Obacelo v Whitehead

[1999] NSWSC 477

CITATION:	OBACELO v WHITEHEAD [1999] NSWSC 477
CURRENT JURISDICTION:	Supreme Court
FILE NUMBER(S):	14486 of 1987
HEARING DATE(S):	2 November 1998
JUDGMENT DATE:	25 May 1999
PARTIES :	First Plaintiff: Obacelo Pty Limited Second Plaintiff: Richard Thomas Moon First Defendant: Phillip Whitehead Second Defendant: Phillip Julius Baxter
JUDGMENT OF:	Hulme J at 1

LOWER COURT JURISDICTION:	Supreme Court
LOWER COURT FILE NUMBER(S) :
LOWER COURT JUDICIAL OFFICER:	Master Harrison

COUNSEL :	Plaintiffs: C. Hoeben SC Defendants: D.P. Robinson
SOLICITORS:	Plaintiffs: Moray & Agnew Defendants: Baker & McKenzie
CATCHWORDS:	Procedure - judgment - satisfaction - effect on liability of second tort feasor; Tort - judgment against one tort feasor - satisfaction - effect on liability of second tort feasor.
ACTS CITED:	Law Reform (Miscellaneous Provisions) Act 1946
CASES CITED:	XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1984-1985) 155 CLR 448 Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574 Wah Tat Bank Ltd v Chan (1975) AC 507 at 519 Bryanston Finance Ltd v de Vries (1975) 1 QB 705 D'Angela v Rio Pioneer Gravel Co Pty Ltd (1979) 1 NSWLR 495 at 499 Castellan v Electric Power Transmission Pty Ltd (1967) 69 SR (NSW) 159 at 180-181 Ruffino v Grace Bros Pty Ltd (1980) 1 NSWLR 732 Carrigan v Duncan 1971 SLT 33
DECISION:	Appeal from Master dismissed

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
NO: 14486 of 1987

Tuesday, 25 May 1999

HULME J

OBACELO PTY LIMITED & ANOR v Philip Richard WHITEHEAD
& ANOR

JUDGMENT

1 HIS HONOUR: By Notice of Motion filed 10 July 1998 the Second Defendant seeks that the proceedings against him be dismissed pursuant to Part 13 Rule 5 of the Supreme Court Rules. On 21 August 1998 Master Harrison dismissed the application. By Notice of Appeal filed on 16 September 1998, the Second Defendant appealed against the Master’s decision.
2 The factual background against which the issue posed for determination arises is as follows. The Plaintiff alleges that the First and Second Defendants were negligent in their conduct of a conveyancing transaction for the Plaintiff, the Second Defendant being the First Defendant’s employee at the time. The application before the Master and before me has proceeded on the basis that any liability the Defendants have or had to the Plaintiff was as joint tortfeasors. The claim between the Plaintiff and the First Defendant has been settled. A deed of release was executed, providing that in consideration of the payment of the sum of $250,000 the Plaintiff released the First Defendant from any claim in relation to the cause of action pleaded in the proceedings but providing for the continuation of the proceedings. Later, Terms of Settlement were filed, paragraph 1 of which states:-
“That there be verdict and judgment against the first defendant in the sum of $250,000.”
3 The $250,000 has been paid. The Second Defendant contends that in consequence of these matters the claim against him cannot succeed. It is said firstly, that the Plaintiff has received full satisfaction of the joint liability of the Defendants. Secondly, it is submitted that s5(1)(b) of the Law Reform (Miscellaneous Provisions) Act 1946 precludes the Plaintiff from obtaining judgment for more than $250,000 and, the Plaintiff having received this sum, further proceedings are therefore futile.
4 So far as is presently relevant s5 provides:-
“5. (1) Where damage is suffered by any person as a result of a tort (whether a crime or not) -

(a) judgment recovered against any tort-feasor liable in respect of that damage shall not be a bar to an action against any other person who would, if sued, have been liable as a joint tort-feasor in respect of the same damage;
(b) if more than one action is brought in respect of that damage by or on behalf of the person by whom it was suffered, or for the benefit of the estate, or of the wife, husband, brother, sister, half-brother, half-sister, parent or child, of that person, against tort-feasors liable in respect of the damage (whether as joint tort-feasors 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 judgment is first given, the plaintiff shall not be entitled to costs unless the court is of opinion that there was reasonable ground for bring the action;”

5 The effect of legislation in similar terms has been the subject of consideration by the High Court in two cases to which I was referred, XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1984-1985) 155 CLR 448 and Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574. It will be convenient to refer to those cases as “XL” and Thompson. It will also be convenient in the discussion which follows to substitute reference to the corresponding sub-section or paragraph of the Law Reform (Miscellaneous Provisions) Act 1946 for the references to the legislation of other jurisdictions considered in those decisions. In those cases it was recognised or decided that:-
(i) Prior to the introduction of the section, there was only one cause of action against joint tortfeasors and only one judgment for one sum of damages could be given in favour of the Plaintiff - XL at 454.3 and 459.9.

(ii) This old common law rule had been abolished in its entirety by sub-section 1(a) - XL at 459.9 - 460.2, Thompson at 584.2.
(iii) More than one judgment may be given against joint tortfeasors for damages caused by a joint tort - XL at 459.9.
(iv) Those judgments may be in different amounts in a proper case - XL at 461.2.
(v) This is so whether the Plaintiff brings separate actions or the joint tortfeasors are sued in the one action - XL at 460.3.
(vi) The concept of a single wrong and single cause of action having gone, the rule that a release given by one joint tortfeasor releases any others must have gone with it - Thompson at 584.

6 The passages in XL to which I have referred are in the judgment of Gibbs CJ. The remarks of at least Mason and Wilson JJ at pp 464 and 465 indicate agreement with these conclusions. See also Brennan J at p465. The passages from Thompson are to be found in the joint judgment of the majority, Brennan CJ and Dawson and Toohey JJ.
7 The “proper case” that was under consideration in XL was one where there was a claim for exemplary damages against one of the joint tortfeasors but not against the others. Brennan J recognised that different evidence in separate actions might also lead to differing awards - at 466.4. Sub-paragraph (b) indeed recognises the same limiting only “the sums recoverable under” those judgments so that in the aggregate the Plaintiff does not recover more than the amount of the judgment in the first action. The provisions of this sub-paragraph do not apply to the case where more than one judgment is given in a single action - Wah Tat Bank Ltd v Chan (1975) AC 507 at 519. Gibbs CJ, and those who agreed with His Honour would seem to have endorsed this approach in XL at p458.
8 Having regard to these various matters, there is nothing in the Law Reform (Miscellaneous Provisions)Act which makes the Plaintiff’s claim unmaintainable.
9 In support of the other basis on which the Second Defendant put its motion reference was made to Bryanston Finance Ltd v de Vries (1975) 1 QB 703. In that case three plaintiffs had issued a writ for libel against de Vries and Lord Carberry. The latter paid 10 pounds into court. Later the dispute between the plaintiffs and Lord Carberry was settled and consent orders in the following terms were approved:-
“Judgment for the plaintiffs against the second defendant Baron Carberry for 1000 pounds, being his proportion of the damages and 1,250 pounds being his proportion of the costs , to be paid by the second defendant …”

An order for the payment out to the plaintiffs or their solicitors of the moneys paid into court on behalf of the second defendant

10 No formal judgment was drawn up although nothing seems to have turned on that. Subsequently a trial was had of the libel action against de Vries and judgment was given against him in favour of one plaintiff in the sum of 300 pounds, and in favour of the other two plaintiffs in the sum of 100 pounds each. De Vries appealed. Inter alia he claimed that the plaintiff’s claim against him was foreclosed by the earlier orders and the terms of settlement they reflected.
11 All three judges agreed that if the earlier judgment had been satisfied, then the Plaintiffs were not entitled to any further judgement - see pp 722, 733 and 739. In XL (at 458) Gibbs CJ said the same.
12 Before me there was little, if any, development of this principle or consideration of its rationale, nor of exceptions to it, nor of the question whether, given the circumstances of the settlement between the Plaintiff and the First Defendant, the principle had any application. The authorities to which I have referred were the only ones mentioned.
13 That basic proposition is not one peculiar to the situation of joint tortfeasors. It may be based on the view that “as soon as the damage is repaired or made up to the party hurt by any one of (the concurrent tortfeasors), the obligation is extinguished as to the rest: for an obligation founded solely upon damage cannot possibly continue after the damage ceases to exist” - Erskine’s Institutes III, Title 1, para 15, or an equitable doctrine designed to prevent unjust enrichment by double compensation or otherwise - D’Angela v Rio Pioneer Gravel Co Pty Ltd (1979) 1 NSWLR 495 at 499 - but whatever be the reason there are many other authorities to like effect. Early authorities are referred to in Glanville Williams Joint Torts and Contributory Negligence para 9. See also Castellan v Electric Power Transmission Pty Ltd (1967) 69 SR (NSW) 159 at 180-181, and Ruffino v Grace Bros Pty Ltd (1980) 1 NSWLR 732. In the latter case Master Allen, referring to Carrigan v Duncan 1971 SLT 33, recognised the possibility that if a Plaintiff receives payment otherwise than as full satisfaction of the defendants’ liability, that payment may not be a bar to proceedings against another tortfeasor. Carrigan v Duncan and some of the cases referred to in it certainly support that approach which may echo the sort of circumstances referred to by Glanville Williams at page 46 note 8.
14 As I have indicated, the Terms of Settlement entered into between the Plaintiff and the First Defendant did contemplate that the action against the Second Defendant would continue. If one is entitled to go outside merely the terms of the judgment itself, it is therefore clear that none of the parties concerned in its entry intended that the judgment sum would define the extent of the Plaintiff’s loss or damages or recovery entitlement. The reference in the Terms of Settlement to the continuation of the proceedings may fairly be regarded as an express reservation of the Plaintiff’s rights against the Second Defendant even in the case of payment of the amount referred to in those Terms.
15 Does the judgment sum define the Plaintiff’s entitlement, notwithstanding the circumstances surrounding its entry? I do not believe this is a matter I should decide finally in an application such as this when the matter was not fully argued. The authorities showing the court’s approach in applications such as this are set forth in the judgment of the Master from which this appeal is brought. They were not canvassed again before me. They dictate that a court should be reluctant to deprive a party of a trial unless persuaded that that party cannot succeed.
16 Compromise of litigation is to be encouraged, even if it is only partial. At common law judgment against one was not definitive of the amount of the Plaintiff’s damages and judgment could be given against a second for a higher amount - Glanville Williams, page 39. Sub-section 5(1)(b) of the Law Reform (Miscellaneous Provisions) Act indeed recognises that this can still occur, although where this occurs in successive actions, the amount recoverable is limited to that awarded in the first action. If a judgment, even one reflecting a determination by a Court of the amount of damages is not definitive, why should payment of an agreed amount, even if it is embodied in a judgment, do so?
17 I do not seek to decide these issues. Despite the weight of the two authorities on which the Second Defendant relied, I am not persuaded that it would be a proper exercise of my discretion to summarily dismiss the proceedings. The application fails.
18 The question of costs was not argued. My inclination is to make them costs in the cause, partly because of the basis on which I have decided the application and partly because there was less than full argument on both sides on the issue just considered. However I will hear argument on costs if either party wishes to advance it.

Last Modified: 09/14/1999