(1) Is a cross-defendant a "defendant"?
85 The first issue is whether the definition of a "defendant", so far as it involves a person against whom a claim "is … made" (the first limb) is limited to the person against whom the plaintiff claims damages for personal injury to herself. In other words, does the phrase "a claim for personal injury damages" extend to a claim for contribution by a person against whom a claim for such damages is made?
86 In order to answer that question, it is necessary to read into the phrase the separate definition of the sub-phrase "personal injury damages". Section 198C(1) provides that it is to have the same meaning as in Part 2 of the Civil Liability Act 2002 (NSW). According to s 11, contained in Part 2 of that Act, "personal injury damages means damages that relate to the death of or injury to a person". Thus, omitting the reference to death, the nature of the claim referred to in s 198C(1) is "a claim for damages that relate to the injury to a person".
87 Ignoring this further definition, it is arguable that the definition of "defendant" could be construed to mean a person against whom a claim is made for personal injury suffered by the plaintiff. (A similar reading would be available in relation to the definition of "plaintiff".) However, when the Civil Liability Act definition is incorporated, one is left with the more general proposition that the damages are not payable for personal injury to the plaintiff, but are damages "that relate to the injury to a person". On their face, these words are capable of referring to an injury suffered by a person other than the plaintiff and where the amount claimed is not the damages payable to the injured person, but damages which merely "relate to" the injury. On the other hand, an amount payable by way of contribution under s 5(1)(c) of the 1946 Act, by way of contribution, does not necessarily fall within the term "damages".
88 If the definitions of "plaintiff" and "defendant" could be read to encompass the parties to a cross-claim, the first question would be answered favourably to the claimant. However, the claimant did not embrace this line of reasoning and it might give rise to further questions as to the intended scope of the definition in s 11 of the Civil Liability Act, being questions which were not agitated on the appeal. For example, s 19 of the Civil Liability Act, which also falls within Part 2, appears to accept the possibility that a third party who seeks contribution from a defendant may be subject to an award to which Part 2 of the Civil Liability Act does not apply. Whether such contextual material casts any light on the scope of the definition in s 11 was not addressed in argument.
89 The alternative approach and that primarily relied upon by the Claimant, was based on the second limb and averred that the cross-defendant, being a potential joint or several tortfeasor, was a person against whom the injured person could have made a claim and was thus a person against whom a claim "may be made". That reading was said also to reflect the second limb of the definition of "plaintiff" as encompassing a person who "is entitled to" make a claim, against another. This terminology, this Claimant contended, reflects the provision in s 5(1)(c) of the 1946 Act that a tortfeasor may recover contribution from any other tortfeasor "who is, or would if sued have been, liable in respect of the same damage". The definition in s 198C(1), in keeping with its different purpose, does not require a finding of liability if sued, but merely a finding that the person was someone against whom the plaintiff was "entitled to" make a claim.
90 The Opponent proffered a number of arguments against the acceptance of that construction. First, it noted that Mason P in Newcastle City Council v McShane (No. 3) [2005] NSWCA 437 (with whom Giles JA and Hunt AJA agreed) suggested that s 198D(1) addresses the costs of plaintiffs and defendants but "would not appear to embrace the costs of third parties joined in the proceedings". Whilst that conclusion is clearly open, it was not an issue in the proceedings being determined, it formed part of "some general observations" made by the President and was not expressed in definitive terms. Furthermore, that paragraph noted the decision now under appeal as support for the conclusion reached; it would be inappropriate for this Court to treat itself as bound by such a statement, made in a case in which the issue did not arise for determination, when the Court is now dealing with an appeal from the very decision on which the dictum was, at least in part, based.
91 The second contention of the Opponent was that the words "may be made" are temporal and not merely conditional in nature: in other words, they were intended to ensure that the cap covered costs incurred prior to the making of a claim as well as from the time the claim was made. (Section 198I suggests that a claim may be "made" whether or not legal proceedings have been instituted, and may be compromised or settled, without such legal proceedings. A claim must therefore be capable of being made by the communication of an appropriate demand.)
92 That the words "may be made" can have a temporal element may be accepted; it does not follow that they operate only in circumstances where a claim is in fact made against that person to cover the period between the infliction of the injury and the making of a claim. Similarly in relation to the definition of "plaintiff" a person who is entitled to make a claim against another, in relation to an injury, need not be limited to a description of the person who has not yet made a claim but later does. A person against whom a claim may be made is one who may be legally liable for the injury suffered.
93 The third objection raised by the Opponent was that the successful outcome of the proceedings demonstrated that it was not in fact a person whom the plaintiff was entitled to sue. A weaker form of that contention was that, even if one were required to look at the question at an earlier point in time, the claim would have to be one which enjoyed reasonable prospects of success and a claim against the Opponent, in the present circumstances, would not qualify under that test.
94 The first limb of the argument, which allows the issue to be viewed with hindsight, might obtain support from s 198D itself, which only operates "if the amount recovered on a claim" is of a certain value. That cannot be known until after judgment has been delivered, or, consistently with s 198I, a settlement has been effected. However, that approach is difficult to reconcile with the terminology of the definitions which in each case involves the present tense and at least includes present entitlement to make a claim in the future and the prospect of future claims.
95 The second limb of the approach is said to be unattractive because it would require a retrospective analysis by the costs assessor of the prospects of a claim which might have been, but was not, made. This argument, with respect, proves too much. The basis upon which an assessment may be made may also depend upon whether there was a costs agreement that complies with Division 3: see s 198E. This may in turn involve a decision as to the validity and effect of any particular costs agreement, again a matter which may not be capable of determinative resolution by a costs assessor, who is not an officer of the Court.
96 In any event, the requirement that the entitlement of the plaintiff to bring a claim be restricted to circumstances where there are "reasonable prospects of success" was said to derive from the contemporaneous inclusion of Division 5C which imposed constraints on legal practitioners bringing proceedings absent a reasonable belief that the claim or defence has such prospects. But the provisions of Part 5C are not directed to the entitlement of a person to sue, nor do they constrain the right of an injured person to bring proceedings. Rather, they are a constraint upon the proper conduct of proceedings (including their commencement) by legal practitioners: see Groth v Audet [2006] NSWCA 48 at [33] (Tobias JA). Arguably an entitlement which could not be described as bona fide, or was in some sense merely colourable, would not qualify. However, it is not necessary to inquire into such questions in the present case. The proceedings against the cross-defendant were commenced by the defendant who was represented by a solicitor and counsel and were filed after the commencement of Part 5C. The Court is entitled to assume that they were commenced in compliance with Part 5C, to the extent that such compliance would be necessary. Nor does the definition of "plaintiff" require that the plaintiff had knowledge of her entitlement. If the defendant, who may well have had better information available to it than the plaintiff, thought that a claim for contribution was warranted, it is difficult to see why the plaintiff in the proceedings would not herself have been entitled to sue the cross-defendant. The concept of entitlement does not necessarily engage particular knowledge or assessments of the likelihood of success.
97 The Court was referred to various authorities which might assist on the question whether a claim for contribution fell within the concept of a claim for personal injury damages. Support for the view that a claim for contribution was of a different kind, was sought from Nickels v Parks (1948) 49 SR(NSW) 124 at 129; Unsworth v Commissioner for Railways (Qld) (1958) 101 CLR 73; Rolls Royce Industrial Power (Pacific) Ltd v James Hardie & Co Pty Ltd (2001) 53 NSWLR 626 and Allianz Australia Finance Ltd v Wentworthville Real Estate Pty Ltd [2004] NSWCA 100. On the other hand, a different view to Unsworth was taken in Genders v GIO (1959) 102 CLR 363 and in GIO v Crittenden (1966) 117 CLR 412. In Rolls Royce, Stein JA distinguished the latter two cases on the basis that they dealt with claims "in respect of damage from personal injury", as opposed to claims for damages "for personal injury" at [50]. They were also distinguished in Allianz at [42] and [43] respectively, on a similar basis.
98 The fine distinctions drawn in seeking to follow Unsworth rather than Genders and Crittenden, the latter two being later authorities dealing with s 5(1)(c) of the 1946 Act, at least call into question the aptness of applying Unsworth and its progeny to resolve questions of construction arising in a different statutory context. In my view those authorities do not assist. Furthermore, as Mason P noted in McShane, there is little guidance to be obtained from the extrinsic material available in relation to Part 5B of the Legal Profession Act 1987 to assist in resolving the question of construction which arose in that case or, it might be added, the present question. As the contentions in this Court vividly demonstrated, harsh and anomalous results can be achieved on either construction.
99 In my view a cross-defendant, who, if properly sued by the defendant (bona fide and in compliance with Part 5C - see [96] above) must, for the purposes of s 5(1)(c) of the 1946 Act, be another tortfeasor and who would, if sued by the plaintiff, have been liable to her, falls within the concept of a person whom the plaintiff was entitled to sue for the purposes of the definition of "plaintiff" in s 198C(1). One would expect a correlative definition of "defendant", a conclusion which would follow if one accepts that a person who the plaintiff is entitled to sue is a person against whom a claim may be made. That conjunction should be accepted and, accordingly, the cross-defendant is a defendant within the meaning of the definition and is also, therefore, a "party" within the meaning of that term as defined in s 198C(1).