New HCA Judgments: Selected Seeds v QBEMM, and R v Nguyen

Two new decisions were handed down by the High Court yesterday. Both were unanimous. They were:

The Queen v Nguyen [2010] HCA 38

The High Court unanimously allowed this appeal against a decision of the Court of Appeal of the Supreme Court of Victoria.

The respondent was found guilty by jury of murder and attempted murder by complicity in relation to an attempt to collect on a drug debt. The Court of Appeal quashed those convictions on the grounds that the verdicts were “unsafe and unsatisfactory” in the sense that the verdicts were unreasonable or could not be supported having regard to the evidence. The prosecution appealed this decision to the High Court and submitted that, applying well-established principles to the facts of this case, it was open to the jury to convict the respondent of both murder and attempted murder. The High Court unanimously agreed with this submission.

In so doing, the Court held that this was an exceptional case in which the prosecution should have special leave to appeal against the orders of an intermediate court quashing a conviction by a jury and directing entry of a verdict of acquittal. The Court decided that it was in the interests of the justice generally, and in the interests of justice in this particular case, that the error made by the Court of Appeal be corrected.

However, the respondent submitted that his application for leave to appeal the Court of Appeal should have succeeded on a ground alleging misdirection of the jury in relation to the availability of the charge of manslaughter. The Court agreed that the trial judge’s directions to the jury were erroneous, and, due to this error, held that it cannot be said that there was no substantial miscarriage of justice to the respondent in not leaving manslaughter as an available verdict. The Court held that this misdirection required that the respondent’s application for leave to appeal to the Court of Appeal be granted, the appeal allowed, his convictions quashed, and an order that a new trial be had.

In its orders, the Court granted both parties special leave to appeal or cross-appeal as the case requires, treating the appeal and cross-appeal as instituted and heard instanter, and allowed the appeal and cross-appeal. In sum, the Court made those orders which it held the Court of Appeal should have made. Finally, the Court noted that any decision further to prosecute the respondent was a matter for the DPP.

Selected Seeds Pty Ltd v QBEMM Pty Limited [2010] HCA 37

The High Court unanimously allowed this appeal against a decision of the Court of Appeal of the Supreme Court of Queensland.

This case is about seeds, grass, and the proper construction of an “exclusion clause” in an insurance policy. In essence, the appellant, Selected Seeds Pty Ltd, is a grain and seed merchant who had purchased grass seed from a third party. This seed was contaminated by an inferior seed and largely not the type it was represented to be. Eventually, this seed reached R and J Shrimp, who instituted proceedings in the Federal Court in 2006 claiming damages. Although these proceedings were ultimately settled in 2008, the appellant’s insurers, the respondents in this case, refused to indemnify the appellant for that loss. The respondents, in proceedings in the Supreme Court of Queensland, argued that the appellant’s supply of the seed was too remote from the damage suffered by the Shrimps and so did not come within the insuring clause. Of especial importance in the insurance policy was an “Efficacy Cause”, which excluded liability from particular defined events, and this was the focus of the Court’s decision.

The Efficacy Clause operated to exclude liability when a product fails to achieve its intended purpose. The respondents contended that this clause was engaged because the appellant’s liability arose from the failure of the seed planted by the Shrimps to “fulfil its intended use or function”. The Court held that this proposition implied that a purpose of the seeds was that they would not injure.

In deciding whether the liability of the appellant for the damage caused to the Shrimps’ land arose out of the failure of the seeds to fulfil their function, and thus be excluded under the second limb of the Policy’s Efficacy Clause, the Court answered in the negative. Liability, the Court held, arose by reason of the direct effect of the seeds upon the land. That is, the liability to the Shrimps was for what the seed did; not what it failed to achieve. Therefore, the Court held that the Efficacy Clause did not apply and allowed the appeal.