Dust Diseases Tribunal of New South Wales CITATION : Antoon Frans Broers v Australian Co-Operative Foods Limited and ors [2008] NSWDDT 38 This decision has been amended. Please see the end of the judgment for a list of the amendments. Antoon Frans Broers Australian Co-Operative Foods Limited Wallaby Grip Limited PARTIES : Wallaby Grip (BAE) Pty Limited (in liquidation) Amaca Pty Ltd SCA 605 Pty Ltd Malleys Pty Limited MATTER NUMBER(S) : 7263 of 2007 JUDGMENT OF: Curtis J at 1 CATCHWORDS: Claims Resolution Process :- Notice of Motion - apportionment LEGISLATION CITED: Dust Diseases Tribunal Regulation 2007 Potter v Minahan [1908] 7 CLR 277 CASES CITED: QBE Insurance (Australia) Ltd v Wallaby Grip & Ors [2007] NSWCA 43 Stewart v QBE Insurance (Australia) Ltd [2008] NSWDDT32 DATES OF HEARING: 8 December 2008 DATE OF JUDGMENT: 15 December 2008 Mr G F Little SC with Mr S Tzouganatos instructed by McLaughlin Riordan appeared for the plaintiff (applicant on the motion) Mr D Priestley instructed by Harmers Workplace Lawyers appeared for the first defendant LEGAL REPRESENTATIVES: Mr D Russell SC instructed by Middletons appeared for the second and third defendants Mr TGR Parker SC instructed by DLA Phillips Fox appeared for the fourth defendant Ms T Moisidis instructed by Goldrick Farrell Mullan appeared for the fifth defendant Mr TM Rowles instructed by Sparke Helmore appeared for the sixth defendant JUDGMENT: Dust Diseases Tribunal of New South Wales Matter Number 7263 of 2007 Antoon Frans Broers v Australian Co-Operative Foods Ltd Wallaby Grip Limited Wallaby Grip (BAE) Pty Limited (in liquidation) Amaca Pty Limited SCA 605 Pty Ltd Malleys Pty Limited 15 December 2008 RULING on NOTICE OF MOTION CURTIS J Background 1. The plaintiff, Mr Broers, has contracted asbestos-related diseases in consequence of his work as a fitter between 1959 and 1992. He sues Australian Cooperative Foods as his employer between 1959 and 1962, Wallaby Grip Ltd, Wallaby Grip (BAE) Pty Ltd (in liquidation) and Amaca Pty Ltd as manufacturers and suppliers of the asbestos materials with which he worked, and SCA 605 Pty Ltd and Malleys Pty Ltd as manufacturers and suppliers of commercial and domestic heaters installed by him which, he says, contained asbestos. 2. Mr Broers' claim is subject to the Claims Resolution Process mandated by the Dust Diseases Tribunal Regulation 2007. Clause 48(1) of those regulations provides that "the defendants to a claim who are alleged to be liable to contribute to any damages recovered by the plaintiff must agree among themselves as to the contribution that each is liable to make to those damages". 3. The defendants sued by Mr Broers could not agree, and the Registrar, pursuant to Clause 49(1), referred the matter to a Contributions Assessor for determination. 4. That assessor was directed by Clause 49(4) to determine the contributions of the defendants "on the assumption that the defendants are liable". 5. On 29 August 2008, the Contributions Assessor determined that the defendants' contributions to the plaintiff's damages were to be: Australian Cooperative Foods Ltd - 8 per cent Wallaby Grip Ltd - 22.75 per cent Wallaby Grip (BAE) Pty Ltd - 26.25 per cent Amaca Pty Ltd - 18.5 per cent SCA Pty Ltd - 13.5 per cent Malleys Pty Ltd - 11 per cent 6. Thereafter Wallaby Grip Ltd, Wallaby Grip (BAE), and Amaca Pty Ltd filed defences denying liability. The present claim 7. By Notice of Motion filed 24 November 2008,the plaintiff seeks orders that those paragraphs in each defence in which liability is denied be struck out pursuant to Uniform Civil Procedure Rules r14.28(1) on the ground that the defences are not reasonably available. 8. The argument turns on the meaning of Clause 52(1) of the Regulation which provides that: (1) An agreement or determination as to apportionment among defendants for the purposes of this Division is conclusively binding on the defendants for the purposes of the settlement, or determination by the Tribunal, of the plaintiff's claim and payment of the plaintiff's damages. (Emphasis added). (2) … 9. Mr Little SC for the plaintiff submits that this regulation must be read in its terms, and a determination by a Contributions Assessor that a defendant is to contribute a proportion of the plaintiff's damages which is binding on the defendants for the purposes …of determination by the Tribunal extinguishes not only any defence that a defendant had to a cross-claim by another defendant, but also any defence it has to the plaintiff's claim. 10. In written submissions he says this: "During the determination of the plaintiff's claim before the Tribunal, the only evidence which the defendants can call is that which is not inconsistent with the binding effect upon them of Clause 52(1)." 11. Pursuant to the plaintiff's argument, the clause requires, (subject to proof of actionable damage), that judgment be entered for the plaintiff against each defendant. This is so because the Tribunal may not enter any judgment incompatible with the assessment, even though the Contributions Assessor was required to make his determination merely on the assumption that the defendant was liable. 12. Mr Little concedes that this reading of the regulation abrogates the common law. He accepts the authority of the statement by O'Connor J in Potter v Minahan [1908] 7 CLR 277 at 304 where His Honour said: It is in the last degree improbable that the legislature would overthrow fundamental principles, infringe rights, or depart from the general system of law, without expressing its intention with irresistible clearness; and to give any such effect to general words, simply because they have that meaning in their widest, or usual, or natural sense, would be to give them a meaning in which they were not really used. 13. Nevertheless, Mr Little submits that the words of Clause 52, in context, reflect with "irresistible clearness" a legislative intention to provide to a plaintiff a means by which he or she may obtain judgment against a defendant without first proving liability. The wording of the clause 14. I do not agree that the terms of Clause 52(1) are unambiguous. The draughtsman has not addressed the problem that arises when a Contribution Assessment is imposed upon a party sued, as defendant or cross defendant, who caused no part of the plaintiff's damage, that is, an innocent party. 15. Although the clause states that apportionment is conclusively binding on the defendants for the purpose of determination by the Tribunal, it does not address the forms of judgment which may be entered to effect this purpose. The clause is silent on whether, in obedience to its terms, a judgment should be entered for the plaintiff against each defendant or cross defendant in accordance with the contributions assessment, or whether, after a contested hearing and entry of judgment for the plaintiff against some but not all of the defendants, judgments are to be entered on cross claims in accordance with that assessment. 16. The first construction is that for which the plaintiff contends. Upon the alternative construction, judgment must be entered for a cross-claimant against an innocent defendant, after the latter has successfully resisted the plaintiff's claim. 17. Although both constructions create anomalies, I believe the second to be correct for reasons summarised in paragraphs 33 to 39 below. The second reading speech 18. Mr Little relies upon to two passages in the Attorney's speech to the Dust Diseases Tribunal Amendment (Claims Resolution) Bill on 5 May 2005. They are as follows: Under the division, if Defendants failed to agree on apportionment within the specified time, the registrar will refer the matter to a contributions assessor for determination. Contributions assessors will then determine the contribution each defendant is liable to make to the plaintiff's damages. This assessment will be binding for the purpose of resolving the claimant's claim, but can be challenged in subsequent proceedings before the tribunal… and; The decision of the contributions assessor cannot be challenged by the Defendants until after the Plaintiffs claim has been settled or determined. Defendants will be able to challenge the determination after the claimants claim has settled or determined, but the challenging Defendant will be liable for indemnity costs for other parties is a challenging Defendant does not materially improve its position. 19. I do not find these passages to be helpful. The ambiguity remains. Context 20. Clause 52(1) appears in Division 5 of Part 4, of the Dust Diseases Tribunal Regulation 2007, which division is entitled APPORTIONMENT. 21. Clause 17, which appears in Division I of Part 4, provides that: The provisions of this Part form part of the procedural law of the State for the purposes of the determination of any claim. 22. Clause 47 provides that a reference to a defendant in the division includes a cross-defendant Clause 49 (4) is in these terms: The Contributions Assessor to whom a matter is referred is to determine the contribution that each defendant is liable to make and is to make that determination on the assumption that the defendants are liable and solely on the basis of: (a) the plaintiff 's statement of particulars and the defendants ' replies on the claim , and (b) standard presumptions as to apportionment determined by the Minister for the purposes of this clause by order published in the Gazette. Clause 52 (2) provides that: The agreement or determination is not binding for the purposes of the subsequent taking, or determination by the Tribunal, of a dispute between defendants as to apportionment. Clause 53 recognises that a defendant or cross defendant, termed "the innocent defendant" may be found by the Tribunal to be not liable on a claim or cross claim if the ground of its defence "is established in the proceedings", and imposes a cost penalty on any defendant or cross claimant who disputed that defence. Confusingly, the clause does not identify whether "the proceedings" are the plaintiff's proceedings or subsequent proceedings brought pursuant to Clause 52(2). If the proceedings refers to the plaintiff's proceedings, then the clause is fatal to the plaintiff's argument that no defence to liability may be mounted in the primary proceedings. If the proceedings refers to Clause 52(2) proceedings, then Clause 53 supports the proposition that judgment may be entered pursuant to a Contributions Assessment against an innocent defendant, which judgment may be later set aside. Clause 4(5) of Schedule 1 to the Dust Diseases Tribunal (Standard Presumptions Apportionment) Order 2007, (promulgated for the purposes of Clause 49 of the regulation) is in these terms: (5) The apportionment is thereby determined for the claimant's case by the Contributions Assessor. Where the apportionment is determined by the Contributions Assessor while the claimant's proceedings are still pending, judgments as to apportionment are to automatically follow the final determination by entry of judgment (either by consent or after a hearing) in favour of the claimant (see clause 52(1) of the Dust Diseases Tribunal Regulation 2007). Where the apportionment is determined by the Contributions Assessor after the claimant's proceedings have been settled or determined, judgments as to apportionment automatically follow the apportionment by the Contributions Assessor. Any defendant has a right to seek a review of the Contributions Assessor's apportionment by a formal hearing and determination by the DDT of the question of apportionment, but any such hearing will not proceed until after the conclusion of the claimant's claim (either by settlement or entry of judgment after hearing) (see clause 52(2) of the Dust Diseases Tribunal Regulation 2007). (Emphasis added) 23. This clause clearly apprehends that no judgment is to be entered on the cross claims until after the plaintiff obtains judgment, by consent or by determination of the Tribunal. Thereafter judgments on the cross claims between or by defendants may be entered in accordance with a Contributions Assessment. Clause 52(2) renders such judgments provisional as between defendants and cross-defendants. 24. Those who drafted the regulations were no doubt cognisant of s11(4) of the Dust Diseases Tribunal Act 1989, which confers jurisdiction upon the Tribunal in respect of cross claims, and s13(6) of the Act which provides that: Whenever appropriate, the Tribunal may reconsider any matter that it has previously dealt with, or rescind or amend any decision that the Tribunal has previously made. The entry of judgment on a cross-claim pursuant to a contribution assessment is no impediment to an innocent party who pays the amount of that judgment obtaining orders for rescission of the judgment and repayment of moneys paid to the cross claimant. In the same proceedings, that cross claimant may claim additional contribution from the other parties to the Contribution Assessment. 25. The procedure is similar to that which operates under the Building and Construction Industry Security of Payment Act 1999. The object of that act is to ensure that subcontractors receive progress payments in relation to construction work. A person who makes a claim for progress payments in accordance with the procedures mandated by the act is entitled to recover the amount of the claim as a debt in any court of competent jurisdiction, and the respondent to the claim is not entitled in those proceedings to bring any cross-claim against the claimant, or to raise any defence in relation to matters arising under the construction contract. In subsequent proceedings in relation to any matter arising under the construction contract, the court may make orders for the restitution of any amount so paid. 26. That legislation is obviously designed to provide a quick, if rough, ready and temporary, solution to contractual disputes which might otherwise take a long time to come on for hearing. The procedure merely identifies the pocket in which the money is to sit, pending resolution of larger issues. With appropriate orders for interest and costs, justice is done in the long run. 27. In the present case, judgments between cross claimants and cross defendants made pursuant to Contributions Assessments are provisional and may be set aside. There is nothing in the regulations or their context which gives any support to the proposition that judgments between plaintiffs and innocent defendants are provisional. Authority 28. The plaintiff relies upon the decision of the Court of Appeal in QBE Insurance (Australia) Ltd v Wallaby Grip & Ors [2007] NSWCA 43. In that case, O'Meally P, on the application of cross-defendants, withdrew a matter from the Claims Resolution Process after the plaintiff settled with the primary defendants. He did this for the reasons that the underlying policy behind the regulation, early resolution of the plaintiff's claim, had been achieved when the plaintiff and defendant settled the action, and further that, because the extent of the cross-defendants' liability was disputed, it would be necessary to litigate the cross-claim in any event and submission of the cross-claim for determination by a Contributions Assessor would only increase costs and cause further delay. 29. The Court of Appeal held that his discretion had miscarried because the existence of a dispute as to the extent or fact of the cross-defendants' liability could not be a relevant consideration in circumstances where the Regulation established a procedure for the summary determination of that dispute, pursuant to which a judgment may be entered. A conclusion that the parties would inevitably proceed to a full trial of the contribution claims was said to be speculative. 30. Handley A-JA, with whom Hodgson J, and Campbell J agreed said: 15 Division 5 establishes a procedure for the summary but provisional determination of contribution claims in order to facilitate settlement of the plaintiff's claim and the satisfaction of any judgment he may obtain by judicial decision or settlement. A defendant or cross-defendant who is dissatisfied with the summary determination can pursue its strict rights and seek a more favourable determination at a trial but will be subject to significant costs sanctions if a substantially better result is not achieved. Meanwhile the summary determination is immediately enforceable. A clear purpose of the scheme is to prevent the final determination of the plaintiff's claim being delayed by contribution disputes. 36 In my judgment the Tribunal is entitled and bound to give effect to [a contributions assessment] by entering appropriate verdicts and judgments. Since the defendants have satisfied the consent judgment in favour of the plaintiff they would be entitled to judgments against each other and the cross-defendants for the contributions determined by the Assessor. 31. The claim of the plaintiff in that case related to the indivisible injury of mesothelioma. The cross-defendants did not dispute that there was evidence, which, if accepted, made them liable to the plaintiff. They asserted that their liability would not be as great as the assessor would determine pursuant to the mandated presumptions of fact. I can see nothing in the decision of the Court of Appeal which advances the plaintiff's case. To the contrary, I think the following passage from the reasons of Handley A JA is fatal to his argument: 34 …[A] determination of the liability of cross-defendants for contribution "for the purposes of payment of the plaintiff's damages" does not entitle the plaintiff to judgment against those cross-defendants nor does it entitle a plaintiff to enforce their liability for the purposes of satisfying his judgment against the defendants. He is not concerned with how the ultimate burden of his judgment should be shared among those responsible. 32. Kearns J in Stewart v QBE Insurance (Australia) Ltd [2008] NSWDDT32 rejected the proposition for which the plaintiff now contends. He said that if Clause 52(1) was designed to prevent a defendant from contesting its liability to a plaintiff, this intention would have been expressed in clearer language. He contrasted the ambiguous terms of Clause 52(1) with those of Clause 49(4), which required in direct terms that a Contributions Assessor assume the liability of defendants and cross-defendants. Conclusion 33. The terms of Clause 52(1) conceal the problem rather than dictate the solution. 34. The context in which Clause 52(1) operates favours the conclusion that the judgments required to discharge its function are judgments on cross claims. 35. Clause 17 expressly provides that Clause 52(1) is a procedural law. It cannot operate substantively to create a statutory cause of action against an innocent party. 36. A defendant in Clause 51(1) includes a cross-defendant. Judgment cannot be entered for the plaintiff in accordance with a contribution assessment if a cross-defendant, not sued by the plaintiff, is assessed as a contributor. 37. Further, a plaintiff whose injuries are indivisible is entitled to obtain and execute a judgment against any one defendant for the whole of his damages, not an assessed portion. He is protected against the contingency that one of the defendants against whom a proportionate judgment is entered may prove to be worthless. 38. If an innocent defendant is compelled by Clause 52(1) to pay damages to a plaintiff rather than to a cross claimant he is without remedy. The relief offered by Clause 52(2) is not available because Clause 52(2) only governs " a dispute between defendants" as to apportionment. The Tribunal cannot exercise its powers of reconsideration if it has been compelled by force of law to enter a judgment in favour of a plaintiff against an innocent defendant. Such a judgment, unlike a judgment in concurrent cross claims, is not provisional. If the damage suffered by the plaintiff is divisible, the innocent defendant subject to judgment in favour of the plaintiff cannot obtain contribution or indemnity against that judgment from other defendants, because the damage is not the same damage within the meaning of s5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946. 39. Further anomalies would be created if Clause 52(1) were to have the far-reaching effect suggested. Clause 52(1) only operates where there is more than one defendant, and a plaintiff suing one defendant only must still prove his case in accordance with the common law. Clause 52 only operates while a claim is subject to the Claims Resolution Process, yet Clause 22 permits removal of a claim from the Claims Resolution Process before apportionment. In that case the plaintiff must again prove his case in accordance with the common law. Orders 40. The plaintiff's motion of 24 November 2008 is dismissed. Plaintiff to pay the costs of Wallaby Grip Ltd, Wallaby Grip (BAE) Pty Ltd (in liquidation) and Amaca Pty Ltd. Liberty to the other defendants to apply in respect of costs. Mr G F Little SC with Mr S Tzouganatos instructed by McLaughlin Riordan appeared for the plaintiff (applicant on the motion) Mr D Priestley instructed by Harmers Workplace Lawyers appeared for the first defendant Mr D Russell SC instructed by Middletons appeared for the second and third defendants Mr TGR Parker SC instructed by DLA Phillips Fox appeared for the fourth defendant Ms T Moisidis instructed by Goldrick Farrell Mullan appeared for the fifth defendant Mr TM Rowles instructed by Sparke Helmore appeared for the sixth defendant 06/02/2009 - 1992 changed to 1962 - Paragraph(s) 1 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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