JAMES N KIRBY PTY LTD (T/AS BARR PLASTICS) v KALINIC [1994] NSWCA 152

JAMES N KIRBY PTY LTD (T/AS BARR PLASTICS) v KALINIC SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MAHONEY, PRIESTLEY and CLARKE JJA 2 June 1994, 1 July 1994

[1994] NSWCA 152

The issue on appeal is whether the trial judge failed to give adequate reasons in his judgment. In trial, the issue was whether despite the fact that the respondent was suffering from a psychotic condition in 1989, the appellant had established that the neurotic condition which had been found to exist in 1980 had gone by 1989. The trial judge rejected the appellant's case that this question should be answered in the affirmative but did not explain the reasoning process which led him to reject the fundamental point made by the appellant.

Held: Clarke JA held that both counsel and the persons present in court during submissions and his Honour's pronouncement of his reasons for judgment would have entertained no doubt why his Honour had decided the case as he did. However, the decision was still deficient for want of reasons and thus represents an error of law. Nevertheless, this error does not affect the ultimate conclusion reached by his Honour. Accordingly, the appeal is dismissed with costs. Mahoney and Priestley JJA agree with Clarke JA's order but do not agree that his Honour made an error of law.

ORDERS

The appeal is dismissed with costs.

Mahoney JA I agree with Clarke JA that this appeal should be dismissed with costs. Two issues arise for decision: (a) whether the trial judge failed to give reasons, to the extent that he erred in law; and (b) (if he did) what order should be made by this Court.

(a) The judge was obliged, under pain of error of law, to indicate his reasons for dismissing the employer's application: in Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 and Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 this Court indicated the nature and extent of that obligation.

In the present case, it is, as Clarke JA has said, plain why the judge dismissed the application. He was not satisfied that the neurotic condition caused by the worker's accident had been replaced by her psychotic condition. The fact was that her signs or symptoms were such that she probably still had the neurosis: at least, the judge was not satisfied that she did not. And, if she did, it was assumed that it operated to cause or contribute to her incapacity.

The appellant has not suggested that it is in doubt as to what was decided or why; it has no doubt as to the rights which flow from the decision. It has not appealed against the judge's finding or sought a rehearing of the facts, here or in the Compensation Court. It has relied merely upon the form of the judge's closing remarks, ie, his judgment.

Should this Court conclude that the judge failed to give reasons for what he did? That depends upon what judgment writing is to be held to require and to warrant. There is little doubt that, since the last War, the form of our court judgments has changed. They have become, I think, more formal and detailed. They often are exhaustive, of fact and of law: at least, they give this impression.

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It is, in my opinion, proper to question how this stands with the nature of court judgments and how it serves current public needs.

A court judgment is, in its nature, several things. It is the record of a formal public act - "the defendant shall pay to the plaintiff $X..." - and the reasons for it. It is an act of communication, by the court to the parties, of what the court has done and the reasons for it. It is an act of communication between the court which decides the case and other lawyers, within the court and outside it. And it is an exercise of the judicial skill of the judge concerned: see generally Rajski v Bainton (Court of Appeal, 6 September 1991, unreported). But the obligation to give reasons is essentially functional: it exists (as in this case) so that the parties may know why they won or lost and so that they may be able to exercise the rights which accrued to them because of the judge's decision. The obligation does not require that the judge indicate his reasons in a particular way or that he follow a particular form. He may feel that the dictates of professionalism require a detailed statement of his conclusions and his reasoning to them. He may (to paraphrase Sir Frank Kitto's views) be conscious of how important his decision is to the unsuccessful party and so may wish to display his reasoning in detail so that, if he be wrong, he may be corrected. But whether he does that depends on choice rather than obligation. His legal obligation will be discharged if (special cases apart) the parties are told what he did and why he did it and can exercise their rights accordingly. It is, within appropriate limits, for the judge to decide to what extent each of these is to be reflected in what he writes.

But there are, in my opinion, limits to what a judge should do in this regard. These limits are imposed by the public functions of the courts and of judgment writing. The writing of judgments takes up a great part of judicial time. The change in judicial procedures, the abolition of jury trial in civil cases, the paper presentation of what formerly was done orally, and the pre trial preparation of cases by judges have all increased the time which must be taken in judgment writing. The time necessarily consumed in judgment writing and its ancillaries often exceeds the time taken in the oral presentation of the case, not infrequently by multiples of it. And the time and the judicial energy consumed is, of course, not available for the hearing and decision of other cases. It is proper to consider how far judgment writing should go.

The right of a judge to prepare his judgment in the manner which to him appears appropriate is to be preserved: Martin v Green (1984) 1 NSWLR 147 at 157F. It is an incident of the duty of a judge to decide disputes impartially and in accordance with his understanding of the law. See Duport Steels Ltd and Ors v Sirs and Ors [1980] 1 WLR 142 at 157, 164; R v Horsham Justices, ex parte Farquharson [1982] 1 QB 762, per Ackner LJ. But, in my respectful opinion, it is necessary that a balance be struck between the burden, or tyranny, of judgment writing and the obvious benefits of judgments which record exhaustively, at each stage of the judicial process, the facts found, the law applied, the conclusions reached and the process of reasoning to them When the public interest presses, it is better that cases be disposed of rather than that time be taken to explain, perfectly or elegantly, why they have been disposed of as they have.

I do not conclude that what the trial judge did in this case was wrong in law. As I have said, no complaint was made about the merits of his decision. The parties knew what he decided and why. On appeal, counsel were able to take the court to those aspects of the transcript which made plain why the judge did what he did. It would, as Clarke JA has indicated, have been better if, by the addition of a few sentences, his Honour's final remarks had been converted into a self

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contained statement of his reasons. The parties would, no doubt, have been saved the cost of this appeal if that had been done: the present appeal would have been unarguable. I do not criticise the judge for not doing so in this case: I do not know the reasons why he did what he did. There may have been reasons which were obvious to those involved. But, in the end, I am not satisfied that, in the context of the case, the judge did not do what was required of him.

(b) Even if the judge had failed to meet the requirements of the law as to judgment writing, that was no reason for this appeal to be brought. If it be clear what the judge did and why - that is not in question - the fact that the judge made a Pettit v Dunkley error of law would produce no relevant result. The worker would not be deprived of her award. There would be no reason why the award should be set aside or why this Court should rehear the merits or return the appeal to the Compensation Court for that purpose. The error of law, if there was such, was irrelevant to the determination of the proceeding.

I therefore agree with the orders proposed by Clarke JA.

Priestley JA I agree with Clarke JA in all respects except that I do not thinkthat the brevity of the trial judge's reasons crossed the rather elusive border that separates succinctness from error of law.

In my opinion the appeal should be dismissed with costs.

Clarke JA The reasons for judgment of Egan CCJ given immediately after the conclusion of argument on 4 November 1991 were as follows:

"T think the difficulties are insurmountable, certainly on the evidence at the moment. When one looks at the original proceedings and Judge Campbell's findings and then the matters which have occurred or arisen since then, I think it is not possible to decide, even on a bare balance of probabilities, that the psychotic condition has so overtaken, assuming she has one, and there does not seem to be much doubt about that, the other matters that they are no longer a factor.

These non organic matters are notoriously difficult particularly when one is dealing not with matters which can be looked at in the sense of having diagnostic aid available, such as CAT scans and x rays and all those matters which assist diagnostically. In my view there should be an award for the respondent worker."

The sole ground of appeal from the award for the respondent was that the court erred in law in failing to give adequate reasons for its decision. Given the conciseness of the reasons for judgment the appellant's contention presents, at first blush, as having considerable merit. However, in order to determine whether or not it should be upheld it is necessary to look more closely at the issues which were being contested by the parties and the circumstances of the hearing immediately prior to the publication by his Honour of his reasons.

The respondent suffered an injury to her back and a left inguinal hernia on 25 May 1978. She was paid workers' compensation voluntarily until she recovered from the organic sequelae of her injuries. Those payments ceased on 17 December 1979. She brought a claim for compensation and relied, in part, upon a report from a psychiatrist, Dr James Grady, in which he concluded that she was suffering from a severe regressive psychotic disorder which had been precipitated by her work injury. Campbell CCJ, who heard the application, accepted Dr Grady's opinion and concluded that the respondent was suffering from a neurotic illness. Accordingly, his Honour made an award for the respondent upon the basis that she was suffering from a functional overlay and was totally incapacitated.

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The appellant made, and is continuing to make, the payments of compensation awarded by the Court but on 25 January 1991 it sought a review, or variation, of the award upon two grounds. The first was that the respondent was no longer incapacitated as a result of the injuries found to be compensable in the earlier hearings. The second was that, if she was still incapacitated as a result of compensable injuries, such incapacity was by then partial although her fitness for work had been further reduced by a non- compensable condition.

This application was based primarily upon the evidence of a psychiatrist Dr Roberts who was of opinion that the respondent was suffering from a psychosis which was not related to her work injury. He also said that if she had ever been suffering from a neurosis that condition had long since resolved. His view emerges in a convenient form from the following question which was asked in cross examination and his answer: "Q. What I am suggesting to you is that when you get a series of symptoms which could be related to neurosis, all of them could be related to neurosis, and you then take those symptoms through the years with a particular patient and one gets a pattern of the repetition of the symptoms and consistency of the symptoms through the years, that tends to suggest, does it not, that there is a neurosis there? A. No, it doesn't. You can get consistency of symptoms with psychoses, and what you've got to look for in making a diagnosis is as to whether there are psychotic symptoms present. Now you don't have auditory hallucinations and paranoid ideations in a neurosis, this is a psychotic person. In a psychosis you can have symptoms that are common to other conditions, that doesn't mean that the person is suffering from those conditions any more than stomach pain, which you can get in terminal cancer or appendicitis, is diagnostic of one or the other. You can't make the connection with - in my view, you can't make the connection with respect, you're trying to make. The lady has symptoms of psychosis, they're quite clear and classical, she has no - the picture is inconsistent in terms of the depth and range and intensity of her illness, it's totally inconsistent with a neurosis in terms of her current presentation. Neurotic people by and large tend to function normally, most of them tend to go to work, most of them tend to earn a living albeit with difficulty. I mean, I could not envisage this woman - "

The respondent resisted the application and again relied on the evidence of Dr Grady who accepted both that there may be a paranoid element in the respondent's condition and that "she may be psychotic". However, he concluded that the history still remained that the accident at work brought on her emotional disturbance and she was still totally unfit for employment.

There was also evidence from a treating psychiatrist, Dr John Strumm, who made it quite clear that he had a general policy of avoiding medico/legal involvement when he was the treating doctor. Nonetheless, he expressed the opinion that she was a lady with mixed symptoms, some of which were psychotic and some of which were neurotic. He noted, however, that he had been reluctant to commit himself about the relationship of symptoms to the accident in 1980 and he said that he was still reluctant to do so. He thought that an independent assessment should be carried out for this purpose.

In his submissions to Egan CCJ counsel for the appellant defined the issue confronting his Honour in these terms:

"\.. this is the essence of the debate, your Honour, that the undoubted neurotic condition which existed in post - 1975, has been completely replaced by the psychotic condition which certainly exists on all of the evidence with the debate being WHETHER IT HAS COMPLETELY REPLACED THE EARLIER CONDITION. "(my emphasis).

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Counsel went on to say that:

"\.. if on an ultimate weighing of the evidence it is the court's view that there is still a residual legacy, may I call it, of the neurotic condition then I can see I have failed. The superimposing of the psychotic does not entitle my client to avoid liability under the award of his Honour Judge Campbell... I accede to the proposition that I must satisfy you that on a fair weighing of the evidence, the neurotic condition has gone".

After counsel had concluded his submissions the following exchange took place between his Honour and counsel:

"HIS HONOUR: Is a neurosis an anxiety state?

MR MACFARLANE: Is a neurosis an anxiety state your Honour?

HIS HONOUR: Yes, or is an anxiety state a neurosis, whichever way you care to put it.

MR MACFARLANE: Your Honour, there are two levels to answer that, I would understand so, that it is part of a confused psyche which occurred after 1975. I would have to concede that.

HIS HONOUR: Does not Mr Taylor say she has an anxiety state. It is just that I find some of the range of the reports difficult, he claims that she does admit, now that was a strange phrase to use at 8, she does admit to having a wide range of psychological symptoms, I thought that was the whole thrust of the matter that she was saying - not admitting it.

These range from symptoms of depression and anxiety the symptoms involving these auditory and visual hallucinations which then on Dr Robert's views would be psychotic.

But if there is symptoms of depression and anxiety does that indicate if one accepts what Mr Taylor says - at least in part anyway on that part, that there is still a neurotic element.

MR MACFARLANE: Your Honour the only way that I could answer that fairly, would be to concede that if I do not explain away that, then yes, that provides the nexus Mr Batten can comfortably rely on and in explaining it away, there is only the evidence of Dr Roberts that it has reached such a level, that is the hallucination, the auditory hallucination that

HIS HONOUR: He is not in agreeance with Mr Taylor on that aspect.

MR MACFARLANE: He appears not to be your Honour, that is a problem with my case.

HIS HONOUR: Mr Taylor indicates he has not got, I think there is a phrase something like well developed or poorly developed or something like that.

MR MACFARLANE: That is true your Honour, I know the reference your Honour is making to. Your Honour that is a problem for the employer's case, I can see that.

HIS HONOUR: Yes. You have organised delusional symptoms.

MR MACFARLANE: Yes. Your Honour, there is no easy way for me around that."

Counsel for the respondent then addressed and after he had concluded his Honour said:

HIS HONOUR: One matter for Mr MacFarlane, does not Dr Roberts in his second answer on the last page, indicate that he does not accept that she has a neurosis for a start. Even if one assumes."

In response Mr MacFarlane said:

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"Yes, your Honour, his answer is consistent with that, your Honour, and that is yet another problem that I cannot answer, your Honour. I accept the very great difficulties that it places the employer's case with, your Honour."

The evidence to which his Honour refers was the answer by Dr Roberts that:

"T do not consider that in terms of her current state as of from 1989 onwards that the neurosis, even if one assumed it to have been originally present, is contributing in any significant manner to her current state."

I would understand his Honour to have been indicating in the last exchange that one difficulty with Dr Roberts' opinion was that it was not based upon the premise that in 1980 the respondent had a neurosis. This was important as Campbell CCJ had conclusively determined between the parties that she was suffering from a neurosis at that time. The doctor's unwillingness to accept that premise was clearly regarded by his Honour as a matter of direct relevance in determining the issue which counsel had earlier defined and there can be no doubt that this was recognised by Mr MacFarlane who expressly said that this approach of the doctor's was a problem which created great difficulties for the employer's case.

In summary, the issue was whether, despite the fact that the respondent was suffering from a psychotic condition in 1989, the appellant had established that the neurotic condition which had been found to exist in 1980 had gone by 1989. That case depended upon a complete acceptance of the view of Dr Roberts which was contradicted by Dr Grady and, to an extent, by Mr Taylor and, in addition, suffered from the difficulty that the doctor did not start from the premise that there had been a neurotic condition.

Once those facts are appreciated it is clear enough that Egan CCJ was of opinion that there was insufficient evidence in support of the appellant's case to lead to an affirmative conclusion, even on a balance of probabilities, that the neurotic condition had gone.

It is true that his Honour does not explain the reasoning process which led him to reject the fundamental point made by the appellant. However, reference to the exchange which took place between his Honour and counsel indicates that Mr Taylor's statement that she had an anxiety state, which was indicative of a neurosis, and the difficulty resulting from Dr Robert's attitude towards the existence of a neurosis following the 1980 injuries, in the light of the other evidence, left him unpersuaded that the neurotic condition had ceased. I would conclude, therefore, that both counsel and the persons present in court during submissions and his Honour's pronouncement of his reasons for judgment would have entertained no doubt why his Honour had decided the case as he did.

Nonetheless, it is well established in this State that it is the duty of the judge to state his reasons for deciding as he does and his failure to do so may constitute an error of law. In this context it is worth referring once again to what Mahoney JA said in Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378. at 385 to 386

"However, such a duty does not exist in respect of every matter, of fact or of law, which was or might have been raised in the proceedings. It is not the duty of the judge to decide every matter which is raised in argument. He may decide a case in a way which does not require the determination of a particular submission: in such a case he may put it aside or, as Lord Scarman said, merely salute it in passing (R v Barnet London Borough Council; Ex parte Nilish Shah [1983] 2 AC 309, at 350). A judge will, of course, appreciate the possibility of

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points being taken or decided on appeal which were not taken or decided below and for this reason he may decide, and give reasons for his decision on, matters which in strictness he need not decide.

However, the decision of a particular submission may be an essential part of the judge's reasoning to his final conclusion. This may be so because it is necessarily so, ie, because he cannot come to his final conclusion without deciding it; or because the reasoning which in fact he follows makes it so. In such a case the duty of the judge will vary according to the way in which the case has been conducted and according to the reasoning which he has followed. Ordinarily he may confine his attention to the points which have been taken and the submissions made in relation to them.... "

In the present case one can discern, as I have indicated, the reasoning process which led to his Honour's conclusion but the fact remains that his Honour has not explained in his reasons why it was that he thought the difficulties were insurmountable or that Dr Roberts' evidence should be rejected. The appellant is therefore correct to say that the judgment is, with respect, deficient for want of reasons.

It should not be thought that in saying that the judgment is deficient I am laying down a requirement that lengthy reasoned judgments be given in all cases. There are many cases in which the reasons for judgment can be short provided the judge's reasoning process is exposed sufficiently. Indeed, conciseness is a desirable quality provided that the reasons leading to the ultimate conclusion are adequately exposed in the judgment. In this case, for instance, it would seem to me that his Honour could have expressed the reasons which led to his conclusion in one or two sentences explaining why it was that he did not accept Dr Roberts' opinion.

Although the submissions of counsel were transcribed and it is possible to infer from them the reasons which did in fact lead to his Honour's conclusion, it must be understood that submissions are not always transcribed and in their absence the court would not have been able to glean why it was that his Honour had decided the case in the way that he did. This is why, or at least one reason why, the judgment should be sufficient in itself to explain the reasoning process. Otherwise an appeal court would be quite unable, in the absence of the transcribed submissions, to understand how it was the judge had reached his conclusion.

This is not the only purpose for the giving of reasons for they are, as Mahoney JA pointed out in Tatmar, "an incident of the judicial process".

I would conclude, therefore, that there has been an error of law in this case insofar as there were inadequate reasons given for his Honour's conclusion. The question then is "What order should the court make?" The present appeal is not limited to an error of law and this Court is obliged, pursuant to the provisions of s75A of the Supreme Court Act 1970, to make the order which ought to have been made in the first instance. In the present case it is clear, as I have earlier indicated, that Egan CCJ did not accept Dr Roberts' opinion for the reasons which were exposed during argument. In the light of the concessions made by counsel for the appellant during the hearing it seems to me that the conclusion reached by his Honour was obviously correct. It is, as his Honour pointed out, difficult to determine whether, and if so when, a neurotic condition ceased. In circumstances where there is a conflict of evidence on the question, there are difficulties with the opinions of the doctor asserting that the condition has ceased

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and the weight of evidence throws doubt on that doctor's conclusions I would conclude, as his Honour did, that the appellant had failed to discharge the onus of proof.

It follows that, although there is an error of law insofar as his Honour failed to give adequate reasons, it is an error which does not affect the ultimate conclusion reached by his Honour. Further that conclusion is, in my opinion, a correct conclusion on the evidence in the case. It follows, therefore, that the appeal should be dismissed with costs.

The appeal is dismissed with costs.

Counsel for the Appellant: GW NEILSEN Instructed by: DAVID LANDA STEWART and CO Counsel for the Respondent: M BATTEN Instructed by: HUNT and HUNT