In summary, a tortfeasor, whose liability in respect of damage to an injured party has been ascertained, may recover contribution from any other tortfeasor liable in respect of the same damage, if, after the injured party's cause of action accrued, there was a time when the other tortfeasor, if it had been sued, would have been liable to the injured party. This is an independent cause of action.
14 McTiernan J was of the same opinion as the Chief Justice. Kitto J was of the view that the appeal should be dismissed for the reasons appearing in the judgments of Donovan J in Morgan v Ashmore, Benson, Pease & Co Ltd (1953) 1 WLR 418 and McNair J in Harvey v R G O'Dell Ltd; Galway (Third Party) [1958] 2 QB 78 at 108-110.
15 The trial Judge said that Clout was a tortfeasor who would, if sued between 7 March 2000 and 27 November 2001, have been liable in respect of the damage for which Baiada was liable to Mr Raj. That is not disputed. On its face, if it be right to say, as the High Court said in Brambles, that there was a time when, after Mr Raj's cause of action accrued, Clout, if Mr Raj had sued it, would have been held liable to him, that is sufficient. The decision appealed from was correct. It is agreed that if Mr Raj had sued Clout after the November amendments came into effect on 27 November 2002, he would have failed.
16 Mr Watson SC, who appeared for Clout, submitted that the right by either to recover contribution under s5(1)(c) did not accrue until Baiada's liability had been ascertained and that was not until Mr Raj's proceedings were settled on 10 September 2003. But if Brambles applies that does not matter. The critical starting point is the date when Mr Raj's cause of action accrued against the tortfeasors, namely the date of his injury.
17 In Unsworth v Commissioner for Railways a widow brought proceedings under Lord Campbell's Act both against the driver of a motor vehicle, in which her husband was killed when the vehicle collided at night with some unlighted railway trucks, and against the Queensland Commissioner for Railways. The Queensland Railways Act 1914 to 1955 limited the amount for which judgment could be entered against the Commissioner to £2,000. Each defendant delivered to the other a third party notice claiming contribution. The question was whether the monetary cap applied to the claim for contribution against the Commissioner. Fullagar J held that it did and said, at 87:
"But it is, in my opinion, clearly implicit in s5(c) [of the Queensland statutory equivalent to the Law Reform Act ] that the amount of the liability to pay contribution cannot be greater than the amount of the primary liability. Contribution can only be recovered from one who 'is, or would if sued have been, liable' to pay damages to the person injured. A person cannot be said to be so liable except to the extent to which damages can be recovered from him at law. In any case, I do not think that it could be lawfully held to be 'just and equitable' within the meaning of s6 of The Law Reform Act that a person should be ordered to pay by way of contribution to another tortfeasor a larger amount than he could be compelled to pay to the person injured."
18 At 93 Taylor J said:
"The legislative provisions are difficult but on the whole I am inclined to the view that the commissioner's contentions on this point should be accepted. It is true that his liability to make a contribution does not depend upon the circumstance that he is liable to the same extent as the appellant; it is sufficient if he is 'liable for the same damage'. It is true also that the language of s5(c) has been chosen without regard to the difficulty which arises in the present case. But the right to contribution is dependent upon the fact of liability and it seems reasonably clear that if the plaintiff had recovered judgment against the commissioner for the sum of £2,000 and the commissioner had thereupon paid that sum to her the appellant could not, thereafter, have succeeded in his claim to recover a contribution. In such circumstances it would then have been impossible for the appellant to contend that the commissioner was a person 'who is, or would if sued have been, liable in respect of the same damage'. If this is so it would be anomalous to a degree to hold that he may now be required to contribute a sum in excess of that amount. This solution of the problem may be regarded as somewhat unsatisfactory but, if it is, it is because the language of the sub-section is obscure and incapable of ready application to the circumstances of cases such as the present. But, on the whole, the provision assumes the existence of a liability in the party from whom a contribution is sought and may fairly be taken to intend that, within the limits of that liability only, he may be called upon to make a contribution to the first tortfeasor."
19 In Unsworth the primary liability of the Commissioner at no time after the plaintiff's cause of action accrued exceeded £2,000. There was therefore no need in that decision for a determination as to whether a temporal element applied to the right to contribution. Hence Unsworth can be distinguished from Brambles, where no reference was made to Unsworth, and, from the present case.
20 Mr Watson submitted that because the primary liability of Clout after the November amendments was nil, the amount for which Clout was liable to contribute could be no higher. However this, it seems to me, ignores what was said in Brambles to the effect that there was no need to import into s5(1)(c) any temporal element and the requirement to read "if sued" as "if sued at any time". Clearly if Mr Raj had begun proceedings against Clout before 27 November 2001 he could have recovered damages against Clout.
21 As an alternative argument Mr Watson turned to the language of s151Z of the Workers Compensation Act which has remained substantially unchanged since it was introduced into the Act in 1989. That section, which is headed "Recovery against both employer and stranger" is divided into five subsections. No part of subsection (1) assists in resolution of the present dispute. Mr Watson did not rely on subs (1) but on subs (2).
22 Subsection (2) applies:
"If, in respect of an injury to a worker for which compensation is payable under this Act:
(a) the worker takes or is entitled to take proceedings independently of this Act to recover damages from a person other than the worker's employer, and
(b) the worker also takes or is entitled to take proceedings independently of this Act to recover damages from that employer."
23 In Leonard v Smith (1992) 27 NSWLR 5, Allen J, after discussing the mischief to which this subsection was directed and giving examples of how it operated, said:
"The first thing to be noticed is that by par (a) and par (b) there are two conditions each of which must be fulfilled. The first is that 'the worker takes [the words 'or is entitled to take' were added by Schedule 1 [74] of the W orkcover Legislation Amendment Act 1995] proceedings independently' of the Act 'to recover damages from a person other than the worker's employer'. This simply means the taking of proceedings which do not rely in any way upon the Act. Ordinary proceedings for damages brought against an ordinary tortfeasor or motor accident tortfeasor, other than the employer, are such proceedings. The second condition is that 'the worker also takes or is entitled to take proceedings independently of (the) Act to recover damages from that employer'. Ordinary proceedings for damages against an employer tortfeasor are such proceedings. There is some difficulty with the phrase 'is entitled to take' such proceedings. It has been argued that this expression means that at the time the proceedings are commenced by the tortfeasor other than the employer the worker must have had the right to commence and maintain proceedings against his employer for damages. If because he had not taken some appropriate step to found such proceedings, or had lost through effluxion of time or otherwise the right to sue the employer then, so it has been argued, the condition would not be satisfied. This argument is reminiscent of the argument considered by the High Court in Brambles Constructions Pty Ltd v Helmers in respect of the similar expression in s5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946. It is an argument unanimously rejected by the judges who constituted the court for that case and it is no more persuasive in the present case. The expression denotes a worker who by his conduct satisfies any condition precedent to being entitled to sue his employer and who sues at the appropriate time in an appropriate court. There is no temporal connotation linking his entitlement to take proceedings against his employer with the time at which he commences proceedings against the other tortfeasor."
24 The effect of what Allen J said is that Mr Raj should, for the purposes of the subsection, be treated as entitled to take proceedings independently of the Workers Compensation Act to recover damages from Clout even though he had not complied with the procedural requirements necessary before he could commence such proceedings; see also per Mahoney JA in Grljak v Trivan Pty Ltd (In liquidation) (1994) 35 NSWLR 82 at 88 in the passage cited below. That being so, the following provisions have effect under s151Z(2):
Paragraph (c) provides that the damages that the worker may recover from the non-employer in the independent proceedings are reduced by the amount by which the contribution which the non-employer (but for Part 5 of the Workers Compensation Act ) would be entitled to recover from the employer as a joint tortfeasor or otherwise exceeds the amount of the contribution recoverable.
Paragraph (d) provides that the amount of the contribution the non-employer is entitled to recover from the employer as joint tortfeasor or otherwise is to be determined as if the whole of the damages were assessed in accordance with the provisions of Division 3 as to the award of damages. Section 151H is to be found in Division 3 of Part 5 of the Workers Compensation Act . If the November amendments applied, since the whole of the damages recoverable by Mr Raj from Baiada, assessed in accordance with Division 3, would be nil Baiada could recover nothing by way of contribution to the $380,000 damages it was ordered to pay Mr Raj; see Grljak v Trivan Pty Ltd at 89, in the passage cited below.
25 In Leonard v Smith at 11, Allen J said about paragraph (d):
"The reference to 'joint tortfeasor' is, in the context of the statutory scheme, a reference to contribution between concurrent tortfeasors (termed 'joint tortfeasors') as provided by s5 of the Law Reform (Miscellaneous Provisions) Act 1946. (It is not necessary, in this judgment, to deal with the complication of the addition of the words 'or otherwise' in the expression 'as a joint tortfeasor or otherwise'.) Paragraph (d) is directed to the ascertainment of the financial burden to be borne by the employer tortfeasor by way of contribution for his share of the responsibility for the accident having happened. But for par (d) the financial burden would be, in substance, his percentage of the fault applied to the damages payable by the other tortfeasor seeking the contribution. But worker damages are so much less than restitution damages or even motor accident damages (except where the employer is liable as the owner or driver of the motor vehicle) that the financial burden on the employer tortfeasor, through contribution, well might be more than what the plaintiff could have recovered as damages from the employer tortfeasor if he had sued him alone. It scarcely would make sense that the financial burden upon the employer tortfeasor is increased because someone else, for whom he is not vicariously liable, was also at fault. What par (d) does is to apply the percentage of the employer tortfeasor's share in the responsibility for the accident not to the amount of the damages payable to the plaintiff by the other tortfeasor but to what the worker damages would have been if the plaintiff sued the employer, that is, worker damages ('damages … assessed in accordance with the provisions of Division 3' of Pt 5). So the financial burden upon the employer tortfeasor is calculated as being his fault proportion applied to the damages he would have had to pay the plaintiff if sued alone - not that fault proportion applied to damages to which the other tortfeasor is liable."
26 Allen J went on to observe at 12 that in order to make the calculations required by para (c) one must employ the figure ascertained in accordance with para (d) which the other tortfeasor is entitled to recover from the employer. Of para (c) his Honour said:
"This paragraph deals with the damages which the plaintiff worker may recover from the tortfeasor other than the employer tortfeasor in the proceedings which the plaintiff has taken for damages against that tortfeasor - be that tortfeasor an ordinary tortfeasor or a motor accident tortfeasor. Paragraph (c) provides for a reduction in the damages otherwise recoverable. …
To ascertain the extent of the reduction two figures form the basis for calculation of it. The first of those figures is 'the contribution' which the other tortfeasor would be entitled, but for Pt 5 of the Act, which is the Part dealing with recovery of damages and containing Div 3 which limits the amount to which I have called worker damages, 'to recover from the employer as a joint tortfeasor or otherwise'. That calculation simply consists of ascertaining the contribution which could be recovered (but for Pt 5) by the other tortfeasor from the employer tortfeasor as a percentage of the damages payable by the other tortfeasor to the plaintiff. Thus in the examples previously given where the employer tortfeasor was two thirds responsible for the accident the ordinary tortfeasor liable to pay $90,000 would recover $60,000 and the motor accident tortfeasor liable to pay $60,000 would recover $40,000. It is convenient to refer to that calculation as 'ordinary contribution'.
The second calculation necessary to ascertain the amount to be deducted from the plaintiff's damages is 'the amount of the contribution recoverable'. That amount is the amount determined as provided by par (d). The amount by which the ordinary contribution exceeds the contribution recoverable in accordance with par (d) is the amount to be deducted from the damages which the plaintiff can recover from the other tortfeasor. Thus in the example which I have taken of the ordinary tortfeasor, the ordinary contribution which he would have recovered would have been $60,000 (two thirds of $90,000). He is entitled to recover as contribution in accordance with par (d), $20,000 (being two thirds of the worker damages of $30,000). The difference is $40,000 ($60,000 less $20,000) and that is the amount which is deducted from the damages of $90,000 which otherwise would have been payable by the ordinary tortfeasor to the plaintiff. Likewise, in the example where the other tortfeasor was a motor accident tortfeasor so that the damages which he would pay to the plaintiff, apart from the provisions of the Workers Compensation Act 1987, would be $60,000, the ordinary contribution which he would be entitled to recover under the Law Reform (Miscellaneous Provisions) Act 1946 would be $40,000. Contribution recoverable in accordance with the par (d), however, would be two thirds of $30,000 namely $20,000. The difference is $20,000 ($40,000 less $20,000) and that is the amount which must be deducted from the damages of $60,000 which otherwise the worker would have recovered from the motor accident tortfeasor."
27 In Grljak v Trivan Pty Ltd (In liquidation) this Court considered the meaning of s151Z. Mr Grljak was employed by Gawa Pty Ltd, which was engaged by Trivan Pty Ltd in a building project. While working on that project, Mr Grljak was injured. At trial it was held that responsibility for the accident should be apportioned as to 90 per cent to Trivan and as to 10 per cent to Gawa. In one set of proceedings, Mr Grljak obtained a verdict in negligence against Trivan for $186,000. However, the trial Judge applied s151Z to reduce the damages by 10 per cent to $167,400. Subsequently, Trivan took proceedings against Gawa for contribution claiming that Gawa was responsible to the extent of 10 per cent or more and that it was entitled to contribution from Gawa accordingly. Mr Grljak appealed to this Court against the 10 per cent deduction of damages. The contribution proceedings were referred to this Court for decision in conjunction with the negligence proceedings.
28 At 87 Mahoney JA, with whose judgment Kirby P and Priestley JA agreed, rejected an argument on behalf of Mr Grljak that s151Z(2) did not apply. The second, and for present purposes relevant, arm of that submission his Honour dealt with at 88 in the following way:
"It was then submitted that Mr Grljak was not 'entitled to take proceedings' to recover damages from Gawa because, as the events showed, the result of such a proceeding would be that no damages would be recovered. I do not think that this is the intended operation of par (b). The test which in this regard par (b) applies is 'entitlement'. The entitlement is entitlement 'to take proceedings' not 'to recover damages'. It looks, I think, to the existence of what conventionally is described as a cause of action rather than to whether the enforcement of the cause of action will result in an award of damages. I am conscious that, in principle, a right of action in negligence or for breach of statutory duty involves the proof not merely of duty and breach of duty, but also of loss by the plaintiff. I do not think that it was the intention of the 1989 amendments to alter the nature of a proceeding of this kind at common law. The purpose and effect of the 1989 amendments was to change and, in many respects, to limit the damages which could be awarded and the way in which they were to be quantified. But that, in the relevant sense, does not go to the 'entitlement' to bring the proceeding; it goes rather to the quantum of the damages which (if any) may be recoverable. Accordingly, the fact that, in the proceeding to recover damages, the assessments made by the trial judge are such that, in the event, no damages are awarded does not mean that, within par (b), the worker was not 'entitled to take proceedings … to recover damages from' the employer."
29 Next, Mahoney JA came to examine the operation of paras (c) and (d). He said at 88-89:
"The paragraphs provide for the reduction of the amount of damages which otherwise would be recoverable by a worker from a third party. The legislature has chosen to apply a formula to achieve that reduction. That formula involves, conceptually, three steps: the Court must first decide what is the amount of the contribution which the third party would (but for Div 3) be entitled to recover from the employer as a co-tortfeasor or otherwise at common law; it must then decide what is 'the amount of the contribution recoverable' within par (c) and par (d); and it must then deduct the second from the first to determine the amount by which the worker's common law damages from the third party are to be reduced.
The operation of the first part of the formula is clear. The judge, acting under the Law Reform (Miscellaneous Provisions) Act 1965 concluded that as between Trivan and Gawa, as co-tortfeasors, Trivan would recover a 10 per cent contribution if sued for it. For present purposes that is not a contest. Accordingly, this amount is $18,600.
It is the second step in the formula upon which the argument of Mr Hughes QC has focused. This step requires that the Court determine 'the amount of the contribution recoverable'. Paragraph (d) provides that that 'is to be determined as if the whole of the damages were assessed in accordance with the provisions of Division 3 as to the award of damages'. This means, I think, that, in determining what is the contribution recoverable, the Court is to assume that the damages which the third party must pay are those damages which would have been paid 'if the whole of the damages were assessed in accordance with the provisions of Division 3 as to the award of damages'. If, in this hypothetical exercise, the Court had calculated the damages recoverable in accordance with Div 3, the result would, as I have said, have been that no damages would have been payable: this would have been the result of the operation of the specific provisions of Div 3. Therefore, in determining what contribution Trivan can, under the 1965 Act, recover from Gawa, it is to be assumed that the damages payable by Trivan are reduced to nil. Accordingly, Trivan would not recover any sum by way of contribution from Gawa.
If the formula be applied in this way, then there is nothing to be deducted from $18,600 and accordingly it is the amount by which $18,600 'exceeds the amount of the contribution recoverable', viz, $18,600 which is to be deducted from the workers common law damages."
30 Mahoney JA rejected the submission that para (c) operated only where there was an amount of contribution "recoverable" and that where there was nothing to be paid there was no contribution "recoverable" and an argument based on what was said to be the policy behind the section. Mahoney JA came next to the contribution proceedings brought by Trivan against Gawa. He quoted, at 90, this part of the trial Judge's reasons for judgment:
"The 10 per cent monetary amount of that contribution has been deducted from the verdict which the plaintiff otherwise would have obtained against Trivan in consequence of section 151Z(2)(c). As the sum which Trivan must pay to the plaintiff pursuant to the judgment excludes the contributory element of damages which otherwise Trivan would have been obliged to pay to the plaintiff and in respect of which it could have sought recover from Gawa, the cross-claim based on contribution as a concurrent tortfeasor must fail'. (Emphasis added by Mahoney JA).
31 The submission was that the trial Judge, in declining to order contribution for this reason, acted on a wrong principle. Mahoney JA said at 90-91:
"In my opinion, the effect of par (d) of s151Z(2) is to provide the basis for calculation of the contribution which the third party in question may recover against a co-tortfeasor employer. Paragraph (d) is not a mere adjunct to par (c). It operates according to its terms and, by its terms, it provides that 'the amount of the contribution … is to be determined as if …' the damages payable by the third party were assessed in accordance with Div 3. That, in my opinion, is a substantive provision limiting what otherwise would be the right under the Law Reform (Miscellaneous Provisions) Act 1965 to recover contribution from the employer. As, upon the basis provided by par (d), it is in effect deemed that no damages are recoverable against the third party, no contribution is to be ordered. I see no reason why par (d) should not, in this regard, be given its ordinary meaning.
I am inclined to think that this may have been the basis upon which the trial judge dealt with the matter. But however that be, the conclusion at which his Honour arrived is that which, in my opinion, is required by the statute. On this basis, I conclude that Trivan's claim for contribution against Gawa should fail."
32 From this judgment the following conclusions can be drawn: