Bitumen & Oil Refineries (Australia) Ltd v Commissioner for Government Transport

The appeal comes by leave from an order of the Full Court of the Supreme Court dismissing an appeal from a judge's order made at chambers by which a defendant's summons to strike out portion of a declaration was dismissed. In the action the plaintiff sues under the statute for contribution by the defendant to damages recovered from the plaintiff in an action against it brought by a third party. It appears from the allegations in the declaration that a motor vehicle under the care, control and management of the defendant's servants or agents came into collision with a tram car of the plaintiff upon which one Vickery was a passenger. Vickery, who was injured in the collision, instituted proceedings in the Supreme Court against the now plaintiff in which he recovered £14,711 18s. 6d. damages in respect of his injuries. Although, of course, the fact does not appear from the record, the award of damages was subsequently attacked by the now plaintiff on the ground of the discovery of fresh evidence, but not on the ground that the award was in itself excessive. The question whether because of the fresh evidence the verdict should be set aside as to damages reached this Court: Commissioner for Government Tram & Omnibus Services v. Vickery [3] . The report of the proceeding may suggest why the present plaintiff framed its declaration in this action in the form of which the defendant complains but otherwise the plaintiff's unsuccessful attempt to disturb the verdict against it is irrelevant to the question now before us. The declaration alleges that the defendant by its servants and agents negligently drove, managed and controlled the motor vehicle so that it came into collision with the tram car whereby Vickery was injured and that "the defendant if sued would have been liable in respect of such damage". These last words are taken from the statute but when the declaration goes on to the allegation intended to bring the plaintiff within the statutory description "any tort-feasor liable in respect of that damage" (scil. damage suffered by any person as a result of a tort) it deserts the words of the provision and states the facts upon which the pleader relies in order to satisfy the description. The allegation is in the following form: - Whereupon the said Vickery instituted proceedings in the Supreme Court against the above-named plaintiff claiming to recover in respect of the said damage and as a result of such proceedings the said Vickery recovered a verdict and judgment against the above-named plaintiff in the amount etc.

The question is whether this allegation alleges what will satisfy the condition expressed in the words "any tort-feasor liable in respect of that damage". The words occur in s. 5 (1) (c) of the Act, the material part of which is as follows: -

(1) Where damage is suffered by any person as a result of a tort (whether a crime or not)

(c) any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tort-feasor or otherwise

Does the verdict and judgment establish the liability of the now plaintiff? It is a question which depends upon the meaning of the words, not upon the general law. Does the word "liable" in that phrase mean or include "liable by judgment", "adjudged liable" or "held liable"? It cannot depend upon the general law, for under the general law a judgment pronounced between Vickery and the now plaintiff would work no estoppel against the now defendant who was a stranger to the proceedings.

In the Supreme Court the question was answered in favour of the present plaintiff (Owen J. dissenting) [1] and the decision in chambers of McClemens J. was affirmed. When the argument of this appeal before us took place the appeal to the House of Lords from the decision of the Court of Appeal in Littlewood v. George Wimpey & Co. Ltd. and British Overseas Airways Corporation [2] had been argued but their Lordships' judgment had not been delivered. Now, however, we have the advantage of the decision of the House of Lords in that case which is reported under the title George Wimpey & Co. Ltd. v. British Overseas Airways Corporation [1] .

1. (1953) 54 S.R. (N.S.W.) 1; 71 W.N. 25. 2. (1953) 2 Q.B. 501. 3. (1954) 3 W.L.R. 932.

The question which the House decided involved the meaning of the word "liable", not, unfortunately, where it occurs first in the paragraph, viz. in the phrase "any tortfeasor liable in respect of that damage", but where it occurs second, viz. in the phrase "any other tortfeasor who is, or would if sued have been, liable in respect of the same damages". Their Lordships all appear to have accepted the view that the word there meant liable in judgment. Viscount Simonds said - "No other meaning can reasonably be attributed to it in the context "would if sued have been", for these words make a suit the condition of liability" [2] . Lord Tucker said - "I understand that all your Lordships agree with the trial judge and the majority of the Court of Appeal that the word "liable", where it appears for the second time in par. (c) of sub-s. (1) must, owing to the presence of the words "would if sued have been," mean "held liable." I agree, and accordingly pass to consider the construction of the subsection on this basis" [3] . But as to the construction of the sub-section on that basis their Lordships were unable to agree. It is small wonder, considering the economy of expression practised in the provision and the apparent failure to advert to any of the many practical problems involved in applying a general principle of contribution between persons liable jointly or severally for the same loss or damage. Viscount Simonds and Lord Tucker decided the case upon the ground that the words "contribution from any tort-feasor who is, or would, if sued, have been, liable", contemplated two cases, namely contribution "from one who in an actual suit by the injured man has been held liable by judgment", and "from one who if sued would in that hypothetical suit have been held liable": the words could not include "one who has been actually sued by the injured man and held not liable". As the respondent, the B.O.A.C., had been sued by the injured man and held not liable on the ground that recovery was barred by lapse of time under the Limitation Act 1939 s. 21, within which the B.O.A.C. fell as a public authority, the view of Viscount Simonds and Lord Tucker was enough to determine the case. Lord Reid arrived at the same result upon another ground, namely that in the phrase quoted the words "if sued" mean if sued at some particular date or during some particular period and that the date contemplated was either the time when the former tort-feasor claimed contribution or when he was sued by the wronged party [1] . In either case recovery against the B.O.A.C. by the appellant was time barred. On this ground Lord Reid concurred in upholding the decision of the majority of the Court of Appeal (Singleton L.J. and Morris L.J., Denning L.J. dissenting), but his Lordship did not agree that a person sued as a tortfeasor unsuccessfully was necessarily outside the provision. As to Lord Reid's view, Viscount Simonds said, at the end of his opinion in which he stated his reasons for dismissing the appeal: "I do not find it necessary to discuss a question of great difficulty, viz., at what date is the hypothetical suit, in which "the other tortfeasor would, if sued, have been liable," to be presumed to have been commenced, and I will say no more than that, having read and considered the opinion of my noble friend, Lord Reid, I should upon this part of the case accept his conclusion though I find myself reluctantly differing from him upon the first and vital question" [2] . Lord Porter and Lord Keith dissented. It was no necessary part of the decision of any of their Lordships to assign a meaning to the word "liable" where it first occurs in par. (c) of sub-s. (1), viz. in the phrase "any tort-feasor liable in respect of the damage may recover contribution". But Viscount Simonds said - "If the word "liable" where secondly used in par. (c) bears the meaning which I have ascribed to it, I should be reluctant to give it any other meaning where it is first used in the same paragraph, nor do I think it unreasonable that the right of contribution between tortfeasors should be limited to the case where he who seeks contribution has himself been sued to judgment. In the view which I take it is immaterial whether the word, where first used, has the same meaning or another: if it were necessary for me to decide it, I should say it had the same meaning" [3] .

1. (1954) 3 W.L.R., at p. 935. 2. (1954) 3 W.L.R., at p. 948. 3. (1954) 3 W.L.R., at p. 947. 4. (1954) 3 W.L.R., at p. 936. 5. (1954) 3 W.L.R., at p. 935.

The view which his Lordship thus expressed covers the present case. In the Court of Appeal Singleton L.J. expressed the same view - "It appears to me", his Lordship said, "that the draftsman of the subsection had in mind a suit in which there were one or more defendants, and it was sought to provide that after judgment in the action contribution could be ordered as between the defendants, and, further, that a tortfeasor who had not been sued in the action, but who was brought in as third party, might be ordered to make contribution if he would have been liable in respect of the same damage if he had been sued. In that way the natural meaning of the word "liable" in the first line of the subsection is "held liable", and the words "who is liable" two lines later would have the same meaning. I am prepared to assume that the meaning of "liable" ought not to be limited to "held liable," and that if a tortfeasor paid a claim he might have a right to contribution" [1] . The last sentence probably means "assume contrary to the opinion just expressed". But it may involve an actual readiness on the part of his Lordship to extend the application of the word "liable" so as to include with judgment accord followed by satisfaction. This was the position taken by Morris L.J., who said: - "I do not think that the word "liable" in the first line of s. 6 (1) (c) need be limited to tortfeasors who have been held liable, though this matter is not now directly in issue. In the context at the beginning of (c) the word may include one who has properly admitted liability to the person who has suffered damage. He may then recover contribution from another tortfeasor who either (a) has been held liable in respect of the same damage; or (b) who has not been sued but who, if he had been sued, would have been held liable" [2] .

1. (1953) 2 Q.B., at p. 510. 2. (1953) 2 Q.B., at p. 523.

In the Court of Appeal a defence was raised by B.O.A.C. to the claim by George Wimpey & Co. Ltd. against that corporation for contribution which was not argued in the House of Lords. It was that the right of Goerge Wimpey & Co. Ltd. to claim contribution from B.O.A.C. arose more than one year before it was made and was therefore barred by s. 21 of the Limitation Act 1939 which applied to B.O.A.C. as a public authority. This defence failed because it was held that the B.O.A.C.'s right to, or "cause of action for", contribution did not arise until their liability to the injured man Littlewood was at least ascertained, and that was less than twelve months before. In the House of Lords Viscount Simonds said upon this subject - "I am content to assume that the right to contribution arose at any rate not earlier than the date when the existence and amount of Wimpeys' liability to Littlewood was ascertained by judgment" [3] . Denning L.J., who in other respects dissented, said: - "One more question, however, arises. Although Wimpeys have a right to contribution from British Overseas Airways Corporation, is their remedy for it barred by the one-year limitation contained in s. 21 of the Limitation Act, 1939? This depends on when the cause of action for contribution arises. If it arises at the date of the accident (as Birkett J. held in Merlihan v. A. C. Pope Ltd. [1] ) then the remedy would be barred; but I do not think that that is correct. It seems to me clear that a tortfeasor cannot recover contribution until his liability is ascertained. If he had not been sued and has paid nothing and admitted nothing, he can have no cause of action for contribution, for the simple reason that he may never be called on to pay at all. The damaged plaintiff may go against the other tortfeasor only. Once the liability of the first tortfeasor has, however, been ascertained by judgment against him or by admission, then he has a cause of action for contribution against the second tortfeasor. He can obtain a declaration of his right to contribution and a prospective order under which, whenever the first tortfeasor has paid any sum more than his share, he can get it back from the second tortfeasor. A close analogy is the right of one surety to contribution from a co-surety. His right at law did not accrue until he had paid more than his share, Davies v. Humphreys [2] ; but his right in equity (which now prevails) arose when his liability was ascertained and the Statute of Limitations then began to run. (Wolmershausen v. Gullick [3] ; Robinson v. Harkin [4] ). In cases where a writ is issued against the first tortfeasor and he serves a third-party notice against the second tortfeasor, the notice is convenient machinery, but it does not mean that he has then a cause of action. His cause of action only arises when judgment is given against him ascertaining his liability" [5] . Parker J., from whom the appeal came, had adopted the view expressed by Cassels J. in Hordern-Richmond Ltd. v. Duncan [6] that time started to run in favour of a third party against whom contribution was claimed only when the defendant claiming it had been made liable for the damages. "The cause of action", said Cassels J., "which entitles a defendant to bring a third party before the court is the liability of the third party to make contribution or to pay an indemnity. The cause of action has not arisen until the liability of the defendant has been ascertained" [7] . (His Lordship did not follow on this point the decision of Birkett J. in Merlihan v. A. C. Pope Ltd. [1] ).

1. (1954) 3 W.L.R., at p. 934. 2. (1946) K.B. 166. 3. (1846) 6 M. & W. 153, at pp. 168-169 [151 E.R. 361, at pp. 367, 368]. 4. (1893) 2 Ch. 514. 5. (1896) 2 Ch. 415. 6. (1953) 2 Q.B., at p. 519. 7. (1947) K.B., at p. 552. 8. (1953) 1 W.L.R., at p. 438. 9. (1946) K.B. 166.

In the Court of Appeal in the case of George Wimpey & Co. Ltd. [8] Singleton L.J. accepted the view of Cassels J. and Parker J. His Lordship said, speaking of the first tortfeasor - "It may be that his cause of action accrues when the writ in the action is served on him - but that was not argued - and I am content to adopt the view of Parker J. that the cause of action arises when the defendant is held liable " [1] .

1. (1954) 3 W.L.R. 932. 2. (1953) 2 Q.B., at p. 511.

Now whether the question when the "cause of action for" or the right to claim contribution arises in the first tortfeasor is put directly on the construction of the word "liable" or upon the more general consideration that only an ascertained liability is regarded as the basis of contribution, it seems to follow that ascertainment by judgment is at least one, and indeed the chief, example of what is required to satisfy the condition expressed by the words "any tort-feasor liable in respect of that damage". In his dissenting opinion in Wimpey's Case [2] Lord Porter states the effect of the view which Parker J. and the Court of Appeal had taken as to the time when the cause of action arose, noting that the same view had been adopted by Cassels J. in Hordern-Richmond Ltd. v. Duncan [3] and by Donovan J. in Morgan v. Ashmore, Benson, Pease & Co. Ltd. [4] . Lord Porter described it thus - "Substantially their view was that Wimpeys were under no liability until judgment was given against them, that their cause of action arose then and not until then " [2] .

1. (1954) 3 W.L.R., at p. 940. 2. (1947) K.B. 545. 3. (1953) 1 W.L.R. 418; (1953) 1 All E.R. 328. 4. (1954) 3 W.L.R., at p. 940.

It is, of course, true that Wimpeys' liability had been ascertained only by judgment, and that the judgment had been satisfied. The observation of Viscount Simonds already quoted [5] , namely that he was content to assume that the right to contribution arose at any rate not earlier than the date when the existence and amount of Wimpeys' liability to Littlewood was ascertained by judgment, may be significant. For it appears advisedly to leave open the question whether discharge by payment might be a necessary element. It does not suggest that until judgment or other ascertainment the liability could be treated as giving an enforceable right to contribution.

The provision under consideration has been transcribed from the English statute in a number of jurisdictions and it is highly convenient that it should be given the meaning and application which it has received in England. It represents a piece of law reform which seems itself to call somewhat urgently for reform. At all events it has not yielded any clear answer to those who have sought in its terms solutions of the not inconsiderable number of problems that arise from its operation. The rigid rules of English law governing interpretation make the Report of the Committee which led to the adoption of the statute inadmissible as a guide to its meaning (Assam Railways & Trading Co. Ltd. v. Commissioners of Inland Revenue [1] ). But perhaps the fact that the second of the Committee's recommendations, which is the foundation of the provision now in question, confined the then proposed right to contribution to "any person who is adjudged to be liable to make any payment or who suffers execution under a judgment recovered against him in respect of an actionable wrong" may be taken into account in considering whether there is any compelling reason of justice or convenience for our refusing to give effect to the conclusion expressed in the passages quoted above from English authorities without embarking on some new exploration of our own. The statement of Viscount Simonds as to the meaning of "liable" where the word first occurs in par. (c) of sub-s. (1) forms no necessary part of his Lordship's ratio decidendi but it has the highest persuasive authority. It is, however, unnecessary for us to say definitively that the ascertainment of the liability must be by judgment to the exclusion, for example, of arbitral award or of agreement itself amounting to accord and satisfaction or of an agreement amounting to accord executory followed by satisfaction. But the meaning of "liable" where it first occurs should be held at least to include ascertainment by judgment. So construed the provision is satisfied by the facts pleaded or at all events substantially so. It is necessary to add the qualification implied by the word "substantially" because there is a slip in the pleading of a technical character. The declaration does not say expressly that the cause of action in the proceedings instituted by Vickery were for negligence or other tort. It may be desirable to allow the plaintiff to amend the declaration to make it clear that the recovery pleaded was for tort. It is logically consistent with the declaration that it might have arisen otherwise, as for example from a contract of indemnity or insurance. A decision that the liability imposed by the previous judgment is a liability which par. (c) of sub-s. (1) contemplated does not necessarily mean that the tribunal which discharges the responsibility of fixing the amount of contribution under sub-s. (2) of s. 5 cannot consider whether owing to the fault of the now plaintiff it stands at an excessive figure. No doubt the Court under sub-s. (2) must accept the assessment as conclusive as to the existence and the amount of the liability of the plaintiff claiming contribution. The Court, however, is required to find what is just and equitable as an amount of contribution having regard to the extent of the responsibility for the damage of the tortfeasor against whom the claim is made. There does not seem to be any valid reason why that tortfeasor may not say to the tortfeasor making the claim, if he has improvidently agreed to pay too large an amount or by unreasonable or negligent conduct in litigation has incurred or submitted to an excessive verdict, that the excess is due to his fault and not to that of the tortfeasor resisting the claim. It would be a matter for the Court to consider under the heading of "just and equitable".