Winford v Permanent Nominees (Aust) Ltd Acn: 000 154 441 & Ors [2002] ACTSC 21 (28 March 2002)

Last Updated: 12 April 2002

WINFORD v PERMANENT NOMINEES (AUST) LTD ACN: 000 154 441 & ORS [2002] ACTSC 21 (28 March 2002)

CATCHWORDS

NEGLIGENCE - personal injury - claims against the Commonwealth - contractual indemnity - claim for contribution by a tortfeasor against the Commonwealth - contribution - Commonwealth as a joint tortfeasor - statutory removal of right of action - is a claim for indemnity or contribution "an action or other proceeding for damages . . . in respect of an injury sustained by an employee" - distinction between a contractual indemnity against damages, costs and other expenses and a claim for "damages" - distinction between contribution and indemnity.

McGregor, H McGregor on Damages 14^th ed Sweet & Maxwell Limited, London, 1980 at 384

Safety, Rehabilitation and Compensation Act 1988 (Cth) s 44, s 44(1)(a) and 45

Law Reform (Miscellaneous Provisions) Act 1955 s 11 and s 12

Judiciary Act 1903 (Cth) s 64 and s 79

Georgiadis v Australian and Overseas Telecommunications Corporation [1994] HCA 6; (1994) 179 CLR 297

Commonwealth of Australia v Mewett [1997] HCA 29; (1997) 191 CLR 471

Austral Pacific Group Ltd (in liquidation) v Airservices Australia [2000] HCA 39; (2000) 203 CLR 136; 173 ALR 619

Commonwealth of Australia v Evans Deakin Industries Ltd [1986] HCA 51; (1986) 161 CLR 254

Pearce v Crown Equipment Pty Ltd (unreported, ACTSC 26 May 1995, SC 308 of 1993)

Birmingham and District Land Company v London and North Western Railway Company (1886) 34 Ch D 261

Westpac Banking Corporation v P & O Containers Ltd (1991) 30 FCR 320; 102 ALR 239

The Workers Rehabilitation and Compensation Corporation v JR Engineering Services Pty Ltd [1995] SASC 4992

Penrith City Council v Government Insurance Office of New South Wales (1991) 24 NSWLR 564

Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589

No. SC 284 of 2000

Judge: Higgins J

Supreme Court of the ACT

Date: 28 March 2002

IN THE SUPREME COURT OF THE )

) No. SC 284 of 2000

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: MARIA WINFORD

Plaintiff

AND: PERMANENT NOMINEES (AUST) LTD ACN: 000 154 441

Defendant

COMMONWEALTH OF

AUSTRALIA

First Third Party

OTIS ELEVATOR COMPANY PTY LTD

Second Third Party

K F (ACT) PTY LIMITED

Third Third Party

ORDER

Judge: Higgins J

Date: 28 March 2002

Place: Canberra

THE COURT ORDERS THAT:

1. The application by the First Third Party to determine in advance the points of law raised by it in its Amended Defence of 9 November 2001 be granted.

2. Paragraphs 12 to 17 of the Amended Defence be struck out.

3. The relief sought in paragraph 18 is, at this stage, declined.

4. The parties will be heard as to costs.

1. This is an application to set aside, as disclosing no cause of action, a Third Party Notice issued by the Defendant to the First Third Party.

2. The principal claim arises out of personal injury suffered by the Plaintiff in the course of her employment by the First Third Party. She was injured on or about 12 February 1998 when she attempted to enter an elevator at her place of employment. It is alleged, and accepted for the purpose of this application, that the elevator had failed to stop level with the outside floor. Thus the Plaintiff fell heavily into the elevator and was injured.

3. Whether or not the First Third Party would otherwise have been liable to pay damages for breach of its duty of care to the Plaintiff at common law, the Plaintiff was prevented from suing the First Third Party by virtue of the provisions of s 44 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the "SRC Act").

4. Section 44 provides:

"(1) Subject to section 45, an action or other proceeding for damages does not lie against the Commonwealth, a Commonwealth authority, a licensed corporation or an employee in respect of:

(a) an injury sustained by an employee in the course of his or her employment, being an injury in respect of which the Commonwealth, Commonwealth authority or licensed corporation would, but for this subsection, be liable (whether vicariously or otherwise) for damages; or

(b) the loss of, or damage to, property used by an employee resulting from such an injury; whether that injury, loss or damage occurred before or after the commencement of this section."

5. The effect of this provision was qualified by the High Court decisions in Georgiadis v Australian and Overseas Telecommunications Corporation [1994] HCA 6; (1994) 179 CLR 297 and Commonwealth of Australia v Mewett [1997] HCA 29; (1997) 191 CLR 471. However, those decisions do not assist the Plaintiff in these proceedings. Her cause of action accrued after s 44 came into effect.

6. The Defendant is the owner of the building in which the allegedly defective elevator is located. It had sublet the whole of the building to the First Third Party pursuant to a registered Memorandum of Sub-Lease between them (the Lease). (The Second and Third Third Parties are respectively the maintenance and management contractors in respect of the elevator). The Defendant has by the Third Party Notice sought contribution from the First Third Party.

7. The First Third Party asserts that s 44 bars any claim against it, whether by the Plaintiff or any other person, whether for contribution, indemnity or otherwise, in respect of the injury to the Plaintiff.

8. The Defendant relies on a contractual indemnity contained in the Lease between it and the First Third Party. It says that that contractual indemnity is not caught by s 44 but should have its full force and effect according to its terms.

9. There had, originally, been an alternative claim for contribution on behalf of the Defendant against the First Third Party, relying on the Law Reform (Miscellaneous Provisions) Act 1955 (the "LR (MP) Act"). However, that claim was not pursued, having regard to the decision in Austral Pacific Group Ltd (in liquidation) v Airservices Australia [2000] HCA 39; (2000) 203 CLR 136; 173 ALR 619.

10. It was, in that decision, held that because the Commonwealth would not ". . . if sued, have been liable in respect of the same damage, whether as a joint tortfeasor or otherwise" (s 11(4) LR (MP) Act), no claim for contribution could be made by a tortfeasor against the Commonwealth where the Commonwealth was protected from action by virtue of s 44 of the SRC Act.

11. The Defendant relies on clause 14.1 of the Lease. That provides that:

"The Lessee [ie the First Third Party] indemnifies the Lessor [ie the Defendant] against all liability or loss arising from:

(c) loss, damage or injury from any cause to property or to a person within or without the Premises or Building caused, or to the extent, contributed to, by the negligence of the Lessee or the Lessee's Employees and Agents."

12. It is accepted that it would be at least arguable that the First Third Party was in breach of its duty of care towards the Plaintiff and, but for s 44 SRC Act, the Plaintiff could maintain an action against the First Third Party.

The First Third Party's argument

13. Mr Burmester QC, Assistant Solicitor-General for the Commonwealth, submitted that cl 14.1 of the Lease had no different effect from s 11 and s 12 of the LR (MP) Act.

14. He advanced a further submission that, even if the Defendant is entitled to rely upon cl 14.1, no rights enforceable by the Defendant, in law or equity, will arise unless, and not until, the Plaintiff obtains a verdict against the Defendant.

15. To the suggestion that equity could require a direct contribution in these proceedings, Mr Burmester responded that such equitable relief was to be excluded because damages would be an adequate remedy.

16. In any event, it was submitted, the clear legislative intent was to prevent the Plaintiff's injury from being a source of legal liability for damages in the Commonwealth. That intent is not to be subverted by the indirect intervention of the indemnity clause.

17. Mr Burmester relied primarily on Austral Pacific (supra). As Mr Braham, for the Defendant, pointed out, that case directly concerned the effect of provisions similar to s 11 and s 12 of the LR (MP) Act where contribution was being sought against the Commonwealth as a joint tortfeasor in respect of injury to a Commonwealth employee.

18. A firefighter (C) had been injured as a result of alighting from a fire truck. A rubber step tread manufactured by the appellant was allegedly defective. C's action was for both negligence and breach of s 71 and s 74 of the Trade Practices Act 1974 (Cth) (the "TPA").

19. The appellant sought contribution from the respondent. The respondent was C's employer and a Commonwealth statutory corporation.

20. The Court was unanimous in dismissing the appellant's claim that it was entitled to seek contribution or indemnity from the respondent.

21. Gleeson CJ, Gummow and Hayne JJ noted that C's cause of action turned upon the claim in negligence. Thus, the deemed contract created by the TPA did not need to be considered. It was assumed that as the liability, if any, of the respondent arose under federal law, s 79 of the Judiciary Act 1903 (Cth) operated to "pick up" the relevant Queensland statute law enabling contribution (similar to the LR (MP) Act). At [21], their Honours stated:

" . . . s 44 operated to deny from the outset the existence of a cause of action in respect of those relevant events."

22. As with the present case there was no evidence that the limited common law rights under s 45 of the SRC Act had been activated. It was assumed that they had not been. From this their Honours concluded:

"[24] . . . It follows that in respect of his injuries at no time did an action or other proceeding by the plaintiff for damages lie against Airservices. That is a significant matter in determining the operation of the [Law Reform Act 1995 (Q)] ("Contribution Act") if it is "picked up" by s 79."

23. The claim between the appellant and respondent was not, however, one for damages for personal injury.

"[26] . . . The claim by Austral Pacific against Airservices was of entitlement to be "indemnified by [it] against, or contribution in respect of, any liability [Austral Pacific] may be found to have in respect of the [p]laintiff's claim, in such amount as may be found by the court to be just and equitable having regard to the extent of [Airservices] responsibility for the damage alleged to have been suffered by the [p]laintiff.

"The claim was not one to recover damages. That was the character of the action instituted by the plaintiff against Austral Pacific. The claim against Airservices was brought in pursuance of new statutory rights, not to enforce a liability of Airservices sounding in damages at the suit of Austral Pacific. Nor was it in respect of acts or omissions on the part of Airservices which were wrongful against Austral Pacific."

24. Their Honours noted that the SRC Act was silent on the obligations between a Commonwealth authority and a third party in the case of negligent injury to a Commonwealth employee. That was left to be determined by relevant State law.

25. The terms of the Contribution Act [equivalent to the LR (MP) Act], however, excluded liability because the right to contribution or indemnity arose only if the third party would, if sued by the plaintiff, have been liable to the plaintiff for damages.

26. McHugh J also noted, in Austral (supra) at [62], that, though the respondent had no liability to the appellant before the action commenced, nevertheless, in view of Commonwealth of Australia v Evans Deakin Industries Ltd [1986] HCA 51; (1986) 161 CLR 254:

" . . . The Commonwealth or its instrumentality can be made liable upon it becoming a party to proceedings even though immediately before the proceedings commenced it had no actual liability."

27. Had the SRC Act simply provided that "no action for damages or other statutory proceeding lies against the Commonwealth" (at [63]) no action could lie under the Contribution Act. However, the SRC Act was not inconsistent with the Contribution Act. Thus:

"[65] . . . s 64 [Judiciary Act 1903 (Cth)] applied to give the defendant a right to proceed against the third party. And s 79 [Judiciary Act 1903 (Cth)] "picked up" the Contribution Act and applied it to the third party as a "surrogate Commonwealth law". However, the provisions of the [SRC Act] so operated that, on its proper construction, the third party was not a tortfeasor "who is, or would if sued have been, liable" for the purposes of the Contribution Act."

28. Thus the claim for contribution failed, not because it was precluded by the terms of the SRC Act but by virtue of the terms of the applicable State law. The SRC Act did not merely bar enforcement of common law rights against the Commonwealth (and its agencies) by the plaintiff but also the substantive cause of action. A right of action could have been created by an election under s 45 SRC Act but until such an election, if open, was made, no cause of action arose against the Commonwealth at the suit of the plaintiff.

29. Callinan J focussed upon the argument as to whether the SRC Act intended to "state exhaustively the liabilities of the Commonwealth and its Authorities in a case such as the present" [79]. His Honour commented, at [111]:

"The result is somewhat anomalous and perhaps unintended. It seems unjust that although the Commonwealth or one of its Authorities may have been negligent and responsible in some measure for an employee's injuries, it may escape liability for such damages simply because an employee has chosen to sue a joint tortfeasor only."

30. In this case, the First Third Party seeks to apply these "anomalous," "unintended" and "unjust" consequences to the different legal consequence of, not a statutory qualified right, but a contractual obligation.

31. There is, however, other authority. Gallop J, in this Court, held, in Pearce v Crown Equipment Pty Ltd (unreported ACTSC, 26 May 1995, SC 308 of 1993), that a third party claim was barred against the Commonwealth in relation to an injury sustained by an employee of the Commonwealth not only under s 11(4) of the LR (MP) Act, but also for "damages for breach of contract".

32. The nature of the particular contract between the defendant and the Commonwealth in that case does not appear from the judgment. Nor is there any explanation in the judgment as to the source of the barrier to the defendant's enforcement of its contractual rights, themselves not barred by s 44 SRC Act and not requiring the aid of s 11(4) LR (MP) Act for enforcement.

33. The only reasoning expressed was the proposition that the contractual obligation, whatever it was, gave rise to or constituted a "proceeding in respect of" a claim by an employee of the Commonwealth for damages for personal injury and such a claim was barred and the cause of action of the employee extinguished by s 44 SRC Act. His Honour concluded, at p 7:

"Giving the words ["in respect of"] a wide meaning it is appropriate to identify the defendant's claim for damages for breach of contract against the third party as an action or other proceeding in respect of an injury sustained by the plaintiff in the course of his employment within the meaning of s 44(1) of the [SRC] Act. The defendant's claim is referable to the plaintiff's injury and the damages sought are the same as what (sic) the plaintiff may recover in his action against the defendant."

34. It may be observed that this reasoning echoes the argument advanced by Mr Burmester that there is an all-embracing legislative intent to exclude claims against the Commonwealth from whatever source relating to or occasioned by a serious personal injury to a Commonwealth employee.

35. Further, his Honour seems to have considered that s 11(4) LR (MP) Act applied to and supported a claim for contribution or indemnity even if based on contract. That is clearly an error. Subsection 11(4) applies only to the case of a joint tortfeasor claiming indemnity or contribution, not available at common law, from any joint tortfeasor. It should be remembered that his Honour did not have the advantage of the decision of the High Court in Austral Pacific (supra).

36. It is now apparent that the result in Austral Pacific (supra) might well have been different had the Queensland Contribution Act created a right to contribution unqualified by the need for the injured person to have been able to sue for and obtain relief from the proposed contributor.

37. Evans Deakin (supra) also makes it clear that the claim for contribution is not excluded merely because the right to it arises only when the liability of a defendant to a plaintiff is established by judgment or order.

The claim for indemnity/contribution

38. The fact that this injured employee has no cause of action against her employer in respect of her injury does not mean she has no cause of action against any other party. Nor does s 44 SRC Act purport to bar or extinguish any such right.

39. The question is whether the claim for indemnity or contribution is "an action or other proceeding for damages . . . in respect of an injury sustained by an employee . . ." (s 44(1)(a) SRC Act) and, hence, barred .

40. The "proceeding" by the Defendant is to obtain some contribution towards the liability the Defendant has (or may have) to pay damages to the Plaintiff in respect of her injury. Against that liability, the Defendant claims a (partial) contractual indemnity.

41. It is apparent that the learned author of McGregor on Damages (14^th ed 1980) did not regard a contractual indemnity against damages, costs and other expenses as a claim for "damages," despite sharing the same name (see p384 par 530). It is "money payable under the terms of a contract.".

42. The difference is that the contractual obligation is to pay money if the events stated in the contract should occur. It is, therefore, not a claim for damages arising from a breach of that contractual obligation. It is the difference between promising not to injure by negligence the building owner so as to keep it harmless and the obligation to pay money to the building owner if the latter becomes subject to an obligation to pay damages in particular circumstances.

43. The distinction was explained in Birmingham and District Land Company v London and North Western Railway Company (1886) 34 Ch D 261. In that case, Land Company had taken a lease of lands subject to a building covenant. The land became subject to a scheme to authorise the building of a railway line, to be authorised by Parliament. Prudently, Land Company did not proceed with the building work lest the houses built pursuant to its covenant conflict with such route for the railway as Parliament might approve. Some parts of the lands were sold by the owner to Railway Company (subject, of course, to the lease). The latter, noting that the time for building had expired, treated the lease to Land Company as at an end. Land Company sought to join the landowner as a third party claiming a right to indemnity. The rules permitted such joinder only in case of such a claim.

44. Chitty J, at first instance, rejected the application holding that Land Company had "no contract express or implied for an indemnity, nor have they any equitable right to indemnity" (at p268). They might have a right to specific performance and compensation from the landowner but not indemnity. That decision was affirmed on appeal.

45. Cotton LJ highlighted the distinction between a right to indemnity and a right to damages:

"(271) In my opinion, the rule must mean where the defendant claims a direct right to indemnity by contract express or implied."

46. Bowen LJ, at 274-5, briefly stated the position:

"But it is quite clear to my mind that a right to damages . . . is not a right to indemnity as such. It is the converse of such a right. A right to indemnity as such is given by the original bargain between the parties. The right to damages is given in consequence of the breach of the original contract between the parties. It is an incident which the law attaches to the breach of a contract, and is not a provision of the contract itself."

47. Fry LJ, at 276, stated the same principle:

" . . . the word "indemnity" in the rule which we have now to construe, means to express a direct right either at law or in equity to indemnity as such, and I think that this right has to be contrasted, and not to be for a moment confounded, with the right to damages which arises either from a breach of contract or from tort."

48. Pincus J applied the above decision with approval in Westpac Banking Corporation v P & O Containers Ltd (1991) 30 FCR 320; 102 ALR 239.

49. The decision was also applied by the Full Court of the Supreme Court of South Australia in The Workers Rehabilitation and Compensation Corporation v JR Engineering Services Pty Ltd, Western Mining Corporation (Olympic Dam Operations) and Jeffrey John Ball [1995] SASC 4992 (10 March 1995) ("JR Engineering").

50. The circumstances of the latter case are of interest in the present case. The appellant, referred to as "The Corporation," was a statutory insurer of employers providing the usual indemnity against workers' compensation liability, including liability arising otherwise than from the statutory entitlements of the worker (for example, at common law).

51. The worker, as plaintiff in the proceedings at first instance, claimed damages against both his employer (JRE, the First Respondent) and the supervising contractor (WMC, the Second Respondent).

52. The respondents were found liable in damages for negligence for the personal injury suffered by the worker.

53. The contract between JRE and WMC contained an indemnity clause whereby (at par 11) it was agreed that:

"2.2 [JRE] shall indemnify and keep indemnified, [WMC], its employees and agents, and hold each of them harmless from and against:

(b) all loss or damage resulting from injury (including death) to any person including [JRE] its employees and agents."

54. WMC contended that it could not be ordered to contribute to the damages awarded to the worker because, by virtue of the contractual right to indemnity, it was not liable to JRE. It had an indemnity against such liability. JRE contended that WMC could not, by virtue of the Compensation Act, s 54(4b), recover "contribution" from it because the terms of that subsection forbade it.

55. JRE also claimed that it was entitled to a statutory indemnity from the Corporation by virtue of s 105:

" . . . against any liability that may arise apart from this Act in respect of a compensable disability arising from employment . . . by the employer." [emphasis added]

56. The former issue raised the question of the difference between contribution and indemnity. The latter issue, whether a contractual indemnity imposed on the proposed indemnor, covers liability "in respect of" the primary liability and the liability, the subject of the indemnity agreement.

57. Gallop J in Pearce v Crown Equipment Pty Ltd (supra), had held that it did.

58. All members of the South Australian Court conceded that the words "in respect of" had "a very wide connotation" but did not come to the same conclusion as Gallop J had done.

59. Olsson J (at par 38) observed, first, that:

" [T]he legal concept of "contribution" is quite distinct and separate from the legal concept of an indemnity - particularly a contractual indemnity."

60. Thus, his Honour held (at par 43):

" . . . section 105 [indemnity by Corporation of insured employer] is, in my view, concerning itself with a liability directly incurred by an employer in relation to an injured employee who has sustained a compensable disability, whereas what is here in issue is a liability flowing from contractual relationships entered into between the employer and a third party, albeit that the "triggering" mechanism for that liability was a claim against the third party - which arose from a disability which happened to be compensable under the Compensation Act, because it occurred in the course of [the worker's] employment. In my opinion, when section 105 spoke of "liability . . . in respect of a compensable disability arising from the employment" it was not directing attention to such a tenuous link - so far as the operation of that section was concerned."

61. Mohr J agreed.

62. Debelle J concurred, expressing the same opinion in the following terms (at par 17):

"The liability of JRE to indemnify did not arise in respect of a compensable disability but under the agreement to indemnify. Although the liability to indemnify under the agreement may be triggered by the fact that a worker has suffered a compensable disability, it is not the compensable disability which gives rise to the liability of JRE but the agreement to indemnify. The nexus between the liability to indemnity and a compensable desirability [sic-"disability"] is too indirect to qualify as a liability "in respect of a compensable disability". JRE is not, therefore, entitled to be indemnified by the Corporation in respect of its liability to WMC."

63. Thus, JRE lost both the right to contribution under the usual contribution statute by virtue of the indemnity clause and the right to be indemnified by the Corporation in respect of the indemnification it had contractually agreed to give WMC because that liability to indemnify WMC was not a right with respect to, though it was "triggered" by, the compensable disability.

64. That decision, and the reasons for it, combined with the tenor of the reasoning of the High Court in Austral Pacific (supra), clearly dictates the result in this case.

65. The fact that the contractual indemnity contained in the Lease is offered only to the extent that the fault of the lessee contributed to the lessor's liability makes no difference in principle as between lessor and lessee.

66. The result is that the effect of the contractual indemnity is not excluded or qualified as between the lessor and lessee by the terms of s 44 of the SRC Act. The liability to indemnify, at least, in part, the Defendant flows from the terms of that indemnity clause not the tortious injury to the Plaintiff, though it is that injury which has "triggered" that contractual liability.

67. It may be added that, if it had been understood to have been otherwise, the bargain between lessor and lessee in this case may well have been less favourable to the lessee. It would have adversely affected the lessor's insurance prospects. Thus, the result I have come to also favours the integrity of the bargain between lessor and lessee. No issue of, even unintended, misleading or deceptive conduct needs to be considered.

The relief to be granted

68. Whilst clause 14.1 operates only to the extent that the First Third Party's negligence has contributed to the liability (if any) imposed on the Defendant, it differs from s 11(4) of the LR (MP) Act (as it then was) in that the obligation so imposed is not limited to those cases in which the Plaintiff could have sued the First Third Party. (Whether or not s 12 of that Act, as it now appears, has the same effect is yet to be determined).

69. However, the First Third Party submits that, even so, the relief sought by the defendant should be denied, as any liability pursuant to cl 14 has yet to crystallise.

70. Further, the First Third Party asserts, the indemnity provided for by cl 14.1 is such that it is enforceable only by damages for its breach.

71. Mr Burmester places reliance, for that assertion, on Penrith City Council v Government Insurance Office of New South Wales (1991) 24 NSWLR 564, per Giles J at 568:

"Thus it must be asked what the defendant was required to do in performance of its promise, and when it failed to do what was required of it. Only when the defendant failed to do what was required of it could a cause of action for damages for breach of contract accrue to the plaintiff."

72. In Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589 at 595, Gibbs CJ, Mason and Aickin JJ observed, however, that:

" . . . the claim to an indemnity may be litigated in the plaintiff's action notwithstanding that the payment creating the right to indemnity is not made until after the amount of the plaintiff's verdict is ascertained in the action. It has been repeatedly affirmed that one of the peculiarities of third party procedure is that it enables litigation on the indemnity to take place before there is any liability."

73. It is, therefore, difficult to see what impediment there is to permitting the Defendant to rely on the indemnity against the First Third Party so as to enable, in the one proceeding, an order to be made, consequent on the judgment against the Defendant, if any, for the First Third Party to indemnify the Defendant, with judgment accordingly, to the extent that the First Third Party's negligence contributed to the Defendant's loss.

74. Indeed, if it were otherwise, the First Third Party could have no direct say in the quantum of damages or the liability of the Defendant for them. It would be able to be heard only on the issue of the extent of its liability under cl 14 in separate, and, no doubt costly, proceedings.

75. The issue raised by the First Third Party as to equitable relief does not arise. Damages, awarded in due course and in separate proceedings, are not an adequate remedy. The fact that the First Third Party is itself proposing that course, does not make it so.

76. Nor does any issue arise as to "contracting out" of the SRC Act. That contention was considered and rejected in the JR Engineering case (supra). The right of the worker and the employer, inter se, are not at all affected. There is no "contracting out".

77. Nor can the "policy of the Act" be called in aid. The disadvantage sustained by the First Third Party arises out of its freely undertaken contractual bargain with the Defendant. Had it wished to avoid the indirect assumption of part of the damages claimable by the Plaintiff from the Defendant, it could have so agreed. It cannot now redefine its past bargain.

78. As urged by both parties, I grant the application by the First Third Party to determine in advance the points of law raised by it in its Amended Defence of 9 November 2001.

79. However, for the reasons set out above, I would strike out from the Amended Defence paragraphs 12 to 17. I decline, at this stage, the relief sought in paragraph 18.

80. I will hear the parties as to costs.

I certify that the preceding seventy nine (79) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Higgins.

Associate:

Date: 28 March 2002

Counsel for the Defendant: Mr P Braham

Solicitor for the Defendant: Ken Cush & Associates

Counsel for the First Third Party: Mr H C Burmester QC

Solicitor for the First Third Party: ACT Government Solicitor

Date of hearing: 15 November 2001

Date of judgment: 28 March 2002