Williams & Ors v Bodewes

[1998] HCATrans 239

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S131 of 1997

B e t w e e n -

HOWARD WILLIAMS,
JOHN KERR WILLIAMS,
ROSS A. LINDGREN,
MICHAEL P. McDONALD,
THOMAS MOK FU YIM, R.A. FIDDES trading as HARRIS WHEELER

Applicant

and

ANTHONY ERNEST BODEWES

Respondent

Application for special leave to appeal

GLEESON CJ
McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 19 JUNE 1998, AT 9.29 AM

Copyright in the High Court of Australia

MR C.G. GEE, QC:   May it please the Court, I appear with my learned friend, MR D.G.T. NOCK, SC, for the applicant.  (instructed by Phillips Fox)

MR R.I. GOODRIDGE:   May it please the Court, I appear with my learned friend, MR D. PRIESTLEY, for the respondent.  (instructed by Firths)

MR GEE:   Your Honours, in this case the point that we wish to submit is appropriate for the grant of special leave is a narrow but important one, and important in daily practice.

The trial judge was confronted with the problem of assessing, in 1997, the value of lost damages lost through the negligence of solicitors in 1987, which was the agreed moment at which a trial notionally would have taken place had everything proceeded properly.

The trial judge held that it was not necessary that he receive evidence in relation to the assessment of damages in an era 10 years before, but whilst not absolutely ruling out the admissibility of such material, held that it was not necessary in every case, and not necessary in the instant case.

GLEESON CJ:   As I understand, what happened at the trial is that neither side put such material before him, and then the point was taken in address.

MR GEE:   That is really how it happened, your Honour.  To try to refine the point as sharply as possible we put it this way:  the decision of the Court in Johnson v Perez has settled the proposition that the search is for the value at the date of the wrong, which for practical purposes in a case such as this is the date, not of the original tort, but the date of the loss of the right; the date when the assessment ought to have been made.

In that same case - I will take your Honours to the pages if necessary - his Honour the then Chief Justice, Sir Anthony Mason, explained that damages might vary in quantum simply because of changes in the value of money over time.  That, if I may say so, with great respect, is, in principle, a non‑controversial proposition.  If damages, as his Honour indicated, vary in quantum according to, among other variables, a change in the value of money, it must be the case that a court in 1997 searching for the appropriate measure of damages in 1987, must have some instruction other than guesswork.

GLEESON CJ:   It is a question of degree, is it not?  What if it were searching for damages as at 1996?

MR GEE:   In my respectful submission, in principle nothing changes, but the difference between 1996 and 1986 is that at an evidentiary level, the difference will be almost certainly non‑controversial between the parties.

McHUGH J:   But your argument must logically lead to the conclusion that in every personal injury action which is heard more than a few years after the date when the cause of action comes into being, you require evidence.

MR GEE:   That is the logical conclusion, your Honour, but it is, if I may say so with respect, a rational conclusion, because ‑ ‑ ‑ 

McHUGH J:   Rational or not, it is contrary to the practice of the courts for more than a century.

MR GEE:   Your Honour, this Court skirted around the question, if I may say so with respect, in the case that followed Johnson v Perez - that is to say, in Nikolaou v Papasavas.  Both of the cases are reported in 166 CLR, and I was going to take your Honours to 404 in a joint judgment in which their Honours, after making the non‑controversial statement that a trial judge was required to assess:

damages by reference to the loss at the date of the right to claim damages.  That loss would ordinarily be quantified -

the Court said:

by the trial judge taking a broad brush approach to the several matters that in a particular case may require to be resolved - the likely date when in the absence of the negligence of the solicitor the action would have come to trial, the evidence that would or should have been available to the plaintiff at that time, the relevant principles of law then governing the assessment of damages, the question of contributory negligence, and.....the prospects of any judgment given in favour of the plaintiff being satisfied - in order to arrive at a figure -

What their Honours did not do, with great respect, was give attention to the unquestioned existence, as we would put it, of another question of fact; namely, what was the value of money compared with the date of actual assessment, and on which question of fact, if that practice is to be adhered to, the courts are deliberately excluding evidence.

May I illustrate it slightly differently, and perhaps I could just grasp the nettle on the way.  One answer to what I have just put is that someone might say the court does not have a problem.  If it wanted to compare the value of money today with the value of money 10 years ago, that being the missing element, as I have tried to give it, all that the court has to do is say, look at the consumer price index figures of 10 years ago, and that will give some indication of the change in the value of money.

But, that would be, in our respectful submission, quite an insufficient answer.  Supposing one changed the facts just a little, and the question was not what would a judge have awarded in 1987, but what would a jury have awarded a plaintiff entitled to a jury trial 10 years previously.  It could not be, in our respectful submission, the case that a judge sitting in 1987 could come to that conclusion, uninstructed as to evidence, not only of the actual change in the value of money, but the way that was subtlety reflecting itself in awards that were being made at the time.

McHUGH J:   Yes, but I am not sure that the point I was putting to you was fully understood.

MR GEE:   I am sorry.

McHUGH J:   What I was putting to you was that in an every day personal injury action between plaintiff and defendant, on your theory of the case, if the accident took place 10 years ago, you would have to call evidence as to what was the value of the injury as at that date, would you not?

MR GEE:   With great respect, no, your Honour.

McHUGH J:   Why not?

MR GEE:   Because that is not the inquiry as we would put it.  The problem facing the present judge this year is to put himself in the position of the notional judge at 10 years before.  He has what I have called the broad brush direction as to a number of matters.

McHUGH J:   But in the ordinary personal injury action, damages are assessed at the date of the injury.

MR GEE:   Yes, your Honour - at the date of trial, your Honour, with great respect.  In the money of the day at the date of trial.

McHUGH J:   Yes, but one is compensated for the damage that one suffered at that particular time.

MR GEE:   Yes, your Honour, and that is done by looking, as was explained, with respect, in Johnson’s Case, if the injury took place, say, five years before 1987 but the notional assessment was to take place in 1987, and that, the parties agree here was the situation, the money of the day to look at is 1987 money.

McHUGH J:   I know you say that, but why is not the practical answer which the common law has supplied, namely, that $200 today is the equivalent of $160 10 years ago, or 20 years ago, as the case may be?

MR GEE:   One reason, with great respect, is that the court is, on the present practice, shutting its face to evidence that would sustain that otherwise, possibly, speculative approach.

GLEESON CJ:   But there was no evidence that was rejected in this case, was there?  If either side had wanted to make an issue out of this they could have done so.  If the defendant had wanted to say, by calling evidence, that the case was proceeding upon a false basis because the judge was unaware of some material fact, the defendant could have called evidence of that.

MR GEE:   Your Honour, let me accept for the purposes of the submission, that that is so.  With great respect, that does not render any less important or worthy of special leave the general question of the admissibility, or the requirement, for evidence in the case that I have postulated.

GLEESON CJ:   But you put the proposition that the courts were shutting out evidence.  I thought the Court of Appeal in this case was careful to say they were not denying the possibility that in some cases it may be appropriate and necessary to have evidence.

MR GEE:   With respect, your Honour, certainly the first limb of that was said, that you would not absolutely bar evidence on the topic.  The Court of Appeal, with respect, did nothing to suggest when such evidence might be desirable, and the problem that poses itself, in our submission, is that there is no basis for saying that in this particular case the judge could simply embark on an assessment as if he knew what the relevant parameters were, including changes in the value of money for something that happened 10 years ago.

The matter could be debated on appeal if special leave were granted without any particular resort being necessary, or any resort being necessary, to evidentiary questions that might have arisen.  The matter can be debated as a legal proposition, logically developing what the Court has said already in Johnson and Nikolaou.

McHUGH J:   But in the context of this case, the Court would be asked to decide an abstract proposition.  It has no bearing on the way this case was conducted.

MR GEE:   No really, your Honour, with respect, because the trial judge, after all, did ask and answer the question, we submit, incorrectly, “Can I, sitting alone, uninstructed, proceed to any assessment of damages?”.

McHUGH J:   He may or may not have been, but in the absence of any evidence that the value of verdicts have changed in the intervening period, why should not one proceed on the basis that they had not, in the absence of you putting forward any evidence to the contrary?

MR GEE:   Your Honour, first of all, one would not know, merely because there was no evidence on the topic, whether there had been any change, but is not the point rather illustrated by what also happened in this same case, namely that when it came to a question of the trial judge putting a value on workers compensation rights that had been obtained in the meantime, so as to deduct them from the original notional figure, the court said the judge has quite insufficient experience to be able to embark on that task, and in principle it should not be done.  In other words, the process was to, first of all, recognise that there is an experience element involved, and giving every weight to the remarks of your Honour the Chief Justice just a few minutes ago, experience will not fill an hiatus in evidence, and if there is no basis on which the court can say, “I do not know whether the value of money has changed.  I suspect it has, but the plaintiff will have to show me what he has lost”, then an evidentiary set of matters is called for.

McHUGH J:   Is there any practical difference in the result?  If, for example, the value of money had changed so the verdict was X minus Y, nevertheless the plaintiff would be entitled to interest from the relevant date on that, would he not, as part of his damage because he had been kept out of his money, and one would assume that X minus Y plus interest would be the equivalent of X as at the present day.  In other words, Y is the interest component.

MR GEE:   In my respectful submission, the answer to that is that it is - I will say notorious; that might be too strong a word - that as inflationary times vary, of the kind, for example, referred to by the Chief Justice in Johnson, there are subtle influences on damages which are not purely arithmetic; which reflect themselves in the way the court will actually go about the process of assessment in high inflationary times versus times of low inflation.  That factor could be dealt with - and this is our last principal submission in support of the application - by recognising that the evidence that would be called for is not evidence, as appeared to be thought by his Honour Justice Cole, for example, below.

It is not evidence from one expert that a judge would have awarded this plaintiff $10,000 in 1987 versus evidence from another expert that this plaintiff would have got $20,000 in 1987.  Apart from anything else, that would be to trespass into the field of looking at comparable verdicts in a field in which the courts seem to have set their face rather against that.  What would be appropriate would be to take an apples and apples situation in which you took, through expert testimony, a controlled group of a range of characteristic cases and showed what their value was in 1997; a similar group of comparable cases 10 years before; and that would give, if such evidence were brought forward, an appropriate touchstone to wrap up all the subtleties that go with assessments of damages that change over an era.

McHUGH J:   I think this would convert common law trial into a seminar of the Wharton’s School of Finance.  Really, one would be having statistical calculations, calling experts.

MR GEE:   The alternative is error, in the sense that we do not even know whether it has occurred.

GLEESON CJ:   A possible point of view is that courts ought to be encouraged to take more broad brush approaches rather than less.

MR GEE:   Your Honour, if there is a question of fact involved - the one I have tried to identify is the value of money X years ago - then, in principle, no court should take a broad brush approach to what a fact was.  It requires evidence.

GLEESON CJ:   There are certain types of facts that arise in litigation that can be argued about to almost infinite detail.

MR GEE:   Yes, the valuation of land is a good example.

GLEESON CJ:   Yes, but this not being a case where somebody tried to lead evidence and it was shut out by the judge, but where, in final address, counsel said, “Even doing the best you can, you cannot do something”, the problem does not arise in that way, does it?

MR GEE:   I am not sure that the facts were precisely that.  If I have agreed with that, your Honour, I am open to correction.  I think before his Honour really embarked on the hearing, the matter was debated to some extent, and he apparently indicated that he saw no reason why he could not embark on the assessment.

GLEESON CJ:   But there was no attempt made to call some evidence that was excluded.

MR GEE:   Would your Honour just allow me to make sure that I answer that question correctly?  What your Honour has said is a correct statement, with respect.  Those are the submissions for the applicant.

GLEESON CJ:   Thank you, Mr Gee.

In this case special leave to appeal is refused on the ground that there is not sufficient reason to doubt the correctness of the decision of the Court of Appeal in the facts and circumstances of the particular case.

Do you resist an order for costs, Mr Gee?

MR GEE:   I do not, your Honour.

GLEESON CJ:   We will order that the applicant should pay the costs of the respondent in this application.

AT 9.48 AM THE MATTER WAS CONCLUDED