Hurley v McDonald's Australia Limited B17/2000 [2000] HCATrans 710 (24 November 2000)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No B17 of 2000

B e t w e e n -

JANETTE LYN HURLEY

Applicant

and

McDONALD'S AUSTRALIA LIMITED

Respondent

Application for special leave to appeal

GUMMOW J

KIRBY J

HAYNE J

TRANSCRIPT OF PROCEEDINGS

FROM BRISBANE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 24 NOVEMBER 2000, AT 10.16 AM

Copyright in the High Court of Australia

MR S.S.W. COUPER, QC: If it please the Court, I appear for the applicants. (instructed by Shine Roche McGowan)

MR M.H. TOBIAS, QC: If it please the Court, I appear with my learned friend, MR D.P. ROBINSON, for the respondent. (instructed by Baker and McKenzie)

GUMMOW J: Yes, thank you.

MR TOBIAS: Before my learned friend proceeds, can I seek your Honours leave to file the respondent's supplementary statement of argument that brings the history of this matter up to date. I understand it was circulated.

KIRBY J: Does Mr Couper have a copy of it?

MR TOBIAS: Yes, he does. In case it may be of assistance to your Honours, and we have notified Mr Couper that we would do this, can I hand up three copies of the document that comprised the totality of the prizes and conditions of entry that was displayed in the stores.

HAYNE J: I thought you were going to give us a tray mat, Mr Tobias.

MR TOBIAS: I think, your Honour, after this litigation we have run out of them.

KIRBY J: Have you had a copy of this piece of paper, Mr Couper?

MR COUPER: I have got one available to me, your Honours, if the need arises.

GUMMOW J: Yes, thank you. Yes, Mr Couper.

MR COUPER: Thank you. Your Honours, there are a number of apparent hurdles of varying sizes - - -

GUMMOW J: I should also ask: you have seen this supplementary argument of the respondent, have you not?

MR COUPER: Yes, I have, thank you, yes.

GUMMOW J: Do proceed.

MR COUPER: Thank you. Your Honours, there are a number of hurdles of varying sizes the applicant must jump in this case for a grant of special leave. I will, if I may, attempt to jump each of them in a sequence which I hope is not too illogical. The first arises from the circumstance identified in the respondent's supplementary outline that the evidence has been heard, so far as this aspect of the action is concerned, and the learned trial judge has reserved his judgment proposing to give it in February. The effect of section 28(4) of the Federal Court of Australia Act is that the point which the applicant seeks to ventilate, could be ventilated as a ground of appeal from the final judgement. We must acknowledge that. In my respectful submission, the - - -

GUMMOW J: Let me just ask you, what were the live legal issues that have consumed so much hearing time other than this contractual issue, which did not go forward? They were section 52 issues, were there?

MR COUPER: Yes, your Honour.

GUMMOW J: What else? What other legal foundation?

MR COUPER: There was a claim in negligence which has not been pressed; there was the section 52 claim and a claim based upon section 18A of the Lotteries and Art Unions Act, New South Wales. That section appears at the learned primary judge's judgment at page 26 of the application book.

GUMMOW J: Well, that would govern some of this, would it? The Lotteries Act has some territorial reach, does it?

MR COUPER: Yes it does, your Honour.

GUMMOW J: It would not cover all these claims, would it?

MR COUPER: On the applicant's submission, it does, but it certainly covers a number of claimants from New South Wales if going no further.

GUMMOW J: Yes. So, there is section 52, Lotteries Act; what else? Negligence not pressed.

MR COUPER: That is it, your Honour. Contract is the other one.

GUMMOW J: Yes.

MR COUPER: So far as section 18A is concerned, the effect of the Full Court's decision is to dispose of the claim based on that section, because the section has, as a premise, that a person who is a winner of a game must be awarded the prize. The effect of the Full Court's decision is that none of these claimants is or can be a winner, because none of them had a game stamp, which McDonald's intended to issue in 1999. So the effect of the judgment is to limit the applicant only to the claim under section 52. That claim involves a claim for a few dollars each for each of the claimants in the class.

So far as section 28 of the Federal Court of Australia Act is concerned, in my submission the result of taking this point after a final judgment, if it were to be taken successfully, would be a new trial, which would be a much longer, more difficult and more expensive exercise than if the point was determined now, so the trial judge would be in a position to manage the extent of additional evidence. One is not opening up the foray of the action again for a second go; one is merely permitting evidence about this point to be led and a decision made about it.

The second and related hurdle, your Honours, is - - -

KIRBY J: Would there be much evidence in relation to this point? Is not this point really just a matter of legal principle? What is the evidence?

MR COUPER: Your Honour, there will be evidence - extent is a matter of some debate, your Honour. The part of the case the applicant seeks to ventilate is that the decision to refuse these claims was one not taken reasonably and in good faith and the applicant has particularised in the proposed amendments a number of factual matters said to lead to the conclusion that there was an absence of reasonableness and good faith in the decision-making process.

Fundamentally what is said is that the respondent rejected each of the claims merely by saying, "This is not a 1999 stamp and that is the end of the story." The applicant says that that is not the issue, the issue is whether each of the claimants collected the stamp in 1999 and the respondent's approach ought to have been, ascertaining from at least a substantial proportion of those claimants, the circumstances in which they obtained the stamp. That has caused the respondent to say, "Well, there will be an awful mountain of further evidence because we will want to approach each of the claimants now and find out what they would have said if asked back in July 1999 about this matter". In my respectful submission, that is really a fairly false approach.

HAYNE J: But is that part of the foundation of the trial judge's holding that to allow the amendment at the time sought would work prejudice?

MR COUPER: Yes it is, your Honour.

HAYNE J: And was that finding controverted in the decision of the Full Court?

MR COUPER: The Full Court did not deal with that matter at all.

HAYNE J: They never got there. Therefore if you got leave, you would have to come here seeking to overturn, amongst other things, the discretionary judgment by a trial judge about the prejudice worked to a party by allowing amendment of pleadings in the course of trial, is that right?

MR COUPER: Yes, that is certainly one of the hurdles, your Honour, that is so.

HAYNE J: Well, for my part, at least, it is a hurdle of considerable size, that we should be called on, as a necessary part of the determination of the issue tendered before us, a question about prejudice, two parties, by amendment, during trial.

MR COUPER: Your Honour, one accepts that that is not obviously normally the thing which this Court is asked to do. My submission is - - -

HAYNE J: More importantly, how could we? How could we assess the prejudice to the parties at the point of application for leave to amend?

MR COUPER: Your Honours, because the facts then known are straightforward and the basis advanced for the prejudice by the respondent is a matter of submission rather than evidence. In other words, the respondent said and says, one can properly assume that we will have to do an awful lot more work to take these steps, and because we will have to do an awful lot more work, therefore we will necessarily be prejudiced. This Court is in no worse position to judge the strength of those assumptions than either of the courts below. The application was made in November last year, at a time when the court had already determined that the trial would not finish in the time allocated for it and it would resume in February 2000. At that time the opportunity existed for the resumed date to be delayed sufficiently for whatever investigation would need to be done, to be done.

In my submission, for the reasons advanced in the written outline in reply, there is no substantial prejudice shown at that time to the respondent. The respondent seeks to say about prejudice, "Well things are even worse now because the trial has finished and we have called more witnesses." In my respectful submission, that is to lay at the feet of the applicant matters which have arisen because, as we would put it, the application was wrongly refused.

KIRBY J: Well now, you very correctly have acknowledged all these hurdles that you have to jump. You have to get Olympic Gold, in a sense, and you have made that absolutely clear, but can we go directly to what - we assume you can somehow get over those hurdles, and I have Justice Hayne's problem. It just seems to me that to embark upon the legal question which is, on one view, quite an interesting legal question, if you are not going to get to it because the trial judge is going to say it is prejudicial to allow you to raise it now, is an exercise in futility.

MR COUPER: That would obviously be so, your Honour. We would ask this Court, and this Court could, in my submission, substitute its view of prejudice with a view taken by the trial judge. If the Court is not prepared to do that, then obviously, as your Honour Justice Kirby says, there is no point to the exercise, but the Court has power, in my submission.

KIRBY J: Why would we do that, Mr Couper? I know you have to advance your client's case, but this is quite an interesting and important question, the issue of the implications into contracts of duties of good faith, and especially in an adjudicative-type contract, but where there is this stumbling block, it just does not seem to be an appropriate vehicle for us to really controvert the opinion of a trial judge, who sat there for weeks dealing with this matter and who would have a much better knowledge of the fairness of allowing a late amendment than we would. I mean, this Court would never get into a thing like that, and rightly so. Now, what is your answer to that? I know you have very correctly and skilfully acknowledged the problem, but I just do not see how you get over that bar.

MR COUPER: Your Honour, the only answer I can give is this, and I have attempted to give it in perhaps a different form, that the prejudice the learned trial judge identified was that there might be a delay or disruption to the process of preparation for the ongoing trial for the respondent. In my respectful submission, as a matter of principle, that was not an appropriate reason to decline leave to amend. All that was being said, in essence, was it may take longer for the respondent to get ready to meet the new case than otherwise would have. In the context where the action was commenced in July 1999, whilst the competition was still running, the trial was ordered to commence and did commence in September 1999. So there was a very short time frame in which things got going. The application - - -

GUMMOW J: Yes, I know, but if your point is a good point, it is a construction point. Why was it not brought at the beginning? It is not the sort of point that comes out only because of some turn in the facts that is not appreciated at the relevant time. If this is a good point, it should have been there from the beginning.

MR COUPER: Yes it should, your Honour. One can only say that if it is a good point, it remains a good point, even if it is sought to be advanced by amendment. There is nothing I can properly say about the reasons why it was not brought at the outset. When representation for the applicant changed, the point was one which was then sought to be taken. I can put it no higher than that.

Your Honours, as I was saying, in my submission, this Court is in as good a position as the trial judge, although that normally would not be the case, to determine the issue of prejudice. The basis for prejudice, fundamentally, was more time would have to be taken and more expense incurred by the respondent in preparing to meet that case. That, in my submission, is not a proper basis for the view that prejudice outweigh the desirability of having the claims of 5000 claimants properly determined.

The other aspect the learned trial judge identified as being potentially prejudicial was based on the notion that this aspect of the action concerns the trial of about 30 claimants. His Honour's view was that other claimants would be watching and that they might decide to tailor their evidence to suit the view the Court might take of the outcome of this stanza if amendment was allowed. In my respectful submission, that sort of approach has no force to it whatever. It is an exercise only in cynicism, which had no evidential foundation, and that being the second limb of his Honour's view of the cause of prejudice, is one which this Court is in as good a position as anybody else to discount to nil.

Your Honours, that is as much as I can say about that. Might I address the other apparent hurdles, because there are more, as briefly as I may. It is said that this is a matter concerning only the terms of one contract, the terms of one competition. There are two answers, in my submission. The first is that this contract concerned some 5000 people Australia wide; the second is, as has been said, the matter of principle involved as to the obligations of a party to a contract acting in an adjudicative fashion to determine the performance of the other party of his or her obligations, is an important one, going more generally beyond the particular contract.

Your Honours, the submission then, having jumped those hurdles, which I make is that contained essentially in the written outline. Two aspects: the decision of the court below, as a matter of construction of the terms of the contract, was one which was fundamentally flawed. The basis of the court's decision appears, in my respectful submission, at page 43 of the application book at the foot of the page - - -

KIRBY J: You are getting to the substance of the matter now.

MR COUPER: I wish to say only two things briefly about the substance, if I might, your Honour, yes.

KIRBY J: Well, you know, I think you have possibly some good points of substance, but you do not get there unless you get over those hurdles.

MR COUPER: Your Honour, I have made the submissions I can make as to the hurdles. If the Court takes the view I have fallen at one or more of them, then there is - - -

KIRBY J: You are not on the winning podium.

MR COUPER: I only attempt to climb the steps, your Honour, but I had intended to move the substance, but if the Court is against me - - -

KIRBY J: Keep running.

MR COUPER: Might I then briefly say, this is the substance, your Honours, the reasons of the court below appears at page 43, where their Honours said, at the foot of the third paragraph on that page at about paragraph 30:

We think it plain that it cannot have been the intention of McDonald's that the conditions of entry on the tray mat relate to other than game stamps printed in 1999 for use in the 99 Competition.

That is to construe the contract by reference to the subjective intention of one party in circumstances where the terms simply do not say what the court found to be the intention of McDonald's.

The contract was one which provided for the competitors to collect game stamps issued from McDonald's stores in 1999. That the applicant and the claimants did; the relevant game stamps were, on the face of the terms of the agreement, those which were so collected. To construe terms saying different things to mean something else, in my respectful submission, is to fall into fundamental error. Your Honours, otherwise the submission as to substance is contained in the written outline. I do not think I can advance the application further.

GUMMOW J: Yes, thank you, Mr Couper. We do not need to call on you, Mr Tobias.

The applicant was refused leave to amend in the course of trial in the Federal Court. The Full Court refused leave to appeal. Judgment in the trial has now been reserved. There are no circumstances to displace the general proposition that the High Court does not review interlocutory rulings by trial judges of the nature such as is involved here. Accordingly, special leave is refused and, in the light of the written submissions, refused with costs.

We will adjourn to reconstitute.

AT 10.35 AM THE MATTER WAS CONCLUDED