Syddall v National Mutual Life Association of Australasia Limited

[2] The liquidated damages are for sums which Mr Syddall claims are due to him under a disability insurance policy issued by Australian Casualty and Life ('AC & L') (the obligations of which insurer were assumed by the defendant under a scheme of arrangement approved by the Federal Court in November 2002). Mr Syddall first took out a disability policy with AC & L in 1993. That policy was varied, or replaced, in 1995. Mr Syddall contends that a new policy issued in 1995. Mr Syddall asserts that he suffered a total disability for the purposes of the policy on 27 November 2000. In January 2001 he made claim under the policy. AC & L paid benefits under the policy for several months until May 2001 when, after receiving certain medical advice, it declined the claim. Mr Syddall contends that he has been completely disabled since that time. In September 2006, the defendant insurer purported to cancel the disability policy, and the validity of that cancellation is contested by Mr Syddall. By a letter dated 25 July 2007, the defendant insurer purported to avoid the policy, pursuant to s 29 of the Insurance Contracts Act 1984 (Cth), on the grounds of fraudulent misrepresentations and non-disclosures. These allegations, and the insurer's purported avoidance of the policy, are strongly contested by Mr Syddall.

[3] Relevant for immediate purposes is the fact that, on his pleading, Mr Syddall has elected for a trial by jury. The defendant now applies under Uniform Civil Procedure Rules 1999 ("UCPR") Rule 474 for an order that the action be tried without a jury.

(a) the trial requires a prolonged examination of records; or

(b) involves any technical, scientific or other issue that can not be conveniently considered and resolved by a jury.'

[5] This rule is in similar, but nevertheless slightly different, terms to that which was found in the previous Rules of the Supreme Court. Order 39 rule 8 provided:

'The Court or a Judge may direct the trial without a jury of any cause, matter, or issue requiring any prolonged examination of documents or accounts, or any scientific or local investigation, which cannot in their or his opinion conveniently be made with a jury or conducted by the Court through its ordinary officers.'

[6] It will be observed that the qualification of the examination or investigation not being able to be 'conveniently ... made with a jury' applied to each of the elements identified in Order 39 Rule 8, whereas the cognate qualification now expressly applies only to the element identified in UCPR Rule 474(b), that is if the trial involves any 'technical, scientific or other issue that can not be conveniently considered and resolved by a jury'. The reason for this change is not apparent, but Rule 474 nevertheless needs to be applied according to its terms.

(a) Will require a prolonged examination of records, and

(b) Will involve medical and accounting issues that cannot be conveniently considered and resolved by a jury.

[8] In that regard, there will, of course, be some practical overlap between these discrete elements, in that resolution of the accounting issues, which is said to be a matter which cannot be conveniently considered and resolved by a jury, will necessarily involve prolonged examination of the financial and other records relevant to this case. The same can be said of the medical issues and the medical documents. And, as will appear, there are issues in this case which involve a combination of medical and accounting issues.

[9] Counsel for the defendant has undertaken a review of the pleadings in this matter, and distilled the following issues which, it is submitted, will involve prolonged examination of documents:

Did Mr Syddall misrepresent his net income in his January 1993 application for insurance?

Did Mr Syddall fail to disclose and/or misrepresent his medical history in his January 1993 application for insurance?

Did Mr Syddall misrepresent his net income in his June 1995 application?

Did Mr Syddall misrepresent his occupation in his June 1995 application?

Did Mr Syddall fail to disclose and/or misrepresent his medical history in his June 1995 application?

Was Mr Syddall unemployed for more than 12 months between mid-1995 (when the policy commenced) and November 2000 (such as to bring the policy to end pursuant to cl 29)?

What was Mr Syddall's occupations at the time of the alleged disablement on 27 November 2000?

Was the alleged injury on 27 November 2000 such as to cause Mr Syddall unable to perform at least one of the duties of each of his occupations?

Has Mr Syddall engaged in any occupation since the time of his alleged disability in November 2000 (which under cl 2 would end total disablement)?

[10] Acknowledging that Mr Syddall disputes that the pre-1995 insurance documents are relevant to the questions for determination on his claim, it is nevertheless apparent to me that these questions fairly articulate the general nature of the issues raised on the pleadings.

[11] In support of the contention that resolution of these issues will involve prolonged examination of documents, counsel for the defendant provided in his submissions an outline identifying the financial documents and medical records which would need to be examined for the purposes of determining these issues. Those documents include tax returns of Mr Syddall and his family trust, and the associated financial documents, over a period of numerous years from 1993, hospital records relating to treatment received by Mr Syddall for various conditions, including over numerous years prior to him taking out the initial policy in 1993, numerous accounts and accounting records, Centrelink records, commission statements, rate books, cheque butts, correspondence over many years, business invoices over many years, and affidavits previously filed in this proceeding.

[12] In Smit v Chan[1], Mullins J at [20] summarised the effect of the relevant rules of Court:

'Where there is no statutory bar to a trial by jury, each of a plaintiff and a defendant may elect for a trial by jury (r. 472). Where there has been that election, the court is empowered to order a trial without a jury if either of the conditions provided for in r 474 are satisfied. Where a party who was entitled to elect for a trial by jury did not so elect, the court is empowered to order a trial by jury on an application by such party (r. 475(1)). The court is also empowered to order a trial by jury, if it appears to the court that an issue of fact could more appropriately be tried by a jury (r. 475(2)).'

[13] At [30], her Honour noted that the discretion conferred by Rule 474 must be exercised having regard to the provisions of the rule itself and its purpose within its division in the UCPR. In relation to a submission made that Rule 474 should be interpreted having regard to the purpose of the UCPR set out in Rule 5, her Honour observed:

'Where there is no statutory bar to a trial by jury, Div 1 of Part 3 of Chapter 13 of the UCPR provides for trial by jury as an alternative mode of trial without a jury in the circumstances provided for in that division. That means that, even though trial by jury is generally accepted as involving greater expense and a longer trial for the parties, trial by jury is maintained by the UCPR as a mode of trial. Recourse to Rule 5(1) cannot detract from or displace the continued existence of that mode of trial as one means for the resolution of civil proceedings.'

[14] Whilst I agree with her Honour's conclusion, I would nevertheless observe that, in my view, consideration of attainment of the objectives of the UCPR, as set out in Rules 5(1) and (2) will be relevant considerations for a judge, at least in the exercise of the discretion under Rule 474(b). My reasons for expressing that view are as follows.

[15] In Beta Construction Ltd v Channel 4 Television Co Ltd[2], the English Court of Appeal considered the statutory provisions in that jurisdiction relevant to the mode of trial in libel actions. Section 69 of the Supreme Court Act 1981 (UK) relevantly provided that where, on the application of any party to an action to be tried in the Queen's Bench Division, the Court was satisfied that there is in issue a claim in respect of libel, 'the action shall be tried with a jury, unless the Court is of the opinion that the trial requires any prolonged examination of documents or accounts or any scientific or local investigation which cannot conveniently be made with a jury ...'.

This formulation is much closer to that which applied under the previous RSC Order 39 Rule 8, but the considerations referred in this case are nevertheless, in my view, pertinent to the application of UCPR Rule 474.

Stuart-Smith LJ, with whom Ralph Gibson LJ agreed, considered the connotation to be attached to the word 'conveniently' in the context of the legislation before him, and said[3]:

Can the prolonged examination of the documents and accounts conveniently be made with a jury? The question of what is meant by convenience was considered by this court in two cases. The first in time is Goldsmith v. Pressdram Ltd. (Note) [1988] 1 W.L.R. 64, the second is Viscount De L'Isle v. Times Newspapers Ltd. [1988] 1 W.L.R. 49. In Goldsmith's case Slade L.J. said, at p. 74:

"I infer that the legislature, in using the particular word 'conveniently' in the context of the subsection was directing its attention to the efficient administration of justice, rather more than the probable difficulty or otherwise of the issue involved."

In Viscount De L'Isle's case [1988] 1 W.L.R. 49 May L.J. agreed with this statement and added, at p. 59:

"The question is whether the trial is likely to involve so lengthy an examination of documents and accounts that it is likely that the administration of justice will suffer if the trial is with a jury rather than by a judge alone."

In Goldsmith's case [1988] 1 W.L.R. 64 Kerr L.J. said, at p. 74A:

"'Conveniently' means, as I see it, without substantial difficulty in comparison with carrying out the same process with a judge alone.'

I would adopt a similar interpretation of the word 'conveniently' in Rule 474(b), i.e. whether it is convenient for the effective and efficient administration of justice.

[18] Stuart-Smith LJ then went on to enumerate four main areas in which the efficient administration of justice may be rendered less than convenient if the trial takes place with a jury:

(a) The physical problem of handling, in the confines of the jury box, large bundles of documents or documents that are so bulky that they cannot conveniently be looked at;

'But where the prolongation is likely to become substantial because of the number and complexity of the documents the administration of justice is affected. If a judge does not understand a document or follow a point made upon it, he can say so and the matter is clarified. Furthermore, he will often study the documents out of court. The jury are unable to do this. Counsel have no means of knowing whether the documents or points made on them are really understood; they must therefore go on what they believe, perhaps quite mistakenly, to be the pace of the slowest jurors. And until they retire to consider their verdict jurors have no chance to study the papers in out of court hours. By no means all jurors can be expected to understand accounts and complex commercial documents. Substantial prolongation of the trial not only uses scarce resources in court and judge time, so that they are not available for other litigants, but it adds significantly to the burden of costs to be borne by the parties.'[4]

(c) The question of expense, not only involved in making the extra copies of documents for the jurors, but because 'if [the cost of litigation] is to be significantly increased because of trial by jury as opposed to judge alone, justice may be denied to one or both of the parties'.[5]

(d) The risk that the jury may not sufficiently understand the issues on the documents or accounts to resolve them correctly:

'The judge may also misunderstand them; but he has to give a reasoned judgment and if he is in error, it can be corrected in this Court. Not so with a jury; no-one can ever know upon what grounds they reached their verdict. Where the documents which require prolonged examination are such that the average jury man cannot be expected to be familiar with them, such as accounts and commercial documents, this risk is enhanced.'[6]

[19] The consideration and application of these four factors by a judge at first instance was affirmed on appeal in Taylor v Anderton[7], per Bingham MR at 454-457.

Accordingly, it seems to me to be proper to say that, at least when considering the effective and efficient administration of justice in the context of the issues of 'convenience' under Rule 474(b), it is appropriate for the Court to have regard, in the exercise of its discretion, but not as a fetter thereon, to the philosophy and objectives of the UCPR enshrined in Rule 5(1) and (2).

In the present case, having regard to the issues which have been identified as necessary for determination, and the variety and breadth of documents to which reference will necessarily be required for the purposes of determining those issues, it seems to me that this will be a case in which the trial will require a prolonged examination of records. Moreover, and independently, it seems to me that the issues identified by the defendant's counsel, involving as they will the prolonged examination of records, are ones which cannot be 'conveniently' (in the sense described above) considered and resolved by a jury. In particular, having regard to the factors identified in the Beta Construction case, I am persuaded that there is a real risk that the efficient administration of justice in this case will be deleteriously affected if these issues are left to trial by jury. The enlarged time which would in any event be attributable to the trial being conducted by jury would, in my view, most likely be significantly expanded further by reason of the nature of the issues, and the necessity to understand and determine those issues in the documentary evidentiary context which will be sought to be advanced by the defendant. That will inexorably lead to a significant increase in costs.

Moreover, I think that the questions required for determination, by their nature, and the process of determination by reference to documents, favour a mechanism by which the reasons for judgment are fully exposed and amenable, if required, to review on appeal, i.e. trial by judge alone.

Accordingly, I am persuaded that this is an appropriate case for an order to be made pursuant to Rule 474.

1. Pursuant to Rule 474, that the trial of this proceeding be without a jury, and

2. The costs of and incidental to this application be reserved.

1. [1] [2003] 2 Qd R 431.
2. [2] [1990] 1 WLR 1042
3. [3] At 1047.
4. [4] At 1048.
5. [5] At 1048-1049.
6. [6] At 1049.
7. [7] [1995] 1 WLR 447