Gammon v Saccardo Constructions Pty Ltd

[1992] HCATrans 87

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Adelaide No A34 of 1991

B e t w e e n -

JAMES PERCY GAMMON

Applicant

and

SACCARDO CONSTRUCTIONS PTY LTD

Respondent

Application for special leave

to appeal

BRENNAN J

TOOHEY J McHUGH J

Gammon 1 13/3/92

TRANSCRIPT OF PROCEEDINGS

FROM ADELAIDE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 13 MARCH 1992, AT 1.47 PM

Copyright in the High Court of Australia

MR o.A. TRIM: If the Court pleases, I appear for the

applicant. (instructed by Ross & McCarthy)

MR R.D. LAWSON, QC: If the Court pleases, I appear with my

learned friend, MR S.G. CONNELL, for the

respondent. (instructed by Thomson Simmons & Co)

BRENNAN J: Yes, Mr Trim.

MR TRIM: This application arises from a judgment of the

Full Court by which Their Honours comprising the
majority allowed an appeal against the trial

judge's finding that there was a presumption of

reasonableness in favour of a settlement sum
reached between the applicant and the plaintiff in

the original proceedings.

The plaintiff in the proceedings, as they were

originally constituted, had been injured in an

industrial accident and accepted an offer that the

applicant, the sole defendant in the proceedings,

had filed in the court. That acceptance was filed

shortly before the trial of the action was due to

commence and the action proceeded to hearing on the

issues arising on the third party notice only.

BRENNAN J:  We have read the judgments, Mr Trim.

MR TRIM: In that event, I will simply forthwith take the

Court to the relevant finding of the trial judge at

page 11. At the foot of that page at line 35:

I hold that the amount of the settlement "may

be used as the basis for assessing

contribution" (if any). There is a

presumption that the agreed award or accord

would not be reached recklessly, negligently

or improvidently. That really is the same as

saying that, prima facie, the sum agreed is
reasonable etc.	However, the presumption is

capable of rebuttal.

On appeal, Acting Justice Zelling, at page 42

of the application book found, at line 22:

The position is that the defendant has to

prove quantum as in any other action -

and he goes on to find at lines 30 and 31, that what was required was that the evidence must be

sufficient to establish -

the settlement was within the limits of

reasonable tolerance -

Gammon 2 13/3/92

whereas Justice Mohr, at page 34, who was in the

minority, quoted a passage from the High Court

decision of Bitumen Oil - which I will not read -

which commences at line 10, and found that that

passage from the unanimous decision of the Court in

Bitumen Oil had the effect of putting the onus on

the third party. It would be the applicant's

contention on an appeal that His Honour

Justice Mohr correctly understood and applied that

passage.

It is a short point, but it is the applicant's

submission that the point is of public importance.

The relevant provisions of the Wrongs Act of this

State are repeated in each State and the Northern

Territory, with the exception of Tasmania, which is

unique in that its legislation spells out the

consequences of a settlement between one tortfeasor

and a plaintiff, and provides that in the event of

such a settlement the tortfeasor who settles must

satisfy the court as to the reasonableness of the
settlement.

Apart from the decisions that are referred to in the judgments of the Full Court and the learned

trial judge, the applicant's research cannot locate

any other reported decision in any State in which

the issue sought to be agitated on appeal has been
the subject of a considered decision. It would be

argued on appeal that there are very persuasive

policy reasons why the presumption found by

His Honour the learned trial judge and by
His Honour Justice Mohr should exist, and that

policy reason is that in the applicant's contention the law should encourage the economic resolution of

litigation. In the absence of the presumption for

which the applicant contends, there would be no

incentive or tortfeasor in the applicant's position

to seek an economic settlement of a claim made by a

plaintiff, and indeed, a disincentive in the sense

that there would be a very persuasive reason why

the tortfeasor in the position of the applicant

would feel compelled to go on in the context of the

trial as originally constituted with the original

plaintiff as a party.

The applicant contends that this case, against that background, is an appropriate vehicle for the

import of a passage that was quoted by Justice Mohr

and relied upon by him to be reconsidered, and a

considered judgment delivered as to whether or not

indeed it has - that is, that passage, has the
import contended for by the applicant. It is a

short point, and they are the applicant's

submissions.

Gammon 13/3/92

BRENNAN J:  Thank you, Mr Trim. We need not trouble you,

Mr Lawson. In giving the leading judgment in this matter in the Full Court, Zelling AJ said:

The position is that the defendant has to

prove quantum as in any other action. If the

third party is foolhardy enough to put the

defendant to strict proof and the judge

hearing the third party proceedings finds that the settlement was reasonable, the third party

will be mulcted in costs. As Wells J pointed

out in the passage cited, the judge need not

come to the exact figure of the settlement.

It is sufficient if the settlement was within

the limits of reasonable tolerance, looked at as a settlement. But there is no shifting of onus by the creation of a presumption ..... If a

contribution claim is to proceed and it is

desired to obviate this necessity for the
calling of all necessary evidence, which is

usually a commonsense way of going about

it, ..... then directions should be sought

before the matter is set down for trial, or the trial proceeds after settlement, as the case may be.

Construing this passage as we think it should be

construed, these propositions are correct. If His

Honour meant no more than that the settlement of

the action between the plaintiff and the defendant

tortfeasor did not create any presumption of law as

to the reasonableness of the amount of the
settlement, we would respectfully agree with his
statement. If, however, His Honour meant that a
settlement is no evidence at all of the

reasonableness of the amount agreed between the

plaintiff and the defendant and that a defendant

claiming contribution must always call witnesses to establish that the amount paid to the plaintiff was reasonable, we would respectfully disagree.

Despite the ambiguity in this passage in the

leading judgment, we do not think that this case is

a suitable vehicle for the grant of special leave.

The trial judge approached the case on the basis

that the settlement created a presumption of

reasonableness which the third party was required

to rebut. He held that the evidence upon which the

third party had relied had failed to rebut this

presumption.

It seems clear that the learned trial judge

thought that the presumption arose as a matter of

law. In doing so he was in error, as the Full

Court held, and the matter has been rightly

remitted back to him.	A new hearing is therefore
unavoidable.	On that hearing, the question for the

Gammon 13/3/92

trial judge will be whether the settlement was

reasonable, having regard to the evidence tendered,

including any inferences he draws from the

circumstances of the settlement itself.

Accordingly, special leave should be refused.

MR LAWSON:	I seek an order for costs.
BRENNAN J:	What do you have to say to that, Mr Trim?
MR TRIM:	No submissions, if Your Honour pleases.

BRENNAN J:  Special leave with be refused with costs. The

Court will now adjourn.

AT 1.56 PM THE MATTER WAS ADJOURNED SINE DIE

Gammon 13/3/92