Cowland v Telkesi A27/2000 [2001] HCATrans 229 (1 June 2001)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Adelaide No A27 of 2000

B e t w e e n -

BRIAN JAMES COWLAND

Applicant

and

BEATRIX CORNELIA TELKESI

Respondent

Application for special leave to appeal

GUMMOW J

KIRBY J

TRANSCRIPT OF PROCEEDINGS

FROM ADELAIDE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 1 JUNE 2001, AT 10.59 AM

Copyright in the High Court of Australia

MR S. WALSH, QC: If the Court pleases, I appear with MR A.J. WARD, for the applicant. (instructed by Ward & Ward)

MR A. FRAYNE: If the Court pleases, I appear for the respondent. (instructed by Andersons)

GUMMOW J: Mr Walsh.

MR WALSH: If the Court pleases, the special leave point in this case is whether in assessing damages for loss of dependency under Lord Campbell Act-type legislation, regard should be had, in the appropriate circumstances, to the fact that a surviving spouse is able, because of the death of a spouse, to undertake work which would notionally replace a loss of dependency, in circumstances where the surviving spouse would otherwise not have undertaken that work and obtained that remuneration. Your Honours, there are two limbs to the point - - -

GUMMOW J: It comes down to Carroll v Purcell, does it not?

MR WALSH: It does, your Honour. In our respectful submission, there are two points that arise as a result of that decision. The first is the correctness of the decision - - -

GUMMOW J: It is 40 years old.

MR WALSH: It is, if your Honour pleases. It has been the subject of debate, however, in other courts, and the rationale for the principle as it is said to be binding as a result of Carroll v Purcell has been doubted and has been not just followed by - at least, in other decisions. The two points that we say - whilst, of course, the principle has, at the end of the day - the two limbs to the point raised by us are firstly, one assumes the correctness of the decision of the Court in Carroll v Purcell, and we say that this is one of those exceptions that was - - -

GUMMOW J: Has the South Australian Wrongs Act 1935 been amended from time to time since then - since 1961?

MR WALSH: Yes, I think that is so, your Honour. The way it reads at the present time and compared to that time as - but not necessarily in relation to the critical issue, in page - - -

GUMMOW J: That is a point in away.

MR WALSH: The current provision appears in our book of authorities or book of materials, at page 1, and this - - -

KIRBY J: See, this is a subject area where the legislatures around Australia are pretty busy. They are making amendments all the time to compensation entitlements; they are qualifying what this Court said, for example, in Griffiths v Kerkemeyer. This is a principle that was stated 40 years ago. So it really is a question of whether this Court should enter upon the field or leave it to parliaments, if they do not like the principle, to restate it, as they have done with Griffiths v Kerkemeyer.

MR WALSH: Yes, that is so, your Honour, but when one looks at the decision of Carroll v Purcell, the fact that the Court considered that there may be an exception obviously could be treated by Parliament as meaning that there can be exceptions. That is in favour of my argument on the first point, but of course, the comment that your Honour makes is against my argument on the second major point, namely, whether Carroll v Purcell should be pursued.

In the present case, there is a rather unique feature of the case as compared to Carroll v Purcell, because in this particular case there was evidence that the widow refrained from exercising her full earning capacity, as it were, because of the wishes of her husband. She might otherwise have done that but she did not necessarily agree with him, but in this particular case, we say it is one of those exceptional cases that comes within the exception in Carroll v Purcell. More importantly, however - - -

KIRBY J: Do you criticise the central holding in Carroll, or do you say that it was correct but it did not think about this particular case, or do you say it was correct at the time and is no longer correct because of changing social circumstances relating to women and employment, and so on. What is your - - -

MR WALSH: We certainly say the latter, if your Honour pleases, although, against us, it could be said that the judges did recognise the fact that even in those days there were circumstances where women would be in the workforce and choose to work. So that is against me. But what we do say is that circumstances have definitely changed since that time, and it is more readily apparent today that there should, of course, be no distinction between spouses as it might originally have been thought there was, because most of the cases, if you look at them, look at the case of a widow rather than a widower, and there were very few examples of the widower.

But what we say in this case is that, given social circumstances as they are at the present time, one should look at the conceptual basis behind the decision of Carroll v Purcell; recognise the fact that the Court may not have been intending to actually state a principle in the way that it has now been accepted; test the conceptual basis in this way: is it correct to look at the question of earning capacity and say, "Well, that is the issue", much the same as one looks at the question of the capacity to remarry. Or is it, in truth, a question of a diminution of the loss, as was considered by Justice McTiernan in Carroll v Purcell.

We say, with the greatest respect, as is observed by the learned author Luntz on Assessment of Damages, that when one looks at the conceptual basis for it, it would seem that it is more properly to be evaluated on the basis that it is a reduction of the loss. If that is so, we should not be talking about capacity. If we should not be talking about capacity, then it may very well be that we should look at the analogy, for example, of remarriage; accept the fact that remarriage in truth acts in a way that it diminishes the loss; look at the earning capacity or at least the exercise of earnings in this case before and after; determine whether in fact there has been a diminution of the loss, and one would have thought, looking at the two of them, logically, that if you are going to take into account remarriage, logically, you should take into account the fact that there was a diminution of the loss by the exercise of capacity afterwards which would not have been exercised but for the death of the spouse.

In our respectful submission, what is put against us by the Full Court is that it seems illogical that you should draw a distinction between, for example, one spouse before the death, namely, the one that chooses not to work, and one that does choose to work. But there are two answers to that.

Firstly, that anomaly, if it is an anomaly, exists in any event when one considers dependency claims, because there is a distinction drawn on the one hand between a spouse that chooses to exercise her earning capacity beforehand and thereby reduce her dependency she might otherwise have, or he might otherwise have, because of the earnings of the other spouse, and the spouse that chooses to do nothing, earn no income at all. Now, in that case, when the assessment is undertaken, account is taken of the fact that there was a reduced dependency. So there is a difference between the assessment.

On the other hand, when one looks at different areas of assessment of damages, one looks at loss of earning capacity, for example, and there are many circumstances where a plaintiff will say, "I never intended to work before the accident", and therefore the award for loss of earning capacity is very small, based upon the off-chance that they might have changed their mind, as opposed to someone who did choose to exercise their earning capacity. Where is the anomaly in the situation that we now assert? There is none.

Each case, if we are right, will be determined on its own facts. In each case, you will look to determine what was intended before the untimely death of the spouse; what was intended by that party; what would have happened but for the death. In the present case, what would have happened but for the death is that this person would not have exercised her earning capacity to the full, because her husband did not wish her to do so. Now, because of the death, she is reducing her notional dependence. If that is the proper conceptual basis, then this Court, in our respectful submission, ought to recognise it.

So it may not be a case of this Court being asked to necessarily overrule the decision in Carroll v Purcell, but, more correctly, to look at it in its proper context; that it was not intended to be stating a general principle for all purposes, it did not look at the conceptual basis, but that if one does so look at the conceptual basis, then one ought not to follow that decision, particularly in modern times. The learned author Luntz identified a number of reasons why it is not in the interests of the community or the dependants that the rule should be as it is under Carroll v Purcell.

Particularly where there is no young family to look after, it can obviously often be therapeutic for the homemaker to resume work for which he or she is trained. Why should the limited resources of the community be devoted to supporting the survivor as the deceased had done, when there is no need, particularly given that the dependent can still be given any difference in value between the support which would have been expected from the deceased, and the dependant's own earnings?

We acknowledge that in this case, that there will be a dependency loss as a result of the partial dependency that existed beforehand, but in so far as it is now partially being replaced, there should be a reduction, as a matter of commonsense. So in a case such as the present, where the spouse has no family, has no further obligation to provide domestic services to the deceased spouse, and who would never have exercised her earning capacity in the way in which she is now free to do, the spouse should be treated as having a reduced loss of dependency.

In our respectful submission, the issue that we have raised was recognised by the judges in Dominish v Astill, which is in our book of authorities - I will not take your Honours to it. But clearly, the issues that we raise in relation to the conceptual principle were at least articulated in that decision and it was recognised that, on a proper analysis of the decisions of the Court, you have on the one hand Carroll's Case, Jones v Schiffmann; on the other hand, Willis v The Commonwealth, in support of the proposition we put, possibly Willis v The Commonwealth and English cases, capacity theory - partly Carroll, query Jones v Schiffmann.

So there is in fact in the decisions of this Court, articulated clearly, the fact that there may be a different conceptual basis which is more logical and more attuned to what is intended by the legislation than the capacity theory, if I can put it that way, which found its way to the reasoning of the majority in Carroll v Purcell. So if the Court pleases, the first point then is that we say that this is an important issue of principle; this is a suitable vehicle, because of the particular facts of the case.

The second point, of course, which is this is an exception to the rule, is this is a suitable vehicle, again because of the particular and peculiar facts of this case; it is an issue of importance generally in the States and Territories, save for Northern Territory, for example, in relation to remarriage, at least, where that has been abolished, and it raises, we say, in our respectful submission, an important issue of principle upon which there are divergent views in the decision of this Court as to what is the proper conceptual basis for the deduction - or at least, taking into account issues of remarriage on the one hand or more particularly in this case, the exercise of earning capacity, on the other. If the Court pleases, they are our submissions.

GUMMOW J: Yes, thank you, Mr Walsh. The Court does not need to trouble you, Mr Frayne.

The applicant accepts that the outcome of the application turns upon the view taken of Carroll v Purcell (1961) 107 CLR 72. That is a decision of this Court given 40 years ago. In that time, the Wrongs Act (SA) has been amended from time to time, without any modification of the principle stated in Carroll v Purcell. The legislatures of Australia have been prepared, when they have thought it necessary, to modify principles as to damages of personal injury stated by this Court, as in the many statutory modifications of Griffiths v Kerkemeyer. This is a reason for caution in reopening the decision in Carroll v Purcell. We are not convinced that the appeal would enjoy sufficient prospects of success, and special leave is refused with costs.

AT 11.13 AM THE MATTER WAS CONCLUDED