Paramasivam v Flynn

[2000] HCATrans 165

IN THE HIGH COURT OF AUSTRALIA

Registry  No C1 of 1999

B e t w e e n -

ROGER PARAMASIVAM

Applicant

and

VINCENT JOHN ADAMS FLYNN

Respondent

Application for special leave to appeal

McHUGH J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 14 APRIL 2000, AT 9.31 AM

Copyright in the High Court of Australia

MR B.J. GROSS, QC:   May it please the Court, I appear for the applicant. (instructed by Bernard Collaery & Associates)

MR B.C. OSLINGTON, QC:   May it please the Court, I appear with DR A.S. BELL for the respondent. (instructed by Eakin McCaffery Cox)

McHUGH J:   Yes, Mr Gross.

MR GROSS:   Your Honours, the Full Bench not only disallowed extensions of time, but also ordered summary judgment on the basis that a claim for breach of fiduciary duty was not arguable and, in effect, was not open in Australian law to cases of this type which they appear to have characterised on page 63 of the book as being ones which had two aspects, that is the nature of the alleged breach and the kind or loss of injury which is said to have been suffered. 

Your Honours, between pages 63 and 69 their Honours note, first of all, at 63, line 10, that Justice Gallop “on breach of fiduciary duty…..was not persuaded that that case had real prospects of success”.  They concluded that “his Honour’s conclusion was justified”.  At the bottom of page 63, they described such a claim as being “novel” because of those two aspects referred to.  The discussion then endeavours to take the High Court decisions and the general Anglo-Australian jurisprudence down a path which prevents breach of fiduciary duty being entertained or equitable compensation being allowed in cases where the allegations relate to anything other than economic interests or, in effect, matters involving a commercial advantage.

Your Honours, the discussion on pages 63 and 64 so narrows the purview of fiduciary duty and, as an added factor, it is said, at the top of page 65, that because:

the conduct complained of is within the purview of the law of tort –

that is another reason why there cannot be fiduciary duty here or compensation allowed.  Your Honours, the court appears to have paid undue reliance upon Breen v Williams for the purposes of finding in that case an endorsement of this restriction of the scope of fiduciary duty claims. 

Your Honours, Breen, of course, was one which dealt specifically in the context of a relationship between a doctor and a patient, with the obligation of that doctor on a fiduciary basis to fully disclose all information that he had and to hand over all records on the basis that he had a duty of utmost good faith to comply with that particular requirement.  So that the focus in Breen v Williams, allowing for the fact that you can have overlap and allowing for the fact that the categories of fiduciary duty are not closed, nevertheless focuses upon that particular alleged basis for obtaining the records of the doctor.  The Full Bench then moved from there, at the bottom of page 67, to say:

that a fiduciary duty claim, such as that made by the plaintiff in this case, is most unlikely to be upheld by Australian courts.

It then goes on to say:

Equity…..protects particular interest which differ from those protected by the law of contract and tort –

et cetera, and that these:

propositions, in our view, lie at the heart of the High Court authorities to which we have referred, particularly, perhaps, Breen.

They sat at page 68:

It follows that Gallop J was justified in concluding that he was not persuaded that the appellant’s claim based on breaches of fiduciary duty owed by the respondent to the appellant had real prospects of success.

So that we would submit that it is odd that that can occur as a matter of summary judgment.  In other words, it is being put by the Bench that it is not even arguable as a question of fact and law before, in effect, the full facts are before the court, but, in any event, before the matter has had an opportunity to be developed.

McHUGH J:   That is not really the way the court has approach it, is it, and you seem to be getting well clear of your special leave ground which is set out at page 82 and really is whether the Court may apply the test of whether the causes of action have “a real chance of success” when deciding the application for an extension of time.  Now, some of these claims were well and truly out of time and why was it not legitimate for the courts to attempt to assess this aspect of the case in determining whether or not they should grant you an extension of time.

MR GROSS:   It was legitimate to visit the area for that purpose.  We submit that what has occurred, however, is that there is error in law in reaching that conclusion.  But, in any event, as part of the process of determining whether a fair trial is possible as measured by Limitation Act standards, it was necessary to weigh the ramifications of there being a fiduciary duty and in any event, by reference to the type of criterion of section 60 I of the New South Wales Act, to take into account the question of the ignorance of the plaintiff of the occurrence of injury, the nature and extent of any injury thus caused and its connection with any conduct ‑ ‑ ‑

McHUGH J:   I thought Justice Gallop was at least sceptical, if he did not accept the applicant’s evidence, in respect of lack of knowledge?

MR GROSS:   He did in certain aspects, but, although sceptical, it was necessary to take into account those ignorance matters which were, of course, natural outcomes of any breach of fiduciary duty or conduct of the type described.  He was obliged to take those matters of ignorance into account in determining the fairness of allowing the case to proceed.

McHUGH J:   No, but when somebody brings an action years out time and in respect of a cause of action which is hitherto unknown to the law, the Court is obviously going to scrutinise the claim with some care before it allows you to avoid the limitation period and subject the defendant to a trial, which would probably be lengthy, in respect of a very speculative cause of action and which one could, I suppose, conjecture that costs would be irrecoverable.

MR GROSS:   Well, your Honour, it went past the point of ‑ ‑ ‑

HAYNE J:   And a trial which the Court concludes cannot be fair.

MR GROSS:   Yes, well, on the question of whether the trial can be fair, could I address that particular point.  Your Honours, it appears that the Full Bench took the view that the prejudice because of delay was overwhelming because of the passage of years and the nature of the allegations of injury and damage.  That, of course, is always a problem in any limitations application involving ancient allegations, particularly those that are harder to prove or disprove.

HAYNE J:   But why should this Court become involved in the assessment of the fairness of trial?  Do we not get to any question of fiduciary duty and actions of that kind only once we have got past the conclusion that the trial cannot be fair?

MR GROSS:   Yes.  In concluding the trial cannot be fair, it is first necessary to weigh into the equation the significance on the delay question of the fact that much of the prejudice because of delays are generated by the alleged breaches of fiduciary duty or breaches of the relevant obligations which are inherent in the original factual situation.  So, in other words, you cannot just say it is too long.  It is in the nature of these cases, where you have an abuse of the trust relationship, that will inhibit the capacity of the child promptly to take legal action in order to seek civil redress.  So that the vulnerability of the child is necessarily one which has not only a physical feature, but also one which relates to the inability of the child to appreciate what is happening in terms of injury and wrong and connection and where, of course, the child lacks the economic means to assert a cause of action.  So, unless you are taking the very nature of the allegations as part of working out what can be fair – and, of course, breach of fiduciary duty takes into account the relationships of dominance and vulnerability – unless you are weighing that in, all you are doing is turning cases away from the court because they are too old without ‑ ‑ ‑

HAYNE J:   How old was the plaintiff at the time of commencing the proceeding?

MR GROSS:   It seems to have commenced in 1996, so he would be 32 at that age, yes.  But ‑ ‑ ‑

McHUGH J:   I mean, even on the best view of it, so far as the ACT incidents were concerned, the matter was at least 10½ years out of time, was it not?

MR GROSS:   It depended on the timetable as to where the events occurred across a continuum up until about his 21st birthday or so, and there were a number of addresses involved, but ‑ ‑ ‑

McHUGH J:   But assuming that the applicant’s first visit to Australia was in December 1979, it was 17½ years delay to the time of the filing of the writ, was it not?

MR GROSS:   Yes, but we would submit you have to take into account not just the expiration of time, but the reasons consistent with the allegations of breach which give rise to that delay.  Now, you start off with infancy, but also once that infancy and the relationship of guardian and child has ceased upon adulthood, the person is already a long way behind the eight ball in terms of making any complaint or seeking any redress, so it is inherent in the nature of the conduct that you do have these problems, so ‑ ‑ ‑

McHUGH J:   But the ACT Limitation Act provides for suspension, does it not, in section 30 of that Act, provide for suspension during legal disability?

MR GROSS:   Yes, both infancy and emotional disability, and ‑ ‑ ‑

McHUGH J:   Well, you are 10½ years out time, were you not, even on the best view of it.

MR GROSS:   Well, it is a delay of that duration, yes.  Our submission is that it is necessary not merely to count the delay and look at the difficulties

in dealing with a claim of this nature after such a delay.  One really has to bring into the equation either the section 60 I considerations in relation to ignorance or, alternatively, the factors that enabled the case to be described in fiduciary duty terms.  Of course, that does involve not only the dominance and vulnerability, but also the natural sequelae in terms of inability to assert the rights and, of course, I suppose, the shame and embarrassment which comes in the wake not only of the alleged events, but also with the difficulty of having to make such allegations so late in the piece, which is the norm when, in fact, you have a child abuse situation.  So we would submit that those are the relevant matters concerning the case.

So far as public interest is concerned, we would urge the following matters:  that you do have the Full Bench saying that, in effect, the categories of fiduciary duty are closed so as to shut out, in effect, personal interests and personal injury.  We would submit that that is totally at odds with what has been decided in Canada and in New Zealand and it is an undue foreclosing of the categories of fiduciary duty.  We would also submit that in relation to limitations, it is necessary to recognise that the lower courts are having great difficulty in determining whether Taylor’s Case should be read so that significant prejudice does wipe out the claim for limitations purposes, or whether the test is the one of whether a fair trial is possible where that prejudice, even great prejudice, is a factor, and we would submit this case is a suitable vehicle to explore that aspect as well.  I think that completes my submissions.

McHUGH J:   Thank you, Mr Gross.  Yes, what have you to say, Mr Oslington?

MR OSLINGTON:   The key features of the judgments appealed from, your Honour, are first in the decision of the Full Court at 48 point 30 where their Honours said that there was “No suggestion…..if the appeal against his Honour’s refusal to extend time failed, the” summary judgment should be set aside.  Thus the only issue before this Court concerns the exercise of discretion in refusing to extend the limitation periods.

The trial judge, at 26 point 1 to point 11, rejected the applicant’s explanations for delay and rejected the applicant’s assertion that he was ignorant of his rights.  The Full Court took that into account as recorded at 51 point 24 to point 29.  The trial judge found that there would be “great prejudice to the respondent”.  That finding is at 26 point 15 to point 19, and was taken into account by the Full Court at page 51 point 30.  The Full Court noted the delay which had occurred at 68 point 10 to point 25.  The Full Court also noted the finding by the trial judge that he was not satisfied that the applicant suffered a “psychiatric illness”, and that appears at 69 point 15 to point 25.

In our respectful submission, the submissions of the applicant have not demonstrated any appellable error in the exercise of the Court’s discretion to extend time.  It was clearly open to both the trial judge and to the Full Court to take into account the strength of at least part of the applicant’s case, which the courts did, in considering the breaches of fiduciary duty claimed.

Contrary to the submission of my learned friend, a proper consideration of the Full Court’s judgment does not involve an absolute rejection of the possible availability of a claim based on breach of fiduciary duty.  The Full Court ‑ ‑ ‑

HAYNE J:   But would this Court get to that point, except having first addressed questions of prejudice and discretionary considerations that you have earlier outlined?

MR OSLINGTON:   Exactly, your Honour.  Yes, your Honour, and we would submit that based upon the findings of fact of the trial judge, accepted by the Full Court and not challenged by the applicant, there was a proper exercise of discretion.  I was merely trying to address what seemed to be at the forefront of my learned friend’s submissions.  We would say the Full Court did not absolutely reject the availability of the cause of action and, indeed, in a recent decision of Justice O’Loughlin he, in fact, relied on the Full Court’s decision in this case as providing a foundation that such a cause of action was not totally hopeless and that was in the Lost Generation Case.

McHUGH J:   We do not want to hear any further, Mr Oslington.

MR OSLINGTON:   Yes, thank you, your Honour.

McHUGH J:   Anything in reply, Mr Gross?

MR GROSS:   Yes, just one matter.  I appreciate the difficulty that is being posed is that if you have discretionary decisions on the facts in relation to the limitations application, you only reach the breach of fiduciary duty claim at the end of that process.  The trouble with that approach, we submit, is that until you have weighed into the equation whether there is a fiduciary duty existing and the ramifications for that duty of the conduct complained of, if the allegations are accepted, you are not providing an even playing field on which to determine whether a fair trial is possible.

If, on the other hand, by reference to the other ratio in Taylor’s Case, you are asking whether there is extreme prejudice which, in effect, makes it too difficult for the defendant to defend against, you have to take into account as part of that equation that some of the prejudice is self-generated

by the covert and opportunistic behaviour which is alleged, if in fact the allegations are true.

Now, until you weigh both factors into the equation, the result on the extension of time application approaches is necessarily weighed in favour of the defendant.  I appreciate that it is difficult because you are dealing with claims which ex hypothesi are denied and they are allegations.  Therefore, you cannot give weight to the allegation as being true in order to override the time.  But we would submit the error is a more subtle one, namely, unless the Court recognises that this is what is at stake if the allegations are true, you are not giving proper value in the plaintiff’s favour to the consequences of the delay, the delay being the consequence of the conduct complained of.  So that fairness requires that you look at what are the allegations on both sides and what are the relevant duties.  If you have eliminated a key part of that duty, you have not, really, anything left with which to counter prejudice or to point out that the prejudice itself should not be given the effect that is being contended for.

McHUGH J:   Thank you. 

Given the discretionary nature of a decision concerning an application for an extension of time in which to commence proceedings, we do not think that an appeal would have any reasonable prospects of success.  For that reason the application for special leave to appeal is dismissed.

MR OSLINGTON:   We would seek an order for costs, your Honour.

McHUGH J:   Nothing you can say about that? 

MR GROSS:   No, your Honour.

McHUGH J:   The application is dismissed with costs.

AT 9.54 AM THE MATTER WAS CONCLUDED