THE STATE OF SOUTH AUSTRALIA v CALLIPARI SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P, MEAGHER and HANDLEY JJA 3 September 1992, 16 October 1992 [1992] NSWCA 238 INFERIOR COURTS and TRIBUNALS — District Court — limit of jurisdiction $100,000 — memorandum of consent to enlarge jurisdiction — fourth party proceedings — fourth party not asked to sign memorandum of consent — plaintiff and defendant alone sign memorandum of consent — belated application to enlarge fourth party claim to include in it claim for amount earlier recovered against thirty party by a separate plaintiff — aggregate of two claims is $148,764.02 — fourth party objects to amendment but not on grounds of jurisdiction — trial judge (Nash DCJ) allows amendment, apparently overlooking want of jurisdiction to extend claim beyond $100,000 without consent — subsequently fourth party objects to enlargement of jurisdiction beyond $100,000 — trial judge holds fourth party waived objection to want of jurisdiction — held: In the circumstances, the fourth party had not waived an objection to excess of jurisdiction nor elected to accept jurisdiction nor was it estopped from objecting to excess of jurisdiction. Woodward Pty Ltd and Anor v Kelleher and Anor, Court of Appeal, unreported, 30 May 1989; (1989) NSWJB 91 distinguished; (2) The trial judge's earlier interlocutory order consenting to enlargement of fourth party claim was made without jurisdiction in respect of the second action because it took the fourth party claim beyond the jurisdiction of the District Court; (3) Accordingly, the enlargement of the fourth party claim should be set aside and the judgment confined to recovery of the sum, within jurisdiction, sought in the claim as originally framed. NEGLIGENCE — duty of care — government authority — State Government Motor Registry — representations made by telephone and in person by officer of Registry — representations made in context of serious enquiry concerning provision of registration and compulsory insurance to semi-trailer motor vehicle — judge (Nash DCJ) finds State Government officer advises that vehicle may be driven after issue of interim receipt provided same is attached to vehicle windscreen — owner of vehicle acts in reliance upon advice — vehicle collision later occasions injuries to two persons who make claims against owner — plaintiffs recover from Nominal Defendant upon the ground that the vehicle was in fact uninsured — Nominal Defendant recovers against owner — owner sues State — held: (1) The circumstances were such as to give rise to a duty of care on the part of the State, by its employee, to avoid negligent misstatement or advice upon which it would be known the recipient would be likely to act, as he did, to his detriment. The Council of the Shire of Sutherland v Heyman and Anor (1985) 157 CLR. 424; San Sebastian Pty Ltd and Anor v Minister Administering the Environmental Planning and Assessment Act 1979 and Anor (1986) 162 CLR 340; Shaddock and Associates Pty Ltd and Anor v The Council of the City of Parramatta (No 1) (1981) 150 CLR 225; Parramatta City Council v Lutz (1988) 12 NSWLR 293 (CA) and Curran v Greater Taree City Council [1992] Aust Torts Rep #81-152 (NSW CA) applied; Abalos v Australian Postal Commission (1990) 171 CLR 167; Dawson v Westpac Banking Corporation (1991) 66 ALJR 94 (HC) applied. 2 UNREPORTED JUDGMENTS District Court Act 1973, s51 Motor Vehicles (Third Party) Insurance Act 1942. Crown Proceedings Act, 1972, (SA). Motor Vehicles Act, 1959 (SA), s9, s20, s24, s33. Kirby P This appeal arises from a judgment of Nash DCJ. It raises three points.The first concerns the alleged misunderstanding by his Honour of the facts and a submission that the conclusions reached are "glaringly improbable" so as to authorise the intervention of this Court notwithstanding the advantages of the trial judge in resolving conflicts of evidence upon the basis of his impression of witnesses. The second, accepting his Honour s findings, involves a challenge to the decision that, from them, a duty of care arose, as a matter of law, which rendered the State of South Australia (the State) liable to Mr Domenico Callipari (the respondent). The third point in the appeal arose from the fact that the judgment, purportedly entered against the State, exceeded the limit of $100,000 fixed by Parliament for the jurisdiction of the District Court. This objection was raised by the State at the very conclusion of the trial. Nash DCJ held that, in the circumstances, the State had waived its right to dispute the Court s jurisdiction. A further ground of appeal, contending that there was no "jurisdiction" on the part of the respondent to bring the proceedings against the State by virtue of the Crown Proceedings Act, 1972 (SA) was abandoned. It is convenient to take each of the foregoing three points in turn. But first, it is necessary to describe the circumstances out of which the proceedings arise. Uninsured motor vehicle - actions against third and fourth parties In 1981 the prime mover of a semi-trailer was registered under the Motor Vehicles Act, 1959 (SA) in the name of R and D Adami Transport of Kidman Park, South Australia. The registration expired on 12 July 1982. Some time in August 1981, the prime mover was purchased by the respondent. It seems that nothing was done during the currency of the registration to substitute the respondent's name. Some time in 1982, before the expiry of the registration, the prime mover broke down by reason of problems in its crankshaft. The breakdown occurred some 60 kilometres from Sydney. The vehicle was towed to a repair facility in Sydney. It remained there for several months. The earlier registration with its attached insurance expired. The vehicle was in this position in October 1982 when the respondent took steps to get it back on the road. To do this he realised that it was necessary to renew the registration of the prime mover and its insurance. On a date in October 1982, the respondent therefore instructed his foreman, Mr Ronald Pennington, to go to the South Australian Motor Registration Division in Adelaide for that purpose. He gave him the old registration certificate and an open cheque. The reverse side of the certificate was completed showing the notice of disposal by Adami and the acquisition of the vehicle by the respondent. Mr Pennington, whose evidence Nash DCJ accepted without reservation, left the respondent's place of business in Mildura in Victoria, near the South Australian border. He proceeded to Adelaide. On 26 October 1982 he there had a conversation with an officer of the South Australian Motor Registration Division, Mr Martin Azzopati. He was told that the vehicle could not be registered immediately and that it would be necessary for certain forms to be filled in. He was provided with forms. He returned with them to Mildura, carrying also the unused cheque. All of these documents were given to the respondent. Shortly thereafter, still in October 1982, the respondent telephoned Mr Azzopati. He then had a conversation with him which is vital for these proceedings. According to the respondent, Mr Azzopati told him to fill in the URJ THE STATE OF SOUTH AUSTRALIA v CALLIPARI (Kirby P) 3 forms, including the statutory declaration that he was engaged in interstate trade. Mr Azzopati told him that once these were returned to the Motor Registration Division in Adelaide, an interim receipt would be sent to him. If he affixed this receipt to the windscreen of the vehicle, he could then drive it on the highway. The respondent duly completed the statutory declaration as to his participation in interstate trade before a justice of the peace in Mildura. He put the documents in an envelope and gave them to Mr Pennington to post. Mr Pennington confirmed that he posted the envelope containing the documents to Mr Azzopati. According to the respondent, he asked Mr Azzopati why it was necessary to have an interim receipt first. Mr Azzopati allegedly told him that an interim receipt was first sent. Full particulars of the vehicle were later procured, after which the permanent label was forwarded for attachment to the windscreen. Approximately ten days after the documents were posted by Mr Pennington, the respondent duly received an interim receipt. With it was a questionnaire which requested details concerning the length of the vehicle, the tyre size, its height and general description. The interim receipt confirmed the receipt by the Motor Registration Division of the respondent's cheque for $194.00. This was the amount which had been paid for the previous registration. According to the respondent, Mr Azzopati had told him, when asked concerning the amount for which his cheque should be completed, that he should look at the old registration papers, make the cheque out for the amount there shown. He was also allegedly told that the Division would "chase [him] up" if they needed more. Having received the interim receipt, the respondent, according to his evidence, again telephoned Mr Azzopati to find out whether the questionnaire sent with it was the final form he had to fill in. After allegedly receiving reassurances, the respondent posted the completed questionnaire back to Mr Azzopati. He then gave the interim receipt to Mr Pennington with instructions to fix it to the windscreen of the prime mover, then still in Sydney. Mr Pennington confirmed the receipt of these instructions from the respondent and that he duly proceeded to Sydney, attached the interim receipt to the windscreen, picked up the prime mover and drove it back to the respondent's place of business in Mildura. A microfiche record of the master file of the Motor Registration Division for 29 November 1982 was received in evidence. It showed that, as at the end of November 1982, according to the Division's records, R and D Adami Transport was still the registered owner of the prime mover. In other words, to the end of that month the internal procedures of the Division had not caught up with the transfer and re-registration of the vehicle in the name of the respondent. Some time in about November 1982 or early December, the respondent received a letter from the Motor Registration Division requesting payment of a further sum of $6. On 10 December 1982 the respondent posed the original of that letter, together with a further cheque for $6 to the Motor Registration Division. Subsequently, on 15 December 1982 an interim receipt of the Motor Registration Division was filled out for the sum of $6 being described as for "part-payment" for registration. In that part of the receipt form which referred to "forms received with payment" the clerk had written "N/R". This was explained to mean "new registration". On 17 December 1982, a letter was sent to the respondent by the Motor Registration Division acknowledging what it described as "your Application for Registration and Third Party Insurance". However, the letter enclosed an "interstate trade undertaking" and a request for documentation verifying 4 UNREPORTED JUDGMENTS ownership. The letter bears all the hallmarks of a form document. After receipt of the letter, the respondent again telephoned Mr Azzopati who allegedly told him that he had the interim receipt: "... which shows I have paid the registration and I should be covered because that showed I paid the money for the registration and insurance." By the end of December 1982 the microfiche master file of the Division indeed showed the notice of transfer of the subject vehicle to the respondent. Such records do not differentiate the date in the month in question when the transfer was recorded. The significance of the foregoing chronology arises now. On 12 December 1982, a major accident took place involving the semi-trailer. It occurred at Gumly Gumly in the State of New South Wales. Relevantly, two persons were seriously injured in the accident, namely Mr Glen Mohr and Mr Trevor Wiegold. Each of these injured persons brought proceedings in the District Court of New South Wales, thereby initiating the litigious saga which now brings this appeal to this Court. Determinations in the District Court. Mr Mohr's action came on for hearing before Freeman DCJ in November 1987. He sued the Nominal Defendant, being the person then liable in law in respect of the negligence of the owner or driver of a vehicle uninsured for the purposes of the Motor Vehicles (Third Party Insurance) Act 1942. He also sued the present respondent, Mr Callipari. The respondent, in due course, joined the South Australian Government Insurance Commission as a third party and claimed indemnity from that Commission upon the basis that he was insured under the South Australian statute at the relevant time of the accident. Freeman DCJ recounted some of the facts previously stated, including the issue of the interim receipts for $194 and $6 prior to the date of the accident. However, he concluded that the accident had occurred at a time when registration of the vehicle had not in law been effected. He rejected the contention that the vehicle (and hence its owner and driver) were nonetheless insured. He concluded that the vehicle was not covered by insurance in South Australia and was thus also uninsured in the State of New South Wales. He entered a verdict in favour of Mr Mohr in the sum of $46,289.10 together with costs. The verdict was entered against the Nominal Defendant. In accordance with a third party notice, Freeman DCJ entered judgment in favour of the Nominal Defendant against Mr Callipari. As between Mr Callipari and the South Australian Government Insurance Commission, his Honour entered judgment in favour of the Commission. Meanwhile, the other person injured, Mr Trevor Wiegold, pursued his claim in the District Court. It came before Nash DCJ. Mr Wiegold also sued the Nominal Defendant and upon the same basis. His injuries were more serious than Mr Mohr's. Upon one view of the evidence, it appeared possible that Mr Wiegold might recover judgment beyond the jurisdiction of the District Court ($100,000). Accordingly, the solicitors for Mr Wiegold and the Nominal Defendant signed a memorandum of consent to unlimited jurisdiction pursuant to s51(2) of the District Court Act 1973. In the event, however, as between those parties, no extension of jurisdiction was required. Nash DCJ assessed Mr Wiegold's damages in the sum of $73,213. He entered judgment in favour of Mr Wiegold against the Nominal Defendant in that sum on 3 November 1989. URJ THE STATE OF SOUTH AUSTRALIA v CALLIPARI (Kirby P) 5 That left Nash DCJ with third party and fourth party proceedings. The third party proceedings were straight forward enough. The Nominal Defendant, as in Mr Mohr's case, claimed to recover the judgment it was obliged to pay from Mr Callipari, as the owner of a vehicle,uninsured for the purposes of the Motor Vehicles (Third Party Insurance) Act 1942. Mr Callipari issued fourth party notices against two parties, namely the State Government Insurance Commission of South Australia and the State of South Australia. So far as the fourth party claim against the Commission, Nash DCJ determined that the relevant issues had, in effect, already been judicially decided in the proceedings upon the third party notice in the Mohr litigation. He therefore dismissed Mr Callipari's further claim against that Commission in the Wiegold case. No appeal has been brought against that decision. This Court is, accordingly, not concerned with its correctness. It was by this process that Nash DCJ came to the issue which is now in contention. This was the claim by Mr Callipari upon a fourth party notice directed to the State of South Australia that he was entitled to recover to the full extent of his liability from the State. The fourth party notice claimed recovery from the State not only of any amount recovered by Mr Wiegold but also of the judgment, interest and costs recovered by Mr Mohr. The aggregate of these two sums was $148,764.02. In resolving the fourth party claim against the State, Nash DCJ had to determine three questions: 1. What representations, if any, were made on behalf of the State to Mr Callipari upon which he relied in authorising the use of the semi-trailer vehicle upon an assumption and belief that it was registered and insured?; 2. Did those representations, in law, give rise to liability in the State, notwithstanding the fact that, by law, the vehicle was not registered and insured and, further, that the duty to secure registration and insurance rested (relevantly) upon the owner of the vehicle?; and 3. If by reason of the facts, as found, and the law as determined the State of South Australia was liable, was its liability capable of being limited either to: (a) an aggregate judgment of $100,000, being the limit of the jurisdiction of the District Court; or (b) the full judgment in the Wiegold action, so that the judgment in the Mohr action remains for later pursuit? The primary findings of fact cannot be disturbed. Nash DCJ concluded his analysis of the evidence with the following crucial finding: "[A]lthough his manner of giving evidence as to the relevant conversation with Mr Azzopardi (sic) was, at face value, somewhat unsatisfactory, I am satisfied on the balance of probabilities that the conversation, the effect of which was given by [Mr Callipari] in evidence took place. Indeed, I am satisfied that all the facts alleged by or on behalf of [Mr Callipari] have been proved. It is clearly part of the duty of someone such as Mr Azzopardi (sic) to give advice to owners of motor vehicles such as the third part in respect of matters arising out of the use of motor vehicles, particularly as to registration and third party personal injury insurance. Enquiries made by [Mr Callipari] were clearly both of a business and important nature and not casual. It was obvious to Mr Azzopardi (sic) [Mr Callipari] would act upon the advice he was given, that is, after affixing the interim receipt to the windscreen and pending receipt of the final windscreen sticker, he could use the vehicle in the course of [his] transport business. [He] believed that, once the interim receipt was attached, as described by Mr Azzopardi (sic), the vehicle would be accepted as if it was registered and he 6 UNREPORTED JUDGMENTS would be insured against any liability for personal injury arising out of the use of the said vehicle. Quite naturally, this belief was brought about by the wrong and careless advice given to him by Mr Azzopardi (sic). I find that this advice was given in the course of his employment [the State] and caused the loss which [Mr Callipari] has suffered by reason of the use of the subject vehicle whilst it was in fact uninsured.... In all the circumstances, therefore, [Mr Callipari] is entitled to succeed in its (sic) claim against [the State] on the basis of negligent misstatement or advice." In this Court the State properly conceded the difficulty it faced in disturbing the foregoing decision, resting as it does upon Nash DCJ's assessment of whether or not a conversation took place between Mr Callipari and Mr Azzopati and what that conversation entailed. Each of these men gave evidence before his Honour. Their versions of the conversations were markedly different. According to Mr Azzopati, the respondent's was one of thousands of enquiries he received. He denied the version given by Mr Callipari and did not recall at all meeting Mr Pennington. In resolving the clash of evidence between the witnesses, the trial judge had an advantage which is denied to an appellate court. He saw the witnesses give their testimony. Conventionally, this is regarded as critical for the resolution of conflicts and the discernment of truth telling. This Court is only authorised to disturb a conclusion reached by a trial judge, who has such advantages, if the appellant can show that the conclusion does not accord with facts which can be incontrovertibly proved or is otherwise "glaringly improbable". So much is laid down by authority old and new. Even for those who, like myself, have reservations about the extent of the suggested advantage of determining truth from the appearance of witnesses, it is essential to conform to the authority of the law on this subject, as that authority now stands. The appellant did not argue to the contrary. It could scarcely do so in the face of the repeated, recent authority of the High Court of Australia. See eg Jones v Hyde (1989) 63 ALJR 349 (HC), 351; 85 ALR 23 (HC), 27; Abalos v Australian Postal Commission (1990) 171 CLR 167, 179f; Dawson v Westpac Banking Corporation (1991) 66 ALJR 94 (HC) 105. It is important to recognise that Nash DCJ did not approach the resolution of the conflict before him with a starry eyed view about the evidence of Mr Callipari. He had before him the reasons of Freeman DCJ in the Mohr case. In that decision, Freeman DCJ had preferred the evidence of Mr Azzopati to that of Mr Callipari, so far as it touched upon the liability of the State Government Insurance Commission. Nash DCJ said that the only witness whom he would accept without reservation was Mr Pennington. It is therefore important to consider the extent to which Mr Pennington's oral testimony confirmed that of Mr Callipari. So far as Mr Callipari was concerned, Nash DCJ observed: "During the hearing I had some doubts as to the credibility of [Mr Callipari] who obviously had some difficulty in expressing himself in the way he wanted to." But his Honour's assessment of Mr Azzopati and of Mr Brenton Williams, also an officer of the Motor Registration Division of South Australia, was even more critical: "T felt that both Mr Azzopardi (sic) and Mr Wiliams (sic) were very defensive in their manner of giving evidence and could not be relied upon unless corroborated in material respects. At no time during the hearing did I have any URJ THE STATE OF SOUTH AUSTRALIA v CALLIPARI (Kirby P) 7 doubt that (Mr Callipari) spoke to Mr Azzopardi (sic) on the occasions of which he gave evidence. However generally I felt I could not accept his evidence without some corroboration." The result is that Nash DCJ came to the conclusion which he did with a full appreciation of the unsatisfactory features of the evidence of each of the major protagonists: the respondent and Mr Azzopati. Senior counsel for the State accepted that his Honour asked himself the correct questions in respect of the resolution of the conflict between the evidence of these witnesses. Thus the issue becomes whether anything in the objective facts undermines the conclusion ultimately reached, demonstrates that Nash DCJ did not understand the evidence or otherwise shows that his Honour's conclusions about the representations allegedly made by Mr Azzopati to Mr Callipari were "glaringly improbable". His Honour's conclusion was, in essence, that Mr Azzopati did represent to Mr Callipari that once he received the interim receipt and affixed it to the label of the vehicle he could drive it as if it were registered and hence insured. This was the crucial finding. In my view the objective facts do not permit this Court to disturb it; nor is it "glaringly improbable". The objective facts included: 1. The interim receipt for $194 dated 15 November 1982; 2. The interim receipt for $6 dated 15 December 1982; 3. The letter of 17 December 1982 from the Division to the respondent; and 4. The register kept by the registry of the Division concerning the registration of vehicles. None of these facts provides, either singly or in combination, the objective facts which show that the trial judge was wrong in his conclusion. On the contrary, the two receipts are entirely consistent with the evidence of Mr Callipari and Mr Pennington. They certainly show, objectively, that Mr Callipari was taking steps to secure registration and insurance of the valuable prime mover which he had acquired so that it could be placed once again upon the road. Mr Pennington's evidence of his visits to the registry in Adelaide and of postage of the forms corroborates the energetic steps being taken by Mr Callipari to that end. So does Mr Pennington's evidence that he received instructions from Mr Callipari to place the interim receipt upon the windscreen and to do so with sticky tape, as he subsequently did. Given the obvious risk of authorising the driving of an uninsured vehicle; the care taken to first secure registration (and thus insurance); the sending of an employee with a blank cheque; the subsequent completion of forms and transmission not of one but two cheques receipted by the Division, the objective evidence seems to support the conclusion which Nash DCJ came to. The evidence does not, of course, differentiate between the conflicting versions of the critical conversation between Mr Callipari and Mr Azzopati. But the instruction by Mr Callipari to Mr Pennington, whose evidence was fully believed, was undoubted. It, at least, shows that Mr Callipari derived from the conversation a belief that affixing the interim receipt to the windscreen would be treated as registration and would authorise the movement of the vehicle on a public street. This was also a belief which Mr Pennington was induced to accept. Otherwise, it seems highly unlikely that he would have solemnly affixed the interim receipt to the windscreen and thereafter driven the vehicle, although unregistered and uninsured, from the Sydney repairer to the respondent's premises in Mildura. 8 UNREPORTED JUDGMENTS Various points were made concerning the meaning of abbreviations written on the interim receipts. But these scarcely come close to being "incontrovertible facts" or evidence which makes the testimony of Mr Callipari "glaringly improbable". The evidence comes from Messrs Azzopati and Williams, of the evidence of each of whom his Honour expressed reservations. The most important objective fact is that prior to the subject accident not one but two cheques in purported payment of registration had been made by Mr Callipari to the Division. These "objective facts" tend to confirm Mr Callipari's evidence, for otherwise it would be unlikely that he would have taken the great risk, of which his business experience would have made him aware, of permitting the semi trailer to be driven uninsured. The State put much emphasis upon the content of the register kept by the Division, relating to information maintained at monthly intervals concerning the registration of vehicles. It is true that, as at 29 November 1982, the previous owner, R and D Adami Transport, was still the registered owner of the motor vehicle according to this register. The December entry showed that the notice of transfer had been received. It also contained the words "require new registration". According to the evidence of the State's witnesses this suggested that an application for registration had not yet been received. The State contended that Nash DCJ erred in failing to perceive the true significance of the notations contained in the interim receipt and in the register entries. However, the interim receipts are by no means inconsistent with the conversation which Mr Callipari recounted. So far as the register is concerned, there are a number of explanations which would reconcile them with Mr Callipari's evidence. The first of these is that a simple mistake occurred on the part of Mr Callipari confusing the status of the interim receipt with a temporary permit. It is now accepted that the interim receipt did not, in law, afford Mr Callipari the protection which he says he was told of and which he accepted and relied upon. The fact that the Division proceeded in its records upon correct assumptions does not prove that the incorrect advice was not given to Mr Callipari. The State accepted before Nash DCJ that a questionnaire form was forwarded to Mr Callipari after the Motor Registration Division received his cheque for $194. None of the documentation relied upon, nor the oral evidence called by the State, referred to that questionnaire. The letter of 17 December 1982 did not refer to the receipt of the questionnaire form. No explanation was given as to why there was forwarded to Mr Callipari, by that letter, not only the interstate trade undertaking but also another form of application. The State appears to have generated a number of these forms. It seems to have done so in the present case with a standard letter which entirely overlooked the previous communications between Mr Callipari and the Division, confirmed by the objective evidence of the interim receipts. In the circumstances, it is unsurprising that ordinary citizens and business people would approach the Division and its officers to clarify their obligations. Having received advice it is equally unsurprising that they would act upon the faith of it, believing that the advice given would be correct. Upon the critical evidentiary question before Nash DCJ he had starkly conflicting evidence. He fully realised the unsatisfactory nature of some of that evidence on both sides. In the end, he preferred the evidence given by Mr Callipari. Far from the objective evidence undermining his Honour's conclusions, I believe it lends support to them. The evidence of Mr Pennington which he accepted does so in material respects. me interim receipts confirm important ingredients in Mr Callipari s testimony. They confirm the payment of URJ THE STATE OF SOUTH AUSTRALIA v CALLIPARI (Kirby P) 9 the registration sum prior to the subject accident. Neither the form letter nor the register entries objectively deny the evidence of the conversation crucial to the State's liability. Accordingly, the challenge to the primary findings of fact fails. That challenge comes nowhere near establishing that the conclusion of Nash DCJ was "glaringly improbable". No incontrovertible facts undermine his Honour's finding. The primary determination on the facts, concerning the representations made by Mr Azzopati to the respondent must therefore stand. The liability of the State must be determined according to the legal effect of those representations. The government's duty of care was breached. The State next argued that there was no duty of care owed by it to Mr Callipari to give advice which would relieve him of the obligations which the law of South Australia imposed upon him to secure the registration of a vehicle under the law of that State. It was put that the scheme of the Motor Vehicles Act, 1959 (SA) imposed obligations upon motor vehicle owners to register their vehicles and hence to secure compulsory insurance. The State argued that the relationship between the Motor Registry Division and owners of motor vehicles applying for registration did not involve such a degree of proximity as to give rise to a duty of care in respect of information provided to applicants such as Mr Callipari by officers of that Division. Specifically, it was put that the reasonable foreseeability of a likelihood of loss occurring did not establish a relationship of proximity which is required before a duty of care can arise in law sounding in damages for negligence. In essence, the State's argument was that the Motor Vehicle Act imposed obligations upon a driver (see s9), and that it was up to the driver to conform to the legal requirements set forth in the Act (see s20, s24 and s33). If the driver failed to do so, the consequences flowed as a matter of law. They could not be altered by conversations, some of them over the telephone, between clerks in the employ of the State and members of the public making the myriad of enquiries which are everyday posed to government officials. If, where the law lays down obligations, an individual affected by the law could deflect those obligations to the State by the mere enquiry of a government clerk, the duties imposed by legislation would be subverted, certainty in the operation of the law would be undermined, disputes of fact (akin to the present case) would be legion and misunderstandings (even bona fide ones) would replace the obligations and liabilities determined by Parliament. There is no doubt that government officials who answer enquiries by members of the public may, according to the circumstances, owe a duty of care to the enquirer to provide legally accurate responses, given that ordinarily it will be assumed that the response is both lawful and accurate and such that a member of the public may safely act in reliance upon it. The applicable principle is stated by Mason J in The Council of the Shire of Sutherland v Heyman and Anor (1985) 157 CLR 424 at 458: "Tt is now well settled that a public authority may be subject to a common law duty of care when it exercises a statutory power or performs a statutory duty. The principle that when statutory powers are conferred they must be exercised with reasonable care, so that if those who exercise them could by reasonable precaution have prevented an injury which has been occasioned and was likely to be occasioned by their exercise, damages for negligence may be recovered... has been applied mainly to private Acts. However, it has been frequently applied in Australia to public authorities, notably public utilities exercising powers under public statutes... While some early statements of the principle suggest that the 10 UNREPORTED JUDGMENTS power given by statute is conditioned upon it being exercised without negligence, so that negligent exercise amounts to an excess of authority... the better view has always been that the cause of action in negligence arises under the principle by virtue of a breach of a duty of care existing at common law... [I]t has been generally accepted that, unless the statute manifests a contrary intention, a public authority which enters upon an exercise of statutory power may place itself in a relationship to members of the public which imports a common law duty to take care." After a review of an important line of authority in the United States of America, Mason J came to this conclusion (at 463): "[A] public authority is liable for negligent failure to perform a function when it foresees or ought to foresee that: (a) the plaintiff reasonably relies on the defendant performing the function and taking care in doing so, and (b) the plaintiff will suffer damage if the defendant does not take care. Several inter related questions arise in connection with the concept of reliance as a sufficient basis for the existence of the duty of care in the class of case with which we are concerned: (1) whether it is an essential element in the concept (a) that there should be conduct on the part of the defendant contributing to the plaintiff's reliance, and (b) that the plaintiff should act to his detriment; and (2) whether the concept extends to general reliance or dependence by those in the position of the plaintiff, as distinct from specific reliance by the plaintiff... It is positive conduct on the part of the defendant or the plaintiff's acting to his detriment which gives rise to specific, as distinct from general, reliance or dependence." The State sought to distinguish the line of authority in the High Court of Australia and in this Court concerning the duty owed to members of the public by local government authorities. See eg L Shaddock and Associates Pty Ltd and Anor v The Council of the City of Parramatta (No 1) (1981) 150 CLR 225; Heyman (above); Parramatta City Council v Lutz (1988) 12 NSWLR 293 (CA) and Curran v Greater Taree City Council [1992] Aust Torts Rep #81-152 (CA). It wassuggested that the distinction lay not in the difference between the levels of State and local government but in two features derived from the facts of this case: 1. The State Government had no duty to provide to members of the public, such as Mr Callipari, advice upon the subject matter of his complaint. In this respect it was in a position different from local government authorities which were obliged by law to provide certificates of compliance in certain circumstances and hence were bound to ensure that such certificates were accurate, given the reliance which would be placed upon them; and 2. If, contrary to (1) a duty was owed to give accurate advice upon a serious matter, no such duty arose in the instant case in circumstances of telephonic or personal enquiries made by a member of the public, or upon other like informal or casual approaches which did not make sufficiently clear the enquirer's intention to rely upon the response. The objection raised in (1) cannot be accepted. In Lutz (above) at 324, McHugh JA expressed the holding to be derived from Shaddock in terms which I would accept: " TA] council which makes a statement concerning the zoning of land in response to an enquiry by an intending purchaser of that land is under a duty to take reasonable care in making the statement. The High Court applied the principle that, when a person gives information or advice to another upon a serious matter in circumstances where the speaker realises, or ought to realise, URJ THE STATE OF SOUTH AUSTRALIA v CALLIPARI (Kirby P) 11 that he is being trusted to give the best of his information or advice as a basis of an action on the part of the other party and it is reasonable in the circumstances for the other party to act on the information or advice, the speaker comes under a duty to exercise reasonable care in the provision of the information or advice which he gives. Mutual Life and Citizens Association Co Limited v Evatt (1968) 122 CLR 556 at 572-573... The statement of principle expounded by Barwick CJ in... Evatt was affirmed by the High Court in San Sebastian Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 (1986) 162 CLR 340. But before a person has a cause of action in respect of a negligent statement he must prove both reliance on the statement and that he acted or refrained from acting to his detriment by reason of the statement: San Sebastian... at 355, 357, 366. There must be a causal relationship between the statement and the plaintiff's loss. " Obviously, the fact that a local council owes a duty of care or is even under a statutory obligation to provide certificates of compliance will lend weight, factually, to the establishment of the circumstances giving rise to the action for allegedly negligent advice. But the existence of such a statutory duty is not an essential ingredient in constructing the cause of action. What is essential is that the plaintiff should be able to prove, from the circumstances of the particular enquiry, the seriousness of the matter in hand, the trust being given to the official involved, the intention to rely upon the information provided, the fact of reliance and the detriment which flows as a result. In the present case, Nash DCJ accepted that the State's employee, Mr Azzopati, gave information and advice to Mr Callipari upon a serious matter in circumstances where Mr Azzopati realised, or ought to have realised, that he was being trusted as an officer of the State service to give the best possible information and advice. Clearly, in the circumstances, it was reasonably foreseeable that damage could flow to Mr Callipari if the advice given were incorrect, such that, far from being covered for registration and third party insurance, Mr Callipari's vehicle remained uninsured notwithstanding the issue to him of the interim certificate and its being affixed to the vehicle's windscreen. It is arguable that Mr Azzopati, acting as an employee of the State in a relevant part of the State's administration (the Motor Registry Division) assumed responsibility for what he told Mr Callipari. Cf Hawkins v Clayton and Ors (1988) 164 CLR 539, 576. But it is sufficient to say that the appellant accepts the test stated by Samuels JA in Curran (above) at 61, 159. His Honour there stated that it was necessary to show that it was reasonably foreseeable that: 1. The plaintiff would reasonably rely on the authority exercising its statutory power and on it taking reasonable care in doing so; and 2. The plaintiff would suffer damage if the authority did not take such care. Applying that test as I would in this case, given the seriousness of the enquiry found by Nash DCJ to have been made and the grave consequences which would attach to an incorrect answer, it was open to his Honour to find that it was reasonably foreseeable that Mr Callipari would rely upon the response which he received and that he would suffer damage if that response were not carefully and accurately expressed. The advice given was found to have been inaccurate as a statement of the law of South Australia. In the facts found there was no doubt that Mr Callipari relied upon the advice. Such reliance alone explains the steps which he instructed Mr Pennington to take, including affixing the interim receipt to the motor vehicle windscreen. When, contrary to the advice given, it later transpired that his vehicle was in fact unregistered and uninsured, Mr Callipari was exposed to the liability to the 12 UNREPORTED JUDGMENTS Nominal Defendant which both Freeman DCJ and Nash DCJ found successively in the Mohr and Wiegold cases. Accordingly, the causal connection with the loss sued for is established, precisely as Nash DCJ determined. So far as objection (2) is concerned, it is true that the High Court in Shaddock (above) found that the local government authority there was under a duty to purchasers to take reasonable care that information given in a certificate was correct but under no duty in responding to a telephone enquiry, when the information was given by an unidentified person and was not confirmed. Gibbs CJ (at 230) explained the distinction thus: "The question... is whether there was a duty to answer carefully the questions put to the Council orally and in writing.... There are obvious differences between negligent words and negligent acts... [P]eople speaking on social or informal occasions may not uncommonly make statements or express opinions with much less care than if they were giving advice or information professionally or for business purposes... It would not be reasonable to act in reliance on advice or information given casually on some social or informal occasion or, generally speaking, unless the advice or information concerned 'a business or professional transaction whose nature makes clear the gravity of the inquiry and the importance and influence attached to the answer', to use the words of Lord Pearce in Hedley Byrne [1964] AC at 539." Dealing with a telephone enquiry, Gibbs CJ (at 236) concluded: "Tt would not... have been reasonable for the appellants to have relied upon an unconfirmed answer given by an unidentified person in response to an inquiry made over the telephone. The council therefore owed no duty of care in making response to such an inquiry." I do not accept that this finding should be expanded into a holding that liability in a governmental authority cannot be established in any circumstances for advice given orally, and particularly over the telephone. Such a holding would defy more than a century of telecommunications and adopt a wholly artificial and unprincipled "telephone exception" to the fundamental principle of reliance which explains Shaddock and other like decisions. In Shaddock the enquiry was casual to an unidentified officer for an insufficiently specified purpose. In this case, the enquiry was undoubtedly specific. The officer was clearly identified and that is objectively shown by an entry in Mr Pennington's diary and writing recorded by Mr Callipari. Furthermore, here the enquiry was found to have been clearly made for a serious purpose which was sufficiently identified and self-evidently carried grave consequences if the response given were incorrect. The distinctions in the facts between this case and Shaddock therefore authorised Nash DCJ to come to the conclusion which he did that Mr Callipari relied upon the advice given on behalf of the State by Mr Azzopati. That reliance being causally related to his loss, it sustains the recovery of judgment against the State. That judgment must stand. Limited jurisdiction of the District Court and waiver The foregoing conclusions leave only the challenge to Nash DCJ's decision that the State of South Australia had waived an objection to the District Court s jurisdiction in excess of $100,000 by the way in which it had conducted the fourth party proceedings up until the very last moment of the trial. The circumstances of the objection are set out in an agreed statement of facts which was tendered. It discloses that before the plaintiff, Mr Wiegold, commenced his evidence, leave was granted to Mr Callipari to file a further amended fourth party notice against the State Government Insurance URJ THE STATE OF SOUTH AUSTRALIA v CALLIPARI (Kirby P) 13 Commission and to file an amended second fourth party notice against the State. The State thereafter participated in the proceedings. By inference, it was aware that as between Mr Wiegold and the Nominal Defendant, a memorandum of consent had been filed to afford the District Court unlimited jurisdiction as between them. After judgment was given in Mr Wiegold's case against the Nominal Defendant and a full indemnity granted to the Nominal Defendant against Mr Callipari, leave was granted to the Commission and the State to file further amended defences. None of these raised any objection to the jurisdiction of the District Court. On 8 November 1989, the solicitor for Mr Callipari telephoned the solicitor for the State advising her that Mr Callipari intended to seek leave to amend the already amended second fourth party notice by including in it a claim for damages in respect of the verdict and costs earlier recovered by Mr Mohr. It will be recalled that the State was not itself a party in Mr Mohr's claim which was determined earlier by Freeman DCJ. The foregoing oral notice was confirmed by facsimile letters. When the hearing recommenced, consent to the course proposed not being forthcoming, application was made on 24 November 1989 by counsel for Mr Callipari further to amend the second fourth party notice to include the Mohr claim. This application was objected to upon various bases. But no reliance was placed upon the fact that the resulting aggregate claims would take the case beyond the Court's jurisdiction of $100,000. Nash DCJ gave leave to Mr Callipari to file the further amended second fourth party notice. Submissions continued. At the end of the submissions for Mr Callipari, Nash DCJ himself raised with counsel whether he had jurisdiction in the fourth party proceedings to enter a verdict for the aggregate sum of $148,764.02. His Honour asked counsel for the State whether it would consent to unlimited jurisdiction. It was only during the submissions of counsel for the State that his Honour was informed that the State would not consent to unlimited jurisdiction. The solicitor for the State had received instructions not to do so. Those instructions were received by telephone. I will not pause to remark further upon the reliance apparently placed, in this circumstance, upon the telephone communication to Adelaide with the State's relevant officer. Nash DCJ, with reference to Woodward Pty Ltd and Anor v Kelleher and Anor, unreported, Court of Appeal, 30 May 1989; (1989) NSWJB 91 expressed the conclusion that the State had, in the circumstances, waived its right to call in question the jurisdiction of the court in respect of the additional claim against it. He thus entered judgment in the total sum sought, being the aggregate of the combined Mohr and Wiegold claims. The State challenges his Honour's jurisdiction to do this and his determination that the State had waived an objection to excess of jurisdiction, or that it was required to do so. In my view, the State's objection to jurisdiction is a good one. The District Court is a court of limited jurisdiction. Its jurisdiction can be extended as s51(1) of the District Court Act provides. But only by a memorandum of consent, signed by each party to the action or its solicitor. A second fourth party is a "party" to the action for this purpose. The consent to extend jurisdiction by Mr Wiegold and the Nominal Defendant did not bind the State. Indeed it may have been insufficient to extend the jurisdiction of the District Court given that "each party to the action" had not signed the document. Clearly, it is the duty of the several parties, or the lawyers representing them, in a case where judgment recovered might go beyond the District Court's limited jurisdiction to consider and, where appropriate, seek signature of a memorandum of consent. Otherwise, the District 14 UNREPORTED JUDGMENTS Court will not have the jurisdiction conferred by consent but will be limited to that imposed by Parliament. Prima facie the objection raised by the State is therefore a good one. I do not consider that the facts indicate that the State ever waived its want of signature to the memorandum of consent. Nor, putting it otherwise, do I believe that the State elected to accept jurisdiction or was estopped from denying it. Woodward v Kelleher was a case where the objection to jurisdiction was raised for the first time on appeal. No objection at all was raised at first instance. Unsurprisingly, in such circumstances, the Court held that the point not having been litigated at trial, it could not be raised for the first time on appeal. But in this case the judge himself raised the point at the trial. The State took it up. Waiver involves giving up rights. It denotes that a person, with rights, surrenders them: by declining or refusing to exercise them. It normally imports knowledge on the part of the person said to waive the rights thereby forfeited. See Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kachenjunga) [1990] 1 LL L Rep 391 (HL) at 398; The Commonwealth of Australia v Verwayen (1990) 170 CLR 394, 424, 474, 486. See also discussion, FMB Reynolds, "The Notions of Waiver" [1990] Lloyd's MCLQ 453 and J W Carter, "Waiver (of Contractual Rights) Distributed" (1991) 4 J Contract L 58. In the present case, the circumstances fall, in my respectful view, far short of waiver or, for that matter, election by the State or estoppel against it. This was not a case of the State knowing or even ignorantly giving up rights to object to the extended jurisdiction of the District Court. Under s51 of the Act the burden is cast upon the party which seeks to enlarge the Court's jurisdiction, positively to secure the signature by each party to the action, to the document which must be signed to achieve the extension of jurisdiction. Otherwise, Parliament has provided a limited jurisdiction which must be observed. That limited jurisdiction is provided by law. The public has an interest in it. It is well known. It derives from the nature and history of the District Court. Therefore, far from this being a case of waiver of rights, it seems that all of the parties (other than the plaintiff (Mr Wiegold) and the Nominal Defendant) simply overlooked the limited jurisdiction of the District Court. The limited jurisdiction provided by Parliament therefore governed at least the fourth party claim. This conclusion presents two possibilities for the resolution of the contest of the parties. The first would be to enter judgment in favour of Mr Callipari against the State to the limit of the District Court's jurisdiction, viz $100,000. In the event that all of its other arguments failed, this was the course which the State urged. It is a course which has the attraction of bringing this protracted litigation to aclose. But it has the disadvantage of denying Mr Callipari the full indemnity to which he has established he has an entitlement in law. It puts him out of pocket by nearly $50,000 in respect of a point raised at the very last moment and then not by the State itself but by the judge. There was a time when such technical results were deemed attractive to the law. But not now. Cf Ainsworth v Hanrahan (1991) 25 NSWLR 155 (CA) at 162. Mr Callipari may still be within time to bring his claim against the State in respect of the judgment recovered against him in the Mohr litigation. If that claim is excised from the fourth party proceedings brought by Mr Callipari against the State, there is no doubt that the claim of Mr Callipari in respect of the judgment entered in favour of Mr Wiegold was within the jurisdiction of Nash DCJ. That was the only claim originally sought on the second fourth party notice. The attempt to enlarge the matters litigated upon that notice, to include the Mohr URJ THE STATE OF SOUTH AUSTRALIA v CALLIPARI (Kirby P) 15 judgment, went ahead against the opposition of the State, although not upon the ground of excess of jurisdiction. In over ruling the opposition, it seems that Nash DCJ gave no consideration to the problem which was then presented as to the jurisdiction of the District Court. Yet that problem was fundamental. A moment s thought about it, at the time, would have demonstrated that consent to the enlargement of the fourth party claim was necessary for the aggregate claim then went beyond the statutory jurisdiction of the District Court, unless consent was forthcoming. As, ultimately, it was not, the only proper course would have been to refuse the amendment and to require Mr Callipari's claim in respect of the Mohr judgment to proceed separately, strengthened doubtless by any issue estoppels deriving from the resolution of the fourth party claim in the Wiegold case. It is notable that s51(1) of the Act describes the "memorandum of consent" which is contemplated to afford jurisdiction in a claim exceeding $100,000 as confined to "an action or cross claim'. It does not relate to part of an action or cross claim. It is thus necessary to determine (including for any argument of waiver, estoppel or election) whether, in respect of the particular action or cross claim, consent has been given or cannot now, in law, be denied. I do not believe that it is proper to distort the language of s51 and to say that the State is forbidden by law from denying that part of the action in the Wiegold and Mohr claims which is within the jurisdiction of the District Court. The proper analysis requires a conclusion that the whole of an action is within the extended jurisdiction or none of it is. In the result, because it is clear that the application to Nash DCJ sought to add the claim for recovery of the Mohr judgment from the State upon an assumption that this could be done within the jurisdiction of the District Court and because that assumption was wrong, the leave which Nash DCJ gave for the amendment of the second fourth party notice was, to that extent, misconceived. Being without consent in that respect, it was beyond jurisdiction. His Honour's procedural order therefore had no validity. He should have then ascertained and upheld an objection of the State to the amendment. His judgment must now, to that extent, be corrected. The judgment in respect of the claim arising out of the verdict recovered by Mr Wiegold will stand. The judgment in respect of the claim arising out of the verdict for Mr Mohr must be excised. So far as the recovery arising out of Mr Wiegold's action concerned, this is recorded as being a verdict of $72,213 together with interest of $1,513.50 to the date of the trial. These sums do not include any interest payable after the trial and the costs of Mr Wiegold in securing his recovery. Whereas those costs were allowed in the component for Mr Mohr's action, no reference was made to them in respect of Mr Wiegold's action. It is possible that this is a result of an oversight. In case that should be so, and to permit adjustment of any final judgment to be entered, it will be appropriate to afford the parties 28 days within which to exercise a liberty to apply for variation of the Court's orders. For the purpose of any further proceedings which may be brought by Mr Callipari against the State in respect of the amount he has been ordered to pay the Nominal Defendant in respect of Mr Mohr's action, it should be made perfectly plain that the setting aside of the judgment of Nash DCJ, in respect of that action, rests solely upon the excess of jurisdiction which the inclusion of that action in the fourth party claim occasioned. It in no way determines that claim on the merits. On the contrary, subject to any matter not immediately apparent, it would 16 UNREPORTED JUDGMENTS seem inevitably to follow, on the merits, that Mr Callipari will be entitled to recover the claim in respect of Mr Mohr s verdict in separate proceedings which will then indubitably be within the jurisdiction of the District Court. It is necessary to provide for the costs of the appeal. It is true that the State has succeeded in the appeal on the third of the points raised. However, upon the first two, which constituted its major attack, it has failed. Its primary objective, to escape liability to Mr Callipari altogether, has not succeeded. Balancing the costs which it is appropriate for Mr Callipari to pay and the costs which the State should pay it is just that the State pay the costs of the trial, except the costs involved in Mr Callipari's misconceived application (which should have failed) to extend his second fourth party claim to include the claim relating to Mr Mohr's verdict. So far as the costs of the appeal are concerned it is just that the State should pay three quarters of those costs. Orders. It follows from the foregoing that the orders of the Court should be: 1. Appeal allowed; 2. Set aside the judgment of his Honour Judge Nash in the fourth party action by Mr Domenico John Callipari against the State of South Australia; 3. In lieu thereof, enter judgment in such action in favour of the said Mr Domenico John Callipari against the State of South Australia in the sum of $73,726.50, such judgment to take effect from 21 December 1989; 4. Order the State of South Australia to pay the costs of the trial excluding the costs occasioned by the application on 24 November 1989 on the part of the said Mr Domenico John Callipari for leave to file a further amended second fourth party notice, which costs are to be the costs of the State of South Australia in the action; 5. The appellant to pay three-quarters of the costs of the respondent of the appeal; and 6. Each party to have liberty, before judgment is taken out, to restore the matter to the list within 28 days of these orders to make submissions concerning the form of the foregoing orders in the light of the Court's reasons. Otherwise judgment as above. Meagher JA I agree generally with Kirby P. Handley JA I have had the benefit of reading the reasons for judgment of Kirby P in draft form. I agree generally with those reasons and with the orders he has proposed. 1. Appeal allowed; 2. Set aside the judgment of his Honour Judge Nash in the fourth party action by Mr Domenico John Callipari against the State of South Australia; 3. In lieu thereof, enter judgment in such action in favour of the said Mr Domenico John Callipari against the State of South Australia in the sum of $73,726.50, such judgment to take effect from 21 December 1989; 4. Order the State of South Australia to pay the costs of the trial excluding the costs occasioned by the application on 24 November 1989 on the part of the said Mr Domenico John Callipari for leave to file a further amended second fourth party notice, which costs are to be the costs of the State of South Australia in the action; URJ THE STATE OF SOUTH AUSTRALIA v CALLIPARI (Handley JA) 17 5. The appellant to pay three quarters of the costs of the respondent of the appeal; and 6. Each party to have liberty, before judgment is taken out, to restore the matter to the list within 28 days of these orders to make submissions 5 concerning the form of the foregoing orders in the light of the Court's reasons. Otherwise judgment as above. Counsel for the Appellant: WH Nicholas QC/DR Conti 10 Instructed by: Michael Rosser and Co Counsel for the Respondent: LP Robberds QC/GW McGrath Instructed by: Russell C Byrnes