Herridge Parties v Electricity Networks Corporation T/As Western Power
[2021] WASCA 111 (S)
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: HERRIDGE PARTIES -v- ELECTRICITY NETWORKS CORPORATION T/AS WESTERN POWER [2021] WASCA 111 (S)
CORAM: BUSS P
MURPHY JA
MITCHELL JA
HEARD: 2 JULY 2021 and ON THE PAPERS
DELIVERED : 3 NOVEMBER 2021
FILE NO/S: CACV 114 of 2019
BETWEEN: HERRIDGE PARTIES (PER ORDER MADE ON 28 OCTOBER 2019)
First Appellant
IAG/ALLIANZ PARTIES (PER ORDER MADE ON 28 OCTOBER 2019)
Second Appellant
RAC PARTIES (PER ORDER MADE ON 28 OCTOBER 2019)
Third Appellant
AND
ELECTRICITY NETWORKS CORPORATION T/AS WESTERN POWER (ABN 18 540 492 861)
First Respondent
NOREEN MERLE CAMPBELL
Second Respondent
VENTIA UTILITY SERVICES PTY LTD (ACN 010 725 247) (FORMERLY KNOWN AS THIESS SERVICES LTD)
Third Respondent
FILE NO/S: CACV 129 of 2019
BETWEEN: NOREEN MERLE CAMPBELL
First Appellant
VENTIA UTILITY SERVICES PTY LTD formerly known as THIESS SERVICES PTY LTD (ACN 010 725 247)
Second Appellant
AND
HERRIDGE PARTIES (PER ORDER MADE ON 28 OCTOBER 2019)
First Respondent
IAG/ALLIANZ PARTIES (PER ORDER MADE ON 28 OCTOBER 2019)
Second Respondent
RAC PARTIES (PER ORDER MADE ON 28 OCTOBER 2019)
Third Respondent
ELECTRICITY NETWORKS CORPORATION T/A WESTERN POWER (ABN 18 540 492 861)
Fourth Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: LE MIERE J
Citation: HERRIDGE -v- ELECTRICITY NETWORKS CORPORATION t/as WESTERN POWER [No 4] [2019] WASC 94
File Number : CIV 1841 of 2016, CIV 1445 of 2016, CIV 1239 of 2016, CIV 2259 of 2015
Catchwords:
Practice and procedure - Costs - Application of contractual indemnity provision - Whether court should order indemnifying party to pay the part of a co-defendant's costs of defending proceedings - Turns on own facts
Legislation:
Nil
Result:
Application for indemnity in respect of legal costs dismissed
Category: B
Representation:
CACV 114 of 2019
Counsel:
| First Appellant | : | P J Dunning QC and T Smyth |
| Second Appellant | : | C M Harris QC and P Mendelow |
| Third Appellant | : | R J Price |
| First Respondent | : | B Dharmananda SC and M J Sims |
| Second Respondent | : | J C Giles SC and T N Owen |
| Third Respondent | : | G M Watson SC and S C M Wong |
Solicitors:
| First Appellant | : | Slater & Gordon - Perth |
| Second Appellant | : | Hall & Wilcox (Perth) |
| Third Appellant | : | Civic Legal |
| First Respondent | : | DLA Piper Australia - Perth |
| Second Respondent | : | Minter Ellison |
| Third Respondent | : | Wotton + Kearney Lawyers (Perth) |
CACV 129 of 2019
Counsel:
| First Appellant | : | J C Giles SC and T N Owen |
| Second Appellant | : | G M Watson SC and S C M Wong |
| First Respondent | : | P J Dunning QC and T Smyth |
| Second Respondent | : | C M Harris QC and P Mendelow |
| Third Respondent | : | R J Price |
| Fourth Respondent | : | B Dharmananda SC and M J Sims |
Solicitors:
| First Appellant | : | Minter Ellison |
| Second Appellant | : | Wotton + Kearney Lawyers (Perth) |
| First Respondent | : | Slater & Gordon - Perth |
| Second Respondent | : | Hall & Wilcox (Perth) |
| Third Respondent | : | Civic Legal |
| Fourth Respondent | : | DLA Piper Australia - Perth |
Case(s) referred to in decision(s):
Bofinger v Kingsway Group Ltd [2009] HCA 44; (2009) 239 CLR 269
Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640
Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10; (2013) 247 CLR 613
March v E & M Stramare Pty Ltd (1991) 171 CLR 506
JUDGMENT OF THE COURT:
Introduction
In reasons published on 2 July 2021 (with which these supplementary reasons should be read) this court determined that Western Power, Thiess and Mrs Campbell were each liable to compensate the plaintiffs for loss and damage resulting from a bushfire in Parkerville, Western Australia.
In doing so, the court upheld the trial judge's decision that Thiess and Mrs Campbell were liable in negligence and nuisance. Thiess' liability arose from its negligent undertaking of the July 2013 works on the PA pole (July 2013 works). The court also upheld the trial judge's decision that Western Power was not liable for Thiess' negligent undertaking of the July 2013 works. In that regard, the trial judge had correctly rejected the plaintiffs' argument that Western Power was liable for Thiess' negligence either on the basis that (1) Western Power owed a non‑delegable duty of care to the plaintiffs, or (2) Western Power was negligent in selecting Thiess as a contractor for the July 2013 works.
However, this court held that Western Power was directly liable to the plaintiffs in respect of Western Power's own negligence. Western Power was negligent in that it failed to have a system for undertaking periodic inspection of wooden point of attachment poles owned by consumers and used to support live electrical apparatus forming part of Western Power's electricity distribution system. This negligence was found to have caused the plaintiffs' loss and damage.
On 2 July 2021, the court made orders having the effect that:
(1)Western Power pay 50% of the plaintiffs' actionable damages;
(2)Thiess pay 35% of the plaintiffs' actionable damages;
(3)Mrs Campbell pay 15% of the plaintiffs' actionable damages;
(4)The defendants (including Western Power) jointly and severally pay the plaintiffs' trial costs;
(5)Western Power pay 25% of the plaintiffs' costs of the plaintiffs' appeals;
(6)The plaintiffs pay Thiess' and Mrs Campbell's costs of the plaintiffs' appeals;
(7)Western Power pay 50% of Mrs Campbell's costs of her appeals; and
(8)Mrs Campbell pay the plaintiffs' costs of her appeals, other than in relation to grounds alleging that Western Power was liable for its own negligent failure to establish an inspection regime.
By a minute of proposed orders lodged on 1 July 2021, Western Power sought orders that Thiess indemnify it in respect of:
(1)The proportion of the trial costs paid by Western Power to the plaintiffs (as part of the costs payable by Western Power under order (4) in [4] above) relating to the plaintiffs' unsuccessful claim that Western Power was liable for Thiess' negligence. Western Power estimates this proportion to be 40% of the plaintiffs' trial costs. Western Power seeks an order that Thiess indemnify it for this proportion of the trial costs it pays to the plaintiffs.
(2)The proportion of Western Power's own trial costs of defending the plaintiffs' unsuccessful claim that Western Power was liable for Thiess' negligence. Western Power estimates this proportion to be 40% of its trial costs. Western Power seeks an order that Thiess indemnify it for this proportion of Western Power's own trial costs.
(3)The proportion of Western Power's own appeal costs incurred in defending the plaintiffs' appeals insofar as they relate to the plaintiffs' unsuccessful claim that Western Power was liable for Thiess' negligence. Western Power estimates this proportion to be 75% of its appeal costs. Western Power seeks an order that Thiess indemnify it for this proportion of Western Power's own appeal costs.
The court ordered that Western Power's application for these orders be determined on the papers. It made programming orders for the filing and service of written submissions, which have been received and considered.
Terms of the Umbrella Deed
The Umbrella Deed includes the following provisions:[1]
[1] Green AB vol 5 p 4987, 4988, 4992, 5001.
S3.1Performance of Services
(a)Western Power engages [Thiess] as an independent contractor to carry out the Services in accordance with this Contract.
(b)[Thiess] accepts the engagement referred to in clause S3.1(a).
(c)[Thiess] must:
(i)perform the Services in accordance with the Service Levels and the Technical Specification (Schedule 8 of the Umbrella Deed) and the Scope of Services (Schedule 11 of the Umbrella Deed); and
(ii)comply with all reasonable Directions given by Western Power or Western Power's Representative regarding the performance of the Services, provided that complying with the Direction will not cause [Thiess] to breach any Legislative Requirement.
(d)In consideration of [Thiess] performing the Services, Western Power must pay [Thiess] the Fees in accordance with clause S15.
…
S4.1[Thiess] to provide qualified Personnel
[Thiess] must engage only suitably qualified Personnel (in accordance with the training requirements in the Technical Specification) who hold current certificates where required and have the necessary skills to perform the Services.
…
S11.1General indemnity
[Thiess] indemnifies Western Power and Western Power's Personnel (except Western Power's subcontractors) against any Loss and Claims suffered or incurred by Western Power or Western Power's Personnel in connection with any wrongful act or omission by [Thiess] or its Personnel arising from or in connection with the performance or non‑performance of the Services, including any:
(a)breach of contract;
(b)tort, including negligence; or
(c)breach of a Legislative Requirement;
(d)breach of equitable duty, including breach of confidentiality or breach of fiduciary duty;
(e)without limiting clause S11.1(a), a breach of the obligations of [Thiess] under clause S20; or
(f)any misuse of Personal Information by [Thiess] whether arising under the Privacy Act or otherwise.
…
S11.2Third Party Claims
[Thiess] indemnifies Western Power and Western Power's Personnel against any Loss and Claims suffered or incurred in connection with any Claim by a Third Party against Western Power or Western Power's Personnel arising from or in connection with the performance or non‑performance of the Services, including any:
(a)breach of contract;
(b)tort, including negligence or breach of a Legislative Requirement;
(c)breach of equitable duty, including breach of confidentiality or a breach of fiduciary duty;
(d)Claim by a Third Party that its IP or Moral Rights have been infringed; or
(e)any misuse of Personal Information by [Thiess] whether arising under the Privacy Act or otherwise.
…
S11.4Exclusion and Mitigation
The indemnities in clauses S11.1 to S11.3 do not apply to any Loss or fine or penalty to the extent that the Loss or fine or penalty is caused by or contributed to by Western Power's or Western Power's Personnel's unlawful conduct or negligence or breach of this Contract. The Contractor's obligation to indemnify in this clause will be reduced to the extent that the indemnified party fails to reasonably mitigate the Loss. …
'Loss' is defined in the Dictionary to the Umbrella Deed to mean:[2]
(a)any liability, cost, expense, loss, personal injury (including illness), death or damage; and
(b)in relation to a Claim, Loss includes amounts payable on the Claim and (whether or not the Claim is successful), legal costs and disbursements on a full indemnity basis.
[2] Green AB vol 5 p 4969 - 4970.
'Claim' is defined in the Dictionary to the Umbrella Deed to mean:[3]
a demand, action or proceeding of any nature whether actual or threatened.
[3] Green AB vol 5 p 4966.
The 'Services' for present purposes were the July 2013 works. The plaintiffs are Third Parties for the purposes of the Umbrella Deed.[4]
[4] See the definition of 'Third Party' in the Dictionary to the Umbrella Deed at Green AB vol 5 p 4971 - 4972.
Basis of Western Power's claim for indemnity
Western Power's claim for indemnification is based on the following aspect of cl S11.2 of the Umbrella Deed:[5]
[Thiess] indemnifies Western Power … against any Loss and Claims suffered or incurred in connection with any Claim by a Third Party against Western Power … arising from or in connection with the performance … of the Services, including any … tort, including negligence[.]
[5] Green AB vol 5 p 5001.
That claim is to be assessed in the context where cl S11.4 of the Umbrella Deed relevantly provides that the indemnity in cl S11.2 does not apply to:[6]
any Loss … to the extent that the Loss … is caused by or contributed to by Western Power's … negligence[.]
[6] Green AB vol 5 p 5002.
Inserting the most relevant part of the definitions referred to at [8] ‑ [10] above into cl S11.2, the effect of the obligation created by cl S11.2 of the Umbrella Deed in the present circumstances can be expressed as follows:
[Thiess] indemnifies Western Power … against any [liability of Western Power to pay its own or other parties' legal costs] … incurred in connection with [proceedings] by [the plaintiffs] against Western Power … arising from or in connection with the performance … of the [July 2013 works], including any [proceedings for liability in] … tort, including negligence[.]
Inserting the most relevant part of the definition of 'Loss' referred to at [8] above. cl S11.4 of the Umbrella Deed relevantly provides, in effect, that the indemnity in cl S11.2 does not apply to:
any [liability of Western Power to pay its own or other parties' legal costs] … to the extent that [such liability to pay legal costs] … is caused by or contributed to by Western Power's … negligence[.]
Disposition
Scope of cl S11.2 and cl S11.4
In Bofinger v Kingsway Group Ltd,[7] the High Court said:
The settled principle in Australia governing the interpretation of contracts of guarantee and indemnity has been stated by this court in authorities the most recent of which is found in the joint reasons in Andar Transport Pty Ltd v Brambles Ltd. The principle is that a doubt as to the construction of a provision in such a contract should be resolved in favour of the surety or indemnifier. It is implicit in this that the doubt may arise not only from the uncertain meaning of a particular expression but from its apparent width of possible application. (footnote omitted)
[7] Bofinger v Kingsway Group Ltd [2009] HCA 44; (2009) 239 CLR 269 [53].
Read in the context of the provisions of the Umbrella Deed referred to in [7] above, cl S11.2 is, on its face, wide enough to indemnify Western Power in respect of all its costs (both its own and payable to other parties) of proceedings against it arising from, or in connection with, the performance of the July 2013 works by Thiess. The indemnity is not contingent on Thiess itself being negligent in the performance of the July 2013 works. The indemnity is engaged simply if the costs are incurred by Western Power in connection with proceedings (including proceedings for negligence) arising from, or in connection with, the performance of the July 2013 works.
Clause S11.4 relevantly excludes the operation of the indemnity where the Loss - here the liability of Western Power to pay its own or other parties' legal costs - is caused or contributed to by Western Power's own negligence.
The phrase 'caused by or contributed to' in cl S11.4 appears to be designed to apply to cases where Western Power's negligence is a cause of its liability to pay costs, even if its negligence is not the only cause of its liability.[8] In other words, cl S11.4 operates so that the reach of the indemnity under cl S11.2 does not apply to the extent that Western Power's own negligence is a cause of its liability to pay costs in connection with such proceedings. That, at least, is an available construction, and any doubt in that regard is to be resolved against Western Power.[9]
Western Power's liability to pay plaintiffs' trial costs
[8] cf Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10; (2013) 247 CLR 613 [45].
[9] Bofinger [53].
In our view, Western Power's liability to pay the plaintiffs' trial costs is a liability incurred in connection with proceedings against Western Power arising from, or in connection with, the performance of the July 2013 works for the purposes of cl S11.2 of the Umbrella Deed.
Subject to the exclusionary effect of cl S11.4 of the Umbrella Deed, cl S11.2 requires Thiess to indemnify Western Power for the liability Western Power incurred in relation to the plaintiffs' legal costs of the trial.
The proceedings in respect of which Western Power incurred the liability for the plaintiffs' legal costs were brought by the plaintiffs to obtain compensation for the loss and damage the plaintiffs suffered because of the Parkerville bushfire. The plaintiffs reasonably brought proceedings against the three defendants (including Western Power), each of whom was found by this court to have caused and be liable for the plaintiffs' loss and damage. The plaintiffs did not ultimately succeed on that aspect of their case that Western Power was liable for Thiess' negligence. However, irrespective of their failure in that regard, Western Power was ordered to pay, and thereby incurred a liability for, the whole of the plaintiffs' costs of the trial proceedings.
In our view, cl S11.4 operates to exclude the indemnity in cl S11.2 of the Umbrella Deed in respect of Western Power's liability to pay the plaintiffs' trial costs. This is on the basis that Western Power's liability to pay the plaintiffs' trial costs was caused by Western Power's own negligence. Western Power's negligence was a cause of all of its liability to pay the plaintiffs' costs of the trial, including the plaintiffs' costs in connection with that aspect of their claim against Western Power in which they were ultimately unsuccessful.
Western Power's own trial and appeal costs
Similarly, Western Power's own costs of the trial and the appeal fall within the indemnity in cl S11.2 subject to the operation of cl S11.4.
Clause S11.4 will operate to exclude the indemnity to the extent that Western Power's own negligence was a cause of its liability to pay its own costs, including costs associated with successfully defending an aspect of the plaintiffs' claim against it.
If Western Power had not been negligent, the plaintiffs would not have suffered the loss and damage sought to be recovered from Western Power and the other defendants in the proceedings. If the plaintiffs had not suffered the loss and damage the proceedings in which the legal costs were incurred would not have been instituted. As a matter of common sense and experience,[10] Western Power's negligence was a cause of its liability to pay its own legal costs in the proceedings brought to recover compensation for the plaintiffs' loss and damage.
[10] cf March v E & M Stramare Pty Ltd (1991) 171 CLR 506.
This operation of the exclusion clause in cl S11.4 is a sensible commercial result of the ordinary meaning of language used in a commercial contract as a reasonable businessperson would have understood it.[11] It is hardly a commercial nonsense that, as between Western Power and Thiess, Western Power is responsible for legal costs incurred by Western Power in proceedings brought by the plaintiffs to recover compensation for loss and damage that was caused by Western Power's negligence, and for which it is obliged to compensate the plaintiffs.
Conclusion
[11] See Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 [35].
Therefore, Thiess is not contractually obliged by the Umbrella Deed to indemnify Western Power in respect of legal costs incurred in these proceedings, at trial or on appeal. We would dismiss Western Power's application for orders that Thiess indemnify Western Power in respect of legal costs incurred in the proceedings.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
JB
Associate to the Honourable Justice Mitchell
3 NOVEMBER 2021
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: HERRIDGE PARTIES -v- ELECTRICITY NETWORKS CORPORATION T/AS WESTERN POWER [2021] WASCA 111 (S2)
CORAM: BUSS P
MURPHY JA
MITCHELL JA
HEARD: 18 FEBRUARY 2022
DELIVERED : 18 FEBRUARY 2022
PUBLISHED : 1 MARCH 2022
FILE NO/S: CACV 114 of 2019
BETWEEN: HERRIDGE PARTIES (PER ORDER MADE ON 28 OCTOBER 2019)
First Appellant
IAG/ALLIANZ PARTIES (PER ORDER MADE ON 28 OCTOBER 2019)
Second Appellant
RAC PARTIES (PER ORDER MADE ON 28 OCTOBER 2019)
Third Appellant
AND
ELECTRICITY NETWORKS CORPORATION T/AS WESTERN POWER (ABN 18 540 492 861)
First Respondent
NOREEN MERLE CAMPBELL
Second Respondent
VENTIA UTILITY SERVICES PTY LTD (ACN 010 725 247) (FORMERLY KNOWN AS THIESS SERVICES LTD)
Third Respondent
FILE NO/S: CACV 129 of 2019
BETWEEN: NOREEN MERLE CAMPBELL
First Appellant
VENTIA UTILITY SERVICES PTY LTD formerly known as THIESS SERVICES PTY LTD (ACN 010 725 247)
Second Appellant
AND
HERRIDGE PARTIES (PER ORDER MADE ON 28 OCTOBER 2019)
First Respondent
IAG/ALLIANZ PARTIES (PER ORDER MADE ON 28 OCTOBER 2019)
Second Respondent
RAC PARTIES (PER ORDER MADE ON 28 OCTOBER 2019)
Third Respondent
ELECTRICITY NETWORKS CORPORATION T/A WESTERN POWER (ABN 18 540 492 861)
Fourth Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: LE MIERE J
Citation: HERRIDGE -v- ELECTRICITY NETWORKS CORPORATION t/as WESTERN POWER [No 4] [2019] WASC 94
File Number : CIV 1841 of 2016, CIV 1445 of 2016, CIV 1239 of 2016, CIV 2259 of 2015
Catchwords:
Appeal - Practice and procedure - Where final orders made subject to a limited liberty to apply - Whether orders sought on application made after final orders are within the scope of the liberty to apply - Turns on own facts
Legislation:
Nil
Result:
Application dismissed
Third respondent in CACV 114 of 2019 to pay first respondent's in CACV 114 of 2019 costs of the application
Otherwise no order as to costs
Category: B
Representation:
CACV 114 of 2019
Counsel:
| First Appellant | : | No appearance |
| Second Appellant | : | No appearance |
| Third Appellant | : | No appearance |
| First Respondent | : | M J Sims |
| Second Respondent | : | J C Giles SC |
| Third Respondent | : | G M Watson SC and S C M Wong |
Solicitors:
| First Appellant | : | Slater & Gordon - Perth |
| Second Appellant | : | Hall & Wilcox (Perth) |
| Third Appellant | : | Civic Legal |
| First Respondent | : | DLA Piper Australia - Perth |
| Second Respondent | : | Minter Ellison |
| Third Respondent | : | Wotton + Kearney Lawyers (Perth) |
CACV 129 of 2019
Counsel:
| First Appellant | : | No appearance |
| Second Appellant | : | No appearance |
| First Respondent | : | No appearance |
| Second Respondent | : | No appearance |
| Third Respondent | : | No appearance |
| Fourth Respondent | : | No appearance |
Solicitors:
| First Appellant | : | Minter Ellison |
| Second Appellant | : | Wotton + Kearney Lawyers (Perth) |
| First Respondent | : | Slater & Gordon - Perth |
| Second Respondent | : | Hall & Wilcox (Perth) |
| Third Respondent | : | Civic Legal |
| Fourth Respondent | : | DLA Piper Australia - Perth |
Case(s) referred to in decision(s):
Amaca Pty Ltd v Hannell [No 2] (2011) 42 WAR 224; [2011] WASCA 232
Cameron v Renouf [2008] WASC 60
Caratti v Mammoth Investments Pty Ltd [No 2] [2018] WASCA 6
Herridge Parties v Electricity Networks Corporation t/as Western Power [2021] WASCA 111
Krishnan v The State of Western Australia [No 2] [2021] WASCA 174
REASONS OF THE COURT:
At the hearing of Thiess' application in appeal CACV 114 of 2019, filed on 22 September 2021 (Application), we made orders to the following effect:
1.The Application is dismissed.
2.Thiess is to pay Western Power's costs of the Application to be assessed if not agreed.
3.There otherwise be no order as to the costs of the Application.
We said that we would publish our reasons for making those orders later. These are our reasons for making those orders.
In these supplementary reasons, terms defined in the principal appeal reasons[12] are used in their defined sense. These supplementary reasons are to be read with the principal appeal reasons.
[12] Herridge Parties v Electricity Networks Corporation t/as Western Power [2021] WASCA 111.
Background
Primary orders made on 20 September 2019
These appeals are against orders made by the trial judge in the primary proceedings on 20 September 2019. Those orders were made after the trial judge found Thiess liable to pay 70% of the plaintiffs' actionable damages resulting from the Parkerville bushfire and Mrs Campbell to be liable to pay 30% of those damages. His Honour had also decided that the plaintiffs' claims against Western Power should be dismissed.
In those orders, judgment was entered for Mr and Mrs Elwood, the lead plaintiffs in CIV 2259 of 2015, against Thiess and Mrs Campbell in the following terms:
1. There be judgment for the lead plaintiffs, Mr G Elwood and Mrs S Elwood, against [Thiess] in the amount of $542,313.25, together with interest of $165,048.36.
2. There be judgment for the lead plaintiffs, Mr G Elwood and Mrs S Elwood, against [Mrs Campbell] in the amount of $232,419.97, together with interest of $70,735.01.
These orders reflected a 70%/30% apportionment of Mr and Mrs Elwood's assessed damages as between Thiess and Mrs Campbell.
Paragraph 4 of the orders of 20 September 2019 required Thiess to pay 70% of the actionable damages suffered by other plaintiffs. Paragraph 5 of the orders of 20 September 2019 required Mrs Campbell to pay 30% of those plaintiffs' actionable damages. Paragraph 6 of those orders provided for the damages of those other plaintiffs to be assessed.
Paragraph 15 of the orders required that Thiess and Mrs Campbell jointly and severally pay 80% of the plaintiffs' costs of the primary proceedings to the date of the orders (20 September 2019).
Settlement of other plaintiffs' claims
Between 20 September 2019 and the determination of the appeals on 2 July 2021, Thiess and Mrs Campbell entered into settlement agreements with the plaintiffs other than Mr and Mrs Elwood.
The claims of some of the Herridge Parties, namely Mr and Mrs Barker, Mr and Mrs Deakin and Mr Wallis, against Thiess and Mrs Campbell were settled at a judicial mediation on 27 July 2020.[13] On 5 August 2020, consent orders were made awarding specified amounts of damages and pre-trial interest to those plaintiffs from both Thiess and Mrs Campbell, with costs reserved. The claim of the estate of Mrs Wallis was dismissed with no order as to costs.[14]
[13] Affidavit of William Peter Robinson sworn 27 October 2021, par 5; affidavit of Lin Chern Tan affirmed 23 November 2021, par 30. The reference to the date of 12 August 2020 in par 5 of Mr Robinson's affidavit appears to be in error.
[14] Affidavit of Jock Inness-Campbell affirmed 24 November 2021, annexure JIC 2.
The claims of the plaintiffs, other than Mr and Mrs Elwood, Mr and Mrs Barker, Mr and Mrs Deakin and Mr and Mrs Wallis, against Thiess and Mrs Campbell were settled in a series of separate agreements between those parties. Each of Thiess and Mrs Campbell reached separate settlement agreements with different Plaintiff Groups. Mrs Campbell reached an independent settlement agreement with each Plaintiff Group before Thiess agreed settlement with the relevant Plaintiff Group.[15]
[15] Affidavit of Lin Chern Tan affirmed 23 November 2021, par 26 - par 31.
The terms of the settlement agreements between Thiess and the Plaintiff Groups varied. However, all of the agreements referred to the orders made on 20 September 2019 and the appeals against those orders. All of the agreements in effect provided that they did not prejudice the parties' rights in the appeal.
Thiess' agreement with the Herridge Parties (other than Mr and Mrs Elwood, Mr and Mrs Barker, Mr and Mrs Deakin and Mr and Mrs Wallis)[16] provided for specified amounts to be paid in respect of damages, interest and costs of the primary proceedings to the date of settlement. However, the amounts, which totalled $40 million, were expressed by reference to those plaintiffs as a group without allocating particular sums to each plaintiff.
[16] Affidavit of William Peter Robinson sworn 27 October 2021, annexure WPR-3 at pages 29 - 34.
The recitals to Thiess' agreements with the IAG/Allianz Parties[17] noted interim payments which had been made by Thiess on 17 December 2019, and allocated components of the amounts paid as damages, interest on damages, costs and interest on costs. The recitals did not allocate these amounts between different plaintiffs. The settlement agreements provided for payment of a further lump sum which, together with the interim payments, was in full and final satisfaction of Thiess' liability to the IAG/Allianz Parties. The agreement did not allocate components of the further lump sum to costs, interest or damages.
[17] Affidavit of William Peter Robinson sworn 27 October 2021, annexure WPR-3 at pages 8 - 12 and 13 - 21.
The agreement between Thiess and the RAC Parties[18] provided for the payment by Thiess to the plaintiffs of $3,185,192.42 (being the principal sum of $2,325,224.20 plus interest of $859,968.22) in settlement of Thiess' liability to pay 70% of the RAC Parties' actionable damages. Components of the principal sum were allocated between individual plaintiffs as per a schedule to the settlement agreement. The settlement agreement did not resolve the question of the outstanding costs of the primary proceedings.
[18] Affidavit of William Peter Robinson sworn 27 October 2021, annexure WPR-3 at pages 23 - 28.
The agreements between Thiess and each of the Plaintiff Groups all contemplated an outcome of the appeal which resulted in Thiess' apportioned liability to the plaintiffs being reduced below 70%. The agreements made different provision for whether, in what circumstances and to what extent the relevant plaintiffs would be liable to reimburse Thiess in respect of any overpayment to them.
Orders on appeal
In its appeal decision published on 2 July 2021, this court found that Western Power was liable to the plaintiffs in negligence, and that the appropriate apportionment of liability was: Western Power 50%; Thiess 35%; and Mrs Campbell 15%. The effect of the appeal decision was that the apportioned liability of both Thiess and Mrs Campbell to the plaintiffs was halved.
This court's orders of 2 July 2021 included orders setting aside the trial judge's orders referred to at [5] - [7] above. Substituted orders were made for each defendant to pay specified amounts of damages and interest to Mr and Mrs Elwood reflecting the 50%/35%/15% apportionment which this court found to be appropriate. Western Power, Thiess and Mrs Campbell were respectively ordered to pay 50%, 35% and 15% of the other plaintiffs' actionable damages to be assessed. This court also substituted orders that Western Power, Thiess and Mrs Campbell jointly and severally pay the plaintiffs' costs of the primary proceedings to 20 September 2019.
Prior to making the 2 July 2021 orders, this court had circulated an advance copy of its reasons to the parties and invited the submission of agreed or competing minutes of proposed orders. In par 7 of Mrs Campbell's minute of proposed orders, she proposed an order that Western Power pay her $151,577.49, being 50% of the damages and interest she had paid to Mr and Mrs Elwood pursuant to order 2 of the trial judge's orders of 20 September 2019. Thiess' minute did not propose any restitutionary or similar orders.
This court did not make the order sought by Mrs Campbell, noting:[19]
Mrs Campbell also seeks restitutionary orders in respect of amounts she paid in damages and interest to Mr and Mrs Elwood for which Western Power has been found responsible. It seems to us that an order of this sort should not be necessary and the parties should be able to arrange this between themselves. We will give the parties liberty to apply within 21 days if this proves not to be the case.
[19] Appeal ts, 2 July 2021, 29.
Paragraph 25 of the orders made by this court on 2 July 2021 was in the following terms:
The parties have liberty to apply within 21 days in relation to any restitutionary orders in respect of amounts paid under orders of the primary court which have been set aside by these orders.
The application in an appeal
On 22 September 2021, Thiess filed the Application, seeking orders set out in a minute of proposed orders appended to a supporting affidavit.
The minute proposed an order that '[a]ll matters arising out of' this court's orders of 2 July 2021 'in relation to any restitution orders in respect of amounts paid under orders of the primary court which have been set aside' be referred to a judge in the General Division of the court.
The Application alternatively sought orders in effect requiring:
1.Western Power to pay Thiess $22,311,219.50, said to be restitution of 35% of the actionable damages which Thiess had paid to plaintiffs pursuant to par 1 of the orders made on 20 September 2019, the consent orders referred to at [9] above and the settlement agreements referred to at [10] - [15] above; and
2.Western Power to pay Thiess 50%, and Mrs Campbell to pay Thiess 15%, of:
(a)the costs which Thiess claimed to have paid to the plaintiffs under the settlement agreements in respect of the costs of the primary proceedings to 20 September 2019 and the subsequent assessments of damages; and
(b)the disbursements incurred by Thiess in the subsequent assessments of damages.
The specific amounts sought to be paid were set out in a schedule to the minute of proposed orders.
Disposition
The orders sought in the Application include orders relating to payments made by Thiess to Mr and Mrs Elwood under par 1 of the orders made on 20 September 2019. However, the substance of the Application is a claim by Thiess for Western Power to reimburse it for part of the payments Thiess has made under settlement agreements reached with other plaintiffs, in relation to damages and interest. Contribution is also sought from Western Power and Mrs Campbell in relation to costs arising both before and after the orders of 20 September 2019.
This court's orders of 2 July 2021 concluded the exercise of its appellate jurisdiction in the appeal subject, relevantly, to the liberty to apply preserved by order 25.[20] Order 25 gave liberty to apply for a restitutionary order in respect of amounts 'paid under orders of the primary court which have been set aside by' the orders of 2 July 2021 (emphasis added). The scope and effect of the order giving liberty to apply depends upon the proper construction of the order in the context in which it was made.[21]
[20] See Amaca Pty Ltd v Hannell [No 2] (2011) 42 WAR 224; [2011] WASCA 232; Krishnan v The State of Western Australia [No 2] [2021] WASCA 174 [85].
[21] Caratti v Mammoth Investments Pty Ltd [No 2] [2018] WASCA 6 [88], adopting the principles summarised by Newnes JA in Cameron v Renouf [2008] WASC 60 [28] - [31].
In our view, amounts paid to plaintiffs pursuant to settlement agreements reached with the plaintiffs are not amounts 'paid under [the] orders' which this court set aside.
The amounts paid to Mr and Mrs Barker, Mr and Mrs Deakin and Mr Wallis were paid under the consent orders made on 5 August 2020. Those consent orders were not set aside by the orders made by this court on 2 July 2021.
The settlement amounts paid to other plaintiffs were paid under the respective settlement agreements. While they discharged Thiess' liability to compensate the other plaintiffs, including the liability declared by the 20 September 2019 orders for Thiess to pay 70% of the plaintiffs' actionable damages, the payments under settlement agreements were not made 'under' the orders of 20 September 2019. The orders of 20 September 2019 did not provide for the payment of those amounts. While the order required the payment of damages and costs to be assessed, that assessment has not occurred. Further, under the settlement agreements the setting aside of the 20 September 2019 orders does not automatically result in the settlement amounts not being payable or entitle Thiess to a reimbursement from the plaintiffs. Payment of costs relating to the assessment of damages after the 20 September 2019 orders were made (costs which are not generally separately quantified in the settlement agreements), are clearly not payments under those orders. The amounts claimed by Thiess are properly regarded as payable under the settlement agreements, and not under the orders made on 20 September 2019.
We do not accept Thiess' submission that the reference to 'amounts paid under orders of the primary court' comprehends sums paid under settlement agreements entered into for the purpose of discharging or satisfying an obligation to make payments under the orders of the primary court.[22] It does not follow from the fact that a payment under an agreement discharges an obligation created by a court order that the payment is made 'under' the court order. Here the payments by Thiess to the plaintiffs were made on the basis that, at least in some circumstances, the plaintiffs were entitled to retain the payments even if the primary court's orders were set aside. For reasons explained above, the payments were made under the agreements rather than under the primary court's orders.
[22] Appeal ts 39, 41.
That view of par 25 of the orders made on 2 July 2021 is reinforced by the context in which the order was made, described at [18] - [19] above. The order was made in a context where Mrs Campbell sought reimbursement for an overpayment of the amount specifically required to be paid under par 2 of the orders made on 20 September 2019. It was not made in contemplation of any claim for reimbursement of payments under settlement agreements, as opposed to payments of amounts required by the orders of 20 September 2019.
Therefore, in our view the Application is appropriately dismissed as falling outside the scope of the liberty to apply reserved by par 25 of the orders made by this court on 2 July 2021. This dismissal does not, in our view, preclude Thiess from bringing new proceedings in the General Division to seek orders for restitution or contribution if it can establish a right to those payments.
Even if we had not taken the above view of the scope of the liberty to apply, we would still have dismissed the Application. Thiess' claims for reimbursement are disputed by Western Power, which denies that it is under any legal obligation to reimburse Thiess for amounts paid under the settlement agreements.[23] It appeared that determination of the Application would require resolution of factual disputes and disputes about the legal basis of any right to payment. Despite Thiess' attempts to persuade the court to the contrary, we were not satisfied that there were discrete legal issues which could appropriately be resolved by this court prior to the resolution of factual questions. The most efficient means of resolving the disputed issues appeared to us to be for Thiess to commence fresh proceedings in the General Division, properly pleading the factual and legal basis for the claims it asserts. Senior counsel for Thiess was unable to point to any prejudice or forensic disadvantage to Thiess in adopting that course.[24]
[23] Appeal ts 45.
[24] Appeal ts 44.
Therefore, even if we had remaining appellate jurisdiction to deal with the issues raised by the Application, it would be in the interests of justice to dismiss the Application and leave it to Thiess to bring new proceedings in the General Division.
Orders
For the above reasons, we dismissed the Application at the hearing on 18 February 2022.
We considered it appropriate that Thiess pay Western Power's costs of the Application, given that Western Power had successfully opposed the Application. Given Mrs Campbell's substantive support of aspects of the Application, we were not satisfied that an order for costs in her favour was appropriate. We therefore ordered Thiess to pay Western Power's costs of the Application and otherwise made no order as to the costs of the Application.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
JB
Associate to the Honourable Justice Mitchell
1 MARCH 2022
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