Ayling v BHP Direct Reduced Iron Pty Ltd

[2001] WADC 252

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CIVIL

LOCATION:   PERTH

CITATION:   AYLING -v- BHP DIRECT REDUCED IRON PTY LTD & ORS [2001] WADC 252

CORAM:   BLAXELL DCJ

HEARD:   27 JULY 2001

DELIVERED          :   26 OCTOBER 2001

FILE NO/S:   CIV 382 of 2000

BETWEEN:   DAVID JOHN AYLING

Plaintiff

AND

BHP DIRECT REDUCED IRON PTY LTD
First Defendant

BHP IRON ORE PTY LTD
Second Defendant

JOHN HOLLAND CONSTRUCTION & ENGINEERING PTY LTD
Third Defendant

UNITED CONSTRUCTION PTY LTD
Fourth Defendant

Catchwords:

Negligence - Claim for damages for personal injury against multiple alleged tortfeasors - Earlier claim against employer for workers' compensation settled by way of consent judgment for damages - Amount of judgment recovered from employer - Trial of preliminary issue as to whether the plaintiff is barred from continuing the present proceedings

Legislation:

Law Reform (Contributory Negligence and Tortfeasor's Contribution) Act s 7(1)(b)

Result:

Plaintiff's claim dismissed on grounds that unable to recover further damages

Representation:

Counsel:

Plaintiff:     Mr L Gandini

First Defendant             :     Mr B S Dodd

Second Defendant         :     Mr B S Dodd

Third Defendant           :     Mr B S Dodd

Fourth Defendant          :     Mr B S Dodd

Solicitors:

Plaintiff:     Chapmans

First Defendant             :     Mallesons Stephen Jaques

Second Defendant         :     Mallesons Stephen Jaques

Third Defendant           :     Mallesons Stephen Jaques

Fourth Defendant          :     Mallesons Stephen Jaques

Case(s) referred to in judgment(s):

Jameson v Central Electricity Generating Board (1999) 1 All ER 193

Case(s) also cited:

Bayley v Wesfarmers Transport Ltd (2000) 24 SR (WA) 229

Darcy v Baines (1995) 12 SR (WA) 285

James Hardie & Co Pty Ltd v Seltsam Pty Ltd (1998) 159 ALR 268

Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574

Tingey v Christ Church Grammar School Inc (1999) 21 SR (WA) 357

Walker v Fares Rural Co Pty Ltd [2001] WADC 94

XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd [1984-1985] 155 CLR 448

1. BLAXELL DCJ:  The plaintiff in this action claims damages for personal injuries suffered in an accident on 11 November 1997 in the course of his employment as a rigger.  The statement of claim alleges that the accident occurred at the site of the Hot Briquetted Iron Refinery operated by the first and second defendants at South Hedland.  It is further claimed that at all material times the third and fourth defendants had been contracted to carry out certain excavation works at the refinery including a slurry pit in which the plaintiff slipped and injured his right knee. 

2. At the time of the accident the plaintiff was employed by Monadelphous Group Ltd (“Monadelphous”) and he had been instructed to attend at the refinery site pursuant to a labour hire agreement between that company and the fourth defendant.  The statement of claim alleges that while employed on site the plaintiff was under the control and direction of the fourth defendant. 

3. Following the accident the plaintiff claimed workers’ compensation from Monadelphous and that claim was eventually settled on terms including the entry of a consent judgment in the District Court for the sum of $50,000 plus $2,000 costs.  The defendants assert that the plaintiff’s recovery of the amount of this judgment bars any further claim in the present proceedings.  In this regard they rely upon s 7(1)(b) of the Law Reform (Contributory Negligence and Tortfeasor’s Contribution) Act (“the Act”) which provides as follows: 

   “(1)Where damage is suffered by any person as the result of a tort -

   (b)If more than one action is brought in respect of that damage by … the person by whom it was suffered … against tortfeasors liable in respect of the damage (whether as joint tortfeasors or otherwise) the sums recoverable under the judgments given in those actions by way of damages shall not in the aggregate exceed the amount of the damages awarded by the judgment first given:  and in any of those actions, other than that in which the judgment is first given, the plaintiff shall not be entitled to costs unless the Court is of opinion that there was reasonable ground for bringing the action.” 

4. I am required to determine this question (and in particular the matters raised by par 21 of the first defendant’s defence, and par 22 of each of the second and third defendants’ defences) as a preliminary issue. 

Matters relevant to the determination of the preliminary issue

1. All evidence at the trial of the preliminary issue has been received by way of affidavit.  No issue has been taken with any of the contents of the affidavits, and accordingly the facts are common ground. 

2. I accept that on 18 January 1999 the plaintiff and his solicitor attended at the office of Monadelphous’ insurer to negotiate a settlement of the plaintiff’s workers’ compensation claim.  Although the relevant legislation did not then provide for any lump sum payment of workers’ compensation, it was desired by both sides to the negotiations that settlement should be on the basis of a “cash in” of the plaintiff’s future entitlement to statutory weekly compensation payments. 

3. It was also within the contemplation of the plaintiff and his solicitor that there was no viable common law claim in negligence against Monadelphous, it having only hired the plaintiff’s labour to the present fourth defendant.  Nevertheless agreement was reached to settle the workers’ compensation claim on the basis that Monadelphous would pay a lump sum of $50,000 plus $2,000 costs pursuant to a consent judgment in an action to be commenced by the plaintiff in the District Court.  It was also agreed that all of the documentation necessary to bring about that consent judgment would be prepared by Monadelphous’ insurers’ solicitors, Jackson McDonald. 

4. It is relevant to note that pursuant to s 93D(4) of the Workers’ Compensation Rehabilitation Act 1981 (“the Workers’ Compensation Act”) the proposed action against Monadelphous could only be commenced with the leave of the District Court.  On 25 January 1999, Jackson McDonald forwarded to the plaintiff’s solicitors for signature, an originating summons seeking leave, an agreement pursuant to s 93D(5)(a) of the Workers’ Compensation Act, a writ of summons with endorsement of claim, and a written consent to the making of orders including the proposed consent judgment.  All of these documents were duly signed and returned to Jackson McDonald. 

5. On 3 February 1999 Messrs Moss Bradley as agents for Jackson McDonald filed in the Albany Registry of this Court all of the above documents together with a memorandum of appearance signed by Monadelphous’ solicitors.  On the same day the Deputy Registrar at Albany ordered that the plaintiff have leave to issue the proposed writ, and then also ordered that there be consent judgment in the action that was thereupon commenced.  The indorsement on the writ in respect of which judgment was obtained claimed: 

   “… damages for all injuries arising out of an injury to the plaintiff’s right knee/leg on or about 11 November 1997 during the course of the plaintiff’s employment with the defendant and all aggravations of any injuries caused as a result of the defendant’s negligence, breach of statutory duty, breach of contract and all other causes of action.” 

6. The plaintiff acknowledges that he subsequently received the full judgment sum of $52,000 inclusive of costs, which sum was in addition to all compensation previously paid on behalf of Monadelphous by way of weekly payments. 

7. On 19 January 2000 the plaintiff commenced the present action which claims damages for “injuries to his right knee” from an accident which occurred “on or about 11 November 1997”.  That claim is based entirely upon tortuous causes of action against each defendant (viz negligence and/or breach of statutory duty).  Pursuant to a notice to admit facts the plaintiff admits that the injuries the subject of the Albany action, and the injuries the subject of the present action are the same. 

Whether s 7(1)(b) of the Act applies

1. It can be assumed for present purposes that if the plaintiff was to be successful in his present action, the total damages likely to be recovered would exceed the $50,000 paid pursuant to the judgment against Monadelphous.  Nevertheless, if s 7(1)(b) applies, the plaintiff clearly will be barred from recovering any additional damages. 

2. The plaintiff contends that in the circumstances of the present claim, Monadelphous cannot be regarded as a “tortfeasor” within the meaning of s 7(1)(b), as all it did was to hire out the plaintiff’s services to the fourth defendant.  It is further contended that the consent judgment in the District Court at Albany was merely a “redemption” of the plaintiff’s future statutory workers’ compensation entitlements, and simply provided a “mechanism” for that lump sum settlement to proceed. 

3. In light of the contents of the affidavits before me, I can accept that the above propositions reflect the actual intent of the plaintiff and his solicitor at the material time.  Regrettably, however, the consent judgment obtained in the Albany District Court cannot be treated as a fiction for any purpose including the purposes of the present action.  It was a judgment fixing the quantum of damages allegedly suffered by the plaintiff as a result of a tort, and clearly was a judgment within the meaning of s 7(1)(b) of the Act. 

4. In the event of the above finding, the plaintiff has put forward the alternative proposition that s 7(1)(b) “should be read as only applying in circumstances where the judgment first given was, when the intention of the parties was examined, designed to be a judgment reflecting the full and final satisfaction of the plaintiff’s damages”. 

5. Thus the plaintiff invites me to look behind the judgment to ascertain what claim or claims for damages the parties intended that it should meet.  In this regard, it can be readily accepted that when the plaintiff and his solicitor negotiated the settlement with Monadelphous they did not intend that the consent judgment should satisfy the total claims for damages arising from his injuries. 

6. In support of this submission I have been referred to the dissenting judgment of Lord Lloyd in the decision of the House of Lords in Jameson v Central Electricity Generating Board (1999) 1 All ER 193. In that matter a widow had brought a fatal accidents claim for damages against the defendant alleging that her late husband had been negligently exposed to asbestos dust. Prior to his death the deceased had brought a similar claim against his employer which had been settled by way of agreement for payment of a lump sum in full and final satisfaction of the same. Notwithstanding these circumstances, the Court below had permitted the widow to maintain her claim on the basis that it arose from a separate cause of action which was not barred by the previous settlement, the latter not having satisfied the full value of the plaintiff’s claim.

7. While Lord Lloyd upheld this reasoning of the Court below the majority of the House of Lords ruled that: 

   “… a claim of damages in tort is a claim for unliquidated damages.  It remains unliquidated until the amount has been fixed either by the judgment of the court or by an agreement as to the amount which must be paid to satisfy the claim.  It cannot be doubted that, once the amount of the damages has been fixed by a judgment against any one of several concurrent tortfeasors, full satisfaction will have been achieved when the judgment is satisfied.” 

8. It should be noted that the issues in Jameson were considered within a legislative framework different from our own.  This is because the statutory equivalent of this State’s s 7(1)(b) had been abolished by the United Kingdom’s Civil Liability (Contribution) Act 1978.  Nevertheless the majority decision in Jameson is consistent with the plain meaning of s 7(1)(b) of the Act. 

9. Jameson is also authority for the proposition that where a prior settlement has been effected by agreement and without any judgment in respect of the initial claim, then that settlement does not necessarily bar subsequent proceedings against concurrent tortfeasors. The question in those circumstances is whether the parties to the settlement agreed that it would be in satisfaction of the plaintiff’s total claim for damages. If not, then the settlement would not extinguish the residual claims against the remaining tortfeasors (see Lord Hope at 204).

10. In the present matter, the plaintiff’s alternative proposition might well have been valid if the settlement with Monadelphous had not resulted in a consent judgment.  However, once the amount of that judgment was received by the plaintiff then the plain effect of s 7(1)(b) of the Act was that he was barred from obtaining any further judgments in respect of the same damage in the present action. 

11. Accordingly, the plaintiff’s claims in the present proceedings cannot succeed, and the only appropriate order is that his claim should be dismissed.