Grincelis v House C12/1998 [1999] HCATrans 367 (8 October 1999)

IN THE HIGH COURT OF AUSTRALIA

Registry No C12 of 1998

B e t w e e n -

ANDREW GRINCELIS by his next friend TADAS GRINCELIS

Applicant

and

STEPHEN HOUSE

Respondent

Application for special leave to appeal

GAUDRON J

KIRBY J

HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 8 OCTOBER 1999, AT 9.48 AM

Copyright in the High Court of Australia

MR L.M. MORRIS, QC: If the Court pleases, I appear for the applicant with my learned junior, MS C.E. ADAMSON. (instructed by Abbott Tout Harper & Blain)

MR M.J. NEIL, QC: May it please the Court, I appear with my learned friend, MR R.C. TONNER, for the respondent. (instructed by JM Crestani)

MR MORRIS: Might I commence with an apology, your Honours. We sought to file an amended draft notice of appeal very late. It has been served upon my learned friend who, as I understand it, takes no objection to its lateness. It does not touch upon the central question to be determined as to whether there are matters of public policy which would warrant leave in this case. It touches upon what is really a mechanical matter in the minority judgments. Might I respectfully hand three copies of the amended notice of appeal and the amended argument.

GAUDRON J: Yes, thank you, Mr Morris.

MR MORRIS: And one for the court reporter, perhaps.

GAUDRON J: Thank you.

MR MORRIS: The amendments sought are to be found in the underlined passages. The amendment was necessary because Mr Justice Madgwick, in assessing the interest rate applicable, took into account the incidence of taxation upon the - - -

GAUDRON J: The absence of taxation.

MR MORRIS: The taxation on the amount to be directed to the Griffiths v Kirkemeyer claim and for that reason it affected the ultimate calculation and it was for that reason that we felt we should incorporate that in the amended application so - - -

GAUDRON J: Mr Morris, you can take it we are familiar with the matter. The question I think you should face is whether this situation is likely to obtain in very many cases.

MR MORRIS: Yes. The answer, with respect, is yes, because throughout the States it will not bear upon product liability cases, medical negligence cases, occupier's liability cases, sporting cases where people may be injured, people diving into swimming pools, a great range of cases where injuries may well be sustained which result in the need for gratuitous or, indeed, commercial care. And it is for that reason we say it is of substantial public importance.

KIRBY J: If you get over that problem - because, I must say that is a matter that concerned me - there is still the question of whether this is a suitable vehicle, having regard to the way in which the parties invited the Full Court to deal with the matter. You have a diversity of opinions in the courts of Australia and therefore, for this residuum, it is arguably a matter of significance for us to sort out, but it still took a rather unusual course in the Full Court.

MR MORRIS: I accept that, and I accept that is a problem with our application. But that is to be, we would respectfully submit - - -

KIRBY J: Do not be so reasonable, Mr Morris, please.

MR MORRIS: - - -balanced against the general application. The matter will have to be resolved by some vehicle and you may never find the perfect vehicle.

GAUDRON J: Is it such a problem? The problem is about what was the commercial rate of interest.

MR MORRIS: No, the problem is whether you get the Gogic rate of 4 per cent divided by 50 per cent because it accrues over a period or, properly, this specie of damage should be compensated by the commercial rate where the evidence justifies periodic payments up to the time of judgment.

HAYNE J: Was there any evidence of commercial rate?

MR MORRIS: Yes, there was, your Honour, in a schedule before the trial judge and it was accepted between the parties for the purpose of the trial and for the purpose of settling that question that it be 12 per cent. There is in the - - -

GAUDRON J: Is that still agreed in the event that special leave is granted? That was accepted at the trial, was it?

MR MORRIS: It was accepted through the trial and through the appellate process. One of the dissenting trial judges adverted to an interest schedule pre-judgment at 138 - - -

GAUDRON J: Mr Morris, at this stage we think we would be assisted by hearing from Mr Neil.

KIRBY J: We might come back to your very reasonable submissions later.

MR NEIL: Your Honours, the reason why the Full Court of the Federal Court sought to find a commercial rate was that during the proceedings before the Full Court it was not accepted by the respondent that the court's schedule rate represented a commercial rate. The court's schedule rate is in fact over and above the commercial rate because it includes a penalty to make people pay earlier. The judgments of the Full Court of the Federal Court then seek, in the minority in particular, to find out what their Honours thought was the correct commercial rate.

GAUDRON J: Was it agreed at 12 per cent?

MR NEIL: If one accepts that the commercial rate is the court rate, it is 12 per cent, but the point that was being made was, as Justices Kiefel and Hill pointed out, that that is not really the commercial rate. The commercial rate, as their Honours considered would be the right way of working it out at page 119 line 10, would be to find:

the difference between the prevailing rate for secure investments and the rate of inflation -

Now, his Honour Justice Madgwick, with whom Justice Mathews agreed, did not think that the 12 per cent rate represented the commercial rate but rather his Honour, setting aside or making an allowance for taxation, derived 10 per cent, but having concluded the right commercial rate was 15 per cent, although that is higher than the 12 per cent.

Now, the difficulty with this case, as we understand it, is that there being an evidentiary deficiency and there being a need for the court to conclude the matter, with both parties saying they did not want a new trial to go back and look and find evidence - - -

KIRBY J: But is there not an issue of principle that is hiding behind this problem. I see the problem. It is the problem I raised with Mr Morris, and it is an issue of principle which is not entirely expunged by the statutes. It does apply to the sort of cases that Mr Morris mentioned. It is an issue of principle on which there are different opinions in the different intermediate appellate courts of Australia and this Court could address the issue of principle, the parties having elected to take the course they did before the Full Court, and if the rate is wrong, then send the matter back to the Full Court where either the parties could agree or the matter could be committed to retrial. It is quite a significant difference for this particular plaintiff.

MR NEIL: I have brought, because we did foreshadow in our argument - - -

GAUDRON J: Could you have a retrial? The parties put whatever evidence they wanted to, did they not?

HAYNE J: If there is an evidentiary lack, that falls on the party that failed to adduce the evidence, does it not?

MR NEIL: That is what our position is, your Honour.

KIRBY J: But is it not a sort of semi-objective matter that could be readily ascertained, what was the commercial rate at a particular time?

MR NEIL: Except perhaps to answer it this way, your Honour. Their Honours Justices Hill and Kiefel said at page 119 the parties were unable to agree on the general point, and then, at line 25:

The parties were also unable to agree to a rate of interest which ought to apply to an amount for past care even assuming values at the date of trial had been adopted, yet both parties argued that this Full Court should do the best it could to make any necessary calculation to avoid yet further litigation between the parties.

HAYNE J: I understand that, but that is saying the parties did not agree on the principle. What is the evidentiary base that was available to the Full Court, or to the trial court, more accurately, about what commercial rates were and what element of those commercial rates represented inflation as opposed to real rate of return?

MR NEIL: Your Honours, as I see it, at the trial there seemed to be an acceptance of the court rate but by the time we got into the argument in the Full Court of the Federal Court, the argument came up as to whether the court rate was the commercial rate or - - -

HAYNE J: Or a penal rate.

MR NEIL: Or a penal rate, and therefore there was a difference and there was no evidence that you could really use, we would submit, to pin down a commercial rate.

KIRBY J: But that is because of common mistake of fact as to what was the commercial rate. I mean the issue was tendered at trial and a course was taken at the Full Court and there was a common statement which later was found to be erroneous. It seems wrong in principle. I do not quite know why the legal process could not fix this up.

MR NEIL: I think the problem is interest was not awarded at either level up until we got to the Full Court of the Federal Court because the master and the Full Court of the Supreme Court both concluded that interest would not apply.

KIRBY J: Yes, but that is the issue of principle, they said.

MR NEIL: Yes, but then when you get to the next level, we would say when you open it up, there being an evidentiary gap and the parties not wanting to go to new trial, the question that would arise, we would want to say there is no interest or commercial is not the penalty rate. There would be three areas you might be looking at, and we would say it is a wrong - - -

HAYNE J: Does it come to this, Mr Neil? The parties have agreed no new trial, the parties agreed the Court of Appeal should assess the damages as best it could on the evidentiary base available. There is a dispute between the parties about principle. One says Gogic, the other says commercial rate. A Court of Appeal would, on whatever it had, sufficient or insufficient, have to do the best it could. If proper principle said commercial rate, to get to a commercial rate and apply it. Is that - - -

MR NEIL: Precisely, your Honour, therefore a most - - -

HAYNE J: But then the vehicle point seems to do away, does it not? The point comes down to the point of principle.

MR NEIL: We would submit, your Honour, it may come down to a point of principle of commercial or no interest - because we would want to argue no interest and even have special leave on the point if this point were granted to the applicant - or penalty rate. But how one would then assess at this Court's level, without sending it back again, which the parties did not want, how to apply - you see, my instructions are that the penalty rate in the ACT is different from New South Wales, for example, the schedules are different.

HAYNE J: The remitter would be to the Full Court, would it not, for it to apply proper principle? It would not be remitted for trial.

KIRBY J: Yes, and armed with your continuing request with the appellant that it should do its best on the material available.

MR NEIL: Your Honour, there would have to be - - -

KIRBY J: You are not withdrawing that request?

MR NEIL: No, your Honour. There would have to be some opportunity to bring in, we would submit, evidence of what is the right commercial rate.

GAUDRON J: You cannot do it in this Court but you might be able to do it in the Full Federal Court if the appeal were successful and the matter remitted.

HAYNE J: You might.

MR NEIL: We might. We would say that - - -

GAUDRON J: You had your opportunity to call the evidence, any evidence you wanted to, both at trial and, assuming it is permissible so to do, in the Full Federal Court.

MR NEIL: We submit that the evidentiary deficiency is on the part of the applicant.

GAUDRON J: There is some evidence - - -

KIRBY J: But you did not take that point. If you had taken that point and stuck to it and said there is just no evidence, then the applicant would have been in a really difficult position, but you asked the Full Federal Court to do the best it could. You have not withdrawn that, therefore the question is, did they apply the best principle before they did the best they could.

MR NEIL: We submit, your Honour, that both parties asked, in light of an evidentiary deficiency on the part of the applicant - - -

KIRBY J: Very sensible; a very sensible thing to do, I might say.

MR NEIL: And both parties set themselves against any further litigation, any further evidence, and any referral back. The court said, this litigation ought to be concluded. We would submit it is, in those circumstances, a one-off situation. We have produced a document as best as we can research and supplement, as we said in our submissions we would have. Basically, we accept my learned friend's schedule at page 137. It would seem to us, with respect, that the matter has no - - -

KIRBY J: But do you disagree with the categories? I mean, we thought, when we were considering this matter, that there was medical negligence and sporting injuries and Mr Norris has added a few more, and there is a disparity of opinion in the intermediate appellate courts of Australia. They are applying different rates.

MR NEIL: I do not disagree with those, your Honour. As best as we can work out, however, at least in Tasmania, there is no gratuitous services allowed by statute. They are very restricted in the Commonwealth sphere. They are not permitted in the areas that we have pointed out. Interest is not allowed in New South Wales in work and motor accident, and there is a statutory scheme in the Northern Territory. In other words, the net effect is confined to the non-motor and work cases in some jurisdictions. In those where it is severely restricted, we would say the interest component is likely to be low.

KIRBY J: It is not a very interesting case, if I can say so. The question is whether or not, given the disparity and given the significant difference for the particular party, and given the way both of you conducted the matter in the Full Court, given the dissenting opinions of two judges of the five member court, there is tendered to this Court an issue of principle which we can deal with relatively quickly.

MR NEIL: Your Honour, we would submit not, and we would submit it is a very inappropriate vehicle, but if there is to be special leave granted, we would seek - and we would undertake to put on whatever are the appropriate papers - to argue the counter point that no interest should be allowed.

KIRBY J: Subject to Mr Morris, I think once it gets here we should look at all the questions, the principle.

MR NEIL: We obviously make an important point of that.

GAUDRON J: You will file the documents and apply for special leave to agitate that point at the hearing.

MR NEIL: Yes, we would undertake to file appropriate documentation to allow that point to be taken.

GAUDRON J: You would also have to apply for special leave.

MR NEIL: And to apply for special leave on that point if - - -

KIRBY J: And to be ready to argue it as of the appeal.

MR NEIL: Indeed, your Honour.

KIRBY J: Because once it is here, it may well be that the Court would range over all the issues of principle, including your fundamental attack on any interest at all.

MR NEIL: We would obviously want to rely on Hodges v Frost and so on.

GAUDRON J: Yes.

MR NEIL: That seems to have brought us, perhaps, to a conclusion, your Honours.

GAUDRON J: Thank you, Mr Neil.

KIRBY J: That is very perceptive.

GAUDRON J: Do you wish to say anything in reply, Mr Morris? I should indicate - - -

MR MORRIS: No. Indeed, we would have no objection to the whole matter falling for argument. We would not object to - - -

GAUDRON J: There will be a grant of special leave in this matter. If leave be necessary, leave to the applicant to file a notice of appeal in accordance with the amended draft notice of appeal handed up in Court.

We presume that this is a matter - that counsel would see this as a matter that would not take more than a day and perhaps significantly less. More like half a day?

MR MORRIS: Certainly. Half a day, I think.

MR NEIL: I would have thought it could take a day, your Honour. There is a lot to go through. Could I seek leave to file an application for special leave out of time?

KIRBY J: But that would be returned before the Full Court hearing the matter upon which we have now granted special leave.

MR NEIL: If your Honours direct, yes.

GAUDRON J: That can be done later, Mr Neil.

AT 10.07 AM THE MATTER WAS CONCLUDED