Citation : THORNTON -v- NEWCREST MINING LTD [2010] WADC 61

Statutes - Statutory construction - Whether a consent judgment is a judgment within the meaning of s 7(1) of the Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA)

Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA), s 7(1)(b)

Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485

Ayling v BHP Direct Reduced Iron Pty Ltd [2001] WADC 252; (2001) 27 SR (WA) 274

Baxter v Obacelo Pty Ltd [2001] HCA 66; (2001) 205 CLR 635

Bayley v Wesfarmers Transport Ltd [2000] WADC 102

Briggs v Glentham Pty Ltd (Unreported, WASC, Library No 920430, 26 August 1992)

Darcy v Baines (1995) 12 SR (WA) 285

Electrolux Home Products Pty Ltd v The Australian Workers' Union [2004] HCA 40; (2004) 221 CLR 309

Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89

Hunt v Knabe [No 2] (1992) 8 WAR 96

Madras Electric Supply Corp Ltd v Boarland (Inspector of Taxes) [1955] AC 667

McGraw-Hinds (Aust) Pty Ltd v Smith [1979] HCA 19; (1979) 144 CLR 633

Nau v Kemp & Associates [2010] NSWCA 164; [2010] Aust Torts Reports 82-064

Potter v Minahan [1908] HCA 63; (1908) 7 CLR 277

Re Luck [2003] HCA 70; (2003) 203 ALR 1

Saeed v Minister for Immigration and Citizenship [2010] HCA 23; (2010) 241 CLR 252

Tanska v Transport Accident Commission [2000] VSC 56; (2000) 30 MVR 561

Tingey v Christ Church Grammar School Inc [1999] WADC 111; (1999) 21 SR (WA) 357

Walker v Fares Rural Co Pty Ltd [2001] WADC 94

1 REASONS OF THE COURT: This is an appeal against the judgment of a District Court judge, Mazza DCJ, as his Honour then was. His Honour dismissed an appeal against an order of Deputy Registrar Hewitt in the District Court. The deputy registrar granted the respondent's application for summary judgment pursuant to O 16 and dismissed the appellant's action.

2 The events leading up to the award of the summary judgment are not in dispute. Those events are as follows. The appellant suffered injuries to his left leg in a workplace accident which occurred at the Telfer mine site. He was employed by Simon Engineering Pty Ltd (Simon Engineering). In 2004, the appellant issued a writ against Simon Engineering seeking damages for negligence and/or breach of statutory duty to compensate him for his injuries, which were caused to him in the course of his employment. The action against Simon Engineering was settled by agreement between the parties. One of the terms of the settlement was that there should be a consent judgment for the settlement sum of $250,000 in addition to workers' compensation payments, plus costs. As a result, a consent judgment was signed by the solicitors for the parties and judgment was entered on 31 May 2007. The judgment read:

It is this day adjudged that judgment be ... entered for the Plaintiff against the Defendant for the sum of $250,000 exclusive of weekly payments made to date ... plus legal costs ...

3 Simon Engineering paid the amount due under the judgment.

4 In the next year, on 23 June 2008, the appellant issued a writ of summons against the respondent. The respondent was the owner and operator of the mine site. The appellant claimed damages for the same injury, based on a failure to provide a reasonably safe worksite and because of the respondent's site nurse's failure to treat the appellant's injuries properly. If the respondent was liable, then the respondent and Simon Engineering were concurrent tortfeasors.

5 The appellant filed a document setting out his particulars of damage. In that document, he revealed that he had already received $250,000 by way of 'settlement monies received', which reduced the damages he claimed against the respondent by that amount.

6 On 11 May 2009 the respondent applied to the Deputy Registrar for summary judgment. The essence of the application was that the appellant had already been compensated for the injury that he suffered on 16 February 2004 and recovery of further damages was impossible having regard to s 7(1)(b) of the Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA) (the Act). The deputy registrar granted summary judgment and dismissed the appellant's claim.

7 The hearing before Mazza DCJ was an appeal by way of hearing de novo. As already stated, the appellant's appeal was dismissed.

8 His Honour recorded the respondent's submission that while the appellant was not barred from suing the respondent or obtaining judgment against it, he could not obtain damages in a sum which exceeded the amount he recovered from the action against his employer, Simon Engineering. His Honour noted the respondent's submission that in the light of that, the action taken against it was pointless and thus frivolous and vexatious.

9 There were a number of issues dealt with by Mazza DCJ which do not have to be described in detail or at all because they are no longer issues in this appeal.

10 One of them was a submission by the appellant that s 7(1)(b) of the Act did not apply 'having regard to' Baxter v Obacelo Pty Ltd [2001] HCA 66; (2001) 205 CLR 635. That submission was dismissed. Mazza DCJ then said:

In my opinion on the undisputed facts in this case, s 7(1)(b) of the Act applies. The appellant's claim against the respondent is with respect to the same damage the subject of the settled proceedings against Simon Engineering. By virtue of s 7(1)(b) of the Act the appellant cannot in the proceedings against the respondent recover damages which exceed the amount of the damages he received in the action against his employer. To proceed against the respondent in light of this, would, even if he was successful in proving negligence against the respondent, be of no value to him. Such proceedings would, in my view, be frivolous and vexatious.

In my opinion the position is so clear that summary judgment should be given in favour of the respondent [35] - [36].

As a result, his Honour dismissed the appellant's appeal.

The decision in Nau v Kemp is delivered

11 Just over two months after Mazza DCJ handed down his decision, the New South Wales Court of Appeal published its reasons for decision in Nau v Kemp & Associates [2010] NSWCA 164; [2010] Aust Torts Reports 82-064. The facts in that case were similar to the facts in this case. The plaintiff brought two actions claiming damages from concurrent tortfeasors. One action was settled, and pursuant to the settlement, a judgment in favour of the injured plaintiff was entered for $220,000. Following that settlement, the defendant in the other action applied to have the action against it dismissed. The application was granted and the action was summarily dismissed. The judge in the court below the Court of Appeal dismissed the action on the basis that the plaintiff had already recovered damages from another tortfeasor for the injury that was the subject of the action, and that s 5(1)(b) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) prevented her from receiving any greater sum, and thus continuation of the action was an abuse of process. The plaintiff appealed to the Court of Appeal. The appeal was upheld. It will be necessary to consider the reasons of the Court of Appeal which are summarised below, but, in short, the ratio of the case was that the phrase 'damages awarded ... by judgment' in s 5(1)(b) of the New South Wales Act (which is identical to s 7(1)(b) of the Act), refers to damages awarded by a court following a judicial assessment and not to a judgment entered by the consent of the parties: McColl JA [28], [75], Campbell JA [211], [230], Sackville AJA [262], [266].

(1) Subject to Part 1F of the Civil Liability Act 2002, where damage is suffered by any person as the result of a tort -

(a) judgment recovered against any tortfeasor liable in respect of that damage shall not be a bar to an action against any other person who would, if sued, have been liable as a joint tortfeasor in respect of the same damage;

(b) if more than one action is brought in respect of that damage by or on behalf of the person by whom it was suffered ... against tortfeasors liable in respect of the damage (whether as joint tortfeasors or otherwise) the sums recoverable under the judgments given in those actions by way of damages shall not in the aggregate exceed the amount of the damages awarded by the judgment first given: and in any of those actions, other than that in which judgment is first given, the plaintiff shall not be entitled to costs unless the Court is of opinion that there was reasonable ground for bringing the action.

(c) any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is or would if sued have been liable in respect of the same damage whether as a joint tortfeasor or otherwise but so that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by him in respect of the liability for which contribution is sought.

13 The appellant appeals on one ground which, in effect, alleges that Mazza DCJ erred in law in holding that the consent judgment entered in this case was one which fell within s 7(1)(b), that being an error because there was no judicial assessment of damages and therefore no damages 'awarded'. The issue is therefore about the correct construction of s 7(1)(b) of the Act. The appellant relies upon the reasons in Nau v Kemp to support the appeal.

This court should follow Nau v Kemp unless it is plainly wrong

14 There are five other District Court cases where a consent judgment was, in effect, treated as a judgment 'awarding' damages. See Ayling v BHP Direct Reduced Iron Pty Ltd [2001] WADC 252; (2001) 27 SR (WA) 274; Tingey v Christ Church Grammar School Inc [1999] WADC 111; (1999) 21 SR (WA) 357; Bayley v Wesfarmers Transport Ltd [2000] WADC 102; Walker v Fares Rural Co Pty Ltd [2001] WADC 94; Darcy v Baines (1995) 12 SR (WA) 285.

15 In Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485, the High Court said that an intermediate appellate court should not depart from an interpretation placed on uniform national legislation by another Australian intermediate appellate court unless convinced that that interpretation is plainly wrong: Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 [135]. Section 7(1)(b) is identical to provisions in three other States in Australia (New South Wales, Queensland and the Northern Territory). The provision is also identical in New Zealand. The statute in South Australia used to have the same provision, but this was repealed in 2001. The provision in the Australian Capital Territory is similar in substance but is worded differently, and in Victoria the relevant provision concerns only the award of costs in subsequent actions for the same damage. The provision in Tasmania is quite different. It states that in respect of a subsequent action against a concurrent wrongdoer for the same damage, the plaintiff cannot recover an amount of damages that, having regard to any damages previously recovered by the plaintiff in respect of the damage or loss, would result in the plaintiff receiving compensation for damage or loss that is greater than the damage or loss actually sustained by the plaintiff: Law Reform (Miscellaneous Provisions) Act 1946 (NSW), s 5(1); Law Reform Act 1995 (Qld), s 6; Law Reform (Miscellaneous Provisions) Act 1956 (NT), s 12; Law Reform Act 1936 (NZ), s 17; Civil Liability Act 1936 (SA), s 25; Civil Law (Wrongs) Act 2002 (ACT), s 20; Wrongs Act 1958 (Vic), s 24AB; Civil Liability Act 2002 (Tas), s 43E.

16 Thus although the legislation under consideration here is not uniform throughout the nation, the fact that it is the same in four Australian jurisdictions warrants similar treatment in those jurisdictions. As a result, this court should follow the ratio in Nau v Kemp unless it is plainly wrong. That requires a consideration of the reasons the members of the court in Nau v Kemp gave for their construction of the section.

17 After outlining the legislative framework in New South Wales and the background to the proceedings, McColl JA directed her attention to the construction of s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW). Her Honour found that a literal construction favoured the appellant, but that the text should not be viewed in isolation. For this reason, her Honour also considered the meaning of the words 'tortfeasors liable' and 'judgment first given,' which appear in s 5(1)(b). Her Honour said at [104] that the common law principle of double satisfaction and comments by Kirby J in Baxter v Obacelo militated against a construction of s 5(1)(b) which would discourage the settlement of actions. A purposive approach was then adopted by her Honour, who examined the common law position before 1946, the mischief that the provision was intended to address and the relevant reports of the Law Revision Committee (Great Britain). In light of this, her Honour concluded that the purpose of s 5(1)(b) was to cap a plaintiff's damages in a successive action, where damages had been determined in a first action in which the damages awarded fully recouped the plaintiff's loss. Her Honour accepted the premise in Baxter v Obacelo that as distinct from a judgment for damages assessed by a court, a sum received by way of consent judgment might not reflect the full amount of the plaintiff's loss. The better view was therefore that the expression 'damages awarded by ... judgment' in s 5(1)(b) referred to damages awarded by a court after a judicial determination on the merits. This construction was seen to be harmonious with other elements of the provision and with the purpose of the provision, and reflected the fact that s 5(1)(b) did not speak with the clear language which would be necessary to impute to the Act the purpose of overthrowing the principle that a plaintiff is entitled to recoup fully the damage suffered as a result of a joint/concurrent tort. In reaching her conclusion, her Honour called in aid the principle that a statute would not be construed to infringe common law rights unless it did so with irresistible clearness.

18 Campbell JA also reviewed the historical background to the provision and commented that insofar as s 6(1)(b) of the Law Reform (Married Women and Tortfeasors) Act 1935 (UK) imposed limits on the recoverability of damages and costs in subsequent actions against a several concurrent tortfeasor who had caused the same damage, it removed a right that had previously existed at common law. This was not acknowledged by the report of the Law Revision Committee (Great Britain) or by the United Kingdom and New South Wales second reading speeches, which focused only on joint tortfeasors. His Honour was not greatly assisted by these extrinsic materials. Campbell JA expressly distinguished the decision in Baxter v Obacelo on the application of s 5(1)(b) because in that case the plaintiff brought a single action against joint tortfeasors. However, his Honour agreed with the High Court's discussion in that case of the common law rule against double satisfaction. The fact that a party to the settlement intended to bring subsequent actions in respect of the same damage was irrelevant to the application of s 5(1)(b), as was the fact that the plaintiff may have been undercompensated by the judgment first given. Although his Honour accepted the respondent's submission that a consent judgment is no less a judgment than one arrived at after a contested hearing, this did not address the question of whether a consent judgment is one by which damages are 'awarded' within the meaning of s 5(1)(b).

19 The reasons of Campbell JA include references to dictionary definitions of 'award,' most of which were said to require deliberation by the person who does the awarding. Campbell J recognised, however, that the definition, 'to bestow by judicial decree' would extend to a judicial decree that is the result of the consent of the parties. The analysis of the dictionary definitions left his Honour with a preference for the view that 'damages awarded' in s 5(1)(b) referred to damages the amount of which a court has decided to award. His Honour referred to the decision of the Victorian Supreme Court in Tanska v Transport Accident Commission [2000] VSC 56; (2000) 30 MVR 561, in which the words 'award of damages' in the Transport Accident Act 1986 (Vic) were held to require a judicial determination, but said that because Tanska involved the expression in the context of the particular statute in question, it could not be decisive of the meaning of 'damages awarded' in s 5(1)(b). Like McColl JA, Campbell JA cited Baxter v Obacelo to support the proposition that for a number of reasons, an amount agreed by the parties as part of a settlement may not be full compensation for the plaintiff's loss. In this situation, a 'blanket rule' limiting recovery in a successive action against a concurrent tortfeasor could work unjustly. Such an injustice did not arise if s 5(1)(b) applied only to damages arrived at by judicial assessment. From a policy perspective, his Honour held that it was far from clear that the provision aimed to stop multiplicity of actions that did not proceed to hearing and determination. His Honour did find, however, that the common law's encouragement of the settlement of actions militated against a construction of s 5(1)(b) which might discourage settlements. His Honour concluded that no considerations of context, history or policy displaced his preferred construction of s 5(1)(b).

20 Sackville AJA examined the recommendations of the Law Revision Committee in its Third Interim Report and noted that the UK Parliament did not follow precisely the language used by the Committee in implementing its recommendations. An examination of the dictionary definitions of 'award' led his Honour to comment that the language used in s 5(1)(b) is ambiguous. Notwithstanding this ambiguity, his Honour found that the more 'natural' interpretation of the phrase was to the amount of damages awarded following a judicial assessment. This conclusion followed from the primary dictionary definition of 'award' as a verb to mean 'determining or deciding (a claim) after consideration or deliberation, or adjudicating that a claim is merited.' His Honour reasoned that this interpretation would overcome the difficulty in ascertaining the amount of 'damages' awarded by the judgment first given because a court must give reasons for its assessment of damages. Sackville AJA was of the view that the inclusion of the words 'damages awarded' in the provision was significant, and that parliament had deliberately departed from the language proposed by the Law Revision Committee. Sackville AJA was not persuaded that an interpretation of the provision that excluded consent judgments would undermine the policy of discouraging successive actions against joint or concurrent tortfeasors. The costs sanction in the second limb of s 5(1)(b) is a disincentive and the plaintiff is precluded from double recovery by the common law principles relating to recovery and satisfaction. Sackville AJA agreed with Campbell JA that the provision had the potential to cause unjustifiable hardship if it applied to consent judgments. The interpretation favoured by the Court of Appeal avoided the 'artificial' distinction between a settlement effected by a consent judgment and an inter partes settlement without a monetary judgment in the plaintiff's favour.

21 If the law is as stated in Nau v Kemp, there will be equality of treatment of a plaintiff who settles with a consent judgment to record the settlement and a plaintiff who settles without a consent judgment. None of the judges in Nau v Kemp detected that parliament had intended that there should be a policy of equality of treatment, but McColl J at [105] said that the section did not:

speak with the clear language ... which would be necessary to impute to the Act the purpose of overthrowing the principle that a plaintiff is entitled to recoup fully the damage suffered as a result of the joint/concurrent tort.

22 This conclusion was based upon the presumption, which is an aspect of the rule of law, that a statute should not be construed as overthrowing fundamental principles, infringing rights or departing from the general system of law unless it does so with irresistible clearness: Potter v Minahan [1908] HCA 63; (1908) 7 CLR 277, 304; Electrolux Home Products Pty Ltd v The Australian Workers' Union [2004] HCA 40; (2004) 221 CLR 309 [21] (Gleeson CJ); Saeed v Minister for Immigration and Citizenship [2010] HCA 23; (2010) 241 CLR 252 [15].

23 This reasoning is persuasive because the construction of the section the respondent contends for brings about a circumstance where a plaintiff who settles against one tortfeasor for less than the full loss and agrees to a consent judgment for the settlement sum will be shut out from pursuing their full loss, whereas a plaintiff in the same circumstances, but who does not agree to a consent judgment, will not be shut out.

24 On the other hand, there is one aspect of the reasoning in Nau v Kemp which has, with respect, less cogency. It is the suggestion by McColl JA and Campbell JA that if the section applied to consent judgments, then this would discourage settlements. Campbell JA said that:

Kirby J (with whom Gummow and Hayne JJ agreed on s 5(1)(b)) said at [74] and [75] of Baxter ... there is a reason of legal policy not to construe an unclear statutory provision in a way that inhibits settlement of litigation [227]

25 It is difficult to see why, if the section applied to consent judgments, this would discourage settlement between properly advised plaintiffs. If parties were prepared to agree on a settlement sum, it is unlikely that there would be a failure to settle merely because the plaintiff refused to agree to a consent judgment for the agreed amount. The matter could easily be resolved by the parties agreeing to a judgment dismissing the action once the agreed sum had been paid. If the law as it has been applied in the District Court to date is correct, then settlements will not be discouraged, but it must be acknowledged that the law would trap plaintiffs who did not realise the significance of agreeing to a consent judgment.

26 However, having made those observations, they do not lead to the conclusion that the decision is plainly wrong.

The respondent submits that Nau v Kemp is plainly wrong

27 Most of the respondent's submissions rehearsed arguments which were unsuccessfully advanced by the respondent in Nau v Kemp, and which were rejected by the court of appeal in that case.

28 The respondent did, however, proffer three points which it contended showed that Nau v Kemp was 'plainly wrong'. They were:

(a) that the express statement by Sackville AJA [261] and the implicit conclusion of McColl JA [103] and [104] and Campbell JA [207] - [210], that the language in s 5(1)(b) (s 7(1)(b) of the Act) is ambiguous, is wrong. The respondent submitted that just because the word 'award' has different meanings, this did not make the word 'award' ambiguous, as the members of the court held in Nau v Kemp. The appellant argued that the different dictionary meanings would apply depending upon the particular circumstances. Thus it was argued that if a consent judgment is entered then the judgment will award, that is, 'bestow' damages by 'judicial decree' (see Macquarie Dictionary definition 2), and when judgment is entered following a trial then judgment will award, that is, 'adjudge to be due' (Macquarie Dictionary definition 1) such damages.

The respondent's contention that a consent judgment will award, that is, 'bestow' damages will not always be correct. An example will suffice to illustrate this. It is not uncommon for a defendant, confident that it can successfully defend the plaintiff's claim, to settle, not because it fears being found liable, but because it apprehends that if it fights the case to victory it will incur substantial costs to achieve success, only to find that the costs cannot be recovered from the impecunious plaintiff. It is not uncommon for defendants, in those circumstances, to offer to settle for a sum equivalent to a fraction of the costs it knows it will incur if it participates in the trial; or the defendant may simply agree to pay the plaintiff's costs up to that date. Settlement whereby the defendant pays a sum to dispose of the litigation and agrees to a consent judgment calculated in such fashion will not, in ordinary language, be an agreement to a judgment which 'bestows' damages. To decide whether the consent judgment 'bestowed' damages or not would therefore involve an inquiry. There is nothing in the section which suggests that the court should be required to embark on an inquiry into what was the purpose of the agreement which led to the consent judgment.

The respondent's submission must therefore be rejected. The conclusion in Nau v Kemp that the phrase 'amount of the damages awarded by the judgment' is ambiguous is not plainly wrong.

(b) Next, the respondent argues that if the word 'judgment' in s 7(1)(a) refers to a consent judgment (as to which see Sackville AJA [263]), then it must have the same meaning in s 7(1)(b). That assumes that a word must bear the same meaning wherever it is used within a statute. It is true that there is a presumption that a word in a statute is used in the same sense and has the same meaning throughout the enactment, but the rule yields where the context otherwise requires: see Madras Electric Supply Corp Ltd v Boarland (Inspector of Taxes) [1955] AC 667, 685; McGraw-Hinds (Aust) Pty Ltd v Smith [1979] HCA 19; (1979) 144 CLR 633, 643. The court in Nau v Kemp held that the context does otherwise require in s 7(1)(b). This argument does not demonstrate that Nau v Kemp was plainly wrong.

(c) The respondent's third basis for arguing that the judgment was plainly wrong was that the judgment entered by consent has the 'same force and validity as if it had been made after a hearing by the court': Rules of the Supreme Court 1971 (WA), O 43 r 16(3). The respondent's argument is, in effect, that a consent judgment is indistinguishable from a judgment after trial. That was an argument presented by the respondent in Nau v Kemp. Campbell JA correctly said that while that was 'undoubtedly correct', it did not answer the question of whether a consent judgment was one by which damages were 'awarded' [206]. The respondent's argument does not establish that the decision was plainly wrong.

29 The respondent has not been able to demonstrate that the decision in Nau v Kemp is plainly wrong. This court should therefore follow the decision in Nau v Kemp. As a result, the appellant's appeal should be allowed.

30 There was a question raised about whether leave to appeal was necessary. The respondent contended that leave was necessary (referring to Re Luck [2003] HCA 70; (2003) 203 ALR 1). The appellant was not interested in making any detailed submissions, merely submitting that if leave were necessary then leave should be granted.

31 Re Luck was dealing with circumstances where a direction had been given that an originating process was frivolous, vexatious or an abuse of process. The High Court in Re Luck said that the usual test for determining whether an order is final or interlocutory is whether the order as made finally determines the rights of the parties. Examples were given of orders which are not final because the unsuccessful party could make a further application for the same relief [25]. Although the matter was not fully argued, it appears that the order made by Deputy Registrar Hewitt and affirmed by Mazza DCJ did finally determine the rights of the parties. See also Briggs v Glentham Pty Ltd (Unreported, WASC, Library No 920430, 26 August 1992) and Hunt v Knabe [No 2] (1992) 8 WAR 96, 109. As a result, the judgment of the District Court was a final judgment. Leave is not necessary. However, if that be wrong, it is a case where leave should be granted.

32 The judgment of the District Court should be set aside and, in lieu, orders should be that the appeal be upheld, that the order of Deputy Registrar Hewitt dated 25 August 2009 be set aside and, in lieu, there should be an order that the respondent's application for summary judgment be dismissed.