Goodman Fielder Limited v Hickson
[2006] NSWDC 163
•20 September 2006
CITATION: Goodman Fielder Limited v Hickson [2006] NSWDC 163 HEARING DATE(S): 31/08/06
JUDGMENT DATE:
20 September 2006JUDGMENT OF: Kearns SC DCJ DECISION: Separated questions answered. CATCHWORDS: workers compensation - refund to employer - whether to be reduced for contributory negligence where the plaintiff and third party tortfeasor settle the plaintiff's claim - section 151Z - res judicata - judgment in rem LEGISLATION CITED: Law Reform (Miscellaneous Provisions) Act 1965
Workers Compensation Act 1987
Interpretation Act 1987
Workers' Compensation Act 1926
Wrongs Act 1958 (Vict)CASES CITED: Project Blue Sky v Australian Broadcasting Authority (1988) 194 CLR 355
Allianz Australia Insurance Limited v GSF Australia Pty Limited (2005) 221 CLR 568
K&S Lake City Freighters Pty Limited v Gordon & Gotch Ltd (1985) 157 CLR 309
Cooper Brookes (Wollongong) Pty Limited v The Commissioner of Taxation (1981) 147 CLR 297
Astley v AusTrust Limited (1999) 197 CLR 1
Government Insurance Office of New South Wales v C E McDonald (NSW) Pty Limited (1991) 25 NSWLR 492
Isaacs & Sons v Salbstein [1916] 2 KB 139, 142, 144
QBE Workers' Compensation (NSW) Limited v Dolan (2004) 62 NSWLR 42
P E Bakers Pty Limited v Yahuda (1988) 15 NSWLR 437
Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589
Blair v Curran (1939) 62 CLR 464, 532
Jackson v Goldsmith (1950) 81 CLR 446, 466
Henderson v Henderson 67 ER 313
Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502PARTIES: Goodman Fielder Limited
Glenn Andrew Joseph HicksonFILE NUMBER(S): 2502/06 COUNSEL: Mr G Parker appeared for the plaintiff.
Mr D Hooke appeared for the defendant.SOLICITORS: Eakin McCaffery Cox for the plaintiff.
Beilby Poulden Costello A.B.N. 12 677 357 190 for the defendant.
39
District Court of New South Wales
Matter No. 2502/06
Goodman Fielder Limited
(Plaintiff)
v
Glenn Andrew Joseph Hickson
(Defendant)
20 September 2006
JUDGMENT
KEARNS J
The Issue - a novel one
1. Mr Hickson was injured on a journey accident and received workers compensation payments from his employer. If he sued the tortfeasor responsible for his injuries and proceeded to judgment, with the court making a finding of contributory negligence, the compensation repayment he would be liable to refund to his employer would be reduced by the extent of his contributory negligence. Because he sued the tortfeasor responsible for his injuries, and settled the matter without the court making a finding of contributory negligence, his employer argues that he is required to refund the whole of the compensation payments received with no reduction to account for his contributory negligence. The question that arises in this case is whether that is correct.
2. Neither counsel, both of whom are highly experienced in personal injuries litigation, has referred me to any authority directly in point.
3. Goodman Fielder Limited (GF), Mr Hickson’s employer, has sued him for the recovery of payments of compensation it has made to him or on his behalf. In his defence, Mr Hickson has pleaded that he is not required to repay the whole amount, and that the amount of the repayment should be reduced by the extent of his contributory negligence.
4. In these proceedings by GF against Mr Hickson, a separate question has been severed for determination. The question was in this form:
Can s.10(2)of the Law Reform (Miscellaneous Provisions) Act 1965 operate in reduction of the amount of workers compensation benefits repayable to the Plaintiff from damages recovered as a result of a settlement of the Defendant’s action against a third party tortfeasor when no determination was made by a Court in the settled proceedings concerning contributory negligence and the quantum of damages?
There are some ancillary questions that I will need to deal with following the determination of this question.
The Facts – a worker, in the course of his employment, is injured by a third party tortfeasor
5. At about 9.15pm on 12 March 2003, Mr Hickson was riding his push bike, in the course of his employment, in an easterly direction in Gardeners Road, Mascot. Mr Ala was driving his motor vehicle, in an easterly direction, in Gardeners Road, Mascot. His vehicle collided with Mr Hickson’s bike, causing Mr Hickson catastrophic injuries. Mr Hickson received payments of compensation from his employer, GF. Mr Hickson sued Mr Ala. Mr Ala filed Notice of Grounds of Defence with extensive particulars of contributory negligence. It was common ground between the parties before me that contributory negligence was a live issue in the proceedings between Mr Hickson and Mr Ala. The proceedings were settled on 20 March 2006 for two million eight hundred thousand dollars ($2,800,000) plus costs. Judgment to this effect was entered by Judge Charteris SC (the consent judgment).
6. On 7 June 2006, GF commenced these proceedings against Mr Hickson. It seeks recovery of six hundred and seven thousand three hundred and fifteen dollars and forty-three cents ($607,315.43) being the amount of compensation payments made to Mr Hickson. I have been informed that an amount has been refunded to GF and that the balance is held in escrow by solicitors for Mr Ala pending the outcome of these proceedings. However, that is a detail I need not concern myself with.
The Legislation
7. GF brings its claim pursuant to section 151Z of the Workers Compensation Act 1987 (WCA). Relevantly, it provides,
(1) If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker’s employer to pay damages in respect of the injury, the following provisions have effect:
(a) the worker may take proceedings both against that person to recover damages and against any person liable to pay compensation under this Act for payment of that compensation, but is not entitled to retain both damages and compensation;
(b) if the worker recovers firstly compensation and secondly those damages, the worker is liable to repay out of those damages the amount of compensation which a person has paid in respect of the worker’s injury under this Act, and the worker is not entitled to any further compensation;
(c) if the worker firstly recovers those damages the worker is not entitled to recover compensation under this Act;
(d) if the worker has recovered compensation under this Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages)
…
8. The Law Reform (Miscellaneous Provisions) Act 1965 (LRMPA) was passed in 1965. It has been amended on a number of occasions as follows, by:
· Act No. 3 of 1968;
· Act No. 52 of 1970;
· Act No. 79 of 1987;
· Act No. 30 of 1995;
· Act 111 of 2000.
It is only the last amendment that appears to be of any consequence.
9. In its original form, the relevant provisions of the LRMPA were as follows:
9.
In this Part, unless the context or subject matter otherwise indicates or requires –
“Court” means in relation to any claim the court by or before whom the claim falls to be determined.
“Damage” includes loss of life and personal injury.
“Fault” means negligence, or other act or omission which gives rise to a liability in tort or would, apart from this Part, give rise to the defence of contributory negligence but does not mean or include a breach of statutory duty.
10. (1) Where any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons, a claim in respect of that damage shall not be defeated by reason of the fault of the person suffering the damage, but the damages recoverable in respect thereof shall be reduced to such extent as the court thinks just and equitable having regard to the claimant’s share in the responsibility for the damage:
Provided that-
…
(c) where any payments made to the claimant by way of compensation take effect pursuant to section 63(5) of the Workers’ Compensation Act, 1926-1965, as a satisfaction of the judgment obtained by him against his employer, such payments shall be reduced to the same extent as the damages recoverable by him and shall be a satisfaction of the judgment to such reduced extent only;
(d) where the claimant is liable to repay compensation to his employer pursuant to section 64(a) of the Workers’ Compensation Act, 1926-1965, the amount of compensation so repayable shall be reduced to the same extent as the damages recoverable by him;
…
(2) Where damages are recoverable by any person by virtue of the foregoing subsection subject to such reduction as is therein mentioned, the court shall find and record the total damages which would have been recoverable if the claimant had not been at fault.
…
(6) Where any case to which subsection one of this section applies is tried-
(a) by a judge sitting without a jury the judge shall make the apportionment under subsection one of this section; or
(b) by a judge sitting with a jury, the jury shall determine the total damages which would have been recoverable if the claimant had not been at fault and the extent to which those damages are to be reduced.
10. In the form applicable to the determination of the question, the LRMPA relevantly provided:
Section 8
Court, in relation to any claim, means the court by or before which the claim falls to be determined.
Section 9(1)
If a person (the claimant) suffers damage as the result partly of the claimant’s failure to take reasonable care (contributory negligence) and partly of the wrong of any other person:
(a) a claim in respect of the damage is not defeated by reason of the contributory negligence of the claimant, and
(b) the damages recoverable in respect of the wrong are to be reduced to such extent as the court thinks just and equitable having regard to the claimant’s share in the responsibility for the damage.
Section 10(2)
If the claimant is liable to repay compensation to his or her employer under section 64(1)(a) of the Workers’ Compensation Act 1926 or under section 151Z of the Workers Compensation Act 1987, the amount of compensation so repayable is to be reduced to the same extent as the damages recoverable by the claimant are reduced under section 9.
Section 11
If the damages recoverable by a claimant are subject to any reduction under this Part, the court is to find and record the total damages that would have been recoverable had there been no contributory negligence by the claimant.
Section 15
(1) If proceedings to which section 9 applies are tried by a judge sitting without a jury, the judge is to make the apportionment under section 9.
(2) If proceedings to which section 9 applies are tried by a judge sitting with a jury, the jury is to determine the total damages that would have been recoverable had there been no contributory negligence by the claimant, and the extent to which those damages are to be reduced.
11. GF argues it is entitled under section 151Z(1)(d) to a recovery of the full amount of payments of compensation made to Mr Hickson. Mr Hickson argues that he is not required to pay the full amount, but only a reduced amount and reduced by the extent of his contributory negligence. He relies on section 10(2) of the LRMPA.
GF’s Argument – the whole of the payments of compensation are repayable
12. Mr Parker, counsel for GF, argued that section 151Z of the WCA gives GF a right to recover payments of compensation made to Mr Hickson. He argued, in effect, that the terms of section 151Z(1)(b) were clear and the elements satisfied. The elements he submitted were:
· a liability in the tortfeasor to the worker;
· payment of compensation by the employer to the worker;
· recovery of damages by the worker against the tortfeasor.
If each of those is satisfied, and each is, then GF is entitled to one hundred percent recovery. The onus then shifts, he argues, to the worker to show that his repayment of compensation to GF should be reduced by section 10 of the LRMPA and that can work only if there is a finding of contributory negligence. Mr Parker frankly acknowledges that if there had been a contest between the worker and the tortfeasor and a finding of contributory negligence, section 10 would operate to reduce the amount of repayment of compensation.
13. Mr Parker argues that it is only when there is a judgment of the court on the issue of contributory negligence that there can be a reduction in the amount of the compensation repayable. This is so, it is argued, for a number of reasons:
(i) “court” in section 9 by reason of the definition in section 8 means “the court by or before which the claim falls to be determined”. This is, argues Mr Parker, the court as originally constituted by Judge Charteris SC when the judgment was entered. As that court did not make any finding of contributory negligence, there can be no reduction in the amount of compensation repayable (GF’s construction point);
(ii) the effect of the judgment on 20 March 2006 was to merge Mr Hickson’s cause of action in that judgment and it no longer has any independent existence. Contributory negligence was an issue in Mr Hickson’s case against Mr Ala and it has been dealt with by the judgment and, therefore, cannot be agitated in these proceedings. This is, Mr Parker argues, a res judicata point (the res judicata point).
Analysis
General approach to construction
14. I do not think it is right to say that these legislative provisions should be interpreted on the basis of shifting onuses. Interpretation of statutory provisions such as these is not undertaken by looking at questions of onus. The statutes are to be read together and they operate together, see, for example, Project Blue Sky v Australian Broadcasting Authority (1988) 194 CLR 355 paras 69-70 (Project Blue Sky). When section 151Z(1)(b) of the WCA is read with section 10 of the LRMPA, and applied to the facts of the case, the amount of the repayment can be determined. And the two sections must be read together. This is because section 10(2) applies to a case where a “claimant is liable to repay compensation to his or her employer … under section 151Z of the Workers Compensation Act 1987”. The worker is such a claimant. Being such a claimant, section 10(2) then determines how the amount of compensation repayable is to be determined. It then becomes necessary to construe section 10(2).
15. The following is clear:
(i) Mr Hickson recovered compensation from GF in respect of his injury;
(ii) that injury was caused under circumstances creating a liability in Mr Ala to pay damages in respect of it. So much seems to be acknowledged by the parties though Mr Parker did submit that if the issue of contributory negligence was available to be agitated, it is possible the Court could find there was no negligence on the part of Mr Ala. This seems to me unrealistic as GF brings this case asserting negligence on the part of Mr Ala and Mr Hickson accepts that. He is hardly able to dispute Mr Ala’s negligence having brought and settled his case against him asserting negligence on his part. Whether it be estoppel, or abuse of process, or the principle that prevents approbating and reprobating does not matter. I cannot see how Mr Hickson can now argue or seek to present a case that Mr Ala was not negligent and he does not seek to do so and nor does GF;
(iii) Mr Hickson is, therefore, liable to repay out of the damages the amount of compensation which GF has paid – section 151Z(1)(b).
16. The question that arises at this point then is how section 10(2) of the LRMPA operates to quantify the amount of the compensation repayable. Clearly, the first limb of section 10(2) is satisfied, that is, Mr Hickson is liable to repay compensation to GF under section 151Z of the WCA. Because that is satisfied the second part of section 10(2) operates.
A purposive or other construction
17. Mr Hooke, counsel for Mr Hickson, has submitted that the relevant statutory provisions of the LRMPA should be given a purposive construction and he has drawn my attention to section 33 of the Interpretation Act 1987. Clearly that section provides that a construction that would promote the purpose underlying the Act should be preferred to one that does not. He referred me to Project Blue Sky at paras 69-70 and Allianz Australia Insurance Limited v GSF Australia Pty Limited (2005) 221 CLR 568 paras 13, 41, 53, 99-100.
18. I was also referred to K&S Lake City Freighters Pty Limited v Gordon & Gotch Ltd (1985) 157 CLR 309 and Cooper Brookes (Wollongong) Pty Limited v The Commissioner of Taxation (1981) 147 CLR 297 (Cooper Brookes). The guidance in these cases is that in interpreting a statute a court should seek the intention from the words used, see, for example, Cooper Brookes at p304.
19. What is the purpose underlying the Act? Mr Hooke has provided me with a copy of the relevant second reading speech for the Law Reform (Miscellaneous Provisions) Bill, but it is of no assistance on this point. It was the speech for the 1965 bill.
20. The second reading speech for the Law Reform (Miscellaneous Provisions) Amendment Bill in 2000 was delivered by Mr Crittenden on behalf of Mr Debus in the Legislative Assembly on 17 November 2000 and by Mr Obeid in the Legislative Council on 7 December 2000. It is that bill which is essentially responsible for the LRMPA in its current form. It is plain that the purpose to be gleaned from the second reading speech was to deal with the High Court decision in Astley v AusTrust Limited (1999) 197 CLR 1 (Astley) to enable damages awards in actions for breach of contract to be reduced for contributory negligence. The speech added “the bill also rewrites the apportionment provisions in plainer language”.
21. Apart from dealing with the issue of contributory negligence and contract that arose following Astley, there was no other stated purpose of substance.
22. I turn then to the text and, to the extent that it is possible, to the context to see if any purpose can be gleaned. So far as context is concerned, the relevant provisions under consideration were introduced as part of legislation abolishing contributory negligence as a complete defence to actions in negligence. The principal function of this legislation then was to abolish contributory negligence as a complete defence. However, the legislation left contributory negligence available as a defence to actions in negligence. It then made provision for how it was to operate as a defence and it was to operate not on liability, but in reduction of damages. The reduction was to be a proportionate amount, depending on the extent of the plaintiff’s share for the damage. All this seems fairly straightforward. Not surprisingly, it was provided that the measure of the reduction would be determined by the court – section 10 of the Act as originally framed.
23. There was also a peripheral matter that the legislation dealt with and that was the repayment of compensation payments (for convenience from time to time, I will refer to this as “the payback”) received by a plaintiff who recovered damages. When contributory negligence was a complete defence, it was all or nothing. Either a plaintiff won his common law case or he lost it. If he won it, he would have to repay the whole of the compensation received pursuant to section 64 of the 1926 Workers’ Compensation Act. If he lost his common law case, he would keep all his workers compensation payments. With the abolition of contributory negligence as a complete defence, and it being a defence that reduced damages available to a plaintiff, there was now another category of case and the legislation dealt with it. That category of case was where a plaintiff won his case and had his damages reduced by reason of his contributory negligence.
24. That brings me to the text of how the legislation dealt with that category of case. It is clear that the legislation dealt with it by reducing the payback, to the same extent as the plaintiff’s damages were reduced – section 10(1)(d) of the Act as originally framed, and that would seem as fair a way of doing it as any other. It might strike one as unusual then to learn that that is not what the legislation did – at least not in all cases. Yet that is GF’s submission. Its submission is, in effect, that there are two categories of case and they are to be treated differently. The first category is the case where a plaintiff has sued the tortfeasor to judgment and there is a court finding of contributory negligence. In this category of case, the plaintiff may have the benefit of a reduction in his repayments of workers compensation. The second category of case is where the plaintiff settles his case and judgment is entered in accordance with the terms of settlement without the court having made any finding of contributory negligence. In this category of case, the plaintiff has to repay the whole of the compensation received. There may be other categories, for example, parties settle without terms of settlement, parties settle with terms of settlement and with a judgment which includes a consent finding as to contributory negligence. The further categories of case do not matter except to highlight what is evident from GF’s submission and that is that the amount of payback is not determined by what really is the contributory negligence, but by how the case is categorised.
25. It would be an odd result that the amount of the payback was not determined by the extent of the contributory negligence, but by whether or not a plaintiff ran or settled his case. Some matters highlight this oddity:
(a) a plaintiff, faced with a good settlement offer from a defendant, might be forced to run his case, not because the defendant’s offer is not right, but because he will have to repay the whole of his workers compensation payments if he settles. Yet if he runs the case, a finding of contributory negligence will reduce the amount of the payback. To this extent, this interpretation of the legislation encourages contested litigation rather than settlement – an unlikely intendment of the legislature;
(b) a plaintiff faced with the scenario in (a) above, would be at considerable disadvantage if the defendant’s offer was in the form of an offer of compromise. He would then be faced with a choice of accepting the offer and paying back the whole of the compensation or running the case, achieving a result less than the offer and being ordered to pay defendant’s costs – again an unlikely intendment;
(c) most personal injuries cases settle. Indeed, over time, the bulk of them have. It is most unlikely that in passing this part of the legislation, the legislature intended that it would apply only to a small minority of cases, they being cases contested.
26. GF’s two arguments in para 13 above are said to bring about the result contended for by GF and I deal with both those arguments hereunder.
GF’s construction point
27. The result contented for by GF, it is argued, is compelled by the wording of the section. This is because of the use of the word “court” in section 9 of the LRMPA and its definition in section 8. “Court” in section 9, it was argued, means the court as constituted by Judge Charteris SC on 20 March 2006. Mr Parker also called in aid in support of his argument sections 11 and 15.
28. I think this argument completely overlooks the LRMPA as originally enacted. Section 10(1)(d) provided the amount of payback was to be “reduced to the same extent as the damages recoverable”. The phraseology in section 10(2) in the legislation applicable in this case is different. It now provides that the payback is to be “reduced to the same extent as the damages recoverable under section 9”. What has been added is the phrase “under section 9”.
29. No argument was put to the effect that because the legislature altered the wording of the provision it therefore intended to alter the meaning. I would not accept as correct a submission to this effect for the following reasons:
(a) a change as substantive as this affecting detrimentally a worker’s rights in legislation designed for the benefit of workers would require plain language;
(b) it is unlikely that the legislature would now require a worker to repay the whole payback instead of part of the payback by utilising a convoluted process rather than being direct. The process is convoluted because it requires several steps:
· section 10(2) refers to a reduction “under section 9”;
· that takes one to section 9(1)(b) which refers to a reduction that “the court thinks just and equitable”;
· that takes one to section 8 where “court” is defined to mean “the court by or before which the claim falls to be determined”.
It follows from those steps, it is argued, that “court” means the court that hears a worker’s case against a tortfeasor. Putting aside the validity of that conclusion, such a convoluted process would be unlikely to be employed to achieve a simple result and one substantially detrimental to a worker;
(c) the legislation is beneficial and should be construed liberally in favour of the worker in the event of ambiguity. That it is beneficial legislation gains support from Handley JA in
Government Insurance Office of New South Wales v C E McDonald (NSW) Pty Limited
(1991) 25 NSWLR 492 at 498 E – F (McDonald);
(d) an altered meaning would be contrary to one of the stated purposes in the second reading speech that the bill was to rewrite the apportionment provisions in plainer language. In other words, the only change intended was cosmetic and not substantive.
30. I think the correct approach is this:
· Mr Hickson is, within the meaning of section 10(2) of the LRMPA a person liable to repay compensation to his employer under section 151Z of the WCA;
· therefore, the amount of compensation repayable by him is to be reduced to the same extent as his damages are reduced under section 9. (I should add here that it would be odd that the section which tells us that his payback should be reduced would then provide a formula or mechanism that would result in no reduction);
· the extent to which Mr Hickson’s damages have been reduced is not known because his case against Mr Ala was settled. Let it be assumed for present purposes that it can be established, by appropriate evidence, that it was reduced by twenty-five percent. In this event, I think it is fair to say that the extent of the damages recoverable has been reduced by twenty-five percent under section 9;
· section 9 is the section that provides for reduction in damages. There is no magic in the court being required to do that. If there were, it would not be possible to settle cases involving contributory negligence. What section 9 does then is provide for damages to be reduced and, to the extent that it is necessary, it provides for the court to determine the extent of that reduction. Overall, however, a reduction for contributory negligence is a reduction under and by reason of section 9 whether or not the court had a role in determining it. Before section 10 in its original format and now section 9, there was no authority for a reduction for contributory negligence. Section 10 in its original format and now section 9 provided the authority and so any reduction for contributory negligence thereafter is a reduction under the original section 10 or the current section 9 whether done by consent or by court order. Therefore, if Mr Hickson’s damages recoverable have been reduced by twenty-five percent (or any other percentage), they have been “reduced under section 9” within the meaning of section 10(2) of the LRMPA.
31. Sections 11 and 15 do not derogate from this analysis. These sections will apply when the court is called upon to determine contributory negligence.
32. Mr Parker argued that the use of the phrase “damages recoverable” in sections 9 and 10 of the LRMPA had significance and the provisions did not apply to Mr Hickson whose damages had been recovered.
I do not think that the use of the phrase “damages recoverable” confines the operation of the provision to cases where damages have not yet been recovered. I think the phrase includes damages recovered. If it were not so, then, if after a contest between worker and tortfeasor, with a finding of contributory negligence, the judgment sum was paid to the worker, he would then be liable to repay the whole of the compensation to his employer. The reduction in the repayment cannot have been intended to depend on whether or not the worker had damages recoverable or recovered.
The res judicata point
33. Mr Parker argued that the effect of the consent judgment of 20 March 2006 was to merge Mr Hickson’s cause of action in that judgment. The cause of action, therefore, no longer has any independent existence. Contributory negligence, being in the pleadings, has been dealt with by the judgment and, therefore, cannot be agitated in this case. It is res judicata. To permit it to be agitated could lead to inconsistent judgments of this Court because in agitating contributory negligence, it is possible that there be a finding of no negligence on the part of Mr Ala which is inconsistent with the consent judgment.
34. It seems to me the res judicata argument does not come to grips with the elements of res judicata.
35. The elements of res judicata are set out in the highly regarded text of Spencer Bower, Turner and Handley, “Res Judicata” Third Edition 1966 (Spencer Bower). At page 17, paragraph 19, the constituent elements of res judicata estoppel are set out as follows:
A party setting up “res judicata” by way of estoppel as a bar to his opponent’s claim, or as the foundation of his own, must establish the constituent elements, namely:
(i) the decision was judicial in the relevant sense;
(ii) it was in fact pronounced;
(iii) the tribunal had jurisdiction over the parties and the subject matter;
(iv) the decision was –
(a) final, and
(b) on the merits;
(v) it determined the same question as that raised in the later litigation; and
(vi) the parties to the later litigation were either parties to the earlier litigation or their privies, or the earlier decision was “in rem”.
36. Whatever may be said about other elements, it seems plain that element (vi) and possibly element (iv) are absent in these proceedings and, accordingly, the principle of res judicata will not apply in this case.
Element (iv) - On the merits
37. The fact that the decision was by consent does not necessarily exclude its being a decision on the merits – Spencer Bower at para 20. However, this is as to essential matters that form part of the consent judgment – Spencer Bower at para 30. The most that can be said about the consent judgment in that contributory negligence was in issue in that case. The consent judgment says nothing as to whether it was dealt with or, if so, to what extent. A decision in these proceedings that Mr Hickson was guilty of contributory negligence would not be inconsistent with the consent judgment – see Spencer Bower at para 176. I cannot see how the consent judgment, which on its face or even on an analysis of all the materials underlying it, is silent as to contributory negligence can be inconsistent with a later judgement that determines the extent of contributory negligence.
Element (vi)
(a) Same parties or privies; or
(b) the decision was in rem
Same parties or privies
38. Spencer Bower is replete with statements to the effect that the estoppel sought to be established by res judicata applies only between parties and their privies unless the judgment was in rem, see, for example, paras 19, 177, 181, 213, 214 and 419. See also Isaacs & Sons v Salbstein [1916] 2 KB 139, 142 and 144.
39. Para 213 of Spencer Bower introduces the concept of mutuality. There can be no mutuality here as the parties are different.
40. There is a further analysis available that, I think, defeats Mr Parker’s submission. If Mr Hickson is bound for all purposes by the consent judgment to the extent that he cannot raise contributory negligence any more, then so must be GF and Mr Ala. Should GF take proceedings for indemnity under section 151Z(1)(d) of the WCA, then no doubt Mr Ala would raise Mr Hickson’s contributory negligence in his defence. GF would be able to reply to that by asserting that it has been dealt with in the consent judgment and, therefore, cannot be agitated. It is res judicata. Yet, plainly, contributory negligence could be agitated in such proceedings – McDonald.
41. As the proceedings and the earlier proceedings are not between the same parties, res judicata cannot be relied on by GF unless the consent judgment was one in rem.
42. I think Mr Parker’s submission is inconsistent with QBE Workers’ Compensation (NSW) Limited v Dolan (2004) 62 NSWLR 42 (Dolan). In that case, an action between the worker and the alleged tortfeasor was settled with a verdict for the defendant and the defendant agreeing to pay the plaintiff four thousand dollars in respect of his costs. It was held that that settlement did not create an issue estoppel or res judicata binding on the employer preventing it from bringing a claim for indemnity against the alleged tortfeasor. I do not see how this case can sit consistently with Mr Parker’s argument. I do not think it is a sufficient distinction that these proceedings are under section 151Z(1)(b) of the WCA and the Dolan proceedings were under section 151Z(1)(d). The basic principle underlying Mr Parker’s submission is that the original proceedings create a res judicata estoppel. It cannot be an estoppel that is limited to preventing Mr Hickson raising contributory negligence in a section 151Z(1)(b) against him, but permits it to be raised by Mr Ala in a section 151Z(1)(d) against him. There is no sound basis for saying the consent judgment creates a res judicata estoppel that prevents contributory negligence being raised in some later proceedings, but permits it to be raised in other later proceedings. It is either res judicata estoppel and binds everybody to the litigation or it is not. There is no basis for saying it is an estoppel that binds only one party to the proceedings, namely Mr Hickson in a section 151Z(1)(b) case, but not Mr Ala in a section 151Z(1)(d) case.
(b) Judgment in rem
43. A reading of the judgment of Hope JA in P E Bakers Pty Limited v Yahuda (1988) 15 NSWLR 437 especially at pp 442-5 reveals that the consent judgment could not be a judgment in rem.
44. In any event, a judgment in rem cannot be obtained by consent – Spencer Bower at para 235.
Authorities
45. Mr Parker took me to a number of authorities and I shall need to deal with those. As I have indicated, however, I think the argument fails to come to grips with the essential elements of res judicata. I do not think the authorities he has referred me to overcome that problem.
46. Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589 (Anshun) was a case where the owner of a crane, a tortfeasor, claimed contribution from another tortfeasor, the hirer of the crane, under the Wrongs Act 1958 (Vict). The owner of the crane could also have sought an indemnity under a contract with the hirer, but did not do so. The owner was ordered to pay ninety percent of the damages awarded in the case and then sought to bring a claim for contractual indemnity against the hirer of the crane. The High Court held the owner to be estopped from bringing the claim for contractual indemnity as it should have been brought in the earlier proceedings.
47. The ratio of Anshun can have no application to this case.
48. Mr Parker took me to a number of passages at pp594, 597, 598, 609 and 611. Many of these passages are not helpful. Others need to be considered in their context. I consider them hereunder.
(a) At p597, the passage from Blair v Curran (1939) 62 CLR 464, 532 that Mr Parker referred me to is a passage in the context of a “judicial determination” and of issues arising between “the same parties”. So much is evident from p531 of the judgment and those elements are absent in this case.
(b) The next passage at page 597 that Mr Parker took me to was the extract of Fullagar J from Jackson v Goldsmith (1950) 81 CLR 446, 466. It was a general statement not addressing specific issues and certainly not addressing the issues arising here. For more specificity in that regard, one can find at p461 reference by Williams J to the result in the earlier proceedings in that case, being “res judicata between Jackson and Goldsmith”, that is, between the parties in the earlier proceedings.
(c) At p598, there is an extract from Henderson v Henderson 67 ER at p319, but it does not advance the argument or deal with the issues raised.
(d) At p609, Mr Parker relied on a passage of Brennan J (as he then was) to the effect that a judgment (in this case the consent judgment) is conclusive to all intents and purposes until set aside. Reference to the foot of the previous page, however, reveals the context in which Brennan J extracted that statement, where he said:
Unless a judgment recovered after litigation between parties is reversed or set aside, it binds the parties and determines their rights and liabilities inter se according to its tenor.
(Emphasis added)
(e) Then further on p609, Mr Parker relied on a passage to argue that these proceedings could not be maintained because the result might be inconsistent with the consent judgment. There are two answers to this. The first is that for reasons I have given earlier (para 15 (ii)), I do not think this is realistic and, secondly, for reasons I set out in para 37, I do not see how a finding of contributory negligence in these proceedings can be inconsistent with the consent judgment.
(f) Again at p611, Brennan J was speaking of a judgment barring subsequent proceedings between the same parties.
49. Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 where Mr Parker referred me to passages at pp504-5, 506, 507, 508, 510 and 511, does not, in my view, advance the argument any further.
Conclusion
50. These proceedings are not between the same parties to the consent judgment and as the consent judgment is not a judgment in rem there can be no res judicata estoppel and GF’s argument on this point must fail.
51. The answer to the question posed in paragraph 4 above must, therefore, be “yes”.
The remaining questions
52. The Notice of Motion contains the following two questions:
1.b. If the answer to Question (a) is in the affirmative, is evidence admissible in these proceedings to establish the extent to which the damages recovered by the Defendant as a result of the settlement of his action against the third party tortfeasor were in fact reduced on account of his contributory negligence?
and
3. In the alternative to Question (b), if the answer to Question (a) is in the affirmative, is evidence admissible in these proceedings to establish the degree of the Defendant’s contributory negligence and the quantum of the damages to which the Defendant would have been entitled without reduction for contribution negligence?
What the parties had in mind in relation to these questions was that if the answer to the primary question was “yes”, whether the extent of the contributory negligence could be proved by the admission of expert evidence in the form of a legal opinion or whether there should be a trial conducted in the normal way to determine the extent of the contributory negligence.
53. Once that is understood, then some sense can be given to the question 1.b. In the strict sense, the answer to question 1.b. should be “yes”, because expert evidence of an engineering or other technical nature may be admissible. However, a bare answer “yes” might suggest that the tender of a legal opinion would be sufficient to establish the extent of the contributory negligence and the parties are agreed that that cannot be so. Accordingly, I think the answer to question 1.b. should be “yes, subject to appropriate rules as to admissibility of evidence at trial”.
54. It is agreed the answer to question 3 should be “yes”.
55. The questions and answers, therefore, are as follows:
Q1.a. Can s.10(2) of the Law Reform (Miscellaneous Provisions) Act 1965 operate in reduction of the amount of workers compensation benefits repayable to the Plaintiff from damages recovered as a result of a settlement of the Defendant’s action against a third party tortfeasor when no determination was made by a Court in the settled proceedings concerning contributory negligence and the quantum of damages?
A: Yes.
Q1.b: If the answer to Question (a) is in the affirmative, is evidence admissible in these proceedings to establish the extent to which the damages recovered by the Defendant as a result of the settlement of his action against the third party tortfeasor were in fact reduced on account of his contributory negligence?
A: Yes, subject to appropriate rules as to admissibility of evidence at trial; and
Q3. In the alternative to Question (b), if the answer to Question (a) is in the affirmative, is evidence admissible in these proceedings to establish the degree of the Defendant’s contributory negligence and the quantum of the damages to which the Defendant would have been entitled without reduction for contribution negligence?
A: Yes.
Mr G Parker, instructed by Eakin McCaffery Cox appeared for the plaintiff.
Mr D Hooke instructed by Beilby Poulden Costello A.B.N. 12 677 357 190 appeared for the defendant.
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