White v Roberts

[1999] HCATrans 411

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S30 of 1999

B e t w e e n -

MARGARET WHITE

Applicant

and

JAMES WILLIAM ROBERTS

Respondent

Application for special leave to appeal

GAUDRON J
McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 19 NOVEMBER 1999, AT 2.00 PM

Copyright in the High Court of Australia

MR D.F. JACKSON, QC:   If the Court pleases, I appear with my learned friend, MR R.J. COLQUHOUN, for the applicant.  (instructed by Colquhoun & Colquhoun)

MR T.E.F. HUGHES, QC:   May it please the Court, I appear with my learned friend, MR M.T. VESPER, for the respondent, the defendant below.  (instructed by M.J. Raymond, Solicitor for Royal & Sun Alliance Insurance Australia Limited)

GAUDRON J:   Yes, Mr Jackson.

MR JACKSON:   Your Honours, the terms of section 79(1) of the Motor Accidents Act 1988 appear at page 54 of the application book in paragraph 9. Your Honours will see that section 79(1) provided that:

No damages shall be award for the non‑economic loss of an injured person as a consequence of a motor accident unless the injured person’s ability to lead a normal life is significantly impaired by the injury suffered in the accident.

The threshold question is contained in the words:

unless the injured person’s ability to lead a normal life is significantly impaired by the injury suffered in the accident.

As the President said in the Court of Appeal at page 57, paragraph 14:

In the case presently under appeal the trial judge found that the respondent’s ability to lead a normal life was significantly impaired for a duration of only eight months.

That is the significant impairment, though significant, had ceased before trial.  Now, your Honours, therefore, the majority in the Court of Appeal held, following the case of Matthews, to which they refer, no damages could be award for non‑economic loss because “is” in the provision means is at the time of trial or perhaps presumably time of judgment.  The provision, your Honours will recall ‑ ‑ ‑

GAUDRON J:   Well, it may simply mean continuous.  It may refer to a continuity, regardless of any precise point, which would not cover the eight months.

MR JACKSON:   Well, your Honour, that is a possible view, but what we would seek to say is that to adopt the view that there is no ability to award damages if the capacity to lead a normal life is no longer impaired at the time of the trial is a possible, but, in our submission, not the better view of the provision.

McHUGH J:   Why would not the legislature have used the past tense “was”, if your argument is correct?

MR JACKSON:   Well, your Honour, the legislature might have, I suppose, but one has to look at what the legislature actually said and what we would submit is that all that the section appears to be intended to require is that the consequence of the motor accident have brought about a significant impairment in the ability to lead a normal life and the ability to recover such damages should not depend on the date of trial, in our submission.  Your Honours, it is apparent that there is a significant body of opinion against the view which the majority itself adopted, and I should say the majority adopted it, but on the basis that if the matter were res integra, as it were, would not have done so.

Your Honours, as Justice Meagher, with whom Justice Beazley agreed, said in Rheinhardt v Huan in a passage which is in the application book at page 64 at about line 32, his Honour said there:

There must be some doubt as to the correctness of Grove J’s decision in Matthews v Dean; it is not immediately apparent to me that the use of the present tense “is” is temporal in its connotation.  Indeed, the whole purpose of the section is simply to ensure that any impairment of normal life is significant, not trifling.

And then his Honour set out the way in which he thought it should be read.  In the same case Chief Justice Gleeson – it is in page 65 of the application book, paragraph 28 – said, and perhaps I could go to the fourth line of the quotation:

As Meagher JA has indicated, there is a cogent argument that can be put to the contrary of that construction of the section.

He set out the argument and then said:

If correct, the argument would avoid the surprising result that a plaintiff’s rights can depend upon the length of delays in the court lists.

He went on to say it was “unnecessary and inappropriate” to deal with it, but there were not two sides arguing the point in that case. 

Your Honours, in another case of England v Van Donk (1997) 26 MVR, which is in amongst the bundle of cases we have given your Honours - it should be, I think, the second case - at page 301 to 302, having discussed the cases, Justice Stein at line 45 on page 301 said that:

It is clear that a literal construction of s 79(1) –

meaning by that that “is” means is now –

has the capacity to cause manifest injustice to a large number of people injured –

et cetera.  Your Honours will see that discussed through the remainder of that paragraph and then the first two paragraphs on the next page.  Your Honours, in the present case Justice Meagher remained of the same view.  That is at page 84 paragraph 55 of his Honour’s reasons where he expresses it somewhat picturesquely and, your Honours, the majority, as I have foreshadowed, would have favoured the view for which we contend.  That appears at page 73, paragraph 42.

Now, your Honours, in the present case the decision had an effect for the applicant which was disastrous.  Not only was any award for non‑economic loss denied her, but it had the costs consequence to which reference is made at page 79, paragraphs 47 and 48, and, your Honours, the reasons why the majority took the view that the earlier decision should not be overruled were set out by the President in a reference to six considerations which commence at page 74, paragraph 45.

Your Honours, we cannot deal all with them in detail now, but may I seek to say these things about them.  Your Honours will see reason (a) at the bottom of page 74.  As to that, we would submit the short fact is that case is wrongly decided.  The arguments against its correctness are strong and it should not be regarded as a factor.  Secondly, it is true that the decision in this case would affect a discrete number of cases in the sense that the legislation has since been altered so that for cases after a particular date the situation is made clear, but, your Honours, even with the attempts made in our learned friends’ written submissions to, as it were, finesse the numbers, it is apparent that the numbers may be significant.  May I in that regard go to page 108 between lines 20 and 25 and, your Honours, that is a letter from the Motor Accidents Authority of 14 May this year and it summarises what appears before and says:

This means that, of the 2,480 claims currently open with accident dates between 1 July 1989 and 31 August 1994, 2,073 are estimated to be affected by a possible a reinterpretation of Section 79.

Now, your Honours, even if one cuts that number by three‑quarters, there are still hundreds of cases which are potentially affected.  The next matter, we would say, is that as to the legislative change, and that is a matter to which the President referred at page 75, line 35, where he said:

Parliament held back from retrospective amendment in 1993 –

your Honours, I just need to say one thing to make more intelligible what I am trying to say.  That refers back to page 59, paragraph 19, where your Honours will see that the 1993 amending Act explanatory note in the second paragraph said:

As originally proposed, the verbal threshold was intended to operate in the narrative sense:  “the injury must significantly disrupt the personal or working life of the applicant”.

And then the proposal is there set out.  We seek two things, your Honours.  Parliament was leaving the resolution of the issue to the courts.  The second thing is that the explanatory memorandum had suggested that the contrary view had been intended.  Why not, we would seek to urge upon the Court, fix it up?  Your Honours, that is what I wanted to say about the first aspect of the application. 

The second aspect of the application concerns the costs order.  As I submitted earlier, your Honours, the result of the appeal was that the court applied Part 39A rule 25(6) of the District Court Rules and in doing so, your Honours, referred to an earlier decision of that court in Morgan v Johnson (1998) 44 NSWLR 578.

Now, your Honours, that is one of the cases in the bundle I have given your Honours.  Your Honours will see the relevant rule set out at page 581 and it commences between letters B and C and what it says, in effect, is that if an offer is made and not accepted by the plaintiff and the plaintiff obtains an order not more favourable than the offer then, unless the court otherwise orders, the plaintiff is entitled to an order for the costs up to the day the offer was made on a party-and-party basis and has to pay the other side’s costs – I am sorry, your Honours:

and the defendant shall be entitled to an order against the plaintiff for the defendant’s costs in respect of the claim thereafter assessed on a party and party basis.”

The principles, your Honours, are referred to at page 581E through to page 582E. 

The approach taken in the present case, your Honours, was that the court looked at the situation as at the time when the offer was rejected and that that is so appears at page 79 about line 45.  Now, your Honours, we would say no doubt one is entitled to look at the situation at the time when the offer is rejected, but in the end what we would submit is that the expression “unless the court otherwise orders” should not be limited to events existing at the time of rejection of the offer.  The whole course of events should be looked at and, your Honours, where, as here, the issue is obviously one on which two views were open, where leave ‑ ‑ ‑

McHUGH J:   But is that right, Mr Jackson, having regard to the course of authority which seemed to have been contrary to your client’s claim for many years?

MR JACKSON:   I am sorry, your Honour, because ‑ ‑ ‑

McHUGH J:   The precedents concerning the substantial issue, the section 79 issue, had been held against you for many years, had they not?

MR JACKSON:   Well, your Honour, the position was that the decision was a decision of Justice Grove.  A number of judges have followed that at first instance, but the nature of the decision, in our submission, was such that it was obviously a decision which might well be the subject of overruling.

McHUGH J:   But when you are talking about the damage to the plaintiff as a result of applying this offer of compromise, although I hate to say it, the fact is that she may have rights against her solicitors, unless they gave her full advice as to what her rights were in respect of that particular section and the risk of costs that she was at.

MR JACKSON:   Well, your Honour, and, could I just say this, in relation to it, one would have to look at the correctness of the decision and the possibility of it being overruled.

McHUGH J:   I know, but it does not necessarily follow that she is going to be out of pocket to the extent of the difference as what she has lost as a result of applying this rule about the offer of compromise.  I mean, she may have other remedies, depending on how well she has been advised.

MR JACKSON:   Well, your Honour, all I am seeking to say though is that in dealing with issues of this kind, the approach taken by the Court of Appeal appears to have been to look at the situation as at the time when the offer was rejected and to say that case held sway, as it were.  What we would seek to say about it is that the issue is one on which two views were open:  leave to appeal to the Court of Appeal was given because of the several views that had been expressed and a leave to appeal given effectively on terms that the other side might have to pay the costs in that court in any event.  In circumstances of that kind, one should look at the

whole case, in our submission, and say this is a case where the court should have otherwise ordered.  Your Honours, those are our submissions.

GAUDRON J:   Yes, thank you, Mr Jackson.  Yes, Mr Hughes.

MR HUGHES:   Your Honours, this is a sad case and a hard case, but the fact ‑ ‑ ‑

McHUGH J:   I must say I am attracted to Justice Meagher’s view of the section, Mr Hughes.

MR HUGHES:   Well, one can understand that, but the salient point that I wish to advance in opposition to the grant of special leave is simply this, that the application for special leave to appeal is made on two grounds, each of which involves canvassing a discretionary judgment.  The Court of Appeal in the majority ‑ one refers in this connection to the leading judgment at pages 74 to 78 – carefully canvassed the points relevant to the exercise of the discretion whether or not to apply or not apply the principle of stare decisis ‑ ‑ ‑

McHUGH J:   But is that not against you in a sense because at page 75 is there not an error on the part of the exercise of that discretion when in paragraph (d) the President said “(indeed, the respondent may be its only member)” of “a very small class of litigants”?

MR HUGHES:   Yes.

McHUGH J:   Well, it would seem from the material to which we were taken by Mr Jackson that there may be many more people involved than this applicant and, indeed, there may be a considerable class.

MR HUGHES:   Your Honour, the answer that we would endeavour to make to that is that this letter from the Motor Accidents Authority raises matter that really is essentially speculative.

McHUGH J:   Well, it is in one sense, but nevertheless it seems to me that what appears in paragraph (d) may well have had an important influence on the President’s view that the earlier decision should not be overruled.

MR HUGHES:   There is no doubt that the matter referred to in paragraph (d) on page 75 was one of the factors borne in mind in balancing out how the discretion should be exercised, but it was only one factor.

McHUGH J:   Well, I appreciate that, but there are other parts of the judgment where the President talks, does he not, about cases being settled on the basis of the earlier decision?

MR HUGHES:   Yes.

McHUGH J:   And so one gets the impression that he thought, “Well, there has been an injustice.  This will only affect one person or a very small class of person.”

MR HUGHES:   And that was a view which, with respect, was open. It was a view fairly open on the material before the court. Now, it really is a matter of speculation to what extent a change in the interpretation of section 79(1) would affect future cases. It has to be said that a lot of cases, as the President pointed out, have been settled on the faith or in reliance upon the previous decisions of the Court of Appeal. There are several of them, as noted in the judgment.

McHUGH J:   Well, Mr Hughes, I am sure there are a lot of waterside workers of the past who did not sue the Stevedoring Industry Authority.

MR HUGHES:   Yes.  Well, your Honour, that has opened up a very interesting floodgate, indeed, but that statutory situation is somewhat different and, of course, that case came before the Court of Appeal in Victoria when the question was largely, very largely, res integra.  Anyhow, your Honour, I appreciate what your Honour says, but another factor that has to be borne in mind, perhaps your Honours may think, is this, that if the law as to the interpretation of section 79 were changed, one might find, given the modern principles established regarding mistake of law of being a cause of action to upset prior agreements - one might find that a lot of settlements might be disturbed.

McHUGH J:   That seems a reason for granting special leave.

MR HUGHES:   Not really because ‑ ‑ ‑

McHUGH J:   To do justice.

MR HUGHES:   No, because one of the factors to be borne in mind, your Honour, in deciding whether to disturb an existing state of the law is what effect it would have on settled and completed transactions.

McHUGH J:   Yes, I understand, but what concerns me in this case is that the appellate judges who looked at this seem, for the most part, to be of the view that this decision is wrong and yet they do not overrule a ‑ ‑ ‑

MR HUGHES:   Most importantly, however, in our respectful submission, they do not say that with a very strong voice.  Your Honour has read ‑ ‑ ‑

McHUGH J:   Yes.

MR HUGHES:   ‑ ‑ ‑ the President’s judgment and he expressed some reluctance to apply the principle that stare decisis can be set aside as a principle on the basis that his view as to the law was not sufficiently confident.

McHUGH J:   Yes.

MR HUGHES:   Now, in essence, what we say is that on each level this is an attempt to appeal against a discretionary judgment ‑ that applies to the costs point as well as to the main point – and one asks in such a situation, as your Honours will know, “What was the misapplication of principle?”  And we say that the majority balanced out the various factors and came to a conclusion that cannot be attacked as a failure to exercise the discretion.

McHUGH J:   But there is also that residual category that was inserted in 35A in 1984, “miscarriage of justice in the particular case.”

MR HUGHES:   In the particular case.

McHUGH J:   Yes.

MR HUGHES:   Well, that brings one back to the same essential question.  There is only a miscarriage of justice, we would venture to suggest, if there is a fair case for saying, a strong case for saying, that the exercise of the judicial discretion miscarried, and that question is not answered simply by a conclusion, strongly arrived at or tentatively arrived at, that the decision in Matthews applied in several subsequent Court of Appeal cases was wrong. 

It is quite clear from the case on costs, and offers of compromise to which my learned friend referred, that, of course, that is par excellence an area in which the judgment is discretionary.  The judgment is no less discretionary when a court has to decide whether to apply or not apply the principle of stare decisis.  That is what I would say in support of the opposition to this application.  If the Court pleases.

GAUDRON J:   Thank you, Mr Hughes.  Yes, Mr Jackson.

MR JACKSON:   Your Honours, if I could just say one thing in relation to our learned friend’s argument on the discretion issue concerning the first point, and to describe the question as being a matter of discretion in the sense of making something less appealable really, with respect, does not give a proper weight to the functions of this Court and of the intermediate appellate courts because one of the functions of this Court, your Honours, is

to decide things more freely than the intermediate appellate courts would themselves be able to do.

This Court is freed from the burden of a precedent, on the one hand, but on the other hand, the weight to be given to individual decisions and one of the reasons why, your Honours, intermediate appellate courts sometimes follow earlier decisions is because they say, “There is a course of decision.  The right place to overrule this is the High Court, not ourselves.”

GAUDRON J:   Yes, thank you, Mr Jackson.  Yes, there will be a grant of leave in this matter.  The Court will now adjourn.

AT 2.26 PM THE MATTER WAS CONCLUDED