Regal Pearl Pty Ltd v Chen & Ors

[2003] HCATrans 491

[2003] HCATrans 491

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S470 of 2002

B e t w e e n -

REGAL PEARL PTY LIMITED

Applicant

and

TO HUNG

First Respondent

GREAT OCEAN PRODUCTS PTY LIMITED

Second Respondent

TAI KWAN SEAFOOD PTY LIMITED

Third Respondent

Office of the Registry
  Sydney  No S471 of 2002

B e t w e e n -

REGAL PEARL PTY LIMITED

Applicant

and

JANE RALSTON STEWART

First Respondent

GREAT OCEAN PRODUCTS PTY LIMITED

Second Respondent

TAI KWAN SEAFOOD PTY LIMITED

Third Respondent

Office of the Registry
  Sydney  No S472 of 2002

B e t w e e n -

REGAL PEARL PTY LIMITED

Applicant

and

EUGENIA ROZENBERG

First Respondent

GREAT OCEAN PRODUCTS PTY LIMITED

Second Respondent

TAI KWAN SEAFOOD PTY LIMITED

Third Respondent

Office of the Registry
  Sydney  No S473 of 2002

B e t w e e n -

REGAL PEARL PTY LIMITED

Applicant

and

EVA AGNES MARKHAM

First Respondent

GREAT OCEAN PRODUCTS PTY LIMITED

Second Respondent

TAI KWAN SEAFOOD PTY LIMITED

Third Respondent

Office of the Registry
  Sydney  No S474 of 2002

B e t w e e n -

REGAL PEARL PTY LIMITED

Applicant

and

SHEN PING CHEN

First Respondent

GREAT OCEAN PRODUCTS PTY LIMITED

Second Respondent

TAI KWAN SEAFOOD PTY LIMITED

Third Respondent

Applications for special leave to appeal

GLEESON CJ
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON TUESDAY, 2 DECEMBER 2003, AT 9.32 AM

Copyright in the High Court of Australia

MR D.F. JACKSON, QC:   If the Court pleases, I appear with my learned friend, MR R.A. CAVANAGH, for the applicant in each of the matters.  (instructed by Holman Webb)

MR P.J. DEAKIN, QC:   If the Court pleases, I appear for the second respondent in each of the matters with MR J.B. TURNBULL.  (instructed by McCabe Terrill)

GLEESON CJ:   There is a certificate from the Deputy Registrar that in the matters of Regal Pearl v Hung, Stewart, Markham and Chen she has been informed by the solicitors for the first respondents that the first respondents will submit to any order of the Court save as to costs and in relation to Regal Pearl v Rozenberg she has been informed by the solicitor for the first respondent that no appearance will be filed for the first respondent, nor will the first respondent participate, and she has been informed by the solicitor for the third respondent that the third respondent submits to the order of the Court save as to costs in all of these matters.

MR JACKSON:   Your Honours, there are two issues in the case:  one, contribution on the ground of co‑ordinate liability; the other, negligence.  The negligence issue is supplementary to contribution.  It is irrelevant if we fail on contribution.  The complaint we make about the contribution issue is that the Court of Appeal refused to deal with the claim.  The refusal occurred because the Court of Appeal first held there was no apposite ground of appeal and, secondly, held that the claim for contribution had been abandoned at the trial.

GLEESON CJ:   Where do we find that?

MR JACKSON:   Your Honours will see the Court of Appeal commencing at – there are three passages.  The first is page 56, paragraphs 50 and 51, which are of an introductory nature and your Honours will see that at the bottom of page 56, in the last sentence:

Regal Pearl also submits that his Honour should have found that the importer was liable pursuant to ss 74B and 74D of the Trade Practices Act.

At the top of the next page, in the second sentence, their Honours say:

The pleadings disclose that the only claim against the importer by the appellant was in negligence –

on the one hand –

and for contribution on the basis of co‑ordinate liability –

on the other.  The Court of Appeal then at page 58 dealt with the issue in paragraphs 60 through to 68.  May I identify, your Honours, exactly where the two things that I referred to earlier appear.  So far as the ground of appeal is concerned, that is at paragraph 64, and then the second issue, the issue of being abandoned, your Honours will see referred to in conclusion at paragraph 68.

May we say a number of things in relation to that.  The first thing is that it was absolutely clear at the trial that there was such a claim.  The judge understood it.  Your Honours will see it referred to in two passages in his reasons at page 3, lines 22 to 24, where your Honours will see the judge saying:

The Restaurant company is also claiming contribution from the importer and the wholesaler on the basis of co‑ordinate liability.

Your Honours will see his Honour deals with it, albeit briefly and perhaps unsatisfactorily, at page 10, between lines 15 and 20 and your Honours will then see the order which he made at page 11, paragraph 3.

CALLINAN J:   Mr Jackson, I may or may not be correct about this, but what about page 3, line 25?  Did that finding there provide a complete defence to ‑ ‑ ‑

MR JACKSON:   In our submission, your Honour, it was wrong.  If it were right, it would be a complete defence, but the point we seek to make about it, your Honour, is that if one goes to the Court of Appeal, we are endeavouring to litigate that issue in the Court of Appeal and were not permitted to.

CALLINAN J:   The Court of Appeal does refer to that finding somewhere.  It seems to be a rather tentative finding, but assume it is a finding at the moment.  Where does the Court of Appeal deal with that, Mr Jackson?

MR JACKSON:   My learned friend says 49, but that is a recitation at paragraph 23.  So your Honour will see that there.

CALLINAN J:   In any event, your response is that was precisely one of the matters that you wanted to litigate on appeal.

MR JACKSON:   Of course, your Honour, and if I could just deal with what the Court of Appeal did, it is plain that there was, first of all, to take the minor point, a relevant ground of appeal.  You will see it at page 16.  These notices of appeal are in similar form, but page 16 sets out the grounds and then grounds 11 and 12, your Honour, at page 17.  In the orders sought one sees (ii) on the same page and (iv)(e) and (h).  So that is the first thing.

The second thing, your Honours, is that the notion that the claim had been abandoned, with respect, quite misunderstands the pleadings.  Could I go for a moment to page 103.  These are our submissions in this Court.  Your Honours will see in paragraph 10 the position simply was our cross‑claim against the importer had contained two relevant parts.  One, which we deleted because in the end it could not succeed, was a direct claim by us against the importer based on sections 74B and 74D of the Trade Practices Act.  It was deleted for the reasons your Honours will see at page 106, paragraph 23.  It could not succeed because we were not persons who, in terms of the statute, had a right directly against the importer.

What we did not delete, however, was the second aspect, and that was the claim which is paragraph 23.  We have extracted it, your Honours, at page 103, paragraph 10, and that was that:

“… if it should be held that upon any cause or causes of action pleaded in the Statement of Claim the …(applicant)… and the …(importer)… are both liable to the Plaintiff for the same damage then –

to put it shortly, we sought contribution and it was clear, your Honours, that that remained live.  The primary judge had recognised that.  Your Honours will see that it was also clear that each plaintiff was claiming under sections 74B and 74D in respect of the importer.  Your Honours will see that referred to at page 119, where we have extracted what took place at the trial at paragraphs 1 to 4 and, in particular, we refer in paragraph 2 to what took place at the trial on 16 May. 

Your Honours will see that Mr Blacket, who was counsel for one of the plaintiffs, then said, towards the bottom of the page, that it was “the intention of all of the plaintiffs that they are relying on” those provisions of the Trade Practices Act and then at the top of the next page the judge said he allowed amendments “to bring the pleadings into conformity”.  Your Honours will then see what happened in paragraph 3.  No one disagreed, some agreed specifically.

If I could go then to paragraph 4, our learned friends assert that we had abandoned the case based on the liability of the importer to the plaintiffs.  If one looks then at what took place – and we have referred to this in paragraphs 5 and following, at page 120 – what then took place was that Mr Fagan – paragraph 6 – who was appearing for us said “perhaps my case should go next”.  He then set out the nature of the cross‑claim that was being made, and speaking about paragraph 23, which was the one that made the cross‑claim, or alleged the cross‑claim, your Honours will see at the top of page 121 the first two paragraphs setting out the nature of the claim that was being made.  From our point of view that part made it absolutely clear we were making the claim.

Could I take your Honours then back to page 108 and your Honours will see what then occurred.  Paragraph 26(a) we filed written submissions in which we sought a division of liability on that basis.  Your Honours will see paragraph 26(b).  We submitted orally that they should have been liable and paragraph 26(c) they responded to it.

GLEESON CJ:   What, in substance, was your answer to the proposition appearing on page 49, paragraph 23?

MR JACKSON:   Your Honour, if one goes to the terms of ‑ ‑ ‑

CALLINAN J:   Section 75AK(1)(c), was it not, Mr Jackson?

MR JACKSON:   Your Honour, 75AK is not, in our submission, a defence to a claim under 74B and 74D, but rather in respect of another provision, 75AC.  In any event, the terms of it are not, in our submission, apposite to the facts of this case.  Your Honour, I do not know if I can advance it beyond that, but that is essentially what the case was.  So our submission is that the Court of Appeal was in error in their rulings in page 58, paragraph 63.

CALLINAN J:   Mr Jackson, why do you say it was not a defect within, 75AC(1)?  Is it the argument that 75AK does not apply because there was no defect within the meaning of 75AC?  Is that the argument?

MR JACKSON:   Yes.

CALLINAN J:   Why was not the presence of the virus in the prawns a defect within the meaning of 75AC?

MR JACKSON:   Your Honour, it is possible for it to be a defect.  Assuming it to be a defect, what one has to have is then a case, so far as the provision is concerned, one which is, in our submission, based on a relevant provision.  If one goes to the terms of section 74B, what your Honours will see is 74B and 74D in each case provide a defence which your Honours will see, for example, in 74D(2) does not apply if the goods are of “merchantable quality” and so on.  So the claim that was being made was that – your Honours will see that goods are “of merchantable quality” in terms of section 74D(3) and this was simply a case, to put it shortly, that fell within that provision.

CALLINAN J:   You say they were fit for the purpose because if sufficiently cooked, they would not have been dangerous.  I do not quite follow the argument.

MR JACKSON:   Your Honour, what we have is a situation where, if one goes to 74D you will see a corporation, namely the importer, supplying goods manufactured to another person, which is the wholesaler.  In paragraph (b) a person, in fact the wholesaler, “supplies the goods . . . to a consumer”.  If the “goods are not of merchantable quality”, then the consumer has suffered damage.  Now, the importer is then liable.  One sees then the circumstances in which they do not apply.

Now, your Honours, the goods, in our submission, were not of merchantable quality and the provision simply applied and the exception did not apply.  Your Honour, that, in our submission, is simply the ‑ ‑ ‑

GLEESON CJ:   Could you go through that again?  You do not challenge the factual finding that the defect could not be discovered having regard to the state of scientific or technical knowledge at the time of supply?

MR JACKSON:   No, we do, your Honour.  This is not the case of you have to open each oyster to find it.  What you have is a very large quantity of prawns, frozen prawns – one of them could easily be tested to see what the condition was.

CALLINAN J:   Ten tonnes, I think it was.

MR JACKSON:   Yes, a lot of prawns.  So, your Honours, we are in effect challenging that, but that is the issue that has not been resolved by the Court of Appeal.

GLEESON CJ:   That sounds like a pretty round factual issue.  Was there argument about that in the Court of Appeal?

MR JACKSON:   Your Honour, the case in the Court of Appeal was one where we sought to rely on the provisions to which I have referred and the Court of Appeal simply did not deal with this issue.

GLEESON CJ:   I am just finding it difficult to imagine that the Court of Appeal would not notice that there was a dispute about the factual question of whether the defect could have been discovered having regard to the state of scientific or technical knowledge at the time of supply.

MR JACKSON:   Your Honour, the position in relation to it was that the issue had been dealt with in the most light fashion by the primary judge.

CALLINAN J:   But, Mr Jackson, there had been a deal of scientific evidence called, had there not?

MR JACKSON:   Yes.  This case has been dealt with in the most passing fashion, with respect, by the primary judge.  We sought to succeed on the issue in the Court of Appeal.  When we get to the Court of Appeal, the case was really dismissed out of hand, with respect.

CALLINAN J:   You say paragraph 23 is just pure narrative, that the issues to which it refers were never resolved by the Court of Appeal.

MR JACKSON:   That is so, your Honour, never resolved because if you go back to page 59, paragraph 68, you have the view taken:

the appellant, having abandoned its cross‑claim against the importer . . . is not entitled to seek to run the claim on the appeal.

CALLINAN J:   So that really, you say, further establishes that that is purely narrative because the court has expressed the view that it does not have to deal with it further.

MR JACKSON:   That is so, your Honour, and your Honours will see it at the top of page 59 also.  So the court just has not dealt with the issue.

CALLINAN J:   Mr Jackson, was the 75AK defence pleaded at all?

MR JACKSON:   It was not run at the trial.

CALLINAN J:   Well, the judge seems to have made a finding or a tentative sort of a finding about it, but it was not pleaded by the importer?

MR JACKSON:   Not pleaded, no, your Honour.  That is why I have expressed with some reserve the fact that the judge had dealt with the case.  He dealt with the case by saying these things, but he dealt with another case really.

CALLINAN J:   It is the sort of thing you would expect to be pleaded because the scientific evidence that was called seemed to be concerned with whether cooking at a certain temperature would eliminate the virus.

MR JACKSON:   That is so, your Honour, yes.

CALLINAN J:   Whereas there does not seem to be any evidence about the state of scientific knowledge generally in relation to this issue.

MR JACKSON:   That is so, your Honour, yes.  The case dealt with the effect of cooking and whether there had been other causes, for example, condition of our restaurant or whether some person at the restaurant had conveyed the disease, but that was the case.  That is why, your Honours, we say it was a case where we had a claim under 74B and 74D and the case was never effectively resolved.  Touched on in the primary judge, not dealt with in the Court of Appeal.

CALLINAN J:   That is the only mention of 75AK in the whole of the judgments of the Court of Appeal, is it?

MR JACKSON:   I do not think there is any at all, your Honour.  In fact, the only mention of section 75AK was in part of a cross‑claim that we had abandoned, nothing raised by the other side.  Your Honours, could I just say something about the other part of the case.  Your Honours will see that the Court of Appeal would not entertain our appeal on the finding of negligence against us.  That had two aspects.  Your Honours will see at page 45, paragraph 6, a reference to grounds 4, 5 and 6 of the notice of appeal and then at page 46, your Honours will see paragraphs 13 through to 16.  Your Honours, what the Court of Appeal essentially said was that we were seeking to appeal against reasons rather than against the order.  Your Honours, I see the time has expired.

GLEESON CJ:   Thank you, Mr Jackson.  Yes, Mr Deakin.

MR DEAKIN:   Your Honours, could we start by just handing to your Honours a copy of the original cross‑claim that was filed by the present applicant in each matter, but conveniently just in one matter which happens to be the Stewart matter.  Could I inquire as to whether the bundle that was sent to the Court which includes the last version of the cross‑claim is with your Honours?  The reason for me troubling your Honours with the pleading is because it is relevant to the question of abandonment which is one of the matters that my learned friend has raised with your Honours.

GLEESON CJ:   The bundle has a document called “Amended First Cross Claim of First Defendant”.  Is that the one you are referring to?

MR DEAKIN:   Yes, can I take your Honour to that one secondly.  The first document is the one that I just handed to your Honour which is the original cross‑claim.  I do not need to trouble your Honours with the details of it, but your Honours will see that it invoked and specifically pleaded a considerable number of trade practices remedies and, in particular, can I take your Honours to page 3 of the document where your Honours see in the case against the importer, we being in this pleading the second cross‑defendant, there is specific reference to 75AD, 75AE, 74B, 74C, going down the page to the foot of page 3, paragraph 18, 74D.

GLEESON CJ:   This is Mr Jackson’s client’s ‑ ‑ ‑

MR DEAKIN:   This is Mr Jackson’s client’s claim against my client, the second cross‑respondent. 

GLEESON CJ:   Yes.

MR DEAKIN:   This is the document which was abandoned and in lieu thereof it is the amended cross‑claim that is in the bundle that we handed to your Honours.  So this is what the Court of Appeal, correctly we submit, construed as the abandonment of claims under, relevantly, 74B, as pleaded in paragraph 11, and D, as pleaded in paragraph 18, because when one then turns to the document which was filed prior to the commencement of the trial, although the document expanded into seven pages, there is no reference in that document at all to anything relevant to the Trade Practices Act, not a mention.  Not a single section is invoked anywhere in that document saying we wish to rely upon any count in the Trade Practices Act.

GLEESON CJ:   Now, what did the trial judge say about it?

MR DEAKIN:   The trial judge – in fairness, my learned friend has taken your Honour to it.  He, apart from that reference to AK, which we will deal with in a moment, his Honour said “I found the negligence established against” Mr Jackson’s client and “I have found a breach of sale of goods and I find no negligence on the part of the importer and it is unnecessary for me to deal with trade practices matters”.

GLEESON CJ:   But when he is referring on page 3, line 25, “to claims under the Trade Practices Act” is he dealing with the consumers’ claims?

MR DEAKIN:   I have to be perfectly frank with your Honour and make three concessions against interest essentially.  Firstly, section 75AK is irrelevant to a claim under sections 74B and 74D.  The AK defence is only relevant to what is described in its opening words as a liability action, and a liability action is defined in 75A of the Act to mean an action under a whole raft of sections that does not include 74B and it does not include 74D.  So AK is simply irrelevant and it was treated as irrelevant.  Quite why the trial judge put it in as a throwaway line, I do not really know, but, your Honour, the fact of the matter is it is irrelevant to 74B and it is irrelevant to 74D.

GLEESON CJ:   Whose were the “claims” being referred to on line 25?  Are they Mr Jackson’s cross‑claims or are they the claims of the injured consumers?

MR DEAKIN:   There were claims by the injured consumers invoking trade practices remedies in the plaintiff’s claims.

GLEESON CJ:   So it is not clear whether Acting Judge Woods is referring to claims or cross‑claims.

MR DEAKIN:   That is true, your Honour, but we would submit in all likelihood he is referring to claims and not cross‑claims because the plaintiff brought an action against the importer and the wholesaler as well as Mr Jackson’s client.  But, your Honour, 75AK is simply irrelevant to the matters before your Honours because this is an attempt now by the restaurant, the applicant, to bring in trade practices counts, two in number, 74B and 74D, which were abandoned before the trial commenced.

GLEESON CJ:   By “bring in” you mean bring into their cross‑claim?

MR DEAKIN:   Yes, and that is what the Court of Appeal correctly, we submit, held had occurred, namely that they had had it in their cross‑claim specifically pleaded and they abandoned it.

GLEESON CJ:   Was there an argument about whether they could rely on it in the Court of Appeal?

MR DEAKIN:   Absolutely, and the Court of Appeal accepted the submissions that were put on our behalf that it did amount to an abandonment of any reliance on those sections.

GLEESON CJ:   By it, you mean the amendment to the ‑ ‑ ‑

MR DEAKIN:   Yes, and that was the manner in which the trial was conducted, with those issues no longer pursued as far as the present applicants are concerned.  So, your Honour, that is the first matter.  Section 75AK is simply irrelevant.  It should not have even ‑ ‑ ‑

GLEESON CJ:   So it is a pleading point?

MR DEAKIN:   It is an abandonment of a pleading point.

GLEESON CJ:   It is a point about a pleading.  It is a point about what were the issues raised by the pleading.

MR DEAKIN:   Exactly, yes, your Honour, and those two documents that we have handed to your Honours make it plain that the Court of Appeal was completely correct in concluding that there was an abandonment and whatever paragraph 23 of the last document means, where it says:

if it should be held that upon any cause or causes of action pleaded in the Statement of Claim the Cross Claimant and the Second Cross Defendant are both liable to the Plaintiff for the same damage –

and, accordingly, contribution under co‑ordinate liability is available, it does not and cannot mean, we submit, an entitlement to invoke trade practices counts that they have already abandoned.

CALLINAN J:   Mr Deakin, page 121, about line 17, who is speaking there?  That is Mr Fagan who is acting for Mr Jackson’s client?

MR DEAKIN:   Yes, he is Mr Jackson’s predecessor.

CALLINAN J:   If you read the paragraph beginning about line 17, Mr Fagan does not seem to be saying himself anywhere that Mr Jackson’s client is relying upon the Trade Practices Act.  He seems to be simply speaking of a situation in which there may be liability to the plaintiffs in respect of claims under the Trade Practices Act.  He does not say anything about co‑ordinate liability arising because of a successful cross‑claim by his client under the Trade Practices Act.  Is that right?  Have I read that correctly?

MR DEAKIN:   I think, in fairness, your Honour, that is probably what is recorded there, the invocation of sale of goods and trade practices.

CALLINAN J:   Yes, but:

if also your Honour should find that the importer is liable to those consumers under the Trade Practices Act provisions then we would have two defendants both for the same damages –

He seems to be talking about the plaintiff’s claim against the importer.

MR DEAKIN:   Yes.  Your Honour, the difficulty with that, and we do accept what your Honour has read into that passage ‑ ‑ ‑

CALLINAN J:   I do not know whether that is what is intended or not.

MR DEAKIN:   The difficulty with that is, your Honour, that that then brings up the question as to whether or not a co‑ordinate liability can exist when, as pleaded in 23, it is a liability for “cause or causes of action pleaded in the Statement of Claim” for which both the present applicant and my client are both liable.  Now, that is incapable of being satisfied because, in the present case, the only liability of the applicant and applicants is one based in negligence and a breach of the Sale of Goods Act.  Negligence has been abandoned against my client by the present applicant and the only liability which is even sought to be asserted is a liability under the Trade Practices Act.

GLEESON CJ:   Mr Deakin, do I understand correctly that this pleading point was taken in the Court of Appeal?

MR DEAKIN:   Yes, your Honour, it was.

GLEESON CJ:   And when your opponents sought to rely on Trade Practices Act liability as the basis of their cross‑claim your side said, “They can’t do that, the pleadings don’t permit it”.

MR DEAKIN:   Yes, your Honour.

GLEESON CJ:   Was there any application to amend the pleadings in the Court of Appeal?

MR DEAKIN:   There was no application to amend the pleadings.  There was an application to amend the notice of appeal to amend the relief, but there was no application to amend the pleadings.  We do submit, your Honour, that the Court of Appeal dealt with the matter on the basis of the argument that was there and, as my learned friend has already drawn to your Honours’ attention, the Court of Appeal concluded unanimously that the appellant, having abandoned its cross‑claim against the importer for breach of the Trade Practices Act, is not entitled to seek to run the claim on the appeal.

GLEESON CJ:   The abandonment being the filing of an amended cross‑claim which omitted references to 74C and 74D?

MR DEAKIN:   Yes.  Now, the passage that Justice Callinan has put to me shows that there was a matter addressed to the court that the pleadings at the commencement of the trial and right through the trial are, as your Honours have seen from the amended cross‑claim, devoid of any reference to the Trade Practices Act at all.  That was the way the case was run.

CALLINAN J:   I am just concerned it may have been litigated before the trial judge.

MR DEAKIN:   I was not there, I cannot tell your Honour that it was.  But we point to the Court of Appeal’s conclusions and we point to the pleadings and we say even if some other view may have been formed, there was no matter that the Court of Appeal failed to take into account, we submit, and no matter they erroneously took into account in the exercise of their discretion in dealing with this topic and that is the end of the matter.  It is an abandonment point.

Now, it is true, and this is the second matter we should concede against interest, but concede, my learned friend is correct.  In Justice Stein’s judgment where it refers to the fact that there was no relevant ground of appeal – I think my friend’s point is correct, there was in fact a relevant ground of appeal that his Honour overlooked – but given the procedural complexity of how this case evolved and how the pleadings are amended, it is perhaps understandable that Justice Stein and the other members of the Court of Appeal overlooked that single ground.  But that brings it back to an abandonment point.  With respect, it does not cure the problem, it just brings it back to an abandonment point and we ‑ ‑ ‑

GLEESON CJ:   Was one of the points that was argued in the Court of Appeal in support of the proposition that the appellant should not be permitted to rely on this point that the course of evidence might have been different if they had pleaded it?

MR DEAKIN:   Indeed, and that was the very point that we made and that was the point that was accepted.  Looking at those two documents, perhaps it is not an unreasonable conclusion for the importer to adopt when all trade practices counts are removed from the pleading against it, and that was the way the case was run.

CALLINAN J:   How would the evidence be different?

MR DEAKIN:   Your Honour, the reason it is different is because sections 74B and D have their own defences within the section.  That is why 75AK is not relevant.  Each of them – and I do not know whether your Honours have time to deal with them – raise very specific matters that are defences available to parties sued under 74B.  Firstly, can I deal with them.  As well as the various matters that need to be satisfied in order for the section to be offended, there are then, in section 74B(2), specific offences saying in what circumstances it does not apply:

(a)  if the goods are not reasonably fit for the purpose . . . by reason of:

(i)  an act or default of any person (not being the corporation or a servant or agent of the corporation); or

(ii)  a cause independent of human control –

These are the sort of factual issues which need to be addressed if these provisions are going to be invoked –

(b)  where the circumstances show that the consumer did not rely, or that it was unreasonable for the consumer to rely, on the skill or judgment of the –

importer.  These are factual issues.  Section 74D is even more extensive.  In 74D the defences include matters of a similar kind dealing with when goods leave the control of a corporation and subparagraph (3) deals with other defences:

Goods of any kind are of merchantable quality within the meaning of this section if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as it is reasonable to expect having regard to:

(a)  any description . . . 

(b)  the price . . . and

(c)  all the other relevant circumstances.

GLEESON CJ:   What is the total amount of the damages awarded to all the people who contracted this?

MR DEAKIN:   Quite considerable, your Honours, I have to say.  It is in the terms of settlement in the application book.  There were amounts of 350,000 and 250,000 and other lesser amounts of 30,000 and some of them were plus costs.  So it has to be conceded we are not talking about minor amounts in the least in some of these cases.  But, as Justice Stein pointed out, the court can only deal with the pleadings as filed and the issues as litigated.  That is what the Court of Appeal did and we submit that nothing my friend has put to your Honours demonstrates any error in the Court of Appeal.

What is the alternative, with respect?  My learned friend seeks to set aside the verdicts entered in favour of the importer.  That would mean that this Court will be called upon to make primary findings of fact for the first time in relation to all of these ingredients that make up the sections of sections 74B and 74D and the defences based on what was evidence that did not address the meaning of those issues.

So that is another reason why we submit it would be inappropriate for this Court to grant special leave in the circumstances of this case.  The pleadings were left on a particular basis, the case was litigated on a particular basis and no valid reason has been demonstrated why the Court of Appeal’s conclusions, particularly on the topic of abandonment, were wrong.

The third matter that I should accept as being correct, your Honours, because our submissions I think were erroneous in this respect, was that whilst the pleadings were not amended in relation to the particular plaintiff’s cases to all of them invoke the two provisions that I referred to, 74B and 74D, the argument that is set out in the applicant’s summary of argument I think makes it plain that that was an issue that, even if the pleadings were not formally amended, had been put in order before the case concluded.

So I think what we put in our submissions in that regard ought to be accepted as – it reflected the pleadings as filed, but not the issues as litigated.  But all of these procedural irregularities, which we admit there were some aspects of it, are further reasons why this Court should not be troubled by this litigation, your Honours.  There are a number of procedural irregularities but they do not give rise to any miscarriage of justice and the Court of Appeal dealt with the matter based on the pleadings as filed and the issues as litigated.

Can we just say one other aspect.  It is important that my learned friends have now conceded that there is no claim sustainable against the importer in any of these cases in negligence and that, therefore, co‑ordinate liability, even if it were to exist, can only be based on at their case at best the two provisions of the Trade Practices Act which are wholly different from the Sale of Goods Act remedies and, of course, common law principles of negligence.  So we would submit that in any event your Honours could not be satisfied that co‑ordinate liability arose in any event, even if any of these arguments were permitted to be put and, as we have submitted, your Honours would not find any error in the Court of Appeal’s approach.

Your Honours, in relation to the criticisms of the Court of Appeal to the effect that they were not permitted to appeal against the finding of negligence against them because that was an appeal against reasons and not against the order, well, we would respectfully submit that is correct, but in any event the Court of Appeal went on to deal with the issue of negligence.  So although it is true they said that there ought not to be permitted, they nevertheless went on to deal with the issue of negligence.

My learned junior has drawn attention to the Court of Appeal finding no negligence on our part, which is now accepted as being a correct conclusion, but in dealing with the issue of negligence, the Court of Appeal says at 61 of the application book, paragraph 77:

Because of my earlier conclusion that the appellant is not entitled to dispute its negligence to the plaintiffs, it is strictly unnecessary to address this issue.  Nonetheless, I will do so, albeit briefly.

His Honour goes on and the Court of Appeal unanimously concludes that there was an abundance of evidence that adequate cooking would have removed the pathogens from the prawns and the customers would not have been contracting hepatitis A.

GLEESON CJ:   Where do we find the statement of claim referred to in line 2 of paragraph 23 of the amended cross‑claim of the first defendant?

MR DEAKIN:   It is not with your Honours’ papers.  None of the pleadings were brought into this application book unfortunately, your Honours.  I am not sure that we can provide a copy to your Honours, but hopefully we will at least have one copy.

GLEESON CJ:   My question is, did the “cause or causes of action pleaded in the Statement of Claim” include claims under 74C or 74B of the Trade Practices Act?

MR DEAKIN:   In strict terms, the pleadings did not in all cases do so.

GLEESON CJ:   No, I am only talking about this case.  I am talking about To Hung v Regal Pearl Pty Limited, which is the document you just handed us, and I am asking about the document referred to in the second line of paragraph 23 as the statement of claim.

MR DEAKIN:   Yes.  It is dealt with in our written submissions, at page 112, line 20, paragraph 6 of our written submissions dealing with the To Hung matter.  There was no claim in the To Hung matter pursuant to section 74B or section 74D.

GLEESON CJ:   All right, that is what I wanted to know.  Thank you very much.

MR DEAKIN:   I do not have the document, but that your Honour can accept as correct.

GLEESON CJ:   Thank you.  Yes, Mr Jackson.

MR JACKSON:   Your Honour, in relation to the matter last raised your Honours will see what is at page 119 in paragraphs 2 through to 4 and although the pleadings may not have been amended formally at that time the position was that claims under sections 74B and 74D were made by each plaintiff.

GLEESON CJ:   I want to understand the meaning and effect of paragraph 23 of the amended cross‑claim that was handed up to us.

MR JACKSON:   Yes.

GLEESON CJ:   Now, my question is, why were the references to 74C and 74D deleted from your client’s pleading?

MR JACKSON:   They were deleted, your Honour, because your Honours will appreciate the claims fall into two categories.  Category one, which was the part that was deleted, was an attempt by us to sue directly the importer based on those provisions.  We have no cause of action.  That is why they are deleted.  The sections do not give us a cause of action.

However, that left then the other aspect of it, which is paragraph 23, and your Honours will have seen from the passage that we quoted earlier, that your Honours will see set out in our written submissions, that what was being said was that we rely upon the fact that there is a claim made by the plaintiff against the importer based on the sections of the Act.  If the plaintiff succeeds in that claim – and your Honours will appreciate all the evidence was in relation to that ‑ ‑ ‑

GLEESON CJ:   I am just having a little sympathy with the Court of Appeal at the moment, Mr Jackson.  I am trying to understand what they were supposed to take from the fact that your client filed a document headed “FIRST & SECOND CROSS CLAIMS”, which in paragraphs 15 and 18 specifically referred to or relied on sections 74C and D and then it filed an amended cross‑claim which made no reference, either directly or indirectly, to sections 74C and 74D.

MR JACKSON:   But it did make one indirectly, your Honour, with respect.  It picked up causes of action by the plaintiff against the importer.

GLEESON CJ:   Causes of action pleaded.

MR JACKSON:   Yes, your Honour, and your Honours have seen ‑ ‑ ‑

GLEESON CJ:   In other words, it refers you over to the statement of claim.

MR JACKSON:   Yes, and your Honour will see, if one goes to what we have said at the top of page 120, all the statements of claim included those pleadings.  Now, your Honours, if I could just say this, what one sees then is that you have us saying – and this is absolutely clear from the transcript of what took place – and everyone agreeing that there are claims by the plaintiff against the importer based on the Trade Practices Act provision.  If the plaintiff succeeds on that claim against the importer, then there is a liability in the importer for the plaintiff.  If they succeed against us on the basis of the Sale of Goods Act or something else, we are both liable for the same damage.

GLEESON CJ:   Mr Jackson, this point I gather was raised and argued as a pleading point in the Court of Appeal.

MR JACKSON:   Well, your Honour, with respect that is one description of it.

GLEESON CJ:   Well, what I wanted to understand was, did anybody on your side say, “If it is a good pleading point, we apply to amend the pleadings”?

MR JACKSON:   With respect, your Honour, they did not have to.  The pleading was already there.  It was there.  This was the claim.  It is simply a case where the Court of Appeal misunderstood it.  They misunderstood the fact that we were seeking – we were not seeking to say they are liable to us under the Trade Practices Act.  We were seeking to say they are liable to the plaintiff under the Trade Practices Act.  We are liable to the plaintiff.  We have a claim against them that we both have to contribute.

CALLINAN J:   Mr Jackson, it was really for the plaintiff to amend the statements of claim, was it not, in view of what his Honour said and which you have repeated at the top of page 120?

MR JACKSON:   Yes, your Honour, it is not our statements of claim.

GLEESON CJ:   No, but the amended cross‑claim is the one that – rightly or wrongly, the point that was taken in the Court of Appeal was that the amended cross‑claim of the first defendant did not raise 74C and 74D as a basis of a cross‑claim.  That point might have been right or it might have been wrong, but that was the pleading about which the point was taken, was it not?

MR JACKSON:   Your Honour, in that sense that is right, but it is, with respect, quite wrong and your Honours have seen the reasons why we say it is quite wrong.  The case in the court below is not one that was dealt with on some different basis from the basis we suggest.  It was dealt with on the basis we suggest and we give your Honours the references to.  For the Court of Appeal then to say this issue was abandoned is, with respect, quite wrong.  It is dealt with by all the parties in the court below, in the trial court, and, your Honour, I do not know that I can take it beyond that, but that is the short simple position.  It is an issue that the Court of Appeal misunderstood and were, with respect, led into misunderstanding because of the way in which the argument was put these points had not been raised.  They plainly had.

GLEESON CJ:   We will adjourn for a short time.

AT 10.19 AM SHORT ADJOURNMENT

UPON RESUMING AT 10.24 AM:

GLEESON CJ:   Mr Jackson, I want to be clear that your answer to this point that was taken in the Court of Appeal and is taken against you here is that in paragraph 23 of the amended cross‑claim of the first defendant we find the point raised.

MR JACKSON:   Yes.

GLEESON CJ:   Now, we unfortunately have not been provided with the statement of claim referred to in paragraph 23 in the To Hung Case or the statements of claim in any of the other cases and we would like to look at those statements of claim before we give our decision in this matter.  So could you and your opponent provide us with those and we will then, when we have had an opportunity to look at them during the course of the day, give our decision.

MR JACKSON:   Yes, your Honour.

GLEESON CJ:   Thank you.

AT 10.25 AM THE MATTERS WERE ADJOURNED
UNTIL LATER THE SAME DAY

UPON RESUMING AT 12.20 PM:

GLEESON CJ:   If you do not mind Mr Justice Heydon is sitting here, not to help us make up our minds or even for his own private entertainment, but because it is more convenient to do that than to go off the Bench and reconstitute.

MR JACKSON:   Your Honour, it is an added pleasure to have his Honour here, if I may say so, with respect.  Your Honours, could I hand to the Court two bundles, or a bundle for each of your Honours.  These are the statements of claim of the various plaintiffs – I will take your Honours to the relevant paragraphs in just a moment – the statements of claim of the relevant plaintiffs before amendments of the kind that were adverted to in the passage to which I took your Honours before.

Stewart is the first one. The relevant paragraph, your Honours, is at page 6, paragraphs 19 to 23, together with following particulars.  Your Honours will see a claim under section 74D there.  In the case of To Hung, which is the next one, there is no reference relevantly to it.  In the case of Rosenberg, which is the one following that, there are two references, paragraph 4 on page 3 and then at paragraphs 12 to 14, at page 5.  In the case of Markham there is an oblique reference at paragraph 19 on the penultimate page of the document and it is not referred to in the next one, Chen.

Now, your Honours, those are the documents as they were.  Can I just take your Honours to a book that your Honours have which contains all sorts of transcripts of what took place.  Behind tab 3 at the page numbered in the bottom right‑hand corner 392 ‑ ‑ ‑

GLEESON CJ:   The tabs do not have numbers.

MR JACKSON:   Your Honours, it is the original Court of Appeal number, as it were, 392 in the bottom right –hand corner and if it is not there, your Honour, it should be page 218 of the original transcript number.

GLEESON CJ:   I think I have the wrong bundle.

CALLINAN J:   Yes, I just have the cases bundle, I think, Mr Jackson.  There may be another bundle. 

MR JACKSON:   Your Honour, there is another bundle that was filed.  I have one copy I can give your Honours.

GLEESON CJ:   That is certainly the ‑ ‑ ‑

CALLINAN J:   This is just the authorities we have.

MR JACKSON:   Your Honours, I want to refer to that page commencing at line 40 and this is the passage to which I took your Honours earlier at

lines 40 to 54 indicating the amendments in relation to sections 74B and 74D and so on.  Then, your Honours, if one goes from that to over the next tab to the first page of that – it is the next day’s transcript – your Honours will see between letters L and O, if I could use it that way, Mr Elkaim saying he has an amended statement of claim and then between letters S and U then there is an amended statement of claim in respect of Rosenberg.

Now, your Honours, one sees then behind the next tab, that is tab 5, at page 468 in the passage between I and N, the judge there referring to the fact that there had been various amendments to the pleadings and various documents filed.  Your Honours will then see behind the tab 7 in the Court of Appeal at page 2, Mr Hislop, who was for the present applicant, between lines 50 and 54 referring to the fact that the appeal related to the termination of cross‑claims.  The issues were essentially the same in each of the five claims.

Now, your Honours, the position seems to have been that the amended versions in pursuance of the amendment for each one to rely on 74B and 74D do not appear to have been in the books that were before the Court of Appeal.  The ones that appear to have been in the books are the ones I handed your Honours this morning, some of which did and some of which did not refer to sections 74B or 74D.

Your Honour, we have endeavoured to make some inquires from the District Court about the extent to which the amendments were actually ever filed and whilst some documents have been produced, I am not certain I could give your Honours an easy answer to that at this moment.

GLEESON CJ:   Mr Deakin.

MR DEAKIN:   Your Honour, we adhere basically to what we outline in our submissions is disclosed from pleadings.  The only document that we are a little bit uncertain about in what my learned friend put to your Honour was the Rozenberg matter.  He referred to paragraph 4.  That is simply a deemed manufacturer provision.  I do not think it is of any relevance to what your Honours are concerned about.  The reference to section 74B in paragraph 12, which is the only other one he referred to, does not seem to be a claim under section 74B, although your Honours can read it for yourselves.  It seems to simply be a reference to a consumer as defined within that section but, your Honours, we do not want to take the Court’s time up otherwise.  The pleadings speak for themselves.

GLEESON CJ:   Mr Jackson, the case went off in the Court of Appeal on a pleading point that was decided against you.

MR JACKSON:   Yes.

GLEESON CJ:   If you were to succeed in your appeal, would it be necessary for the matter to be remitted to the Court of Appeal to decide the issues that you attempted unsuccessfully to ventilate?

MR JACKSON:   It would be necessary, your Honour, for either this Court or the Court of Appeal to decide it.

GLEESON CJ:   It sounds as though what I said was right.

MR JACKSON:   Yes.  Your Honour, one always likes to leave a temptation there just in case.

GLEESON CJ:   Yes, a probably very resistible one.  In this matter there will be a grant of special leave to appeal.  We will adjourn for a short time to reconstitute.

AT 12.27 PM THE MATTERS WERE CONCLUDED