New South Wales Supreme Court CITATION : Belan v Casey [2002] NSWSC 683 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 3909/01 HEARING DATE(S) : 22 July 2002 JUDGMENT DATE : 22 July 2002 Derrick Belan (First Plaintiff) PARTIES : Nicholas Belan (Second Plaintiff) Arthur Casey (Defendant) JUDGMENT OF : Campbell J COUNSEL : L Aitken (Plaintiffs) M Dulhunty (Defendant) SOLICITORS : Maurice May & Co (Plaintiffs) R L Whyburn & Associates (Defendant) CATCHWORDS : LIMITATION OF ACTIONS - contracts, torts and personal actions - action for contribution between tortfeasors - TORTS - THE LAW OF TORTS GENERALLY - joint or several tortfeasors - availability of contribution between joint tortfeasors at common law LEGISLATION CITED : Law Reform (Miscellaneous Provisions) Act 1946 Limitation Act (NSW) 1969 Bourke v LFOT [2002] 187 ALR 612 Burrows v Rhodes [1899] 1 QBE 816 Cia de Seguros Imperio v Heath [2001] 1 WLR 112 Cockburn v GIO Finance Limited (2) [2001] NSW CA 177 Coulthard v Disco Mix Club Ltd [2000] 1 WLR 707 CASES CITED : James Hardie & Coy Pty limited v Seltsam Pty Ltd (1998) 196 CLR 53 Knox v Gye (1872) LR 5 HL 656 Merryweather v Nixan (1799) 8 Term Rep 186; 101 ER 1337 Moxham v Grant [1900] 1 QB 88 Palmer v Wick and Pultneytown Steam Shipping Company Ltd [1894] AC 318 R v McNeil (1922) 31 CLR 76 Woodhead v Elbourne [2001] 1 Qd R 220 DECISION : Striking out of claim seeking contribution between tortfeasors refused - 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EQUITY LIST CAMPBELL J MONDAY 22 JULY 2002 3909/01 DERRICK & NICHOLAS BELAN v ARTHUR CASEY JUDGMENT 1 HIS HONOUR: This is the hearing of a notice of motion in which the defendant to a suit in this Division seeks the striking out of the entirety of the plaintiffs' claims. The basis on which the striking out is sought is that it is alleged that the plaintiffs' claim is statute barred pursuant to s 26(1)(a) of the Limitation Act (New South Wales) 1969. 2 The Applicant on the present motion does not rely on any evidence but rather makes the application as a pure argument of law arising from the terms of the pleading document. 3 The facts as they appear from the statement of claim are as follows. The claim which is sought to be struck out, arises from some earlier litigation. In about 1994 the late Frank Belan and Mr Arthur Casey were officers of the National Union of Workers (New South Wales Branch). In 1994 union elections were held. Mr Belan and Mr Casey ran together for office under the banner of "the Frank Belan team". There was some material published in the course of the election campaign which resulted in a Mr Dennis Boner and a Mr Edward Palmer each suing Mr Casey and Mr Belan alleging defamation. Those defamation actions were heard together before his Honour Mr Justice Kirby. 4 On 12 March 1999 Kirby J delivered judgment, holding that each of the plaintiffs before him had succeeded. In the result, Mr Belan and Mr Casey were ordered to pay damages and costs. Their liability to make the payment of damages was expressly stated by his Honour to be joint and several. Ultimately, Mr Belan paid the whole of the damages which were awarded and, after the costs had been assessed, also paid the whole of the costs which were payable. 5 Mr Belan has since died. The proceedings before me are ones which are brought by the executors of the late Frank Belan. They claim from Mr Casey contribution towards the money which Mr Belan has paid. That claim is made on the basis of statute, common law and equity. 6 By an amended notice of grounds of defence, which was filed in court today, Mr Casey has alleged that, "The plaintiffs' action is not maintainable as it is statute barred pursuant to s 26(1)(a) of the Limitation Act (New South Wales) 1969." Section 26 of the Limitation Act says, (1) An action on a cause of action for contribution under sub s 1 of s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 is not maintainable if brought after the first to expire of: (a) a limitation period of two years running from the date on which the cause of action for contribution first accrues to the plaintiff or to a person through whom the plaintiff claims, and (b) a limitation period of four years running from the date of the expiration of the limitation period for the principal cause of action. (2) For the purposes of paragraph (a) of sub section one, the date on which a cause of action for contribution first accrues is: (a) if the plaintiff in the action for contribution or a person through whom the plaintiff claims is liable in respect of the damage for which contribution is claimed by judgment in a civil action or by arbitral award – the date on which the judgment is given or the award is made, whether or not, in the case of a judgment, the judgment is afterwards varied as to quantum of damages, or (b) if, in a case to which paragraph (a) does not apply, the plaintiff in the action for contribution or a person through whom the plaintiff claims makes an agreement with a person having a cause of action for the damage for which the cause of action for contribution arises, which agreement fixes, as between the parties to the agreement, the amount of the liability in respect of that damage of the plaintiff in the action for contribution or a person through whom the plaintiff claims – the date on which the agreement is made". 7 Section 5 of the Law Reform (Miscellaneous Provisions) Act 1946 says, so far as relevant, (1) Where damage is suffered by any person as a result of a tort ... (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, so, however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by that person in respect of the liability in respect of which the contribution is sought." 8 My attention has been drawn to a provision of the defence which alleges that Mr Casey was, indeed, entitled to be indemnified by the late Mr Belan concerning this liability. That does not, however, really deal with the true force of the contention which the defendant puts on today's application. 9 If it were the case that this situation was one where s 5 applied, and it were to be found that there was indeed a contract for indemnity between Mr Casey and Mr Belan, that would be a reason why the plaintiffs would fail. However, regardless of that, the defendant asserts, in the present application, that the action that is brought is out of time. 10 It was on 12 March 1999 that Kirby J gave his judgment in the defamation actions. The present proceeding were not commenced until 8 August 2001. Thus, in so far as this is an action for contribution under s 5 Law Reform (Miscellaneous Provisions) Act 1946, to which s 26(1)(a) applies, it is clearly brought out of time. 11 Mr Aitken, counsel for the plaintiffs, says that this is not an action brought under s 5, but rather is an action to enforce a common law or equitable right to contribution. He refers me to the recent decision in Bourke v LFOT [2002] 187 ALR 612, especially at 616, 621 and 635, and also to the judgment of Mason P in Cockburn v GIO Finance Limited (2) [2001] NSW CA 177; [2001] 51 NSW LR 264 at 631, which conveniently summarises principles about the general law remedy of contribution. If Mr Aitken is right in saying that the present action is one founded on the general law right of contribution, to that extent it is clearly brought within time. 12 I pause here to point out that it seems that, when the defamation actions were before Justice Kirby, there were no cross claims between Mr Casey and Mr Belan which sought to make any claims for contribution one against the other. It is, presumably, because of this absence of cross claims at that time that the present proceedings are now brought. 13 The historical circumstances that led to the enactment of s 5 of the Law Reform (Miscellaneous Provisions) Act, and its English predecessor enacted in 1935, were the limitations which the common law imposed, under the rules arising from the decision in Merryweather v Nixan (1799) 8 Term Rep 186; 101 ER 1337, on the recovery of contribution between tortfeasors. 14 Meagher, Gummow and Lehane, Equity Doctrines and Remedies, Third Edition paragraph 1001, when explaining the circumstances in which the equitable remedy of contribution arose, say, "Joint tort-feasors were long in a different position. For the common law turned its face against contribution between joint tort-feasors in Merryweather v Nixan (1799) 8 TR 186; 101 ER 1337, and equity followed the law, with the result that the right as it exists today rests upon statutes modelled after the ambiguously phrased Imperial Law Reform (Married Women Tort-Feasors) Act 1935". 15 In my view, if the situation were that the tort of defamation, which Justice Kirby has found was committed by Mr Belan and Mr Casey, was one for which the common law would not permit contribution between tortfeasors, equity would follow the law so far as the availability of contribution was concerned, and the only way in which the present action for contribution could succeed would be on the basis of s 5 of the Law Reform (Miscellaneous Provisions) Act. 16 However, if the action was one where the common law, independently of the statute, would have allowed a right of contribution to exist, then the action for contribution has a basis independent of s 5 of the Law Reform (Miscellaneous Provisions) Act. 17 Examination of whether the common law, independently of the statute, would have permitted such a right of contribution will involve an examination of how the common law on this topic stood prior to the enactment in England in 1935, and in this State in 1946, of the legislation allowing contribution between tort-feasors. The law on that topic was not as black and white as some accounts of it would suggest. 18 In Shirley, "A Selection of the Leading Cases in Common Law", 5th edition (1896) at 488, the learned authors first give an account of the decision in Merryweather v Nixan (1799) 8 TR 186, "Merryweather and Nixan destroyed the machinery and injured the mill of a Yorkshire man named Starkey. The mill-owner was not prepared to submit tamely, and brought an action against the pair of them. The jury gave him 840 pounds as damages, and instead of getting 420 pounds from each, he made Merryweather pay the whole 840 pounds. Merryweather did not see why he should pay for Nixan's whistle as well as his own, and sued him for contribution, that is to say, for 420 pounds. In fairness, of course, Nixan ought to have made no difficulty about paying it; but he steadfastly declined to do anything of the sort. The law upheld him in this refusal, for ex turpi causa non oritur actio." 19 The learned author then set out some principles which apply in this area of the law, saying at 488, "There is no contribution between defendants in tort. In contract there is... But the rule that one tort-feasor cannot sue another for contribution does not extend to the case where the former has acted quite innocently, and was simply obeying what he believed to be the lawful instructions of his employer. Such a person may claim not merely contribution, but an absolute indemnification. If A orders B to drive cattle out of a field, and in obeying the order B unwittingly commits a trespass, A must indemnify him; but it would be different if the order given and obeyed were to assault C without rhyme or reason, because B must have known that A had no business to tell him to do that. ( Pearson v Skelton) (1836) 1 M & W 504; [(1836) 150 ER 533]; Betts v Gibbins (1834) 2 AD and E 57; 4 N and M 64; [(1834) 111 ER 22]; Dixon v Fawcus (1861) 30 LJQB 137; 3 El & El 537; [(1861) 121 ER 544])". 20 As well, the House of Lords, in Palmer v Wick and Pultneytown Steam Shipping Company Ltd [1894] AC 318 has cast some doubt on the proper scope of the decision in Merryweather v Nixan, even in England. Lord Herschell said that, "The reasons to be in Lord Kenyon's judgment [in Merryweather v Nixan ] so far as reported, are somewhat meagre, and the statement of the facts of the case is not less so. It is now too late to question that decision in this country; but when I am asked to hold it to be part of the law of Scotland, I am bound to say that it does not appear to me to be founded on any principle of justice or equity, or even of public policy, which justifies its extension to the jurisprudence of other countries. There has certainly been a tendency to limit is application even in England. In the case of Adamson v Jarvis [1827], 4 Bing 66; 12 Moore, 241; [(1827) 130 ER 693], Best CJ delivered the judgment of the court, referring to the case of Philips v Biggs [1735], Hard 164; [(1735) 145 ER 433], which he said was never decided; 'but the Court of Chancery seemed to consider the case of two sheriffs of Middlesex, where one had paid the damages in an action for an escape, and sued the other for contribution, as like the case of two joint obligors.' He then proceeded as follows: 'from the inclination of the court in this last case, and from the concluding part of Lord Kenyon's judgment in Merryweather v Nixan , and from reason, justice and sound policy, the rule that wrongdoers cannot have redress or contribution against each other is confined to cases where the person seeking redress must be presumed to have known that he was doing an unlawful act.' If the view thus expressed by the Court of Common Pleas be correct (and I see no reason to dissent from it), the doctrine that one tort-feasor cannot recover from another is inapplicable to a case like that now under consideration." 21 When the limitations on the doctrines expressed in Merryweather v Nixan were as Lord Herschell had held them to be in Palmer v Wick and Pultneytown Steam Shipping Company Ltd, it will be seen that the mere statement of the facts which are alleged in the statement of claim, and which I have summarised earlier in these reasons for judgment, does not suffice to demonstrate that the general law would not have allowed contribution, prior to the enactment of the English legislation of 1935 and s 5(1)(C) of the New South Wales legislation of 1946. It may be that, when the facts are exposed at a trial, it will become apparent that the present is a case where the general law would not have allowed contribution prior to the enactment of these statutes. What suffices for present purposes today is that, short of that investigation, I cannot say that it is inevitable that the limitation defence will succeed. It is on this basis that I decline to make the orders for striking out which the notice of motion seeks. See also per Kirby J, James Hardie & Coy Pty limited v Seltsam Pty Ltd (1998) 196 CLR 53 at 76, "Judges affronted by the injustice of the rule [in Merryweather v Nixan] became inventive at finding exceptions -- see, e.g. Moxham v Grant [1900] 1 QB 88 at 93, and Burrows v Rhodes [1899] 1 QBE 816 at 828. In the latter it was held that the rule was inapplicable where the act was done in honest ignorance of the facts which constituted the unlawfulness. The plaintiff in that case was induced to take part in the Jameson Raid by a representation that the service in question was to be lawful employment." 22 What this brief examination of the history of contribution between tortfeasors shows, is that s 5 was needed because the circumstances in which the common law allowed contribution between tortfeasors were patchy and limited. But it is not correct to say that there was never contribution between tortfeasors. 23 I should record that the parties presented arguments concerning whether this was a situation where equity would, or would not, apply by analogy the limitation provisions which attach to s 5 of the Law Reform (Miscellaneous Provisions) Act, to any claim to invoke an equity of contribution. Counsel referred to Knox v Gye (1872) LR 5 HL 656 at 674, R v McNeil (1922) 31 CLR 76 at 100, Coulthard v Disco Mix Club Ltd [2000] 1 WLR 707 at 730, Cia de Seguros Imperio v Heath [2001] 1 WLR 112 at 120, Woodhead v Elbourne [2001] 1 Qd R 220, and Spry, Equitable Remedies, 5th ed p 419 – 420. 24 It seems to me that any question of whether equity would apply limitation provisions by analogy in this case is dependent upon coming to a decision about whether it is only pursuant to s 5 that a right of contribution exists in the present case. 25 It seems to me that, if there was a right of contribution independent of s 5, then s 26 of the Limitation Act would not apply; if the only way in which contribution could be sought was pursuant to s 5, then no question of there being an equitable right of contribution would arise, and so no question of equity applying the limitation statute by analogy would arise. 26 Thus, the rights of the parties concerning the present motion are not in my view advanced by considering the law concerning when equity will apply statutes of limitation by analogy. 27 It follows that I dismiss the notion of motion. 28 The plaintiff seeks costs of the motion. The defendant opposes that saying that costs should be reserved, and follow the event of the trial. It seems to me that this is not an appropriate case for reserving the costs, nor indeed for any order other than that the costs should follow the event. The application was brought, and failed, and would not have been necessary if the matter had gone to trial. In those circumstances, I order the defendant to pay the plaintiff's costs. ********** Last Modified: 08/06/2002 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.