Litigating in a Statutory Universe Chief Justice Robert French AC
18 February 2012, Melbourne Cosmological metaphor is a useful way of elevating pedestrian utterances about statutes into a larger perspective. Sir Owen Dixon was not above cosmological metaphor. He compared the common law to the ether. The ether is relevantly defined in the Oxford Dictionary as:
A very rarefied and highly elastic substance formerly believed to permeate all space, including the interstices between the particles of matter, and to be the medium whose vibrations constituted light (and radio waves) …1 In an article which was published in the Australian Law Journal in 1955, Sir Owen Dixon said:
The common law is more real and certainly less rigid than the ether with which scientists were accustomed to fill interstellar space. But it serves all and more than all, the purposes in surrounding and pervading the Australian system for which, in the cosmic system, that speculative medium was devised.2 Our legal universe today is dominated by innumerable statutes and varieties of delegated legislation and legislative instruments made under those statutes. The fundamental infrastructure of that universe is founded in the Constitution of the Commonwealth and, arguably, the Constitutions of the State and the Australia Acts. The common law is like the pervasive background radiation left over from the 'big bang' that brought our Federation into existence. The evolution of our legal universe has been dominated by the runaway expansion of statutes, delegated legislation and legislative instruments enacted by Commonwealth, State and Territory governments and their legislative delegates. The common law is today so entangled with statutes that it is difficult to find any legal problem which is able to be defined and resolved solely by resort to the common law. On the other hand, it is not easy to find a statute which does not depend for its interpretation on principles derived from the common law, even if some of them find expression in the provisions of an Interpretation Act.
In its interaction with statutes, the common law has a constitutional dimension. As former Chief Justice John Latham said in 1960:
… in the interpretation of the Constitution, as of all statutes, common law rules are applied.3 That constitutional dimension is also reflected in the institutional arrangements which the common law brings with it. At its core are public courts which adjudicate between parties and which are the authorised interpreters of the law which they administer.4 Professor Goodhart characterised as the most striking feature of the common law its public law dimension, it being '… primarily a method of administering justice.'5 The common law has also been referred to in the High Court as '… the ultimate constitutional foundation in Australia".6 Nevertheless, ours is a predominantly statutory universe. The Constitution of the Commonwealth is itself s 9 of a British statute, The Commonwealth of Australia Constitution Act. Binding force was given to our Constitution by s 5 of that Imperial Act – sometimes called covering cl 5 which provides that: .
This Act, and all laws made by the Parliament of the Commonwealth under the Constitution, shall be binding on the courts, judges, and people of every State and of every part of the Commonwealth, notwithstanding anything in the laws of any State …
In Australia today we go about our lives under a mountain range of statutory words which impose obligations and restrictions, create rights and liabilities, and confer powers on a large and varied array of regulatory bodies, public authorities and officials. Two of the largest and most complex statutes of the Commonwealth make the point well. They are the Income Tax Assessment Acts 1936 and 1997 (Cth) and the Social Security Act 1991 (Cth).
In 1901, the Commonwealth Parliament enacted the Immigration Restriction Act 1901 (Cth). When enacted, it contained 19 sections. It was amended in the years that followed its enactment but by 1935 still only comprised 19 sections. By 1950, it had grown to 64 sections. It was repealed by the Migration Act 1958 (Cth) ('the Migration Act'), which established a completely new statutory scheme for migration, regulating entry into Australia by entry permits, the grant of which was within the power of officers of the Department of Immigration. Although more complex than its immediate predecessor the Migration Act in 1958 comprised some 67 sections. By 2001, the Migration Actcontained more than 740 sections with its operation supported by hundreds of regulations set out in two volumes. It is a statute which is replete with official powers and discretions, tightly controlled under the Act itself, and under the regulations, by conditions and criteria which are to be satisfied before those powers and discretions can be exercised. It has not shrunk in the last 10 years. Legislative drafters, in the search for certainty, have put more and more words into the Act. Many of those words which condition the exercise of official powers under the Act, give rise to contested interpretations and, in come cases, the discovery of vitiating jurisdictional error based on wrong interpretations.
The Migration Act is but one example of many. In our litigious universe no question of substantive or procedural law can be investigated, defined or resolved without first identifying the range of statutes which may be applicable to it and the issues of interpretation which they may throw up.
At a procedural level, legislatures have begun to seek to regulate access to the litigious process by the imposition of pre-litigation requirements or protocols. Their imposition, particularly in this State, has been contentious and contested. It is sufficient to refer to Ch 2 of the Report of the Victorian Law Reform Commission in 2008 setting out the arguments for and against pre-action protocols, the passage of the Civil Procedure Act 2010 (Vic) and the repeal of Ch 3 of that Act by the Civil Procedure and Legal Profession Amendment Act 2011 (Vic).
The policy of such statutes is clear enough – to create opportunities at an early stage for parties in dispute to resolve their differences before resorting to the litigious process which involves the expenditure of both public and private resources.
Access to the courts is access to a public resource. The plurality judgment in Aon Risk Services Australia Ltd v Australian National University7, referred to rule 21 of the Civil Procedure Rules of the Australian Capital Territory which introduced Ch 2 of those Rules, setting out as their objective:
(a) The just resolution of the real issues in the proceedings; and
(b) The timely disposal of the proceedings and all other proceedings in the Court at a cost affordable by the respective parties.
The rule imposed an obligation on parties to a civil proceeding to 'help the court to achieve the objectives' and in r 21(4) required the court to 'impose appropriate sanctions if a party does not comply with these rules or an order of the court.' After referring to established principles of case management in the courts, the plurality said of r 21(2)(b), relating to the timely disposal of the proceedings at an affordable cost that the rule:
… indicates that the rules concerning civil litigation no longer are to be considered as directed only to the resolution of the dispute between the parties to a proceeding. The achievement of a just but timely and cost-effective resolution of a dispute has an effect upon the Court and upon other litigants.
The creation of statutory requirements regulating or incidental to access to the courts is informed by policy objectives with which most would agree. Inevitably, however, there are transaction costs involved, including the cost of debates about compliance or non-compliance with the requirements. Under the Native Title Act 1993 (Cth) it was and, I think still is, a precondition for access to the arbitral functions of the Native Title Tribunal in relation to certain future acts that the parties have negotiated in 'good faith'. The jurisdiction of the Tribunal being thus conditioned, it was not surprising that there were a number of cases in which the content of the notion of good faith negotiation was explored and the question whether there had been good faith negotiation determined.
The Civil Disputes Resolution Act 2011 (Cth), which applies to the Federal Court and the Federal Magistrates Court, requires an applicant who institutes civil proceedings in the court to file a genuine steps statement at the time of filing the application. It must specify the steps that have been taken to try to resolve the issues in dispute between the parties or the reason why no such steps were taken. A respondent must, in turn, file a genuine steps statement stating that the respondent agrees with the genuine step statement filed by the applicant or if not specifying the respect in which and the reasons why the respondent disagrees.8Importantly, s 10(2) provides that:
A failure to file a genuine steps statement in proceedings does not invalidate the application instituting the proceedings, a response to such an application or the proceedings.
However, a court in performing its functions or exercising powers in relation to civil proceedings before it may take account of whether a person who was required to file a genuine steps statement did so and whether such a person took genuine steps to resolve the dispute.9 The concept of 'genuine steps' is defined in s 4(1A) which says that:
For the purposes of this Act, a person taking genuine steps to resolve a dispute if the steps taken by the person in relation to the dispute constitute a sincere and genuine attempt to resolve the dispute, having regard to the person's circumstances and the nature and circumstances of the dispute.
There follows a non-exhaustive list of examples of steps that could be taken by a person as part of taking genuine steps to resolve a dispute.
The implications of these provisions for the litigious process is not clear. No doubt their effects will emerge with time. I would not want to make any predictions. I refer to them and to analogous provisions in other States to illustrate that statutes are reaching into the pre-litigation decision-making processes of legal advisors and their claims not only with respect to their invocation of the substantive law, but also with respect to their initial engagement with parties with whom they are in dispute.
Turning from the procedural to the substantive law, what presents initially as a common law contract or tort problem is likely, in many cases, to require consideration of interacting and overlapping Commonwealth and State statutes. A small case study which illustrates the point is thrown up by a recent decision of the High Court10. It concerns a woman, Mrs Young, living in New South Wales, who purchased a European tour package from a New South Wales tour company called Insight Vacations Pty Ltd ('Insight Vacations'). Part of the tour involved travel on a coach from Prague to Budapest. In the course of the journey Mrs Young got out of her seat to retrieve a bag from the overhead luggage shelf. The coach braked suddenly and she fell and was injured. Her contract with the tour company was governed by the law of New South Wales.
Mrs Young sued Insight Vacations in the Local Court of New South Wales. She sued in contract but found that there was a statutory provision to help her. It was s 74 of the Trade Practices Act 1974 (Cth) ('the Trade Practices Act'), which made it an implied term of her contract with Insight that the services supplied by it would be rendered with due care and skill. She alleged that Insight had not done that and that as a result she had suffered injury. Insight, however, pointed to an exemption clause in the contract which said that where a passenger occupies a motor coach seat fitted with a safety belt, neither the operators nor their agents or cooperating organisations would be liable for any injury arising from any accident if the safety belt was not being worn at the time of such accident. The question was whether the exemption clause could defeat the warranty implied by the Commonwealth statute.
There was a provision in a State law, s 5N of the Civil Liability Act 2002 (NSW), which permitted parties to a contract for 'recreation services', to provide by their contract for the exclusion, restriction or modification of liability. The closest analogue I can find in the Wrongs Act 1958 (Vic) is s 46(1), which provides that Pt X of the Act relating to negligence does not prevent parties to a contract from making express provision for the rights, obligations and liabilities under the contract in relation to any matter to which Pt X applies. In the Young case, a Commonwealth law, the Trade Practices Act, expressly left room for the operation of a State law which limited or precluded liability for breach of an implied warranty created by the Commonwealth law. In that case however, the Court held, as a matter of statutory interpretation, that the State law which allowed the parties to contract an exemption clause, did not thereby limit or preclude liability and was therefore not picked up by the Commonwealth law. In any event, the relevant provision of the State law did not apply to a contract to be performed wholly outside the State of New South Wales. The exemption clause was thus overcome by the implied term created by the Trade Practices Act.
The Court also noted that the exemption clause began with the words 'Where the passenger occupies a motor coach seat fitted with a safety belt…' It was to be construed as referring only to times when the passenger was seated, not to times when the passenger stood up to move around the coach or to retrieve some item from an overhead shelf or for some other reason. The contract did not require passengers to remain seated at all times while the coach was in motion. The provision of a toilet at the rear of the coach showed that the operator accepted that a passenger could, and sometimes would, get out of his or her seat. The case is a good example of the way in which a contract which derived its legal force from the common law was nevertheless embedded in a matrix of Commonwealth and State statutes which ultimately determined a right of action under the contract.
In dealing with what presents as a common law problem it is always the case that the legal practitioner will have to consider whether there are any statutes which affect the question. In Victoria, if you want to sue somebody for negligence causing personal injuries, it is necessary to have regard to the provisions of the Wrongs Act 1958 (Vic) which modifies some of the common law principles of negligence. If the prospective plaintiff was injured in the course of employment, workers' compensation legislation may be applicable. If the case involves joint wrong-doers, a motor vehicle and a fatal accident, and contributory negligence, then other statutory provisions come into play. There are also special provisions in the Wrongs Act relating to the question whether a public authority has a duty of care or has breached a duty of care.11
In many cases in which somebody wants to sue somebody else at common law, the question should be asked: Is there a statute which confers a right of action for the same conduct? Mrs Young found s 74 of the Trade Practices Act. There are other examples. If a party to a contract alleges that the other party has failed to perform a pre-contractual promise or that a pre-contractual representation has turned out to be false, that failure may give rise to a cause of action for misleading or deceptive conduct under Federal or State consumer and competition laws. Indeed, in some cases the statutory cause of action will be the preferred course because it may require the plaintiff to prove less than has to be proved to make out the common law cause of action. In the cause of action for misleading or deceptive conduct, it is not necessary to prove dishonesty or carelessness. On the other hand, it may be that greater damages will be recoverable under the common law action than might be recoverable under the statutory cause of action. For example, in some cases punitive damages, which may not be recoverable under the statute, may be recoverable at common law.12 The remedies available under the statutory cause of action will also be defined by statute and will require consideration and interpretation.
The field of torts provides a rich store of examples of the ways in which the common law and the statute law may interact. A list of those ways, which are neither exhaustive nor mutually exclusive, would include the following:
1. Statutory modification of an existing common law tort.
2. Statutory creation of a new tort.
3. Statutory abolition of a common law tort.
4. Statutory incorporation of an existing common law tort.
5. Development of the common law by analogy from statute.
6. Implied creation of a tort by statute.
7. Creation by statute of new occasions for the commission of torts.
8. Statutory changes to procedural laws affecting access to justice in relation to tort actions.
I will offer a few brief comments on each of these:
1. Statutory modification of existing common law tort
Early examples of this kind of interaction between common law and statute law appeared in the Workmens Compensation Acts and trade disputes legislation. Lord Campbell's Act and its Australian descendants, provide another example emerging out of the 19th century. Prominent contemporary examples are the Wrongs Act 1958 (Vic) and the Civil Liability Acts of other States. Those statutes cannot be taken as simply restating common law principles. In Adeels Palace Pty Ltd v Moubarak13 the Court remarked, in relation to the question of causation:
It is not necessary to examine whether or to what extent the approach to causation described in March v Stramare might lead to a conclusion about factual causation different from the conclusion that should be reached by applying s 5D(1) [of the Civil Liability Act]. It is sufficient to observe that, in cases where the Civil Liability Act or equivalent statutes are engaged, it is the applicable statutory provision that must be applied.14 2. Statutory creation of a new tort
Statute law may create new torts. A law which creates a statutory cause of action imposing civil liability for damages for interference with a right defined by that statute may properly be viewed as creating a statutory tort. An example is the proposed cause of action for a serious invasion of privacy, which the Australian Law Reform Commission recommended in May 2008.
3. Statutory abolition of a common law tort
Example of such abolition have occurred in Australia in relation to loss of consortium, champerty and maintenance.
4. Statutory incorporation of an existing common law tort
An example of this phenomenon is to be found in s 116 of the Copyright Act 1968 (Cth). That section authorises an owner of copyright in a work or other subject matter to bring an action for conversion or detention in relation to an infringing copy or a device used or intended to be used for making infringing copies.
A less explicit form of incorporation of tort in statutes occurs where a statute imposes a duty in terms reflecting a common law rule. The duty imposed by the Corporations Act 2001 (Cth)on company directors may be seen as an example of that form of incorporation.15 5. Development of the common law by analogy from statute
This is an area which is open to ongoing debate and I merely identify it as a head of possible interaction between the common law and statute law.
The implied creation of a tort by statute is a reference to the so-called action for breach of statutory duty. That cause of action has been regarded as a special case of reasoning by analogy from statute. There is a difficulty with this cause of action, which was identified by Dixon J in O'Connor v SP Bray Pty Ltd.16 That is that the legislature, in a case where the cause of action is invoked, may have expressed no intention on the subject. Dixon J said:
an interpretation of the statute, according to ordinary canons of construction, will rarely yield a necessary implication positively giving a civil remedy. As an examination of the decided cases will show, an intention to give, or not to give, a private right has more often than not been ascribed to the legislature as a result of presumptions or by reference to matters governing the policy of the provision rather than the meaning of the instrument.17 7. Creation by statute of new occasions for the commission of torts
When a statute confers powers or obligations upon authorities or individuals they may create occasions for the application of common law torts. This was explained by Gaudron J in Crimmins v Stevedoring Industry Finance Committee:
In the case of discretionary powers vested in a statutory body, it is not strictly accurate to speak, as is sometimes done, of a common law duty superimposed upon statutory powers. Rather, the statute pursuant to which the body is created and its powers conferred operates 'in the milieu of the common law'.18 A question whether police officers had a duty of care which they had breached in relation to a man who later committed suicide was considered in Stuart v Kirkland-Veenstra19.
8. Statutory changes to procedural law affecting access to justice
Mention should also be made of statutory changes to procedural laws which affect access to justice as relevant to the development of tort law. Representative or class actions, funded by commercial litigation funders, provide access to the courts for litigants who would have been unable to achieve such access without funding. Such arrangements, of course, do raise collateral questions about the relationship between litigation funders and instructing solicitors and counsel and the need for the maintenance of their independence as officers of the court. Some of these issues were considered by the Court in Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd20 and in Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd21.
Reference has been made to the interaction of statutes with contract law and with torts. It is sometimes too easy to overlook, in dealing with equitable cases involving equity and trusts, that there are some very important statutes of a general character which may be relevant. So a question about breach of duty by a trustee of real property may raise questions about the powers and duties of the trustee under trustees' legislation and the effects of general property statutes and Torrens title legislation. An example in which reference to such statutes was made in the context of an allegation of breach of trust was Byrnes v Kendle22, decided in August 2011.
The pervasiveness of statutes in all areas of the law direct attention to rules of interpretation and the core concept of legislative intention.