Tame v Morgan & Anor S120/2000 [2001] HCATrans 151 (6 April 2001)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S120 of 2000

B e t w e e n -

CLARE JANET TAME

Applicant

and

JOHN MORGAN

First Respondent

STATE OF NEW SOUTH WALES

Second Respondent

Application for special leave to appeal

GLEESON CJ

KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 6 APRIL 2001, AT 9.33 AM

Copyright in the High Court of Australia

MR P.C.B. SEMMLER, QC: May it please the Court, I appear with my learned friend, MR N.J. MULLANY, for the applicant. (instructed by Herbert Weller)

MR B.H.K. DONOVAN, QC: May it please the Court, I appear with MR S.C. FINNANE, for the respondent. (instructed by I.V. Knight, Crown Solicitor for New South Wales)

GLEESON CJ: Yes, Mr Semmler.

MR SEMMLER: Your Honours, 16 years have elapsed since this Court last examined the principles governing liability for negligent infliction of psychiatric injury. As the President of the New South Wales Court of Appeal in this case observed, these are uncertain seas. The maps provided by the decisions of this Court are somewhat dated and sometimes unclear in a rapidly changing environment of both psychiatric knowledge and overseas case law.

Your Honours, as was observed by Chief Justice Gibbs in Jaensch v Coffey, the last decision of this Court on this issue, the old and, we would say, irrational limitations on the right to recover for pure psychiatric injury have one-by-one been removed, and it is our submission that this case affords a suitable opportunity for this Court to examine the issue of whether two of these further limitations, that is, the need for foreseeability of injury to a person of normal fortitude and the issue of whether a sudden impact to the senses is required, those two, whether they ought to be removed.

GLEESON CJ: Could I just understand a little more about the facts in this case? What happened was that a policeman or somebody in the police department made a mistake in filling out an accident report, is that right?

MR SEMMLER: Yes, your Honour.

GLEESON CJ: As I understand it, it is suggested against you that not only was the mistake an innocent mistake, it was a perfectly obvious mistake to anyone who looked at the form because it attributed to the driver of both vehicles by an astonishing coincidence precisely the same blood alcohol content.

MR SEMMLER: Yes, that is correct.

KIRBY J: And that when drawn to your client's notice, she realised it was a mistake and sought correction, which was immediately given.

MR SEMMLER: Well, that is not quite correct, with respect, your Honour. She telephoned the Penrith Police Station and the officer concerned said, "Well, what do you expect me to do about it?" It was corrected within a short time, but - - -

KIRBY J: What you said in your opening is undoubtedly right as far as I am concerned, and that is it is a question of whether this is a suitable opportunity, if this is a suitable vehicle. Sometimes, you know, you can get facts which are not very good. Sometimes, as for example, if I can so, in Wik you can get facts that tender a case in a way most advantageous to a party. Sometimes you can get facts that tender a case in a rather extreme case factually, and the question is whether this would be the most appropriate case in which to plumb the depths of this area of the law.

MR SEMMLER: Your Honour, our submission in regard to that by reason of the fact that the facts in this case are unusual, is the very reason why it is a suitable vehicle.

GLEESON CJ: One possible point of view is the facts of this case would make a mockery of the principle for which you contend.

MR SEMMLER: The principle that there ought not to be these irrational limitations on recoverability?

GLEESON CJ: Just look at what happened in this case. A policeman makes a mistake in filling out an accident report form that is not only an honest mistake, but is also perfectly obvious as a mistake to anybody who reads the document he fills out. Then because the information about the mistake he has made comes in a second or third hand way to your client, she suffers psychological distress.

MR SEMMLER: Your Honour, with respect, it was not perfectly obvious to the reader of that form that Mrs Tame was not three times over the legal limit.

GLEESON CJ: Well, it looked pretty funny that they both had precisely the same blood alcohol. What was the figure? What was the number?

MR SEMMLER: I think it was .15 or something of that order, .14.

KIRBY J: The primary judge upheld the claim of your client, purporting to do so the basis of the current doctrine.

MR SEMMLER: Yes, your Honour, although the Court of Appeal said that he was not applying the current doctrine in relation to the normal fortitude test. To come back to your Honour Justice Kirby's question as to whether the facts of this case make it a suitable vehicle, the President of the New South Wales Court of Appeal said that this case tests the limits of liability for psychiatric - - -

KIRBY J: That is not the way the common way usually progresses. The common law usually progresses with a case that edges it forward just a little bit, a little bit more, then you reach a point where you ask have we been going the wrong direction.

GLEESON CJ: Your proposition, as I understand, it is the facts of this case are so extreme that it presents an ideal opportunity.

MR SEMMLER: No. We would say they are unusual facts, but the principles arising out of those facts which were applied are of broad application. But, your Honour, it presents certain other opportunities which very few cases in this area present. The President of the College of Psychiatrists of Australia and New Zealand gave evidence in this case which was uncontradicted. That is Dr Jonathan Phillips, and he was in addition to two other psychiatrists who testified on behalf of the plaintiff. His evidence was uncontradicted, that depression is an extremely common illness in the community. He said and I quote:

it is one of the most common and most debilitating disorders of mankind.

He quoted a report issued a few months before he gave his evidence that by the year 2010 depression will be the second greatest cause of disease amongst mankind. That is the World Health Organisation report.

This was uncontradicted evidence. He said one in five women are at risk of this illness during their lifetime. He said a large number of Australians women share Mrs Tame's genetic predisposition to the kind of illness which she sustained. In our submissions - - -

GLEESON CJ: That means that people better be very careful about making mistakes.

MR SEMMLER: The police department, your Honour?

GLEESON CJ: Anybody. Why does the fact that it is a policeman make a difference?

MR SEMMLER: Well, it does not, your Honour.

GLEESON CJ: What if it was a barrister?

MR SEMMLER: Well, your Honour, when your Honour says people better be careful about making mistakes, your Honour is presumably, with respect, invoking the idea of floodgates of litigation.

KIRBY J: The Chief Justice thought of barristers. I immediately thought of judges.

GLEESON CJ: Fortunately a wise public policy confers immunity on them.

MR SEMMLER: I agree with that, your Honour. Just because Mrs Tame suffered an unusual but we would say, in the light of current psychiatric evidence, foreseeable reaction to this mistake, does not mean there is going to be deluge of litigation over - - -

KIRBY J: If a fifth of the community suffer potential depression, that is a lot of people who may for simple mistakes, say in a school report or something else, then have claims, on your theory, against the mistaker.

MR SEMMLER: No, your Honour, with respect, the two facts, that is, that a large number of the Australian community suffer this propensity to mental illness or vulnerability to it, on the one hand, and the fact that someone like Mrs Tame, we would say, is entitled to recover damages for that very propensity on the other; they sit comfortably together. It will be very rarely that somebody, in fact, as a result of a mistake will be able to and will sue in the same way that Mrs Tame has sued. This was, we would say, a rare but foreseeable case. As your Honours have already pointed out, the circumstances were most unusual, and simply because a lot of people have this vulnerability does not mean a lot of people are going to sue.

Your Honours, our submission would be that that is not a valid policy reason why what we contend, that is, that these are irrational 19th century limitations on recoverability.

GLEESON CJ: That is your contention, but maybe the facts of this case demonstrate that they are not irrational.

MR SEMMLER: Well, your Honour, if the law at the start of the 21st century is blind to modern psychiatric knowledge about the incidence of depression in the community, for instance, we would say that is an unsatisfactory state of affairs. There ought not to be these arbitrary limitations which have no regard to the extent of vulnerability.

KIRBY J: When you say that these a points which are of importance, and the fact that they may seem on first blush to lawyers brought up in other doctrine as irrational is perhaps a reason to explore them.

MR SEMMLER: Yes, your Honour.

KIRBY J: You mention in your submissions that the English law and the South African law and even the Singapore law have taken a different course. Could you just give up a potted version of what has happened there.

MR SEMMLER: That is in relation to the other issue; not the normal fortitude test.

GLEESON CJ: Do you have any authority in England that would allow recovery to your client in this case?

MR SEMMLER: Well, we would say within the Page v Smith doctrine that has developed since this Court last examined this issue, Mrs Tame would be regarded as a primary victim, and, in those circumstances, these, what we say are irrational limitations, would not apply. She would not have to prove that a person of so-called normal fortitude, foreseeably, would suffer injury as a result of learning of this kind of carelessness.

KIRBY J: Is the line of authority in South Africa and Singapore swept aside in those jurisdictions the principle you have to have a sudden shock?

MR SEMMLER: Yes.

KIRBY J: I see. That aspect is put to one side.

MR SEMMLER: That is correct.

KIRBY J: At the heart of the notion of normal fortitude is, I think, a part of the concept of reasonable foreseeability. The law of negligence is ultimately anchored in what is reasonable.

MR SEMMLER: Yes, but, your Honour, there is, we would say, an unfair and unjustified distinction in the light of modern psychiatric knowledge between physically vulnerable individuals and psychiatrically vulnerable individuals.

KIRBY J: In other words, the eggshell skull protects the very vulnerable physical injury but not the psychiatric and what you are trying to do is to say that the principle that the law has adopted in respect of the eggshell skull in respect of physical injury just has to have its logical consequence in psychiatric.

MR SEMMLER: Absolutely, because to maintain this distinction between the two vulnerable categories of human beings is, we would say, to continue an unjustified 19th century distrust of psychiatry.

GLEESON CJ: Maybe you could put your case even higher. Maybe you could say this case provides a good opportunity to have another look at the concept of foreseeability.

MR SEMMLER: It does, your Honour, with respect. It does, because foreseeability in the psychiatric injury context - - -

GLEESON CJ: Maybe we have all been assuming for far too long that foreseeability is as undemanding as everybody says.

MR SEMMLER: Yes.

GLEESON CJ: Maybe if you are right in your first step, this case demonstrates that it perhaps ought to be a little more demanding.

MR SEMMLER: Your Honour, I do not know that we would be arguing that if your Honours granted special leave but certainly it is a valid - - -

KIRBY J: I cannot see you arguing it.

MR SEMMLER: It would be a good reason why special leave ought to be granted, your Honours. Our submission is that the Wyong Shire Council v Shirt test, the undemanding test, was undoubtedly satisfied in this case and that given that there should be no distinction between psychiatric injury and physical injury, the Court of Appeal ought not to have decided as they did.

To come back to your Honour Justice Kirby's inquiry regarding shock: that is the other aspect of the Court of Appeal's decision which we say is, with respect, erroneous. The notion that, at the start of the 21st century, people who suffer serious psychiatric illnesses need to prove that, necessarily, in a tortious context those illnesses were caused by a sudden impact to the senses is blind to the evidence given by the President of the College of Psychiatrists in this country that you do not need that kind of mechanism to cause serious illnesses.

That fact, which was exposed in this case without contradiction, is consistent with the arguments that have proliferated, the academic controversy that has proliferated in the last 16 years suggesting that the policy considerations behind the notion of having the need for a sudden shock are without foundation.

KIRBY J: You say that, but Mr Finnane in his written argument says that you only have to put the facts of this case. The policeman makes a little mistake on a P4 form. It is brought to notice. It is seen to be a mistake by your client. It is corrected quickly and then years later she comes along and seeks $160,000 as damages. Now he says that is ridiculous and the common law does not usually adopt ridiculous conclusions.

MR SEMMLER: Your Honour, this was undoubtedly a careless - - -

KIRBY J: I suppose people could say that with "eggshell skull" cases they might seem, to some lay people, as ridiculous.

MR SEMMLER: Absolutely, your Honour, and what the psychiatrist in this case pointed out was this kind of - Dr Phillips said learning of this kind of mistake in a public document filled in by the police department - admitted carelessness - that kind of thing can have a very severe and deleterious impact upon a lot of people.

He said particularly people who are decent, law-abiding citizens as, we would say, Mrs Tame was. She was a teetotaller. She testified that she had worked in a hospital where she had seen the carnage created by alcohol and driving. She abhorred the notion of people driving while they were affected by alcohol and Dr Phillips testified that against that background of a decent, law-abiding approach to life and learning that people in the police department had said, "You were nearly three times over the legal limit", that had a predictable effect, according to the President of the College of Psychiatrists and it created the illness that she was suffering from that the trial judge found had been shown.

This scenario that your Honours refer to of how can it be that a simple mistake results in a verdict of over $100,000, this is not new. Barnes v The Commonwealth which has been referred to in our outline of submissions was an example of an official act. Somebody, I think, in a government department who wrote to a person and, I think, the mistake was that they said that the lady's husband was in an asylum or something like that. It was a clear case of carelessness and the recipient of the letter suffered a significant psychiatric illness and recovery was permitted.

We are not dealing with a new concept here. The law has recognised the entitlement to recover in a non-accident scenario for psychiatric illness for a long while, but what we have in this case, why it is a suitable vehicle is we have the psychiatric evidence. We know what modern psychiatry thinks. We have in the one case these two very much academically criticised concepts of normal fortitude and the need for sudden shock. They are both here.

We have a non-accident situation and we are dealing with concepts which, we would say, are simply not justified. They are irrational. As long ago as in Mount Isa Mines v Pusey, Justice Windeyer criticised this concept of normal fortitude. He said what is it? How can it be judged? How can the courts assess what is normal fortitude and what is not? The notion that Australian courts at the start of the 21st century should be blind to the continuum of emotional vulnerabilities in the community, we would say, offends basic concepts of justice.

Your Honours, we would say that if the law of tort protects physically vulnerable people so also it ought to protect an acknowledged large portion of the community that are psychiatrically vulnerable.

KIRBY J: You do not seek to support the primary judge's conclusion. You tender the issue directly to this Court on the basis that you challenge the established principles. Is that correct?

MR SEMMLER: We do, your Honours, but we also say, as your Honours will see from our outline of submissions, that his Honour was correct in his conclusions. Certainly, we challenge these special limitations that were invoked by the Court of Appeal. We say that they are wrong and that is the reason why this case, we say, is a suitable one for determination by this Court.

KIRBY J: But if the special leave were granted would you be seeking to argue the case within the current perimeters?

MR SEMMLER: Yes, within the notice of appeal that we have set forth, certainly. But, your Honours, the other reason why this case ought to be granted special leave is simply because this is an important area. There are many cases involving psychiatric injury.

KIRBY J: I think it is an important area. The only question in my mind is whether it is a suitable vehicle.

MR SEMMLER: In England the House of Lords has considered this issue on a number of occasions since our latest decision in Jaensch v Coffey. Our submission is that just as the ultimate court in Britain has had the opportunity, at least to consider whether, at the start of a new century, these old, we would say, unfounded restrictions on recovery for psychiatric injury are appropriate - - -

KIRBY J: You do not have to go into that. What about the South African case? What was that about?

MR SEMMLER: That relates to the issue of shock and the Supreme Court of Appeal of South Africa decided that that was not a necessary ingredient in this context in recoverability of damage for psychiatric injury. That accords with modern psychiatric understanding. That is consistent with the evidence given by Dr Phillips in this case that you do not have to have a sudden shock, a sudden impact to the senses to cause an illness. It is clearly founded in the endemic distrust of psychiatry that was around at the end of the 19th century when this whole concept of nervous shock was created. It has no foundation in psychiatry. It is irrational and it is not a justified impediment, in our submission, to recovery for psychiatric injury, legitimate psychiatric injury caused by carelessness.

GLEESON CJ: Thank you, Mr Semmler.

MR SEMMLER: If your Honours please.

GLEESON CJ: Yes, Mr Donovan.

MR DONOVAN: Your Honours, may I start by saying that this is simply the wrong vehicle for these issues to be explored. The notice of appeal itself has eight specific grounds on page 140 of the appeal book, all of which the applicant has to succeed on before the applicant can, in fact, succeed ultimately.

Might I start by just handing up some brief notes. They are only a couple of pages, which I will spend a little time taking your Honours through to save me getting lost.

KIRBY J: It will not be saving time because you only have a certain amount of time.

MR DONOVAN: It will save me getting lost. That is the more important thing, your Honour. The first thing, might I say, is the nature of the message. The nature of the message, may I remind your Honours, as has been said, is that this woman received a communication which only communicated to her that a police officer had made a mistake. She knew it was wrong so there is no question of her actually believing that she was drunk. She knew it was wrong and when she rang the police officer within a few minutes he said to her, "You know it's a mistake". The evidence which - - -

KIRBY J: I know it is hard for some people but for others like myself brought up, really, in a non-alcoholic view, the fact that I appeared in an official report saying that I was drunk would be a shock to me. I mean, it is just not something which would come lightly.

MR DONOVAN: I cannot quibble with how your Honour might react to it. Angry, angry - I understand that, your Honour.

KIRBY J: But people do, a sector of the community. Some people never taste alcohol in their whole life as a matter of principle.

MR DONOVAN: Your Honour, I do not debate all of that but what I am trying to point out at the moment is the message she receives is a communication that a mistake has been made by a police officer, not that she, in fact, was drunk. That is important. It is a mistake which is obvious on the face of it because it appears on both sides for both drivers. She checks immediately with the police officer who says, "You know it's a mistake". There is a letter of apology which issues. True it is at the beginning of 1993, some six months - - -

KIRBY J: All of this is reasonable, but if we apply the "eggshell skull" doctrine in psychiatric injury, it is just your client made a mistake and he or she must bear the consequences.

MR DONOVAN: That is not really what the "eggshell skull" theory is, your Honour. The "eggshell skull" theory requires the person who makes the mistake, the offender, to have reasonable foreseeability that an injury of some type will occur. The "eggshell skull" principle only applies once you have that initial foresight that an injury will occur. The eggshell skull applies to the extent of the injury, whether it is physical or psychiatric. Once you have foreseeability that an injury will occur then eggshell skull takes up the extent but it does not apply when you are determining liability in the first place.

KIRBY J: I know it may sound shocking to some people but I think it is reasonably foreseeable that if you say that somebody was drunk that that will cause them great disturbance. People who have - - -

MR DONOVAN: Your Honour is very careful about the word your Honour uses. I accept "great disturbance".

KIRBY J: Well, 0.14 is quite a lot of alcohol.

MR DONOVAN: Your Honour, I accept the statement of disturbance. I accept vexation, distress. I accept all of those things but we simply say it is not foreseeable that someone is going to have a psychiatric injury out of this type of mistake. Bear in mind we are all faced with very distressing things on television every day - people starving - - -

KIRBY J: Not affecting ourselves directly, personally in our own existence.

MR DONOVAN: Perhaps, your Honour. Perhaps I understand what your Honour says. Well, let me move to the next point if I might because I would like, if I may, just to take up something which has been said before, but I would like to take up the idea of offending the sense of the community that an event of this type might create legal liability. Your Honour in Romeo will remember that a third of the points that your Honour used was whether it is fair, just and reasonable that the law should impose a duty of a given scope on the alleged wrongdoer for the benefit of such person. It is similar to what his Lordship, Lord Hoffmann said in White where he spoke about it being unacceptable and he spoke about concepts of distributive justice.

Now, let me just point this out, that if these facts are going to be held to be within the principles of psychiatric injury and nervous shock, then in principle there is no way you can distinguish this. Every person who receives an error in a tax assessment, every person who receives an error in an account - - -

GLEESON CJ: There was a lot of publicity a couple of years ago to people who received phone bills that grossly overstated the amount they owed and some of them suffered nervous collapse as a result of it, according to what they told the newspaper.

MR DONOVAN: Indeed. Well, your Honour, we would say that - - -

KIRBY J: It might make public officials very careful.

MR DONOVAN: May I say this, your Honour. The next step I was going to take your Honours to was the barrister who accidentally has a "not" put in, not in his conclusion of opinion but in the facts that he is outlining in the facts themselves. If you allow this sort of case, then you allow all of that. Now, if the Court says, "We're going to allow all of that", then so be it.

KIRBY J: But only if the person happens to be particularly vulnerable and becomes greatly depressed as a result of it and has the fortitude to take a case and litigate with the risks and perils that that involved. Lots of other ingredients.

GLEESON CJ: It does not necessarily follow, you know, from the fact that a court might say there is no relevant distinction between psychiatric injury and physical injury that a plaintiff in a case like this would recover. A possibility is that the court would say, "There being no relevant distinction between psychiatric injury and physical injury, we are now forced to reconsider the concept of foreseeability".

MR DONOVAN: Indeed, and that is one of the points which your Honours will see I have in this list here.

KIRBY J: That would certainly be a special leave point.

MR DONOVAN: Yes, indeed, but the applicant is not going to win in this case in any event because we would say that it just is not foreseeable - - -

KIRBY J: Well, the primary judge found for her on present doctrine so you say is not going to win - - -

MR DONOVAN: That is not correct. He omitted a number of facts. He omitted immediate shock, he omitted - - -

KIRBY J: It looks as though that is on wobbly legs.

MR DONOVAN: I understand that. Well, let me just go through where, we would say, this applicant would fail on each of the points and we have taken it up here in No 4. We say that she would fail on general foreseeability because this reaction was idiosyncratic. We say that it offends the requirement of foreseeability of the type of injury which was laid down in Wagon Mound, not that she might have some distress but that the person, the person who is going to be held liable for negligence must, in fact, have been able to foresee that there would be psychiatric injury from this minor, may I say, mistake which was obvious to her right from the start.

Next, your Honours, we say it offends against proximity. Proximity in time and space are nowhere satisfied. She finds out about this something like a year later through a very guarded phone call from her solicitor. This was her evidence. The solicitor said to her, according to her, "Do you know you have a blood reading almost three times over the limit, or did you know there was a blood reading on the form?" She said, "He", the solicitor, "told me about the mistake on the form, that there was a blood reading. I said, `I have not been drinking. I do not like alcohol. Particularly I would never drink and drive'." That is her reaction to it and her solicitor's evidence - - -

KIRBY J: You are being very, very rational, as always, Mr Donovan, but the human mind is not always rational. The human body, physiology, does not always follow normal patterns.

MR DONOVAN: Your Honours, if this case was to be heard by the Full Court and this particular applicant was to be awarded damages for this mistake it would offend against every principle that applies to - - -

KIRBY J: Well, she was awarded damage. You say erroneously and the Court of Appeal says erroneously but she says, "I say I wasn't awarded damages erroneously but even if, on current doctrine, I was, you should reconsider that doctrine because the courts have created all of these false hurdles".

MR DONOVAN: No, but it offends against all of them. It is not as if, as Mr Semmler says, there are two that she has to overcome, the shock and the reasonable fortitude. It offends against a whole list which I have listed there. It offends against proximity, which is what I was just pointing to.

KIRBY J: But you agree that the highest courts in the United Kingdom, Singapore and South Africa have lately visited this area and have overruled aspects of past doctrine.

MR DONOVAN: No. I accept Singapore. I accept South Africa. The English authorities have tightened it up. They have used an artificial distinction - - -

KIRBY J: Maybe that is what this Court would do if special leave was given.

MR DONOVAN: Well, then she loses and there is no point in there being an appeal.

KIRBY J: If other highest courts look at the issue and if there are aspects of the old law that certainly appear, at least arguable, then this is a case which presents that question to this Court.

MR DONOVAN: Let me point this out, your Honour. Your Honour asked about England and I heard some rumblings from the side when I said they tightened it up.

KIRBY J: I heard them too - rumblings, mutterings.

MR DONOVAN: Let me explain this. They tightened it up in Alcock. In Page v Smith, which was a driver of a car who received no injury at the time but some hours later developed chronic fatigue syndrome, they opened it up a little bit by saying he was a primary victim, not a secondary victim. Therefore, reasonable fortitude and immediate shock are not required. But the primary and secondary distinctions have never been applied in this country. They were fiercely criticised by academics. They were fiercely - - -

KIRBY J: That would mean in the Chester v Waverley Corporation that the child is the primary victim, the mother is the secondary victim.

MR DONOVAN: That is how it would be said, yes.

KIRBY J: That seems dubious.

MR DONOVAN: Yes, but the problem is that then the House of Lords allowed different tests for different types of victims whereas previously, it had always been that the tests, as I have listed them there, applied to all victims, all psychiatric injury victims.

KIRBY J: You are beginning to make this sound very, very interesting.

MR DONOVAN: I think I will sit down, your Honour.

KIRBY J: To me, at least.

GLEESON CJ: Just before you do, where, if at all, did the Court of Appeal deal with the question of foreseeability?

MR DONOVAN: Where? The President dealt with it at page 91, line 45 and your Honours will see that it was considered to be "far-fetched or fanciful" and also at page 81 at line 5.

GLEESON CJ: Well, was the submission that the respondent's injury was too remote because it was not reasonably foreseeable, was that submission upheld?

MR DONOVAN: Yes. Yes, it was upheld there and the Chief Justice described it as being idiosyncratic. I will just find the passage from that.

KIRBY J: So to succeed, the applicant has to overcome that finding.

MR DONOVAN: Yes.

KIRBY J: That may well require some examination of that concept again.

MR DONOVAN: Your Honours, I do not debate it is not an interesting case. I mean, in one sense I could not debate that because it does raise all these various points, but the problem is it is not a case where this Court can simply progress step by step. What the Court is being asked to do, even on the two points that the applicants raised is overturn shock and reasonable fortitude in the one decision. In actual fact the Court will have to overturn much more than that. The Court will have to overturn ideas of proximity, ideas of foreseeability to extend it much more widely than it ever has been before to include what is far-fetched and fanciful. The Court may have to introduce primary and secondary dictums into Australia, which has been criticised overseas, and, indeed, in the latest House of Lords' case - - -

KIRBY J: You would not have to draw that distinction in this case - - -

MR DONOVAN: You do not have to, no.

KIRBY J: - - - because the plaintiff was a primary victim and therefore - - -

MR DONOVAN: No, she was not, on no definition. The definitions of "primary victim" are - - -

KIRBY J: The so-called shock or surprise came to her.

MR DONOVAN: Well, it may have come to her but the definition of "primary victim" before have been the primary victim has participated in the accident and been well within the range of physical injury. That is Lord Lloyd in Page and Lord Oliver in Alcock said a primary victim is one who participates on the one hand, and one who is no more than a passive and unwilling witness on the other is a secondary victim.

GLEESON CJ: But we are not dealing with an accident case.

MR DONOVAN: I know we are not.

GLEESON CJ: Primary victim has nothing to do with this case, has it?

MR DONOVAN: I agree, but if we are talking about trying to introduce a distinction, this woman is certainly not a primary victim.

GLEESON CJ: Well, the concept of primary victim as opposed to secondary victim is relevant to an accident case but what has it to do with a case like this?

MR DONOVAN: Nothing at all, we would say. There seems to be an attempt to introduce it by my learned friend to say we should have a distinction of primary and secondary victim, therefore this woman is a primary victim, therefore you do not need to apply the control mechanisms. That is in the argument.

KIRBY J: It sounds to me as if it is just another judge-invented control mechanism, with all respect.

MR DONOVAN: Indeed.

GLEESON CJ: Was it relevant to the reasoning of the Court of Appeal?

MR DONOVAN: No, not at all. They said it did not exist here.

GLEESON CJ: So the Court of Appeal did not decide this case on the basis of some distinction between a primary victim and a secondary victim?

MR DONOVAN: No, no, certainly not.

KIRBY J: I think we can sweep that to one side then.

MR DONOVAN: Well, I have listed there all the control mechanisms - - -

KIRBY J: The real issue it comes down to - this is interesting, and the issues behind it are important. It is a question of whether this is a suitable vehicle of whether the fact that the applicant has not only to leap the shock point and the normal fortitude point but the commonsense notion of reasonable foreseeability makes this an unsuitable vehicle. That is what it comes down to, does it not.

MR DONOVAN: I mean, one can expand it by saying and proximity and everything else but yes, that is what it comes down to.

KIRBY J: Yes, well I think we understand what the issue is.

GLEESON CJ: Thank you. Mr Semmler.

MR SEMMLER: Yes, your Honour. So far as my learned friend's submission about the fact that she knew it was a mistake is concerned, our submission is that is irrelevant. We have dealt with that in our reply at paragraph 2. The damage was already done.

KIRBY J: What do you say about that point that you not only have to leap the hurdles of - just assume you could carry me over the hurdle of shock and over the hurdle of normal fortitude, but still it gets back to that assertion that Mr Finnane, before his departure for higher things, wrote, that you just do not get over the hurdle of reasonable foreseeability, that it is not reasonably foreseeable in the real world that a person who makes a little mistake in a form is going to have these grave consequences.

MR SEMMLER: We do, your Honour, according to the current test. It was not far-fetched or fanciful. The trial judge found that. He was at great pains to say this is at the forefront of the community's thinking. He was a trial judge in a busy trial court in this State. He said effectively - - -

KIRBY J: And an experienced trial judge who would have a lot of these cases.

MR SEMMLER: Absolutely, your Honour, and he said effectively, "I come across this every day. I recognise that some people don't react in this way to this kind of information but I recognise that it's a phenomenon that occurs and I know that as a trial judge." Dr Phillips said, "He's right. Psychiatry recognises this". He says Dr Phillips went so far - and he is the President of the College - he said people of normal fortitude can suffer - - -

KIRBY J: So you say far from being a third hurdle this is a hurdle that long ago this Court put at a very low rung.

MR SEMMLER: Absolutely, as long ago as the early 80s in Wyong Shire Council and, in any event, your Honours, if that is the matter that is troubling your Honours and the Chief Justice has indicated, well perhaps the foreseeability test is too undemanding, then that is another reason why this is an appropriate vehicle.

My learned friend invokes proximity and he says they also have to get over that hurdle but this Court is well aware that the notion of proximity is now being brought into question as a control device or as an element of the duty of care and that really is just another argument why this is a suitable vehicle. As the President of the Court of Appeal said it tests the limits of liability in this area in an area where there is growing controversy.

Your Honour, the other reason that I need to emphasise why this is a suitable vehicle and why the issues we raise are important is because this very notion of normal fortitude that seems to be accepted, certainly by the Court of Appeal, is one that is unclear whether it really is part of Australian law.

In Jaensch v Coffey, the only case to have really touched upon it, only one judge, Justice Brennan, clearly embraced it. In our outline of submissions we have dissected the judgments and it is not clear at all that the whole Court accepted the notion that normal fortitude, the foreseeability of it, is an element of this kind of claim and, indeed, your Honours, there have been four cases since Jaensch v Coffey, four in lower courts, who have taken the view that all that happened in Jaensch v Coffey was that the High Court assumed, without deciding, that normal fortitude was a necessary requirement in this kind of case.

So it is to clarify that uncertainty as well as to deal with the academic criticism in relation to both elements, but particularly the need for proof of sudden shock to - - -

KIRBY J: Yes, but let us come down from the high clouds of all the theory to a practical litigant who is seeking damages. Now, what would be the outcome if your submissions were upheld in this Court?

MR SEMMLER: That the judgment of - - -

KIRBY J: Would it have to be retried because the wrong doctrine was applied?

MR SEMMLER: No, your Honours. We say that, as your Honours will see from our argument, the trial judge applied the right doctrine. Our first submission is he applied the normal fortitude test and found that it was appropriate.

KIRBY J: I realise that, but assume that this Court came to the conclusion with the Court of Appeal that he did not apply the right doctrine, but that the doctrine was different, is that a new trial point or is that something that could be sorted out in the Court of Appeal on the facts of the case? You have to look down at what is actually going to end up in this litigation. There is a human being out there who is interested in money, not the law.

MR SEMMLER: Yes. Well, your Honours, our submission would be it could be dealt with on the facts as exposed in the case.

KIRBY J: I doubt if it could be dealt with by us, could it?

MR SEMMLER: By the Court of Appeal. But in any event, your Honours, the fact - - -

GLEESON CJ: I am sorry. What was the point? You say it should be remitted to the Court of Appeal?

MR SEMMLER: Your Honours, we say it clearly could not be dealt with by this Court and if it - - -

GLEESON CJ: What do you mean by that? You mean on the facts as found, if the Court accepted your submissions of law it would have to order a rehearing by the Court of Appeal. I want to understand what your - - -

MR SEMMLER: Your Honours, our submission is this. We have a number of grounds of appeal. One is that the trial judge applied the normal fortitude test. That is implicit in his reasons and he also found shock. Now, the Court of Appeal decided that he did not apply the normal fortitude test and that he did not make a finding in relation to shock.

KIRBY J: Had he done so, it was fatal to the plaintiff's claim. That is what the Court of Appeal found.

MR SEMMLER: Yes.

KIRBY J: So we would not normally give special leave, I would not think, to simply explore whether the Court of Appeal got wrong the application of settled law.

MR SEMMLER: We accept that, your Honour, except that we would say that according to the Warren v Coombes test, their Honours in the Court of Appeal did not give proper respect and weight to the finding of the trial judge which accorded with the uncontested evidence of the psychiatrist.

GLEESON CJ: I am afraid I am still unclear, Mr Semmler, even though you have exceeded your time, what do you say would be the consequence if this Court were to accept the propositions contained in your notice of appeal? Would the consequence be that we would simply reinstate the verdict of the trial judge or would we remit it to the Court of Appeal or, perhaps, for a fresh trial?

MR SEMMLER: Well, your Honours, it would depend upon whether you uphold our contention that the trial - if your Honours uphold our contention that on the evidence the trial judge was correct, then there will not have to be a new trial. The verdict will stand.

KIRBY J: But that is on assumption that this is simply an ordinary case of applying a settled doctrine, but on your alternative assumption, that is to say that, if on current doctrine, the Court of Appeal was right that you were not entitled to a verdict, this Court should eliminate some of the hurdles that current doctrine established and then either this Court or the Court of Appeal, by examining the facts anew, would be able to reach a conclusion absent the hurdles of shock and normal fortitude. Is that it?

MR SEMMLER: Yes, your Honour. Your Honours, we accept that this Court would not normally grant leave in a case where, we say, the trial judge applied settled principles and he got it right and the Court of Appeal erred in accordance with the Warren v Coombes concept, although we submit also that they did not afford proper weight to his decision. But we say that there are important legal questions that arise that ought to be determined. They can be determined in this case, but if, in the final analysis, your Honours accept the views that we have put forward, that is that the judge applied the correct principles and he got it right, then there would not need to be a retrial.

GLEESON CJ: Thank you, Mr Semmler. In this case there will be a grant of special leave to appeal. You will be looking at the question, I suppose, Mr Donovan, as to whether or not there is any need for you to file a notice of contention.

MR DONOVAN: Yes.

AT 10.20 AM THE MATTER WAS CONCLUDED