QBE Insurance (Australia) Ltd v Wallaby Grip Ltd
[2007] NSWCA 43
•12 March 2007
New South Wales
Court of Appeal
CITATION: QBE Insurance (Australia) Ltd v Wallaby Grip Ltd & Ors [2007] NSWCA 43
This decision has been amended. Please see the end of the judgment for a list of the amendments.HEARING DATE(S): 26 February 2007
JUDGMENT DATE:
12 March 2007JUDGMENT OF: Hodgson JA at 1; Campbell JA at 4; Handley AJA at 5 DECISION: 1. Leave to appeal granted. The notice of appeal is to be filed and served within seven days.; 2. Appeal allowed with costs.; 3. Orders of the President of the Dust Diseases Tribunal of 18 August 2006 set aside.; 4. The respondents’ notice of motion of 18 August 2006 is remitted to a judge of the Dust Diseases Tribunal, other than the President, to be heard and determined according to law.; 5. The respondents are to have a certificate under the Suitors’ Fund Act 1951 if qualified. CATCHWORDS: CONCURRENT TORTFEASORS – contribution – summary provisional determination – later judicial determination – remedy of cross-defendant who overpaid - DUST DISEASES TRIBUNAL – claims resolution process – settlement of plaintiff’s claim – whether Div 5 apportionment should cease to apply – relevant considerations LEGISLATION CITED: Dust Diseases Tribunal Act 1989
Dust Diseases Tribunal Regulation 2001CASES CITED: Andrews v Nominal Defendant (1962) 63 SR (NSW) 110
BHP Billiton Ltd v Schultz (2004) 221 CLR 400
Bitumen & Oil Refineries (Australia) Ltd v Commissioner for Government Transport (1955) 92 CLR 200
Brambles Constructions Pty Ltd v Helmers (1966) 114 CLR 213
Croston v Vaughan [1938] 1 KB 540
Harvey v Phillips (1956) 95 CLR 235
Speirs v Caledonian Collieries Ltd (1956) 57 SR (NSW) 483
Wenkart v Pitman (1998) 46 NSWLR 502PARTIES: QBE Insurance (Australia) Ltd (Claimant)
Wallaby Grip Ltd (First Opponent)
Wallaby Grip (BAE) Pty Ltd (In liq) (Second Opponent)
Burroughs Wellcome & Co (Australia) Pty Ltd (formerly known as Peerless Engineering Pty Ltd) (Third Opponent)FILE NUMBER(S): CA 40546 of 2006 COUNSEL: T Parker SC/D Miller (Claimant)
A Scotting/A Cassels (First and Second Opponents)
No appearance (Third Opponent)SOLICITORS: Moray & Agnew (Claimant)
Middletons (First and Second Opponents)
Hicksons (Third Opponent)LOWER COURT JURISDICTION: Dust Diseases Tribunal LOWER COURT FILE NUMBER(S): DDT 6082 of 2006/1 LOWER COURT JUDICIAL OFFICER: O'Meally P LOWER COURT DATE OF DECISION: 18 August 2006 LOWER COURT MEDIUM NEUTRAL CITATION: [2006] NSWDDT 28
CA 40546 of 2006
12 MARCH 2007HODGSON JA
CAMPBELL JA
HANDLEY AJA
CONCURRENT TORTFEASORS – contribution – summary provisional determination – later judicial determination – remedy of cross-defendant who overpaid
DUST DISEASES TRIBUNAL – claims resolution process – settlement of plaintiff’s claim – whether Div 5 apportionment should cease to apply – relevant considerations
In April 2006 the plaintiff brought proceedings in the Dust Diseases Tribunal to recover damages for a disease caused by exposure to asbestos. The claims resolution process established by Pt 4 of the Dust Diseases Tribunal Regulation 2001 automatically applied. The only original defendant joined the opponents, within the short time limits, as cross-defendants to claim contribution. QBE, the relevant insurer of two dissolved corporations, was later joined by the plaintiff as a defendant and attempted to sue the opponents, as cross-defendants, for contribution, but arguably its cross-claims were out of time and invalid.
The plaintiff’s condition suddenly deteriorated and on 8 August the President removed his claim from the claims resolution process and fixed an early hearing date, but directed that the Div 5 of Pt 4 dealing with apportionment should continue to apply. This provided for the summary assessment of contributions by a Contributions Assessor within strict time limits, but did not prevent the judicial determination of the contributions in due course.
The defendants settled the plaintiff’s claim on the second day of the hearing and the cross-defendants then applied for an order that Div 5 cease to apply to the cross-claims. On 18 August the President made that order over the opposition of the defendants including QBE, which sought leave to appeal. HELD: (1) QBE had standing to challenge the order because Div 5 had been binding on all defendants and cross-defendants; (2) The summary determination of a Contributions Assessor would have been immediately enforceable against the cross-defendants; (3) The President’s exercise of discretion miscarried because he had taken irrelevant considerations into account and not taken into account relevant considerations; (4) Leave to appeal should be granted and the appeal allowed; (5) Semble a cross-defendant who considers that its contribution as determined by a Contributions Assessor was excessive cannot recover the excess it has paid under s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 but must bring a claim or cross-claim for restitution.
1. Leave to appeal granted. The notice of appeal is to be filed and served within seven days.
2. Appeal allowed with costs.
3. Orders of the President of the Dust Diseases Tribunal of 18 August 2006 set aside.
4. The respondents’ notice of motion of 18 August 2006 is remitted to a judge of the Dust Diseases Tribunal, other than the President, to be heard and determined according to law.
5. The respondents are to have a certificate under the Suitors’ Fund Act 1951 if qualified.
CA 40546 of 2006
12 MARCH 2007HODGSON JA
CAMPBELL JA
HANDLEY AJA
1 HODGSON JA: I agree with Handley AJA.
2 I would add to Handley AJA’s reasons the following further consideration. 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.
3 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.
4 CAMPBELL JA: I agree with Handley AJA.
5 HANDLEY AJA: This application for leave to appeal, which was heard on a final basis, sought the reversal of an order of the President of the Dust Diseases Tribunal under cl 18(7) of the Dust Diseases Tribunal Regulation 2001. He ordered, on the application of the opponents, that the contribution claims against them consequent on a mesothelioma claim be removed from the Claims resolution process under Pt 4 Div 5 of the Regulation.
6 On 3 April 2006 Kenneth Linquist filed a statement of claim in the Tribunal naming Peerless Engineering Pty Ltd, now Burroughs Wellcome & Co (Australia) Pty Ltd (Peerless), as first defendant, Drysys Pty Ltd as second defendant and Leigh Mardon Pty Ltd as third defendant. The action could not proceed against the second and third defendants because they had been dissolved. On 13 July the plaintiff amended his statement of claim to substitute QBE which was the relevant insurer.
7 Peerless, the only original defendant (Reg cl 11(1)), filed a cross-claim seeking contribution from Wallaby Grip Pty Ltd and Wallaby Grip (BAE) Pty Ltd (the opponents) within the strict time limit of 10 business days in malignant claims under cl 21(2), (3), and (4) of the Regulation. This may have expired on 13 July, the day the plaintiff added QBE as a defendant but the time within which QBE could file a cross-claim was not extended by the Regulation.
8 It seems that QBE thus lost any right to join its cross-claims in the plaintiff’s action, but it could still bring those claims in separate proceedings: cl 21(8). In fact QBE did file cross-claims against the opponents which argued that they were invalid. The President disposed of the opponent’s application without ruling on the validity of QBE’s cross-claims and this Court can do likewise.
9 Part 4 automatically applies to a claim in respect of an asbestos related condition and any cross-claim (cl 12). It requires all parties to exchange documents and information and participate in mediation.
10 The proceedings were being conducted in accordance with Pt 4 when the plaintiff’s condition suddenly deteriorated and an urgent hearing became necessary. On 8 August the President made orders that the claim be removed from the claims resolution process and that the plaintiff’s evidence be taken at his home on 16 August. Counsel for the opponents obtained leave for his clients to attend and cross-examine.
11 Counsel for Peerless then made an application under cl 18(7) for an order that Div 5 Apportionment continue to apply. Counsel for QBE consented but counsel for the opponents said he had no instructions and was unable to consent. The President then made the following order:
- “On the application of the first defendant and with the consent of the second defendant pursuant to cl 18(7) of the Dust Diseases Tribunal Regulation Div 5 of Pt 4 of the said Regulation continues to apply. In the event the first defendant and the cross-defendants fail, on or before 17 August 2006 to agree upon the contribution of each, the registrar is forthwith to appoint a Contributions Assessor.”
12 Clause 18(7) relevantly provides:
(a) If the Tribunal does so order:“If a claim is removed from the claims resolution process because the Tribunal determines under this clause that the claim is urgent, the Tribunal must consider whether to order the application to the claim of the provisions of Division … 5 (Apportionment), and:
(i) Those provisions apply as if the claim were still subject to the claims resolution process …, and
(iii) The Tribunal must by its order specify the period within which mediation or apportionment under the applied provisions must be completed, or(ii) The Tribunal may, in ordering the application of those provisions to the claim, order that those provisions apply subject to specified modifications, and
(b) If the Tribunal does not so order despite an application for such an order by a party to the claim, the Tribunal must give its reasons for not so ordering.”
13 On 16 August the evidence of the plaintiff and his wife was taken before the President and they were cross-examined. When the hearing resumed on the 17th the President was told that the plaintiff’s case had been settled and by consent verdict and judgment were entered against the defendants jointly and severally for an agreed amount. Counsel for the opponents then applied to discharge the President’s order that Div 5 continue to apply.
14 The President directed the opponents to file a notice of motion and adjourned the proceedings to the following day when after full argument he delivered an extemporary judgment and made the order. The text of his judgment when released on 1 September was substantially longer than his oral reasons and included additional material.
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.
16 Clause 40 provides that a reference in Division 5 to a defendant includes a reference to a cross-defendant. Clause 41 “requires” defendants to agree on their contributions, in the case of malignant claims, within 35 days after service of the plaintiff’s statement of particulars on the last of the original defendants. If agreement is not reached cl 42(1) requires the Registrar to refer the matter to a Contributions Assessor for determination. Clause 42(2) provides:
“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:
(b) standard presumptions as to apportionment determined by the Minister for the purposes of this clause by order published in the Gazette.”(a) the plaintiff’s statement of particulars and the defendants’ replies on the claim, and
17 In the case of malignant claims the Assessor’s determination is to be made within 40 business days (cl 42(3)). Clause 42(5) provides:
- “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 sub-clause does not prevent the subsequent taking (sic), or determination by the Tribunal of a dispute between defendants as to apportionment.”
18 Clause 43 provides for the appointment of a panel of Assessors and their remuneration. Clause 44 provides:
“(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 (sic), 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.
(5) For the purposes of this clause a 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.”(4) …
19 The President rejected the opponents’ submission that settlement of the plaintiff’s claim terminated the claims resolution procedure in Div 5. Counsel for the opponents did not renew this submission before us and there is no need to consider it.
20 The President rejected submissions for Peerless and QBE that the opponents had acquiesced in the order that Div 5 continue to apply, and the defendants, having settled the plaintiff’s claim, would be prejudiced if that order were revoked. He said: “there is nothing to warrant the conclusion that the plaintiff’s case would not have settled after the claim [was] removed from the claims resolution process”.
21 The opponents, who were manufacturers and suppliers of asbestos products, did not dispute that there was evidence, which, if accepted, made them liable to contribute to the damages recovered by the plaintiff. However they asserted that their liability would not be as great as an Assessor would determine.
22 The considerations which the President said moved him to make the order were (paras [32]-[33]):
- “Because the extent and perhaps even the fact of the cross-defendant's liability to contribute to the plaintiff's damages is disputed it will be necessary, unless the case is resolved extracurially, to litigate the cross-claim. In my view that is sufficient reason for ordering that Div 5 should not apply. To submit the cross-claim for determination by a Contributions Assessor would only increase costs and possibly cause delay … Moreover, the object of achieving early resolution of the plaintiff’s claim was achieved when the plaintiff and the defendants settled the action. Had the plaintiff’s claim not been resolved, different considerations would apply.”
23 Mr Parker SC who appeared with Mr Miller for the claimant identified the following errors which in his submission entitled this Court to intervene -
(i) The failure of the President to deliver his full reasons before pronouncing oral orders on 18 August, as evidenced by the substantially fuller reasons delivered in writing on 1 September. In the case of an inferior court this is an error of law: Palmer v Clarke (1989) 19 NSWLR 158, 173.
(iii) Treating the settlement of the plaintiff’s claim as a relevant consideration in favour of making the order when it was a consideration against doing so.(ii) Treating as a relevant consideration the fact that the opponents’ liability was disputed and litigation was inevitable so that a summary determination under Div 5 would only increase costs and possibly cause delay.
24 The appeal to this Court is limited to questions of law. If legal error affecting the exercise of a judicial discretion is identified this Court is not entitled to re-exercise the discretion but must remit that question to the Tribunal: Dust Diseases Tribunal Act 1989 s 32(1), (2).
25 Mr Scotting, who appeared with Mr Cassel for the opponents acknowledged that the failure of the President to give his full reasons before making the order constituted legal error but contended that leave to appeal should be refused because no injustice had been occasioned. He also submitted that it would be futile to remit the matter if that were the only error. There is no need to consider either the concession or those submissions because, in my judgment, the summons should succeed on other grounds.
26 Mr Scotting took preliminary objections to the standing of QBE. Its cross-claims against the opponents were said to be out of time so that cl 21(8) of the Regulation prevented them being determined in the proceedings and it could not invoke the summary procedure under Div 5.
27 The second objection under cl 44(1) was that a summary determination of the opponents’ contributions would now be futile. That clause provides:
- “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.”
28 The submission was that the plaintiff’s claim had already been settled, and his damages paid, so that a summary determination at this stage would be without legal effect. This was particularly relevant in the case of QBE because clause 21(8) prevented its cross-claims being “made in the proceedings”.
29 A related submission was that in the absence of valid cross-claims QBE would not be a party to any summary determination and could not enforce it.
30 These submissions fail to give proper effect to cl 40 which provides that a reference in Div 5 to a defendant includes a reference to a cross-defendant. Clause 42(2) provides that the Assessor “is to determine the contribution that each defendant is liable to make”, and cl 44(1) makes that determination “conclusively binding on the defendants”. Although a single defendant who fails to file and serve a cross-claim within time will be barred by cl 21(8) from pursuing a cross-claim in the proceedings brought by the plaintiff, this did not prevent Peerless enforcing its cross-claims, or prevent the opponents being defendants for the purposes of Div 5.
31 There must be a single determination of the contributions which the defendants and cross-defendants are bound to make. There cannot be one determination for the benefit of Peerless binding on QBE and the opponents and another for the benefit of Peerless as between it and QBE. Clause 44(1) provides that the single determination is “conclusively binding on the defendants”, that is on the defendants and cross-defendants (cl 40).
32 The reference in cl 44(1) to the apportionment being conclusively binding “for the purposes … of … payment of the plaintiff’s damages” does not have the restricted meaning suggested. In the ordinary course a judgment in favour of a plaintiff in a mesothelioma case will be entered against the defendants who are liable for the full amount of the plaintiff’s damages without reference to any apportionment between those defendants or any contribution recoverable from cross-defendants: Speirs v Caledonian Collieries Ltd (1956) 57 SR (NSW) 483.
33 If a defendant’s contribution claims succeed there will be a verdict for the defendant against the cross-defendants for their contributions but the defendant will not be entitled to enter judgment until the plaintiff’s judgment has been satisfied: Bitumen & Oil Refineries (Australia) Ltd v Commissioner for Government Transport (1955) 92 CLR 200, 210-11; Andrews v Nominal Defendant (1962) 63 SR (NSW) 110, 119-120. In appropriate circumstances an immediately enforceable order can be made in equity although the plaintiff’s judgment has not been satisfied, and a cross-defendant can also be ordered to make a payment direct to a plaintiff: Wenkart v Pitman (1998) 46 NSWLR 502.
34 It follows 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.
35 The question of contribution could have been brought before the Tribunal pursuant to cross-claims filed within time by all defendants on the record. But for cl 21(8) contribution could also have been determined by a trial judge as between the defendants on the record pursuant to an oral application without formal cross-claims being filed: Croston v Vaughan [1938] 1 KB 540 CA, 553-4, 559, 564-5. Division 5 permits contribution to be determined by an Assessor without all defendants having served cross-claims on each other and on all cross-defendants.
36 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.
37 If the opponents, 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 the opponents.
38 The opponents although nominally in the position of defendants would in reality be plaintiffs seeking a refund of contribution they had overpaid.
39 They would not be within s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946. The word “liable” where it first appears in that provision means liable by judgment: Bitumen & Oil Refineries (1955) 92 CLR 200, 208, 212; or settlement: ibid at 212; Brambles Constructions Pty Ltd v Helmers (1966) 114 CLR 213, 219. The opponents 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).
40 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.
41 The preliminary objections must be overruled, and the Court must consider the claimant’s challenges to the reasons of the President (above para [18]) for making the order.
42 The fact that “the extent and perhaps even the fact of the cross-defendants liability to contribute to the plaintiff’s damages is disputed” cannot be relevant considerations. The Division 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”. The possibility of a dispute as to liablity which did not rise above conjecture (“perhaps even”) fell well short of discharging the opponents’ onus. They called no evidence.
43 The President seems to have acknowledged as much when he said: “had the plaintiff’s claim not been resolved, different considerations would apply”. However if it would be good enough for the procedure to be maintained for the benefit of the plaintiff, it was good enough for it to be maintained for the benefit of the defendants on the record. The Regulation does not authorise this form of discrimination between plaintiffs and defendants. Compare BHP Billiton Ltd v Schultz (2004) 221 CLR 400 paras [26] and [258].
44 It was mere speculation for the President to conclude that these parties would inevitably proceed to a full trial of the contribution claims. The effect of a determination in promoting settlement before a full trial could not be discounted.
45 The President said that the “only” result of applying the Div 5 procedure would be increased costs and delay. There would be a slight delay before the Registrar could appoint an Assessor and send him the file, and further delay, up to 40 days (cl 42(3)) before the summary determination was made. However these delays were so insignificant as to be utterly irrelevant. Immediate delay and expense are inevitable results of applying the Div 5 procedure and cannot be a relevant ground for disapplying it. The foreseeable delay and additional expense caused by ordering, over opposition, that Div 5 be disapplied was always likely to be far greater.
46 Moreover the Div 5 procedure would not “only” have those results. It would bring about a binding determination of the opponents’ 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 his Honour overlooked.
47 His Honour 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.
48 The President said that “There is nothing to warrant the conclusion of the plaintiff’s case would not have settled after the [contribution] claim[s] were removed from the claims resolution process”.
49 There was evidence before the President relevant to that question which he did not refer to. Carlo Fini, the solicitor for Peerless, in his affidavit of 18 August, admitted without objection and not tested in cross-examination, said (para 5) that the settlement negotiations on 16 August between Peerless and QBE, and the instructions he sought from Peerless and its insurer “were on the basis that the orders of his Honour O’Meally P made on 8 August 2006 applied and in particular to the effect that the contributions assessment provisions of the claims resolution process applied to the cross-claims including the cross-claim of the first defendant”.
50 Mr Fini said (para 6) that in the negotiations with the plaintiff’s lawyers “the defendants relied on the orders of his Honour O’Meally P made on 8 August 2006 and in particular the order … that the contributions assessment provisions of the claims resolution process applied to the cross-claims including the cross-claim of the first defendant”.
51 Mr Fini did not say that the plaintiff’s case would not have settled if the contribution claims had already been removed from the Div 5 procedure. In para 7 he said:
- “The first and second defendants had not agreed apportionment among themselves. Both the first and second defendants at the time of settlement negotiations were prepared to abide the decision of a contributions assessor and to reserve their rights to challenge such decision in accordance with the Dust Diseases Tribunal Regulation 2001.”
52 Thus the availability of the summary procedure facilitated the settlement with the plaintiff although it left each defendant liable to immediate enforcement of the whole judgment. The defendants may have been reluctant to settle and run the risk that one of them would have to satisfy the judgment and wait to recover the contributions.
53 Mr Fini’s evidence established that both defendants relied on the President’s order of 8 August in their dealings with the plaintiff and each other. This was a most material consideration in the exercise of the President’s discretion. Courts expect litigants to obey their orders and rely on them and they should be scrupulous in protecting the reasonable expectations of litigants who do so.
54 The opponents said and did nothing to challenge the President’s order of 8 August until after orders had been made giving effect to the settlement (affidavit of Lianne Shing para 7).
55 The opponents’ conduct in standing by in silence on 17 August when the settlement was announced, until it was perfected, was a powerful consideration against making the order.
56 The President said (para [29]):
- “It has also been submitted that the defendants will suffer detriment if the cross-defendants were permitted to change their position. I do not see that the cross-defendants have changed their position. They neither consented to nor acquiesced in the order of 8 August 2006.”
57 This misunderstood the true position. The opponents could not unilaterally change their position because they were bound by the order of 8 August.
58 There was evidence that the defendants would suffer detriment “if the cross-defendants were permitted”, that is by the Court, “to change their position”.
59 The fact that the opponents neither consented to nor acquiesced in the order of 8 August was not relevant. That order bound them until they obtained an order removing them from Div 5. They could not change their position, but the Court was being asked to do that. The President’s reasons on this point show that he asked himself the wrong question.
60 He said that different considerations would have applied if the opponents had made their application before the plaintiff’s claim was settled. However they could and should have done this as soon as they had the necessary instructions. They should certainly have made their position clear when they became aware of the settlement negotiations and especially when they knew that the case had been settled.
61 The knowledge that the opponents intended to apply for the discharge of the order may have caused the settlement to break down. The risk that Div 5 might be disapplied may have been a reason for refusing to enforce the settlement at least until the opponents’ application had been determined: compare Harvey v Phillips (1956) 95 CLR 235, 243.
62 The opponents should not be in a better position than they would have been in had they made their application earlier and the President should have determined their application on that basis. This was a highly relevant consideration which he failed to consider.
63 In my judgment the President’s discretionary decision was vitiated by the legal errors that have been identified and this Court must intervene. The following orders should be made:
1. Leave to appeal granted. The notice of appeal is to be filed and served within seven days.
2. Appeal allowed with costs.
3. Orders of the President of the Dust Diseases Tribunal of 18 August 2006 set aside.
5. The respondents are to have a certificate under the Suitors’ Fund Act 1951 if qualified.4. The respondents’ notice of motion of 18 August 2006 is remitted to a judge of the Dust Diseases Tribunal, other than the President, to be heard and determined according to law.
12/03/2007 - Name of solicitor for Peerless amended - Paragraph(s) [49], [50], [51], [53]
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