Wills v Bell

[2003] HCATrans 479

[2003] HCATrans 479

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B92 of 2002

B e t w e e n -

TIMOTHY PATRICK WILLS

Applicant

and

JAMES WILLIAM BELL

First Respondent

VACC INSURANCE CO LIMITED

Second Respondent

ERINDELL PTY LTD

Third Respondent

JOHN FRANCIS STONE

Fourth Respondent

Application for special leave to appeal

HAYNE J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

FROM BRISBANE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 14 NOVEMBER 2003, AT 11.33 AM

Copyright in the High Court of Australia

__________________

MR J.S. DOUGLAS, QC:   If the Court please, I appear with MR R.C. MORTON on behalf of the applicant.  (instructed by Murphy Schmidt)

MR J.D. HISLOP, QC:   If the Court please, I appear with my learned friend, MS P.J. GORMLY, on behalf of the second respondent.  (instructed by McInnes Wilson Lawyers)

HAYNE J:   I have a certificate from the Deputy Registrar that he has been informed by the solicitors for the first respondent that its client will abide by the decision of the Court save as to costs, and a certificate that he has been informed by the solicitors for the third and fourth respondents that its clients do not wish to enter an appearance or otherwise take part in the proceedings.  Yes, Mr Douglas.

MR DOUGLAS:   Your Honours, apart from what is contained in our summary of argument, we wish to say a few things briefly about the effect of some recent decisions of this Court and the Queensland Supreme Court delivered after those submissions were finalised.  Some of the discussion in Joslyn v Berryman, a decision of the Court earlier this year, which we have provided the Court with a copy of, raises the issue of the continuing authority of the Queensland Court of Appeal decision in McPherson v Whitfield [1996] 1 Qd R 474, a decision which was discussed in the judgments below.

Justice McHugh questioned its continuing validity at paragraph [36] of Joslyn v Berryman, where his Honour said - do your Honours have that paragraph?

HAYNE J:   Yes.

MR DOUGLAS:   And his Honour said that it, McPherson v Whitfield, and similar decisions that he refers to in that paragraph:

cannot be followed in so far as they hold or suggest that a passenger is guilty of contributory negligence in accepting a lift from an intoxicated driver only if the passenger knew, or was aware of signs indicating, that the driver was intoxicated.

In Joslyn v Berryman also, Justice Kirby referred to those decisions at paragraphs [100] to [118] in a fairly extensive discussion, which I do not wish to take you to in detail, but his Honour arrived at a decision based on the proper interpretation of the Motor Accidents Act 1988 (NSW) as did your Honour Justice Hayne in that decision, while saying at paragraph [149], which I will take you to - if your Honours have that paragraph:

Of the judicial approaches discussed, the one that takes the broader focus of considering the entire course of conduct by the intoxicated passenger is preferable to that which narrows the lens to focus exclusively on the events immediately preceding the accident.  This is the approach that the statutes in issue here, and both of them, require.

Your Honour Justice Hayne will recall that essentially the decision in Joslyn v Berryman turned on the proper interpretation of section 74 of the Motor Accidents Act (NSW).

HAYNE J:   Now, how do those statements, either the statements of Justice McHugh or the statements of Justice Kirby, assist you?

MR DOUGLAS:   They illustrate that there is doubt about the continuing application in Queensland of the reasoning in McPherson v Whitfield, a decision that was discussed below and one that remains authoritative of in Queensland.

HAYNE J:   Let that be assumed for the purpose of debate, how would that assist you in demonstrating that assigning 70 per cent responsibility to your client lay outside the permissible range of decision?

MR DOUGLAS:   If McPherson v Whitfield continues to be regarded as authoritative, it makes it more likely that the apportionment of contribution against my client was clearly wrong.  If McPherson v Whitfield is to be treated as no longer authoritative, it assists the respondent to some extent but not necessarily to the extent that the Court of Appeal allowed.

HAYNE J:   Do I understand the approach of the Court of Appeal to be founded in the notion that the two men concerned engaged in a drinking escapade and that, in rough terms, each was equally responsible for undertaking the ultimately disastrous motor car journey which might have assigned 50:50 responsibility, and your client, for not wearing a seatbelt, was assigned a further 20 per cent to take it up to 70 per cent.  Is that ‑ ‑ ‑

MR DOUGLAS:   Yes, that appears to be the approach adopted by the Court of Appeal.

HAYNE J:   And what is wrong with that as an available approach?

MR DOUGLAS:   Because it fails to take into consideration the approach to issues of contributory negligence of this Court in cases such as Podrebersek, which we have referred to in our outline, and similarly in the slightly more recent decision of the Court in Wynbergen, which we have also referred to in the outline, and reverting to Podrebersek can I remind your Honour of your own reference to that in Joslyn v Berryman at paragraph [157] where your Honour repeated a passage from it, which reads as follows:

A finding on a question of apportionment is a finding upon a “question, not of principle or of positive findings of fact or law, but of proportion, of balance and relative emphasis, and of weighing different considerations ‑

Then you go on to say, again quoting from Podrebersek:

The making of an apportionment as between a plaintiff and a defendant of their respective shares in the responsibility for the damage involves a comparison both of culpability, ie of the degree of departure from the standard of care of the reasonable man and of the relative importance of the acts of the parties in causing the damage ‑

And when you look at the relative importance of the acts of the parties in causing the damage with the respondent here, he is the driver of the vehicle that he drives into a bridge while looking for cigarettes on the floor of his car.  He is drunk; admittedly, the passenger is drunk, but when one looks at the relative importance of the cause of the accident one must conclude, in our respectful submission, that the driver is much more to blame than the drunken passenger even though the drunken passenger may not have been wearing a seatbelt, and it leads to the anomalous conclusion that the drunken passenger is two and a third times to blame for the accident as the drunken driver who actually drove the car into the bridge.  With respect, that is a completely anomalous conclusion which is contrary to principle.  That, we say, is the main special leave point as we have articulated in our summary of argument.

Can we also say that their Honours were able to arrive at the conclusion apportioning blame between the parties as they did partly by ignoring the factual finding of the trial judge, which we referred to at pages 108 to 109 of the appeal book and paragraphs 11 to 12 of our outline, where the trial judge had arrived at the finding that when the applicant left the hotel - you will remember that was about midafternoon perhaps, or early in the afternoon.  He had no intention to travel in his vehicle that day.

The Court of Appeal, however, reached the conclusion that there was a reasonably foreseeable specific risk that the applicant would have to travel in a vehicle or a likelihood that he may have to travel in a vehicle, in circumstances where the parties had booked into the hotel for three days, had prepaid their accommodation, had not checked out, had left their clothing in the room and had, at least in the applicant’s case, indicated that he wished to stay rather than leave on the day of the accident, at an earlier stage of the day.

So looked at objectively, the evidence supported her Honour the trial judge’s finding of fact and the Court of Appeal’s ignoring of that factual finding and arriving at their conclusion was one which is inconsistent with principle, and principle that has been referred to recently in other cases decided by this Court such as Suvaal v Cessnock City Council and Hoyts v Burns, that such factual findings should not be interfered with except where the primary decision was compellingly or culpably erroneous.  In our submission that is another ground for showing that the Court of Appeal erred in such a situation that it erred in principle and in this situation gives rise to a special leave point.

Getting back to your Honour’s question about the proportionate liability finding of the Court of Appeal, we say that the error of principle by the court came about because they sought to abrogate separate findings of negligent behaviour on the part of the applicant that even in combination, compared with the respondent’s behaviour, should have been treated as significantly less negligent conduct, and the failure of the applicant to wear a seatbelt, in our submission, should not be viewed in isolation from his drinking.  It is artificial in the extreme to assess contributory negligence separately for each such finding if the decision is left to stand.  It would encourage an approach to contributory negligence findings that is artificial and contrary to principle.

One other point we wish to make, your Honours, before we sit down is this.  The other recent decision of relevance is not one of this Court, but it is a single judge decision of Justice White in the Queensland Supreme Court in Willett v Futcher, which again we have supplied to the Court.  Her Honour, though in the majority in this decision, in dealing with the issue of the recoverability of damages in respect of investment management fees, decided not to follow the Court of Appeal’s decision in this Court, her Honour stating that she erred in her conclusion in the Court of Appeal even though her view was agreed in by Justice Mackenzie.

We say this is another area where a special leave point exists.  The question which arises is whether, in assessing damages for the management of a fund that is created by an award such as this one, the court should, as well as assessing damages in respect of what has been called an establishment fee, should also allow investment management fees to be assessed as part of the damages.

Her Honour discusses that issue at length in this decision, starting really with the decision of this Court in Gardikiotis and discussing a number of other decisions before saying, at paragraph [27]:

It is necessary to say something about Wills v Bell ‑

Do your Honours have that paragraph?

HAYNE J:   Sorry, which paragraph is it?

MR DOUGLAS:   Paragraph [27].

HAYNE J:   Yes.

MR DOUGLAS:   Of the decision of Willett v Futcher.  She refers to Wills v Bell, and then it says:

In my judgment in the Court of Appeal at [111] and following, I concluded that her Honour erred in not considering the management of the fund as a compensable head of damage relying (as her Honour did) on Gardikiotis.  Mackenzie J agreed without elaboration on this issue.  The President allowed an amount for the cost of investment advice without detailed discussion.  After the analysis which I have been able to do for this determination I have concluded that I was wrong in Wills v Bell on this issue.

That decision itself, I can tell the Court, has gone on appeal to the Queensland Court of Appeal and I understand that argument has been heard but no decision has been made yet.  But that illustrates that there is a

controversy about whether or not investment management fees can be allowed as well as establishment fees in the assessment of damages for large awards like this where the plaintiff is disabled and cannot himself manage his own affairs.

In our submission, it must be in the reasonable contemplation of the parties that the ordinary plaintiff who receives a large award of damages in a case like this, where he suffers significant brain damage, will need investment advice in respect of the lump sum he or she is likely to be awarded because of the defendant’s negligence and, therefore, that that should be a component of the damages.

The Court of Appeal in this case allowed to some extent such component, but the decision they made in allowing that component is itself very hard to interpret and very hard to apply with any degree of logic.  For that reason as well, in our submission, that is a special leave point which, coupled with the contributory negligence issue, makes this a case that should be heard by this Court.  With respect, they are our submissions.

HAYNE J:   Yes, thank you, Mr Douglas.  Mr Hislop, we would wish to hear you on the second of the matters raised by Mr Douglas; the question of allowing investment management fees as a head of damage.

MR HISLOP:   If it please the Court, the matter is essentially dealt with in Gardikiotis, a decision of the Court, which said that the question was to determine the amount to put the plaintiff in that position would have been in if the tort had not been committed.

Now, that is a factual question and it was answered in the court at first instance by the trial judge who determined that there were a number of fees which were to be paid and some only of those were to be taken into account.  Now, what she held was that the fee with the Perpetual Trustee Company was the relevant fee to be taken into account, and that was some $67,000.

HAYNE J:   Is that the so‑called establishment fee?

MR HISLOP:   That was what was called an establishment fee, your Honour.  It also had something that was called a discretionary fee involved in it.  So that was $67,000.  The Public Trustee had what they called an administrative fee, which was of a similar nature, which was $103,000.  The plaintiff’s next relatives wished the moneys to be invested with Perpetual Trustee rather than the Public Trustee, and the trial judge awarded the establishment fees and discretionary fees as sought by the Perpetual Trustee Company as opposed to the Public Trustee’s $103,000‑odd for its similar administrative fees.  Now, the trial judge at application book 52 line 25, concluded that:

whether it is the Public Trustee’s management fees or the advisory and investments management fees of Perpetual Trustees, they are fees that are incurred as a result of investing the funds.  They can be contrasted with Perpetual Trustees’ establishment and discretionary fees and the Public Trustee’s administration fees, which are charged in respect of the function of administrator and incurred because of the incapacity which necessitates the appointment of an administrator for financial affairs.  It is only the latter charge which can be a head of damage in this case.

Now, that finding is a finding of fact which is in accordance with the principles in Gardikiotis and which gives rise to no special leave question, the Court of Appeal substituting for the Perpetual Trustee’s figure of $67,000 the Public Trustee’s figure of $103,000‑odd.  The relevant principles in Gardikiotis are to be found in the judgment of Justice Gummow who laid down the relevant principles, and relied particularly upon the decision of Campbell v Nangle in the South Australian Supreme Court.

In that case it was held that the expenses in relation to investment were not payable.  That appears in Gardikiotis at page 58 where Justice McHugh sums up the South Australian decision by saying:

Neither the trial judge nor the Full Court, however, allowed any damages for the fees payable to an investment adviser because those expenses could be incurred by any injured plaintiff.

To similar effect, the judgment of Justice McHugh, to similar effect the judgments of the remaining Justices who followed the decision of your Honour Justice Gummow.

In our submission, therefore, it was totally in accordance with the law laid down by this Court that the fees, which were the investment fees to which the trial judge referred, were not recoverable and the decision, therefore, contains no error, in our submission, of principle and as a decision on fact is one which would not give rise to any matter requiring the intervention of this Court.

For those reasons we would submit that there should not be a grant of special leave in relation to the second matter which my learned friend has raised.  May it please the Court.

HAYNE J:   Thank you, Mr Hislop.  Yes, Mr Douglas.

MR DOUGLAS:   Nothing in reply, your Honours.

HAYNE J:   The applicant seeks special leave to appeal to contend, first, that an apportionment of responsibility made in the Court of Appeal of Queensland assigning 70 per cent of responsibility to the applicant for the injuries that he sustained when a motor vehicle driven by the respondent, and in which the applicant was a passenger, ran off the road, was wrong.  At the time of the accident both applicant and respondent were heavily intoxicated.  The figure of 70 per cent was arrived at by treating driver and passenger as equally to blame for their attempting to travel by motor car when both had been drinking heavily for an extended period of time, increasing the applicant’s share of responsibility to 70 per cent on account of his not wearing a seatbelt.

Similar but not identical problems have recently been considered by the Court in Joslyn v Berryman (2003) 77 ALJR 1233, 198 ALR 1137. No disputed question of principle would necessarily fall for decision if special leave to appeal were to be granted. Although high, it cannot be said that attributing 70 per cent of responsibility to the applicant fell outside the range of results to which a proper exercise of judgment might lead in the particular facts of this case. We are not persuaded that an appeal on this issue would enjoy sufficient prospects of success to warrant a grant of special leave.

Insofar as leave is sought to deal with the question of allowing investment management fees as a head of damages, the relevant principles are to be found in the decision of this Court in Nominal Defendant v Gardikiotis (1996) 186 CLR 49. No point of principle would conveniently be raised in this matter were special leave to appeal to be granted. Accordingly, special leave to appeal is refused with costs.

The Court will adjourn to reconstitute.

AT 11.57 AM THE MATTER WAS CONCLUDED