Roy Morgan Research Centre Pty Ltd v Electrade Pty Ltd

[1993] HCATrans 156

-... ~~

•

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne No M123 of 1992

B e t w e e n -

THE ROY MORGAN RESEARCH CENTRE

PTY LTD

Applicant

and

ELECTRADE PTY LTD

Respondent

Application for special leave

to appeal

MASON CJ
DEANE J

GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON THURSDAY, 17 JUNE 1993, AT 3.44 AM

Copyright in the High Court of Australia

Roy 1 17/6/93

MR J.E. BARNARD, OC:  May it please the Court, I appear with

my learned friend, MR S.G.E. McLEISH, for the

applicant. (instructed by Winneke Sinclair)

MR A.M. NORTH, QC:  If the Court pleases, I appear with my

learned friend, MR A.C. NEAL, for the respondent.

(instructed by Gadens Ridgeway)

MASON CJ:	Mr Barnard.
MR BARNARD:	May it please the Court, we seek to rely on the

amended draft notice of appeal rather than the

notice of appeal which is set out in the

application book.	We understand that the Court has
that amended notice.

MASON CJ:  Where do we find the amended notice of appeal?

MR BARNARD: It is a separate document, if the Court

pleases.

MASON CJ: Yes.

MR BARNARD:  If the Court pleases, the point of law of

general importance in this matter involves how and

when reasons for judgment should be given. It is
whether when a judge has made a finding of fact and

has not given reasons, it is open to an appellate

court to speculate as to what the reasons may have

been and disallow the appeal, that the transcript

discloses reasons with which the trial judge could

have supported his findings. It also involves

whether a bald finding on credit is an adequate

compliance with the duty to give reasons.

We further submit here that the course adopted

by the appeal division was inconsistent with an

earlier judgment of the Full Court in Victoria and

with judgments of the Court of Appeal in New South

Wales.

Our submission is that where the trial judge

has not given reasons, it is not open to the Appeal

Court to attribute to him reasons that he may not

have had, and that is what we say happened here.

It would appear that the appellate division

concluded that the reasons of the trial judge were

inadequate and I take the Court to page 24, line 38

of the application book where they said:

Needless to say, the trial Judge found

for the respondent on the ttcost plustt issue

and did so on the basis that he believed

Gilligan and did not believe Morgan. He

expressed his preference without elaboration.

It must be conceded that the learned Judge

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expressed himself very economically indeed and

declined to concern himself with the details

of the submissions of counsel on credibility.

We will return to the reasons a little later.

At the top of page 31 they said this:

The critical feature of the trial Judge's

reasons was the failure to explain the basis

of rejection of defence evidence which

appeared compelling. On its face, it pointed

strongly to a different conclusion from that

which the judgment reflected.

Now, it must be accepted that in that statement

there they may have been referring to Massoud's

case which they had been discussing on the previous

page, but they do use the expression:

failure to explain the basis of rejection of

defence evidence -

whereas at the bottom of page

GAUDRON J: Which appeared compelling.

MR BARNARD: Yes, I - - -

GAUDRON J: And it clearly does relate to Massoud, did it

not?

MR BARNARD: Well, except at the bottom of page 31 they say,

speaking of the obstacles that have been raised:

In our opinion, all these matters

went to credibility and were for the learned

Judge to consider after hearing the submissions of counsel. They are in no way

analogous to the obstacles in Massoud where

the evidence of independent experts favourable
to the defence was simply overlooked or

ignored.

So, they are treating Massoud's case as being a

case where evidence was simply overlooked or

ignored, but we would accept that that passage
possibly could relate to Massoud's case but it is

not clear, in any event.

GAUDRON J: But this was a case where one side or the other

had to be believed - - -

MR BARNARD: Yes.

GAUDRON J: And what point was served by saying which side

was believed - the reasons why one side was

believed rather than the other?

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MR BARNARD:  We say because firstly, the authorities require

you to say why somebody is believed or why they are

not believed and the - - -

GAUDRON J:  I am not too sure that they do. I mean

sometimes one gets no more than I have had the

opportunity to observe people in the witness box

and observe their demeanour and I do not believe

them.

MR BARNARD: In our submission - - -

GAUDRON J: That would be adequate?

MR BARNARD:  In our submission, the law requires you to say

why •.,:>u do not believe them, that you just cannot,

that Lt is not satisfactory. It is no longer

satisfactory to say merely, "I reject the evidence

of the defendant or reject the evidence of those
witnesses", or "Here, what has happened is the

evidence of four, total of four witnesses was

rejected without explanation".

We say that is inconsistent with what happened

in Massoud's case and I prefer to deal with that

matter and, of course, here the court said at

page 36 line 16 - they seem to have taken an

alternative view:

The essential role of this Court is to

watch over the administration of justice where

it has jurisdiction to do so. Unlike Massoud

and other cases in which the Court has seen

fit to intervene the trial judge was clearly

entitled, as the evidence shows, to reach the

conclusion which he did and to reach it

basically for the reasons he gave, namely that

he preferred the evidence of Gilligan and was

satisfied to rely on it.

Now, we say that it is not a satisfactory

approach and we would refer to dicta of the

President of the Court of Appeal in New South Wales,

Mr Justice Kirby, in Palmer v Clarke, and I think that has been provided to the Court, reported in

1989. We refer particularly to the passage on

page 170 where at line 3 the President of the Court

of Appeal said:

In many cases, bald findings on credit,

where there remain substantial factual issues

to be dealt with, may not constitute an

adequate compliance with the judge's common

law duty to provide the parties, and the

appellate court, with the basis of his

decision.

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And we say, merely to reject evidences of all finding on credit.

We go on to say that the history of the rule

as to the giving of reasons and the purposes of the

rule were considered by Justice McHugh as a member

of the Court of Appeal in Soulemezis v Dudley
(Holdings), (1987), 10 NSWLR 247 - this I think has

been provided to the Court - in particular at

page 279B where His Honour said:

The giving of reasons for a judicial

decision serves at least three purposes. First, it enables the parties to see the

extent to which their arguments have been

understood and accepted as well as the basis

of the judge's decision. As Lord MacMillan

has pointed out, the main object of a reasoned

judgment "is not only to do but to seem to do

justice". Thus the articulation of reasons

provides the foundation for the acceptability
of the decision by the parties and by the

public. Secondly, the giving of reasons

furthers judicial accountability.	As
Professor Shapiro has recently said:

" ... A requirement that judges give reasons for

their decisions - grounds of decision that can

be debated, attacked, and defended - serves a

vital function in constraining the judiciary's
exercise of power."

Thirdly, under the common law system of adjudication, courts not only resolve disputes - they formulate rules for

application in future cases ..... Hence the

giving of reasons enables practitioners,

legislators and members of the public to

ascertain the basis upon which like cases will

probably be decided in the future.

And what we say here is, particularly the first

principle to which Justice McHugh refers that it

becomes relevant, that the unexplained rejection of

the evidence of four witnesses provides no

foundation upon which either the parties or the

public can understand and accept the decision in

this act.

MASON CJ: But on page 280 Justice McHugh said - this is

between Band C:

Where the resolution of the case depends

entirely on credibility, it is probably enough

that the judge has said that he believed one

witness in preference to another; it is not

necessary "for him to go further and say, for

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example, that the reason was based on

demeanour" .

Now, does this not cover this case?

MR BARNARD:  Your Honour, we accept that it could cover this

case, but what we say that it is a matter in issue

and we say it really is a very unsatisfactory

matter in this day and age, but it may be - if one

goes back 30 years, one went before the courts of

petty sessions and the magistrate heard the

policeman say that the defendant walked against the

lights, and the defendant got into the box and

said, well, he did not walk against the lights, and

the police magistrate said, "Well, I believe the

informant and reject the evidence of the

defendant", and the defendant was left in that

position and it could never be explained to him why

his evidence was rejected.

And we say here, again, it is entirely

unsatisfactory that the evidence of four witnesses

can be rejected and some other evidence preferred

without giving any explanation as to why that is

so. There must be an explanation that their

account was not a coherent account, as to their

appearance in the witness box or as to something.

MASON CJ: But it is common enough, is it not, where the

issue is straight credibility for judges at first

instance to say from time to time they preferred
the plaintiff's witnesses to the defendant's

witnesses?

MR BARNARD:  We would accept that it certainly occurs but we

say that they should be required to give reasons as

to why they do. That one is left, as here, in an

entirely unsatisfactory position where all that is

said is that they have been observed and their

evidence is not accepted, and that is evidence about a variety of incidents and detailed evidence	about those incidents and evidence which is given,	not only in relation to those incidents but about
other matters, but in relation to those specific incidents their evidence - it is just indicated
that they are not accepted.

We say that is not giving reasons and it does

not satisfy the requirements laid down by

Justice McHugh so that the public and the parties

in particular can understand the reason, what has

happened to them, understand the result of the

case.

And we would certainly accept that the old

position used to be and firmly be that one was

entitled to do that but we say, and our submission

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is, in this day and age that the litigants and the

public are entitled to an explanation as to why

that course is taken. And, of course, the adoption

of a course such as that really deprives the

litigants of any real right of appeal. If a judge

has looked at the evidence and got the evidence

mixed up and said, "Well, the witness' evidence is

confused" and he said to himself, "Well, I will

disbelieve this witness because his evidence is

confused", and he does not give those reasons, you

are left in the position where you have lost your
right of appeal, even though his reason for

disbelieving the evidence is a wrong reason and a

reason which would be rejected by an appellate

court.

We go on and say also that it is inconsistent

with the decision of the Full Court in Sun Alliance

Insurance Ltd v Massoud and that there - and also,

for that matter, we submit, inconsistent with

Palmer v Clarke - but in Sun Alliance Insurance v

Massoud the sole issue on liability was whether the plaintiff had intentionally fired a shop and

dwelling.

The plaintiff's story was that the television

set blew up and started a fire and he broke a window

with his hands and climbed out and a number of

expert witnesses were called by the defendant and

their evidence was to the effect that the window was

broken by the fire, the television could not have

started the fire and that accelerants had been used.

In the decision, Mr Justice Gray, who gave the

judgment with which the other members of the court

agreed, indicated on page 14 that the learned trial

judge had summarized the evidence in detail which he

had given before him and, at page 15,

Mr Justice Gray set out an extract from the judgment

of the learned trial judge and that, at line 5,

began:

"Having regard to the standard of proof,

I say that, taking into account the whole of the evidence in this case, including reference

to the exhibits, and including inferences that

I may draw, the defendant has failed to

satisfy me that I should find in its favour in

relation to paragraph 6 of the defence.

He went on to discuss the arguments of counsel and

at line 25 said:

Having heard the whole of the male plaintiff's

evidence and taking into account the evidence

of all other witnesses in the case, the defendant has not satisfied me upon the

balance of probabilities (and the onus is on

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the defendant on this aspect) that the fire

which occurred on 10 January 1982 was caused by the male plaintiff. And this despite the

fact that I accept the evidence of Mr Barnes

that there was petrol in a container and on a
portion of carpet and on a portion of

underfelt in the premises on the morning after

the fire. And this despite the fact that

Mr Potocki has stated that a Philips-Pye black

and white television set could not have

'blown' or otherwise shown signs of fire or

lightning and caused the fire at the premises.

Well, now, from that and from what Mr Justice Gray

says it can be inferred that the learned trial

judge was doing no more than the preferring the

evidence of the plaintiff to the expert witnesses.

On page 16, just over halfway down the page,

Mr Justice Gray said:

The foundation for his Honour's ultimate conclusion would seem to be that his Honour:- (1) Was impressed by the plaintiff's denials

that he fired the premises.

(2) Accepted the plaintiff's version that the

T.V. set "acted otherwise than as a T.V.

set should".

(3)	Was not satisfied that the accelerants were present at the time of the fire
because he could not exclude the
possibility that they had been introduced to the premises by some person after the
fire.

The credibility issue, of course, was the

second:

Accepted that the plaintiff's version that the

T.V. set "acted otherwise than as a T.V. set

should".

At the last paragraph on the page, His Honour

said:

The second of his Honour's critical findings

presents, in my view, more difficulty. If his

Honour was prepared to accept the plaintiff's

evidence that the black and white T.V. set
misbehaved at the critical time, his Honour

had to get over the difficulties presented by

the evidence of Potocki and George. The

former had sworn that this particular T.V. set

could not behave as the plaintiff described.

The latter swore that it was physically

impossible for power to reach the T.V. set

because of the condition of the power point.

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For reasons which I will express later, I

consider that his Honour, in accepting that

the T.V. set misbehaved, was required to state

reasons why, if it was the case, the evidence

of Potocki and George carried no weight with

him. In this regard the evidence of Potocki

may stand in a different position from that of

George.

I think that does not matter, but the point is here, what the learned trial judge had done was to accept the evidence of the plaintiff and prefer it to the evidence of the expert which one can only

conclude from what his Honour said and from what

the trial judge said was the trial judge was

rejecting.

We say that it is on this basis that the Full

Court then granted a retrial. We say that is the

correct principle that where the evidence is

rejected and the details of the rejection are not explained, where the evidence of one party or one witness is preferred to another, without

explanation, reasons must be given and this

presents authority for that.

I was going to pursue the matter - and perhaps

I should say in relation to this, on the other
aspect of it as to the appellate court providing
its own reasons, it is very clear that in Massoud's

case the appellate court was not prepared to look

at the matter itself and say whether there were

reasons for rejection of the defendant's case.

At page 18 on the first complete paragraph,

Mr Justice Gray said:

I am not to be taken as saying that the

acceptance of the defendant's case is the only

view that is properly open. If the learned

trial judge had grappled with the defendant's

case and made sensible criticisms of the

salient features of it, I would not have been

disposed to disturb his Honour's finding.

This is particularly true when the finding is

a refusal to be satisfied with the case of a

party bearing the onus of proof.

Mr Anderson, counsel for the plaintiff,

took the Court through the defendant's

evidence and made a number of criticisms of

the evidence of each witness. These

criticisms, to my mind, were not significant.

But if criticisms of this kind had been made

and acted upon by the learned trial Judge, his

ultimate conclusion would probably have been

beyond attack.

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So we say there the court was not prepared to

do what the appellant did in this case and that is

go through the transcript and find evidence which

could have supported the - - -

GAUDRON J:  But did Their Honours not simply do that by way

of perhaps elliptically saying, "In a case of this

kind where it is word against word and nothing

more, the only basis on which it could be opened to

attack is if there were no basis for the finding

made", and the court then went on to say, "Well,
there were bases on which that binding could be

made.

MR BARNARD:  But we say you are not entitled to do that. If

a person comes to a decision and has reasons for

that decision, one must know his reasons if you are to know if his decision was right. You cannot just

take his decision and suppose that it - - -

GAUDRON J: Well, that comes back to your first point.

MR BARNARD:  there may be reasons that would support

it.

GAUDRON J: That comes back to your first point.

MR BARNARD:	Yes.
GAUDRON J:	The second point I am suggesting to you is that

Their Honours were not substituting their reasons for reasons which the trial judge might or might

not have had. What they were in fact doing was

saying, "Well, in a case of this kind, the trial

judge's findings stand unless it could be said

there is no basis on which such findings could have

been made", and in this case they say there were

these bases.

MR BARNARD: With respect, on page 33 they say, at line 8:

It was conceded that the trial Judge was

entitled to reject their evidence. It is not

clear how much more he might have said by way

of reasons for doing so. However, this is not

a case where this Court is unable to

understand the basis on which he did, nor

should Morgan and, through him, the appellant

have been under such misunderstanding. The

transcribed record of the hearing makes it
clear.

So, they are saying that they can turn to the transcribed record of the hearing and take from it possible explanations - speculate as to the

explanations for the trial judge's finding and say

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that is where the applicant has to look for to find

why the finding was made against him.

And that is why we say it seems they have

concluded that the reasons were inadequate and gone

on and sought to support them, although they did it

on that passage on page 36 say he might have come

to that decision giving the reasons that he did.

That is the substance of the submissions

without taking the Court to other cases.

MASON CJ: Yes, thank you, Mr Barnard. The Court need not

trouble you, Mr North.

The Court considers that in all the

circumstances of this case an appeal would enjoy no

prospect of success.	The application is therefore
dismissed.

MR NORTH:  Your Honour, we seek costs and we seek costs,

Your Honour, on the same basis that we were awarded

costs in the Full Court, that is, on a

solicitor/client basis, for the reason that this

litigation has been marked by an attempt, as we put

it and as was accepted by the Full Court, of the

applicant in this Court using financial strength to

seek to squash and economically destroy the

respondent.

This matter was considered by the Full Court

on pages 37 and 38 of the application book. There

is first a reference to a threat made by Mr Morgan

which was to the effect that I just referred to a

moment ago, and the evidence upon which that is

based is set out at the beginning of the judgment

on page 23, commencing firstly at line 25 where

there is an extract of the evidence of Mr Gilligan

to this effect - this was before the proceedings

were issued.

Mr Morgan then made an offer to me

MASON CJ: We have read this Mr North. There is no occasion

to read it out again.

MR NORTH:	Yes, if Your Honour pleases.
MASON CJ:	We are aware of the basis on which the order for

costs was made.

MR NORTH:	Yes. Well, Your Honour, in our submission, the very same reasoning should lead to the same result
in this application.
MASON CJ:	You do not want to say anymore, Mr North?

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MR NORTH:	No, if Your Honour pleases.
MASON CJ:	The application will be refused with costs.

AT 4.12 PM THE MATTER WAS ADJOURNED SINE DIE

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