Certain Lloyd's Underwriters v. Cross
[2012] HCA 56(2012) 248 CLR 378
(2012) 293 ALR 412
(Decision by: French CJ, Hayne J)
Certain Lloyd's Underwriters
v Cross
Judges:
French CJ
Hayne JCrennan J
Kiefel J
Bell J
Judgment date: 12 December 2012
Decision by:
French CJ
Hayne J
[1] These three appeals were heard together with New South Wales v Williamson. [1] All four appeals concern the construction of provisions of New South Wales statutes that limit the costs that a court may order one party to pay another if the amount recovered on a claim for personal injury damages does not exceed a specified amount. The reasons in these appeals should be read with the reasons in New South Wales v Williamson.
The issue
[2] New South Wales legislation regulated claims for "personal injury damages" and awards of "personal injury damages". The expression "personal injury damages" was defined to mean "damages that relate to the death of or injury to a person caused by the fault of another person". The respondents alleged that they had been assaulted by hotel security staff. They sued the appellants, [2] as the insurers of the company that employed those staff, for trespass to the person claiming damages for personal injuries allegedly inflicted intentionally and with intent to injure. Were these claims for "personal injury damages" within the meaning of the relevant New South Wales Acts?
[3] Answering this question requires consideration of Div 5B of Pt 11 (ss 198C-198I) of the Legal Profession Act 1987 (NSW) ("the 1987 Legal Profession Act") as inserted by the Civil Liability Act 2002 (NSW) ("the Liability Act"). [3] Later forms of the relevant legislation are discussed in New South Wales v Williamson.
The relevant provisions
[4] Section 198D(1) of the 1987 Legal Profession Act fixed the maximum costs for legal services provided to a party in connection with "a claim for personal injury damages", "[i]f the amount recovered on [the claim] does not exceed $100,000". A lawyer and client could contract out of this limitation [4] by a "costs agreement" complying with Div 3 of Pt 11 of the 1987 Legal Profession Act. But s 198D(4)(b) provided that, subject to some exceptions which need not be considered, when the maximum costs for legal services provided to a party were fixed by Div 5B, "a court or tribunal cannot order the payment by another party to the claim of costs in respect of those legal services in an amount that exceeds that maximum".
[5] Section 198C(2) of the 1987 Legal Profession Act provided that Div 5B did not apply to certain costs, namely, costs payable to an applicant for compensation under Pt 2 of the Victims Support and Rehabilitation Act 1996 (NSW) and costs for legal services provided in respect of certain other identified forms of statutory claim: claims under the Motor Accidents Act 1988 (NSW) or the Motor Accidents Compensation Act 1999 (NSW), claims for work injury damages as defined in the Workplace Injury Management and Workers Compensation Act 1998 (NSW) and claims for damages for dust diseases brought under the Dust Diseases Tribunal Act 1989 (NSW). The respondents' claims did not fall within any of these expressly excluded classes of claim.
[6] Section 198C(1) defined terms used in Div 5B. In particular, it provided that "personal injury damages has the same meaning as in the Civil Liability Act 2002".
[7] The Liability Act provided [5] that, in that Act, "personal injury damages means damages that relate to the death of or injury to a person caused by the fault of another person". The Liability Act further provided [6] that:
injury means personal or bodily injury, and includes:
- (a)
- pre-natal injury, and
- (b)
- psychological or psychiatric injury, and
- (c)
- disease.
And it provided [7] that "fault includes an act or omission".
[8] Read together with the definitions of "injury" and "fault", the Liability Act's definition of "personal injury damages" can thus be expressed as follows. In the Liability Act:
personal injury damages means damages that relate to the death of or personal or bodily injury (including pre-natal injury, psychological or psychiatric injury and disease) to a person caused by the fault (including an act or omission) of another person.
[9] Section 198C and the other provisions of Div 5B of Pt 11 of the 1987 Legal Profession Act were introduced by the Liability Act as amendments connected with and consequential upon the enactment of the Liability Act. The two Acts did not, however, have identical areas of operation. The costs limiting provisions of Div 5B of Pt 11 of the 1987 Legal Profession Act applied to a "claim" for personal injury damages whereas Pt 2 of the Liability Act applied to an "award" of personal injury damages. And there were some similarities, but most importantly some differences, in the exclusions that were made from the operation of each Act.
[10] Part 2 of the Liability Act regulated the amount recoverable as an "award of personal injury damages". As enacted, s 9(1) of the Liability Act provided that Pt 2 of the Act "applies to and in respect of an award of personal injury damages, except an award that is excluded from the operation of this Part". Section 9(2) excluded several kinds of awards of damages. The first of these exclusions [8] was "an award where the fault concerned is an intentional act that is done with intent to cause injury or death or that is sexual assault or other sexual misconduct". Other exclusions included awards of damages for death or injury resulting from a motor accident to which either Pt 6 of the Motor Accidents Act 1988 (NSW) or Ch 5 of the Motor Accidents Compensation Act 1999 (NSW) applied, [9] awards of damages for death or injury to a worker to which Div 3 of Pt 5 of the Workers Compensation Act 1987 (NSW) applied [10] and awards of damages for dust diseases brought under the Dust Diseases Tribunal Act 1989 (NSW). [11]
[11] Some, but not all, of these excluded awards would be made following claims for personal injury damages that were expressly excluded from the operation of the costs limiting provisions of Div 5B of Pt 11 of the 1987 Legal Profession Act. Thus, particular kinds of award made under the Motor Accidents Act 1988, the Motor Accidents Compensation Act 1999 and the Dust Diseases Tribunal Act 1989 were excluded from the operation of Pt 2 of the Liability Act and claims for those kinds of awards were excluded by s 198C(2) from the application of Div 5B of Pt 11 of the 1987 Legal Profession Act. Likewise, an "award comprising compensation under" the Victims Support and Rehabilitation Act 1996 (NSW) was excluded [12] from the operation of Pt 2 of the Liability Act and the costs payable to an applicant for compensation of that kind were excluded by s 198C(2)(a) from the operation of Div 5B of Pt 11 of the 1987 Legal Profession Act.
[12] Although there was thus some similarity in the express exclusions that were contained in the 1987 Legal Profession Act and the Liability Act, there were also some differences between them. For example, the Liability Act also excluded [13] from the operation of Pt 2 of that Act awards comprising compensation under certain Acts other than the Victims Support and Rehabilitation Act 1996, but none of those other Acts was mentioned in s 198C(2) of the 1987 Legal Profession Act. And, of greatest significance for the present appeals, the Liability Act excluded [14] from the operation of Pt 2 "an award where the fault concerned is an intentional act that is done with intent to cause injury or death or that is sexual assault or other sexual misconduct" but there was no equivalent exclusion in Div 5B of Pt 11 of the 1987 Legal Profession Act.
The parties' arguments
[13] The central point of difference between the parties in this court was whether the definition of "personal injury damages" in the 1987 Legal Profession Act (it "has the same meaning as in" the Liability Act) was to be construed by reference only to the words of the definition of that expression in s 3 of the Liability Act or by reference to both the words of the definition and the limited operation which the Liability Act had in respect of awards of personal injury damages as a result of the exclusions in s 9(2) of the Liability Act.
[14] The appellants submitted that s 198C(1) of the 1987 Legal Profession Act required reference only to the definition given in the Liability Act and that, as there defined, personal injury damages extended to any and every form of damages that relate to the death of or personal or bodily injury to a person caused by the fault of another person. In particular, the appellants submitted that "personal injury damages" included damages for trespass to the person and that, in the District Court, Garling DCJ had been right to declare, in effect, that s 198D of the 1987 Legal Profession Act was engaged.
[15] The respondents submitted that the costs limiting provisions of Div 5B of Pt 11 of the 1987 Legal Profession Act applied only to those claims for personal injury damages where the award of damages was regulated by Pt 2 of the Liability Act. They submitted that it follows that awards of the kind in issue in these appeals -- "where the fault concerned is an intentional act that is done with intent to cause injury" [15] -- were not awards of personal injury damages because awards of damages resulting from an intentional act were not regulated by the Liability Act. On its face, that submission ignored the differences that have been noted between the provisions which each Act made for its own area of application. The Liability Act expressly excluded intentional torts. The 1987 Legal Profession Act did not. And yet, on the respondents' construction, the costs limiting provisions of the 1987 Legal Profession Act were not to apply to claims for personal injury damages for an intentional tort.
[16] The respondents sought to surmount the obstacle of this textual difference, and thus justify their preferred construction, by reference to notions of "context" and "purpose". The respondents submitted that it is necessary to look not only to the words of the definition of "personal injury damages" in the Liability Act but also to the "context" provided by the other provisions of the Liability Act that define the scope of that Act's application to an "award of personal injury damages". This was said to follow, in particular, from the words "meaning" and "as in" in the definition of "personal injury damages" in s 198C(1) of the 1987 Legal Profession Act (it "has the same meaning as in" the Liability Act). And they submitted that the two Acts were intended to have the same sphere of operation because the relevant provisions were made at a time when there was concern about the costs associated with claims for damages for personal injuries caused by negligence.
The appeals to the Court of Appeal and this Court
[17] The Court of Appeal (Hodgson and Basten JJA and Sackville AJA) held [16] unanimously that the present respondents' construction should be adopted. Sackville AJA described [17] the preferred construction as being that the definition of "personal injury damages" in s 198C(1) of the 1987 Legal Profession Act "meant personal injury damages of the kind to which Part 2 of [the Liability Act] applied" (emphasis added). Basten JA, who gave the principal reasons of the court, concluded [18] that there was "no basis", either in extrinsic material or "in terms of the policy underlying the legislation, to impose the cost-capping regime on all claims for personal injury damages, however they might arise, without reference to the carefully crafted exclusions in s 9(2)" of the Liability Act. Accordingly, Basten JA decided [19] that the definition of "personal injury damages" in the relevant costs limiting provisions should be construed by "reference not merely to the definition of that expression in the source statute, but also to the scope of its application in the specified Part" of the Liability Act.
[18] By special leave, the appellants appeal to this court. These reasons will show that the appellants' construction of the costs limiting provisions should be adopted, not the construction favoured by the Court of Appeal.
Which costs limiting legislation?
[19] The costs limiting provisions of the 1987 Legal Profession Act were repealed, with effect from 1 October 2005, by the Legal Profession Act 2004 (NSW) ("the 2004 Legal Profession Act"). The 2004 Legal Profession Act contained [20] costs limiting provisions in generally similar, but not identical, terms to those in the 1987 Legal Profession Act. Whether the earlier or the later provisions applied to the present cases depended upon the application of transitional provisions made by the 2004 Legal Profession Act. Those transitional provisions [21] provided, in effect, that the new Act applied only to "a matter" in which the client had first given instructions on or after 1 October 2005.
[20] In the Court of Appeal, some consideration was given [22] to what was the relevant "matter" in these cases. Much of the reasons of Basten JA proceeded by reference to the costs limiting provisions of the 2004 Legal Profession Act rather than the 1987 Legal Profession Act because he concluded [23] that the relevant "matter" was the respondents' claim for costs, not their claim for damages.
[21] There was limited argument on this issue in this court. The appellants submitted that the relevant "matter" was the claim for damages, not the claim for costs, and that the respondents first gave instructions in that matter before 1 October 2005. The respondents submitted that the "matter" was the claim for costs. But the respondents' submissions noted that "[i]t is agreed that the question of whether the provisions of the [earlier] or the [later Act applies] does not affect the determination of the principal issue in the appeal[s]".
[22] The reasons in New South Wales v Williamson examine the differences between the costs limiting provisions of the two Acts and the amendments that had been made to the Liability Act by the time the 2004 Legal Profession Act was enacted. As those reasons show, the same answers should be given to the questions which arise about the construction of the later provisions as the answers to be given about the construction of the earlier provisions. Because no different answer should be given, the application of the transitional provisions need not be examined. Attention can and should be confined in these appeals to the resolution of the issue of construction of the 1987 Legal Profession Act that has been identified.
Some basic principles
[23] It is as well to begin consideration of this issue by re-stating some basic principles. It is convenient to do that by reference to the reasons of the plurality in Alcan (NT) Alumina Pty Ltd v Cmr of Territory Revenue: [24]
This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. [25] Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. [26] The language which has actually been employed in the text of legislation is the surest guide to legislative intention. [27] The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, [28] in particular the mischief [29] it is seeking to remedy.
[24] The context and purpose of a provision are important to its proper construction because, as the plurality said in Project Blue Sky Inc v Australian Broadcasting Authority, [30] "[t]he primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute" [31] (emphasis added). That is, statutory construction requires deciding what is the legal meaning of the relevant provision "by reference to the language of the instrument viewed as a whole", [32] and "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". [33]
[25] Determination of the purpose of a statute or of particular provisions in a statute may be based upon an express statement of purpose in the statute itself, inference from its text and structure and, where appropriate, reference to extrinsic materials. The purpose of a statute resides in its text and structure. [34] Determination of a statutory purpose neither permits nor requires some search for what those who promoted or passed the legislation may have had in mind when it was enacted. It is important in this respect, as in others, [35] to recognise that to speak of legislative "intention" is to use a metaphor. Use of that metaphor must not mislead. "[T]he duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have" [36] (emphasis added). And as the plurality went on to say [37] in Project Blue Sky:
Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction [38] may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.
To similar effect, the majority in Lacey v A-G (Qld) [39] said:
Ascertainment of legislative intention is asserted as a statement of compliance with the rules of construction, common law and statutory, which have been applied to reach the preferred results and which are known to parliamentary drafters and the courts. (footnote omitted)
The search for legal meaning involves application of the processes of statutory construction. The identification of statutory purpose and legislative intention is the product of those processes, not the discovery of some subjective purpose or intention.
[26] A second and not unrelated danger that must be avoided in identifying a statute's purpose is the making of some a priori assumption about its purpose. The purpose of legislation must be derived from what the legislation says, and not from any assumption about the desired or desirable reach or operation of the relevant provisions. [40] As Spigelman CJ, writing extra-curially, correctly said: [41]
Real issues of judicial legitimacy can be raised by judges determining the purpose or purposes of Parliamentary legislation. It is all too easy for the identification of purpose to be driven by what the particular judge regards as the desirable result in a specific case. (emphasis added)
And as the plurality said in Australian Education Union v Department of Education and Children's Services: [42]
In construing a statute it is not for a court to construct its own idea of a desirable policy, impute it to the legislature, and then characterise it as a statutory purpose. (footnote omitted)
Context
[27] Because "context" loomed large in argument in this court, particularly in the submissions of the respondents in these appeals, it is necessary to say something more about the use of "context" in statutory interpretation.
[28] It is not to be doubted [43] that the relevant provisions must be construed in context, and the contrary was not suggested in argument. But there was some debate about what use could be made of provisions of the Liability Act in construing the definition of "personal injury damages" in the 1987 Legal Profession Act.
[29] In construing the definition of "personal injury damages" contained [44] in the Liability Act ("damages that relate to the death of or injury to a person caused by the fault of another person") it is no doubt necessary to have regard not only to the words of the definition but also to the context in which the definition was set. So much follows from what has been said about statutory construction in the cases to which reference has been made.
[30] Nothing said in Producers' Co-operative Distributing Society Ltd v Cmr of Taxation (NSW) [45] in this court or on appeal to the Privy Council [46] denies the general proposition that regard must be had to context, or requires that a definition which is picked up from one statute (the source Act) and applied in another be construed by reference only to its words without regard to the context provided by the source Act. Indeed, in the Producers' Co-operative Case, Dixon J expressly acknowledged [47] the need to consider the context provided by the other provisions of the source Act when considering a definition provided for in that Act and picked up and applied by another.
[31] It may be accepted that there are some limitations to the use that can properly be made of other provisions of the source Act when construing a definition in the source Act that is picked up and applied by another Act. As both Latham CJ [48] and the Privy Council pointed out [49] in the Producers' Co-operative Case, if the definition that is picked up is to be applied in the source Act only "unless the context or subject-matter otherwise indicates or requires", the particular meaning that the term in question may have in any particular provision of the source Act will not elucidate the meaning of the general definition of the term. But it by no means follows from this observation that a definition should be construed without regard to its context. That is why the Privy Council in the Producers' Co-operative Case treated [50] the activities which the source Act in question permitted as explaining "the general meaning and application of the definition" in question.
[32] Resolution of these appeals ultimately does not depend upon examining when or to what extent it is necessary to consider the context of the definition of "personal injury damages" in the Liability Act in construing that expression in the 1987 Legal Profession Act. Although the respondents' arguments were couched in terms of "context", upon analysis they sought to go further than elucidate the meaning of the expression "personal injury damages" as it was used in the 1987 Legal Profession Act by consideration of its statutory context in the Liability Act. Rather, they sought to treat s 198C(1) of the 1987 Legal Profession Act as providing that "personal injury damages" means personal injury damages of the kind to which Pt 2 of the Liability Act applied. It is more useful to focus attention on that proposed construction than to investigate, in the abstract, the use of "context" in statutory interpretation.
Construing s 198C(1)
[33] The construction favoured by the Court of Appeal and supported in this court by the respondents must be rejected. The text of the provisions at issue in these appeals readily yields the construction which the appellants urged: that the expression "personal injury damages" when used in the costs limiting provisions of Div 5B of Pt 11 of the 1987 Legal Profession Act extended to any and every form of damages that relate to the death of or personal or bodily injury to a person caused by the fault of another person. In its terms, the definition of "personal injury damages" contained in the Liability Act and picked up by the 1987 Legal Profession Act neither required nor permitted any different application according to whether the "fault" which founded the claim was a failure to take reasonable care or the commission of an intentional act with intent to injure. And s 198C(1) of the 1987 Legal Profession Act, by providing that "personal injury damages" has the same meaning as in the Liability Act, naturally and immediately directed attention to the definition of that expression in the Liability Act, which used the cognate word "means": "personal injury damages means ..." (emphasis added). It did not refer to the operation or application of the Liability Act. It did not direct attention to whatever was identified as being the legal effect or consequence which the Liability Act produced by using that defined expression in its various provisions.
[34] At least in this court, if not also in the courts below, the respondents' argument for confining the application of the costs limiting provisions by reference to the operation or application of the Liability Act depended upon a false premise. The respondents focused attention on the expression "personal injury damages" as if that expression was the hinge on which both the 1987 Legal Profession Act and the Liability Act turned. Hence, their argument was that "personal injury damages" in the 1987 Legal Profession Act is to be confined to those "personal injury damages" regulated by the Liability Act.
[35] The premise underlying this argument is not sound. Each Act used the defined expression "personal injury damages" as part of a larger composite phrase: "award of personal injury damages" in the Liability Act and "claim for personal injury damages" in the 1987 Legal Profession Act (emphasis added). The hinge on which the relevant operation of each Act turned was the larger composite phrase and not the defined expression "personal injury damages". None of the statutory provisions that depended on the composite expressions "claim for personal injury damages" or "award of personal injury damages" affected the sense in which the defined expression "personal injury damages" was used in the relevant Acts. There is no textual reason to limit the expression "personal injury damages" in the 1987 Legal Profession Act to those claims for personal injury damages the award of which was regulated by the Liability Act.
[36] There is an additional problem with the respondents' argument. It assumed that the costs limiting provisions of the 1987 Legal Profession Act and the Liability Act were to have coextensive operation. For example, the respondents submitted that "the Civil Liability Act and the costs limitation provisions of the Legal Profession Act were introduced as a single package of reforms in the Civil Liability Act and were clearly intended to work in harmony". From this premise, the argument continued that because the Liability Act regulated some but not all forms of awards of "personal injury damages", the only claims for "personal injury damages" to which the costs limiting provisions of the 1987 Legal Profession Act applied were those claims for personal injury damages the award of which was regulated by the Liability Act. Again, the premise underpinning this argument is not right.
[37] The use of the defined expression "personal injury damages" in both composite phrases provides no textual basis for reading the defined expression (when it is used in the 1987 Legal Profession Act) as confined by reference to the Liability Act's field of operation once due regard is paid to the wider, and different, composite expressions that are central to the relevant provisions of each Act. Further, as has already been noted, the two Acts expressly identified circumstances in which their respective provisions were not to apply, some of which were the same but some of which were different. In their very terms the relevant provisions of the two Acts demonstrate that each had, and was intended to have, a different area of operation.
[38] Considerations of context do not support the conclusion that the two Acts are to be read as having coextensive fields of operation. The Liability Act's exclusion of intentional torts done with intent to injure from the application of its operative provisions (all of which were originally to be found in Pt 2 of the Act) demonstrates that the mischiefs to which that Act was directed were identified as arising in connection with claims for damages for personal injury other than claims in respect of intentional torts. It by no means follows, however, that the mischiefs to which Div 5B of Pt 11 of the 1987 Legal Profession Act was directed were confined to mischiefs arising in respect of only those classes of claims for personal injury damages the award of which was regulated by the Liability Act. Particularly is that so when intentional torts were not expressly excluded from the operation of Div 5B, as they might so easily have been.
[39] The only circumstance which can be identified as suggesting that the "purpose" or "intention" of Div 5B should be read as confined in the manner described is that it was the Liability Act which introduced the relevant provisions into the 1987 Legal Profession Act. But when it is observed that the provisions of the two Acts were not connected, as they might so easily have been, by express reference in the 1987 Legal Profession Act to the operation of the Liability Act, it is apparent that the supposed limitation by reference to "purpose" or "intention" is not soundly based. The text of the relevant provisions provides no support for confining Div 5B to those claims for personal injury damages the award of which was regulated by Pt 2 of the Liability Act. The statutory text reveals no "intention" so to confine Div 5B.
[40] The reasons of the Court of Appeal illustrate the dangers of reasoning from legislative "intention" that is not based, as it must be, in the text of the relevant legislation. The Court of Appeal stated [51] that there was "no basis" in "the policy underlying the legislation" (presumably both the provisions of the Liability Act and the provisions which it introduced into the 1987 Legal Profession Act) for imposing the costs limiting provisions of the latter Act "without reference to the carefully crafted exclusions in s 9(2)" of the Liability Act. No foundation for making such an assumption about "the policy underlying the legislation" was identified, whether in the reasons of the Court of Appeal or in argument in this court. Neither the paragraphs from extrinsic material quoted [52] by the Court of Appeal nor the Court of Appeal's earlier decision in Newcastle City Council v McShane (No 3) [53] founded the asserted assumption. To say, as the Court of Appeal did, [54] that there was "no basis" in extrinsic material or "in terms of the policy underlying the legislation" for imposing the costs limiting provisions on all claims for personal injury damages is to assume the answer to the question of construction and then ask whether the assumed answer is falsified.
[41] It is not legitimate to identify a legislative purpose not apparent from the text of the relevant provisions (or in this case even expressed in some extrinsic material), to examine extrinsic material and notice that there is nothing positively inconsistent with the identified purpose, and then to answer the question of construction by reference to the purpose that was initially assumed. That reasoning is not sound. It is reasoning of the kind of which Spigelman CJ rightly disapproved in the extra-curial writing set out earlier in these reasons. Statutory "purpose" and "intention" are to be identified according to the principles that were described earlier under the heading "Some basic principles". Once that is done, it becomes apparent that the text and context of the relevant provisions point towards the construction supported by the appellants in these appeals: a claim for personal injury damages includes any and every form of claim for damages that relate to the death of or personal or bodily injury to a person caused by the fault of another person whether it be a failure to take reasonable care or the commission of an intentional act with intent to injure.
Conclusion and orders
[42] The claims which the respondents made were claims for damages that related to personal or bodily injury suffered by them. Contrary to the conclusions reached by the Court of Appeal in each matter, the claims that each respondent made were "claims for personal injury damages" within the meaning of s 198D(1) of the 1987 Legal Profession Act.
[43] Each appeal should be allowed. In each appeal paras (4) and (5) of the orders of the Court of Appeal made on 1 June 2011 should be set aside and in their place there should be orders that the appeal to that court is dismissed. In accordance with the appellants' undertaking proffered and accepted when special leave to appeal was granted, the appellants should in each case pay the respondent's costs of the appeal to this court.