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High Court of Australia Transcripts |
Office of the Registry
Adelaide No A36 of 1997
B e t w e e n -
DONALD GRAY
Appellant
and
MOTOR ACCIDENT COMMISSION (formerly State Government Insurance Commission)
Respondent
GLEESON CJ
McHUGH J
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON THURSDAY, 28 MAY 1998, AT 10.20 AM
Copyright in the High Court of Australia
MR S.W. TILMOUTH, QC: May it please the Court, I appear with my learned friend, MR G.A. BRITTON, for the appellant. (instructed by Aboriginal Legal Rights Movement Inc)
MR S. WALSH, QC May it please the Court, I appear with my learned friend, MR M.F. NEWELL, for the respondent. (instructed by Finlaysons)
GLEESON CJ: Yes, Mr Tilmouth.
MR TILMOUTH: May it please the Court, this morning I intend to address at the start the legislation, the third party scheme in South Australia, then the exemplary damages issue and the application of Watts v Leitch, then the third party compulsory scheme and this Court's decision in Lamb v Cotogno, and finally, the fourth matter, the issue of general damages.
Your Honours, I have prepared a bundle of legislation for the convenience of the Court in relation to the third party scheme in South Australia. If I could perhaps - I think that has been placed before your Honours. It is in a format which reflects, first of all, what the legislation was at the time that this case came before the Court, and behind it is the legislation, in chronological sequence, which shows the status of the Motor Vehicles Act 1988 beforehand.
If I can quickly take the Court through the material; it has been culled from various pieces of legislation. It is an Act which, unhappily, If the Court pleases, has been substantially amended over a long period of time in a piecemeal fashion. Your Honours, the first part of the legislation is headed, at the top left-hand corner, "Reprint No 21", which is, as we understand it, the legislation as it applied to the case. Can I point out some key sections to the Court, without reading them, and then go to the two key provisions 124A and 125A. Your Honours, as I have said, it is a compulsory third part scheme in South Australia for personal injuries arising out of motor vehicle accidents.
Section 9, your Honours, which is the first one which appears in these papers, is the duty to register a motor vehicle. Section 101, your Honours, on the next page, is included simply because it shows that any insurer, before they could be a third party insurer, had to be approved by the Minister. As I understand it, your Honours, at this time the State Government Insurance Commission, the respondent, was the only approved insurer; however, your Honours should be aware that since 1995 the third party insurance area has been privatised in South Australia by the SGIC sale Act 1995. I just give that piece of post-history, but at the time, your Honours, there was only one approved insurer, as I understand it.
GUMMOW J: What has happened to the present respondent?
MR TILMOUTH: As I understand it, the present respondent in many respects is no longer a corporate entity; it has been......So for our purposes, your Honour, an entity liable to judgment in this matter, if the Court pleases. I do not think it pretends otherwise. A new entity, new company, was created by the sale Act.
GUMMOW J: Yes, but has the purchaser assumed by statute the responsibilities of the respondent?
MR TILMOUTH: I beg your pardon, I missed that?
GUMMOW J: Is there some statutory assumption of responsibility by the new body in place of the respondent?
MR TILMOUTH: Yes, Motor Accident Corporation Commission, if the Court pleases.
GUMMOW J: No, you are not with me. In respect of pending actions, is there some substitution by statute of a new body to substitute for the present respondent?
MR TILMOUTH: Not as I understand it. Our understanding always has been that the SGIC remain liable in this case and it has never been pretended otherwise in the process of this litigation to the Court.
GUMMOW J: Well, we have heard that sort of thing before here.
MR TILMOUTH: At all events, if the Court pleases, section 102 creates the obligation to insure, so that dovetails with nine. You have to have registration and insurance to put a car on the road, basically. Section 107, if the Court pleases, at the bottom of that next page, is the indemnity provision, that is to say the approved insurer is required to indemnify, to paraphrase it, the insured person in respect of any liability which the policy purports to cover. So, that is the indemnity provision, if the Court pleases. Section 112, which is the next page, also at the bottom, reinforces the indemnity, again to paraphrase it, by providing that a judgment creditor, ie, a plaintiff may enforce a judgment obtained against an insured person direct against the insurer. That is the effect of it. So, the person who secures a judgment against an insured person need not enforce it through that insured person, it can go direct to the approved insurer for that purpose.
For our purpose, if the Court pleases, the next provision which relates to this matter is 124A, which is two pages following. I will explain the history, the background, in a moment, very briefly. But, 124A applied to this case, if the Court pleases. What happened, as the Court would know, is that the driver, Mr Bransden, was originally sued, but the SGIC obtained an order under this section that it be the defendant under this section 125A, that it be substituted, and I will explain how that happens.
Under 124A(1) it provides:
Where an insured person incurs a liability against which he or she is insured under this Part and the insured person has contravened or failed to comply with a term of the policy of the insurance -
Then (aa) applies. That was added in 1993, by the way, as you will see from the later pages:
by driving a motor vehicle, or doing or omitting to do anything in relation to a motor vehicle, with the intention of causing the death of, or bodily injury to, a person -
et cetera. Just pausing there; that, of course, on the findings in this case applied because there was a deliberate running down. Then I go to the rider, (a) and (b) are irrelevant for this purpose:
the insurer may, by action in a court of competent jurisdiction, recover from the insured person any money paid or costs incurred by the insurer in respect of that liability.
GLEESON CJ: So that if there is an award of exemplary damages against the insurer, the insurer can recover that amount from the insured?
MR TILMOUTH: Precisely. That is part of our point, when we come later to Lamb v Cotogno and the scheme, that at all times the driver, Bransden, was still liable to SGIC in this case for any award which included - - -
KIRBY J: That is the total award. Not just for the element of exemplary damages.
MR TILMOUTH: Exactly; which included exemplary damages if properly awarded.
KIRBY J: Was it revealed whether in this case any proceedings had been brought against the driver by the insurer for the balance of the damage?
MR TILMOUTH: No, it was not revealed at all.
CALLINAN J: Mr Tilmouth, I notice in section 124 the word "accident" is used, that is the notice provision.
MR TILMOUTH: Yes.
CALLINAN J: I wondered whether that word is used anywhere else and I ask it obviously because an accident would be something different, perhaps, from an event that arose out of a malicious activity.
MR TILMOUTH: That could be so, if the Court pleases, but, in my submission, on the proper construction of the Act as a whole there was never any intent, as it were, to exclude ,by using the word "accident", in anything like this.
CALLINAN J: No, I am really asking do you know whether the word "accident" is used anywhere else. Is there a statutory form of policy for example as opposed - is a policy actually issued as opposed to simply setting out what the provisions are in the Act.
MR TILMOUTH: Yes, there is, if the Court pleases, and as I understand it it is a Schedule 4 which we have not provided but which can be given to the Court. It is a schedule to the Act. But there was nothing exotic, as it were, in the word "accident". It was just a broad word used to - - -
CALLINAN J: That seems to be the only place in the sections to which you have referred us that it is used. I am really inquiring whether it is anywhere else.
KIRBY J: When you real that word in 124 with the contemplation in 124A that it can be action deliberately intentional to cause death or bodily injuries and that recovery has already been made but may secured by the insurer, then reading the two together, "accident" must have a rather special meaning one would think.
MR TILMOUTH: Indeed. The policy was, with respect, in 124A, if the driving was bad enough or wanton enough that the general rule that the driver would be indemnified without recourse was replaced by a provision that he should pay for it.
GLEESON CJ: Well, it depends from whose point of view you look at it. Something can be accident on the part of the person who is run over which is deliberate on the part of the person who drove.
MR TILMOUTH: I accept that, of course, but "accident" was never meant in one - - -
GLEESON CJ: From the point of view of Mr Gray, what happened to him was undoubtedly an accident.
MR TILMOUTH: Yes, although it was deliberate, I accept that.
McHUGH J: Because it was an unexpected occurrence as far as he was concerned - - -
MR TILMOUTH: Indeed.
McHUGH J: - - - which is the ordinary definition of "accident".
MR TILMOUTH: Precisely so, and the whole scheme is, with respect, as I said, 124A is a narrow exemption - - -
McHUGH J: And 124AB talks about:
insured under this Part and the liability arises out of an accident - - -
MR TILMOUTH: Indeed.
McHUGH J: - - - which must cover liability under 124 - - -
MR TILMOUTH: That is right, and your Honours will see 124AB, its very narrow ability to recover by SGIC in the absence of an intentional causing of death or bodily injury. In other words, the ordinary recourse by the approved insurer was limited, let us say in ordinary accident cases, but under 124A where it was a deliberate matter, it stood quite differently. At all events, if the Court pleases, 124AA clearly applied here on the findings of the trial judge and, in our submission, plainly, it was always open to the respondent to recover against Bransden by subsequent or concurrent proceeding. Now, the next step, if the Court pleases, is the question of joinder and there was a joinder in this case. That is dealt with in 125A which is the next page and that section provided, if the Court pleases, that:
Where an action for damages or other compensation has been commenced in a court against an insured person in respect of death or bodily injury resulting from the use of a motor vehicle the court may, on the application of the insurer, join it as a defendant to the action.
So, as a first step, if the Court pleases, prima facie the only way the insurer can be joined in an action is on its own application.
KIRBY J: It says "join it". That rather implies that you leave the personal defendant as a defendant.
MR TILMOUTH: Initially it does but, in our submission, the scheme is generally that the first defendant, as it were, drops off or drops out of the litigation.
KIRBY J: How? That seems to contradict "join"?
MR TILMOUTH: I accept what your Honour says, but the later provisions make it clear that the insured person only remains in the litigation for very limited purposes.
GUMMOW J: For (3)(b).
MR TILMOUTH: That is right. Can I just go through the section sequentially for a moment and I will come back to that. Under (2)(a) or under (2) itself there has to be for that joinder, which is permissive, an "actual or potential conflict of interest" and then under (3), if that is satisfied and the court makes the order:
an insurer has been joined as a defendant to an action -
(a) the insurer will be taken to have directly assumed the liability (if any) of the insured person upon the claim in respect of death or bodily injury and -
judgment must be given against the insurer:
(b) the insured person remains a party to the action
and this is in further answer to your Honour Justice Kirby in particular -
only for the purposes of -
(i) defending a claim that is not a claim in respect of death or bodily injury -
Probably that applies, if the Court pleases, where a plaintiff also sues for property damage, say damage to the car, in the same proceeding, or -
or
(ii) proceeding upon a counterclaim,
Now, neither of those applied here, and then the rider:
and where there is no such claim or counterclaim, the insured person ceases to be a party to the action;
So by dint of the legislation, if the Court pleases, as in this case, when Bransden was originally sued, when the order for joinder was made by statutory force, he ceased to be a party and the respondent in this case became the defendant to the original proceedings.
McHUGH J: Having regard to the terms of section 124A, 125A(3)(c) is a little strange, is it not:
the insured person may not be joined as a third party to the action -
I would have expected that in a 124A situation one would have been entitled to join the insured as a third party.
MR TILMOUTH: Yes, well I accept that. The legislation does have anomalies, if the Court pleases.
KIRBY J: But also another anomaly seems to be - I may be wrong - that (3)(b) keeps the insured person as a party, but only for purposes. Now did the personal defendant remain as a party or did he drop out?
MR TILMOUTH: He dropped out in this case, your Honour, both in form as a matter - - -
GUMMOW J: What do you mean by "drop out"?
MR TILMOUTH: He went to gaol, actually, he went down.
GUMMOW J: .....the court record, what happened?
MR TILMOUTH: No, he dropped off the court record and the Court can see it from these proceedings, and also, if the Court pleases, he paid - - -
HAYNE J: He dropped off by operation of the end of (3)(b):
the insured person ceases to be a party - - -
MR TILMOUTH: Precisely, and when it came to the appeal to the Full Court, as indeed the special leave application in the appeal to this Court, the only parties ever were, as a matter of record, the two parties now in Court today. Also, if the Court pleases, under the - - -
KIRBY J: Can I just ask on that, is there a potential liability in Mr Bransden for what may be the outcome of these proceedings?
MR TILMOUTH: Yes, there is.
KIRBY J: Is he on notice of these proceedings?
MR TILMOUTH: I presume so, if the Court pleases, but he is certainly - - -
KIRBY J: Well, you are the moving party; you would have to give him notice, would you not?
MR TILMOUTH: Not if he is a party, no. I cannot answer categorically whether he actually knows of these proceedings, but I can submit, if the Court pleases, under section 124A, which I have already read, he is plainly liable to the respondent for any proceeding which it might bring.
KIRBY J: So he is liable; he may be affected by the outcome of your argument, but he is not necessarily aware of these proceedings and is not here today.
MR TILMOUTH: That is true. Now, if the Court pleases, he played no part in the proceedings in the court below, even though, under section 125A(3)(d) and (e), he had the right to be heard, albeit that he was not a party.
KIRBY J: But assume he turned up today and asked for leave to intervene to be heard on the basis that he might be potentially affected, one would think the Court would have to consider that very favourably, even though he is not a party.
MR TILMOUTH: Yes, I accept that, but he played no part in the proceedings right through, if the Court pleases, even though he had the right to be heard and to be represented under (d) and (e) respectively.
Finally, if the Court pleases, although it is irrelevant for this purpose, under (f) there is a provision that:
the insurer may apply to call the insured person -
where this joinder is made and may cross-examine, which is, as we understand it, fairly unique.
Finally, if the Court pleases, under subsection (4):
No judgment or finding of the court in proceedings in which an insurer has been joined as a defendant under this section is binding in subsequent proceedings against the insured person under 124A.
So, that is a reinforcement of the unfettered right of the respondent, in this case, to sue Bransden for the full amount of any judgment which may result from these proceedings against the SGIC. If the Court pleases, what we would submit in a line about all of that is that although it is a scheme familiar - - -
KIRBY J: Could you just explain (4) to me? Does it mean that even though you recover exemplary damages against the insurer, that does not bind as between the insurer and the insured?
MR TILMOUTH: That would seem to be so.
KIRBY J: So you have to re-litigate the issue in those proceedings?
MR TILMOUTH: Yes, indeed. You cannot, as it were, tender a certificate of judgment of the court or plead issue estoppel, you have to prove your case as before, but, with respect, all that would have to be proved, going back to 124A, in my submission, would be the liability and the dollar amount.
KIRBY J: That seems to be contradicted by (4), presumably, inserted for natural justice reasons, that once he has dropped out he should not be held bound by the judgment you secure.
MR TILMOUTH: Perhaps if that person was not represented or heard in the initial proceedings, yes, but, in my submission, the elements of recovery, under 124A, are merely, as the end of that section says, to:
recover from the insured person so much of the money paid or costs incurred by the insurer in respect of that liability.
So, it is really a debt, a statutory debt, which can be enforced. If the Court pleases, in our submission, although in one sense it is a familiar compulsory third party scheme with indemnity of the insured person, in other respects it is, in our submission, a fairly unique scheme with respect to the attributes that have just been outlined. In that sense, if the Court pleases, in our submission, it stands quite differently than any other analogous legislation.
Your Honours, I should simply point out that, going to the appeal book, that in page 1.a and 1 itself, your Honours can see that the initial proceedings in April 1983 were taken out against the driver; at page 2.a and following, is in respect of the amended statement of claim upon which the matter went to trial by which an order was made in the District Court - that should be the 25 January by the way, if the Court pleases - that the defendant State Government Insurance Commission be substituted. That was the order made, although, in some respects, the Act speaks differently, the order was made for substitution. That is reflected, if the Court pleases, by the amendment on page 2 in para 1(a) of the statement of claim. There are other amendments made by leave at the time, including the amendment to add exemplary damages, but that is what happened on the record as a result of the application of the sections to which I have just referred.
If the Court pleases, returning to the legislation, which I will not read, but the subsequent pages in the materials that have been submitted to your Honours this morning commence with the 1959 Motor Vehicles Act, that is the original Act in this respect, and simply contains the various amendments since that time to the up to date legislation which I have just taken your Honours through. So that your Honours can see, in the remaining materials, what the situation was beforehand, before these provisions applied. I do not go through them, they are simply there in chronological sequence of enactment, if the Court pleases.
If the Court pleases, on that footing, we have undertaken some research and could I simply hand up a schedule of legislation which, on our researches in this area, deals with the question of joinder in other States or Territories and without going through that, your Honours, on our researches at least, as we understand the current position, when it comes to the substitution, as it were, of an insurer for an insured person, there are only two States which provide for that, like the South Australian scheme.
The first is New South Wales, on page 1, but as your Honours can see from section 47A of the Motor Accidents Act, that is only where the insurer seeks to avoid liability to indemnity. In Queensland, on the other hand, as we understand the current position, which is in the middle of page 2, the situation is that the action must be brought against the insured person and the insurer as joint defendants. In other words, it is obligatory to sue both, initially.
Apart from that, on our researches, there is no other analogous legislation apart from the obvious fact that in all States or Territories, in one form or another, there is compulsory third party schemes, and in some cases like the Northern Territory, for example, a no fault scheme. But there is none, in our submission, which bears any analogy in any relevant respect to the legislation in South Australia.
That is the statutory scheme, if the Court pleases. I come back to that again when I deal with Lamb v Cotogno because it was the Motor Accidents Act which, in part, was considered by this Court in that case, and which this Court unanimously held, five Judges did not affect the incidence of liability when it came to an award for exemplary damages.
Before I deal with that, could I take the Court to the findings in relation to exemplary damages, and deal with the way in which the trial judge, and then the Full Court, dealt with that issue. I take the Court, first of all, to the appeal book page 220 where the relevant findings of the trial judge are contained. This is, by the way, paragraph 5 of our written outline. Your Honours, at line 11 and following is simply a reflection of the fact that the criminal proceedings and the sentencing remarks of the driver were tendered to the court and used by the parties as evidentiary of the facts. His Honour refers to that by consent at line 12. His Honour then found, relying on that material - the plaintiff had amnesia so he could not depose to these events - at line 22 his Honour found:
I am satisfied, as I now find, that on the 9th day of September, 1988 Bransden unlawfully and maliciously caused grievous bodily harm to the plaintiff with intent to do him such harm. On the evidence before me I find that the circumstances in which the plaintiff was injured are as follows.
The plaintiff was one of a group of aboriginal youths who at the relevant time were using the road as pedestrians at or near the junction of Grange Terrace and Gawler Street at Salisbury.
Salisbury is a northern suburb of Adelaide, if the Court pleases:
The man Bransden was near his car. The car was stationary. He was not occupying it. The group went past and away from Bransden. Bransden then got in his car and pursued the group driving his vehicle towards them. He drove directly at two of them on the left-hand side of the road. They jumped clear. The plaintiff was on Bransden's right. Bransden changed course and drove his vehicle directly toward the plaintiff. He did so with the intention of running him down and with the intention of really hurting him. He succeeded.
I just pause there to point out that on the findings and on those facts, there was not, in any sense, any situation of provocation, as for example in Watts v Leitch or Lamb v Cotogno. There was nothing at all in the conduct of the plaintiff, himself, which in any way contributed in the damages sense to this injury. He was just run down - as crude as that, if the Court pleases. At 221 his Honour then goes on to deal with the question of exemplary damages. He is discussing that issue. I do not read that material.
At 222, if the Court pleases, his Honour, after referring to the decision of this Court in Lamb v Cotogno, at line 7, draws this conclusion at the bottom of that page, at line 35:
Having reflected on the submission of counsel, and in the light of the authorities to which I have referred, my conclusion is that there is nothing in the Motor Vehicles Act 1921 , 1959, as amended, or the Wrongs Act, 1936, as amended, which prohibits the awarding of exemplary damages. My further conclusion is that it would be an affront to common sense and to the administration of justice if the plaintiff could otherwise secure an award under that heading if Bransden had remained defendant but is to be deprived of it because, and only because, State Government Insurance Commission has seen fit to become substituted as defendant in the exercise of its statutory right to do so. I hold therefore that if the plaintiff should otherwise be entitled to an award fro exemplary damages, that award can and should be made, notwithstanding that the defendant is State Government Insurance Commission and not the tortfeasor himself.
I pause there to make the point that we accept and adopt what his Honour has found there. We submit, particularly, that it would be an affront to commonsense that an award should not be made merely because of the accident, the unrelated fact to the case that the State Government Insurance Commission, on its own application, sought to be joined under the sections to which I have referred.
KIRBY J: But whilst you hold on to the decision in Cotogno v Lamb, you do not really have to argue that, do you?
MR TILMOUTH: No.
KIRBY J: Because, I mean, there were arguments contrary to that in the Court of Appeal of New South Wales, but so long as Cotogno v Lamb stands, the argument against commonsense is that if you have a scheme where all motorists have to pay for this, it is not very reasonable and not very rational. But that has all been settled by this Court's decision.
MR TILMOUTH: Indeed, by five Judges unanimously and by a majority of the Court of Appeal on appeal in that case. I agree with that. I only need to - - -
KIRBY J: There was a strong dissent, of course.
MR TILMOUTH: Indeed, as always, If the Court pleases. Your Honours, the other point though I make is - and this is not unimportant - is that it is an accident of procedure, as it were, rather than anything substantive that led to this quirk in the end result declining an award. If Bransden had sued and there had not been the application by the insurer, in my submission, there would have been nothing standing in the path of an award for exemplary damages in this case. It is clearly an accident that because of the exemptive provisions, the very narrow exemptive provisions, the respondent in this case sought to be joined and, in effect, substituted as defendant. It had nothing to do with - - -
GUMMOW J: Is there any criminal compensation legislation in force in South Australia?
MR TILMOUTH: Yes, we do.
GUMMOW J: Has there been any application under that?
MR TILMOUTH: No, there has not. I stood to be corrected, if - - -
GUMMOW J: So, does the existence of that legislation have any bearing on these questions?
MR TILMOUTH: No, because, if I am correct, you have to exhaust your other remedies. Even if I am wrong in that, if you succeed here, you have to pay back your compensation. So, by one route or another, it is of no influence in this case.
KIRBY J: We had better have reference to those statutory provisions.
MR TILMOUTH: It is the Criminal Injuries Compensation Act, if the Court pleases.
KIRBY J: Yes, but what year, what section?
MR TILMOUTH: I do not have that off hand but I can get it, if the Court pleases, and bring it to the Court's attention.
KIRBY J: There were distinctions between this and Cotogno, were there not? In Cotogno they sued in trespass; you did not. In Cotogno there was no conviction, I think. In this case, there was.
MR TILMOUTH: Your Honours, in Cotogno there is a reference, which I will take the Court to later, and your Honour Justice Kirby's judgment as President of the Court, where there is a reference to the fact that he was charged, Cotogno was charged on a serious offence, but it is no more Delphic than that. But it does appear that there was a criminal proceeding. In Cotogno, of course, this point about the effect of that was not really raised directly; it was the insurance issue. Could I add that even in vigorous dissent, if the Court pleases, your Honour, as President, said that that fact alone did not preclude, at least in that case, an award of exemplary damages. I will identify that passage later when I come to it, rather than come in and out of the case.
GLEESON CJ: Would it have made any difference to the operation of the scheme of compulsory insurance to which you have referred us, if the plaintiff's cause of action had been framed in trespass to the person rather than negligence?
MR TILMOUTH: No, not at all. There is a Full Court decision in South Australia of Venning v Chin, to which I will give the reference in a moment, which has held that a cause of action in negligence can be framed in trespass, but otherwise, the situation is the same.
GUMMOW J: It would be the other way around, would it not?
MR TILMOUTH: In my submission, the fact that it is not framed in trespass has no bearing at all on the outcome of this case. At 223, could I read on, if the Court pleases, going back into the facts, line 6:
On the evidence before me I am satisfied, as I now find, that Bransden's conduct was wanton and malicious. To adopt the words of His Honour Bollen J as contained in his sentencing remarks, Bransden's conduct amounted to a blatant breach of the law. It was brutal and cowardly. There were no mitigating factors or anything to excuse it.
His Honour then went on to award $10,000 for exemplary damages, at line 14.
GUMMOW J: The rationale of all of this is to carry into the civil dispute a finding between other parties. There is no privity in all of this.
MR TILMOUTH: No.
GUMMOW J: A finding in other litigation but at a higher standard of proof, which is to your advantage, I suppose.
MR TILMOUTH: Indeed it is, and that was brought about simply because, rather than proving the original facts by calling witnesses, the parties by consent simply tendered the record.
GUMMOW J: Here, unlike Cotogno, we know that this gentleman, on one view of it, is being penalised twice for the same offence.
MR TILMOUTH: Yes, we do. He went to gaol for a substantial period. There is absolutely no doubt about that. But we know as well that, unlike most of the other cases, there are absolutely no mitigating factors, no provocation, no spontaneity, as in both Watts v Leitch and Lamb v Cotogno.
HAYNE J: What is the significance you attach to that?
MR TILMOUTH: Because there is authority for the proposition that you can reduce an award or refuse to award exemplary damages if the plaintiff himself partly contributed to the conduct which led to the proceedings being brought. In this case there was no such factor whatsoever. The other significance, if the Court pleases, is that such consideration was relevant in both Watts v Leitch and Cotogno v Lamb. I will come back to those.
His Honour then asked the question, going back to page 223 at line 25, "Should I make the award?". He refers to the argument by the respondent now that an award should not be made and that he has a discretion and refers at line 33 or 34 to Watts v Leitch. I will come to - - -
GUMMOW J: What does it mean? What are the integers in the discretion? It is all very well to say if one has a discretion under a statute and it is open-ended, the content of the discretion is dictated by the subject, purpose and scope of the statute. What is the content of the discretion here? It is not much good saying it is going to be exercised judicially. Of course it is.
MR TILMOUTH: Yes. The content of the discretion, if the Court pleases, is that the Court has a discretion to refuse exemplary damages if the tortfeasor has already been punished.
GUMMOW J: It is a funny rule of law, it seems to me.
MR TILMOUTH: In my submission, it is a rule of law that it is a factor - - -
GUMMOW J: Well, it has to be. It is a rule of the common law.
MR TILMOUTH: Yes, I agree with that but it is not a rule of law, if the Court pleases, that if he has been punished that you are disqualified automatically.
GLEESON CJ: But the discretion cuts in at an anterior stage, does it not? The power to award punitive damages, according to Lamb, is a discretionary power.
MR TILMOUTH: Yes.
GLEESON CJ: That appears from the bottom of page 12 and the top of page 13 of the report. So that the judge below approached the matter upon the basis that this was something relevant to the exercise of his discretion to grant or withhold punitive damages.
MR TILMOUTH: At that stage at the bottom of page 223, he did, yes, but, in my submission, what in effect he did was to apply it as an automatic or absolute rule that if there has been punishment, that is the end of the matter. That is where the discretion miscarried, in our submission.
HAYNE J: What is it then that should inform the exercise of the discretion? Is it the quantum of the punishment already inflicted? What informs its exercise?
MR TILMOUTH: It is more, in my submission, not the quantum or the fact of imprisonment. It is more the other factors which bear upon the award of exemplary damages, and they are factors not simply of deterrence or to mark the court's disapproval but they are also factors which are, as it were, subjective to the plaintiff himself.
GLEESON CJ: Presumably if the power to award punitive damages in the first place is a discretionary power, you have to let us know what you say are the considerations relevant to the exercise of a discretion to award punitive damages in the first place because, whatever those considerations are, they will presumably inform the approach you take to the significance of collateral punishment.
MR TILMOUTH: Yes. Those factors were, if the Court pleases, the primary findings which I have read about the wanton and callous nature of this running down. The second fact that there was no mitigation of that conduct. It was blatantly bad conduct. The third factor is that there was nothing at all in any respect in actions or words by the appellant which contributed to that conduct.
GLEESON CJ: I think I have not made myself clear. I was not asking what were the facts relevant to the exercise of the discretion to grant or withhold punitive damages. I was asking what are the principles which govern the exercise of discretion to award punitive damages or, conversely, to decline to award it.
MR TILMOUTH: Yes. Can I come to Watts v Leitch in a moment, but the principles, in my submission, are that the court looks at, first of all, its primary findings and decides what the facts are and then it looks at - - -
GUMMOW J: Well, wait a minute. Here it did not do that. It looked at what Justice Bollen had said.
MR TILMOUTH: That is right, and then looked at what Justice Nettlefold had said in Watts v Leitch and said, "Well, he has been punished. That is the end of it." And, in my submission, that was altogether too narrowly looking at the proper basis and effect of an award for exemplary damages.
GUMMOW J: But all I was asking you, you said the court looks at the facts, and what I am asking you is, facts found by whom?
MR TILMOUTH: They are facts found by his Honour the trial judge in this case. It may be that they are based upon the tendered record of Justice Bollen, but nevertheless they are facts in the cause.
GUMMOW J: It was a jury trial, was it not?
MR TILMOUTH: No. No, this is a judge alone. There are no jury trials in civil in South Australia, if the Court pleases.
GUMMOW J: No, the criminal trial.
MR TILMOUTH: The criminal trial, it would have been probably, unless there was a plea of guilty and in this case, from recollection, I think it was. The information is before the Court. Yes, I think it was.
GUMMOW J: So what is treated as findings of fact in criminal proceedings are sentencing remarks, are they?
MR TILMOUTH: They were treated as findings of fact in this case by consent.
CALLINAN J: Some Evidence Acts make findings of the plea evidence in civil proceedings. Is there such a provision in the South Australian Evidence Act?
MR TILMOUTH: Yes, there is an Evidence Act which would enable the tender of the conviction.
HAYNE J: Abolishes Hollington v Hewthorn, does it?
MR TILMOUTH: Exactly, but it would not have probably been sufficient to prove the underlying facts. So in this case, as a shorthand method of proof, the court by consent of the parties simply tendered the record and his Honour found - - -
GUMMOW J: Yes. Now, assume there had not been that consent.
MR TILMOUTH: You would have to call the other witnesses, the other two young Aboriginal youths, who were on the left-hand side and who were missed. You would have to prove it in the ordinary way, in other words. Yes, there was conviction by jury, by the way, appeal book 170 line 16. But that is simply a mode of proof, if the Court pleases. A shorthand method was chosen by the parties and that does not - - -
GUMMOW J: Assume it is not chosen by the parties. What significance flows from what happened at the trial other than the fact of conviction in exercising this discretion in the civil proceedings? That is what I am trying to get out of you.
MR TILMOUTH: In my submission, you would in the first place have to prove it in the ordinary way by calling witnesses to prove the underlying facts which his Honour found at 220 in the passage I read. His conclusion it was wanton and so on is just another way of restating those basic findings, albeit using words more applicable to the criminal court.
KIRBY J: Were Justice Bollen's remarks on sentencing tendered by consent?
MR TILMOUTH: They were and they were used as evidential of the underlying facts by consent. So, in my submission, that is the end of that. The words "wanton and malicious", "brutal and cowardly" are simply a summary of the basic facts that his Honour has already found at 220. Now the record of conviction could have gone in as well of, course, by certificate under the Evidence Act 1988 as proof of the fact that Bransden was convicted and sentenced, and that would have been a factor which was relevant to the exercise of the discretion to award exemplary damages amongst the other factors I have identified.
KIRBY J: What is the provision of the Evidence Act under which - - -
MR TILMOUTH: Thirty-three from recollection, if the Court pleases.
GUMMOW J: What, in favour of the award?
MR TILMOUTH: I am sorry your Honour.
GUMMOW J: A discretionary factor militating in favour of making an award?
MR TILMOUTH: No, the fact of conviction and sentence would have been a factor militating against the making of the order but it would be discretionary and it would not be automatic in operation and my submission here is, when one looks at the way his Honour approached it, he regarded that fact as an absolute bar to the award of exemplary damages, that is where the discretion miscarried.
HAYNE J: Understanding that, what are the considerations that the judge should have, but did not, take to account?
MR TILMOUTH: The other findings that I have endeavoured to outline in my three points earlier.
HAYNE J: Those are the facts that you say cause the discretion to be exercised. How should the judge argue to the conclusion that an award should or should not be made?
MR TILMOUTH: He should have then said, "Well, I accept that there is the factor of the conviction and sentence which counts", as it were, "against the award. On the other hand, there are the facts that this is as bad a driving as you can get, therefore, this is a very bad example of a case where exemplary damages would be appropriate. I have nowhere else in my judgment under the rubric of non-economic loss under the Wrongs Act allowed for the fact that this was such bad driving. There is nothing in here where I have awarded or are being asked to award aggravated damages. I should consider those factors. The driving is so bad that it merits an award of exemplary damages. There is no conduct by the plaintiff", et cetera. "Those factors outweigh the factor of the conviction and sentence of the - - -"
HAYNE J: On this argument, should the trial judge have reached that conclusion upon a basis that began, for example, by saying, "I am of the opinion that the defendant has not been punished enough". Should he begin by saying, "I regard the plaintiff as being the unfortunate innocent victim of wanton", et cetera, "conduct, and considering the standpoint of the plaintiff, the plaintiff deserves more". What factors does he take to account in his argument to conclusion?
MR TILMOUTH: In addition to those I have endeavoured to identify, if the Court pleases, he should also have considered those we have tried to identify in the first part of paragraph 11, and that is the fact that an award for exemplary damages is not limited as a matter of law to just factors of deterrence or punishment, but it includes injuries, what I might label "subjective matters to the plaintiff" - injuries to feelings, insult to the plaintiff - this is the first part of paragraph 11 on page 4 of our outline - to remove a sense of grievance, and to reduce the temptation to engage in self help.
KIRBY J: Well, the last one is a proper concern of criminal punishment, deterrence.
MR TILMOUTH: That is deterrence to the offender but as I understand that reflection - - -
KIRBY J: Well, general deterrence is an ordinary principle of sentencing.
MR TILMOUTH: Yes.
KIRBY J: To deter the offender and to deter others who might be tempted to act in a similar way. It is a standard consideration of sentencing.
MR TILMOUTH: That passage comes from the judgment of your Honour Justice McHugh in the Court of Appeal at 586 in Cotogno v Lamb and, as I understand it, if the Court pleases, the award of damages is an additional award, in this respect, to a plaintiff in an endeavour to stop the plaintiff from exacting his or her own revenge.
KIRBY J: But does this not illustrate the overlap and the danger of double punishment; it is a fundamental offence to basic principle, that you are potentially punishing the defendant, rendering him liable to punishment, by being sued by the insurer, because you are saying you are getting one judge to say, I do not think he is being punished enough or I think I should award exemplary damages because I believe there should be additional punishment, even though the sentencing judge, with the primary obligation, has considered X to be the proper punishment, I consider it has to be X plus so many thousand dollars.
MR TILMOUTH: Well, in my submission, the cases do not look at exemplary damages that way and review, as it were, the punishment given out by a criminal judge. The case is simply - - -
HAYNE J: But the question, Mr Tilmouth, is whether they should. Take, for example, this case, which you say was a very bad case of criminal offending. Assume that the trial judge, Justice Bollen, had formed that view and had imposed a sentence at the top end of the range. Take the extreme case, the maximum sentence. What significance should the civil court have attached, say, to that fact, that this man had been punished to the maximum extent the criminal law permitted?
MR TILMOUTH: Well, in my submission, none, because that would impermissibly allow the second trial judge to review and substitute, as it were, their own view about the facts of the criminal case, in the civil proceedings. All that is relevant, in our submissions, on the authorities, is that there has been other proceedings in the criminal court for which the tortfeasor has been punished.
KIRBY J: You say that the judge in the civil proceedings should not take the criminal punishment into account at all?
MR TILMOUTH: No, the quantum, as it were, of that punishment, no.
McHUGH J: Well, there may be an overlap, because the two proceedings are directed to different ends. For example, in the criminal process one would be taking into account issues such as rehabilitation, likelihood of the offender offending again in that particular respect, whereas one of the issues in exemplary damages is injury to feelings, insult and so on. Take a case where insulting words are used of a very bad kind, the magistrate might give a bond, might not even proceed to conviction, but in a civil case it might nevertheless, in all the circumstances call for an award of exemplary damages. So arguably, the fact that you have been punished in a criminal court would not deter a court from awarding exemplary damages in the civil proceedings.
MR TILMOUTH: Yes, well, with respect, I can see the force of that, even though it runs contrary to my main argument.
KIRBY J: That undermines then your statement that you do not take them into account. You say you take them into account, but only as to part, which all shows the artificiality of this, in my respectful - - -
MR TILMOUTH: If the Court pleases, the point I make at base is that when one looks at the criminal court, one is essentially looking at factors of punishment and deterrence. To that extent, whether the tortfeasor has already been punished or punished enough in the criminal court, and the degree of that punishment all go to those two factors which, as it were, are objective or extraneous to the plaintiff. They deal with the situation of the tortfeasor. My main point is that nothing that happens in the criminal court really has much to do with the injury to feelings, insults, et cetera. Those passages are just culls from the decisions of the two courts in Lamb v Cotogno which are subject to the - - -
HAYNE J: Is it necessary to distinguish between aggravated damages for injury to feelings, et cetera, on the one hand; and punitive damages which are there simply to punish and deter, or is that a false dichotomy?
MR TILMOUTH: No, in our submission it is a dichotomy under the one rubric of exemplary damages in this case. Part of the error, we submit, made by the trial judge in this case, and perpetuated in the Court of Appeal, was that it looked at only the one side i.e. deterrence and punishment, but it did not look at the subjective side to the plaintiff - the insult to feelings, et cetera.
GLEESON CJ: Just go back a step. You say that the fact of the punishment was a discretionary factor to be taken into consideration against making an order of punitive damages?
MR TILMOUTH: In this case, yes.
GLEESON CJ: Why?
MR TILMOUTH: On the authorities, it is a matter of law that whether a person has been punished has to be taken into account.
GLEESON CJ: Yes, but what is the reason for that?
MR TILMOUTH: The underlying reason appears to be that there is a double punishment.
GLEESON CJ: Why might, in a particular case, double punishment mean that there should not be an award of punitive damages?
MR TILMOUTH: Only because, on the authorities, the defendant has been punished twice for the one conduct. But, in our submission, that hardly arose in this case at all. There was imprisonment for this misconduct, but there was nothing - - -
KIRBY J: Presumably it was open to the judge, Justice Bollen, to impose both imprisonment and a fine, and he chose instead imprisonment, and therefore he chose not to burden the pocket of the defendant, but you are coming along seeking to burden the pocket of the defendant, in a way that the judge with the primary responsibility of punishment did not consider appropriate.
MR TILMOUTH: No, but only because he misapplied Watts v Leitch, in our submission.
KIRBY J: I am talking about the sentencing judge.
MR TILMOUTH: Although there was no fine in the sentencing, it would be very unusual, if not totally exceptional, to have a prison sentence and a fine.
KIRBY J: It may be, and that is for the reason that deprivation of liberty is regarded as such a serious punishment that you do not have to add to it monetary punishment, and yet that is what you are trying to get the law to do.
MR TILMOUTH: Or, with respect, because awarding a fine in the criminal proceedings would have been no effect. There has to be some evidence that the defendant can afford to pay otherwise a fine would be just a futile exercise.
KIRBY J: On feelings, it is not unknown for judges to say in sentencing, "I take into account the insulting way in which you conducted yourself and the way in which you brought your victim into a denigrating and humiliating situation". I have often sat there and seen that in sentencing remarks.
MR TILMOUTH: That is true, although I do not - - -
KIRBY J: There is no real lack of overlap; there is total overlap between the criminal punishment and the civil punishment.
MR TILMOUTH: Well, in my strong submission, not in the mind of a plaintiff in these cases. As his Honour said, at commonsense, it would be an affront to justice if there was not some civil remedy for what would otherwise be compensable.
KIRBY J: But would that mean that a sentencing judge would have to say, "Now, steady on, one day somebody might come along and seek to recover damages and I've got to keep that in mind and, therefore, I've got to reduce the punishment that I impose to make sure that you do not double count".
MR TILMOUTH: Well, with respect, it could be, which would be an extraneous intrusion into the law of sentencing - - -
KIRBY J: Not if you are aiming to avoid double punishment, which is a pretty fundamental principle of sentencing.
MR TILMOUTH: Only, with respect, if that double punishment is looked at purely from the point of view of the tortfeasor but not, with respect, if it has also looked at the other elements of an award for exemplary damages which relate to the subjective, as it were, of the plaintiff concerned.
GLEESON CJ: Did the trial judge in the present case say anything more complicated than this? It would be a very unusual thing to award punitive damages in a running-down case, but it is not beyond the bounds of possibility. This was a particularly bad running-down case. On the other hand, the defendant has been subject to very severe punishment by way of imprisonment, "so I'm not going to award exemplary damages".
MR TILMOUTH: Well, on one view, of course, that is all he has done. But, with respect, that simplicity belies actually what has happened underneath the reasoning process. His Honour has not anywhere expressly adverted to, still less weighed, the other factors which weighed in favour of an award of exemplary damages, and the way he has applied the consideration of the punishment is, in effect, to say, "Well, it is obligatory for me not to award exemplary damages once I have the fact of that punishment before me".
GLEESON CJ: Or has he simply said, "In the present case there is a factor which you acknowledge to be a relevant factor against an award of punitive damages which is of such substantial weight, having regard to the extent of the punishment that's already been imposed, that I will conclude that it outweighs any other possible considerations"?
MR TILMOUTH: In my submission, no. A proper exercise of the judicial discretion to award exemplary damages would require the judge to consider factors pro and con. He has not done that. He has clearly only considered one factor - that is the fact of the punishment - and nothing else and he has applied it, in my submission, not in a discretionary but in an absolute way. So that, if the Court pleases, when one goes to page 224 of the appeal book, his Honour is quoting from Watts v Leitch, which he refers to in the previous page. He refers to page 24 of Justice Nettlefold's judgment at line 6:
"The defendant has already been punished in the criminal court. To punish him again would be to punish him twice for the one act. I should assume that the punishment was appropriate having regard to the facts before the court."
Those words apply with equal force to the case before me.
At line 19:
In the exercise of my discretion, therefore, and for the reasons which I have endeavoured to give, I do not propose to award to the plaintiff any amount by way of exemplary damages.
So, he has not taken relevant factors into consideration at all, which went the other way, and he has regarded what Justice Nettlefold did in Watts v Leitch as being a bar rather than just a discretionary factor in coming to that conclusion.
GUMMOW J: But we have to know, and I still do not know, when one talks about a discretion, what are the matters that have to be taken into account which mean that the discretion miscarries if they are not taken into account than those which are permissible to take into account, if any?
MR TILMOUTH: If the Court pleases, there is no one case which defines exhaustively the factors in the - - -
GUMMOW J: I know that. That is why the law seems to be in an unsatisfactory condition. On one view of it, it is why we are here.
MR TILMOUTH: May it please your Honour, as I have tried to identify what I have submitted the other countervailing factors - - -
GUMMOW J: The reason why I say this is that if the discretion is treatment for some "open sesame" operation, it becomes unappealable.
MR TILMOUTH: I accept that, but I have endeavoured to identify two errors: the failure to take into account other relevant considerations and the fact that his Honour - - -
GUMMOW J: You just get the recitation of mantras by trial judges which are unimpeachable.
MR TILMOUTH: With respect, in this case there were strong countervailing factors based on the primary findings which I have read which were not adverted to in the exercise of the discretion on this point. In my submission, that is an error, and the other error is by applying rigidly the principle that the fact of punishment may be taken into account. His Honour said it must be and, in my submission, also said that is the end of the matter, in effect. That happened in the passage I have just read at page 224, if it happened anywhere.
KIRBY J: Could you help me on this. I know it is often said that in awarding damages, that damages, say general damages, are quasi-discretionary and so on. It is something I have always felt myself a bit uncomfortable with. Is there any other area of damages in tort for negligence where the damages are discretionary? I thought the theory of the common law of tort was that the damages were compensatory and therefore you have a right which is merely to be quantified, which is difficult to quantify, but it is, as it were, not discretionary in nature. Do you know any other area where damages are discretionary?
MR TILMOUTH: Not offhand, if the Court pleases.
KIRBY J: Apart from authority, why is this an exceptional head of common law damages which are discretionary?
MR TILMOUTH: I cannot answer that question, if the Court pleases. There is no immediately obvious - - -
KIRBY J: It seems a departure from steady common law principle.
MR TILMOUTH: Indeed. Could I add this as well on this case. At page 223 can I remind your Honours that his Honour at line 4 did conclude that the plaintiff here was entitled to exemplary damages. The first step had already been reached and resolved in favour of the appellant and there was a prima facie finding that he should qualify. It was only in the weighing factors when the discretion came later that his Honour decided not to. In my submission, the fact that he had found that exemplary damages were otherwise appropriate also demonstrates that he misconstrued the weight that should be given to the question of the punishment.
McHUGH J: I thought the defendant had been punished in Cotogno v Lamb and that appears in my judgment in the Court of Appeal at page 573F:
Furthermore the evidence before the master showed that the appellant pleaded guilty to a serious criminal charge arising out of the events sued upon and was presumably dealt with in accordance with the law upon that plea.
MR TILMOUTH: Yes. We have been able to find nothing below that, if the Court pleases, even though in the beginning of your Honour Justice Kirby's judgment there is reference to previous litigation. One was on the constitution of a court, I think, in the reported decision and the other we have not been able to get access to, the unreported 9 August 1985. But in none of the material before us have we been able to ascertain the precise facts. But it does appear that there was some punishment, although it is not specified.
KIRBY J: I suppose you can say in Cotogno v Lamb the Court of Appeal in the majority and this Court were on notice that the defendant was punished criminally and assumed that he was but did not think it important to have any regard to what that punishment was.
MR TILMOUTH: Well, that may be, but could I add this, that there is no express phrase in that case or any other where a judge actually says, "Well, I don't think the judge awarded enough in the criminal court" or "awarded too much". In my submission, none of the cases go to that extent. They simply regard in a general way the historical fact of the criminal proceedings but consider other factors.
The other point, if the Court pleases, on the Watts v Leitch issue is that when one looks behind Watts v Leitch, it is no authority for the proposition that his Honour purported to say, that it should "apply with equal force to the case before me", also at page 224. Can I take your Honours briefly to Watts v Leitch [1973] TASStRp 2; (1973) Tas SR 16 to demonstrate that point. Your Honours, the facts, without reading them, are at page 17 but there was an assault in a hotel using a glass which occurred under provocation. It was spontaneous rather than planned or deliberate. The plaintiff had been mocking the defendant in the civil proceedings and it was in the context of the defendant in that case being upset with the plaintiff because of a relationship he had had with the defendant's wife. In fact, divorce proceedings had just been issued.
So it occurred not only as a spontaneous eruption in a hotel, but it occurred in the background of a domestic situation where there were conflicting emotions and some degree of provocation was involved. So the facts were quite different on any view, in my submission. All that Justice Nettlefold did, if the Court pleases, at page 20 was when he considered the question of what damages should be awarded, he had already resolved at the bottom of page 19 and over to 20 that there should be an element of aggravated damages and that is covered as well by his point (3) on that - - -
GLEESON CJ: This was a trial by jury, was it?
MR TILMOUTH: It is a bit confusing because he talks about the way he should make directions but in the end result his Honour fixes the award at page 24.
GLEESON CJ: Is he directing himself perhaps?
MR TILMOUTH: Perhaps, if the Court pleases. I must confess I was confused as to that aspect but, all the same, whether he is directing himself or a jury, he is, first of all, recognising that in that case there is already an allowance to be made for aggravated damages - page 20 - and at his point (4) in the middle of that page his Honour merely observes:
The fact that the defendant was fined in the Criminal court must be taken into account when considering the question of exemplary damages. There is no specific authority on this point.
Then his Honour goes on to discuss analogous cases.
McHUGH J: Now, you did not claim aggravated damages in this case?
MR TILMOUTH: No.
McHUGH J: And perhaps that is part of your problem. Could I take you back to paragraph 11 of your submissions. I was a bit alarmed when I read the reference to:
Although punitive in nature, such an award retains significant components compensatory to the plaintiff, such as injury to feelings, insult -
I thought in Lamb I must have had in mind the distinction between aggravated and punitive damages, but reading page 586 I cannot see anything in my judgment in Cotogno which would support the proposition there, nor can I see anything in 164 CLR at page 9 to support the proposition that those cases are quoted for. Both judgments make it plain in different parts that there is a distinction between aggravated damages and punitive damages and that aggravated damages go to insult, humiliation and the like and injury to feelings.
MR TILMOUTH: If the Court pleases, I am sorry if your Honour was alarmed, but I did purport simply to paraphrase what those two courts had said.
McHUGH J: I do not think - I stand subject to correction. I have not gone through from the first word to the last word, I have just read quickly through them, but both sets of passages, I really do not think that either of those two pages bear out the proposition for which they are cited.
MR TILMOUTH: Can I endeavour to make the written submission good now, if the Court pleases. Lamb v Cotogno [1987] HCA 47; 164 CLR 1 at 9. The passages which I would rely on begin at about point 6 on page 9, in the joint judgment:
The object, or at least the effect, of exemplary damages is not wholly punishment and the deterrence which is intended extends beyond the actual wrongdoer and the exact nature of his wrongdoing.
That is partly my point.
McHUGH J: Yes, I know that, but then they go on to explain them in the next sentence by saying:
It is an aspect that they serve to assuage any urge for revenge felt by victims and to discourage any temptation to engage in self-help likely to endanger the peace.
They do not talk anything about "components retain significance - components compensatory to the plaintiff such as injury to feelings, insult".
MR TILMOUTH: Not there, but the first point to make is that that -"feelings of revenge" are, of course, feelings of revenge by a plaintiff and the "temptation to engage in self-help" is likewise.
McHUGH J: Yes.
MR TILMOUTH: The Court then goes on, and if I could read a bit later, if the Court pleases, the third to last line:
They nevertheless remain as part of the law. When exemplary damages are awarded in order that a defendant shall not profit from his wrongdoing or even where they are described as a windfall to the plaintiff - a description which a plaintiff is unlikely to accept - the element of appeasement, if not compensation, is none the less present.
In my submission, if anything, supports the proposition in our written outlines, that is, that can only be the passage from that part of the judgment.
So far as your Honour Justice McHugh in v Cotogno v Lamb, (1986) 5 NSWLR 559 at 586 to 587, is concerned, at G, on 586 - perhaps just before G:
The sanctions of the criminal law are not always sufficient to protect the weak and the disadvantaged against the oppressive conduct of the powerful and the wealthy. An award of exemplary damages also serves another useful social purpose: it helps to remove the sense of grievance which the plaintiff feels when he has been the victim of insulting behaviour. It is when the victim of such behaviour believes that the law can not or will not remedy his grievance that he is most likely to take the law into his own hands. Historically, the awarding of exemplary damages was the common law's substitute for the duel.
Then I read on, just before line B:
An award of exemplary damages against a conscious wrongdoer placates the victim who has the satisfaction both of seeing the defendant punished and of receiving the additional damages. When the defendant is known to be insured, the plaintiff may not have the same satisfaction in knowing that the defendant has to pay for his wrong; but the plaintiff's feelings are assuaged to the extent that he receives the additional sum awarded as exemplary damages.
GLEESON CJ: Mr Tilmouth, we know something about Darren James Bransden and his antecedents, do we not, from pages 170 and 171 of the appeal book? He is not a man to whom economic consequences are likely to be important.
MR TILMOUTH: Correct.
GLEESON CJ: His response to punishment by way of financial imposition might be, if it were consistent with his past, to go out and rob another bank. So the trial judge here was not dealing with a person who was likely to be responsive to deterrence by way of economic imposition: he was a man with convictions for armed robbery; his life was a life of crime, although he was only a relatively young man; and he had been sent to gaol for a long term as a result of what he did in the present case. On the face of it, it does not look much like a case where economic imposition would be an appropriate response of the law seeking to achieve deterrence or punishment, does it?
MR TILMOUTH: I agree wholly, if the Court pleases.
GLEESON CJ: The trial judge might have thought that this was a fairly uncomplicated case, in relation to the claim for punitive damages, and simply said, a long gaol term for a person like this is enough.
MR TILMOUTH: Well, with respect he might have, but that does nothing to allow for the other factors, which I have endeavoured to outline by reading the passages I just have. There was nothing in what the trial judge here did at all to deal with what I have labelled, compendiously, as the subjective components of the exemplary award of damages and they can only arise from the passages I have just read and we are dealing with - - -
KIRBY J: Picking up what Justice Hayne said earlier, and given that there seems to be an obfuscation, at least an unclarity, in the law, if it be consistent with authority, would it not be more appropriate to, as it were, reformulate the principle that you have exemplary damages for punishment and if there is criminal punishment then you do not, as it were, double it up, but there are aggravated damages for the kinds of affront to person and hurt and so on which are increasing of the compensatory damages, but you did not plead for them in this case, and that there are then compensatory damages in the normal way. Now, is that not a much more clean and logical way than to, as it were, say, well there is a little bit of overlap between these things. What guidance does that give to trial judges?
MR TILMOUTH: Well, if the Court pleases, these two areas of damages, of course, have always overlapped to a certain extent, in their application - - -
GLEESON CJ: Well, as Justice Nettlefold pointed out, an award of compensatory damages is a deterrent to a wrong-doer.
MR TILMOUTH: Yes, and to that extent, to try and make the pigeonholes, as it were, more clearly defined, might, but will not necessarily resolve the issue, because there will always be overlying factors upon which a court might legitimately seize in both heads of damages, aggravated or exemplary. And in fact, if the Court pleases, when it comes to aggravated damages, aggravated damages are normally for - this is my label, but the objective features of the wrong-doing; the brutal and cowardly actions in this case. They do not normally allow for what I have called the subjective elements, which I have endeavoured to identify and support from the two references - - -
GLEESON CJ: But, to pick up the distinction pointed out by Justice Kirby, on the facts of the present case, when you move outside the area of compensating your client for his harm into the area of punishing or deterring Darren James Bransden, bearing in mind his character and antecedence, prison is the appropriate response, is it not, not some kind of economic response?
MR TILMOUTH: I accept that, but all the more reason, with respect, to consider the other factors subjective to the plaintiff, which should lead to an award of exemplary damages. If there was no point in - - -
McHUGH J: If you ask whether sending him to gaol for a number of years helps to remove the sense of grievance which the plaintiff feels when he has been the victim of such behaviour, then, if the answer to that is yes, then a case for awarding exemplary damages tends to disappear. That is not to say, to my mind, that every time somebody is punished you cannot award exemplary damages. For example, landlords in New South Wales would sometimes cut off vital services to tenants and might be subjected to some summary fine that would achieve their object; cut of the electricity, cut off this service, drive the tenant out. In such a case it may be appropriate to award exemplary damages, but here you have got somebody who has been sent to prison and there does not seem much scope for awarding exemplary damages in that sort of case.
MR TILMOUTH: Well, if the Court pleases, the way I would argue and answer that, and also answer your Honour the Chief Justice, is if one came to the civil case and looked at Bransden's history and thought, well nothing I can do by way of adding to the general damages by way of exemplary damages is going to affect this man one jot. That only means that the other factors come into more prominence.
HAYNE J: It may also be necessary to take account not only of specific deterrence, but general deterrence. But if you are take account of general deterrence, I would have thought the sentence imposed on this man might itself have acted as something of a general deterrent.
MR TILMOUTH: That may be but, if the Court pleases, there is the element in the civil court of general deterrence but if a further award of damages in this case would have been nugatory as against Bransden, that only means that the fact that he has already been sentenced is of really no weight in the case and that the other factors which lean favourably towards an award of exemplary damages should have far more play.
HAYNE J: But lurking underneath this argument is the problem of the kind identified by the Chief Justice, that the employer who acts in flagrant disregard of occupational health and safety requirements to earn a profit and is convicted and fined $100 in the local court for breach of the regulation, and a plaintiff worker is cruelly injured, should there be scope for the award of exemplary or punitive, rather, damages in that case. If the answer to that is an intuitive "Yes", we then have to confront the question, what are the considerations that inform that award. Is it some a priori assumption by the judge trying the civil case the employer has not been punished enough. If that is so, that itself presents a fundamental and basic question of whether it should be open to a judge to say that the criminal sanction imposed, I think, is not enough though it may be prescribed by Parliament. We come back to what are the things that inform the exercise of this discretion.
MR TILMOUTH: Yes, well I understand the point, if the Court pleases, and I have endeavoured to answer it. But as I have also endeavoured to point out there is really no authority which at least expressly measures the adequacy, as it were, of the punishment already metered in the criminal court.
GUMMOW J: In Canada, it seems to have been settled since 1939 that where it is an individual defendant rather than a corporate one, and there has been a period of imprisonment, no punitive damages.
MR TILMOUTH: Our understanding of the cases in Canada were that they were discretionary rather than - - -
GUMMOW J: That is not what the leading text says by Professor Waddams on The Law of Damages, second edition, paragraph 11,470.
MR TILMOUTH: Well, I am obliged to your Honour for that - - -
GUMMOW J: Nor their other leading text by Cooper-Stephenson called Personal Injury Damages in Canada 1981, page 699. They collect about 25 cases between them.
MR TILMOUTH: Well, I must say on our researches it seemed that the Canadian and American authorities added no more to our understanding and that - - -
GUMMOW J: I think they add a lot more in terms of conceptualisation, if I may say so.
MR TILMOUTH: I was not aware of that reference, your Honour, I am sorry.
GLEESON CJ: Have you looked at the report of the English Law Commission in 1997 called Aggravated, Exemplary and Restitutionary Damages?
MR TILMOUTH: No, if the Court pleases.
MR TILMOUTH: Our understanding of the English situation was it was complicated by the limitation imposed by Rookes v Barnard, a severe limitation not applicable in Australia.
GLEESON CJ: As I understand it, they looked at the specific question of whether collateral punishment should be a discretionary or an absolute bar to punitive damages and came to the conclusion that it would be inappropriate to advocate a complete and automatic bar but the court should have a discretion to refuse to make an award of punitive damages where a defendant had already been convicted and punished, for a series of policy reasons set out at length in the report.
MR TILMOUTH: I am obliged to your Honour for that, as well. That, of course is the effect of our submission on this issue.
GUMMOW J: Is that not what Justice Hayne is putting? In the end what is involved, perhaps, where the criminal offence is a statutory one, is a civil court second-guessing what the legislature has said should be the punishment.
MR TILMOUTH: Yes, I accept that. That is why I have been reticent in accepting the broad proposition that the court - - -
GUMMOW J: The legislature has said that these shameful factory owners who permit these wretched activities only get fined $100. They may repeat the offence over and over again, and then the civil courts say, "We will grant an injunction", which is another example of the same problem, with a contempt sanction.
MR TILMOUTH: Yes. Your Honours, can I try and bring it together this way, apart from what I have already put, and come back to Your Honour Justice McHugh, in particular, because twice your Honour has mentioned the question of aggravation. Then I will come back to Watts v Leitch.
Your Honours, in relation to aggravated damages, as opposed to exemplary damages, it is true that aggravated damages were not sought, but there is no reason, if the Court pleases, why, under the Wrongs Act South Australia, which has a common law base but restrictions on various heads of damages, and instead of "pain and suffering" calls it "non-economic loss", an element of the non-economic loss could not have included what we would normally call aggravated damages. That could be awarded in assessing the numeral between nought and sixty - factored into assessing that numeral between nought and sixty as part of the court's ordinary consideration of the non-economic loss.
The New Zealand Court of Appeal in Donselaar v Donselaar, which is on our list, has ruled exactly that way in relation to its similar legislation, that you do not need to plead aggravated damages; it comes under the rubric of the statutory scheme. I do not intend to read it, if the Court pleases. It stands for the proposition that under the statute you can get an award of aggravated damages without having to plead it because it comes within, to adopt the South Australian wording, the non-economic loss.
McHUGH J: I do not know; in New South Wales you would have to specially plead the claim for aggravated damages, because it otherwise might take the defendant by surprise. Is there such a rule in South Australia that you have to plead any fact that might - - -
MR TILMOUTH: At common law, yes. But, in my submission, as a matter of the statutory scheme, no. In this case it would not have made any difference to the way the case was conducted because the facts upon which you would argue for aggravated damages, or exemplary damages, was precisely the same.
McHUGH J: No, they are not, because you are looking at a different aspect. That seems to be the problem with paragraph 11 of your submissions. When judgments talk about "an award of exemplary damages, assuaging hurt", and so on "of the plaintiff", they are talking about the consequences of an award. But you seem, in paragraph 11, to regard those matters as things that must be taken into account, that is things such as injury to feelings, insult, in determining whether to punish the defendants. But the true test as to whether the defendant should be punished is whether he or she has acted in contumelious disregard of the plaintiff's rights. If you answer that question, yes, then a discretionary judgment comes into play, whether or not, in all the circumstances of the case, this is a case which calls for some further award, not to compensate, but to deter.
MR TILMOUTH: Well, with respect, that is true, but to go back to my point, the basic facts would be the same, whether you use them for different purposes to reason whether aggravated damages and then exemplary damages will be awarded.
McHUGH J: But aggravated damages looks at the hurt to the plaintiff, for example, is usually injury to feelings, insult. You look at the effect on the plaintiff and you say, this person, this plaintiff was badly injured in his or her feelings by the conduct of the defendant, therefore, we will increase the compensation by way of the aggravating conduct.
MR TILMOUTH: Well, with respect, it is more than that. In aggravated damages it looks, first of all, at the gross conduct, that is to say the objective facts, and to a point, of course, it looks how those objective facts affect the plaintiff but, with respect, so too in exemplary damages to the point that at least I can extract it from Lamb v Cotogno and Cotogno v Lamb, and the two do overlap. But, if the Court pleases, in my submission, it is fundamentally wrong to say, with respect, that exemplary damages are confined to punishment or deterrence, full stop.
McHUGH J: That was the view I took about it in Carson's Case, in Carson v John Fairfax [1993] HCA 31; 178 CLR 44. I took the view that aggravated damages may include an element of punishment. I doubt if other members of the Court agreed with that analysis, but certainly I contended in that case that exemplary damages were concerned with punishment.
MR TILMOUTH: Well, if the Court pleases, in my submission, aggravated damages are more, to put it simply, the objective features whereas exemplary damages, apart from deterrencd and punishment, are the subjective features that I have endeavoured to identify them.
Can I return to the point that I was making? Even though unpleaded, it would still be open to make an award in the rubric of non-economic loss in South Australia, unpleaded, apart from the authority of Donselaar. I notice, if the Court pleases, on my learned friend's outline at 3.3.1 he makes the same point. So, this was an alternative argument I meant to put later, but I will do it now. If the Court pleases, if the Court were against us on the exemplary damages, the fact remains that under the rubric of non-economic loss, the plaintiff has received no consideration in this judgment of the aggravating features of the case and how they should influence - - -
KIRBY J: May I ask - I have not read Donselaar, but it looks to be, as it were, a case that concerned getting around the ban in section 5(1) of the Accident Compensation Act, which was the Woodhouse scheme, on the recovery of damages and they have said, "Well, you cannot recover damages but you can recover aggravated damages". Now, where does it say that aggravated damages are within the pleading of damages, because it seems to be addressed at that rather particular and statutory problem in New Zealand?
MR TILMOUTH: Could I postpone that, your Honour. I am fairly sure that it is there, and come back to that? But the point is, in my submission, it seems to be accepted by the respondent that aggravated damages would come within the rubric of the non-economic loss or what the common law would call pain and suffering, and there can be no doubt, with respect, in this case, that his Honour has not, when he fixed the numeral 17 in this matter, considered the aggravating features of the case.
GLEESON CJ: Was he asked to do so?
MR TILMOUTH: He was not asked specifically to award a separate award for aggravated damages but, in my submission, it could hardly be the case that he should ignore the gross attributes of this driving.
GLEESON CJ: But he dealt with the case on the basis on which it was conducted and it was not conducted on a basis that included such a claim, was it?
MR TILMOUTH: Not as a specifically pleaded claim.
McHUGH J: That was the problem in Cotogno v Lamb. In fact, if I remember rightly, we actually gave a separate judgment in Cotogno v Lamb in which we refused to allow the plaintiff to then claim aggravated damages on appeal because it had not been run that way at the trial. They had asked for exemplary damages.
KIRBY J: That may be the unreported one you cannot find.
MR TILMOUTH: Yes. Certainly it was talked of as a separate head and a discrete argument about it anyway but, in my submission, if the Court pleases, it would be very unjust to this plaintiff, where his Honour has said that $10,000 was appropriate for him ,to miss out altogether when it is very plain that the manner of driving was a feature of the case and a mere technicality like that, with respect, should not be allowed to stand in his way.
KIRBY J: Are there any pleading rules in South Australia that we should be specifically aware of that permit relaxation? I mean, it would be a very rare thing for this Court, the matter not having been litigated on this basis in the Supreme Court, not having really been dealt with on this basis in the Full Court, to now say, "Well, we know better. We are going to say that the judge, having thought that 10,000 was for exemplary, he really meant some of that was for aggravated and he should have awarded aggravated, even though the plaintiff did not seek it."
MR TILMOUTH: Yes. Well, what I can say, if the Court pleases, is that it is odd that there was a specific plea of exemplary damages, but not aggravated. I accept that but, in my submission, the Court should do substantial justice in the case. But could I add - - -
GLEESON CJ: Was there any evidence by the plaintiff of the kind that would support a claim for aggravated compensatory damages? Did the plaintiff go into the witness box and say, "Well, I was affronted by the high-handed conduct of this defendant"?
MR TILMOUTH: Not beyond the findings that I have referred to. Those findings are all we rely on, but could I add this as well, if the Court pleases, as a retort in addition to what has been put and that is that it was not argued in the court below - the Watts v Leitch point was argued - but it was conceded that aggravated damages could be awarded - - -
GLEESON CJ: Exemplary damages.
MR TILMOUTH: Exemplary damages, I beg your pardon, but the matter went off on the discretion. So there is that countervailing factor, if the Court pleases.
Your Honours, some time ago I was dealing with Watts v Leitch. Could I finish my submissions in relation to that very briefly? Watts v Leitch, the basic point was that it was a very different case altogether and there is nothing Justice Nettlefold said which made it an automatic application of the discretion to award exemplary damages to be refused where there was punishment and I was dealing with page 20 in relation to that.
The point to be made in conclusion on Watts v Leitch is precisely that which his Honour came to at page 24. His Honour decided not to award exemplary damages for an accumulation of factors. One was that he had "already been punished" et cetera:
2. The plaintiff is to receive compensatory damages including aggravated damages -
which is not the case here, and 3, a subjective consideration:
The background of the matter should not be overlooked. It affects the degree of culpability and leads to the conclusion that there is no significant risk of a repetition.
All that meant to import what I put earlier about the hotel situation, a spontaneous matter arising out of the matrimonial dispute, none of which applied here. So it is clear, if the Court pleases, that Justice Nettlefold was not being in any way rigid about that rule and, in fact, there were other countervailing factors which led to the same conclusion and materially, of course, there was aggravated damages awarded. Your Honours, in our submission, the same errors were perpetuated in the Full Court at 264 to 165 of the appeal book. Page 264 at line 32:
The only other matter is exemplary damages. Mr Stratford -
for the respondent -
conceded that on the authority of Lamb v Cotogno exemplary damages could have been awarded. It was a matter of discretion. He referred to the third edition of Luntz Assessment of Damages in which the learned author, on the authority of Watts v Leitch says that where a defendant has pleaded guilty to a criminal charge arising out of an incident in which a plaintiff was injured and been sentenced, there should be -
I emphasise "there should be" -
no exemplary damages, "since the defendant had already been punished."
GLEESON CJ: Well, they say that after having just said it is a matter of discretion.
MR TILMOUTH: True.
GLEESON CJ: So what they mean is that as a matter of discretion there should be no exemplary damages.
MR TILMOUTH: Well, with respect, they do not analyse the problems which I have endeavoured to identify in the judgment of the learned trial judge, the two errors I have pointed up; they simply say it is a matter of discretion. In my submission, when one reads it in context, they regard it more than that and they simply say there is no appealable error. Now, in my submission, that ignores the two points I have already made in relation to the matter and compounds the problem and in that sense, in my submission, that there would be an appeal from the Full Court for the same reasons I have identified in relation to the trial judgment.
Your Honours, that is the submission on exemplary damages. I was coming to the issue of the third party scheme, but much of that has been partly dealt with arguendo and, without going back to Lamb v Cotogno and Cotogno v Lamb respectively, can I put this: this Court in Lamb v Cotogno itself considered the statutory scheme, which was the 1988 Act. It decided unanimously by five judges that that should not affect the award of exemplary damages, even though there was compulsory insurance and, in my submission, there are no sound policy reasons or anything that has happened since which should cause the Court to reconsider that decision.
KIRBY J: Can I ask, picking up the point the Chief Justice asked earlier, would it have been an appropriate matter for the primary judge to take into account here that, in the circumstances of this particular personal defendant, that it was very unlikely that there would ever be an action by the State Government Insurance Commission against him to recover from him, because he is a man who spends most of his time apparently in gaol and that therefore it is really not going to work any deterrence or punishment upon him; it is merely going to work it on the ordinary motorist who contributes to the fund that the insurance commission administers.
MR TILMOUTH: For the sake of the insurance argument, I think I would be foolish other than to concede that, may it please your Honour, but what I would say is that the Court accepted such a proposition as well in Lamb v Cotogno at page 7, but determined that, nevertheless, that was not a consideration which should lead it to review.
GUMMOW J: Your opponent would need leave to reopen that decision.
MR TILMOUTH: In my submission, yes.
GUMMOW J: Well, he does not seem to have sought it; he seems to have sort of advanced into it sideways in paragraph 7.
MR TILMOUTH: Yes, his submission hints at it, if the Court pleases, but indirectly.
GUMMOW J: He wants to wound, but he will not strike.
MR TILMOUTH: Yes.
GLEESON CJ: Perhaps he decided he would run up a flag and see if anyone saluted.
KIRBY J: There might be one here.
MR TILMOUTH: Or, as Justice Jacobs of our court, used to say, your Honour, flew the kite without wind. If the Court pleases, at the moment I am content to reside in the authority of this Court and, with respect, the majority in the Court of Appeal in New South Wales, with due respect to your Honour Justice Kirby, and, in my submission, there is nothing that has happened since which would affect the issue.
The only other point I would make without going to Kars v Kars is that, although, with respect, in a Delphic utterance at page 382 of Kars v Kars in a footnote the Court referred to Lamb v Cotogno, the ratio of Kars v Kars in relation to gratuitous services provided by the tortfeasor was such that it rejected, in essence, any view that the fact that there was a compulsory third party insurance scheme should affect the common law principles, and that is particularly at pages 378 and 379 and at 381; the reference to Lamb v Cotogno was at page 382. To put my submission another way, it would be very odd, with respect, if this Court as recently as Kars v Kars had looked at a third party insurance scheme and decided that it should not affect common law principles, would then turn around and do the opposite in short time in this case. It has done in the past, of course, exceptionally. I think Cullen v Trappell and Barrell Insurance is an example, but it is very exceptional.
CALLINAN J: Mr Tilmouth, can I ask you a question about the statutory scheme. I wanted to ask you about section 125A(3)(a). This is a case in which the insurer was joined as a defendant, so that section applied, is that correct?
MR TILMOUTH: Yes.
CALLINAN J: Do you say that a liability for exemplary damages is a liability upon the claim in respect of bodily injury?
MR TILMOUTH: Yes.
CALLINAN J: On one view, that might conclude the case in your favour, might it not?
MR TILMOUTH: In our submission - - -
CALLINAN J: Assuming that the discretionary factors weighed in your favour and assuming that the presence of a statutory insurer becomes irrelevant by virtue of that provision, as prima facie it seems to me it does, then if you can make out, on discretionary considerations, a case for exemplary damages, then the fact that the statutory insurer may have to pay them seems to be irrelevant.
MR TILMOUTH: In our submission, yes. To rework that point in a little more detail, our submission would be that if in fact the situation of the insurer standing in the place of the insured person under this scheme was in some way meant to alter the situation, one would expect in this Act Parliament to say, in such a case of joinder the insurer shall not be liable, however, to award for exemplary damages or - - -
CALLINAN J: It seems to say the opposite. It says the insurer will be.
MR TILMOUTH: Exactly. If the Court pleases, without labouring the point, we also prepared a schedule of legislation in this area in which the State legislatures have dealt with the question of excluding exemplary damages in schemes like the South Australian scheme. So far as we are aware, there are only two cases where that applies.
KIRBY J: Is not that section 125A merely saying that the insurer will be liable for that for which the insured would be liable?
MR TILMOUTH: Yes.
KIRBY J: It is not, as it were, giving a statutory additional entitlement to exemplary damages which had to be paid; it is simply putting the Commission into the shoes of the insured.
MR TILMOUTH: Indeed, but unaffected by any reduction on any account.
CALLINAN J: And unaffected by any consideration that the damages might have to be met by a statutory insurer.
MR TILMOUTH: Indeed. As to that schedule, if the Court pleases, if we have the legislation correct, Parliament has excluded exemplary damages in New South Wales, and in Queensland it has excluded it against the insurer. Your Honours will remember it is compulsory now in Queensland, as we understand it, to sue the insurer and the insured. In Queensland, the legislation excludes an award of exemplary damages against the insurer but leaves it still open as against the insured person. So, presumably, in Queensland, if there is full indemnity, you could get a judgment against the insurer, exclusive of exemplary damages, but a separate judgment against the insured person for the remainder, represented by the exemplary damages.
KIRBY J: Just before you leave that, have you said everything you can in answer to Justice Hayne? Is there anything better that can be said in relation to the intuitive question; that is to say, that a judge may think that intuitively the criminal punishment is not enough, but what authority does the judge have to add to the punishment that Parliament has provided?
MR TILMOUTH: I have said inadequately what I - - -
KIRBY J: Everything you can say you have said?
MR TILMOUTH: That comes to my mind at this point.
KIRBY J: It is not a very satisfactory principle, is it, that first of all it is purely intuition and, secondly, it is intuition in the face of a statute that Parliament has enacted - the punishment?
MR TILMOUTH: I have not put it, with respect, on the basis of intuition. The thrust of my submission - - -
KIRBY J: That is what it comes down to, does it not?
MR TILMOUTH: With respect, not. In my submission, it would generally be wrong for the civil court to second-guess or to supplement or to derogate from the punishment imposed in the first court.
GUMMOW J: Suppose there had been a plea bargaining in which the victim was a stranger and that became apparent during the civil trial. Would that be a factor?
MR TILMOUTH: I expect the plaintiff might be a disappointed person if they could not compensate in the civil proceedings. I understand those factors, if the Court pleases. Those issues have not, so far as we are aware, really been dealt with by any superior court in the sense that they are now being formulated.
GUMMOW J: They are now here. You are not in the South Australian Full Court any more; you are here. What do we do? What principle do we apply?
MR TILMOUTH: With respect to the exemplary damages or - - -
GUMMOW J: The question Justice Kirby has just put to you.
MR TILMOUTH: In terms of this case, in my submission - - -
GUMMOW J: We just cannot sit here and despair; we have to produce some reasons.
MR TILMOUTH: Indeed, but in my submission, one has to look at it in the strict legal sense first of all, and my case is as good or as bad as the errors I have endeavoured to identify. The net result in that respect would be that there should be an award for exemplary damages of $10,000, as I remind the Court his Honour wanted to give, except for this factor which he - - -
GLEESON CJ: So that is the relief that you seek on this part of the case?
MR TILMOUTH: Indeed.
GLEESON CJ: An extra $10,000?
MR TILMOUTH: Yes, we do.
KIRBY J: What if you were to fail on the exemplary damages but the Court were of the view that some award of aggravated damages was appropriate, non-exemplary?
MR TILMOUTH: To remit it to the Full Court to deal with that part of the case.
GLEESON CJ: And the Full Court would have to deal with it on the evidence at the trial.
MR TILMOUTH: Yes.
HAYNE J: Not raised, not pleaded, not cross-examined upon.
MR TILMOUTH: In our submission, there could be no more evidence on the issue.
GLEESON CJ: The usual evidence that is led in support of a claim for aggravated compensatory damages is that, is it not, of a plaintiff saying, "I felt I was treated in a high-handed manner, my rights were trampled upon. I'm a sensitive individual".
McHUGH J: "I could'nt eat my egg for breakfast".
GLEESON CJ: That is right - Mr Andrews.
McHUGH J: Mr Andrews, yes.
MR TILMOUTH: All that is very true, if the Court pleases, but there was very little of that subjective material but - - -
GLEESON CJ: In Carson's Case, Mr Justice Mahoney in the Court of Appeal said that aggravated compensatory damages in a defamation action are a substitute for a horse whip. That makes the point fairly graphically - - -
HAYNE J: For a horsewhip.
MR TILMOUTH: Indeed.
HAYNE J: To some.
MR TILMOUTH: But, if the Court pleases, it would be, with due respect, turning a blind eye once the findings are accepted as to this manner of driving, that there was not something, even given the paucity of the evidence which the Court could seize upon. The plain fact which I emphasise, is there has been no allowance in the numeral which was fixed, for this kind of factor.
HAYNE J: There is a line of difficulty about that. I thought you told us the plaintiff had amnesia.
MR TILMOUTH: Well, he did for the - - -
HAYNE J: The plaintiff has no recollection of any of these.
MR TILMOUTH: No, but the Court can draw inferences, with respect, from the proven facts that a plaintiff in this position would naturally have those kind of feelings. Now, they would not necessarily be - - -
HAYNE J: The amnesiac plaintiff?
MR TILMOUTH: But, with respect, that would only preclude what he felt at the time, but he has to carry these injuries with him all the time and he would have feelings about those as well which the Court could infer. In my submission, it would be highly unjust to leave this inadequate award untouched by a very gross piece of driving indeed.
GLEESON CJ: Mr Tilmouth, this is a very small matter, but I think you told us earlier you were going to give us a reference to a case in the Full Court which, in effect, said it does not make a difference whether, in a case like this, you sue in negligence or trespass.
MR TILMOUTH: Yes, I am sorry, Venning v Chin (1975) 10 SASR 299.
GLEESON CJ: Thank you.
CALLINAN J: Justice McHugh deals with that in the New South Wales Court of Appeal though in Cotogno v Lamb. I think his Honour referred - - -
MR TILMOUTH: If that is so, your Honour, I have overlooked that, but - - -
CALLINAN J: His Honour refers to "high handed conduct" as well as "malicious conduct", I think.
MR TILMOUTH: Yes, indeed, he does, and, with respect, his Honour also refers to the fact that plaintiffs would feel deprived, as it were, if they could not receive this kind of compensation which would otherwise be awarded. That is at 587. I did not quite get to that passage when I read from it earlier.
GLEESON CJ: Do not plaintiffs claiming aggravated compensatory damages have to give evidence of their feelings?
MR TILMOUTH: Normally, yes.
KIRBY J: One feels a certain sympathy for trial judges having to apply the law in this area where there is an overlap between compensatory and aggravated, and exemplary damages, but it is not very clear.
McHUGH J: Have you found any case where exemplary damages were awarded although the defendant was acquitted on the criminal charge?
MR TILMOUTH: No, not off hand, but I would not think, as a matter of principle, that that would necessarily matter. It would be a discretionary issue and, of course, the onus of proof would be different.
McHUGH J: Of course it is.
GUMMOW J: And there would be no self incrimination - - -
AMcHUGH J: But may that not call in question the criminal - I suppose, different onus of proof and, therefore, different considerations?
MR TILMOUTH: Yes, indeed, and sometimes different factors the Criminal Court might stress, deterrence, for example. In a case like this the overriding consideration would be punishment to reflect the community attitude and that is reflected by Justice Bollen's remarks.
Your Honours, can I deal briefly with general damages? This is the future - damages for the future - in this way: this deals with our written outline as well. Your Honours, in the written outline we have endeavoured to identify the findings in relation to the injuries at paragraph 7, and I do not repeat those. They were fairly serious injuries.
In this case, your Honours, his Honour declined to award very much at all for the future, simply because in the end result he regarded the school reports in the case as showing that he had already beforehand suffered the memory loss which he found existed.
GLEESON CJ: It was not quite as simple as that, was it? He had a look at the history of alcoholism, the history of incarceration, the history of unemployment and formed a bleak view of the future of the plaintiff.
MR TILMOUTH: All of the latter, with respect, were subsequent to the accident, but the school reports, in my submission, was the key issue which led to a fairly small award.
GLEESON CJ: I thought that, as the trial was conducted, the battleground was that the plaintiff was seeking to assert that this post-injury poor performance was causally related to the injury - - -
MR TILMOUTH: Yes.
GLEESON CJ: And the plaintiff loss on that issue of fact.
MR TILMOUTH: Yes.
GLEESON CJ: The trial judge then said, "This post-injury poor performance is indicative of a bleak future, and it was not caused by the accident."
MR TILMOUTH: He did, but in my submission, when one looks at it, solely because of the school reports. He regarded the school reports as showing lack of short-term memory before the accident, therefore, not causally related. Can I show your Honours where that chain of reasoning occurred. At 212 of the appeal book, his Honour referred to the leg injuries and so on. Then, at line 34, to the evidence of Mr Ingman, who is a medical expert in the matter, to the effect that - Mr Ingman, by the way, your Honour, was an orthopaedic surgeon.
McHUGH J: He was the treating doctor, was he not?
MR TILMOUTH: As I understand it, yes, your Honour.
McHUGH J: His evidence was preferred to that of Sir Dennis Paterson, were they not?
MR TILMOUTH: That is right. His Honour referred to Mr Ingman's evidence and quoted it at line 34 on page 212:
that as a result of injuries the plaintiff would be restricted in work requiring squatting or bending, heavy lifting and carrying. He went on to say that if the plaintiff were asked to do that sort of work he could do it intermittently and more slowly than the average person. He concluded by saying "the reality is that unless he happened to be in a situation where someone wanted a person who worked more slowly he would be better employed in something else."
His Honour went on, at the top of 213, to accept Mr Ingman. But then, your Honours, his Honour then reasoned, at line 30 - perhaps I should read a bit earlier, line 28 and 29:
His opinion -
and this is the opinion of Mr Reid -
was that for that reason approximately 75% of the plaintiff's cognitive impairment was directly attributable to the accident. Mr Reid agreed that that was so. I accept that evidence. It was Mr Reid's evidence that the plaintiff's cognitive impairment also affects the plaintiff's short term memory. In my judgment the plaintiff already suffered that impairment before the subject accident.
As we shall see, by that his Honour clearly meant, "I can see that in the school reports":
For reasons which I give later, I am not prepared to accept Mr Reid's opinion that the plaintiff's short term memory problem is causally related to the subject incident. In my opinion it is not so related and I so find.
The reasons coming later are at 242 line 9:
In support of his submission Mr Britton reminded me of the views that had been expressed by Mr Ingman and more importantly of those which had been expressed by Mr Reid.....to which I have already referred and which I have already quoted.
If the opinions of Mr Reid were to be accepted in total, I think that there would be substantial force in Mr Britton's submissions, but I am not able to accept those views -
That submission was that there was practically total, permanent incapacity:
Mr Reid's opinion is predicated on the basis that the plaintiff suffers from a cognitive impairment affecting his short term memory which impairment, in his view, is causally related to the head injury because of the post traumatic amnesia that resulted from it.
I accept that the plaintiff suffers from an impairment of his short term memory. He gave evidence of that with supporting examples.....I have no problem with that. My problem is with the question whether that impairment is causally related to the head injury or whether it was pre-existing in any event. I say that because of various comments that appear in the school assessment reports of the plaintiff to which I have already referred.
So, it is clear, in my submission, that when it comes to this finding it is based upon the school reports.
GLEESON CJ: This is a finding of fact?
MR TILMOUTH: Yes, it is.
GLEESON CJ: Are there concurrent findings of fact from the courts below on this issue?
MR TILMOUTH: No, not in substance. The court simply dismissed this in a line or two without reasoning the result. I will identify that passage in a moment.
GUMMOW J: What is the significant issue in all this? Is there any point of construction of 35A of the Wrongs Act?
MR TILMOUTH: No. We understood we had leave on general damages, and this is the point I seek to argue on that.
KIRBY J: You are saying, in a sense, that this is a miscarriage of justice?
MR TILMOUTH: Yes, I am. What we are saying is in essence was his Honour found, simply because of the school reports, that there was no causal relation between the short-term memory and the accident and, in our submission, that was quite an improper base.
HAYNE J: Is that right? What is the significance of 244 line 14 and following?
MR TILMOUTH: It is because, as I said earlier, when one has to tease this out to go back to 212 and 213, but the reason - - -
HAYNE J: The judge did not believe the plaintiff.
MR TILMOUTH: That has nothing to do with - that is irrelevant to whether or not he has a short-term memory loss. That was a medical issue. His Honour rejected, at 244 at line 14 - I am jumping a bit here:
It is for these reasons that, as I say, the plaintiff made an unfavourable impression upon me. I do not believe him. For that reason I am unable to accept Mr Reid's and/or Mr Walsh's opinions to the extent that such opinions are based on unproved facts which either or both of them have elicited from the plaintiff. Accordingly therefore I reject Mr Britton's submission that the plaintiff is, and that his damages should be assessed on the basis that he is, totally and permanently unemployable.
But, the point is, in the reasoning process to that conclusion at 242 and 243, his Honour is finding that there was pre-existing short-term memory, because that arises from the - - -
GUMMOW J: Was this urged in support of the application for special leave?
MR TILMOUTH: Yes, it was, your Honours, and it is also part of the draft grounds of appeal.
GUMMOW J: It does not seem to be highlighted in the transcript.
MR TILMOUTH: I am looking now at pages 5, 6 and 7. It commences at about line 32 on page 5, the question of future earning capacity, and I talk about the issue of school at the bottom of 5 and over onto 6.
GUMMOW J: Look at what Justice Kirby said at the top of page 7.
MR TILMOUTH: I am hoping I would not take up much time, if the Court pleases.
KIRBY J: It is true that in part the primary judge's findings seem to have turned on his unfavourable impression of your client, and that is a very weak foundation on which to lay a suggestion that there has been a miscarriage of justice here of a kind that this Court has to get involved in.
MR TILMOUTH: Ordinarily I accept that, but what I would put is this. His Honour was of the view at page 242 in the passage that I read that Mr Britton's submissions would have "substantial force" if it were not for the problem of the short-term memory which he found to be pre-existing. At 243 his Honour said at line 3:
In the absence of other credible evidence to the contrary I must say that I have not been satisfied to the appropriate degree that the plaintiff's short term memory problem is causally related to the subject incident. In my judgment that problem was pre-existing and therefore not compensable.
GLEESON CJ: It went off on a question of onus of proof, did it not? As Justice Kirby has just pointed out, one of the problems was that the plaintiff was not accepted as a witness of truth.
MR TILMOUTH: But, with respect, that was quite irrelevant to this issue. His Honour found that there was a pre-existing short-term memory because of the school reports.
GLEESON CJ: But he had nothing else to work on because there was nobody else he could believe.
MR TILMOUTH: True, but the credit of the plaintiff is irrelevant to that exercise. My point here is that when one looks at the school reports which are quoted, which are reproduced in the appeal book at 205 to 206, those comments are isolated and out of context and, if the Court pleases, it is very - - -
McHUGH J: Well, more than that on their surface. If they had been used against Sir Winston Churchill, it was said that he had a short-term memory because he - - -
MR TILMOUTH: And, your Honours, I do not want to labour this point because I recognise it is a question of fact, but if you look at 205 and 206, I could pull out passages which are to the opposite effect. What I am putting is there was hardly any basis to draw the inference that there was a short-term memory loss in the face of the medical evidence based on those two isolated reports and the other fact of the matter is, if the Court pleases, that in his Honour's findings there was the plain fact as well that - this is at 233 and 234 - to paraphrase it, your Honours, the plaintiff was brought up by foster parents, also Aboriginal people, to whom he was close. At 234 line 10:
Their departure from this world represented a tremendous loss for the plaintiff.
That was at the time of his schooling. At 235 there was the finding at lines 8, 9 and 10 that he left school:
because the school which he was attending was frequented by two aboriginal students only. He had been one of them. He was continuously being picked upon by the others.
All the school reports show, your Honours, is absenteeism essentially and the failure to do a bit of homework and keep up his diary but, with respect, I can only go back to it. At 242 his Honour said "there would have been substantial force" in the submission, but when I look at those three isolated passages at 242 and 243 of the school reports I find that they tell me he had a short-term memory loss when he was at school; therefore, there is no causal relation between the accident.
KIRBY J: Do you tell us that you argued precisely this point in the Full Court?
MR TILMOUTH: Yes. If the Court pleases, it was dealt with very briefly by the Court of Appeal at 264 at line 9:
The sad fact is that the appellant's chances of achieving much by way of employment in life have always been small.
Now, with respect, apart from the school reports, there is nothing to sustain that.
Although Mr Britton argued that the learned judge should not have, nor should we, set store by those school reports I cannot see why not. They don't show much promise. Mr Britton argued that the appellant's poor performance was due to the loss of his substitute parents and that he, as an aboriginal, was picked on at school. The learned judge had rejected the arguments and found the reports pointed to the appellant's lack of motivation: he found that this lack of motivation has gone on. There is no reason for us to review these findings.
And, your Honours, can I also say that this issue was debated at length in the Full Court and only received that treatment. Without identifying it, your Honours, without reading it, page 249, the grounds of appeal to the Full Court, are included in the appeal book and what I am putting now is referred to extensively in the grounds of appeal. Points 6, 7 and 8 on page 250, at page 52, paragraph 13, 15 and 16 of the notice of appeal, and at page 254 grounds of appeal 28 and 29.
GLEESON CJ: But it was not only the short-term memory impairment that was working against your client; he had a history of excessive drinking, he had a history of offending and imprisonment. An attempt was made at the trial to relate those things to the injury and that attempt was unsuccessful, and there are a series of findings throughout the trial judge's reasons in which he says you cannot blame these problems on the accident.
MR TILMOUTH: Well, with respect, those matters were all post-accident; there was always a question in respect of them whether one followed the other or was independent, but the key feature was the school reports. That is why I read, if the Court pleases, at page 213, his Honour said, and I repeat it, because it is very important, in our submission:
For reasons which I give later, I am not prepared to accept Mr Reid's opinion that the plaintiff's short term memory problem is causally related to the subject incident.
The reasons he gives later are the school report reasons. In the context of him saying, if it were not for this, Mr Britton's submission that that there was total and permanent incapacity would have substantial support and, in my submission, the sine qua non of the finding on economic loss - - -
GLEESON CJ: But what if the reason later were the school reports, which you make an effective attack on, and also what his Honour said, his unfavourable impression of the plaintiff, now you can say in answer to that, well he is being unfavourable to him post-trauma, and therefore that cannot really be a true assessment of what was the cause of the problem, but maybe it was his general view of the plaintiff as to what he would have been like if he had not been injured.
MR TILMOUTH: Well, with respect, that was not the reasoning process and, in my submission as well, one cannot disentangle his Honour's views about the short-term memory for this purpose. If his Honour had a different view about the short-term memory loss then, in my submission, his conclusion about the quantum of economic loss would have been quite different.
KIRBY J: Given the brevity of the way in which the Full Court dealt with this matter and given its nature, it is not the sort of thing that the Full Court could really fix up, is it? It is a case where the primary judge who had certain advantages has, as it were, not fully exercised them all as being confused in the way he used those advantages.
MR TILMOUTH: In my submission, in this respect it is the Warren v Coombes situation. It was a question of drawing inferences from the school reports. The inference his Honour drew from, with respect, isolated and out of context passages was an inference that he had a short-term memory when he was 15, 16 and 17. The Full Court and, indeed, this Court is in just a good position to draw those inferences and in the Warren v Coombes sense, it is entitled to substitute its view for that matter.
But, in my submission, with due respect, it is so bad that the inference of short-term memory loss based solely on those three thin passages is not open, and could I add this as well, if the Court pleases. In the end, his Honour preferred Mr Reid to Mr Walsh. Later he rejected both of them on this because he felt there was - their predicate of course was there was no short-term memory loss before accident. His Honour said there was because of the school reports.
Mr Reid was not ever cross-examined about this issue. It was never put to him. So his Honour has made a finding - drawn inferences rather, it is not a credit matter - he has drawn inferences from a very thin base out of context and misquoted in an atypical period of the plaintiff's life when he was unsettled by the death of his carers and he was picked on at school and said, to paraphrase Justice Millhouse, that he never really had any hope. Now, that simply is not open, in my submission, and certainly not on the basis of school reports.
GLEESON CJ: He was aged 16 at the time of the accident.
MR TILMOUTH: Yes, and he was in work. He was in work. Now, it might have been a six-month contract, but the first time he goes out into the workplace he has a job.
GLEESON CJ: What age did he leave school?
MR TILMOUTH: Age 16, I think, with respect. He turned 16 in April of - - -
GLEESON CJ: It is a very surprising thing to do, to look at school reports if you are trying to find out what his potential was before the accident, when he was only 16 at the time of the accident.
MR TILMOUTH: They were called for and they had to be submitted under the discovery rules. Nevertheless - and they were not complete, by the way; there was only a few of them there - but my submission is that when one looks at it, this is the sine qua non of the finding on the future economic loss, the school reports. That issue was not, despite vigorous contention to the contrary, really dealt with by the Full Court, in my submission. In 1986 he was in year 8. He turned 14 - - -
McHUGH J: He left school at year 9 when he was 15.
MR TILMOUTH: That is right; I correct myself.
McHUGH J: What do you say about the passage on page 234 at line 15, where his Honour referred to the absence being "frequent" and "numerous", and then says:
I do not accept that his poor performance was due to the fact that, as he says, he was not brainy enough.
It seems to assume that he was brainy enough. His Honour goes on:
In my judgment he did not succeed at school because he did not put enough effort into what he was doing.
There seems some contradiction there.
MR TILMOUTH: Exactly. Your Honours, time does not permit, but I do ask your Honours to read all the reports in here, but especially those two at 205 and 206. As I have said, one can fairly take out other passages where "he is trying, he is doing his best". Given his problems, that is hardly surprising. The whole finding on future economic loss is built on these two pages.
McHUGH J: Knowing what we know about the problems with Aboriginal children, we can hardly expect that a child at school in these circumstances that he was would prosper at school.
MR TILMOUTH: Precisely.
McHUGH J: You would expect his school record would be dismal.
MR TILMOUTH: Precisely. With respect, the Court here is looking at - judging this man on a couple of isolated reports for two terms only, with due respect, out of context, for a whole working life, and come up with a grossly inadequate figure.
McHUGH J: What do you say about the causation question, about the drinking? That is not a ground of appeal, is it?
MR TILMOUTH: Well, with respect, his Honour's findings might well have been quite different if he was prepared to accept that there was short-term memory due to the accident.
McHUGH J: But the trial judge seemed to accept some of the earlier authorities such as Havenaar's Case which, in effect, say that if you have problems as a result of drink post-accident as a result of a voluntary act which breaks the chain of causation.
MR TILMOUTH: With respect to those periods, I accept that, of course. But that would reduce damages, but it would not virtually entitle him to practically a nominal award as given here. If the Court pleases, I would be repeating myself now, but when one looks at it, it is absolutely inescapable that the critical finding in relation to the economic loss is based upon the school reports, as I have submitted it.
KIRBY J: Dr Ingman was the one that the judge accepted at page 212. Leave aside the issue of the school reports, did Dr Ingman really throw any light on the loss of capacity of the plaintiff, the loss of work capacity, given that this young man had, in a sense, an unpromising potential probably because of his aboriginality and his leaving school early and so on, the injury to him would be more significant than the injury would be to somebody in a different social milieu.
MR TILMOUTH: Indeed.
KIRBY J: Now, the judge accepted Dr Ingman. Does he cast any light on this issue?
MR TILMOUTH: In my submission, the passage I adverted to at the bottom of 212 which is:
restricted in work requiring squatting or bending, heavy lifting and carrying -
and that the reality is - - -
KIRBY J: What did the judge give this lad for future loss of earning capacity?
McHUGH J: Thirty thousand.
MR TILMOUTH: Thirty thousand dollars for a whole working life.
KIRBY J: For a person whose potential was really only a sort of labouring potential, or gardening, or things of that kind. His school reports said he liked gardening and did his work on his plot well.
MR TILMOUTH: Yes.
KIRBY J: He was injured in a way that prevented him squatting, bending, lifting, carrying heavy objects.
MR TILMOUTH: The very things he is best at, the sort of work he could do, yes.
KIRBY J: And he got $30,000 for loss of earning capacity.
MR TILMOUTH: Yes, and in the end result, I am sorry to repeat it, but we submit it is very important, simply because of those reports.
GLEESON CJ: That is your only point, is it not, the misuse of the school reports?
MR TILMOUTH: In essence, yes, apart from the fact that he was actually in employment and it was inadequate, but the building block for the finding is the school reports.
McHUGH J: Can you not rely on the amount itself?
MR TILMOUTH: Yes, we do. I did not want to repeat matters in our written outline, but paragraph 17 deals with the other aspects and a disproportion with what he got pre-trial.
McHUGH J: Well, $15,000 - - -
MR TILMOUTH: Pre-trial, that is right.
McHUGH J: And $30,000 for the future.
MR TILMOUTH: Yes, I did not want to repeat those matters, if the Court pleases, but I wanted to deal with this factual issue. But it is all the things we outline in paragraph 19. We have only got adverse contingencies. We have no favourable contingencies. Our future has been reckoned on the thinnest base possible, then unfairly out of context, et cetera, I have put those points. And, in fact, his Honour, it appears, would have accepted at 242 that he was totally and permanently incapacitated but for those reports and, in our submission, that was a substantial issue which was inadequately addressed by the Full Court in the passage I have already read at 264.
Could I just read another passage and I will conclude my submission on this. At line 27 on page 264 Justice Millhouse for the court simply said:
As for the future, the appellant has little permanent disability -
which of course was wrong, on the findings; the disabilities were much more serious than that -
and he has always been likely, even if he had not been injured, to have found it difficult to get and hold employment: his employment future, given his lack of skills and motivation, has never been a good one.
GLEESON CJ: What about the findings on the bottom of page 245 and the top of page 246? Is there any challenge to those?
MR TILMOUTH: Well, what I say about those is, if the Court pleases, they are consequent upon his Honour already finding that there was no causal relation with the short-term memory, which means - - -
GLEESON CJ: I am sorry, it is not his memory that means that he ends up in prison, is it?
MR TILMOUTH: No, that is true, but all of these things happened post-accident and, in my submission, it is obvious that part of this difficulty he has had could be attributable to the accident, but the point is those factors would only - mitigate is not quite the right word, but for the periods he is in imprisonment and other things intrude, that would reduce the economic earning capacity for that period but, with due respect, they do not justify excluding him from a working life of 40 years which is ahead of him, and he has really got only a nominal sum for that award.
The other thing I would add, whilst on page 246, is that in two places, at lines 13 and 36 or 37, his Honour literally wield a broad axe without - - -
McHUGH J: It does seem to raise the sort of Baker v Willoughby-type point though, does it not? That is, something that is not causally related to the accident destroys your earning capacity anyway. Are you entitled to get damages for your loss of earning capacity when there was this supervening non-causative aspect?
MR TILMOUTH: Yes. Baker v Willoughby, if I recollect, your Honour, was more - two accidents - - -
McHUGH J: It was about the - - -
MR TILMOUTH: - - - and the question of - - -
McHUGH J: Yes.
MR TILMOUTH: Yes. Of course that is true, in a sense, and I suppose it must be conceded that this kind of subsequent activity could be suggested as evidential of a lack of motivation. If the Court pleases, I - - -
McHUGH J: No, no, I was not looking at that so much, but let it be assumed that you make out your point about the errors of the trial judge in the Full Court about the future, so let us say, for example, you should have got $200,000 and 10 of it was for earning capacity, but it is now found that as a result of your drinking, drugs and so on, criminal record, you really have not got any earning capacity in any event, and that is something quite unrelated to the accident.
MR TILMOUTH: If it is quite unrelated, of course, then it is not compensable.
McHUGH J: No, I know, but can it cut down your earlier loss?
MR TILMOUTH: It can. In my submission, his Honour might have viewed - - -
McHUGH J: I rather thought Baker v Willoughby said it did not.
MR TILMOUTH: My recollection of Baker v Willoughby, your Honour, is imperfect and I thought there were two accidents that - - -
McHUGH J: Yes, so is mine.
MR TILMOUTH: The question was which accident caused which. Your Honours, in my submission, his Honour's views about the plaintiff might have been quite different if he had been prepared to accept that there was no short-term memory loss evidenced by the school reports. One cannot say that his Honour would have been driven to the same conclusions about alcohol and imprisonment if his findings on that issue were different. In my submission, he might have looked at it differently.
GLEESON CJ: So, what you are seeking is a retrial on the issue of damages - on the issue of compensatory damages, assuming - - -
MR TILMOUTH: No, to remit the matter back to the Full Court to assess damages.
KIRBY J: How can they do that? They did not see your client.
MR TILMOUTH: Or, alternatively, a retrial. My main point about - yes, on reflection, maybe a retrial would be advisable. My main point, of course, was in relation to school reports, that that was an inference issue, not a credit issue.
KIRBY J: Essentially, you say, this matter on the question of the economic capacity went off the rails, the trial judge accepted the doctor, but he discounted all that because of the couple of school reports - - -
MR TILMOUTH: Exactly.
KIRBY J: And in any case, he awarded an amount which, even with the school reports, was inadequate to the injury to this Aboriginal, unlettered man, but I just find it difficult to see how a Full Court could substitute a decision on the way in which the matter was tried.
MR TILMOUTH: Well, I accept the force of that. What I would conclude on is this, that it was clear that his Honour accepted Mr Ingman and Mr Reid. He only discounted Dr Reid on the issue of short-term memory loss because of the school reports. Absent that, it is clear, except in Mr Reid's evidence, that this man was effectively unemployable, and as I repeat, he acknowledged the substantial force of Mr Britten's submissions relating to total and permanent incapacity for work in the future, but for the finding on the school report.
GUMMOW J: When you talk about retrial, a complete retrial, or how does exemplary damages fit into this?
MR TILMOUTH: Well, I would ask for a complete retrial, if the Court pleases, if the Court was minded to send the matter back on the issue of the future loss.
GUMMOW J: But what if we are in your favour on exemplary damages but not on the other issue?
MR TILMOUTH: Just to award the $10,000.
KIRBY J: I am sorry, I did not understand that. I thought your complaint was that $30,000 was manifestly inadequate, and you were thinking in terms of very large sums, and now you are, as it were, willing to grab $10,000 and run.
MR TILMOUTH: Well, on very specific assumptions, if the Court pleases.
KIRBY J: I see. It was on an assumption the Court - - -
MR TILMOUTH: As I understood it, the Court is against us on the future issue and on everything else bar the exemplary damages.
KIRBY J: But if the Court were against you on exemplary damages but thought there was some merit in the second point, then the remedy you ask is retrial?
MR TILMOUTH: Retrial. Yes, on reflection, I accept that.
CALLINAN J: Mr Tilmouth, so I can be clear about this, if we decide in your favour on exemplary damages, you are content with $10,000. You do not suggest that there is any overlapping with respect to matters that might appear to be aggravated damages which should increase the $10,000. You say $10,000.
MR TILMOUTH: I do, putting aside the future issue, of course.
CALLINAN J: Well, that is economic loss, is it not? There is no complaint about pain and suffering or anything of that kind?
MR TILMOUTH: No, apart from the $10,000.
CALLINAN J: So it is purely $10,000 and future economic loss?
MR TILMOUTH: Yes. In the net result, yes. If the Court pleases.
GLEESON CJ: Thank you, Mr Tilmouth. Yes, Mr Walsh.
MR WALSH: If the Court pleases, I will deal with the last issue that the Court dealt with as a matter of convenience and then turn to the issue of exemplary damages, if that is convenient, and the starting point with respect to the issue of general damages is page 269 of the appeal book, which is the notice of appeal and the grounds of appeal, and at page 269 what the appellant complains of is that there was an:
error in failing to increase the damages for loss of future economic loss.....of $30,000 -
reference to the legs and the closed head injury and then in 2.3 that:
The Full Court was in error in its decision by accepting the trial judge's finding that the head injury as significant and severe and the injuries to his legs.....was little permanent disability.
2.4 The Full Court failed to rectify the error made by the learned trial judge in placing great weight on the content of the applicant's school reports -
The point that we make, initially, is that there was no challenge to findings of fact other than those which, in a sense, might arise as a result of 2.4, which we are left to read into the complaint but, in particular, there is no challenge to other findings of fact which relate to the question of assessment of damages, the loss of future earning capacity, which is the only complaint that is made.
Thus, when we look at the evidence, one will see that his Honour did not reject, for example, the evidence of Mr Walsh, the neuropsychologist, that the issue of the loss of memory was not ever going to be a problem for this particular person with respect to his earning capacity in the sort of work that he might have done anyway. So that at the end of the day the only issue that became important from a practical point of view with respect to the loss of future earning capacity component, was the question of lack of motivation.
Thus it was that his Honour was left with this issue of lack of motivation at the end of the day and was left with the dilemma of saying, "Was there some lack of motivation in this young man before the motor vehicle accident, or is there something about what has happened since which has nothing to do with the accident, which can justifiably lead one to conclude that he might have had some lack of motivation anyway? How do I assess this young man who appears before me, and how do I then conclude, with all of that, as to what this man was in terms of his likelihood of work in the future and motivation to work in the future?".
KIRBY J: Is this a complaint of surprise by terms of the ground of appeal. Mr Tilmouth told the Court that he put these very arguments to Full Court and they dealt with it in that brief way.
MR WALSH: Yes, but, with respect, when one looks at the actual grounds of appeal to this Court and the challenge - - -
KIRBY J: Were you in the Full Court?
MR WALSH: No, I was not, your Honour.
GLEESON CJ: If you look at page 264, line 14, in the Court of Appeal the relevance attributed to the reports was to the appellant's lack of motivation, not to the appellant's short-term - - -
MR WALSH: Memory loss.
GLEESON CJ: - - - memory impairment.
MR WALSH: Yes, your Honour. Correct, your Honour. That was the issue - - -
KIRBY J: But if you look at page 263, at the bottom, line 35, 36:
The appellant complains that these sums are "manifestly inadequate"- - -
MR WALSH: Sorry, page 260 - - -?
KIRBY J: Page 263, at the very bottom of the page. The complaint about exemplary damages is an alterative, or is additional. The essential complaint was "manifest inadequacy".
MR WALSH: Yes. I understand that the challenge that has been made is, one, that is manifestly inadequate, but it is on the basis, substantially, of the findings of fact that were made by the learned trial judge in the first instance, because there is no challenge to most of the findings of fact that are made. The only challenge that one can see in terms of a finding of fact by the learned trial judge was that which might arise as a result of the error alleged with respect to the school reports.
McHUGH J: Yes, but this really is getting into a question of semantics. Special leave to appeal has been granted in respect of these matters because, arguably, there is a miscarriage of justice and one is going to look at the substance, and I have to tell you, Mr Walsh, that I am amazed that any Supreme Court judge would give this particular plaintiff only $30,000 for future injuries, having regard to his own findings, leaving aside this question of the effect of his short-term memory.
MR WALSH: Can I suggest to the Court that at the moment it does not have a full broad picture of the findings that the learned trial judge was making. For example, the starting point with respect to those findings, and the dilemma that his Honour Judge Pirone had in the District Court, and keeping in mind that the Supreme Court was a Court of Appeal when making a decision as to whether there was justification for setting aside the learned trial judge's assessment, at page 243 on this critical issue of the neuro-psychological evidence, my learned friend referred to the absence of other credible evidence to the contrary.
I must say that I have not been satisfied to the appropriate degree that the plaintiff's short term memory problem was causally related to the subject accident. In my judgment that problem was pre-existing -
The first point we make is that that is not going to be specifically deleterious to his ability to work, given what he was likely to be doing in the future anyway, so that is not necessarily going to sound in damages - - -
McHUGH J: Exactly, and that is what I find so amazing about this judgment. Here is a relatively unskilled person. He has got nothing but his physical capacity to offer on the labour market. Even if you only gave him 10,000 or 12,000 a year, you are talking about figures of $350,000 or $400,000 discounted. How could you have ever got to a figure of $30,000?
MR WALSH: I will explore by referring to all of the findings of fact made by the learned trial judge, Judge Pirone, on the topic of loss of future earning capacity because that is what we are concerned with in this case and if you then turn to the next - - -
GLEESON CJ: Would it be convenient for you to come to that matter after lunch?
MR WALSH: I see, yes.
GLEESON CJ: We will adjourn until 2.15.
AT 12.49 LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.17 PM:
GLEESON CJ: Yes, Mr Walsh.
MR WALSH: Thank you, your Honour. If the Court pleases, one of the issues that my learned friend now raises is that he seeks, in effect, a retrial because he says that his Honour might not have concluded in the way he did, with respect to the issue of relating to the criminal offences and the like. Now, with the greatest respect, that issue should have been raised as a ground of appeal, if that is what my learned friend is saying. There is no mention, whatsoever, of that as being a ground of appeal; there is no challenge to the conclusion that the learned trial judge justifiably drew that the incidence of criminal offence and alcohol, drinking and drugs, was other than a voluntary act on his part, and there was an abundance of evidence to support that conclusion, and that is not the subject of an appeal here and that is the basis that my learned friend says that he might prefer to seek a retrial, because other things might flow, he says, from the issue relating to the challenge with respect to the school reports. In our respectful submission, that is just simply not open at this time.
If we concentrate on what it is that they have appealed against, it is to do with or relates or emanates from the issue of the school reports and what his Honour Judge Pirone in the District Court said at page 243 at the top, after referring to the school reports, my learned friend quoted from the first paragraph:
In the absence of other credible evidence to the contrary I must say that I have not been satisfied to the appropriate degree that the plaintiff's short term memory problem is causally related to the subject incident.
And his Honour was clearly looking at it, not only in the context of the impression he drew of the plaintiff, but the question of the burden of proof as well, as to what the actual injuries were, as a result of this accident, what the plaintiff had proved.
True it is that the plaintiff's evidence, if acceptable, should lead me to make a finding to the contrary but I am unable to accept that evidence because I have no faith in its truthfulness or reliability.
And the reality is that - - -
KIRBY J: Can you help me with this, the trial judge did accept Dr Ingman, he accepted his evidence, and Dr Ingman said that as a result of the injury the plaintiff had various physical disabilities: no squatting, no bending, no lifting and all the usual things. Now, in a person of this background it would seem manifestly inadequate, a point that was argued at the trial and raised in the appeal, that the amount that was awarded by the trial judge should be the measure of the plaintiff's loss of economic capacity.
MR WALSH: I will not shirk from the duty that I have to respond to the issue of the physical injury, that was fine by the learned trial judge. At the moment, if your Honour pleases, I am dealing with the question of the injury to the head and the sequela from that. My answer, in due course, to that is going to be that his Honour found that as a matter of fact that this plaintiff was capable of doing the sort of work, irrespective of his injury, capable still of doing the sort of work that he would have done, but for the injury.
KIRBY J: I will discuss that with you when you come to it.
MR WALSH: Yes, your Honour.
KIRBY J: At the moment you are concentrating on the intellectual loss, though intellectual loss would not seem to have loomed so large in this man as physical loss.
MR WALSH: Yes, your Honour, that may be so but I will deal with that latter aspect, as I must, of course, in due course, but the point that I make at the moment is this, that what his Honour has said is that, " I have evidence from some neuro-psychological experts," namely Mr Reid and Mr Walsh. Those two experts in giving their evidence had two fundamental bases for giving their evidence. One was the history that they were given and the other is the result of the psychometric testing that they undertake and his Honour was left with a dilemma, as Mr Reid acknowledged, in this particular plaintiff because you could not be satisfied necessarily that he was applying himself to the tests, and they have all sorts of batteries of tests, including things called Maze Tests and things like that and, of course, if someone is not applying themselves that will affect the tests.
In addition to that, he could not be satisfied that this young man, in fact, did have the deficits that they thought might be due to the accident as a result of the injury as opposed to having deficits simply because he was who he was and that in order to reach a conclusion about that you inherently had to rely upon, on the one hand, the tests, but on the other hand, the history that was given to the medical experts and, of course, at the end of the day his Honour's assessment of the plaintiff and whether, in fact - the way he presented and the like - and what his Honour concluded on this topic of psychological loss was not just as my learned friend asserts and has asserted on a number of occasions, not just, "Well, the report means this or they lead me inevitably to this conclusion." It was balanced against all these other factors as well and, in particular, balanced against the fact that he did not accept the plaintiff's history and thereby he could not accept the history that had been given to Mr Walsh and Mr Reid and thereby could not have confidence in their opinions with respect to those issues.
KIRBY J: The suggestion to us is that he could not accept the plaintiff's history on such paltry foundation as the three extracts suggested that be taken out of context from school records, prepared for different purposes and not necessarily showing, at least without expert evidence, that there was an intellectual impairment at that stage.
MR WALSH: Your Honour, the school reports must also be put into this context, that they were documents that were discovered but which Mr Reid certainly had not been shown prior to the cross-examiner raising the question of prior school reports and information that would assist in reaching a conclusion. Mr Reid acknowledged, "Look, if I knew about these reports" - these very reports, which his Honour refers to and which, I think, Mr Reid accepted, showed the very lack of motivation that ultimately was at issue in the case. That is referred to in the judgment itself. It was an acceptance, all round, that the reports did show that lack of motivation and that the reports were of value and that they would have been taken into account had they had that information.
GLEESON CJ: I thought we were told this morning that Mr Reid was not cross-examined about this.
MR WALSH: Mr Reid was asked about the issue of the pre-accident history and the school reports - I am sorry, that was Tony Walsh. I beg your pardon, that is my fault. It was Tony Walsh I should have been concentrating on. I withdraw that. Mr Walsh was certainly cross-examined on that topic. Mr Reid, I am sorry, had said in his report, "Look, I am at a disadvantage because we do not know what this person's background was." So that, in effect, what his Honour had was a situation whereby an assertion was being made that this young man had a lack of motivation as a result of brain injury, which was never going to be certain and, counterbalanced against that, reports which suggested that he had a lack of motivation beforehand.
Those reports were tendered by consent, and those reports were not the subject of any attempt on the part of the plaintiff to suggest that other than the inference which obviously Mr Walsh spoke about, when his Honour was asking him questions, which is referred to in the judgment, itself, that it did affect the question of motivation - no evidence to the contrary; no rebuttal evidence, no further evidence. Mr Walsh, I think, was called as part of the plaintiff's case. So, nothing at all was put to the court. The judge was left in the unenviable position of having to grapple with a concession by Mr Walsh that, look yes, these reports are important; they do indicate that this person may have a lack of motivation and had it before the accident; and an assessment of the plaintiff who said, on face value, "I, on the one hand, had not been drinking before the accident", for example, yet was proven to have been drinking before the accident. Had gone to drink; he said he used to sip with his friends. Well, sip was three or four Eccos on the day of the accident, that was sipping, before the accident occurred. His Honour had to then weigh up his impression of the plaintiff as a witness of truth or otherwise, and he was not satisfied that he was a witness of truth on some very critical issues that related to the question of what was his pre-morbid personality, and what was, in truth, the sequelae of the head injury.
So, in our respectful submission, inevitably we are left with the situation where in order to overturn his Honour the trial judge's finding, or findings with respect to this issue, one has to reject the benefit he had by seeing the witnesses and hearing the evidence of Mr Walsh and Mr Reid and the real thrust of what they were saying as opposed to the actual words that one might see in a transcript, and his assessment of the plaintiff.
KIRBY J: How would seeing witnesses inform his Honour's mind as to whether or not this plaintiff had a prior intellectual disability?
MR WALSH: Were they asked that question?
KIRBY J: I mean, his Honour was seeing him at a time after injury.
MR WALSH: That is right.
KIRBY J: So the only elements that cast light on what was the position before injury were the school reports.
MR WALSH: Two things.
KIRBY J: And they really - I mean if you judged every plaintiff on the basis of school reports and said because they were inattentive at school they had suffered some prior brain damage, well, that would just be absurd.
MR WALSH: Well, with great respect, we accept that you should not judge solely on the basis of school reports, but his Honour did not. What his Honour had was certain assertions from the plaintiff about himself too and he had to make assessments of that and he did not accept the plaintiff.
KIRBY J: But they were assertions by the plaintiff as a damaged person.
MR WALSH: Well, that is so, your Honour, but there was no suggestion that that affected his ability to be truthful about issues - that was never put - or that he had no ability to recall generally what he was doing as a young person before the accident, not immediately before the accident but in the years before the accident. He was cross-examined about the reports. Initially his evidence would tend to suggest that he had applied himself reasonably diligently at school and he was constrained to accept when he was confronted with the evidence that it not have been so.
When one looks at the matter in isolation, of course one sees reference to some school reports which only span two years, but that was not the sole basis of his Honour's conclusion in this case. When one looks at the issue of loss of earning capacity and reflects upon the fact that - certainly Mr Walsh himself said that the issue of loss of memory is not going to be an inhibitor in terms of his capacity for work and the sort of work he would have done irrespective of the accident, then it tends to pale into some insignificance at the end of the day.
Of course, I must deal with the issue of the physical injury but, just concentrating solely on that, there is nothing, in our respectful submission, that would justify the supreme Court of Appeal interfering with the judge's decision and exercise of judgment with respect to the assessment of damages and nor, with the greatest respect, would there be any justification for this Court to want to interfere with that, given what we have put. If I may, I will turn to my outline of argument just merely - - -
HAYNE J: Just before you do, looking at the written report of Mr Reid, particularly at page 159, that report was in evidence, was it?
MR WALSH: Yes, it was, your Honour.
HAYNE J: And it is his opinion that the plaintiff had made a good recovery, I read from line 20 or 21:
he has made a good recovery with some evidence of mild residual memory disturbance. I would assess this cognitive impairment as being in the order of 10 to 15%.
Am I right in understanding that as evidence before the trial judge which might, if accepted, warrant a conclusion that the man presented at trial with what was described as "mild residual memory disturbance" only?
MR WALSH: There was evidence that the plaintiff gave on that topic, your Honour, yes, there was evidence at trial. Once again we are reliant, very substantially, on the plaintiff's history, with respect to those issues, but what we do see from Mr Reid's report at page 158 at line 32 approximately, the third last paragraph, is the comment that:
Estimating pre-morbid intellectual level is very difficult due to the uncertainty of his educational level and expertise and also because of his ethnic background it is not possible to use English based skills as an estimate. From what he has told me it seems likely he was in the average or slightly below average range of intelligence.
Now there is an example of the fact that he relies upon, and inherently must rely upon, the history that he is given by the plaintiff.
KIRBY J: At page 244, line 16 or so, the judge says that he is:
unable to accept Mr Reid's and/or Mr Walsh's opinions to the extent that such opinions are based on unproved facts -
and I may have misread it, but it seems that he is saying that because of the school reports and the evidence of the plaintiff at the trial, he was not even inclined to accept a mental disability of 10 to 15 per cent.
MR WALSH: The judge certainly, no, I think the contest was short-term memory, motivation, on the one hand, and some cognitive deficits and sequelae from brain damage on the other hand, because his Honour certainly accepted that Mr Walsh's opinion, I think it was, that there was, of the cognitive deficit, putting aside those issues, 75 per cent due to the accident and 25 per cent due to other factors.
HAYNE J: Was Mr Reid called by the plaintiff or by the defendant?
MR WALSH: By the plaintiff.
KIRBY J: A cognitive impairment of 10 to 15 per cent in a person who, on your evidence, was already inattentive at school and not an intellectual giant, would be a significant impairment in such a person, would it not?
MR WALSH: Well, that is easy to say, with the greatest respect, but one must look at the evidence to see whether, in fact, that is so. For example, as I indicated, Mr Walsh's evidence was that the short-term memory issue, even if it had have been accepted, was not going to inhibit him with respect to his work. So, it must be kept in context. One must look at the actual effect that it has on the particular individual - - -
KIRBY J: Combined with the physical disabilities which were found by Dr Ingman, accepted by the trial judge, combine the physical and the intellectual and you have a very severe impact on a person who has a modest employment capacity to offer to the market in the first place.
MR WALSH: Can I turn to my summary of the findings of fact that the learned trial judge made, to illustrate, I hope, the point that I make with respect to the overall submission which incorporates the issue of physical disability as well. In my outline of arguments I deal with it in paragraph 2, namely, the findings of fact of the learned trial judge, and I will only really skim through them rather than taking you through the actual judgment because it is a more convenient and quicker way to do it. His Honour referred, in my 2.1, said that the plaintiff suffered a permanent disability of 10 per cent loss of use of the right leg and 5 per cent loss of use of the left leg, but that the likelihood of future degenerative changes has not been significantly increased and long term future complications are unlikely.
So, he was satisfied on the medical evidence that there was not going to be any worsening of his condition, that he made a good recovery from his head injury, but he had some cognitive impairment which affects new learning to some extent. That is that separate issue that I was referring to when I said that there was a distinction to be drawn between, on the one hand, the problems associated with motivation and the cognitive deficits that were being spoken of. However, the plaintiff's short-term memory impairment existed before the accident, not causally related to the accident, the plaintiff's demeanour was indicative of a "who cares" type of attitude, thereby showing lack of motivation, that is the way he presented, and as to motivation, his Honour reached the conclusion that that is something from which the plaintiff suffered prior to and even long before the subject accident.
McHUGH J: Well, now, can I take you up on that, because going through the reports I find it difficult to see how the judge could have made that finding. If you go through the reports, 197 - the statement he was "an active participant", at 198 and 200 - when he was here "he was cooperative", 200 -he was punctual, 203 - "more positive attitude" and he worked willingly, 204 - garden well maintained, more attentive in classroom attitude, making an effort to get his work done, made some good efforts, maintained a positive outlook and was a "willing helper" at 205, 206 - "making an effort", now - - -
KIRBY J: They sound like my school reports.
McHUGH J: The trial judge says, on the basis of the reports, that he obviously lacked motivation beforehand because the judge takes a couple of comments and he then draws a conclusion from it.
MR WALSH: Well, your Honour, there are plenty of comments, I will not go through them, well, your Honour has chosen to pick some and one could go to page 207 and see that he:
is a friendly student who has missed far too many days to achieve a lot of progress.
At the foot. I mean, the general context of these reports is someone who is not achieving, someone who is spending a lot of time away from school.
McHUGH J: Well, of course he is achieving some way, but that does not mean he lacks motivation. There are all sorts of reasons why a boy of his age would miss days, having regard to his background, what had happened to his parents.
MR WALSH: Your Honour, to make that decision, in our respectful submission, is to replace the views of the learned trial judge, who has heard the witness, and where there is - - -
McHUGH J: No, it is not, Mr Walsh. The trial judge is taking a view about things. One can accept one is bound by the trial judge's findings that he presented in the witness box as a "who cares" person, but the judge made a finding based on the school reports and why is not this Court or the Full Court in just as good a position as the judge to make those findings?
MR WALSH: Our response is he did not make it just on the basis of the school reports, your Honour. He made it on the basis of his understanding of the effect of the evidence of the neuro-psychologists who said, "Yes, it might be due to the head injury." Balanced it against - - -
McHUGH J: I thought he put it higher than that, did he not? Did not Mr Walsh say that it was and when the reports were put to Mr Walsh in cross-examination he has maintained his opinion, that they did not affect his opinion that the problems arose from the brain damage suffered in the accident? But, notwithstanding that, the trial judge rejected Walsh's evidence.
MR WALSH: Yes, and if one reads all the evidence, your Honour, what he put, what he answered was, "Yes, it would affect my opinion but I am not prepared to go back on what I decided earlier on." And his Honour might have concluded from the way in which the evidence was being given, it was a witness who was reluctant to concede that he was wrong when faced with the inevitable result of what he had conceded himself, that it might well have to change his opinion and that is the very element of the nature of the trial process, that judges have to assess those things. When one looks at the quote that the learned trial judge makes of that evidence, yes, he goes through it and he elaborates how the question was put and the answers and eventually the witness having said, "Yes, it would be relevant. It might change my opinion, but I am not prepared to at the end of the day."
If I may continue just in my outline. His Honour continued in my reference 2.6 that the plaintiff's excessive drinking was deliberate and voluntary, a perfectly justified conclusion on the evidence. His convictions and imprisonment were not caused by the injury suffered at the hands of the defendant. On the topic of the drinking the plaintiff's evidence was not convincing and inconsistent. He was evasive. He said he had given up drinking since the release from gaol and his father confirmed that that was not so.
His Honour concluded as a matter of fact that he could return to sport on a gradual basis, that the lack of employment was due to alcohol, lack of motivation and criminal record and, if I pause there, my learned friend says we only have two years of school reports, but what we do have is another six years post-accident of non-accident induced behaviour. Now, by the time we get to trial you cannot ignore that. If his Honour is correct - and we must accept that he is correct about that - then you have six further years of what was this young man's life irrespective of the accident.
So we do, by the time we get to the trial, have very much more available to us than the two years that has been supposed with respect to the school reports. His Honour continued, at 2.9: importantly, he has retained an undoubted capacity for work. He could continue his pre-accident work or a variety of other occupations. His Honour made further comments with respect to his reliability and so forth and I will not read through those. We say is that, if I may just conclude by pointing to 5.3 of my outline, after referring to the fact that his Honour has made assessment of the credibility of witnesses and made conclusions with respect to that issue, in assessing loss of future earning capacity, his Honour was entitled to hae regard to the plaintiff's pre-existing lack of motivation, the work that he was likely to undertake, being manual work, which would not be affected by his cognitive deficits. That he is capable of doing that work. That he had chosen not to do that work from the time of the accident up until the time of the trial, in June 1995, an excess of six years. That the failure to work was despite the fact that he was fit to work - and the plaintiff acknowledged that - he conceded it. He was fit to do the sort of work that he had done and he just did not do it.
I have referred to the passages of evidence and I will not take you to them. He had chosen to drink what he called "full on", being intoxicated from consumption of beer, spirits and wine. "Full on" meaning drinking every day. He had lengthy criminal records, which I will not take you through, but nevertheless are lengthy, that related - - -
KIRBY J: He went to a TAFE college, I see, from the chronology. What was that? This is before injury. What was that for?
MR WALSH: I am sorry, your Honour, the?
KIRBY J: A TAFE, the Adelaide TAFE College.
MR WALSH: Yes, your Honour, the Adelaide TAFE College was the six months work that he had done - I beg your pardon - - -
KIRBY J: It is in the plaintiff's chronology. He commenced a course at the Aboriginal TAFE College at Salisbury.
MR WALSH: Yes.
KIRBY J: What did that relate - that rather suggests that he was pursuing his studies.
MR WALSH: The evidence suggested that that did not amount to anything, as I - my recollection of the evidence. It was not a course in the sense that it was going to lead to something which would productive of work or the like. It makes it appear as if it was something other than it was. His own evidence, I think, was, on that topic, was - I think my learned junior might have the reference to it. It is referred to at the foot of page 53, and I do not think there was a satisfactory answer with respect to what in fact happened, but as the cross-examination continued - - -
GUMMOW J: At page 235 - - -
MR WALSH: Yes, at that time. Yes. I think his Honour concluded with respect to that, but having his own business, was talking about working from someone else and doing work which he accepted he could still do. For example, there was reference to the work at Point Pearce, which he was aware of, which he could do, which he was capable of doing but which he had never done.
KIRBY J: It is a picture; I realise you have to be careful of prop to hop, but it is a picture of a person who had various intellectual limitations, but who was at least making an effort and going to a TAFE college at Salisbury, and then the person for whom you are liable runs into him, and his life we know. We do not know what it would have been; but we certainly know what it has been since.
MR WALSH: There was no balance in terms of some objective reporting with respect to his attendance there. One had to rely on, I think, on what he was saying about that, and he was cross-examined about, for example, his earlier school success, or lack of it, and conceded that he had not done well at school, and he was not, in effect, too bright or too brainy.
KIRBY J: There are such people as slow learners, and particularly an Aboriginal in a general school he might not do as well as he would in a special school for Aboriginals, which, apparently, is what the TAFE was.
MR WALSH: We accept that; but there might have been some evidence of that if that was the case. The evidence, if it did exist, was available to only, presumably, the plaintiff would through his knowledge of who might assist his case, was available to him. His Honour obviously was not accepted that the burden of proof was met with respect to some of these things. In our respectful submission, it is important when one considers, then, the evidence of Mr Ingman, which your Honour Justice Kirby raised, to look at it in the context of his Honour's findings of fact, though, with respect to what the plaintiff could do. Namely, he could still do the work that he had done before the accident.
McHUGH J: I know his Honour found that, and maybe he is entitled to find it, but that really seems to be pushing his discretion in these factual matters to their limits. After all, the work involved squatting, lifting materials and bending. Having regard to what was said by the treating specialists, I must say, on paper, it is very difficult to accept that he could have gone back to doing that.
MR WALSH: But, your Honour, that is a relative thing, once again. Naturally, if a doctor says you are bending, squatting all day, eight hours a day, that is one thing. To be doing the sort of work that he was doing before all that he might have done anyway is another thing.
McHUGH J: But Mr Ingman said he could do it intermittently and more slowly than the average person. He said the reality is that unless he happened to be in a situation when someone wanted a person who worked more slowly he would be better employed in something else.
MR WALSH: Can I suggest that here we are now entering into an area where there was not a challenge to the learned trial judge's finding that he - - -
McHUGH J: I know. This whole case disturbs me, particularly - you will have to explain to me at some stage how the judge could justify giving him $15,000 to the date of trial and only $30,000 for the rest of his life.
MR WALSH: Because the learned trial judge concluded that he was capable of doing the sort of work that he was likely to have done but for the accident. That he chose not to do that sort of work, and he made an assessment that he was probably not going to be seeking work much in the future, either. There was an abundance of evidence to at least support that conclusion. With the greatest of respect, your Honour, it may be that some other judges might put a different gloss on it, but without having heard the evidence, and the way in which the evidence was given, where there was doubt, there is no justification for an appeal court, in our respectful submission, replacing its view for that of the learned trial judge. And so found the Full Court, on our respectful submission, on proper appeal principles.
In our respectful submission, obviously what was a long and careful judgment - his Honour has carefully analysed the evidence and reached the conclusion that he could not find that this plaintiff was as disabled as he was asserting he was because of injuries.
An assessment of damages is akin of course to an exercise of discretion, in our respectful submission, and I will not take those authorities further but it is referred at 5.10 of my outline of argument.
There is one other issue before I turn to the question of exemplary damages and that is the question of aggravated damages. My learned friend now says, as I understand it, that he may seek to challenge - - -
KIRBY J: Have you said everything you are going to say about the physical disabilities of this young man?
MR WALSH: Well, the answer that I have put to your Honour, as I understood it, was that although he has physical disabilities, his Honour has nevertheless found that those disabilities are not going to get worse and they do not prevent him from doing the sort of work that he would have done but for the accident.
KIRBY J: But an Aboriginal student with a poor intellectual record and a poor intellectual capacity, mocked at school, at a TAFE but not much time there, with these physical disabilities is just going to be in a very restricted labour market.
MR WALSH: But your Honour, whatever - - -
KIRBY J: How much is $30,000? That is $500 a year for the rest of his natural life.
MR WALSH: But your Honour, if in fact he was never going to exercise his earning capacity in a way other than consistent with what he can still do, then that is highly relevant to that very question.
KIRBY J: But you injured him, you have to pay for your injury and the injury that you - - -
MR WALSH: I will ask the CTP insurer to do that for me, your Honour.
KIRBY J: Well, the person for whom you are liable injured him, and it seems to me that $500 a year for the balance of his life for a man who really only has his labour to sell, is never going to be an intellectual giant, is really manifestly inadequate for a person who cannot lift, cannot squat, cannot bend, cannot do all the things that are essential to a physical labouring job.
MR WALSH: Well, your Honour, I can only repeat the submissions that we have put, in our respectful submission. With the greatest respect, we say that the award is a loss of a chance only in this case. It was justifiably an award of the loss of a chance only.
GUMMOW J: Well, that is a mischievous phrase "loss of a chance" it seems to me.
MR WALSH: Sorry, your Honour.
GUMMOW J: It is a mischievous phrase "loss of a chance".
MR WALSH: Well, it was not intended.
GUMMOW J: Runs all over the law now. I do not think it was meant to run in this case.
KIRBY J: That is if you cannot go in a beauty contest and win it. I mean it has nothing to do with this case. I have never heard of a loss of earning capacity being argued in terms of the loss of a chance.
MR WALSH: Well, I suppose in the context of Malec v Hutton the chances or the probabilities, or the possibilities, have to be assessed and it was a very low chance or probability or possibility, in our respectful submission, in this case, on his Honour's conclusion, that, in fact, this person was going to exercise, but for the accident, his earning capacity in a way which he is now prevented from exercising it. And that is his Honour's finding.
HAYNE J: That is a finding that, regardless of the accident, this man would have done little remunerative work for the balance of his life. Is that what you are saying?
MR WALSH: No, what I am saying is that one factor is that he is not going to be seeking work as much as another person might. But in so far as he chooses to, he will choose to do work that he can still do and he would have done that but for the accident. That is the way we put it, if your Honour pleases.
If I may then turn to the question of aggravated damages, it was not pleaded, it was not argued, it was not an issue that was raised on the special leave to appeal, it is not an issue which is part of the appeal that is before this Court. It was not the subject of any evidence of the plaintiff with respect to matters that might relate to that additional award and for the first time now my learned friend says, "Oh well, if we're going to lose on the issue of exemplary damages, then we will seek to have an award for aggravated damages incorporated into the assessment under section 35A of the Wrongs Act".
Furthermore, we do not know whether the learned trial judge has allowed something in the assessment of 17 that he chose, but in any event your Honours might conclude that it is just a wasted exercise even if your Honours were prepared to allow the plaintiff to argue that point now because, if you look at the way in which Parliament has enacted the scheme under the Wrongs Act, one has to allocate a figure between nought and sixty. The trial judge allocated a figure of 17. Sixty is for the very worst type of case: maybe a C2, C3 quadriplegic reliant on phrenic nerve pacers or the like. Whatever might be said about issues of aggravated damages, 17 cannot be shown to be other than probably a fair assessment, so there is no point in even allowing that matter to proceed any further.
I then turn to the question of exemplary damages.
GUMMOW J: Before you do that, Mr Walsh, is not the correct style of your client now the Motor Accident Commission?
MR WALSH: Motor Accident Commission now accepts the liabilities of State Government Insurance Commission, your Honour.
GUMMOW J: Not accepts the liabilities. It just is as a result of the operation of section 4 of the Motor AccidentCommission Act of 1992.
MR WALSH: That is so, your Honour.
GUMMOW J: There has been no change in corporate identity. It is a change in corporate name.
MR WALSH: Corporate name, your Honour, and it is still - my learned friend seemed to be suggesting that it had been sold off. It has not - only other portions of - - -
GUMMOW J: Why should we not change the name of the respondent?
MR WALSH: Why should you not?
GUMMOW J: Yes.
MR WALSH: I accept it should be, your Honour.
GUMMOW J: Well, why did not someone tell us?
MR WALSH: I cannot comment on that, your Honour, but we do not take any point in so far as the name should be Motor Accident Commission.
KIRBY J: But I think the point is we should get our title in order because, if in fact the named respondent has disappeared, then it looks absurd on the face of it for those who know that the High Court of Australia is solemnly making orders against a Commission that has gone out of existence.
MR WALSH: I accept that, your Honour.
GLEESON CJ: Should the title be Donald Gray, Appellant v Motor Accident Commission (formerly State Government Insurance Commission)?
MR WALSH: Yes, your Honour, and I would consent to an order immediately, with respect to that.
GLEESON CJ: Are you happy with that, Mr Tilmouth?
MR TILMOUTH: Yes I am, your Honour.
GLEESON CJ: Very well then, by consent we will amend the title to the notice of appeal so that it will read Donald Gray, Appellant v Motor Accident Commission (formerly State Government Insurance Commission), Respondent.
MR WALSH: Thank you, your Honours. The first matter that I raise with respect to the issue of exemplary damages is to deal with a number of propositions put by my learned friend. My learned friend, on numerous occasions, put to the Court that this was not a case where there was any element of any provocation whatsoever, and that was put quite unequivocally, on a number of occasions. At page 170, however, and it is not a big issue, we accept - - -
KIRBY J: Now you have plunged into the facts, rather like your opponent, but do you have a theory of how this works? Are you going to help us, before we start looking at whether there was aggravation and provocation and all the little factual nuances - - -
MR WALSH: Yes, it is not an issue that we are terribly concerned about, namely the provocation issue, your Honour; I am just merely correcting - - -
KIRBY J: It would be helpful to me if you could give us your theory of how, if at all, aggravated or exemplary damages work in the context of this litigation under this Act, given the decision of this Court in Cotogno v Lamb.
MR WALSH: I will come back with some trepidation to a further proposition that I will put, but the way in which it works, in our respectful submission, is that firstly, the question of exemplary damages, particularly where there is a compulsory third party insurer, is a question of discretion, but in so far as the discretion is to be exercised, we firstly argue that if in fact the defendant has been punished at the hands of the criminal law, then that discretion should be exercised against any award for exemplary damages and that the Court, as a matter of policy, should not allow one court or the same court to be put in the unenviable position of having to comment upon a criminal decision, for example, and the adequacy of that, in a subsequent civil trial.
Even if we were wrong with respect to that, we say that in the present case the exercise of the discretion in this case is the complete answer because, firstly, the defendant is, in fact, the insurer and the named defendant on the record is the insurer. I am mindful of what your Honour Justice Kirby, for example, said in the case of Lamb v Cotogno in the New South Wales Court of Appeal where it was pointed out that the record was that the defendant was the individual and here the defendant is the insurer and, further - - -
GUMMOW J: Does anything flow in particular from this particular statutory regime that provides for your client to appear as it does?
MR WALSH: Yes, there is the statutory regime - - -
GUMMOW J: But does anything follow for this point about exemplary damages?
MR WALSH: Yes. Well, can I just say that I think the Court may be labouring under a misapprehension as to what the law was at the time of this accident because - - -
GUMMOW J: It was in 1988, was it not?
MR WALSH: I have asked your Honours' associates to have - - -
GUMMOW J: The accident was in 1988, was it?
MR WALSH: it was, your Honour. I have got the law as it was at the time of the accident and I think your Honours' associates should have a two-page document which will assist in that regard.
KIRBY J: Is this different from the one that we have been working on until now?
MR WALSH: Yes, it is. Now, the statutory scheme is that the insurance is provided by the insurance contained in the fourth schedule, and that is the second document, and the fourth schedule provides that:
The insurer insures the owner of the motor vehicle and any other person who at any time drives the vehicle.....of all liability -
so we accept that it insures for all liability, but the person:
warrants that the vehicle-
(a) will not be driven by himself or herself.....
(i) while so much under the influence of intoxicating liquor -
and so forth, and in 1988 and up until May 1993 that was the form of the policy of insurance. It did not include reference to the additional feature which you have in, for example, (a) as it now appears in the fourth schedule referring to dangerous driving and the like.
CALLINAN J: Was section 125A in the Act as it applied at the time of the accident?
MR WALSH: It was. Section 125A, I believe, was an amendment in 1987, I think, your Honour.
GUMMOW J: Well, you had better be sure about it. You have just got to be sure about it. We are for ever in this situation. We get told by counsel something may or may not be so as to the state of this vital statute at a vital time. It is not good enough.
MR WALSH: Yes, but, your Honour, that was a procedural provision, with respect, and I have the answer for your Honour but I just do not have it immediately at my fingertips.
GLEESON CJ: But we have a more elementary modest problem. We have to produce a judgment and in it we have to set out the relevant statutory provisions. Now, is the document that was handed to us by Mr Tilmouth this morning reliable in that respect?
MR WALSH: Your Honour, the document that have handed to you just -no, the one that you have been handed you can piece together, at the end of the day, that as at 1988 the policy of insurance did not include the first paragraph (a) that is referred to in the current Fourth Schedule.
CALLINAN J: Mr Walsh, the document you have just handed to us also shows section 124a and the document that Mr Tilmouth gave us has section 124A, and that is quite different from section 124a. What I would need to know is what the position was with respect to that provision at the time of the accident.
MR WALSH: Your Honour, I can tell you that as at - sorry, prior to 5 May 1993 there was no provision within section 124a or the Fourth Schedule with respect to the ability or the warranty with respect to deliberate - - -
GLEESON CJ: Let us take it step by step. What was the section? Was it section 124A or 124a?
MR WALSH: I believe it was 124a.
CALLINAN J: You see, small "a" makes no reference to intention.
MR WALSH: That is right, exactly, your Honour.
CALLINAN J: Could we be provided with a complete copy of the legislation which was in force at the time of the accident, regulations and schedules.
HAYNE J: That would be of assistance if, but only if, the transitional provisions that governed what later happened applied that law to the action that was brought.
MR WALSH: Yes.
HAYNE J: It is all very well to hand us up idle sheets of paper and say that we can piece things together. It is not of assistance, at least so far as I am concerned.
MR WALSH: Your Honour, we thought - I apologise to the Court, but we thought that the Court was going to be shown the process by the appellant, and the documents that were handed ultimately show the way it is now and the way it was then. It became apparent that there may be a misapprehension that in fact at the time of this accident that the current provision, with (aa) in section 124 - - -
CALLINAN J: Mr Walsh, would you and Mr Tilmouth together, perhaps, provide all of the Court with the legislation in force and the transitional provisions to which his Honour Justice Hayne referred.
MR WALSH: In the short time that we have had available to rectify the position, I can tell your Honours that we will do that, firstly, and secondly, that the amending Act, which changed the Fourth Schedule and section 124a was Act No 5 of 1993, which came into force on 5 May 1993.
GLEESON CJ: What we require is that counsel agree between themselves on the form of the legislation applicable to this case. It would be desirable that you supplement that agreement by an explanation of why that is the form of legislation applicable to this case, but the minimum requirement that we have is that you agree, between yourselves, on the form of legislation that is applicable so that it can be reproduced in the judgment.
MR WALSH: Yes, your Honour.
KIRBY J: Was there some form of statutory revision of legislation that changed little "a" to capital "A" in South Australian statutes? I think this came up once before in a South Australian case.
GUMMOW J: Yes, it did. It was Walsh v Tattersall.
KIRBY J: Yes.
MR WALSH: It would appear but it has changed it for some reason or other, but it is essentially the same section other than the addition of the amendments.
KIRBY J: The document Mr Tilmouth handed out seems to be a reprint of statutes whereas yours does not seem to bear that, but you tell us this is - the one you have handed us is the statute as it was in force at the relevant time.
MR WALSH: Yes, your Honour.
KIRBY J: Well, no doubt, you will be able to take up the Chief Justice's suggestion - - -
MR WALSH: I will indeed, yes, but the answer with respect to the transitionary provisions is simply this, that a policy of insurance under the Fourth Schedule could only apply in 1988 as it was in 1998, so that - - -
KIRBY J: 1988.
MR WALSH: Sorry, your Honour?
KIRBY J: Could only apply in 1988.
MR WALSH: I will start again. A policy of insurance in 1988, as it was then worded, must be the policy of insurance that applied to an accident in 1988. The subsequent amendment of a different policy with respect to a different policy of insurance under the Fourth Schedule, would not apply to a 1988 accident.
HAYNE J: That turns exactly on the terms of the transitional provisions. What you say may have logic, but these compulsory schemes are not driven solely by considerations of logic. Transitional provisions must be considered.
MR WALSH: Yes, and we have been attempting, this morning, to get copies of the amending provision and I apologise for not having it now, but it was only when it became apparent that we were starting to work on the incorrect premise that this provision, (aa), for example, in 124A was applicable, and - - -
CALLINAN J: I am sorry, have you answered that question, I did not mean to interrupt?
MR WALSH: Yes, your Honour.
CALLINAN J: Mr Walsh, is there an interpretation statute in South Australia that permits reference to the second reading speech?
MR WALSH: No, there is not, your Honour. There is, however, some authority that speaks about the question of - the general authorities with respect to the issue of ambiguity and the mischief.
CALLINAN J: I was concerned to know why the reference to intention is made, or was introduced, in section 124A?
MR WALSH: Well, I suppose - - -
CALLINAN J: Would the second reading speech or anything else throw any light on that?
MR WALSH: The second reading speech - I cannot answer that question, your Honour, but what we hope to have had was the amendment which I inquired about this morning, I just do not have it and I apologise for that. What we do say is that the policy of insurance that existed in 1988 was the policy of insurance as it appears in the Fourth Schedule with no reference to the topic of intention. And my learned friend actually, if you will recall, had said that there was an amendment in 1993, and his documents, in fact, incorporate, I think, a 1993 amendment.
GUMMOW J: Yes, well he told us that little (aa) and 124A was added in 1993.
MR WALSH: Yes.
GUMMOW J: That is right.
MR WALSH: If you look at the amendment in 1993, which is No. 5 of 1993, it speaks of 124a.
CALLINAN J: Mr Walsh, was there a section 125a in the same form, or much the same form, as in the extract that was handed up by Mr Tilmouth?
MR WALSH: I believe it was, your Honour. I did look it up, but I am certain that it was.
CALLINAN J: In any event, we will see that when you give us the legislation.
MR WALSH: I beg your pardon, that came into force. It is Act No 119 of 1983, your Honour.
CALLINAN J: Thank you.
GUMMOW J: With a transitional provision?
MR WALSH: No transitional provision, your Honour. So that, in our respectful submission, at the time of this accident, there was no ability to recover under section 124a as against the driver of the vehicle for an intentional tort, and section 124a provided the circumstances in which that could occur. So that that is another factor, I suppose, which weighs in the scales of a determination in this case of, with respect to the exercise of discretion, but in fact there will be no recovery with respect to an intentional tort as a result of an accident that occurred in 1988.
GUMMOW J: Now, how do you say this discretion works? Assume this case had been tried by jury, how does the so-called discretion operate?
MR WALSH: If it is a trial by jury in a civil trial, your Honour?
GUMMOW J: Yes.
MR WALSH: Unfortunately we are not familiar with jury trials as they might be in New South Wales.
GLEESON CJ: No, but what would the judge tell the jury, what would he tell them?
MR WALSH: Well, in our respectful submission, the question of, I suppose in a civil trial, even by trial by jury, the question of whether there should be an award should be by way of a direction of the judge as to that there would be no award if in fact, as a matter of law, there had been punishment at the hands of the criminal court.
GLEESON CJ: An alternative slightly different proposition, which would not necessarily produce a different outcome in the present case, would be that if a defendant has been punished by the criminal law for the conduct the subject of the civil action, the discretion to award exemplary damages should ordinarily be exercised against the plaintiff but there may be rare occasions when it would nevertheless be appropriate to exercise that discretion in favour of the plaintiff.
MR WALSH: Possibly on the basis, your Honour, that no one would see that exercise of discretion as, in effect, treading upon the province of the Criminal Court, but because of the very unusual circumstances of the particular case before the Criminal Court it would be appropriate to do so. Yes, we respect the fact that that could be another way of looking at the matter but that, generally speaking, the awards of exemplary damages ought not to be made where there has been punishment at the hands of the criminal law. There is another way of looking at it too, I suppose. I mean, you could say that the rule ought to be that if somebody suffers punishment at the hands of the criminal law, in terms of an imprisonment, as opposed to some other form of penalty, that that would be a differentiating factor.
GUMMOW J: Well, suppose the criminal offence was strict liability?
MR WALSH: Well, in that sense, I suppose you would have many people who were not worthy of an award of exemplary damages anyway, so it would only work in favour of the rule, namely, it would result in the rule being enforced in a proper case too, where it should be enforced, because it was a case of strict liability, no intention.
GUMMOW J: But the judge would have to rule on all these questions.
MR WALSH: Yes.
HAYNE J: And the proposition is qualified by the qualitative description "improper case". Unless and until you identify the criteria, the category is meaningless.
MR WALSH: Yes, your Honour. We would argue that the categories that the Court would have regard to, in exercising the discretion not answered by the Court in Lamb v Cotogno, and the issues that will be looked to to - - -
GUMMOW J: Looked to by whom, you see; that is what I am trying to get at?
MR WALSH: By whom?
GUMMOW J: Yes.
MR WALSH: The trial judge in the jury trial, your Honour.
GUMMOW J: In saying that it was open to the jury.
MR WALSH: Yes, your Honour.
GUMMOW J: Yes.
MR WALSH: But the issues that the trial judge would determine, in the exercise of discretion will be, is there any room for suggesting, in this case, that exemplary damages are necessary to assuage the urge for revenge or self-help; is it necessary for the court to award exemplary damages to show its condemnation of the conduct; is it necessary because it is needed as a deterrence to others of a like mind; is it necessary because, having regard to issues of provocation, which might disentitle? All those issues are raised in the decision of Lamb v Cotogno, and they provide, in our respectful submission, if we are wrong about the fact that it ought not to be applicable in cases involving a compulsory third party fund - - -
GLEESON CJ: Well, do you start from the proposition that if you accept that there are, following Lamb, some cases of tort in which there exists a discretion to award exemplary damages, then the basis for that discretionary power would usually be satisfied in a case where there has been punishment by the criminal justice system? I mean by that, punishment for the same conduct by the criminal justice system would ordinarily satisfy the purposes which would otherwise be served by an award of exemplary damages and would therefore produce the result that this is not a proper case for such an award.
MR WALSH: That is our argument, if your Honour pleases, that, in fact, it does answer all four questions if there has been a dealing with the defendant, the wrongdoer, the tortfeasor, at the hands of the criminal justice system.
GLEESON CJ: But it is not impossible to imagine cases where the punishment inflicted by the criminal justice system might still leave standing the occasion for awarding exemplary damages. But, what it is that informs the exercise of the discretion is the purpose of awarding exemplary damages in the first place.
MR WALSH: Yes.
GLEESON CJ: That purpose is normally satisfied by the operation of the criminal justice system where it has operated.
MR WALSH: But there may be the rare case where the operation of the criminal justice system does not work. For example, a person is not found guilty because of a technicality. Some technicality which has prevented the criminal law - I withdraw that, because, of course, that has not dealt with - - -
GLEESON CJ: The person might be found not guilty because he had a clever barrister.
MR WALSH: No, he is not being dealt with as such. I suppose the way we would put it would be that it would be a very rare case where you could not say the criminal law has satisfactorily answered those four questions. But, in addition to that, when you are considering, in the case of whether there should be an award of exemplary damages because the four tests are not fully met, another issue, we say, should be relevant, and that is, for example, will the defendant in fact have to meet that cost. For example, if in fact there is compulsory third party insurance, as in this case, even in the event that the criminal sanction was not sufficient to justify the law's needs with respect to the conduct, the fact that the tortfeasor, or the wrongdoer, is not going to be paying the money is, again, a factor that ought to be taken into account as to whether the exemplary damages should be awarded.
KIRBY J: This reference to a proper case, and a rare case is, if we state it, going to give precious little guidance to trial judges as to what they have to do, and the whole purpose of bringing this matter up is in order to try and clarify the issue so that we can do just that. You have not even touched yet upon the problem that arises where the sequence of trials is different, and that is where the criminal trial has not yet taken place; may not take place ever, or may take place some time in the future, and may have one or several consequences.
MR WALSH: Quite so. I accept that, your Honour, and that is something that has to be addressed for a proper understanding of the policy. The answer to that may well be that there cannot be an award for exemplary damages if, at a point of time, there is still pending a criminal process.
KIRBY J: But that cannot be so. What if the accused has disappeared? How can he hold up the right of a plaintiff to an award of exemplary damages if Lamb says the plaintiff is entitled to it.
MR WALSH: I suppose it had been my primary submission; I had thought about that difficulty. It is our primary submission that, if in fact somebody has been dealt with, or is being dealt with by the criminal law system, that there should be no award of exemplary damages at all. That was the primary submission we put. Then his Honour the Chief Justice said there may be some room for an alternative point of view, and that alternative point of view may then lead into some difficulties.
GLEESON CJ: You achieve clarity, perfect clarity, by saying you can never have an award of exemplary damages in a case where a person has committed a criminal offence, because the mere fact that a person has committed a criminal offence then exposes that person to punishment by the criminal law, whether the person has been dealt with or not been dealt with.
MR WALSH: Yes, I accept that, your Honour. If that was the rule then, yes, it would overcome that problem.
GLEESON CJ: It would be a funny rule perhaps, but it would be clear.
KIRBY J: It would not be quite so funny in the context of compulsory insurance, but that is another issue.
GLEESON CJ: Yes.
MR WALSH: But I do not want to give away either the argument that, in our respectful submission, in a case where there will be no visitation of the loss upon the wrongdoer himself or herself, such as in this case where there is a CTP insurance fund involved, that there should never in that case be any award for exemplary damages.
GLEESON CJ: Let me give you an example of a tort not normally covered by a policy of insurance: the tort of trespass to the person which takes the form of a sexual assault by a male upon a female. Is it relevant to an award of exemplary damages in a case like that that the conduct constitutes a criminal offence?
MR WALSH: Well, it must ultimately be so.
GLEESON CJ: Would it make a difference that the person who allegedly committed the trespass to the person has been dealt with by the criminal justice system?
MR WALSH: Again, that must be so.
GLEESON CJ: Would it make a difference if the person is going to be dealt with in the future by the criminal justice system?
MR WALSH: Well, that is where the difficulties arise, but if it is clear that the person is at risk with respect to the criminal justice system, then it would be wrong, in our respectful submission, to award exemplary damages when we do not know the answer as to whether the court needs to show its condemnation of the conduct in a different way because that is one of the objects that the court seeks to achieve, its own condemnation, the very same court that then may have to deal with the matter at a later time and that is why it is better, in our respectful submission, to limit exemplary damages but knowing that aggravated damages provide the mechanism for fair compensation to assuage the feeling of wrongdoing by the person who has been injured by the criminal conduct of another and, in our respectful submission, there is a distinction and a very clear distinction to be drawn between aggravated damages, on the one hand, and exemplary damages, on the other hand.
My learned friend says in his outline of argument that the learned trial judge was wrong to say that exemplary damages are not compensatory. They are not compensatory. The learned trial judge was entirely correct in that observation. The exemplary damages, as has been decided in cases before Lamb v Cotogno, Uren's Case and the like, have always been punitive damages, namely punitive, retribution, deterrence, condemnation, not associated with any compensatory aspect at all and so aggravated damages clearly take up the alleged injustice, in our respectful submission, if, in fact, this Court determined that it ought to restrict exemplary damages or abolish exemplary damages because there is a mechanism for ensuring in the case where a person is guilty of a criminal offence, as opposed to other cases - so we are only talking about cases of criminal offences - that issue of exemplary damages is not necessary. It is not necessary to award it because the criminal courts will deal with that aspect of it. So we say that - - -
KIRBY J: What about in the case where there is a liability for a criminal offence where the prosecuted were not prosecuted, and in sentencing for a criminal offence you would take into account any particular affront to the victim, which is a common thing to do in sentencing? That is the sort of thing you take into account in awarding aggravated damages. Why should you have this double counting?
MR WALSH: A double counting in favour of the wrongdoer, your Honour means or - - -
KIRBY J: You would burden a defendant, whether indemnified by an insurer or not, with the burden of civil damages, whereas that person might already have been, or might be liable to be, punished for a criminal offence in respect of the same affronting conduct.
MR WALSH: Yes, a double burden, in effect, on the defendant, but if in fact we abolish exemplary damages, there would be no double burden.
KIRBY J: We cannot really abolish exemplary damages unless Cotogno v Lamb is overruled. You have not asked us to do that.
MR WALSH: I accept that but, in our respectful submission, it may be that particularly with respect to compulsory third party fund - or road accidents, what this Court said in Kars v Kars runs contrary to the fundamental justification for an award of exemplary damages in road accident cases, as the Court found in Lamb v Cotogno. When my learned friend referred your Honours to page 378 of the decision, that was the argument that was being put on the basis that you should not award additional damages or damages if the tortfeasor has provided the loss. Then when you go further into the judgment, you see that then the other side of the coin is looked at, and at the end of the day the Court concluded that you do have regard to insurance - or, at least, that is the way it appears on the weighing up of the two arguments.
GLEESON CJ: It would not only be a question of overruling Lamb; it would be a question of overruling Uren, would it not? Lamb dealt with a narrow question of the significance for exemplary damages of the existence of insurance. If the broader proposition is correct, then the Court in Lamb was straining at a gnat and swallowing a camel.
MR WALSH: Yes, that is true, your Honour, I accept that. One would have to go back to Uren's Case and the position that the High Court was in after Rookes v Barnard.
KIRBY J: You do not have to busy yourself or fuss about with exemplary damages generally. At least if Lamb were not in the way, you would be able to say, "Whatever may be the position generally -" and there may be some special case in the area of libel or other areas in the particular case of motor car negligence where there is a compulsory third party insurance. It just does not fit together as part of the scheme.
MR WALSH: That is sufficient for our purposes. Yes, I accept that, your Honour.
KIRBY J: Yet, but Lamb stands in the way of it, unless you can distinguish that case on the basis that the plaintiff there sued in trespass, which is not the way in which this plaintiff sued.
MR WALSH: And that is what we seek to do as contained in our outline of argument, that we do say that there are a number of ways in which you can seek to distinguish Lamb v Cotogno from this case. Firstly, that it is not a case in trespass. Secondly, that the defendant on the face of the record is an insurer, not the wrongdoer.
GLEESON CJ: But if the first point is correct, that means that if somebody like the present plaintiff wants to recover exemplary damages, they should frame their action in trespass to the person and not in negligence.
MR WALSH: Yes, because the way in which the law of negligence has developed has naturally been on the basis that it is a non-intentional tort, and trespass of course dealt with intentional torts. The way it has developed is, in our respectful submission, that it coped with the concept of, for instance, insurance being allowed with respect to negligent actions but not being allowed with respect to deliberate actions.
GLEESON CJ: Then what do you say about that South Australian decision we were referred to this morning?
MR WALSH: Venning v Chin, your Honour?
GLEESON CJ: Yes.
MR WALSH: Venning v Chin was a case where the plaintiff sued in trespass because the plaintiff may not have been able to prove that there was any negligence on the part of the driver of the vehicle, and it was put that if you sued in trespass, then you do not have to prove negligence and you are entitled to your damages unless the defendant could disprove any negligence, as it were. Ultimately the court concluded that in road accident cases the court should treat the issue of trespass differently because in those cases it should always be the rule that even if you sue in trespass, the plaintiff should nevertheless still have to prove that the defendant was negligent. So it was an exception to the rule with respect to trespass and it developed in that way.
KIRBY J: Would you give me the citation of Venning v Chin again, please.
MR WALSH: Yes, I can provide that for your Honour.
GUMMOW J: It is 10 SASR at page 299, decided in 1975. Is that right?
MR WALSH: I think that is correct, your Honour. It is also the subject of reference in the most recent edition of Fleming, Law of Torts, the ninth edition. Chapter 14 deals with the question of illegality and I think deals with - I may be wrong. If it is not in that chapter, it certainly deals with the question of Venning v Chin. I will just check that for the Court.
KIRBY J: Does Professor Luntz deal with this general question in his book?
MR WALSH: Yes, I think Professor Luntz deals with the question of - sorry, trespass. Venning v Chin - I am not sure that Professor Luntz - - -
KIRBY J: Not only trespass but the whole interaction of exemplary damages, aggravated damages and - - -
MR WALSH: In section 7, page 60 of Luntz, third edition, Professor Luntz deals with the history and the interaction of aggravated and exemplary damages and also the issue which arises as to where somebody has in fact been sentenced at the hands of the criminal law, but the learned author does not really analyse that issue in the way in which your Honours may be called upon to consider it in this case.
GLEESON CJ: In the ordinary running-down case, does a plaintiff suffer any disadvantage by framing a case in trespass to the person rather than negligence?
MR WALSH: They do not suffer any disadvantage, in our respectful submission, because of, at least in South Australia, the decision of Venning v Chin where they proved their negligence and they would be entitled to their damages for trespass.
GLEESON CJ: All right. Then, if that is correct, the effect of our drawing a distinction of the kind that you have mentioned, could be overcome simply by people amending their pleadings.
MR WALSH: That is true.
GLEESON CJ: Which seems to be a considerable revitalisation of the forms of action.
MR WALSH: Yes, and that would be unwarranted, we accept that, your Honour. That is why it may be that, particularly in road accident cases, in so far as the distinction has already been found between road accident cases and, for example, other cases, the justification for treating road accident cases where there are compulsory third party funds which is part of modern day life in Australia, that there should not be the possibility of an award for exemplary damages, and I know that, and I say that guardedly because of the decision of this Court in Lamb v Cotogno but, in our respectful submission, the whole development of the law with respect to negligence does not allow exemplary damages to aptly fit in to the concept of damages for negligence where negligence, of course, provide - where someone is negligent, compensation is the yardstick, compensatory damages.
GLEESON CJ: Negligent driving is something that frequently leads to punishment by the criminal justice system.
MR WALSH: Yes, your Honour, but there would be very few people, in our respectful submission, on the roads who would expect that where a compulsory third party insurer is paying the damages, and not the wrongdoer, that, in fact, there should be any grief about the issue of a
non-ability to obtain exemplary damages as opposed to a very upset average person if - in fact, the criminal law was unable to deal appropriately with people who commit intentional wrongs on others. That is where we often see people complaining bitterly about sentencing processes and the like. That is where the public attention inevitably goes, because the criminal law is best to be treated by the public as the law which should deal with such things as retribution deterrence and the court's condemnation of contumelious behaviour and wrongful behaviour.
KIRBY J: I do not want to extend the debate about the legislation, but I just noticed that the Statute Amendment Act 1993 contains, in section 19, a provision that says that the amendments made do not affect a course of action before the commencement of the Act, and that seems to include a large number of the amendments that were in the document that was handed up to us earlier this morning as the law to be applied.
MR WALSH: Well, in our respectful submission, I feel confident that - - -
KIRBY J: Anyway, you will, no doubt, sort that out in due course so that we do not make a mistake on that.
GUMMOW J: What then is the significance of paragraph (aa) in 124A(1)? It came in in that Act that Justice Kirby has just referred to and it talks about intention. Now what significance does it now have in the light of section 19?
MR WALSH: The difference between the capital "A" and little "a", your Honour?
KIRBY J: No, little (aa) is included. This is the point Justice Callinan raised earlier.
MR WALSH: Yes, what significance is to be given to that? In our respectful submission, in the context of exemplary damages, none, but clearly Parliament was merely intending to dissuade people, by whatever means, from, in fact, using vehicles in a criminal way and merely indicating that that loss would be visited upon the individual if they chose to do so. That is all Parliament was intending to do and, in fact, the whole legislative scheme in South Australia, including the legislative scheme under section 35a, which also suffers at times from the difference between little "a" and capital "A", so I think it is a drafting issue, is that the damages - that there should be every encouragement given to ensuring that people do not breach the law with respect to the use of motor vehicles unless there are provisions that relate to drink driving offences, failure to wear seat belts and all sorts of issues in section 35A which I will not take you through but is on our list of authorities, and corresponding mechanisms in the Motor Vehicles Act to supplement that.
KIRBY J: Is the best you can do in relation to the criminal proceedings which might come is that you say a civil trial court should simply not award exemplary damages in that case.
MR WALSH: Yes, your Honour.
KIRBY J: Even though by Lamb and by the earlier decision in Uren that is a plaintiff's right.
MR WALSH: That is so, yes, your Honour.
GLEESON CJ: But a case in which criminal proceedings might come is virtually every case where the conduct constitutes a crime. There might be rare examples of cases where there is statute barred criminal proceedings.
MR WALSH: That is so, your Honour, I accept that. We have been taken down this path in terms of seeking a solution that overcomes all potential anomalies and, in our respectful submission, that would achieve the purpose of overcoming unnecessary anomalies and allow the question of aggravated damages to deal with the smart, the hurt and the whatever, to the anguish to the particular person, and leaving to the criminal law the ability to impose criminal sanctions and show its disapprobation of the conduct in that way.
GLEESON CJ: Even the word "crime" carries with it its own difficulties. There are not many people convicted of negligent driving who would regard themselves as criminals.
MR WALSH: No, that is so, and correctly so as it turns out sometimes, of course. But that so. The law of exemplary damages, in our respectful submission, was intended to cope with modern day use of motor vehicles, compulsory third party insurance funds and the like. It was something that was there to stop people taking actions into their own hands in a different time and in different circumstances where even duelling, and other such things were possible. Now, in our respectful submission, the public turns to the modern police force to enforce and requires and complains about the failure of action of the modern police force and the prosecution to properly prosecute criminal offences. They do not turn to the civil law for that purpose and nor should they, in our respectful submission.
If one is isolating one's attention specifically to the case at bar and CTP funds, in our respectful submission, it is an odd thing that, on the one hand, the law would not sanction insurance of a criminal act and of course it was not going to do that if it is just a mere negligent act. You might do it with respect to an act of trespass but it seems a very odd thing that the law should countenance an insurance of an act where exemplary damages are awarded, and it is not apt that Parliament would have intended, in our respectful submission, as we say in our outline, that Parliament would have intended that there should be exemplary damages awarded in the case of the use of a motor vehicle.
That is why we put that, for example, in this case section 35A which says "non-economic loss, pain and suffering is to be dealt with in accordance with a scale of 0-60", Parliament was probably intending that that dealt with all issues of non-economic loss, and it will be odd, as we say, that Parliament would then expect, "Yes, but we can insure the loss due to an award of exemplary damages as a result of wrongful conduct". And that, in our respectful submission, seems very very odd.
GLEESON CJ: Well, let us take actions against the nominal defendant. Let us suppose a plaintiff alleges that he has been pursued by a motor vehicle, unidentified motor vehicle, which deliberately ran him down in circumstances much like the present case and then went off. Now, is the nominal defendant liable to pay exemplary damages, and relevant to that, that the driver of the motor vehicle was unidentified and will not be brought to justice.
MR WALSH: I intended to raise this issue of a nominal defendant that, in our respectful submission, clearly, the law could not possibly intend that the nominal defendant should have to pay exemplary damages where it is a nominal defendant providing a remedy which otherwise would not be there at all because a person would be long gone, that the public would not expect that in a circumstance like that where they are given an advantage over that which they had before what is essentially social legislation, should then be able to gain access through that system, that fund which is provided by the members of the community substantially to assuage or to deal with issues that ordinarily would be dealt with by the criminal law.
The average member of the public, in our respectful submission, would never ever say, "Look that is entirely unfair, why cannot I get my exemplary damages against the nominal defendant? They would accept, in our respectful submission, that, "Look, this is a good system which allows us to gain access to a fund of money.
GUMMOW J: Would not the terms of the statute which provided for the nominal defendant be vital?
MR WALSH: Yes, it could be. In Lamb v Cotogno it was thought important. For example, his Honour Justice McHugh said in the New South Wales Court of Appeal that the legislative scheme in that case did not seem to exclude the issue of exemplary damages and that is against us, we accept that, but interestingly enough, in that case, I think the New South Wales legislation tinkered around with assessment of damages, such as discount rates and things like that, whereas curiously enough, in this scheme under section 35A, it does not just tinker; it actually takes away a common law assessment for non-economic loss and superimposes the naught to sixty scale. So Parliament would seem to have gone a lot further and we say, I think I say in my outline, but certainly we do say, that that is another reason for distinguishing this case, for instance, from Lamb v Cotogno. So that if I am wrong about the general propositions we have been discussing, nevertheless I still say we can distinguish this case from Lamb v Cotogno for very good reasons and, in addition to that, we can, even if one goes back to the question of exercise of discretion, in this case the exercise of discretion was properly exercised by the learned trial judge against an award of exemplary damages, even if Lamb v Cotogno stands.
GUMMOW J: I am not sure "discretion" is the right word actually? He had a power, I suppose; the common law gave him a power. The common law gives a power in this respect, does it?
MR WALSH: Yes, it does, and power can be exercised.
GUMMOW J: On certain criteria being satisfied?
MR WALSH: Yes, and the criteria - - -
GUMMOW J: We do not know what they are yet.
MR WALSH: The criteria we say that need to be satisfied are those criteria that are contained within Lamb v Cotogno. So, if I may just - - -
GLEESON CJ: Normally a power to order a defendant to pay money to a plaintiff is matched by a right of some kind in the plaintiff.
MR WALSH: Who must by right have - - - ?
GLEESON CJ: Is is matched by a right in the plaintiff. If a judge has got a power to make a defendant pay money to a plaintiff, that usually means the plaintiff has got some kind of right against the defendant.
MR WALSH: Yes, it is a right, but on the assumption that certain criteria are met, that is if it remains as a right. If it remains as a right, it is a right that is only capable of being exercised, in a practical sense, if you satisfy the criteria that are attendant upon it, because, at the end of the day - - -
HAYNE J: But unless it is analysed in terms of rights and duties, what is its nature? Something in the nature of an ex-gratia payment or something. If you are to analyse it in those terms, and it may be very illuminating, it may require - at least at first sight seems to require, identification of the circumstances that give rise to the right of the plaintiff.
MR WALSH: Well, it may, yes, and of course if there is no right, then we do not have to go the next step. If there is the right, then in what circumstances and, finally, we say in the present case this is certainly not a case where the right ought to be allowed to be exercised or the discretion should be exercised in favour of the grant of an award. I suppose I could sum up some of the things that have been said to be relevant to the question of whether Lamb v Cotogno ought to be reviewed, given the anomaly that is inevitably created when we have a case of this kind, but in a sense what the civil court is allowing, this right that we speak of, is allowing in a sense a profit because ordinarily it is not compensatory; it is something that the court is awarding against the defendant to punish the defendant, not to compensate the plaintiff.
In our respectful submission, it seems odd that, particularly in the compulsory third party arena, that should be so and even if one looks at the history of exemplary damages, the very purpose behind it to stamp out people taking things into their own hands, duelling and the like, illustrates very graphically that it is an ancient remedy that may not have kept pace with modern developments in modern society and when we consider - - -
GLEESON CJ: Which includes legislation relating to victims' compensation, and victims' compensation is frequently capped.
MR WALSH: Yes.
GLEESON CJ: What is the situation if a person is the victim of a violent trespass to the person, makes a claim under victims' compensation legislation which is capped, as it would be in the example that I gave you earlier, and then sues for civil damages? Could the person say, "I want exemplary damages to reflect the inadequacy of the amount I received under this capped claim for compensation"?
MR WALSH: You would only get exemplary damages - I think under the Criminal Injuries Compensation Act the question of the ability to recover against the wrongdoer is highly relevant as to the question of any award, so that it may not be an element of duplication in that sense. It would only be in the sense that you obviously are going to be unable to be able to recover anything, so they are safeguards.
HAYNE J: But should recovery matter? If exemplaries are there to punish, deter, et cetera, does recovery in the hands of the victim affect the determination?
MR WALSH: No, I can see the logic that it ought not to, but the point, I suppose, I was making was that in that case there would not be any practical duplication because, presumably, there would not be a successful case against another party as a matter of fact. But, in addition, I suppose, what has happened by way of the criminal injuries compensation system is that again, a member of the public is being given something which ordinarily they would not have had, because they would not have had an access to a person who could pay some money. So it becomes much the same as the issue with respect to CTP Insurance.
GUMMOW J: How does the criminal compensation system in South Australia work if there has been an award for exemplary damages?
MR WALSH: I think that the system works on the basis that you have to satisfy the court that practical recovery is unlikely in another arena, for example. So if there has been an award, that would be taken into account. I think that is the position.
GUMMOW J: But if there had not yet been an award, would there be some subrogation to the right to obtain such an award?
MR WALSH: I am sorry; I should have researched that more thoroughly. I cannot answer that question, precisely. I apologise to the Court. I do not want to say something that I am not certain of. I am aware of the criminal injuries compensation system but I had not specifically looked at that topic.
GUMMOW J: I suspect it is full of all sorts of points which have not been litigated.
HAYNE J: It is going to be made even more complex in Victoria where trial judges, having passed sentence upon offenders, now assess the damages that are to be paid in favour of the victim. This is an ordinary quantification of loss. These are joys we may not yet have to suffer.
MR WALSH: That is another way of dealing with the issue. If the Court pleases, there is one final point we do make with respect to the topic of the distinction, or between on the one hand an insurer being a defendant here in this case, as opposed to Lamb v Cotogno, and that is by drawing upon the question of vicarious liability, and whether, in fact, it is proper that somebody should be vicariously liable; for example, for the wrongdoing of another person, if there is no independent contumelious behaviour on the part of the person who is vicariously liable such as - - -
GLEESON CJ: The criminal law certainly makes company directors liable in those circumstances, for breach of environmental legislation, for example.
MR WALSH: Yes, by legislation, that is true.
GLEESON CJ: And subjects them to penalties, including a penalty of imprisonment.
MR WALSH: Also, I suppose, as against me is that in some countries you can get vicarious liability - - -
GUMMOW J: And in some you cannot.
MR WALSH: Yes; but, what we say is if you take a case of XL Petroleum v Caltex, it was, in our respectful submission, a classic case of a case where the company, itself, was guilty of contumelious behaviour, and very significant exemplary damages awarded. But, the inference is almost felt at times that were it not for the fact that it was guilty of the contumelious behaviour itself, then it would not be proper to visit upon an employer who otherwise had no control over his employees, vicarious liability. Whereas Luntz points out "There would not be vicarious liability, I suppose, because we would be outside the scope of employment anyway". In the case at Bar, of course, we are even one further step removed. It is a CTP insurer that is paying the fund with community funds, and not even responsible in a sense, other than in that community way, for the actions of the wrongdoer, himself or herself. So we are even further removed in a case of this kind as a matter of policy than in the case of vicarious liability.
CALLINAN J: Can you tell me whether the means or assets of the defendant is a relevant matter?
MR WALSH: Yes, it is. In fact, Justice Brennan, I think, referred to that in XL Petroleum v Caltex, and that is the final, I suppose, issue, I think. I am not sure whether we deal with it, but we intended to raise it, that in this case is it, for example, to be relevant to look at the fact that the fund has got millions and millions of dollars in the fund? It is relevant, yes, it would seem. I can give the reference, I think, to - - -
CALLINAN J: No, that is all right.
MR WALSH: It is in the list of authorities, and I am sure that his Honour - - -
GUMMOW J: How does one find out?
MR WALSH: Sorry, your Honour?
GUMMOW J: Many, many, many rich defendants are not in the habit of flaunting their wealth. How do you find out the means of the defendant?
McHUGH J: You can make it an issue by way of discovery and interrogatories.
GUMMOW J: Yes, plead it.
McHUGH J: And pleading; you plead your claim.
KIRBY J: But what is the relevance of it, do you say here? Is it only that if you sued there is no way you could get it out of the driver and that, therefore, it is not proper to burden you but - - -
MR WALSH: Yes, that is right.
KIRBY J: Is that the only way in which you use it?
MR WALSH: No. The other relevance is to show the illogicality of a CTP fund having to pay exemplary damages - - -
KIRBY J: Please, that is Cotogno.
MR WALSH: Yes, of course, I accept that.
KIRBY J: You do not have to convince me of the illogicality.
MR WALSH: I am sorry, your Honour.
KIRBY J: But if you want to convince the Court, you have to seek to - - -
MR WALSH: I am sorry, that was the only other - that was the - I raised it in that way initially and it did have the other effect that your Honour just raised in terms of the point of distinction in this case.
CALLINAN J: Mr Walsh, I put to Mr Tilmouth that on one construction of section 125A, for the purposes of a claim in South Australia, the fact of the existence of a statutory insurer and that the statutory insurer is ultimately liable, it may be irrelevant - - -
MR WALSH: Because it is a chance thing that has happened.
CALLINAN J: No, because of the language of section 125A, and that was one of the reasons why I was anxious to know whether it was in force at the relevant time. Do you want to say anything about that, because what I put Mr Tilmouth I think he adopted as part of his argument.
MR WALSH: It is true that the language that is used suggests that it picks up the liability, as it were, which I presume is the point that your Honour is making.
CALLINAN J: Yes, exactly, and that was the point I put to Mr Tilmouth.
MR WALSH: In our respectful submission, the reason why we draw the distinction about the fact that the insurer is the party on the face of the record is because that is a fact that will be taken into account with respect to the issue of what is the public expectation about - or even the plaintiff's expectation with respect to what is proper in terms of retribution and deterrence as a matter of fact.
CALLINAN J: At present, I must say it seems to me that a claim for exemplary damages is in fact a claim in respect of bodily injury within the meaning of 125A(3)(a). If that is right, then the statutory insurer will be taken to have directly assumed that liability.
MR WALSH: Yes.
CALLINAN J: That was the proposition I put to Mr Tilmouth which he adopted and which seems to me to be right, with respect, at this stage.
MR WALSH: If we are liable for exemplary damages, then, as a matter of discretion, as a matter of law, because Lamb v Cotogno is good law, then we pick up that liability.
CALLINAN J: But if you are liable for them, the nature of your existence as a statutory compulsory insurer, it seems to me, becomes irrelevant; that that excludes the peculiar position which you are in as being a matter to be considered in any way at all.
MR WALSH: Well, I suppose our response is that that is not seeking to establish that there is in fact, or ought to be, a liability for exemplary damages.
CALLINAN J: All the other considerations come into play, I am not putting that that is not so, all the other matters, a possibility of punishment and all of those sorts of things, but really the consideration that was debated in Lamb v Cotogno, for the purposes of this statute in your State, it seems to me are irrelevant.
MR WALSH: Well, we argue for the other reasons that it is not.
GLEESON CJ: Well, another way of putting the same point is that your client is in no better position than Mr Bransden.
MR WALSH: Yes, I understand the force of the submission that is being made - - -
GLEESON CJ: And Mr Bransden could not have said, I am an insurer, so it does not avail your client to say, I am an insurer.
MR WALSH: Well, in our respectful submission, the very fact that the insurer is the defendant and is not a wrongdoer is relevant to the determination of whether there should be an award of exemplary damages, albeit that otherwise the insurer must be responsible for the liability of the wrongdoer.
GLEESON CJ: Another argument available to you is that your client is equally no worse than Mr Bransden, and that it would have been very unlikely that it would have occurred to anybody, if Mr Bransden had sued, that they should deal with this problem by fining him $10,000.
MR WALSH: Well, may I adopt that with gratitude, your Honour. The fact of the matter is that the fund is there to a large degree in order to ensure that plaintiffs do not go without compensation, but is not there and it is not intended to be there to provide a fund for the purposes of matters that are properly within the province of the criminal law system.
CALLINAN J: As a windfall fund, you say.
MR WALSH: I think in the process of our discussion I have covered all of the issues that we raise in the outline of argument and I will not take you through those issues. As I said, I would tread warily in the question of whether this Court should decide not to follow Lamb v Cotogno, or even go further, but the common law, as we point out, is a developing thing, a developing creature, and it may be that when one looks at cases like Kars v Kars, where the illogicality of allowing a defendant to have the benefit of a tortfeasor's contribution to an injured spouse, in other words not have to pay damages with respect to that, which was considered to be something that ought not to be followed, despite the compensatory principle, for past losses anyway, and the fact of the relevance of insurance, in the consideration of that topic, is an illustration, we say, of the way in which the common law can develop and to take into account the changes that occur in society, and particularly in this area, the advent of the motor vehicle and the compulsory third party fund.
When one looks at Kars v Kars and compares it to the decision in Lamb v Cotogno, it may be that we have now reached the stage where this Court could, because of the way in which it has reasoned the issue of insurance in Kars v Kars, reach the conclusion that the time has come to review Lamb v Cotogno. I think they are the issues that we raise, if the Court pleases.
McHUGH J: Before you sit down, Mr Walsh, if I could take you back to the issue of damages at page 246 of the appeal book. Have you any submission to make about the judge's statement at the last four lines where he says that:
wielding the broad axe, after taking account of all relevant factors and having regard to all relevant contingencies the plaintiff were to be awarded the sum of $45,000 for economic loss which I apportion as to the sum of $15,000 for the past and as to the sum of $30,000 for the future inclusive in each instance of the plaintiff's loss of a chance.
Now, prima facie that seems an error.
MR WALSH: Because of the use of the words "loss of a chance", your Honour?
McHUGH J: Yes, when he is talking in that particular context.
MR WALSH: Yes, but, your Honour, in our respectful submission, the learned trial judge was merely using the phrase "loss of a chance" in the context of Malec v Hutton, probabilities and possibilities, and what he had found, in our respectful submission, was that there was obviously a high probability that this person was only going to exercise his earning capacity in the same way in which he can still exercise his earning capacity and, in our respectful submission, that is all that his Honour intended by that.
McHUGH J: That means that the judge was not satisfied he would ever again exercise his earning capacity but there was a chance that he might.
MR WALSH: No, that is not what we are putting, your Honour. What we put - - -
McHUGH J: Well, that must be what it means, must it not?
MR WALSH: No. What his Honour has found is that there is a chance that he may not exercise his earning capacity at all but there is a high probability - in our respectful submission, when one looks at the reasoning process, his Honour has found that there is a high probability that if he exercises his - that he will only seek to exercise his earning capacity in the future the same way as he would have but for the accident and he is capable of doing that work.
GLEESON CJ: Mr Walsh, just before you conclude, we had better bring one matter to a head. Your reference to Kars v Kars was accompanied by a speculation that it might lead the Court to wish to review Lamb. Could you let us have your submissions on two questions: first, if you wish to argue that Lamb was wrongly decided, do you need leave to do that; and, second, if so, do you seek such leave?
MR WALSH: Yes, obviously we were in error with respect to that issue. We were contacted and asked if we were arguing that, and informed the Registrar that we were, and no further consideration was given to the question, your Honour.
GUMMOW J: Evda Nominees said you need leave. That is generally known; it is not a secret.
MR WALSH: If we need leave, I do seek leave, your Honour.
GLEESON CJ: Is that to reopen Lamb only, or Uren as well?
MR WALSH: I only need to go as far as Lamb v Cotogno, your Honour.
GLEESON CJ: Thank you.
MR WALSH: May I get some instructions on that, your Honour? We rest content to seek leave with respect to Lamb v Cotogno only.
GLEESON CJ: Thank you. Yes, Mr Tilmouth.
MR TILMOUTH: Your Honours, on the question of criminal injuries compensation, this was raised about five minutes ago, and also by Justice Kirby when I addressed, the Act is the Criminal Injuries Compensation Act - - -
GUMMOW J: The answer seems to be section 11(2).
MR TILMOUTH: That is right, which gives the right to recover.
GUMMOW J: "The Attorney-General may decline".
MR TILMOUTH: That is right. Also, if the Court pleases, there are other sections within section 11 in relation to recovery from the criminal, but in section 11, basically, in my submission, if the Court pleases, the rights that are given under that section in (2) and (3) are dealing in relation to compensation - - -
GUMMOW J: Section 11A is a statutory subrogation.
MR TILMOUTH: That is right, and in subsection (3) the Attorney can, where a payment has been made to a claimant under the Act, and that claimant has received subsequently compensation or damages, he can sue for the recovery of that sum. Under section 11A(4), as it now is, he can also recover from the offender who has been convicted of the offence, the sum paid out for compensation, so there is recovery from both ends of the scale, as it were, and it is simply recovery in a court of competent jurisdiction from either tortfeasor or the victim.
The other point I should make on the Act, is section 8 does have a cap. It is a complex section which limits recovery to $50,000 and - I beg your pardon, it is section 7(a) and it has, if the Court pleases, for non-financial loss, one has to sign a numerical value of naught to fifty, so there is another gloss upon the Wrongs Act of principle of naught to sixty. So, whatever else may be said, given the fact that the non-financial loss has to be assessed at a numerical value running from naught to fifty and is capped at $50,000 anyway, there is always going to be a gap and probably a significant gap between criminal injuries compensation paid to a victim and what a victim is likely to get in an award for damages, whether it be a trespass action or a negligence action. In any event, the Attorney can recover any monies that the victim receives by compensation under the Wrongs Act, to the extent that there is a payment of criminal injuries compensation and he can pursue, without fetter, the criminal, in any event.
Your Honours, on the question of the general damages and the future, there is something that in reply I wish to put to the Court which perhaps I have not put clearly before and it relates to this issue of the findings in relation to alcoholism and gaoling and so on and perhaps I have not put it clearly before. Your Honours, in my submission this was dealt with by his Honour and his Honour found that 75 per cent of the plaintiff's problems were due to the accident and 25 per cent were due to other factors like alcoholism and subsequent misbehaviour.
KIRBY J: Where is that finding?
MR TILMOUTH: At 213. If one goes to 213 at line 24 his Honour says that:
The plaintiff's cognitive impairment has been assessed by Mr Mark Reid, a forensic and neuro-psychologist at ten to fifteen percent -
that is the 10 to 15 per cent which was referred to during Mr Walsh's address from the report -
The plaintiff was reviewed by Mr Anthony Walsh. Mr Walsh agreed with the assessment which had been made by Mr Reid. His view, however, was that not all of it was causally related to the accident because, as he saw it, there were many potential contributors to the plaintiff's problem. His opinion was that for that reason approximately 75% of the plaintiff's cognitive impairment was directly attributable to the accident. Mr Reid agreed that that was so. I accept that evidence.
Now, I will show you where that evidence is, and then it goes on to deal with the short-term memory problem which I have dealt with and which I submitted was taken care of by the school reports. Now, the evidence of Mr Reid, which his Honour accepted in that 75 per cent finding, if the Court pleases, is at 115 and at the risk of being too isolated in the passage, I commence at line 20 - this is Mr Reid in cross-examination. Perhaps I should begin at line 18:
it's difficult to say with absolute definity what percentage is attributable to what, but given the severity of the head injury in the car accident and given the severity of the alcohol and possible head injuries sustained after that and putting it all together, I have no objection whatsoever to an estimate of something around the order of 75% being attributable to the head injury sustained in the 1988 accident and possibly up to 25% being attributable to other causes, including alcohol abuse, including these possible concussive head injuries in a cumulative manner.
In my submission, when one looks behind the bare finding, it is clear already that his Honour has factored in the question of the subsequent unrelated matters. When one looks at the later findings in relation to alcohol and his gaoling and so on, his Honour is dealing there only with the submission of the plaintiff's counsel that 100 per cent of the subsequent conduct was due to the accident. In other words, his Honour is dismissing in the later findings he made, where he did not believe the plaintiff, the 25 per cent that remained. Could I also add, if the Court pleases, the passage at 115 that Mr Reid agreed with Mr Walsh, comes from Mr Walsh's report at 166 of the appeal book, line 6:
The major difficulty here is the differentiation between the enormous number of potential contributors to this problem. These include his premorbid ability, his difficulty psychosocial history as well as alcohol abuse and numerous mild head injuries sustained in fights. However, given the severity of this injury, and the report that the majority of his personality changes occurred after the subject accident, I am of the opinion that the majority (approximately 75%) of the deficits reported here are likely to have been caused by this accident.
So, in my submission, the later findings, where the plaintiff was not accepted, related only to the argument that the remaining 25 per cent should also be said to be causally related to the accident.
By the way, without reading, Mr Walsh was cross-examined at page 134 of the appeal book on the school reports, but, as I have already indicated, if the Court pleases, the finding was by his Honour, as a trial matter, at page 219, line 4:
To the extent that their views are at odds I prefer the opinions of Mr Reid (subject to what I have said elsewhere in these reasons) to those of Mr Walsh -
KIRBY J: Is the result of that that both Reid and Walsh agreed that it was 75 per cent/25 per cent?
MR TILMOUTH: In the net result, yes.
KIRBY J: On this matter there is no difference, but they just happen to coincide?
MR TILMOUTH: That is right, and factoring in already in that the subsequent alcohol abuse and the imprisonment and the like. So that process has already been determined, with respect, by his Honour in the 75 per cent finding and to reinforce my argument that, when it came to the short-term memory issue, which turned out to be so important on economic loss, that the school reports were the governing factor, can I also point out at page 219, if the Court pleases, that his Honour went on to deal with that and said, with respect to that, at line 7:
Their respective expertise was accepted without question but Mr Walsh's opinion, as it seems to me, having regard to the questions that I put to him and his answers thereto that I have quoted ante, is based on facts which have not been proved and indeed which are contrary to the proven facts as appears from the teachers' comments -
So that reinforces the argument I have already put, that the sine qua non of that finding was no more and no less than the teachers' reports.
One final matter and a correction, if the Court pleases. Mr Walsh made the argument, albeit briefly, that perhaps section 35a of the Wrongs Act South Australia precluded exemplary damages. In my submission, that argument was not only not dealt with in the courts below, but has been dealt with effectively, albeit with different legislation, by this Court in Lamb v Cotogno at page 12 and also the same argument was rejected in New Zealand on comparable legislation in the case I referred to this morning, Donselaar. And the reference to Donselaar leads me to the correction. Your Honour Justice Kirby tested me about where Donselaar was authority for the proposition that you could get aggravated damages without a plea. It does not stand for that. I stepped too far beyond that case. In fact on re-reading it, it was pleaded. It simply stands for the proposition that, on comparable legislation, you still can get exemplary damages, it has not been excluded. And my point would be, exemplary damages can only be excluded by express reference. Section 35a may be a Code, but it is not a complete Code.
GLEESON CJ: What would be a convenient time within which counsel can comply with the requirement concerning the agreed statutory material?
MR TILMOUTH: Is Friday next week too late, if the Court pleases.
GLEESON CJ: Very well, 4 pm on Friday of next week.
MR TILMOUTH: If the Court pleases.
GLEESON CJ: We will reserve our decision in this matter.
AT 4.20 PM THE MATTER WAS ADJOURNED
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