Australian Native Landscapes Pty Ltd v Minogue [2010] NSWCA 279 (29 October 2010)

Last Updated: 1 November 2010

NEW SOUTH WALES COURT OF APPEAL

CITATION:
Australian Native Landscapes Pty Ltd v Minogue [2010] NSWCA 279


FILE NUMBER(S):
2009/325388

HEARING DATE(S):
11 October 2010

JUDGMENT DATE:
29 October 2010

PARTIES:
Australian Native Landscapes Pty Ltd - Appellant
Bernie Minogue - first Respondent
Australian Native Landscapes (Admin) Pty Ltd - second Respondent

JUDGMENT OF:
Allsop P Beazley JA McColl JA

LOWER COURT JURISDICTION:
District Court

LOWER COURT FILE NUMBER(S):
DC 2006/84

LOWER COURT JUDICIAL OFFICER:
Charteris DCJ

LOWER COURT DATE OF DECISION:
18 December 2009


COUNSEL:
KW Andrews - for the Appellant
JE Sexton SC with DP Kelly - for the Respondents

SOLICITORS:
David Veasey - for the Appellant
Moray & Agnew - for the Respondents

CATCHWORDS:
TORTS – damages – contribution between tortfeasors – s 5(1)(c), Law Reform (Miscellaneous Provisions) Act 1946 – where plaintiff’s damages already reduced by determination of co-tortfeasor’s notional liability under s151Z(2), Workers Compensation Act 1987 -
APPEAL – general principles – point not taken at hearing – not permitted to be raised on appeal

LEGISLATION CITED:
Law Reform (Miscellaneous Provisions) Act 1946 (NSW)
Motor Accidents Compensation Act 1999 (NSW)
Workers Compensation Act 1987 (NSW)


CASES CITED:
Clout Industrial Pty Ltd (in Liq) v Baiada Poultry Pty Ltd [2004] NSWCA 89; (2004) 61 NSWLR 111
Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1
Dokoza v Stadkite Pty Ltd (1997) 42 NSWLR 544
Forstaff Blacktown Pty Ltd v Brimac Pty Ltd; Brimac Pty Ltd v Johnston [2005] NSWCA 423; (2005) Aust Torts Reports 81-814
Grljak v Trivan Pty Ltd (In Liq) (1994) 35 NSWLR 82
Hayes v Nominal Defendant (District Court of New South Wales, 11 April 2008, unreported)
James Hardie & Co v Seltsam Pty Ltd [1998] HCA 78; (2008) 196 CLR 53
Leonard v Smith (1992) 27 NSWLR 5
Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631
University of Wollongong v Metwally (No 2) [1985] HCA 28; (1985) 59 ALJR 481
Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491

TEXTS CITED:


DECISION:
Appeal dismissed with costs.



JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

2009/325388

ALLSOP P

BEAZLEY JA

McCOLL JA

Friday 29 October 2010

Australian Native Landscapes Pty Ltd v Minogue

Judgment

1 ALLSOP P: For the reasons given by McColl JA, whose judgment I have had the advantage of reading, the appellant should not be allowed to approach this appeal in the different manner that is attempted to be done. For this reason, as explicated by McColl JA, the appeal should be dismissed with costs. I would only wish to add that the lack of raising the issue (with any adequate clarity) as was sought to be agitated on appeal can be seen by its absence from the otherwise comprehensive reasons of the learned primary judge.

2 BEAZLEY JA: I agree with McColl JA.

3 McCOLL JA: Matthew Hayes, the plaintiff, was injured on 9 January 2004 when he was struck by a large set of metal grabs which were being loaded onto the trailer of his prime mover by the first respondent, Bernie Minogue (the “driver”), who was driving an unregistered front-end loader owned by Australian Native Landscapes Pty Ltd (the “owner”), the appellant. Australian Native Landscapes (Admin) Pty Ltd (the “employer”), the second respondent, employed the plaintiff and the driver.

4 The plaintiff brought proceedings in negligence against the Nominal Defendant because the vehicle was unregistered (and hence uninsured): s 33, Motor Accidents Compensation Act 1999 (NSW) (the “MAC Act”). He also joined the owner, the driver and the employer. He framed his case against all defendants on the basis that he was entitled to recover damages because his injuries were caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle within the meaning of s 122 of the MAC Act. It was common ground at trial that the plaintiff could not have obtained an award of damages against his employer for the latter’s negligence as employer because the degree of his permanent impairment was less than 15 per cent: s 151H, Workers Compensation Act 1987 (NSW) (the “WC Act”).

5 The plaintiff succeeded against the Nominal Defendant, the owner and the driver, each of whom was found liable because the plaintiff was injured in circumstances which fell within the relevant definition of “injury” in the MAC Act: Hayes v Nominal Defendant (District Court of New South Wales, 11 April 2008, unreported – the “principal judgment”). The employer was found not liable because the case pleaded and conducted against it did not fall within the MAC Act. The plaintiff’s damages were reduced because of the operation of s 151Z(2) of the WC Act. There is no appeal from any part of the principal judgment.

6 The owner sought to recover contribution from the driver and the employer pursuant to cross-claims which were, relevantly, based on s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) (the “LRMP Act”). The primary judge held that s 5(1)(c) did not apply because he had found the employer was not liable, applying James Hardie & Co v Seltsam Pty Ltd [1998] HCA 78; (2008) 196 CLR 53 (at [31]) per Gaudron and Gummow JJ. He concluded that the owner’s s 5(1)(c) cross-claim against the driver must also fail because he had been found liable as the owner’s, not the employer’s, agent: Hayes v Nominal Defendant (District Court of New South Wales, 18 December 2009, unreported – the “cross-claim judgment”). The owner appeals from the cross-claim judgment.

7 For the following reasons, I am of the view that the appeal should be dismissed. The primary judge correctly applied James Hardie insofar as the employer was concerned. It is possible, although unnecessary to decide for reasons which will become apparent, that the owner could have succeeded against the driver pursuant to s 5(1)(c), LRMP Act had it framed its cross-claim against him purely on the basis of him having been found liable to the plaintiff. However the owner first sought to advance that case on appeal. Before the primary judge, it pursued the cross-claims against the driver and the employer on the basis that the employer was vicariously liable for the driver’s conduct. The primary judge’s findings under s 151Z(2), WC Act against the employer in the principal judgment were based on his view of the contribution the owner would, but for Pt 5 of the WC Act, have been entitled to recover from the employer: s 151Z(2)(c), WC Act. That was an evaluative judgment which may well have been different had his Honour been required to take into account when considering that issue, that the driver may also be required to pay contribution pursuant to s 5(1)(c). The owner should not be permitted to raise a new case on appeal.

Legislative framework

8 Section 5 of the LRMP Act relevantly provides:

“5 Proceedings against and contribution between joint and several tort-feasors

(1) Where damage is suffered by any person as a result of a tort (whether a crime or not):

...

(c) any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tort-feasor 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.

(2) In any proceedings for contribution under this section the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person’s responsibility for the damage; and the court shall have power to exempt any person from liability to make contribution, or to direct that the contribution to be recovered from any person shall amount to a complete indemnity.” (emphasis added)

9 Section 151Z of the WC Act relevantly provides:

“151Z Recovery against both employer and stranger

(1) ...

(2) If, in respect of an injury to a worker for which compensation is payable under this Act:

(a) the worker takes or is entitled to take proceedings independently of this Act to recover damages from a person other than the worker’s employer, and

(b) the worker also takes or is entitled to take proceedings independently of this Act to recover damages from that employer,

the following provisions have effect:

(c) the damages that may be recovered from the person by the worker in proceedings referred to in paragraph (a) are to be reduced by the amount by which the contribution which the person would (but for this Part) be entitled to recover from the employer as a joint tortfeasor or otherwise exceeds the amount of the contribution recoverable,

(d) the amount of the contribution that the person is entitled to recover from the employer as a joint tortfeasor or otherwise is to be determined as if the whole of the damages were assessed in accordance with provisions of Division 3 as to the award of damages, ...” (emphasis added)

10 Chapter 5 of the MAC Act governs damages awards. Section 122(1) provides that that Chapter applies “to and in respect of an award of damages which relates to the death of or injury to a person caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle.” A court cannot award damages to a person in respect of a motor accident contrary to Ch 5: s 123, MAC Act. At the time the plaintiff was injured, “injury” was defined in s 3 of the MAC Act relevantly as follows:

“injury:

(a) means personal or bodily injury caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle if, and only if, the injury is a result of and is caused during:

(i) the driving of the vehicle, or

(ii) a collision, or action taken to avoid a collision, with the vehicle, or

(iii) the vehicle’s running out of control, or

(iv) such use or operation by a defect in the vehicle”.

Section 5(1)(c) and s 151Z

11 In order to provide background to the critical issues which were determined both in the primary and cross-claim judgments, it is appropriate to set out at this stage relevant principles underlying the operation of s 5(1)(c) of the LRMP Act and s 151Z(2) of the WC Act.

12 Section 5(1)(c) of the LRMP Act, taken with s 5(2), created a right and remedy of contribution which did not exist at common law. That entitlement “is conferred only between certain parties [who] must answer the criteria specified in s 5(1)(c).” The liability ascertained as between the plaintiff and the claimant tortfeasor is a condition precedent to the assertion by that tortfeasor of its statutory right to recover contribution. Contribution may be recovered “from those other tortfeasors who bear responsibility in respect of the same damage” and who are either first, “liable in respect of the same damage" or secondly, “would if sued have been, liable in respect of the same damage”: s 5(1)(c), LRMP Act. Those who have been sued to judgment, whatever its outcome, do not fall within the second category: James Hardie per Gaudron and Gummow JJ (at [2], [24], [31]); see also Callinan J (at [124] – [126]).

13 In order to place s 151Z in context it is necessary to have regard to some other provisions of Pt 5 of the WC Act in which s 151Z is found.

14 The plaintiff’s right to recover damages from the employer at common law was governed by Pt 5, Div 3 of the WC Act (“Modified common law damages”) as in force at the date of his accident, 9 January 2004. If he satisfied the requirement that his injury resulted in a degree of permanent impairment that was at least 15 per cent (s 151H), he was only entitled to recover damages for economic loss: s 151G. Part 5, Div 3 does not apply to an award of damages to which, relevantly, Ch 5 of the MAC Act applies: s 151E(2).

15 Part 5 of the WC Act does not prevent an injured worker exercising his or her common law right to obtain damages from a non-employer: Clout Industrial Pty Ltd (in Liq) v Baiada Poultry Pty Ltd [2004] NSWCA 89; (2004) 61 NSWLR 111 (at [3]) per Sheller JA. However, s 151Z which is found in Pt 5, Div 5 of the WC Act, governs the case where an injured worker has rights whether to workers compensation or at common law, against his/her employer, in respect of an injury caused in circumstances which create a liability for damages in a person other than the employer: see generally Dokoza v Stadkite Pty Ltd (1997) 42 NSWLR 544 (at 547) per Beazley JA (with whom Handley and Cole JJA agreed). Significantly, s 151Z assumes the application of s 5(1)(c) of the LRMP Act and modifies its operation in a limited way: Grljak v Trivan Pty Ltd (In Liq) (1994) 35 NSWLR 82 (at 90 – 91) per Mahoney JA (Kirby P and Priestley JA agreeing); Clout (at [73]) per Hodgson JA.

16 As I have said, the extent of the plaintiff’s injuries were such that he could not have obtained an award of damages against his employer for any negligence on its part as employer: s 151H. Despite this, he was a worker who was “entitled to take proceedings independently of this Act to recover damages from [his] employer” within the meaning of s 151Z(2)(b): Clout (at [32]) per Sheller JA; (at [50]) per Giles JA; (at [72]) per Hodgson JA.

17 The operation of s 151Z(2) was explained in Forstaff Blacktown Pty Ltd v Brimac Pty Ltd; Brimac Pty Ltd v Johnston [2005] NSWCA 423; (2005) Aust Torts Reports ¶81-814 (at [74] – [75]) per McColl JA, Hodgson and Ipp JJA relevantly agreeing, as follows:

“74 Sheller JA [in Clout] considered the operation of s 151Z(2)(c) and (d) as explained in Leonard v Smith, Grljak No 2 and State of New South Wales v Kennelly (No 2). Those cases demonstrated that:

(a) Section 151Z(2)(c) provides for a reduction in the damages the plaintiff worker may recover from a tortfeasor (the non-employer) other than the employer tortfeasor in the proceedings which the plaintiff worker has taken for damages against the non-employer: Grljak no 1 (at 88); Clout (at [29]); the worker’s entitlement to recover from the employer either directly or indirectly is to be no greater than if the worker had sued the employer alone, but the net burden on the non-employer is not to be increased; Grljak no 2 (BC9601317 at 7); Clout (at [29], [38]);

(b) The figure used in s 151Z(2)(c) is calculated by the Court: (i) deciding the amount of the contribution the non-employer would (but for Pt 5) be entitled to recover from the employer as a co-tortfeasor or otherwise at common law; (ii) deciding what is ‘the amount of the contribution recoverable’ within s151Z(2)(c) and s 151Z(2)(d); and (iii) deducting the second figure from the first, the product being the amount by which the plaintiff worker’s common law damages from the non-employer tortfeasor are to be reduced: Grljak No 1 (at 88 – 89) Clout (at [29] – [31]);

(c) Where step (b)(ii) leads to the conclusion that the employer would have been liable to pay no damages if the plaintiff worker’s damages were calculated under Pt 5, Div 3, the whole of the figure derived after step (i) is deducted from the plaintiff worker’s damages: Grljak no 1 (at 89); Grljak no 2 (BC9601317 at 7) Clout (at [34]);

(d) Section 151Z(2)(d) is directed to determining the financial burden to be borne by the employer tortfeasor by way of contribution for that person’s share of the responsibility for the accident having happened: Leonard v Smith (at 11); it provides the basis for calculation of the contribution which the non-employer tortfeasor may recover against the employer tortfeasor; it is a substantive provision limiting what otherwise would be a non-employer tortfeasor’s right under the Miscellaneous Provisions Act to recover contribution from the employer tortfeasor: Grljak No 1 (at 90 – 91) Clout (at [25], [31]);

(e) Section 151Z(2)(d) ensures that in assessing contribution as between the non-employer tortfeasor and the employer tortfeasor, the financial burden upon the employer tortfeasor is calculated as the employer tortfeasor’s fault proportion applied to the damages the employer would have had to pay the plaintiff worker if sued alone – not that fault proportion applied to the damages for which the non-employer tortfeasor is liable to the plaintiff worker: Leonard v Smith (at 11) Clout (at [23]);

(f) If, in undertaking the s 151Z(2)(d) hypothetical exercise, no damages calculated in accordance with Pt 5, Div 3 would be recoverable by the plaintiff worker, then in determining the contribution the non-employer tortfeasor can recover from the employer tortfeasor, it is to be assumed that the damages payable by the non-employer tortfeasor are reduced to nil. Accordingly, the non-employer tortfeasor would not recover any sum by way of contribution from the employer tortfeasor: Grljak No 1 (at 89, 91); Clout (at [32]).

75 As is apparent the figure derived from the s 151Z(2)(d) calculation performs two functions: it identifies the contribution recoverable for the purposes of the s 151Z(2)(c) reduction exercise as well as determining the damages to which the non-employer tortfeasor can look when seeking contribution pursuant to s 5(1)(c).” (emphasis added)

The course of the proceedings

18 The proceedings were heard in the District Court of New South Wales sitting in Wagga Wagga. They came on for hearing on 29 January 2008. At the commencement of the trial the owner sought an adjournment on the basis that its solicitors had only recently been retained, its previous solicitors having ceased to act apparently when a question arose as to whether the owner was entitled to be indemnified by the insurer by whom they had been retained.

19 The adjournment was sought on two bases. First, so that the previous solicitors’ file could be obtained. At that stage those representing the owner did not have a complete copy of the pleadings – including a copy of the owner’s defence – a position the primary judge said he could (and I assume did) remedy. Counsel for the owner informed his Honour that his client had been unable to investigate liability, or ascertain the extent to which its previous legal representatives had investigated it. Secondly, he flagged the possibility that the insurance company whose declinature of indemnity had led to the previous solicitors ceasing to act may have to be joined on a cross-claim. The plaintiff, the Nominal Defendant, the driver and the employer opposed the adjournment.

20 The primary judge refused the adjournment application, but remarked that if in the course of the hearing it became apparent that the proper conduct of the owner’s case was prejudiced, he would seek to address that matter as the trial proceeded.

21 The owner’s defence as on foot at the commencement of the hearing pleaded that if the plaintiff was injured as he alleged:

“...such injury, loss and damage was caused or contributed to by the negligence of the [employer] and the [owner] says that any verdict which the Plaintiff recovers against it should be reduced by reason of that negligence in accordance with...section 151Z Workers Compensation Act 1987.”

22 On the fifth day of the trial counsel for the owner sought leave to file a number of cross-claims, including a third cross-claim naming the employer as the third cross-defendant and seeking indemnity and/or contribution on the basis that the plaintiff’s injuries were caused by its negligence. The third cross-claim did not specify the basis on which indemnity and/or contribution was sought.

23 The owner also sought leave to file a fourth cross-claim against QBE Workers Compensation (NSW) Ltd seeking indemnity pursuant to a workers’ compensation policy of insurance it had issued to the owner and the employer. Counsel for the owner informed the primary judge that if given leave to file the cross-claims, he would ask that they be severed.

24 Although it was not spelled out in the proposed third cross-claim, counsel for the employer and driver inferred – without being disabused by counsel for the owner, and without anyone apparently appreciating that s 151Z had already been pleaded in the owner’s defence – that it appeared to raise s 151Z(2) of the WC Act. A lengthy debate ensued before the primary judge about whether s 151Z would apply in the circumstances. There was no reference to s 5(1)(c) of the LRMP Act in the course of that debate. The primary judge gave the owner leave to file the cross-claims, but ruled he would not determine the issues they raised unless there was agreement by the parties, in substance, that the pleadings were in order and the parties were ready to proceed. His Honour observed that he could not see any disadvantage to anyone in giving leave to file the third and fourth cross-claims, a proposition with which counsel for the employer agreed.

25 The owner’s application to file the third and fourth cross-claims was made at a stage of the trial when all oral evidence had been taken and only documentary tenders had to be considered. The primary judge heard submissions on the plaintiff’s case on that and the following day. It would appear (although the transcript for the last hearing day is not in the appeal papers) that his Honour reserved his judgment which he then delivered on 11 April 2008.

26 The primary judge noted in the principal judgment that he had severed the cross claims in order to avoid the principal proceedings being adjourned. After he delivered the principal judgment the issue of the future disposition of the further amended third and fourth cross-claims was adjourned to enable the parties to consider their position in the light of the principal judgment.

27 The appeal papers do not reveal what happened on the adjourned date or on the hearing of the cross-claims. However in due course both the third and fourth cross-claims were substantially amended in documents signed by the owner’s solicitor and dated 22 September 2008. The third cross-claim (now the further amended third cross-claim) was amended to specify that the owner’s claim for indemnity and/or contribution was made pursuant to s 5 of the LRMP Act. The fourth cross-claim (now the further amended fourth cross-claim) was amended to add the driver as the second fourth cross defendant and, again relevantly to seek indemnity and/or contribution from him pursuant to the LRMP Act.

28 The employer’s defence to the further amended third cross-claim, relevantly pleaded that the owner could not recover contribution and/or indemnity from it pursuant to the LRMP Act because it had been found not to be liable for the damage for which the owner was found liable and also that the owner was estopped from asserting the driver and the employer were liable other than as set out in the primary judgment.

29 The driver’s defence to the claim against him pursuant to the LRMP Act, pleaded, relevantly, that the owner was “estopped by reason of the Judgment and otherwise from asserting that [the driver] was negligent other than as found in the Judgment” and that the owner could not maintain any claim against him because he was its agent acting within the scope of his authority. The latter plea particularised the principal judgment and s 112 of the MAC Act. The driver also pleaded that the owner could not maintain the LRMP Act claim against him “because it was not found liable as a tortfeasor for the damage suffered by the plaintiff”. This plea appears to have been transposed inappropriately from the defence to the further amended third cross-claim.

The principal judgment

30 Judge Charteris SC found in the principal judgment that the plaintiff was injured when the driver negligently lowered the bucket of the front-end loader onto the grabs, causing them to fall onto the plaintiff. He held the definition of “injury” in s 3, MAC Act as in force at the date of accident, was satisfied in that the plaintiff’s injuries were “...caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle...if, and only if, the injury is a result of and is caused during...the driving of the vehicle...”. (emphasis in original)

31 The primary judge next found, relevantly, that by virtue of the fact the driver was presumed to be the owner’s agent (s 112, MAC Act) the owner was liable for his actions. He also found that the owner did not employ the driver, but recorded its acknowledgment that the driver was its agent.

32 The primary judge found that the employer did not own the front-end loader and was not liable for the casual acts of negligence of the driver in driving it – an allegation which was not, in any event, pleaded. His Honour noted that the particulars of negligence pleaded against the employer (and in some ways, the driver) sought to raise an unsafe system of work case which was not open to the plaintiff on the basis of the motor accidents case he sought to advance. He concluded that the employer was not liable on the case pleaded and conducted before him in accordance with the MAC Act.

33 On the basis of those findings, the primary judge found the Nominal Defendant, the owner and the driver were liable to the plaintiff but the employer was not liable. He also held that the Nominal Defendant was entitled to recover any verdict against it plus costs from the owner and the driver in accordance with s 39 of the MAC Act.

34 The owner successfully sought a reduction in the amount of damages awarded to the plaintiff in accordance with s 151Z(2) of the WC Act. His Honour held in this respect:

“In my view, section 151Z clearly applies. Had the employer been sued for negligence, breach of duty to its employee, in my view, inevitably, the plaintiff would have succeeded. The system of work employed at the Tumut depot in the task at hand was negligent. It was in breach of the duty that the employer owed to the employee. There was no real planning, there was not use of appropriate equipment; safety was not adequately addressed. I then have to apportion the damages as between the Motor Accidents Compensation Act and the damages that would have been achieved against an employer. I find that negligence would clearly have been established.”

35 His Honour concluded, applying Leonard v Smith (1992) 27 NSWLR 5, that 50 per cent of the plaintiff’s damages should be attributed to the owner’s liability under the MAC Act and, pursuant to s 151Z(2), 50 per cent as if assessed under the WC Act against the employer. He assessed the plaintiff’s damages under the MAC Act at $712,108, 50 per cent of which was $356,054. He then said:

“I then make an assessment under the Workers Compensation Act. It was accepted that the plaintiff would not qualify for non-economic loss. His entitlement is restricted to past and future economic loss and superannuation losses. On the figures I have assessed of past economic loss $109,233, future economic loss $220,000 and superannuation loss $32,923: that arrives at a total figure of $362,156.

Fifty per cent of the MACA assessment is $356,054. Fifty per cent of the Workers Compensation assessment is $181,078. Combining those figures, the plaintiff would be entitled to a verdict against the first, second and third defendants in the sum of $537,132.”

36 This led to a verdict for the plaintiff against the Nominal Defendant, the owner and the driver of $537,132. The primary judge entered a verdict for the employer against the plaintiff. As I have said, no appeal has been brought from the principal judgment.

The cross-claim judgment

37 A number of issues were raised on the further amended third and fourth cross-claims. It is only necessary to deal with those aspects of the cross-claim judgment which are pursued on appeal.

38 The primary judge recorded the owner’s substantive submission against the employer and the driver insofar as the s 5(1)(c) claim was concerned as follows:

“Further Mr Andrews submits that the [employer] was responsible for the way in which the vehicle was driven and the system of work employed. In contrast, the [owner] had no control over the way in which the [driver] carried out his work. There was no suggestion, so Mr Andrews submitted, that the [owner] should have done anything which would have prevented the accident. The agency, under s 112 of the Motor Accidens Compensation Act, although admitted, was not causative of the injury. He submitted that liability should be found on the cross-actions as one hundred per cent against [the driver], and therefore a similar finding against the [employer] as principal of the [driver].” (emphasis added)

The cross-claim judgment: further amended third cross-claim

39 The primary judge described the “thrust” of the further amended third cross-claim as “the assertion by [the owner] that the [employer] was liable pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW)” because it “was a tort feasor liable in respect of the same damage suffered to the plaintiff, as had the [owner] been found liable.” His Honour rejected that submission in reliance on James Hardie (at [31]) where Gaudron and Gummow JJ said of a claim for contribution pursuant to s 5(1)(c):

“The claimant tortfeasor who satisfies the condition precedent [the liability ascertained as between the plaintiff and the claimant tortfeasor] may recover contribution from those other tortfeasors who bear responsibility in respect of the same damage in a fashion which answers a description in the balance of par (c). The defendant tortfeasor must be one (i) ‘who is ... liable in respect of the same damage’ or (ii) ‘would if sued have been, liable in respect of the same damage’. Only those who satisfy (i) or (ii) are amenable to a claim for contribution under the statute. Further, those who have been sued to judgment, whatever its outcome, do not fall within (ii). That is the effect of settled authority in this Court.” (emphasis added)

40 The primary judge held that the fact that the employer had been sued and found not liable was fatal to the owner’s claim for contribution from the employer.

The cross-claim judgment: further amended fourth cross-claim

41 The primary judge dealt succinctly with the further amended fourth cross-claim against the driver, which he described as a claim made by the owner on the basis of the driver being the employer’s agent. His Honour said that claim must also fail because:

“The fact of the matter is that the court found liability in [the driver] and that it [sic, should be “he”] was the agent of [the owner].”

Issues on appeal

42 A number of grounds of appeal were pleaded, however the only extant issue at the commencement of the hearing was whether the primary judge erred in rejecting the owner’s claims for contribution/indemnity under s 5(1)(c) from the employer and the driver.

43 That issue was further refined during the hearing of the appeal. Mr K Andrews, who appeared for the owner on appeal and at trial, accepted that this Court was bound by James Hardie with the consequence that the primary judge correctly dismissed the s 5(1)(c) claim against the employer, he having found it not liable to the plaintiff.

44 Mr Andrews also accepted that, even if the Court was to find that the owner could claim s 5(1)(c) contribution from the employer on the basis that the latter was vicariously liable for the driver’s negligence (for which the latter had been found liable), the employer’s negligence on that basis had effectively been considered by the primary judge in the context of determining the employer’s notional liability to contribute under s 151Z(2)(c) of the WC Act – an exercise which, in turn, had led to a reduction in the damages the owner was required to pay the plaintiff.

45 Mr Andrews conceded, in the light of that proposition, that it was improbable, as the employer argued, that the owner could get any greater contribution than 50 per cent from the employer pursuant to s 5(1)(c), bearing in mind the requirement that the Court should determine the amount of the contribution recoverable under s 5(1)(c) and s 5(2) of the LRMP Act on the basis of what was just and equitable.

46 I would add however, that in my opinion the reason the owner’s claim for contribution against the employer would have failed, even if it had been found liable to the plaintiff, or had not been found not liable was because, as explained in Forstaff (at [74](f)), as the plaintiff could not have recovered any damages from the employer if calculated under the WC Act, the owner could not recover any sum by way of contribution from the employer.

47 The remaining issue, therefore, was whether the owner should have succeeded in its s 5(1)(c) claim against the driver on the basis that he had been found liable to the plaintiff. In this respect Mr Andrews submitted that, having been left after the s 151Z(2) exercise involving the employer with a net MAC Act liability to the plaintiff, the owner was entitled to ask the driver whose acts or omissions gave rise to that burden to indemnify it for that liability.

48 The difficulty with this argument, as the respondents submitted, is that it raised an issue which was not raised at the primary or cross-claim hearings. In the first of those hearings the plaintiff’s case was that the driver was the owner’s agent and hence by virtue of s 112 of the MAC Act, the owner was liable for his negligence in driving the front-end loader. The driver was only found liable because of his conduct in driving the owner’s vehicle, not for any conduct as the employer’s employee.

49 When the primary judge came to consider the s 151Z(2)(c) position, he considered the employer’s liability on the basis that, if sued by the plaintiff for employer’s negligence (rather than under the MAC Act), the employer’s system of work would have been found to have been negligent. It was on that basis he assessed the employer’s liability to contribute to the owner at 50 per cent. Although not expressly stated by his Honour, it can be assumed that that assessment included his Honour’s opinion as to the driver’s role in implementing the employer’s system.

50 At that stage of the proceedings, as is apparent from the chronology set out above, the owner had not formulated the cross-claims against the employer and the driver in the terms in which they ultimately came to be determined. Further, when those cross-claims were heard, it is apparent that the owner sought to pursue the s 5(1)(c) claim against the driver on the basis that he was executing the employer’s system of work. His Honour rejected that claim because it did not reflect the basis on which he had found the driver liable, which was as the owner’s, rather than the employer’s agent. In other words, at no stage did the owner advance a case that the driver was liable simpliciter, independently of whether he was a statutory agent of the owner by virtue of s 112 of the MAC Act or as the employer’s employee.

51 In my opinion the owner should not be permitted to formulate a claim against the driver in those terms for the first time on appeal. If a claim in those terms had been advanced at the primary hearing stage, so that his Honour had had to consider not only the extent to which the employer might be liable to contribute to the owner as a joint tortfeasor under s 151Z(2)(c), but also the extent to which the driver may be required to contribute purely on the basis of s 5(1)(c) of the LRMP Act, the extent of the employer’s contribution may well have been different from the 50 per cent for which he adjudged it liable. That, in turn, could have affected the damages the plaintiff was entitled to recover from the owner.

52 The owner should be bound by the way he conducted the cross-claim proceedings and the primary hearing: Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1 (at 7) per Gibbs CJ, Wilson, Brennan and Dawson JJ. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case has been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so: University of Wollongong v Metwally (No 2) [1985] HCA 28; (1985) 59 ALJR 481. Whether or not an appellate court exercising a rehearing function as this court does will entertain a new point on appeal depends upon whether the court finds it expedient and in the interests of justice to do so: Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491 (at 497) per Mason CJ, Wilson, Brennan and Dawson JJ; see also Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631 (at 645–6) per Mason P (Gleeson CJ and Priestley JA agreeing).

53 It would clearly be inexpedient, and inimical to the interests of justice, to allow the owner to raise a point which would require not only determining the further amended fourth cross-claim on a basis not hitherto advanced, but also determining it in circumstances where the outcome would necessarily impinge on the issues determined in the principal judgment from which no appeal has been brought. In my opinion the appeal should be dismissed with costs.

Conclusion

54 It remains only to say that the manner in which the owner conducted the proceedings was unfortunate. It does not appear to have appreciated that the s 151Z claim it had pleaded in the defence on foot at the outset of the trial effectively required the primary judge to determine the question raised by s 5(2) of the LRMP Act, namely “the amount of the contribution recoverable ... as may be found by the court to be just and equitable having regard to the extent of that person’s responsibility for the damage”.

55 Accordingly the further amended third cross-claim insofar as it pleaded s 5(1)(c) of the LRMP Act was misconceived. Further, it should also have been apparent to those representing the owner, even if only recently retained, that it was probable that a contribution claim would be made against the driver. This was never articulated even on a tentative basis before the primary judge on the adjournment application. Accordingly the extent to which the issues which may arise on the cross-claims was not identified in a manner which should have made apparent to his Honour the difficulties which may arise if he severed the cross-claims or, as is apparent from what appears below, even if severance was appropriate, if he determined issues of liability before determining the cross-claims.

56 When leave was ultimately sought to file the cross-claims in the course of the trial, it was not made apparent to his Honour that the issues sought to be raised in the cross-claims impinged on the issues he was determining in the primary proceedings – at least insofar as contribution/indemnity was sought at that stage from the employer. The owner should have been alive to the risk that a finding against the plaintiff and in the employer’s favour on liability would imperil its s 5(1)(c) claim – assuming such a claim had not been caught up in the s 151Z claim. It should have drawn to the primary judge’s attention the importance of keeping the issue of the employer’s liability open to enable it to pursue its s 5(1)(c) claim: see James Hardie (at [19]) per Gaudron and Gummow JJ; (at [133]) per Callinan J.

Orders

57 I would dismiss the appeal with costs.

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LAST UPDATED:
29 October 2010