MLC Ltd v J&W Management Services Pty Ltd [2001] VSC 241

408. I next turn to the allegations of the defendants that if they or either of them are liable to the plaintiff whether in breach of contract or in negligence any damages to be recovered by the plaintiff should be reduced having regard to the plaintiff's share in the responsibility for the damage. In its amended defence the defendants relied on the provision of s. 26 of the Wrongs Act 1958 (Vic) as amended by the Wrongs (Amendment) Act 2000. For the reasons previously expressed it is not necessary to consider this plea against the second defendant as I have concluded that the deceased and thereby the second defendant is not liable in damages to the plaintiff. In making these allegations no specific allegation was made on behalf of the first defendant that if the plaintiff was able to recover damages against it pursuant to s. 82 of the Trade Practices Act, the amount that should be awarded to the plaintiff should take into account the fact that loss suffered by Capita and thereafter the plaintiff had been partly due to the fault of Capita and the plaintiff.

411. In I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd[17], it was held by the Full Court of the Supreme Court of Queensland, comprising five members of the Court, that when regard was had to the inter-relationship between s. 82 and s. 87 (1) of the Trade Practices Act that s. 87 (1) of the Act, should be given the effect which its terms appear to require, namely that an order may be made requiring that the defendant to compensate the plaintiff for part only of the loss which is causally connected with the contravention with respect to complaint made. It was further held, that once a proceeding of a kind mentioned in s. 87(1) is before the Court, it has vested in it all the powers which s. 87 encompasses, whether or not the plaintiff presses for a s. 87 order and that the Court may properly mould the relief granted in such a way to achieve a fair result for both parties' and in doing so and consequently the Court may award only part of the loss causally connected with the contravention found. Accordingly it was held that in assessing damages under s. 82 of the Act, a Court is not confined to an "all or nothing" assessment but rather in order to achieve a fair result to both parties, it may take into account fault on behalf of a plaintiff, relevant to the loss suffered by a party acting in contravention of s. 52 thereby reducing the damages to be recovered by such plaintiff.

414. In Australian Securities Commission v Marlborough Gold Mines Ltd[18], the High Court held that in the case of Commonwealth Legislation uniformity of decision in interpretation is of sufficient importance to require a judge of a single court not to depart from an interpretation on such legislation by an Australian intermediate appellant court unless convinced that the interpretation was plainly wrong. On behalf of the plaintiff senior counsel submitted that the decision in I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd was wrong and should not be followed and that any damage able to be recovered by the plaintiff against the first defendant under s. 82 of the Trade Practices Act should not be reduced in the event of it being determined that there was fault on the part of Capita and or the plaintiff. Not withstanding argument addressed to the Court relevant to this matter, I would not be prepared to depart from the decision in I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd. However, as I referred it has not been alleged that any damages awarded to the plaintiff by reason of the first defendant's breach of the provision of s. 52 of the Trade Practices Act, should be reduced having regard to the fault of Capita or the plaintiff. Not withstanding that the reasons that I hereafter express, in my view damages to be recovered by the plaintiff in these proceedings should not be reduced.

417. In Astley v Austrust Ltd[19], it was held by a majority of the Court that where damages are to be awarded for breach of contract such damages may not be reduced under apportionment of liability legislation such as that provided by s. 26 of the Wrongs Act 1958 (Vic) where the plaintiff had sued in contract whether or not the plaintiff has or could have also sued in tort.

420. By the Wrongs (Amendment Act) 2000, s. 25 of the Wrongs Act 1958 was amended to introduce a definition of the word 'wrong' which was defined as follows -

(a) gives rise to a liability in tort in respect of which a defence of contributory negligence is available at Common Law: or

(b) amounts to a breach of a contractual duty of care that is concurrent and coexistent with a duty of care in tort."

Section 26 (1) of the Act was also amended by substituting for s. 26 (1) the following -

"(1) if a person (the claimant) suffers damage as a result partly of the claimant's failure to take reasonable care (contributory negligence) and partly of the wrong of any other person or persons -

(a) a claim in respect of the damage is not defeated by reason of the contributory negligence of the claimant: and

(b) the damage recoverable in respect of the wrong must be reduced to such extent as the court thinks just and equitable having regard to the claimant's share in the responsibility for the damage."

431. By the plaintiff's reply to the amended defence of the defendants not only did the plaintiff deny that it was guilty of contributory negligence but further or alternatively it made the plea:

"the defence of contributory negligence is not available in respect of the claims for breach of the terms alleged by paragraphs 6B(b) 7A(b) and 14(b) of the amended statement of claim as those contractual duties are not concurrent and extensive with a duty of care in tort."

435. The plea by the reply specifically related to alleged breaches of express terms of the agency agreements between Capita and the deceased and between the first defendant and Capita and between the first defendant and the plaintiff. In substance the plea of the plaintiff, by its reply, is that a breach of an express term of the agency agreements do not amount to breaches of a contractual duty of care that is concurrent and coexistent with a duty of care in tort and therefore if in consequence of such a breach or breaches the plaintiff suffers damages, such damages are not able to be reduced by application of s. 26(1) of the Wrongs Act having regard to the responsibility of the plaintiff for such damages. For the reasons previously expressed it is not necessary to consider the plea of the defendants insofar as it relates to any alleged breach by the deceased of an express term of the agency agreement entered into between him and Capita.

438. Insofar as I have determined that the first defendant acted in breach of an express term of its agreement with Capita dated 11 July 1989 in that by not forwarding the letter of 11 May 1990 to Cash Resources it had effectively waived the forfeiture of the contract of insurance by Capita thereby causing the plaintiff to suffer damage, I accept the plea of the plaintiff by its reply, that the plea of contributory negligence would not be available to the first defendant with respect to the damage thereby suffered by the plaintiff.

441. However, to the extent that I have concluded that by operation of law there was to be implied in the agency agreements had between Capita and the first defendant, and the plaintiff and the first defendant, that the first defendant was under a duty to exercise reasonable skill and care in its actions relevant to the subject policy of insurance and by breach of that duty the plaintiff suffered damage, such duty is concurrent and co-existent with a duty of care in tort and in such circumstances the plea of contributory negligence made by the first defendant must be had regard to.

444. By its amended defence the first defendants alleged that there was contributory negligence on the part of Capita and the plaintiff in that the plaintiff failed to correctly exercise its purported rights to cancel the policy in accordance with law; that it failed to instruct the defendants or either of them; that it failed to give notice to cancel the policy which complied with s. 59 of the Insurance Contracts Act; that it failed to require them or either of them to forward the letter of 17 May to the insured; that it failed to make proper inquiries of the defendants or of the insured as to whether the letter of the 17 May 1990 had been forwarded and received by the insured; that it failed to make proper inquiries as to the basis upon which the sums of money received after the 17 May 1990 were received; that it failed to inform the defendants or the insured that the plaintiff regarded the policy as being no longer on foot; and that it failed to send the letter of the 17 May 1990 or a copy thereof to be insured.

447. The letter of Capita dated 17 May 1990 was addressed to Cash Resources care of the deceased at the business address of the deceased being the business address of the first defendant. As I have previously referred to, that letter had it been received by Cash Resources would have constituted notice pursuant to s. 59 of the Insurance Contracts Act and it would have had the effect of cancelling the policy of insurance. The letter itself was addressed to Cash Resources care of the deceased. I am satisfied that as a probability it was received by the deceased as agent for the first defendant at his business premises, that being the business premises of the first defendant. It was the failure of the first defendant, the agent of Capita at the time to forward that letter to Cash Resources which resulted in the contract not being cancelled by Capita. Clearly by its contents and address the letter was directed to Cash Resources. It was reasonable for Capita to expect such an important letter, when regard is had to its contents, to be furnished, by its agent, the first defendant, to the insured. Capita did not need to instruct the deceased or the first defendant that it required the letter to be forwarded to Cash Resources. It was entitled, in my view, to rely on its agent, the first defendant, to send the letter on to Cash Resources and it was not at fault in not enquiring of the first defendant as to whether the letter had been forwarded to Cash Resources. The letter on its face informed the deceased, the first defendant, and Cash Resources, had it been delivered, that Capita regarded the policy to have lapsed and be no longer on foot. Having received the sum of $2,880 in June 1990, it was appropriate for it to be deposited, in the superannuation fund in which it was so deposited. Further, having regard to the payment of the sum of $1,696.50 in April 1994 accompanied by the "With Compliments" slip, it was appropriate for the plaintiff to credit that sum to the superannuation fund held in the name of Roberts. In my view, on the receipt of each of those sums there was no fault on behalf of either Capita or the plaintiff. In my view, in the circumstances of this case there was no contributory negligence on the part of Capita or the plaintiff which should cause damages which the plaintiff is otherwise able to recover in these proceedings to be reduced nor does there exist any matter which should reduce the damages that the plaintiff is entitled to recover under s. 82 of the Trade Practices Act by operation of s. 87(1) of that Act.

450. For the reasons expressed it is my view, the plaintiff is entitled to recover against the first defendant damages in the sum of $531,615.74. However, for the reasons I have also expressed the plaintiff is not entitled to damages against the second defendant, the administrator ad litem of the deceased.

453. It is ordered that there be judgment for the plaintiff against the first defendant in the sum of $531,615.74 and it is ordered that the first defendant pay the sum of $531,615.74 to the plaintiff. Further, on the plaintiff's claim against the second defendant, as administrator ad litem of the estate of the deceased Charles Warwick Mahony, it is ordered that there be judgment for the second defendant against the plaintiff and it is ordered that the plaintiff's proceedings against the second defendant be dismissed.

[1] (1935) 52 CLR 137 at 733.

[2] (1992) 7 ANZ Ins. Cas. 61-129

[3] (1983) 2 ANZ Ins. Cas. 60-510

[5] [1994] UKHL 5; [1995] 2 AC 145, at 193-194 (which was agreed to by Lord Keith of Kirkel, Lord Browne-Wilkinson, Lord Mustill and Lord Nolan).

[6] International Encyclopedia of Comparative Law, vol 11, Torts, ch 12, par 67.

[7] [2000] FCA 980.

[8] [1992] 2 NZLR 517.

[9] Whitehorse Distillers v Gregson Associates Ltd [1984] RPC 61.

[10] Salomon v Salomon & Co Ltd [1997] AC 22.

[11] Lee v Lee's Air Farming Ltd [1961] AC 12.

[12] (1996) 71 FCR 231.

[13] [1992] FCA 557; (1992) 39 FCR 31.

[14] [1989] ATPR (digest) 53, 193 at 53, 195.

[15] [1992] FCA 437; (1992) 37 FCR 526.

[17] [2000] QCA 383.

[18] [1993] HCA 15; (1993) 177 CLR 485 at 492.