Stead v State Government Insurance Commission

[1986] HCA 54

HIGH COURT OF AUSTRALIA

Mason, Wilson, Brennan, Deane and Dawson JJ.

STEAD v. STATE GOVERNMENT INSURANCE COMMISSION

(1986) 161 CLR 141

23 September 1986

Courts

Courts—Practice—New trial—Denial of natural justice—Trial—Submission that evidence of witness should not be accepted stopped by judge—Evidence accepted—Whether new trial should be granted.

Decision

MASON, WILSON, BRENNAN, DEANE AND DAWSON JJ.: In an action in negligence arising out of a motor accident on 9 June 1981, in which liability was admitted, judgment was given for the appellant in the sum of $11,300, consisting of $10,000 for pain and suffering and loss of amenity of life, $1,000 for out of pocket expenses and $300 for interest. The amount of $10,000 was awarded in respect of a physical injury sustained by the appellant to his neck or cervical spine.

2. The appellant had sought additional damages in respect of a neurotic condition from which the primary judge found that he was suffering. The additional damages sought were substantial because the condition led to a complete breakdown and rendered the appellant totally incapacitated for work. The primary judge found that the respondent's negligence did not cause or materially contribute to the condition.

3. Whether the accident which resulted from the respondent's negligence was the cause or a material factor contributing to the condition was a major issue at the trial. Before the accident the appellant had always been a regular and industrious worker. Some time shortly after the accident he began to experience pain and discomfort in the region of his neck and cramping pains all over his body during sexual intercourse. This lead to his consulting his doctor about the accident for the first time thirteen months after the accident and to a deterioration in what had been a loving relationship with his third wife whom he had married one month before the accident. He came to believe that he was suffering from muscular dystrophy and, later, heart disease. He virtually ceased to work from the time when he first consulted his doctor, Dr Hardy, in July 1982.

4. The respondent's case on the issue of causation was that the cause of the condition was not the accident, but the stresses and strains arising from the appellant's third marriage. A substantial amount of evidence was tendered on the issue. The appellant gave evidence, as did his wife and father. He called a fellow worker, his doctor, a psychiatrist, a dentist, and a physiotherapist. He tendered reports by a surgeon, a neurosurgeon, a physician and rheumatologist and another psychiatrist. The respondent called two psychiatrists, one of whom was Dr Scanlon, and tendered the reports of a neurosurgeon and two orthopaedic surgeons.

5. After the close of the evidence the respondent's counsel, Miss Mack, addressed. She relied strongly on Dr Scanlon who had given cogent evidence against the existence of a causal connexion between the accident and the appellant's neurotic condition. Following some discussion between Miss Mack and the primary judge concerning Dr Scanlon's evidence, particularly with respect to the accident operating as a "trigger" to set off the appellant's neurotic condition, Miss Mack submitted that the psychiatrists were in harmony as to the appellant's unusual personality make-up. The learned judge then said:

"HIS HONOUR: Yes, the main difference is the triggering or non triggering. I think as presently advised and having heard you on that, and very recently heard Dr Scanlon and from my legal position I am not moved so far, from my present view that on the balance of probabilities it was the trigger .... You should argue on the second basis, as to how strong the risk was of the contingency of the same result, what effect it should have."

6. When the appellant's counsel came to address, he submitted that his Honour should not accept Dr Scanlon's evidence that the accident had nothing to do with the neurotic condition. This elicited from his Honour the comment, "Alright. I don't accept Dr Scanlon on that. You needn't go on as to that." The appellant's counsel understandably did not develop the submission and addressed no further argument on the acceptability of Dr Scanlon's evidence on the issue of causation.

7. His Honour, having reserved his decision, ultimately accepted Dr Scanlon's evidence on that issue, holding that the neck pains originating in the accident were not a material cause of the cramps and of the appellant's subsequent psychological and physical breakdown. His Honour specifically accepted Dr Scanlon's testimony that there was "no relation between the subject accident and his behaviour" and that the accident did not operate as a "trigger". His Honour went on to find:

"... on the balance of probabilities, that the third marriage stresses were the cause of the plaintiff's decompensation in late 1981 and following years. The lower position I take is that the plaintiff has not proved, on the balance of probabilities, that the accident caused his decompensation or materially contributed to it."

8. The appellant appealed to the Full Court of the Supreme Court of South Australia on various grounds. One ground was that by stopping the appellant's counsel from addressing on the topic of Dr Scanlon's evidence with respect to causation, the primary judge had deprived the appellant of an opportunity of presenting argument on a vital issue in the case. The Full Court dismissed the appeal, holding that the primary judge was "perfectly entitled to accept the evidence" of Dr Scanlon. Bollen J. (with whom King C.J. and Prior J. agreed) said that "the enquiry whether a miscarriage of justice has occurred involves asking whether the event said to cause a miscarriage could have made any difference to the result." To support this proposition, his Honour called in aid decisions, such as Balenzuela v. De Gail (1959) 101 CLR 226, which established that a new trial will be granted on the ground that evidence has been wrongly rejected unless it appears that the evidence rejected could not have affected the jury's verdict. His Honour, referring to the decisions, said:

"They emphasize that we must enquire if there has been a miscarriage of justice. I think that they show that the practical question is - would further argument possibly have made any difference?"

He answered this question in the negative on the footing that the arguments advanced for the appellant in the Full Court must have been considered by the primary judge. His Honour concluded by saying:

"In my opinion, therefore, the further arguments and elaboration of argument which the appellant's counsel would have put could not have made any difference to the result."

9. The general principle applicable in the present circumstances was well expressed by the English Court of Appeal (Denning, Romer and Parker L.JJ.) in Jones v. National Coal Board (1957) 2 QB 55, at p 67, in these terms:

"There is one thing to which everyone in this country is entitled, and that is a fair trial at which he can put his case properly before the judge. ... No cause is lost until the judge has found it so; and he cannot find it without a fair trial, nor can we affirm it."

That general principle is, however, subject to an important qualification which Bollen J. plainly had in mind in identifying the practical question as being: Would further information possibly have made any difference? That qualification is that an appellate court will not order a new trial if it would inevitably result in the making of the same order as that made by the primary judge at the first trial. An order for a new trial in such a case would be a futility.

10. For this reason not every departure from the rules of natural justice at a trial will entitle the aggrieved party to a new trial. By way of illustration, if all that happened at a trial was that a party was denied the opportunity of making submissions on a question of law, when, in the opinion of the appellate court, the question of law must clearly be answered unfavourably to the aggrieved party, it would be futile to order a new trial.

11. Where, however, the denial of natural justice affects the entitlement of a party to make submissions on an issue of fact, especially when the issue is whether the evidence of a particular witness should be accepted, it is more difficult for a court of appeal to conclude that compliance with the requirements of natural justice could have made no difference. True it is that an appeal to the Full Court from a judgment or order of a judge is by way of rehearing and that on hearing such an appeal the Full Court has all the powers and duties of the primary judge, including the power to draw inferences of fact (Supreme Court Rules O.58 rr.6 and 14). However, when the Full Court is invited by a respondent to exercise these powers in order to arrive at a conclusion that a new trial, sought to remedy a denial of natural justice relevant to a finding of fact, could make no difference to the result already reached, it should proceed with caution. It is no easy task for a court of appeal to satisfy itself that what appears on its face to have been a denial of natural justice could have had no bearing on the outcome of the trial of an issue of fact. And this difficulty is magnified when the issue concerns the acceptance or rejection of the testimony of a witness at the trial.

12. This is just such a case. At the trial the critical question on the issue of causation was whether Dr Scanlon's testimony should have been accepted in preference to the appellant's expert witnesses, notably Dr Donsworth. It was an issue pre-eminently suitable for determination by the primary judge who had an advantage over the Full Court in seeing and assessing the witnesses. We do not see how the Full Court, denied the important advantage of seeing and assessing the witnesses, could satisfactorily conclude that had the appellant's counsel been given a reasonable opportunity to present submissions on the issue, it could have made no possible difference to the result.

13. It is significant that Bollen J., after referring to "the forcefully and attractively presented arguments" of Mr Anderson for the appellant, made this comment:

"... they were arguments fit for offering to the trial judge but not on appeal. There was evidence which could have led to the rejection of Dr. Scanlon's opinion. But it was for the trial judge to say. He had the inestimable advantage of seeing and hearing the witnesses."

Later Bollen J. said:

"In my opinion, the learned trial judge was perfectly entitled to accept the evidence of Dr. Scanlon. It was his evidence which the learned trial judge found acceptable. It was entirely open for him to so find."

14. These statements do not suggest that his Honour considered that the primary judge was bound to find the issue of fact in favour of the respondent or that the finding of fact was the only finding reasonably open on the evidence. Instead they imply that the issue was rather finely balanced, an assessment which accords with the primary judge's reaction. Initially he had been disposed to reject Dr Scanlon, but on mature reflection he had come to the opposite conclusion.

15. It is natural that Bollen J. expressed himself as he did in the passages which we have quoted. He was conscious that, not having seen the witnesses, he could not evaluate their evidence in the way in which a trial judge can. It is for this very reason that, in our view, the Full Court was disabled in the circumstances of this case from reaching a sound conclusion that a new trial in which the applicant's counsel would have an adequate opportunity of presenting submissions on the issue of causation could make no difference to the result.

16. Alternatively, if the Full Court is properly to be understood as saying no more than that a new trial would probably make no difference to the result, their Honours failed to apply the correct criterion. All that the appellant needed to show was that the denial of natural justice deprived him of the possibility of a successful outcome. In order to negate that possibility, it was, as we have said, necessary for the Full Court to find that a properly conducted trial could not possibly have produced a different result.

17. There is nothing in Balenzuela v. De Gail which compels us to a different conclusion. Indeed there is much in that case that reinforces what we have said - see the judgment of Dixon C.J. at pp.232 et seq., esp. at p.235. There the Court ordered a new trial because material evidence was wrongly rejected. It would have been otherwise had the respondent been able to demonstrate that the rejected evidence could have made no difference to the result. Then it would have emerged that the appellant had not lost a possible chance of obtaining a verdict. However, that was something which the respondent in Balenzuela v. De Gail was unable to demonstrate. So it is here.

18. Accordingly, the Full Court's refusal to order a new trial was, in the circumstances, mistaken.

19. The appeal should be allowed, and a new trial ordered limited, as was the first trial, to the issue of damages.

Orders

Appeal allowed with costs. Order that the appeal to the Full Court of the Supreme Court of South Australia be allowed with costs. Set aside the order of the trial judge and in lieu thereof order that there be a new trial limited to the issue of damages.