DANIEL HERRIDGE and the Plaintiffs listed in Schedule 1 to the Further Amended Writ of Summons -v- ELECTRICITY NETWORKS CORPORATION t/as?WESTERN POWER [No 5] [2020] WASC 145 (7 May 2020)

1. Central to the argument of Senior Counsel for the Herridge plaintiffs, Mr Armstrong QC, in support of the Herridge plaintiffs' application is the proposition that the plaintiffs in the Parkerville Proceedings are 'coincident plaintiffs' ‑ a term Mr Armstrong used not as a term of art, but a convenient description of the coincident circumstances of the Herridge plaintiffs and the other plaintiffs in the Parkerville Proceedings. Mr Armstrong says they are coincident plaintiffs for the following reasons. First, the plaintiffs' claims and interests arise from the same occurrence ‑ the Parkerville bushfire. Secondly, they are plaintiffs in multiple plaintiff proceedings which have been managed together. Thirdly, issues of liability were determined at a single trial. Fourthly, the plaintiffs' rights to damages arise from a single judgment of the court. It is therefore necessary to outline the Parkerville Proceedings and the judgment and orders made in the course of those proceedings.
2. The Parkerville bushfire started on 12 January 2014 when a jarrah pole supporting electrical cables fell towards the ground causing electrical arching which ignited dry vegetation around the base of the pole. The fire spread and became the Parkerville bushfire.
3. The four actions constituting the Parkerville Proceedings are brought by plaintiffs who claim to have suffered loss or damage as a result of the bushfire. Each of the plaintiffs owned, lived on, had a financial interest in, or personal assets on or near, properties affected by the bushfire. The plaintiffs claim they have suffered loss or damage as a result of the negligence of each of the defendants.
4. The plaintiffs further claim that the bushfire interfered in the use or enjoyment by those plaintiffs who were owners or occupiers of land within the fire area (the landholders subgroup), or the interest which they held in those lands. The plaintiffs say that the bushfire was a nuisance created by each of the defendants and the landholders subgroup suffered loss or damage by that nuisance.
5. The first action, CIV 2259 of 2015, was commenced in 2015 by a number of owners of properties damaged or destroyed by the fire against the defendants. The plaintiffs claim damages for loss and damage they allege was caused by the negligence of, or nuisance caused by, the defendants. The action is referred to as the Herridge proceeding in reference to the first named plaintiff. In CIV 1239 of 2016, CIV 1841 of 2016 and CIV 1445 of 2016 the plaintiffs, by their insurers, claimed damages against the defendants in negligence and nuisance for loss and damage suffered as a result of the fire. Actions CIV 1239 of 2016, CIV 1841 of 2016 and CIV 1445 of 2016 are referred to as the Allianz, IAG and RAC proceedings respectively in reference to the insurers bringing the actions pursuant to their rights of subrogation.
6. The jarrah pole fell because fungal decay and damage by termites had caused it to be unable to withstand the forces applied to it by the wind, the lean of the pole and the overhead electrical cable (the service cable) which ran from a network pole to the jarrah pole.
7. The jarrah pole was owned by, and embedded in land owned by, the third defendant, Mrs Campbell. The plaintiffs alleged that Mrs Campbell was negligent in failing to inspect and maintain the jarrah pole in a condition that was safe and fit for use.
8. The first defendant, Western Power, is the network operator which distributed electricity from its network to Mrs Campbell by the service cable. The plaintiffs claim that Western Power was negligent in failing regularly to inspect and maintain the jarrah pole in a safe and fit condition for use. The plaintiffs further say that Western Power was negligent in failing to inspect and maintain the jarrah pole in a safe and fit condition for use when doing work on the pole on 19 July 2013.
9. Western Power engaged the second defendant, Thiess, to carry out the 19 July 2013 works. The works involved detaching and reattaching the service cable from and to the jarrah pole in the course of replacing the network pole from which the service cable ran. The plaintiffs claim that Thiess was negligent in failing to properly train and supervise its line crew which carried out the works, such that the line crew failed to properly inspect the jarrah pole and left it in the condition that was unsafe and unfit for use.
10. The plaintiffs say that the fire was a nuisance for which each of the defendants is liable in damages to the landholders subgroup for having created the nuisance.
11. These proceedings are being managed together notwithstanding that they consist of four separate actions with multiple plaintiffs. There are 196, 30, 159 and 88 plaintiffs in the Herridge, Allianz, IAG and RAC proceedings respectively. The former Chief Justice directed that the plaintiffs serve a consolidated statement of claim, colour coded to show which claims are made by which plaintiff groups in the proceedings. There were subsequently directions given for the trial of the issues of liability in all of the actions. I ordered that evidence in each of the actions shall be evidence in all of the actions.
12. On 10 November 2017 the court ordered that the questions of the defendants' liability (if any) for the failure and collapse of the jarrah pole (including the subsequent fire and damage) and the individual loss claims of the nominated test case plaintiffs, Mr and Mrs Elwood, be tried separately from the other issues in the proceedings.
13. Each of the defendants deny they are liable to the plaintiffs in negligence or nuisance. The defendants say that if they are liable for damages to the plaintiffs then the damages are apportionable and should be apportioned pursuant to the Civil Liability Act 2002 (WA). There were contribution proceedings between the defendants.
14. The initial trial took place between 16 July and 30 August 2018. For the reasons which I published on 29 March 2019[1] (the Principal Judgment) I found:

(1) Thiess and Mrs Campbell are each liable to the plaintiffs in negligence and in nuisance.

(2) Thiess breached the duty of care it owed to the plaintiffs by failing to adequately train and supervise the line crew, and by failing to exercise due care and skill in inspecting the jarrah pole in accordance with its contractual obligations and industry standards. Thiess participated in the creation of a nuisance by failing to inspect the jarrah pole properly, as a result of which the pole remained in service when it was unsafe and unserviceable, and constituted a potential nuisance.

(3) Mrs Campbell breached the duty she owed to the plaintiffs to take reasonable care to inspect and maintain the jarrah pole in a safe and serviceable condition by failing to make any inspection of the pole. Mrs Campbell participated in the creation of a nuisance by retaining and continuing to use the jarrah pole to receive electricity and not replacing it when it became unserviceable.

(4) Thiess is liable for 70% of the plaintiffs' damages and Mrs Campbell is liable for 30% of the plaintiffs' damages.

(5) The plaintiffs' claims against Western Power should be dismissed.

(6) Mr and Mrs Elwood are entitled to damages of $774,733.20.

(1) There be judgment for the lead plaintiffs, Mr G Elwood and Mrs S Elwood, against Thiess in the amount of $542,313.25 together with interest of $165,048.36.

(2) There be judgment for the lead plaintiffs, Mr G Elwood and Mrs S Elwood, against Mrs Campbell in the amount of $232,419.97, together with interest of $70,735.01.

(3) The personal injuries damages of Mr G Elwood be assessed.

(4) Thiess pay the plaintiffs 70% of the actionable damages suffered by them as a result of the Parkerville bushfire which commenced on 12 January 2014.

(5) Mrs Campbell pay the plaintiffs 30% of the actionable damages suffered by them as a result of the Parkerville bushfire which commenced on 12 January 2014.

(6) The damages of the non‑lead plaintiffs be assessed.

(7) The plaintiffs' claims against Western Power are dismissed.

(8) Thiess and Mrs Campbell shall jointly and severally pay 80% of the plaintiffs' costs of the proceeding.

1. In October 2019 each of the plaintiff groups, Thiess and Mrs Campbell commenced appeals against the Principal Judgment and the Trial Orders. The appeals have not been determined.
2. On 16 October 2019 I made orders in relation to the assessment of the property loss and economic damage claims of the plaintiffs in each of the four actions. The orders in the Herridge proceeding provide for the plaintiffs to provide particulars of damages for two tranches, each of ten identified plaintiffs, and for Thiess and Mrs Campbell to each file and serve a response to each of the identified plaintiffs' particulars of damages.
3. In the other actions I made orders which provide for the plaintiffs to file and serve any amended particulars of damages and supporting documentation on the defendants and for Thiess and Mrs Campbell to file and serve a response.
4. I made different orders in the Herridge proceeding than in the other actions because the plaintiffs in those actions had already delivered particulars of damages and were more advanced in the particularisation of their damages than the plaintiffs in the Herridge proceeding.

1. The Herridge plaintiffs are aware of settlement agreements between Mrs Campbell and the Allianz and IAG plaintiffs.
2. Rory Walsh is the lawyer with the conduct of the matter on behalf of the Herridge plaintiffs. Mr Walsh has sworn that for the purposes of several pre‑trial attempts at mediation, the Herridge plaintiffs provided to the defendants and to the Allianz, IAG and RAC plaintiffs without prejudice estimates of the total losses suffered by the Herridge plaintiffs. Mr Walsh says that based on his knowledge of the likely quantum of the Herridge plaintiffs' damages and the affidavit evidence filed by the Allianz, IAG and RAC plaintiffs on 3 July 2019, he expects that the total value of the plaintiffs' claims including interest and costs will be in excess of $75 million.
3. The Herridge plaintiffs are concerned that if Mrs Campbell pays to the Allianz and IAG plaintiffs the settlement amounts in accordance with the settlement agreements, the resources available to Mrs Campbell to meet her obligations to the remaining plaintiffs, and in particular to the Herridge plaintiffs, might be reduced or exhausted. In other words any such payments would carry with them a danger that Mrs Campbell's assets (in the form of the cover provided by the home and contents insurance policy she holds with Westpac) would be disposed of, in whole or in part, or diminished in value, to the prejudice of the Herridge plaintiffs.

1. Mrs Campbell is the owner of the Granite Road property from which the Parkerville bushfire originated. There is evidence that its unimproved value is $850,000. There is no evidence that Mrs Campbell has any other assets and I infer that Mrs Campbell has no substantial assets to satisfy the claims of the plaintiffs beyond the Granite Road property and the Westpac insurance policy.

1. Mrs Campbell holds a home and contents insurance policy with Westpac General Insurance. Cover for legal liability under the policy includes cover for legal costs in respect of claims, both a plaintiff's and Mrs Campbell's. The limit of the cover is $20 million in total for any one occurrence or series of occurrences arising directly or indirectly from the one original source or cause. This amount includes all legal costs and expenses that are incurred with the insurer's consent or which are awarded against Mrs Campbell.
2. Pursuant to Order 2 of the Trial Orders, Mrs Campbell has satisfied the judgment against her in respect of the Herridge lead plaintiffs, Mr and Mrs Elwood. The damages to which the remaining plaintiffs in the Parkerville Proceedings may be entitled have not been assessed.
3. Mrs Campbell's solicitor, Mr Tan, has had, on behalf of Mrs Campbell, without prejudice discussions regarding settlement with each of the plaintiff groups in the Parkerville Proceedings. The discussions were conducted on a without prejudice basis. Those discussions have resulted in an agreement in relation to the Allianz and IAG proceedings and Mrs Campbell wishes to continue negotiations with the other plaintiff groups with an aim to settle their claims against her.
4. The settlement terms agreed between Mrs Campbell and the Allianz and IAG plaintiffs are in deeds in substantially the same terms, each dated 16 March 2020.
5. The terms of the Allianz deed are as follows. By 27 March Mrs Campbell will pay $522,983 to the plaintiffs (being 30% of a sum of $1,270,000 plus interest on that amount) in full and final settlement of Mrs Campbell's liability pursuant to the Principal Judgment to resolve her 30% share of liability pursuant to the Trial Orders. Mrs Campbell is liable to pay the plaintiffs' costs of the proceedings in accordance with the Trial Orders. The plaintiffs and Mrs Campbell reserve their respective appeal rights. If either Mrs Campbell or the plaintiffs succeed in the appeal and Mrs Campbell's liability to the plaintiffs is reduced, Mrs Campbell has a right to recover the overpayment.
6. The terms of settlement between Mrs Campbell and the IAG plaintiffs are the same except that Mrs Campbell is to pay $2,831,106 in full and final settlement of her liability in respect of the IAG plaintiffs.

1. The Supreme Court has inherent power to make a freezing order in relation to a prospective judgment of the court. The exercise of the power is regulated by RSC O 52A r 5.[2] Order 52A r 5(1) provides that the rule applies if, amongst other things, an applicant has a good arguable case on an accrued cause of action that is justiciable in the court. In this case the Herridge plaintiffs have a good arguable case on accrued causes of action that are justiciable in this court and accordingly O 52A r 5 applies.
2. Order 52A r 5(4) provides that the court may make a freezing order against a prospective judgment debtor if the court is satisfied, having regard to all the circumstances, that there is a danger that a prospective judgment will be wholly or partly unsatisfied because, amongst other things, the assets of the prospective judgment debtor are disposed of, dealt with or diminished in value.
3. In Duro Felguera Australia Pty Ltd v Trans Global Projects Pty Ltd (in liq),[3] the Court of Appeal dismissed an appeal against the grant of a freezing order. The appellant contested the primary judge's finding that the respondent had satisfied the jurisdictional requirement that there was a danger that a prospective judgment would be wholly or partly unsatisfied because the appellant's parent company might obtain the benefit of the appellant's funds. The appellant did not contend that if the jurisdictional requirement was satisfied the primary judge erred in exercising his discretion to grant a freezing order. In any event the Court of Appeal said that the kind of dealings which the evidence indicated might frustrate the satisfaction of a prospective judgment were not the payment of normal trading debts in the ordinary course of trade.
4. The following principles were expounded by the Court. First, the court has inherent or implied power to make a freezing order to prevent the abuse or frustration of its process in relation to matters coming within its jurisdiction.[4]
5. Secondly, it is a condition of the exercise of the court's power to make a freezing order that it be satisfied, relevantly, that:

(a) the assets of the prospective judgment debtor might be disposed of, dealt with or diminished in value;

(b) there is a danger that the prospective judgment will be wholly or partly unsatisfied; and

(c) that danger arises because the assets of the prospective judgment debtor are disposed of, dealt with or diminished in value.[5]

1. Thirdly, the risk of danger must be real or substantial, as opposed to a remote, speculative or a theoretical possibility. The degree of danger or risk must be sufficient to justify an order in the terms which the court is asked to make.[6]
2. Fourthly, a freezing order is a drastic remedy which imposes a severe restriction on the respondent's right to deal with its assets.[7]
3. Fifthly, the purpose of a freezing order is not to provide security for a judgment which the applicant hopes to obtain and fears might not be satisfied.[8]
4. Sixthly, a freezing order is not designed to stop a debtor from sliding into insolvency.[9]
5. Seventhly, it is not necessary that the respondent must act for the purpose of avoiding judgment before a freezing order can be granted. If the effect of a dealing is to give rise to a danger that a prospective judgment will be wholly or partly unsatisfied, then the jurisdictional requirement in O 52A r 5(4)(b)[10] will be satisfied irrespective of the purpose for which the respondent may act.[11]
6. Eighthly, the irregular nature of the transaction will be relevant to the exercise of the power to grant a freezing order. When the court exercises its discretion having found the jurisdictional requirement to be satisfied, the absence of any purpose of defeating the court's process or any irregularities in the transaction will be a relevant factor. For example, the discretion is not likely to be exercised in favour of granting a freezing order where the danger referred to arose only because of dealings such as the payment of normal trading debts in the course of business. In such a case, while the court may be satisfied of the existence of a danger, and the judgment will be unsatisfied because of such dealings, the court would not exercise its discretion to make a freezing order.[12]
7. The Consolidated Practice Directions[13] provide that the freezing order should exclude dealings by the respondent with his or her assets for legitimate purposes, in particular:

(c) dealings and dispositions in the ordinary and proper course of the respondent's business, including paying business expenses bona fide and properly incurred; and

(d) dealings and dispositions in discharge of good faith obligations and properly incurred under a contract entered into before the order was made.

1. The practice direction accords with the usual form of a freezing order which permits the respondent to make payments in the ordinary course of business.
2. The authorities on this matter start with Iraqi Ministry of Defence v Arcepey Shipping Co SA (The Angel Bell)[14] where Goff J held, in determining an issue as between an intervenor and a claimant, that a Mareva injunction granted against the defendant should be varied so as to permit the defendant to make a payment in good faith and in the ordinary course of business to the intervenor.
3. Iraqi Ministry of Defence was followed by Kennedy J in Norilya Minerals Pty Ltd v Ireland (Intervener Commonwealth Development Bank of Australia).[15] The plaintiff had sought damages against the defendants for deceit or misleading conduct. On the plaintiff's application, a Mareva injunction was granted preventing the defendants from dealing with their assets to the value of the claim against them. The intervenor had been successful in an action against the first defendant and had commenced execution proceedings. The Mareva injunction prevented the first defendant from meeting any part of the judgment debt. The intervenor applied to amend the Mareva injunction to allow for the release of the first defendant's assets. The plaintiff consented to a variation of the injunction. In determining the intervenor's application for costs from the plaintiff on an indemnity basis Kennedy J said:

A Mareva injunction is not intended to give a plaintiff the status of a judgment creditor prior to judgment by freezing the defendant's assets pending resolution of the plaintiff's claim, nor to preserve them for the satisfaction of that claim. It is not a form of pre‑trial attachment and confers no priority upon the plaintiff to which it is not already entitled. It was not intended to rewrite the law of insolvency: see Iraqi Ministry of Defence v Arcepey Shipping Co SA (The Angel Bell) [1981] QB 65 at 71‑72; A J Bekhor & Co Ltd v Bilton [1981] EWCA Civ 8; [1981] QB 923 at 941‑942; K/S A/S Admiral Shipping v Portlink Ferries Ltd [1984] 2 Lloyd's Rep 166; Jackson v Sterling Industries Ltd [1987] HCA 23; (1987) 162 CLR 612 at 617‑618. (487).

1. In Frigo v Culhaci[16] the New South Wales Court of Appeal set aside a freezing order. In addressing the form of the freezing order the court said:

Provision should be made for the defendant to have access to his or her own assets for living expenses, payment of debts and legal expenses. Ideally such a proviso should be included from the outset. If not, it should be engrafted at the earlies appropriate time ... (emphasis added)

1. In England an applicant for a freezing order must establish a real risk that a judgment in his favour will be unsatisfied by 'unjustifiable' disposal of assets. In Mobil Cerro Negro Ltd v Petroleos de Venezuela SA,[17] Walker J considered whether it was just and convenient for the court to grant a worldwide freezing order. In considering the requirement that the applicant establish a danger of dissipation of assets, his Honour said that the expression 'dissipation of assets' focuses on the conduct of the defendant as regards the defendant's assets. The question is whether a particular course of conduct in relation to assets by the defendant, actual or feared, is conduct which should or may lead the court to conclude that the grant of a freezing order is just and convenient. His Honour then set out three principles which guide the court.[18] First, freezing orders are not granted in order to provide security for a claim. By procuring an order that assets are frozen, an applicant is not put in a better position than any other creditor. The mere fact that a defendant's credit worthiness is in doubt does not justify the making of a freezing order. Secondly, the risk of 'dissipation' must involve a risk of impairing the claimant's ability to enforce a judgment or award. It is not necessary for the claimant to prove that the purpose of the defendant's actual or feared conduct is to frustrate the enforcement of any judgment which is obtained, provided that, objectively, that would be the effect. Thirdly, the mere fact that the actual or feared conduct would risk impairing the claimant's ability to enforce a judgment or award does not in every case mean that a freezing order should be granted. The conduct in question must be unjustifiable (see the judgment of Stuart‑Smith LJ in Ketchem International PLC v Group Public Relations Holdings Ltd[19] at 10 and the statement by the Court of Appeal in Mediterranean Feeders LP v Bernd Meyering Schiffahrts[20] that 'there must be a risk that [the asset] will be used otherwise than for normal and proper commercial purposes').
2. In Holyoake v Candy,[21] the England and Wales Court of Appeal set aside a modified form of freezing order on the ground that the evidence was insufficient to demonstrate the requisite risk of dissipation of assets. In discussing the correct test in relation to the dissipation of assets Gloster LJ, with whom Jackson LJ agreed, said:

There was some debate as to what was the correct test to establish that there was a risk of dissipation such as to make it just and convenient to grant a conventional freezing injunction. However, the threshold in relation to conventional freezing orders is well established. There must be a real risk, judged objectively, that a future judgment would not be met because of unjustifiable dissipation of assets [34].

1. In a recent decision, Palmer v Parbery,[22] the Queensland Court of Appeal considered the test to be applied in deciding whether to grant a freezing order under the Queensland equivalent of RSC O 52A r 5. In addressing the 'dissipation of assets' requirement McMurdo JA, with whom Fraser and Gotterson JJA agreed, referred with apparent approval to the statement of Gloster LJ in Holyoake v Candy referred to above. McMurdo JA went on to explain what Gloster LJ meant by 'unjustifiable disposals':[23]

Not every disposition of a defendant's property might be unjustifiable so that the payment of ordinary trading debts, which might affect ultimately the recovery of the plaintiff's judgment, would not be an unjustifiable disposal in this sense. But that is not to say that an applicant must prove that the purpose of a likely disposition is to put the defendant's assets beyond the plaintiff's reach. In one of the authorities cited in the text, TTMI Ltd of England v ASM Shipping Ltd of India, the point was described as follows:

'[25] The purpose of the Mareva jurisdiction is sometimes referred to as the prevention of the "dissipation of assets". Without explanation that phrase is, itself, obscure. As Colman J stated in Gangway Ltd v Caledonian Park Investments (Jersey) Ltd (2001) 2 Lloyd's Rep 715 the underlying purpose of the jurisdiction is not to provide a claimant with security for its claim but to restrain a defendant from evading justice by disposing of assets otherwise than in the ordinary course of business so as to make itself judgment proof with the result that any judgment or award in favour of the claimant goes unsatisfied. The purpose is not to provide security for the claimant in respect of his claim. It is well established that it is not necessary to establish that the defendant is likely to act with the object of putting his assets beyond reach. What has to be shown is that there is, absent an injunction, "a real risk that a judgment or award in favour of the plaintiffs would go unsatisfied": The "Niedersachsen" [1983] 2 Lloyd's Rep 600. That formulation cannot, however, be regarded as a complete statement of the law. A defendant may be likely to make perfectly normal dispositions, such as the payment of ordinary trading debts, the effect of which may be that, when any award is made, it is, in whole or in part unsatisfied when, absent those payments, it might have been satisfied or satisfied to a greater extent. Something more than a real risk that the judgment will go unsatisfied is required [55].

1. McMurdo JA then referred with approval to the statement of the New South Wales Court of Appeal in Riley McKay Pty Ltd v McKay[24] that:

[T]he jurisdiction to grant the [Mareva] injunction is not to be exercised simply to preclude a debtor from dealing with his assets, and in particular to prevent him from using them to pay his debts in the ordinary course of business. It is directed to dispositions which do not fall within this category and which are intended to frustrate, or have the necessary effect of frustrating, the plaintiff in his attempt to seek through the court a remedy for the obligation to which he claims the defendant is subject.

1. The jurisdictional requirements of RSC O 52A r 5(4), as explained in Duro Felguera, are satisfied. I am satisfied by the evidence of Mr Walsh, the evidence of Mr Tan and the material filed in the court to which Mr Walsh has referred, that there is a real or substantial risk or danger that the Herridge plaintiffs' prospective judgments will be wholly or partly unsatisfied because Mrs Campbell's assets are disposed of, dealt with or diminished in value. That is, there is a danger Mrs Campbell's right to indemnity from Westpac will be insufficient to pay the whole of the prospective judgments in favour of the remaining Herridge plaintiffs after the payment of Mrs Campbell's legal fees, the judgment in favour of Mr and Mrs Elwood and the agreed settlement amounts to be paid to the Allianz and IAG plaintiffs.

1. The real issue here is whether the court should exercise its discretion to grant a freezing order to restrain Mrs Campbell from paying to the Allianz and the IAG plaintiffs the sums she has agreed to pay them under the deeds of settlement.

Payment to Allianz and IAG plaintiffs not unjustifiable

1. On the face of it, it is not irregular, inappropriate or unjustifiable for Mrs Campbell to pay to the Allianz and IAG plaintiffs the debts arising from the settlement deeds, and the court should not exercise its discretion to make a freezing order restraining her from making those payments for two reasons.
2. The first reason is that there is no evidence that Mrs Campbell has entered into the settlement deeds or proposes to pay the debts arising from those deeds for the purpose of defeating any judgment that may be obtained by any of the Herridge plaintiffs. Mrs Campbell's solicitor, Mr Tan, has sworn that all settlement negotiations have been conducted with the aim of ensuring Mrs Campbell's liability for damages does not exceed her insurance limit (after deducting defence costs) and with regard to the fair and reasonable value of the plaintiffs' claims for damages.[25]
3. It is not necessary that the respondent must act for the purpose of avoiding judgment before a freezing order can be granted. However, when the court exercises its discretion having found the jurisdictional requirement to be satisfied, the absence of any purpose of defeating the court's process or any irregularities in the transaction will be a relevant factor.[26]
4. The second reason is that the disposal, dealing with or diminishing in value of her assets, in the form of diminishing her right to indemnity from Westpac, by paying to the Allianz and IAG plaintiffs the amounts due to them under the settlement deeds, is not an irregular, inappropriate or unjustifiable disposal, dealing with or dimunition of the value of her assets.
5. Mrs Campbell and the Allianz and IAG plaintiffs say that Mrs Campbell should pay the insurance monies in the order the indemnity policy responds, that is, 'chronologically by reference to the point in time the amount Mrs Campbell is liable to pay any person claiming against her, a claim to which the policy responds, is established by judgment, award or settlement (colloquially but aptly, on a 'first past the post' basis).
6. The first past the post principle was referred to by the New South Wales Court of Appeal in Chubb Insurance Company of Australia Ltd v Moore.[27] That proceeding concerned the provisions of s 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (WA). The effect of s 6 was that the amount of any liability to pay damages or compensation, of a person who has entered into a contract of insurance by which that person is indemnified against such liability, is, on the happening of the event that gives rise to that liability, to be a charge on all insurance monies that may become payable in respect of that liability under that contract of insurance. The provisions of s 6 were invoked in connection with claims made in several proceedings (the GS proceedings) arising out of the collapse of the Great Southern Group. In one or more of the GS proceedings, the claimants (GS claimants) claimed damages from executives of companies in the group (the Executives) and from one of the companies in the group (GSMAL). The defendants in the GS proceedings were insured under contracts of insurance (the Policies) between GSL and the plaintiffs (the Insurers). The Policies covered the liability that the Executives and GSMAL may be found to have in the GS proceedings. In addition, the Policies covered legal expenses incurred by the GS defendants in defending those proceedings. The essential question before the Court of Appeal was whether s 6 affords priority to the GS claimants over the GS defendants in relation to monies that may be payable under the Policies. For present purposes the relevant questions before the court were questions 4 and 5. The essence of the dispute reflected in those questions was whether, because the charge under cl 6(1) comes into existence at the happening of an event giving rise to a liability, it must, at that time, attach to or descend on all insurance monies that are, or may become, payable, in respect of the claim made to enforce that liability, being received by the insured. The critical question concerned the meaning of the words in s 6(1) that the amount of the liability of the insured is to be a charge on 'all insurance monies that are or may become payable in respect of that liability'.
7. I make two observations in relation to Chubb Insurance. First, the relevant issue in Chubb Insurance concerned priority between parties entitled to an indemnity under an insurance policy on the one hand and parties entitled to a charge created by a statutory provision on the other hand. That is far from the issues in this case. Secondly, the relevant issue in Chubb Insurance turned on a question of statutory interpretation. The relevance of the judgment in Chubb Insurance for this case is the following observation made by Emmett JA and Ball J, with whom the other three members of the Court of Appeal agreed:

Under the terms of the Primary Policy, an insured is entitled to be indemnified against any loss. Where the indemnity concerns an obligation to satisfy a judgment, award or settlement, the right to the indemnity arises at the time when the liability is established by that judgment, award or settlement ... At that time, the insured is entitled to sue on the indemnity and, subject to exhaustion of the maximum liability under the relevant contract of insurance, is entitled to recover the amount of the judgment, award or settlement. The fact that other claims have been, or may be brought, against the insured, or any other insured indemnified by the same contract of insurance, does not alter the first insured's right to indemnity in respect of the liability that has been determined [126].

1. The statement by Emmett JA and Ball J is, in effect, that claimants on the insurance cover are entitled to recover on a 'first past the post' basis. The principle being that those who first established their claims against an insolvent insured party may recover against that party's insurer to the full extent of their claim or to the full extent of the available cover (whichever is the lesser), leaving those behind them to recover only to the extent that such insurance cover has not been used up already, possibly leaving such claimants with nothing.[28]
2. In the absence of a statutory regime of apportionment, the historic 'first past the post' principle applies on enforcement of judgments or settlements, and the effect of a judgment or settlement is that it gives priority over other claimants who have not yet obtained a judgment, award or settlement. It is no part of the court's function or jurisdiction to impose on the parties some form of informal insolvency regime.

Herridge plaintiffs submit this is exceptional case

1. The Herridge plaintiffs submit that the court should make a freezing order so that any shortfall in recovering damages from Mrs Campbell should be shared equally between all the Parkerville plaintiffs. Senior counsel, Mr Armstrong QC, advanced three reasons why this is an exceptional case warranting the making of a freezing order. First, it would be unfair for one group of plaintiffs to 'steal a march' on another so that the settling groups' share of Mrs Campbell's asset pool is unjustifiably greater.
2. The second reason advanced by the Herridge plaintiffs in their written submissions is that in the Principal Judgment and in the Trial Orders, the court drew no distinction between different or differently represented plaintiffs ‑ they all bore the consequence of the same negligence ‑ and so it would be both unfair and subversive of the court decision were some plaintiffs allowed a greater recovery from Mrs Campbell than were others.
3. In his oral submissions Mr Armstrong submitted that a reason for the court to make a freezing order is the court's management of the Parkerville Proceedings. All plaintiffs and defendants were party to the management plan for the Parkerville Proceedings, the issue of liability in all actions was tried at the same time and the court has made orders in relation to the quantification of damages. In those circumstances, Mr Armstrong submitted, the order in which judgments or settlements establishing the plaintiffs' claims are obtained should not determine priorities in recovering under Mrs Campbell's insurance policy.
4. Mr Armstrong submitted that the court has the power and should exercise its discretion, to preserve the integrity of its own procedures by controlling what happens to the defendants' assets, after the court has determined that those assets are exposed, in common to the claims of all of the plaintiffs. Mr Armstrong said that the plaintiffs rely particularly on the second aspect of the role of a freezing order, namely, to preserve the integrity of the court's own processes. Mr Armstrong submitted that the integrity of multi‑plaintiff proceedings, as a form of procedure, and the integrity of the court's case management of large claims like this and, indeed, the integrity of any class action procedure, is seriously undermined if after judgement on liability, there is then an unseemly rush of the different plaintiffs to get first past the post.
5. Mr Armstrong submitted that the plaintiffs are trying to preserve an orderly way for the court to supervise the distribution of the limited assets of Mrs Campbell as between all of the plaintiffs who are entitled to benefit from the simultaneous and also, in some respects, joint judgment that all of those plaintiffs obtained.
6. A third reason advanced by Mr Armstrong is that if the court does not restrain Mrs Campbell from paying plaintiffs who obtain a settlement or judgment in the chronological order in which they obtain a settlement or judgment, it will result in an inconvenient and unworkable situation. Mr Armstrong submitted that such a situation would create a race amongst the plaintiffs to have their damages assessed first which would result in an undue burden on the resources of the court and result in the court, in effect, allocating priority amongst the plaintiffs by the order in which the court assessed their damages. The alternative proposed by the Herridge plaintiffs is that the court should exercise its powers and procedures so that the insurance monies were shared rateably between the plaintiffs who make out their claims by settlement or judgment.

1. I am not persuaded by the arguments advanced by Mr Armstrong notwithstanding their legal coherence and appeals to fairness and equity.
2. There is, in effect, one pot of money with numerous claimants, not all of whom, in view of the insurance policy limit, may have their claims fully satisfied. Satisfying the claims on a global pro rata basis is not necessarily fairer than on a claim by claim basis according to chronological priority. The ordinary rule of chronological priority involves hardship for plaintiffs who are not at the front of the queue. That may involve a degree of unfairness where the result does not reflect the relative degree of diligence demonstrated by the claimants in pursuing their claims. On the other hand, not following the chronological approach may involve a degree of unfairness to those who have obtained judgment or settlement who are precluded from accessing the fruits of their judgment or settlement until all claims are determined. Furthermore, encouraging settlement may be thwarted by a pro rata system that depends on the determination of all claims before a payout.
3. It would be unfair on the Herridge plaintiffs if the resolution of their claims by judgment or settlement were delayed by order of the court while the resolution of the claims brought by other plaintiffs overtook them, if the other plaintiffs whose actions were accelerated were so enabled to recover the proceeds of insurance cover which would otherwise have been, but in the event would not be, available to satisfy the claims of the Herridge plaintiffs whose actions have been retarded.
4. I accept that the court management of the Parkerville Proceeding has had an effect on how the actions making up the Parkerville Proceeding would otherwise have proceeded. This was the very object of the case management. But there is no evidence that the court management of the Parkerville Proceedings has caused the claims of the Allianz and IAG plaintiffs to be established before the Herridge plaintiffs have established their claims when that would not otherwise have been the case. The Herridge proceeding consists of claims by 196 plaintiffs. It was never proposed by the Herridge plaintiffs that the court should proceed in any way other than determining questions of liability before assessing the damages of each plaintiff. Judgment on liability was handed down on 29 March 2019. Twelve months have elapsed since then and the Herridge plaintiffs' claims are not all ready for assessment. Indeed, the Herridge plaintiffs have delivered particulars of loss and damage for the purposes of assessment in respect of only 20 of the 196 Herridge plaintiffs. I do not attribute any lack of diligence to the Herridge plaintiffs or their solicitors. Senior counsel explained that prior to the trial of the issues of liability the Herridge plaintiffs delivered summary loss claims for each of the plaintiffs for the purposes of mediation. They were not worked up as fully as loss claims for trial because the costs were prohibitively expensive. However, the point is that establishing their claims by judgment or settlement has not been delayed by the case management procedures adopted by the court.
5. I accept that the court has power, generally speaking, to ensure that its procedures do not work injustice. In Cox v Bankside Members Agency Ltd,[29] Sir Thomas Bingham MR observed that in a case in which two action groups independently suing the same defendants were at odds as to which claims should be tried first, it would be open to the judge trying the first case to delay giving any judgment establishing the claim until judgment was given in the second case. However, such an approach is not open in this case because the Allianz and IAG plaintiffs have established their claims by settlement and do not require any order of the court to give effect to them.
6. Peter Gibson LJ agreed with the reasons of the Master of the Rolls but added a thought of his own which Mr Armstrong says applies to the present plaintiffs' situation. Peter Gibson LJ said:

The one exception is where a group judgment is obtained or where more than one judgment are obtained at the same time. In such circumstances, subject to any agreement to the contrary, the successful litigants will, it is accepted, take rateably. That is only right and proper, those litigants being in the same position as each other in relation to the establishing of their claims and there being no sensible or fair alternative. Further, I see no reason in principle why the court cannot in the interests of fairness in an appropriate case, such as obtained in Banque Financiere de la Cite v Pare (Battersea) Ltd (Court of Appeal, 20 April 1993, unreported), engineer a situation wherein judgments are given simultaneously so as to achieve a rateable entitlement. But I am wholly unpersuaded that it would be right for this court now to engineer such a situation in relation to all the diverse claims which have been and have yet to be established. I am simply unable to say that this is what fairness requires in the present complex situation.

1. In Cox v Bankside the court had undertaken an elaborate process of case managing the different proceedings and the plaintiffs submitted that in circumstances where they were all subject to this close case management procedure, the court was by making decisions about the order of hearing of claims, itself going to be ‑ as Mr Armstrong put it ‑ picking winners. The Court of Appeal concluded that the court was not able to do anything to displace the ordinary rule that first in time is first in line. Mr Armstrong submitted that Peter Gibson LJ made it clear that it would be a different situation if it were a problem of coincident plaintiffs.
2. I am not assisted by the exceptional case referred to by Peter Gibson LJ. Peter Gibson LJ referred to where more than one judgement is obtained at the same time or where the court might engineer a situation wherein judgements are given simultaneously so as to achieve a rateable entitlement. His Lordship is there referring to final judgements which entitle plaintiffs to payment, not, as in this case judgments determining liability but not giving rise to an entitlement to be paid.
3. The Herridge plaintiffs have not advanced any scheme for pro rata distribution which would be operable in practice. When would the freezing order cease? Upon the last of the Herridge plaintiffs' claims being established by judgment or settlement? If so, the payout of the Allianz and IAG plaintiffs' claims may be delayed by years if each of the Herridge plaintiffs' claims, or even a significant number of them, must be resolved by court assessment rather than settlement. The legal costs incurred by Mrs Campbell in resolving the Herridge plaintiffs' claims and interest incurred on the settled claims and earlier claims resolved by assessment may erode a significant part of the insurance monies available to payout the claims. How would the court ensure that at the end of the process all of the claims were paid out on a pro rata basis? What is to be done about the claims of Mr and Mrs Elwood, which have already been satisfied by payment out of the insurance monies? The court is not aware of any statute, subordinate legislation or common law authority for devising and imposing such a scheme.

1. As a condition of the making of a freezing order, the court will normally require appropriate undertakings by the applicant to the court, including the usual undertaking as to damages.[30] If it is demonstrated that the applicant has or may have insufficient assets within the jurisdiction of the court to provide substance for the usual undertaking as to damages, the applicant may be required to support the undertaking by providing security.[31] The Herridge plaintiffs accept that the practice direction reflects the principle that freezing orders should 'in general' be supported by an undertaking as to damages.[32]
2. The Herridge plaintiffs have offered no undertaking as to damages. They submit that the court should not require such an undertaking for three reasons. First, this is not an ex parte application. Secondly, the underlying requirement for an undertaking is to provide a respondent, if the proceedings fail, with a remedy against the plaintiff with respect to any loss flowing from obedience to the freezing order. The Herridge plaintiffs say that in this case it is impossible to identify any loss that any person might conceivably suffer by reason of the freezing order. Thirdly, there are peculiar difficulties for the plaintiffs in multi‑plaintiff actions like the Herridge proceedings.
3. Senior counsel for Mrs Campbell, Mr Giles SC, submits that both Mrs Campbell and the other plaintiffs' groups may suffer loss as a result of a freezing order. First, interest accrues on all amounts which may ultimately be determined by judgments to be payable by Mrs Campbell and she is thereby prejudiced by any increase in her liability to pay interest through the further erosion of the insurance available to her and the increased risk that the insurance available will not be sufficient to cover all judgments. Second, an inability to settle and pay the other plaintiffs' claims results in extra costs, both Mrs Campbell's defence costs and exposure to the other plaintiffs' costs of the assessment process. Third, if settlements cannot occur because of a freezing order, for example with the RAC plaintiffs, Mrs Campbell will lose the chance of a settlement on terms more favourable than an assessment of damages. Fourth, the freezing order will, subject to arguments of frustration, place Mrs Campbell in breach of the contracts between her and the Allianz and IAG plaintiffs. Fifth, the other plaintiffs, whose rights, in effect, to settle with Mrs Campbell on terms satisfactory to them are interfered with, suffer loss. They are kept out of their money and are otherwise, in effect, forced to litigate.
4. This freezing order is sought in unusual circumstances. The object of requiring a plaintiff to give an undertaking as to damages is to ensure that a defendant will receive compensation for any loss which she suffers by reason of the grant of the freezing order if it should turn out the order should not have been granted.[33] In this case, if the freezing order is granted, it is not obvious in what circumstances it should turn out that the order should not have been made. One circumstance may be that the amount of Mrs Campbell's insurance cover turns out to be sufficient to meet all of the plaintiffs' established claims. Another circumstance might be that the insurance cover proves insufficient to meet all of the plaintiffs' established claims but no orders are made which have the effect of requiring all of the claims to be paid on a pro rata basis. In either circumstance I find, substantially for the reasons given by Mr Giles, that Mrs Campbell and the Allianz and IAG plaintiffs may suffer loss and damage as a result of the wrongful making of the freezing order.
5. I accept that it may be difficult for the Herridge plaintiffs to give an undertaking as to damages but it is necessary for the court to take into account that the giving of the usual undertaking as to damages is the price paid by the plaintiffs for obtaining the very significant relief constituted by the granting of a freezing order.
6. Mr Armstrong submitted that if the court would grant a freezing order but for the lack of an undertaking as to damages being offered, then the court should give the Herridge plaintiffs an opportunity to provide such an undertaking. However, I have determined that I would not grant the freezing order even if an undertaking as to damages were offered. Accordingly, it is not necessary to pursue the question any further.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

Research Orderly to the Honourable Justice Le Miere

[1] Daniel Herridge v Electricity Networks Corporation t/as Western Power [No 4] [2019] WASC 94.

[2] PT Bayan Resources TBK v BCBC Singapore Pte Ltd [2015] HCA 36; (2015) 258 CLR 1.

[3] Duro Felguera Australia Pty Ltd v Trans Global Projects Pty Ltd (in liq) (2018) 53 WAR 201.

[10] The assets of the prospective judgment debtor might be disposed of, dealt with or diminished in value.

[14] Iraqi Ministry of Defence v Arcepey Shipping Co SA (The Angel Bell) [1981] QB 65.

[15] Norilya Minerals Pty Ltd v Ireland (Intervener Commonwealth Development Bank of Australia) (1994) 12 WAR 485.

[16] Frigo v Culhaci [1998] NSWCA 88.

[17] Mobil Cerro Negro Ltd v Petroleos de Venezuela SA [2008] EWHC 532; [2008] 2 All ER (Comm) 1034.

[19] Ketchum International PLC v Group Public Relations Holdings Ltd [1997] 1 WLR 4, 10.

[20] Mediterranean Feeders LP v Bernd Meyering Schiffahrts (Unreported, EWCA Civ, 5 June 1997).

[21] Holyoake v Candy [2018] Ch 297 Ch D.

[22] Palmer v Parbery (2019) 136 ACSR 26.

[24] Riley McKay Pty Ltd v McKay [1982] 1 NSWLR 264, 276.

12. I am conscious that interest continues to accrue on the plaintiffs' claims and costs involved in the damages assessment process continue to erode the insurance limit. Settling the claims prior to the assessment hearings and then payment of the settlement sums stops interest from accruing. Settling prior to the assessment hearings also reduces costs and eliminates the risk of the Court awarding the plaintiffs a higher amount than under a negotiated settlement.

13. Based on my knowledge of the quantum material served in these proceeding, I do not agree with Mr Walsh that the total value of all plaintiffs' claims in the Parkerville Proceedings including interest and costs will be well in excess of $75 million. I do not agree that it is inevitable that Mrs Campbell's insurance will be insufficient to pay the plaintiffs' claims for damages in the Parkerville Proceedings, particularly if timely and reasonable settlements are achieved.

14. There is an inherent disadvantage to all parties, including Mrs Campbell if timely, reasonable settlements cannot be achieved as interest and costs continue to accrue as Mrs Campbell's exposure to interest and costs continues to increase.

[27] Chubb Insurance Company of Australia Ltd v Moore [2013] NSWCA 212; (2013) 302 ALR 101.

[28] See for example Prichard v Westminster Bank [1969] 1 WLR 547 where Lord Denning said: 'The general principle when there is no insolvency is that the person who gets in first gets the fruits of his diligence'; and James Bibby Ltd v Woods [1949] 2 KB 449 where Lord Chief Justice Goddard said: 'Garnishee proceedings are one form of execution and, as I have said more than once in the course of the argument, it's not infrequently happens that where there are several claims or may be several claims against money the person who gets in first gets the fruits of his diligence'.

[29] Cox v Bankside Members Agency Ltd [1995] 2 Lloyd's Law Reports 437.

[30] Consolidated Practice Directions 9.6.1. [16].

[31] Consolidated Practice Directions 9.6.1 [17].

[32] Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 [43].