Shaw v Commonwealth of Australia

[2007] HCATrans 69

[2007] HCATrans 069

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S297 of 2006

B e t w e e n -

BRIAN JOHN SHAW

Applicant

and

COMMONWEALTH OF AUSTRALIA

Respondent

Office of the Registry
  Sydney  No S298 of 2006

B e t w e e n -

RUSSELL HENRY PEARCE

Applicant

and

COMMONWEALTH OF AUSTRALIA

Respondent

Application for special leave to appeal

HAYNE J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 9 FEBRUARY 2007, AT 2.04 PM

Copyright in the High Court of Australia

__________________

MR A.G. MELICK, SC:   If it please the Court, I appear with MR J.F. SHARPE for the applicants in both matters.  (instructed by Hollows Lawyers)

MR C.T. BARRY, QC:  In the matter of Shaw I appear for the respondent with my learned friend, MR S. WOODS.  In the matter of Pearce I appear with my learned friend, MR D.J. BROGAN, for the respondent.  (instructed by Blake Dawson Waldron)

HAYNE J:   Although we have called only matter No 11, what do counsel say about dealing with this matter and matter 12?  Should we deal with them sequentially, should we deal with them together?  What do counsel say?

MR MELICK:   The issues are very similar in both of them, your Honour.  There is a separate issue in relation to Shaw in relation to section 60G discretion, but otherwise I have no objection to dealing with them together if my learned friend is content with that course.

HAYNE J:   What do you want to do, Mr Barry?

MR BARRY:   Yes, we are content with that course.

HAYNE J:   Yes, Mr Melick.

MR MELICK: Thank you, your Honour. Now, your Honours, these matters essentially deal with the question of the meaning of “ought to have known” in section 60I(1)(b) of the Limitation Act (NSW). Are your Honours familiar with the provisions or do you wish me to go ‑ ‑ ‑

CRENNAN J:   Yes.

MR MELICK:   I should indicate that there are at least 22 cases awaiting determination for special leave, the Melbourne/Voyager Case alone, apart from New South Wales police cases and other such matters, so these are not an isolated case. Now, section 60I(1)(b) is a gateway provision which follows section 60I(1)(a)(i) to (iii) which refer to actual knowledge. It introduces for the first time the concept of “ought to have known” as some form of constructive knowledge. We say it should be interpreted with caution and not with regard to discretionary considerations which follow from section 60G.

HAYNE J:   Sorry, could you put that again.  I just missed the proposition.

MR MELICK:   The proposition is firstly section 60I(1)(a) talks about actual knowledge, (b) introduces for the first time constructive knowledge, and we say this has to be interpreted without regard to any of the discretionary considerations which follow in section 60G because you do not get there unless of course you first pass the threshold of (a) and (b) and therefore you do not interpolate any of the wider implications and discretionary matters back into (1)(b).  What the Court of Appeal has done, it has placed something between objective and subjective knowledge.  In other words, they have called it normative knowledge. 

It is quite clear from what the Court of Appeal said in preceding cases that it could not be a purely objective test.  We say it should in fact be a subjective test and the only gloss or addition that the words “ought to have known” add to the meaning of the section is if a person does not acquire the knowledge because of either wilful blindness or ignoring of appropriate, and we would say in the case of psychiatric injury, professional advice.  We are talking about psychiatric injury and people suffering same and they are not normal people and the manner in which they deal with their problems are not within the normal range of experience and therefore we say one has to be very careful to avoid unfairness. 

Now, in the Court of Appeal Justice Basten, at paragraph 73 which appears at page 65 of the Court books, states that this test “requires an evaluative judgment of a somewhat imprecise kind” about imprecise mental condition.  We are not talking about an obvious injury such as a broken bone or an obvious set of facts as to whether or not a person has a right to sue his employer, whether or not the employer has made contribution, as was in Smith’s Case.  So we are adding imprecision upon imprecision and we say this leads to unfairness and would not have been within the legislative intention.

HAYNE J:   In that paragraph 73, is his Honour right to say, in your submission, that “each case must be governed by its own factual circumstances”? 

MR MELICK:   Each case obviously will be governed by its own factual circumstances, but we say that does not allow you to expand the subjective definition past what we say it should be because by doing so one has this enormous sea of the normative test which makes it very difficult, especially on a special leave application which is not being heard in conjunction with the main issue.  We say part of the unfairness in relation to all of this is that his Honour, and accepted by his fellow judges on the Court of Appeal, has made quite critical assumptions about what the medical evidence would reveal in the absence of any evidence, but I will deal with that shortly, your Honour.

We say it is not enough that a lay person says you need help.  In fact, in Smith’s Case it dealt with, as observed by Justice Santow, many wives have said to their husband at various times in a relationship “You need help”.  That does not necessarily then give the husband constructive knowledge that he has some sort of mental disease.  If one looks at the facts of this case, that is basically what they are saying and we say it is a pretty long and unfair bow to draw.  At the very least, and this is point two of the special leave application, if one is supposed to make an inquiry, it must do more than render it likely that the plaintiff would have acquired the relevant knowledge, bearing in mind, of course, the lack of insight that is referred to by Professor McFarlane in the evidence cited by both the judge at first instance and the Court of Appeal in Pearce’s Case.

CRENNAN J:   You have to give some proper weight to “ought” though in the phrase under consideration.

MR MELICK:   I understand that, your Honour, and we say “ought” means that you cannot absolve yourself of actual knowledge by wilfully blind or ignoring appropriate advice, and we say appropriate advice is not advice of a lay person, “You need help; go and get some”.  That is our first point and we say that the normative test is far too wide.  The second point is that once you have got there, you cannot make the assumption that if somebody goes and seeks professional help that the psychiatric illness would have been disclosed.  Perhaps I can illustrate that point by the facts, of course, in Shaw’s Case. 

In Shaw’s Case the medical evidence was that he had suffered post‑traumatic stress disorder since shortly after the collision in 1964.  There was no evidence of any particular change from that time onwards until the time he took his action.  He had alcohol problems and relationship problems in 1973 and 1974 and saw two different psychiatrists in August 1973 and then again in August 1974.  They did not diagnose post‑traumatic stress disorder.  Nothing changed until about 1978 when he said, “Even though I still didn’t think I had a problem, because my second wife had left me I realised perhaps I might have had a problem”. 

The Court of Appeal says “There it is, there is the threshold.  If in 1978 you had gone and seen a psychiatrist it was likely that you would have been diagnosed with PTSD, you ought to have known and therefore you don’t pass the (1)(b) gateway”.  I ask the question:  what evidence is there to suggest there would have been any change in the diagnosis of the psychiatrist in 1978 to one in 1973 and 1974?  Why would it not have been unreasonable for the plaintiff in those circumstances in 1978 to say, “Why bother?  I’ve already seen two psychiatrists, they haven’t told me anything”?  Justice Basten does indicate, of course, that there are problems because of the change of psychiatric knowledge from the early 1970s until the late 1990s.

CRENNAN J:   The evidence was, was it not, that the family member had been urging him from something like 1969 up until 1981 ‑ ‑ ‑

MR MELICK:   That is Pearce’s Case, your Honour.

CRENNAN J:   I am sorry.

MR MELICK:   In Shaw’s Case ‑ ‑ ‑

CRENNAN J:   What is the period in Shaw’s Case?

MR MELICK:   It was about 1978 he realised that perhaps he might have had a problem because his second wife had left him, although he did not think he had a problem.  If we take a situation in either of these cases that in 1968 they went along to a psychiatrist and said, “I think I’ve got a problem and I think it might relate to the Melbourne/Voyager”, and the psychiatrist said, “No, you haven’t got a problem, don’t worry about it”, because the level of psychiatric knowledge in 1968 was nowhere near what it was in 1999, I pose the hypothetical question:  should the plaintiff ought to have known because at some stage he should have realised that psychiatric knowledge had changed and then gone along and sought help at a later stage, or is in exactly the same position as Smith in the Court of Appeal case who, once he is told by his employer, “You don’t have a claim”, he does not pursue it?

We would say he would be in the same situation as Smith’s Case and de facto Mr Shaw at least is in exactly that position because he has already seen two psychiatrists.   His condition has not changed.  From 1973 and 1974 to 1978 there is no change in his condition, so why should it then be incumbent upon him to go and see yet another psychiatrist, because there was nothing to alert him to the fact that he might have got a different diagnosis?  More importantly, there was nothing before either the judge at first instance or the Court of Appeal to suggest the diagnosis would have been any different in 1978.  That is an enormous mental leap made by the court without the benefit of any evidence whatsoever.

HAYNE J:   Do I understand the two points you have thus far made as being, one, “ought to have been aware” in the context of these facts in both cases is limited to circumstances in which the plaintiff ought, as a result of professional advice, have been aware, professional as distinct from lay advice?  Step one?

MR MELICK:   Yes, your Honour.

HAYNE J:   Step two is that you cannot conclude the plaintiff ought to have been aware unless it is positively demonstrated that he would have been diagnosed had he sought professional advice.

MR MELICK:   Exactly, your Honour.

HAYNE J:   Are the two propositions consistent one with the other?

MR MELICK:   We only need to call in aid the second one if we fail on the first one.

HAYNE J:   They are alternatives, are they not?

MR MELICK:   They are alternatives as such, yes, your Honour.  We only have to call in aid the first one if the normative test applies.  We say, firstly, the normative test does not apply and, if it does, there was not evidence here to positively persuade the court that he would have known.  We also say, of course, he who asserts “ought to have known” bears the onus, and it was inappropriate for his Honour Justice Basten to say that lack of evidence does not assist the plaintiff.  We say lack of evidence will assist the plaintiff because he does not carry the evidentiary onus to show that he ought to have known.  In fact, how could he when it is raised for the first time in cross‑examination on the application for special leave?  We say these mechanical and evidentiary difficulties point to why it is inappropriate to extend the definition of “ought to have known” to that of normative rather than subjective with those two additions which we have added. 

It is also interesting if one considers tests laid down in Smith and Do Carmo.  The court calls in aid those tests when relying upon the basis for the normative provision.  But at page 259 point 4 of Do Carmo – and this actually assists on my evidentiary point, your Honours.  It is referring to section 58(2) of the relevant Act under consideration then which dealt with any of the material facts not within the means of knowledge of the plaintiff.  The passage says:

However, s 58(2), unlike s 57(1)(c), makes no assumption that appropriate advice was received when it was sought.  What is important is the means of knowledge –

and we say one should be very careful.  You should make no assumption that appropriate advice would have been received when it was sought.  That has to be a matter of actual proof.  So even the very cases relied upon to form the basis of the normative test do not allow the jump which is taken to make the assumption the appropriate advice would have been received. 

Now, they are the first two special leave points in relation to Shaw’s Case.  There is the additional point of the section 60G discretion.

HAYNE J:   Before you come to that, are those two points also points that you would raise in the Pearce Case as well?

MR MELICK:   Yes, your Honour, precisely.  Maybe just to tidy it up I will now go on to Pearce and just deal with factual differences there.

HAYNE J:   Whatever course is easiest for you, Mr Melick.

MR MELICK:   In Pearce’s Case, that was a matter where his wife had been saying between 1969 and 1981 that he should have gone and sought some help and his Honour said if he went and sought help, he made the assumption he would have been diagnosed and the Court of Appeal agreed with him on that.  There was no evidence whatsoever about the state of knowledge between 1969 and 1981, reference PTSD, and it is very hard, bearing in mind that both these people went and saw professional advocates in 1999 from counselling services who then understood, because of all the publicity given in the late 1980s to PTSD as a result of Vietnam, the implications as such, filled out questionnaires and then were referred to an appropriate psychiatrist.

That is what seems to have been assumed both by his Honour Justice Harvey Cooper and his Honour Justice Basten in the leading judgment in the Full Court, that because when these people went along in 1999 or thereabouts – it is 2000 or later, in fact, for Mr Shaw – and the PTSD was picked up, it therefore would have been picked up at an earlier time.  We say it is incumbent upon he who asserts the “ought to have known” to actually lay the evidentiary onus for that.  One should not look with the benefit of hindsight at the state of medical knowledge in 1999 as to what was likely to have occurred between 1969 and 1981, knowing already, of course, that Mr Shaw had similar problems, and in 1973 and 1974 two separate psychiatrists failed to make the diagnosis.

Your Honours, that then takes me to the question of the section 60G discretion in Shaw’s Case, because what happened here was that after criticising Justice Harvey Cooper for going ahead and considering the section 60G question in case he was wrong about his interpretation of section 60I(1)(b), the court then considered section 60G after effectively dismissing the appeal on the basis of their interpretation of section 60I(1)(b). We say that should not have occurred because it is a general discretion and one should not interfere with a general discretion of a judge at first instance unless there is a clear and obvious error which has led to a vitiation of his discretion. I perhaps should take your Honours to page 67 of the application book in relation to Shaw.  His Honour sets it out ‑ ‑ ‑

HAYNE J:   Paragraph 78 and following.

MR MELICK:   Yes, 78 and following.  Thank you, your Honour.  Unfortunately, your Honours, this involves a lot of messy evidentiary matters which are probably inappropriate to go to on the special leave application.

HAYNE J:   But it does present you with a little difficulty in seeking leave, does it not, Mr Melick?

MR MELICK:   In relation to Shaw’s Case but not in relation to Pearce’s Case.

HAYNE J:   I understand this is restricted to Mr Shaw’s case, yes.

MR MELICK:   Yes, and so, your Honour, I have to deal with it.

HAYNE J:   Yes, I understand.

MR MELICK:   Now, we say, generally speaking, his Honour has misapplied the test, and we refer to that in our written submissions.  If one looks at the comments in Brisbane South Regional Health Authority v Taylor, the discretion conferred is one to grant, not to refuse.  The evidentiary onus is on the defendant and that is reinforced at Zegarac’s Case at 197F, also referred to in the submissions.  What we have here is a very cursory brushing over of his Honour’s finding, “So I disagree with those and therefore I wouldn’t have allowed it.  In fact, we wouldn’t allow it”.  There really has not been a pointing to a fundamental error.  If I deal with the point one by one, at paragraph 79:

The first matter addressed by the primary judge was the Commonwealth’s complaint that “it is impossible for it to call witnesses who might be able to comment upon the plaintiff’s pre‑collision conduct –

There was no appropriate evidence before his Honour about that.  There was an affidavit from the Commonwealth about the fact that they had identified 22 people, bearing in mind there were over 1000 people on the Melbourne at the time of the collision, but they had identified 22 people who had reported upon the plaintiff in his record of service and had trouble locating any of those who could remember the plaintiff.  There was not any proper examination of what efforts had been made by the Commonwealth and there was no real evidence about the fact that the Commonwealth would not be able to find anybody who would comment upon the plaintiff’s pre‑collision condition.  There is no examination there of that evidence at all.  The comments about not answering the gravamen of the complaint – I am sorry, your Honour, I cannot read my own writing.

HAYNE J:   I think you must be dealing with paragraph 81, must you not?

MR MELICK:   Yes, I am, your Honour.

HAYNE J:   Yes, I can go with you that far, Mr Melick, but I do not know what is in your notes.

MR MELICK:   It says:

The Commonwealth should not be required to rely solely upon inherent weakness or inconsistencies in the plaintiff’s case.

There is no evidence to suggest that is all they could rely upon.  As I said, there were over 1000 people on HMAS Melbourne.  The plaintiff was in the Navy for at least nine years and he must have served with hundreds of people during that time and there was no evidence about what attempts, if any, that had been made by the Commonwealth to contact any of those people.  So once again, the proper evidentiary foundation has not been laid for the Commonwealth’s complaint.  It is all very well for them to make a complaint, but the evidentiary basis was not there in the first place.

HAYNE J:   Am I doing this last aspect of the argument justice if I say that it is an argument that criticises the sufficiency of the evidentiary base for

the conclusions expressed between paragraphs 78 and 84?  Is that the essence of it?

MR MELICK:   Far better put than I have, your Honour, yes.  The other problem is, of course, that none of these criticisms, we would say, of the trial judge amount to a fundamental error of such nature to vitiate his first instance discretion to allow the gateway, bearing in mind that there have been many of these matters decided already in the court with exactly the same problems and no suggestion of unfairness or no finding of unfairness to the Commonwealth in any of the completed matters upon appeal.

HAYNE J:   It leads me to this point which I think you may have to deal with.  Why should we take on what would be a purely evidentiary fight about the sufficiency of the evidence underpinning section 60G?  I understand what you say about the other two points.  They may, they may not stand separately, but on this section 60G point in Mr Shaw’s case, why should we take it on?

MR MELICK:   Merely to curb excessive interference by Courts of Appeal to a judge’s at first instance exercise of discretion.  I can put it no higher than that, your Honour.  Subject to anything else your Honours wish to raise, they are ‑ ‑ ‑

HAYNE J:   That completes what you would say in both of the matters, does it, Mr Melick?

MR MELICK:   Yes, your Honour.

HAYNE J:   Yes, thank you.  We might adjourn for a short time.

AT 2.26 PM SHORT ADJOURNMENT

UPON RESUMING AT 2.30 PM:

HAYNE J:   Mr Barry, we will not trouble you in either of these matters.

The applicant in neither case sought to challenge the proposition of Mr Justice Basten expressed in paragraph 73 of his reasons for judgment in the matter of Shaw that each case must be governed by its own factual circumstances.  We are not persuaded that any point of general principle would conveniently fall for consideration were special leave to appeal to be granted in either of these matters, nor are we persuaded that an appeal in either matter would enjoy sufficient prospects of success to warrant a grant.

Accordingly, in each matter special leave to appeal is refused.  It must be refused with costs.

The Court will adjourn to reconstitute.

AT 2.31 PM THE MATTERS WERE CONCLUDED