FMP Group (Australia) Pty Limited v Coffs Harbour Auto Electrical Pty Limited and Ors

DISCUSSION

1. The Dust Diseases Tribunal Regulation 2019 (NSW) ('DDTR') commenced to operate on 1 September 2019. It repealed and replaced the 2013 Regulation. So far as the present matter is concerned, DDT Regulations 55(1) and (2) are identical to the predecessor DDT Regulations 56(1) and (2). Further, Division 6 headed "Special Provision for Apportionment Claims Commenced after the Plaintiff Claim Finalised" appears to be the same in both the 2013 and 2019 versions.
2. The earlier Regulation was the subject of appellate consideration on a number of occasions. The plaintiff submits that the previous decisions remain binding authority and continue to control the operation of the 2019 DDTR.
3. Division 5 of the DDTR deals with the apportionment and the making of immediately enforceable apportionment determinations. The intent of the scheme is to prevent the final determination of an injured plaintiff's claim from being delayed by contribution disputes: QBE Insurance (Australia) Limited v Wallaby Grip Limited [2007] NSWCA 43, Handley AJA, [15] (with whom Hodgson and Campbell JJA agreed).
4. The intention is encapsulated in Clause 55. Clause 55, Division 5 of the DDTR states: '(1) An agreement or determination as to apportionment among defendants for the purposes of this Division is conclusively binding on the defendants for the purposes of the settlement, or determination by the Tribunal, of the plaintiff's claim and payment of the plaintiff's damages.'
5. Division 6 of the DDTR makes claims such as the present, apportionment claims commenced after the original claim has settled or determined, subject to the CRP. Division 5 of the DDTR, subject to certain modification, applies to a new cross claim and to new defendants: Clause 61. The rationale for Division 5 of the CRP to apply to new cross claims is to give an incentive to defendants and cross-defendants to act commercially in resolving their dispute: Bradford Insulation Industries Pty Limited v Babcock Australia Pty Limited [2011] NSWCA 117, [67], per Sackville AJA, with whom Macfarlan JA agreed.
6. In QBE Insurance (Australia) Limited v Wallaby Grip Limited & Ors [2007] NSWCA 43; (2006) 4 DDCR 331, Hodgson JA (in a short addendum to his agreement with Handley AJA) said this referring to the CRP (4 DDCR at 333): '2. I would add to Handley AJA's reasons the following further consideration. The President in his reasons did not take into account the relevant consideration that, if the contribution claims were removed from the claims resolution process on the ground that the object of achieving early resolution of the plaintiff's claim, this could provide a disincentive for defendants to settle in the future and thus tend to reduce the utility of the claims resolution process. One of the objects of the process is to ensure that defendants are not held back from settling claims by plaintiffs on the ground that they cannot be confident of contribution from cross-defendants until they have prosecuted cross-claims to a conclusion. If settlement with a plaintiff justified removal of contribution claims by plaintiffs in the confident expectation of an early provisional resolution of their claims against cross-defendants, so part of the utility of the claims resolution process would be prejudiced.'
7. The leading judgment in that case was that of Handley AJA who said (4 DDCR at 335): '15 Division 5 establishes a procedure for the summary but provisional determination of contribution claims in order to facilitate settlement of the plaintiff's claim and the satisfaction of any judgment he may obtain by judicial decision or settlement. A defendant or cross-defendant who is dissatisfied with the summary determination can pursue its strict legal rights and seek a more favourable determination at a trial but will be subject to significant costs sanctions if a substantially better result is not achieved. Meanwhile the summary determination is immediately enforceable. A clear purpose of the scheme is to prevent the final determination of the plaintiff's claim being delayed by contribution disputes.'
8. Later in the judgment, Handley AJA said (4 DDCR at 338); '35 …. Division 5 permits contribution to be determined by an Assessor without all defendants having served cross-claims on each other and on all cross-defendants. 36 In my judgment the Tribunal is entitled and bound to give effect to such a determination by entering appropriate verdicts and judgments. Since the defendants have satisfied the consent judgments against each other and the cross-defendants for the contributions determined by the Assessor.'
9. In Power Technologies Pty Limited v Energy Australia [2010] NSWCA 107, Allsop P explained at [3] that the reference to "appropriate verdicts and judgments" by Handley AJA at [36] of QBE Insurance (Australia) Ltd v Wallaby Grip Ltd (supra) was not judgments on, or disposing of, the cross-claims but orders for payment to fund any settlement with the plaintiff. In this regard, Allsop P explained at [3] that the "claims resolution process could be used to extract money from defendants and cross-defendants to contribute towards a settlement with a plaintiff, even if they (the defendants or cross-defendants) had to be compelled to that position by the use of the claims resolution process after the settlement with the plaintiff had occurred."
10. It is important to note that an apportionment determination, even in respect of new cross-claims and new defendants is conclusively binding for the purposes of the settlement or determination by the Tribunal of the plaintiff's original claim and the payment of the plaintiff's damages: Clause 55(1). However, the determination is not binding for the purposes of the subsequent determination by the Tribunal of a dispute as to apportionment: Clause 55(2). Nonetheless, if a new defendant disputes the contribution it is liable to make and the Tribunal's judgment does not "materially improve" the defendants position, it is liable to pay the other party's costs assessed on an indemnity basis: Clause 55(5).
11. The leading judgment in Power Technologies Pty Limited v Energy Australia (supra) was delivered by Sackville AJA (agreed with by Allsop P and Beazley JA). At [32] Sackville AJA quoted the passage at [15] from Handley AJA's judgment. At [42]-[58] Sackville AJA considered QBE Insurance (Australia) Limited v Wallaby Grip Limited & Ors (supra) in detail. His Honour said the decision stood for a number of propositions including, at [56(iv)], "the Tribunal is bound to give effect to such a determination [that is, the CAD] by "entering appropriate verdicts and judgments".
12. To resist the plaintiff's application, the Lindsay defendants refer my attention to Bradford Insulation Industries Pty Limited v Babcock Australia Pty Limited [2011] NSWCA 117 at [5] where Hodgson JA said: 'In order that a person seeking contribution in separate proceedings be able to rely on the determination as binding (and thus support an order for payment under s 90 of the Civil Procedure Act 2005), it would appear that the person has to show that the determination had such a connection with the settlement or determination of the plaintiff's claim that it can be found to be "for the purposes of" that settlement or determination; and it may be very difficult for this to be shown unless the new proceedings are commenced very promptly.'
13. It is upon that authority that the Lindsay defendants submit that as the making of an interim payment is not an absolute right in new cross claims as because FMP did not act promptly, and as a result of the determination obtained under the DDTR, even though it was lawfully obtained and in accordance with the policy of giving incentive to parties to act commercially in resolving their dispute, it was not obtained for the purposes of the settlement, or determination by the Tribunal, of the plaintiff's claim.
14. The Lindsay defendants detail the history of correspondence between the parties, which I do not propose to repeat here, and submit that FMP did not "act promptly" in commencing and prosecuting these proceedings. Thus, they submit the nexus with "for the purposes of a settlement or determination of the plaintiff's claim" is lost.
15. They further submit that what FMP are attempting to do is to use the "rough and ready" process of apportionment determinations to its advantage by having the benefit and full use of $368,000.00 of the Lindsay defendants' money whilst it prosecutes its contribution claim.
16. The authority that the Lindsay defendants rely upon involved Babcock satisfying a consent judgment obtained against it by the plaintiff. Babcock then instituted proceedings in the Tribunal claiming contributions from a number of supplier companies, including Bradford and CSR. Babcock invoked the CRP in relation to its contribution claims not withstanding that they had been made in separate proceedings, and not by way of a cross-claim in the original proceedings commenced by the plaintiff. Bradford and CSR contended that the CRP was only available in relation to cross-claims filed in the original proceedings. The Tribunal ruled in favour of Babcock and the appellant, Bradford, sought leave to appeal from that decision.
17. The Court of Appeal upheld the determination of the Tribunal to the effect that the contributions assessor's determination of the apportionment should be upheld and a payment order made.
18. With respect, Justice Hodgson's dicta has to be read in the context of the full judgment. The remarks relied upon fall within the following context: '2 One matter adverted to in argument was that it, Div 6 of Part 4 of the Dust Diseases Tribunal Regulation 2007 applied to separate proceedings for contribution, not brought as cross-claims in the original claim for damages, there was no time limit of two years provided by s 26 of the Limitation Act 1969, running from the time when judgment was obtained in the original proceedings. 3 If Div 6 does apply to separate proceedings for contribution, then cl 55 of the Regulation means that they are subject to the claims resolution process, and are liable to be removed from that process only in the limited cases specified in cl 22. It might be thought that the Regulation could not reasonably have intended that the rough and ready procedure of the claims resolution process should apply to proceedings brought for contribution up to two years from the time when the judgment was obtained in the damages proceedings 4 There is some force in that consideration, but in my opinion it is far from sufficient to displace the considerations discussed by Sackville AJA. 5 One matter that removes the force from that consideration is that a determination concerning contribution under the claims resolution process is binding on defendants "for the purposes of the settlement, or determination by the Tribunal, of the plaintiff's claim and payment of the plaintiff's damages: cl52. In order…… [then follows the passage quoted by the Lindsay defendants].'
19. My reading of those passages in the correct context does not suggest that his Honour was departing from the usual practice where the Tribunal makes interim payment orders on the basis of the apportionment as contained in the CAD.
20. In the same decision Sackville AJA came to the following conclusion:'48 It might be thought that the language of Div 6 Part 4 of the DDT Regulation 2007 clearly demonstrates an intention that a modified CRP is to apply where, after settlement of the plaintiff's claim, an original defendant brings claims for contribution in separate proceedings. Clause 54 states that Div 6 applies to a claim for contributions (which is designated as "the new cross claim") by a defendant or cross-defendant to a claim, when proceedings on the contributions claim are commenced after the original claim has been settled or determined. This language plainly contemplates that the CRP, as modified by clause 58, is to apply to fresh contribution proceedings instituted by a defendant or cross-defendant after the original proceedings commenced by the plaintiff have been settled or determined.'
21. In CSR Limited v Wallaby Grip Limited [2012] NSWCA 154 the Court of Appeal upheld a payment order made by the Tribunal where the claimant had not brought a claim against the contributor required to make the payment.
22. The issue for the determination on appeal was whether the payment order was properly made. The Court of Appeal granted leave to appeal and dismissed the appeal.
23. Basten JA said this: '40 It is apparent from the reasoning of the assessor and the general nature of the plaintiff's claim for damages, that Amaca was not seeking to have CSR indemnify it for any part of its liability: it was merely seeking to have CSR joined as a responsible party liable to make a payment to the plaintiff. The result of an apportionment under the claims resolution process was thus to identify the proper several contributions of each defendant to payment of the plaintiff's damages. The result is not a final order, because the determination gives rise only to a liability to make an immediate payment, subject to adjustment if the outcome is disputed by one of the parties. The result, at the interim or provisional stage, following the assessor's determination, is thus quite different from the case of a plaintiff suing jointly liable tortfeasors, where the plaintiff is entitled to a damage amount for the full amount of his or her loss as against each tortfeasor and, subject to the preclusion of double recover, seeking to recover the full amount of the damages from either defendant.'
24. It seems to me that to not make a payment order, on the basis that such order would be contrary to the authorities, would be in error. There are Court of Appeal judgments as detailed above that accept that the payment order can be made in circumstances such as this, where the CAD has arisen in separate proceedings to those between the plaintiff and a defendant where no cross claims are on foot. The nexus with "for the purposes of the settlement", or determination by the Tribunal, of the plaintiff's claim has not been broken.
25. The Lindsay defendants also submit that the payment order ought not be made because FMP did not act "promptly". The history of communications between the parties is detailed in the annexures to the Affidavits of Alison Hunt and Guy Rumble, and I do not propose to repeat same here.
26. The complaint of failing to act promptly by the Lindsay defendants seems to rest on the circumstance where the proceedings were commenced on 5 December 2018, one day before the relevant limitation period ended, and that the Statement of Claim was served on 4 June 2019, one day before it would have gone stale.
27. It is clear to me from the correspondence attached to Ms Hunt's Affidavit that the Lindsay defendants were on notice of a potential claim against them from 8 November 2016. There were periods during which the Lindsay defendants did not respond to correspondence from FMP. I am not satisfied that FMP did not act sufficiently "promptly" so as to prohibit the making of a payment order.
28. At paragraph 15 of the written submissions on behalf of the Lindsay defendants reads as follows: 'Even if the Tribunal has power to make such an order as that sought by FMP, the justice of the case is against it. The policy of the DDTR and apportionment process is against defendants such as FMP not acting promptly and merely as a way of taking a substantial benefit ahead and instead of any significant effort in making out its contribution claim. The status quo should be maintained pending final determination of FMP's contribution claim; particularly in light of substantial ongoing uncertainty in the present economic environment.'
29. I understand this submission to mean that if I have a discretion to make the order, I should not do so as if the monies are paid to FMP by the Lindsay defendants, and the Lindsay defendants are successful in the contribution claim, the money may have dissipated due to the COVID-19 pandemic and the financial uncertainty it brings with it. The submission is also that if the order was made then FMP would have the benefit of money to which they may not be ultimately entitled.
30. Dealing with the question of my discretion firstly. The elements of Clause 55 are: 1. contribution assessment apportioning the contributions; 2. settlement or judgment with the plaintiff specifying the amount; 3. payment of the verdict monies to the plaintiff; and 4. satisfaction of those requirements results in the party (in this case the plaintiff, FMP) being entitled to a payment order.
31. I do not see that I have a discretion to exercise. The purpose and objectives of the claims resolution process are set out in Clause 12 of the DDTR. There are no policy considerations favouring the Lindsay defendants. In fact, all of the policy considerations to my mind are against the position adopted by the Lindsay defendants. If I were to adopt the Lindsay defendant's submissions, it could have the effect of encouraging delay in the resolution of the plaintiff's claims as it may allow arguments between defendants and cross-defendants about apportionment. Such a course would completely undermine the objectives of the CRP and frustrate attempts by defendants to settle claims with dying or extremely unwell plaintiffs, as they would be deprived of the confident expectation of an early provisional resolution of their claims against cross-defendants.
32. I also refer to the suggestion that FMP will have the benefit of a "large sum of money which will confer a significant forensic benefit" which in my view is not justified. If a payment order is made in favour of FMP, they have already paid the relevant sum to the plaintiff on 13 January 2017. They have been out-of-pocket, potentially, for more than 3 years. I do not accept the submission by the Lindsay defendants that the "justice of the case" is against making an order for payment. Quite the contrary, I accept that the conditions set out in clause 55 have been established, and I do not have a discretion to exercise, and I will therefore make the order for payment as sought in the motion.
33. The plaintiff seeks costs order requiring the costs be paid forthwith. I do not believe that to make such an order is appropriate at this stage. Whilst there is uncertainty about what the final outcome of the contribution dispute remains unresolved, it would not be appropriate that I force such a burden on the Lindsay defendants. The final disposition of this claim will have consequent cost orders, and I believe that this costs of this application ought be payable at the final conclusion of the proceedings.

ORDERS

1. I make the following orders: 1. Pursuant to Clause 55, Division 6 of the Dust Diseases Tribunal Regulation 2019 and in accordance with the Contribution Assessment of Mr J L Sharpe dated 4 February 2020 the fifth, sixth, seventh, eighth, and eleventh defendants pay to the plaintiff the sum of $368,000.00. 2. The fifth, sixth, seventh, eighth and eleventh defendants pay the plaintiff's costs of and incidental to this motion as agreed or assessed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 June 2020