throwing off the chains

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Tas SR 1 and Thomson v Nix [1976] WAR 141 (FC) that the rule in Searle v Wallbank .... in Edwards v Porter were said to be obiter and Brown v. Holloway was ...

THROWING OFF THE CHAINS: ENGLISH PRECEDENT AND THE LAW OF TORTS IN AUSTRALIA by HAROLD LUNTZ*

Introduction

The English Law of Torts was brought to Australia with the early colonists.

Few, if any, of its principles would

have been unsuitable1 for application in the infant colonies, but, even if some were, they would have been attracted as the colonies developed.2

Until recently the Australian courts

1

The test for whether a principle is "unsuitable" is whether it can be applied, not whether or not it is beneficial: Delohery v Permanent Trustee Co of NSW (1904) 1 CLR 283, 310-11. Note the holding in Gartner v Kidman (1962) 108 CLR 12, 23, that despite the very different conditions of settlement, climate and geography, the body of customary law relating to rights and obligations in respect of the flow of water which was developed in England applied in Australia.

2

See generally Alex C Castles, "The Reception and Status of English Law in Australia" (1963) 2 Adel L Rev 1, 4-11; Dugan v Mirror Newspapers Ltd (1978) 142 CLR 583, 589-91 per Gibbs J; State Government Insurance Commission v Trigwell (1979) 142 CLR 617, 625-7 per Gibbs J, 634-5 per Mason J. The view taken in Jones v McIntyre [1973] Tas SR 1 and Thomson v Nix [1976] WAR 141 (FC) that the rule in Searle v Wallbank [1947] AC 341 (HL) was not relevant to Tasmania and Western Australia respectively because of local circumstances must be regarded as very doubtful, since the contrary was held in New South Wales (Kelly v Sweeney [1975] 2 NSWLR 720 (CA)), Victoria (Brisbane v Cross [1978] VR 49 (FC)) and South Australia (SGIC v Trigwell, supra, upholding the decision in

- 2 looked upon the courts of England as the authoritative expositors of the common law, applicable in England and Australia alike.

Thus, as we approached the last quarter

century of the Bicentennial period, courts at every level in Australia regarded themselves as bound to follow decisions of the House of Lords.

Decisions of the Court of Appeal in

England, too, were accorded high status, being ordinarily followed by all courts other than the High Court, which itself would not normally depart from such decisions in most areas of the law.

From 1964 to 1987 pronouncements of the High Court of Australia have steadily removed these fetters, first from the High Court itself and then from lower courts in the Australian hierarchy.

Similarly, during this period the binding nature

of decisions of the alter ego of the House of Lords, the Privy Council, has been relaxed in relation to the High Court and to some extent, at least, in relation to other courts.

Courts

will now sometimes display a willingness to question longstanding rules of the common law.

There are, however, limits

- presently somewhat ill-defined - to when a court will overturn a settled doctrine that emanates from England.

This

essay sets out to illustrate the changes that have occurred by

Bagshaw v Taylor (1978) 18 SASR 564 (FC)).

- 3. 3 -

reference to cases on torts, which have often been in the forefront of the movement.

It does not purport to offer any

kind of constitutional or jurisprudential analysis of the theory of precedent.

The position before the change

Until the change of attitude to be illustrated below, Australian courts at all levels gave effect to the dictum of the Privy Council in Trimble v Hill (1879) 5 App Cas 342, 345, that "it is of the utmost importance that in all parts of the Empire where English law prevails, the interpretation of that law by the courts should be as nearly as possible the same".3 Although in Robins v National Trust Co [1927] AC 515 (PC), 519, Viscount Dunedin observed that "when an appellate court in a colony4 which is regulated by English law differs from an

3

See eg Waghorn v Waghorn (1942) 65 CLR 289, 292 per Rich J; and see particularly the view of Dixon J in this case at 297-9, where earlier cases are discussed.

4

The course of the judgment indicates that "our great Dominions" were included among the colonies for this purpose.

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appellate court in England, it is not right to assume that the colonial court is wrong", his Lordship went on to state:

It is otherwise if the authority in England is that of the House of Lords.

That is the supreme tribunal to

settle English law, and that being settled, the colonial court, which is bound by English law, is bound to follow it.5

While denying that technically it could be bound by a decision of the House of Lords - a court in a different judicial hierarchy - the High Court of Australia nevertheless applied the substance of this statement in Piro v W Foster &

5

He added that the point of difference might equally be settled so far as the colonial court was concerned by a judgment of the Privy Council. The ruling in Robins' case has more recently been redefined as requiring a distinction between decisions on the common law - which it has now been recognized may develop differently in the different jurisdictions (see Australian Consolidated Press Ltd v Uren [1969] 1 AC 590 (PC), discussed below) - and on the interpretation of identical legislation, where decisions of the House of Lords "will have the same practical effect as if they were strictly binding": de Lasala v de Lasala [1980] AC 546 (PC), 558.

- 5. 5 -

Co Ltd (1943) 68 CLR 313.

This was an action for damages for

personal injury sustained as a result of breach of a statutory duty to fence dangerous machinery.

The issue of law which was

raised was whether contributory negligence on the part of the injured worker could constitute a defence to the action.

In

Bourke v Butterfield & Lewis Ltd (1926) 38 CLR 354 the High Court had unanimously decided that the defence was not available in such an action.

However, in Caswell v Powell

Duffryn Associated Collieries Ltd [1940] AC 152, the House of Lords had disagreed with the view of the law taken in Bourke v Butterfield, holding that contributory negligence, if made out, would provide a defence.6

In Piro v Foster the High Court

held that it should defer to the House of Lords.7

6

On the facts it was held that, when due allowance was made for the noise and bustle of the place of work and other factors associated with the nature of the work, contributory negligence had not been established. Shortly afterwards, in Lewis v Denye [1940] AC 921, the House of Lords, Lord Atkin dubitante, found a factual situation in which it applied the view of the law it had taken in Caswell's case so as to deny the plaintiff's claim.

7

On the facts a majority of the High Court held that, as in Caswell's case, the defence failed in the particular circumstances of the case. Shortly afterwards, the legislature in New South Wales restored the effect of the decision in Bourke v Butterfield in that

- 6. 6 -

Latham CJ said (at 320):

...it should now be formally decided that it will be a wise general rule of practice that in cases of clear conflict between a decision of the House of Lords and of the High Court, this Court, and other courts in

State by the Statutory Duties (Contributory Negligence) Act 1945 (NSW), the operation of which was preserved even after the enactment of general legislation providing for the apportionment of damages instead of a complete defence in cases of contributory negligence: Law Reform (Miscellaneous Provisions) Act 1965 (NSW), s 7. Although Bourke v Butterfield was decided on appeal from New South Wales and Piro v Foster on appeal from South Australia, there was never any doubt that the latter decision applied in New South Wales until abrogated by the legislation. Whether or not the High Court was at the time right in recognizing only one common law for "the Empire", no one today would seek to deny that the common law throughout the Commonwealth of Australia is uniform and that any differences that emerge at State court level are appropriately resolved by the High Court, whatever jurisdiction the particular appeal comes from: cf n 2, supra. Instances of the High Court settling differences among State courts in recent years are Evans v Muller (1985) 15 CLR 117, on the deductibility of unemployment benefits in the assessment of damages for loss of earning capacity, and Todorovic v Waller (1981) 150 CLR 402, on the discount rate to be applied in the assessment of damages for future loss.

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Australia, should follow a decision of the House of Lords upon matters of general legal principle.8

It was emphasized that lower courts should not, in case of conflict between decisions of the House of Lords and the High Court, follow the latter, leaving it to the High Court itself to decide whether to overrule its own previous decision.

To

short-circuit the procedure, lower courts should follow the House of Lords.9

This view gave rise to a curious little episode with

8

See also Rich J at 325-6, Starke J at 326, McTiernan J at 335-6, Williams J at 340-2. The dicta are unsympathetically analysed by Ross Parsons, "English Precedents in Australian Courts" (1948-50) 1 U of WA Ann L Rev 211, 212-16.

9

This was contrary to what had been done in Houston v Stone (1943) 43 SR (NSW) 118 (FC). There it was held (at 123) that it was the Court's duty to follow the High Court in Bourke v Butterfield and so to exclude contributory negligence as a defence to a count for breach of statutory duty, notwithstanding the decisions of the House of Lords in Caswell v Powell Duffryn Collieries and Lewis v Denye. It was said to make no difference that the House of Lords had given express consideration to the High Court's decision and rejected it.

- 8. 8 -

regard to the liability of a husband for his wife's torts.

In

Brown v Holloway (1909) 10 CLR 89 the High Court had declined to follow a Court of Appeal decision which had held that even after the married women's property legislation, a husband could be joined in an action against the wife and so be made liable for his wife's torts.10

The High Court felt at liberty

not to follow the Court of Appeal because the decision had been doubted in a later Court of Appeal decision,11 in which one of the Lords Justices, though acknowledging that he was bound by the earlier case, criticized it in terms which the High Court found convincing.

Subsequently, in Edwards v

Porter [1925] AC 1 (HL), though two of their Lordships approved Brown v Holloway, three preferred the earlier view of the Court of Appeal.

In Hall v Wilkins (1933) SR (NSW) 220

(FC), on an extraordinarily narrow view of what is ratio decidendi, the opinions expressed on the point by the majority

10

Earle v Kingscote [1900] 2 Ch 585 (CA). Another decision of the Court of Appeal not followed in a torts case was Hurst v Picture Theatres Ltd [1915] 1 KB 1, not followed as being "manifestly wrong" in Cowell v Rosehill Racecourse Co Ltd (1937) 56 CLR 605, Evatt J dissenting strongly.

11

Cuenod v Leslie [1909] 1 KB 880 (CA).

- 9. 9 -

in Edwards v Porter were said to be obiter and Brown v Holloway was followed.

The Full Court in Western Australia,

on the other hand, in Cross v Pederick (1937) 40 WALR 45, regarded these dicta as the considered opinion of the House of Lords, which had itself applied them in Greenwood v Martins Bank Ltd [1933] AC 51.

Being itself of the opinion that the

High Court would probably follow the later English cases in preference to its own previous decision, the Western Australian Full Court reversed the trial judge, who had followed Brown v Holloway.

Back in New South Wales, in

McCance v Maher (1957) 74 WN (NSW) 249, a district court judge held that he was bound by the Full Court in Hall v Wilkins to hold that what was said on the point in Edwards v Porter was obiter, but that Greenwood v Martins Bank had not been cited in that case and Piro v Foster required him to follow this later decision of the House of Lords.

Eventually, the

liability of the husband was abolished by statute everywhere.12

12

Married Persons (Property and Torts) Act 1901 (NSW), s 18 (inserted in 1964); Marriage Act 1958 (Vic), s 154; Law of Property Act 1936 (SA), s 84; Law Reform (Miscellaneous Provisions) Act 1941 (WA), s 2; Married Women's Property Act 1935 (Tas), s 13; Law Reform (Miscellaneous Provisions) Ord 1955 (ACT), s 9; Law Reform (Miscellaneous Provisions) Act 1956

- 10. 10 -

The position with regard to the English Court of Appeal was not so clear.

As we have seen, the High Court itself

would not always follow that Court.

Yet it was prepared to

reconsider and, if need be, overrule a previous decision of its own if a subsequent decision of the Court of Appeal seemed likely to settle the law in England, whether or not the High Court was convinced of the correctness of the Court of Appeal's decision and whether or not the Court of Appeal had taken into account the views of the High Court.13

Lower courts

probably did not have the responsibility even of considering the correctness of a Court of Appeal decision in the absence of contrary High Court or House of Lords authority.

They were

(NT), s 10. The Married Women's Property Act 1890 (Qld), s 3, was amended in 1943 so as to add a subsection (3) in similar terms to the Law Reform (Married Women and Tortfeasors) Act 1935 (UK), s 3, on which most of the Australian statutes were based. However, the whole of s 3 was repealed by the Married Women's (Restraint upon Anticipation) Act 1952 (Qld), but the effect of the amendment was preserved by s 2 of the latter Act "for the avoidance of doubt". 13

Sexton v Horton (1926) 38 CLR 240; Waghorn v Waghorn (1942) 65 CLR 289. For criticism, see Ross Parsons, op cit, 216-20.

- 11. 11 -

simply expected to follow it.

As late as 1975, Starke J in

the Victorian Full Court was able to say:

I cannot find, nor can I remember, nor have I been referred to any decision of the Court of Appeal that this Court has not followed except where the High Court or the House of Lords has expressed a contrary opinion.

In my

judgment a decision of the Court of Appeal should be departed from in this Court only in exceptional circumstances.14

14

Pratt v Pratt [1975] VR 378 (FC), 391. His Honour was contending for the adoption of the principle of Donnelly v Joyce [1974] 1 QB 454 (CA) that an injured plaintiff may recover as part of the damages the value of voluntary services provided by a relative. That principle was thought by the Court of Appeal in New South Wales in Gaydon v Public Transport Commission of NSW [1976] 2 NSWLR 44 to be inconsistent with two decisions of the High Court. Nevertheless, the principle was adopted soon afterwards by the High Court in Griffiths v Kerkemeyer (1977) 139 CLR 161. A non-torts case in which a single judge in Victoria indicated that he would have difficulty in adhering to the normal practice of following without hesitation a particular Court of Appeal decision, which in the end he distinguished, is Wood Radio Exchange v Marriott [1939] VLR 309; see at 314.

- 12. 12 -

In the same year, two members of the High Court castigated the New South Wales Supreme Court for not following the Court of Appeal's interpretation of similarly worded workers' compensation legislation so as to preclude an employer whose negligence had contributed to the employee's injury from recovering an indemnity from a negligent third party.15

The Privy Council, being at the time at the apex of the judicial hierarchy and entertaining appeals both from the High Court of Australia and direct from State Supreme Courts, of course, bound all courts in Australia.16

This applied to

15

Public Transport Commission of NSW v J Murray-More (NSW) Pty Ltd (1975) 132 CLR 336, 341 per Barwick CJ, 349 per Gibbs J. The latter was of the opinion that the judges of the Supreme Court should have treated the case in the Court of Appeal "as an authority binding on them".

16

There was never any question in Australia, as there might have been in England at the time, that after The Wagon Mound (No.1) [1961] AC 388 (PC) the test for remoteness of damage in tort was to be governed by "foreseeability", rather than the "direct consequences" rule of Re Polemis [1921] 3 KB 560 (CA), though difficulties of application remained: see eg Rowe v McCartney [1976] 2 NSWLR 72 (CA). The binding nature of Privy Council decisions, even for the High Court, was still acknowledged in 1972: Cooper v Southern Portland Cement Ltd (1972) 128 CLR 427, 438, 445 per Barwick CJ, 481 per Walsh J.

- 13. 13 -

decisions of the Privy Council on appeal from an Australian jurisdiction or any other where the common law was in force.17 A decision of the Privy Council in a case arising under a system of law other than the common law would, on the other hand, not be binding in Australia.

In Gartner v Kidman (1962)

108 CLR 12 it was held that this was so, even though the Privy Council had expressed the view that the law it was applying had been accepted into the common law.

Thus, the High Court

held that a lower proprietor is not liable in nuisance for erecting with reasonable care and skill barriers reasonably necessary for the protection of the lower land, though the effect is to pen back surface waters on upper-lying land. This was contrary to Gibbons v Lenfestey (1915) 84 LJ (PC) 158 on the law of Guernsey, where it had been said that even countries ruled by the common law had accepted the rules of

17

Eg Frazer v Walker [1967] 1 AC 569 (PC), on appeal from New Zealand, was regarded as binding in Mayer v Coe [1968] 2 NSWR 747, despite contrary views of the relevant law having previously been expressed in Australia. See also Breskvar v Wall (1971) 126 CLR 376; Morris v E S & A Bank Ltd (1957) 97 CLR 624.

- 14. 14 -

Roman law as to the flow of water.

A problem for the Australian courts arose where there was a conflict between decisions of the Privy Council and House of Lords.

This occurred at least twice.18

One such

conflict resulted from the rejection by the House of Lords in Duncan v Cammell Laird & Co Ltd [1942] AC 624 of the right of the court to inspect documents for which Crown privilege was claimed, as laid down in Robinson v State of South Australia (No 2) [1931] AC 704 (PC).

Although initially some Australian

courts applied Duncan,19 the view which prevailed was that they

18

Another possible conflict was in the area of occupiers' liability to trespassers. In Cooper v Southern Portland Cement Ltd (1972) 128 CLR 427 the majority of the High Court held that there was no conflict between Commissioner for Railways (NSW) v Quinlan [1964] AC 1054 (PC) and British Railways Board v Herrington [1972] AC 877 (HL) and that they were able to decide the case in accordance with the latter decision. Walsh J, however, reluctantly dissented, because he thought the two cases were irreconcilable and it was his duty to follow the Privy Council. The Privy Council itself upheld the decision of the majority: Southern Portland Cement Ltd v Cooper [1974] AC 623. For subsequent developments, see infra.

19

Eg Nash v Commissioner for Railways [1963] SR (NSW) 357 (FC), where Duncan's case was treated (at 363)

- 15. 15 -

were bound by Robinson.20

The other conflict was between

Colonial Bank of Australasia Ltd v Marshall [1906] AC 559 (PC) and London Joint Stock Bank Ltd v Macmillan [1918] AC 777 (HL) on the duty of care owed by a customer of a bank so to draw cheques as not to facilitate forgery.

The former, being

unfavourable to bankers, was ignored by the then leading Australian textbook on banking law.

Nevertheless, in Varker v

Commercial Banking Co of Sydney Ltd [1972] 2 NSWLR 967, 970-1 the judge regarded himself as bound by the decision of the Privy Council and the reasoning of the High Court whose decision it had affirmed, though able to consider opinions in the House of Lords which explained, but did not criticize it.21

"as a final statement of the law on the subject". 20

Bruce v Waldron [1963] VR 3 (FC); Ex parte Brown (1966) 67 SR (NSW) 1 (CA); see also Christie v Ford (1957) 2 FLR 202 (NT). English courts eventually came round to the same view of the law: Conway v Rimmer [1968] AC 910 (HL). This particular conflict between the Privy Council and the House of Lords and its ultimate resolution was foreshadowed shortly after Piro's case by Zelman Cowen, "The Binding Effect of English Decisions upon Australian Courts" (1944) 60 LQR 378. Cf Ross Parsons, op cit, 221.

21

In the later period the High Court, adopting Macmillan's case, overruled Marshall: Commonwealth Trading Bank of Australia v Sydney Wide Stores Pty

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Difficulty could also arise when lower courts were faced with an actual decision of the High Court and later reasoning in the Privy Council which seemed to be inconsistent therewith.

In Jacob v Utah Construction & Engineering Pty Ltd

(1966) 116 CLR 200 this occurred in relation to the question whether certain regulations, relied on by the plaintiff in an action for breach of statutory duty, were valid.

The High

Court had earlier held one of the regulations to be valid,22 but the Privy Council had cast some doubt on the decision in the course of interpreting another regulation made under the same Act.23

In the present case it was held that unless the

earlier decision of the High Court had been overruled by the Privy Council, or the High Court itself, it continued to be binding on the Supreme Court; it was not for the latter court to decide that a decision of the High Court precisely in point ought to be decided differently because of later, apparently

Ltd (1981) 148 CLR 304. 22

Australian Iron & Steel Ltd v Ryan (1957) 97 CLR 89.

23

Utah Construction and Engineering Pty Ltd v Pataky [1966] AC 629.

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inconsistent, reasoning in the Privy Council.

It would have

been different if the earlier decision had not been precisely in point and a comparison had to be made between two lines of reasoning.24

The change

The first indication of a change of attitude towards English precedent in the Australian courts came in a criminal case, Parker v The Queen (1963) 111 CLR 610, 632-3.

The

change was not, however, precipitated by any wish to assert independence or any recognition of a desirable new relationship between England and Australia.

On the contrary,

it was expressly said to be "unfortunate" and to have forced a "critical situation" in the relationship.

It resulted simply

from disagreement as to fundamental principles of the law.

24

See at 207 per Barwick CJ, at 217 per McTiernan, Taylor and Owen JJ. See also Rejfek v McElroy (1965) 112 CLR 517, which held that a decision of the High Court laying down the standard of proof of fraud in civil proceedings as being on a balance of probabilities was binding on lower courts, notwithstanding contrary obiter dicta in the Privy Council.

- 18. 18 -

The much-criticised decision of the House of Lords in DPP v Smith [1961] AC 290 was thought by Dixon CJ to constitute such an unwarranted departure from the fundamental principles that, though its application did not arise in the instant case, he gave notice that he could no longer adhere to the policy of following decisions of the House of Lords at the expense of the Court's own opinions and decisions.

Past expression of

the principles in Australia would in future be preferred to the holding in Smith's case.

All the members of the High

Court shared these views.

The occasion which for the first time led to the application of the

dicta in Parker's case was hardly one

going to the very essence of liability, either in criminal law or tort.

The courts had for centuries awarded damages for

pain and suffering, loss of amenities and other non-pecuniary loss, without any deep investigation of their rationale. Advances in medical skills and technology had brought about a situation in which injured persons who in the past would almost certainly have died were kept alive for lengthy periods without any apparent consciousness of their existence and

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without any ability to make use of any damages awarded to them.

Were awards of damages for non-pecuniary loss to be

made in such cases and, if so, at what sort of level? Windeyer J had addressed the problem, obiter, in Teubner v Humble (1963) 108 CLR 481, 506-7.

He was "not prepared to

accept the view that damages for loss of enjoyment, loss of amenities, can properly exceed any sum that the injured person can in any way enjoy or which can be used to provide him with comforts or amenities" (at 506).

This was inconsistent with

the view taken by a majority of the Court of Appeal in Wise v Kaye [1962] 1 QB 638, where very substantial damages were awarded.

Subsequently, a majority of the House of Lords in H

West & Son Ltd v Shephard [1964] AC 326 (HL) approved Wise v Kaye.

Trial judges in Australia disagreed as to whether they

should follow the dicta in Teubner v Humble or the decision in West v Shephard.25

25

In Skelton v Collins (1966) 115 CLR 94 a

In Hobbelen v Nunn [1965] Qd R 105 and Scutt v Bailey (No. 1) [1964] WAR 74 the judges held that they ought to follow the House of Lords; Windeyer J's dicta were preferred in Scutt v Bailey (No 2) [1964] WAR 81, Fowler v Fowler [1964] WAR 193 and Skelton v Collings [sic] [1965] WAR 90. Prior to West v Shephard , Australian courts had sometimes awarded substantial damages, sometimes not: see the cases cited in H Luntz, Assessment of Damages for Personal

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majority of the High Court disagreed with the majority in West v Shephard and held that, contrary to the opinions expressed in West v Shephard, the earlier House of Lords case of Benham v Gambling [1941] AC 157 - which was concerned with the assessment of compensation to the estate of an injured person who had died - required the award of a moderate conventional sum of damages in cases of "living death".

Windeyer J, "for

the sake of conformity..., but not from conviction", agreed to be guided by Benham v Gambling, the underlying assumptions of which he did not find easy to make (at 136).

Menzies J would

have followed West v Shephard, as he believed the lower court ought to have done (at 124).

Kitto, Taylor and Owen JJ all pointed out (at 104, 122 and 137-9 respectively) that opinions expressed in the House of Lords would continue to be accorded great respect by the High Court itself.

Lower courts were enjoined to follow

decisions of the House of Lords, unless there was a contrary decision of the Privy Council or the High Court directly in

Injury and Death (2nd ed, 1983), p 173 nn 1 and 2.

- 21. 21 -

point.26

The latter qualification reinstated the view that had

been taken in Houston v Stone (1943) 43 SR (NSW) 118 (FC) (see no 9, supra), which was expressly approved by Owen J (at 139).

Damages in tort again provided the occasion for the High Court not to follow the House of Lords later the same year.

This time the issue arose in the context of two

defamation actions and resulted in a challenge to the High Court's authority being carried to the Privy Council.

In Rookes v Barnard [1964] AC 1129 (HL) - a decision in which the House of Lords revived the tort of intimidation as a weapon for use in cases of industrial conflict - all their Lordships had concurred in an analysis by Lord Devlin at the

26

Unanimously, the High Court refused to follow Oliver v Ashman [1962] 2 QB 210 (CA) and Wise v Kaye [1962] 1 QB 638 (CA) on another point. It held that in assessing damages for loss of earning capacity in a case where the plaintiff's life expectation has been reduced, the relevant calculations are to be made over the period during which the plaintiff would have earned if the life-span had not been reduced. The House of Lords later came to the same conclusion: Pickett v British rail Engineering Ltd [1980] AC 136.

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end of his speech of the nature of damages awarded for deliberate wrongdoing by a defendant.

He held that damages

which in the past had been awarded in such cases could be divided into those which were compensatory, including compensation for the aggravation of the harm brought about by the deliberate nature of the defendant's conduct ("aggravated damages"), and those which were not, but were intended to punish and deter the defendant ("exemplary damages").

The

latter were an anomaly in a civil action and should be confined as far as possible.

In particular, they should not

be awarded in any case which did not fall into one of three categories, which authority and some element of policy compelled the House of Lords to continue to recognize as appropriate for the award of exemplary damages.

The

categories were: (i) "Oppressive, arbitrary and unconstitutional action by the servants of the government"; (ii) cases "in which the defendant's conduct has been calculated by him to make a profit for himself which may well exceed the compensation payable to the plaintiff"; and (iii) where "exemplary damages are expressly authorized by statute".

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Very shortly afterwards, a federal politician (and subsequent Minister) had sued two publishers in the Supreme Court of New South Wales in respect of various defamatory publications.

At the trials directions had been given to the

juries which included permission to award exemplary damages, though none of the publications could have come within the categories prescribed by Lord Devlin, at least if his words were narrowly construed. awarded.

Substantial damages had been

In appeals to the New South Wales Full Court, new

trials had been ordered, but differences of opinion had become manifest as to whether Rookes v Barnard should or should not have been followed.27

Appeals were then brought by the

plaintiff to the High Court against the orders for new trials and by the defendant in one action against such new trial being limited to damages.

In Uren v John Fairfax & Sons Pty

Ltd (1966) 117 CLR 118 and Australian Consolidated Press Ltd v Uren (1966) 117 CLR 185 the High Court unanimously decided

27

Uren v John Fairfax & Sons Pty Ltd (1965) 66 SR (NSW) 223; Uren v Australian Consolidated Press Ltd (1965) 66 SR (NSW) 271.

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that awards of exemplary damages in Australia should not be limited to the categories of case laid down in Rookes v Barnard.28

Although Windeyer J saw this as indicating "no

disrespect for the high authority of their Lordships' House, no breaking of the ties light as air", it was apparent that no longer would the desire for uniformity in the common law cause the High Court to modify its own opinions so as to accord with the definitive statement of the Law in England.29

By something of a procedural quirk, the successful appellant in the Australian Consolidated Press appeal carried the matter further.

The Privy Council held, however, that,

28

A majority held, however, that in none of the counts sued on in the Fairfax appeal was there any evidence justifying exemplary damages even in the wider circumstances in which the Court believed such damages had hitherto been available in Australia. A similar view, held unanimously, in respect of two of the counts in the Australian Consolidated Press appeal led to a majority order of a general new trial on all counts.

29

The Practice Statement by the House of Lords that it would no longer be bound by its own previous decisions (see [1966] 3 All ER 77) was given some seven weeks later. Whether the members of the High Court had any advance intimation of it is not known.

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prior to Rookes v Barnard, it had been accepted in Australia that exemplary damages were available in a wider range of circumstances than suggested in Rookes v Barnard; that this acceptance had not been based on any mistaken understandings or faulty reasoning; and that "in a sphere of the law where its policy calls for decision, and where its policy in a particular country is fashioned so largely by judicial opinion, it became a question for the High Court to decide whether the decision in Rookes v Barnard compelled a change in what was a well-settled approach in the law of libel in Australia".30

Ironically, the legislature in New South Wales

subsequently abolished exemplary damages in defamation actions31 and the Law Reform Commission recommended their

30

Australian Consolidated Press Ltd v Uren [1969] 1 AC 590, 644. See also Geelong Harbor Trust Commissioners v Gibbs Bright & Co [1974] AC 810 (PC), 820-1, approving the decision of a majority of the High Court ((1970) 122 CLR 504) to follow a previous decision of its own in preference to a later one of the House of Lords on whether legislation made the liability of a vessel for damage to a harbour installation dependent on fault.

31

Defamation Act 1974 (NSW), s 46. The difficulty of distinguishing between exemplary and aggravated damages, adverted to by Windeyer J in Uren v Fairfax (see (1966) 117 CLR 118, 149-52) remains: see Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225

- 26. 26 -

abolition in such actions throughout Australia,32 while Rookes v Barnard itself survived a challenge to its authority in the House of Lords.33

The High Court has twice since upheld awards

of exemplary damages.34

(CA). 32

(Australia) Law Reform Commission, Unfair Publication: Defamation and Privacy (ALRC Report No 11, 1979), para 263.

33

Broome v Cassell & Co Ltd [1972] AC 1027, where five of the seven members of the House held that Rookes v Barnard was correct and applied to defamation actions, but four of the seven upheld the particular award of exemplary damages as being within the second category.

34

In XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1985) 155 CLR 448 the High Court sustained the decision of the New South Wales Court of Appeal, contrary to dicta in Broome v Cassell, supra, that exemplary damages could be awarded against some, though not all, defendants and separate judgments be entered for different amounts in the same proceedings. (At an earlier stage of the proceedings, Caltex Oil (Australia) Pty Ltd v XL Petroleum Pty Ltd (1985) 155 CLR 72, the High Court, while recognizing by a majority the then continued existence of the possibility of appeals by different parties to the High Court and the Privy Council, emphasized the desirability of the appeal to the High Court being heard first so that the definitive law for Australia could be decided in Australia.) In Lamb v Cotogno (1987) 74 ALR 188 the High Court held that exemplary damages could still serve a useful purpose even where they would be paid by a

- 27. 27 -

The new situation

As has been shown, in assuming the liberty not to follow the House of Lords, the High Court directed lower courts no longer to prefer decisions of that tribunal to ones of its own directly in point, thereby reversing the instructions that had emanated from Piro v Foster.

On at

least two occasions in cases concerned with substantive liability in tort, Barwick CJ took the opportunity of emphasizing that the common law in Australia was no longer necessarily the same as the common law in England and could lend itself to indigenous development.35

His similar views in

a case on damages precipitated an episode in which the High Court by a narrow majority refused to follow the House of Lords and then rapidly, again by a narrow majority, reversed

compulsory motor vehicle insurer. 35

Mutual Life & Citizens' Assurance Co Ltd v Evatt (1968) 122 CLR 556, 563; Cooper v Southern Portland Cement Ltd (1972) 128 CLR 427, 438. Both these cases proceeded to the Privy Council, which decided them without reference to the point.

- 28. 28 -

itself and reinstated the coincidence between Australian and English Law.

In Atlas Tiles Ltd v Briers (1978) 144 CLR 202,

a wrongful dismissal action, three members of the High Court refused to apply British Transport Commission v Gourley [1956] AC 185 (HL), which required the damages to be calculated on the basis of earnings lost by the plaintiff after deduction of the income tax that would have been payable on the.

The

reasons of Barwick CJ and Murphy J clearly applied also to actions for personal injuries, as did those of the two dissentients, who held that tax had to be deducted.

Jacobs J,

the third member of the majority, adopted a compromise position with regard to personal injury claims, indicating that tax should be deducted in respect of past loss of earnings, but not in respect of future loss.

Lower courts

were obviously left in a quandary as to what to do.36

An

appeal was soon brought to the High Court in Cullen v Trappell (1980) 146 CLR 1, where by a majority of four to three the authority of Gourley's case in personal injury actions were fully reinstated in Australia.

36

See H Luntz, op cit, para 5.7.05, for their reactions.

- 29. 29 -

One of the difficulties faced by trial courts before Skelton v Collins was that there was no decision of the High Court on the assessment of damages for loss of amenities for unconscious plaintiffs, only the obiter dicta in Teubner v Humble.

What were lower courts to do when faced with a

decision of the House of Lords, but indications from elsewhere that that decision would not be followed?

In Brisbane v Cross [1978] VR 49 (FC), 51-2 the Chief Justice had no doubt that the Court should unquestionably follow Searle v Wallbank [1947] AC 341 (HL), unless the rule of immunity from liability in negligence for the occupier of land whose animal came on to a highway had not been received as part of the law of Victoria because it was incapable of application.

It was unanimously held that the history of

highways in Victoria did not make the rule incapable of application and Searle v Wallbank was therefore followed.37

37

Whether or not the rule was suitable to local circumstances has given rise to differences of opinion in different State courts, as mentioned in n 2, supra. The High Court itself, in Trigwell's case, later held that the rule was capable of

- 30. 30 -

In Seale v Perry [1982] VR 193 (FC) the question came up of the liability of a solicitor for negligence in supervising the execution of a will to persons other than the client, an issue that has arisen in numerous jurisdictions in recent years.

Two members of the Court held on principle that

no such liability existed.

McGarvie J agreed in the result.

He held that modern principles of negligence law would lead to liability, but he regarded himself as bound to deny liability because of a nineteenth century decision of the House of Lords, which he thought indistinguishable.38

Not long

application in South Australia and, by a majority, followed Searle v Wallbank, being of the opinion that any reform of the law was best left to legislatures, which had already been active in relation to the rule. In Kelly v Sweeney [1975] 2 NSWLR 720 (CA), while Hutley JA thought Searle v Wallbank binding but distinguishable, and Mahoney JA thought it binding and applicable, Samuels JA declined to follow it because it had been abrogated by statute in England and the reason for following decisions of the House of Lords - the maintenance of uniformity in the application and development of the common law - had thereby disappeared in this case (see at 735-6). 38

Robertson v Fleming (1861) 4 Macq 167. In England itself, in Ross v Caunters [1980] Ch 297, Megarry VC felt able to put aside this case as having been decided some 70 years before the emergence of

- 31. 31 -

afterwards his Honour's attitude changed.

In McKenna v

McKenna [1984] VR 665 (FC), 681 he expressed the opinion that the passage of years had altered the relationship between the Full Court of Victoria and the House of Lords.

"Having a duty

to declare and expound the law of Australia the Full Court should not bind itself by formula to apply decisions of the House of Lords which it regards as inconsistent with that law."

In accordance with this precept he declined to follow

the view of the majority of the House of Lords in Birkett v James [1978] AC 297 that in exercising a discretion to dismiss an action for want of prosecution it is not a relevant consideration whether the plaintiff has an effective remedy against the solicitor who had the conduct of the proceedings on the plaintiff's behalf.39

negligence as an independent tort in Donoghue v Stevenson [1932] AC 562 (HL). McGarvie J in Australia was not prepared to do so (see at 243-4). 39

Cf Horne v Chester & Fein Property Developments Pty Ltd [1987] VR 913, 916, in which Southwell J, without citing any later authority on the point than Public Transport Commission of NSW v J Murray-More (NSW) Pty Ltd (1975) 132 CLR 336, 341 per Barwick CJ, said that he would regard himself as bound to follow an indistinguishable decision of the House of Lords.

- 32. 32 -

A similar change in attitude is apparent in South Australia.

In 1979 in a criminal case King CJ, though

expressing some doubt about a particular decision of the House of Lords, stated the orthodox rule that it would ordinarily be followed unless there was clear High Court or Privy Council authority to the contrary.40

In 1986, however, when a

defendant landlord relied on the much criticized decision in Cavalier v Pope [1906] AC 428 (HL) in an attempt to escape liability in negligence to the child of a tenant for failure to repair a defective gas-stove let with the premises, the Chief Justice decided not to follow the decision.41

He

continued to see in decisions of the House of Lords uniquely persuasive authority, not as a vestigial survival of imperial authority, but because of a combination of two factors.

One

is the prestige attached to the ultimate court of appeal in great common law countries, which the House of Lords shared, in his view, with the Supreme Courts of the United States and

40

R v Thompson (1979) 22 SASR 12, 16-17.

41

Parker v South Australian Housing Trust (1986) 41 SASR 493 (FC).

- 33. 33 -

Canada.

The other "is the position which it occupies as the

ultimate court of appeal of the country in which the common law had its genesis and experienced its formative development".

He added that, since the abolition of appeals

to the Privy Council, similar persuasive force would doubtless be accorded to decisions of that body.42

Queensland, however, remains conservative.

In

Gillespie v Elliott [1987] 2 Qd R 509 the Full Court of that

42

See at 516. Prior J, though believing that it was possible to distinguish Cavalier v Pope on a number of grounds, also decided not to follow it as being incompatible with subsequent developments in the law of negligence. Olsson J did formally distinguish it, but was prepared to hold that, if he were wrong as to the grounds of distinction, the case should no longer be followed because its reasoning was outmoded. According to a note in (1986) 60 ALJ 410 a district court judge in New South Wales "was constrained to hold that the rule [in Cavalier v Pope] remained of binding authority", but he too was able to distinguish it. Earlier, in the High Court, Windeyer J had done likewise in Voli v Inglewood SC (1963) 110 CLR 74, with the use of one of his military metaphors, viz that "firmly entrenched positions may be outflanked" (at 91). (Sir Victor Windeyer was a distinguished army commander as well as a High Court Justice: see his Obituary in (1987) 61 ALJ 823.)

- 34. 34 -

State, in a case involving the limitation period for an action in tort against solicitors for negligence causing economic loss, regarded Pirelli General Cable Works Ltd v Oscar Faber & Partners [1983] 2 AC 1 (HL) as "authoritative", though it dealt with property damage.

They therefore followed two

English Court of Appeal decisions43 which are consistent with it, in preference to decisions of the Supreme Courts of Canada and California,44 which applied different principles.

The Full

Court made no real independent investigation of the merits of the different approaches, though one member did express regret at the result reached, which he regarded as unjust.

As pointed out above, members of the High Court in 1975 were still directing lower courts ordinarily to follow the English Court of Appeal.45

A problem in this regard arose in

43

Forster v Oughtred & Co [1982] 2 All ER 753 (CA); Baker v Ollard & Bentley (1982) 126 Sol J 593 (CA).

44

City of Kamloops v Nielsen [1984] 2 SCR 2 and Neel v Magana Olney Levy, Cathcart & Gelfand 491 P 2d 421 (1971) respectively.

45

Public (NSW) these those

Transport Commission of NSW Pty Ltd (1975) 132 CLR 336, statements which influenced in Brisbane v Cross, supra,

v J Murray-More 341, 349. It was judges such as to hold that a

- 35. 35 -

relation to actions by passengers in motor vehicles against the drivers of the vehicles, where, to the knowledge of the passengers, the drivers lacked the ordinary skill and competence to be expected of such drivers.

In Nettleship v

Weston [1971] 2 QB 691 (CA), an action by a driving-teacher against a learner driver, a majority of the Court had held that the standard of care did not vary according to the known lack of experience of the driver.

The majority expressly

rejected the principle espoused by Dixon J in Insurance Commissioner v Joyce (1948) 77 CLR 39, a case of drunken driving.46

Some courts thereupon followed Nettleship v Weston,

whereas others adhered to the principle put forward by Dixon J.47

In order to resolve the differences among State courts,

leave to appeal was given by the High Court against the

fortiori they should follow the House of Lords. 46

His Honour dissented on the facts of the case, holding that it had not been proved that the passenger had the necessary knowledge or appreciation of the driver's incompetence due to drink.

47

Cf eg Squire v David (1984) 2 MVR 476n with Chang v Chang [1973] 1 NSWLR 708 (CA). The point was left unresolved on the appeal to the High Court in the latter case, (1974) 48 ALJR 362.

- 36. 36 -

decision in Cook v Cook (1986) 41 SASR 1 (FC), where differing views were taken. Having held that in special and exceptional circumstances the relationship between a driver and passenger may fall into a category in which the standard of care or skill to be expected will be either expanded or confined, the High Court went out of its way to issue a definitive statement on precedent:

Cook v Cook (1986) 68 ALR 353.

Statements

requiring that in the absence of controlling authority State Supreme Courts should as a general rule follow decisions of the English Court of Appeal "should no longer be seen as binding upon Australian courts" (at 362-3).

Inevitably,

"assistance and guidance" would still come from the learning and reasoning of United Kingdom courts, just as from other great common law courts48.

48

But "the precedents of other legal

Cf Shaw v Donaldson (1988) 78 ACTR 1, where after noting that the High Court in Williams v The Queen (1986) 161 CLR 278 had taken a different view of the law of arrest from that taken by the House of Lords in Mohammed-Holgate v Duke [1984] AC 437, and considering some of the authorities on precedent referred to above, Gallop J nevertheless followed on a slightly different point an English Court of Appeal case which had been approved in MohammedHolgate v Duke.

- 37. 37 -

systems are not binding and are useful only to the degree of the persuasiveness of their reasoning".

One possible

qualification was left, but that only tentatively.

This

related to "the special position of decisions of the House of Lords given in the period in which appeals lay from this country to the Privy Council".

If decisions of the House of Lords do continue to enjoy a special status, making them akin to decisions which are binding because they emanate from a superior court in the same judicial hierarchy, that status terminated on the cessation of appeals from Australian courts to the Privy Council. Presumably, this means after appeals from State courts could no longer be brought.

Appeals to the Privy Council were

abolished in stages, first in matters of federal law, then in matters of State law which had been determined by the High Court and, finally, in matters which had been determined in State Supreme Courts.49

49

The last stage operated from 3 March

Privy Council (Limitation of Appeals) Act 1968 (Cth); Privy Council (Appeals from the High Court) Act 1975 (Cth); Australia Act 1986 (Cth and Imp), s 11.

- 38. 38 -

1986, but appeals instituted before that date continued to be heard until 27 July 1987.50

The relationship between the High Court and the Privy Council needs to be explored next.

The effect of the

abolition of the right to appeal to the Privy Council from the High Court itself was considered first in another criminal case concerned with a defence to a murder charge, Viro v R (1978) 141 CLR 88.

It was held that, the two courts no longer

being in the same judicial hierarchy, the High Court was not bound by decisions of the Privy Council and was free to prefer decisions of its own to conflicting decisions of the latter. Furthermore, just as it had reserved to itself the right to reconsider its own decisions, unlike the House of Lords from the late nineteenth century until 1966, it would be prepared to reconsider decisions of the Privy Council in determining what the law should be for Australia, thereby effectively exercising within Australia a power that the Privy Council had maintained.

50

See (1987) 61 ALJ 585.

- 39. 39 -

In L Shaddock & Associates Pty Ltd v Parramatta CC (1981) 150 CLR 225 an opportunity came for the High Court to flex the muscles it had developed in Viro.

In Mutual Life &

Citizens' Assurance Co Ltd v Evatt [1971] AC 793 the Privy Council, by a majority of three to two, had reversed a decision of the High Court, arrived at by a similar majority ((1968) 122 CLR 556).

The decision of the majority in the

Privy Council was seen as narrowing the circumstances in which, since Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 (HL), a duty of care was recognized as arising not to cause financial loss through negligent misstatement. The decision was extraordinary, as it involved, inter alia, an interpretation of words used by Lords Reid and Morris in the Hedley Byrne case and yet these were the very members of the Board of the Privy Council on this occasion who were the dissentients.

The decision of the majority was also much

criticized by academic commentators, while the dissent was said to be preferable in at least two decisions of the Court of Appeal in England.51

51

When Shaddock's case was before the

Howard Marine & Dredging Co Ltd v A Ogden & Sons

- 40. 40 -

New South Wales Court of Appeal, all three judges acknowledged that, despite "almost universal dissatisfaction both to courts and to the learned", the decision of the majority in the Privy Council in Evatt's case was binding until overruled by the High Court.52

Three members of the High Court thereupon did

overrule the majority of the Privy Council in Evatt and proceeded to reinstate the decision of the majority in the High Court in that case.53

The consequence is that in

(Excavations) Ltd [1978] QB 574 (CA), 591 per Lord Denning MR, 600 per Shaw LJ; Esso Petroleum Co Ltd v Mardon [1976] 1 QB 801 (CA), 827 per Ormrod J. 52

L Shaddock & Associates Pty Ltd v Parramatta CC [1979] 1 NSWLR 566 (CA), 571 per Moffitt P (who nevertheless felt able to distinguish the majority decision in Evatt in the Privy Council), 586 per Hutley JA (who cited some of the judicial and academic sources in which dissatisfaction was expressed), 601 per Mahoney JA ("Whatever be the position where the High Court and the Privy Council have, in different cases, adopted different principles, where that has occurred in the course of an appeal from the High Court to the Privy Council in a single proceeding, the principle formulated by the Privy Council should...be followed by this Court").

53

See L Shaddock & Associates Pty Ltd v Parramatta CC (1981) 150 CLR 225, 248-51 per Mason J (with whom Aickin J agreed), 256 per Murphy J. Gibbs CJ, while expressing some reservations about its reasoning, preferred merely to distinguish the judgment of the majority of the Privy Council in Evatt's case (at

- 41. 41 -

Australia - as probably also in England - a duty of care to avoid causing financial loss through negligent misstatement is not limited to persons who are in the business of giving such information and advice or who hold themselves out as having comparable skills or who have a financial interest in the transaction.

Such duty may arise whenever a person gives

information or advice to another on a serious matter in circumstances where the speaker realizes, or ought to realize, that he or she is being trusted to give the information or advice as a basis for action on the part of the other party and it is reasonable in the circumstances for the other party to act on that information or advice.54

234-5). 42). 54

Stephen J also distinguished it (at 239-

For a later statement by the High Court on the place of negligent misrepresentation in the law of negligence generally, see San Sebastian Pty Ltd v Minister administering the Environmental Planning and Assessment Act 1979 (1986) 68 ALR 161. On the question of precedent, cf Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd (1986) 66 ALR 29, where the High Court by a majority of three to two followed Fowles v Eastern & Australian Steamship Co Ltd [1916] 2 AC 556 (PC) in holding that the general employer of a pilot is not liable for the pilot's negligence while a ship is subject to compulsory pilotage. The majority was more influenced by the length of time that the precedent had stood than by

- 42. 42 -

During the period from 1975 - when appeals from the High Court to the Privy Council were abolished - until 1986 when all new appeals ceased from Australian courts to the Privy Council - State courts continued to be in alternative judicial hierarchies.

At the apex of one was the High Court;

the ultimate court of appeal in the other was the Privy Council.

State courts could thus find themselves bound by

conflicting decisions.

Various dicta in Viro expressed

concern that this situation should not arise; but favoured an Australian preference if it did,55 though some would have countenanced some qualification, such as a State court not following an old High Court decision expressly rejected by the Privy Council, while others declined to direct State courts at all.

The issue seems not to have arisen until after all

appeals to the Privy Council were abolished, in which case, as we shall see, State Supreme Courts saw their obligation as

the status of the court which decided it. 55

See at 93-4 per Barwick CJ; 118-21 per Gibbs J; 130-2 per Stephen J; 135-7 per Mason J; 150-1 per Jacobs J; 159-67 per Murphy J; 172-6 per Aickin J.

- 43. 43 -

being primarily towards the High Court, the Privy Council no longer being a superior court in the same judicial hierarchy.

The potentiality for conflict was to be found in Caltex Oil (Australia) Pty Ltd v The Dredge "Willemstad" (1976) 136 CLR 529 and Candlewood Navigation Corporation Ltd v Mitsui OSK Lines Ltd [1986] AC 1 (PC).56

In the former the High Court,

for the first time in Australia or England,57 recognized liability for the negligent infliction of pure economic loss outside the area of negligent misstatement.

Although the

House of Lords briefly flirted with such liability in Junior

56

See Sir Harry Gibbs "The State of the Australian Judicature" (1985) 59 ALJ 522, 524-5. His Honour noted that the potentiality of further such conflicts had been exacerbated by the increase in the number of appeals from State courts to the Privy Council. This was due to lack of confidence by litigants that the High Court would grant leave to appeal, the right of appeal in cases above a monetary threshold having been removed by an amendment to the Judiciary Act 1903 (Cth) in 1984.

57

Morrison SS Co v Greystoke Castle [1947] AC 265 (HL) is an exception, usually regarded as dependent on maritime law, though it contains dicta of wider applicability.

- 44. 44 -

Books Ltd v Veitchi Co Ltd [1983] 2 AC 520, English courts rapidly retreated to the earlier position which excluded all such liability.58

In the Candlewood case the Privy Council, on

appeal from the Supreme Court of New South Wales, could discern no ratio decidendi in the five judgments of the High Court in the Caltex case, treated the actual result as merely stating an anomalous exception, and reaffirmed the exclusionary rule.59

In Hawkins v Clayton (1986) 5 NSWLR 109 (CA) the

58

Eg Tate & Lyle Food & Distribution Ltd v Greater London Council [1983] 2 AC 509 (HL); Muirhead v Industrial Tank Specialists Ltd [1986] QB 507 (CA); Leigh & Sillavan Ltd v Aliakmon Shipping Co Ltd [1986] AC 785 (HL); Curran v Northern Ireland Coownership Housing Association Ltd [1987] AC 718 (HL); Simaan General Contracting v Pilkington Glass Ltd (No 2) [1988] 1 All ER 791 (CA). An exception remains the decision at first instance in Ross v Caunters [1980] Ch 297.

59

In two later cases the Privy Council on appeal from Hong Kong has refused to impose liability for negligent conduct resulting in pure economic loss: Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1980] AC 80; Yuen Kun Yeu v A-G of Hong Kong [1988] AC 175. See also the appeal from New Zealand in Takaro Properties Ltd v Rowling [1988] 1 All ER 163 (PC).

- 45. 45 -

majority of the Court avoided any such conflict by holding that, even if liability could arise in the particular circumstances of the case - alleged negligence by a solicitor in failing to notify the executor of a will in the solicitor's possession of the death of the testator - the limitation period had run.60

McHugh JA, who dissented, necessarily dealt

with the effect of the Privy Council decision (at 136-7). Acknowledging the correctness of the Privy Council's view that there is no single ratio in Caltex, he nevertheless thought it the duty of Australian courts to apply statements of principle to be found in the judgments of the High Court.

Since the

Privy Council had been removed entirely from the structure of the administration of justice in Australia, he thought that none of its decisions had any binding effect.

The High Court

itself was no longer bound by decisions of the Privy Council, even those given at a time when appeals lay from the High Court to that body (as Shaddock demonstrates); logically, he said, no Australian court remained bound.

60

That did not mean

An appeal to the High Court was successful: (1988) 78 ALR 69. However, the issue of precedent was not adverted to, both Caltex and Candlewood being ignored in the judgments.

- 46. 46 -

that a lower court would lightly depart from a decision of the Privy Council, particularly a court at first instance.61

That an Australian court is no longer bound by a decision of the Privy Council was reaffirmed unanimously by the Court of Appeal in New South Wales in Westpac Banking Corporation v Metlej (1987) Aust Torts Reps 80-102.

It was

there said that Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1980] AC 80 (PC) would become a precedent binding on the Court of Appeal "if the High Court says so, and not

61

The President of the Court of Appeal in New South Wales has noted that, except where the High Court gives special leave to appeal, that Court is now the final court of appeal for the State: A A Tegel Pty Ltd v Madden (1985) 2 NSWLR 591 (CA), 601. This, he said, should lead the Court to show greater willingness to review its own previous decisions and to depart from them if satisfied that they were wrong (which could include the need to adapt the law to changed social circumstances; but cf SGIC v Trigwell, (1978) 142 CLR 617, 623 per Barwick CJ). This reasoning would apply to the appellate benches of all State Supreme Courts (cf Britten v Alpogut [1987] VR 929 (FC), 939 per Fullagar J). It remains to be seen whether it is applied also to review by appellate State courts of Privy Council decisions, or whether they may expect the High Court to grant leave to appeal whenever a Privy Council decision is seriously challenged.

- 47. 47 -

otherwise".

Although the Court recognized the force of

criticism of the narrowness of the duty of care which the Tai Hing case places on the customer of a bank, it also acknowledged that there might be reasons why a court would not want to disturb an understanding of the law which had long been acted on.

In the end it held that on the facts of the

present case it was unnecessary to rule on the law as laid down in Tai Hing. Earlier, in Baltinos v Foreign Language Publications Pty Ltd (1986) 6 NSWLR 85 Hunt J held himself bound to apply Lloyd v David Syme & Co Ltd [1986] 1 AC 350 (PC), which had upheld the dissenting judgment of Priestley JA in the New South Wales Court of Appeal in David Syme & Co Ltd v Lloyd [1984] 3 NSWLR 346. This latter judgment was based on certain obiter dicta in the High Court in Lee v Wilson (1934) 51 CLR 276 relating to the relevance of the defendant's intention to the issue of identification in a defamation action, which Hunt J thought were wrong. Since there was no actual High Court authority to the contrary, the judge held that he had to follow the Privy Council decision. This must still remain the case for a judge at first instance, at least where the Privy

- 48. 48 -

Council appeal emanated from that particular jurisdiction. Yet in Parramatta CC v Lutz (1988) Aust Torts Reps 80-159 the New South Wales Court of Appeal, reiterating that Australian courts are no longer bound by "foreign" precedents, said that trial judges in that State are bound only by its own decisions (and presumably those of its predecessor, the Full Court) and those of the High Court.62

It is now clear that some63 Australian courts will be

62

The question of precedent arose in the context of the measure of damages for damage to real property: reinstatement cost or cost of repair? The decision to hold a local authority liable for damage to neighbouring property resulting from failure to exercise powers in respect of a derelict building makes an interesting contrast with Smith v Littlewoods Organization Ltd [1987] AC 241 (HL).

63

Again, Queensland has proved to be conservative. The Full Court there refused to reconsider the rule that a wife has no action to recover for loss of consortium or other loss from a tortfeasor who injured her husband: Grigg v Harris (1987) Aust Torts Reps 80-134; sub nom Harris v Grigg 5 MVR 201.

- 49. 49 -

willing to entertain challenges even to long-standing doctrines of the common law as developed in England.

In Swan

v Williams (Demolition) Pty Ltd (1987) 9 NSWLR 172 the New South Wales Court of Appeal heard such a challenge to the rule in Baker v Bolton (1808) 1 Camp 493 that "[i]n a civil court, the death of a human being could not be complained of as an injury".

In the end the challenge failed, but, so far as

concerned Priestley and McHugh JJA, seemingly only because two members of the three-judge bench of the High Court in Woolworths Ltd v Crotty (1942) 66 CLR 603 had accepted the rule as a necessary part of their decision.

Perhaps the clearest illustration of the new attitude is to be found in the High Court's approach to occupiers' liability.

In 1932, in Lipman v Clendinnen (1932) 46 CLR 550,

Dixon J had given a classic exposition of "the English law", with never a hint that Australian law could be any different. Having referred to two exceptions, he observed (at 555) that a person "who enters on land occupied by another does so in one or other of three characters", viz trespasser, licensee or invitee.

"The separation is absolute between these three

- 50. 50 -

classes, which are mutually exclusive.

A different duty is

incurred by an occupier to each class, and these various duties are not to be confused or assimilated" (ibid).

Fifty-

five years later, in Australian Safeway Stores Pty Ltd v Zaluzna (1987) 69 ALR 615, the High Court (Brennan J dissenting) swept away the separate measures of duty owed by occupiers of land to different categories of entrant.

The

majority saw it as consistent with the trend of recent decisions of the Court in the area of occupiers' liability and negligence generally64 to simplify the operation of the law.

64

This trend manifests the subsumption of the whole law of negligence under the statement of principle contained in Lord Atkin's "neighbour dictum" in Donoghue v Stevenson [1932] AC 562 (HL), 580. It recognizes that reasonable foreseeability of harm is a necessary, but not sufficient requirement for a duty of care to arise. It emphasizes the need for "proximity" between plaintiff and defendant, a concept which allows factors such as the nature of the loss (eg physical damage or pure economic loss) or conduct (eg act or omission) to be taken into account by the court. The approach of the court towards a novel situation involves induction and deduction, as well as policy and is akin to the traditional one described by Lord Devlin in Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 (HL), 524-5, and Lord Diplock in Dorset Yacht Co Ltd v Home Office [1970] AC 1004 (HL), 1058-60. Members of the High Court have expressly rejected Lord Wilberforce's well-known two-stage approach in Anns v Merton London BC [1978] AC 728 (HL), 751-2 (as,

- 51. 51 -

They gave approval to a passage of Deane J in Hackshaw v Shaw (1984) 155 CLR 614, 662-3, which included the following:

All that is necessary [in an action in negligence against an occupier] is to determine whether, in all the relevant circumstances including the fact of the defendant's occupation of premises and the manner of the plaintiff's entry upon them, the defendant owed a duty of care under ordinary principles of negligence....

The measure of the

indeed, have members of the House of Lords and Privy Council: eg Governors of Peabody Donation Fund v Sir Lindsay Parkinson & Co Ltd [1985] AC 210 (HL) and Yuen Kun Yeu v A-G of Hong Kong [1988] AC 175 (PC)). The modern approach of the High Court is to be found in Jaensch v Coffey (1984) 155 CLR 549 (on nervous shock, where the same result was reached as in McLoughlin v O'Brien [1983] 1 AC 410 (HL), but the Court making it clear that it was doing so independently); Sutherland SC v Heyman (1985) 157 CLR 424 (on the duty of a local council in inspecting a house under construction, where a contrary result to that in Anns was reached); San Sebastian Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 (1986) 68 ALR 161 (on the duty of a local council in relation to developers relying on a planning scheme); Cook v Cook, supra; Hawkins v Clayton (1988) 78 ALR 69 (on the liability of a solicitor who has custody of a will for failing to take reasonable steps to find the executor).

- 52. 52 -

discharge of the duty is what a reasonable man would, in the circumstances, do by way of response to the foreseeable risk.

It is not necessary in this essay to trace in detail the history of the High Court's earlier attempts to break out of the narrow confines of the rigid standards of care laid down in nineteenth and early twentieth century England for occupiers towards the different categories of entrant.

This

was done through the development of so-called concurrent or co-existing duties, a concept which was resurrected more than once after its rejection, at least in particular circumstances, by the Privy Council.65

Brennan J's dissenting

judgment in Zaluzna demonstrates how previously the abolition of the special standards of care appropriate for occupiers to show towards different entrants had not won general acceptance in the High Court.

One can only speculate how far the

majority were influenced by belated moves on the part of

65

The cases are comprehensively surveyed in the judgment of Deane J in Hackshaw v Shaw (1984) 155 CLR 614.

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legislatures to adopt or extend the Occupiers' Liability Act 1957 (Eng).66

Deane J alone referred (in Hackshaw at 659) to

social conditions, particularly in Australia, which made a change in the law desirable:

...the...formulae defining an occupier's liability to a visitor by reference to rigid distinctions between invitee, licensee and trespasser may have seemed appropriate to a social structure based largely on land holdings, particularly in the context of a heritage tracing back to feudal times.

They were, however, simply

inadequate for the requirements of justice in a modern industrialized urban society where the boundary between invitee, licensee and trespasser is likely to be at best blurred and where the trespasser may be unconscious of any wrong-doing or on an errand of mercy while the confidence man or thief may enter in the guise of an invitee....

66

It was never appropriate even to the rural

Wrongs ACt 1968 (Vic), Pt IIA (inserted in 1983); Occupiers' Liability Act 1985 (WA); Wrongs Act 1936 (SA), Pt IB (inserted in 1987).

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parts of this country where the size of land holdings, the comparative unproductiveness of land and local attitudes are liable to make both "occupation" of land and the notion that a wayfarer or visitor who is not an invitee or a licensee is a trespasser somewhat unreal and where there remain significant areas in which it would be more than somewhat unreal and quite unjust to determine the existence and content of a duty of care by reference to whether an Aboriginal plaintiff, to whom notions of personal ownership of occupation by others of particular parts of his communal environment are likely to be culturally incongruous, came upon land which might lie within his inherited spiritual custodianship as "invitee", "licensee" or "trespasser".

Factors such as these make it inevitable that the common law of Australia, as developed and adapted by Australian courts, will draw increasingly away from the common law of England in which its roots were located. amendments of the law will accelerate the trend.

Statutory At one time

in Australia's history such amendments were frequently based

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slavishly on English legislation.67

No longer is this so.

But

that is another story!

67

G Paton (ed), The Commonwealth of Australia: The Development of its Laws and Constitution (1952), p 15 n 44, claims that "[o]ne legislature in adopting the English Sale of Goods Act solemnly enacted the section which stated that the Act was not to apply to Scotland". Since the Sale of Goods Act 1893 (UK) was applicable to Scotland, the story seems apocryphal.

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THROWING OFF THE CHAINS: ENGLISH PRECEDENT AND THE LAW OF TORTS IN AUSTRALIA by HAROLD LUNTZ*

Introduction The English Law of Torts was brought to Australia with the early colonists.

Few, if any, of its principles would

have been unsuitable68 for application in the infant colonies, but, even if some were, they would have been attracted as the

68

The test for whether a principle is "unsuitable" is whether it can be applied, not whether or not it is beneficial: Delohery v Permanent Trustee Co of NSW (1904) 1 CLR 283, 310-11. Note the holding in Gartner v Kidman (1962) 108 CLR 12,23, that despite the very different conditions of settlement, climate and geography, the body of customary law relating to rights and obligations in respect of the flow of water which was developed in England applied in Australia.

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colonies developed.69

Until recently the Australian courts

looked upon the courts of England as the authoritative expositors of the common law, applicable in England and Australia alike.

Thus, as we approached the last quarter

century of the Bicentennial period, courts at every level in Australia regarded themselves as bound to follow decisions of the House of Lords.

Decisions of the Court of Appeal in

England, too, were accorded high status, being ordinarily followed by all courts other than the High Court, which itself would not normally depart from such decisions in most areas of the law.

69

See generally Alex C Castles, "The Reception and Status of English Law in Australia" (1963) 2 Adel L Rev 1, 4-11; Dugan v Mirror Newspapers Ltd (1978) 142 CLR 583, 589-91 per Gibbs J; State Government Insurance Commission v Trigwell (1979) 142 CLR 617, 625-7 per Gibbs J, 634-5 per Mason J. The view taken in Jones v McIntyre [1973] Tas SR 1 and Thomson v Nix [1976] WAR 141 (FC) that the rule in Searle v Wallbank [1947] AC 341 (HL) was not relevant to Tasmania and Western Australia respectively because of local circumstances must be regarded as very doubtful, since the contrary was held in New South Wales (Kelly v Sweeney [1975] 2 NSWLR 720 (CA)), Victoria (Brisbane v Cross [1978] VR 49 (FC)) and South Australia (SGIC v Trigwell, supra, upholding the decision in Bagshaw v Taylor (1978) 18 SASR 564 (FC)).

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From 1964 to 1987 pronouncements of the High Court of Australia have steadily removed these fetters, first from the High Court itself and then from lower courts in the Australian hierarchy.

Similarly, during this period the binding nature

of decisions of the alter ego of the House of Lords, the Privy Council, has been relaxed in relation to the High Court and to some extent, at least, in relation to other courts.

Courts

will not sometimes display a willingness to question longstanding rules of the common law.

There are, however, limits

- presently somewhat ill-defined - to when a court will overturn a settled doctrine that emanates from England.

This

essay sets out to illustrate the changes that have occurred by reference to cases on torts, which have often been in the forefront of the movement.

It does not purport to offer any

kind of constitutional or jurisprudential analysis of the theory of precedent.

The position before the change

Until the change of attitude to be illustrated below,

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Australian courts at all levels gave effect to the dictum of the Privy Council in Trimble v Hill (1879) 5 App Cas 342, 345, that "it is of the utmost importance that in all parts of the Empire where English law prevails, the interpretation of that law by the courts should be as nearly as possible the same".70 Although in Robins v National Trust Co [1927] AC 515 (PC), 519, Viscount Dunedin observed that "when an appellate court in a colony71 which is regulated by English law differs from an appellate court in England, it is not right to assume that the colonial court is wrong", his Lordship went on to state:

It is otherwise if the authority in England is that of the House of Lords.

That is the supreme tribunal to

settle English law, and that being settled, the colonial court, which is bound by English law, is bound to follow

70

See eg Waghorn v Waghorn (1942) 65 CLR 289, 292 per Rich J; and see particularly the view of Dixon J in this case at 297-9, where earlier cases are discussed.

71

The course of the judgment indicates that "our great Dominions" were included among the colonies for this purpose.

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it.72

While denying that technically it could be bound by a decision of the House of Lords - a court in a different judicial hierarchy - the High Court of Australia nevertheless applied the substance of this statement in Piro v W Foster & Co Ltd (1943) 68 CLR 313.

This was an action for damages for

personal injury sustained as a result of breach of a statutory duty to fence dangerous machinery.

The issue of law which was

raised was whether contributory negligence on the part of the injured worker could constitute a defence to the action.

In

Bourke v Butterfield & Lewis Ltd (1926) 38 CLR 354 the High Court had unanimously decided that the defence was not available in such an action.

However, in Caswell v Powell

Duffryn Associated Collieries Ltd [1940] AC 152, the House of Lords had disagreed with the view of the law taken in Bourke v Butterfield, holding that contributory negligence, if made out, would provide a defence.73

In Piro v Foster the High

72

He added that the point of difference might equally be settled so far as the colonial court was concerned by a judgment of the Privy Council.

73

On the facts it was held, that when due allowance was

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Court held that it should defer to the House of Lords.74

made for the noise and bustle of the place of work and other factors associated with the nature of the work, contributory negligence had not been established. Shortly afterwards, in Lewis v Denye [1940] AC 921, the House of Lords, Lord Atkin Dubitante, found a factual situation in which it applied the view of the law it had taken in Caswell's case so as to deny the plaintiff's claim. 74

On the facts a majority of the High Court held that, as in Caswell's case, the defence failed in the particular circumstances of the case. Shortly afterwards, the legislature in New South Wales restored the effect of the decision in Bourke v Butterfield in that State by the Statutory Duties (Contributory Negligence) Act 1945 (NSW), the operation of which was preserved even after the enactment of general legislation providing for the apportionment of damages instead of a complete defence in cases of contributory negligence: Law Reform (Miscellaneous Provisions) Act 1965 (NSW), s 7. Although Bourke v Butterfield was decided on appeal from New South Wales and Piro v Foster on appeal from South Australia, there was never any doubt that the latter decision applied in New South Wales until abrogated by the legislation. Whether or not the High Court was at the time right in recognizing only one common law for "the Empire", no one today would seek to deny that the common law throughout the Commonwealth of Australia is uniform and that any differences that emerge at State court level are appropriately resolved by the High Court, whatever jurisdiction the particular appeal comes from: cf n 2, supra. Instances of the High Court settling differences among State courts in recent years are Evans v Muller (1985) 15 CLR 117, on the deductibility of unemployment benefits in the assessment of damages for loss of earning capacity, and Todorovic v Waller (1981) 150 CLR 402, on the

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Latham CJ said (at 320):

...it should now be formally decided that it will be a wise general rule of practice that in cases of clear conflict between a decision of the House of Lords and of the High Court, this Court, and other courts in Australia, should follow a decision of the House of Lords upon matters of general legal principle.75

It was emphasized that lower courts should not, in case of conflict between decisions of the House of Lords and the High Court, follow the latter, leaving it to the High Court itself to decide whether to overrule its own previous decision.

To

short-circuit the procedure, lower courts should follow the

discount rate to be applied in the assessment of damages for future loss. 75

See also Rich J at 325-6, Starke J at 326, McTiernan J at 335-6, Williams J at 340-2. The dicta are unsympathetically analysed by Ross Parsons, "English Precedents in Australian Courts" (1948-50) 1 U of WA Ann L Rev 211, 212-16.

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House of Lords.76

This view gave rise to a curious little episode with regard to the liability of a husband for his wife's torts.

In

Brown v Holloway (1909) 10 CLR 89 the High Court had declined to follow a Court of Appeal decision which had held that even after the married women's property legislation, a husband could be joined in an action against the wife and so be made liable for his wife's torts.77

The High Court felt at liberty

not to follow the Court of Appeal because the decision had

76

This was contrary to what had been done in Houston v Stone (1943) 43 SR (NSW) 118 (FC). There it was held (at 123) that it was the Court's duty to follow the High Court in Bourke v Butterfield and so to exclude contributory negligence as a defence to a count for breach of statutory duty, notwithstanding the decisions of the House of Lords in Caswell v Powell Duffyn Collieries and Lewis v Denye. It was said to make no difference that the House of Lords had given express consideration to the High Court's decision and rejected it.

77

Earle v Kingscote [1900] 2 Ch 585 (CA). Another decision of the Court of Appeal not followed in a torts case was Hurst v Picture Theatres Ltd [1915] 1 KB 1, not followed as being "manifestly wrong" in Cowell v Rosehill Racecourse Co Ltd (1937) 56 CLR 605, Evatt J dissenting strongly.

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been doubted in a later Court of Appeal decision,78 in which one of the Lords Justices, though acknowledging that he was bound by the earlier case, criticized it in terms which the High Court found convincing.

Subsequently, in Edwards v

Porter [1925] AC 1 (HL), though two of their Lordships approved Brown v Holloway, three preferred the earlier view of the Court of Appeal.

In Hall v Wilkins (1933) SR (NSW) 220

(FC), on an extraordinarily narrow view of what is ratio decidendi, the opinions expressed on the point by the majority in Edwards v Porter were said to be obiter and Brown v Holloway was followed.

The Full Court in Western Australia,

on the other hand, in Cross v Pederick (1937) 40 WALR 45, regarded these dicta as the considered opinion of the House of Lords, which had itself applied them in Greenwood v Martins Bank Ltd [1933] AC 51.

Being itself of the opinion that the

High Court would probably follow the later English cases in preference to its own previous decision, the Western Australian Full Court reversed the trial judge, who had followed Brown v Holloway.

78

Back in New South Wales, in

Cuenod v Leslie [1909] 1 KB 880 (CA).

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McCance v Maher (1957) 74 WN (NSW) 249, a district court judge held that he was bound by the Full Court in Hall v Wilkins to hold that what was said on the point in Edwards v Porter was obiter, but that Greenwood v Martins bank had not been cited in that case and Piro v Foster required him to follow this later decision of the House of Lords.

Eventually, the

liability of the husband was abolished by statute everywhere.79

The position with regard to the English Court of Appeal was not so clear.

As we have seen, the High Court itself

would not always follow that Court.

79

Yet it was prepared to

Married Persons (Property and Torts) Act 1901 (NSW), s 18 (inserted in 1964); Marriage Act 1958 (Vic), s 154; Law of Property Act 1936 (SA), s 84; Law REform (Miscellaneous Provisions Act 1941 (WA), s 2; Married Women's Property Act 1935 (Tas), s 13; Law Reform (MIscellaneous Provisions) Ord 1955 (ACT), s 9; Law Reform (Miscellaneous Provisions) Act 1956 (NT), s 10. The Married Women's Property Act 1890 (Qld), s 3, was amended in 1943 so as to add a subsection (3) in similar terms to the Law Reform (Married Women and Tortfeasors) Act 1935 (UK), s 3 on which most of the Australian statutes were based. However, the whole of s 3 was repealed by the Married Women's (Restraint upon Anticipation) Act 1952 (Qld), but the effect of the amendment was preserved by s 2 of the latter Act "for the avoidance of doubt".

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reconsider and, if need be, overrule a previous decision of its own if a subsequent decision of the Court of Appeal seemed likely to settle the law in England, whether or not the High Court was convinced of the correctness of the Court of Appeal's decision and whether or not the Court of Appeal had taken into account the views of the High Court.80

Lower courts

probably did not have the responsibility even of considering the correctness of a Court of Appeal decision in the absence of contrary High Court of House of Lords authority. simply expected to follow it.

They were

As late in 1975 Starke J in the

Victorian Full Court was able to say:

I cannot find, nor can I remember, nor have I been referred to any decision of the Court of Appeal that this Court has not followed except where the High Court or the House of Lords has expressed a contrary opinion.

In my

judgment a decision of the Court of Appeal should be departed from in this Court only in exceptional

80

Sexton v Horton (1926) 38 CLR 240; Waghorn v Waghorn (1942) 65 CLR 289. For criticism, see Ross Parsons, op cit, 216-20.

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circumstances.81

In the same year, two members of the High Court castigated the New South Wales Supreme Court for not following the Court of Appeal's interpretation of similarly worded workers' compensation legislation so as to preclude an employer whose negligence had contributed to the employee's injury from recovering an indemnity from a negligent third party.82

81

Pratt v Pratt [1975] VR 378 (FC), 391. His Honour was contending for the adoption of the principle of Donnelly v Joyce [1974] 1 QB 454 (CA) that an injured plaintiff may recover as part of the damages the value of voluntary services provided by a relative. That principle was thought by the Court of Appeal in New South Wales in Gaydon v Public Transport Commission of NSW [1976] 2 NSWLR 44 to be inconsistent with two decisions of the High Court. Nevertheless, the principle was adopted soon afterwards by the High Court in Griffiths v Kerkemeyer (1977) 139 CLR 161. A non-torts case in which a single judge in Victoria indicated that he would have difficulty in adhering to the normal practice of following without hesitation a particular Court of Appeal decision, which in the end he distinguished, is Wood Radio Exchange v Marriott [1939] VLR 309; see at 314.

82

Public Transport Commission of NSW v J Murray-More (NSW) Pty Ltd (1975) 132 CLR 336, 341 per Barwick CJ, 349 per Gibbs J. The latter was of the opinion that the judges of the Supreme Court should have treated the case in the Court of Appeal "an

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The Privy Council, being at the time at the apex of the judicial hierarchy and entertaining appeals both from the High Court of Australia and direct from State Supreme Courts, of course, bound all courts in Australia.83

This applied to

decisions of the Privy Council on appeal from an Australian jurisdiction or any other where the common law was in force.84 A decision of the Privy Council in a case arising under a

authority binding on them". 83

There was never any question in Australia, as there might have been in England at the time, that after The Wagon Mound (No.1) [1961] AC 388 (PC) the test for remoteness of damage in tort was to be governed by "foreseeability", rather than the "direct consequences" rule of Re Polemis [1921] 3 KB 560 (CA), though difficulties of application remained: see eg Rowe v McCartney [1976] 2 NSWLR 72 (CA). The binding nature of Privy council decisions, even for the High Court, was still acknowledged in 1972: Cooper v Southern Portland Cement Ltd (1972) 128 CLR 427, 438, 445 per Barwick CJ, 481 per Walsh J.

84

Eg Frazer v Walker [1967] 1 AC 569, on appeal from New Zealand, was regarded as binding in Mayer v Coe [1968] 2 NSWR 747, despite contrary views of the relevant law having previously been expressed in Australia. See also Breskvar v Wall (1971) 126 CLR 376; Morris v ES & A Bank Ltd (1957) 97 CLR 624.

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system of law other than the common law would, on the other hand, not be binding in Australia.

In Gartner v Kidman (1962)

108 CLR 12 it was held that this was so, even though the Privy Council had expressed the view that the law it was applying had been accepted into the common law.

Thus, the High Court

held that a lower proprietor is not liable in nuisance for erecting with reasonable care and skill barriers reasonably necessary for the protection of the lower land, though the effect is to pen back surface waters on upper-lying land. This was contrary to Gibbons v Lenfestey (1915) 84 LJ (PC) 158 on the law of Guernsey, where it had been said that even countries ruled by the common law had accepted the rules of Roman law as to the flow of water.

A problem for the Australian courts arose where there was a conflict between decisions of the Privy Council and House of Lords.

85

This occurred at least twice.85

One such

Another possible conflict was in the area of occupiers' liability to trespassers. In Cooper v Southern Portland Cement Ltd (1972) 128 CLR 427 the majority of the High Court held that there was no conflict between Commissioner for Railways (NSW) v Quinlan [1964] AC 1054 (PC) and British Railways Board v Herrington [1972] AC 877 (HL) and that they

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conflict resulted from the rejection by the House of Lords in Duncan v Cammell Laird & Co Ltd [1942] AC 624 of the right of the court to inspect documents for which Crown privilege was claimed, as laid down in Robinson v State of South Australia (No 2) [1931] AC 704 (PC).

Although initially some Australian

courts applied Duncan,86 the view which prevailed was that they were bound by Robinson.87

The other conflict was between

Colonial Bank of Australasia Ltd v Marshall [1906] AC 559 (PC)

were able to decide the case in accordance with the latter decision. Walsh J, however, reluctantly dissented, because he thought the two cases were irreconcilable and it was his duty to follow the Privy Council. The Privy council itself upheld the decision of the majority: Southern Portland Cement Ltd v Cooper [1974] AC 623. For subsequent developments, see infra. 86

Eg Nash v Commissioner for Railways [1963] SR (NSW) 357 (FC), where Duncan's case was treated (at 363) "as a final statement of the law on the subject".

87

Bruce v Waldron [1963] VR 3 (FC); Ex parte Brown (1966) 67 SR (NSW) 1 (CA); see also Christie v Ford (1957) 2 FLR 202 (NT). English courts eventually came round to the same view of the law: Conway v Rimmer [1968] AC 910 (HL). This particular conflict between the Privy Council and the House of Lords and its ultimate resolution was foreshadowed shortly after Prior's case by Zelman Cowen, "The Binding Effect of English Decisions upon Australian Courts" (1944) 60 LQR 378. Cf Ross Parsons, op cit, 221.

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and London Joint Stock Bank Ltd v Macmillan [1918] AC 777 (HL) on the duty of care owed by a customer of a bank so to draw cheques as not to facilitate forgery.

The former, being

unfavourable to bankers, was ignored by the then leading Australian textbook on banking law.

Nevertheless, in Varker v

Commercial Banking Co of Sydney Ltd [1972] 2 NSWLR 967, 970-1 the judge regarded himself as bound by the decision of the Privy Council and the reasoning of the High Court whose decision it had affirmed, though able to consider opinions in the House of Lords which explained, but did not criticize it.88

Difficulty could also arise when lower courts were faced with an actual decision of the High Court and later reasoning in the Privy Council which seemed to be inconsistent therewith.

In Jacob v Utah Construction & Engineering Pty Ltd

(1966) 116 CLR 200 this occurred in relation to the question whether certain regulations, relied on by the plaintiff in an action for breach of statutory duty, were valid.

88

The High

In the later period the High Court, adopting Macmillan's case, overruled Marshall: Commonwealth Trading Bank of Australia v Sydney Wide Stores Pty Ltd (1981) 148 CLR 304.

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Court had earlier held one of the regulations to be valid,89 but the Privy Council had cast some doubt on the decision in the course of interpreting another regulation made under the same Act.90

In the present case it was held that unless the

earlier decision of the High Court had been overruled by the Privy Council, or the High Court itself, it continued to be binding on the Supreme Court; it was not for the latter court to decide that a decision of the High Court precisely in point ought to be decided differently because of later, apparently inconsistent, reasoning in the Privy Council.

It would have

been different if the earlier decision had not been precisely in point and a comparison had to be made between two lines of reasoning.91

89

Australian iron & Steel ltd v Ryan (1957) 97 CLR 89.

90

Utah Construction and Engineering Pty Ltd v Pataky [1966] AC 629.

91

See at 207 per Barwick CJ, at 217 per McTiernan, Taylor and Owen JJ. See also Rejfek v McElroy (1965) 112 CLR 517, which held that a decision of the High Court laying down the standard of proof of fraud in civil proceedings as being on a balance of probabilities was binding on lower courts, notwithstanding contrary obiter dicta in the Privy Council.

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The change

The first indication of a change of attitude towards English precedent in the Australian courts came in a criminal case, Parker v The Queen (1963) 111 CLR 610, 632-3.

The

change was not, however, precipitated by any wish to assert independence or any recognition of a desirable new relationship between England and Australia.

On the contrary,

it was expressly said to be "unfortunate" and to have forced a "critical situation" in the relationship.

It resulted simply

from disagreement as to fundamental principles of the law. The much-criticised decision of the House of Lords in DPP v Smith [1961] AC 290 was thought by Dixon CJ to constitute such an unwarranted departure from the fundamental principles that, though its application did not arise in the instant case, he gave notice that he could no longer adhere to the policy of following decisions of the House of Lords at the expense of the Court's own opinions and decisions.

Past expression of

the principles in Australia would in future be preferred to the holding in Smith's case.

All the members of the High

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Court shared these views.

The occasion which for the first time led to the application of the

dicta in Parker's case was hardly one

going to the very essence of liability, either in criminal law or tort.

The courts had for centuries awarded damages for

pain and suffering, loss of amenities and other non-pecuniary loss, without any deep investigation of their rationale. Advances in medical skills and technology had brought about a situation in which injured persons who in the past would almost certainly have died were kept alive for lengthy periods without any apparent consciousness of their existence and without any ability to make use of any damages awarded to them.

Were awards of damages for non-pecuniary loss to be

made in such cases and, if so, at what sort of level? Windeyer J had addressed the problem, obiter, in Teubner v Humble (1963) 108 CLR 481, 506-7.

He was "not prepared to

accept the view that damages for loss of enjoyment, loss of amenities, can properly exceed any sum that the injured person can in any way enjoy or which can be used to provide him with comforts or amenities" (at 506).

This was inconsistent with

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the view taken by a majority of the Court of Appeal in Wise v Kaye [1962] 1 QB 638, where very substantial damages were awarded.

Subsequently, a majority of the House of Lords in H

West & Son Ltd v Shephard [1964] AC 326 (HL) approved Wise v Kaye.

Trial judges in Australia disagreed as to whether they

should follow the dicta in Teubner v Humble or the decision in West v Shephard.92

In Skelton v Collins (1966) 115 CLR 94 a

majority of the High Court disagreed with the majority in West v Shephard and held that, contrary to the opinions expressed in West v Shephard, the earlier House of Lords case of Benham v Gambling [1941] AC 157 - which was concerned with the assessment of compensation to the estate of an injured person who had died - required the award of a moderate convention sum of damages in cases of "living death".

Windeyer J, "for the

sake of conformity..., but not from conviction", agreed to be

92

In Hobbelen v Nunn [1965] Qd R 105 and Scutt v Bailey (No. 1) [1964] WAR 74 the judges held that they ought to follow the House of Lords; Windeyer J's dicta were preferred in Scutt v Bailey (No 2) [1964] WAR 81, Fowler v Fowler [1964] WAR 193 and Skelton v Collings [sic] [1965] WAR 90. Prior to West v Shephard , Australian courts had sometimes awarded substantial damages, sometimes not: see the cases cited in H Luntz, Assessment of Damages for Personal Injury and Death (2nd ed, 1983), p 173 nn 1 and 2.

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guided by Benham v Gambling, the underlying assumptions of which he did not find easy to make (at 136).

Menzies J would

have followed West v Shephard, as he believed the lower court ought to have done (at 124).

Kitto, Taylor and Owen JJ all pointed out (at 104, 122 and 137-9 respectively) that opinions expressed in the House of Lords would continue to be accorded great respect by the High Court itself.

Lower courts were enjoined to follow

decisions of the House of Lords, unless there was a contrary decision of the Privy Council or the High Court directly in point.93

The latter qualification reinstated the view that had

been taken in Houston v Stone (1943) 43 SR (NSW) 118 (FC) (see no 9, supra), which was expressly approved by Owen J (at 139).

93

Unanimously, the High Court refused to follow Oliver v Ashman [1962] 2 QB 210 (CA) and Wise v Kaye [1962] 1 QB 638 (CA) on another point. It held that in assessing damages for loss of earning capacity in a case where the plaintiff's life expectation has been reduced, the relevant calculations are to be made over the period that the plaintiff would have earned if the life-span had not been reduced. The House of Lords later came to the same conclusion: Pickett v British rail Engineering Ltd [1980] AC 136.

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Damages in tort again provided the occasion for the High Court not to follow the House of Lords later the same year.

This time the issue arose in the context of two

defamation actions and resulted in a challenge to the High Court's authority being carried to the Privy Council.

In Rookes v Barnard [1964] AC 1129 (HL) - a decision in which the House of Lords revived the tort of intimidation as a weapon for use in cases of industrial conflict - all their Lordships had concurred in an analysis by Lord Devlin at the end of his speech of the nature of damages awarded for deliberate wrongdoing by a defendant.

He held that damages

which in the past had been awarded in such cases could be divided into those which were compensatory, including compensation for the aggravation of the harm brought about by the deliberate nature of the defendant's conduct ("aggravated damages"), and those which were not, but were intended to punish and deter the defendant ("exemplary damages").

The

latter were an anomaly in a civil action and should be confined as far as possible.

In particular, they should not

be awarded in any case which did not fall into one of three

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categories, which authority and some element of policy compelled the House of Lords to continue to recognize as appropriate for the award of exemplary damages.

The

categories were: (i) "Oppressive, arbitrary and unconstitutional action by the servants of the government"; (ii) cases "in which the defendant's conduct has been calculated by him to make a profit for himself which may well exceed the compensation payable to the plaintiff"; and (iii) where "exemplary damages are expressly authorized by statute".

Very shortly afterwards, a federal politician (and subsequent Minister) had sued two publishers in the Supreme Court of New South Wales in respect of various defamatory publications.

At the trials directions had been given to the

juries which included permission to award exemplary damages, though none of the publications could have come within the categories prescribed by Lord Devlin, at least if his words were narrowly construed. awarded.

Substantial damages had been

In appeals to the New South Wales Full Court, new

trials had been ordered, but differences of opinion had become manifest as to whether Rookes v Barnard should or should not

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have been followed.94

Appeals were then brought by the

plaintiff to the High Court against the orders for new trials and by the defendant in one action against such new trial being limited to damages.

In Uren v John Fairfax & Sons Pty

Ltd (1966) 117 CLR 118 and Australian Consolidated Press Ltd v Uren (1966) 117 CLR 185 the High Court unanimously decided that awards of exemplary damages in Australia should not be limited to the categories of case laid down in Rookes v Barnard.95

Although Windeyer J saw this as indicating "no

disrespect for the high authority of their Lordships' House, no breaking of the ties light as air", it was apparent that no longer would the desire for uniformity in the common law cause

94

Uren v John Fairfax & Sons Pty Ltd (1965) 66 SR (NSW) 223; Uren v Australian Consolidated Press Ltd (1965) 66 SR (NSW) 271.

95

A majority held, however, that in none of the counts sued on in the Fairfax appeal was there any evidence justifying exemplary damages even in the wider circumstances in which the Court believed such damages had hitherto been available in Australia. A similar view, held unanimously, in respect of two of the counts in the Australian Consolidated Press appeal led to a majority order of a general new trial on all counts.

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the High Court to modify its own opinions so as to accord with the definitive statement of the Law in England.96

By something of a procedural quirk, the successful appellant in the Australian Consolidated Press appeal carried the matter further.

The Privy Council held, however, that,

prior to Rookes v Barnard, it had been accepted in Australia that exemplary damages were available in a wider range of circumstances than suggested in Rookes v Barnard; that this acceptance had not been based on any mistaken understandings or faulty reasoning; and that "in a sphere of the law where its policy calls for decision, and where its policy in a particular country is fashioned so largely by judicial opinion, it became a question for the High Court to decide whether the decision in Rookes v Barnard compelled a change in what was a well-settled approach in the law of libel in Australia".97

Ironically, the legislature in New South Wales

96

The Practice STatement by the House of Lords that it would no longer be bound by its own previous decisions (see [1966] 3 All ER 77) was given some seven weeks later. Whether the members of the High Court had any advance intimation of it is not known.

97

Australian Consolidated Press Ltd v uren [1969] 1 AC

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subsequently abolished exemplary damages in defamation actions98 and the Law Reform Commission recommended their abolition in such actions throughout Australia,99 while Rookes v Barnard itself survived a challenge to its authority in the House of Lords.100

The High Court has twice since upheld

awards of exemplary damages.101

590, 644. See also Geelong Harbor Trust Commissioners v Gibbs Bright & Co [1974] AC 810 (PC), 820-1, approving the decision of a majority of the High Court ((1970) 122 CLR 504) to follow a previous decision of its own in preference to a later one of the House of Lords on whether legislation made the liability of a vessel for damage to harbour installation dependent on fault. 98

Defamation Act 1974 (NSW), s 46. The difficulty of distinguishing between exemplary and aggravated damages, adverted to by Windeyer J in Uren v Fairfax (see (1966) 117 CLR 118, 149-52) remains: see Andrews v John Fairfax & Sons Ltd [1980] 2 NSWLR 225 (CA).

99

(Australia) Law Reform Commission, Unfair Publication: Defamation and Privacy (ALRC Report No 11, 1979), para 263.

100

Broome v Cassell & Co Ltd [1972] AC 1027, where five of the seven members of the House held that Rookes v Barnard was correct and applied to defamation actions, but four of the seven upheld the particular award of exemplary damages as being within the second category.

101

In XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1985) 155 CLR 448 the High

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The new situation

As has been shown, in assuming the liberty not to follow the House of Lords, the High Court directed lower courts no longer to prefer decisions of that tribunal to ones of its own directly in point, thereby reversing the instructions that had ;emanated from Piro v Foster.

On at

least two occasions in cases concerned with substantive liability in tort Barwick CJ took the opportunity of emphasizing that the common law in Australia was no longer

Court sustained the decision of the New South Wales Court of Appeal, contrary to dicta in Broome v Cassell, supra, that exemplary damages could be awarded against some, though not all, defendants and separate judgments be entered for different amounts in the same proceedings. (At an earlier stage of the proceedings, Caltex Oil (Australia) Pty Ltd v XL Petroleum Pty Ltd (1985) 155 CLR 72, the High Court, while recognizing by a majority the then continued existence of the possibility of appeals by different parties to the High Court and the Privy Council, emphasized the desirability of the appeal to the High Court being heard first so that the definitive law for Australia could be decided in Australia.) In Lamb v Cotogno (1987) 74 ALR 188 the High Court held that exemplary damages could still serve a useful purpose even where they would be paid by a compulsory motor vehicle insurer.

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necessarily the same as the common law in England and could lend itself to indigenous development.102

His similar views in

a case on damages precipitated an episode in which the High Court by a narrow majority refused to follow the House of Lords and then rapidly, again by a narrow majority, reversed itself and reinstated the coincidence between Australian and English Law.

In Atlas Tiles Ltd v Briers (1978) 144 CLR 202,

a wrongful dismissal action, three members of the High Court refused to apply British Transport Commission v Gourley [1956] AC 185 (HL) so as to calculate the damages after deduction of the income tax that would have been payable on the earnings lost by the plaintiff.

The reasons of Barwick CJ and Murphy J

clearly applied also to actions for personal injuries, as did those of the two dissentients, who held that tax had to be deducted.

Jacobs J, the third member of the majority, adopted

a compromise position with regard to personal injury claims, indicating that tax should be deducted in respect of past loss

102

Mutual Life & Citizens' Assurance Co Ltd v Evatt (1968) 122 CLR 556, 563; Cooper v Southern Portland Cement Ltd (1972) 128 CLR 427, 438. Both these cases proceeded to the Privy Council, which decided them without reference to the point.

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of earnings, but not in respect of future loss.

Lower courts

were obviously left in a quandary as to what to do.103

An

appeal was soon brought to the High Court in Cullen v Trappell (1980) 146 CLR 1, where by a majority of four to three the authority of Gourley's case in personal injury actions were fully reinstated in Australia.

One of the difficulties faced by trial courts before Skelton v Collins was that there was no decision of the High Court on the assessment of damages for loss of amenities for unconscious plaintiffs, only the obiter dicta in Teubner v Humble.

What were lower courts to do when faced with a

decision of the House of Lords, but indications from elsewhere that that decision would not be followed?

In Brisbane v Cross [1978] VR 49 (FC), 51-2 the Chief Justice had no doubt that the Court should unquestionably follow Searle v Wallbank [1947] AC 341 (HL), unless the rule of immunity from liability in negligence for the occupier of

103

See H Luntz, op cit, para 5.7.05, for their reactions.

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land whose animal came on to a highway had not been received as part of the law of Victoria because it was incapable of application.

It was unanimously held that the history of

highways in Victoria did not make the rule incapable of application and Searle v Wallbank was therefore followed.104

In Searle v Perry [1982] VR 193 (FC) the question came up of the liability of a solicitor for negligence in supervising the execution of a will to persons other than the client, an issue that has arisen in numerous jurisdictions in

104

Whether or not the rule was suitable to local circumstances has given rise to differences of opinion in different STate courts, as mentioned in n 2, supra. The High Court itself, in Trigwell's case, later held that the rule was capable of application in South Australia and, by a majority, followed Searle v Wallbank, being of the opinion that any reform of the law was best left to legislatures, which had already been active in relation to the rule. In Kelly v Sweeney [1975] 2 NSWLR 720 (CA), while Hutley JA thought Searle v Wallbank binding but distinguishable, and Mahoney JA thought it binding and applicable, Samuels JA declined to follow it because it had been abrogated by statute in England and the reason for following decisions of the House of Lords - the maintenance of uniformity in the application and development of the common law - had thereby disappeared in this case (see at 735-6).

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recent years.

Two members of the Court held on principle that

no such liability existed.

McGarvie J agreed in the result.

He held that modern principles of negligence law would lead to liability, but he regarded himself as bound to deny liability because of a nineteenth century decision of the House of Lords, which he thought indistinguishable.105 afterwards his Honour's attitude changed.

Not long

In McKennz v

McKennz [1984] VR 665 (FC), 681 he expressed the opinion that the passage of years had altered the relationship between the Full Court of Victoria and the House of Lords.

"Having a duty

to declare and expound the law of Australia the Full Court should not bind itself by formula to apply decisions of the House of Lords which it regards as inconsistent with that law."

In accordance with this precept he declined to follow

the view of the majority of the House of Lords in Birkett v James [1978] AC 297 that in exercising a discretion to dismiss

105

Robertson v Fleming (1861) 4 Macq 167. In England itself, in Ross v Caunters [1980] Ch 297, Megarry VC felt able to put aside this case as having been decided some 70 years before the emergence of negligence as an independent tort in Donoghue v Stevenson [1932] AC 562 (HL). McGarvie J in Australia was not prepared to do so (see at 243-4).

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an action for want of prosecution it is not a relevant consideration whether the plaintiff has an effective remedy against the solicitor who had the conduct of the proceedings on the plaintiff's behalf.106

A similar change in attitude is apparent in South Australia.

In 1979 in a criminal case King CJ, though

expressing some doubt about a particular decision of the House of Lords, stated the orthodox rule that it would ordinarily be followed unless there was clear High Court or Privy Council authority to the contrary.107

In 1986, however, when a

defendant landlord relied on the much criticized decision in Cavalier v Pope [1906] AC 428 (HL) in an attempt to escape liability in negligence to the child of a tenant for failure to repair a defective gas-stove let with the premises, the

106

Cf Re Gladecroft Pty Ltd; Horne v Chester & Fein Property Developments Pty Ltd (Vic SC, 4 Sept 1986, not yet reported), in which Southwell J, without citing any later authority on the point than Public Transport Commission of NSW v J Murray-More (NSW) Pty Ltd (1975) 132 CLR 336, 341 per Barwick CJ, said that he would regard himself as bound to follow an indistinguishable decision of the House of Lords.

107

R v Thompson (1979) 22 SASR 12, 16-17.

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Chief Justice decided not to follow the decision.108

He

continued to see in decisions of the House of Lords uniquely persuasive authority, not as a vestigial survival of imperial authority, but because of a combination of two factors.

One

is the prestige attached to the ultimate court of appeal in great common law countries, which the House of Lords shared, in his view, with the Supreme Courts of the United States and Canada.

The other "is the position which it occupies as the

ultimate court of appeal of the country in which the common law had its genesis and experienced its formative development".

he added that, since the abolition of appeals

to the Privy Council, similar persuasive force would doubtless be accorded to decisions of that body.109

108

Parker v South Australian Housing Trust (1986) 41 SASR 493 (FC).

109

See at 516. Prior J, though believing that it was possible to distinguish Cavalier v Pope on a number of grounds, also decided not to follow it as being incompatible with subsequent developments in the law of negligence. Olsson J did formally distinguish it, but was prepared to hold that, if he were wrong as to the grounds of distinction, the case should no longer be followed because its reasoning was outmoded. According to a note in (1986) 60 ALJ 410 a district court judge in New South Wales "was constrained to hold that the rule [in Cavalier v Pope] remained of binding authority", but he too was

- 106. 106 -

Queensland, however, remains conservative.

In

Gillespie v Elliott [1987] 2 Qd R 509 the Full Court of that State, in a case involving the limitation period for an action in tort against solicitors for negligence causing economic loss, regarded Pirelli General Cable Works Ltd v Oscar Faber & Partners [1983] 2 AC 1 (HL) as "authoritative", though it dealt with property damage.

They therefore followed two

English Court of Appeal decisions110 which are consistent with it, in preference to decisions of the Supreme Courts of Canada and California,111 which applied different principles.

The

Full Court made no real independent investigation of the

able to distinguish it. Earlier, in the High Court, Windeyer J had done likewise in Voli v Inglewood SC (1963) 110 CLR 74, with the use of one of his military metaphors, viz that "firmly entrenched positions may be outflanked" (at 91). (Sir Victor Windeyer was a distinguished army commander as well as a High Court Justice: see his Obituary in (1987) 61 ALJ 823.) 110

Forster v Oughtred & Co [1982] 2 All ER 753 (CA); Baker v Ollard & Bentley (1982) 126 Sol J 593 (CA).

111

City of Kamloops v Nielsen [1984] 2 SCR 2 and Neel v Magana Olney Levy, Cathcart & Gelfand 491 P 2d 421 (1971) respectively.

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merits of the different approaches, though one member did express regret at the result reached, which he regarded as unjust.

As pointed out above, members of the High Court in 1975 were still directing lower courts ordinarily to follow the English Court of Appeal.112

A problem in this regard arose in

relation to actions by passengers in motor vehicles against the drivers of the vehicles, where, to the knowledge of the passengers, the drivers lacked the ordinary skill and competence to be expected of such drivers.

In Nettleship v

Weston [1971] 2 QB 691 (CA), an action by a driving-teacher against a learner driver, a majority of the Court had held that the standard of care did not vary according to the known lack of experience of the driver.

The majority expressly

rejected the principle espoused by Dixon J in Insurance Commissioner v Joyce (1948) 77 CLR 39, a case of drunken

112

Public Transport Commission of NSW v J Murray-More (NSW) Pty Ltd (1975) 132 CLR 336, 341, 349. It was these statements which influenced judges such as those in Brisbane v Cross, supra, to hold that a fortiori they should follow the House of Lords.

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driving.113

Some courts thereupon followed Nettleship v

Weston, whereas others adhered to the principle put forward by Dixon J.114

In order to resolve the differences among State

courts, leave to appeal was given by the High Court against the decision in Cook v Cook (1986) 41 SASR 1 (FC), where differing views were taken. Having held that in special and exceptional circumstances the relationship between a driver and passenger may fall into a category in which the standard of care or skill to be expected will be either expanded or confined, the High Court went out of its way to issue a definitive statement on precedent: 353.

Cook v Cook (1986) 68 ALR

Statements requiring that in the absence of controlling

authority State Supreme Courts should as a general rule follow decisions of the English Court of Appeal "should no longer be seen as binding upon Australian courts" (at 362-3).

113

His Honour dissented on the facts of the case, holding that it had not been proved that the passenger had the necessary knowledge or appreciation of the driver's incompetence due to drink.

114

Cf eg Squire v David (1984) 2 MVR 476n with Chang v Chang [1973] 1 NSWLR 708 (CA). The point was left unresolved on the appeal to the High Court in the latter cae, (1974) 48 ALJR 362.

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Inevitably, "assistance and guidance" would still come from the learning and reasoning of United Kingdom courts, just as from other great common law courts.

But "the precedents of

other legal systems are not binding and are useful only to the degree of the persuasiveness of their reasoning".

One

possible qualification was left, but that only tentatively. This related to "the special position of the House of Lords given in the period in which appeals ?

If decisions of the House of Lords do continue to enjoy a special status, making them akin to decisions which are binding because they emanate from a superior court in the same judicial hierarchy, that status terminated on the cessation of appeals from Australian courts to the Privy Council. Presumably this means after appeals from State courts could no longer be brought.

Appeals to the Privy Council were

abolished in stages, first in matters of federal law, then in matters of State law which had been determined by the High Court and, finally, in matters which had been determined in State Supreme Courts.115

115

The last stage operated from 3 March

Privy Council (Limitation of Appeals) Act 1968 (Cth);

- 110. 110 -

1986, but appeals instituted before that date continued to be heard until 27 July 1987.116

The relationship between the High Court and the Privy Council needs to be explored next.

The effect of the

abolition of the right to appeal to the Privy Council from the High Court itself was considered first in another criminal case concerned with a defence to a murder charge, Viro v R (1978) 141 CLR 88.

It was held that the two courts no longer

being in the same judicial hierarchy, the High Court was not bound by decisions of the Privy Council and was free to prefer decisions of its own to conflicting decisions of the latter. Furthermore, just as it had reserved to itself the right to reconsider its own decisions, unlike the House of Lords from the late nineteenth century until 1966, it would be prepared to reconsider decisions of the Privy Council in determining what the law should be for Australia, thereby effectively exercising within Australia a power that the Privy Council had

Privy Council (Appeals from the High Court) Act 1975 (Cth); Australian Act 1986 (Cth and Imp), s 11. 116

See (1987) 61 ALJ 585.

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maintained.

In L Shaddock & Associates Pty Ltd v Parramatta CC (1981) 150 CLR 225 an opportunity came for the High Court to flex the muscles it had developed in Viro.

In Mutual Life &

Citizens' Assurance Co Ltd v Evatt [1971] AC 793 the Privy Council, by a majority of three to two, had reversed a decision of the High Court, arrived at by a similar majority ((1968) 122 CLR 556).

The decision of the majority in the

Privy Council was seen as narrowing the circumstances in which, since Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 (HL), a duty of care was recognized as arising not to cause financial loss through negligent misstatement. The decision was extraordinary, as it involved, inter alia, an interpretation of words used by Lords Reid and Morris in the Hedley Byrne case and yet these were the very members of the Board of the Privy Council on this occasion who were the dissentients.

The decision of the majority was also much

criticized by academic commentators, while the dissent was said to be preferable in at least two decisions of the Court

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of Appeal in England.117

When Shaddock's case was before the

New South Wales Court of Appeal, all three judges acknowledged that, despite "almost universal dissatisfaction both to courts and to the learned", the decision of the majority in the Privy Council in Evatt's case was binding until overruled by the High Court.118

Three members of the High Court thereupon did

overrule the majority of the Privy Council in Evatt and proceeded to reinstate the decision of the majority in the High Court in that case.119

The consequence is that in

117

Howard Marine & Dredging Co Ltd v A Ogden & Sons (Excavations) Ltd [1978] QB 574 (CA), 591 per Lord Denning MR, 600 per Shaw LJ; Esso Petroleum Co Ltd v Mardon [1976] 1 QB 801 (CA), 827 per Ormrod J.

118

L Shaddock & Associates Pty Ltd v Parramatta CC [1979] 1 NSWLR 566 (CA), 571 per Moffitt P (who nevertheless felt able to distinguish the majority decision in Evatt in the Privy Council), 586 per Hutley JA (who cited some of the judicial and academic sources in which dissatisfaction was expressed), 601 per Mahoney JA ("Whatever be the position where the High Court and the Privy Council have, in different cases, adopted different principles, where that has occurred in the course of an appeal from the High Court to the Privy Council in a single proceeding, the principle formulated by the Privy Council should...be followed by this Court").

119

See L Shaddock & Associates Pty Ltd v Parramatta CC (1981) 150 CLR 225, 248051 per Mason J (with whom Aickin J agreed), 256 per Murphy J. Gibbs CJ, while

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Australia - as probably also in England - a duty of care to avoid causing financial loss through negligent misstatement is not limited to persons who are in the business of giving such information and advice or who hold themselves out as having comparable skills or who have a financial interest in the transaction.

Such duty may arise whenever a person gives

information or advice to another on a serious matter in circumstances where the speaker realizes, or ought to realize, that he or she is being trusted to give the information or advice as a basis for action on the part of the other party and it is reasonable in the circumstances for the other party to act on that information or advice.120

expressing some reservations about its reasoning, preferred merely to distinguish the judgment of the majority of the Privy Council in Evatt's case (at 234-5). Stephen J also distinguished it (at 23942). 120

Cf Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd (1986) 66 ALR 29, where the High Court by a majority of three to two followed Fowles v Eastern & Australian Steamship Co Ltd [1916] 2 AC 556 (PC) in holding that the general employer of a pilot is not liable for the pilot's negligence while a ship is subject to compulsory pilotage. The majority was more influenced by the length of time that the precedent had stood than by the status of the court which decided it.

- 114. 114 -

During the period from 1975 - when appeals from the High Court to the Privy Council were abolished - until 1986 when all new appeals ceased from Australian courts to the Privy Council - State courts continued to be in alternative judicial hierarchies.

At the apex of one was the High Court;

the ultimate court of appeal in the other was the Privy Council.

State courts could thus find themselves bound by

conflicting decisions.

Various dicta in Viro expressed

concern that this situation should not arise; but favoured an Australian preference if it did,121 though some would have countenanced some qualification, such as a State court not following an old High Court decision expressly rejected by the Privy Council, while others declined to direct State courts at all.

The issue seems not to have arisen until after all

appeals to the Privy Council were abolished, in which case, as we shall see, State Supreme Courts saw their obligation as being primarily towards the High Court, the Privy Council no

121

See at 93-4 per Barwick CJ; 118-21 per Gibbs J; 130-2 per Stephen J; 135-7 per Mason J; 150-1 per Jacobs J; 159-67 per Murphy J; 172-6 per Aickin J.

- 115. 115 -

longer being a superior court in the same judicial hierarchy.

The potentiality for conflict was to be found in Caltex Oil (Australia) Pty Ltd v The Dredge "Willemstad" (1976) 136 CLR 529 and Candlewood Navigation Corporation Ltd v Mitsuit OSK Lines Ltd [1986] AC 1 (PC).

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