High Court of Australia|2004-06-15|Before: Heydon JJ

For the reasons given[109], the jury's determination of Mr Wail's contributory negligence is not, in law or fact, determinative of, or coextensive with, Andar's liability to contribute to Brambles under the Wrongs Act. However, the decision on Mr Wail's contributory negligence is plainly relevant to that determination.

Given the close factual and evidentiary interrelationship of Mr Wail and Andar, the judicial consideration of what is "just and equitable" will obviously take into account the jury's verdict on contributory negligence. At the very least, this must be done to avoid double-counting or ignoring a relevant overlap of responsibilities. It would be unjust and inequitable to ignore the elements common to the legal liability of Andar to Mr Wail and Mr Wail's own obligation to be careful as to his personal safety. The two are not the same. However, they overlap in fact.

I agree in the orders proposed in the joint reasons.

CALLINAN J. This appeal raises questions about the effect of a contract the term of which has expired but in accordance with which the parties have continued to act, and the responsibility and liability of a company to and for its employees.

Mr Wail had earned his living as a truck driver for many years. In about 1988, he became a driver for Princes Linen Service which operated a commercial laundry and cleaning service involving collection from, and deliveries to hospitals and nursing homes in Melbourne. His duties included the loading and unloading of trolleys containing laundry from a truck owned by his employer.

Subsequently the respondent acquired the business of Princes Laundry. Mr Wail became an employee of it. The respondent maintained the same methods of delivery and collection as Princes Linen Services.

The respondent decided however to make different arrangements with its drivers, that is, to cease to employ them, but to enter into a contract for services with companies controlled by them. Mr Wail and Mr Parker incorporated the appellant. There were only two directors, and two shareholders, Mr Wail and Mr Parker. Mr Wail's employment with the respondent ceased in April 1990. The respondent entered into a written agreement with the appellant for services, and the appellant purchased the truck which he had previously driven. Mr Wail continued to do exactly the same work in the same way as formerly. He was not only a director of the appellant, but he was also the person responsible for the day to day performance of the work from which it derived its profits. The other director, Mr Parker, was responsible only for the books and other financial matters. The appellant also owned and operated another truck, and employed two other employees from time to time.

The written agreement, entitled "Independent Trucking Contractor Agreement" was for a term of 3 years and provided for an "operator fee" of $1600 per week. The appellant was to procure a suitably qualified driver, in practice, Mr Wail to operate an Hino 1985 10-tonne truck with van body and hydraulic tailgate as specified in the agreement ("the vehicle"). By cl 1 the respondent and the appellant agreed that the appellant would make the vehicle available for use in connexion with the respondent's cleaning business from 4 April 1990, for the term of the agreement. Clause 3.11 required the appellant to repair, maintain and fit out the vehicle as prescribed by the respondent.

The agreement made provision for an indemnity by the appellant in favour of the respondent. By cl 4.6 the appellant agreed:

"To assume sole and entire responsibility for and indemnify [the respondent] against all claims liabilities losses expenses and damages arising from operation of the Vehicle by reason of any happening not attributable to the wilful negligent or malicious act or omission of [the respondent]."

And by cl 8.2 the appellant (referred to in the agreement as "the Operator") agreed to:

"8.2 Indemnify [the respondent] from and against all actions, claims, demands, losses, damages, proceedings, compensation, costs, charges and expenses for which [the respondent] shall or may be or become liable whether during or after the currency of the Agreement and any variation renewal or extension in respect of or arising from - > > 8.2.1 loss damage or injury from any cause to property or person occasioned or contributed to by the neglect or default of the Operator to fully, duly, punctually and properly pay, observe and perform the obligations, covenants, terms and conditions contained in the Agreement and on the part of the Operator to be paid, observed and performed. > > 8.2.2 loss, damage, injury or accidental death from any cause to property or person caused or contributed to by the conduct of the Delivery Round by the Operator. > > 8.2.3 loss, damage, injury or accidental death from any cause to property or person occasioned or contributed to by any act, omission, neglect or breach or default of the Operator. > > notwithstanding that any of such actions, claims, demands, losses, damages, proceedings, compensation, costs, charges, and expenses shall have resulted from any act or thing which the Operator may be authorised or obliged to do under the Agreement and notwithstanding that any time waiver or other indulgence has been given to the Operator in respect of any obligation of the Operator under the Agreement AND PROVIDED ALWAYS it is agreed and declared that the obligations of the Operator under this Clause shall continue after variation or termination of the Agreement and any renewal or extension in respect of any act, deed, matter or thing happening before such termination."

Clause 9 is important. Its unmistakable purpose was to make it clear that although the respondent could insist upon the employment by the appellant of an efficient driver, the last was not on any account to be regarded as an employee, nominee, or agent of the respondent:

"Direction and Control > > The Driver shall not form part of [the respondent's] organisation and the Driver and any other employee nominee or agent of the Operator shall not be under the direction or control of [the respondent] but [the respondent] shall have the right to notify the Operator that it is dissatisfied with the manner in which the Delivery Round is being completed and in that event the Operator (if required by [the respondent]) may substitute another Driver."

Mr Wail went to the respondent's laundry at Box Hill early on 26 July 1993. He was then about 30 years old and experienced in the job. He loaded his truck with trolleys of clean linen. About three quarters of an hour later, he arrived at the Cotham Private Hospital in Cotham Road, Kew, where he was required to unload some of the trolleys. He reversed the vehicle into a driveway adjacent to the delivery bay of the hospital. The rear of the vehicle was higher than its front. He opened the rear of the truck, lowered its hydraulic tailgate, and untied the trolleys which were to be delivered. He placed his left hand on the roof of the truck and his right hand on a trolley which was at the end of a line of trolleys. He moved to pull it up the slight slope towards the hydraulic tailgate. He felt a searing pain across his lower back which made him sink to his knees. He sat down to ease the pain. After 10 minutes he was able to continue unloading laundry. Despite that he was in "considerable pain" he was able to complete his deliveries.

Mr Wail, it was subsequently established, had damaged the lumbosacral disc in his lower back. The injury has disabled him from working as a truck driver. The appellant's business declined. Mr Wail was forced to seek to earn a living by other means.

Mr Wail sued the respondent in negligence for damages for personal injuries in the County Court of Victoria. The appellant was joined as a third party by the respondent. The proceedings were governed by the Accident Compensation Act 1985 (Vic) which relevantly limited Mr Wail to "pecuniary loss damages" and "pain and suffering damages" up to specified limits[110].

The case was tried by a judge with a jury. Despite that the case against the respondent was at best a slight one, the jury gave a verdict in favour of Mr Wail. Damages were assessed at $100,000 for pain and suffering and at $315,000 for economic loss. The jury also found that Mr Wail's damages should be reduced by 35% for contributory negligence. The effect of that, and the Act to which I have referred, was that the total damages were reduced to $201,822.46 plus interest.

The appellant and the respondent agreed that the issues between them should be determined by a judge without the jury. Those issues had to be decided in the light of the jury's verdict against the respondent. His Honour (Judge Kent) made these findings. Mr Wail conducted the affairs of the appellant: he effectively controlled it and its decisions were in reality his. The system of work had been established by the respondent and pre-dated the appellant's contract with the respondent. The contract continued to bind the parties as they had both acted in accordance with it. He rejected however that the respondent had an entitlement to indemnity under it. In consequence the third party claim was dismissed.

The respondent appealed to the Court of Appeal of Victoria (Winneke P, Charles and Batt JJA)[111]. The appeal against the verdict in favour of Mr Wail failed. The appeal against the dismissal of the third party proceedings succeeded.

The members of the Court of Appeal were of the same opinion as the trial judge as to the continued operation of the terms of the written agreement. They thought however that his Honour had taken a very narrow view of the provisions in it with respect to indemnity. They said[112]:

"Clause 8.2.2 covers a situation of injury to a person contributed to by the conduct of the delivery round by [the appellant]. Clause 8.2.3 covers a situation of injury to a person contributed to by any neglect or breach or default of [the appellant]. We have already found that the injury to Wail was contributed to by [the appellant's] breach of its obligation to provide a safe system of work, an obligation quite separate and distinct, and of quite a different kind, from any owed by Wail. In their plain and ordinary meaning both clauses are apt to cover the occurrence of the injury to Wail. His injury clearly arose out of and was contributed to by the conduct of the delivery round, the injury having been in part caused by [the appellant's] breach of its obligation to provide a safe system of work. We see no justification for reading down the clauses so as to exclude a situation in which [the respondent's] negligence was partly responsible for the occurrence of the injury. > > ... > > It follows that [the respondent] is, by virtue of either of cl 8.2.2 or 8.2.3, entitled to be indemnified by [the appellant] against [the respondent's] own liability to Wail. Since a complete indemnity is given by these clauses it is unnecessary to consider further the question of contribution as between [the respondent] and [the appellant]."

Several questions arise in this appeal as to the nature and extent of the liability of a company to and for its employees: also whether the terms of a written agreement which has expired, but in accordance with which the parties are still conducting themselves, continue to bind them; as to the proper construction of those terms; and, assuming that they can and do otherwise bind the parties, the effect of Pt IV of the Wrongs Act 1958 (Vic) ("the Act") on the parties.

Let it be assumed that Mr Wail had sued the appellant. It seems to me that had he done so he would have been bound to fail. It was Mr Wail who parked the truck on the incline where it was parked. It was he who was responsible for the method (subject to the role of the respondent in devising or acquiescing in it, a matter to which I will return) of transferring the trolleys to and from the truck. He was under no direct supervision by the respondent. No other person had any involvement in fact in the events which led to Mr Wail's injury and subsequent incapacity. Mr Parker, the other director, was not an executive director in any way responsible for, or even remotely involved in the design of the method, or the performance of the work of the appellant or its drivers.

The matters to which I have referred distinguish this case from Nicol v Allyacht Spars Pty Ltd[113]. As Mason CJ, Toohey and Gaudron JJ pointed out[114], the plaintiff there, although a director of the defendant company, was not, or certainly not solely, the author of the dangerous method of work adopted. Brennan J was of a similar view. His Honour said[115]:

"His injury was caused by his failure and by the failure of other executive directors to prescribe a safe system for reaching the horizontal arm. The function of prescribing the system fell to all the executive directors who were involved in the discussion, and the failure of the executive directors other than the plaintiff to prescribe a safe system is a failure for which the company is responsible. It is immaterial whether the company's liability rests on its vicarious liability for their negligence or on its failure by its agents to discharge the duty of care which it owed to the plaintiff. The failure of the plaintiff and the failure of the other executive directors to prescribe a safe system for reaching the horizontal arm of the flag-pole together caused the plaintiff's injuries." (original emphasis)

It follows that if the appellant were negligent, its negligence was co-extensive with, and in all respects the negligence also of the relevant executive director, here, Mr Wail. His negligence was the appellant's negligence and vice versa. If Mr Parker had been the person carrying out the work of the appellant, or had he been in any way involved in the operation or driving of its vehicle, and had Mr Wail been injured in consequence thereof, the appellant would have been entitled to recover the damages payable to Mr Wail, for which it would then have been vicariously liable, from Mr Parker to the extent of his negligence[116]. Why should the practical and legal result be any different when Mr Wail was both the person entirely responsible for devising the method of carrying out the employing company's work, and suffering injury in the course of doing so? In my opinion there is every reason why it should not be.

Corporations can only think, decide and act by natural persons. If as Dawson J thought correct in Nicol[117], and as the appellant here contended, the duty of an employer and employee can never be coterminous, in practice a corporate employer, obliged as it is to think and act by natural persons, would always be at risk, no matter how diligent it may have been, of being held not to have discharged its duty to its employees. I am unable to accept that there is some robotic unidentifiable agency remote from human agency for which a company may be held to be responsible. If it were otherwise there would have been no need for the majority in Nicol to undertake the careful examination that it did of the conduct of the injured plaintiff and other directors. It was only because another human agency on behalf of the company was involved, another director or directors who participated in the devising and adoption of the unsafe method of work there, that the injured director was able to succeed in his claim against the company.

Legislation[118] imposing criminal or quasi-criminal liability upon both directors of a company and the company itself falls to be construed according to the language used. Neither it, nor other legislation imposing statutory duties giving rise to civil rights of action for breach can provide a solution, or indeed even a reliable guide to the common law as stated in Lister v Romford Ice and Cold Storage Co Ltd[119] and by this Court in Nicol, in the latter of which the Court clearly regarded as decisive, the answer to the question, was the director who was injured the director who in fact [solely] devised the system.

I have proceeded so far on the basis that the appellant (by Mr Wail) was negligent, and that its negligence caused or contributed to Mr Wail's injury. As to this the Court of Appeal said[120]:

"[The respondent] supplied [the appellant] with trolleys and linen to deliver to and collect from various hospitals, and the jury's verdict shows that the trolleys were not safe to use. It necessarily follows that since [the appellant] had a duty to take reasonable care in making the trolleys and the system of handling them safe, there was a breach of [the appellant's] duty to Wail to provide a safe system of work."

The appellant submits that this holding suffers from the defect that it does not identify the respects in which, in continuing to implement the respondent's system of work, the appellant had acted unreasonably or negligently.

The difficulty for the appellant is however that it owed its employees an independent duty of care. That duty included a duty to provide a safe system of work. The duty, of course, could only in reality be discharged by a natural person or persons on behalf of the company, in this case, unlike in Nicol, by one person, Mr Wail, the director assuming responsibility for all relevant aspects of the work. It was a duty not to be discharged however, by accepting, or uncritically implementing a system of work devised by the party with whom it had a contract. The jury has held that the respondent was negligent and that as between it and Mr Wail, the latter was guilty personally of contributory negligence to the extent of 35%. And the trial judge has found that his personal negligence was also the negligence of the appellant. These are findings of fact. The last was inevitable. I do not think that this Court can disturb them. There was clearly evidence upon which the findings could be made. It included the evidence about the way and place in which the vehicle was parked, the placement of the trolleys in the truck, the means adopted to pull or push them to and from the truck, the failure of the appellant (by Mr Wail) to notice that a trolley was perhaps defective, and, in particular, the decision of Mr Wail to pull a trolley from the truck out of the stack in the way in which he did.

The operation and effect of the agreement between the parties

It is convenient to deal next with the effect of the written agreement of the parties. The first of the questions arising in relation to it is whether the parties continued to be bound by its terms despite that its stated period of operation had expired. As to that, cl 15.5 is of relevance:

"15.5 [E]xpiry or determination of the Agreement shall operate without prejudice to the rights and obligations of [the respondent] and the Operator which have accrued prior to the date of expiry or termination and shall not affect the parties [sic] respective continued rights and obligations under the Agreement and in particular shall not prejudice the rights - > > 15.5.1 to require the payment of all monies due and payable, and > > 15.5.2 to pursue any other remedy existing at law or in equity by either party against the other party or any other person."

No formal renewal was effected but the parties continued to deal with each other in the same way as previously. Payment was made in accordance with the written agreement. In all respects the course of dealings between the parties and the work done were exactly the same as they had been.

In Brogden v Metropolitan Railway Co[121] a slightly different problem arose. The parties there had failed to execute an agreement for the supply of a commodity that had been settled in all essential respects (except as to the identity of an arbitrator). The form of the agreement had been the subject of voluminous correspondence. But of more significance was the fact that for some years the course of dealings between the parties, including the price payable for the coal, was in accordance with the written but unexecuted contract.

By parity of reasoning the parties here should be held to be in a similar situation, that is, of being bound by the terms of the written contract (except as to duration). Indeed it may be that the continued allocation of work by the respondent to the appellant and payment in accordance with the agreement should be regarded as the exercise of a discretion by the respondent to renew the contract. It is unnecessary however to reach a conclusion about this. I doubt whether it would ever have occurred to the parties that their arrangements were governed other than by the terms of the written contract.

It is to the terms of the contract that I now go. This observation should be made at the outset. The whole of the contract manifests in the plainest of language the intention that no relationship of, or indeed in any respect similar to a relationship of employer and employee is to exist between the appellant or its employees and the respondent for any purpose. An entirely new relationship of independent contractor with independent contractor was created to replace the former relationship of employer and employee. Anything that the parties thereafter accepted and agreed was based on that premise, including the financial terms of the contract.

I agree generally with the reasoning and conclusion of the Court of Appeal with respect to the effect of the contract. There can be readily discerned in it the clearest possible intention on the part of the parties to ensure that the respondent is not to be liable for any loss arising out of the performance of the work by the appellant. That intention is not manifested by cl 8 alone. The summary of the rights and obligations at the beginning of the agreement contained two items intended to put beyond doubt that the appellant was to be, and the respondent not to be, responsible for the negligence of the appellant, and that the driver of the truck was to be directed and controlled by the appellant:

"25. INDEMNITY Operator to conduct Delivery Round at his sole risk and indemnify [the respondent] against all liabilities. > > 26. DIRECTION & CONTROL The Driver will remain under the Direction and Control of the Operator, but if unsatisfactory substitute driver to be appointed."

As to cl 4.6, I would suspect that "wilful" when used there was intended as "wilfully" but it must be read according to its terms, that is, as entitling the respondent to an indemnity except in the case of its own wilful, or negligent, or malicious act or omission arising from the operation of the motor vehicle, something quite different from the circumstances, I would observe, of Mr Wail's injury here. It may be that liability on the part of the respondent of the kind referred to by McHugh J in Hollis v Vabu Pty Ltd[122] was in the contemplation of the parties in settling cl 4.6, but it is unnecessary to speculate about that.

The respondent is correct in its submission that the express exception in respect of negligence on its part arising from the operation of the motor vehicle in cl 4.6 argues against the reading of a like exception into cll 8.2, 8.2.2 and 8.2.3 of the agreement.

Clause 8.1 obliges the appellant to conduct the delivery round at its sole risk, and goes on to provide that the appellant releases the respondent from all liabilities, injuries and damages of any nature or kind in connexion with it. This is a very clear indication of the parties' intention, that is that the respondent is to have no liability with respect to claims arising out of the performance of the contract by the appellant, except for a case within the narrow category of instances with which cl 4.6 is concerned.

The appellant argues that the reference in cl 8.2.2 to "operator" should be read as a reference to "operator by its driver". That being so, it said that it would be an unlikely interpretation of the clause to regard it as encompassing an injury to the driver. The appellant makes effectively the same submission in respect of the meaning of cl 8.2.3.

The submissions should be rejected. They ignore the separateness of the legal personalities involved, the operator, the corporate appellant, and the natural persons including Mr Wail who were its employees. They also overlook the several references in the agreement to, and separate treatment of each of the driver and the operator, and the numerous requirements imposed on the latter with respect to the ways in which the former is to carry out the work that the appellant has agreed to undertake for reward for the respondent.

The submissions would require the Court to insert by implication an expression at odds with the clear thrust of the arrangements between the parties, that they are to be at arms length legally, and that not only was the respondent not to be liable in respect of the operation of the vehicle, except as agreed in cl 4.6, but also that any potential liability it might have in respect of the neglect or default of the appellant in the performance of the contract was to be the subject of an indemnity by the latter.

The fact that the contract was in a standard form prepared by the respondent does not avail the appellant. There is nothing ambiguous in its terms. The contract can be seen to be an arrangement accepted by the appellant by its directors, not just to change a business practice of the respondent, but to effect a radical change in the legal relationship between the respondent and its former employees, and a different legal personality which Mr Wail must have preferred to substitute as a contracting party. To treat the relationship, for any legal purpose, between Mr Wail and the respondent, as if this express radical change had not occurred would be to subvert the whole intention of the parties. They were free to make their own arrangements for insurance on the basis of the contract. Its terms as a whole, including its financial terms, were similarly no doubt agreed upon the basis of the changed respective legal rights and obligations to which it gave rise. As Lord Diplock said in a case of exclusion of liability by contract, Photo Production Ltd v Securicor Transport Ltd[123]:

"It is generally more economical for the person by whom the loss will be directly sustained to do so rather than that it should be covered by the other party by liability insurance."

It would be an unlikely construction, one which the plain words do not in any event in my opinion permit, that the indemnity is to be in favour of the respondent in respect of injury or damage to anyone in the whole world, except one of the persons most likely to suffer it, Mr Wail as the driver of the vehicle on a day to day basis.

I would reject the submission that this is a case in which the contra proferentem rule has any role to play. In Darlington Futures Ltd v Delco Australia Pty Ltd[124] Mason, Wilson, Brennan, Deane and Dawson JJ said this:

"[T]he interpretation of an exclusion clause is to be determined by construing the clause according to its natural and ordinary meaning, read in the light of the contract as a whole, thereby giving due weight to the context in which the clause appears including the nature and object of the contract, and, where appropriate, construing the clause contra proferentem in case of ambiguity."

This is not, as I have pointed out, a case of an ambiguity of language in a contract. Nor does the application of the ordinary meaning of its words produce any absurdity, indeed the contrary, the consequences for which the parties plainly contracted. To allow the appellant to escape its liability to indemnify would be to put Mr Wail in the position in which he had been before, as if no presently relevant change had been made in his relationship with the respondent.

As Kirby J in McCann v Switzerland Insurance Australia Ltd said[125]:

"Courts now generally regard the contra proferentem rule (as it is called) as one of last resort because it is widely accepted that it is preferable that judges should struggle with the words actually used as applied to the unique circumstances of the case and reach their own conclusions by reference to the logic of the matter, rather than by using mechanical formulae." (footnote omitted)

The Court of Appeal was right to hold that the appellant was contractually bound to indemnify the respondent. The relevant provisions of Pt IV of the Wrongs Act are set out in the judgment of Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ. There is nothing in them to prevent the operation of the agreement as to indemnity. Indeed, again the contrary is the case because contractual rights in that regard are expressly preserved[126].

The appellant advanced a further argument. It involved these propositions. The damages payable by the respondent in the principal proceedings were reduced by the jury in consequence of the finding of contributory negligence. That reduction necessarily took into account the "causative fault" of Mr Wail: the causative fault of Mr Wail was precisely equivalent to the fault of the appellant. It would not, in those circumstances, be just and reasonable to award the respondent any amount by way of contribution.

In support of this argument the appellant relied on a passage in the judgment of Jackson J in Doyle v Pick and Rickwood[127], contending that a similar conclusion should be reached here:

"[T]he amount recoverable is such as is found to be just and equitable. As the damages awarded against the defendant correspond exclusively to his own share of the responsibility and the negligence of the third party has already been taken into account in arriving at those damages, it would not be just and equitable that the defendant should have any recovery against the third party. If it were otherwise, then the third party would have to pay twice, because he is liable at the suit of the plaintiff for his share of the responsibility for the damage. This opinion, which I advanced during argument at the hearing, has, I am glad to find, the support of Professor Glanville Williams in his book on Joint Torts and Contributory Negligence".

The second proposition was that as the appellant had inherited the system of work from the respondent and had continued to implement it, any allowance for contribution would constitute an inequitable or unfair "windfall" for the respondent.

I disagree with both propositions. The parties were bound by a contract. Whether, viewed subjectively or even objectively, its provisions may appear to have operated unfairly and inequitably in relation to one or other of them would be beside the point. The event in question, the contributory negligence of the appellant, necessarily by one or other of its employees, in this instance the injured person, was precisely the sort of event which the parties' agreement had in contemplation. It is likely, as I have already said, that provision was made for it as the price of an adjustment to some other term or terms of the contract. The parties were free to effect their own arrangements for insurance and otherwise on the basis of the contract. It is not for the Court to say that a consequence different from the one bargained for should ensue, that the appellant should not be answerable to, and obliged to indemnify the respondent for its own (by Mr Wail) negligence.

There are two answers to the second proposition. One is the answer that I have just made to the appellant's first contention on this aspect of the case. The second is that inheritance of the respondent's system of work did not relieve the appellant of its own continuing obligation, in this case assumed and undertaken by Mr Wail himself, to devise and maintain a safe system of work.

For the reasons that I have given, Mr Wail's contributory negligence should and would have been held to be the complete and only contributory cause as between him and the appellant of his injuries. Any action by him against the appellant would therefore have failed. The fact that the respondent has been held liable to Mr Wail has nothing to say about the contractual indemnity owed by the appellant to the respondent. Even if otherwise the appellant's submissions about justness and equity were correct, they could provide no answer to cl 8 of the agreement. It entitles the respondent to an indemnity against the appellant in the circumstances here, of an injury arising out of the performance by the operator (in this case the appellant) of the work.

[1] Brambles Ltd v Wail (2002) 5 VR 169.

[2] Brambles Ltd v Wail (2002) 5 VR 169.

[4] [1987] HCA 15; (1987) 162 CLR 549.

[5] [1987] HCA 15; (1987) 162 CLR 549 at 561.

[6] [1989] HCA 63; (1989) 168 CLR 242 at 256.

[7] [1810] EngR 210; (1810) 12 East 227 at 228 [104 ER 89 at 89].

[8] (1832) 1 C & M 48 [149 ER 309].

[9] (1832) 1 C & M 48 at 52 [149 ER 309 at 311].

[10] [1812] USSC 10; 7 Cranch 69 (1812).

[11] [1812] USSC 10; 7 Cranch 69 at 92 (1812).

[12] (1840) 6 M & W 605 at 612 [1840] EngR 150; [151 ER 554 at 557].

[13] A Treatise on the Law of Guarantees and of Principal & Surety, 3rd ed (1897) at 200-201. See also Stearns, The Law of Suretyship, 2nd ed (1915) at 18-20.

[14] Moss and Marks, Rowlatt on Principal and Surety, 5th ed (1999) at 44; cf Andrews and Millett, Law of Guarantees, 3rd ed (2000) at 70-71.

[16] (1987) 8 NSWLR 88 at 92; cf Tam Wing Chuen v Bank of Credit and Commerce Hong Kong Ltd [1996] 2 BCLC 69 at 77 (PC).

[17] (1840) 6 M & W 605 at 612 [1840] EngR 150; [151 ER 554 at 557].

[18] See also Halford v Price [1960] HCA 38; (1960) 105 CLR 23 at 30, 34, 40, 41 (an insurance policy case); Davis v Commissioner for Main Roads [1968] HCA 10; (1968) 117 CLR 529 at 534 (a contract of indemnity case).

[19] [1987] HCA 15; (1987) 162 CLR 549 at 560.

[20] [1936] USSC 3; 296 US 526 at 531 (1936).

[21] Bank of Nova Scotia v St Croix Drive-In Theatre Inc [1984] USCA3 167; 728 F 2d 177 at 181 (1984).

[22] Bank of Nova Scotia v St Croix Drive-In Theatre Inc [1984] USCA3 167; 728 F 2d 177 at 181 (1984); Stearns, The Law of Suretyship, 5th ed (1951) at 89-92; Arnold, "The Compensated Surety", (1926) 26 Columbia Law Review 171 at 172-173.

[25] See, eg, s14, comment (c) with s49, comment (b).

[26] cf Corpus Juris Secundum, (1987), vol 72 at 232.

[27] See Ankar Pty Ltd v National Westminster Finance (Australia) Ltd [1987] HCA 15; (1987) 162 CLR 549 at 560.

[28] [1988] HCA 11; (1988) 166 CLR 245 at 254.

[29] See Davis v Commissioner for Main Roads [1968] HCA 10; (1968) 117 CLR 529 at 534, 537; Smith v South Wales Switchgear Co Ltd [1978] 1 WLR 165; [1978] 1 All ER 18; Greenwell v Matthew Hall Pty Ltd (No 2) (1982) 31 SASR 548. See also Andrews and Millett, Law of Guarantees, 3rd ed (2000) at 73; O'Donovan and Phillips, The Modern Contract of Guarantee, Eng ed (2003) at 258-259.

[30] [2004] HCA 7; (2004) 78 ALJR 411; 204 ALR 417.

[31] [2004] HCA 7; (2004) 78 ALJR 411 at 417 [32]; [2004] HCA 7; 204 ALR 417 at 425.

[32] Hamilton v Nuroof (WA) Pty Ltd [1956] HCA 42; (1956) 96 CLR 18 at 25; Commissioner for Railways (NSW) v O'Brien [1958] HCA 20; (1958) 100 CLR 211 at 216-217; O'Connor v Commissioner for Government Transport [1954] HCA 11; (1954) 100 CLR 225 at 229; Ferraloro v Preston Timber Pty Ltd (1982) 56 ALJR 872 at 873; 42 ALR 627 at 629.

[33] See Kondis v State Transport Authority [1984] HCA 61; (1984) 154 CLR 672 at 688, 689, 694, 695; Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; (1986) 160 CLR 16 at 32, 44, 49; McDermid v Nash Dredging & Reclamation Co Ltd [1986] UKHL 5; [1987] AC 906 at 919.

[34] [1984] HCA 61; (1984) 154 CLR 672 at 694.

[35] [1937] UKHL 2; [1938] AC 57 at 84.

[36] See, generally, Stanton et al, Statutory Torts, (2003) at 329-332.

[39] [1964] 1 WLR 768 at 777; [1964] 2 All ER 452 at 455.

[40] [1969] 1 WLR 661 at 668; [1969] 2 All ER 439 at 442.

[41] See, eg, Shedlezki v Bronte Bakery Pty Ltd (1970) 72 SR (NSW) 378 at 388-389; Buckman (H C) & Son Pty Ltd v Flanagan [1974] HCA 30; (1974) 133 CLR 422 at 442; Nicol v Allyacht Spars Pty Ltd [1987] HCA 68; (1987) 163 CLR 611 at 623-624.

[42] See also Ross v Associated Portland Cement Manufacturers Ltd [1964] 1 WLR 768 at 777, 783-784, 787; [1964] 2 All ER 452 at 455, 460, 462; Boyle v Kodak Ltd [1969] 1 WLR 661 at 667, 668, 670, 673; [1969] 2 All ER 439 at 441, 442, 444, 446; Stanton et al, Statutory Torts, (2003) at 329.

[43] [1991] HCA 12; (1991) 171 CLR 506 at 511. Toohey J (at 524) and Gaudron J (at 525) agreed with Mason CJ.

[45] [1946] HCA 47; (1946) 74 CLR 541 at 545, 547, 549.

[46] [1991] HCA 12; (1991) 171 CLR 506 at 512.

[47] [1987] HCA 68; (1987) 163 CLR 611.

[48] [1991] HCA 12; (1991) 171 CLR 506 at 511.

[49] See Buckman (H C) & Son Pty Ltd v Flanagan [1974] HCA 30; (1974) 133 CLR 422 at 442.

[50] [1974] HCA 30; (1974) 133 CLR 422. See also the judgment of Mason JA in Shedlezki v Bronte Bakery Pty Ltd (1970) 72 SR (NSW) 378 at 389-390.

[51] [1974] HCA 30; (1974) 133 CLR 422 at 442.

[52] [Boyle v Kodak Ltd] [1969] 1 WLR 661 at 665-666; [1969] 2 All ER 439 at 440.

[53] cf Sherman v Nymboida Collieries Pty Ltd [1963] HCA 63; (1963) 109 CLR 580 at 591.

[54] See, eg, Australian Iron and Steel Ltd v Ryan [1957] HCA 25; (1957) 97 CLR 89 at 95-96.

[55] Sovar v Henry Lane Pty Ltd [1967] HCA 31; (1967) 116 CLR 397 at 404-405.

[56] [1967] HCA 31; (1967) 116 CLR 397 at 405.

[57] [1987] HCA 68; (1987) 163 CLR 611 at 624.

[58] [1987] HCA 68; (1987) 163 CLR 611 at 621.

[59] See Nicol v Allyacht Spars Pty Ltd [1987] HCA 68; (1987) 163 CLR 611 at 623. See also Stanton et al, Statutory Torts, (2003) at 331; Glass, McHugh and Douglas, The Liability of Employers, 2nd ed (1979) at 233-234.

[60] [1987] HCA 68; (1987) 163 CLR 611 at 625. See also the judgment of Mason JA in Shedlezki v Bronte Bakery Pty Ltd (1970) 72 SR (NSW) 378 at 389-390.

[61] (1964) 111 CLR 443 at 480; affd [1966] UKPCHCA 1; (1966) 116 CLR 38 (PC); [1967] 1 AC 308. See also Industrial Equity Ltd v Blackburn [1977] HCA 59; (1977) 137 CLR 567 at 577; Nicol v Allyacht Spars Pty Ltd [1987] HCA 68; (1987) 163 CLR 611 at 616-617.

[62] Lee v Lee's Air Farming Ltd [1961] AC 12 at 26.

[63] See Shedlezki v Bronte Bakery Pty Ltd (1970) 72 SR (NSW) 378 at 389-390.

[64] Hamilton v Whitehead [1988] HCA 65; (1988) 166 CLR 121. See also Attorney-General's Reference (No 2 of 1982) [1984] QB 624; Macleod v The Queen [2003] HCA 24; (2003) 77 ALJR 1047 at 1052 [28]- [29]; [2003] HCA 24; 197 ALR 333 at 340.

[66] Salomon v Salomon & Co [1897] AC 22.

[67] [1988] HCA 65; (1988) 166 CLR 121 at 128.

[68] [1974] USSC 104; 417 US 85 at 100 (1974). See also Braswell v United States [1988] USSC 134; 487 US 99 at 113 (1988); United States v Stone [1992] USCA4 1759; 976 F 2d 909 at 912 (1992). Braswell was discussed in Environment Protection Authority v Caltex Refining Co Pty Ltd [1993] HCA 74; (1993) 178 CLR 477 esp at 492-493, 515, 527-531, 542.

[69] [1974] USSC 104; 417 US 85 at 88 (1974).

[70] United States v White [1944] USSC 109; 322 US 694 at 699 (1944); Braswell v United States [1988] USSC 134; 487 US 99 at 107, 110 (1988).

[71] Braswell v United States [1988] USSC 134; 487 US 99 at 110 (1988).

[74] Lee v Lee's Air Farming Ltd [1961] AC 12.

[75] See Industrial Equity Ltd v Blackburn [1977] HCA 59; (1977) 137 CLR 567 at 577.

[76] (2002) 5 VR 169 at 182; see also at 178.

[77] 1936 SC 883 at 904. See also Speed v Thomas Swift & Co [1943] KB 557 at 563.

[78] Winter v Cardiff Rural District Council [1950] 1 All ER 819 at 825 per Lord Reid. See also Glass, McHugh and Douglas, The Liability of Employers, 2nd ed (1979) at 20-21.

[79] [1987] HCA 68; (1987) 163 CLR 611 at 618. See also Munkman on Employer's Liability, 13th ed (2001) at 140.

[80] See, eg, Ferraloro v Preston Timber Pty Ltd (1982) 56 ALJR 872 at 873; 42 ALR 627 at 629; Ross v Tennant Caledonian Breweries Ltd 1983 SLT 676.

[83] Soblusky v Egan [1960] HCA 9; (1960) 103 CLR 215 at 235; Amaca Pty Ltd v New South Wales [2003] HCA 44; (2003) 77 ALJR 1509 at 1513 [20]; [2003] HCA 44; 199 ALR 596 at 601.

[84] [1994] HCA 54; (1994) 181 CLR 404 at 421.

[85] See FAI General Insurance Co Ltd v Southern Cross Exploration NL [1988] HCA 13; (1988) 165 CLR 268 at 283-284, 290. See also Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178 at 185, 202-203, 205.

[88] Joint reasons at [30]-[32] setting out the relevant provisions of ss 23A and 23B of the Wrongs Act 1958 (Vic).

[90] Brambles Ltd v Wail (2002) 5 VR 169.

[91] See the terms of the indemnity provisions set out in the joint reasons at [15].

[93] cf McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579 at 602 [74.4]; Siemens Ltd v Schenker International (Australia) Pty Ltd (2004) 78 ALJR 508 at 537 [167]; 205 ALR 232 at 272.

[94] cf reasons of Callinan J at [122]-[124].

[96] Holdsworth, A History of English Law, 3rd ed (1945), vol 5 at 298.

[97] Arnold, "The Compensated Surety", (1926) 26 Columbia Law Review 171; Stearns, The Law of Suretyship, 5th ed (1951) at 89-92.

[98] [1936] USSC 3; 296 US 526 (1936).

[99] Williston, A Treatise on the Law of Contracts, 3rd ed (1967), vol 10 at 706-707.

[100] Darlington Futures Ltd v Delco Australia Pty Ltd [1986] HCA 82; (1986) 161 CLR 500 at 510; Nissho Iwai Australia Ltd v Malaysian International Shipping Corporation Berhad [1989] HCA 32; (1989) 167 CLR 219 at 227.

[102] [1987] HCA 15; (1987) 162 CLR 549 at 561. See the joint reasons at [17]-[18]. See also Chan v Cresdon Pty Ltd [1989] HCA 63; (1989) 168 CLR 242 at 256.

[104] Salomon v Salomon & Co [1897] AC 22.

[105] cf Lee v Lee's Air Farming Ltd [1961] AC 12.

[107] Wrongs Act, ss 23A, 23B. See the joint reasons at [31]-[32].

[111] Brambles Ltd v Wail (2002) 5 VR 169.

[112] Brambles Ltd v Wail (2002) 5 VR 169 at 191-192 [71]-[74].

[113] [1987] HCA 68; (1987) 163 CLR 611.

[114] [1987] HCA 68; (1987) 163 CLR 611 at 616.

[115] [1987] HCA 68; (1987) 163 CLR 611 at 621-622.

[116] See Lister v Romford Ice and Cold Storage Co Ltd [1956] UKHL 6; [1957] AC 555. In some jurisdictions, but not in Victoria, the rule established in this case has been abolished by legislation. See the discussion in Fleming, The Law of Torts, 9th ed (1998) at 298-300. The correctness and application of Lister in Australia appear to have been assumed in Commercial and General Insurance Co Ltd v Government Insurance Office (NSW) (1973) 129 CLR 374 at 380-381. In FAI General Insurance Co Ltd v A R Griffiths & Sons Pty Ltd (1997) 71 ALJR 651, on application for special leave to appeal from the Court of Appeal of Queensland, the Court said:

"The applicant seeks special leave to canvass in this Court the decision of the House of Lords in Lister v Romford Ice & Cold Storage Co Ltd and its application in Australia. However, that question necessarily arises on the footing that the employer was under the statutory obligation contained in s 3 of the Motor Vehicle Insurance Act 1936 (Qld). That provision has been repealed. Moreover, the principle which Lister expresses has been legislatively overruled in some jurisdictions and, in circumstances of which this case is an example, it is desirable that a legislative rather than a judicial solution be found. In those circumstances, this is not a suitable case for the grant of special leave. Accordingly special leave is refused."

[117] [1987] HCA 68; (1987) 163 CLR 611 at 624-625.

[118] See for example s 124 of the Corporations Act 2001 (Cth).

[119] [1956] UKHL 6; [1957] AC 555.

[120] Brambles Ltd v Wail (2002) 5 VR 169 at 182 [45].

[121] (1877) 2 App Cas 666 at 678 per Lord Cairns, 686 per Lord Hatherley, 690 per Lord Selborne.

[122] [2001] HCA 44; (2001) 207 CLR 21 at 47 [64]- [65].

[123] [1980] UKHL 2; [1980] AC 827 at 851.

[124] [1986] HCA 82; (1986) 161 CLR 500 at 510.

[125] [2000] HCA 65; (2000) 203 CLR 579 at 602 [74]. See also Johnson v American Home Assurance Co [1998] HCA 14; (1998) 192 CLR 266 at 274-275 [19] per Kirby J.

"(4) The right to recover contribution in accordance with section 23B supersedes any right, other than an express contractual right, to recover contribution (as distinct from indemnity) otherwise than under this Part in corresponding circumstances but nothing in this Part shall affect -

(a) any express or implied contractual or other right to indemnity; or

(b) any express contractual provision regulating or excluding contribution -

which would be enforceable apart from this Part or render enforceable any agreement for indemnity or contribution which would not be enforceable apart from this Part."

Compensation Act 1985

Building (Safety, Health and Welfare) Regulations 1948

Vehicle Insurance Act 1936

Compensation Act 1985

Building (Safety, Health and Welfare) Regulations 1948

Vehicle Insurance Act 1936

Building (Safety, Health and Welfare) Regulations 1948

Compensation Act 1985

Vehicle Insurance Act 1936

Andar Transport Pty Ltd v Brambles Ltd [2004] HCA 28; 217 CLR 424; 206 ALR 387; 78 ALJR 907 (15 June 2004)

Andar Transport Pty Ltd v Brambles Ltd [2004] HCA 28; 217 CLR 424; 206 ALR 387; 78 ALJR 907

At a glance

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Legislation Cited (12)

Cases Cited (45)

Andar Transport Pty Ltd v Brambles Ltd [2004] HCA 28; 217 CLR 424; 206 ALR 387; 78 ALJR 907 (15 June 2004)