Austral Pacific Group Limited v Airservices Australia B23/1998 [1999] HCATrans 210 (24 June 1999)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No B23 of 1998

B e t w e e n -

AUSTRAL PACIFIC GROUP LIMITED

Applicant

and

AIRSERVICES AUSTRALIA

Respondent

Application for special leave to appeal

GLEESON CJ

CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON THURSDAY, 24 JUNE 1999, AT 11.17 AM

Copyright in the High Court of Australia

MR P.J. LYONS, QC: May it please the Court, I appear with my learned friend, MR R.N. TRAVES, for the applicant, Austral Pacific Group Limited. (instructed by Michael Stewart)

MR J.C. SHEAHAN, SC: I appear with my learned friend, MR P.A. FREEBURN, for the respondent. (instructed by Corrs Chambers Westgarth)

GLEESON CJ: Yes, Mr Lyons.

MR LYONS: Your Honours, this matter came before the Court on 16 April this year when we had recently learned that liquidators had been appointed to the applicant. It was then adjourned to enable us to investigate that matter further. Yesterday I arranged for the Court to receive a short written submission dealing with the position of the applicant in view of the appointment of the liquidators, and unless the Court wishes me to speak further about it, I propose to rely on the written submission in that regard.

The application arises out of third party proceedings in the District Court of Queensland which was struck out by the Court of Appeal on the ground, effectively, that it was necessary for the third party proceedings to be instituted and maintained. That the plaintiff had elected under the provisions of section 45 of the Commonwealth Safety Rehabilitation and Compensation Act to make a claim of the kind there referred to. If leave were granted, we would submit that the proceedings should not have been struck out for two reasons. The first relates to the provisions of section 6(c) of the Queensland Law Reform Act, the contribution legislation; and the second is an alternative ground, namely that it was premature to strike out the third party proceedings. In our submission, under section 6(c), the contribution legislation, the relevant question is whether the respondent is a person who would, if sued, have been liable in respect of the damages for which the plaintiff claims.

GLEESON CJ: Does that second issue you want to address raise the question of General Steel?

MR LYONS: In a sense it does, yes. It assumes the principle in General Steel, but it raises a slightly different point because it arises on the proposition that no cause of action has in fact arisen at this stage but might arise in the future; whereas the usual principle is one considers the facts at the time of an application to strike out and if there is no prospect of success, the action might be struck out.

GLEESON CJ: On the first point, as I understand it, but my understanding may be imperfect, the Court of Appeal followed a decision of the New South Wales Court of Appeal but said that if they had been considering the matter afresh they would have taken a different view.

MR LYONS: That is so, your Honour.

GLEESON CJ: Is there any other authority apart from the decision of the New South Wales Court of Appeal that bears on the issue?

MR LYONS: There is a third decision, a decision of the South Australia Supreme Court at appellate level called Coomblas v Gee which is also against us and it is case No 3 in our list of authorities.

GLEESON CJ: Did it just follow the New South Wales - - -?

MR LYONS: Not in terms. It considered afresh the position, and an analysis similar to that of the New South Wales Court of Appeal emerged from its decision. The language of its statute is a little different in the words used, but in principle it is very similar to the Queensland statute.

We submit there are two reasons why that approach is incorrect. The first is that section 6(c) raises the hypothetical question whether the respondent is a person who, if sued, would have been liable and, effectively, that requires the Court to assume that the injured party, the plaintiff, would take certain steps to establish that liability. The question was discussed in Brambles Construction v Helmers, which is a case in our bundle, where his Honour Justice Windeyer dealt with the things that are to be assumed in determining whether third party contribution proceedings might be maintained. His Honour said at page 221:

The description, a tort-feasor who if sued would have been liable, denotes any person who would have been held liable in tort had he been sued in a competent court, by proper process, at a proper time and on evidence properly presented - that is anyone whose liability as a tort-feasor could have been ascertained in an action.

Now, those matters are in a sense procedural, but they have a common feature and that is that they are all matters which are substantially within the control of the injured party and not of the party claiming contribution and we submit they provide a relatively strong analogy with the position of the applicant in this case.

The second matter we would draw attention to in that case is the passage in the judgment of his Honour the Chief Justice at page 218 who noted that where notice is required before the commencement of proceedings - that is notice from the plaintiff - and that has not been given to the proposed third party, the party from whom contribution is sought, that is not a bar to the contribution proceedings. His Honour said that "is an irrelevant circumstance" and his Honour referred to Nickels v Parks.

GLEESON CJ: We might be assisted by hearing from Mr Sheahan at this stage, Mr Lyons.

MR LYONS: Thank you, your Honour.

GLEESON CJ: Yes, Mr Sheahan.

MR SHEAHAN: May it please the Court. Section 44, in our submission, was intended to have substantive rather than merely procedural effect. That appears first from the language of section 44 itself which operates as a substantive bar, indeed an absolute bar to all claims against the Commonwealth, apart from those which are subject to the proviso in section 45. That was the effect of the decision of this Court in Georgiadis in which it was held that the effect of section 44 in respect of claims not within the section 45 proviso was to extinguish the cause of action against the Commonwealth. In our submission it would be odd, with respect, if the language of section 44 were held to be substantive as to most of its operation, but only procedural, in effect, as to some small part of it.

Your Honours, secondly, if one looks at sections 44 and 45 which are conveniently at page 22 of the appeal book, your Honours will note in section 44(i) the use of the subjunctive in the third and fourth lines:

corporation would, but for this subsection, be liable -

and again in section 45 at about point 6 on that page in (b):

would, but for subsection 44(1), be liable -

What the use of the subjunctive indicates, in our submission, your Honour, is that the effect of section 44 is that there is no liability in the Commonwealth.

Thirdly, your Honours, the alternative view which must be advanced by our learned friends if they are to succeed involves giving the statute what is aptly described as an absurd operation. This appears, we think, most clearly from the reasons of Justice McPherson in the Court of Appeal at page 15 of the appeal book. About halfway down the page his Honour sets out the conclusion of the Court of Appeal in Flaviano and he then continues that:

It is not impossible to adopt a different view of s.44(1). After all, it is introduced by the words "Subject to section 45 ...", so that, in a sense, the prohibition it imposes is suspended until the election is made. To that extent, it might be said that the prohibition does not operate until the election to institute an action is made, and that there never was any prohibition -

et cetera. That is ultimately the contention for which the applicants must aim. It is a contention which seems rather odd, on its face, because it involves giving to the statute the construction that it imposes a prohibition that does not operate until it ceases to operate. For that reasons, essentially, his Honour Justice McPherson went on to conclude, rightly, in our submission, that that would be an artificial construction of section 44.

Your Honours, fourthly, the doubts expressed about the decision and the reasoning of Flaviano expressed by Justices Ambrose and Pincus proceed, in our submission, on the basis of somewhat circuitous reasoning and your Honours can see that in the reasoning of Justice Ambrose at page 26 of the appeal book, at point 2, where his Honour refers to an unsatisfactory consequence of adopting the approach which prevailed below, that is:

that a defendant may be denied the right to obtain contribution and indemnity from another tortfeasor.....merely because the plaintiff has failed to make a timely election under s.45.

That assumes - as we submit the next passage we will take your Honours to does - the point that has to be established, that is that the Commonwealth in enacting section 44 intended that a third party claim might be able to be brought against it, despite extinguishing the causes of action against it by section 44.

CALLINAN J: Why not? It is very unfair to the defendant.

MR SHEAHAN: Your Honour, it may be in some circumstances thought to be unfair to the defendant who is sued by the employee. But the question is, did the Commonwealth intend that consequence or not? To posit, as Justice Ambrose does here, that the unfairness suggests that the outcome -the unfairness suggests a contrary conclusion is boot strapping. It appears a little more clearly from Justice Pincus' reasons at page 19.

CALLINAN J: The Commonwealth should be taken to have legislated deliberately to create an unfair situation?

MR SHEAHAN: Your Honour, what the Commonwealth has done with the legislation, in our submission, is to create a very generous scheme of contribution and rehabilitation for its employees; and by the Act not merely to define the benefits that are available to its employees, but to define the extent of its liability in respect of injury to its employees. In the context of that, that is, defining the extent of its liability, one reaches the conclusion or one supports the conclusion that what was intended by section 44 was something substantive, not merely something procedural.

I was going to take your Honours to Justice Pincus' reasons at page 19 of the appeal book where he said:

The question becomes a narrow one: since there was a time, however brief, at which the employer would have been liable -

a proposition we confess we have a little difficulty understanding -

subject to the performance of a very simple step, does the requirement that that step be taken save the employer from liability under a claim for contribution? An affirmative answer to this question appears to me to require a technical approach.....the same practical result could have been achieved -

his Honour said -

by providing in the -

Commonwealth -

statute that an employee may sue at any time before a compensation payment is made.

To say, your Honours, that the notice of election is, in substance, superfluous and that the same practical result could have been achieved a different way assumes that the Commonwealth did not intend to achieve the outcome that it did achieve in accordance with the reasoning of Flaviano and of Justice McPherson.

CALLINAN J: Mr Sheahan, if the criteria for special leave are satisfied, what you are saying is that the decision of the New South Wales Court of Appeal in unarguably correct. That is your basis for refuting or for meeting an application.

MR SHEAHAN: There are two limbs to the submission, really, your Honour. One is that the decision of the Court of Appeal in New South Wales and the Supreme Court of South Australia and the reasoning of Justice McPherson about the construction of section 44 is correct. The second is that the applicants have another hurdle, in any event, to overcome. It is not enough for them to establish that section 44 has procedural effect. They must also persuade the Court of a point about construction of the contribution legislation and that, we would submit, is a point which does not warrant the consideration of the Court either for a number of reasons. May I come to that immediately?

Your Honours will see the point at page 26. I am sorry, before I come to it, there is just one more thing I should mention about section 44. It would be wrong to think that the Commonwealth legislation was not drawn with an eye to the possibility of claims by an employee against other parties. Sections 46, 48, 50 and 51 of the Act all deal specifically with that possibility and adjust the rights of the Commonwealth and the employee and the potential other defendant, as between them. It does not deal specifically with a claim for contribution, but our submission is that no doubt that was intended to be dealt with by section 44.

Your Honours, on page 26 in the middle of the page Justice Ambrose highlights the two matters on which the applicants have to succeed if they are to prevail on appeal. The first is:

to construe the -

contribution -

legislation so that the words "would if sued be liable" in s.6(c) would read as "would if properly used be liable" or as "would if sued in accordance with all procedural requirements be liable".

And then to also succeed on the question of the construction of section 44.

Your Honours, there are two reasons why the first question, that is the construction of the contribution legislation, does not warrant the attention of this Court. The first is that the argument involves in a different form the argument that was rejected by this Court in its recent decision in James Hardie v Seltsam 159 ALR. The argument here is that words should be read into contribution legislation to give it an operation which is thought to be appropriate in relation to circumstances for which the legislation does not explicitly provide. In James Hardie, your Honours, Justice Kirby, with whom Justice McHugh agreed, dissented on the ground that the contribution legislation there, indistinguishable from that here, should be read as if the words "to judgment on the merits" were inserted after the words "if sued". The majority disagreed. Here the applicant wishes to invite the Court, as indicated in Justice Ambrose's reasons, to read the words "in accordance with all procedures required" after "if sued".

There is no reason, in our submission, to think that the Court would be any more attracted by that invitation than it was by the invitation in James Hardie. Might I mention that the decision of the High Court in Brambles which dealt with limitation periods as to time does not affect this submission. Although it is sometimes said that Brambles stands for the proposition that the words "at any time" can be read into the section, what Brambles really stands for is that the section has no temporal connotation in speaking of "would if sued be liable".

The second reason, your Honours, why the contribution legislation point does not raise a question warranting the attention of this Court is that the burden of the reasons of Justices Gaudron and Gummow in James Hardie was that the contribution legislation, that is legislation in the old style like the Queensland writ, is known to be in need of reform to deal with difficulties of this kind and that legislative reform is the proper solution , rather than judicial reinterpretation. May I take your Honours briefly to what their Honours had to say on that subject. In paragraph 7, their Honours refer to the - - -

GLEESON CJ: I am sorry, which case is this?

MR SHEAHAN: James Hardie v Seltsam, paragraph 7, your Honour, yes. Their Honours refer to the fact that:

The legislation has become notorious for the conceptual and practical difficulties it engenders. It is an example of the need to keep measures of law reform under legislative review for defects and inadequacies exposed from time to time by the actual operation -

and that:

judicial decisions calculated to remove one anomaly -

may give rise to others. They conclude in paragraph 11, having mentioned some difficulties, that:

they serve to emphasise the need for renovation of the New South Wales legislation, not by judicial grafting to it of tissue which it lacks, but upon detailed reconsideration by the legislature. Judicial interpretative techniques may come close to leaching the existing statutory text and structure of their content and, whilst answering that apparently hard case then before the court, unwittingly lay the ground for other hard cases.

Your Honour Justice Callinan was the other member of the majority. Your Honour did not say anything precise to the same effect but your reasons, in our submission, were broadly consistent with that approach.

CALLINAN J: Yes, the provision was a quite different provision, though, that we were considering there, Mr Sheahan. I really do not think that the comparison is apt.

MR SHEAHAN: The contribution provision, your Honour, was in our submission, effectively identical. What was different was the factual situation and the group of words that were sought to be read into the section. There it was "if sued" and "if sued to judgment on the merits" was the language that was sought to be introduced notionally into the legislation. Here it is something different. But, in our submission, special leave is not warranted because the Court does not need another opportunity so recently to encourage the legislatures to act in respect of the contribution legislation to make it conform to what is thought to be current standards of efficiency and fairness.

Did your Honours wish to hear me on the second ground that has been raised in relation to special leave? I would move on to that now?

GLEESON CJ: Yes.

MR SHEAHAN: In relation to that, the question is whether, assuming the applicant's cause of action for contribution is extinguished, whether third party proceedings ought nevertheless be permitted to continue in case the right to contribution might revive. Now, your Honours, there are three reasons, perhaps four, why that is not a special leave point. The first is that it is simply a matter of practice and procedure. The second is that this case is not a suitable vehicle for considering it because the Court of Appeal did not deal with it. The third is that there is no question of injustice here if, hypothetically, the plaintiff in the proceedings were after judgment against Mr Lyons' client to elect to sue the Commonwealth. Mr Lyons' client could then bring contribution proceedings against the Commonwealth. Fourthly, really the question is academic. The employee is now out of time to sue the Commonwealth in any event, the accident having happened in 1994, the limitation period in Queensland for claims for personal injuries being three years. So we are here starting at shadows. Those are our submissions, your Honour.

GLEESON CJ: We do not need to hear Mr Lyons. In this matter there will be a grant of special leave to appeal.

AT 11.40 AM THE MATTER WAS CONCLUDED