Power Technologies Pty Ltd v Energy Australia

[2010] NSWCA 107

New South Wales

Court of Appeal

CITATION:	Power Technologies Pty Ltd v Energy Australia [2010] NSWCA 107
HEARING DATE(S):	31 March 2010
JUDGMENT DATE:	14 May 2010
JUDGMENT OF:	Allsop P at 1; Beazley JA at 7; Sackville AJA at 8
DECISION:	(1) Appeal allowed. (2) Set aside the orders made by Judge Kearns on 13 February 2009. (3) Remit the proceedings to the Dust Diseases Tribunal for determination or the making of orders consistent with this judgment. (4) The respondents pay the appellant’s costs of the appeal, including the application for leave to appeal. (5) The respondents, if otherwise qualified, have a certificate under the Suitors’ Fund Act 1951.
CATCHWORDS:	DUST DISEASES TRIBUNAL–claim for damages in Tribunal – cross-claims by defendants seeking contribution from third party–claims resolution process–apportionment determination by a Contributions Assessor-position of cross-defendant which is forced to contribute under the apportionment determination but denies liability–whether necessary for cross-defendant to institute fresh proceedings–whether cross-defendant bears onus of proof–powers of Tribunal in determining cross-claims.
LEGISLATION CITED:	Civil Procedure Act 2005 Dust Diseases Tribunal Act 1989 Dust Diseases Tribunal Amendment (Claims Resolution) Act 2005 Dust Diseases Tribunal Regulation 2001 Dust Diseases Tribunal Regulation 2007 Dust Diseases Tribunal (Standard Presumptions—Apportionment) Order 2005 Dust Diseases Tribunal (Standard Presumptions—Apportionment) Order 2007 Law Reform (Miscellaneous Provisions) Act 1946 Limitation Act 1969 Suitors’ Fund Act 1951
CATEGORY:	Principal judgment
CASES CITED:	Amaca Pty Ltd v CSR Ltd [2001] NSWSC 263; 51 NSWLR 476 CSR Ltd v Amaca Pty Ltd [2007] NSWCA 107 Electricity Commission of New South Wales v Yates (1991) 30 NSWLR 351 QBE Insurance (Australia) Ltd v Wallaby Grip Ltd [2007] NSWCA 43; 4 DDCR 331 Re Millard; Energy Australia v Power Technologies Pty Ltd [2008] NSWDDT 11 SCI Operations Pty Ltd v Trade Practices Commission [1984] FCA 52; 2 FCR 113 Trade Practices Commission v Manfal Pty Ltd (No 3) [1991] FCA 650; 33 FCR 382
TEXTS CITED:	Ritchie’s Uniform Civil Procedure NSW
PARTIES:	Power Technologies Pty Ltd (Appellant) Energy Australia (First Respondent) Eraring Energy (Second Respondent)
FILE NUMBER(S):	CA 2009/00298246
COUNSEL:	P Webb QC; T M Rowles (Appellant) G M Watson SC; J C Sheller (First and Second Respondents)
SOLICITORS:	Carroll & O’Dea Lawyers (Appellant) Goldrick Farrell Mullan Lawyers (First and Second Respondents)
LOWER COURT JURISDICTION:	Dust Diseases Tribunal of New South Wales
LOWER COURT FILE NUMBER(S):	DDT 6124/2006/CC1 DDT 6124/2006/CC2
LOWER COURT JUDICIAL OFFICER:	Kearns J
LOWER COURT DATE OF DECISION:	6 February 2009
LOWER COURT MEDIUM NEUTRAL CITATION:	Re Millard; Energy Australia v Power Technologies Pty Limited [2009] NSWDDT 1 Re Millard; Eraring Energy v Power Technologies Pty Limited [2009] NSWDDT 2

CA 2009/40132

ALLSOP P
BEAZLEY JA
SACKVILLE AJA

Friday 14 May 2010
POWER TECHNOLOGIES PTY LTD v ENERGY AUSTRALIA
Headnote
[This headnote is not part of the reasons of the Court.]

This appeal arises out of proceedings in the Dust Diseases Tribunal of NSW. The plaintiff in those proceedings, Mr Millard, sued Energy Australia and Eraring Energy (the respondents), his former employers, for damages in respect of mesothelioma he contracted as a result of asbestos exposure during the course of his employment.

The respondents filed cross-claims seeking contributions from several cross-defendants, including the appellant. Pursuant to cl 42(1) of the Dust Diseases Tribunal Regulation 2001 (DDT Reg 2001), a Contributions Assessor was appointed and made a Determination on the apportionment between the respondents and cross-defendants.

The plaintiff’s claim was settled and an order was made by the Tribunal to give effect to the settlement. The respondents and cross-defendants, with the exception of the appellant, paid their shares of the settlement sum in accordance with the Determination. The plaintiff was paid all amounts due to him under the judgment. Since the appellant had refused to contribute, the respondents paid to the plaintiff a sum equivalent to the appellant’s 7.5 per cent contribution, as determined by the Contributions Assessor. The respondents then obtained orders from O’Meally P that the appellant pay its share of the settlement to the respondents. These orders did not dispose of, nor were they made as judgments on, the cross-claims.

The respondents then sought orders for judgment on their cross-claims against the appellant, relying on the Determination and not proceeding on the merits. Kearns J heard the respondents’ motion and delivered judgment on 6 February 2009 in the respondents’ favour. This judgment is the subject of the appeal. The question that arose for decision was whether the respondents were entitled to judgment in accordance with the Determination without pursuing their cross-claims on the merits.

Held (per Sackville AJA, Allsop P and Beazley JA agreeing), allowing the appeal:

i. Clause 42 of the DDT Reg 2001 must be read with cl 44, such that although an apportionment determination cannot be challenged in any proceedings, it is conclusively binding on the defendants, including cross-defendants, only for the limited purposes specified in cl 44(1), namely settlement, or determination by the Tribunal of the plaintiff’s claim and payment of the plaintiff’s damages.

ii. The language of cl 44(1) indicates that the apportionment determination is not binding for the purposes of a determination by the Tribunal of an apportionment dispute on the merits claim.

iii. The respondents are not entitled to orders on their cross-claims otherwise than after a hearing on the merits. If the respondents do not wish to proceed with their cross-claims on the merits they may be liable to refund to the relevant cross-defendant (here the appellant) sums received from it pursuant to the contributions assessment process.

CA 2009/40132

ALLSOP P
BEAZLEY JA
SACKVILLE AJA

Friday 14 May 2010

POWER TECHNOLOGIES PTY LTD v ENERGY AUSTRALIA

Judgment

1 ALLSOP P: I have read the reasons to be published of Sackville AJA. I agree with them and with the orders that his Honour proposes.

2 I would add only the following remarks. My comments should be read with a familiarity with the reasons of Sackville AJA.

3 The parts of the judgment of Handley AJA in QBE Insurance v Wallaby Grip [2007] NSWCA 43; 4 DDCR 331 that may have led the learned primary judge to the erroneous conclusion to which he came can be found at 4 DDCR 338-339 [37]-[40]. These were obiter comments superfluous to Handley AJA’s reasoning that the second objection (referred to in [27] of his reasons), that the summary determination of the opponents’ contributions would be futile, should be rejected. Essential to his Honour’s reasoning in that regard was that the summary and “rough and ready” claims resolution process could be used to extract money from defendants and cross-defendants to contribute towards a settlement with a plaintiff, even if they (the defendants or cross-defendants) had to be compelled to that position by the use of the claims resolution process after the settlement with the plaintiff had occurred. As Hodgson JA emphasised in Wallaby Grip, settlement with plaintiffs would be undermined if parties knew that if they held out in negotiations and did not voluntarily contribute to any settlement with the plaintiff, they would not have to pay any money towards the settlement until the cross-claims were finally litigated and resolved adversely to them. In such circumstances, defendants willing to settle would have to be prepared to fund the whole settlement until final success on any cross-claims. If, however, parties knew that the claims resolution process could continue after settlement with the plaintiff, they could be assured of prompt resolution of the contribution obligations of all parties for the purposes of settlement with the plaintiff, and of obtaining orders for payment of such contribution for that same purpose. Any such orders were the “appropriate verdicts and judgments” referred to by Handley AJA in Wallaby Grip at [36] for the “provisional determination of contribution claims”: Wallaby Grip at [15]. These were not judgments on, or disposing of, cross-claims, but orders for payment of the kind O’Meally P made here: payments to fund any settlement with the plaintiff.

4 Clause 44 of the 2001 Regulation makes the limited nature of the binding force of the determination clear: for the purposes of the settlement or determination of the plaintiff’s claim and payment of the plaintiff’s damages. If a determination had the effect of creating an entitlement to a judgment on a cross-claim, thus throwing the onus on the cross-defendant to bring a fresh action or proceeding for restitution or recovery of the sum earlier paid, its effect would be beyond cl 44(1).

5 Such a change to a party’s rights would need to be expressed clearly in the law in question. It is not. To the contrary, it is clear that the effect is more limited.

6 The respondents brought their cross-claim. They should pursue it. They have had the advantage of a payment from the appellant to assist them in meeting the plaintiff’s claim. If the respondents do not wish to vindicate their rights inter se by propounding their cross-claim, ample power exists, as Sackville AJA’s reasons show, for disposal of their now unwanted litigation and to order repayment of the moneys previously paid to them. Such an order for repayment would prima facie be just, because the previous order had been made for their benefit after a procedure (the claims resolution process) had been engaged on the hypothesis in the legislative framework that the respondents had, and desired to press, legitimate cross-claims.

7 BEAZLEY JA: I agree with the reasons and orders proposed by Sackville AJA and the additional remarks of Allsop P.

8 SACKVILLE AJA: This appeal arises out of proceedings in the Dust Diseases Tribunal of New South Wales (“Tribunal”). The plaintiff in those proceedings, Mr Millard, sued two of his former employers (“respondents”), claiming damages from them in respect of mesothelioma he contracted as a result of exposure to asbestos in the course of his employment.

9 Each of the respondents filed a cross-claim against a number of cross-defendants including the appellant. The respondents sought indemnity or contribution from the cross-defendants under s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 (“1946 Act”) for any damages the respondents were required to pay to the plaintiff.

10 The plaintiff’s claim was settled and the respondents and the cross-defendants, with the exception of the appellant, reached agreement as to their respective contributions. The respondents pursued their cross-claims against the appellant, relying on an apportionment determination made by a Contributions Assessor pursuant to the claims resolution process (“CRP”) established by Part 4 of the Dust Diseases Tribunal Regulation2001 (“DDT Regulation 2001”). On 6 February 2009, the Tribunal (Judge Kearns) gave judgment for the respondents against the appellant in amounts totalling $18,375.00. His Honour considered that the appellant could make a claim to recover these amounts (which the appellant had paid pursuant to an earlier order of the Tribunal). However, Judge Kearns expressed the view that the appellant would have to institute fresh proceedings in which it would bear the onus of proving that its contribution assessed under the Contribution Assessor’s apportionment determination (“Determination”) was excessive.

11 A party dissatisfied with a decision of the Tribunal “in point of law” may appeal to the Supreme Court: Dust Diseases Tribunal Act 1989 (“DDT Act”), s 32(1). Leave to appeal is required if the appeal does not involve a claim for or question relating an amount of $20,000 or more. In the present case, the appellant brings the appeal against the judgment of the Tribunal pursuant to leave granted on 3 August 2009.

12 As will be seen, the Determination was made following the “rough and ready” procedures provided by the DDT Regulation 2001. (The expression “rough and ready” was used by Handley AJA, with whom Hodgson and Campbell JJA agreed, in QBE Insurance (Australia) Ltd v Wallaby Grip Ltd [2007] NSWCA 43; 4 DDCR 331 (“Wallaby Grip”), at 339 [42].) The appellant accepts that as a result of the Determination it became liable to pay (and did pay) an amount for a limited purpose only, namely settlement or determination of the plaintiff’s claim. However, the appellant contends that the respondents were entitled to obtain judgment on their cross-claims only if they proved their entitlement to a contribution from the appellant under the 1946 Act without relying on the Determination or gaining any procedural benefit, in terms of onus of proof, from the Determination. The appellant says that the decision made by the primary Judge was erroneous in point of law.

THE LEGISLATIVE FRAMEWORK

DDT Act

13 The DDT Act establishes the Tribunal as a court of record: s 4. The Tribunal, subject to immaterial exceptions, has exclusive jurisdiction to hear and determine claims for damages for “dust-related conditions” including conditions related to exposure to asbestos: ss 10(1), 11(1), Sch 1. The Tribunal also has jurisdiction to hear and determine proceedings brought by any tortfeasor liable in respect of damages for dust-related conditions to recover contribution from any other tortfeasor liable in respect of that damage: s 11(1A). In addition, the Tribunal’s jurisdiction includes any matter that is ancillary or related to any matter that is the subject of proceedings to be brought under subss (1) and (1A) of s 11: s 11(4).

14 The Civil Procedure Act 2005 (“CP Act”), Parts 3 to 8, apply to all civil proceedings in the Tribunal: CP Act, s 4, Sch 1; Uniform Civil Procedure Rules 2005 (“UCPR”) r 1.6, Sch 1. The DDT Act confers a rule-making power on the Dust Diseases Tribunal Rules Committee: ss 32A, 33(3), (4). However, the rule-making power does not permit rules to be made that are inconsistent with the uniform rules under the CP Act unless the uniform rules expressly permit rules to that effect: s 33(7).

15 Among the provisions of the CP Act that apply to the Tribunal are those in Part 6 Div 5 (ss 81-84), conferring power on the Tribunal to order interim payments. Ritchie’s Uniform Civil Procedure NSW, at [81.5], states that Part 6 Div 5 does not apply directly to proceedings in the Tribunal. This statement is incorrect. While Sch 1 to the CP Act originally excluded Part 6 Div 5 from the provisions of the CP Act applicable to the Tribunal, Sch 1 was amended by the Dust Diseases Tribunal Amendment (Claims Resolution) Act 2005 (“DDT Amendment Act 2005”). The effect of the amendment is to remove the exclusion: DDT Amendment Act 2005, s 5, Sch 3, cl 4.

16 Section 14(1) of the DDT Act provides as follows:

“(1) If a judgment or order of the Tribunal is for payment of an amount of money (including a sum awarded as costs) the judgment or order shall, on the filing of the prescribed documents in the registry of the Common Law Division of the Supreme Court, be taken to be a judgment of that Court for the payment of that amount of money in accordance with the judgment or order of the Tribunal.”

Section 14(5) of the DDT Act states that Part 8 of the CP Act (which deals with enforcement of judgments and orders) does not apply to authorise the Tribunal to exercise any function of a court under that Part. However, s 10(5) of the DDT Act provides that, subject to s 14 and one other presently irrelevant exception, a decision of the Tribunal has the same effect as and may be enforced in the same way as a decision of the Supreme Court.

17 The DDT Act empowers the Governor to make regulations for or with respect to procedures and presumptions for the apportionment of liability between defendants and cross-defendants in connection with a claim: s 32H(1)(b), (2)(c). Section 32H was introduced into the DDT Act by the DDT Amendment Act 2005 s 2, Sch 1, cl 14. The DDT Amendment Act 2005 also inserted Part 4 into the DDT Regulation 2001. Thus the CRP, although governed by Part 4 of the DDT Regulation 2001, was introduced by statute, not subordinate legislation.

Which is the Applicable Regulation?

18 The two principal elements of the CRP, as implemented by Part 4 of the DDT Regulation 2001, are the contributions assessments process and compulsory mediation (Part 4, Div 4). The present appeal is concerned with the contributions assessment provisions of the DDT Regulations.

19 The DDT Regulation 2001 was repealed by the Dust Diseases Tribunal Regulation2007 (“DDT Regulation 2007”), which came into force on 2 March 2007. Part 4 of the DDT Regulation2007 repeated verbatim many of the provisions of Part 4 of the DDT Regulation2001, although it incorporated additional provisions. Presumably for that reason, the parties, both at hearings before the Tribunal and in written submissions to this Court, appeared to proceed on the basis that little turned on which DDT Regulation applied. Nonetheless, the applicable DDT Regulation should be correctly identified: see Electricity Commission of New South Wales v Yates (1991) 30 NSWLR 351, at 357, per Handley JA (with whom Clarke and Meagher JJA agreed).

20 Clause 16(1) of the DDT Regulation 2007 provides that Part 4 applies, relevantly, only to claims commenced by statement of claim filed on or after 1 July 2005. Since the plaintiff’s statement of claim was filed with the Tribunal on 26 May 2006, cl 16(1) perhaps suggests that Part 4 of the DDT Regulation2007 applies to proceedings in the Tribunal.

21 However, the Determination was made by the Contributions Assessor in the present case on 21 December 2006, before the DDT Regulation2007 came into force. Clause 97 of the DDT Regulation2007 provides as follows:

“(1) The Dust Diseases Tribunal Regulation 2001 is repealed.

(2) Any act, matter or thing that, immediately before the repeal of the Dust Diseases Tribunal Regulation 2001 had effect under that Regulation continues to have effect under this Regulation.

(3) A provision of this Regulation extends to a claim that is pending immediately before the commencement of the provision, except as otherwise provided by this Regulation.”

22 The issues in the present case turn largely on the effect of the Determination. According to cl 97(2), the Determination, despite the repeal of the DDT Regulation2001, continues to have the effect that it had immediately before the repeal of the DDT Regulation2001.

23 Clauses 16(1) and 97(3) of the DDT Regulation 2007, in my view, are not intended to alter the effect of a Determination already made before the DDT Regulation2007 came into force. If, therefore, the effect of an apportionment determination by a Contributions Assessor is different under the DDT Regulation2001 than under the DDT Regulation2007 (a proposition suggested by neither party), cl 16(2) of the DDT Regulation2007 does not alter the effect of an apportionment determination made before 2 March 2007. In short, the effect of such a determination is to be ascertained by the provisions of the DDT Regulation2001.

24 For these reasons I refer below to the provisions of the DDT Regulation2001. For convenience in this section of the judgment, I insert in square brackets references to equivalent provisions in the DDT Regulation2007.

DDT Regulation 2001

The CRP

25 Part 4 of the DDT Regulation2001 establishes a CRP for asbestos-related conditions: cl 12 [cl 14]. Part 4 applies (as does the DDT Regulation2007) to claims commenced by statement of claim on or after 1 July 2005.

26 A claim in proceedings in the Tribunal brought under s 11 of the DDT Act is subject to the CRP until settled by mediation or until mediation if concluded: cl 16(2) [cl 18(2)]. While a claim is subject to the CRP, the parties must comply with the provisions of Part 4 and, subject to limited exceptions, proceedings in the Tribunal to determine the claim are deferred: cl 17(1), (2) [cl 19(1), (2)].

27 A claim can be removed from the CRP in certain cases, for example on application by the claimant on the basis that the claim is urgent: cl 18(1)(a) [cl 22(1)(a)].

28 Clause 21 [cl 25] provides that an “original defendant” in proceedings must make any cross-claim as soon as practicable after being served with the plaintiff’s claim: cl 21(1) [cl 25(1)]. In any event, cross-claims by all defendants (including original defendants) must be filed within strict time limits. In the case of malignant claims, the cross-claims must be filed within ten business days of service of the plaintiff’s particulars, although there is provision for a limited extension: cl 21(2)(a), (4)(a) [cl 25(2)(a), 4(a)]. A cross-claim that is not served and filed as required by cl 21 [cl 25] cannot be made in the proceedings, but this does not affect the defendant’s right (including the right of a cross-defendant) to pursue the claim in separate proceedings: cl 21(8) [cl 25(9)]. Unlike cl 22 [cl 26], cl 21 [cl 25] does not contain a definition of “defendant”. In consequence, it would seem that “defendant”, for the purposes of cl 21 [cl 25] does not include a cross-defendant.

29 Clause 22(1) [cl 26(1)] requires a defendant in proceedings to file and serve on the claimant and each other party, including other defendants, a reply to the claim against the defendant. Stringent time limits apply, but they are stricter for original defendants than for a defendant other than an original defendant: cl 22(4), (5) [cl 26(4), (5)]. For the purposes of cl 22 [cl 26], a “claim” includes a cross-claim and “defendant” includes a cross-defendant: cl 22(9) [cl 26(10)].

30 Division 4 of Part 4 of the DDT Regulation2001 provides for compulsory mediation of claims subject to the CRP process. Clause 35(1) [cl 39(1)] provides that if mediation of a claim results in settlement of the claim, the mediator may:

“on the application of a defendant who intends to dispute in subsequent proceedings the contribution that the defendant is liable to make to the damages recovered by the plaintiff”
require the plaintiff to give evidence on oath before the mediator as to certain matters. A “ defendant ” for the purposes of cl 35(1) [cl 39(1)] includes a cross-defendant (cl 35(11) [cl 39(11)], but a “ claim ” is not defined to include a cross-claim.

31 Otherwise, the details of the mediation process are not relevant for present purposes.

Apportionment Determinations

32 The operation of Div 5 of Part 4 of the DDT Regulation2001 (cll 40-44) [cl 47-53] was explained by Handley AJA in Wallaby Grip as follows (at 335 [15]):

“Division 5 establishes a procedure for the summary but provisional determination of contribution claims in order to facilitate settlement of the plaintiff’s claim and the satisfaction of any judgment he may obtain by judicial decision or settlement. A defendant or cross-defendant who is dissatisfied with the summary determination can pursue its strict rights and seek a more favourable determination at a trial but will be subject to significant costs sanctions if a substantially better result is not achieved. Meanwhile the summary determination is immediately enforceable. A clear purpose of the scheme is to prevent the final determination of the plaintiff’s claim being delayed by contribution disputes.”

33 Clause 41 [cl 48] of the DDT Regulation 2001 requires defendants to a claim, who are alleged to be liable to contribute to any damages recovered by the plaintiff, to agree among themselves as to the contribution each is liable to make to those damages: cl 41(1) [cl 48(1)]. Agreement is required within a very short time frame (35 business days after service of the plaintiff’s statement of particulars for malignant claims): cl 41(2) [cl 48(2)]. It is important to appreciate that a reference in Div 5 of Part 4 to a “defendant” includes a reference to a cross-defendant: cl 40 [cl 47].

34 Clause 42 [cl 49] is critical to the present appeal. Clause 42 of the DDT Regulation 2001 provides as follows:

“(1) If by the end of the period within which the defendants are required to reach agreement as to apportionment an apportionment statement setting out details of the apportionment of liability that the defendants have agreed to has not been filed with the Registrar, the Registrar is to refer the matter to a Contributions Assessor for determination.
(2) The Contributions Assessor to which a matter is referred is to determine the contribution that each defendant is liable to make and is to make that determination on the assumption that the defendants are liable and solely on the basis of:

(a) the plaintiff’s statement of particulars and the defendants’’ replies on the claim, and

(b) standard presumptions as to apportionment determined by the Minister for the purposes of this clause by order published in the Gazette.
Note: For the standard presumptions as to apportionment determined by the Minister see the Dust Diseases Tribunal (Standard Presumptions—Apportionment) Order 2005 .
(3) A Contributions Assessor’s determination is to be made within:
(a) 40 business days for malignant claims, or
(b) 80 business days for non-malignant claims,
after service of the plaintiff’s statement of particulars on the last of the original defendants.

(4) …

(5) A determination of a Contributions Assessor under this Division cannot be challenged, reviewed, quashed or called into question before any court of law or administrative review body in any proceedings. This subclause does not prevent the subsequent taking, or determination by the Tribunal, of a dispute between defendants as to apportionment .” (Emphasis added to (2) above.)

[The equivalent provisions in the DDT Regulation 2007 to those extracted above are cl 49(1), (4), (6), (8).]

35 Clause 43 [cl 50] provides for a panel of legal practitioners to act as Contributions Assessors for the purposes of Div 4.

36 Clause 44 [cl 52] specifies the effect of an agreement or determination as to apportionment:

“(1) An agreement or determination as to apportionment among defendants for the purposes of this Division is conclusively binding on the defendants for the purposes of the settlement, or determination by the Tribunal, of the plaintiff’s claim and payment of the plaintiff’s damages.

(2) The agreement or determination is not binding for the purposes of the subsequent taking, or determination by the Tribunal, of a dispute between defendants as to apportionment.

(3) If a defendant disputes the contribution that the defendant is liable to make to damages recovered by the plaintiff and the judgment of the Tribunal in the dispute does not result in the defendant materially improving the defendant’s position, the defendant is liable to pay the costs of each other party to the dispute occasioned by the dispute, assessed on an indemnity basis.

(4) …

(5) For the purposes of this clause, the defendant is considered to materially improve the defendant’s position only if the Tribunal’s determination of the dispute results in a reduction of the defendant’s contribution of at least 10% of the amount of the defendant’s agreed or determined contribution or $20,000, whichever is the greater.” (Emphasis added.)

[The equivalent provisions in the DDT Regulation 2007 to those extracted above are cl 52(1), (2), (3), (7).]

37 Clause 47 [cl 61] provides for the appointment of a single claims manager to conduct the proceedings on behalf of all defendants: cll 47(4), (5), 48(1) [cll 61(4), (5), 62(1)].

2005 Order

38 The Dust Diseases Tribunal (Standard Presumptions – Apportionment) Order 2005 (“2005 Order”) was made by the Attorney-General pursuant to cl 42(2)(b) of the DDT Regulation2001. Schedule 1 to the 2005 Order contains an Introduction which sets out the terms of the 1946 Act relating to apportionment among tortfeasors and cl 3(1) identifies a “multitude of factual matters which will impact upon apportionment”.

39 Clause 4 of Sch 1 to the 2005 Order summarises a number of provisions in the DDT Act and the DDT Regulation 2001. Clause 4(3) says that the task of the independent Contributions Assessor is, on the basis of the papers, to apply the standard presumptions with such variations as are appropriate to a particular case, but within the range. Clause 4(4) is as follows:

“The apportionment is thereby determined for the claimant’s case, with judgments as to apportionment to automatically follow the final determination by entry of judgment (either by consent or after a hearing) in favour of the claimant (see clause 42(1) of the Dust Diseases Tribunal Regulation 2001 ). Any defendant has a right to seek a review of the Contributions Assessor’s apportionment by a formal hearing and determination by the DDT of the question of apportionment, but any such hearing will not proceed until after the conclusion of the claimant’s claim (either by settlement or entry of judgment after hearing ) (see clause 42(2) of the Dust Diseases Tribunal Regulation 2001 ).”

40 Clause 5 of Sch 1 to the 2005 Order sets out the standard presumptions. The various presumptions apply to exposure to asbestos during specified periods. As the Note to cl 5 explains, the standard presumptions are designed principally to take account of the relative state of knowledge that can be attributed to the broad categories of defendants in each period. A distinction is drawn between manufacturers, suppliers or installers of asbestos (Category 1) and all other defendants (Category 2): cl 5(2). The 2005 Order allows for variations for each category of defendants, in relation to specified dates of exposure, by reference to a number of circumstances. These include the actual knowledge of a Category 2 defendant and the size and state of sophistication of a particular defendant: cl 5(6).

41 The 2005 Order was repealed by the Dust Diseases Tribunal (Standard Presumptions – Apportionment) Order 2007 (“2007 Order”). The 2007 Order was made by the Attorney-General pursuant to the power conferred by cl 49 of the DDT Regulation 2007. Clause 4(5) of Sch 1 to the 2007 Order is the equivalent to cl 4(4) of Sch 1 to the 2005 Order, although the language is not identical.

Wallaby Grip

42 This Court in Wallaby Grip considered Div 5 of Part 4 of the DDT Regulation2001. As the judgment in that case was relied on by the Tribunal in the present proceedings, it is convenient at the outset to identify the holding in that case and identify comments that were obiter dicta.

43 In Wallaby Grip, the plaintiff brought proceedings in the Tribunal to recover damages for mesothelioma caused by negligent exposure to asbestos. He named B as the first defendant. QBE, as the insurer of two dissolved corporations, became the second defendant. B filed a cross-claim against Wallaby Grip within the prescribed time. QBE filed a cross-claim against Wallaby Grip but arguably failed to comply with the required time limits. However, it could still bring its cross-claim against Wallaby Grip in separate proceedings.

44 The plaintiff’s condition suddenly deteriorated and the President of the Tribunal ordered the claim removed from the CRP. His Honour then ordered that the Div 5 of Part 4 of the DDT Regulation2001 should continue to apply in relation to apportionment and that, if B and Wallaby Grip were unable to agree upon their contributions, the Registrar was to appoint a Contributions Assessor.

45 Shortly thereafter the plaintiff’s claim settled. Judgment was entered against the defendants jointly and severally and the agreed amount was paid to the plaintiff. Wallaby Grip then applied for revocation of the order that Div 5 continue to apply in relation to apportionment. The President made the revocation order over the opposition of the defendants (B and QBE). His Honour’s reasons included a concern that, as the extent of Wallaby Grip’s liability to contribute was in dispute, it would be necessary to litigate the cross-claim. Accordingly, continuation of the CRP would only increase costs and possibly cause delay.

46 On the application for leave to appeal from the revocation order, Wallaby Grip contended, among other arguments, that an apportionment determination by a Contributions Assessor would be futile since the plaintiff’s claim had been resolved and an apportionment determination would be without legal effect. It was said that this contention was particularly relevant to QBE because it (arguably) was prevented from filing a cross-claim in the proceedings.

47 Handley AJA considered (at 337 [30]) that Wallaby Grip’s contention failed to give full effect to the terms of cll 40, 42 and 44 of the DDT Regulation2001. Clause 44(1) required (at 337 [31]) that there be a single determination of the contributions which the defendants and cross-defendants were bound to make. That determination was conclusively binding on the defendants and cross-defendants.

48 Handley AJA pointed out (at 337-338 [32]) that, in the ordinary course, a judgment in favour of the plaintiff in a mesothelioma case is entered against the defendants who are then liable to pay the full amount of the judgment without reference to any question of apportionment. If a defendant’s contribution cross-claim succeeds, it is entitled to a verdict against the cross-defendants. However, the defendant/cross-claimant is not entitled to enter judgment against the cross-defendants until the plaintiff’s judgment is satisfied, although an immediately enforceable order can be made in equity (at 338 [33]).

49 Handley AJA said (at 338 [34]) that it followed that:

“a determination of the liability of cross-defendants for contribution ‘for the purposes of payment of the plaintiff’s damages’ does not entitle the plaintiff to judgment against those cross-defendants nor does it entitle a plaintiff to enforce their liability for the purposes of satisfying his judgment against the defendants. He is not concerned with how the ultimate burden of his judgment should be shared among those responsible.”

50 Handley AJA noted (at 338 [35]) that the question of contributions could have been brought before the Tribunal pursuant to cross-claims brought within time by all defendants on the record. Division 5 of Part 4 of the DDT Regulation 2001 permitted contributions to be determined by a Contributions Assessor without all defendants having served cross-claims on each other and on all cross-defendants.

51 Handley AJA concluded (at 338 [36]) as follows:

“In my judgment the Tribunal is entitled and bound to give effect to such a determination by entering appropriate verdicts and judgments. Since the defendants have satisfied the consent judgment in favour of the plaintiff they would be entitled to judgments against each other and the cross-defendants for the contributions determined by the Assessor.”

52 Handley AJA continued (at 338-339 [37]-[40]) as follows:

“If [Wallaby Grip], having satisfied any such judgment sought to have their liability determined judicially they could find themselves in an unusual position. If the defendants were content with the determination they would have no interest, and perhaps no standing, to pursue cross-claims against [Wallaby Grip].
[Wallaby Grip] although nominally in the position of defendants would in reality be plaintiffs seeking a refund of contribution they had overpaid.
They would not be within s 5(1)(c) of the [ 1946 Act ]. The word ‘liable’ where it first appears in that provision means liable by judgment … [Wallaby Grip] have not been held liable to the plaintiff by judicial decision or consent and would have no standing to seek a judicial determination of their liability under s 5(1)(c).
Their remedy may be a claim or cross-claim in the Tribunal (cl 42(5)) for restitution for having discharged, by compulsion of law, an obligation for which the defendants on the record were liable. They would have the onus of proving that the defendants should bear a greater share of responsibility than that determined by the Assessor. If they succeeded the defendants would be ordered to refund the difference between the amounts paid by the opponents and their contributions as judicially determined. These views are tentative because the matter was not fully argued.”

53 Handley AJA rejected (at 339 [42]) the President’s holding that it was relevant to take into account that Wallaby Grip disputed its liability to contribute to the plaintiff’s damages. His Honour considered that Div 5:

“establishes a procedure for the summary determination of such claims, on an avowedly rough and ready basis, which allows disputes as to liability and quantum to be determined judicially in due course when any necessary adjustments can be made. In my judgment a dispute as to quantum was manifestly not ‘a sufficient reason for ordering that Div 5 should not apply’.”

54 Furthermore, it was mere speculation for the President to conclude that the parties would inevitably proceed to a full trial of the cross-claim (at 339 [44]). The effect of a determination in promoting settlement could not be discounted. In Handley AJA’s view, the delays involved in the summary contributions procedure were “insignificant”. The foreseeable delay likely to be caused by the revocation order was far greater. Moreover (at 339 [46]-[47]), the Div 5 procedure:

“would bring about a binding determination of [Wallaby Grip’s] liabilities with immediate benefits for the defendants, and it would attract the potential costs benefits and incentive for settlement created by cl 44(3) and (4). Both are relevant considerations which [the President] overlooked.
[The President] said that one of the objects of Div 5, early resolution of the plaintiff’s claim, had been achieved. That was self evidently correct, but there was a second object, which was to maximise the sources available within a short time for payment, directly or indirectly, of the plaintiff’s damages. It did this by including in those sources contributions from defendants who had not settled with the plaintiff and from cross-defendants who had not agreed to contribute. That object had not yet been achieved.”

55 In a concurring judgment, Hodgson JA identified an important object of the scheme (at 333 [2]-[3]):

“The President in his reasons did not take into account the relevant consideration that, if the contribution claims were removed from the claims resolution process on the ground that the object of achieving early resolution of the plaintiff’s claim was achieved when the defendants agreed to settle the plaintiff’s claim, this could provide a disincentive for defendants to settle in the future and thus tend to reduce the utility of the claims resolution process.
One of the objects of the process is to ensure that defendants are not held back from settling claims by plaintiffs on the ground that they cannot be confident of contribution from cross-defendants until they have prosecuted cross-claims to a conclusion. If settlement with a plaintiff justified removal of contribution claims from the claims resolution process, defendants could not settle claims by plaintiffs in the confident expectation of an early provisional resolution of their claims against cross-defendants, so part of the utility of the claims resolution process would be prejudiced.”

56 The following propositions appear to be essential to Handley AJA’s reasoning in Wallaby Grip and thus form part of the ratio of the case:

(i) there must be a single apportionment determination of the contributions which the defendants and cross-defendants are bound to make (at 337 [31]);

(ii) an apportionment determination is binding on all defendants and cross-defendants (at 339 [47]);

(iii) a Contributions Assessor may be appointed to make an apportionment determination even after the plaintiff’s claim has settled by entry of judgment and the plaintiff has been paid by the defendants (at 338 [36], 339 [47]); and

(iv) the Tribunal is bound to give effect to such a determination by “ entering appropriate verdicts and judgments ” (at 338 [36]).

These were the essential steps in the reasoning of Handley AJA in rejecting the “ second objection ” (referred to at [27]), that a summary determination of Wallaby Grip’s contribution would be futile once the plaintiff’s case had been settled.

57 It seems clear that his Honour’s observations (at 338-339 [37]-[40]) concerning the position of a cross-defendant who has paid the amount due pursuant to an apportionment assessment, as the appellant did in this case, were obiter dicta. In particular, Handley AJA’s suggestion that a cross-defendant seeking to recover some or all of the amount so paid may have to bring a fresh claim in the Tribunal bear the onus of proof, was not part of the ratio of Wallaby Grip. As his Honour expressly indicated, his remarks on this topic were made tentatively and without the benefit of full argument.

58 It should be noted that the DDT Regulation 2007 has confirmed the decision in Wallaby Grip. Clause 47(2) states that the settlement or determination of the plaintiff’s claim does not affect the continued operation of Div 5 in relation to a cross-claim and the apportionment of liability among the cross-defendants.

THE PROCEEDINGS IN THE TRIBUNAL

59 On 26 May 2006, the plaintiff filed his statement of claim in the Tribunal. The first defendant was Energy Australia (“EA”), a statutory corporation previously known as the Sydney County Council, which was alleged to have employed the plaintiff at the Bunnerong and Prymont Power Stations from 1946 to 1952. The second was Eraring Energy (“EE”), also a statutory corporation, previously known as the Electricity Commission of New South Wales. EE was alleged to have employed the plaintiff from 1956 until 1965 at various power stations. The particulars of negligence alleged that EA and EE (the respondents to the present appeal) failed to take sufficient steps to protect the plaintiff from asbestos dust.

60 On 13 October 2006, the respondents filed separate cross-claims in substantially identical terms, seeking contributions from seven cross-defendants, including the appellant. The cross-claims alleged that prior to 1952, the appellant had constructed boilers and associated plant at Pyrmont Power Station and had failed to warn the plaintiff or the respondents of the danger of exposure to asbestos.

61 In its reply to the cross-claim, filed on 29 November 2006, the appellant asserted that it had had nothing to do with that part of the Pyrmont Power Station in which the plaintiff alleged that he had been exposed to asbestos.

62 Pursuant to cl 42(1) of the DDT Regulation 2001, Mr Letcher QC was appointed as a Contributions Assessor to determine the apportionment between the defendants and cross-defendants. Mr Letcher delivered the Determination on 21 December 2006. The Determination allocated to each defendant and cross-defendant a proportion of the whole liability to the plaintiff, expressed as a percentage. The contribution of EA was assessed at 9%, EE’s at 23.5% and the appellant’s at 7.5%. The Contributions Assessor appointed EE to be the claims manager for the defendants and cross-defendants, as contemplated by Part 4 Div 6 of the DDT Regulation 2001.

63 On 12 February 2007, a settlement was reached between the plaintiff and EE acting within its authority as the claims manager. The agreement provided for verdict and judgment for the plaintiff in the sum of $245,000. The agreement resolved the contributions to be made by each defendant and cross-defendant, with the exception of the appellant which did not participate in the settlement. On 12 February 2007 the Tribunal made orders in accordance with the agreement.

64 The plaintiff was paid all amounts due to him under the judgment. Each of the respondents paid its proportion of the judgment as did all cross-defendants other than the appellant. Since the appellant refused to contribute, the respondents paid to the plaintiff a sum equivalent to the appellant’s 7.5% contribution, as determined by the Contributions Assessor.

Orders for Payment of the Contribution

65 On 26 February 2007, the respondents filed a notice of motion seeking findings that the Contributions Assessor had made an apportionment determination that was binding on the defendants and cross-defendants for the purposes of settlement of the plaintiff’s claim. The motion also sought an order that the appellant pay the respondents the sum of $18,375.00 in respect of the 7.5% contribution it was liable to make to settlement of the plaintiff’s claim.

66 The respondents subsequently filed an amended motion seeking orders pursuant to s 90 of the CP Act that the appellant pay separate sums to each of the respondents amounting to $18,750.00, plus interest. Section 90(1) of the CP Act provides that:

“The Court is, at or after the trial or otherwise as the nature of the case requires, to give such judgment or make such order as the nature of the case requires.”

67 On 6 September 2007, O’Meally P made the orders sought by the respondents. His Honour held (at [113]) that the reasoning of Handley AJA in Wallaby Grip was inconsistent with the present appellant’s submission that the Tribunal had no power to make the orders.

68 O’Meally P identified (at [143]) an “anomalous situation” that in his view could arise. His Honour pointed out that an order for the payment of money under s 90 of the CP Act could be enforced as a judgment of the Supreme Court upon being registered with the Common Law Division, pursuant to s 14 of the DDT Act. In these circumstances, it would be pointless for the respondents to pursue their cross-claims, unless they disputed the apportionment assessment. Consequently, as Handley AJA had indicated in Wallaby Grip, the appellant would have to file a cross-claim to challenge the apportionment assessment. This would have the effect of shifting the onus of proof to the appellant, rather than the respondents having to prove their case on the cross-claim.

Directions for the Hearing of the Cross-Claims

69 The appellant did not seek leave to appeal from the orders made by O’Meally P and duly paid the amounts due to the respondents under those orders. However, on 13 March 2008, the appellant filed a notice of motion seeking orders that the respondents’ cross-claims be listed for hearing in the Tribunal “forthwith”.

70 On 15 April 2008, O’Meally P dealt with the appellant’s motion: Re Millard; Energy Australia v Power Technologies Pty Ltd [2008] NSWDDT 11. He expressed the view (at [63]) that the cross-claims should be heard and determined. However, his Honour declined to make orders in the terms sought by the respondents. Instead, he dismissed the respondent’s motion, but gave directions designed to enable the cross-claims to proceed to a hearing “in the ordinary way” (at [77]). The directions made provision for the filing of evidence and the administration of interrogatories.

71 Between April and November 2008 various steps were taken by the parties in preparation for a hearing on the cross-claim. These included discovery of documents by the respondents and the administration of interrogatories by the appellant to the respondents.

The Judgment Appealed From

72 On 7 November 2008, each of the respondents filed a motion in identical terms. EA’s motion sought the following orders:

“1. Judgment to be entered on the Cross Claim against [the appellant] in favour of [EA] on the basis that [the appellant] pay [EA’s] costs;

2. Alternatively, leave be granted to [EA] to discontinue the Cross Claim on the basis that each party pay their own costs.”

73 The motion was heard on 12 December 2008 by Kearns J, who delivered judgment on 6 February 2009 in favour of the respondents. It is this judgment that is the subject of the appeal.

74 Kearns J in his judgment said (at [17]) that the position of the respondents was “fairly clear”. They had obtained orders from the President requiring the appellant to pay money and the appellant had satisfied the orders. The respondents had no interest in prosecuting the proceedings to establish “something that they have already obtained”.

75 Kearns J observed (at [19]) that cl 42(5) of the DDT Regulation2001 envisaged that, despite the finality of an apportionment determination by a Contributions Assessor, the Tribunal could decide a dispute between defendants as to apportionment. However, the manner in which the dispute reached the Tribunal had not been spelled out in the Regulation.

76 In his Honour’s view (at [21]), the apparent effect of cll 44(1) and 44(2) was that the Tribunal could decide the question of apportionment “in the usual way and without regard for what the CA [Contributions Assessor] has determined.” The question that arose for decision was whether the respondents were entitled to judgment in accordance with the Determination. Kearns J considered (at [26]) that the answer to that question was “yes”:

“The Regulation provides for the binding effect and conclusiveness of the CA’s determination for certain purposes. That cannot be given effect unless there is some provision for enforcement. Unfortunately, the Regulation itself in setting up this regime has not expressed the mechanism for enforcement. That it has not done so surely cannot mean that there is no method of enforcement such that the whole exercise of a contributions assessment may be rendered useless because defendants decide they do not like the result and will not abide by it. It may be taken, therefore, in my view, that the intent of this Regulation is that determination by a CA may be enforced and, consequently, it may also be taken, in my view, that if enforcement was intended, it would be through the process of judgment of the Tribunal. There is nothing to prevent that process and, in the interests of making the system work, everything to support it.”

77 In his Honour’s opinion (at [29]), the respondents were entitled to a judgment in accordance with the Determination. It was, however:

“an interim judgment or a judgment for a limited purpose and a final judgment would await a hearing on the merits.”

78 Kearns J recognised (at [29]) that the effect of this might be to throw an onus on the appellant to prove its case, rather than “as might be expected” preserving the onus borne by the respondents to establish their cross-claims. But this did not cast doubt on the conclusion he had reached. The intent of the DDT Regulation2001 was that the party wishing to dispute an apportionment determination should carry the onus. Moreover, it would be incongruous to require a defendant “with no interest in undertaking litigation to pursue litigation to satisfy somebody else’s interest”.

79 Kearns J rejected (at [31]) the appellant’s alternative argument that the respondents had “eschewed” an application for judgment on the hearing of their motions determined by the President and had thereby waived their entitlement to any such relief. His Honour considered that the course taken by the respondents before the President did not constitute abandonment for all time of their right to seek judgment. Nor had they made an election between inconsistent remedies. The right to an order for payment and the right to judgment were not inconsistent rights; the respondents could choose one without abandoning the other. For the same reason, no estoppel arose.

80 Accordingly, Kearns J held that the respondents were entitled to judgment.

81 Orders were made on 13 February 2009 to give effect to his Honour’s judgment. In the case of EA, judgment was entered in its favour against the appellant in the sum of $5,512.50. The Court noted that the appellant had already paid that sum to EA in satisfaction of the judgment. Equivalent orders were made in favour of EE.

SUBMISSIONS ON THE APPEAL

82 There was a good deal of common ground between the parties. Both the respondents and the appellant accepted that the effect of cll 42(5) and 44(1) of the DDT Regulation 2001 was that a defendant/cross claimant in Tribunal proceedings could enforce an apportionment determination made by a Contributions Assessor against a cross-defendant. The parties agreed that a cross-claimant was entitled to an order against the cross-defendant for payment of the amount due under the “conclusively binding” apportionment determination (cl 44(1)) and that the defendant/cross-claimant could do so by filing a motion in the cross-claim seeking such an order. It was also common ground that in the circumstances of the present case s 90 of the CP Act, read with s 11(1A) and (4) of the DDT Act, authorised the Tribunal to make an order for payment of money as the President did on 6 September 2008.

83 Indeed at one point in the argument on the appeal, it seemed that there may have been no material difference between the parties. Mr Watson SC, who appeared with Mr Sheller for the respondents, accepted that the effect of the order for payment made by the President on 6 September 2008 was essentially the same as the judgment entered by Judge Kearns on 13 February 2009. Nor did Mr Watson dispute that the President’s order was a “judgment”, bearing in mind that the CP Act defines (s 3) “judgment” to include any order for the payment of money. When pressed as to why the respondents had not simply rested content with the order made by the President and discontinued their cross-claims, Mr Watson replied “That should have happened”. Mr Watson attributed the fact that the cross-claim proceeded to judgment to the directions for the hearing of the cross-claim made by the President on 15 April 2008.

84 It emerged that the substantial dispute between the parties concerned whether the appellant, if it wished to challenge the apportionment made by the Determination, bore the onus of proving that its assessed contribution of 7.5% of the plaintiff’s award was wrong. This is potentially an issue of some significance for contribution claims by defendants in asbestos-related proceedings. Asbestos-related conditions usually do not manifest themselves until many years after exposure to the asbestos. Evidence of the working conditions experienced by the plaintiff may therefore be very difficult to obtain. The party bearing the onus of proof on a cross-claim consequently may be at a forensic disadvantage.

85 On Mr Watson’s argument, the effect of the President’s order and of the subsequent judgment was the same. Both the order and the judgment enforced the appellant’s liability under the Determination. If it sought some other apportionment of its liability to contribute to the plaintiff’s damages, it would have to bring proceedings against the respondents in which it would bear the onus of proof. Mr Watson submitted that this would have been the position even if the respondents had discontinued their cross-claims and had not sought a judgment in their favour from Kearns J.

86 Mr Webb QC, who appeared with Mr Rowles for the appellant, submitted that the appellant was entitled to have the respondents’ cross-claims proceed to a hearing on the merits, with the respondents bearing the onus of establishing their claim to contribution without deriving any forensic benefit from the Determination. As I have noted, Mr Webb accepted that the respondents could obtain orders for the payment of the contribution assessed by the Determination and that the Tribunal could make the orders in the respondents’ cross-claims. However, he characterised an apportionment determination as the product of an administrative process that does not permit the cross-defendant to mount a defence on the merits. He contended that the intent of the CRP established by the DDT Regulation 2001 was that a cross-defendant, although required to contribute to the plaintiff’s damages, was not prejudiced in relation to the merits of the defendant’s cross-claims. That is, the true rights and obligations of the parties to the cross-claim were to be determined in the usual way.

87 According to Mr Webb, if the respondents had been given leave to discontinue the cross-claim, the grant of leave should have been made conditional upon their agreeing to repay the amounts paid by the appellant pursuant to the orders made by O’Meally P. Otherwise, so he argued, the appellant would be disadvantaged since it would be subject to an order for payment while the respondents would be relieved from the need to proceed to a hearing on the merits of their cross-claims. If the respondents elected to continue with their cross-claim, they would have had to prove their case according to the usual principles applicable to a claim by a tortfeasor for contribution from another tortfeasor.

88 The appellant submitted, in the alternative, that the respondents had waived their right to seek a judgment in the cross-claim. According to Mr Webb, they had very carefully elected to seek an order for payment under s 90 of the CP Act, rather than a judgment. Furthermore, having in effect been directed by O’Meally P to proceed to a hearing on the merits of their cross-claim, preparations had been made for the hearing on that basis. If this did not amount to waiver, so Mr Webb argued, the respondents should be held to be estopped from seeking a judgment in the terms given by Kearns J.

89 The respondents submitted that the appellant was not entitled to rely on waiver or estoppel. There had been no election between inconsistent rights such as would attract the doctrine of waiver. Nor had the appellant identified any basis for estoppel, particularly as there had been no allegation of detrimental reliance.

REASONING

90 No submission was made that Div 5 of Part 4 of the DDT Regulation 2001 is not a valid exercise of the regulation-making power conferred by s 32H(1) of the DDT Act. The dispute between the parties therefore must be resolved by reference to the provisions of Div 5, particularly cll 42 and 44.

Effect of an Apportionment Determination

91 The apportionment determination made by a Contributions Assessor is indeed the product of a “rough and ready” process. The Contributions Assessor is to determine the contribution that each defendant is liable to make on the assumption that the defendants (including cross-defendants) are liable: cl 42(2). Moreover, the determination is to be made solely on the basis of the plaintiff’s statement of particulars and the defendants’ replies, together with the standard presumptions as to apportionment set out in the 2005 Order: cl 42(2)(a), (b). The Contributions Assessor must assess the contribution of a cross-defendant on the assumption that it is liable to the plaintiff, even if the cross-defendant denies any liability (as did the appellant in this case) and provides cogent support in its reply for that denial.

92 Division 5 recognises that there must be limitations on the effect of an apportionment determination made in this way. The limitations are specified by cll 42(5) and 44(2). The first sentence of cl 42(5) states that an apportionment contribution cannot be challenged, reviewed, quashed or called into question before any court or administrative body in any proceedings. However, that statement is immediately qualified by the second sentence of cl 42(5), which provides that the first sentence:

“does not prevent the subsequent taking, or determination by the Tribunal of a dispute between defendants as to apportionment”.

93 Clause 42 must be read with cl 44. Clause 44(1) specifies the effect of an apportionment determination made by a Contributions Assessor. The determination is conclusively binding on the defendants (including cross-defendants):

“for the purposes of the settlement, or determination by the Tribunal of the plaintiff’s claim and payment of the plaintiff’s damages”.

Clause 44(2) qualifies the binding effect of the apportionment determination by providing, in the same terms as cl 42(5), that the determination is not binding for the purposes of the subsequent taking, or determination by the Tribunal of a dispute between defendants as to apportionment.

94 It will be seen that, although an apportionment determination cannot be challenged in any proceedings, it is conclusively binding on the defendants (including cross-defendants) only for the limited purposes specified in cl 44(1). This is consistent with the object of the scheme identified in Wallaby Grip, namely to prevent the final determination of the plaintiff’s claim being delayed by contribution disputes and, to this end, to ensure early provisional resolution of cross-claims. It is significant, in my view, that cl 44(1) says nothing about an apportionment determination being conclusively binding or, indeed, having any effect at all, on the final resolution of a claim for contribution by any defendant or cross-defendant against another defendant or cross-defendant. So far as cl 44(1) is concerned, an apportionment determination has no effect on the principles that govern the final determination of a claim for contribution among defendants or cross-defendants.

95 As Wallaby Grip decides, an original defendant may recover the contribution due from a cross-defendant or another original defendant pursuant to an apportionment determination made by a Contributions Assessor. Where an original defendant has filed a cross-claim (as it must if it seeks contribution under the CRP against a third party not named as an original defendant in the plaintiff’s proceedings), it can seek the contribution due under an apportionment determination in the course of the cross-claim. However, any order for payment of money by the cross-defendant, made in reliance on the apportionment determination, can have no greater effect than provided by cl 44(1). That is, the order can be made only for the purposes of settlement or determination of the plaintiff’s claims. The rights of the defendants and cross-defendants among themselves, leaving aside the costs sanction provided for in cl 44(3), must be determined by the usual principles that govern claims for contribution, unaffected by the apportionment determination. To use the language of Hodgson JA in Wallaby Grip, an apportionment determination produces only a “provisional resolution” of the cross-claims.

Position of a Cross-Defendant

96 What, then, is the position of a cross-defendant who denies liability but is forced, in consequence of an apportionment determination, to pay the sum assessed and seeks a refund of the contribution overpaid? Division 5 does not directly address this question. However, in Wallaby Grip, Handley AJA considered (at 338-339 [40]) that the cross-defendant would have a remedy in restitution for having discharged, by compulsion of law, an obligation for which the defendants on the record were liable. His Honour thought that the remedy could be pursued by a claim or cross-claim in the Tribunal, but that the cross-defendant would bear the onus of proving that the defendants should bear a greater share of responsibility than that determined by the Contributions Assessor.

97 I respectfully agree that the cross-defendant has a remedy, but not that it can pursue the remedy only on the basis that it bears the onus of proving that the defendants’ share should be greater than that assessed by the Contributions Assessor. If I have construed cll 42 and 44 correctly, Div 5 of Part 4 of the DDT Regulation 2001 is not intended to alter the principles governing contributions among defendants and cross-defendants in asbestos-related claims. Division 5 is intended only to establish a rough and ready procedure for determining contributions solely for the purposes identified in cl 44(1): that is, the settlement or determination of the plaintiff’s claim. The object is to ensure that the resolution of the claim of a plaintiff, who is often gravely ill, is not delayed by contribution disputes.

98 The entitlement of the defendant/cross-claimant to recover the contribution assessed by the apportionment determination, even after settlement or determination of the plaintiff’s claim (as Wallaby Grip decides), is intended to achieve the same purposes. A defendant can contribute to the plaintiff’s settlement in the knowledge that it is entitled to obtain an order for payment of the cross-defendant’s assessed share of the settlement. However, this is an interim or provisional resolution of the apportionment issue, which will become lasting only if the parties accept it as such.

99 In my opinion, Div 5 is not intended to give the defendant/cross-claimant a forensic advantage by allowing it to obtain an order on the basis of the apportionment determination, discontinue the cross-claim and force the cross-defendant to bear the burden of displacing the Contribution Assessor’s determination. If the defendant/cross-claimant pursues the cross-claim to finality, but fails to establish that the cross-defendant is liable to contribute to the plaintiff’s damages, the basis of the defendant/cross-claimant’s entitlement to retain the moneys paid by the cross-defendant on a provisional basis is removed. The foundation of the defendant/cross-claimant’s entitlement to retain those moneys beyond the limited purpose specified in cl 44(2) rests on the merits of its cross-claim against the cross-defendant. If that cross-claim is dismissed, the Tribunal has determined that the cross-claim is without merit and that the defendant/cross-claimant is not entitled to any contribution from the cross-defendant.

100 In these circumstances, the Tribunal, having disposed of the cross-claim on the merits, can give effect to the cross-defendant’s entitlement to be repaid the moneys paid by it under compulsion of law. Sections 10(1), (2) and 11(1A) of the DDT Act confer jurisdiction on the Tribunal to hear and determine proceedings by a tortfeasor liable in respect of damages to a person suffering from a dust related condition, seeking contribution from another tortfeasor. In addition, the Tribunal has jurisdiction under s 11(4) to determine any matter that is ancillary or related to a matter that is the subject of proceedings brought under s 11(1A). This jurisdiction includes claims founded on restitution and certain non-statutory claims for contribution: see Wallaby Grip, at 338 [40]; CSR Ltd v Amaca Pty Ltd [2007] NSWCA 107, at [19]-[20], per Young CJ in Eq (with whom Hodgson JA agreed), cf Mason P, at [1]. The jurisdiction of the Tribunal in matters within s 11(4) of the DDT Act appears not to be exclusive (Amaca Pty Ltd v CSR Ltd [2001] NSWSC 263; 51 NSWLR 476 (Bergin J)), but nothing turns on this for present purposes. Section 22(1) of the CP Act provides that the court (including the Tribunal) may grant to a defendant (including a cross-defendant) such relief against another person (including the cross-claimant) as the Tribunal can grant in separate proceedings. Section 90(1) of the CP Act, as I have noted, permits the Tribunal to make such order as the nature of the case requires.

101 If a defendant/cross-claimant, having obtained an order for payment of money in reliance on an apportionment determination, seeks to discontinue or otherwise terminate the cross-claim without any intention to pursue it further, the position is essentially the same. A defendant/cross-claimant who seeks to discontinue the cross-claim or does not wish to proceed to a hearing on the merits, does not intend to establish its entitlement to retain the moneys paid to it under compulsion of law. In such circumstances, the Tribunal has the power to ensure that the defendant/cross-claimant does not retain the moneys previously paid to it by the cross-defendant. Thus there is ample authority for the proposition that the Tribunal’s broad discretion to grant (or withhold) leave to a cross-claimant to discontinue the proceedings (UCPR, Pt 12 r 12.1) can be exercised in a manner that avoids injustice to the cross-defendant: SCI Operations Pty Ltd v Trade Practices Commission [1984] FCA 52; 2 FCR 113, at 142-143, per Sweeney J; at 161-162, per Lockhart J; at 184-185, per Sheppard J; Trade Practices Commission v Manfal Pty Ltd (No 3) [1991] FCA 650; 33 FCR 382 (Lee J). That power can be exercised so as to grant leave to the defendant to discontinue its cross-claim, but on condition that it repays the moneys to the cross-defendant. In the present case, had the respondents sought leave to discontinue their claims (as they foreshadowed in their motions of 7 November 2008), the Tribunal may well have decided to grant leave, but on condition that the respondents refund to the cross-defendant the amount paid by it pursuant to the Determination.

102 If a defendant/cross-claimant, having obtained an order against the cross-defendant enforcing the apportionment determination, shows no inclination to proceed with its cross-claim, there may be a question as to whether the Tribunal can force the defendant, against its will, to pursue its cross-claim to a hearing on the merits. But the Tribunal has ample powers under the CP Act to ensure that the cross-claim is finalised one way or another. Moreover, this can be done without undue delay and without prejudicing the position of a cross-defendant who denies the entitlement of the defendant/cross-claimant to retain the moneys paid to it: see CP Act, ss 56(1), (2), (3), 57(1), (2), 59, 61; UCPR Pt 2 r 2.1 (power to give directions), Pt 12, r 12.7 (want of prosecution).

103 It must be remembered that the respondents were only able to utilise the CRP provided for in the DDT Regulation 2001 because they filed cross-claims against the appellant. There is in my opinion nothing surprising in the Tribunal being able to resolve all claims between the respondents and the appellant in the course of determining the cross-claim.

A Construction Argument

104 Mr Watson sought to support the view expressed, obiter, by Handley AJA in Wallaby Grip that a cross-defendant, if it wishes to recover moneys paid to a defendant/cross-claimant under compulsion of law, must institute fresh proceedings in which it bears the burden of proof. Mr Watson did not dispute that cl 44(1) of the DDT Regulation 2001 was limited in the way that I have described. However, he submitted that the language of cll 42(5) and 44(2) implies that the only way a cross-defendant can challenge an apportionment determination is to institute a fresh cross-claim in the Tribunal (as contemplated by s 11(1A) of the DDT Act) or, possibly, fresh proceedings in another court (see the Note to s 11(1A); DDT Regulation 2001, cl 21(8).). The consequence, so Mr Watson argued, was that a cross-defendant can establish its claim to a refund only if it can prove that the apportionment determination overstated the cross-defendant’s true liability to contribute to the plaintiff’s damages.

105 In my opinion, this construction is supported neither by the language of cll 42(5) and 44(2), nor by the limited purposes for which an apportionment determination is binding (cl 44(1)). The qualification in cl 44(2) as to the binding effect of an apportionment determination has two limbs. An apportionment determination is not binding for the purposes of

the subsequent taking, or
the determination by the Tribunal

of a dispute between defendants (including cross-defendants) as to apportionment. The use of the disjunctive and the insertion of a comma after “ taking ” indicate that the apportionment determination is not binding for the purposes of a determination by the Tribunal of an apportionment dispute, regardless of when the dispute is commenced in the Tribunal (subject of course to the operation of s 26 of the Limitation Act 1969). Accordingly, if the dispute takes the form of a cross-claim instituted in the Tribunal before the apportionment determination is made by the Contributions Assessor, the cross-claim will ultimately be determined on the merits in accordance with the usual principles applicable to contribution claims uninfluenced by the apportionment determination. For the reasons I have given, if the defendant/cross-claimant fails to prove its case, the foundation for it retaining the benefit of moneys paid by the cross-defendant pursuant to the apportionment determination is removed. In these circumstances, the Tribunal can make an order giving effect to the cross-defendant’s right to recover the moneys paid under compulsion of law.

106 Mr Watson also relied on the costs sanction provided by cl 44(3). This provision applies where the defendant (or cross-defendant) disputes the contribution that it is liable to make to the damages, but the Tribunal’s judgment does not materially advance the defendant’s position. Clause 44(3) is clearly designed to create an incentive for each defendant and cross-defendant to accept the apportionment determination made by the Contributions Assessor and not to seek a better outcome in the Tribunal. But that incentive does not mean that Div 5 should be construed as creating a quite different mechanism for discouraging challenges by cross-defendants, namely reversing the usual burden of proof in contribution proceedings. On the contrary, the costs sanction provided by cl 44(3) suggests that if the drafter had intended the cross-defendant to bear the burden of proof in contribution proceedings determined by the Tribunal, Div 5 would have said so.

Interim Payments

107 So far I have not referred to Part 6 Div 5 of the CP Act, which neither party mentioned it in their submissions. Section 82(1) of the CP Act provides that in any proceedings for the recovery of damages, the Court (or Tribunal) may order a defendant in the proceedings to make one or more payments to the plaintiff as part of the damages sought to be recovered in the proceedings. An order can be made only in the application of a plaintiff and only against a defendant: s 82(2). However, “plaintiff” includes cross-claimant and “defendant” includes cross-defendant: s 3.

108 The limitations on the making of an order for interim payment are such that Part 6 Div 5 is unlikely to be a suitable mechanism for giving effect to an apportionment determination. In particular, the Tribunal is not to make an order for interim payments unless satisfied that if the proceedings went to trial, the plaintiff/cross-claimant would obtain judgment for “substantial damages” against the defendant/cross-defendant: s 82(3)(c).

109 Nonetheless, it is worth noting that where the procedure is utilised and the defendant/cross-defendant makes interim payments, the Tribunal has power to make a variety of orders. These include orders requiring the cross-claimant to repay all or part of the interim payments: s 84(1), (2)(c). Such orders can be made when the Tribunal makes final orders or grants the cross-claimant leave to discontinue the cross-claim: s 84(3)(a), (b). The Tribunal can also make orders on the application of a party at any stage of the proceedings: s 84(3)(c).

110 The significance of this statutory regime for present purposes is that the Tribunal is given power to order the cross-claimant to repay the interim payments in the course of the cross-claim. Moreover, there is nothing to indicate that the cross-defendant bears the onus of proving its entitlement to a refund. It would seem to be odd if this is the effect of a regime under which interim payments can be ordered only on a showing that the cross-claimant will recover substantial damages at trial, yet is not the effect of the CRP, where across-claimant is entitled to rely on a “rough and ready” apportionment determination by a contributions Assessor to obtain an interim payment.

2005 Order

111 Both parties referred to cl 4(4) of Sch 1 to the 2005 Order. It states that an apportionment determination by a Contributions Assessor determines the claimant’s case “with judgments as to apportionment to automatically follow the final determination by entry of judgment”. Some time was spent in argument attempting to discern the meaning of this passage and whether it modifies the effect of cll 42 and 44 of the DDT Regulation 2001.

112 Clause 4(4) of Sch 1 to the 2005 Order has no effect on cll 42 and 44. The 2005 Order was made by the Attorney-General pursuant to the power conferred by cl 42(2)(b) of the DDT Regulation2001 to publish orders providing for standard presumptions as to apportionment. The operative part of the 2005 Order is cl 5 of Sch 1 which sets out the standard presumptions to be applied by Contributions Assessors. The balance of the 2005 Order simply summarises the effect of the relevant legislation and regulations for information. The summary cannot affect the correct construction of the DDT Regulation2001.

CONCLUSION

113 In giving judgment for each of the respondents on the basis of the apportionment determination, Kearns J accepted (at [29]) that the judgments were interim in character and were given for a limited purpose. His Honour considered that a final judgment would have to await a hearing on the merits, but that the effect of the interim judgment would be to throw the onus on the appellant to prove its case on the merits. He also considered it to be “incongruous” to require the respondents, who were prepared to accept the assessment and had no interest in undertaking litigation, to “pursue litigation to satisfy somebody else’s interest”.

114 For the reasons I have given, an order for the payment of money to give effect to an apportionment determination does not cast an onus on a cross-defendant which denies that it is liable to contribute to the plaintiff’s damages or is not liable to the extent specified in the apportionment determination. Nor is it anomalous for the defendant/cross-claimant to be required to pursue the cross-claim if it wishes to retain moneys paid to it by the cross-defendant as an interim basis under compulsion of law. In my respectful opinion, it is not correct to say that the defendant, having obtained an order enforcing the apportionment determination, has no interest in pursuing the cross-claim. Unless it does so, the foundation for its claim to retain permanently the benefit of moneys paid to it on an interim basis, under compulsion of law, will be wanting.

115 It is not entirely clear what legal effect the orders made by Kearns J were intended to have beyond the effect of the earlier orders made by O’Meally P, which were duly satisfied by the appellant. If they simply duplicated the earlier orders (as Mr Watson suggested), they added nothing and were therefore superfluous. The decision of Kearns J would be erroneous in point of law because neither the DDT Act nor the DDT Regulation 2001 authorised his Honour to enter judgment for the respondents, where the judgment did no more than repeat the orders already made by O’Meally P. Not only was there no application for leave to appeal against those orders, but the appellant had satisfied the orders.

116 I think, however, that the better view is that the orders made by Kearns J were intended to go further than the orders made by O’Meally P and to dispose finally of the cross-claims. Judgment was entered in favour of the respondents without a hearing on the merits of the cross-claim and without consideration of whether the respondents should be given leave to discontinue the cross-claims. Kearns J proceeded on the basis that entering judgment for the respondents in this manner would require the appellant, if it wished to seek repayment of the moneys paid by it under compulsion of the earlier orders made by O’Meally P, to institute fresh proceedings in which it would bear the burden of proof. His Honour also proceeded on the basis that the respondents were entitled to retain permanently the benefit of the payments made by the appellant, without proving their case on the merits reaching agreement with the appellant or seeking leave to discontinue the proceedings, subject only to the possibility of the appellant instituting fresh proceedings.

117 In these circumstances, the decision of Kearns J was erroneous in point of law since it proceeded on a mistaken construction of cll 42 and 44 of the DDT Regulation 2001.

118 It is not necessary to address the appellant’s submissions or waiver and estoppel. However, in the absence of evidence of detrimental reliance, it is not easy to see how a claim of estoppel could be made out. Nor is it clear, whatever the procedural difficulties with the course adopted, that the respondents pursued inconsistent remedies so as to attract the doctrine of waiver.

Cross-Claims Between Original Defendants

119 The present appeal involves cross-claims between the respondents, the original defendants in the proceedings instituted by the plaintiff, and the appellant, a cross-defendant but not an original defendant in the proceedings. The appellant was compelled to submit to the CRP because it had been joined as a cross-defendant.

120 The position where original defendants are the subject of an apportionment determination was not the subject of argument. Division 5 of Part 4 of the DDT Regulation2001 would not have any different meaning when applied to cross-claims between original defendants. The procedural mechanisms for resolving such claims will need to take into account the procedural requirements applicable to cross-claims between original defendants: see cl 21(2)-(4), (8), 41(1), 42(2). The working out of these matters should await a case in which they arise.

ORDERS

121 The appeal should be allowed. The orders made by Judge Kearns should be set aside. The proceedings should be remitted to the Tribunal for determination or the making of orders consistent with this judgment. The respondents should pay the appellant’s costs of the appeal, including the application for leave to appeal. The respondents, if otherwise qualified, should have a certificate under the Suitors’ Fund Act 1951.

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