at the outset between competing interests.  So, in our submission, that is not a matter that requires the Court to consider.

NETTLE J:   Mr Andreatidis, can I ask you a question, please?

MR ANDREATIDIS:   Of course you may, your Honour.

NETTLE J:   Thank you.  In 1850, Lord Campbell held in East India Company v Oditchurn Paul that if one could contract out of a limitation period, the only remedy would be damages for breach of covenant and that remark was subsequently affirmed by Lord Evershed in 1957 in The Sauria and the Trent.  Is there any Australian authority contrary to those holdings?

MR ANDREATIDIS:   Not that we have been able to find, your Honour.  The highest I could put the submission is that when one looks at the result in Verwayen, that informs what the result should be here in Australia, having regard to the underlying policy reflected in the Act.  In Verwayen, whether it be by - in our submission, whether it be by estoppels, waiver, or contract, it makes no difference if there is something that triggers - there is some mechanism that triggers - sorry, “triggers” is the wrong word - if there was some mechanism by which a defendant is precluded from relying on the Limitations Act, the plaintiff is not restricted to compensation for breach of that particular promise and that, in our submission, is reflected in the result in Verwayen where when - combine the 2:2 rationale, the proposition that you are limited to compensation was not the outcome.  But I accept that there is no direct authority on the proposition, your Honours.  We were unable to find any. 

NETTLE J:   I suppose if you were limited to damages it would accord better with the public…..the time in which actions could be brought.

MR ANDREATIDIS:   That may be so, but even if I was to accept, which we do not, but even if I was to accept that that is the limit of my client’s cause of action, no cause of action accrued until that promise was breached, and we are still within time for that, even now, today, so that, in our submission, makes this an inappropriate vehicle for the determination of principle.

NETTLE J:   But why so?  You could go out and sue upon the covenant for damages.

MR ANDREATIDIS:   Yes, and we are not out of time.

NETTLE J:   …...

MR ANDREATIDIS:   I beg your pardon, your Honour.

NETTLE J:   I beg your pardon.  The way would be clear for you then to go out and pursue damages.

MR ANDREATIDIS:   Well, it would, but in our submission it is an alternative avenue that is open to us.

NETTLE J:   I understand that.  The authority seems to be against you.

MR ANDREATIDIS:   Well, I have put my submission as highly as I can in respect to that, your Honour.

NETTLE J:   Thank you.

MR ANDREATIDIS:   Otherwise, in terms of the – so the only other thing I will expressly refer to is the decision of Paul which has been referred to.  That, in our submission, is a very different case.  It was not a case involving a contract which at the outset included the prevention of relying on the Limitations Act, and in fact as we read the decision the case did not turn on whether or not there was or was not an agreement, so to that extent it is obiter, but even if it was, the court did no more than indicate that there was an option to the plaintiff to sue for beach of that promise, that second contract of course needing its own consideration but that is factually an entirely different circumstance to the one that your Honours are dealing with today. 

Otherwise, your Honours, we are content to rely on what we have written.  They are our submissions – I am sorry, I should say the Court of Appeal was, in our submission, plainly correct. 

KIEFEL CJ:   Yes, thank you.  Do you have anything in reply, Mr Matthews?  Mr Matthews, I think you might be on mute.

NETTLE J:   You need to switch on, Mr Matthews.

MR MATTHEWS:   I am switched back on now, your Honour, thank you.  We have three short matters in reply.  The first is to ask your Honours to look to the passage just before that one to which we took you in Marquis Cholmondeley v Lord Clinton, where the Master of the Rolls said that:

The door of justice is closed –

at the expiry of the limitation period:

The claimant cannot be heard to shew his title.  It is a decisive answer to him that he comes too late.  That alone is the bar.  His title remains, but his remedy is lost . . . 

“The statute is founded upon the wisest policy, and is consonant to the municipal law of every country.  It stands upon the general principle of public utility.

The second matter is this, that in respect of our learned friend’s contentions that, as it were, a defendant holds the key to unlocking the application of the statute, if Parliament has entrusted to parties to litigation to choose to burden the courts by waiving reliance on a limitation defence in the face of an articulated case against them, then we ask rhetorically, why should the policy of the Act be understood as being contrary to allowing them to contract out of the Act?

We say there is a simple answer to that question.  There is a marked difference between making a commercial and forensic decision to decline to invoke the Act in the throes of anticipated or pending litigation, and signing away any opportunity to rely upon the Act in blind ignorance of what the future might hold and, indeed, that is the very distinction between waiver and contracting out and it is the latter with which this case is concerned.

The final of the three matters in reply is this, and it arises from our learned friend’s submission about the potential for use of a clause such as clause 24 in this particular mortgage.  It may not presently be widely used, but the outcome of this case will determine whether such a broad clause becomes a boilerplate to enable parties in a superior bargaining position to simply contract out in all cases from the protections afforded to individuals, society and the community and the burden on the courts by the imposition of limitation periods.  So, it is a point of general importance for which we leave should be granted.  They are our submissions. 

KIEFEL CJ:   Yes, thank you.  The Court will adjourn to determine the course it will take. 

AT 11.08 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.12 AM:

KIEFEL CJ:   There will be a grant of special leave in this matter.  Mr Matthews, what is your time estimate for the hearing?

MR MATTHEWS:   We think one full day, your Honour. 

KIEFEL CJ:   Do you agree with that, Mr Andreatidis?

MR ANDREATIDIS:   Yes, your Honours. 

KIEFEL CJ:   Yes, thank you.  The Court will now adjourn until 11.30. 

AT 11.13 AM THE MATTER WAS CONCLUDED