McDonald (as Administratrix of Boundy) v Spargo

[1993] HCATrans 63

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Adelaide No Al8 of 1992

B e t w e e n -

GLENYS IRENE McDONALD (as

Administratrix of the estate

of the late BRIAN ALLAN BOUNDY)

Applicant

and

SHAUN DERRICK SPARGO and SCOTT

SUMMERS

Respondents

Application for special leave

to appeal

DEANE J

DAWSON J

TOOHEY J

McDonald 1 12/3/93

TRANSCRIPT OF PROCEEDINGS

FROM ADELAIDE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 12 MARCH 1993, AT 9.44 AM

Copyright in the High Court of Australia

MR K.R. McCARTHY, QC:  May it please the Court, I appear

with my learned friend, MR P.W. ERICKSEN, for the

applicant. (instructed by Angela Bentley and

Associates)

MRS. WALSH, QC:  May it please the Court, I appear with

MR A.M.J. HILDITCH, for the respondent.

(instructed by Ward and Partners)

DEANE J:	Thank you, Mr McCarthy.
MR McCARTHY:	If the Court pleases, we have sent a book of

authorities and an outline of submissions to the

Court. I very much hope it has been received.

DEANE J:  We certainly have the outline; yes, and we also

have the book of authorities.

MR McCARTHY:  Thqnk you, Your Honour.

DEANE J: Yes, Mr McCarthy.

MR McCARTHY:  If the Court pleases, the issues of importance

upon which special leave is sought relate to the

principles of damages, once and for all, and the

use of actuarial evidence by a judge as opposed to

a jury, and conflicting decisions of the Court of

Appeal of New South Wales and the Full Court of the

Supreme Court of South Australia.

If the Court pleases, if I can take you to

page 86 of the application book, starting at about

line 10. Of course, what happened here is that

when the appeal was called on the plaintiff had

already died and the administratrix had already

been appointed. There was argument as to whether

or not the evidence as to death could be received

by the court and then the matter was adjourned to

enable parties to obtain any evidence they might

want to put before the court should the court

decide to exercise its discretion.

His Honour Justice Mullighan has, in that

paragraph commencing on page 10, put the matter

somewhat the other way around in that it was indeed

after the court decided that it would hear the

evidence of death that the agreement as to the fact

that the plaintiff was dead and died on

9 November 1991 and that he had been working on the

previous day, was put into evidence, as it were, by

the Full Court.

TOOHEY J: 

Mr McCarthy, do you challenge the power of the

court to receive the evidence as opposed to an
argument that in its discretion it ought not to

have received it?

McDonald 2 12/3/93

MR McCARTHY:  No, I did not.

TOOHEY J: Well, I was not asking you whether you did, but

do you now?

MR McCARTHY:  No, if the Court pleases, I say that the rules

of court permit the court to receive the evidence

in its discretion, provided that discretion is

exercised on proper grounds.

TOOHEY J: But you say it was not relevant.

MR McCARTHY:  Yes, I do. Now, I have referred, and I will

not weary the Court with House v R, but it is in

the book of authorities. The Full Court held that

the learned Master who assessed the plaintiff's

damages had assumed that the plaintiff would live beyond retiring age. Indeed, and in fact, he did

not. He used the actuarial evidence that was

present~d to him and the Full Court, of course,

acknowledged that at line 6 on page 94 of the

appeal book.

The effect of actuarial evidence is neatly

summarized, in my submission, in the article by Wickens, and the passage to which I refer is at

pages 95 and 96 of the book of authorities. I draw

the Court's attention to page 95, second column,

"Rationale of adding an annuity", and the whole of the first column on page 289, or 96 of the book of

authorities.

TOOHEY J:  I am not sure what the point is here,

Mr McCarthy. Is it that the actuarial evidence

must be taken to have brought to account the whole

range of circumstances in which people may die and

that therefore the actuarial evidence must be taken to have brought to account in some way or other the

circumstances of this death?

MR McCARTHY:  No, Your Honour, that is not the point at all.

The point is that the actuarial evidence, as it only can be, deals with the community average, but

it does take into account that community average.

Some people, of course, will die younger than their

appointed span, some will die when they are much

older.

TOOHEY J:  I rather thought that is what I was putting to

you, that the actuarial evidence takes into account a whole range of circumstances in which people meet

their death.

MR McCARTHY:  Then I have misunderstood Your Honour and, indeed, that is what I was putting to you. And I

move on from there, because I say this, that in

taking into account the average, the actuary

McDonald 12/3/93

applies, as is pointed out by Wickens, the

mortality at the end of each year. So that if one

is 25, X per cent of people will die before they

reach 26, and when they are 26, Y per cent of

people will die before they reach 27.

That point was taken up by His Honour

Mr Justice Windeyer in General Motors Holden's v

Moularas, (1964) 111 CLR 234 at page 258, and that

appears at page 42 of the book of authorities. It

is interesting to note, if the Court pleases, that

at page 94 of the application book, part of the

dictum to which I want to refer the Court of

Mr Justice Windeyer was quoted, but the most

important sentence - it stopped before what, in my

submission, is a most important sentence. If I can

weary the Court by reading from page 42 of the book

of authorities, about point 3:

If the calculation put before them be an

actuarial one, made by reference to average

mortality experience, the possibility of the
assumed period of working life being cut short
by death is already allowed for to the extent

of the average of the community; but

probabilities peculiar to the individual
plaintiff have not. If before the injury he

in fact had some frailty or disease likely to

result in early death or incapacity for work,

some further allowance for that may seem to a

jury proper.

That ~s where the Full Court ceased.	Then
His Honour continued:

If, on the other hand, the calculation under

consideration be not of an actuarial character

but purely arithmetical, then it should be

remembered that it makes no allowance at all

for the possibility of death within the

assumed period -

In that passage, in my submission, His Honour

Mr Justice Windeyer has accurately stated the law

and gives, as it were, credence to the next case to

which I would want to take the Court. That is the

question of what evidence need be before the Court

before one looks at the question of early death

rather than the average.

I would then take the Court to an 1880

decision of the House of Lords in McDonald v

McDonald. That appears at page 15 of the book of

authorities. That was an action in relation to

destroying an entailed estate. The

Lord Chancellor, Earl Cairns, posed the problem at the beginning of the first paragraph on page 15 of

McDonald 4 12/3/93

my book.	I ask the Court to consider down to the
end of the second paragraph.	I emphasize
His Lordship's comment:

The onus of proof will be upon the Appellants.

In my submission, with respect, that is

exactly what Mr Justice Windeyer was saying in

Moularas. Lord Hatherley's speech was to the same

effect, and that appears at page 16 of my book,

page 532 of the report, at about point 8 beginning

"Many cases may occur" and I move to the end of

that paragraph, appearing on page 17 at about

point 3.

DAWSON J: But no one would doubt that the actuarial

evidence would be to that effect, if it were the

only evidence. But, by the time this matter came

on appeal it was not the only evidence and the

additio~al evidence that there was that the

Court of Appeal considered showed that the Master

was wrong in assessing the probabilities as he did.

MR McCARTHY: Well, if the Court pleases, the Master was not

wrong, in my submission, in making the assessment.

DAWSON J:  And finding this man probably would live until -

well, in the light of the fact that he died, that

was a wrong assessment of probabilities.

MR McCARTHY: Well, in the events as they turned out, it was

wrong.

DAWSON J: Exactly. And the courts have always looked, if

they are able to, at events as they turn out,

rather than take something which was a mere

hypothesis when they have the facts before them.

MR McCARTHY:  The difficulty with that, if the Court

pleases, is when must they be looked at?

DAWSON J: Within the period allowed, and it would be a

different matter if the time for appealing had expired, but the processes were still on foot.

MR McCARTHY: Well, indeed, the time for appealing had

expired, if the Court pleases.	The death occurred
three months after the verdict.

DAWSON J: But the appeal had not come for hearing.

MR McCARTHY:	No.
DAWSON J:	So the processes had not been completed.

MR McCARTHY: Well, if the - - -

McDonald	12/3/93
DAWSON J:	I mean, you have got to have a cut-off point

somewhere, but if he had died during the trial for

instance, after the Master had made certain

findings but·before the trial had concluded, you

would not expect the Master to say, "Well, that is

just bad luck for the - - -

MR McCARTHY:  The action would then be at an end.

DAWSON J: But that is the point, the action was not at an

end, there was an appeal on foot, and whilst the

action was still on foot in that sense, facts

occurred, and the court was entitled to look at

facts rather than hypotheses.

MR McCARTHY:  In my submission, that is not the way in which

the question should be looked at, at all.

DAWSON J:	Why not?
MR McCARTHY:	One should look at the question of assessing

damages once and for all, and then - - -

DAWSON J: That is right, after the process has been

completed.

MR McCARTHY: Well, if I can then take that point a little

further, because indeed, as I understand what

Your Honour is saying to me, it is that the death

of the plaintiff as it were falsified the basic

assumption of the Master that he would live beyond

the usual retiring age and that is, of course, what

the Full Court held.

DAWSON J: Yes.

MR McCARTHY:  Now, that point was specifically dealt with in

an application before this Court for special leave

to appeal from the New South Wales decision - - -

DAWSON J:	I said something different, did I?
MR McCARTHY:	I was about to suggest that, Your Honour, and

if I can take you to pages 76 and 77 of my book of

authorities, and I start where Your Honour

Mr Justice Dawson's name first appears, at about

point 5. I go to the end of what fell from

Your Honour, Mr Justice Dawson, at about point 2 on page 77.

In my submission, what Your Honour put there

was an accurate statement of the law that is

applicable in this case.

DAWSON J: That is the other argument, is it not?

MR McCARTHY:  Yes, Your Honour.

McDonald 6 12/3/93

DAWSON J: There is more difficulty where you have a jury?

MR McCARTHY:  With respect, I would not accept Your Honour's

proposition that there is difficulty with the jury.

A judge is in no better position with a jury. It

is said by the Full Court in this case that the

judge did not - - -

DAWSON J:  No, but you have the reasons as you have reasons

here.

MR McCARTHY:  Yes, but in a jury case you have the summing

up where the judge has said, "Well, look, he might

die early, he might die late", and the jury is in

no better position than the judge or the judge is

in no better position than the jury. Then the

question of whether or not the evidence ought to be

admitted and when it ought to be admitted comes in,

and I appreciate that it leads to the floodgates

argument, and I submit that the floodgates argument

is a very good argument in this case, and that was

pointed out by the Chief Justice in Doherty's case,

and if I can take the Court to that - - -

DAWSON J: There must be a cut-off point somewhere, must

there not, and the obvious cut-off point is when

the time expires for appealing?

MR McCARTHY:  I am more than happy with that, if Your Honour

pleases, because the death of this plaintiff

occurred long after -

DAWSON J: With no appeal;	no appeal having been made.
MR McCARTHY:	If Your Honour means at the time of the

hearing of the appeal then, in my submission,

that -

DAWSON J:  Yes. The appeal here was commenced within time

was it not?

MR McCARTHY: It was, yes, and the death occurred
DAWSON J:	So if the time expires with no appeal, then that

must be the cut-off point.

MR McCARTHY:  The death occurred some three months after the

time - - -

DAWSON J: Yes, but the appeal was brought within time, was

it not?

MR McCARTHY:  It was, Your Honour, there is no suggestion to

the contrary. But if that is to be a cut-off point
then, with great respect, I would submit that that

is a very arbitrary - - -

McDonald 7 12/3/93

DAWSON J: Necessarily it has to be arbitrary, does it not?

MR McCARTHY:  In my submission, not. In my submission, it

is purely and simply a matter of discretion.

DAWSON J: But it is not as arbitrary as all that, if I can

put that to you - I think I am going over the same

ground - that in fact the processes have not been
completed and something occurs which enables the

court to get it right, whereas previously they could only see it on a hypothesis. Surely the

court should get it right.

MR McCARTHY:  I suppose one could take that then even

further. If that is to be the arbitrary decision,

then if an application for special leave to appeal

to this Court were made, we are still in the

position where a plaintiff may die.

TOOHEY J: It do~s not have to be the cut-off point, does

it? I mean, it is a consideration, and a fairly

powerful consideration, in the mind of the Court when deciding to exercise its discretion or not. But once the evidence is admitted, in this case the

evidence of death, does not the Court then move

very much into the area of discretion?

MR McCARTHY:  My submission is that the area of discretion

is whether or not to admit the evidence. If

special leave is granted my appeal, of course, will

be based on the principles of the wrong exercise of

discretion by the court in hearing that evidence in

this hearing.

TOOHEY J:  What is the position with the remarriage cases,

Mr McCarthy? There were some, years back, where a

remarriage which had been the subject of
speculation or evidence, or even actuarial

evidence, then turned out that the widow had

remarried before the appeal came on for hearing.

MR McCARTHY:  There was one case dealt with by the House of

Lords in which the evidence was heard and there are

several in which the evidence was not heard.	Now,
I have not brought those with me, but my

recollection of them, and I hope I am not - I am

certainly not trying to mislead the Court, but my

recollection of those is that there was some, as it

were, conscious falsification or withholding or

evidence.

So that in one of the cases where the evidence

was allowed, as I recall it, the widow had given

evidence that she had no intention of remarrying

and a week after the verdict was announced, she

remarried, and that evidence was allowed. But, my

reading of it suggests that most of the other

McDonald 12/3/93

remarriage cases, the evidence was just simply not

allowed, for very much the same reason as I say
that the evidence of death ought not to be allowed

in this case because the assessment takes into

account early death, and it takes into account non-

early death, if I can put it that way.

I mean, after a plaintiff lives out, say, his

72 years and perhaps turns 95, can he come back to

the court and say, "Well, here I am, I am 95 and

the money has run out".

DEANE J:  Mr McCarthy, the appeal to the Full Court was an

appeal by way of rehearing in the sense that that

term is used. That means that what you said about

an appeal to this Court really would not be

applicable. Indeed, if you recall, the majority of

this Court in Mickelberg held that this Court could

not even receive additional or new evidence, which

means that you would probably be quite safe, once

you pass- through the Court, of rehearing this

appeal.

MR McCARTHY:  I do remember that from Mickelberg and I do

apologise for having -

DEANE J: There is no cause for apology. I was just

pondering about it.

MR McCARTHY:  It seemed like a good point at the time,

your Honour. It is not as good as I thought it

was.

Can I move the Court to a consideration of

what fell from the Chief Justice in the Court of

Appeal in New South Wales in Doherty's case. First

of all, if I can take the Court to page 62 of my

application book and draw the Court's attention to

what the Chief Justice had to say in that paragraph

at line C, and then moving to page 292 of the

attention to the paragraph beginning after E and	judgment, page 64 of my book, I draw the Court's
moving over to Bon page 293.
Now, I move to point 6 of my outline and the finding of the Full Court that it was unjust for
the respondent to pay damages for a purpose which
no longer exists. I make my submission in the
second paragraph on page 6. It cannot be unjust if
the contingency allowed for in the verdict does or
does not eventuate. And I refer back to what
Your Honour Mr Justice Dawson said in the
application for special leave in that particular
case, and I refer to the discussion on that point
by the Chief Justice of New South Wales in
Doherty's case, appearing at lines A and Bon
page 69 of my authorities book.

McDonald 9 12/3/93

MR McCARTHY:  If the Court pleases, we say that the wrong

principle has been used by the Full Court. We say

that it has, in many cases, made mistakes and

overlooked material considerations. Most

importantly, we say that there seems to be a clear

difference of opinion between the two courts, the

two superior courts in Australia.

DAWSON J: Well, not really. Chief Justice Gleeson says it

is a matter of discretion upon which various

factors will play, but if it is a matter of

discretion, it means that there may be different

results in different cases.

MR McCARTHY:  I accept that, but I come back, of course, to

the question of the exercise of the discretion.	I
have sought to point out, albeit badly, no doubt, that the court has offended, as it were, against
the rules relating to the exercise of the

discretion in that it has taken wrong principles
into acc-ount. It has overlooked material
considerations, those that I have referred to in my

outline of submissions; and that it is a matter

which, in my submission, the High Court ought to

look at thoroughly so as guidance can be given to

those involved in these situations, and these

situations, unfortunately, are not altogether

uncommon.

They are my submissions, if the Court pleases.

DEANE J: Thank you, Mr McCarthy. Yes, Mr Walsh.

MR WALSH:  If the Court pleases, this was a case of an

exercise of discretion. The New South Wales case

of Doherty was also a case of the exercise of

discretion. I have provided an outline of argument

to the Court and I invite the Court to read that

outline.

TOOHEY J:  In putting the matter in the way that you do,

Mr Walsh, would it be right to say that absent the

evidence of recent death, there was no proper basis

upon which the Full Court could have interfered

with the award of damages below?

MR WALSH:  No, that is not so, with respect, Your Honour.

There was a challenge to the - - -

TOOHEY J:  I appreciate there was a challenge, yes.

Obviously there was a challenge because it preceded

the death.

MR WALSH:  Yes, well, we say that, in fact, that was not

dealt with by the Full Court, that challenge,

because it determined that it would receive the

fresh evidence which made it unnecessary to deal

McDonald 10 12/3/93

with those issues of challenge. We say that there was a very strong challenge to the issues relating

to loss of future earning capacity, for example, by

way of the substantive appeal before the event of

death.

TOOHEY J:  So that for the purposes of the present

application, it seems that	both sides focus on the
reception of the evidence.	That is the crucial
question.

MR WALSH:  They did indeed, Your Honour, because - - -

TOOHEY J: But before us, you do.

MR WALSH:  Indeed, Your Honour. If, in fact, the evidence

of death is not to be received the appellant would

proceed with its grounds of appeal as they were in

the first instance. What we say is that that is

one of the differences that was discussed by this

Court during the course of the leave to appeal in

Doherty's case and, in fact, the Court considered

that there was a difference, of course, between a

case where somebody had appealed on the one hand,

and an ensuing event occurred; but on the other

hand there had been nothing before the Court other

than the fact of death, which was the case of

Doherty.

In this case, of course, we are exactly the

opposite. We are the exception that was discussed

in the transcript which is before Your Honours in

Doherty's case on the application for leave to
appeal. Furthermore, we say that this is, as I

say, a case about the exercise of discretion and no

more, and the very issues that we raise in our

point that there is no difference between the Court of Appeal in New South Wales and the Court of

outline of argument by way of distinction between

Appeal in South Australia. They were applying

their discretion to different fact circumstances.

For example, the very important point raised,

I think by Your Honour Justice Dawson, that in that

case, by way of argument with my learned friend,

Mr McCarthy, Doherty's case, the defendant had not

actually appealed. There was a cross appeal only.

The cross appeal was out of time. The appeal at

first instance was by the plaintiff on issues

totally unrelated to damages, contributory

negligence, interest and costs. So it was in truth

quite a different case altogether, and when it came

to a question of weighing up the various factors

that would be important in the exercise of

discretion, the New South Wales Court of Appeal

came down in favour of not receiving the evidence.

McDonald 11 12/3/93

In the case at bar we had an appeal within

time.	We had a valid appeal in relation to heads
of damage.	We had not a jury trial, but a trial
before a judge.	We had, because we know of what

was said by the learned Master at first instance at

page 47, a determination by him as a matter of fact

that this man would work to age 65 years. That was

the assumption that he made.	That is the way in
which he proceeded to deal with it.	It was a

positive finding. That was rendered false by what,

in fact, occurred during the course of the appeal.

So what we say is that what this Court will be

asked to do if leave to appeal is granted is to do

no more than to lay down some guidelines as to the

proper approach in terms of the exercise of

discretion. Ought this Court do that when there is

evidence that there is no disagreement in the cases

as to the areas that are appropriate to consider in

terms of the exercise of discretion, and the only

issue is whether a particular court might have

exercised its discretion in a different way in one

court than to another?

That is the only issue that really arises on

this appeal. There is no issue of importance, in

our respectful submission. The issue raised by my

learned friend, Mr McCarthy, as to the annuity is not to the point. The annuity is there to assist

in a mechanical way or mathematical way to

determine what sum of money is required in order to

allow for the last dollar in effect to be spent in

terms of loss of earning capacity at the age of 65.

The assumption by the court, as I say, at page 47

by the Master who heard the action was that he
would work until age 65. Apart from reiterating

what has already fallen from the Court and apart

from what is in my outline of argument, that is all

we wish to put to the Court.

DEANE J: Thank you, Mr Walsh.	Yes, Mr McCarthy?
MR McCARTHY:	If the Court pleases, what my learned friend

says about the appeal in Doherty is of course

correct but, in my submission, that cannot affect

the correctness or otherwise of the exercise of the

discretion. That is really all I want to put in

reply.

DEANE J: Thank you, Mr McCarthy. The Court will take a

short adjournment to consider what course it should

take in this matter.

AT 10.20 AM SHORT ADJOURNMENT

McDonald	12	12/3/93
UPON RESUMING AT 10.30 AM:

DEANE J:  The decision of the Full Court of the Supreme

Court of South Australia in the present case to admit evidence of the plaintiff's death was given

in the exercise of a discretion and turned upon the

fact that an appeal by the defendant against the

quantum of damages was pending at the time of the
plaintiff's death, and upon other circumstances of

the particular case.

Notwithstanding what has been said by

Mr McCarthy QC on behalf of the applicant, we do

not think that an appeal would involve any question

of general principle. Perhaps more important, we

do not think that an appeal from the exercise by

the Full Court of the discretion vested in it to
hear fu~ther evidence and from its decision to set
aside the assessment of the learned Master would
enjoy sufficient prospect of ultimate success to

warrant a grant of special leave.

Accordingly, the application for special

leave to appeal is refused.

MR WALSH:  If the Court pleases, I ask for an order for

costs.

DEANE J:	Mr McCarthy, is there anything you can say?
MR McCARTHY:	I cannot oppose that, if the Court pleases.
DEANE J: Very well.	The application for special leave to

appeal is refused with costs.

AT 10.32 AM THE MATTER WAS ADJOURNED SINE DIE

McDonald 13 12/3/93