(Re: Mowbray) Brambles Australia Limited v British and American Tobacco Australia Services Limited

[2005] NSWDDT 8

Reported Decision (2005) 2 DDCR 303

Dust Diseases Tribunal

of New South Wales

CITATION:	(Re: Mowbray) Brambles Australia Limited v British & American Tobacco Australia Services Limited [2005] NSWDDT 8
PARTIES:	Brambles Australia Limited British & American Tobacco Australia Services Limited
MATTER NUMBER(S):	176 of 2001/1
JUDGMENT OF:	Curtis J at 1
CATCHWORDS:	:- Notice of Motion Law Reform (Miscellaneous Provisions) Act 1946 s 5 (1) (C) "liable" consent judgment
LEGISLATION CITED:	Law Reform (Miscellaneous Provisions) Act 1946
CASES CITED:	Bitumen Oil Refineries (Australia) Ltd v Commissioner for Govt Transport (1954-1955) 92 CLR 200; Brambles Construction v Helmers (1965-1966) 114 CLR 213; Wallaby Grip Ltd v SRA (2001) 21 NSWCCR 650; James Hardie and Coy Pty Ltd v Seltsam Pty Ltd (1998-1999) 196 CLR 53; Woolworths (WA) Pty Ltd v Berkeley Challenge Pty Ltd (2004) 28 WAR 540; Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574; Stott v West Yorkshire Road Car Co Ltd and Ors (1971) 2 QB 651; Bayliss v Waugh (1962) NZLR 42; Baker v Joppich and Bitumax Pty Ltd [1980] 25 SASR 468; John Holland v Jordin (1985) 36 NTLR 1; Bawden v Saint (1988) 141 LSJS 306; Ballina Shire Council v Volk (1989) 18 NSWLR 1; Deloitte Touche Tohmatsu v Cridlands Pty Ltd [2003] 204 ALR 281; Lawrence v Faulkner (2003) 12 TASR 15; James P Corry and Co Ltd v Clarke [1967] NI 62; George Wimpey and Co Ltd v British Overseas Airways Corporation [1955] AC 169
DATES OF HEARING:	9 & 10 March 2005
DATE OF JUDGMENT:	03/30/2005
LEGAL REPRESENTATIVES:	FOR CROSS-DEFENDANT (APPLICANT): Mr D F R Beach SC with Mr M F Wheelahan SC and Ms R Sofroniou FOR CROSS-CLAIMANT (RESPONDENT): Mr B C Oslington QC with Mr G J Parker and Mr I L Gritisci

JUDGMENT:

1. By amended Notice of Motion dated 10 March 2005 British and American Tobacco Australia Services Ltd (BATAS) seeks the following orders, renumbered for convenience:

(1) that pursuant to Pt 31 r2 of the Supreme Court Rules there be a separate trial of the questions:
(a) whether the cross-claimant can rely upon the judgment, entered by consent against Brambles on 27 February 2002 in favour of the plaintiff, to establish that for the purposes of s5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 the cross claimant was a tortfeasor liable in respect of any damage suffered by the late Mr Allan Mowbray;

(b) whether the cross-claimant must establish, independently of that judgment, that it was a tortfeasor liable in respect of damage suffered by the late Mr Allan Mowbray so that, if Mr Mowbray’s claim had been fought out, Brambles would have been held responsible in law and liable to pay in whole or in part for such damage; and

(2) that these questions be answered as follows:
(a) no;

(b) yes;

(3) that the judgment be set aside or alternatively be varied or amended so as to provide that the cross-claimant may not rely upon it for the purposes of establishing that it was a tortfeasor liable in respect of any damage suffered by the late Mr Allan Mowbray.

(4) consequent upon orders sought above that:

(a) par 3.2 of the fourth amended cross-claim be struck out; and

(b) the cross-claimant have leave to make consequential amendments to the fourth amended cross-claim.

2. Because the trial should not commence until the pleadings identify clearly that which Brambles Australia Ltd (Brambles) must prove in order to succeed on its cross-claim, it is appropriate that the issue of law raised be determined prior to and separately from the trial of the cross-claim and I have so ruled in the course of argument.

The Effect of the Judgment

3. The question for determination is deceptively simple:

What facts are necessary or sufficient to satisfy the condition that a claimant pursuant to s5 of the Law Reform (Miscellaneous Provisions) Act 1946 be a “tortfeasor liable in respect of that damage”?

(a) Is it necessary that the claimant prove that the damage resulted from a breach of duty owed by him to the person suffering the damage?

(b) Is it sufficient that the claimant prove that he is, by his consent, liable in judgment to a plaintiff in proceedings in which the plaintiff alleges breach of duty causing the damage?

4. S5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946, reads:

S5(1) Where damage is suffered by any person as a result of a tort (whether a crime or not)

(a) . . .

(b). . .

(c) any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is, or would if sued have been, liable in respect of the same damage,. . .

5. BATAS submits that in the terms of the statute a claimant for contribution must separately prove (a) that he is a tortfeasor, that he caused the damage by tortious act or omission and, (b) that he has become liable to pay to the person who suffered the damage a sum certain in respect of that damage.

6. Accepting that (a) “one of the methods by which a tortfeasor may demonstrate his liability in respect of the damage is by proof of the judgment which he has suffered at the hands of the injured party who has sued him in respect of the damage” (Bitumen and Oil Refineries (Australia) Ltd v Commissioner for Government Transport [1954-1955] 92 CLR 200, Brambles Construction Pty Ltd v Helmers (1965-1966) 114 CLR 213 at 218), and (b) that “the court deciding the application for contribution must accept an earlier judgment against the now plaintiff tortfeasor as conclusive as to the existence and the amount of liability of the plaintiff claiming contribution” (Wallaby Grip Ltd v SRA (2001) 21 NSWCCR), BATAS submits that a consent judgment does not have the same force as a judgment following a trial on the merits.

7. Such an argument was rejected by the High Court in James Hardie and Coy Pty Ltd v Seltsam Pty Ltd (1998-1999) 196 CLR 53, in relation to the force of a consent judgment in favour of a defendant and the meaning of the word “liable” where it secondly appears in s5(1)(c); (a tortfeasor who is, or would if sued have been liable).

8. Gaudron and Gummow JJ in a joint judgment there said that in applying s5(1)(c):

the first step is to identify those upon whom the new statutory right is conferred and the time from which that conferral is operative. This is answered by the construction placed by authority upon the opening words of par (c) of s5(1). The reference to the right of a tortfeasor who is “liable in respect of…damage” to recover contribution is as Windeyer J put it “to a person whose liability as a tortfeasor has been ascertained, ordinarily by judgment , perhaps in some cases in some other way” (Brambles Constructions Pty Ltd v Helmers (1966) 114 CLR 213 at 221). The scheme of the legislation is that, as his Honour said, a “person thus found liable may seek relief from having to bear the whole burden (at 65 , emphasis added) .

9. Both Bitumen and Oil and Wallaby Grip involved judgments entered after a trial upon the merits. Each case involved disputed facts, upon which a court differently constituted with the advantage of additional evidence, may have fairly reached a different conclusion. Although the exercise is one of statutory construction, the result in each case is only explicable in legal theory by according to the judgment, as between the cross-claimant and the cross-defendant, a status equivalent to res judicata, because neither party to the cross-claim was permitted to re-agitate the factual basis upon which the cross-claimant was found liable for the damage to the plaintiff.

10. Gaudron and Gummow JJ in James Hardie, having cited a passage from the judgment of the Court in Bitumen and Oil which included the statement that “A decision that the liability imposed by the previous judgment is a liability which par (c) of subs (1) contemplated” went on to say that in the instant case:

The plaintiff’s cause of action against the respondent merged in the [consent] judgment, thereby destroying its independent existence. The status of the Tribunal as a court of record was such that the circumstance that the judgment in favour of the respondent was entered by consent renders it no less effective to absolve the respondent from liability to the plaintiff (at 69) .

11. Callinan J said “the final judgment which is a judgment of a court of record is no less a judgment of that kind because it was a judgment entered by consent” and “the appellant’s attempt to apply to this case the categorical statement in Spencer, Bower, Turner and Handley “Res Judicata” 3rd edition (1966) that “[no] consent judgment or order has any operation against any third person or against any party not shown to have consented” should be rejected” (at 96-97 and 99-100).

12. Consistently with this reasoning, the Full Court of the Supreme Court of Western Australia in Woolworths (WA) Pty Ltd v Berkeley Challenge Pty Ltd [(2004)] 28 WAR 540, held that the cross-defendant could not defeat the cross-claimant’s contribution claim on the ground that the cross-claimant should not have consented to judgment against it because the cross-claimant was not in fact negligent.

13. Murray J, with whom Malcolm CJ and Jenkins J agreed, said:

Nor in my opinion can the respondent now defeat the appellant’s claim in the contribution proceedings by asserting that the appellant should not have consented to judgment against it. The simple fact of the matter is that it did so and it matters not that the judgment against it was by consent. The plaintiff’s cause of action against the appellant merged in the judgment the plaintiff obtained. The appellant’s liability to the plaintiff was thereafter res judicata. It was a tortfeasor liable in respect of the damage suffered by the plaintiff as the result of the tort of negligence committed by the appellant and it therefore has the capacity to seek contribution in respect of the burden of that liability. This is the classic mode of operation of the section: Brambles Constructions Pty Ltd v Helmers (1966) 114 CLR 213 at 221 per Windeyer J.

14. Upon this authority I would conclude that a cross-claimant may rely upon a consent judgment to establish for the purposes of s5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 that he was a tortfeasor liable to the plaintiff and that he need not, independently of that judgment, prove that he was a tortfeasor liable in respect of the plaintiff’s damage.

15. There are however contrary statements of the law. In Thompson v Australian Capital Television Pty Ltd [1996] 186 CLR, Gummow J said at 616:

Authority indicates that the phrase in s11(4) “any other tortfeasor. . .liable” includes a party whose liability has been ascertained upon a settlement whether or not reflected in a consent judgment, and that this is so whether or not in reaching the settlement the party now seeking contribution admitted liability. Nevertheless, the party seeking contribution after such a settlement must be prepared in that proceeding to establish that, if the claim had been fought out, that party would have been held responsible in law and liable to pay in whole or in part for the damage referred to in s11(4). The decision of the English Court of Appeal in Stott v West Yorkshire Car Co [1971 2 QB 651] which established these propositions with respect to the UK Act, has been followed in respect of Australian legislation deriving from it [Bakker v Joppich and Bitumax Pty Ltd [1980] 25 SASR, John Holland v Jordin (1985) 36 NTR 6, Ballina Shire Council Volk (1989) 18 NSWLR 1]. In New Zealand, the decision of the English Court of Appeal was anticipated by McGregor J in Bayliss v Waugh [1962 NZLR 42].

16. In avoidance of this dicta, Brambles argue before me that the cases relied upon by His Honour do not in terms support the proposition that a party whose liability has been ascertained upon entry of a consent judgment must nevertheless prove in contribution proceedings that it was liable to the plaintiff independently of the judgment.

17. The question in Stott v West Yorkshire Road Car Co Ltd and ors (1971) 2 QB 651, was whether a cross-claimant may qualify as a tortfeasor liable to the plaintiff where he had reached accord and satisfaction with the plaintiff upon terms that he did not admit liability.

18. The English Court of Appeal held that he did so qualify although he was not liable to the plaintiff in judgment because the meaning of the word “liable” where first appearing in the statute included “responsible in law” so that a tortfeasor who settled a plaintiff’s claim short of judgment was entitled to sue for contribution.

19. Lord Denning there said:

I am of the opinion that the word liable does mean “responsible in law”. It follows that a tortfeasor is entitled to recover contribution from another tortfeasor (i) when he has been held liable in judgment; (ii) when he has admitted liability; and (iii) when he has settled the action by agreeing to make payment to the injured person, even though, in making the settlement he has not admitted liability. But, of course, when the tortfeasor settles an action [emphasis added] , he cannot claim contribution from the other tortfeasor unless he proves that he himself was “liable”. He must prove therefore, that, if the claim had been fought out, he would have been held responsible in law and liable to pay in whole or in part for the damage. (at 657)

20. Lord Salmon agreeing, added that “in contribution proceedings following a claimant’s settlement with a plaintiff [emphasis added], that [the respondent to the claim] will be fully entitled to raise in their defence to the third party proceedings that the defendants were not to blame at all.”(at 659)

21. Megaw LJ stated:

With great respect, I do not think that the word “liable” where it is first used in s6(1)(c) can be confined [emphasis added] to the meaning “liable in judgment”. No doubt if the alleged joint tortfeasor does not admit the existence of liability on the part of the defendant towards the plaintiff on grounds either of fact or law, the defendant must establish the existence of such liability towards the plaintiff as a condition of establishing his claim to contribution from the alleged tortfeasor. For [the] provisions beyond doubt or question contemplate that there may be a valid claim when the tortfeasor defendant has not been sued to judgment, but has settled with the plaintiff (at 660)

22. Bayliss v Waugh (1962) NZLR 42, was a similar case in which the question was whether the cross-defendant qualified to claim if he had not been held liable to the plaintiff but had merely made a payment into court with a denial of liability. Having observed that “the conclusion of an action by payment into court is something quite different from its conclusion by judgment”, the trial judge held that the meaning of “liable” where first appearing in the equivalent of s5(1)(c) included “responsible in law” although to succeed the claimant must prove (a) that he was a tortfeasor and (b) that he was liable at the time he paid.(emphasis added)

23. The remarks in both Stott and Bayliss concerning the onus of proof may be taken to refer to those cases in which the claimant has reached accord and satisfaction with a plaintiff but is not liable in judgment.

24. Bakker v Joppich and Bitumax Pty Ltd [1980] 25 SASR 468, was a case in which the defendant either submitted to judgment or reached an accord and satisfaction with the plaintiff, the exact circumstance is not clear. The trial judge first instructed himself in these terms:

Where the defendant to a claim for damages founded upon his alleged negligence, is disposed to admit liability, but intends to claim contribution from a third party, is it open to him to submit to judgment or make an accord and satisfaction in an amount determined by negotiation between the plaintiff and him, and then claim contribution from the third party on the basis of the judgment or agreement without proving liability and damage by independent evidence; or is he precluded from relying on the consent judgment or agreement, and is he, accordingly, driven to proving the extent of his own liability, and the amount of damages he must pay as a condition precedent to obtaining contribution from the third party?

25. He went on to say:

Both in principle and authority, I am of the opinion that, with respect to the first question, the word “liable” in the first line of par (c) of subs(1) of s25 [the equivalent of s5(1)(c) of the Law Reform (Miscellaneous Provisions) Act] comprehends all circumstances in which a defendant becomes liable under any head, legally liable to the plaintiff to pay damages on account of acknowledged or alleged negligence: liability, within the meaning of that passage, exists inter alia, where the defendant has submitted to judgment on that account or has made accord and satisfaction.

26. Upon the facts in Bakker v Joppich the liability of the cross-claimant, the driver of a car which collided with the road sweeping machine, to the injured driver of that machine who worked under the control of the cross-defendant, was never in issue. His Honour, in addressing the contentious point raised by the contribution legislation, held that the cross-claimant may rely upon the sum fixed by consent judgment or accord and satisfaction as the prima facie measure of the sum for apportionment and was not required to prove by evidence the extent of his liability. His Honour’s reasons are not entirely clear, and the case has been accepted as tending to support the proposition that a consent judgment in favour of a plaintiff against a cross-claimant relieved him from the burden of proving that he was in fact a tortfeasor liable for the plaintiff’s damage (by Johnston J in BawdenvSaint (1988) 141 LSJS 306).

27. In John Holland v Jordin (1985) 36 NTLR 1, a building worker brought an action against his employer and a crane operator. The action settled and a consent judgment was entered against both the employer and the crane operator. Before the settlement was effected, the employer brought a separate action against a third party claiming, amongst other things, contribution. Nader J held that because there had been neither a settlement nor the entry of judgment against the employer at the time the proceedings were brought against the third party, the employer at the time of bringing the separate action claiming contribution was not a tortfeasor within the meaning of the contribution legislation. His Honour did not address the question of whether a prior settlement or consent judgment in itself would be sufficient to establish a person’s status as a tortfeasor.

28. Ballina Shire Council v Volk (1989) 18 NSWLR 1, was a case concerned with an appeal by an unsuccessful co-defendant cross-claimant against the finding of the trial judge that the other defendant and cross-defendant was not liable to the plaintiff. The decision is silent on the question whether a consent judgment may be relied upon to found a claim for contribution.

29. Without accepting these criticisms, BATAS further contends that its position is supported by other authority and relies upon the decisions in Bawden v Saint (1988) 141 LSJS 306, Deloitte Touche Tohmatsu v Cridlands Pty Ltd [2003] 204 ALR 281, Lawrence v Faulkner (2003) 12 TASR 15 and James P Corry and Co Ltd v Clarke [1967] NI 62. With the exception of James P Corry v Clarke I am not persuaded that these authorities very much assist the argument.

30. In Bawden v Saint the plaintiff worker sued his employer and also a carrier from whose vehicle he fell while loading sheep. The plaintiff then settled with the employer, consent judgment being entered in his favour, and discontinued his claim against the stock carrier. The claim for contribution by the employer against the stock carrier did not settle and that case ran. The employer sought to rely upon the consent judgment entered against him in favour of the plaintiff to establish that he was a tortfeasor for the purpose of the contribution claim. The contribution claim was dismissed on the ground that the employer had failed to prove the stock carrier would if sued have been liable to the plaintiff. The trial judge held accordingly that it was unnecessary for him to decide whether the consent judgment in itself established the employer’s status as a tortfeasor, although he doubted that proposition and that the point remained open.

31. Lawrence v Faulkner was a case in which the plaintiff claimed he had suffered some injury about 25 years earlier and had received inadequate medical treatment. Twenty five years after the alleged damage, he sued his father for negligently failing to arrange proper medical treatment for him. The father raised no defence whatsoever, including no limitation defence and consented to an interlocutory judgment on the issue of liability with damages to be assessed. A few days later the father brought a contribution claim against the doctor who had allegedly treated the plaintiff 25 years earlier. The doctor applied for consolidation of the action against him with the proceedings commenced by the plaintiff against the father and that relief was refused at first instance. The issue on appeal was whether there should be an order for consolidation. Consolidation was desired because the rules of court would have enabled the doctor to raise all and any defences which the father might have had available to him in answer to the claim brought against him by his son, giving him standing to have the interlocutory judgment set aside. The essential distinction between Lawrence and the present case is that Lawrence involved an interlocutory judgment, not a final judgment.

32. Deloitte Touche Tohmatsu was yet another case in which the cross-claimant had reached accord and satisfaction with the plaintiff. No judgment was entered. The trial judge in reliance upon the dicta of Gummow J in Thompson, held that it was necessary in that case for the cross-claimant to establish by evidence that it was liable as a tortfeasor for the damage done to the plaintiff, and that its liability, had the case been fought out, was in a sum at least equal to the settlement sum. His reasons are silent on the force of a consent judgment.

33. James P Corry and Co Ltd v Clarke 1967 NI 61, is a decision of the Court of Appeal of Northern Ireland directly in point upon facts similar to those under consideration in Bawden v Saint. The plaintiff, an employee of James P Corry and Co, timber merchants, the defendant/cross-claimant, suffered injuries in the course of loading timber when he fell from a motor lorry owned by Clarke. Having settled with the plaintiff and paid to him £11,000 pursuant to a consent judgment in his favour, James P Corry and Co cross-claimed against Clarke. In the statement of claim James P Corry and Co set out the nature of the first action and the terms of its settlement and went on to allege that the plaintiff’s injuries were caused by the negligence of Clarke in failing to provide a safe system of work for the plaintiff. The statement of claim made no allegation of negligence by James P Corry and Co. The trial judge accepted a submission by Clarke that there was no proof fit to go to the jury of his negligence, discharged the jury and gave judgment for Clarke.

34. The appeal was sufficiently disposed of by the court holding that the trial judge was correct on the no evidence point. Their Honours however went further and expressly rejected the submission by counsel for James P Corry and Co that George Wimpey and Co Ltd v British Overseas Airways Corporation [1955] AC 169; Bitumen and Oil and Bayliss were authority for the proposition that proof of the consent judgment without more established that James P Corry and Co was a tortfeasor entitled to contribution within the meaning of the statute. Lord McDermott LCJ, with whom Curran LJ agreed, said:

If accepted, the submission under examination would mean, in effect, that the onus of proving that the party claiming contribution under [the section] was a tortfeasor could be placed on the party sued for contribution merely by proof of a consent judgment against the claiming party and its satisfaction. In the absence of express enactment to that effect, I would be reluctant to hold that parliament had any such intention.

35. In an Australian context, two replies may be made to this reasoning.

36. First, it is by no means obvious that Parliament, by its use of the word "liable" did not intend to qualify a tortfeasor as entitled to claim contribution upon proof that he had submitted to judgment at the hands of the plaintiff. Observing that their Lordships in George Wimpey and Co v British Overseas Airways Corporation [1955] AC 169, could not agree on the meaning of the word “liable” the High Court in Bitumen and Oil (Dixon CJ, McTiernan, Webb, Fullagar and Taylor JJ) said that “It is small wonder, considering the economy of expression practised in the provision and the apparent failure to advert to any of the many practical problems involved in applying a general principle of contribution between persons liable jointly or severally for the same loss or damage” (at 207). Salmon LJ in Stott, albeit in a different context, said

I do not think that when that section was enacted the legislature contemplated a situation in which a defendant paid out of charity or that a defendant would ever pay otherwise than because he thought he was liable, or at any rate, partly liable. The legislation did not deal with what might have seemed a wholly unrealistic situation in which a defendant paid without a liability do so. If he did, there could, in no event, be any liability upon the third party. In the present case I do not consider that there was the remotest chance that these defendants would have paid unless they were satisfied that there was a real risk that they were to blame [emphasis added].

37. To my mind, consistently with James Hardie and Coy v Seltsam a consent judgment in favour of a plaintiff, asserting a bona fide cause of action in tort against a defendant/cross-claimant, creates a liability to pay sufficient to qualify the cross-claimant to seek contribution from the third party within the terms of this dicta by Lord Salmon and within the intention of Parliament as reflected in the words of the statute.

38. The Law Reform (Miscellaneous Provisions) Act 1946 was designed to prevent the injustice which occurred when a plaintiff by arbitrary election, compelled one joint tortfeasor to bear the entirety of his loss and permitted others, equally culpable in law, to escape contribution. It would seem strange if the legislature in framing the remedy intended that in a case involving difficult questions of causation, when one tortfeasor at risk settled with a plaintiff, paid out pursuant to a consent judgment, and proved another tortfeasor responsible for the damage, the other may escape contribution by proving that he was in fact solely responsible for the damage.

39. If a cross-defendant is bound by a judgment entered after a trial in which he was not a party, I see no injustice in binding him to a commercial compromise effected by a consent judgment entered against another party at risk who is on the face of it equally concerned to minimise the quantum of the plaintiff’s claim. The cross-defendant may yet escape liability if the cross-claimant fails to prove that the cross-defendant was responsible for the plaintiff’s damage. If the cross-defendant was in fact responsible, there can be no injustice in requiring him to contribute.

40. Where a suggestion of collusion between plaintiff and cross-claimant arises, or where the cross-claimant has failed to raise a defence available to the cross-defendant had he been sued directly by the plaintiff, the court deciding the claim for contribution may yet deny the claim pursuant to s5(2) on just and equitable grounds.

41. Second, His Lordship does not address the status or nature of a consent judgment nor explain how its legal effect is different from a judgment entered after a contest. If my understanding of the reasoning of the High Court in James Hardie v Seltsam is correct, the effect of the consent judgment is not merely to reverse the onus of proof but to conclusively determine the existence and the amount of the cross-claimant’s liability to the plaintiff.

42. I am conscious of the authority with which Gummow J speaks in the High Court as I am of the comity with which I should regard the decision of a superior appellate court of a state of Australia directly on point. For reasons apparent in the preceding discourse I believe it proper to follow the decision of the Western Australian Full Court in Woolworths (WA) Pty Ltd v Berkeley Challenge Pty Ltd [(2004)] 28 WAR 540, until more explicit guidance is provided by the High Court.

43. I rule that the questions in par 2 of the notice of motion, as renumbered, be answered:

(a) yes;

(b) no.

44. It is in the light of this ruling that I turn to consider the further motion of BATAS that the judgment against Brambles on 27 February 2002 in favour of the plaintiff be set aside.

Should the Judgment be set Aside?

45. These background facts are not contentious:

(a) The proceeding was commenced by Mr Mowbray against Brambles as defendant on 8 May 2001.

(b) A number of interlocutory steps in the proceeding took place between May and August 2001, as will be apparent from the Tribunal’s file.

(c) Mr Mowbray filed an affidavit sworn 31 August 2001

(d) Counsel for Brambles cross examined Mr Mowbray on 3 September 2001.

(e) On or about 30 October 2001 the proceeding between Mr Mowbray and Brambles was compromised. Handwritten heads of agreement were entered into. A transcription of the heads of agreement is as follows –

1. The plaintiff [sic] claim against the defendant is settled in the sum of $200,000 inclusive of costs.

2. The sum is to be paid within 21 days of the date hereof. The defendant’s insurer Allianz Insurance Ltd undertakes to use its best endeavours to pay the sum as soon as possible.

3. The plaintiff consents to judgment being entered within 28 days of today’s date: should the plaintiff die before judgment is entered the plaintiff’s solicitors undertake at the request of the defendant and at its cost substitute the appropriate representation [sic] of his estate as plaintiff.

4. The plaintiff consents to an order that his testimony be perpetuated for the purposes of further proceedings.

5. The plaintiff to provide to the defendant within 21 days –

(i) notice of change under Health Insurance legislation

(ii) an authority to receive.

6. No interest is to [accrue] on the settlement sum in paragraph 1 if paid within 21 days of the date hereof.

7. The terms of settlement not to be disclosed.

8. The plaintiff consents to any order sought by the defendant for leave to issue cross claim(s)

(f) On 30 October 2001 Brambles obtained leave to file and serve a cross claim on or before 15 December 2001.

(g) On 26 November 2001 the Tribunal extended time for Brambles to file its cross claim to 28 February 2001.

(h) On 29 November 2001 the Tribunal gave leave to Brambles to defer entry of judgment until 25 February 2002.

(i) By 30 November 2001 Brambles had identified BATAS as the relevant cross respondent for its cross claim.

(j) The late Mr Mowbray died on 23 January 2002.

(k) Brambles filed the cross claim on 22 February 2002.

(l) Brambles served the cross claim on BATAS on or about 22 February 2002.

(m) On 27 February 2002 the consent judgment was entered at a hearing of the Tribunal constituted by His Honour Judge O’Meally.

(n) At the time of entry of the consent judgment the settlement monies due under the heads of agreement had already been paid to Mr Mowbray. The settlement monies were paid some time before 29 November 2001.

(o) . . .

(p) Brambles gave no notice or indication to BATAS of the application to enter the consent judgment, or of its intention to enter the consent judgment.

(q) The consent judgment was entered in the absence of BATAS and without its knowledge or consent.

(r) Brambles had an arguable defence to Mr Mowbray’s claim.

(s) The plaintiff’s estate has no objection to the judgment being set aside.

46. By force of s78(4) of the Supreme Court Act 1970 BATAS became a party to the plaintiff’s proceedings upon service of the cross-claim by Brambles claiming relief pursuant to s5 of the Law Reform (Miscellaneous Provisions) Act 1946.

47. Part40 r9(2)(b) provides that the Tribunal may set aside or vary a judgment which has been entered in the absence of a party, whether or not the absent party had notice of trial or of motion for judgment.

48. This rule reflects the fundamental principle that persons likely to be affected by orders have a right to be heard (see Ritchie Supreme Court Procedure p 2859).

49. Because the effect of the judgment is to preserve Brambles’ right to contribution against a possible and fatal finding in the cross-claim that its breach of duty did not, on the probabilities, cause or materially contribute to the plaintiff’s damage, the judgment adversely affects BATAS.

50. Had BATAS been heard at the time the Tribunal was asked to enter judgment, the Tribunal may have:

(a) refused to enter judgment;

(b) adjourned the application to enter judgment until after the determination of the cross-claim;

(c) entered the judgment upon terms that Brambles undertook not to rely on it in contribution proceedings.

51. Brambles argues that it will suffer prejudice if the judgment does not stand because it will lose the protection of the judgment against further action by the plaintiff’s estate. Brambles paid the late Mr Mowbray without the protection of a judgment and I regard this submission as without merit in the circumstances of the particular case.

52. Similarly I dismiss Brambles’ contention that I should exercise my discretion against BATAS because BATAS delayed some two years in bringing this application. Prior to pleading its liability under the consent judgment in the fourth amended cross-claim of 1 October 2004 Brambles did not rely upon it. This is demonstrated by reference to Brambles’ statement of issues dated 2 September 2003 which raises no suggestion that Brambles would rely upon the judgment.

53. The most powerful argument advanced by Brambles in relation to discretionary considerations is the contention that even if BATAS does suffer prejudice if the judgment stands, that prejudice is no more than the inverse of a legitimate forensic advantage to which Brambles is entitled, pursuant to the terms of the statute and that all or any defences which BATAS was entitled to raise under the rules against the plaintiff's claim may be raised on just and equitable grounds in defence of the claim for contribution.

54. The debate occasioned by this contention could and should have been raised before His Honour Judge O’Meally when judgment was entered and I believe it is too late to raise it now.

55. In the circumstances the judgment should be and is set aside.

Consequential Orders

56. Paragraph 3.2 of the fourth amended cross-claim is in these terms:

Brambles is a tortfeasor liable to Mr Mowbray in respect of the damage referred to in paragraph 3.1 by reason of the judgment entered against Brambles in these proceedings in favour of the plaintiff for $200,000 inclusive of costs (“the Damage”) which took effect on 27 February 2003.

57. It follows from my preceding orders that this paragraph should be struck out and I so order.

Mr D F R Beach SC with Mr M F Wheelahan SC and Ms R Sofroniou instructed by Corrs Chambers Westgarth appeared for British American Tobacco Australia Services Limited, Applicant on the Motion

Mr B C Oslington QC with Mr G J Parker and Mr I L Griscti instructed by Ebsworth and Ebsworth appeared for Brambles Holdings Ltd, Respondent to the Motion