Harradine v Cockatoo Dockyard and Ors

Court of Appeal (NSW)|2008-03-05|Before: O'Meally P

CITATION : Harradine v Cockatoo Dockyard and Ors [2008] NSWDDT 8 This decision has been amended. Please see the end of the judgment for a list of the amendments.

Alfred Edward Harradine (Plaintiff) Wallaby Grip (BAE) Pty Ltd (in liquidation) (Eighth Defendant) PARTIES : Amaca Pty Ltd (Cross-Defendant in the first cross-claim) BOC Limited (Cross-Defendant in the second cross-claim)

MATTER NUMBER(S) : 6185/2006; 6185/2006/1; 6185/2006/2

Dust Diseases Tribunal Regulation 2007 (cl 18(1); cl 48; cl 49; cl 52) LEGISLATION CITED: Dust Diseases Tribunal Act 1989 (s 32H) Uniform Civil Proceedure Rules (r 22.2) Law Reform (Miscellaneous Provisions) Act 1946 (s 5(1)(c))

CASES CITED: QBE Insurance (Australia) Limited v Wallaby Grip Limited and Ors [2007] NSWCA 43

Mr G F Little SC instructed by Turner Freeman, appeared for the Plaintiff

LEGAL REPRESENTATIVES: Mr D J Russell SC instructed by Middletons, appeared for the Eighth Defendant Ms N Lapthorne of DLA Phillips Fox appeared for the Cross-Defendant in the first cross-claim Mr T G R Parker SC instructed by Piper Alderman, appeared for the Cross-Defendant in the second cross-claim

JUDGMENT: Alfred Edward Harradine (Plaintiff) v Cockatoo Dockyard (First Defendant) Comcare (Second Defendant) Gin Gin Co-operative Sugar Mill Association Limited (Third Defendant) Fluor Australia Pty Limited (Fourth Defendant) A Sargeant and Co Pty Limited (Fifth Defendant) WorkCover Queensland (Sixth Defendant) Wallaby Grip Limited (Seventh Defendant) Wallaby Grip (BAE) Pty Limited (in liquidation) (Eighth Defendant) Wednesday 5 March 2008 RULING O'MEALLY P

By notice of motion pursuant to r 28.2 of the Uniform Civil Procedure Rules (UCPR), Wallaby Grip (BAE) Pty Limited (in liquidation) seeks the determination of separate questions. The notice of motion was filed on 29 February last, but amended today. The questions upon which separate determination is sought are: Does Clause 52 of the Dust Diseases Tribunal regulation 2007 and the decision herein of the Contributions Assessor dated 6 July 2007 entitle the plaintiff 1. to a judgment against BOC Limited, as if the Plaintiff had sued BOC Limited directly as a Defendant; 2. for an amount which represents 21.125 % of the Plaintiff's total damages?
On 1 August 2006, Alfred Edward Harradine issued a statement of claim seeking damages in respect of the diseases of asbestosis and asbestos related pleural disease (ARPD). Certain consequential injuries or disabilities are recited in the statement of claim, but they do not bear on the present question. It should, however, be observed that asbestosis and ARPD, unlike mesothelioma and carcinoma, are divisible injuries.

Mr Harradine seeks damages from Cockatoo Dockyard Pty Limited, Comcare, Gin Gin Co-operative Sugar Mill Association Limited, Fluor Australia Pty Limited, A Sargeant and Co Pty Limited, WorkCover Queensland, Wallaby Grip Limited and Wallaby Grip (BAE) Pty Limited (in liquidation).

By reason of cl 18(1) of the Dust Diseases Tribunal Regulation 2007 (the Regulation), his claim became subject to the Claims Resolution Process provided for by the Regulation. On 27 February 2007, the seventh defendant, Wallaby Grip Limited, issued a cross-claim against Amaca Pty Limited, seeking indemnity or contribution pursuant to s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 (the Law Reform Act). On 13 April 2007, the eighth defendant, Wallaby Grip (BAE) Pty Limited (in liquidation) (BAE), issued a cross-claim against BOC Limited (BOC) seeking indemnity or contribution under the same statutory provision.

Div 5 of the Regulation deals with apportionment of liability between defendants and cross-defendants, and a reference in Div 5 to a defendant includes a reference to a cross-defendant.

Cl 48 of the Regulation requires defendants (and cross-defendants) to a claim alleged to be liable to contribute to any damages recovered by a plaintiff, to agree among themselves as to the contribution each is liable to make to those damages. Cl 49 provides that if agreement is not reached within the time prescribed by cl 48 (the time depends upon the nature of the disease), the registrar is to refer the matter to a contributions assessor for determination.

The contributions assessor is required by cl 49(4) to determine the contribution each defendant is liable to make. The contributions assessor is to make that determination on the assumption that the defendants (including cross-defendants), are liable, and "solely" on the basis of the plaintiff's statement of particulars, which the Regulation requires a plaintiff to file, and the defendants' replies, and upon standard presumptions determined by the Minister by order published in the Gazette. The use of the word "solely" when three criteria are to be considered, might be thought odd if not solecistic.

On 15 June 2007, Mr J T Kearney of counsel, was appointed contributions assessor and on 6 July 2007, made a contributions assessment. He determined the contributions as follows: Cockatoo Dockyard Pty Limited, 0.625 per cent; Comcare, 3.125 per cent; Gin Gin Co-operative Sugar Mill Association Limited, 5 per cent; Fluor Australia Pty Limited, 4.2 per cent; A Sargeant and Co Pty Limited, 14.35 per cent; WorkCover Queensland, 4.2 per cent; Wallaby Grip Limited, 13.125 per cent; BAE, 21.125 per cent; Amaca Pty Limited (Amaca), 13.125 per cent and BOC, 21.125 per cent. Those percentages total 100.

All defendants and the cross-defendant to the first cross-claim (Amaca) have accepted the apportionment. BOC, the cross-defendant to the second cross-claim, denies it is liable to the plaintiff. It says it is not a person who, if sued by the plaintiff, would be liable to him.

Even though damages have not been assessed, BAE submits that judgment should be entered against BOC for an amount which represents 21.125% of the plaintiff's total damages. It submits the summary determination is in the first instance enforceable by the plaintiff against all defendants and cross-defendants. BOC and the plaintiff submit that the Regulation does not authorise the entry of judgment against BOC until such time as it has been found liable to contribute by judgment given by the Tribunal.

Cl 52 of the regulation relevantly provides as follows: (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. (2) The agreement or determination is not binding for the purposes of the subsequent taking, or determination by the Tribunal, of a dispute between defendants as to apportionment. (3) If a defendant disputes the contribution that the defendant is liable to make to damages recovered by the plaintiff and the judgment of the Tribunal in the dispute does not result in the defendant materially improving the defendant's position, the defendant is liable to pay the costs of each other party to the dispute occasioned by the dispute, assessed on an indemnity basis.
So far as I am aware, the only case in which the Regulation has been considered in the Court of Appeal is QBE Insurance (Australia) Limited v Wallaby Grip Limited and Ors [2007] NSWCA 43. Speaking of Div 5 Handley AJA said at [15]: Division 5 establishes a procedure for the summary but provisional determination of a contributions claim 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 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.
When the decision was given on 12 March 2007, the Dust Diseases Tribunal Regulation 2001 had been repealed, but its provisions were repeated in the Regulation of 2007, gazetted on 2 March 2007, that is, between the Court of Appeal's reserving its decision and delivering its judgment.

Speaking of what had became cl 52(1), Handley AJA said: [32] The reference in cl 44(1) [sic 52(1)] to the apportionment being conclusively binding "for the purposes . . . of . . . payment of the plaintiff's damages" does not have the restricted meaning suggested. In the ordinary course a judgment in favour of a plaintiff in a mesothelioma case will be entered against the defendants who are liable for the full amount of the plaintiff's damages without reference to any apportionment between those defendants or any contribution recoverable from cross-defendants. [33] If a defendant's contribution claims succeed (sic) there will be a verdict for the defendant against the cross-defendants for their contributions but the defendant will not be entitled to enter judgment until the plaintiff's judgment has been satisfied . . . In appropriate circumstances an immediately enforceable order can be made in equity although the plaintiff's judgment has not been satisfied, and a cross-defendant can also be ordered to make a payment direct to a plaintiff. [34] It follows that a determination of the liability of cross-defendants for contribution "for the purposes of payment of the plaintiff's damages" does not entitled a plaintiff to judgment against those cross-defendants nor does it entitle a plaintiff to enforce their liability for the purposes of satisfying his judgment against the defendants. He is not concerned with how the ultimate burden of his judgment should be shared among those responsible. [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 judgment in favour of the plaintiff they would be entitled to judgments against each other and the cross-defendants for the contributions determined by the Assessor.
That case was in a number of respects different from this. First, the plaintiff there was suffering mesothelioma, an indivisible injury. His case had been removed from the Claims Resolution Process on the basis of urgency. Secondly, his action was settled and he had obtained judgment. There were cross-claims, and I ordered, upon application made subsequent to an initial order, that the provisions of Div 5 not apply. The Court of Appeal held I was in error in doing so. The fact that the plaintiff was suffering an indivisible injury and had obtained judgment, that is, he had recovered damages, distinguishes QBE from the present case. That does not mean, of course, that the statements of principle recited in the judgment of Handley AJA are inapposite to the present question.

BAE wants an affirmative answer to the first question upon which a determination is sought, but now says that QBE is authority for the proposition "that a plaintiff, in a case of an indivisible disease, recovers all his damages against every defendant he sues. Those defendants are then entitled to obtain contribution from cross-defendants in the percentages assessed" by the contributions assessor under Div 5 of the Regulation.

In accordance with what was said in QBE in pars 32 to 34, a plaintiff cannot recover directly against cross-defendants. In cases of indivisible injury, every defendant whose conduct has made a material contribution to the injury is liable to compensate for the whole. In cases of divisible injury the situation is different; defendants are liable to compensate a plaintiff only for the damage caused by their contribution to the injury.

If a plaintiff suffering a divisible injury does not sue all available defendants and there are "empty chairs at the table", the plaintiff may recover damages only against those sued. If a defendant who negligently contributed to a plaintiff's damage is absent, or has ceased to exist, or is without means to satisfy a judgment, a plaintiff will recover less than he or she might otherwise be entitled to recover.

Cl 49(4) requires the contributions assessor to determine the contribution that each defendant is liable to make. Contribution to what, asks BAE. Cl 48(1) provides the answer. Cl 48(1) is as follows: The defendants to a claim who are alleged to be liable to contribute to any damages recovered by the plaintiff must agree among themselves as to the contribution that each is liable to make to those damages. That is, the contribution must be to damages recovered by the plaintiff. To suggest contribution must be made before the plaintiff recovers damages is akin to putting the cart before the horse or the appeal before the trial. Damages are recovered only after a plaintiff obtains judgment by agreement or following a hearing. Mr Harradine's case has not been settled, nor has there been a determination by the Tribunal. He has not obtained judgment.
Mr Russell SC for BAE, submits that the regulation creates what he has called a "parallel universe", and in this universe neither the common law nor the Law Reform Act apply. The Regulation is said to replace the statute and the common law in those cases to which the Regulation applies. That this is so, he says, is evident from the terms of subcl (2) of cl 52 of the Regulation, which says: The agreement or determination is not binding for the purposes of the subsequent taking, or determination by the Tribunal of a dispute between defendants as to apportionment.
It is submitted on behalf of BOC that the Regulation, or the parts to which I have referred, does not, as a matter of construction, mean that a judgment must now be given for the plaintiff against BOC. This is because the plaintiff is not a party to, and is not bound by the contributions assessment process. Cl 52(1) is binding upon defendants and cross-defendants. It is not binding upon a plaintiff.

Mr Parker SC for BOC, says that whatever other effect cl 52(1) might have, it does not affect the nature of judgments given by the Tribunal on plaintiffs' claims. Judgments must reflect the Tribunal's findings determined either after a contested hearing between a plaintiff and the sued defendants, or by agreement between the parties, on the claim pleaded by a plaintiff. It is, he says, only after that point that cl 52(1) comes into play to determine on a preliminary basis the rights of the defendants and cross-defendants with respect to meeting the liability created by judgments.

Mr Little SC for the plaintiff, is concerned that if judgment is entered against BOC in favour of the plaintiff, or if BOC is required by order to make a payment of money to the plaintiff, the plaintiff is at risk of a claim for unjust enrichment. The plaintiff has not sued BOC and cannot make a case against it. If a claim for unjust enrichment succeeded because he failed to make a case against it, he could be deprived of damages to which otherwise he would be entitled. Such a result, Mr Little says, could not have been in the contemplation of the Regulation making authority. Liability, he submits, wherever used in the Regulation, means a liability found to exist.

Mr Little submits that the Regulation does not establish a regime for finding liability. It is a regime for determining how liability, once found, is to be satisfied. Parties dissatisfied with a determination by a contributions assessor can have that determination reviewed subsequently. Mr Little submits that the Regulation was not intended to impose, and could not have the effect of imposing a liability on a person not sued by the plaintiff to pay damages to the plaintiff.

The phrase "damages recovered" in cl 48(1) is an expression in the past tense, referring to a past event, an event which could occur only after a hearing or by agreement. It thus seems to me that the submissions of Mr Parker and Mr Little are well-founded.

There is, however, another matter which should be adverted to. If, contrary to my view, the Regulation does impose a requirement upon the Tribunal to enter a judgment against BOC in favour of the plaintiff, then it is submitted, to that extent, the Regulation is invalid and ultra vires the Regulation making power contained in s 32H of the Dust Diseases Tribunal Act 1989. S 32H relevantly provides: (1) The Governor may make regulations for or with respect to the following: (a) the establishment of a claims resolution process for claims, with procedures for identifying the issues in dispute between the parties to a claim and the settlement of claims by alternative dispute resolution processes, (b) procedures and presumptions for the apportionment of liability between defendants and cross-defendants in connection with a claim, (c) . . . (2) Without limitation, this section authorises the making of regulations for or with respect to the following: (c) procedures and presumptions for the apportionment of liability between defendants and cross-defendants (including by providing for the making of determinations as to apportionment and for the determination by the Minister of standard presumptions as to apportionment), . . .
It is my view that "liability" where used in s 32H and in the Regulation, means liability which has been determined after a hearing or by agreement of the parties. S 32H authorises the Governor to make regulations concerning apportionment of liability between defendants and cross-defendants. It does not authorise the making of regulations imposing liability on a person, not sued by a plaintiff, to pay damages to a plaintiff, nor the entry of judgment against a person not sued by a plaintiff. If the Regulation does impose such a liability it is a liability not permitted by s 32H, and is ultra vires. Accordingly, the answer to the questions upon which separate determination are sought, are:
No.
Does not arise.

Though it has nothing to do with the matters dealt with in argument, there is a matter I wish to mention. It arises from the judgment of Handley AJA in QBE. In [25] it was submitted that an error of law was committed by "the failure of the President to deliver his full reasons before pronouncing oral orders on 18 August . . . ". The point was not decided, but Palmer v Clarke (1989) 19 NSWLR 158 at 173, was referred to. That was a case somewhat different from QBE. I had understood that it was always permissible for a judge to add to oral reasons after they were delivered, providing the decision was not altered. So much had been said by Gleeson CJ when Chief Justice of New South Wales. In 1995, in an article published in 25 WALR 213, Kirby J, when President of the Court of Appeal Division of the Supreme Court of New South Wales, said, amongst other things, "it is always possible and entirely proper for a judicial officer to revise ex tempore reasons, even extensively, without altering the substance or the orders which they contain".

If this is not acceptable practice for a judge of an inferior court of record it would, in my view, be of assistance if the Court of Appeal would say so in express terms.

If I might, with all respect to the Court of Appeal, also suggest that when it orders that a case returned to a lower court be heard by a judge other than the judge whose decision was appealed against, the reasons for that order be given. Doing so would enable the conduct which caused the order to be made to be avoided subsequently. In QBE the Court of Appeal ordered that the matter be "remitted to a judge of the Tribunal, other than the President." No reason for that order was given and Mr Parker SC, who appeared on the appeal, was unable to say that such an order was asked for.

The eighth defendant will pay the costs of the plaintiff and BOC of the separate hearing.

Mr G F Little SC, instructed by Turner Freeman, appeared for the Plaintiff Mr D J Russell SC, instructed by Middletons, appeared for the Eighth Defendant Ms N Lapthorne of DLA Phillips Fox appeared for the Cross-Defendant in the first cross-claim Mr T G R Parker SC, instructed by Piper Alderman, appeared for the Cross-Defendant in the second cross-claim

22/04/2008 - "defendant" amended to "cross-defendant" the last line of the quote of paragraph 32 of the Court Of Appeal's judgment - Paragraph(s) 14

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