Murphy & Anor v Overton Investments Pty Limited

[2003] HCATrans 582

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S138 of 2001 and No S207 of 2002

B e t w e e n -

JOHN JAMES MURPHY and DAPHNE MURPHY

Applicants

and

OVERTON INVESTMENTS PTY LIMITED

Respondent

Applications for special leave to appeal

GLEESON CJ
GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 14 FEBRUARY 2003, AT 9.45 AM

Copyright in the High Court of Australia

MR R.J. ELLICOTT, QC:   May it please the Court, I appear with MR G.A. MOORE for the applicants.  (instructed by The Aged Care Rights Service Inc)

MR J.C. KELLY, SC:   May it please the Court, I appear with my learned friend, MR A.J. McINERNEY, for the respondent.  (instructed by Gadens Lawyers)

GLEESON CJ:   Mr Ellicott, I realise there are two separate applications and two separate litigious histories, as it were, here, but I just asked for them to be called together, not for the purpose of limiting anybody’s time, but because there may be some interrelationship between the disposition; they do not necessarily stand or fall together.

MR ELLICOTT:   There is an interrelationship.  On the other hand, I was going to ask your Honours to consider them together.

GLEESON CJ:   Yes.

MR ELLICOTT:   Your Honour the Chief Justice, of course, sat on the earlier application when it came before the Court, and that was on 20 November 2001.  Since then that was stood over because there was an application under the Contracts Review Act.  That went to Justice Emmett, he decided it in a way that was not satisfactory to my client.  The matter then went to the Full Court, they remitted it back to Justice Emmett, he looked at it again and he made a decision which, in relation to the Contracts Review Act matter, meant that it was not satisfactory to my clients - in fact, they got no relief under the Act - and that is now subject to an appeal to the Full Court of the Federal Court.

What we have today is the application restored to the list and the other matter is an application for special leave in relation to the Contracts Review judgment of the Full Court.  But there is a potential for there to be yet another judgment in the Full Court.  I think we may have written to the Court, actually, and said that as a condition of special leave in the first matter we would not pursue the appeal before the Full Court from Justice Emmett in the Contracts Review matter.

GLEESON CJ:   Where does that leave your application in relation to the second matter?  I have to say I had an initial reaction, and it was only a very superficial reaction, Mr Ellicott, but a problem you had in relation to the second matter, which maybe is not a problem you have in relation to the first matter, is that it did appear to turn upon factual issues and perhaps the application of fairly settled principles in the circumstances.  So that your application in Matter S138 seemed to have one or two more legs than your application in S207.

MR ELLICOTT:   Yes.  Your Honour, there is no doubt that, looking at them alongside one another, the stronger matter for special leave is the first matter and I concede that.  In the second matter, the only point for special leave is this question, whether the Full Court, sitting as a court on appeal, should have exercised the discretion as to whether the circumstances justified relief and, if so, what relief.

GLEESON CJ:   Instead of sending it back.

MR ELLICOTT:   Instead of sending it back, and there appears to be a division of view on the Court of Appeal between Justice Kirby, the then President, and Justice Samuels, on the one hand, and Justice Mahoney and others who have dealt with this issue from time to time, but that is ‑ ‑ ‑

GLEESON CJ:   Where would it leave your clients if we were to grant special leave in matter S138 and refuse it in S207?

MR ELLICOTT:   Your Honour, I have given thought to that; it is very difficult to know, and I will come to what I, perhaps impudently would want to put to the Court.  That is, if it is minded to grant special leave in relation to the first matter, what troubles me, looking at the matter, is to know what effect any factual findings in the second matter might have if we get into the Full High Court and we have seven Justices looking at the matter and saying, “Well, what about that finding in the other matter?”.

Now, I do not concede that that would happen or need happen, but it is something that, where it seemed to me, my clients were entitled to some protection.  The only protection I could suggest would be that if that other appeal in the second matter is not proceeded with, that if your Honours granted leave in the first matter, your Honours would simply stand over the application for special leave in the second.  So that, should there be any hangover from the second matter on factual issues, at least my client is protected as far as it can be in a Full Court situation.  I do not concede that it would have that effect, but it would protect the situation.  So that we would submit that the appropriate course is to do that.  If, on the other hand ‑ ‑ ‑

GUMMOW J:   But to stand over the second one to what ultimate end?

MR ELLICOTT:   In case there is some matter of principle or fact that some Justices might consider in the first matter in respect of which special leave was granted because they cover similar facts.

GUMMOW J:   Yes, but suppose you won S138 in this Court, what would then happen to S207?

MR ELLICOTT:   So far as we are concerned, that would just fall away; we would not proceed ‑ ‑ ‑

GUMMOW J:   And if you lost?

MR ELLICOTT:   And if we lost, we would no doubt have to satisfy this Court that it was a proper case for special leave and, your Honours, I concede it is not a strong case, but at least there is sufficient there of principle, with division in the Court of Appeal on a very important matter as to how an appellate court should consider matters under a statute such as the Contracts Review Act, whether they should treat it as a mere matter of discretion or whether it is a special matter that an appellate court should seize and give the appellant the benefit of its view as to whether or not relief should be granted.

GLEESON CJ:   As a practical matter, if you get special leave in S138 and you win the appeal, that is the end of the litigation?

MR ELLICOTT:   Yes, that is the end of it, and that is my clients’ rights and all the other 91 people’s rights would probably be vindicated by that decision.

GLEESON CJ:   And, as a practical matter, if you get special leave in S138 and lose the appeal, you will be fighting a desperate rearguard action in relation to S207.

MR ELLICOTT:   It would be a desperate rearguard action.  If your Honours put me to the election now, then I would have to say that we would elect not to proceed with the second application.  I am asking your Honours not to do that but simply to stand it over in case there is some remnant of assistance that we may get in the context of the Full Court consideration of the first matter.

Now, I can perhaps explain that in this way, that much of what is concerned with the first matter, that is to say, when did the loss occur ‑ ‑ ‑

GLEESON CJ:   Or was there a loss?

MR ELLICOTT:    ‑ ‑ ‑or was there a loss and, if so, when did it occur, is caught up in Justice Emmett’s, when I say, fixation, I do not mean that in any pejorative way; I simply mean he has a view of facts and that has never changed and the view that he formed in the first matter, the damages matter, has impacted on his view in relation to whether or not relief should be granted.  We have little chance of shifting that because the Full Court has also been prepared to adopt that, and they have adopted it to a degree in the damages matter and they have adopted it in the second matter.  Our submission, of course, would be that it does not matter what the Full Court has decided in the Contracts Review matter, that the facts that will be before the Court on the damages matter are there, they are the facts, and the question is whether in those circumstances, was there a loss and when did it occur?

GLEESON CJ:   In the application book No S138, on page 249 your opponent submits that there is a “fatal defect” in your case because your clients “did not prove loss or damage”.

MR ELLICOTT:   Yes.

GLEESON CJ:   I understand the point that Mr Kelly is making to be that, contrary to the view of Justice Gyles, the fact that the outgoings were greater than they were represented to be might or might not have meant that your clients paid too much for what they acquired, but there was no evidence before the trial judge to support the conclusion that they did, whereas Justice Gyles took the view that it was self-evident that they must have done so.  Is that a fair statement of the issue?

MR ELLICOTT:   That is a fair statement, but so far as Justice Gyles is concerned, of course, he said the proper order was to send it back because the issue of principle was never resolved in my clients’ favour.  The truth is that had the loss not impacted, as it were, on my clients until November 1996, as distinct from earlier dates that were suggested by the other justices involved, had it impacted then, then there were clear losses that our client had suffered and that is because, partly, it was never, we say, understood that this was not simply dealing with a piece of property, a lease, but this was an acquisition by old-age pensioners of a right to live in a retirement village, albeit called a lease, but yet under a system which took away, I think it is 25 per cent at first, which itself was never recoverable the longer they lived.  If five years went past, they lost the lot of this first segment - that is a common feature of retirement villages - and left then with the other amount.

The question whether they could ever recover what they had put in became embedded in the situation once they had gone on, because their options were gone.  In that sense there was always a situation where the loss was hanging over their head and it did not come home, we would say actually on fact, until the amount was actually charged - not even in November 1996 when it was intimated it might be charged, but in April when they actually got the bill, that is when the ‑ ‑ ‑

GLEESON CJ:   What was the nature of the loss?  Was it having acquired at an overvalue an asset or was it incurring unexpected expenditure?

MR ELLICOTT:   Preferably the latter.  I think an argument could be put on the first, but the preferable approach is that they acquired an asset, and it was a pre-contractual representation.  They acquired this asset, believing that they would only have to pay amounts within a certain context and suddenly find that that amount that was originally given to them did not include these other commitments, and so they ultimately required to pay amounts which were not within their contemplation and not within the representation.

GLEESON CJ:   But if what they were paying for was worth what they were paying for it, where is the loss?

MR ELLICOTT:   The loss is because it is a contingent loss; it fits in with Wardley’s Case and, if I may say so, with respect, it fits in with Justice Gummow’s assessment in Marks’ Case and there was a clear division in this Court between the views that were expressed in Marks’ Case and it splits, it would seem three all, if one assumes Justice Kirby is really saying the same thing as Justice Gummow and Justice Gaudron.  Really this case is different from Marks because here Overtons never said to us, “There will be no penalty, you can go somewhere else and acquire something else if you want to.  Here is your money back”.  They never said that.  From the moment we proceeded in these circumstances, that is, the moment we entered upon the lease, we started to suffer.  We were locked in, as it were, and that is where the estoppel argument comes in as well, because there is an estoppel factor here too.

But the damage from either the misleading conduct or the negligent advice or the estoppel fructifies at the moment it comes home to our client in the sense that they get a bill that requires them to pay out something, which is quite inconsistent with the representations.  That is when the loss has occurred.  The simple issue of damages is whether or not that loss is to be reflected in the value at that date or, alternatively, is to be reflected in some assessment of present value of an amount which should not have had to be paid.

Now, Overtons, of course, have gone out of the position of manager and this is the claim against them now as a separate company that is not connected with this village, so it is not a question of reducing the amounts that they receive.  The amounts have to be paid under the lease arrangements, so our clients are paying out on the other basis but getting no recovery from Overtons in respect of it, and that is what this case is about.

GUMMOW J:   The remedies at page 236 that you seek, which I suppose are the remedies Justice Gyles had in mind, how would that work out, given the change in identity of the proprietor?  I would not have thought that 5 would not work, would it, nor 5A?  It would have to be 6, I think.

MR ELLICOTT:   It would have to be 6, and 6 is a reflection, I think, of Justice Gyles’ judgment.

GUMMOW J:   I think what Mr Kelly says is that the necessary groundwork for 6 was not laid in the evidence at trial and it should have been.  I take it that is what his complaint is at 249 that the Chief Justice referred to.

MR ELLICOTT:   If the courts below have consistently acted on a basis which is not the proper basis, then we would submit it is clearly within the competence of the appellate court to refer a matter back to do justice in a case such as this, where the issue really is one that was close to unconscionability, as Justice Gyles puts it; there was a claim based on unconscionability.  It is a matter of the court framing its order in order to procure the just result.  We would say the just result is that which Justice Gyles has set out when he says:

I have no doubt that in resolving these questions guidance will be obtained from a closer examination than we had in argument of the recent cases which have assessed damages on a basis other than Potts v Miller, and there may be issues as to the manner in which the appellants have propounded their case.  In those circumstances, I will only briefly refer to a couple of matters.  The first is that it is beyond doubt that, all other things being equal, a significant difference in the levels of contribution must be reflected in the capital value of the leasehold.  Significantly higher contributions must reduce the capital value.  Any evidence which casts doubt upon that self evident truth should be carefully scrutinised.  The second is that it is not at all clear to me that the nature and significance of the evidence as to discounted cash flow values was sufficiently brought home to his Honour by the parties.

So that what his Honour is really saying is that what has been established is that, if our view is correct based on adopting, if I may say so, the approach that Justice Gummow took in Marks and the approach of this Court in Wardley, that loss is self-evident almost, that we are right in principle.  We have suffered a loss and we have shown that we have suffered a loss because in the circumstances, because of this reduction in the amounts – there are two amounts, one is the total rent, and it is treated as a loan to the lessor, but the amount repayable is reduced by 20 per cent each year and after five years it is nil.  So they lose that ‑ ‑ ‑

GLEESON CJ:   Mr Ellicott, we have a problem here.  There is a technical malfunction.  Ms Scotford says that the lights are not working - and I am sure she is right and I am sure it is not just that she cannot work them - and that you have been going for 17 minutes, but I think you have technically longer than 20 minutes ‑ ‑ ‑

MR ELLICOTT:   I have 40 minutes, your Honour.

GLEESON CJ:   Exactly, so I just wonder if we can compromise on 30?

MR ELLICOTT:   I may even compromise further, your Honour.  I am told, just to complete the point, there was this total rent which disappeared after five years and then there was a lease deposit refundable on termination, but then there was an adjustment up and down.  If you got more for it, then you shared it with the village; if you got less for it, you got some compensation.  The total rent disappeared after five years, so by 1997 it had completely disappeared, but each year the loss was impacting and it is in that sense that they were locked in.  The evidence that was given by, I understand, both valuers was that substantial increases in levies substantially reduced the value of the leasehold.

The evidence of loss, we would submit, is self-evident, but if one were to go into the evidence itself, the valuers themselves gave evidence of a declining value over a period and those values are set out in the judgment of Justice Emmett - I will give your Honours a reference to that.  We would submit that in the circumstances the court can mould an order if it is satisfied that there was a loss on the facts of the case – and we say it was self-evident – and that it is an appropriate order that Justice Gyles made.

I can take your Honours to Marks’ Case and show the division in the Court, but I apprehend that I have no need to do that, because there is a clear division and there is an issue to be determined in a case like this.  Marks’ Case never really resolved it as a matter of decision, because it was agreed something had happened which meant that the appeal should be dismissed, except I think Justice Kirby had a view that it should be allowed.  The reason it was dismissed was simply that the GIO came along and said, “We’re going to increase the interest rate and we’ll let you go elsewhere without penalty”.  Overton did not come here and say, “We’ll let you stay on this basis or, alternatively, we’ll refund to you what you have had to pay since we’ve told you this and you can go elsewhere if you want to”.  That election was never available.

Our clients were actually kept in the dark right through until in 1996 an amount fructifies that says this is what you are going to have to pay, but

even then it is not brought home to them as a debt due and owing until, I think, it was April 1997.  Your Honours, they are our submissions.

GLEESON CJ:   Yes, thank you, Mr Ellicott.  Yes, Mr Kelly.

MR KELLY:   Your Honours, this is not a matter which is an effective vehicle to resolve any large question remaining concerning the proper effect of the reasoning in Marks v GIO for the case failed below for want of sufficient evidence to prove loss.  Indeed, it failed not only on the first occasion before Justice Emmett, but in substance the applicants have had at least two further bites at the cherry where in substance the same question was raised and they failed on each of those occasions.  The first bite was when the Contracts Review Act claim was remitted back before his Honour.  His Honour dealt with that in a judgment and found once again that there was insufficient evidence to prove any loss of any description.  By then, of course, the applicants had had the benefit of the judgment of the first Full Court, had the benefit of reading Justice Gyles’ reasoning, but took no steps to apply for leave to reopen their case or to tender any evidence which repaired the essential defects described in great detail by then in the first judgment of Justice Emmett, and in the majority opinions in the Full Court.

GLEESON CJ:   Was it the view of Justice Emmett at first instance and the majority in the Full Court that, although some years after they went into the home the applicants encountered expenditure that was greater than it had been represented to them that they would encounter, they got full value for the expenditure that they met and consequently could have suffered no loss?

MR KELLY:   Definitely, there was an express finding to that effect by his Honour.  In addition, I should point out to your Honours that this is not a case which raises ‑ ‑ ‑

GUMMOW J:   But that involves a proposition of law.  That is the problem, mainly what the word “loss” means in the section.

MR KELLY:   Certainly, yes, your Honour, but it also involves questions of evidence.

GUMMOW J:   Undoubtedly so.

MR KELLY:   On any view of the proper approach to loss, one does not get started unless and until one has sufficient evidence to raise whichever theory of loss one is contending for.  In this case, the failure was at the most elementary level, the failure to adduce any evidence at all.

GLEESON CJ:   Now, how did Justice Gyles answer that proposition?

MR KELLY:   His Honour really did not answer it.  If his Honour had, as it were, a full and complete answer, one would expect to see in his Honour’s judgment ‑ ‑ ‑

GUMMOW J:   Well, did the debate we are having now occur in the Full Court, in fairness to Mr Justice Gyles, in submissions?

MR KELLY:   I think the answer to that would be yes, your Honour, sufficiently, but what one does not see in Justice Gyles’ judgment or in my learned friend’s summary of argument is an indication of precisely what loss it is that they say they proved and how they proved it.  The best Justice Gyles could do was to remit the question to Justice Emmett and, of course ‑ ‑ ‑

GLEESON CJ:   I thought Justice Gyles said – I may have misunderstood him – it is self-evident that they suffered some loss because a unit, if I can use that inaccurate expression, that has to bear outgoings of X plus Y dollars is necessarily worth less than a unit that has to bear outgoings of X dollars.

MR KELLY:   There are two problems with that proposition:  firstly, your Honour, the applicants before Justice Emmett at first instance expressly eschewed any such case.  There was no evidence led that at the time of acquisition the property was worth less than was paid for it, and Justice Emmett in appeal papers page 74 says:

There is, however, no evidence of loss or damage at that time.  Indeed, they have eschewed a case based on any proposition that they suffered loss or damage at that time.

So, although his Honour ‑ ‑ ‑

GUMMOW J:   Sorry, 74 line?

MR KELLY:   Line 17.  So, although theoretically, Justice Gyles was posing that matter, it has no application in this case by reason of the fact that that theory of loss was not pursued in this case.

GLEESON CJ:   Well, that theory of loss would have put them out of time.

MR KELLY:   Definitely.  That is the reason why they eschewed it.

GUMMOW J:   But what about a theory of loss that would have allowed them within time?  What happened about that before the trial judge.

MR KELLY:   It also failed for want of evidence.

GUMMOW J:   Well, is it dealt with?

MR KELLY:   Yes, I believe so, your Honour.

GUMMOW J:   Whereabouts?

MR KELLY:   Not by Justice Emmett but in the Full Court, I think in Justice Branson’s reasoning ‑ ‑ ‑

GUMMOW J:   We had better find it; it is quite important really.

MR KELLY:   One gets to the point – at page 162, paragraph 46 line 34 and over the page, we see Justice Branson contemplating and analysing, as it were, the Gyles approach and coming to the conclusion that - and this is over the page at 163 line 14:

There was simply no evidence placed before his Honour on this issue.  In any event, it may be noted that his Honour preferred the valuations of Mr Robertson, who was called by the respondent . . . Mr Robertson regarded “level of outgoings” as only one of nine primary factors –

et cetera.  The net result was that even if one took a later date and the alternative theory, the evidence was insufficient to prove any actual loss.  Of course one has to take into account the value of benefits received and one knows that Mr and Mrs Murphy remained in the unit, did not wish to leave ‑ ‑ ‑

GLEESON CJ:   Well, is that the matter that is dealt with in the next paragraph in Justice Branson’s judgment on page 163 commencing in paragraph 47?

MR KELLY:   Yes, your Honour, but the net result is that if one were to go forward, hoping for an opportunity to resolve any difference of opinion on the definition of “loss” for the purpose of Marks v GIO, one would be disappointed because this vehicle is barren of evidence.  There is no material on which to work and, of course, not only was no additional evidence led on the first remitter to Justice Emmett, but on the second remitter after the second Full Court hearing, that opportunity was not availed of either.  What is lined up next on the way to the third visit to the Full Court, which is listed for hearing on 3 March this year, but a few weeks away, one of the issues in that appeal is - and here I refer to paragraph 6 of the notice of appeal which is not with your Honours’ appeal papers, but that

ground is that his Honour erred in his findings, “that there was no material before me that enables me to conclude that the consequence of surrender by Mr and Mrs Murphy of their leasehold interest, at any time during the period March 1994 to October 1995, would have resulted in any loss”.

In effect, this application is seeking the fourth bite of the same cherry and the concept of the 3 March appeal somehow remaining in existence would keep alive a fifth bite.  All of those facts tend to show that the problem with this entire matter from beginning to end is the paucity of the evidence and on that basis it has no prospects and it is not an appropriate vehicle.  That is the way we put it, your Honour.

GLEESON CJ:   Thank you.  Mr Ellicott.

MR ELLICOTT:   If your Honours go to application book 88 your Honours will see at paragraph 272 line 20:

As a result of that meeting, the two valuers . . . agreed that:

as at March 1994 the value of Unit 53 on the assumption that maintenance fees were $60.79 per week was $215,000;

as at November 1996 –

that is the date we are concerned about, or one of the preferred dates –

the value . . . was $207,000.

That reflects an increase.  So there is evidence there of a decrease in value based on an increase in the quantum of the payments that had to be made, maintenance fees.

If your Honours go to application book 92 you will see that various conclusions of value as at November 1996, February 2000.  The question was well and truly ventilated that there was, in fact, a loss and it was up to his Honour to quantify it.  He never did it because, if one goes to AB 74, he says, as your Honours have pointed out - and, if I may just interpolate, this is really what Justices McHugh, Callinan and Hayne have said in Marks’ Case is the proper proposition:

If Mr and Mrs Murphy suffered any loss or damage as a consequence . . . they did so when they entered into the Lease.  There is, however, no evidence of loss or damage . . . Indeed, they have eschewed a case –

and that is true –

based on any proposition that they suffered loss or damage at that time.

And that was the case that we put.  It certainly included a case, as embraced by Justice Gyles, that we suffered a loss at the later date, and there was evidence to show that that loss was incurred.

GLEESON CJ:   Now, what is the nature of the loss that you suffered at the later date?

MR ELLICOTT:   The nature of the loss flowed, first of all, from the fact that the representation turned out to be untrue and they were obliged to pay more than they would have been on the basis of the representation.

GLEESON CJ:   But they got value for what they paid for.

MR ELLICOTT:   That is not – what they paid for is a lease and a lease under which they, looking at their retirement as old-age pensioners, would be getting, they thought, a lease under which the maintenance fees that would be payable would represent all the items of expenditure that the $55.71 represented, that they were told was subject to CPI, would be the maintenance fee, and they assumed, and this is what Justice Emmett found, that they would not have to pay any more than a figure which would represent the component of the $55.71 in terms of items, but the fact is ‑ ‑ ‑

GLEESON CJ:   If I could give you an example, Mr Ellicott, that gets slightly away from the facts of this case, but suppose I am interested in buying a dwelling house but I am a stranger to the location, and a real estate agent negligently, not fraudulently and not contractually, represents to me that the council rates in respect of that land will be at a certain level over a certain period of time and I say I can afford that and on that basis I will buy the house.  Suppose the council rates turn out to be substantially higher than that.  I have bought a house, I might or might not be financially embarrassed in due course by finding that the rates have gone up above the level that I was led to expect, but have I suffered any loss?

MR ELLICOTT:   Your Honour, I would submit in that case you have suffered a loss because you have bought something which turns out not to be that which you thought you were buying, namely a house in respect of which the rates would be so much and, to that extent, that is to the extent that it differed, you had not obtained that which had been represented to you and you would suffer that loss.

GLEESON CJ:   When do I suffer the loss?

MR ELLICOTT:   When the council sent the rates you would know that you had suffered a loss and it must have been at least no later than that time - it could have been earlier.  On that example, of course, other considerations would come in which were not applicable here, and that is that the purchaser, your Honour, would be able to check with the council and you would know that this was a representation that might have been made, but it would be normal practice for your solicitor to inquire as to council rates and therefore you would know about it.  But in this case the applicants were entirely in the hands of Overton and they put out this brochure to attract these old-age pensioners into this situation, which told them, in effect, that they would have to pay no more than a maintenance fee based upon a particular amount containing all the items which they could possibly have to be required to pay in order to meet the expenditure of the village.

That representation meant that they suffered a clear loss later on when they were obliged to pay.  In Marks it could have been an additional interest rate if it had gone up to 1.75 instead of 1.25.  That is the consequence, we would submit, apart from that particular little fact in Marks, that they had offered to let them out and no penalty.  According to the view expressed by Justice Gummow, we would submit, in Marks’ Case, they would have suffered a loss because, if the interest rate had been put up to 1.75, their loss which was caused by the misrepresentation was that they had to pay a greater interest on a loan and therefore the loan was not worth as much as it previously was.

GLEESON CJ:   Mr Ellicott, I suppose if we were to grant special leave in the first of these matters, we could assume that, the case having been before an almost record number of courts and tribunals over the years, all the evidence that is available in support of the case of the applicants has already been led.  There is, I take it, no question of any attempt, or possible attempt, on the part of the applicants if the matter were remitted to a trial judge to seek to lead evidence that was available, however many years ago this case was started and was simply not led?

MR ELLICOTT:   Your Honour, if that was the penalty, if it was a penalty, that my clients had to suffer, then so be it, but it is clear that there is evidence that was put before Justice Emmett, which we say could lead a trial judge to make a finding of a particular amount in our favour.  Now, the only reservation I have about it is that if it went back to a trial judge, the trial judge might think that it was appropriate, but it would be his or her discretion, to allow my client to adduce further evidence, because the matter is still before him.  Subject to that right, my client would be content to deal with the matter on that basis.  It would not impact on the Full Court’s decision if leave was granted.

GLEESON CJ:   It would be a monstrous thing if this litigation, having been through so many courts, has reached this stage without all the available evidence that could be led on behalf of your clients having been led.

MR ELLICOTT:   I do not know whether that is the correct adjective to use, your Honour, but it would be fair for your Honour to assume that by this stage you would expect that all the evidence that could be led has been led, and your Honours should proceed on that basis.

Of course, the other judges, that is Justice Branson, she said that there was evidence that they had gone off to the St John Paul’s Retirement Village, and she said there was no evidence of what would have happened had they done that and therefore that is ‑ ‑ ‑

GLEESON CJ:   Could you just show us where in Justice Gyles’ judgment he dealt with this problem about the absence of evidence of loss.

MR ELLICOTT:   He says at AB 196 paragraph 132:

a change in contributions due (contrary to representations) which adversely affected the affordability . . . does lead to loss or damage . . .It is unrealistic to equate entry into a retirement village on the terms here with acquisition of a chattel, a business or the fee simply of commercial real estate.  As his Honour said, the decision by the appellants to sell their home of many years and to buy a leasehold interest in this retirement village was probably one of the most momentous that they made in their joint lives.  Having made that momentous change, to find that, contrary to representations . . . contributions could not be afforded, left them open to termination of the lease for breach, with all of the disruption and cost, let alone the potential for loss of capital, necessarily involved.  In my opinion, this certainly means that they were likely to suffer loss or damage . . . and that is sufficient for the purposes of this case.

And, over the page:

The argument in principle which is contrary to the above is that, as there is no finding either that the property was worth less . . . or that the contributions levied from 1997 onwards do not reflect actual costs, to grant relief would be to give the appellants a windfall gain. That argument was put, but did not prevail, in Marks.  If it did not prevail there, it certainly should not prevail here.  Paying more interest, when there was no “affordability” problem asserted or found, is a vastly different proposition from the position in which the appellants find themselves, being confronted with payments that cannot be afforded, with the immediate risk of removal from their final home.

The trial judge was wrong in finding that any loss or damage which was suffered occurred upon entry ‑ ‑ ‑

and then his Honour then expresses that view, which is, in effect, favouring the view in Marks –

In my opinion, the appellants were likely to and did suffer loss or damage for relevant purposes when the levy of contributions was made in April 1997 on the basis of full recovery of costs which departed from the misleading representations.

Just stopping there, if a trial judge had that evidence and that evidence was certainly before the court, then he would be able to make some assessment based on the present value of contributions.

GLEESON CJ:   Well now, going over to page 210, under the heading “RELIEF”, his Honour says that:

the conclusions below meant that there was no comprehensive consideration of the assessment of damages.

On the approach that Justice Gyles takes on page 210 to the assessment of damages, was there evidence before the trial judge on which he could have assessed damages on that basis?

MR ELLICOTT:   In our submission, yes, your Honour.  He certainly had the evidence that I have referred to, that there was a loss in value.  It may not have been great but there was that evidence, and there was also the evidence that the contributions on one basis would have been so much and the contributions on the basis that actually represented the lease, as distinct from the basis upon which Overtons assessed it, were different and different in the defined amount and therefore it was open to the court to make a judgment based on that evidence as to what loss should be quantified.  The judge can quantify it; there is no difficulty in saying, “Here they are.  They have to pay proportionately more for the rest of their life.  At the moment it’s so much”, and they can take an estimate, they have their ages, et cetera.  It is not a quantification that is outside the competence of a judge aided by tables, et cetera, but they commonly do.  One does not have to have the actuary in front of the judge, in our submission; it is common for judges to be able to do that.

There was also the difference in value, so there is evidence there.  If there may have been more evidence, that is a matter that either lies at the feet of our client, and that is all he can get, but certainly we would submit that what Justice Gyles is proposing is not such that it would exclude an application to adduce further evidence.  But that would be determined according to judicial principles and no doubt this Court might say something about it if they were in favour of our client as to what should happen when it goes back.

We would submit that that is not a reason why special leave should not be granted.  So far as Justice Nicholson’s concern at application book 178, he was very much of the view that the joint judgment of Justices McHugh, Hayne and Callinan in Marks’ Case should be followed.  So he simply said there was no loss because there was no evidence of any difference in value as at 1992 and, indeed, on the limitations question, there would have been difficulty to claim any loss as at that date.

We would submit that your Honours should regard this as an appropriate vehicle.  It is obvious that the points of law are of great significance to this, to the other 90 cases involved and also to the multitude of cases that may come before the Court in the future on this issue.

GLEESON CJ:   We will adjourn for a short time to consider the course we will take in this matter.

AT 10.38 AM SHORT ADJOURNMENT

UPON RESUMING AT 10.38 AM:

GLEESON CJ:   In matter S138 of 2001, there will be a grant of special leave to appeal.  In relation to matter S207 of 2002, the Court is of the view that the case turns upon the application of settled principles to the facts and circumstances of the particular case and does not raise a point suitable for a grant of special leave, and in that matter the application is dismissed with costs.

Mr Ellicott, in relation to the notice of appeal in S138, I notice it has already come down a bit in size because of some remarks made on the last occasion but you had better have a look at the question of relief, you remember the point Justice Gummow raised with you about order No 6.

MR ELLICOTT:   Yes.

GUMMOW J:   And how many volumes of appeal book are we letting ourselves in for, too?

How big was the record in the Full Court?

MR ELLICOTT:    Five volumes.

GLEESON CJ:   So, the notice of appeal might require some further pruning down, particularly in relation to the relief sought.

MR ELLICOTT:   If your Honour please.

AT 10.45 AM THE MATTERS WERE CONCLUDED