Kirby J takes a parting shot at Equity gurus on High Court

By Legal Eagle

In a recent speech delivered at Queensland University of Technology, Kirby J has delivered a rebuke to the Equity gurus on the High Court, namely Gummow and Heydon JJ. The title of the speech itself is stinging enough: ‘Equity’s Australian isolationism’.

Kirby J mounts a three-pronged attack on the approach of the current High Court to Equity.

First, he criticises the notion of “fusion fallacy” famously expounded by Meagher, Gummow and Lehane in their seminal Australian text. Broadly, the idea of fusion fallacy is that while judges were given concurrent jurisdiction in Equity and common law by the Judicature Acts, the judges could not “mix and match” causes of action and remedy (eg, by awarding an account of profits – typically an equitable remedy – for a breach of contract – typically a common law cause of action). I don’t need convincing on this one. I can’t abide the notion of fusion fallacy. It’s just hair-splitting for the sake of it. As I’ve said before, the law does not have to stand still, and it can develop and evolve to fit changing circumstances.

Secondly, Kirby J takes aim at a number of recent High Court decisions:

  • The retention of the wife’s special equity pursuant to Yerkey v Jones in Garcia v National Australia Bank. Essentially, this doctrine permits a married woman to set aside a guarantee if she can prove that (a) the Bank left it to the husband to procure the guarantee from her and (b) if the wife did not understand the effect of the guarantee in essential respects and the Bank did not ensure she had independent advice. I have to agree with Kirby J’s doubts on the retention of this doctrine. It is an anachronism and does not reflect the society in which we live today.
  • Reluctance to expand fiduciary relationships in Breen v Williams (1996) 186 CLR 71. This boils down to a division between those who think the obligations of a fiduciary should merely be proscriptive (ie, not to conflict and not to profit) or whether they think fiduciary obligations should be prescriptive (ie, should involve a positive duty to take certain actions). Canada has wholeheartedly embraced prescriptive fiduciary duties, and Kirby J suggests Australia should have done the same.  On this point, I disagree with Kirby J and take the orthodox Anglo-Australian approach to restrict fiduciary obligations to proscriptive duties. The prescriptive duty cases open a potential can of worms whereby people could be liable for all kinds of nebulous and ill-defined “duties”. It expands the concept of fiduciary unduly. I believe some other kind of doctrine should be developed for disputes such as parent-child, doctor-patient and State-indigenous person – there is a need for some kind of recognition of the duties in these cases; I just don’t believe that the fiduciary relationship is the right doctrine unless it is stretched out of shape.
  • Hostility to restitutionary remedies in Farah v Say-Dee Investments Pty Ltd. Anyone who has been a long time reader of this blog will know what I think about this. I am not a “restitution fascist” who thinks restitution should expand into all areas of the law of obligations. However, I believe firmly that the law of unjust enrichment has a valid and useful place in the smorgasbord of obligations law, and that it should not merely be rejected out of hand because of some prejudice. In this, I note that I also agree with Kirby J.

The third prong of Kirby J’s attack is at the implication in Farah that intermediate appellate courts do not have a role in developing the law. Again, I strongly disagree with the High Court’s approach in Farah (as my previous posts show). As I have said previously:

I believe that the High Court is behaving in a way that is also activist, just in the opposite direction. It opposes extension to the law blindly. Rather than making a principled response, it exhibits blind prejudice against anything featuring the word “restitution” or anything that suggests that equity and common law might have some kind of synergy. I don’t really care a fig about restitution or fusion fallacy. What I do care about is justice for litigants, and if there is a suggestion that an unjust result can be avoided by expanding principle, then I think the expansion needs to be carefully considered.

I do not think it is at all appropriate to let personal prejudice about a particular interpretation of the law run riot in a judgment at the expense of litigants. A plague on both their houses, say I.

Kirby J also takes careful aim at the rudeness of the Farah judgment. Personally, I believe that rudeness in judgments is unprofessional and inappropriate, as well as disrespectful to litigants. If I were a judge, and I were called upon to consider a decision of a judge whose opinion I disagreed with, I would still be polite. Just as I try to be polite to those on this blog who have different political opinions to myself. It’s just good manners.

In conclusion, Kirby J raises the interesting question that the fixed and conservative nature of Australian equity law may have had consequences for indigenous people in this country:

This impediment has sometimes had very large and probably unexpected consequences. One of them may be witnessed in the differing developments that have occurred respectively in Canada and Australia, two settler societies of Britain, concerning the extent to which the Crown owes a fiduciary duty to the indigenous peoples of the country. Whereas in Canada, reasoning by analogy from other more confined and propertied relationships, a doctrine was fashioned that accepted that the Crown owed the indigenous peoples fiduciary obligations, such adaptation of equitable doctrine has not yet been accepted in Australia. Had it happened, the earlier injustices to the traditional property interests of indigenous communities in Australia might have been more quickly repaired. These are not, therefore, purely theoretical questions. They are questions of large legal and social import.

All food for thought. Although I don’t agree with everything Kirby J says (and I sometimes suspect he dissents just to be contrary) I will miss his judgments on the High Court. At least they were something different.

I don’t believe that expansion of the law of equity or restitution is necessarily a good thing. One has to leave some basic principles intact so there is some continuity of doctrine and some certainty. Sometimes conserving what has gone before is a good thing. However, as I have said above, what I really care about is making the law as fair as possible to both sides of a dispute, and if some old principles have to be overidden to achieve that, then so be it.

4 Comments

  1. hillary
    Posted January 17, 2009 at 11:52 am | Permalink

    This is an admirable restating of Justice Kirby’s lecture – always good to piggyback ont he greatness of others –
    however all credibility was lost with “Although I don’t agree with everything Kirby J says (and I sometimes suspect he dissents just to be contrary) I will miss his judgments on the High Court. At least they were something different”

    seriously?

    You think one of most eminent minds of our country dissents just ’cause he feels like standing out?

    SERIOUSLY?

    Please, for your sake, remove this immature, douch bag comment. When you hit your 30’s realise how stupid this was and thank me.

  2. John Greenfield
    Posted January 17, 2009 at 5:46 pm | Permalink

    Kirby would do well to learn the difference between the AUSTRALIAN Constitution and the anti-democratic Luvvie-fests of crypto-fascist gnomes of Geneva and their disingenuous shibolleths of “international human rights ‘law'”.

    Similarly, he would do well to learn that the vast majority of Australia’s indigenous population comes from freaking Britain and Ireland. So would this broom-travelling bint, hitlary!

  3. Posted April 25, 2009 at 3:40 pm | Permalink

    Hi Legal Eagle,

    This was the post that I used as an idea for a short university assignment I did. I have adapted the assignment to my blog if you would like to have a look. One of the phrases in it is similar to your article, so I will have to cite that, along with embedding relevant links to the cases and Kirby J’s speech.

    Kind regards,
    Andrew

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