Newcrest Mining Limited v Thornton [2012] HCA 60

HIGH COURT OF AUSTRALIA

FRENCH CJ, HEYDON, CRENNAN, KIEFEL AND BELL JJ

NEWCREST MINING LIMITED APPELLANT

AND

MICHAEL EMERY THORNTON RESPONDENT

Newcrest Mining Limited v Thornton [2012] HCA 60 13 December 2012 P59/2011

ORDER

Appeal dismissed with costs.

On appeal from the Supreme Court of Western Australia

Representation

B W Walker QC with P Kulevski for the appellant (instructed by DLA Piper Australia)

B L Nugawela with B W Ashdown for the respondent (instructed by Chapmans)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Newcrest Mining Limited v Thornton

Negligence – Damages – Statutory limit on recoverability of damages – Section 7(1)(b) of Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA) provides that person bringing more than one action in respect of damage suffered as the result of a tort cannot recover more than "the amount of the damages awarded by the judgment first given" – Settlement of claim against concurrent tortfeasor given effect by consent judgment – Subsequent claim brought against different concurrent tortfeasor – Whether statutory limitation on recoverability of damages applied to subsequent claim.

Words and phrases – "award", "consent judgment", "damages awarded by the judgment first given".

Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA), s 7(1)(b).

FRENCH CJ. Introduction A person who has suffered damage as the result of a tort or torts and brings separate actions against tortfeasors liable in respect of the damage cannot recover more than "the amount of the damages awarded by the judgment first given". That is the substance of s 7(1)(b) of the Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA) ("the WA Act"). It is a limit upon the recoverability of damages that has been part of the law of Western Australia since 1947. Similar provisions are found in New South Wales, Queensland and the Northern Territory. They were all modelled on s 6(1)(b) of the Law Reform (Married Women and Tortfeasors) Act 1935 (UK) ("the 1935 UK Act"). The question in this case is whether the limit applies when the "judgment first given" is a consent judgment in proceedings in tort and/or contract where the proceedings have been commenced and the consent to judgment filed solely to give effect to an agreement to settle the claim. The answer in this case is no. The appeal by Newcrest Mining Ltd against the decision of the Court of Appeal of Western Australia which so found should be dismissed. Statutory framework – the section Section 7 of the WA Act provides: "(1) Subject to Part 1F of the Civil Liability Act 2002, where damage is suffered by any person as the result of a tort— (a) judgment recovered against any tortfeasor liable in respect of that damage shall not be a bar to an action against any other person who would, if sued, have been liable as a joint tortfeasor in respect of the same damage; (b) if more than one action is brought in respect of that damage by or on behalf of the person by whom it was suffered … against tortfeasors liable in respect of the damage (whether as joint tortfeasors or otherwise) the sums recoverable under the judgments given in those actions by way of damages shall not in the aggregate exceed the amount of the damages awarded by the judgment first given: and in any of those actions, other than that in which judgment is first given, the plaintiff shall not be entitled to costs unless the court is of opinion that there was reasonable grounds for bringing the action; (c) any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is or would if sued have been liable in respect of the same damage whether as a joint tortfeasor or otherwise but so that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by him in respect of the liability for which contribution is sought." Factual and procedural background In February 2004 the respondent, who was employed as a rigger at the Telfer mine site in Western Australia, slipped in mud and injured his knee. He claimed workers' compensation payments and common law damages from his employer at the mine site, Simon Engineering (Australia) Pty Ltd ("Simon Engineering"). Eventually the respondent and Simon Engineering's insurer, Allianz Australia Insurance Ltd ("Allianz") agreed to settle his claims. The terms of the settlement, set out in a letter dated 17 May 2007 from the solicitors for Allianz to the respondent's solicitor, included the following: "2. By consent between the parties, judgment for [the respondent] against [Simon Engineering] in the sum of $250,000.00, in addition to all payments that have been made to date pursuant to the Workers' Compensation and Injury Management Act 1981 ... 3. [Allianz] will make a contribution towards [the respondent's] legal costs in the sum of $10,000.00 and will pay the disbursements in the sum of $1,804.00. 4. Settlement is to be effected by way of Consent to Judgment filed and sealed at the District Court." Enclosed with the letter was a writ of summons to be issued out of the District Court of Western Australia and a form of consent to judgment in the proceedings which were to be commenced by that writ. The terms of settlement contained no admission of liability in respect of any cause of action. The writ was issued out of the District Court in the name of the respondent as plaintiff against Simon Engineering as defendant. The indorsement of claim on the writ stated: "The Plaintiff claims against the Defendant damages in respect of all personal injuries suffered by him arising out of or in the course of his employment with the Defendant on or around 16 February 2004 and in respect of all subsequent aggravations and/or recurrences of whatsoever nature, which injuries, aggravations and/or recurrences were caused by the negligence and/or breach of statutory duty and/or breach of contract of the Defendant." No statement of claim was filed. Contemporaneously with the issue of the writ, the consent to judgment was filed in the proceedings which it commenced. The consent to judgment was in the following terms: "WE THE PARTIES to this action consent to judgment being entered for the Plaintiff against the Defendant for the sum of $250,000.00, exclusive of weekly payments made to date pursuant to the Workers' Compensation & Injury Management Act 1981, plus legal costs in the sum of $11,804.00 inclusive of disbursements." It was signed by the solicitors for the respondent and for Simon Engineering. Simon Engineering at that time was subject to a Deed of Company Arrangement. The consent to judgment was subsequently endorsed with a statement signed by the Registrar of the District Court: "Order that judgment be entered accordingly", followed by the words: "JUDGMENT Dated the 31 day of May 2007. Pursuant to the aforesaid order of the Registrar IT IS THIS DAY ADJUDGED that judgment being entered for the Plaintiff against the Defendant for the sum of $250,000.00 exclusive of weekly payments made to date pursuant to the Workers' Compensation & Injury Management Act 1981, plus legal costs in the sum of $11,804.00 inclusive of disbursements." On 23 June 2008, the respondent issued a writ against the appellant and others in respect of his injuries arising out of the same incident in respect of which he had sued Simon Engineering. The appellant had been operating the Telfer mine site. In a statement of claim filed with the writ, the respondent alleged that the appellant was negligent for failure, inter alia, to provide a safe work place and was in breach of a statutory duty said to be owed pursuant to s 9(1) of the Mines Safety and Inspection Act 1994 (WA). As is apparent, the appellant was sued as a "several concurrent tortfeasor" with Simon Engineering albeit Simon Engineering was also sued in tort and/or contract. The appellant's alleged liability arose out of a cause of action distinct from those which the respondent had asserted against Simon Engineering. The particulars of damages claimed against the appellant and the other defendants in the proceedings amounted to $1,989,746.00. A credit was given for the settlement monies received from Simon Engineering leaving a total outstanding claim of $1,739,746.00. The particulars were filed on 31 March 2009. On 11 May 2009, the appellant filed a chamber summons for summary judgment. The appellant invoked s 7(1)(b) of the WA Act. In a supporting affidavit sworn by its solicitor, the appellant referred to the consent judgment entered on 31 May 2007 against Simon Engineering and the satisfaction of that judgment by Simon Engineering's insurer. On 25 August 2009, a Deputy Registrar of the District Court ordered that the respondent's action against the appellant be dismissed with costs. The respondent appealed to a judge of the District Court (Mazza DCJ) who ordered that the appeal from the Deputy Registrar's decision be dismissed with costs. The respondent then appealed to the Court of Appeal of Western Australia. That Court allowed the appeal, quashed the order of the District Court dismissing the appeal from the decision of the Deputy Registrar, and dismissed the appellant's application for summary judgment in the District Court. The appellant was ordered to pay the respondent's costs of the summary judgment application, the appeal to the District Court and the appeal to the Court of Appeal. On 9 December 2011 this Court (Crennan and Kiefel JJ) granted special leave to the appellant to appeal from the judgment of the Court of Appeal. The decision of the Court of Appeal Two months after Mazza DCJ delivered his judgment in the District Court dismissing the respondent's appeal from the decision of the Deputy Registrar, the Court of Appeal of New South Wales delivered judgment in Nau v Kemp & Associates Pty Ltd. The Court of Appeal of New South Wales held that the term "damages awarded by [a] judgment" in s 5(1)(b) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) ("the NSW Act"), relevantly identical to s 7(1)(b) of the WA Act, did not extend to a judgment entered by consent of the parties. The Court of Appeal of Western Australia followed the decision in Nau v Kemp on the basis that it was not "plainly wrong". In so doing, the Court of Appeal of Western Australia acted in accordance with what was said in this Court in Farah Constructions Pty Ltd v Say-Dee Pty Ltd. Consent judgments under the District Court Rules The District Court Rules 2005 ("DCR"), which are made under the District Court of Western Australia Act 1969 (WA), provide that the Rules of the Supreme Court 1971 ("RSC") apply to and in respect of any case in the District Court. Order 42 of the RSC provides for entry of judgment to be made in a book to be kept by the Principal Registrar at the Central Office. There is a specific requirement that in any case in which a defendant "has appeared by a solicitor, no order for entering judgment shall be made by consent unless the consent of the defendant is given by his solicitor or agent". Where a defendant is self-represented no such order shall be made unless the defendant appears before a judge and gives his consent in person or unless his written consent is attested by a solicitor acting on his behalf. Those rules are calculated to ensure that an informed consent is given by the defendant. They do not require any assessment by the court of the merits of the compromise underlying the order. Order 43 provides for drawing up judgments and orders. Order 43 r 16 deals with consent orders. It provides that "[t]he parties to proceedings or their practitioners may file a written consent to the making of an order in those proceedings". The Registrar may "settle, sign and seal the order without any other application being made in any case in which in his opinion the Court would make such an order upon consent of the parties". Alternatively, the Registrar may bring the matter before the court which, without any other application, may "direct the registrar to settle, sign, and seal the order". Order 43 r 16(3) provides: "The order shall state that it is made by consent and shall be of the same force and validity as if it had been made after a hearing by the Court." A consent order of the kind made in this case can properly be described as an order which expresses an agreement in a more formal way than usual. It may be set aside on any ground which could invalidate the agreement. It is, nevertheless, an order. However, when a consent order in favour of a plaintiff gives effect to an agreement which does not involve any admission of liability in respect of any cause of action asserted by the plaintiff, it cannot be taken as reflecting an admission of liability or as a determination of liability by the court. In this case, the consent order was an order for the payment of a money sum. Order 43 r 16(3) gives the same legal effect to such an order as an order made after a hearing in the court. That does not impute any finding to the court. In this case, the causes of action asserted in the indorsement of claim on the writ were cumulatively, and alternatively, negligence, breach of statutory duty and breach of contract. It cannot be known whether underlying the terms of settlement was an unexpressed concession as to liability in respect of any of the causes of action. That gives rise to the question whether, for the purposes of s 7(1)(b) of the WA Act, it can be said, and if so on what basis, that the consent judgment was a judgment given in an action against a tortfeasor liable in respect of the damage suffered by the respondent. The answer is in the negative. Nor can it be said that the money sums specified in the consent judgment constituted "damages awarded by the judgment" within the meaning of s 7(1)(b) of the WA Act. The latter answer is fatal to this appeal. That answer flows from the construction of s 7(1)(b) in the light of its legislative history. Legislative history of s 7(1)(b) At common law a judgment in an action against one of several joint tortfeasors was a bar to an action against the others for the same cause whether or not the judgment was satisfied. The rule, which dates back to the beginning of the 17th century, was explained by Parke B in King v Hoare: "[t]he judgment of a court of record changes the nature of that cause of action, and prevents it being the subject of another suit, and the cause of action, being single, cannot afterwards be divided into two". The rule was also said to be directed against the mischief of a plaintiff who had obtained judgment against one of several joint tortfeasors thereafter bringing a multiplicity of actions against the others in respect of the same tort. It was nevertheless "highly technical" and was confined to cases in which there was only one cause of action. An unintended by-product of the common law rule, as explained by the Privy Council in Wah Tat Bank Ltd v Chan, was that: "it prevented a plaintiff who had brought only one action against a number of joint tortfeasors from recovering final judgment, even by consent or default, against any of them without barring his right to judgment against the others". To avoid that difficulty, settlements were given effect by a "Tomlin Order" which would record the agreement of the parties in a schedule to a stay order rather than in the terms of a consent judgment. The common law rule, it seems, was seen as applying to consent and default judgments as well as to judgments entered after trial. The enactment of s 6 of the 1935 UK Act, upon which s 7 of the WA Act is modelled, followed recommendations made in the Third Interim Report of the Law Revision Committee of Great Britain published in 1934. The Report responded to a reference relating to denial of contribution between tortfeasors and the rule in Merryweather v Nixan. However, the Committee also decided to deal with the rule that a joint tort merged in a judgment obtained against one tortfeasor, regardless of its satisfaction, with a resulting bar to recovery against other joint tortfeasors. The Committee recommended, inter alia, that: "[a] judgment recovered against one or more persons in respect of an actionable wrong committed jointly shall not, while unsatisfied, be a bar to an action against any others liable jointly in respect of the same wrong. Provided that the Plaintiff shall not be entitled to levy execution for, or to be paid, a sum exceeding, in the aggregate, the amount of the first judgment obtained against any of the persons so liable, nor to recover the costs of any subsequent action, unless the Judge before whom it is tried is of opinion that there was reasonable ground for bringing it." The proviso in the recommendation was limited in its application to joint tortfeasors. Its implementation in s 6(1)(b) of the UK Act and s 7(1)(b) of the WA Act extended to several concurrent tortfeasors. The object of the 1935 UK Act, as described by Professor Glanville Williams, was "to prevent injustice to a plaintiff who finds that the tortfeasor whom he has chosen to sue is insolvent". Relevantly to s 6(1)(b), however, he observed: "It is no part of the policy of the Act that a plaintiff who has sued one tortfeasor, and who is dissatisfied with the assessment of his damages by the court, should be allowed to sue the other tortfeasor in the hope of obtaining a greater bite from the cherry. Accordingly it is expressly provided in s 6(1)(b) ... that the plaintiff cannot in any event recover more than the sum awarded by the judgment in the first action". The limit on recoverability imposed by s 6(1)(b) was described by Professor Glanville Williams as a curtailment of the common law rights of plaintiffs. He said: "At common law judgment against one several concurrent tortfeasor did not bar an action against another, and in the second action the plaintiff might obtain a larger judgment than in the first. In such a case the plaintiff could presumably have required payment of the whole of the second judgment if the first were unsatisfied, or, if the first were satisfied, of the amount by which the second exceeded the first. Now, by the Act, the second judgment cannot effectively be for more than the first." The character of the limit on recoverability as a curtailment of common law rights indicates that s 7(1)(b) should not be construed so as to involve a greater incursion on such rights than is clearly mandated by the text. It is necessary now to refer more directly to the constructional question. The construction of s 7(1)(b) The limit on recoverability of tortious damages created by s 7(1)(b) is imposed when the following conditions are satisfied: • a person has suffered damage as the result of a tort; • more than one action is brought in respect of that damage by or on behalf of the person by whom it was suffered; • the actions are brought against persons liable in respect of the damage (whether as joint tortfeasors or otherwise); • an amount of damages is awarded by the judgment first given in one of those actions. The limit imposed when those conditions are met is that the sum recoverable under any subsequent judgments given in the other actions, shall not in the aggregate exceed the amount of the damages awarded by the judgment first given. It follows from the text of s 7(1)(b) that the person against whom damages are awarded by the judgment first given must be a tortfeasor liable in respect of the damage suffered by the plaintiff. That requirement raises the question: what is necessary to establish that the person against whom the first judgment is awarded is in that category? What is necessary to establish that condition has some bearing on the collocation "damages awarded by the judgment first given". It was that collocation which was the focus of constructional debate in this appeal. None of the authorities cited by the parties directly resolved that debate. Baxter v Obacelo Pty Ltd, which involved a consideration of s 5(1)(b) of the NSW Act by this Court, concerned an action brought against a solicitor and his employee for professional negligence. The Court held that a settlement reached and a consent judgment entered against one of the co-defendants did not attract the application of s 5(1)(b) of the NSW Act so as to preclude recovery against the other. That was because, as the Court held, the words of s 5(1)(b) "should be given their ordinary meaning, as applying to cases where there is more than one action, that is to say, more than one proceeding". That case therefore has no direct bearing upon the constructional issue thrown up in this appeal. There have been a number of decisions in this and other jurisdictions concerning the conditions necessary to establish an entitlement in one person to recover contribution from another pursuant to s 7(1)(c) of the WA Act and its equivalents elsewhere. The course of that authority in Australia is at least of analogical significance when it comes to construing s 7(1)(b) although it is necessary to bear in mind the different purposes of pars (b) and (c). Bitumen and Oil Refineries (Australia) Ltd v Commissioner for Government Transport concerned the entitlement to contribution conferred under s 5(1)(c) of the NSW Act upon "any tort-feasor liable" in respect of damage suffered by a person as a result of the tort. The criterion of liability was found to be satisfied by a verdict and judgment after trial, which it was held could be pleaded in contribution proceedings against a concurrent tortfeasor. The Court said that the term "liable" where it first occurs in s 5(1)(c) "should be held at least to include ascertainment by judgment". The Court went on to observe that it might be desirable to allow the plaintiff to amend the declaration sought in its pleading "to make it clear that the recovery pleaded was for tort". The Court left open the possibility that liability for the purposes of s 5(1)(c) could be established by arbitral award or by agreement amounting to accord and satisfaction, or agreement amounting to accord executory, followed by satisfaction. As subsequent dicta in this Court have made clear, the precondition of liability necessary to enliven the entitlement to contribution under s 7(1)(c) and its equivalents can be established by other than a final judgment following a contested hearing. In Thompson v Australian Capital Television Pty Ltd, Gummow J observed that the phrase "any other tort-feasor … liable" appearing in s 11(4) of the Law Reform (Miscellaneous Provisions) Act 1955 (ACT): "includes a party whose liability has been ascertained upon a settlement whether or not reflected in a consent judgment, and ... this is so whether or not in reaching the settlement the party now seeking contribution admitted liability". His Honour, however, added the important caution, reflecting what Lord Denning MR said in Stott v West Yorkshire Car Co: "Nevertheless, the party seeking contribution after such a settlement must be prepared in that proceeding to establish that, if the claim had been fought out, that party would have been held responsible in law and liable to pay in whole or in part for the damage referred to in s 11(4)." That approach had been followed in respect of Australian legislation and in New Zealand in Baylis v Waugh. It has also been applied in the Court of Appeal of Northern Ireland in James P Corry & Co Ltd v Clarke. In James Hardie & Coy Pty Ltd v Seltsam Pty Ltd, which was another case concerned with contribution proceedings under s 5(1)(c) of the NSW Act, Gaudron and Gummow JJ said that: "The reference to the right of a tortfeasor who is 'liable in respect of ... damage' to recover contribution is, as Windeyer J put it, 'to a person whose liability as a tortfeasor has been ascertained, ordinarily by judgment, perhaps in some cases in some other way'." Each of the authorities mentioned was concerned with the equivalent of s 7(1)(c) and the conditions necessary to establish one person's liability for a tort which is necessary to enliven that person's entitlement to contribution from a joint or concurrent tortfeasor. None of the authorities support the proposition that liability as a tortfeasor in such cases is established simply by a consent judgment or agreement without some basis from which it may be ascertained that the liability imposed relates to a tort. The character of the "judgment first given" referred to in s 7(1)(b) as a judgment against a tortfeasor liable in respect of the damage suffered by the plaintiff will not be established merely by a consent judgment reflecting an agreement to settle proceedings. Consistently with that approach, the term "damages awarded by the judgment" in s 7(1)(b) requires some connection between the debt created by the consent judgment and a tortious liability on the part of the defendant. The limit upon recoverability imposed by s 7(1)(b) is not enlivened by an agreement to make a payment in settlement of an action, even agreement involving an admission of liability. It is therefore difficult to see how a consent judgment which merely gives effect to the agreement can, without more, amount to an award of damages for the purposes of s 7(1)(b). There is nothing in the procedure adopted by the Registrar of the District Court following lodgment of the consent order that requires that any consideration be given to the basis of the liability underpinning the order. Section 7(1)(b) is directed to successive actions in which a plaintiff, discontented with the outcome in the first action, seeks another bite of the cherry. A consent judgment which gives effect to an agreement between the parties, a fortiori an agreement which does not identify tort as the basis for liability, does not cross over into the area of policy concern to which s 7(1)(b) is directed. Absent a clear textual indication, it should not be so construed. As indicated earlier, s 7(1)(b) infringes the common law rights of a plaintiff to recover successively against several concurrent tortfeasors. That infringement should not be broadly construed beyond what the text of s 7(1)(b) requires and beyond what is necessary to deal with the mischief to which it is directed. In my opinion the Court of Appeal was correct to allow the appeal against the decision of the District Court. Conclusion The appeal should be dismissed with costs.