Petricca v Kinnas

[1999] HCATrans 292

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S1 of 1999

B e t w e e n -

ROBERTO PETRICCA

Applicant

and

ANTONIUS KINNAS

Respondent

Application for special leave to appeal

GAUDRON ACJ
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 10 SEPTEMBER 1999, AT 11.34 AM

Copyright in the High Court of Australia

MR P.W. BATES:   I appear for the applicant.  (instructed by Autore & Associates)

MR J.D. HISLOP, QC:   May it please the Court, I appear with my learned friend, MR I.J. McGILLICUDDY, for the respondent.  (instructed by Grahame Goldberg Partners)

MR BATES:   Your Honour, this is an application for special leave in relation to an application to commence proceedings out of time under section 52 of the Motor Accidents Act of New South Wales.  While the provision in question can be classed in a general sense as a limitation provision, it is a specific limitation provision and the provisions of section 52 say that in fact the Limitation Act does not apply.  This is relevant to the special leave points that arise because whilst the applicant accepts that in a general sense section 52 is a limitation provision, the applicant does also contend that the provisions that apply in a discretionary sense by way of general principle can vary in some respect between different kinds of limitation provisions. 

The applicant says the general principles that were relevant to the exercise of discretion under section 52 of the Limitation Act were correctly set out by the New South Wales Court of Appeal in the earlier decision of Salido v Nominal Defendant (1993) 32 NSWLR 524. When this matter came on before the primary judge, his Honour Judge Rummery in the District Court in 1997 in relation to an accident which had occurred in 1989, his Honour approached the exercise of his discretion in terms of the principles that had been laid out in Salido’s Case as governing the exercise of that discretion.

In Salido’s Case the Chief Justice his Honour Justice Gleeson and the President Justice Kirby indicated that the exercise of discretion under section 52 of the Motor Accidents Act is a broader discretion than the corresponding discretion under the Limitation Act.  His Honour Judge Rummery - - -

GAUDRON ACJ:   But it is still limited in some way, is it not?

MR BATES:   It is still limited.

GAUDRON ACJ:   By what is it limited, in your submission?

MR BATES:   Your Honour, it is a discretion and has to be exercised judicially and in the - - -

GAUDRON ACJ:   That does not tell us much.

MR BATES:   Yes, your Honour, but in Salido’s Case the Chief Justice and Justice Kirby gave some guidelines which they felt would help primary judges apply their discretion and Judge Rummery, in fact, took that approach.  He actually applied - in his judgment he went through the discretionary guidelines that have been set out in the - - -

GAUDRON ACJ:   Is not the difficulty with this case that his Honour Judge Rummery treated the prejudice – the question of prejudice to the defendant - respondent in this case – as being, in part, whether it was unable to answer a case.  That is at page 11.  Even on the Salido principles, his Honour’s notion of prejudice seems to be a little at large, does it not?

MR BATES:   Yes, your Honour, but where Judge Rummery was correct in his approach was that prejudice was one of a number of factors relevant to the exercise of discretion.  The fundamental error or principle that the Court of Appeal made was that they reduced the whole question of discretion to one of prejudice.

GAUDRON ACJ:   Well, did they?

MR BATES:   Yes, your Honour.  For example, if I can take your Honours to the relevant passages.  It is set out most clearly in the main judgment of Justice Handley at page 30 of the application book.

CALLINAN J:   I have just read that and I was looking at what his Honour Judge Rummery said at page 11 and his Honour did say:

So the defendant is not in the position where he simply is unable to answer any case which may be presented –

That is not the right test, is it?  That was really the test that I think has been criticised by the Court of Appeal at page 30.  It is a question of prejudice.  The prejudice does not have to be such that a defence becomes impossible.

MR BATES:   No, your Honour, but Judge Rummery was correct in approaching the matter on the basis that the issue of prejudice or alleged prejudice was only one of the factors to be taken into account.

GAUDRON ACJ:   That may be so but he may, nonetheless, have fallen into error in the way he took prejudice into account. 

CALLINAN J:   You see, above that passage on page 11 to which I referred you, his Honour seems to have taken into account the possibility arising out of delay of prejudice to the applicant himself because his Honour said it was “a two-edged sword”.  Now, any possible prejudice to the applicant must be an irrelevant matter, must it not?

MR BATES:   Yes, your Honour, but in terms of the concept of prejudice – the main authority, of course, which was relied on in the Court of Appeal was a decision of this Court in Brisbane South v Taylor and the question of prejudice ultimately is the question of whether a fair trial can be held.

CALLINAN J:   No, but just if you do not mind, if you would apply yourself to what I am suggesting, that possible prejudice, because of delay to the applicant, is not a relevant consideration.

MR BATES:   Yes, your Honour.

CALLINAN J:   Well, it is a consideration, however, that Judge Rummery seems to have taken into account at the top of page 11 because he talks about delay being “a two-edged sword”, obviously implying that it was a matter of some disadvantage to the applicant also.

MR BATES:   Yes, your Honour, but although he made that comment, I submit it was on the basis of the exercise of his discretion.

CALLINAN J:   Well, it seems that it is one matter that he did take into account and that may be sufficient for the discretion to have miscarried, to take into account an irrelevant consideration.  If he was in error in that respect, then it fell to the Court of Appeal to exercise the discretion in a correct way.

MR BATES:   Yes, your Honour, but even if one accepts for the sake of the argument that his Honour Judge Rummery had approached prejudice in some respects which are not entirely correct, the Court of Appeal when it then went on to re-exercise its own discretion also fell into error.  Your Honours, the applicant’s case would be that the discretion was approached properly by his Honour Judge Rummery but - - -

CALLINAN J:   What was the worst error of discretion that the Court of Appeal made?

MR BATES:   The worst error was twofold, your Honour.  Two errors.  First of all, that they took the view that prejudice was the only discretionary factor.

CALLINAN J:   Where do they do that?

MR BATES:   At page 30 in the judgment of Justice Handley where the Court of Appeal seems to have regarded themselves as bound by the dicta in this Court in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 to hold that - - -

GAUDRON ACJ:   It is a discretion to grant, not a discretion to refuse.  Now, you cannot quibble with that, can you, Mr Bates?

MR BATES:   No, your Honour, but further down – this is the really important passage at about line 15:

Taylor’s case establishes that the ultimate onus is always on the applicant –

I do not dispute that, your Honours –

and moreover –

this is a passage that becomes significant and, we say, in error, your Honours, that –

Toohey and Gummow JJ, in their joint judgment, held that the discretion should not be exercised where there will be “material prejudice” to the defendant or where the delay has made the chances of a fair trial “unlikely”. 

Now, we submit that in fact Taylor’s Case does not establish that proposition.

GAUDRON ACJ:   What do you say it establishes?

MR BATES:   We say that Taylor’s Case establishes that prejudice is a fact to be taken into account.

CALLINAN J:   Was it not the case that in the Court of Appeal that the matter that was really focused upon was prejudice and the degree of prejudice?  Is not the Court of Appeal merely responding to what was the substantial argument that was presented by both sides?

MR BATES:   Your Honour, we say that in the Court of Appeal, the Court of Appeal approached the matter wrongly in terms of general principle in that its - - -

CALLINAN J:   No, but I mean in these passages.  The Court of Appeal is really responding to the argument on the issue that the parties treated as, in substance, the real issue.

MR BATES:   No, your Honour.  The real issue that the applicant regarded as an issue was whether it was fair and just for the discretion of the exercise in his favour.

GAUDRON ACJ:   Yes.  What does that mean?

MR BATES:   That meant that his Honour would have regard to a variety of factors including the issue of prejudice.

GAUDRON ACJ:   What was not taken into account that should have been taken into account?  That is ultimately what your submission comes down to, is it not?

MR BATES:   Yes.

GAUDRON ACJ:   And what is it that you say should have been taken into account that was not by the Full Court?

MR BATES:   Substantially, the applicant’s reasons for not proceeding earlier with his claim which were discussed by Judge Rummery.

GAUDRON ACJ:   If you start from the proposition that the discretion is a discretion to grant an application, not a discretion to refuse it, the reasons may well be reasons why a discretion would not be exercised if the inadequacy of them – but, surely, the adequacy of them simply gets your foot in the door, as it were.  You have to make good the proposition that the adequacy of your reasons is itself sufficient to - - -

MR BATES:   Your Honour, those included also the fact that there was an early admission of liability by the defendant; the fact that the defendant’s own doctors had had – the defendant was in possession of two medical reports which it had solicited at an early stage.

GAUDRON ACJ:   Well, those are questions going to prejudice though, are they not?  They are matters that limit prejudice.

MR BATES:   Yes, your Honour.

GAUDRON ACJ:   On one view, the admission of liability might magnify it.

MR BATES:   Your Honour, the fact that the applicant, by virtue of his condition – it was not until his marriage – and this is particularly at page 8 of the application book, your Honour, about line 10:

the applicant through his counsel seeks to explain the lack of direct medical evidence addressing his inability to make a decision by pointing to the apathy and inertia and indeed torpor into which the applicant settled and remained for a very long time –

and then about line 15:

That proposition is, in my opinion, amply supported by the material the Court has when looked at in the context of the affidavit of the applicant’s wife – - -

CALLINAN J:   But the Court of Appeal took that into account at page 25 because the Court of Appeal recites those facts.

MR BATES:   Yes, your Honour, but the - - -

CALLINAN J:   Your complaint is that the Court of Appeal should have given more weight to those matters than to other matters, or something of that kind.

MR BATES:   No, your Honour, the gravamen of the complaint is that the Court of Appeal has reduced the discretionary considerations solely to the issue of prejudice, and this is certainly not the only relevant factor.  If I could take your Honours for a moment to Salido’s Case to amplify - - -

CALLINAN J:   Well no, that is not right, I am sorry.  If you look at page 26, the Court of Appeal has referred to another factor and that is the absence of an explanation for delay.  If you look at line 9 on page 26 to line 14 you will see that the Court of Appeal directed attention to at least one of the statutory matters, provision of a full and satisfactory explanation.  So, it is not right to that the court only looked at prejudice and misdirected itself in relation to prejudice.  The court had a look at a wide variety of matters including one right at the forefront of the statutory provision.

MR BATES:   Yes, your Honour.

CALLINAN J:   And held that there was no explanation for a period of 2 years 7 months.

MR BATES:   Yes, your Honour, but in terms of the statutory scheme, the issue of a satisfactory explanation is a separate issue from the issue of the extension of time.  It is a separate requirement.

CALLINAN J:   It is a necessary requirement.

MR BATES:   Yes, your Honour. 

CALLINAN J:   And it may be relevant to the exercise of the discretion also.

MR BATES:   Yes, your Honour, but the applicant says that in approaching the matter as his Honour did in terms of the principles in Salido, that was an approach which was entirely appropriate and reasonable and that what has happened in the Court of Appeal essentially is that discretionary matters have been overly reduced to issues with regard to issues of prejudice and that other factors have not been appropriately regarded by the Court of Appeal and that his Honour did approach the issues of discretion in a way that was permissible, at first instance, including on the issue of prejudice.

The passages that your Honours have taken me to already with regard to how his Honour Judge Rummery approached the issues of prejudice, we would submit, on behalf of the applicant, that his Honour was directly himself correctly to the ultimate issue on the question of prejudice, whether or not a fair trial could be held but, your Honour, further, we say this:  the point that the Court of Appeal has not addressed is this, that even if there is some prejudice, can that be overcome by other discretionary factors?  That is what we say is the critical aspect of the failure of the Court of Appeal to approach its own discretion correctly.

GAUDRON ACJ:   Those discretionary factors being, in essence, that otherwise the applicant will not have a cause of action?

MR BATES:   No, your Honour.

GAUDRON ACJ:   What are they?  That is, explain the delay?

MR BATES:   Well, his Honour at first instance found there was an adequate explanation of delay.

GAUDRON ACJ:   Yes, but is that what - - -

MR BATES:   No, the other factors being the explanation of delay, his inability to make a decision - - -

GAUDRON ACJ:   Well, that is the explanation of delay, is it not?

MR BATES:   Yes.  No, but it also goes to the justice of whether it is fair and reasonable – it also goes to the issue of whether it is fair and reasonable.

GAUDRON ACJ:   What you have to say is that the ability to explain the delay can trump prejudice, do you not?

MR BATES:   Yes, we say it is one of the factors.

GAUDRON ACJ:   You have to say that.

MR BATES:   Yes.

GAUDRON ACJ:   So your ability to explain the delay can in some circumstances be the beginning and end of it?

MR BATES:   No, we do not say it is the beginning and end of it.  We say it is one of the factors that would be taken into account in his Honour in exercising his discretion properly.

GAUDRON ACJ:   Well, the trial judge took it into account and the Court of Appeal took it into account.  They did not think there was a full adequate explanation of it.

MR BATES:   Yes, your Honour, but what the Court of Appeal did not consider was, as a matter of principle, the relationship between the issue of prejudice and whether there were other factors that can, in a sense, to use your Honour’s language, “trump it”.  This is the fundamental error of principle:  what are the factors and where does it cut in that can be trumped?  This is the point that was also emphasised, we would submit, in Salido’s Case.  But not only Salido’s Case, we say what the Court of Appeal simply has not really given consideration to as a matter of principle is how does one, as a matter of discretion, balance the issue of delay with other factors such as a satisfactory explanation.  We say that where his Honour Judge Rummery was correct in his approach was that he was balancing the issue of prejudice in that sense with other factors.

Also, your Honours, in Salido’s Case in the guidelines that were stated by the Chief Justice there are number of factors set out including prejudice as one of them.  There are other factors as well.

CALLINAN J:   Which page. 

MR BATES:   At page 532E, your Honour, through to 533A.

CALLINAN J:   The Chief Justice was not enacting the statute when he said this. 

MR BATES:   No, of course, he was not, your Honour.  Of course he was not.  But the point is, your Honour, only one of the factors which is mentioned there, No 4, was that prejudice was a factor to be taken into account but it did not become a sole trumping factor.  The approach of the Court of Appeal makes prejudice the trumping factor of - - -

GAUDRON ACJ:  

and may in some cases be of decisive importance.

MR BATES:   In some cases, your Honour.

GAUDRON ACJ:   Well, it must be if, for example, it would be impossible to have a fair trial of the issues at all.

MR BATES:   Yes, your Honour.  But, your Honour, we would submit it was open to the trial judge to find, as he did, that the prejudice that did exist did not in that sense render it unfair.  Although he did not express himself most articulately, he did - - -

GAUDRON ACJ:   No, he rather suggested that there was no prejudice because the defendant could use the delay to attack the plaintiff’s credibility.

MR BATES:   No, your Honour, with great respect, what he said was that having regard to all the matters, he felt, on the evidence, that a fair trial could be held, notwithstanding some prejudice.

GAUDRON ACJ:   Yes.  He said he thought the disadvantages were not that great.

MR BATES:   Yes, your Honour.

GAUDRON ACJ:   And without identifying them in detail, the only places on which you could give meaning to that is what is said at page 11, where because:

delay…..a two-edged sword….the defendant is not in the position where he simply is unable to answer –

the case.

MR BATES:   Yes, your Honour, but he also said at page 10, your Honour ‑ ‑ ‑

GAUDRON ACJ:   “It is not an insurmountable matter” - - -

MR BATES:   Yes, your Honour, in a sense that it was - - -

GAUDRON ACJ:   But he does not say what it is, the forensic disadvantage.  It is not identified.

MR BATES:   Yes, your Honour, but that has to be read in the context of the remarks, but I would submit that is clear when one reads that with the bottom of page 9, about lines 20, 25. 

If the accident had not been reported…..I would accept that the submissions made on behalf of the respondent –

so, what we say is this, your Honour, that his Honour has actually found that a fair trial can be held in his opinion because of the matters set out at the bottom of pages 9 and 10.  We say that is a fundamental reason why his Honour’s discretion was correct on the issue of prejudice because his Honour has carefully considered whether a fair trial can be held and he has stated quite clearly that if that had not occurred a fair trial could not have been held, but in his assessment a fair trial can be held because of what happened at the bottom of page 9. 

His remarks at page 10, at lines 10 to 15, are in that context.  We submit that was open to his discretion and that was a proper assessment that a trial judge could make and he was entitled to take the view as he did, that the other factors that I have already mentioned trumped whatever slight prejudice might flow from that.  But when the matter went into the Court of Appeal, the Court of Appeal did not give any consideration to this aspect of relating the degree of prejudice to the issue of trumping.  Thank you, your Honours.

GAUDRON ACJ:   Thank you, Mr Bates.  We need not trouble you, Mr Hislop.

An analysis of the reasons given at first instance discloses that there was no real consideration of the prejudice that the respondent was likely to suffer in consequence of the failure to commence action within time.

In those circumstances, it was open to the Court of Appeal to find that the discretion to extend time had miscarried and to exercise the discretion afresh.  Moreover, we see no error which would warrant the conclusion that the Court of Appeal’s discretion miscarried.  Accordingly, special leave is refused.

MR HISLOP:   We would seek costs, if it please the Court.

MR BATES:   Your Honour, as set out, we would ask the Court to make no order as to costs in this case.  Liability was admitted.  This will compound the applicant’s situation and we ask the Court, in its discretion, not to order costs.

GAUDRON ACJ:   Mr Hislop, do you wish to push it in circumstances where you have admitted liability for the accident in negligence and the only real question is whether proceedings can now be brought?  Do you push the application for costs?

MR HISLOP:   Well, I simply put to the Court that it is the usual order and the reason the costs have been incurred is the fact that an application has been made to this Court.  Beyond that - - -

GAUDRON ACJ:   I know it is the usual order but it is not usually the case that there is an admission of liability.

MR HISLOP:   Yes.  Well, I would submit that that really is irrelevant, but it is entirely a matter for the Court, of course, as to how they exercise their discretion on costs.

GAUDRON ACJ:   In the present circumstances where liability has been admitted and yet there is no ability to pursue that liability, we think it is appropriate that there be no order as to costs.

AT 12.01 PM THE MATTER WAS CONCLUDED