Packer v Cigna Insurance Asia Pacific Ltd

[2002] HCATrans 206

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth  No P23 of 2001

B e t w e e n -

PHILIP JEFFREY PACKER

Applicant

and

CIGNA INSURANCE ASIA PACIFIC LTD

Respondent

Application for special leave to appeal

GUMMOW J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

FROM PERTH BY VIDEO LINK TO CANBERRA

ON FRIDAY, 31 MAY 2002, AT 12.29 PM

Copyright in the High Court of Australia

MR G.R. HANCY:   If the Court pleases,  I appear for the appellant.  (instructed by Ilberys)

MR M.H. ZILKO, SC:   If the Court pleases, I appear for the respondent.  (instructed by Pynt McKay)

MR HANCY:   Your Honours, the two special leave points that arise are, first, whether, on an appeal from a decision on a preliminary issue, the powers of the appeal court to determine facts and make appropriate orders permit it to summarily dismiss the plaintiff’s claim by deciding an issue of fact ‑ ‑ ‑

GUMMOW J:   Yes, you rely on what Justice Kennedy said, do you not, page 82 and ‑ ‑ ‑

MR HANCY:   For that point, yes.  I mean that is the unusual feature of this case that we believe we won the preliminary issue.  The court ordered, however, we were the respondent, that the appeal be allowed and then they went outside that and dismissed our claim in the District Court.  We went back to the court and asked for the decision to be reversed.

GUMMOW J:   Just assist me for a minute, Mr Hancy.  What was the subject matter before the Full Court.  What did they have before them, and appeal from what?

MR HANCY:   What was before the District Court was a preliminary issue that was argued on certain paragraphs of the defence plus the contract of ‑ ‑ ‑

GUMMOW J:   Wait a minute.  Just a minute.  They had an order made in the District Court.  Now, what was that?

MR HANCY:   The order does not appear to have been extracted, but in the book of materials your Honours will see the chamber summons on which the order was made at page 4.

GUMMOW J:   Thank you.

MR HANCY:   The order on which the matter proceeded in the District Court was No 3:

The issue raised by paragraph 8(a), (b), (c) and (e) of the Re‑Amended Defence be tried as a preliminary issue before the other issues in this action.

HAYNE J:   The facts on which that preliminary issue was to be tried were nowhere identified.

MR HANCY:   Yes, because the defendant was brought in as a reluctant party to try this issue without all of the other facts.  So there was a limited number of facts that were agreed, but not anything to do with ‑ ‑ ‑

HAYNE J:   Was a statement of agreed facts made and recorded?

MR HANCY:   I cannot tell your Honour specifically whether it was a statement, but there were certain limited agreed facts.  If you turn to page 36 of the application book, that is a page from the reasons of Chief Justice Malcolm and your Honours will see that there were certain facts agreed but they were very limited and they are set out in paragraph 11 below line 15.

GUMMOW J:   Anyhow, what the Court of Appeal had before it was an order by the District Court dealing with the determination of the preliminary issue pursuant to the order made in terms of order 3 sought on page 4 of the supplementary book and what emerged at the end was an order that the action be dismissed.

MR HANCY:   That is right and that is why we are here.

GUMMOW J:   Yes.  Yes?

MR HANCY:   I should add, your Honours, that the Full Court did have a copy of the policy.  They had a pleading and they had a policy and the barest of facts and, based on that, they dismissed ‑ ‑ ‑

GUMMOW J:   You are answering Justice Hayne.  What was the factual material?  I am not quite sure I understand.

MR HANCY:   That was agreed?

GUMMOW J:   The factual material that was before the District Court and/or as supplemented in the Court of Appeal in the Full Court.

MR HANCY:   It was not supplemented in the Full Court, but all that was before the courts was on page 36 of the application book and, just summarising it, that a policy was issued, “Mermaid is a wholly owned subsidiary of Woodside”, that is, “The policy was renewed” ‑ ‑ ‑

GUMMOW J:   Was the policy annexed to any statement of agreed facts?

MR HANCY:   It was introduced as an exhibit, Exhibit 1 ‑ ‑ ‑

GUMMOW J:   I see.

MR HANCY:    ‑ ‑ ‑ and a condition attached to it was introduced as Exhibit 2 in the District Court.

GUMMOW J:   Any other exhibits in the District Court.

MR HANCY:   No.

GUMMOW J:   Right, thank you.

MR HANCY:   So the relevant facts that were before the courts are summarised on pages 36 through to 38 of Chief Justice Malcolm’s reasons as set out in the application book.  

GUMMOW J:   Yes, thank you.  I think we would be assisted if we heard at this stage from your opponent.  Yes, Mr Zilko.

MR ZILKO:   May it please your Honours.  As my learned friend, Mr Hancy, indicated to you, this was an appeal from a plenary issue in respect of the limitation period which applied.  The relevant pleading, I think, is the starting point, your Honours, and I take you to that.  If you go to the application book, you will see at page 8 the respondent’s plea before the District Court and the plea is that, particular (a) which was ultimately upheld by the Full Court:

the Plaintiff’s entitlement to the payment of benefits pursuant to the policy, and therefore the Plaintiff’s cause of action, was complete as at the date upon which the Plaintiff suffered Permanent Total Disablement (as defined in the policy) –

Now, (b) and (c) put up an argument as to when he suffered permanent total disablement and the three parts, that is, 8(a), (b) and (c) were heard before an acting judge in the District Court.  That acting judge, Commissioner Stavrianou, found that it was a term of the policy – although it could never be found in the policy in written form, so it must have been an implied term – that before the cause of action accrued, a claim had to be made under the policy and the insurer deny the claim.  That was what we appealed about.  We appealed to the Full Court on the basis that that defied the law on the subject of when a cause of action accrues on a contract of insurance and, as well, that it defied the very terms of this particular policy.

The Full Court heard the matter.  Justice Pidgeon found in favour of the respondent, that is, my client, on all parts of paragraph 8(a), (b) and (c).  The Chief Justice and Justice Kennedy found for my client in respect of paragraph 8(a) but found against us in respect of 8(b) and (c).  Having found for us in respect of 8(a), their Honours in a joint judgment ‑ and we say “a joint judgment”, it was the Chief Justice’s judgment but Justice Kennedy joined in with him ‑ the Chief Justice then said in light of the plea of the plaintiff that he had made a claim that he had suffered from permanent and total disablement in 1988 and that is, in fact, to be found in his statement of claim.  It followed from that that notwithstanding that there was no evidence before the Full Court from any trial that had been held because, indeed, your Honours, there was no trial up to that point in time, nevertheless it followed from his plea that he must have suffered from permanent and total disablement as at the time which he pleaded he made a claim for it.  That was well out of time, something like four or five years out of time and, on that basis, they moved to dismiss the claim, that is, to uphold the appeal and dismiss the plaintiff’s claim.  My learned friend ‑ ‑ ‑

HAYNE J:   Where in the plaintiff’s statement of claim do we find the plaintiff fixing a date as the date of his suffering permanent disablement?

MR ZILKO:   The amended statement of claim starts at page 3 and at page 4 he sets out at paragraph 9 the date on which he was injured.  Then he says in 10 that he “suffered serious injuries and disabilities” as a result of that accident and those are particularised.  In 11 he says:

By reason of his injuries and disabilities from the accident the Plaintiff has suffered Bodily Injury and Permanent Total Disablement as defined in the Policy.

Then in August ‑ this is in paragraph 12, your Honours ‑ in August 1988, he made a claim in respect of the accident against the defendant.  Having pleaded in the previous paragraph that he had suffered from permanent total disablement, he then pleads in paragraph 12 that on 30 August 1988 he made a claim in respect of his condition.  From that the Full Court, we say, correctly concluded that that was the latest date on which he suffered from permanent total disablement.  On that basis, they dismissed the plaintiff’s claim as well as upholding the appeal.

GUMMOW J:   How could they do that as a matter of the procedures in the Supreme Court of Western Australia in the Full Court?  How were they seize of any broader subject matter?  It is ‑ ‑ ‑

MR ZILKO:   As with all of the – I am sorry, your Honour?

GUMMOW J:   Is there some statutory provision or rules of court ‑ ‑ ‑

MR ZILKO:   Yes, there are, and if you go ‑ ‑ ‑

GUMMOW J:    ‑ ‑ ‑ that enable the Full Court to go outside the ambit of the stated case when there is an appeal from the stated case?

MR ZILKO:   If your Honours go to the applicant’s book of materials, you will find the relevant rule of the Supreme Court at page 22, Order 63 rule 10, which sets out the general powers of the Western Australia Supreme Court and, I might add, is in very similar terms to the general powers conferred upon the Full Courts of the other States or the Courts of Appeal of the other States.  But if you go, your Honours, to page 22 and to Order 63 rule 10(2), firstly it sets out the:

power to draw inferences of fact and to given any judgment, and to make any order which ought to have been made, and to make such further or other order as the case may require.

GUMMOW J:   Yes, the judge and the Commissioner in the District Court could not have dismissed the claim.

HAYNE J:   Is that right?  Is there power in the rules governing trial of separate issue to make an order disposing of the action as a whole upon the answer being given to the separate issue thus identified?

MR ZILKO:   In my respectful submission, yes, your Honour.

GUMMOW J:   Where is that?

MR ZILKO:   If I could go on to subrule (3), Order 63 rule 10(3) then elaborates upon subrule (2) and it says:

The powers of the Full Court under the foregoing provisions of this Rule may be exercised notwithstanding that no notice of appeal or respondent’s notice has been given in respect of any particular part of the decision of the court below or by any particular party to the proceedings in the that court, or that any ground for allowing the appeal or for affirming or varying the decision of that court is not specified in such a notice; and the Full Court may make any order, on such terms as the Court thinks just, to ensure the determination on the merits of the real question –

that is –

in controversy between the parties.

The real question here, your Honours, was on what date had this man’s cause of action accrued and it was plain ‑ ‑ ‑

HAYNE J:   Ordinarily that would be the subject of a trial.

MR ZILKO:   Ordinarily it would be.

HAYNE J:   Now what is the rule that would have entitled the District Court Commissioner if he had answered the separate issue in the sense identified by the Full Court, then proceeding to dispose of the action as a whole?

MR ZILKO:   I doubt that the Commissioner had that power because the District Court Rules do not go that far.

HAYNE J:   Then, if he did not have that power, why should the Full Court be understood under these general powers of 63.10 as having power to do that which the Commissioner could not have done absent trial?

MR ZILKO:   These are the powers provided for the Full Court, your Honours.  There is no argument ‑ ‑ ‑

GUMMOW J:   Wait a minute.  That would be the exercise by the Full Court of some species of original jurisdiction, would it not?  Maybe that is what is permitted, but it does not seem immediately apparent that that is so.

MR ZILKO:   There is no Western Australian authority on the point.  There are some English authorities my learned friend has referred to which refer to the English rule of similar proportions, although I might add that the English rule is not entirely the same.  The rules that are referred to here, your Honours, are to be found in all of the rules of the Supreme Courts around the country.  There is nothing, I think, unusual about the rules, but it is a question of their application and we would say ‑ ‑ ‑

GUMMOW J:   More exactly.

MR ZILKO:    ‑ ‑ ‑ that there were a number of discretionary factors which the Full Court took account of and one of those was that on any stretch of the imagination, this matter was statute barred because that is the way it had been pleaded by the plaintiff and he could not.  His plea was based in such a way that it was not open to him, I think, later on – and I think the Full Court accepted this – to resile from what must have been his instructions to his solicitors as to when he was permanently and totally disabled.

GUMMOW J:   Was the pleading sworn?

MR ZILKO:   No, it was not sworn, your Honour, but there were long periods of time involved in this.  It was not a closed matter where something ‑ ‑ ‑

GUMMOW J:   I understand that.

MR ZILKO:   He instructed in relation to the pleading in 1998, no doubt, or thereabouts because that is when the proceedings were commenced.  He pleaded that he had made a claim in respect of permanent and total disablement in 1988, that was 10 years before.  This is the point that Justice Kennedy made which your Honour Justice Gummow referred to when my learned friend was addressing you and that is that Justice Kennedy had said that perhaps the matter had to go back and be ventilated at a trial and that is why he dissented on the reopening.  But he did also point out that he could not see the plaintiff doing very well on a rehearing simply because by his own plea, which no doubt his evidence would have to support, he suffered permanent and total disablement some 10 years before he commenced his action and that was the date on which the cause of action accrued.  So what the Full Court did was really just decline to resuscitate a case which was to all intents and purposes a lost cause. 

Let us for a moment, your Honours, look to see what would have happened if they had not made the order that they did.  You have the plaintiff’s plea ‑ ‑ ‑

HAYNE J:   What would have happened if they had not made that order is there would have been a trial of fact, the normal way of disposing of an action of this kind?

MR ZILKO:   Can I just pose a hypothetical situation for a moment, your Honours, as to what that would have entailed.  He would have gone back – and you have to bear in mind here that his plea is one of a breach of contract arising out of the failure to meet his claim.  The Full Court found that that was not the basis on which the cause of action accrued so his statement of claim is immediately based on a false premise because it alleges that the time begins to run from that.  So the statement of claim poses a serious impediment to the plaintiff continuing with his action because it is not predicated on the true date on which the cause of action accrued.  So it has that, we say, fatal flaw in it which means that it could not have been properly retried in any event.

But let us for a moment assume that he went back and then he tried to amend his statement of claim.  What would he do to amend it?  He would have to allege that rather than being permanently and totally disabled in August 1988, in truth, he permanently and totally disabled at some stage in 1992 or 1993 or 1994. 

GUMMOW J:   I take it that the substance of what you are saying to us, Mr Zilko, is that having regard to the last sentence in Justice Kennedy’s judgment, in this Court on an application for special leave what otherwise might be a visitation case to deal with procedural irregularities in the Western Australian court, there will be no sufficient point in us getting involved because of the unlikelihood of any ultimate outcome favourable to the applicant for leave.  Is that what it comes to?

MR ZILKO:   That is precisely our submission, that is precisely the point.  You would say it is just not an unsuitable vehicle to be ventilating these issues, it is an issue which can ultimately only lead to one result in the end and it is not, therefore, an appropriate vehicle for your Honours to use to determine issues regarding the procedural powers of the Full Court in similar circumstances. 

HAYNE J:   To that I take it you would add that this is an unusual policy where you have this further unexplored difficulty that emerges from the policy being issued to the company and the claim now being made by the employee.

GUMMOW J:   With no joinder in the other party.

MR ZILKO:   I would add those matters, your Honours, because as I said in my written submissions, this is by no means a common policy.  Some policies have a requirement that you give notice and the time will run from that.  Some policies have other provisions regarding when time will run.  This policy is a little unusual, not totally uncommon, but unusual in the sense that it simply provides that payment will be made on the happening of the relevant event and there is plenty of authority for that proposition and I have referred in my submissions to a decision of the Privy Council in  respect of that and a decision of the Full Court here in Western Australia on the same point.  There cannot seriously be an argument that your Honours are required to resolve differences of view about what the law is there and that is my learned friend’s ground 1.  So there is nothing we would say in that all that requires you to consider the issues.

As for ground 2 which we have been discussing, the point is so unusual and arises out of such an unusual set of circumstances that it could not possibly act as a benchmark, in my respectful submission, for any other

matter of like kind that came before the courts subsequent to your Honours hearing the matter and, thus, it does not meet the requirements for a special leave point.  My submission is that ultimately, as I have said and as his Honour Justice Kennedy opined, this man will lose so we will go to the High Court on a full hearing of an appeal, if my learned friend’s point gets up, but only to receive the result that ultimately has occurred by the Full Court’s decision, with no attendant legal principles of merit or importance that need to be considered by your Honours in the process.  So we would say it is a lost cause which the Full Court quite appropriately decided not to resuscitate at the point it had the opportunity to do so. 

Your Honours, my learned friend has referred in respect of the first ground, that is, the ground about the time for accrual of cause of action, to some single judge decisions in Australia which disagree with the Privy Council’s decision that I have referred to.  If I could very quickly just deal with those.  Obviously, the first point is that they are single judge decisions and, as such, may not perhaps carry the weight that my learned friend ascribes to them.  But, secondly, there are quite major differences between the policy provisions in those cases where we know about them and the policy provisions in the present case.

In the case of Council for the City of Penrith v Government Insurance Office of New South Wales, which is referred to in both my learned friend’s list and in my submissions, the policy was an entirely different policy which called for notice to be given which, of course, is not the case here.  Thus, his Honour Justice Giles was dealing with an entirely different policy and quite appropriately ‑ ‑ ‑

GUMMOW J:   We do not need to hear you on these cases, Mr Zilko.

MR ZILKO:   Thank you, your Honour.  In those circumstances, there is nothing more I need to say to your Honours in regard to either of the grounds.

GUMMOW J:   Thank you.  Yes, Mr Hancy.  What is troubling us in particular is the point made as to the ultimate inutility of us becoming involved.

MR HANCY:   Your Honour, every plaintiff confronts the problem that he or she may lose at trial and this plaintiff is no different.  There might even be greater problems, we do not know, we have not had that opportunity to confront those problems and that is what we are asking for.

HAYNE J:   Given the way in which the statement of claim is framed and accepting for the purposes of argument that it does not in terms specify the date on which permanent and total disability occurred, what is there in it that would suggest that it is arguable that disability occurred after 30 August 1988?

MR HANCY:   It does not specify a date, that is the simple answer.

HAYNE J:   Yes.  The fact that the claim was made ‑ is there material which demonstrates what claim was made on the insurer.  A claim was made but for what?

MR HANCY:   No, there was not before the court that material.  The statement was not part of the material before the court.  I have included it in the book of materials.

GUMMOW J:   Page ‑ ‑ ‑?

MR HANCY:   It starts at page 14.

GUMMOW J:   Yes.

MR HANCY:   It is called the “Insured’s Statement to Company”.  Now, it needs to be read with the preceding page, page 13, which was Exhibit 2 and perhaps probably better to start with that.  That is the condition in 3 you will see if you have found page 13.  It provided that:

(a) Written notice containing full particulars of any Event in respect of which a claim is to be made shall be given to the Company at the office of the Company . . . within twenty-one days of

(i) the sustaining of the Bodily Injury –

So the notice of the injury had to be given and this policy was one that distinguished between injury, on the one hand, and resulting permanent total disablement on the other.  The issue of permanent total disablement was something that was clearly contemplated could happen in the future. 

Now, in the form which was not before the court because it was not part of the preliminary issue and it was not part of the appeal, you will see there is ‑ ‑ ‑

GUMMOW J:   I know, but if you eventually do have a trial, how will it be put to get you home?  That is what is relevant at this special leave stage when we are looking at overall utilities.

MR HANCY:   There are two ways.  We do have the other point about when the cause of action arose.  So if your Honours grant special leave and we succeed on that point, then that point remains open.  Even if we do not get special leave or we lose on that point, the issue remains ‑ and this was even acknowledged in the court below ‑ of when the permanent total disablement occurred as a question of fact. 

GUMMOW J:   I know, but what is your case going to be about when it did occur as a question of fact?

MR HANCY:   We will then have to obtain and call the evidence to determine when the ‑ ‑ ‑

GUMMOW J:   I know but, in summary, what is it going to be or do you not yet know, that is all I am asking?

MR HANCY:   There is no evidence before the District Court or this Court or the court below about that and I cannot ‑ ‑ ‑

GUMMOW J:   I know, but on a special leave application, when we are looking at this overall question of utility, that is one of the things we can look at in a general way.

MR HANCY:   Yes, well, I cannot give your Honours an answer to what the evidence would say on that question.

GUMMOW J:   Thank you.

HAYNE J:   Is page 16 of the supplementary book part of the form, “Insured’s Statement to Company”?  In particular I am looking at the answer to question N which ‑ ‑ ‑

MR HANCY:   Yes, I was going to take your Honours to that.

HAYNE J:    ‑ ‑ ‑ which describes “Totally disabled from” the date of the accident “to indefinite”, which suggests that the statement made to the company was that there was an indefinite total disablement.

MR HANCY:   Indefinite at that stage, but your Honours will see with the definition of “total permanent disablement” ‑ ‑ ‑

HAYNE J:   No, I understand there are verbal differences.

MR HANCY:    ‑ ‑ ‑ required the disablement from attending to certain specified occupations for the remainder of the applicant’s life.

GUMMOW J:   Yes, thank you, Mr Hancy.  We will take a short adjournment.

AT 12.59 PM SHORT ADJOURNMENT

UPON RESUMING AT 1.06 PM:

GUMMOW J:   We tend to prefer the view expressed by Justice Kennedy as to the powers of the Full Court disposing of the appeal in this matter.  However, we consider it is not demonstrated that a grant of special leave here would lead to a disposition of the litigation which would differ from that brought about by the order of the Full Court. 

Therefore, we are not persuaded that an arguable case of miscarriage of justice has been demonstrated.  Moreover, the unusual nature of the insurance policy, taken with the various procedural difficulties mentioned in the course of argument, such as the absence of the joinder of the company to which the policy in question was issued, make this an unsuitable vehicle for the exploration of any more general questions of law.    Accordingly, special leave is refused with costs.

AT 1.07 PM THE MATTER WAS CONCLUDED