Smith v Australian National Line Ltd
[2000] HCATrans 207
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Perth No P56 of 1999
B e t w e e n -
STEPHEN PAUL SMITH
Appellant
and
AUSTRALIAN NATIONAL LINE LTD
Respondent
GLEESON CJ
GAUDRON J
McHUGH J
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON WEDNESDAY, 24 MAY 2000, AT 10.20 AM
(Continued from 23/5/00)
Copyright in the High Court of Australia
GLEESON CJ: Yes, Mr Solicitor.
MR BENNETT: If the Court pleases. I propose to deal first with five matters arising out of questions asked by members of the Bench yesterday and then to proceed from paragraph 22 of our submissions. I still regard the three‑quarters of an hour as a realistic estimate. At pages 6 to 7 of the transcript at paragraph 230 your Honour Justice Kirby asked about the proportion of Commonwealth employees effected.
KIRBY J: Only if it is in the record.
MR BENNETT: Your Honour, it is in the report which was tabled in Parliament as part of the proceedings giving rise to this legislation. I can tell your Honour what that said.
KIRBY J: Was that before the courts below or not? I do not want anything outside the record.
MR BENNETT: Well, I - - -
KIRBY J: I did see it somewhere. I did see some estimate of 2,000 or 2,000 employees of the respondent, I think.
MR BENNETT: Yes. I can give your Honours the answer if your Honour wants it.
KIRBY J: Anyway, it is not important.
GUMMOW J: Well it would be admissible, would it not, under the Interpretation Act provisions?
MR BENNETT: I would so submit, your Honour; it is a constitutional fact, in a sense, which ‑ ‑ ‑
KIRBY J: I just do not want to receive new evidence in an appeal, I am very sensitive to that question.
GUMMOW J: But it helps construe the statute, does it, I suppose, as part of the matrix in the Parliament?
MR BENNETT: It does, your Honour; we will know more about that tomorrow, after the judgment comes down in Eastman, but your Honours have the advantage ‑ ‑ ‑
GLEESON CJ: The parliamentary debates are not part of the record, but if they can be referred to as an aid to construction, they can be referred to.
MR BENNETT: Well, referring to them in that basis, what one gets from Professor Luntz’s report is that approximately 21 per cent was ANL as at 1993 and, of course, that was not the Commonwealth at that stage, and, as far as we can ascertain, there were no other Commonwealth employees who were affected by it, but we have not, of course, done any more really than look at the report and the names on the report. His report actually was late 80s, although it was tabled in Parliament in 1993, so that gives one an approximate idea. It certainly is not an industry which, in any sense of the word, is dominated by the Commonwealth or even was in 1993.
The second matter is ‑ ‑ ‑
KIRBY J: Is that that is relevant to the question of characterisation of the law as not a law for the acquisition, that is how it is put, I think.
MR BENNETT: A constitutional fact which therefore could be proved in this Court. My learned predecessor has been heard to say that the only rule of evidence in appeals in this Court is that one needs 10 copies, but that may not be a correct analysis.
KIRBY J: It is a little more sophisticated than that.
MR BENNETT: Yes. Your Honour, the second matter is that at page 83 of the transcript at paragraph 3735, your Honour Justice Callinan asked for references dealing with the question of “adjustment of competing rights”. That is referred to in a number of cases. It is referred to in the Australian Tape Manufacturers Case 176 CLR 480 at 510 where, in the judgment of Chief Justice Mason and Justices Brennan, Deane and Gaudron, the statement is made:
In a case where an obligation to make a payment is imposed as genuine taxation, as a penalty for proscribed conduct, as compensation for a wrong done or damages for an injury inflicted, or as a genuine adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity, it is unlikely that there will be any question of an “acquisition of property” –
The phrase also appears in a number of other cases. It appears also in Nintendo v The Commonwealth 181 CLR 134 at 161, in the judgment of six members of the Court including Justices Gaudron and McHugh where it is said:
The cases also establish that a law which is not directed towards the acquisition of property as such but which is concerned with the adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity is unlikely to be susceptible of legitimate characterization as a law with respect to the acquisition of property –
They seem to be the main authorities for it. We have set out a number of other authorities in footnote 54, the most recent being a couple of references in the Air Services Case.
CALLINAN J: What are the competing rights here, if any?
MR BENNETT: One has a situation in which there are seafarers who are injured in the course of their employment and one has to adjust the rights and liabilities of employees and employers, bearing in mind a large range of factors including the desirability from the plaintiff’s point of view of a continuing scheme as opposed to a lump sum, the ‑ ‑ ‑
CALLINAN J: But that is not a right, is it? It might be a claim, I suppose, but it is not a right or an obligation, is it?
MR BENNETT: I am suggesting the rights of the respondent employers and the applicant employees and one is adjusting the rights and liabilities between them in accordance with one scheme rather than a common law scheme.
CALLINAN J: “Adjusting” just might be another term for taking away or giving or acquiring. It is not your word, I know.
MR BENNETT: In a sense one can look also at the scheme cases, cases like Peverill in this Court and the Fishing Quota Cases in the Federal Court where the courts have said if you have federally created rights to, for example, a fishing quota and you then adjust them by taking away from some people and giving to others, that is not an acquisition under section 51.
CALLINAN J: Is that subject to the qualification that the right must be a right that cannot be found in the common law, that it is an entirely statutory right?
MR BENNETT: Certainly in all those cases they were statutory rights but there would seem to be no logical reason why one would draw a distinction because, if one has a complex area of the common law where there are systems of rights and liabilities and the common law like a statute can be adjusted by statute, the same type of principle could be said to apply.
CALLINAN J: What about a grant of freehold land by the Commonwealth in the Northern Territory? It may not be identical with or the same as what you would get at common law. It may not have the same meaning as freehold at common law. Does that mean that because it is granted by the Commonwealth under some statutory power, if it is, the Commonwealth can take it away without triggering the constitutional provision?
MR BENNETT: No, your Honour, the cases on section 51(xxxi) make it clear that it even applies to licences but it is ‑ ‑ ‑
CALLINAN J: No, but do not worry about licences, for the freehold.
MR BENNETT: Your Honour, the principle seems to apply where one has a scheme of rights and liabilities by one person against another as opposed to the situation where one has rights against the world such as proprietary rights. Now, certainly one can have a proprietary right against an individual such as a debt or a cause of action and Georgiadis has shown us that taking that away can constitute an acquisition, but nevertheless one still has to characterise what is being done and this is partly the final argument to which ‑ ‑ ‑
CALLINAN J: Why do you have to characterise it? If it is with respect to the acquisition of property for the purpose of the exercise of some power of the Commonwealth, why do you have to do more than that? You find that the Commonwealth cannot acquire anything other than for a purpose; is that right?
MR BENNETT: No, your Honour, because ‑ ‑ ‑
CALLINAN J: Apart from taxation and perhaps custom and the like.
MR BENNETT: Well, it is the “and the like”, your Honour. Certainly merely by saying one is under another power does not prevent the law being a law with respect to acquisition. The classic example I suppose would be acquiring land to build a lighthouse on.
CALLINAN J: But it must be under another power because it must be for a purpose ‑ ‑ ‑
MR BENNETT: Precisely, your Honour.
CALLINAN J: ‑ ‑ ‑ and the purpose must be in pursuance of some power that the Commonwealth has surely.
MR BENNETT: But, your Honour, if what is being done is, as in Peverill, a general adjustment of rights and liabilities under a scheme involving in that case the Commonwealth provision of medical services and the financing of them, one can adjust that scheme and then one says even if there are winners and losers, there are people who have rights, which may well be proprietary rights, taken away. The law is not a law with respect to the acquisition of property. It is a law with respect to the administration and adjustment of that particular scheme.
McHUGH J: There is a difference, is there not, in the cases between rights which are vested and those that are, in effect, at the discretion of the government? The United States cases, in particular, say that people have no vested legal rights to pensions, gratuities, licences, privileges and so on. Although, one case that is not easy to reconcile with that in this Court is Allpike’s Case where, although a deceased soldier’s entitlements had already vested, this Court held that under the defence power an officer was authorised to direct those entitlements to be paid in a way contrary to the terms of the deceased will. It is not an easy case to reconcile, I think, with later authorities, although Justice Dixon gave the leading judgment. He said there was no acquisition of property by the Commonwealth.
MR BENNETT: When your Honour uses the phrase “at the discretion of government”, there may be a difference if by “the discretion of government” one means that Parliament can pass a law doing something or “the discretion of government” means that some government officer has the discretion whether to apply it, and one may get different applications. But the cases of the Peverill type are concerned with the adjustment by Parliament of statutory schemes. That is certainly in a different category. All I was doing at this stage was answering, in advance of when I come to it in my argument, Justice Callinan’s question and that was the purpose of referring to those cases.
GUMMOW J: This word “acquisition”, there was some flavour in your submissions that this was not an acquisition because there was a choice given the plaintiff.
MR BENNETT: Yes, your Honour.
GUMMOW J: What is involved in that, I wonder?
MR BENNETT: That is the first of the submissions, your Honour. That goes, in a sense, to the example which was put yesterday by Justice Hayne about the motor vehicle legislation which said if you had legislation which said everyone’s motor vehicle must be sold on the open market within six months otherwise it is acquired by the Commonwealth for $100. Now, if one just changes that example slightly that might have problems, because of the difficulties of sale and so on, but if one said, “If the owner of the motor vehicle serves within six months a notice on the Commonwealth requiring it to acquire the vehicle on just terms it shall do so and any person who does not do that loses the vehicle for $100 after six months”, then it might have a different characterisation. Certainly that would be a just terms situation, we would say, but before one gets to just terms one might well characterise that law differently because the existence of the primary result under which something else happens, under which the person has the full right, might prevent it being an acquisition.
HAYNE J: That argument seems to be based on the proposition that acquisition connotes compulsion. Is that part of the contention?
MR BENNETT: Yes, it is, your Honour. Perhaps a better example ‑ ‑ ‑
GUMMOW J: What do you mean by “compulsion”, legal compulsion, economic compulsion ‑ ‑ ‑
MR BENNETT: No, compulsion in the sense that one is ‑ ‑ ‑
GUMMOW J: Compulsion as a practical matter?
MR BENNETT: A legal compulsion.
GUMMOW J: A legal compulsion.
MR BENNETT: Yes, your Honour. Perhaps the example would be even better if one made it that the vehicle is not acquired at all if one serves notice on the Commonwealth, more like the example of the enemy aliens I gave yesterday who own real estate. So long as the person has the option not to have it acquired and it is a reasonably exercisable option, it is not a thinly concealed device because of the shortage of time ‑ ‑ ‑
HAYNE J: Analogies are liable to take us over. I know that.
MR BENNETT: Yes.
HAYNE J: The relevant analogy, surely, is one in which someone has an opportunity to turn an asset or item of property to account in a particular way within a limited time in default of which certain consequences follow by operation of Commonwealth law.
MR BENNETT: Yes, add in the factor that it is the only way in which the asset can ever be turned to account. There is no other way of turning this asset to account except by suing.
HAYNE J: Yes, the qualification is one that does not, at the moment, convey much to me but the argument then seems to run on implicitly, if not explicitly, to attribute constitutional significance to the alternative courses.
MR BENNETT: Yes, your Honour.
HAYNE J: What I want to understand is what you say is the operative feature which gives constitutional significance to the fact of choice - not the fact of choice, the fact of alternative courses.
MR BENNETT: But section 51(xxxi) is concerned with compulsory acquisition. It does not use the word “compulsory” but that must be implicit. I certainly cannot think of any section 51(xxxi) case, and as always, one says things subject to correction, but I cannot think of any one in which there was not some form of compulsion in relation to the acquisition. If the Commonwealth says we will offer freely to acquire all guns at a reasonable price but there is no compulsion, no one would describe that as an acquisition under 51(xxxi).
McHUGH J: You remember in the Bank Nationalization Case there were provisions which, in effect, put a gun at the Bank’s head. They said that they should sell shares to the Commonwealth Bank and upon getting a notice, or if they did not they got a notice or something to that effect and if they did not then they could only get compensation through a compensation court so there was that sort of provision in that legislation.
GLEESON CJ: Is not the point about compulsion illustrated by the consideration that an offer by the Commonwealth to acquire property at an undervalue would not be an acquisition other than on just terms?
MR BENNETT: Yes, precisely, your Honour.
GLEESON CJ: If the Commonwealth had offered to acquire everybody’s guns at an unreasonably low price, that would not be an acquisition other than on just terms, would it?
MR BENNETT: That is my submission, your Honour, in relation to that.
GLEESON CJ: But, is that because it is not an acquisition, or is it because there is no lack of just terms?
MR BENNETT: It is not an acquisition, your Honour. I notice that – my learned junior just reminds me – in Trade Practices Commission v Tooth & Co Ltd 142 CLR 397, in the judgment of Justice Stephen, who was a member of the majority, at page 416 point 9 his Honour said:
Despite early dicta to the contrary it is now well established that pl. (xxxi) contemplates acquisition by “the method of requisition”, not by “the method of agreement” –
and he refers to some earlier cases, John Cooke & Co Pty Ltd v The Commonwealth, Poulton v The Commonwealth and the BMA Case. The BMA Case, Justice Dixon as he then was:
contrasted acquisition under pl. (xxxi) with the case of a voluntary sale.
GUMMOW J: But I think, is not the Banking Case authority for he proposition that compulsion can involve some consideration of practicalities of the matter?
MR BENNETT: Certainly, your Honour.
GUMMOW J: On one view of it, there was no legal compulsion in the Banking Case.
McHUGH J: Yes, I just notice a passage at page 341 in the judgment of Justice Dixon in 76 CLR. He said that part of the argument was:
Upon this footing it is claimed that, over a very long period, the Commonwealth Bank may be left in possession both of the business of a private bank and of the purchase money. For it need pay nothing on account of compensation before the amount is assessed.
MR BENNETT: Yes, but in this case, all that says is that there may be cases where compulsion is applied other than compulsion of law, but that is not this case; there was ‑ ‑ ‑
GLEESON CJ: Mr Radcliffe’s argument in the Privy Council was that pointing a gun at somebody’s head and saying, your money or your life, is a well-known form of acquisition of property, but not on just terms.
MR BENNETT: Yes, precisely, your Honour. The relevance here is, here there was no compulsion of any kind; there is six months in which the applicant is free to bring his application, the plaintiff is free to sue. If he does that, there has been no acquisition of any kind and it is as simple as that. It removes the element of compulsion which is necessary to an acquisition.
HAYNE J: Well that, if I may say so, Mr Solicitor, seems to me to state the asserted conclusion you want the Court to reach, offering no reason whatever for its ascertain. I would be assisted by understanding what the Commonwealth’s contention is about the constitutionally significant fact or indicator, not a bare assertion of the answer.
MR BENNETT: The fact, your Honour, is that there is no acquisition if the plaintiff acts in a particular way within six months after the passage of the legislation.
GAUDRON J: Well, that much is self evident, but the question is, is there acquisition if the plaintiff does not act within six months?
MR BENNETT: We would submit not, your Honour. There is a consequence of his failure to act.
GUMMOW J: Which is an acquisition that is not compulsory because there was not the relevant compulsion.
MR BENNETT: It is the consequence of the failure to act. I realise that also just states the issue in another way, states the problem, but we would say it is a consequence of the failure to act, not a consequence of any legislative requirement.
McHUGH J: No, it is a consequence that you taking against his will. What is the difference between you taking against his will on the day after the Act is proclaimed and taking against his will six months later? The fact that you give him six months to do something else does not seem to me to make it any less an acquisition.
MR BENNETT: Your Honour, it is an acquisition because he need not have his property acquired. It is not an acquisition because he need not have his property acquired.
McHUGH J: But the whole purpose of section 51 is to ensure that the property of the subject or of a State is not taken for the general welfare of the Commonwealth unless just compensation is paid for it. People are entitled to hang on to their property if they want to.
MR BENNETT: It is not the general welfare of the Commonwealth in this case because it is not ‑ ‑ ‑
McHUGH J: No, I know it is not, but that is generally. That is also what troubles me about the adjustment of competing rights theory, although I was a party to the judgment in Nintendo, but supposing if acting under the external affairs power or a reference from the States, the Commonwealth in recent times had said, “In the interests of public safety we are going to acquire all guns of a certain calibre in this country, no compensation”. Could they possibly say this was a question of adjusting competing rights, the safety of the general population, as against the owners of these guns?
MR BENNETT: It would be a case where one would have to characterise it. There is no doubt that one can acquire by sterilising but no one would suggest that a law saying you must not fire a gun was an acquisition of property, so at the end of the day one cannot apply bright line tests to that sort of situation where ‑ ‑ ‑
McHUGH J: Except in the illustration you just gave, it can be said that nobody acquires anything. Somebody may lose but nobody gains.
MR BENNETT: The purpose of the Commonwealth acquiring the gun is not so the Commonwealth can fire it; it is so that the Commonwealth can destroy it. That is why I say there are questions of characterisation involved in that type of legislation which are perhaps in a different category.
McHUGH J: But, once you open up this notion of adjustment of competing rights, it seems to me that you provide a rather large gap for the Parliament to avoid the operation of 51(xxxi).
MR BENNETT: Your Honour, however it is worded, you are going to have that problem of this type of provision with a constitutional guarantee against acquisition. The very fact that we have had to immediately create exceptions for tax and criminal penalties and customs forfeitures - almost before one started one had to create those exceptions and see them as being in a different category. The reason they are in a different category is that they do not have the same character of acquisition, although one would have thought taxation is very much for the purpose – indeed, the sole purpose – of increasing the public revenue.
GLEESON CJ: Is it because it does not have the character of acquisition or is it because you have to read two provisions in the Constitution together and one constitutes a qualification on the other?
MR BENNETT: Yes, but one does not do that with the lighthouses power when one acquires land to build a lighthouse on. So that may well be part of it but it ‑ ‑ ‑
McHUGH J: There may be a question as to whether it is necessary for the true exercise of the power to do something, such as tax.
MR BENNETT: One way of looking at it is to start with the archetype and say, “Well, this is about the Commonwealth acquiring land to put a post office or a lighthouse, or something like that, on it”. No doubt it extends to other areas and no doubt it goes further than that, but one starts by saying, “That is what we are talking about”. Then one says, “Well, that is so different to tax and required but they do not come within it”. That does not answer the question. That, again, poses the problem of how one draws the line and almost any way in which one draws the line, one is going to have the sort of problem to which your Honour Justice McHugh refers.
The third matter in the transcript yesterday was a question asked by your Honour Justice Gummow at paragraph 4510 about extensions of time. So far as we have been able to ascertain, in Western Australia there is no provision in the Limitation Act, no general provision for general extensions of time. However, in a number of States including - and again so far as we have quickly been able to ascertain, Victoria, South Australia, Northern Territory and the Australian Capital Territory - there are extension provisions which have no ultimate ceiling, so that one can at anytime, as long as one satisfies very stringent requirements bring a claim. In the other States there seems to be different sorts of extensions provisions but usually there is an ultimate limit. That is as far as we have been able to take it overnight. It is important to note that the discretions are fairly circumscribed in all that legislation.
GUMMOW J: In Western Australia the doctrine of common employment seems to have been abolished by the Law Reform (Common Employment) Act 1951 ‑ ‑ ‑
MR BENNETT: If your Honour pleases.
GUMMOW J: Section 3, which treats the doctrine as a defence.
MR BENNETT: Yes. Your Honour, the fourth matter is a question Justice Kirby asked at 4605 in relation to the concession which was referred to below. I said, and I may have answered too quickly:
It was not my concession, your Honour, nor that of any predecessor for whom I bear responsibility.
I should qualify that by saying that, of course, the Commonwealth was a party, the second defendant, at an early stage in this case and did take part in the proceedings. We are not aware as to whether or not a concession of the type referred to by Justice Ipp was made. The submissions we have looked at simply do not refer at all to the issue of just terms. But whether the argument was subsumed or not subsumed, I cannot assist your Honour.
The fifth matter is the general matter which was raised by your Honour Justice Gummow yesterday in relation to the nature of sections 64 and 79 and the Judiciary Act and there are a few further matters I wanted to say in relation to that.
The first is that, of course, the Judiciary Act was enacted in 1903 so there has been an adoption once proceedings are commenced of State Limitation legislation since then. It, in fact, goes back further to the Suits Against the Crown Act of 1902 which was enacted on 10 October 1902. So there may have been a period of a year and 10 months during which there was no limitation in relation to actions against the Commonwealth. Since then there has been the practical limitation that whatever State provisions were, were picked up once one commenced the proceedings.
It is in Evans Deakin v The Commonwealth 161 CLR 254. There is a passage at pages 265 to 6 in the judgment of five of the six members of the Court and this is referred to by your Honour Justice Gummow in Mewett, and I will come to that in a moment, but it is about point 8 on page 265 after the reference to Strods v The Commonwealth where their Honours say:
Secondly, in deciding whether a private person has a right against the Commonwealth, and the Commonwealth has a corresponding obligation, it must be remembered that once a suit is commenced between those parties the rights of the parties in that suit will as nearly as possible be the same as in a suit between subject and subject. If it is possible to say that once a suit is commenced the Commonwealth will be held liable, it follows that it can also be said, before the suit is commenced, that the events which have happened have created a liability which will be recognized and enforced in legal proceedings. A payment in satisfaction of such a liability will not be unlawful.
It is therefore only a half‑truth to say that section 64 has the effect that upon the commencement of a suit the Commonwealth becomes subject to obligations which did not exist beforehand. The section does not have a retrospective operation. At all times before a suit is commenced, it can be known what the rights of the parties will be once the suit is commenced.
That has to be qualified by reference to the possibility of suing in a different State.
GUMMOW J: Yes.
MR BENNETT:
It follows that we do not find compelling the ‑ ‑ ‑
GUMMOW J: I always thought Evans Deakin may have been one of Justice Callinan’s forensic successes.
MR BENNETT: Yes. It is a decision, other aspects of which have been criticised in other contexts.
McHUGH J: Yes. It is the first time I have ever heard the Commonwealth rely on Evans Deakin.
MR BENNETT: Yes. Yes, I was careful to qualify it the way I just have done, but it is an aspect of Evans Deakin which is of interest. Now, in Mewett 191 CLR 471 that is picked up by your Honours Justices Gummow and Kirby and at page 556 in the last paragraph on the page your Honours say this:
No State law can now be identified as having barred Mr Mewett’s cause of action in or before 1988. The application of any one of a number of State and Territory laws awaited the enlivening of the judicial power of the Commonwealth by the institution of an action in this Court or in another of the courts invested…..The differential operation of s 79 of the Judiciary Act, in combination with s 64, upon State law meant that it could not be known before commencement of an action what the rights of the parties would be after that commencement ‑
and your Honours have a footnote to that referring back to the passage I have just read –
Indeed, on one view, this knowledge may have awaited not the commencement of the action in this Court on 20 June 1994 but the subsequent filing of the defence –
So, where that leads one is that in the present case as at the date of the Commonwealth legislation, the plaintiff, the present appellant, had some subsisting rights. But that is so in any event. We know that without this doctrine because his cause of action on any view of it was one he could have sued for, at least in Western Australia and probably in a number of other places. We do not know what the limitation period would have been until he commenced the action. We do not know whether he might have commenced it in a State in which there was a theoretical right, which may or may not have had practical value in the circumstances, to obtain an unlimited extension of time. But we do know, and one can surmise without difficulty that any solicitor advising him would know, that as a practical matter it would be very much harder to enforce his rights as time went by, and after the passage of six years from the date of the accident. But we know he had rights.
Our point in this case is directed not to whatever limitations may have attached or potentially attached to those rights – and I use “potentially” in the sense in which it is used in Evans Deakin – our point depends entirely on what is done to them and the manner in which you may exercise them and what you may do to them despite the Commonwealth statute. So, at the end of the day, our argument does not depend on whether the cause of action would or would not have become a statute barred 18 months later. That may be a forensic flourish. It depends upon the fact that he still had a cause of action he could sue for within six months.
CALLINAN J: In Queensland his action would have been statute barred. I think it is three years for all claims for personal injuries.
MR BENNETT: Yes, in some States that is so. All that illustrates is that one cannot look at any particular State to get the necessary result in a situation where one could sue anywhere. But, certainly from the point of view of – there is no dispute that he had a live cause of action, and that really is sufficient to make this point not of great significance in this case. It is not a Mewett Case where one is doing it after the expiry.
Your Honours, those are the matters I wanted to raise in relation to what was said yesterday. May I just return to my written submissions ‑ ‑ ‑
GUMMOW J: Before you do that, Mr Solicitor, in addition to the passage in the Banking Case to which Justice McHugh referred, another passage perhaps to like effect is at 351 of 76 CLR.
MR BENNETT: Yes, if your Honour pleases.
GUMMOW J: Where the Court is looking to substance as to what is going on in this nationalised entity. The paragraph beginning “the amount payable by the Commonwealth Bank”, about line 10.
HAYNE J: His Honour refers to it as not falling on the side of the company, as being an involuntary – sorry, I have got the negatives wrong – he regards it as on the side of the company as being an involuntary disposition. As I understand your argument it is one that would put what happened here on the voluntary rather than the involuntary side of some line.
MR BENNETT: Yes, your Honour. If one said you can sue during six months but, if you do, you are subjected to some serious deterrent, then it might fall on the other side of the line because one might have the practical compulsion of the type to which the Chief Justice referred.
HAYNE J: And had analogies been available to you of the kind that used, at one time, to be found commonly in limitation provisions, that notice of action had to be given within 12 months of the event if you were going to sue a public authority, there might be some greater or intuitive comfort with the legislation. But what is it that you say leads to the conclusion, “Well, six months is enough”?
MR BENNETT: Your Honour, anything is enough so long as the period is not so short as to make it a device under which there is really an acquisition. It clearly could not be one day. The six months is not a matter of a palpable device. It is something which, on any view of it, we would submit, gives the legal profession time to advise and file.
CALLINAN J: Your argument in that regard is assisted if you can say that the date to look at the matter is when the enactment comes into effect, because if you look at it from that date there is a much lesser change in the plaintiff’s circumstances really.
MR BENNETT: That is the date that it was looked at in Georgiadis.
CALLINAN J: Yes.
MR BENNETT: In Georgiadis it did not matter that the legislation had been enacted much earlier and its coming into effect had been postponed so that everyone knew for six months. But that did not matter because the moment it came into effect there was an immediate acquisition. Here, the moment it comes into effect there is still time to sue.
CALLINAN J: I asked Mr Hanks whether, if one had to value a notional acquisition as at the date of the enactment or when the enactment comes into effect, the acquisition would have, and I think he conceded, very, very, little value if you were valuing it at that date, just as the diminution would be, perhaps, de minimis as you first submitted if you are looking at what is lost as at that date, that is the effective date.
MR BENNETT: Yes. It is not comparable to legislation which says that after six months everyone must hand over his car or his gun. It is not analogous to that.
Now, in paragraph 22 of our submissions there is a reference to Georgiadis 179 CLR 297 at 307 and there is just one sentence which we did not refer to which I should add to the reference. In the judgment of Chief Justice Mason and Justices Deane and Gaudron there is a reference to the effect of the legislation in Georgiadis and their Honours and your Honour say this. This is the middle of page 307:
However, it is by no means accurate to describe s 44 as a law modifying the limitation period applicable to causes of action with respect to injuries sustained by Commonwealth employees before the new scheme came into effect. Subject to s 45…..s 44 puts an end to a cause of action…..if it was not sued upon before it, s 44, came into effect. Section 44 operated once and for all as a final measure terminating those causes of action which fall outside s 45, not as a measure prescribing the time in which proceedings were to be commenced.
It is those words that we emphasise. Their Honours are drawing a distinction between a measure which operates when the Act comes into effect as a final measure and something which was merely a measure prescribing the time in which proceedings were to be commenced. That, we submit, supports the distinction we draw with Georgiadis.
I have dealt with everything up to the end of paragraph 24. Paragraphs 25 and 25 deal with the form as opposed to substance argument and refer to the nature of the words used and we simply contrast the words which were the relevant words in Georgiadis which were that an action does not lie, which was held to amount to an extinguishment, to the words here which are a person does not have the right to bring an action.
There are a number of cases in which this Court has said that the distinction is not merely a semantic one. Perhaps the clearest is McKain v Miller 174 CLR 1 at 44 where, in the judgment of Justices Brennan, Dawson, Toohey and McHugh at about point 2 of the page, their Honours said:
The meaning and reality of the distinction can be perceived more clearly where the statute bars an action to enforce a contractual proprietary, or possessory, right than where it bars an action to enforce a claim for damages in tort. Nevertheless, there is a real distinction between a statute which extinguishes a right to damages and a statute which bars an actin to enforce a right to damages –
There is a reference to Verwayen and much the same appears in Mewett.
KIRBY J: That, of course, was in the particular context which was for a purpose different from the one we are dealing with here.
MR BENNETT: It was, your Honour, but it was picked up in Mewett in the judgment of your Honour and Justice Gummow at pages 534 to 535 as being a real distinction. There is a reference there to the same distinction in that context.
GUMMOW J: Yes, but, as Justice Kirby says, that is talking about the constitutional question, is it not? It is saying a statute barred right may nevertheless still attract a guarantee, is it not?
MR BENNETT: Yes. It is the converse of the situation, but we would submit that there is a real distinction and the wording of this legislation is not the language of extinguishment. Turning to just terms ‑ ‑ ‑
KIRBY J: If you look at it from the point of view of the worker, one day he has a cause of action, which is something he can pursue in the courts, one day later he has not, so it is extinguished looking at it just from his point of view.
MR BENNETT: In that sense it is, yes, your Honour, of course, but ‑ ‑ ‑
KIRBY J: Why is that not what the Constitution is seeking to protect, that the Parliament cannot come in and take away established legal rights without providing just terms?
MR BENNETT: Your Honour, because there has always been a distinction recognised in relation to the effect of a limitation statute of the two types and it is one that has been referred to. I accept it is an argument based upon form rather than substance and that is why I have put it very much behind our primary argument, which is based on substance rather than form, but in the light of what this Court has said in a number of cases about that distinction, we do not abandon it.
In relation to just terms, I have already referred to the argument, it is a very simple one; we simply say that as long as you have still got time to sue on it, what is substituted, if it is regarded as a substitution, constitutes just terms. We have prepared, in view of the discussion yesterday, a short summary setting out the appellant’s position before and after the commencement of the 1993 legislation in relation to the various rights and liabilities that he had. I do not propose to go through this.
GAUDRON J: Am I right in thinking that the transitional provisions with respect to rights under the new Act, as it were, apply, whether or not there was a vested cause of action or a live cause of action or a good cause of action?
MR BENNETT: In general terms, yes, your Honour. I do not propose to go through this document, it is a detailed analysis of it, but what it shows is that, although in general terms his rights under the statutory scheme were similar to his rights under the former statutory schem, in, at least, two respects, under the statutory scheme his position improved under the new legislation and at some stage, if your Honours were against me, one would need to analyse that.
GUMMOW J: Which are the paragraphs which point to the improvement?
MR BENNETT: Paragraphs 8 and 10, your Honour. The final submission is the one to which I have referred in some detail in my discussion with Justice Callinan this morning, and that is the characterisation of the law as not being a law with respect to the acquisition of property. I have said most of what I needed to say about that.
It is important to note, as we in paragraph 31, that in Georgiadis’ Case the judgment of the Chief Justice and Justices Deane and Gaudron, who were three of the four members of the majority, described it as a borderline case on the issue of characterisation. If it was a borderline case where as at the date of the statute it effectively took away the cause of action, this is a long way from a borderline case where the litigant is free for six months to bring his cause of action without any impediment.
KIRBY J: It is still a borderline case, as your argument concedes, because you say one day, no; two days, no; a week, no; but six months, fine. I mean, it is still a borderline case. Our job is at the border drawing line.
MR BENNETT: The reason for the border is the phrase – I have not got the precise phrase in my mind, but the phrase about circuitous device. The reason for the concession about one day is that one day would be a circuitous device, not because the period is too short and that one has to allow some period.
GUMMOW J: What does this circuitous device doctrine actually mean? Is it just another way of saying one can look at substance, including economic coercion?
MR BENNETT: Yes, your Honour. Suppose one had some sort of scheme analogous to a Gorton scheme imposed by legislation so the Commonwealth obtained majority shareholding ‑ ‑ ‑
GUMMOW J: Pye v Renshaw might be an example. That is what always worries me about this area. The Commonwealth gives the money to the States on the terms that the States will acquire it compulsorily and then transfer it to the Commonwealth.
MR BENNETT: Yes, I suppose there are ‑ ‑ ‑
GUMMOW J: But that was upheld.
MR BENNETT: There are circuitous devices and circuitous devices, your Honour. That is all one can say. But the concession in relation to one day is confined to that circuitous device doctrine. As I say, in The Ydun, in England in 1899 it was thought that leaving a person a month did not prevent it ‑ ‑ ‑
KIRBY J: I do not think you should labour that authority.
McHUGH J: Is the term “circuitous device” referred to in any of the section 51(xxxi) cases? It comes out of section 92 doctrine, does it not, the old section 92 doctrine?
MR BENNETT: Your Honour, I had thought it was but I cannot ‑ ‑ ‑
GUMMOW J: It is in the Banking Case.
MR BENNETT: I cannot identify one off the top of my head at the moment but ‑ ‑ ‑
KIRBY J: It is just really a tool for characterisation, is it not? You do not really characterise it in a particular way because it is really a circuitous device.
MR BENNETT: Yes. In Harris and Caladine, where it was argued that the time for appeal from a registrar of one week was so short as to be a nugatory right of appeal, this Court was not at all receptive to that argument and regarded a week as quite sufficient for that purpose. That is a different purpose of course. One is there and one gets the decision and one knows one has a week, but it is six months ‑ ‑ ‑
KIRBY J: Mr Solicitor, you were a solicitor once and I was a solicitor once and I have to tell you that a week, a month and six months is not time for this sort of information to percolate. That may not be determinative but it takes a long time for this information to percolate down to the engine room.
MR BENNETT: The root of permeation with this type of litigation, particularly where it affects one industry only, is likely to be the union to the union’s solicitors and so on. Well, your Honour, my submission is that six months is nowhere near a circuitous device. It is simply ‑ ‑ ‑
GUMMOW J: The circuitous device is in 76 CLR 349.
MR BENNETT: Yes, I am indebted to your Honour
GUMMOW J: Sir Owen Dixon is purportedly applying on that page.
MR BENNETT: Yes. Well, your Honours, the remainder of my submissions on this topic are fairly detailed and I will not go through them unless there is an aspect your Honours wish me to go to.
CALLINAN J: Mr Solicitor, do you say that the appellant’s rights before the enactment were entirely federal statutory rights?
MR BENNETT: No, your Honour, I cannot. Well, the question is quite a complex one because it involves two or three different levels. There is the fact that at the time ANL may well have been an emanation of the Commonwealth. If it was, the rights against it, how they arose depends on the question whether the right to sue the Commonwealth was constitutional, was common law or was Judiciary Act. Probably it was common law. That seems to be the current doctrine in this Court.
CALLINAN J: Well, if it was common law, what was the significance, if any, of the abolition of the rule in relation to common employment?
KIRBY J: By the statute that is expressed as a defence.
CALLINAN J: The 1951 Law Reform Act ‑ ‑ ‑
KIRBY J: So that the theory that Mr Hanks said yesterday was that the common law right was there. It was just a defence an employer could raise and the statute has abolished the defence, but the right is still there in the nucleus, in the bosom of the common law.
CALLINAN J: And that the allegations, I think as Justice McHugh pointed out yesterday, seem to be allegation based upon vicarious liability of co‑employees.
MR BENNETT: Yes. Well, common employment, of course, meant that at common law there was no duty. The employer owed no duty, that one employee should not injure another negligently in the course of employment.
KIRBY J: That is not the basis on which the legislation has proceeded. It appears to have proceeded on the basis that they owed a duty but had a defence. It says it shall not be a defence to an employer.
MR BENNETT: That may well be, your Honour, because by then – I think I am correct in saying this - Western Australia would have had a Judicature Act in which the pleading was more in accordance with the modern form where one does not look to the cause of action, one rather looks to the underlying matter. At common law, in the case of common employment, the plea would be a plea of not guilty rather than a plea of common employment. Now, as, of course, the Judicature Act came into force, and as pleadings became more modern, one needed to specify what aspect of not guilty one meant and that would bring in what would colloquially be called a defence of common employment. But it is only a colloquial description. The true description would have been a situation where there was no duty, therefore no cause of action.
McHUGH J: That depends upon what your theory of vicarious liability is. One theory was that the employer had a primary duty which the act of the servant broke. The other view, which is the view of Justice Fullagar in Darling Island v Long, is that the employer was liable for the tort of the employee and was not himself in breach of any duty, that the common law imputed liability to the employer for the tort of the employee.
MR BENNETT: Yes. Probably to answer Justice Callinan’s question, one would have to resolve that controversy.
CALLINAN J: I ask it because I wonder about its relevance to an argument that this is, and I think you say this, do you not, that this could be characterised as an adjustment of competing rights and claims? It is easier to say that if ‑ and you may also, I think, bring yourself within what Justice McHugh said in Peverill ‑ that if some right is conferred, then that right can be adjusted or taken away by the Commonwealth and if this is the gift, as it were, of the Commonwealth statute, a federal statute, then it may be easier to say that the new provisions merely adjust that or take away something that was conferred and can be taken away.
MR BENNETT: Your Honour, there are two aspects to the principle stated in Peverill and referred to in the other cases to which you have been taken. The first is, as your Honour says, a Commonwealth scheme, and what the Commonwealth giveth the Commonwealth taketh away, and in that situation there is simply an adjustment of rights and, where is the acquisition? That comes up in the Fishing Cases too, in the Federal Court, Davies and a few other cases. The other way of looking at it is to say there are areas of the common law ‑ and perhaps one can leave for the moment, negligence, and take some other tort, take nuisance, for example ‑ where the law of nuisance is concerned with the complex adjustment of rights and liabilities of co-owners in relation to various forms of intangible interference with each others enjoyment of land.
The common law and the law of nuisance, a private nuisance, had a series of balanced principles balancing those two interests. If legislation, assuming one found an area within the Commonwealth power, if legislation seeks to change that balance and say, “Well, we think in 2000 that the adjustment of the rights and liabilities should be on a different basis to the way the common law of nuisance adjusts it”, that might well be thought to be within that principle.
In other words, the other aspect of the principle, the general adjustment of rights and liabilities of people in society as opposed to the idea of simply acquiring the property of one person for the benefit of another. That is, in our respectful submission, what is involved in the exception referred to in the cases.
CALLINAN J: Do you accept, then, that the defendant could have been sued, absent any legislation at all, assuming a case of negligence could be made out?
MR BENNETT: I have to apologise because I cannot give a direct answer to your Honour because the ‑ ‑ ‑
CALLINAN J: Once legal personality of the defendant was created, then that was enough for legal personality and could be sued in the same way as any other legal personality absent any further legislation. Do you accept that?
MR BENNETT: So we are ignoring the ANL legislation?
CALLINAN J: Yes.
MR BENNETT: And we are ignoring the seafarers legislation.
CALLINAN J: Ignoring all legislation except any legislation that may have been necessary to establish the defendant as a legal personality.
MR BENNETT: And we are assuming sufficient connection with the jurisdiction to confer jurisdiction under an Australian court?
CALLINAN J: Yes.
MR BENNETT: With those qualifications, yes, your Honour.
GLEESON CJ: Thank you Mr Solicitor. Yes, Mr Murphy.
MR BENNETT: I am sorry, before my learned friend begins, if I could just add this: there was a reference yesterday to your Honour Justice Callinan’s judgment in The Commonwealth v Western Australia. There is an addendum to that judgment which deals with the matter which was referred to, which is not picked up in the Commonwealth Law Reports. The addendum is, no doubt, available if one is referring to it. If the Court
pleases. I have a document which simply says “High Court of Australia Amendment”. It bears the name of the publishing officer at the end and it simply purports to make an amendment to ‑ ‑ ‑
CALLINAN J: It is a correction, is it not?
MR BENNETT: Yes, your Honour.
CALLINAN J: I think I attributed something to more judges than Justice Deane and it was only Justice Deane who said something and that was corrected. I think Mr Hanks may have gone to the body of the report rather than to the correction. It was only Justice Deane who said something and I think he was on his own in that. That was what I put to Mr Hanks, I think, yesterday.
MR BENNETT: If your Honour pleases.
MR MURPHY: Yes. May it please your Honours, in the respondent’s submission there are three issues to be considered. The first is whether section 54 of the Seafarers Act effects an acquisition of property within the meaning of section 51(xxxi). Secondly, if it does, whether section 54 is nevertheless properly characterised as a law with respect to the acquisition of property within the meaning of section 51(xxxi). Thirdly, if section 54 is such a law, whether it provides for the acquisition of property on just terms.
Your Honours, might I make brief reference to the written submissions. As to the first issue which is addressed at page 2 of the written submissions under the heading of that name subsection (b), the initial focus of the submissions, your Honours, is on the terms of section 54 itself and a consideration of whether section 54 on its own, leaving aside for the moment section 13 ‑ ‑ ‑
GUMMOW J: Section 54 never had an operation at a point in time where section 13 also had an operation.
MR MURPHY: That is so, your Honour, but it may help elucidate the operation of the two together by looking at them one at a time. The first point we make, your Honours, is that section 54 in its terms does not provide for an extinguishment. One does not see the word there unlike, for example, section 63 of the New South Wales Limitation Act.
The second point we make is that even though the words “right” and “action” are within the same section, they are not juxtaposed in the phrase “right of action” and if there was to be an extinguishment of the cause of action it would have been very simple to provide that a person does not have a right of action but that was not done and, as is mentioned in the footnote to paragraph 5 of that part of the submissions, your Honours, the words “right of action”, of course, are synonymous with cause of action and that was explained by Justice Rich in Loxton v Muir (1914) 18 CLR 360 at 379.
If I could just interpolate there, your Honours, the right of action as Justice Rich explained it is a right enforceable by action, that is, it is a right capable of being enforced by action. In our submission that tells us something about the nature of the right. It is not to say that it is future property but it does mean that by its nature it is property the value in which remains potential until it is realised through adjudication by a court. So the essence of the right lies in the potential to obtain curial relief.
Now, your Honours, section 54 does not, as I have indicated, provide that nobody has a right of action as such. It says that people do not have a right to bring an action and we make the observation that those words are traditional words of limitation, of the remedy rather than the right.
All of that leads to one point of distinction with Georgiadis. In Georgiadis the legislation was found to bar the right, not the remedy and, in that case, the legislation provided an action does not lie. In our submission, the construction which was approved of as with respect to the barring of the right in that case is, with respect, a proper one, because the word “lie” itself means, in our submission, exist or occur, such as “the fault lies there” or “the truth lies here”, “the truth exists here”, “the fault lies or exists there”. The legislation in Georgiadis provided that an action does not lie, therefore an action does not occur or exist.
Up to that point, your Honours, our submission is that section 54, at least on its own, would not lead to the conclusion that there is an extinguishment of a right. The words do not compel that conclusion and, as a matter of common law construction, the conclusion would not be preferred if another one were available.
GAUDRON J: Well, is a right to bring action an aspect of a right of action?
MR MURPHY: A right of action itself is a cause of action, in our submission, your Honour.
GAUDRON J: Yes, but does that involve a right to bring action?
MR MURPHY: Yes, it must. The essence of the right, your Honour, lies in its potential to obtain curial relief; that is the essence of the right.
GAUDRON J: And what they say here - and that is a right, is it not?
MR MURPHY: Yes.
GAUDRON J: And it is a valuable right.
MR MURPHY: Yes, it is not future property; it is an existing ‑ ‑ ‑
GAUDRON J: But it is a valuable right too; a right to bring action is a valuable right.
MR MURPHY: Yes, your Honour.
GAUDRON J: Now, section 54(1) says, no right to bring an action; what is the difference? Why is it necessary to look to these arcane distinctions about barring the remedy of the right, et cetera? What we are talking about is a right to bring action.
MR MURPHY: Your Honour, could I answer it in this way. If the legislation stopped there and the legislature wished to modify, to use a neutral term, common law rights, the possibilities were, at least, four fold: first that section 54 bars the remedy and operates with immediate effect; secondly, that section 54 extinguishes the right with immediate effect; a third possibility could have been that section 54 of the relevant provision bars the remedy, but not with immediate effect, and other provisions of the law provide for a further period of time in which causes of action could be sued upon before the bar on the remedy takes effect; and the fourth possibility, your Honour, would be that section 54 extinguishes the right, but not immediately, and other provisions of the law provide for a further period of time in which existing causes of action could be sued upon before they become extinguished.
Now, in relation to those four possibilities, your Honours, the second is the Georgiadis’ option, it extinguished the right with immediate effect. The first, ex hypothesi, does not directly extinguish the right because ‑ ‑ ‑
GUMMOW J: What was the first, again?
MR MURPHY: It is barring the remedy and operating with immediate effect, so, ex hypothesi ‑ ‑ ‑
GAUDRON J: But in terms it is not simply barring the remedy. In terms it is dealing with the right to bring action and a right to bring action is an aspect of the underlying right of action and for the purposes of 51(xxxi) even anomalous rights are within its operation, therefore, it seems to me to be irrelevant, except perhaps, for the purposes of characterisation, whether or not it extinguishes the right or the remedy.
MR MURPHY: That, with respect, is the submission that I was about to develop. If one takes those four possibilities, the second extinguishes the right, that is Georgiadis, the first bars the remedy but with immediate effect. That, as I have said, ex hypothesi, does not bar the right, it bars the remedy, but for the purposes of section 51(xxxi) the inquiry does not end there because one has to look at substance over form and as Sir Owen Dixon said in the Banking Case at page 349, one can have an acquisition within the meaning of section 51(xxxi) if the holder of the right is deprived of the substance of the proprietary interest in it.
For a cause of action, the substance of a proprietary interest lies in the potential to obtain curial relief. It may be said that the potential to obtain curial relief in reality is rendered illusory if relief is barred at the very point when the right to claim relief is first asserted. So, a plaintiff in that situation could well say as a matter of substance, “The substance of my proprietary interest has been divested because the practical effect is that I have been denied the potential to obtain curial relief” which, as I apprehend it, was the point your Honour Justice Gaudron was putting to me.
Now, section 54, of course, did not leave it in either of those situations. Section 54 was modified and qualified by section 13 of the Transition Act and section 13 of the Transition Act, in our submission, put the effect of section 54 into the third of the categories I have mentioned, which is a barring of the remedy, but not with immediate effect, and the provision of a further period in which causes of action could be sued upon before the bar or the remedy does take effect.
Now, if that is the correct way to look at the section, one is not dealing with the divesting of the right as such. The question has to be asked, “Is there a divesting of the substance of the proprietary interest?” If the substance of the proprietary interest lies in the potential to obtain curial relief, then a statute which operates to deny the substance of the proprietary interest, which is the potential to obtain curial relief, will fall within section 51(xxxi). The converse of that is if the law does not operate to deny the potential to obtain curial relief then it does not fall within the section because that is the substance of the right, the potential to obtain curial relief.
Now, the potential to obtain curial relief can be denied by, in the first and obvious case, as a matter of form extinguishing the right itself or as a matter of substance rendering the right illusory by barring any relief with immediate effect from the time that the right is first asserted in the proceedings. So, in our submission, a distinction, which is a very real one, has to be drawn between a law which operates to strike at or deny the very potential to obtain curial relief and one which merely shortens the period in which the claim is to be brought if the potential is to be fully realised.
GUMMOW J: Now, Mr Hanks, you need to deal, I think, and maybe you may want to ask to be able to deal with it in writing, but you need to deal, I think, with the submissions developed orally by counsel for the respondent this morning. For example, with the BMA Case, this notion of legally free, which is referred to, amongst other places, I notice, in Air Services 74 ALJR at paragraph [493], and with his submission that at the threshold there is no acquisition.
MR HANKS: Yes, your Honour, I can attempt to deal with those immediately.
GLEESON CJ: Well, you can choose. You can either deal with them orally or your can deal with them in writing. Which would you prefer?
MR HANKS: My preference would be to deal with them in writing simply because I may not have grasped the full import of the argument as it was put and it would be preferable ‑ ‑ ‑
GLEESON CJ: All right, you can have seven days from today within which to put any written submissions.
MR HANKS: Yes, your Honour. I am grateful for that, thank you. If the Court pleases.
GLEESON CJ: Thank you, Mr Hanks. We will reserve our decision in this matter. Call the next case please.
AT 12.36 PM THE MATTER WAS ADJOURNED
Key Legal Topics
Areas of Law
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Employment Law
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Negligence & Tort
Legal Concepts
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Duty of Care
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Negligence
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Causation
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Damages
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Vicarious Liability
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