Medlin v State Government Insurance Commission

[1993] HCATrans 248

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Adelaide No AlS of 1993

B e t w e e n -

BRIAN HERBERT MEDLIN

Applicant

and

STATE GOVERNMENT INSURANCE

COMMISSION

Respondent

Application for special leave
to appeal

DAWSON J TOOHEY J McHUGH J

TRANSCRIPT OF PROCEEDINGS

Medlin 1 26/8/93

FROM ADELAIDE BY VIDEO LINK TO CANBERRA

ON THURSDAY, 26 AUGUST 1993, AT 10.48 AM

Copyright in the High Court of Australia

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

learned friend, MR R.A. CAMERON, for the applicant.

(instructed by Paul Kirk, Roberts & Co)

MR H.G. ROWELL:  May it please the Court, I appear for the

respondent. (instructed by Stratford & Co)

DAWSON J: Yes, Mr Gray.

MR GRAY:  If the Court pleases, this matter raises two

special leave points, in our respectful submission.

Could I identify them shortly. The first is that

the court, in dealing with an assessment of damages

and addressing the question of damages causation,

applied a pre-eminent cause test. We say in doing

so, they erred. That is not the correct test in

the light of the decision of this Court in March v

Stramare.

The second special leave point relates to the

non-allowance for any damages for loss of any

capacity. The special leave point arises in this

way: that this Court's decision in GrahaITI v Baker

was relied on by the trial judge in making his

assessment and apparently by the Full Court.

Graha1T1 v Baker's authority was questioned in the

case of Griffiths v Kerkemeyer, and there

Justice Mason, as he then was, and Justice Stephen specifically addressed the question of the

reasoning in Graham v Baker not standing against
the reasoning in Donnelly v Joyce in the Court of

Appeal or in the reasoning of the majority view in

Griffiths v Kerkemeyer.

This Court in Van Gerven reaffirmed the

application of the logic of Griffiths v Kerkemeyer

and Donnelly v Joyce and make it quite plain that

in regard to damages for a need occasioned by

reason of injury to be compensated regardless of

there being in actual fact an expense being

incurred.	The question of law is as to whether
Graham v Baker should be reviewed. That is, that

when there is a case of loss of earning capacity
not productive of economic loss because, for

example, of a charitable employer, whether or not

damages should still be allowed. That is the

second of the special leave points.

The Court will find both those matters

addressed in the outline of argument that has been

submitted. Could I, if the Court pleases, turn

initially to the question of causation. In the

reasons for - - -

TOOHEY J: Could I just ask you this, Mr Gray, because I

think the question relates to both of what you

Medlin 26/8/93

describe as special leave points. Is causation and
loss of earning capacity related to that period

when it is said that the applicant would have

retired had it not been for the accident, in other

words, the period when in the ordinary course of

events he would have retired, or does it go beyond

that?

MR GRAY:  If the Court pleases, the case was argued up to

the date of retirement, so the Court is concerned

with a claim for loss of earning capacity from date

of injury until anticipated date of retirement.

TOOHEY J: But does that not present a difficulty for you?

The court really addressed that question, did it

not?

MR GRAY:  The court did address that question. The court

found that there was impairment in regard to

working ability in the professor but found that

because he was able still to teach sufficient to

avoid dismissal, that there therefore would be no

economic loss, therefore no damages. In our

respectful submission, the court having found that

the injuries were of this nature - they caused

chronic pain leading to waking each night, an

inability to do ..... duties for at least a

substantial period, an inability to do research

work and teaching at the same time and teaching

under disability - that there was plainly

established a loss of earning capacity.

TOOHEY J: Yes, but a loss of earning capacity which the

plaintiff accepted did not extend beyond the normal

retiring date, have I put it correctly?

MR GRAY:  Well, no. I have put the point badly to the

Court. The applicant's case was that these

problems that he faced following injury were

ongoing, and he said that by reason of the

injuries, or they were a cause of his retiring

early, but they remained there for the rest of this
life, obviously.	They did not stop when he
retired.

TOOHEY J: 

No, but was it put to the trial judge that the

loss of earning capacity should be assessed not
merely by reference to the ordinary retiring date
but having regard to activities that the plaintiff

might have embarked on subsequently? I mean, he

might have written a book, or done some part-time

teaching, or that sort of thing.

MR GRAY: 

Yes. Well, the trial occurred, of course, before

his normal retiring age, and the primary submission
put was for an assessment based on the loss of

earnings if retirement had not occurred. There was

Medlin 26/8/93

no concession that, in regard to ongoing capacity,
there should not be some allowance - - -

TOOHEY J: Well, there may not have been a concession, but it is not very clear that the case was put on the

basis that there should be an allowance beyond the

ordinary retiring date.

MR GRAY:  What was put below was that there should be a

broad allowance for loss of earning capacity, and

the appropriate - - -

TOOHEY J:	And that acts befor and after retirement?
MR GRAY:	Yes, I am instructed yes
TOOHEY J:	The second part does not appear very clearly

anywhere, though, Mr Gray, and - - -

MR GRAY:  No, we accept that, if the Court pleases. As the

Court will see from the trial judge's reasoning

that the trial judge took the view that

Graham v Baker was binding upon him, and that if

there could not be an establishment of loss of

earnings, there could be no damages for loss of

earning capacity, and His Honour decided the point

narrowly on that basis.

TOOHEY J: Yes, but we have moved from the primary judge to

the Full Court. Where do you say the Full Court

went wrong in its approach?

MR GRAY:  The Full Court went wrong in two respects: first

of all the causation. The Full Court simply adopts the pre-eminent cause test and, hence, was wrong in regard to causation. That is apparent at page 48

of the application book, when the learned trial

judge's finding about pre-eminent reason was quoted

and simply accepted. In regard to the question of

loss of earning capacity, at page 47

Justice Millhouse, delivering the reasons of the

court, at line 20, concluded that there was no loss

of earning capacity.

TOOHEY J: Well, given that your point is well taken there,

and I must say I think it is, is not the proper way

of analysing the matter that it is really a

question of mitigation of damages, that your client

by failing to continue in the position as professor

of philosophy has failed to mitigate his damage.

Is not that the true answer?

MR GRAY: Yes, that is a logical approach that would need to

be followed through. That point was taken at

trial, but Justice Debelle did not make a decision

on that ground, His Honour taking the view that he

preferred to adopt the approach that there was no

Medlin 4 26/8/93

loss of earnings proved, and therefore no damages.

So, in our respectful submission - - -

McHUGH J: That, of course, would only answer your point up

to retirement age?

MR GRAY:  Yes, it would. If the Court pleases, the other

matter that we would submit is of concern in this case, and it is more of a factual matter, is that the Court rather treated the research work of an

academic as being not part of his job. Now, there

was evidence before the court, and it is in the
application book, that the research work was part
of the job, and the professor's point was simply,

"I cannot do research and teach", whereas -

TOOHEY J:	I suppose what you have in your favour is the statement on page 48 in the judgment of the Full
Court, at line 24, where the Court says quite unequivocally:

The appellant has shown no loss of earning

capacity as a result of the accident.

And, therefore, no allowance whatsoever should be made.

MR GRAY:  Yes.

If the Court pleases, we suggest that what has happened is the court has confused the concepts

of loss of earning capacity and loss of earnings,

which has been a hot debate, of course, for some

30 years. Professor Luntz, in his book, goes

through the respective analyses. But the confusion

entered there and has been compounded, if the Court

pleases, by Graham v Baker needing to be, with

respect, reviewed, and also the wrong test of

causation being applied.

Could I take the Court to the Graham v Baker

point in a little more detail.

DAWSON J:  Perhaps we can call on the other side now,

Mr Gray.

MR GRAY: If the Court pleases.

DAWSON J:	Mr Rowell.
MR ROWELL:	If the Court pleases. If Your Honour please, may I deal initially with the pre-eminent point just
briefly that Your Honours have been taken to at
page 48. It is the respondent's submission that,
starting at line 22, the Full Court has resolved
the pre-eminent issue by finding that the sole cause of the applicant's retirement were the other
reasons to which the Court refers.
Medlin	26/8/93

McHUGH J: That could only go to mitigation of damages,

could it not? It cannot affect the question of

earning capacity.

MR ROWELL:  With respect, if Your Honour pleases, in line

with this Court's decision of Malec v J.C. Hutton,

where the Court said that one had to take into

account the possibilities, and do an assessment on

that basis, it is the respondent's submission in

this case that that is what the Full Court has

done; that it has assessed the possibility had the

accident not occurred, and found that the

respondent has retired for his other reasons.

TOOHEY J: But it has made no allowance, has it, for loss of

earning capacity? It is one thing to say, well,

the plaintiff has suffered serious injuries, there

has been a loss of earning capacity but that must

be reduced, having regard to his own decision to

retire early. But to say that there has been no

loss of earning capacity because he chose to retire

early for reasons unconnected with his injuries is

a quite different proposition.

MR ROWELL: With respect, Your Honour, if he has retired for

other reasons so that the court could come to the
conclusion that he was going to do that in any

event, whether or not he had the injuries, then

consistently with the decision in Malec's case he

would award him nothing for damages for loss of

earning capacity.

TOOHEY J:  I am sorry, I do not understand that. I mean, he

might, having chosen to retire, then decided to do
something else but finds himself unable to do it

because of the injuries he sustained. That is what

loss of earning capacity is all about.

MR ROWELL: Certainly that is a hypothesis but the question

is, with respect, whether it is on the evidence a

probable or a possible hypothesis. It has not been

raised by the applicant in his evidence, he did not give any evidence that he hoped to do these things	at some stage, or he had any prospect of doing
these things. So it would be a matter, in my
submission, of pure speculation were the court to
fine that he intended to do something else or
couild or might do something else. It takes it
beyond the range of hypotheses, in the respondent's
submission, that should be dealt with on the
authority of Malec's case.

May I take the Court to page 10 of the

application book where the trial judge did set out

at line 18 that the applicant was advancing his

case on the basis of loss of earnings. There is no

mention in the learned trial judge's reasons for

Medlin 6 26/8/93

judgment of any claim by the plaintiff that he

might, or may, or could well do something else.

The case proceeded on that basis, the matter was

not raised in the notice of appeal where the

challenge to the learned trial judge's findings

was, in effect, that he had misconstrued the

evidence and should have come to another

conclusion. So in the respondent's submission the

finding of the Full Court that the plaintiff
retired for other reasons deals with all of the

other issues, the speculation as to whether or not

he may have, or might have, or could have,

exercised any earning capacity that he did have in

another way. It is the respondent's submission

that consistent with the decided authority in that

event, the plaintiff would not be entitled to any

award for damages for loss of earning capacity.

My learned friend, Mr Gray, raises the

question of pre-eminent as a question of causation.

If leave is granted to proceed on that basis,

Your Honours will see in the grounds of appeal, will need to be redrafted. But, in any event, it

is the respondent's submission that that has been

dealt with by the Full Court, that while they refer

to the trial judge's reasons at page 48 of the

appeal book, they came to an evidentiary finding

that what the trial judge had found was justified

and then went on to dispose of the pre-eminent

reasons by turning them into the reasons.

It is, in the circumstances, the respondent's

submission that this is not a suitable case to deal

with the issues that are sought to be raised. The

matter has not been analysed by the courts below;

the law is not uncertain in this regard; the
decision in Malec's case has dealt with that, in

the respondent's submission, and that sets out the

means by which damages for loss of earning capacity

are to be considered and if the matter should have

been dealt with on the basis of mitigation, that

has not been raised before.

Unless the Court has any other matter that

they wish to hear from me, that is all I propose to

put.

DAWSON J:  Thank you, Mr Rowell. We need not trouble you,

Mr Gray. There will be a grant of special leave in

this matter.

AT 11.04 AM THE MATTER WAS ADJOURNED SINE DIE

Medlin 26/8/93