Gammon v Saccardo Constructions Pty Ltd

Saccardo Constructions Pty Ltd sought special leave to appeal to the High Court of Australia from a judgment of the Full Court. The dispute concerned the reasonableness of a settlement sum agreed between the applicant (the sole defendant in the original proceedings) and the plaintiff, who had been injured in an industrial accident. The plaintiff accepted the applicant's offer shortly before the trial, and the action proceeded to a hearing solely on the issues arising from a third-party notice.

The central legal issue before the High Court was whether a presumption of reasonableness applied to a settlement sum agreed between a defendant and a plaintiff, thereby placing the onus on a third party to prove the settlement was unreasonable. The trial judge had found that such a presumption existed, holding that the settlement amount could be used as a basis for assessing contribution and that there was a prima facie presumption of reasonableness. However, the majority of the Full Court overturned this, with one judge finding that the defendant bore the onus of proving the quantum of the settlement, and that the evidence must establish the settlement was within the limits of reasonable tolerance. A dissenting judge in the Full Court, however, had found that a High Court decision in *Bitumen Oil* placed the onus on the third party.

The applicant contended that the dissenting judge in the Full Court had correctly applied the principles from *Bitumen Oil*, which they argued established a presumption of reasonableness for settlement sums. The applicant submitted that this point was of public importance, as similar provisions existed in the *Wrongs Act* across most Australian states and territories. They argued that a presumption of reasonableness was supported by persuasive policy reasons, specifically that the law should encourage the economic resolution of litigation. The applicant's research indicated a lack of other reported decisions directly addressing this specific issue.