Baxter v Obacelo Pty Ltd [2001] HCA 66 | Case summary

Baxter v Obacelo Pty Ltd [2001] HCA 66 | Case summary | Zoe

The appellant applied for summary dismissal of the respondents' action against him pursuant to Pt 13 r 5 of the Supreme Court Rules (NSW). In brief, he argued that the facts set out in pars 16 to 22 of the defence, which (subject to one qualification) were not in contest, meant that the action was bound to fail, that the test for summary dismissal formulated in General Steel Industries Inc v Commissioner for Railways (NSW)[1] was satisfied, and that the case should be dismissed without the parties being required to litigate the issues of negligence and quantum of damages.
Master Harrison ruled against the appellant, declining summary dismissal of the action. An appeal to Hulme J failed. The appellant then sought leave to appeal to the Court of Appeal[2]. In the Court of Appeal, for the purpose of avoiding the possibility that the case might go off on questions relating to the standard of conclusiveness required to make good an application for summary dismissal, an application was made under Pt 31 r 2 of the Supreme Court Rules for the Court to determine, as a separate question, whether the matters of defence in pars 16 to 22 of the defence provide a defence to the respondents' claim against the appellant. The precise expression of the question was a matter of argument, but the Court of Appeal ultimately decided to treat that as a separate question. The Court of Appeal dismissed the application for leave to appeal from Hulme J, and answered the question in the negative[3].
It was mentioned above that there is a qualification to the statement that the facts asserted in pars 16 to 22 of the defence were not in contest. The qualification concerns the relationship between the sum of $250,000 and the respondents' total claim for damages. Master Harrison noted that the total claim was $433,247 and that the sum of $250,000 inclusive of costs "represented less than the totality of the claim against both defendants". At all stages the respondents have conceded that, if an award of damages is assessed against the appellant, in that assessment he will have to be given credit for the amount received from Mr Whitehead. The Court of Appeal decided the case on the basis that the sum of $250,000 could not have been received in full satisfaction of the respondents' loss "because recovery of further compensation was contemplated". As a matter of fact, that is correct, but it is not easy to reconcile with the concluding words of par 22 of the defence, which were assumed, for the purposes of the question asked and answered in the Court of Appeal, to be accurate. Evidently, no one considered that par 22 required the Court of Appeal to make the factual assumption that the damage actually suffered by the respondents had already been fully recovered, in the sense that the respondents suffered no loss or damage in excess of that for which they were compensated by Mr Whitehead. If such a point had been taken, it may have demonstrated the inappropriateness of framing a question along the lines asked in the Court of Appeal, but there would have remained for determination the appellant's original application under Pt 13 r 5, which did not require any artificial assumption about the extent of the respondents' claim. In argument in this Court, counsel for the appellant accepted that the case was not one where, (apart from whatever might be the legal effect of the entry and satisfaction of judgment), the respondents' loss had been fully recouped.
Two other matters concerning the question formulated in the Court of Appeal should be mentioned. First, at all stages of the proceedings, it has been common ground that it was appropriate to refer to the whole of the deed of release and the terms of settlement, and not merely to such parts of them as are set out in the defence. Secondly, it is theoretically possible that there might be facts, additional to those raised in pars 16 to 22 of the defence, which bear upon the application of the principles concerning recovery and satisfaction invoked by the appellant. If there are such facts, they are outside the scope of the arguments presently under consideration. The appellant contends that (subject to what has been said above) the bare facts set out in pars 16 to 22 mean that the action against him is bound to fail.

It is common ground that, if the respondents' allegations concerning negligence and damage are correct, the appellant and Mr Whitehead were liable as joint tortfeasors in respect of the same damage. The circumstance that the appellant was Mr Whitehead's employee is immaterial, except insofar as it explains how they came to be joint tortfeasors. The outcome of the case would be the same if Mr Whitehead had been the employee and the appellant the employer; or if, as was supposed originally by the respondents, they had been partners.
One fact emerges clearly from the language of the deed of release and the terms of settlement, and from the conduct of the parties. At the time the respondents settled with Mr Whitehead, it was contemplated by the respondents, and by Mr Whitehead, that the respondents would pursue their claim against the appellant. The continuation of the claim was expressly referred to in the deed of release and the terms of settlement. There was nothing to suggest that the sum of $250,000 was intended to be paid, or received, in full satisfaction of all claims arising out of the allegedly negligent conduct of the conveyancing transaction. On the contrary, it was made clear that the respondents intended to continue with the action against the appellant, and to seek to recover from him an amount in addition to the amount they recovered from Mr Whitehead. At the same time, the respondents have acknowledged consistently, both in the Supreme Court of New South Wales and in this Court, that if damages are ultimately assessed at more than $250,000, they will be obliged to give credit for that amount in any determination of the amount of the judgment against the appellant. For this reason, they say, no question of double satisfaction arises. Their intention is, and has at all times been, clear. Having recovered $250,000 from Mr Whitehead, they say that the damages to which they are entitled exceed that amount, and they seek to recover the balance from the appellant. The first question is whether s 5 of the Act permits, or prevents, that.
Glanville Williams, in Joint Torts and Contributory Negligence, published in 1951, used "concurrent tortfeasors" as a generic term for joint tortfeasors and several concurrent tortfeasors. Concurrent tortfeasors are persons whose acts concur to produce the same damage. Joint tortfeasors are responsible for the same wrongful act leading to single damage. Such joint responsibility may arise from vicarious responsibility of one for another, or from the non-performance of a joint duty, or from concerted action. Several concurrent tortfeasors are independent tortfeasors whose separate acts combine to produce damage. In their case, "concurrence is exclusively in the realm of causation"[4]. In Thompson v Australian Capital Television Pty Ltd[5], Brennan CJ, Dawson and Toohey JJ said:

At common law, the liability of joint tortfeasors was joint and several. A plaintiff could sue joint tortfeasors separately, in independent actions, for the full amount of the loss. Or the plaintiff could sue all the joint tortfeasors in the same action[6]. Several concurrent tortfeasors, on the other hand, could not be joined as defendants in the one action. That was because they were severally liable "on separate causes of action"[7]. The difference between action and cause of action was significant. A person suffering injury as a result of the wrongdoing of joint tortfeasors had only one cause of action[8]. Some consequences of this will be considered below. Such a person might bring one action (ie proceeding), or more than one action. In the case of several concurrent tortfeasors, there was a separate cause of action against each, and if a plaintiff desired to sue more than one, it was necessary to commence separate actions.
One corollary of the principle that a plaintiff had only one cause of action against a number of joint tortfeasors was that, where an action was brought against two or more joint tortfeasors, only one judgment for one sum of damages could be given in favour of the plaintiff[9]. In XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd[10] this Court had to consider the effect upon that rule of s 5 of the Act in a case where one of two joint tortfeasors was liable for exemplary damages, but the other was not so liable.
Another corollary, sometimes referred to as the rule in Brinsmead v Harrison[11], was that the single cause of action resulting from the joint commission of a tort merged in the first judgment which the plaintiff obtained in respect of it. A plaintiff who recovered action against any one joint tortfeasor was "barred from subsequently recovering judgment against any other joint tortfeasor responsible for that tort whether in an action commenced before, at the same time as, or after the action in which a final judgment had already been recovered".[12] The Privy Council, in Wah Tat Bank Ltd v Chan[13] described this common law rule as "highly technical and unsatisfactory" and cited, as its only possible justification, what was said about it by Blackburn J in Brinsmead v Harrison[14]:

The appellant does not contend, either that Wah Tat Bank was wrongly decided, or that s 5(1)(a) has a meaning different from s 6(1)(a) of the UK Act, or from the corresponding legislation relating to Singapore under consideration in that case. The New South Wales Act directly copied the UK Act, and the common law rule at which it was directed was a rule developed by the common law in England which, at the time, was part of the law in New South Wales. The Common Law Procedure Act 1899 of New South Wales used the term "action" in a sense that was familiar both in New South Wales and in England.
In XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd[21] this Court held that s 5(1)(a) of the Act abolished, in its entirety, the old common law principle that a person who suffers damage by a joint tort has only one cause of action which merges in the first judgment recovered in respect of it. That was a case concerning joint tortfeasors sued in the one action. The appellant accepts that any attempt to rely upon the rule in Brinsmead v Harrison is foreclosed by authority, which establishes that s 5(1)(a) of the Act abolished that rule in its application to a case where joint tortfeasors are sued in the one action as well as in its application to a case where separate actions are brought.
A third corollary of the principle that a plaintiff had only a single cause of action against a number of joint tortfeasors was that an unqualified release of one joint tortfeasor released the others[22]. It is unnecessary for present purposes to go into the distinction between a release and a covenant not to sue, but it may be noted that Glanville Williams referred to the qualification that, even if a document were expressed as a release, if it expressly reserved the plaintiff's rights against the other parties liable, it would be read as a covenant not to sue and would not operate to release those others[23]. In Thompson v Australian Capital Television Pty Ltd[24] it was held that, since the effect of s 5(1)(a) was that the cause of action against joint tortfeasors was no longer one and indivisible, the rule that a release given by one joint tortfeasor releases any other had been abolished. In this respect it appears that the law in Australia may be different from that in the United Kingdom. The judgment of Auld LJ in the English Court of Appeal in Jameson v Central Electricity Generating Board[25] indicates that the English courts have not gone that far. It is important to bear that in mind in considering English authority.
The appellant accepts that the effect of s 5(1)(a) is that he cannot rely on the release of Mr Whitehead, or on the rule in Brinsmead v Harrison.
But what of s 5(1)(b)? The appellant submits that it applies to the present case, and produces the consequence that, there having been damages awarded by the judgment given against Mr Whitehead, the sums recoverable under any judgments given by way of damages against both Mr Whitehead and the appellant shall not in the aggregate exceed the amount of the damages awarded by the judgment against Mr Whitehead. There is no further sum recoverable against the appellant. The action against the appellant should therefore be dismissed. This argument does not depend upon the judgment entered against Mr Whitehead having been satisfied.
The argument requires a departure from the literal meaning of par (b). The paragraph applies "if more than one action is brought", and it refers to "those actions". At first sight, it appears to be directed to the problem of multiplicity of actions. It applies to actions against joint tortfeasors, and several concurrent tortfeasors. It operates in relation to the recoverability of sums awarded under judgments rather than upon rights of action. It does not bar proceedings. It limits recoverability. And it is also concerned with legal costs. Nevertheless, the appellant submits, by parity of reasoning with the approach taken to the meaning of par (a), the reference to "more than one action" should be understood as including a reference to claims against two or more joint tortfeasors made in the one proceeding.
There are inconsistent judicial dicta touching the point.
In Wah Tat Bank[26], in a passage immediately following that quoted above, Lord Salmon said:

Gibbs CJ, in XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd, referring to Wah Tat Bank, repeated that par (b) "clearly contemplates a number of actions and not a single action" and that it "was designed to prevent a multiplicity of actions"[27].
Curiously, in Bryanston Finance Ltd v de Vries[28], Lord Denning MR cited Wah Tat Bank as authority for precisely the opposite proposition. In the same case, Lord Diplock[29] referred to the absence of reference in par (b) to cases where separate judgments are recovered in the same action as a casus omissus. The precise ground of the decision in that case is elusive, although the merits seem fairly clear.
The construction that the appellant seeks to give s 5(1)(b) of the Act should be rejected. The words of the paragraph should be given their ordinary meaning, as applying to cases where there is more than one action, that is to say, more than one proceeding.
This conclusion does not result in any inconsistency between pars (a) and (b). They are addressed to different, although related, topics. The word "action" has the same meaning in both paragraphs, but the expression which is controlling in par (a) is that judgment recovered against one joint tortfeasor "shall not be a bar to an action against" another. A bar to an action is a ground upon which an action must fail. It makes no difference whether the action in question is a pending proceeding or one yet to be commenced, or whether it is the same proceeding as that in which judgment has been entered against one tortfeasor or a separate proceeding. That is not inconsistent with reading par (b) as meaning what it says. What it says does not apply to the present case because there was not more than one action.
It is necessary to turn to the appellant's second argument. Although s 5(1)(b), in cases where it operates, has an effect that might be described as preventing double recovery, its application should not be confused with the principles relating to what is described, sometimes, as double recovery, and sometimes as double satisfaction[30].

Discussion of this subject often contemplates judgment entered by a court following a judicial assessment of damages. That will ordinarily involve a judicial assessment of the entire extent of the plaintiff's loss or damage. Or judgment may be entered by consent, and this may be by way of compromise. Recoupment of the whole of a plaintiff's loss may not be the only circumstance in which it might be unconscientious to pursue a claim against another. Subject to those qualifications, the principles stated by his Lordship are in point. They were referred to in Thompson v Australian Capital Television Pty Ltd[32].
In Castellan v Electric Power Transmission Pty Ltd[33], both Walsh JA and Asprey JA accepted that it was a common law rule that, if an injured person obtained judgment and full satisfaction against one tortfeasor, the liability of another concurrent tortfeasor was thereby discharged. Walsh JA considered that there was also an equitable principle which had the same result. But what exactly is meant by "full satisfaction" in a context such as the present?
Leaving to one side procedures relating to payment of money into court, which are governed by rules of court, frequently aimed at imposing costs sanctions upon parties in relation to their conduct of litigation, a plaintiff's claim against one tortfeasor may be resolved by judicial decision or by settlement. Settlement may or may not be accompanied by, or result in, a consent judgment. Judicial decision will result in judgment for an amount usually (although not invariably) assessed as the full amount of the plaintiff's loss or damage (subject to any question of contributory negligence). A settlement may, or may not, expressly or by implication reserve a plaintiff's rights against other tortfeasors and may or may not make it clear that, if a consent judgment is entered pursuant to the terms of settlement, such judgment is not intended by the parties to the settlement to represent the full amount of the plaintiff's loss or damage. The different senses in which the term "satisfaction" are used were considered by Gummow J in Thompson v Australian Capital Television Pty Ltd[34].
In Jameson v Central Electricity Generating Board[35], the House of Lords was dealing with a case where a plaintiff, who claimed damages for personal injury, first sued one of several concurrent tortfeasors. He settled with the defendant, agreeing to accept ₤80,000 in "full and final settlement and satisfaction of all the causes of action in respect of which the plaintiff claimed in the statement of claim". That amount was significantly less than the full liability value of his claim. A Tomlin order was made. There was no consent judgment. The plaintiff then died. His executors sued a second concurrent tortfeasor. The House of Lords held that the second action must fail. Lord Hope of Craighead, with whom Lord Browne-Wilkinson and Lord Hoffmann agreed, treated the outcome as turning upon the meaning and effect of the agreement by which the first action was settled. His Lordship, who used the expression "concurrent tortfeasor" in contradistinction to joint tortfeasor, said[36]:

In most cases in which this problem arises, as in the present case, the second tortfeasor will not be a party to the settlement agreement. The agreement will not have contractual effect as between the plaintiff and the second tortfeasor. A defence of accord and satisfaction is not available to the second tortfeasor.
Nevertheless, the significance of the contractual basis upon which a plaintiff settles with one tortfeasor, and its consequences as between the plaintiff and another tortfeasor, may be found both in the equitable principle which prevents double satisfaction, and in the common law principle that a plaintiff who has fully recouped the loss cannot obtain a further award of damages. If a plaintiff has agreed with one tortfeasor to accept a sum upon the basis that it will be received in full discharge of all claims for compensation for the loss or damage incurred by the plaintiff, it would ordinarily be unconscientious to pursue a further claim in relation to the same damage against another tortfeasor. And if a single loss has been fully recouped, there is no further remedy for a plaintiff to pursue.
If there has been a judicial assessment of the whole of the plaintiff's loss or damage, resulting in an award of damages by way of judgment in that amount against one tortfeasor, satisfaction of the judgment by that tortfeasor will put an end to any claim, or possible claim, against another tortfeasor, whether a joint tortfeasor or one of several concurrent tortfeasors, for two reasons. First, the damage, as assessed by judicial decision, has been fully recouped and the claim against another tortfeasor lacks a subject matter. Where, as here, damage is an essential element of the cause of action, that element will have gone. Secondly, it would be inequitable to permit additional recovery.
If there has been no judicial assessment of damages, then, in the light of current Australian authority on the effect of s 5(1)(a) of the Act, it would be anomalous if the consequences of a settlement with one tortfeasor upon a claim against another tortfeasor should turn upon the difference between a consent judgment and a Tomlin order, or between joint tortfeasors and several concurrent tortfeasors. If it would be unconscientious of the plaintiff to pursue a claim against another tortfeasor, or if the amount received pursuant to the settlement is, or ought to be regarded as, recoupment of the whole of the plaintiff's loss or damage, then action against another tortfeasor, whether in separate proceedings, or, where the other tortfeasor was a party to the original proceedings, by way of continuation of those proceedings, must fail. If, either expressly or by implication, a settlement agreement manifested a common intention of the parties to the agreement that the settlement sum was to be paid and received in full satisfaction of the rights of the plaintiff, against the defendant or anyone else, in relation to the loss or damage incurred, then, for both of those reasons, a further claim would fail. The most obvious way to negative such an intention would be by an express reservation of rights. While the effect of the settlement agreement, in the ordinary case, will be the most significant factor bearing upon either or both of the two possible grounds mentioned, it is not possible to eliminate any other circumstances which, in a given case, could indicate unconscientiousness, or loss of the subject matter of a claim. Bearing in mind the obligation to give credit for the amount already recovered, a defendant who could show that the actual loss or damage incurred by the plaintiff did not exceed the amount already recovered would succeed in any event. Leaving aside questions of onus of proof, to say that there is no such excess is simply to say that the loss has been fully recouped.
In the present case, the deed of release, the terms of settlement, and the conduct of the parties to the settlement, clearly showed that it was contemplated that the respondents would pursue their claim against the appellant, and that they were not accepting the sum of $250,000 in full satisfaction of the loss or damage they said they incurred. There is no reason why they should be prevented from continuing with their claim against the appellant.

The appeal should be dismissed with costs.
GUMMOW AND HAYNE JJ. The relevant facts, including the procedural history of the litigation, are described, and the issues presented in this Court are identified, in the reasons of the Chief Justice and Callinan J.
We agree, for the reasons given by the Chief Justice and Callinan J, and by Kirby J, that the appellant's submissions respecting the construction of par (b) of s 5(1) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) should be rejected. The result is that that statute does not provide an answer to the action by the respondents to recover damages from the appellant, Mr Baxter, in a sum greater than that already provided for in the settlement reached between the respondents and Mr Whitehead.
The second basis upon which the appellant puts his case is that, by reason of the settlement with Mr Whitehead, any recovery by the respondents in their action against the appellant, no matter what the measure of the recovery, would offend the principle or rule respecting "double satisfaction" of claims upon co‑ordinate liabilities.
The consequence of the holding in Thompson v Australian Capital Television Pty Ltd[38] is that the release given by the respondents to Mr Whitehead did not have the effect in law of releasing their cause of action against the appellant as the other joint tortfeasor. Further, once it is accepted, as Thompson requires, that the effect of statute was to sever the unity of the cause of action against Mr Whitehead and Mr Baxter as joint tortfeasors and that the release of Mr Whitehead did not thereby as a matter of law effect a release of Mr Baxter, there appears no basis in law for treating the agreement effecting that release of Mr Whitehead as full satisfaction in respect of the action against Mr Baxter. He was not a party to the deed of release. Nor has it been contended that, by any relaxation of the rules respecting contractual privity[39], the release effected by the deed enured to his benefit. Therefore, in the action brought by the respondents against the appellant, Mr Baxter, no defence of accord and satisfaction is available to him.
Nevertheless, the appellant contends that on a basis respecting the law's abhorrence of "double satisfaction", the deed of release may be pleaded by him as a complete bar to the respondents' action.
Some care is required here in distinguishing between the different senses in which the term "satisfaction" is used. In Osborn v McDermott, Phillips JA said[40]:

A further question is whether, in any event, the circumstance that the pursuit of that second action is in breach of the undertaking to the first tortfeasor renders unconscientious any recovery on the second claim where that recovery does not, when taken with the first recovery, exceed the plaintiff's loss. We do not regard the reasoning of the majority of the House of Lords in Jameson as foreclosing debate upon any of these questions in an appropriate case at any level in the Australian court system.
These questions do not arise for decision in this appeal. That is because the text of the deed of release, taken with the terms of settlement and the conduct of the parties in relation thereto, plainly indicate that the respondents and Mr Whitehead contemplated that the respondents would pursue their claims against the appellant. There was no acceptance of the sum paid under that settlement as full satisfaction of the loss or damage the respondents claimed they had suffered. That being so, no basis has been shown to render it unconscientious for the respondents to continue the pursuit of their claim against the appellant.
The appeal should be dismissed with costs.
KIRBY J. One would have thought that in its comparatively long history, all of the problems presented by s 5(1) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) ("the Act"), and its equivalents enacted throughout the British dominions after 1935, would have been addressed and clarified. However, they continue to present themselves as the recent decision in James Hardie & Coy Pty Ltd v Seltsam Pty Ltd[61] and this appeal demonstrate.
The basic problem that has led "gallons of ink"[62] to be spilt over the meaning of s 5(1) of the Act is "the economy of expression practised in the provision and the apparent failure to advert to … the many practical problems"[63] liable to arise in consequence of its application. That is why the sub-section was described, once the original English template[64] was copied in so many common law jurisdictions, as "a piece of law reform which seems itself to call somewhat urgently for reform"[65]. These words were said in relation to the language of the legislation providing for contribution between concurrent tortfeasors liable in respect of the same damage - the problem presented in Seltsam. However, they apply equally in this appeal where the issue concerns the meaning and application not of s 5(1)(c) of the Act but of s 5(1)(b). Of the words in that paragraph it was rightly said in another decision that they are "elliptical and somewhat obscure"[66].
To respond to the various practical problems not expressly covered by the language of the section this Court[67], the Privy Council on appeal from a decision concerning the Singapore equivalent of the Act[68] and the Court of Appeal[69] in England, have attempted to fill the gaps by stretching somewhat the words of the legislative text in order to apply them to the problems presented, doing so in the spirit of the legislative language and so as to achieve its apparent purposes. That was the approach which I favoured in Seltsam[70]. It led me (and McHugh J[71]) to a conclusion in that case concerning the meaning of s 5(1)(c) of the Act different from that reached by the majority. I remain of the view which I expressed there as to the appropriateness of applying a purposive construction to the meaning of an uncertain expression in the Act. There is no reason to adopt a different approach to elucidating the meaning of s 5(1)(b) of the Act. There is every reason to adopt the same.
There is a further consideration to which I referred in Seltsam which I consider is applicable to this appeal and helpful in resolving the questions that must be decided. It is a consideration of legal policy. Without clear legislative provisions requiring a contrary decision, a court should not readily come to a conclusion about ambiguous provisions of a statute - or uncertain requirements of the rules of the common law or of equity - that would inhibit the early settlement of litigation as between those parties to a dispute who are agreed, even if they do not represent all of the parties to the litigation. In Seltsam, I said[72]:

The facts of the dispute between the appellant, Mr Baxter and Obacelo Pty Ltd and Mr Moon ("the respondents") are described in the reasons of Gleeson CJ and Callinan J[73]. So are the details of the course of the proceedings that took the parties first to a Master, then to a single Judge of the Supreme Court of New South Wales (Hulme J) and finally to the Court of Appeal of that Court[74]. It is from the judgment and orders of the Court of Appeal that, by special leave, this appeal now comes to this Court. There was no dispute about the facts nor about the description of the two issues presented for decision. These issues concern the requirements of s 5(1)(b) of the Act and of the rule of the common law or of equity that limits the recovery by a plaintiff of damages where the plaintiff has already obtained judgment and recovered full satisfaction against another tortfeasor liable in respect of the same damage.
It is important to note the limited issue that was before the Court of Appeal, even after it enlarged the issues by formulating a separate question of law for determination[75]. The Court was not engaged, as such, in an exploration of the facts of the respondents' claims of negligence against Mr Baxter. Nor was it concerned to resolve defences to that claim raised by Mr Baxter, including a defence of contributory negligence which was available to meet such a claim (framed in the tort of negligence) whereas it would not have been available to respond to the claims of the respondents against Mr Whitehead, Mr Baxter's employer (who was sued in contract)[76].
The sole question for decision was whether, upon the facts pleaded and elaborated slightly by matters taken to be agreed, those facts, on their face without more, entitled Mr Baxter, in law, to succeed. In short, Mr Baxter mounted a preliminary objection to the maintenance of the respondents' action against him. His was in the nature of a pre-emptive strike. If successful, it would obviate the necessity of any further litigation. If it failed, it would not deprive Mr Baxter of any other defences or answers he might have to the respondents' action against him.
The settlement of the first proceedings between the respondents and Mr Whitehead took place as long ago as February 1988. The litigation then fell into a slumber from which it was only awakened in 1998, apparently as a result of Mr Baxter's initiative in applying to have the claim against him summarily dismissed[77]. This appears to have produced a belated flurry of pleadings - both of the respondents' further amended statement of claim, Mr Baxter's amended defence and the current litigation. Perhaps it would have been wiser for Mr Baxter to have let the sleeping dogs of litigation lie. One cannot but have a measure of sympathy for him that his attempt to bring the dormant proceedings to finality has brought on his head all of the hearings that have followed.
However, having initiated the strike out application, and having consented to the formulation and contest upon the separate question stated in the Court of Appeal, all that a court can do is to resolve those issues in accordance with law. It is not enough to give effect to sympathy for Mr Baxter. He still has several lines of resistance to the respondents' action against him. And the resolution of the question of statutory construction, and of the issues of common law and equity raised by the case, potentially have implications for other litigants who settle by compromise part of a proceeding with one party but intend to keep the rest of the proceedings alive for later prosecution against other parties, alleged to be concurrent tortfeasors, with whom they do not, or cannot, settle.
I have referred to these matters to make it clear what this appeal is not about. It is not about any dispute concerning the facts. It is not about Mr Baxter's asserted defences on the merits of the respondents' claim against him, including that based on contributory negligence. It is not about any larger issues, not presently pleaded, to which that claim might potentially give rise, such as whether Romford Ice and Cold Storage Co Ltd v Lister[78] is now, or ever was, a correct statement of the common law of Australia; whether if it was, it was repealed by statute with effect in the circumstances of this case; or whether, in the case of an employment contract such as that between Mr Baxter and Mr Whitehead, a term would be implied to the effect that Mr Whitehead would hold Mr Baxter indemnified in respect of any negligent acts or omissions performed in the course of his employment and/or secure such professional indemnity insurance cover for his practice as would extend to, and indemnify, Mr Baxter during such employment[79]. Nor does this appeal concern any entitlement that Mr Baxter may have against Mr Whitehead to recover under the Act and otherwise than under a term of his contract of employment with Mr Whitehead, contribution or indemnity in respect of any recovery that the respondents make against him personally[80].
All of the foregoing issues lie in the future if Mr Baxter loses this appeal. The only questions now presented for decision are those considered by the Court of Appeal. In short, does Mr Baxter's pre-emptive strike succeed as a matter of law? Or is he obliged to proceed to trial to explore some, or all, of the foregoing points, such as are proper to the resolution at trial of the action between the parties and its determination on its factual and legal merits?

Mr Baxter's submissions sought to rely upon some, and to distinguish other, judicial decisions about s 5(1)(b) of the Act so as to maintain his first argument that that paragraph, properly understood, rendered the respondents' attempt to recover damages from him, beyond those already recovered from Mr Whitehead, untenable as a matter of law. The terms of the provisions of the Act are set out in the reasons of Gleeson CJ and Callinan J[81]. I will not repeat them.
This Court is not bound by any of the many inconsistent judicial dicta about the Act, or by the holdings of overseas courts struggling with the section's opaque language. Obviously, the statutory template being a common one, the mischief to which it was addressed being a problem of the shared common law and the courts involved being courts of high authority analysing an identical legislative text applicable in many jurisdictions, close attention will be paid to the approach adopted by the earlier judges who have considered the meaning and operation of the Act. However, the starting point for analysis is an appreciation that this Court has not, as such, decided the point in issue. The most that the earlier judicial opinions offer are therefore persuasive observations. Our duty is to the text of a statute of an Australian Parliament as it is designed to operate to repair a pre-existing problem of the common law of Australia.
That problem is made plain by reference to the old law on the liability of joint tortfeasors[82] and the distinction that was originally drawn between the positions of joint and several tortfeasors.[83] It was to repair the inconvenience and injustice which the old law could occasion (and to answer judicial appeals for reform) that the English Law Revision Committee was eventually moved to suggest redress in a report that proposed legislation[84]. Whereas, in earlier times, it was regarded as impermissible to take an antecedent report of this character into account in giving meaning to the Act to which the report gave rise, now the opposite approach is adopted. This is so, both by reason of legislative prescription and advances in the common law[85]. The Committee's report makes it clear that the general object of the legislation was, relevantly, to abolish the old rule that release of one joint tortfeasor automatically released the other so far as the law was concerned. This is the work that s 5(1)(a) of the Act performs. The meaning of s 5(1)(b) must be derived in a context in which that was a principal purpose of the legislative reform. The terms of s 5(1)(b) must be read accordingly. It would be to undermine the obvious objectives of s 5(1)(a), read with the Committee's report, to construe s 5(1)(b) in such a way as to restore, or preserve, the anomalous position of joint tortfeasors, unless the language of par (b) was intractable and allowed no other interpretation.
Mr Baxter submitted that his construction of par (b) required nothing more than according to this provision its literal meaning. However, the better view is that the literal meaning supports the respondents' argument. It does so when it is appreciated that "action" in par (b) is a reference to a proceeding. This was the normal meaning given to the word both in England and Australia, both in 1935 (when the English legislation was enacted) and in 1946 (when the relevant Australian legislation was enacted by the Parliament of New South Wales). The word was then used, as it is now, both in legislation and in common speech, to describe a proceeding commenced by an originating process in a court, particularly one amenable to claims at common law.
This interpretation also accords with a view of par (b) that is consistent with the object given effect by par (a) of s 5(1) of the Act. It confines the operation of par (b) to the two subjects with which its language specifically deals in the closing words - namely control of the aggregate recovery so as to prevent double dipping by reason of the reform effected in par (a); and control of the recovery of multiple costs in several actions against concurrent tortfeasors where it would have been reasonable for the plaintiff to have brought one action, that is one proceeding. Viewed in this light, par (b) does not contradict the reform in par (a). On the contrary, it is a supplementary provision designed to protect defendants from the risks of excessive recoveries by multiple actions (that is proceedings) which the reform in par (a) permitted for the first time in the case of joint tortfeasors.
Because this interpretation is compatible with the language of s 5(1)(b) of the Act, is consistent with the reform achieved by s 5(1)(a) and is harmonious with the considerations of legal policy mentioned earlier in these reasons relevant to personal and economic liberty, it is the interpretation that I would adopt. Although it deprives Mr Baxter of success on his first argument, it does so fundamentally to uphold the central reform which s 5(1)(a) of the Act was enacted to introduce. And it does so in circumstances in which specified limitations are imposed by the Act upon recovery of "damages" (in the sense of a money sum) in respect of the same "damage" (in the sense of a civil wrong) and upon the entitlement to recover full costs for unreasonably bringing multiple actions (in the sense of proceedings).

It may be accepted that very clear language would be needed to impute to the Act a purpose of abolishing the rule of common law or of equity which forbids a person recovering twice in respect of the same damage[86]. It may also be accepted that the Act does not, by its terms, displace that rule. In my view, it is unnecessary on this appeal to identify the precise legal source of the rule against double satisfaction: whether it be a principle of the common law, a rule of equity based on good conscience and the prevention of unconscientious conduct or a principle founded in notions of preventing unjust enrichment. In my opinion, Mr Baxter's second argument fails at the threshold on the facts as they stand at this time.
Those facts appear relevantly in the circumstances of the settlement as between the respondents and Mr Whitehead. Having regard to the terms of that settlement, expressed in the deed of release between those parties, with appropriate additional reference to the amended statement of claim filed prior to the settlement and the judgment entered, it cannot seriously be disputed that the parties to the settlement were on notice that the respondents were keeping open the possibility of pursuing separately, and later, their action against Mr Baxter. No other interpretation is compatible with the record.
It is unnecessary to resolve the question of whether the intention of the parties to the settlement is to be derived subjectively - from what they expected and meant in their own minds - or (as I would prefer) objectively from the effect of what they did - from what a reasonable observer (represented ultimately by a court) would impute to the parties[87]. In either event, the only interpretation of the conduct of the respondents and of Mr Whitehead was that the respondents were reserving their right to proceed against Mr Baxter in respect of the residue of their damage which they continued to assert.
The respondents had originally claimed against Mr Whitehead and Mr Baxter considerably more by way of damages than the amount for which they settled their claim against Mr Whitehead ($250,000), for which settlement judgment was entered against him. Properly, Mr Baxter conceded in this Court that, before the Master, there had been evidence which, if accepted, would have entitled the respondents to recover from himself and Mr Whitehead (the two named defendants in that matter) more than the amount of the settlement and the consent judgment against Mr Whitehead that followed. In these circumstances, it is impossible to conclude, without more facts, that a recovery now from Mr Baxter would amount to a form of double satisfaction. There is no basis in the facts as they stand to regard the possibility of recovery from Mr Baxter as constituting recovery for damage already accorded by the earlier judgment or as unconscionable or as amounting to unjust enrichment of the respondents.
It is conceivable that future litigation, and further facts, may bear out Mr Baxter's complaint. By force of s 5(1)(b) of the Act, and as conceded by the respondents, they must give credit to Mr Baxter for the recovery for their damage which they have already made against Mr Whitehead. But as the proceedings now stand, the claim of double satisfaction is not made good in the facts to which reference may be had. The second argument of Mr Baxter also fails.

Baxter v Obacelo Pty Ltd

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