Reinhold v New South Wales Lotteries Corporation

CATCHWORDS : TORTS AND CONTRACTS - prior findings of liability of both defendants for breach of contract and negligence - whether claims "apportionable claims" under Civil Liability Act - whether defendants "concurrent wrongdoers" under Civil Liability Act - principles to be applied in apportioning liability among concurrent wrongdoers - assessing respective degrees of responsibility - relevance of "unjust enrichment" - unavailability of contribution and indemnity among concurrent wrongdoers

Civil Liability Act 2002, Parts 3, 4, ss 34(1), 34A, 34(2), 35, 36 Civil Liability (Contribution) Act 1978 (UK), ss 1, 2(1) Civil Procedure Act 2005, ss 100, 101 Fair Trading Act 1987, s 42 LEGISLATION CITED : Law Reform (Miscellaneous Provisions) Act 1946, s 5 Law Reform (Miscellaneous Provisions) Act 1965, Part 3 Law Reform (Miscellaneous Provisions) Amendment Act 2000 Trade Practices Act 1974 (Cth), Part VIB Wrongs Act 1958 (Vic), Part IVAA

Amaca Pty Ltd v State of New South Wales [2003] HCA 44; (2003) 77 ALJR 1509 Astley v Austrust Ltd [1999] HCA 6; 197 CLR 1 Brian Warwicker Partnership v Hok International Ltd [2005] EWCA Civ 962 Burke v LFOT Pty Ltd [2002] HCA 17; (2002) 209 CLR 282 Chandra v Perpetual Trustees Victoria Ltd [2007] NSWSC 694; (2007) ANZ ConvR 481 Daniels v Anderson (1998) 37 NSWLR 438 Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd [2007] FCA 1216 Downs v Chappell [1996] 3 All ER 344 Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48; [2003] 2 AC 366 Eddy Lau Constructions Pty Ltd v Transdevelopment Enterprise Pty Ltd [2004] NSWSC 273 Elliott v Laverty [2006] NIQB 97 Ghunaim v Bart [2004] NSWCA 28; (2004) Aust Torts Reports 81-731 CASES CITED : I&L Securities Pty Ltd v HWT Valuers (Brisbane) Pty Ltd [2002] HCA 41; (2002) 210 CLR 109 J (A Child) v Wilkins [2001] PlQR 179 Macquarie Pathology Services Pty Ltd v Sullivan (NSWCA, unreported, 28 March 1995). Madden v Quirk [1989] 1 WLR 702 Metron Medical Australia Pty Ltd v Windahl [2007] VSCA 40 Nationwide News Pty Ltd v Naidu [2007] NSWCA 377 Niru Battery Manufacturing Co v Milestone Trading Ltd (No 2) [2004] EWCA Civ 487; [2004] 2 All ER (Comm) 289 Podrebersek v Australian Iron and Steel Pty Ltd [1985] HCA 34; (1985) 59 ALJR 492 Reinhold v New South Wales Lotteries Corporation [2008] NSWSC 5 Resource America International Ltd v Platt Site Services and Barkin Construction Ltd [2004] EWCA Civ 665 Rexstraw v Johnson [2003] NSWCA 287 Vinidex Tubemakers Pty Ltd v Thiess Contractors Pty Ltd [2000] NSWCA 67 Yates v Mobile Marine Repairs Pty Ltd [2007] NSWSC 1463

TEXTS CITED : V J Vann, "Equity and proportionate liability" (2007) 1 JOE 199 The Honourable Robert Debus MP, "Tort Law Reform in New South Wales: State and Federal Interactions" (2002) 8 UNSW L Rev 13

Werner Reinhold - Plaintiff PARTIES : New South Wales Lotteries Corporation - First Defendant Graeme John Baker - Second Defendant Julie Anne Baker - Third Defendant

Mr J B Simpkins SC/Mr T M Thawley - Plaintiff COUNSEL : Mr J T Gleeson SC/Ms T L Wong - First Defendant Mr J C Kelly SC/Mr R A Cavanagh - Second and Third Defendants

Piper Alderman - Plaintiff SOLICITORS : Eakin McCaffery Cox - First Defendant Boyd House & Partners - Second and Third Defendants

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

3532/06 WERNER REINHOLD v NEW SOUTH WALES LOTTERIES CORPORATION & 2 0RS (NO 2) JUDGMENT

1 These reasons deal with matters left for further argument and subsequent decision in the light of my judgment of 30 January 2008: Reinhold v New South Wales Lotteries Corporation [2008] NSWSC 5. 2 When the proceedings came back before the court on 22 February 2008, submissions were made on three matters. The first is the way in which liability for damages should be borne. It has been decided that the plaintiff ("Mr Reinhold") is entitled to damages of $2,000,000 for both breach of contract and negligence as against the first defendant ("Lotteries") and the second and third defendants ("the Newsagents") because of their actions and want of care in relation to cancellation of his ticket in Oz Lotto Draw 605 ("Ticket B"). The second and third matters to be dealt with are interest on damages and the question of costs. 3 The threshold question in relation to the first of these matters is whether the proportionate liability regime created by Part 4 of the Civil Liability Act 2002 applies to the liability of Lotteries and the Newsagents in relation to cancellation of Ticket B. If it does, liability will be split between Lotteries and the Newsagents in the way dictated by the proportionate liability provisions, so that each bears a distinct part of the burden without any ability to claim contribution or indemnity from the other. If it does not so that Lotteries and the Newsagents are both liable in full, questions of contribution and indemnity raised by the cross-claims of Lotteries and the Newsagents against each other will need to be addressed. Civil Liability Act, Part 4 - "proportionate liability" 4 It is the contention of Lotteries and the Newsagents that they are, in terms of Part 4 of the Civil Liability Act, "concurrent wrongdoers" in respect of "apportionable claims" and that the legislation applies to define and limit the liability of each of them. For reasons to which I shall refer presently, Mr Reinhold does not accept that Part 4 applies. 5 It is necessary to set out key provisions of Part 4 as follows: " 34 Application of Part (1) This Part applies to the following claims ( apportionable claims ): (a) a claim for economic loss or damage to property in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care, but not including any claim arising out of personal injury, (b) a claim for economic loss or damage to property in an action for damages under the Fair Trading Act 1987 for a contravention of section 42 of that Act.

(1A) For the purposes of this Part, there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action (whether or not of the same or a different kind).

(2) In this Part, a concurrent wrongdoer , in relation to a claim, is a person who is one of two or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim.

(3) For the purposes of this Part, apportionable claims are limited to those claims specified in subsection (1).

(4) For the purposes of this Part it does not matter that a concurrent wrongdoer is insolvent, is being wound up or has ceased to exist or died.

34A Certain concurrent wrongdoers not to have benefit of apportionment (1) Nothing in this Part operates to limit the liability of a concurrent wrongdoer (an excluded concurrent wrongdoer ) in proceedings involving an apportionable claim if: (a) the concurrent wrongdoer intended to cause the economic loss or damage to property that is the subject of the claim, or (b) the concurrent wrongdoer fraudulently caused the economic loss or damage to property that is the subject of the claim, or (c) the civil liability of the concurrent wrongdoer was otherwise of a kind excluded from the operation of this Part by section 3B.

(2) The liability of an excluded concurrent wrongdoer is to be determined in accordance with the legal rules, if any, that (apart from this Part) are relevant.

(3) The liability of any other concurrent wrongdoer who is not an excluded concurrent wrongdoer is to be determined in accordance with the provisions of this Part.

35 Proportionate liability for apportionable claims (1) In any proceedings involving an apportionable claim: (a) the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss, and (b) the court may give judgment against the defendant for not more than that amount.

(2) If the proceedings involve both an apportionable claim and a claim that is not an apportionable claim: (a) liability for the apportionable claim is to be determined in accordance with the provisions of this Part, and (b) liability for the other claim is to be determined in accordance with the legal rules, if any, that (apart from this Part) are relevant.

(3) In apportioning responsibility between defendants in the proceedings: (a) the court is to exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent under any relevant law, and (b) the court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings.

(4) This section applies in proceedings involving an apportionable claim whether or not all concurrent wrongdoers are parties to the proceedings.

(5) A reference in this Part to a defendant in proceedings includes any person joined as a defendant or other party in the proceedings (except as a plaintiff) whether joined under this Part, under rules of court or otherwise.

36 Contribution not recoverable from defendant A defendant against whom judgment is given under this Part as a concurrent wrongdoer in relation to an apportionable claim: (a) cannot be required to contribute to any damages or contribution recovered from another concurrent wrongdoer in respect of the apportionable claim (whether or not the damages or contribution are recovered in the same proceedings in which judgment is given against the defendant), and (b) cannot be required to indemnify any such wrongdoer." 6 These provisions of the Civil Liability Act under the heading "Proportionate liability" made significant changes to the law. Under older statutory schemes concerning concurrent liability (such as s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 which continues in force), a successful plaintiff is entitled to recover judgment against each defendant found liable for his or her loss and those defendants might, depending on circumstances, be entitled to contribution or indemnity among themselves. Those older statutory schemes leave undiminished the right of the successful plaintiff to recover against all wrongdoers - by way of "solidary liability"; and it is, in a real sense, unimportant to the plaintiff whether rights of contribution or indemnity arise among those wrongdoers. Part 4, by contrast, reshapes the liabilities of the wrongdoers so that each is separately liable for an amount reflecting a proportion of the plaintiff's loss or damage. The successful plaintiff's entitlements are correspondingly reshaped. 7 Part 4 is concerned with a class of claims different from that covered by s 5 of the Law Reform (Miscellaneous Provisions) Act 1946. That section and its regime of contribution among tortfeasors is confined to actions in tort. That limitation has prompted incursions of the law of negligence into fields it previously did not need to occupy: see, for example, Daniels v Anderson (1998) 37 NSWLR 438. Part 4, by contrast, is concerned with claims "in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care" (or for contravention of s 42 of the Fair Trading Act 1987). It thus straddles boundaries which, in other contexts, have seen different and perhaps anomalous results emerge according to whether a successful plaintiff's claim is in tort, in contract or of some other kind. The distinctions were formerly relevant to the question whether contributory negligence of the plaintiff might work to mitigate the liability of the defendant: see, for example, Astley v Austrust Ltd [1999] HCA 6; 197 CLR 1 and Part 3 of the Law Reform (Miscellaneous Provisions) Act 1965, inserted by the Law Reform (Miscellaneous Provisions) Amendment Act 2000; and I&L Securities Pty Ltd v HWT Valuers (Brisbane) Pty Ltd [2002] HCA 41; (2002) 210 CLR 109 and Part VIB of the Trade Practices Act 1974 (Cth). 8 Part 4 of the Civil Liability Act is concerned with a particular sub-class of claims in actions for damages arising from a failure to take reasonable care, being the sub-class that consists of claims "for economic loss or damage to property" which do not arise out of personal injury. Its coverage is in those ways narrower than that of s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 which applies in every case where "damage is suffered by any person as a result of a tort (whether a crime or not)". The nature of the tort and the nature of the loss or damage are, in the s 5 context, irrelevant. Are there "apportionable claims"? 9 In the present case, Mr Reinhold's claims are unquestionably claims "for economic loss" in "an action for damages" (the question whether a suit for equitable compensation is covered is discussed by V J Vann, "Equity and proportionate liability" (2007) 1 JOE 199 but does not arise here). The central question is therefore whether each of Lotteries and the Newsagents is, in terms of s 34(2) of the Civil Liability Act, a "concurrent wrongdoer". That raises the threshold question whether there are "apportionable claims" within s 34(1). And that, in turn, makes it necessary to revisit key findings stated in the 30 January judgment. 10 It was held at paragraph [197] of the 30 January judgment that the Newsagents were guilty of a breach of contract. This was because Ticket B was cancelled without the four conditions stated in rule 6(5) of the Oz Lotto Rules (and set out at paragraph [180] of the judgment) having been satisfied. In short, the rules (and therefore the contract) allowed a ticket to be cancelled only if it was returned to the place of purchase on the day of purchase and if the holder requested cancellation. It was held at paragraph [196] that Mr Reinhold neither returned Ticket B nor requested its cancellation. 11 It was held at paragraph [198] that Lotteries was also guilty of a breach of contract because the Newsagents, in effecting the cancellation of Ticket B, acted as Lotteries' agent. 12 At paragraph [199] of the 30 January judgment, it was held that Lotteries breached a duty of care in negligence owed by it to Mr Reinhold in that it failed to take reasonable care to identify the ticket to be cancelled. 13 At paragraphs [200] to [202], it was held that the Newsagents breached a duty of care in negligence owed by them to Mr Reinhold, in that they failed to exercise reasonable care and skill in executing and fulfilling his order, in particular by failing to exercise reasonable care and skill to avoid the risk that the second and complete ticket printed in response to his order (Ticket B) might be cancelled. 14 The conclusions just stated were repeated in summary form at paragraph [227] of the judgment: "Mr Reinhold has succeeded in establishing that

(a) Lotteries and the Newsagents were each guilty of a breach of contract, as against Mr Reinhold, by obtaining the cancellation of Ticket B through the acts of Ms Skinner at Terminal 3;

(b) Lotteries breached a duty of care in negligence owed by it to Mr Reinhold when it failed to take reasonable care to identify the ticket to be cancelled;

(c) the Newsagents breached a duty of care in negligence owed by them to Mr Reinhold when they failed to take reasonable care in giving to Lotteries information for the identification of the ticket to be cancelled; and

(d) the exclusion provisions in the Oz Lotto Rules do not preclude liability of the Newsagents and Lotteries to Mr Reinhold for these breaches; nor do they preclude recovery of damages by Mr Reinhold accordingly." 15 The matter of causation was dealt with at paragraph 229: "Mr Reinhold would not have been deprived of Ticket B and the Entry it reflected but for the cancellation which, as I have found, entailed a breach of contract, as against him by each of Lotteries and the Newsagents. And that cancellation would not have occurred but for the breaches of the duties in negligence owed to Mr Reinhold by both Lotteries and the Newsagents, being the duties related to the exercise of care and skill in the identification of tickets to be cancelled. The breaches of contract and of the duties of care were directly causative of Mr Reinhold's deprivation. In the terms used in s 5D(1) of the Civil Liability Act , those breaches were a necessary condition of the harm constituted by the deprivation and it is appropriate for the scope of the liability of Lotteries and the Newsagents to extend to that harm, they being, to the entire exclusion of Mr Reinhold, the persons with control of the process of ticket cancellation and with knowledge of the workings of that process. This last factor means that the risk to which Mr Reinhold was exposed was not an "obvious risk" as defined by s 5F of the Civil Liability Act ." 16 Consideration of matters of remoteness and quantum led to the following conclusion, stated at paragraph [236]: "The damages for both breach of contract and negligence are therefore the sum of $2,000,000 necessary to put Mr Reinhold into the position he would have occupied had the deprivation not occurred." 17 In the result, therefore, each of Lotteries and the Newsagents is, apart from any impact of the Civil Liability Act, liable to Mr Reinhold to the extent of $2,000,000 because of both breach of contract and negligence. But if Part 4 of the Civil Liability Act applies to all the claims concerned, the amount of the liability of Lotteries and the amount of the liability of the Newsagents will be limited to an amount determined by the court under s 35(1)(a) and, by virtue of s 35(1)(b), the court will not have power to give judgment for a sum greater than that limited amount. 18 There was some debate before me about the construction of Part 4 of the Civil Liability Act and the fact that its provisions are, in terms, concerned with "claims", not liability as such. But I am of the opinion that the several references to "claims" are references to determined or decided claims that have been established as sources of liability. In this respect, I adopt the construction advocated by Mr J T Gleeson SC on behalf of Lotteries and Mr J C Kelly SC on behalf of the Newsagents. 19 It seems to me clear that a person will be a "concurrent wrongdoer" only if the court makes findings about the existence of "loss or damage" and about which acts or omissions "caused" the loss or damage. It is only when those findings are made that it is possible to identify, as contemplated by s 34(2), each person whose acts or omissions, as found, "caused" the "loss or damage", as found. At that point, and not before, a person can be seen to be a "concurrent wrongdoer". 20 The relevant "claim" - that is, the claim in relation to which the identified person is a "concurrent wrongdoer" - can only be the claim in respect of which the findings concerning loss or damage and causation are made. That claim is, of necessity, a claim already litigated, not a pending or foreshadowed claim. Its nature and content (and, therefore, its status under s 34(1)) will be discoverable by looking at the findings that cause it to be determined as it is determined. If, on those findings, it is seen that the loss or damage (as established in "an action for damages") arose from a failure to take reasonable care and did not arise out of personal injury, the case will be within s 34(1)(a); and if it is seen that there was a contravention of s 42 of the Fair Trading Act, the case will be within s 34(1)(b). In either such case, the already litigated "claim" will be an "apportionable claim" because of s 34(1) and, if, on the findings made, the acts or omissions of several persons "caused" the "damage or loss" as found, the persons will be "concurrent wrongdoers". 21 The need to know the outcome of the claim in order to apply Part 4 is emphasised by s 34A. The operation of that section - and, therefore, the ambit of Part 4 as a whole - depends on the ability to know, among other things, whether a person "intended to cause" or "fraudulently caused" the "loss or damage that is the subject of the claim". These things can be judged only after the loss or damage and its causes have been identified through a process of fact finding and analysis. Viewed in prospect and in its pending state, a claim might allege an intentional or fraudulent act or omission, but it is impossible to say, at that point, whether any loss or damage was caused and, if it was, what caused it - in particular, whether it was intentionally caused or fraudulently caused. 22 On this basis, the nature of a "claim", for the purposes of Part 4, will be determined by what the court has decided in the case, not by what might be prayed or pleaded in an initiating process or points of claim. In short, "claim" refers to a claim as proved and established, not a claim as made or advanced. 23 This approach accords with that taken by Middleton J to analogous legislation of Victoria (Part IVAA of the Wrongs Act 1958 (Vic)) in Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd [2007] FCA 1216. After referring to the need for facts warranting apportionment to be put forward by a defendant at an early stage, his Honour said (at [31]): "The court, after hearing all the evidence, will then need to determine, as a matter of fact, whether the relevant claim brought by the applicant is a claim arising from a failure to take reasonable care." 24 The decision of Bryson AJ in Chandra v Perpetual Trustees Victoria Ltd [2007] NSWSC 694; (2007) ANZ ConvR 481 reflects the same approach. His Honour proceeded on the basis (at [110] and [111]) that the question of "concurrent wrongdoer" status is to be addressed and determined by reference to findings as to liability and causation already made in the proceedings. 25 Because the question whether a claim is, in terms of s 34(1)(a), one "arising from a failure to take reasonable care" is to be judged by reference to the findings in the proceedings, I do not accept that Mr Reinhold's claim for breach of contract (by reason of cancellation of Ticket B without Mr Reinhold's having returned it for cancellation or requested its cancellation) is not within s 34(1)(a). It was submitted by Mr J B Simpkins SC on Mr Reinhold's behalf that the breach of contract claim is outside s 34(1)(b) because the relevant contractual term was concerned with the fact of cancellation, however the cancellation may have arisen and regardless of questions of intention and questions of want of care. According to the submission made, a contract claim is within s 34(1)(a) only where the breach is a breach of an express or implied term requiring that reasonable care be taken - such as the contract claim arising from the solicitors' retainer in Astley v Austrust Ltd (above). The decision of Palmer J in Yates v Mobile Marine Repairs Pty Ltd [2007] NSWSC 1463, one of the very few cases in which there has been a direct application of Part 3 of the Civil Liability Act, was of this kind. 26 In the present case, there would have been a breach of the relevant contractual term had Lotteries or the Newsagents intentionally and knowingly cancelled Ticket B without Mr Reinhold's consent. Hypothetical examples of intentional breaches were referred to at paragraph [224] of the 30 January judgment. On the findings actually made, however, there was a breach of the contractual term because of actions entailing want of care rather than intention to breach or knowing breach. No one held any positive or conscious intention that Ticket B - the ticket with which Mr Reinhold left the shop - should be cancelled. Its cancellation was the product of the conduct of Lotteries and the Newsagents which entailed breach by each of a duty of care in negligence. The breaches of contract to which the cancellation of Ticket B gave rise were of the same character as the negligence. Each had as its central element failure to take reasonable care. 27 The case was thus one in which each relevant "claim", as determined by the court and according to the findings actually made, was a claim in an action for damages "arising from" the failure to take reasonable care that was also at the centre of the tortious claim in negligence. This is so of both the claims in tort and the claims in contract. That, in my view, is sufficient to bring the contract claims, as well as the tort claims, within s 34(1)(a) and it makes no difference that the breaches of contract, as alleged, were not framed in terms of failure to take reasonable care. 28 It is pertinent to note that the words in s 34(1)(a) ("an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care") do not follow the pattern found in the modified Part 3 of the Law Reform (Miscellaneous Provisions) Act 1965 adopted in 2000 and dealing with contributory negligence. Following Astley v Austrust Ltd (above), that Part 3 made a plaintiff's contributory negligence relevant to the assessment of damages for "a breach of a contractual duty of care that is concurrent or co-extensive with a duty of care in tort": s 8, definition of "wrong". The description in s 34(1)(a) of the Civil Liability Act, by contrast, shows a legislative intention going beyond contractual duties existing, as it were, in parallel with duties of care in tort. 29 Again, support for the approach I consider to be correct is found in the observations of Middleton J in Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd (above). His Honour said (at [30]): "Where a claim brought by an applicant does not have as one of its necessary elements any allegation of failing to take reasonable care, an additional enquiry into the failure to take reasonable care may become relevant in the course of a trial to determine the application of Pt IVAA. Even though the claims in this proceeding themselves do not rely upon any plea of negligence or a "failure to take reasonable care" in a strict sense, a failure to take reasonable care may form part of the allegations or the evidence that is tendered in the proceedings. At the end of the trial, after hearing all the evidence, it may be found that Pt IVAA applies. ' 30 I respectfully agree that a claim may properly be regarded as one "arising from a failure to take reasonable care" if, "at the end of the trial", the evidence warrants a finding to that effect and regardless of the absence of "any plea of negligence or a 'failure to take reasonable care'". The nature of the claim, for the purposes of Part 4, is to be judged in the light of the findings made and is not determined by the words in which it is framed. 31 There is good reason in policy to take this approach. The clear objective of Part 3 is to abolish "solidary liability" under which all defendants found guilty of relevant breach are jointly and severally required to meet an undissected verdict. The provisions reflect legislative views about allocation of risk as between plaintiffs and defendants. The New South Wales Attorney-General in office at the time of the enactment of Part 3 made this clear when he said of the new provisions: "[I]n cases of negligence not involving personal injury, considerations of prejudice to plaintiffs weigh less strongly than the value of limiting liability of defendants according to their share of responsibility, and as a consequence the CLA(PR) Bill proposes in Part 4 the introduction of proportionate liability in the context of economic loss and property damage."

(The Honourable Robert Debus MP, "Tort Law Reform in New South Wales: State and Federal Interactions" (2002) 8 UNSW L Rev 13). 32 The provisions of Part 4 are compulsory. They change substantive rights, so that a plaintiff's ability to obtain an adjudication of joint and several liability is removed where the circumstances are of the type to which the alternative regime of proportionate liability is applied. A case no doubt needs to be pleaded and proved by one or more defendants so as to engage the statutory provisions. But it will be the findings ultimately made that determine whether the statutory conditions compelling the court to adopt the proportionate approach are satisfied. 33 In my judgment, each of the determined claims of Mr Reinhold for breach of contract and negligence (that is, each claim referable to the several breaches mentioned at paragraphs [10] to [14] above) is, in terms of s 34(1)(a), an "apportionable claim". Each, whether in contract or in tort, is a determined claim for economic loss arising from the relevant defendant's failure to take reasonable care in and about the cancellation of Ticket B. 34 It follows that each of Lotteries and the Newsagents is, in terms of s 34(2), a "concurrent wrongdoer". The want of care of Lotteries, through Mr Cardwell, in identifying the ticket to be cancelled was causative of Mr Reinhold's economic loss, as was the want of care of the Newsagents, through Ms Skinner, in executing and fulfilling Mr Reinhold's order. 35 These proceedings are accordingly "proceedings involving an apportionable claim", as referred to in s 35, with the result that the liability of each of Lotteries and the Newsagents, as a "concurrent wrongdoer", is limited to an amount determined in accordance with s 35(1)(a). In addition, the court is forbidden by s 35(1)(b) to give judgment against either Lotteries or the Newsagents for more than the amount so determined in relation to it. 36 I turn, therefore, to the apportionment question.

The apportionment process 37 The task prescribed by s 35(1) of the Civil Liability Act must, in this case, be approached without reference to s 35(2) and s 35(3). This is because all the claims established against Lotteries and the Newsagents are "apportionable claims", there is no allegation of contributory negligence on the part of Mr Reinhold and there is no "concurrent wrongdoer" who is not a defendant. 38 Section 35(1) applies separately to Lotteries and to the Newsagents. Its effect is to limit the liability of Lotteries to a particular amount and to preclude the award of judgment against Lotteries for more than that amount. Its effect is also to limit the liability of the Newsagents to a particular amount and to preclude the award of judgment against the Newsagents for more than that amount. The section is, in terms, concerned to fix the amount of the liability of each wrongdoer, as distinct from splitting the whole of the entitlement of the plaintiff into parts that together equal that whole and allocating the parts to the wrongdoers. But absent contributory negligence of the plaintiff (dealt with in s 35(3)), I must say that I cannot envisage a situation in which the amounts separately determined under s 35(1) in respect of the several wrongdoers (whether or not actually parties: see s 35(4)) will not together equal the plaintiff's established entitlement. I say this because the "just" criterion on which s 35 is based, being a criterion having regard to respective degrees of "responsibility" of the wrongdoers, would not be met if the plaintiff were not given that entitlement in full. The wrongdoers must be taken to bear, among them, full "responsibility". There is accordingly no room to determine in relation to any of them an amount which, when added to the amounts determined in relation to the others, does not provide the whole of the plaintiff's established entitlement. 39 The approach dictated by s 35(1) requires the court to determine in relation to each of Lotteries and the Newsagents the amount that reflects the proportion of Mr Reinhold's loss of $2,000,000 that it "considers just having regard to the extent of the [particular] defendant's responsibility for the damage or loss". These words have close counterparts in other legislation. Section 9(1) appearing in Part 3 of the Law Reform (Miscellaneous Provisions) Act 1965 under the heading "Apportionment of liability in cases of contributory negligence" is in these terms: "If a person (the claimant ) suffers damage as the result partly of the claimant's failure to take reasonable care ( contributory negligence ) and partly of the wrong of any other person: (a) a claim in respect of the damage is not defeated by reason of the contributory negligence of the claimant, and (b) the damages recoverable in respect of the wrong are to 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." 40 Section 5 of the Law Reform (Miscellaneous Provisions) Act 1946 "Contribution among tort-feasors" provides in sub-section (2): "In any proceedings for contribution under this section the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person's responsibility for the damage; and the court shall have power to exempt any person from liability to make contribution, or to direct that the contribution to be recovered from any person shall amount to a complete indemnity." 41 Like wording is found in analogous statutes of other States and Territories and also in the United Kingdom. 42 Many of the other statutory provisions (including those just quoted) use the word "just and equitable", where s 35(1) uses the word "just" alone. The phrase "just and equitable" is widely employed in statutes: see Eddy Lau Constructions Pty Ltd v Transdevelopment Enterprise Pty Ltd [2004] NSWSC 273 at [43] to [49]. There is a question whether "just" alone means something different from "just and equitable". I doubt that it does or that any shade of difference there may be is of significance. That which is not "equitable" is unlikely to be "just". In any event, a direction that the court, acting judicially, do what it considers "just" is, in reality, a direction that it undertake an evaluation and come to a discretionary conclusion about where the justice of the case lies. Considerations of what is equitable will inevitably intrude, subject to the terms of the legislative directive. 43 Mr Kelly SC emphasised, on behalf of the Newsagents, that the central inquiry is into what is "just". He submitted that, in the search for what is "just", resort should be had to the equitable doctrine of contribution most recently explored by the High Court in Burke v LFOT Pty Ltd [2002] HCA 17; (2002) 209 CLR 282 and that it would not be "just" if apportionment were assessed in a way that enriched Lotteries at the expense of the Newsagents. I shall return to the second part of the submission presently. As to the first part, I accept that principles of equity may assist in discovering what is "just". As I have said, that which is not "equitable" is unlikely to be "just"; and in Niru Battery Manufacturing Co v Milestone Trading Ltd (No 2) [2004] EWCA Civ 487; [2004] 2 All ER (Comm) 289 Clarke LJ noted that general principles of subrogation and recoupment would, in the particular case, lead to the same destination as contribution legislation. It may also be accepted that the effect of s 35(1)(a) is to treat the overall situation in the same way as if the concurrent wrongdoers were subject to coordinate liabilities - in other words, that they are all obliged to make good one loss. But to recognise this is not, in my view, to sanction resort to equitable principles as such. In particular, any free-floating notion that "equality is equity" cannot operate, even as a starting point. The consequences of the operation of s 35(1)(a), in terms of the sharing of the burden, can only ever be the consequences produced by application of the statutory criterion directing attention to the "responsibility" of the several wrongdoers. Guidance from the case law 44 It is instructive to look briefly at some of the case law on provisions using similar wording to prescribe apportionment . I begin with cases about s 1 of the Civil Liability (Contribution) Act 1978 (UK) which enables a person who is liable in respect of any damage suffered by a claimant to recover contribution from any other person liable in respect of the same damage. It will be obvious immediately that this provision allowing claims for contribution in respect of established "solidary liability" is quite different from Part 4 of the Civil Liability Act in both purpose and effect. It is concerned with contribution and does not seek to reshape defendants' liabilities and the plaintiff's rights. The basic approach is the same as that s 5 this State's Law Reform (Miscellaneous Provisions) Act 1946. The United Kingdom legislation of 1978 replaced equivalent joint tortfeasor legislation that had been in force in that country from 1935. The potential relevance of the United Kingdom legislation to the present situation lies in its s 2(1) which says how contribution is to be calculated and uses language very similar to that in s 35(1)(a) of the Civil Liability Act: "Subject to subsection (3) below, in any proceedings for contribution under section 1 above the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person's responsibility for the damage in question." 45 This provision has been held by to warrant resort to the principles applied in making apportionment for contributory negligence under the United Kingdom equivalent of what is now Part 3 of this State's Law Reform (Miscellaneous Provisions) Act 1965: J (A Child) v Wilkins [2001] PlQR 179 at [13] to [15] per Keene LJ with whom Mummery LJ and Nourse LJ agreed. The relevant concept of "responsibility" was said by Simon Brown J in Madden v Quirk [1989] 1 WLR 702 at 707 to involve "considerations both of blameworthiness and of causative potency": and see, more recently, Elliott v Laverty [2006] NIQB 97. There may thus be a case in which one party's "more serious fault" has "less causative impact" than the other's "less serious fault" so that both are held equally responsible: Downs v Chappell [1996] 3 All ER 344 at 363. 46 The United Kingdom cases also make it clear that the "having regard to" requirement does not confine the court's decision on what is "just and equitable" by reference to the matter of "responsibility" expressly mentioned. This was made clear in the judgments of the Vice Chancellor (Sir Andrew Morritt) and Arden LJ (Keene LJ concurring) in Brian Warwicker Partnership v Hok International Ltd [2005] EWCA Civ 962. The following statement by Tuckey LJ in Resource America International Ltd v Platt Site Services and Barkin Construction Ltd [2004] EWCA Civ 665 at [51] was quoted with approval: "Section 2 of the 1978 Act is not expressed exclusively in terms of causative responsibility for the damage in question, although obviously the court must have regard to this, as the section directs, and it is likely to be the most important factor in the assessment of relative responsibility which the court has to make. But in the result the court's assessment has to be just and equitable and this must enable the court to take account of other factors as well as those which are strictly causative ." [emphasis added] 47 Arden LJ said in the Brian Warwicker case at [38]: "It might be thought that where Parliament provides that the court shall have regard to one matter it did not intend the court to have regard to other matters. However this not the case in section 2(1) of the 1978 Act. The court may take into account under section 2 of the 1978 Act the fact that one of the parties against whom contribution is sought has made a profit out of his wrongful conduct (see Dubai Aluminium Co Ltd v Salaam [2003] 2 AC 366 per Lord Nicholls at [51] to [53], with whom all the other members of the House, save Lord Millett agreed, and per Lord Millett at [164] with whom Lord Hutton and Lord Hobhouse agreed). The court may also take into account the fact that one of the parties is insolvent ( Fisher v CMT Ltd [1996] 2 QB 475). These, however, are exceptional situations." 48 The case of Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48; [2003] 2 AC 366 referred to in the last extract was a case of knowing participation in fraud by a member of a solicitors' partnership. Questions of vicarious liability of partners arose, as did the question of contribution under the United Kingdom Act of 1978. Their Lordships held that the required "just and equitable" result could be obtained only if account were taken of the fact that the perpetrators of the fraud retained the proceeds of it. Lord Nicholls of Birkenhead said at [52] and [53]: "[52] … The object of contribution proceedings under the Contribution Act is to ensure that each party responsible for the damage makes an appropriate contribution to the cost of compensating the plaintiff, regardless of where that cost has fallen in the first instance. The burden of liability is being re-distributed. But, of necessity, the extent to which it is just and equitable to re-distribute this financial burden cannot be decided without seeing where the burden already lies. The court needs to have regard to the known or likely financial consequences of orders already made and to the likely financial consequences of any contribution order the court may make. For example, if one of three defendants equally responsible is insolvent, the court will have regard to this fact when directing contribution between the two solvent defendants. The court will do so, even though insolvency has nothing to do with responsibility. An instance of this everyday situation can be found in Fisher v C H T Ltd (No 2) [1966] 2 QB 475, 481, per Lord Denning MR.

[53] In the present case a just and equitable distribution of the financial burden requires the court to take into account the net contributions each party made to the cost of compensating Dubai Aluminium. Regard should be had to the amounts payable by each party under the compromises and to the amounts of Dubai Aluminium's money each still has in hand. As Mr Sumption submitted, a contribution order will not properly reflect the parties' relative responsibilities if, for instance, two parties are equally responsible and are ordered to contribute equally, but the proceeds have all ended up in the hands of one of them so that he is left with a large undisgorged balance whereas the other is out of pocket." 49 In Australia, principles similar to those developed by the United Kingdom courts have been applied to a certain extent only. It has been held that the approaches to apportionment under contributory negligence statutes are also generally applicable to apportionment among wrongdoers: see, for example, the recent observations in Metron Medical Australia Pty Ltd v Windahl [2007] VSCA 40 at [111], which are consistent with those of Clarke JA in Macquarie Pathology Services Pty Ltd v Sullivan (NSWCA, unreported, 28 March 1995). In the last-mentioned case (a case of joint tortfeasors), his Honour said that observations made in contributory negligence cases "apply equally" to a claim for contribution under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946. 50 Blameworthiness and causative potency are recognised in Australia as determinants of responsibility. In Podrebersek v Australian Iron and Steel Pty Ltd [1985] HCA 34; (1985) 59 ALJR 492 at 494, a case involving apportionment for contributory negligence, the High Court (Gibbs CJ, Mason J, Wilson J, Brennan J and Deane J) said: "The making of an apportionment as between a plaintiff and a defendant of their respective shares in the responsibility for the damage involves a comparison both of culpability, ie of the degree of departure from the standard of care of the reasonable man ( Pennington v Norris (1956) 96 CLR 10 at 16) and of the relative importance of the acts of the parties in causing the damage: Stapley v Gypsum Mines Ltd [1953] AC 663 at 682; Smith v McIntyre [1958] Tas SR 36 at 42-49 and Broadhurst v Millman [1976] VR 208 at 219, and cases there cited. It is the whole conduct of each negligent party in relation to the circumstances of the accident which must be subjected to comparative examination. The significance of the various elements involved in such an examination will vary from case to case; for example, the circumstances of some cases may be such that a comparison of the relative importance of the acts of the parties in causing the damage will be of little, if any, importance." 51 This is the authoritative statement of the law in Australia. The passage I have set out has been frequently and consistently quoted and applied in both contributory negligence cases and tortfeasor contribution cases. A recent example is found in the judgment of Beazley JA in Nationwide News Pty Ltd v Naidu [2007] NSWCA 377 at [278]. Her Honour also quoted with approval the following passage from the judgment of Rolfe AJA (with whom Sheller JA and Fitzgerald JA agreed) in Vinidex Tubemakers Pty Ltd v Thiess Contractors Pty Ltd [2000] NSWCA 67 at [29]: "[T]he court must have regard to what is just and equitable and, in doing so, it must make a comparison of the culpability and of the acts of the parties causing damage and, thus, to the relative blameworthiness and the relevant causal potency of the negligence of each party, and to the whole conduct of each negligent party in relation to the circumstances of the accident by way of comparative examination: Podrebersek v Australian Iron and Steel Pty Limited (1985) 59 ALJR 492; Wynbergen v Hoyts Corporation Pty Limited (1977) 72 ALJR 65; Macquarie Pathology Services Pty Limited v Sullivan (Court of Appeal - 28 March 1995 - unreported) and James Hardie & Coy Pty Limited v Roberts & Anor (1999) 47 NSWLR 45." 52 Reference may also be made to a passage in the judgment of McColl JA in Ghunaim v Bart [2004] NSWCA 28; (2004) Aust Torts Reports 81-731, a contributory negligence case, at [71]: "Although as will become apparent it is not necessary to make a decision about apportionment in this case, I note that the statutory requirement that, if contributory negligence is found, the damages have to 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 … ' requires the trial judge to 'compare the culpability of the plaintiff and defendant in the sense of the "degree of departure from the standard of care of the reasonable man"': Liftronic Pty Ltd v Unver [2001] HCA 24 ; (2001) 75 ALJR 867 at 872 [28] per McHugh J referring to Pennington v Norris [1956] HCA 26 ; (1956) 96 CLR 10 at 16. The trial judge has to have 'regard … to the "relative importance of the acts of the parties in causing the damage"'. It is '"the whole conduct of each negligent party in relation to the circumstances of the accident which must be subjected to comparative examination"': Wynbergen v Hoyts Corp Pty Ltd [1997] HCA 52 ; (1997) 72 ALJR 65, 149 ALR 25 at 29." 53 There is not in the Australian case law any indication that factors beyond the relevant person's "responsibility for the damage in question" may be taken into account in the determination of what is "just" or "just and equitable"; or that the benefit of profits or burden of losses is relevant to the question of such "responsibility". The "having regard to" specification delimits the field of inquiry. Two cases may be mentioned in this connection. 54 The first is Amaca Pty Ltd v State of New South Wales [2003] HCA 44; (2003) 77 ALJR 1509, an asbestos injury case. The judge at first instance had taken into account in an apportionment under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 the fact that the asbestos manufacturer had made "large profits from selling vast quantities of asbestos products heedless of the dangers to others". The manufacturer had submitted that the State (the plaintiff's employer, which was concurrently liable) should, under s 5, contribute to the plaintiff's damages - so that, in the words of the trial judge, "a loss inevitably flowing from these commercial activities should be borne in part, not out of James Hardie's profits or risk capital, but by the taxpayers of New South Wales. The trial judge concluded: "Such a result would in my opinion be neither just nor equitable having regard to the State's responsibility for the damage." 55 The High Court (McHugh J, Gummow J, Kirby J, Hayne J and Callinan J) held this to be an erroneous approach. Their Honours said, quite simply: "That James Hardie was a commercial enterprise pursuing profit and the State a polity raising revenue by taxation are not considerations relevant to their respective responsibilities to contribute to the damage sustained by the injured plaintiff." 56 The second case is Rexstraw v Johnson [2003] NSWCA 287, a case of negligence in relation to the promotion and offering of certain investment opportunities. The trial judge, in making an apportionment between defendants under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946, took into account the fact that one defendant, after receiving advice from the Law Society, "had the courage and honesty to acknowledge his shortcomings", while the other had "still not given any credible explanation for so completely abandoning any commitment to the welfare of the investors who had trusted him". The Court of Appeal regarded as properly made a concession by the first of these defendants that his so-called "courage and honesty" was an irrelevant consideration in the exercise of the discretion vested in the trial judge by s 5. 57 These two cases show that the financial strength or profitability of a party is not to be taken into account in assessing contribution or apportionment. Nor is it relevant to look to the situation or status of a party (for example, that it is a polity financially dependent on the exaction of revenues from its citizens). The attitude of a wrongdoer in the terms of remorse or lack of remorse is also irrelevant. The Dubai Aluminium case (above) raises an issue which, it appears, has not received direct attention in Australia, that is, whether the fact that one wrongdoer has profited from the wrongdoing and retains the profit may be taken into account. I am of the opinion that, for the reasons stated at paragraph [53] of the speech of Lord Nicholls (see paragraph [48] above), that fact, if it exists, is inevitably relevant since, as his Lordship observed, it goes to the issue of responsibility with which s 35(1)(a) of the Civil Liability Act is expressly concerned. 58 In concluding this brief conspectus of the case law, I should refer to the two cases I have located in which s 35(1)(a) has been found applicable and applied. One is Yates v Mobile Marine Repairs Pty Ltd (above). Palmer J there observed (at [97]), consistently with the approach I consider to be indicated by decided cases on analogous provisions, that the considerations relevant to apportionment will include (but not necessarily be limited to) which of the wrongdoers was more actively engaged in the activity causing loss and which was more able effectively to prevent the loss happening. The other case is Chandra v Perpetual Trustees Victoria Ltd (above). Bryson AJ there dealt with apportionment under s 35(1)(a) as follows (at [113]): "In the application of s 35(1), and apposing the responsibility of Mr Miller for the loss with the responsibility of Mr Pan, the extent of Mr Miller's responsibility for the loss is altogether overwhelmed by Mr Pan's responsibility for the loss. Mr Pan acted deceitfully in pursuit of a large monetary advantage which he gained; Mr Miller was deceived and conducted an apparently small piece of professional work in a way which fell short of appropriate skill. I consider it just, having regard to the extent of his responsibility, that Mr Miller's liability be limited to 10 per cent of the plaintiffs' loss." 59 This is consistent with the approach indicated in the Dubai Aluminium case (above). Approach to apportionment in this case 60 Because the legislature has seen fit to adopt in s 35(1)(a) of the Civil Liability Act a form of words concerning apportionment which is almost indistinguishable from that which has long been used in statutes concerning contributory negligence and contribution among tortfeasors, I consider it appropriate to follow approaches to the meaning of those words developed and sanctioned by appellate courts. I therefore approach the matter before me on the basis that my principal task is to make findings about (a) the degree of departure from the standard of care of the reasonable man, as regards the causative conduct of Lotteries and the Newsagents; and (b) the relative importance of the acts of Lotteries and the Newsagents in causing the economic loss suffered by Mr Reinhold,

making a comparative examination of the whole conduct of each of Lotteries and the Newsagents in relation to the circumstances in which the loss was sustained. 61 I also approach the matter on the basis that, if either party has profited from its own actions causative of the plaintiff's loss and the other is or will be out of pocket, that imbalance can and should be brought into account as an element of the respective degrees of responsibility. 62 Against that background, I turn to the factors which, it is submitted, ought to inform the assessment called for by s 35(1)(a). Assessment 63 The immediate cause of the cancellation of Ticket B was the action of Ms Skinner, the Newsagents' employee, in keying a ticket serial number ("TSN") into the computer terminal at the Newsagents' premises. A ticket could not be cancelled at an agency except by entering the TSN into a terminal, either by scanning it (where the TSN was on the ticket) or by keying it in (where, as here, it was not visible). Ms Skinner obtained the TSN over the telephone from Mr Cardwell, an employee of Lotteries. The ticket Ms Skinner wished to cancel and intended to cancel was the ticket she held in her hand while speaking to Mr Cardwell, that is, the first ticket produced in response to Mr Reinhold's order which, like Shakespeare's Richard III, emerged into this world "scarce half made up". That ticket ("Ticket A") carried no TSN, no barcode corresponding with a TSN and no record of the agency at which and terminal through which it was produced. It did have on it, however, game panels in which game numbers appeared. These game numbers were distinctive and provided a ready and entirely reliable means of identifying Ticket A. 64 Ms Skinner keyed in as the TSN of the ticket to be cancelled a number given to her by Mr Cardwell. He had undertaken, by reference to Lotteries' computer system and while Ms Skinner waited on the telephone, a process of identifying the ticket to be cancelled, using information given to him for the purpose by Ms Skinner. Mr Cardwell identified the relevant ticket as Ticket B but, in so doing, did not implement an important part of Lotteries' established procedures for identification of partially printed tickets. Partial printing of the kind that happened in this case was a quite common occurrence - indeed, common enough for Lotteries to have developed specific procedures to identify such tickets upon receipt of inquiries from agencies of the kind Ms Skinner made. The procedures included asking the caller from the agency to read out game numbers from two of the game panels on the ticket where, as in the case of Ticket A, game numbers had been printed. Mr Cardwell did not make any such request. Nor did his supervisor, Ms Cooper, ask him whether he had done so when he went to her, in accordance with internal procedures, to obtain her concurrence to his giving the number to Ms Skinner. It was part of Ms Cooper's standard procedure to check that matter with a person in Mr Cardwell's position but, as I have said, she did not do so in this case. 65 The loss Mr Reinhold sustained would not have occurred had Mr Cardwell observed the part of the standard procedure that he failed to observe.

66 Nor would Mr Reinhold have sustained that loss had Ms Skinner, at her end, followed procedures that Lotteries required to be followed by agents seeking TSNs of partially printed tickets for ticket cancellation purposes. Mr Baker (the second defendant) acknowledged awareness of the procedures and that he had not brought them to Ms Skinner's attention or given her training in relation to them. Those procedures required three things in respect of which the conduct of the Newsagents, through Ms Skinner, was deficient. Game numbers from game panels on the partially printed ticket to be cancelled were not volunteered by Ms Skinner to Mr Cardwell; Ms Skinner did not supply to Mr Cardwell the TSN of the replacement ticket issued to Mr Reinhold (that is, Ticket B); and Ms Skinner sought ticket cancellation even though Mr Reinhold was no longer in the shop. In each of these ways, the Newsagents' conduct fell short of the required standards.

67 The loss Mr Reinhold suffered would not have occurred had these actions been taken by Ms Skinner.

68 At this point, therefore, it can be said that the want of care of Lotteries and the want of care of the Newsagents were both causative of Mr Reinhold's loss and that, had each or either exhibited the required standard of care, the loss would not have occurred.

69 It is pertinent, however, that Lotteries was called upon to deal with cases of partially printed tickets routinely and frequently. Staff members such as Mr Cardwell received many telephone calls from agents about such cases. Where a ticket lacked the TSN, Lotteries undertook the task of identification by accessing its computer records and carrying out a search, relying on information provided by the caller from the agency and on the skills and diligence of its own staff. For the Newsagents, by contrast, a partially printed ticket was not a common occurrence. Indeed, Ms Skinner, who had worked for the Newsagents for just over six months, had not encountered such a case before. She turned first to her colleague, Ms Macdonald, for guidance. Ms Macdonald said, in effect, that Ms Skinner should put herself into the hands of Lotteries by calling the help line and asking what to do. That is what Ms Skinner did. It was a natural and reasonable thing to do. Having made contact with Mr Cardwell, Ms Skinner explained the problem and then did no more than answer the questions he asked her. In the end, Mr Cardwell gave her a number and told her to use that as the TSN to enter the cancellation.

70 This, to my mind, indicates that, although the mistake would not have been made had both Mr Cardwell and Ms Skinner followed the procedures expected of them, Lotteries played a clearly dominant role in the relevant events. It had experience of what was, from its perspective, a common occurrence. The Newsagents were dealing with what was, for them, an unusual situation - one that Ms Skinner herself had not encountered before. And it was Lotteries that controlled the computer system and had the means of searching within it. The Newsagents could do nothing except give information to Lotteries and wait for Lotteries to give them a number to use as the TSN of the ticket to be cancelled. The shortcoming of the Newsagents was to fail to volunteer information that should have been volunteered. Nor, of course, was that information requested by Lotteries as it should have been.

71 The acts of Lotteries and the expectations upon it were of a much higher order than those of the Newsagents when it came to capacity to avoid the mistake and to exercise the care necessary to do so. Despite the ability of the Newsagents to avoid the mistake by volunteering game numbers from game panels on the ticket to be cancelled, they were in a position where they had a natural and understandable inclination to defer to Lotteries as the proprietor and operator of the computer system and the party more knowledgeable about relevant procedures. 72 I accept that Lotteries, for its part, had put in place systems and procedures for identifying tickets to be cancelled and that these, if properly applied, would have avoided the wrong cancellation that occurred here. The problem is that the systems and procedures were not properly applied. They broke down because of human error. I also accept that the Newsagents had no corresponding systems and procedures in place. They had not taken steps to bring to bring to their employees' attention the requirements published to them by Lotteries. Again, there was human error. 73 It was, in the circumstances, to be expected that someone in Ms Skinner's position would rely heavily on assistance given by Lotteries through the help line and not be very proactive in trying to solve the problem. 74 There was, in my view, a very significantly greater degree of culpability on the part of Lotteries and a very significantly stronger causative force in Lotteries' conduct. 75 I turn to the "unjust enrichment" argument advanced by Mr Kelly SC on behalf of the Newsagents. That argument lays emphasis on the fact that the cancellation of Ticket B instead of Ticket A not only deprived Mr Reinhold of the entry that would have attracted the $2,000,000 prize but also caused Lotteries to retain the sum of $2,000,000 that it would otherwise have paid out as that prize. It is said that it would not be "just" in terms of s 35(1)(a) to accept an apportionment which has the effect of enriching one party to a joint obligation at the expense of the other. 76 It is at this point that the Newsagents place specific reliance on equitable principles discussed by the High Court in Burke v LFOT Pty Ltd (above). It seems to me, however, that the more appropriate approach - which might well lead to the same destination - is that emerging from the last part of the passage in the speech of Lord Nicholls in Dubai Aluminium (above) which I have set out at paragraph [48]. His Lordship referred, by way of example, to a case where two parties are otherwise equally responsible for the relevant loss but the proceeds have all ended up in the hands of one of them so that he is left with a large undisgorged balance whereas the other would be out of pocket if the prima facie position of equal responsibility were recognised. That case, his Lordship said, would be one in which the prima facie position of equal sharing would not reflect the parties' relative responsibilities in a way that was just. 77 In this case, the want of care of Lotteries and the Newsagents combined to produce the result that Mr Reinhold was deprived of the Oz Lotto entry to which the prize of $2,000,000 came to attach. A corollary was that Lotteries did not pay that prize to Mr Reinhold. Had the want of care of Lotteries and the Newsagents not occurred, Lotteries would have paid the prize of $2,000,000 to Mr Reinhold and the Newsagents would have neither derived gain nor suffered loss. Immediately after the draw, therefore, Lotteries might have been regarded as "left with a large undisgorged balance", although the Newsagents could not have been regarded as "out of pocket". 78 A proper reflection of what is just having regard to the respective degrees of responsibility will not, in my view, take account of the fact that, as a consequence of the wrongdoing, Lotteries did not pay $2,000,000 to Mr Reinhold. It was emphasised by Mr Gleeson SC that Lotteries did not, in the long run, retain or enjoy any resultant benefit. The fact that there was no winner of the $2,000,000 prize in Oz Lotto Draw 605 meant that that sum was carried forward to the next draw, at which point it was paid out as part of a larger prize. Lotteries did not itself benefit from non-payment of the $2,000,000 prize. In fact, the system is such that Lotteries, as a person, never benefits from the fact that an Oz Lotto prize is not won or is not paid. The prize money already forms part of a prize pool which, at some stage and in some draw, will be expended. The prize pool is, in a real sense, money that is not beneficially enjoyed by Lotteries. 79 The circumstance I have just mentioned leads me to conclude that the enrichment or retention element of responsibility that might be recognised in accordance with Lord Nicholls' approach (and which the Newsagents sought to ground in equitable principle) does not exist here. I proceed without regard for any aspect of increased responsibility on the part of Lotteries on that account. 80 I return therefore to my finding that there was a very significantly greater degree of culpability on the part of Lotteries and a very significantly stronger causative force in Lotteries' conduct. Lotteries was subject to higher expectations. The degree of its departure from expected standards was much greater. The acts of Lotteries were much more important in causing the loss. The Newsagents were not, however, free from culpability; nor was their conduct devoid of causative force. But their contribution to the result was very much less. 81 In my judgment, the apportionment that is just, having regard to the respective degrees of responsibility for Mr Reinhold's loss, is 90% to Lotteries and 10% to the Newsagents. 82 In accordance with s 35(1) of the Civil Liability Act, therefore, the court will give judgment against Lotteries for $1,800,000 (90% of $200,000,000) and judgment against the Newsagents for $200,000 (10% of $2,000,000), exclusive of interest in each case. Interest 83 Mr Simpkins SC submitted on behalf of Mr Reinhold that the court should, as allowed by s 100 of the Civil Procedure Act 2005, include interest in the judgment. There is no basis on which such a claim could be resisted. An award of interest will see Mr Reinhold compensated for delay. It is accepted that, had Mr Reinhold become entitled to the $2,000,000 prize, payment would have been made about two weeks after the relevant draw (which took place on 20 September 2005). Interest should therefore be computed from 4 October 2005 to the date of judgment. Mr Reinhold says that interest should be allowed at the rates in Schedule 5 to the Uniform Procedure Rules. Although those rates are the rates for interest after judgment under s 101, I consider they are appropriately applied also in awarding interest up to judgment in the absence of submissions and evidence indicating otherwise. There being no submission to the contrary, interest will be included in each judgment sum on that basis. Cross-claims 84 Claims for indemnity and contribution have been made as between Lotteries and the Newsagents. These are based in part on express contractual terms (and terms which, it is said, should be implied) and in part on s 5 of the Law Reform (Miscellaneous Provisions) Act 1946. 85 In light of my conclusion that Part 4 of the Civil Liability Act applies, however, neither Lotteries nor the Newsagents can be required to render contribution or indemnity to the other. This is the effect of s 36 of the Act. 86 I should add that, to the extent that any claims for damages based on s 52 of the Trade Practices Act 1974 (Cth) might be relied upon in a like connection as between Lotteries and the Newsagents, s 87CF of that Act would preclude them in the same way. 87 There will accordingly be no order requiring either of Lotteries or the Newsagents to render contribution or indemnity to the other. Costs 88 On the footing that there is no reason why costs should not follow the event, Mr Reinhold is entitled to an order for costs against all defendants. His counsel drew attention to offers of compromise made by him to each of Lotteries and the Newsagents which might have justified an order for indemnity costs had both Lotteries and the Newsagents suffered judgment for the full $2,000,000. In light of the apportionment to be made in obedience to the Civil Liability Act, however, there will be no basis for an order that costs be assessed on the indemnity basis. Orders 89 The declarations and orders of the court are as follows: 1. Declare pursuant to s 35 of the Civil Liability Act 2002 that the liability of the first defendant to the plaintiff is limited to, and is in the sum of, $1,800,000.00 together with interest of $414,100.22 pursuant to s 100 of the Civil Procedure Act 2005. 2. Declare pursuant to s 35 of the Civil Liability Act 2002 that the liability of the second and third defendants to the plaintiff is limited to, and is in the sum of, $200,000.00 together with interest of $46,011.14 pursuant to s 100 of the Civil Procedure Act 2005. 3. Order judgment for the plaintiff against the first defendant in the sum of $2,214,100.22. 4. Order judgment for the plaintiff against the second and third defendants in the sum of $246,011.14. 5. Order that the plaintiff's costs of the proceedings be paid by the first, second and third defendants on the party-party basis. **********

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