the civil liability act – the current position on proportionate liability and causation richard...

The Civil Liability Act – The Current The Civil Liability Act – The Current Position on Proportionate Liability Position on Proportionate Liability

and Causationand Causation

Richard Douglas SCRichard Douglas SC

Rick OliverRick Oliver

Kevin HolyoakKevin Holyoak

RichardRichard – CLA Proportionate Liability: the – CLA Proportionate Liability: the concept, apportionable claim, concurrent concept, apportionable claim, concurrent wrongdoer, manner of apportionment, wrongdoer, manner of apportionment, contribution and indemnity exclusion between contribution and indemnity exclusion between defendants.defendants.

RickRick – CLA Proportionate Liability: identifying – CLA Proportionate Liability: identifying wrongdoers, pleading obligations, directions wrongdoers, pleading obligations, directions hearings, impact on UCPR offers.hearings, impact on UCPR offers.

KevinKevin – CLA Causation, in particular the common – CLA Causation, in particular the common law contrast on the decided authorities.law contrast on the decided authorities.

Comparative Provisions Comparative Provisions

• Civil Liability ActCivil Liability Act 2003 (Qld) Ch 2 Pt 2. 2003 (Qld) Ch 2 Pt 2.• Civil Liability ActCivil Liability Act 2002 (NSW) Pt 4. 2002 (NSW) Pt 4.• Wrongs ActWrongs Act 1958 (Vic) Pt IVAA. 1958 (Vic) Pt IVAA.• Law Reform (Contributory Negligence and Law Reform (Contributory Negligence and

Apportionment of Liability) ActApportionment of Liability) Act 2001 (SA) Pt 3. 2001 (SA) Pt 3.• Civil Liability ActCivil Liability Act 2002 (WA) Pt 1F. 2002 (WA) Pt 1F.• Civil Liability ActCivil Liability Act 2002 (Tas) Pt 9A. 2002 (Tas) Pt 9A.• Civil Law (Wrongs) ActCivil Law (Wrongs) Act 2002 (ACT) Ch. 7A. 2002 (ACT) Ch. 7A.• Proportionate Liability ActProportionate Liability Act 2005 (NT) 2005 (NT)

Comparative Provisions (cont’d)Comparative Provisions (cont’d)

• Trade Practices ActTrade Practices Act 1974 (Cth) Pt VIA. 1974 (Cth) Pt VIA.• Australian Securities & Investments Australian Securities & Investments

Commission ActCommission Act 2001 Pt 2 Div 2 Sub-div 2001 Pt 2 Div 2 Sub-div GA.GA.

• Corporations ActCorporations Act 2001 (Cth) Ch 7 Pt 17.10 2001 (Cth) Ch 7 Pt 17.10 Div 2A.Div 2A.

Comparative Provisions (cont’d)Comparative Provisions (cont’d)

• Cth Acts – apportionable claim: damages for M Cth Acts – apportionable claim: damages for M & D conduct.& D conduct.

• State and Territory Acts – apportionable claims: State and Territory Acts – apportionable claims: damages for State M & D conduct damages for State M & D conduct oror for “breach for “breach of duty”.of duty”.

• Similar but not synonymous drafting in States Similar but not synonymous drafting in States and Commonwealth.and Commonwealth.

• Qld Act applies to any “breach of duty” Qld Act applies to any “breach of duty” (presumably including a State M & D conduct (presumably including a State M & D conduct contravention) occurring on or after 1 March contravention) occurring on or after 1 March 2005: s 4(3) and s 82.2005: s 4(3) and s 82.

Operative PrinciplesOperative Principles• Common law solidary liability – where two or more defendant parties Common law solidary liability – where two or more defendant parties

causatively liable, jointly or concurrently, for the same loss or damage, causatively liable, jointly or concurrently, for the same loss or damage, whatever the cause of action, adjudication ensues against each in full whatever the cause of action, adjudication ensues against each in full measure despite any common law or statutory apportionment between measure despite any common law or statutory apportionment between the defendants.the defendants.

• Statutory Proportionate liability – where two or more defendants are Statutory Proportionate liability – where two or more defendants are causatively liable for the same loss or damage, a court apportions causatively liable for the same loss or damage, a court apportions responsibility for the proven damages between them as concurrent responsibility for the proven damages between them as concurrent wrongdoers upon a consideration of what is “just” or like touchstone, wrongdoers upon a consideration of what is “just” or like touchstone, adjudication re each going only for the apportioned sum and no more adjudication re each going only for the apportioned sum and no more and with contribution precluded between them.and with contribution precluded between them.

• Proportionate liability shifts to the plaintiff, from the solvent defendant Proportionate liability shifts to the plaintiff, from the solvent defendant or defendants, the risk of inability to recover contribution from any or defendants, the risk of inability to recover contribution from any insolvent or uninsured liable defendant or third party.insolvent or uninsured liable defendant or third party.

Operative ProvisionOperative Provision

31 Proportionate liability for apportionable claims31 Proportionate liability for apportionable claims(1) In any proceeding involving an apportionable claim—(1) In any proceeding involving an apportionable claim—

(a) the liability of a defendant who is a concurrent wrongdoer in relation to the (a) the liability of a defendant who is a concurrent wrongdoer in relation to the claim is limited to an amount reflecting that proportion of the loss or claim is limited to an amount reflecting that proportion of the loss or damage claimed that the court considers just and equitable having regard damage claimed that the court considers just and equitable having regard to the extent of the defendant’s responsibility for the loss or damage; andto the extent of the defendant’s responsibility for the loss or damage; and

(b) judgment must not be given against the defendant for more than that (b) judgment must not be given against the defendant for more than that amount in relation to the claim.amount in relation to the claim.

……(3) In apportioning responsibility between defendants in a proceeding the (3) In apportioning responsibility between defendants in a proceeding the

court may have regard to the comparative responsibility of any court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceeding.concurrent wrongdoer who is not a party to the proceeding.

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

Operative Provision (cont’d)Operative Provision (cont’d)

7 Provisions relating to operation of Act7 Provisions relating to operation of Act……

(3) This Act, (3) This Act, other than chapter 2, part 2 and chapter other than chapter 2, part 2 and chapter 33, does not prevent the parties to a contract from , does not prevent the parties to a contract from making express provision for their rights, obligations making express provision for their rights, obligations and liabilities under the contract (the and liabilities under the contract (the express express provisionprovision) in relation to any matter to which this Act ) in relation to any matter to which this Act applies and does not limit or otherwise affect the applies and does not limit or otherwise affect the operation of the express provision.operation of the express provision.

(4) Subsection (3) extends to any provision of this Act (4) Subsection (3) extends to any provision of this Act even if the provision applies to liability in contract.even if the provision applies to liability in contract.

……

Operative Provisions (Cont’d)Operative Provisions (Cont’d)• Section 31 has sequential operation.Section 31 has sequential operation.

• In a sole or multiple defendant case in which no In a sole or multiple defendant case in which no apportionable claim is pleaded (by plaintiff or defendant), apportionable claim is pleaded (by plaintiff or defendant), solidary liability applies.solidary liability applies.

• In a sole defendant case in which an apportionable claim is In a sole defendant case in which an apportionable claim is pleaded, but no concurrent wrongdoer is identified, solidary pleaded, but no concurrent wrongdoer is identified, solidary liability applies.liability applies.

• In a sole or multiple defendant case in which apportionable In a sole or multiple defendant case in which apportionable and non-apportionable claims are pleaded, and if the/a and non-apportionable claims are pleaded, and if the/a defendant and others (defendant or not) are concurrent defendant and others (defendant or not) are concurrent wrongdoers, proportionate liability applies to the claims and wrongdoers, proportionate liability applies to the claims and solidary liability applies to the non-apportionable claims.solidary liability applies to the non-apportionable claims.

Pt 2 ExceptionsPt 2 Exceptions

28 Application of pt 228 Application of pt 2……

(3) This part does not apply to a claim—(3) This part does not apply to a claim—(a) arising out of personal injury; or(a) arising out of personal injury; or(b) by a consumer.(b) by a consumer.

(4) Also, this part does not apply to a claim to (4) Also, this part does not apply to a claim to the extent that an Act provides that liability for the extent that an Act provides that liability for an amount payable in relation to the claim is an amount payable in relation to the claim is joint and several.joint and several.

……

Personal Injury ExceptionPersonal Injury Exception

• Term “personal injury” defined widely in Schedule 1 (eg Term “personal injury” defined widely in Schedule 1 (eg includes death).includes death).

• Plainly a plaintiff’s claim for damages and a defendant’s Plainly a plaintiff’s claim for damages and a defendant’s claim against another defendant or third party for claim against another defendant or third party for statutory or common law (not contractual) indemnity or statutory or common law (not contractual) indemnity or contribution would be excluded.contribution would be excluded.

Personal Injury Exception (cont’d)Personal Injury Exception (cont’d)

• According to the Explanatory Memorandum to According to the Explanatory Memorandum to the introducing the introducing Professional Standards BillProfessional Standards Bill 2004: 2004:

This will preclude application of the provisions in not This will preclude application of the provisions in not only direct claims by injured people, but also in only direct claims by injured people, but also in contribution proceedings between responsible parties contribution proceedings between responsible parties and related third party proceedings.and related third party proceedings.

• Remains faintly arguable, in the case of the Remains faintly arguable, in the case of the defendant having an independent cause of defendant having an independent cause of action, for damages comprising PI claim against action, for damages comprising PI claim against two or more defendants or third parties, two or more defendants or third parties, proportionate liability applies because the proportionate liability applies because the subject matter of such cause of action is subject matter of such cause of action is economic in character: economic in character: Allianz v WentworthvilleAllianz v Wentworthville 13 ANZ Ins Cas 61-598.13 ANZ Ins Cas 61-598.

Consumer ExceptionConsumer Exception

Section 29Section 29In this part—In this part—……consumer consumer means an individual whose claim is based on means an individual whose claim is based on

rights relating to goods or services, or both, in rights relating to goods or services, or both, in circumstances where the particular goods or services—circumstances where the particular goods or services—(a) (a) are being acquiredare being acquired for personal, domestic or household use or for personal, domestic or household use or

consumption; orconsumption; or(b) relate to (b) relate to adviceadvice given by a given by a professionalprofessional to the individual for to the individual for

the the individual’s use, other than for a businessindividual’s use, other than for a business carried on by carried on by the individual whether solely or as a member of a business the individual whether solely or as a member of a business partnership.partnership.

……

Consumer Exception (cont’d)Consumer Exception (cont’d)

• Domestic Acquisition exception carries subjective (“are Domestic Acquisition exception carries subjective (“are being acquired”), not objective acquisition test (cf TPA s being acquired”), not objective acquisition test (cf TPA s 4B – “ordinarily acquired for personal etc”), e.g. tractor 4B – “ordinarily acquired for personal etc”), e.g. tractor purchased for mowing acreage; installation services for purchased for mowing acreage; installation services for large domestic water tank or bore.large domestic water tank or bore.

• Professional services exception not direct nexus (“goods Professional services exception not direct nexus (“goods or services relate to”) and further such services can be or services relate to”) and further such services can be for commercial purposes as long as not “for a business”, for commercial purposes as long as not “for a business”, e.g. solicitor’s advice in a PI case, on land sale or to e.g. solicitor’s advice in a PI case, on land sale or to executor; valuer’s advice to executor; accountant’s executor; valuer’s advice to executor; accountant’s advice on setting up and maintaining a private advice on setting up and maintaining a private superannuation trust; personal investment advice.superannuation trust; personal investment advice.

Apportionable ClaimApportionable Claim

28 Application of pt 228 Application of pt 2

(1) This part applies to either or both of the (1) This part applies to either or both of the following claims (following claims (apportionable claimapportionable claim)—)—(a) a (a) a claimclaim for economic loss or damage to property in for economic loss or damage to property in

an action for damages an action for damages arising from a breach of a arising from a breach of a duty of careduty of care;;

(b) a (b) a claimclaim for economic loss or damage to property in for economic loss or damage to property in an action for damages an action for damages under the under the Fair Trading Act Fair Trading Act 1989 1989 for a contravention of section 38 of that Act.for a contravention of section 38 of that Act.

……

Arising from a Breach of a Duty of Arising from a Breach of a Duty of CareCare

• Schedule 2:Schedule 2:duty means—

(a) a duty of care in tort; or(b) a duty of care under contract that is concurrent andcoextensive with a duty of care in tort; or(c) another duty under statute or otherwise that isconcurrent with a duty of care mentioned in paragraph (a) or (b).

duty of care means a duty to take reasonable care or to exercise reasonable skill (or both duties)

Arising from a Breach of a Duty of Arising from a Breach of a Duty of Care (cont’d)Care (cont’d)

• No refuge in TPA s 74 (1) in respect of due skill and care No refuge in TPA s 74 (1) in respect of due skill and care warranties (cf s 74(2)) due to subs (2A) which applies to warranties (cf s 74(2)) due to subs (2A) which applies to contracts entered into after 13 July 2004.contracts entered into after 13 July 2004.

• Previously s 74 prevailed under Constitution s 109: Previously s 74 prevailed under Constitution s 109: Wallis v Wallis v DownardDownard 179 CLR 388. 179 CLR 388.

• Explanatory Memorandum in Explanatory Memorandum in Treasury Legislation Treasury Legislation Amendment (Professional Standards) BillAmendment (Professional Standards) Bill::

1.15 The amendments will seek to ensure that State and Territory 1.15 The amendments will seek to ensure that State and Territory reforms of the law of contract are not undermined.reforms of the law of contract are not undermined.


• 7474 Warranties in relation to the supply of servicesWarranties in relation to the supply of services (1) In every contract for the supply by a corporation in the course of a (1) In every contract for the supply by a corporation in the course of a business of services to a consumer there is an business of services to a consumer there is an implied warranty that the implied warranty that the services will be rendered with due care and skillservices will be rendered with due care and skill and that any materials and that any materials supplied in connexion with those services will be reasonably fit for the purpose supplied in connexion with those services will be reasonably fit for the purpose for which they are supplied.for which they are supplied.……(2A) If: (2A) If:

(a) there is a breach of an implied warranty that exists because of this section (a) there is a breach of an implied warranty that exists because of this section in a contract made after the commencement of this subsection; and in a contract made after the commencement of this subsection; and

(b) the law of a State or Territory is the proper law of the contract; (b) the law of a State or Territory is the proper law of the contract; the law of the State or Territory applies to limit or preclude liability for the law of the State or Territory applies to limit or preclude liability for

the breach, and recovery of that liability (if any), in the same way as it the breach, and recovery of that liability (if any), in the same way as it applies to limit or preclude liability, and recovery of a liability, for breach applies to limit or preclude liability, and recovery of a liability, for breach of another term of the contract. of another term of the contract.


• A salient question is this: in the event that:— A salient question is this: in the event that:— (a)(a) a plaintiff, against a sole defendant, a plaintiff, against a sole defendant,

pleads a claim expressly founded on a cause pleads a claim expressly founded on a cause of action not involving breach of a duty to take of action not involving breach of a duty to take reasonable care nor entailing statutory reasonable care nor entailing statutory “misleading or deceptive conduct”;“misleading or deceptive conduct”;

(b)(b) one of the latter causes of action is one of the latter causes of action is available, factually and legally, to the plaintiff available, factually and legally, to the plaintiff to recover the same damages;to recover the same damages;

(c)(c) a “concurrent wrongdoer” is identified,a “concurrent wrongdoer” is identified, (d) the defendant pleads (b) and (c); (d) the defendant pleads (b) and (c);

Is proportionate liability invoked? Is proportionate liability invoked?


• The better (but contentious) answer to the above The better (but contentious) answer to the above question is in the negative. question is in the negative.

• Examples of non-apportionable claims are Examples of non-apportionable claims are damages for breach of some prescriptive damages for breach of some prescriptive contractual obligation, implied SGA terms in the contractual obligation, implied SGA terms in the tort of nuisance or upon one of the raft of tort of nuisance or upon one of the raft of contraventions of, or causes of action under Pt V contraventions of, or causes of action under Pt V Divs 1, 1A, 2A and Pt VA of the Trade Practices Divs 1, 1A, 2A and Pt VA of the Trade Practices Act 1974(Cth) other than ss 52 and 74 which Act 1974(Cth) other than ss 52 and 74 which are, or end up being apportionable.are, or end up being apportionable.


““The application of the CL Act depends on there being both an apportionable claim The application of the CL Act depends on there being both an apportionable claim and concurrent wrongdoers in respect of that claim. In the ordinary way, it would not and concurrent wrongdoers in respect of that claim. In the ordinary way, it would not be in the interests of the plaintiff having a non-apportionable claim against one deep-be in the interests of the plaintiff having a non-apportionable claim against one deep-pocketed defendant to plead material facts that might show the existence of an pocketed defendant to plead material facts that might show the existence of an apportionable claim and concurrent wrongdoers. A clear example is apportionable claim and concurrent wrongdoers. A clear example is a plaintiff a plaintiff having a claim against a contractor for breach of an express contractual having a claim against a contractor for breach of an express contractual warranty to hand over the works by the time limited for practical completion (as warranty to hand over the works by the time limited for practical completion (as extended from time to time) free of defectsextended from time to time) free of defects. A claim in respect of defective works . A claim in respect of defective works (and/or for late delivery) could be brought for breach of that promise. In terms, it (and/or for late delivery) could be brought for breach of that promise. In terms, it would not be an apportionable claim.would not be an apportionable claim.However, the defendant might wish to allege that its breach of contract was the result However, the defendant might wish to allege that its breach of contract was the result of negligence: negligently failing to manage and undertake the works, and negligently of negligence: negligently failing to manage and undertake the works, and negligently failing to use reasonable care and skill in and about their execution.... failing to use reasonable care and skill in and about their execution.... Who owns the Who owns the litigation? ... It is hard to see why the application of the statutory regime (which, litigation? ... It is hard to see why the application of the statutory regime (which, after all, was introduced to serve the interests of prospective defendants and after all, was introduced to serve the interests of prospective defendants and their insurers) should be governed by the ingenuity of those who plead their insurers) should be governed by the ingenuity of those who plead plaintiffs’ causes of actionplaintiffs’ causes of action. Put in less emotive language: the question should fall to . Put in less emotive language: the question should fall to be answered by considerations of substance rather than form.” [Emphasis Added]be answered by considerations of substance rather than form.” [Emphasis Added]

Per McDougall J “Proportionate Liability and Construction Litigation”(2006) 22 BCL 396Per McDougall J “Proportionate Liability and Construction Litigation”(2006) 22 BCL 396


[29] As the respondents observed, in drafting the provisions of Pt VIAA of the Wrongs Act, the [29] As the respondents observed, in drafting the provisions of Pt VIAA of the Wrongs Act, the legislature deliberately chose to define "apportionable claim" by reference to an action for legislature deliberately chose to define "apportionable claim" by reference to an action for damages arising from a failure to take reasonable care. damages arising from a failure to take reasonable care. The provisions do not require that the The provisions do not require that the claim itself be a claim in negligence or for a breach of duty — it only requires that the claim itself be a claim in negligence or for a breach of duty — it only requires that the claim arise from a failure to take reasonable care. The expressions "arising from" or claim arise from a failure to take reasonable care. The expressions "arising from" or "arising out of" are of wide import"arising out of" are of wide import — see the discussion in A Stephenson, "Proportional — see the discussion in A Stephenson, "Proportional Liability in Australia — The Death of Certainty in Risk Allocation in Contract" (2005) 22(1) ICLR Liability in Australia — The Death of Certainty in Risk Allocation in Contract" (2005) 22(1) ICLR 64 at 71 to 73, and generally B McDonald, "Proportionate Liability in Australia: the Devil in the 64 at 71 to 73, and generally B McDonald, "Proportionate Liability in Australia: the Devil in the Detail" (2005) 26(1) ABR 29.Detail" (2005) 26(1) ABR 29.

[30] In my view, Pt IVAA could apply in the circumstances of this proceeding according to its own [30] In my view, Pt IVAA could apply in the circumstances of this proceeding according to its own terms. Where a claim brought by an applicant does not have as one of its necessary elements terms. 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 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 reasonable care may become relevant in the course of a trial to determine the application of Pt IVAA. IVAA. Even though the claims in this proceeding themselves do not rely upon any plea of 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 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 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 proceedings. At the end of the trial, after hearing all the evidence, it may be found that Pt IVAA applies.IVAA applies. [Emphasis added] [Emphasis added]

Dartberg Pty Ltd v Wealth Care Dartberg Pty Ltd v Wealth Care [2007] FCA 1216 per Middleton J[2007] FCA 1216 per Middleton J


• In the absence of unequivocal language, Pt 2 ( TPA In the absence of unequivocal language, Pt 2 ( TPA likewise) ought not be construed as emasculating a likewise) ought not be construed as emasculating a common law right, namely solidary liability apropos a common law right, namely solidary liability apropos a pleaded non-apportionable cause of action, pleaded non-apportionable cause of action, notwithstanding an apportionable cause of action could notwithstanding an apportionable cause of action could have been pleaded, and concurrently founds liability.have been pleaded, and concurrently founds liability.

• Election for best remedy is hardly novel, e.g. pre-2001 Election for best remedy is hardly novel, e.g. pre-2001 contract plea and pre-2004 TPA s 52 plea to avoid contract plea and pre-2004 TPA s 52 plea to avoid contrib. neg.contrib. neg.

• This view underscored by the fact that the Act, in s 31(2), This view underscored by the fact that the Act, in s 31(2), expressly caters for the circumstance of there being both expressly caters for the circumstance of there being both apportionable and non-apportionable claims propounded apportionable and non-apportionable claims propounded by a plaintiff in the same proceeding:by a plaintiff in the same proceeding:


31 Proportionate liability for apportionable claims…(2) If the proceeding involves both an apportionable claim

and a claim that is not an apportionable claim—(a) liability for the apportionable claim, to the extent it involves concurrent wrongdoers, is to be decided in accordance with this part; and(b) liability for the other claim, and the apportionable claim to the extent it is not provided for under paragraph (a), is to be decided in accordance with the legal rules, if any, that, apart from this part, are relevant.

…


• Take, for example, a plaintiff (commercial or private) claiming Take, for example, a plaintiff (commercial or private) claiming damages from a sole defendant professional for breach of an damages from a sole defendant professional for breach of an express prescriptive contractual obligation paid for handsomely (e.g. express prescriptive contractual obligation paid for handsomely (e.g. due diligence entailing specific document scrutiny) to detect fraud due diligence entailing specific document scrutiny) to detect fraud or asset complement before settling a transaction.or asset complement before settling a transaction.

• The defendant pleads and proves that if it is liable to the plaintiff, The defendant pleads and proves that if it is liable to the plaintiff, such liability could have been pleaded and proved by the plaintiff as such liability could have been pleaded and proved by the plaintiff as a contractual breach of duty to exercise reasonable care, and in turn a contractual breach of duty to exercise reasonable care, and in turn pleads and proves the conduct of another wrongdoer who is guilty pleads and proves the conduct of another wrongdoer who is guilty of causing the loss by deceit or M & D conduct. of causing the loss by deceit or M & D conduct.

• Given that wrongdoer fraudster or statutory deceiver would Given that wrongdoer fraudster or statutory deceiver would ordinarily be apportioned the lion’s share of,or certainly substantial ordinarily be apportioned the lion’s share of,or certainly substantial liability, why ought the plaintiff be deprived of the benefit of full liability, why ought the plaintiff be deprived of the benefit of full unapportioned damages contractually available against the unapportioned damages contractually available against the defendant professional he has sued?defendant professional he has sued?

Concurrent WrongdoerConcurrent Wrongdoer

• 30 Who is a concurrent wrongdoer(1) A concurrent wrongdoer, in relation to a claim,

is a person who is 1 of 2 or more persons whose acts or omissions caused, independently of each other, the loss or damage that is the subject of the claim.

(2) For this part, it does not matter that a concurrent wrongdoer is insolvent, is being wound up, has ceased to exist or has died.

Concurrent Wrongdoer (cont’d)Concurrent Wrongdoer (cont’d)

• Does not arise for consideration unless there is an “apportionable claim” under s 28.

• Likewise, and expressly, identification and joinder obligations under s 32(1) and (2) do nota rise unless there is such a claim.

• Once s 30 is satisfied each of apportionable Once s 30 is satisfied each of apportionable claim defendant and identified further claim defendant and identified further wrongdoer is a “concurrent wrongdoer”.wrongdoer is a “concurrent wrongdoer”.

Concurrent Wrongdoer (Cont’d)Concurrent Wrongdoer (Cont’d)

• Need the genesis or foundation of the liability of the Need the genesis or foundation of the liability of the putative further “concurrent wrongdoer” be breach of a putative further “concurrent wrongdoer” be breach of a duty to exercise reasonable care (whether arising from duty to exercise reasonable care (whether arising from tort contract or statute), or statutory misleading and tort contract or statute), or statutory misleading and deceptive conduct (as in s 28)?deceptive conduct (as in s 28)?

• The better answer is in the negative.The better answer is in the negative.• The language (“acts or omissions”) is plenary in The language (“acts or omissions”) is plenary in

character, sufficient to comprehend causes for breach of character, sufficient to comprehend causes for breach of prescriptive obligations (eg, express or implied prescriptive obligations (eg, express or implied contractual warranties as to fitness quality or time: civilly contractual warranties as to fitness quality or time: civilly enforceable state statutory obligation) owed by the enforceable state statutory obligation) owed by the alleged wrongdoer (cf s 28 definition of “apportioanble alleged wrongdoer (cf s 28 definition of “apportioanble claim”). claim”).

Concurrent Wrongdoer (cont’d)Concurrent Wrongdoer (cont’d)

[98] I do not accept, as Mr McHugh submits, that MAN [98] I do not accept, as Mr McHugh submits, that MAN Australia’s breach of contract was not an “omission” Australia’s breach of contract was not an “omission” causing Mr Yates’ loss. The contract imposed an obligation causing Mr Yates’ loss. The contract imposed an obligation on MAN Australia to ensure that the work was done on MAN Australia to ensure that the work was done properly. It “omitted” to perform a contractual duty which, if properly. It “omitted” to perform a contractual duty which, if performed, would have prevented the loss. In my opinion, performed, would have prevented the loss. In my opinion, a breach of contractual duty to ensure that work is done a breach of contractual duty to ensure that work is done properly by others, whether employees, agents or properly by others, whether employees, agents or independent contractors, is an “omission” within s 34(2) independent contractors, is an “omission” within s 34(2) CLA such as may make a contract breaker a concurrent CLA such as may make a contract breaker a concurrent wrongdoer within the operation of Part IV CLA.wrongdoer within the operation of Part IV CLA.

Yates v Mobile Marine Pty Ltd & AnorYates v Mobile Marine Pty Ltd & Anor [2007] NSWSC 1463 [2007] NSWSC 1463 per Palmer J.per Palmer J.


• Need the putative “concurrent wrongdoer” be a Need the putative “concurrent wrongdoer” be a person or entity against whom the plaintiff has a person or entity against whom the plaintiff has a enforceable cause of action?enforceable cause of action?

• The better answer is in the affirmative.The better answer is in the affirmative.• No such enforceable where liability contractually No such enforceable where liability contractually

excluded or exempted liability, (cf. statute barred excluded or exempted liability, (cf. statute barred liability).liability).

• A construction of the enactment which would allow A construction of the enactment which would allow of apportionment to a party bereft of liability to the of apportionment to a party bereft of liability to the claimant plaintiff, at any point in time, is such a claimant plaintiff, at any point in time, is such a gross departure from the common law of solidary gross departure from the common law of solidary liability that a court ought be loath to adopt it in the liability that a court ought be loath to adopt it in the absence of clear statutory language.absence of clear statutory language.


[58] There is no doubt that Part VIA effects a [58] There is no doubt that Part VIA effects a significant change in the law in those cases to significant change in the law in those cases to which it applies. A claimant can no longer which it applies. A claimant can no longer recover all of his damages from one of a number recover all of his damages from one of a number of wrongdoers who were previously jointly and of wrongdoers who were previously jointly and severally liable to the plaintiff. The claimant can severally liable to the plaintiff. The claimant can recover from each wrongdoer only that recover from each wrongdoer only that proportion of the loss and damage claimed that proportion of the loss and damage claimed that the court considers just having regard to the the court considers just having regard to the particular wrongdoer’s responsibility for the particular wrongdoer’s responsibility for the damage or loss. damage or loss.


[59] In my opinion, the Part was not intended to go any [59] In my opinion, the Part was not intended to go any further than this and the construction of the proportionate further than this and the construction of the proportionate liability provisions advanced by Selected Seeds must be liability provisions advanced by Selected Seeds must be rejected. … it was submitted that providing it could be said rejected. … it was submitted that providing it could be said that one or more of the cross-respondents had caused the that one or more of the cross-respondents had caused the loss or damage claimed by the applicants within s loss or damage claimed by the applicants within s 87CB(3), and providing they were liable to another party, 87CB(3), and providing they were liable to another party, albeit not the applicants, then their responsibility for the albeit not the applicants, then their responsibility for the loss and damage was to be taken into account in loss and damage was to be taken into account in assessing the extent of Landmark’s responsibility for the assessing the extent of Landmark’s responsibility for the damage or loss. Without more, such a construction of the damage or loss. Without more, such a construction of the proportionate liability provisions of the TPA would result in proportionate liability provisions of the TPA would result in a very significant erosion of a plaintiff’s rights as they were a very significant erosion of a plaintiff’s rights as they were before the introduction of the provisions. ….before the introduction of the provisions. ….


……That construction would involve a significant alteration of That construction would involve a significant alteration of the substantive law. In my opinion, however the argument the substantive law. In my opinion, however the argument is put it must be rejected because clear words would be is put it must be rejected because clear words would be required before one would accept a construction involving required before one would accept a construction involving such a substantial erosion of a plaintiff’s rights or a change such a substantial erosion of a plaintiff’s rights or a change in the substantive law as to the circumstances in which one in the substantive law as to the circumstances in which one party is liable to another. There are no such clear words in party is liable to another. There are no such clear words in the provisions and there is no other indication that the provisions and there is no other indication that Parliament intended to change the law so radically or why Parliament intended to change the law so radically or why it would be considered appropriate to do so.it would be considered appropriate to do so.

• Shrimp v Landmark Operations LimitedShrimp v Landmark Operations Limited [2007] FCA 1468 [2007] FCA 1468 per Besanko J, with a similar construction being applied by per Besanko J, with a similar construction being applied by his Honour to the Phis Honour to the Proportionate Liability Actroportionate Liability Act 2005 (NT) 2005 (NT)

• See, likewise, See, likewise, Chandra v Perpetual Trustees Victoria LtdChandra v Perpetual Trustees Victoria Ltd [2007] NSWSC 694 per Bryson AJ at [110].[2007] NSWSC 694 per Bryson AJ at [110].


• Can a joint (cf independent) tortfeasor or Can a joint (cf independent) tortfeasor or contractual obligor be a “concurrent wrongdoer”?contractual obligor be a “concurrent wrongdoer”?

• Answer is in negative because s 30 provides Answer is in negative because s 30 provides “acts or omissions caused, independently of “acts or omissions caused, independently of each other, the loss or damage”.each other, the loss or damage”.

• Examples of joint liability: employer/employee, Examples of joint liability: employer/employee, (vicarious liability), joint occupiers, joint (vicarious liability), joint occupiers, joint contractors.contractors.

• Cf TPA s 87CB(3); NSW s 34 “independently of Cf TPA s 87CB(3); NSW s 34 “independently of each other or jointly”.each other or jointly”.

ApportionmentApportionment

31 Proportionate liability for apportionable claims(1) In any proceeding involving an apportionable claim—

(a) the liability of a defendant who is a concurrent wrongdoer in relation to the claim is limited to an amount reflecting that proportion of the loss or damage claimed that the court considers just and equitable having regard to the extent of the defendant’s responsibility for the loss or damage; and(b) judgment must not be given against the defendant for more than that amount in relation to the claim.

…(3) In apportioning responsibility between defendants in a

proceeding the court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceeding.

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

Apportionment (Cont’d)Apportionment (Cont’d)

[113] In the application of s 35(1), and apportioning the responsibility of [113] In the application of s 35(1), and apportioning the responsibility of Mr Miller for the loss with the responsibility of Mr Pan, the extent 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 Miller's responsibility for the loss is altogether overwhelmed by Mr Pan's responsibility for the loss. Mr Pan acted deceitfully in Mr Pan's responsibility for the loss. Mr Pan acted deceitfully in pursuit of a large monetary advantage which he gained; Mr Miller pursuit of a large monetary advantage which he gained; Mr Miller was deceived and conducted an apparently small piece of was deceived and conducted an apparently small piece of professional work in a way which fell short of appropriate skill. I professional work in a way which fell short of appropriate skill. I consider it just, having regard to the extent of his responsibility, that consider it just, having regard to the extent of his responsibility, that Mr Miller's liability be limited to 10 percent of the plaintiffs' loss.Mr Miller's liability be limited to 10 percent of the plaintiffs' loss.

Chandra v Perpetual Trustee Victoria LtdChandra v Perpetual Trustee Victoria Ltd [2007] NSWSC 694 per [2007] NSWSC 694 per Bryson AJ but note tortious duty, not contractual obligation to the Bryson AJ but note tortious duty, not contractual obligation to the damaged plaintiff there assumed by the solicitor Miller.damaged plaintiff there assumed by the solicitor Miller.

Apportionment (Cont’d)Apportionment (Cont’d)Yates v Mobile Marine Repairs Pty Ltd & AnorYates v Mobile Marine Repairs Pty Ltd & Anor [2007] NSWSC 1463 per Palmer J (NSW ss 34 [2007] NSWSC 1463 per Palmer J (NSW ss 34

and 35 analogues of Qld ss 28/30 and 31.and 35 analogues of Qld ss 28/30 and 31.

[95] However, under s 35(1) CLA, the exercise is much more complicated than apportioning [95] However, under s 35(1) CLA, the exercise is much more complicated than apportioning blame in an action for negligence in tort because the apportionment may have to be made blame in an action for negligence in tort because the apportionment may have to be made as between a wrongdoer who has breached a contract and wrongdoer who has committed as between a wrongdoer who has breached a contract and wrongdoer who has committed a tort: s 34(1)(a) and (1A).a tort: s 34(1)(a) and (1A).…………

[97] …s 34 CLA makes it clear that both a contract breaker and tortfeasor may be [97] …s 34 CLA makes it clear that both a contract breaker and tortfeasor may be concurrent wrongdoers liable for the same loss or damage in an apportionable claim. The concurrent wrongdoers liable for the same loss or damage in an apportionable claim. The duty to avoid loss imposed by contract is as weighty as the duty to avoid loss imposed by duty to avoid loss imposed by contract is as weighty as the duty to avoid loss imposed by the common law. However, the Court is required to go beyond the legal character of the the common law. However, the Court is required to go beyond the legal character of the duties imposed upon concurrent wrongdoers and to examine the practicalities of duties imposed upon concurrent wrongdoers and to examine the practicalities of responsibility. Accordingly, the Court should apportion liability according to considerations responsibility. Accordingly, the Court should apportion liability according to considerations such as (but not limited to):such as (but not limited to):

– which of the wrongdoers was more actively engaged in the activity causing loss;– which of the wrongdoers was more actively engaged in the activity causing loss;

– which of the wrongdoers was more able effectively to prevent the loss happening.– which of the wrongdoers was more able effectively to prevent the loss happening.…………

Concurrent Wrongdoer (Cont’d)Concurrent Wrongdoer (Cont’d)[100] Mobile Marine has admitted that it was negligent in carrying out the work on [100] Mobile Marine has admitted that it was negligent in carrying out the work on the the Eagle’sEagle’s engines. As far as the evidence goes, all that MAN Australia did was to engines. As far as the evidence goes, all that MAN Australia did was to make the contract with Mr Yates and, presumably, pay half the cost of the repairs.make the contract with Mr Yates and, presumably, pay half the cost of the repairs.

[101] However, this is not a case in which MAN Australia undertook contractual [101] However, this is not a case in which MAN Australia undertook contractual responsibility for proper workmanship in an area in which it had no knowledge or responsibility for proper workmanship in an area in which it had no knowledge or expertise whatsoever and had, of necessity, to rely entirely on the skill of Mobile expertise whatsoever and had, of necessity, to rely entirely on the skill of Mobile Marine. MAN Australia was the supplier of the engines. It doubtless had its own Marine. MAN Australia was the supplier of the engines. It doubtless had its own employees who were capable of overseeing or checking what Mobile Marine had employees who were capable of overseeing or checking what Mobile Marine had done. It had access to experts within MAN AG, which had actually manufactured the done. It had access to experts within MAN AG, which had actually manufactured the engines. At the very least, MAN Australia might have asked questions as to the engines. At the very least, MAN Australia might have asked questions as to the process which Mobile Marine proposed to follow in carrying out the repair work. The process which Mobile Marine proposed to follow in carrying out the repair work. The expert evidence suggests that Mobile Marine’s intention to sand-blast before expert evidence suggests that Mobile Marine’s intention to sand-blast before repainting was inherently risky and likely to cause the very damage that occurred.repainting was inherently risky and likely to cause the very damage that occurred.

[102] In my opinion, [102] In my opinion, although Mobile Marine was more actively engaged, if not although Mobile Marine was more actively engaged, if not solely engaged, in the physical activity which caused Mr Yates’ loss, solely engaged, in the physical activity which caused Mr Yates’ loss, nevertheless, MAN Australia was not in a position where it was unable nevertheless, MAN Australia was not in a position where it was unable effectively to prevent the loss occurring. Because it had its own expertise, it effectively to prevent the loss occurring. Because it had its own expertise, it could not disregard its responsibility under the contract to ensure that Mobile could not disregard its responsibility under the contract to ensure that Mobile Marine had carried out the work properlyMarine had carried out the work properly..

[103] In my opinion, the liability for Mr Yates’ loss should be apportioned equally[103] In my opinion, the liability for Mr Yates’ loss should be apportioned equally between Mobile Marine and MAN Australia. Judgment should be entered against between Mobile Marine and MAN Australia. Judgment should be entered against them accordingly. them accordingly.


• Contributory negligence deducted before Contributory negligence deducted before apportionment: s 32G.apportionment: s 32G.

• Some instances of apportionment but with Some instances of apportionment but with several liability deemed in certain several liability deemed in certain concurrent wrongdoers.concurrent wrongdoers.

• Fraudulent wrongdoer: s 32D.Fraudulent wrongdoer: s 32D.• Wrongdoer who intends to cause loss or Wrongdoer who intends to cause loss or

damage: s 32E.damage: s 32E.• State FTA contravener: s 32F.State FTA contravener: s 32F.

Recoverability of Contribution Recoverability of Contribution Indemnity or Damages Indemnity or Damages inter seinter se

DefendantsDefendants32A Contribution not recoverable from concurrent

wrongdoerSubject to this part, a concurrent wrongdoer against whom judgment is given under this part in relation to an apportionable claim—

(a) can not be required to contribute to the damages recovered or recoverable from another concurrent wrongdoer for the apportionable claim, whether or not the damages are recovered or recoverable in the same proceeding in which the judgment is given; and(b) can not be required to indemnify the other concurrent wrongdoer


Defendants (cont’d)Defendants (cont’d)

7 Provisions relating to operation of Act…

(3) This Act, other than chapter 2, part 2 and chapter 3,3 does not prevent the parties to a contract from making express provision for their rights, obligations and liabilities under the contract (the express provision) in relation to any matter to which this Act applies and does not limit or otherwise affect the operation of the express provision.(4) Subsection (3) extends to any provision of this Act even if the provision applies to liability in contract.


Defendants (cont’d)Defendants (cont’d)• The language of the section identifies a specific The language of the section identifies a specific

circumstance, namely a judgment in favour of a circumstance, namely a judgment in favour of a claimant plaintiff against a “concurrent claimant plaintiff against a “concurrent wrongdoer” defendant or more than one of them wrongdoer” defendant or more than one of them for apportioned damages.for apportioned damages.

• The better but contentious view is that s 32A The better but contentious view is that s 32A does not preclude a court from awarding does not preclude a court from awarding damages in favour of one concurrent wrongdoer damages in favour of one concurrent wrongdoer against another concurrent wrongdoer adjusting, against another concurrent wrongdoer adjusting, between them, the burden of liability to the between them, the burden of liability to the plaintiff.plaintiff.


Defendants (cont’d)Defendants (cont’d)On this postulation:On this postulation:• the pltf’s claim will be apportioned between the wrongdoer defts.the pltf’s claim will be apportioned between the wrongdoer defts.• in turn any claim inter se defts under the contribution legislation is in turn any claim inter se defts under the contribution legislation is

excluded.excluded.• however a superior outcome may be achieved by one defts against however a superior outcome may be achieved by one defts against

another upon a cause of action for damages for breach of contract, another upon a cause of action for damages for breach of contract, whether in the character of a warranty to exercise reasonable care whether in the character of a warranty to exercise reasonable care or some other prescriptive condition or warranty.or some other prescriptive condition or warranty.

• arguably the same outcome obtains for non-contractual causes of arguably the same outcome obtains for non-contractual causes of action for damages, for example, in tort of negligence, nuisance or action for damages, for example, in tort of negligence, nuisance or breach of statutory duty or M & D conduct under TPA or FTA.breach of statutory duty or M & D conduct under TPA or FTA.

• irrespective of whether such a cross-claim, or subsequent claim, is irrespective of whether such a cross-claim, or subsequent claim, is mounted, each wrongdoer defendant remains liable to the ptf for the mounted, each wrongdoer defendant remains liable to the ptf for the damages adjudicated, and in the measures apportioned.damages adjudicated, and in the measures apportioned.


Defendants (cont’d)Defendants (cont’d)• The “indemnity” identified by the section lies The “indemnity” identified by the section lies

undefined and is Delphic in character eg it is undefined and is Delphic in character eg it is common law indemnity? common law indemnity?

• The better (but contentious) view is that an The better (but contentious) view is that an express, and effectively worded, contractual express, and effectively worded, contractual indemnity is an agreed disposition of risk indemnity is an agreed disposition of risk allocation which allows for pecuniary recovery if allocation which allows for pecuniary recovery if invoked and ought not be disturbed in the invoked and ought not be disturbed in the absence of clear legislative language.absence of clear legislative language.


Defendants (cont’d)Defendants (cont’d)• ““[I]t seems unlikely that Parliament would have intended to so [I]t seems unlikely that Parliament would have intended to so

drastically affect a party’s commercial bargain. It also seems to be drastically affect a party’s commercial bargain. It also seems to be counter to the policy behind the legislation of responding to the counter to the policy behind the legislation of responding to the perceived “insurance crisis”. One of the ways in which commercial perceived “insurance crisis”. One of the ways in which commercial parties arrange their affairs is to require parties contracting with parties arrange their affairs is to require parties contracting with them to provide a full indemnity and to carry insurance for any loss. them to provide a full indemnity and to carry insurance for any loss. Why would the legislation cut across that arrangement, thereby Why would the legislation cut across that arrangement, thereby increasing the risk of creating an uninsured defendant?”increasing the risk of creating an uninsured defendant?”

Uren QC and Aghion “Proportionate Liability: An analysis of Uren QC and Aghion “Proportionate Liability: An analysis of Victorian and Commonwealth Legislative Schemes” (Vic Victorian and Commonwealth Legislative Schemes” (Vic Commercial Bar Assoc CLE paper 2005) at 20; see also Watson Commercial Bar Assoc CLE paper 2005) at 20; see also Watson “From Contribution to Proportionate Liability” (2004) 78 ALJ 126 at “From Contribution to Proportionate Liability” (2004) 78 ALJ 126 at 144; cf Stephenson144; cf Stephenson “Proportional Liability in Australia – the death of “Proportional Liability in Australia – the death of certainty and risk allocation” (2005) 22 International Construction certainty and risk allocation” (2005) 22 International Construction Law Review 64 at 83.Law Review 64 at 83.


Defendants (cont’d)Defendants (cont’d)• The use of the linguistic “judgment” in s 32A The use of the linguistic “judgment” in s 32A

contrasts with contribution legislation which contrasts with contribution legislation which requires only that the claimant tortfeasor be requires only that the claimant tortfeasor be “liable”.“liable”.

• Any “concurrent wrongdoer” seeking to avail the Any “concurrent wrongdoer” seeking to avail the protection (if any) of s 32A against later protection (if any) of s 32A against later independent cause of action pursuit by another independent cause of action pursuit by another “concurrent wrongdoer”, ought garner (if “concurrent wrongdoer”, ought garner (if necessary by consent or in UCPR offer) a necessary by consent or in UCPR offer) a “judgment” secured against him or her. “judgment” secured against him or her.

the civil liability act – the current position on proportionate liability and causation richard...

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apportionment of liability

qld act

nt proportionate liability

corporations act

operation of act

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