Ventia Utility Services Pty Ltd (ACN 010 725 247) (Formerly Known as Thiess Services Limited) v Electricity Networks Corporation T/As Western Power [No 3]
[2024] WASC 179
•21 MAY 2024
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: VENTIA UTILITY SERVICES PTY LTD (ACN 010 725 247) (FORMERLY KNOWN AS THIESS SERVICES LIMITED) -v- ELECTRICITY NETWORKS CORPORATION T/AS WESTERN POWER [No 3] [2024] WASC 179
CORAM: ARCHER J
HEARD: 15 JANUARY 2024; FURTHER WRITTEN SUBMISSIONS FILED 29 JANUARY, 23 FEBRUARY, 6 MARCH & 30 APRIL 2024
DELIVERED : 21 MAY 2024
FILE NO/S: CIV 1195 of 2023
BETWEEN: VENTIA UTILITY SERVICES PTY LTD (ACN 010 725 247) (FORMERLY KNOWN AS THIESS SERVICES LIMITED)
Plaintiff
AND
ELECTRICITY NETWORKS CORPORATION T/AS WESTERN POWER
First Defendant
NOREEN MERLE CAMPBELL
Second Defendant
Catchwords:
Preliminary determination of issues - Three concurrent wrongdoers with distinct proportionate liabilities for bushfire victims' property damage but jointly and severally liable for the victims' legal costs - Contribution as between them - 'Equality is equity' - Must equitable contribution be mathematically equal so that the costs are paid in equal shares? - Or can equitable contribution be ordered in shares that reflect the different levels of liability for the underlying damages? - Is the scope and operation of the equitable right of contribution modified by legislation which permits contribution among tortfeasors and in unequal shares?
Legislation:
Civil Liability Act 2002 (WA), Part 1F
Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA), s 7
Result:
Question answered
Equitable contribution among those liable for the same loss and to the same extent must be in equal shares, regardless of the different levels of liability for the underlying damages
Category: B
Representation:
Counsel:
| Plaintiff | : | S C M Wong |
| First Defendant | : | M J Sims SC |
| Second Defendant | : | J C Giles SC |
Solicitors:
| Plaintiff | : | Wotton + Kearney |
| First Defendant | : | DLA Piper Australia |
| Second Defendant | : | MinterEllison |
Case(s) referred to in decision(s):
Acohs Pty Ltd v RA Bashford Consulting (1997) 144 ALR 528
AMP Bank Limited v Brown and Kavanagh [2017] NSWSC 313
Bialkower v Acohs Pty Ltd & RA Bashford Consulting Pty Ltd (1998) 83 FCR 1
Burke v LFOT Pty Ltd [2002] HCA 17; (2002) 209 CLR 282
Fico v O'Leary [2004] WASC 215
Flinders Diamond Ltd v Tiger International Resources Incorporated [2006] SASC 139
Floreani Bros Pty v Woolscourers (SA) Pty Ltd (1976) 13 SASR 313
Friend v Brooker [2009] HCA 21; (2009) 239 CLR 129
Hampic Pty Ltd v Adams [1999] NSWCA 455
Herridge Parties v Electricity Networks Corporation t/as Western Power [2021] WASCA 111 (S2)
Herridge v Electricity Networks Corporation t/as Western Power [2019] WASC 94 (S)
Herridge v Electricity Networks Corporation t/as Western Power [No 4] [2019] WASC 94
HIH Claims Support Ltd v Insurance Australia Ltd [2011] HCA 31; (2011) 244 CLR 72
James Hardie & Co Pty Ltd v Seltsam Pty Ltd [1998] HCA 78; (1998) 196 CLR 53
James Hardie & Co Pty Ltd v Wyong Shire Council [2000] NSWCA 107; (2000) 48 NSWLR 679
Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313
Leigh‑Mardon Pty Ltd v Wawn (1995) 17 ACSR 741
Merryweather v Nixan (1799) 8 TR 186; 101 ER 1337
Michael Wilson & Partners Ltd v Emmott [2021] NSWCA 315
Mike Gaffikin Marine Pty Ltd v Princes Street Marina Pty Ltd (Unreported, NSWSC, BC9603588, 15 July 1996)
Mohammadi v Bethune [2018] WASCA 98
Queensland Bulk Water Supply Authority t/as Seqwater v Rodriguez & Sons Pty Ltd [2021] NSWCA 206
Re Steel [1979] Ch 218
Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority t/as Seqwater (No 24) [2020] NSWSC 1498
Sky Channel Pty Ltd v Tszyu (No 2) [2000] NSWSC 1150
Steel v Dixon (1881) 17 Ch D 825
Ventia Utility Services Pty Ltd (ACN 010 725 247) (formerly known as Thiess Services Limited) v Electricity Networks Corporation t/as Western Power [2023] WASC 381
Ventia Utility Services Pty Ltd (ACN 010 725 247) (formerly known as Thiess Services Limited) v Electricity Networks Corporation t/as Western Power [No 2] [2024] WASC 4
ARCHER J:
Overview
On 28 September 2023, I decided that three questions should be determined separately (and before) the trial of the action.[1] The trial of the first two questions occurred on 4 December 2023 and I gave judgment on 15 January 2024.[2] These reasons explain my answer to the third question.
[1] Ventia Utility Services Pty Ltd (ACN 010 725 247) (formerly known as Thiess Services Limited) v Electricity Networks Corporation t/as Western Power [2023] WASC 381 (Ventia [No 1]).
[2] Ventia Utility Services Pty Ltd (ACN 010 725 247) (formerly known as Thiess Services Limited) v Electricity Networks Corporation t/as Western Power [No 2] [2024] WASC 4 (Ventia [No 2]).
In broad terms, the third question asks whether a court may order equitable contribution in unequal shares among those jointly liable for the same loss and in the same amount. In this case, the parties were concurrent wrongdoers found to have distinct proportionate liabilities for bushfire victims' property damage but were ordered to be jointly and severally liable for the victims' legal costs. The question is whether, if one of them paid all the costs, and if equitable contribution were ordered, the contribution would have to be in equal shares or whether it could be in unequal shares to reflect their different levels of liability for the property damage.
The answer is that the contribution would have to be in equal shares.
Background
The background to this matter is set out in my two previous judgments. For convenience, however, the following is repeated.
On 12 January 2014, a jarrah pole supporting electrical cables fell to the ground causing electrical arcing. This ignited dry vegetation around the base of the pole. The fire spread and became what is known as the Parkerville bushfire.
The pole was owned by, and on the property of, the second defendant (Mrs Campbell).
The first defendant (Western Power) is the network operator which, prior to the fire, had distributed electricity from its network to Mrs Campbell by a service cable attached to the jarrah pole.
Western Power had engaged the plaintiff (Ventia), then known as Thiess Services Pty Ltd, to carry out works on the jarrah pole.
People whose property had been destroyed or damaged by the fire (Plaintiffs) sued Ventia, Western Power and Mrs Campbell in six different proceedings. The Plaintiffs alleged that they had suffered loss due to the negligence of, or the nuisance created by, each of the defendants.
His Honour Justice Le Miere tried questions of the defendants' liability in four of the proceedings (Actions), and also determined the quantum of the loss of two of the Plaintiffs Mr and Mrs Elwood. I will refer to the Plaintiffs in the Actions collectively as the 'Action Plaintiffs'.[3]
[3] That is, the 'Action Plaintiffs' group excludes the plaintiffs in the two proceedings not tried by Le Miere J. Those proceedings are referred to as the 'Pontague Proceedings' and the 'Krepp Proceedings'.
Justice Le Miere found that both Ventia and Mrs Campbell were liable. His Honour found that Western Power was not. His Honour apportioned liability between Ventia and Mrs Campbell: 70% to Ventia and 30% to Mrs Campbell.[4] His Honour also ordered Ventia and Mrs Campbell to jointly and severally pay 80% of the Action Plaintiffs' costs. His Honour expressly declined to make a costs order apportioning liability for the Action Plaintiffs' costs on the basis of fault.[5] I will refer to the orders made by Le Miere J as the 'Primary Orders'.
[4] Herridge v Electricity Networks Corporation t/as Western Power [No 4] [2019] WASC 94 (Herridge [No 4]) and Herridge v Electricity Networks Corporation t/as Western Power [2019] WASC 94 (S) (Le Miere J's Orders Decision).
[5] Le Miere J's Orders Decision [52] ‑ [53].
The Action Plaintiffs appealed.[6] The Court of Appeal allowed the appeal in part. The Court re‑apportioned liability as being 50% to Western Power, 35% to Ventia and 15% to Mrs Campbell.[7] The Court of Appeal ordered that the defendants jointly and severally pay the Action Plaintiffs' costs to 20 September 2019 (being the date the Primary Orders were made).[8]
[6] Western Power notes, in its Amended Defence dated 7 July 2023 (Defence) [13], that the costs order was not appealed.
[7] Statement of Claim dated 23 February 2023 (Statement of Claim) [14]; Defence [14].
[8] Statement of Claim [14.7]; Defence [14].
Prior to the Court of Appeal's decision, Ventia made payments to the Action Plaintiffs in accordance with Le Miere J's Primary Orders. After the Court of Appeal's decision, Ventia sought restitution orders in respect of part of the payments from the Court of Appeal. The Court of Appeal dismissed the application, but did not preclude Ventia from bringing new proceedings in the general division to seek such orders.[9]
[9] Herridge Parties v Electricity Networks Corporation t/as Western Power [2021] WASCA 111 (S2) [31].
Following the Court of Appeal's decision, Western Power made a number of payments to Ventia. Western Power agreed to make the payments subject to the Court of Appeal's orders remaining undisturbed on appeal to the High Court and to Western Power obtaining an effective discharge of its obligations to the Plaintiffs.[10]
[10] Proposed Statement of Agreed Facts and Assumptions filed 8 November 2023 (Agreed Facts) [14.1]. Despite the title, the document was agreed.
The High Court dismissed Western Power's appeal.[11]
Current Action - restitution from other wrongdoers
[11] Agreed Facts [15].
On 23 February 2023, Ventia commenced the current proceedings against Western Power and Mrs Campbell seeking restitution. On 20 July 2023, Ventia informed the court that the proceedings against Mrs Campbell had been resolved.
In the current proceedings, Ventia seeks additional payments from Western Power. The additional payments sought fall into five categories:[12]
1.'Western Power's Unpaid Interest' - $527,888.15;
2.'Western Power's Unpaid Liability Costs' - $3,982,481.00;
3.'Western Power's Unpaid Damages Assessment Costs' - $745,079.94;
4.'Western Power's Unpaid Krepp Proceedings Costs' - $67,500.00; and
5.'Western Power's Unpaid Expert Costs' - $289,136.97.
Application for preliminary determination
[12] Statement of Claim [18] ‑ [21].
The parties engaged in settlement negotiations. Those negotiations were hampered by disputes as to issues of principle.
Ventia sought a preliminary determination of four questions to address the disputed issues of principle. I was satisfied that there should be a preliminary determination of three of those questions.[13]
[13] Ventia [No 1].
As noted earlier, I have already heard and determined the first two questions. The third question was directed to a dispute as to what share of the victims' costs should be paid by Western Power. The dispute was whether the defendants should pay the costs in equal shares or in the same proportion as their liability in relation to the property damage.[14] Ventia expressed the third question as follows:
Assuming (without deciding) that the joint and several liability of Ventia, Western Power and Mrs Campbell under the costs order pleaded in paragraph 14.7 of the Statement of Claim was discharged in full, would Ventia, Western Power and Mrs Campbell be bound, as amongst themselves, to contribute to the discharge of that liability:
(a)equally; or
(b)50% as to Western Power, 35% as to Ventia and 15% as to Mrs Campbell?
[14] Affidavit of Robin Maurice Shute sworn 3 July 2023 [10].
The costs order pleaded in paragraph 14.7 of the Statement of Claim was the Court of Appeal's order that the defendants jointly and severally pay the Action Plaintiffs' costs to 20 September 2019 (being the date the Primary Orders were made).
The parties filed written submissions in relation to the third question. Once I had the opportunity to consider those submissions, I became concerned that the wording of the third question would not resolve the issues between the parties. Accordingly, shortly prior to the hearing, I asked the parties through my associate whether that was so, and set out the two questions it appeared the parties wanted answered (proposed questions).
The parties broadly agreed with the first proposed question. They did not agree in relation to the second.
The second of my proposed questions related to the costs discretion under O 66 r 2(e) of the Rules of the Supreme Court 1971 (WA). That rule provides:
[I]f there are several defendants and the plaintiff has a verdict against them, each of them shall be liable to the plaintiff for the entire costs although they defend separately: Provided that the Court may from time to time make an order or orders as between several defendants apportioning the liability as between themselves and the recovery of contribution.
The second proposed question was:
If the costs discretion in O 66 r 2(e) is able to be exercised,
(a)should it be exercised in view of the Court of Appeal's order?
(b)if the answer to 2(a) is yes, is it open to the court to apportion the costs in unequal shares? [if this is not common ground]
(c)if the answer to 2(b) is yes, should the costs discretion be exercised so as to order contribution by proportions of liability (assuming, or if, or given, no party contends that there any other relevant factors in the exercise of the discretion)?
Western Power submitted, in short, that it was not open to Ventia to ask the court to exercise the costs discretion in the circumstances of this case. It became apparent that the second question raised a number of issues about which the parties had not yet conferred. Accordingly, I ordered the parties to confer on this question to determine whether it (or some part of it) should be the subject of a further application for a preliminary determination.
The first proposed question was:
Given the parties' costs liability is joint and several (by the Court of Appeal's order), if equitable contribution is ordered, must the contribution be in equal shares?
Ventia and Mrs Campbell submitted that this question should also include whether, if the answer is 'no', the court should order contribution by proportions of liability (assuming, or if, or given, no party contends that there any other factors relevant to this issue). Western Power did not object to this. Accordingly, I made an order amending the wording of the third question[15] in those terms. However, during the hearing, Western Power did not contend that, if the answer to my original question was 'no', the court should not order contribution by proportions of liability.[16] Accordingly, the question to be answered was as I had proposed.
[15] See Order 1 of the orders made 15 January 2024.
[16] Confirmed in an email from Western Power's solicitors to the Court on 9 April 2024.
I will refer to this as 'Amended Question 3'.
Amended Question 3 - context
Both the original and Amended Question 3 refer to the costs order made by the Court of Appeal, in varying the Primary Orders. By that order, the defendants were ordered to jointly and severally pay the Plaintiffs' costs of the Actions to 20 September 2019 (being the date the Primary Orders were made).
I earlier set out the five categories of additional payments which Ventia claims Western Power should pay. Categories 2, 3 and 4 all relate to sums paid by Ventia in relation to the Plaintiffs' costs. Western Power paid one‑third of those sums.[17] Ventia asserts that, as Western Power was found to be 50% liable by the Court of Appeal in relation to the property damage, Western Power should pay half of the Plaintiffs' costs. Mrs Campbell agrees. Western Power does not. It says it is only required to pay one third, because, in equity, contribution must be equal.
[17] Statement of Claim [17.3], [18.2], [18.3] and [18.4] and Defence [17(c)].
Amended Question 3 asks whether a court may order equitable contribution in unequal shares among those jointly and severally liable for the same loss. In this case, the parties were concurrent wrongdoers found to have distinct proportionate liabilities for the Action Plaintiffs' property damage but were ordered to be jointly and severally liable for the Action Plaintiffs' legal costs. The question is whether, if Ventia paid all the costs, and if equitable contribution were ordered, the contribution would have to be in equal shares or whether it could be in unequal shares to reflect their different levels of liability for the property damage.
The term 'co‑ordinate liabilities' is used by courts and academics to refer to liabilities of the same nature and the same extent. In general, those under co‑ordinate liabilities in respect of the same loss will have an equitable right to contribution if they pay more than their share of the common obligation.[18] In cases where the parties are liable in the same amount, it has been said that equitable contribution can only be in equal shares, unless the parties have a common intention to bear the liability in different proportions.[19] I will refer to that exception as the 'common intention exception'. That exception does not apply here.
[18] See Mason K, Carter JW and Tolhurst GJ, Mason & Carter's Restitution Law in Australia (4th ed, 2021) (Restitution Law in Australia) [610], [619], [621], [623]. See also HIH Claims Support Ltd v Insurance Australia Ltd [2011] HCA 31; (2011) 244 CLR 72 [36] ‑ [47] and Friend v Brooker [2009] HCA 21; (2009) 239 CLR 129 [40].
[19] Examples of such cases are discussed later.
Both Ventia and Mrs Campbell submit equitable contribution may be ordered in unequal shares among those under co‑ordinate liabilities even where they are liable in the same amount.
Western Power says it can only be in equal shares.[20]
What are not issues
[20] First Defendant's Submissions on Separate Trial of Preliminary Questions (Western Power's Submissions) [38] ‑ [40] and [44] ‑ [46].
The single issue arising from Amended Question 3 is the question itself:
Given the parties' costs liability is joint and several (by the Court of Appeal's order), if equitable contribution is ordered, must the contribution be in equal shares?
Whether Ventia is entitled to contribution is not the issue to be here determined. Rather, Amended Question 3 assumes that equitable contribution is ordered and asks whether, if it is, it must be in equal shares. It is this issue that has hampered the settlement negotiations.[21]
[21] See the affidavit of Robin Maurice Shute sworn 3 July 2023 [10].
Mrs Campbell sought to raise an additional issue relating to the Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA) (Contribution Act). I later explain why I do not accept this issue falls within the scope of Amended Question 3.
Must equitable contribution be in equal shares?
The equitable right to contribution arises when a plaintiff has paid more than its proper share towards discharging a common obligation.[22] The right derives from the injustice of the defendant having had its burden relieved by the plaintiff.[23]
[22] Restitution Law in Australia [610].
[23] Restitution Law in Australia [625]. This passage in an earlier edition of the text was cited with approval in Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313 [239] (Giles JA, with whom Handley and Stein JJA agreed).
In their submissions, both Ventia and Mrs Campbell note that the maxim 'equality is equity' does not necessarily mean literal equality and can mean proportionate equality. Both cite Re Steel.[24]
[24] Re Steel [1979] Ch 218. See Plaintiff's Submissions as to Preliminary Questions (Ventia's Submissions) [34], citing Re Steel (226) and Second Defendant's Submissions in respect of the Third Question in Order 1(c) of the Orders made by the Honourable Justice Archer on 18 October 2023 filed 15 November 2023 (Mrs Campbell's Submissions) [16], noting that Re Steel (225 ‑ 226) was cited in Bialkower v Acohs Pty Ltd & RA Bashford Consulting Pty Ltd(1998) 83 FCR 1, 10.
In Re Steel, Megarry VC was considering how the residue of an estate should be distributed amongst beneficiaries who had received legacies in nominated but differing amounts. Megarry VC noted that, in Steel v Dixon,[25] Fry J discussed the rule that as between co‑sureties there is to be equality of the burden and of the benefit. Megarry VC said:[26]
[Fry J] says, 'When I say equality I do not mean necessarily equality in its simplest form, but what has been sometimes called proportionable equality'; and he then explains that if the sureties are sureties for unequal amounts, they must contribute proportionately to the amount for which each is a surety. That, of course, is a very different case from this: but I think it is valuable as correcting any assumption that equality necessarily means mathematical equality. When the maxim 'equality is equity' comes to be applied, it often, and I think usually, will mean mathematical equality, in that no other basis of equality can be discerned: but given suitable circumstances a true equality of treatment may require the application of a mathematical inequality, and instead a proportionate equality.
[25] Steel v Dixon (1881) 17 Ch D 825.
[26] Re Steel (226).
In the result, Megarry VC ordered that the residue be divided equally among the legatees, irrespective of the size of their legacies.
In my view, given that Re Steel was not a case about contribution, and given what Megarry VC said in the context of the case before him, Re Steel does not advance the position beyond what was said in Steel v Dixon.
As noted by Megarry VC, Fry J in Steel v Dixon was discussing the position where the sureties were sureties in unequal amounts. In Meagher, Gummow & Lehane's Equity Doctrines & Remedies, the authors note that, as between persons under co‑ordinate liabilities in respect of the same loss but who have different limits of maximum exposure for the loss, contribution is available but will be unequal. The authors wrote:[27]
In such cases, as Fry J explained in Steel v Dixon, the maxim 'equality is equity' requires that there be proportionate equality rather than mathematical equality, so that each will be liable to contribute rateably proportionate to their undertaking. (footnote omitted)
[27] Heydon JD, Leeming MJ, and Turner PG, Meagher, Gummow & Lehane's Equity Doctrines & Remedies, (5th ed, 2015) (Equity Doctrines & Remedies) [10‑125], citing Steel v Dixon and Re Steel. See also Burke v LFOT Pty Ltd [2002] HCA 17; (2002) 209 CLR 282 [14].
That is, where parties under co‑ordinate liabilities in respect of the same loss have different limits of maximum exposure for the loss, unequal equitable contribution may be ordered to reflect the difference. Re Steel and Steel v Dixon do not support any broader proposition.
In this case, there is no difference in the exposure of the parties. Each is jointly and severally liable for the entire amount of the Action Plaintiffs' costs.
After this common reference to Re Steel, the respective submissions of Ventia and Mrs Campbell take very different paths.
In broad terms, Ventia submits that the statement (that equitable contribution among those under co‑ordinate liabilities in respect of the same loss and who are liable in the same amount can only be in equal shares) is not a rigid rule. Ventia submits it is simply a general statement which applies where there is no question of wrongdoing (such as in the case of co‑insurers) or, if there is wrongdoing (such as may be the case with partners or co‑trustees), the result of the application of implied contract theory. That is, Ventia submits that contribution is equal among partners or co‑trustees because they will be taken to have agreed to share any loss equally. Ventia submits that the 'general statement' does not apply to tortfeasors because they will not be taken to have agreed to share any loss equally.[28]
[28] ts 152 ‑ 155.
Mrs Campbell submits that, in addition to the common intention exception, there is an exception where the parties are tortfeasors.[29] Mrs Campbell's submissions on this evolved over time. For that reason, it would be unhelpful to attempt to summarise her submissions at this point. I will set them out when dealing with their substance.
[29] ts 187 ‑ 188.
For the reasons that follow, I do not accept the contentions of Ventia or Mrs Campbell. As their submissions followed different paths, I will deal with them separately.
Ventia's submissions
Assertion it is not a rigid rule
In Burke v LFOT Pty Ltd,[30] Gaudron ACJ and Hayne J said:
In general terms, the principle of equitable contribution requires that those who are jointly or severally liable in respect of the same loss or damage should contribute to the compensation payable in respect of that loss or damage, either equally where they are liable in the same amount or proportionately, where the amount of their liability differs. The principle has regularly been applied between co‑sureties, co‑insurers, partners, co‑owners, where payment is made by one in discharge of a common liability, and co‑trustees who are in pari delicto. (citations omitted)
[30] Burke [14].
Ventia says that the opening words '[i]n general terms' demonstrate that their Honours were not purporting to record a rule of rigid application.
Ventia acknowledges that subsequent cases have expressed this principle as a rigid rule, including EM Heenan J in Fico v O'Leary.[31] Ventia says that his Honour was wrong to do so.[32] I will discuss Fico v O'Leary later.[33] For the moment, it is sufficient to note that I do not accept that his Honour was wrong.
Historical context
[31] Fico v O'Leary [2004] WASC 215 [247]. See also [232].
[32] ts 153. See also ts 189.
[33] See under the heading 'Contrary authorities'.
Ventia further submits that the second sentence in the passage extracted shows that the question of contribution historically arose in cases involving co‑insurers, partners, co‑owners, and co‑trustees. Ventia submits that contribution is equal in such cases for reasons related to those specific contexts. Ventia submits that, where the situation concerns sureties and insurers, issues of differing culpability do not arise. Those co‑obligors are not wrongdoers, so there is no reason why contribution would not be equal. Ventia acknowledges that partners, co‑owners, and co‑trustees may sometimes be wrongdoers with different levels of culpability. However, it submits that the reason why contribution is still made equal in those cases is because those persons have agreed or can be taken to have agreed that they will be equally liable for any loss that arises. Ventia submits that tortfeasors cannot be taken to have agreed this.[34]
[34] ts 152 ‑ 155.
Ventia noted that McHugh J in Burke, said that '[e]arly cases suggested that the common law right arose as a result of an implied contract between the parties'.[35] Ventia relied on this comment in support of its submission that 'the historical context for these statements of principle were based on this implied contract theory'.[36] However, even if that is correct in relation to the common law right, the principle of equitable contribution was not based on this.[37]
[35] Burke [38].
[36] ts 158 (and see ts 152 ‑ 155 for the context, and ts 189 for the conclusion).
[37] In footnote 1 of its submissions filed 30 April 2024 (with leave), Ventia said it accepted that the equitable right stems from justice, not implied contract.
After making the comment relied upon, McHugh J in Burke noted that the equitable principles now covered the field. His Honour said:
Those [equitable] principles are based on the equitable doctrine of equality. When a person pays more than his or her share of a common monetary obligation, the payment pro tanto discharges the obligation of all who owe the common obligation. In accordance with the maxim that equality is equity, equity requires the common burden to be shared equally so that none of those owing the common obligation will pay more than his or her share of the burden. An order of contribution prevents the injustice that would otherwise flow to the plaintiff by the defendant being enriched at the plaintiff's expense in circumstances where they have a common obligation to meet the liability which the plaintiff has met or will have to meet. (citations omitted)
In Michael Wilson & Partners Ltd v Emmott, Brereton JA, with whom Emmett AJA agreed, made similar observations as to the common law's reliance on contract and the different notion that lay behind the equitable doctrine of contribution. His Honour said:[38]
The equitable doctrine of contribution derives from the equitable maxim that 'equality is equity'; and the notion that, as between multiple interested parties, ultimately liability should not depend on the creditor's choice of defendant, nor (as the common law would insist in requiring a claim to be brought within the framework of contract, express or implied) on the knowledge of one obligor of the existence, present or proposed, of the others. Its rationale is to protect one of several obligors from having to bear more than its just share of the obligation. (citations omitted)
[38] Michael Wilson & Partners Ltd v Emmott [2021] NSWCA 315 [55] (Brereton JA, with whom Emmett AJA agreed at [141]).
In short, equitable contribution is not based on an implied contract. It is based on ensuring that those who bear a common obligation share the burden equally.
I observe that an analysis similar to the one advanced by Ventia was made in an article by Alison Gurr, Accessory Liability and Contribution, Release and Apportionment, published in the Melbourne University Law Review.[39] Ms Gurr offered the analysis as a theoretical basis upon which proportionate contribution could be justified. However, Ms Gurr acknowledged that the weight of authority appeared to be against unequal apportionments.[40]
Reliance on the dissenting judgment of Kirby J in Burke
[39] Gurr A, 'Accessory Liability and Contribution, Release and Apportionment' (2010) 34 Melbourne University Law Review 481, 497 ‑ 499 (Gurr Article).
[40] Gurr Article (497, 499).
Ventia also relies on the dissenting judgment of Kirby J in Burke.
First, Ventia notes that Kirby J set out three principles of equity.
The first was 'the precept that equality is equity'. Kirby J said that this maxim was not to be applied literally.[41] Kirby J went on to explain:[42]
As the cases show, it is not necessary to demonstrate that each of the co‑obligors owes exactly the same duty, founded on exactly the same legal source, in precisely the same amount, to the identical obligee. It is enough to say, as Story put it, that 'no one ought to profit by another man's loss where he himself has incurred a like responsibility'.
[41] Burke [94].
[42] Burke [94].
The second principle was that equity prefers substance over form.[43]
[43] Burke [95].
The third was that '[t]he operation of the principle of contribution must not be "defeated by too technical an approach". Courts must keep their eye fixed on the purpose of the remedy, ie on the essential concept, not just particular past applications'.[44]
[44] Burke [96].
None of these principles are contentious.
Next, Ventia relies upon later (obiter) passages of Kirby J's judgment, in which his Honour considered unequal contribution in equity.[45] However, it is not entirely clear that his Honour was contending that it was open to do so on the law as it currently stands. Rather, his Honour appeared to be saying that equitable remedies should be developed so as to permit it.[46] His Honour acknowledged that '[t]he weight of authority, and perhaps the history of contribution to this time, appear to be against unequal apportionments'.[47] In any event, Kirby J was in dissent in Burke. Further, these remarks were rejected by the New South Wales Court of Appeal in Michael Wilson,[48] discussed later.[49]
Reliance on Mike Gaffikin
[45] Burke [119]-[121]. See ts 152, 158 ‑ 159.
[46] See, in particular, Burke [119] ('if unequal contributions could be ordered …') and [121] ('Equitable remedies, such as contribution, should be developed …').
[47] Burke [119].
[48] Michael Wilson [56] (Brereton JA, with whom Emmett AJA agreed at [141]), and [4] (Leeming JA).
[49] See under the heading 'Contrary authorities'.
Ventia acknowledged that it had not been able to find any case in which unequal equitable contribution had been ordered in relation to people who were under co‑ordinate liabilities in respect of the same loss and who were liable in the same amount, other than where the common intention exception applied.[50]
[50] See ts 156 ‑ 157, 161 and 166.
Ventia identified one case in which the question had been considered, but not decided - Mike Gaffikin Marine v Princes Street Marina Pty Ltd.[51]
[51] Mike Gaffikin Marine Pty Ltd v Princes Street Marina Pty Ltd (Unreported, NSWSC, BC9603588, 15 July 1996). In Flinders Diamond Ltd v Tiger International Resources Incorporated [2006] SASC 139 [105] ‑ [108], Layton J commented on this, without finding it to be correct, saying '[i]nsofar as Young J is correct in his analysis that 'fault' may be a relevant consideration in a given case' (and see [23] ‑ [24], [28] ‑ [30]).
In Mike Gaffikin, Young J briefly discussed a claim of equitable contribution following an order that the defendants be jointly liable for the plaintiff's costs. His Honour said, in effect, that there were three ways in which the costs could be split fairly. However, his Honour was not saying that each way was open as a matter of law. Rather, his Honour was noting that there was no single answer to what would be fair. Indeed, his Honour appeared to doubt that it would be open to him to order equitable contribution based on fault. His Honour said:[52]
Mr Hogg also based his claim on the equitable doctrine of contribution. The third defendant has a similar claim pending by motion in the Court of Appeal against the fifth defendant. Both Mr Hogg and Mr W Hodgekiss, who appeared for the third defendant, agreed that the doctrine of contribution applied to the present situation. I am sure this is a proper concession, though a quick look through the Equity text books surprisingly shows no example where the doctrine has been applied in a situation where there has been a joint order for costs, but as Fisher J pointed out in the Nicholas case that situation in fact very rarely occurs in practice.
As the doctrine applies, one has to consider how it should apply in the present case.
I should point out that there is actually no claim or cross‑claim in the litigation by either the third or fifth defendant for contribution against each other. Essentially (although it is practical to determine the matter in the existing suit) there should be a new suit between the third and fifth defendants. In that new suit any questions of unclean hands or unconscionability could be raised.
There is very little authority as to how one should approach questions of contribution in the present type of case. There seem to me to be three possible answers to the question in what shares would it be conscionable for the third and fifth defendants to bear between themselves the costs which have to be paid to the plaintiff. The first is that as 'equality is equity' the third and fifth defendants should each bear a moiety of the costs. The second is that they should bear the costs in the proportion that $120,000 bears to $272,783. The third is that the contribution should be according to the amount of 'fault'.
It is clear from my reasons for judgment and from the comments that I have already made that the cause of the plaintiff's costs was more attributable to the third defendant than to the fifth defendant. However, as far as I know there are no authorities showing that this is the proper method of approaching assessment of contribution.
Counsel asked me not to decide the amount of contribution until they had had a chance to consider the matter further and I am happy to accede to this request. (emphasis added)
[52] Mike Gaffikin (5 ‑ 7).
Mike Gaffikin was a 1996 decision, and appears to have been delivered ex tempore. As Ventia acknowledges, Young J merely identified three possible answers to the question of what shares it would be conscionable for the defendants to bear. His Honour did not say that unequal equitable contribution could be ordered. Further, his Honour expressly noted that he was not aware of any authorities which showed that contribution could be assessed by fault. For these reasons, Mike Gaffikin does not support Ventia's submissions.
In addition, Young J stated in a subsequent decision, Sky Channel Pty Ltd v Tszyu (No 2), that apportionment could not be based on fault.[53] Further, Sky Channel and Fico v O'Leary were cited by Young J and his Honour's co‑authors in On Equity[54] as authority for the following proposition:
The fact that one party may be at greater fault is not a ground for ordering contribution in unequal amounts; contribution is not founded upon comparative culpability.
[53] Sky Channel Pty Ltd v Tszyu (No 2) [2000] NSWSC 1150 [9] ‑ [14].
[54] Young P, Croft C, and Smith M, On Equity (2009) [12.430].
Ventia submits that neither Sky Channel nor Fico v O'Leary concerned what would be a just contribution where a joint and several costs order is made and there are different findings of fault which gave rise to the common obligation.[55]
[55] Plaintiff's Supplementary Submissions filed 30 April 2024 (with leave) [8] ‑ [9].
I accept this. However, the judges in both cases were stating a principle - namely, that equitable contribution cannot be ordered in unequal amounts based on fault.[56]
[56] I discuss both of these cases below, under the heading 'Contrary authorities'.
There are other authorities which indicate equitable contribution among those under co‑ordinate liabilities in respect of the same loss and who are liable in the same amount can only be in equal shares (subject to a common intention to the contrary). I will say more about some of these authorities later.[57]
Conclusion on Ventia's submissions
[57] See under the heading 'Contrary authorities'.
For these reasons, I do not accept Ventia's contention that the statement (that equitable contribution among those under co‑ordinate liabilities in respect of the same loss and who are liable in the same amount can only be in equal shares) is not a rule. Nor do I accept that the rule will only apply where issues of differing culpability do not arise or where the parties can be taken to have agreed that they will be equally liable.
Mrs Campbell's submissions
'increasingly recognised'
Mrs Campbell says:[58]
It has been increasingly recognised by the Courts that that [sic] 'equality' in the maxim 'equity is equality' is 'not literal equality, but proportionate equality': for example, see Bialkower v Acohs Pty Ltd & RA Bashford Consulting Pty Ltd (1998) 83 FCR 1 at 10.
[58] Mrs Campbell's Submissions [16]. In the footnote to this paragraph, Mrs Campbell wrote ' See, eg, Re Steel (dec'd) [1979] Ch 218, 225-6 cited in Bialkower 10.'
I earlier explained the context of this statement and why it does not support any broader proposition than that, where parties under co‑ordinate liabilities in respect of the same loss have different limits of maximum exposure for the loss, unequal equitable contribution may be ordered to reflect the difference.[59]
[59] See under the heading 'Must equitable contribution be in equal shares?'
Nor does the case cited by Mrs Campbell, Bialkower, support any broader proposition. On the contrary, the court in Bialkower expressly doubted whether contribution could reflect comparative culpability.
Bialkower was an appeal from a decision of Merkel J in Acohs Pty Ltd v RA Bashford Consulting.[60] In Acohs, Merkel J had found that 'RMS' and 'RMC' had contravened s 52 of the Trade Practices Act 1974 (Cth) and Mr Bialkower was a person involved in the contravention. His Honour found that Mr Bialkower was the primary cause of the contravention, and that RMS and RMC were entitled to a substantial contribution from Mr Bialkower in respect of the damages and any costs awarded against them. His Honour said that the contribution should be 75%.[61]
[60] Acohs Pty Ltd v RA Bashford Consulting (1997) 144 ALR 528.
[61] Acohs (539).
The Court of Appeal said:[62]
[D]espite the observation of Davies J in Jones at 422; 565 that he could see no reason why equity 'should not aid … the ascertainment of what would be a just contribution', we doubt whether the general law of contribution authorises an apportionment such as that made by the primary judge. Contribution is 'founded on equality': Albion at 351, though it is true that 'equality' in the maxim 'equity is equality' is not literal equality, but proportionate equality: Re Steel [1979] Ch 218 at 225‑226. Equality was the basis of the doctrine of contribution between trustees liable to make good a breach of trust: R P Meagher and M C Gummow, Jacobs' Law of Trusts in Australia (6th ed, 1997), p 644. If one paid more than his share he could claim contribution from the others. In exceptional cases the rule of equal contribution was replaced by a right on the part of one trustee to obtain an indemnity from the others. But, according to Snell, until the intervention of statute (Civil Liability (Contribution) Act 1978 (UK), ss 1(1), 6(1), 7(3) there was no intermediate position between these two extremes: Snell's Equity (29th ed, 1990), p 296. And see Jacobs, p 644. The matter was not argued before us, and since the apportionment can be supported by s 23B of the Wrongs Act,[63] we need not decide the issue, which will be a live one in jurisdictions such as New South Wales which do not have a provision such as s 23B. (emphasis added)
'increasing willingness'
[62] Bialkower (12 ‑ 13). See also Hampic Pty Ltd v Adams [1999] NSWCA 455 [57] ‑ [59].
[63] The Wrongs Act 1958 (Vic) relevantly provides that the amount of the contribution recoverable from any person shall be such as may be found to be just and equitable having regard to the extent of that person's responsibility for the damage. Similar provision is made in the Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA), and other jurisdictions, as discussed below.
Mrs Campbell next says:[64]
The Court's increasing willingness to recognise that the development of the doctrine of contribution has evolved to reflect comparative culpability was discussed by Kirby J, albeit in dissent, in Burke at [119] ‑ [120]. (footnote omitted)
[64] Mrs Campbell's Submissions [17].
It will be recalled that Ventia also relied upon Kirby J's remarks in Burke. In dealing with Ventia's submissions, I noted that it is not entirely clear that Kirby J was contending that it was open to order unequal contribution on the law as it currently stands. Rather, his Honour appeared to be saying that equitable remedies should be developed so as to permit it. His Honour acknowledged that '[t]he weight of authority, and perhaps the history of contribution to this time, appear to be against unequal apportionments'.[65] Accordingly, I do not accept Mrs Campbell's submission.
[65] Burke [119].
In addition, as noted earlier, not only was Kirby J in dissent in Burke, but his Honour's remarks were also rejected by the New South Wales Court of Appeal in Michael Wilson,[66] discussed later.[67]
'further illustrates the evolution'
[66] Michael Wilson [56] (Brereton JA, with whom Emmett AJA agreed at [141]), and [4] (Leeming JA).
[67] See under the heading 'Contrary authorities'.
Mrs Campbell then submits that Acohs, a 1997 decision, 'further illustrates the evolution of the doctrine of contribution to reflect comparative culpability'.[68] However, as noted earlier, the decision in Acohs was appealed. On appeal, the Full Court in Bialkower doubted whether the general law of contribution authorised an apportionment based on culpability.[69]
[68] Mrs Campbell's Submissions [18].
[69] Bialkower (13). It did not need to decide the point, as it upheld the rateable apportionment which had been made by Merkel J under the Wrongs Act 1958 (Vic).
Mrs Campbell's arguments on the Contribution Act
In her written submissions filed prior to the hearing, Mrs Campbell made an alternative submission that, pursuant to s 7(1)(c) and (2) of the Contribution Act, the Court has the power to award contribution in an amount it considers to be just and equitable in the circumstances.[70]
[70] Mrs Campbell's Submissions [25].
In responding to this, Western Power said that that submission must be rejected on several grounds.[71] In particular, Western Power noted that Ventia, the plaintiff in these proceedings, did not seek contribution under the Contribution Act.[72]
[71] Western Power's Submissions [36].
[72] Confirmed by Ventia at ts 133.
In the hearing, Mrs Campbell orally reframed what she sought to draw from the Contribution Act. In broad terms, she contended that the Contribution Act had modified the equitable right of contribution among tortfeasors. She contended, in effect, that tortfeasors now have an equitable right of contribution in unequal amounts.[73] As Western Power had not had a proper opportunity to consider this reframed contention, I made orders requiring supplementary written submissions to be filed. The last of those was filed on 6 March 2024.
[73] See ts 174 ‑ 188, and in particular ts 174 and 177 ‑ 179, 181, 183.
I do not accept Mrs Campbell's submissions. Before addressing them, I will set out the relevant legislation.
The legislation
Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act
Section 7(1)(c) and (2) of the Contribution Act provides:
7.Rules applicable if there are 2 or more tortfeasors
(1)Subject to Part 1F of the Civil Liability Act 2002, where damage is suffered by any person as the result of a tort -
…
(c)any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is or would if sued have been liable in respect of the same damage whether as a joint tortfeasor or otherwise but so that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by him in respect of the liability for which contribution is sought.
…
(2)In any proceedings for contribution under this section the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable; and the court shall have power to exempt any person from liability to make contribution, or to direct that the contribution to be recovered from any person shall amount to a complete indemnity.
As is stated in s 7(1), the right to contribution under this section is made subject to Part 1F of the Civil Liability Act 2002 (WA). So that the full context of s 7 of the Contribution Act can be understood, I will set out the relevant sections of Part 1F of the Civil Liability Act.
Civil Liability Act
Part 1F of the Civil Liability Act sets up a scheme of proportionate liability in relation to concurrent wrongdoers[74] in 'apportionable claims'. An 'apportionable claim' relevantly includes a claim for economic loss or damage to property in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care (but not including any claim arising out of personal injury).[75]
[74] A 'concurrent wrongdoer' means a person who is one of two or more persons whose act or omission caused, independently of each other or jointly, the damage or loss that is the subject of the claim.
[75] See the definition of 'apportionable claim' in s 5AI.
Section 5AK relevantly provides:
5AK.Proportionate liability for apportionable claims
(1)In any proceedings involving an apportionable claim -
(a)the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss; and
(b)the court may give judgment against the defendant for not more than that amount.
(2)If proceedings involve both an apportionable claim and a claim that is not an apportionable claim -
(a)liability for the apportionable claim is to be determined in accordance with the provisions of this Part; and
(b)liability for the other claim is to be determined in accordance with the legal rules, if any, that (apart from this Part) are relevant.
…
(4)This section applies in proceedings involving an apportionable claim whether or not all concurrent wrongdoers are parties to the proceedings.
Section 5AL provides that a concurrent wrongdoer against whom judgment is given under Part 1F in relation to an apportionable claim cannot be required to contribute to the damages or contribution recovered from another concurrent wrongdoer in respect of an apportionable claim. It provides:
5AL.Contribution not recoverable from defendant
(1)A defendant against whom judgment is given under this Part as a concurrent wrongdoer in relation to an apportionable claim -
(a)cannot be required to contribute to the damages or contribution recovered from another concurrent wrongdoer in respect of an apportionable claim (whether or not the damages or contribution are recovered in the same proceedings in which judgment is given against the defendant); and
(b)cannot be required to indemnify any such wrongdoer.
Section 5AM provides:
5AM.Subsequent actions
(1)In relation to an apportionable claim, nothing in this Part or any other law prevents a plaintiff who has previously recovered judgment against a concurrent wrongdoer for an apportionable part of any damage or loss from bringing another action against any other concurrent wrongdoer for that damage or loss.
(2)In any proceedings in respect of any action referred to in subsection (1) the plaintiff cannot recover an amount of damages that, having regard to any damages previously recovered by the plaintiff in respect of the damage or loss, would result in the plaintiff receiving compensation for damage or loss that is greater than the damage or loss actually sustained by the plaintiff.
The two cases relied on in oral submissions
In oral submissions, Mrs Campbell submitted that there were two cases which were authority for the proposition that, due to legislation such as the Contribution Act, there could be unequal equitable contribution among those under co‑ordinate liabilities and who were liable in the same amount.[76] The two cases she relied upon were James Hardie & Co Pty Ltd v Wyong Shire Council[77] and Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority t/as Seqwater (No 24).[78] I will refer to the first of those cases as 'James Hardie v Wyong' to distinguish it from another decision cited by Mrs Campbell involving the same plaintiff.[79]
James Hardie v Wyong
[76] ts 185.
[77] James Hardie & Co Pty Ltd v Wyong Shire Council [2000] NSWCA 107; (2000) 48 NSWLR 679.
[78] Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority t/as Seqwater (No 24) [2020] NSWSC 1498 (Rodriguez).
[79] James Hardie & Co Pty Ltd v Seltsam Pty Ltd [1998] HCA 78; (1998) 196 CLR 53 (James Hardie v Seltsam), discussed later.
Mrs Campbell submitted that James Hardie v Wyong demonstrates that the Contribution Act has altered the nature of equitable contribution as between joint tortfeasors.[80] In short, Mrs Campbell submitted that, as a result of the Contribution Act, joint tortfeasors can claim contribution in equity, unless that right is excluded by the Civil Liability Act.
[80] ts 177. See also Second Defendant's Further Submissions Pursuant to Orders Made by the Honourable Justice Archer on 15 January 2024 filed 29 January 2024 (Mrs Campbell's Further Submissions) [2].
Mrs Campbell acknowledged that the Civil Liability Act excludes the right of contribution in relation to a concurrent wrongdoer's distinct proportion of liability for damages in an apportionable claim.[81] However, she said the Civil Liability Act does not exclude any right of contribution in relation to costs.[82] Mrs Campbell submitted that, as 'damages' under legislation similar to the Contribution Act has been interpreted to include costs, the Court has the power to order equitable contribution in relation to costs in the same proportion as the contribution in relation to damages.[83]
[81] See s 5AL of the Civil Liability Act.
[82] ts 177.
[83] ts 177 ‑ 180.
I do not accept this.
In James Hardie v Wyong, the New South Wales Court of Appeal was considering the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) (NSW Law Reform Act). The NSW Law Reform Act is similar to the Contribution Act.
The Court found that there was a right to contribution under the NSW Law Reform Act, and that this right included a right to contribution in relation to the plaintiff's costs in the same proportion as the right to contribution in relation to the plaintiff's loss. However, I do not accept that the case supports a proposition that there was a right in equity to contribution in those terms. Rather, the Court found a statutory right to contribution in relation to costs in the same proportion.
Due to Mrs Campbell's heavy reliance on this case, I will set out the relevant parts of the judgment at length.
In James Hardie v Wyong, a council employee contracted fibrosis in his lungs after being exposed to asbestos supplied by a company. At first instance, the council was ordered to contribute to the employee's damages, but not to the costs. The issue determined by the Court was whether there was power under the NSW Law Reform Act to order that the council contribute to the costs.[84]
[84] James Hardie v Wyong [28] ‑ [29] (Giles JA), [46] (Heydon JA agreeing) and [7] (Handley JA).
Section 5(1)(c) and 5(2) of the NSW Law Reform Act provides:
5(1)Where damage is suffered by any person as a result of a tort (whether a crime or not) -
…
(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, whether as a joint tort‑feasor or otherwise, so, however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by him in respect of the liability in respect of which the contribution is sought.
(2)In any proceedings for contribution under this section the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person's responsibility for the damage; and the court shall have power to exempt any person from liability to make contribution, or to direct that the contribution to be recovered from any person shall amount to a complete indemnity.
Giles JA, with whom Heydon JA agreed, held that, as a matter of textual analysis, costs could readily be regarded as part of the tortfeasor's liability 'in respect of' the damage suffered by the plaintiff as a result of the tort, so as to come within s 5(1)(c).[85]
[85] James Hardie v Wyong [31] ‑ [33] (Giles JA), [46] (Heydon JA agreeing).
Giles JA went on to add that, '[b]eyond textual analysis, there are sound reasons for costs being part of the tort feasor's liability in respect of the damage'.[86]
[86] James Hardie v Wyong [34] (Giles JA), [46] (Heydon JA agreeing).
His Honour then explained that, prior to the NSW Law Reform Act, there was no contribution between joint or concurrent tortfeasors. His Honour said that this was referred to as a 'rule' (namely, the rule in Merryweather v Nixan[87]), but was actually an exception to the principle that persons who are under co‑ordinate liabilities to make good the one loss should bear the burden pro rata. His Honour described that principle as 'one of natural justice, operating both at law and in equity, directed to achieving equality of benefit and burden'.[88]
[87] Merryweather v Nixan (1799) 8 TR 186; 101 ER 1337.
[88] James Hardie v Wyong [35] ‑ [36] (Giles JA), [46] (Heydon JA agreeing).
Giles JA said that 'what underlies the notion is not common liability to be sued but a common risk the burden of which should, if it falls unequally, be adjusted', citing, and then quoting, Bray CJ in Floreani Bros Pty v Woolscourers (SA) Pty Ltd.[89] Part of that quote was:[90]
The doctrine [of contribution] is an old one. It exists both at law and in equity, though the right in equity is more extensive than the right at common law. It has been variously formulated. It is clear enough … that it is not founded on contract but on general principles of equity and justice. I agree with Mr Fisher that it does not depend, in equity at any rate, upon a common liability to be sued. (citations omitted)
[89] Floreani Bros Pty v Woolscourers (SA) Pty Ltd (1976) 13 SASR 313, 320 ‑ 321.
[90] James Hardie v Wyong [37] (Giles JA), [46] (Heydon JA agreeing).
Giles JA said '[c]onsistently with this, at least in equity contribution as to costs can be obtained'.[91]
[91] James Hardie v Wyong [38] (Giles JA), [46] (Heydon JA agreeing).
His Honour returned to the construction of the NSW Law Reform Act, saying:[92]
Returning to s 5 of the [NSW Law Reform Act], the tort feasor found liable and the contributing tort feasor are under coordinate liabilities to make good the one loss as to damages. The [NSW Law Reform Act] reinstated the principle of natural justice by abolishing the rule in Merryweather v Nixan, and went further by specifically providing for unequal contribution between the tort feasors. The tort feasor found liable and the contributing tort feasor are in one sense not under coordinate liabilities to make good the one loss as to costs, because the order in favour of the plaintiff is only made against the tort feasor found liable. But if there is to be complete recognition of the principle of natural justice, and equality of benefit and burden, costs should be treated in the same way as damages. … it is just and equitable that the burden of the plaintiff's costs should be shared between the tort feasors, so that the burden will not fall on one of them to the exclusion of the other because the plaintiff chose to sue only the one.
…
The wording of s 5 permits the contribution to extend to contribution as to costs, and construing it as extending to costs gives effect to fundamental principle. …
In my opinion, there was power under the [NSW Law Reform Act] to order that the Council contribute to the costs payable by the company to the plaintiff. Contribution to the tort feasor's own costs is another matter, as to which I say nothing. (citations omitted, emphasis added)
[92] James Hardie v Wyong [40] (Giles JA), [46] (Heydon JA agreeing).
The third member of the Court, Handley JA, also found that, under the NSW Law Reform Act, there was power to order the respondent to contribute to the costs of the plaintiff. His Honour's construction of the Act differed from Giles JA in one respect,[93] but Handley JA reached the same conclusion.[94]
[93] See James Hardie v Wyong [32] (Giles JA), [46] (Heydon JA agreeing).
[94] James Hardie v Wyong [23].
In the result, the Court ordered that the respondent contribute to the costs of the plaintiff, in the same proportion as the respondent had been required to contribute to the damages.[95]
[95] This can be calculated having regard to James Hardie v Wyong [2] ‑ [3], [26], [45], [46].
Having regard to the above, I do not accept Mrs Campbell's submission that this case demonstrates that the Contribution Act has altered the nature of equitable contribution as between joint tortfeasors. In my view, it was a case about a statutory right of contribution, albeit a right found to exist on the interpretation of the statute according to its text and in light of the equitable principles of contribution.
My view is consistent with an observation made by the New South Wales Court of Appeal in Queensland Bulk Water Supply Authority t/as Seqwater v Rodriguez & Sons Pty Ltd (Seqwater).[96] The Court cited James Hardie v Wyong as a case which established that the right to recover statutory contribution extends to the costs payable to the plaintiff in addition to the damages.[97]
[96] Queensland Bulk Water Supply Authority t/as Seqwater v Rodriguez & Sons Pty Ltd [2021] NSWCA 206 (Seqwater).
[97] Seqwater [766].
I also note that, in the passage extracted above, Giles JA said that the NSW Law Reform Act reinstated the principle of natural justice by abolishing the rule in Merryweather v Nixan, and went further by specifically providing for unequal contribution between the tortfeasors. In my view, this again confirms that equitable contribution must be equal (among those under co‑ordinate liabilities in respect of the same loss and who are liable in the same amount).
Rodriguez
The second case relied upon by Mrs Campbell was Rodriguez, a decision of Beech‑Jones J. In that case, it was common ground that the plaintiff was entitled to a joint and several costs order against all of the defendants.[98] The issue was whether, as between the defendants, they should bear responsibility for the plaintiff's costs in the same proportions as they had been found to be liable for the loss.
[98] Rodriguez [3].
Beech‑Jones J said that the power to make an order for contribution arose either:[99]
1.under s 7 of the Law Reform Act 1995 (Qld) [which, similarly to the Contribution Act, the NSW Law Reform Act and the Wrongs Act 1958 (Vic), provides that the contribution recoverable from any person is what is just and equitable having regard to the extent of that person's responsibility for the damage]; or
2.under s 98 of the Civil Procedure Act 2005 (NSW) [which gives the Court a broad costs discretion].
[99] Rodriguez [5] ‑ [6] and [8].
Justice Beech‑Jones rejected a submission that the manner in which the proceedings were defended was the sole determinant of the proper proportion of the plaintiff's costs. To the contrary, his Honour found:[100]
[T]he starting point is that a tort was committed for which the three defendants are responsible in proportions of 50%, 30% and 20% respectively. The necessity for the plaintiff to initiate and maintain the proceedings, and hence incur costs, was occasioned by the commission of that tort as well as the decision of all three defendants to resist the plaintiff's claim. ...
Thus, the starting point for each defendant is the negligence by each of them, the proportionate responsibility they each bear for the plaintiff's loss and the necessity for the plaintiff to bring a claim. Thereafter, if some aspect of the defence by any defendant warranted the attribution to them of responsibility for a different or lesser proportion of the plaintiff's costs, such as the unnecessary lengthening of the proceedings, then the Court's orders can reflect that.
[100] Rodriguez [8] ‑ [9].
His Honour said there was nothing in any of the defendants' conduct of the proceedings which would warrant a departure from the starting point. Accordingly, his Honour found that the defendants would bear the same proportions of the plaintiff's costs as they bore for its loss and damage.[101]
[101] Rodriguez [9] ‑ [10].
This decision was appealed. The appeal decision was Seqwater, referred to earlier. The Court of Appeal in Seqwater said that the Law Reform Act 1995 (Qld) did not apply because the question did not fall to be determined by the law of Queensland, but by the law of New South Wales.[102] It said that the source of the power was the broad costs discretion in s 98 of the Civil Procedure Act. However, it did not need to consider the ground of appeal in relation to the apportionment of costs.[103] I will say more about Seqwater later.
[102] Seqwater [766] ‑ [767].
[103] Seqwater [769] ‑ [774].
Mrs Campbell submitted that the first instance decision in Rodriguez is an example of a case in which equitable contribution was ordered in unequal shares in relation to parties under co‑ordinate liabilities in respect of the same loss and who were liable in the same amount. Mrs Campbell acknowledged that the two sources of power identified by Beech‑Jones J were the Law Reform Act 1995 (Qld) and the costs discretion in s 98 of the Civil Procedure Act 2005 (NSW). However, she submitted, in effect, that the exercise of power under the Law Reform Act 1995 (Qld) was, in truth, an exercise of the power to order equitable contribution. She submitted that the Law Reform Act 1995 (Qld) (and its equivalents in other jurisdictions) modified the equitable principles to be applied to joint tortfeasors. In other words, she submitted that the legislation did not create a statutory right of contribution between tortfeasors, but rather modified the manner in which the equitable right of contribution would apply to tortfeasors.[104]
[104] ts 174 ‑ 185.
I do not accept that Rodriguez is an example of a case in which equitable contribution was ordered in unequal shares in relation to parties under co‑ordinate liabilities in respect of the same loss and who were liable in the same amount. Beech‑Jones J expressly identified the sources of power he was considering, both of which were statutory. The case is an example of the exercise of a statutory power.
Further written submissions
It will be recalled that Mrs Campbell orally submitted that the Contribution Act had modified the equitable right of contribution among tortfeasors. She said that there is only one right of contribution among joint tortfeasors, but submitted, in effect, it was an equitable right of contribution in unequal amounts. In further written submissions filed after the hearing (with leave), Mrs Campbell retreated from this position. She said, in effect, that it did not matter whether the right of contribution between joint tortfeasors was correctly described as a non‑statutory right modified by statute or a statutory right.[105]
[105] Mrs Campbell's Further Submissions [2].
In this case, it does matter. Amended Question 3 asks whether, if equitable contribution is ordered, the contribution must be in equal shares. That is, Amended Question 3 is limited to dealing with Ventia's claim for equitable contribution.[106]
[106] Ventia does not make a claim in these proceedings for contribution under the Contribution Act. In the proceedings before Le Miere J, Ventia had made a claim for contribution under the Contribution Act against Western Power. This was dismissed by Le Miere J (see Herridge [No 4] [5]) and not appealed by Ventia.
I do not accept that there is an equitable right of contribution among joint tortfeasors. Rather, for the reasons that follow, I consider that the Contribution Act, properly construed, gives tortfeasors a statutory right to contribution (unless Part 1F of the Civil Liability Act applies).
The proper approach to statutory construction is well settled.[107] In short, '[s]tatutory construction requires attention to the text, context and purpose of the Act. While the task of construction begins and ends with the statutory text, throughout the process the text is construed in its context'.[108]
[107] See, for example, Mohammadi v Bethune [2018] WASCA 98 [31] ‑ [33].
[108] Mohammadi v Bethune [31].
Section 7(1)(c) of the Contribution Act permits tortfeasors to recover contribution subject to Part 1F of the Civil Liability Act (which creates proportionate liability for apportionable claims). That is, s 7(1)(c) permits tortfeasors, other than those who are liable for an apportionable claim, to recover contribution. Historically, tortfeasors could not recover contribution at common law or in equity.
Section 7(2) refers to 'proceedings for contribution under this section'. It provides that the contribution recoverable shall be such as may be found by the court to be just and equitable. This is different to the rule or 'general statement' that equitable contribution must be in equal amounts among those with co‑ordinate liability and who are liable in the same amount (unless the common intention exception applies).
The statutory purpose of those provisions is to permit tortfeasors (other than those who are liable for an apportionable claim) to recover contribution (where, in the absence of these provisions, they could not) and in amounts assessed differently to the way in which contribution is generally assessed in equity.
There is nothing in the text of the Contribution Act to suggest it was intended to amend the manner in which contribution could be ordered in equity. Rather, having regard to its text, context and purpose, I consider that the Contribution Act gives tortfeasors a statutory right to contribution (unless Part 1F of the Civil Liability Act applies).
Consistently with my conclusion, contribution rights under similar legislation in other jurisdictions have been described as statutory rights.
Such cases include the case relied upon by Mrs Campbell in that same paragraph of her further written submissions, being James Hardie v Seltsam. In that case, a claim for contribution under the NSW Law Reform Act had been made. The majority, Gaudron, Gummow and Callinan JJ, found that contribution was not available on the facts. Kirby J, with whom McHugh J agreed, dissented.
Mrs Campbell refers to statements in that case to the effect that the NSW Law Reform Act had the effect of abolishing or altering the common law rule preventing contribution among tortfeasors. However, it was not said, by any member of the Court, that the NSW Law Reform Act meant that tortfeasors had a right in equity to contribution. On the contrary, the judgment of Gaudron and Gummow JJ contains numerous references to the 'statutory entitlement', the 'statutory right', and the 'statutory action'. So too did the dissenting judgment of Kirby J, also relied on by Mrs Campbell.[109]
[109] See James Hardie v Seltsam, the heading above [22] and [24] ‑ [25], [28], [31] (Gaudron and Gummow JJ) and [77] ‑ [79], [83], [87] ‑ [88], [92] ‑ [93] (Kirby J with whom McHugh J agreed).
The two cases relied upon by Mrs Campbell in her oral submissions also referred to a 'statutory right'. The first, James Hardie v Wyong, dealt with the NSW Law Reform Act. The second, Rodriguez, dealt with the Law Reform Act 1995 (Qld).[110]
[110] Both were discussed earlier.
Mrs Campbell did not contend that there were material differences between the Contribution Act and the NSW Law Reform Act or the Law Reform Act 1995 (Qld).
As my task is to construe the Western Australian legislation, I am not bound by such cases, nor required to follow them unless they are plainly wrong. Nor were those cases directed to the issue before me. I only refer to the descriptions used in these cases to note that they are consistent with my conclusion.
Finally, I note that my conclusion is supported by the decision of EM Heenan J in Fico v O'Leary. I will say more about Fico v O'Leary later.[111] For the moment, it is sufficient to note that, as will be seen, EM Heenan J distinguished between contribution in equity and contribution under the Contribution Act.
Conclusion on Contribution Act
[111] See under the heading 'Contrary authorities'.
Given my view that the Contribution Act creates a statutory right of contribution, there is no reason to consider the Contribution Act further. Any statutory right to contribution is not the subject of Amended Question 3.
I further note that Ventia does not plead in these proceedings[112] any claim arising under, or by virtue of, the Contribution Act. Nor did Ventia rely upon that Act in its submissions.[113] Further, Ventia amended its pleading to specify that it seeks payment from Western Power of a larger amount of the costs 'pursuant to the doctrine of equitable contribution or, further or alternatively, order 66 rule 2(e) of the Rules of the Supreme Court'.[114]
[112] In the proceedings before Le Miere J, Ventia had made a claim for contribution under the Contribution Act against Western Power. This was dismissed by Le Miere J (see Herridge [No 4] [5]) and not appealed by Ventia.
[113] see ts 133.
[114] Writ of Summons and Amended Statement of Claim filed 29 February 2024 [20.1].
In its further submissions on this issue, Ventia was silent as to the merits of Mrs Campbell's submissions. It merely said, in effect, that the point should be dealt with because it had been fully argued.[115] It pointed out that Mrs Campbell was a party, and not an intervener bound by the pleadings of others. It pointed out that pleadings may be amended at any time.[116] I accept this. However, this does not mean (nor did Ventia suggest) that an unpleaded issue should be determined in case it is subsequently pleaded.
[115] Plaintiff's Submissions in Response filed 6 March 2024.
[116] Plaintiff's Submissions in Response filed 6 March 2024 [5].
For completeness, I note that Mrs Campbell sought to place weight on Western Power's pleading in paragraph 18(e) of its Defence.[117] That paragraph responds to Ventia's pleading as to the expert witness costs. Those costs are not the subject of Amended Question 3. Rather, they were the subject of Question 2, and I have already ruled that Ventia is not entitled to restitution from Western Power in relation to the expert witness costs.[118]
[117] Second Defendant's Reply Submissions filed 6 March 2024 (Mrs Campbell's Reply Submissions) [3].
[118] See Ventia [No 2] [129].
The Seqwater case
As noted above, Mrs Campbell relied upon the first instance decision in Rodriguez as an example of a case in which equitable contribution was ordered in unequal shares in relation to parties under co‑ordinate liabilities and who were liable in the same amount. I have explained why I do not accept this.[119]
[119] See under the heading 'The two cases relied on in oral submissions'.
In their written submissions, both Ventia and Mrs Campbell also relied upon the appeal decision from Rodriguez, being Seqwater.
During the hearing, Ventia clarified that it did not rely on that case (or the first instance decision) in relation to whether equitable contribution could be in unequal shares.[120]
[120] See ts 162 ‑ 164. Rather, Ventia relied on the cases for two other purposes. First, in relation to the exercise of a costs discretion under O 66 r 2(e), which is not the subject of the question I am currently considering. Second, to support a contention that, if contribution could be ordered to be in unequal shares, it should be ordered to be in shares reflecting the proportionate liability of the defendants. This second point is not disputed by Western Power.
In oral submissions, Mrs Campbell discussed Seqwater in the context of submitting that it did not detract from her arguments in relation to the first instance decision of Rodriguez. However, she did not withdraw her written submissions on the case. If her written submissions intended to assert that Seqwater was authority for (or was an example of) the proposition that unequal equitable contribution could be ordered among persons under co‑ordinate liabilities and who were liable in the same amount,[121] I do not accept that. Seqwater discussed the exercise of a statutory costs discretion.
[121] See the second sentence and footnote 7 of [18] of Mrs Campbell's Submissions, cf [23].
In addition, to the extent that Seqwater averted to equitable contribution, it does not support the contention that unequal equitable contribution can be ordered.
In that case, Seqwater's position was that the appropriate starting point for the exercise of the costs discretion was not by reference to the proportions in which liability for damages had been apportioned among the three defendants. Seqwater said this was not relevant to an assessment of the defendants' respective responsibilities for the plaintiff's legal costs. Seqwater contended that the starting point for the exercise of the costs discretion was the separate liability for the costs of the proceedings which should be divided equally. The Court noted that 'Seqwater also maintained that its position was supported by contribution in equity in respect of the co‑ordinate liability created by the joint and several costs order'.[122]
[122] Seqwater [772].
That is, the Court noted Seqwater's reliance on contribution in equity to support its submission that the starting point for the exercise of the statutory costs discretion should be payments in equal shares. This implicitly acknowledged that, in equitable contribution, shares will be equal.
For these reasons, I consider that Seqwater does not support Mrs Campbell's (or Ventia's) position.
Contrary authorities
Western Power accepts that, under O 66 r 2(e) of the Rules of the Supreme Court, a court can make an order for contribution between defendants in unequal shares.[123] Western Power contends, however, that where contribution in equity is ordered against those who are under co‑ordinate liabilities and who are liable in the same amount, the contributions must be the same.
[123] ts 145.
Western Power relies on cases which set out the general principles, and two cases which it says put beyond doubt that equitable contribution must be in equal shares: Michael Wilson and Fico v O'Leary.[124]
Michael Wilson
[124] Western Power's Submissions [38], [44] ‑ [46].
In Michael Wilson, the New South Wales Court of Appeal dismissed a challenge to the primary judge's decision to decline jurisdiction in respect of a contribution claim. Brereton JA, with whom Emmett AJA agreed, did so on two grounds. The first ground was that the contribution claim was precluded because there was no co‑ordinate liability between the relevant parties.[125] In explaining this, his Honour said:[126]
56The touchstone of a claim for contribution is that those liable to contribute are under a 'co‑ordinate obligation' in respect of 'the one loss', or an obligation 'of the same nature and to the same extent'. The requirement that the contributories be equally liable for the same obligation means that liability is apportioned between them equally, or where the amount of their liability differs, proportionately.
[125] Michael Wilson [53] (Brereton JA, with whom Emmett AJA agreed at [141]).
[126] Michael Wilson [56] (Brereton JA, with whom Emmett AJA agreed at [141]).
A footnote to the last sentence (footnote 37) referred to numerous cases and a textbook which supported this proposition.[127] I will say more about some of the references later. Footnote 37 concluded by stating 'Kirby J expressed a contrary view in Burke at 324-326 [119]‑[122]'. I earlier discussed the reliance placed on these paragraphs of Kirby J's dissenting judgment by Ventia[128] and Mrs Campbell.[129]
[127] The cases cited in the footnote included Burke at 292 [14] (Gaudron ACJ and Hayne J), Sky Channel [7] ‑ [9] (Young J), Bialkower (13), and Leigh‑Mardon Pty Ltd v Wawn (1995) 17 ACSR 741, 752 (Hodgson J).
[128] See under the heading 'Ventia's submissions'.
[129] See under the heading 'Mrs Campbell's submissions'.
In a separate judgment, Leeming JA was similarly emphatic. He said that Kirby J's view was to be compared to what was, according to Leeming JA, settled law. His Honour said:[130]
[I]t was contended … that the 'contribution' sought … should be regarded as an indemnity, on the basis that a person found to have been knowingly involved in a dishonest and fraudulent breach of fiduciary duty was entitled to shift the entirety of that person's liability to the fiduciary. No authority was advanced in support of that proposition. To the contrary, it is settled law that contribution is available to achieve an equal bearing of the burden of coordinate liabilities: see, for example, Burke v LFOT Pty Ltd (2002) 209 CLR 282; [2002] HCA 17 at [14] and [38]; cf the dissenting view of Kirby J at [119]‑[123]. MWP's submission is inconsistent with the principles underpinning the doctrine as explained by French CJ, Gummow, Hayne and Bell JJ in Friend v Brooker (2009) 239 CLR 129; [2009] HCA 21 at [38]‑[40].
[130] Michael Wilson [4].
Ventia does not dispute the accuracy of any of the statements made in Michael Wilson. Ventia submits, however, that statements referring to contribution being in equal shares do not apply to cases involving joint and several costs orders against tortfeasors because they cannot be taken to have agreed that they will be equally liable.[131] I have already explained why I do not accept this.[132]
[131] ts 189.
[132] See under the heading 'Ventia's submissions'.
Mrs Campbell says that the Court in Michael Wilson was dealing with whether contribution was available between a primary wrongdoer and an accessory, whose liability differed.[133] However, the Court was dealing with the equitable right of contribution. It confirmed that, under the equitable right of contribution, contribution must be equal if the parties are under co‑ordinate liabilities in respect of the same loss and are liable in the same amount.
[133] ts 185 ‑ 186.
In short, to the extent that Ventia and Mrs Campbell submit that Michael Wilson is distinguishable on its facts, I do not accept that. In my view, the case is (further) authority for the proposition that equitable contribution among those under co‑ordinate liabilities in respect of the same loss and who are liable in the same amount must be equal.
Neither Ventia nor Mrs Campbell contended that Michael Wilson was plainly wrong.
Fico v O'Leary
The second case relied upon by Western Power is Fico v O'Leary. In that case, EM Heenan J was required to consider, among other things, a series of crossclaims for indemnity, contribution or damages.
His Honour said that the claims gave rise to:[134]
A question of law about whether or not a claim for contribution towards, or indemnity for, any liability under s 82 of the Trade Practices Act or under s 79 of the Fair Trading Act (1987) will lie against another party who is also directly or indirectly involved in the misleading or deceptive conduct, whether under s 7 of the [Contribution Act] or at all, therefore arises.
[134] Fico v O'Leary [9].
There was also a contribution claim under the Contribution Act by three of the defendants against a third party on the basis that he was alleged to have been a concurrent tortfeasor.[135]
[135] Fico v O'Leary [10].
When EM Heenan J came to consider the contribution claims, his Honour noted that it was established that equitable contribution could be sought in relation to claims under the Trade Practices Act.[136]
[136] Fico v O'Leary [232].
In relation to the claims under the Contribution Act, his Honour said:[137]
234There are also the claims by the first, second and fourth defendants against each other for indemnity or contribution under the provisions of s 7 of the Law Reform (Contributory Negligence and Joint Tortfeasors' Contribution) Act 1947 which involve distinct issues. The history and the purpose of the legislation of which this Act is largely a stereotype, have been fully explained in James Hardie & Co Pty Ltd v Seltsam Pty Ltd (1998) 196 CLR 53 per Gaudron and Gummow JJ at 57 ‑ 58; 59 ‑ 61; and 64 ‑ 67 and per Kirby J at 69 ‑ 70 and 75 ‑ 80. As those passages explain, at common law, as distinct from in the courts of Chancery, and later in courts exercising jurisdiction in equity, there was no contribution available between either joint or concurrent tortfeasors - Merryweather v Nixan (1799) 8 TR 186; 101 ER 1337. Consequently, as explained by Gaudron ACJ and Hayne J in Burke v LFOT Pty Ltd (supra) at 293, there was no occasion for the common law to enquire into or examine the notion of co‑ordinate liability. Questions of contribution between joint tortfeasors could be dealt with only in accordance with the statutory powers conferred, in this State, by the 1947 Law Reform Act. Despite the many practical difficulties of interpretation and application which the statute has produced over the years, that fundamental divergence between rights of contribution which arise in equity on the one hand, and the limited rights of contribution that may arise in proceedings for a common law tort only by virtue of the statute, still exists. Therefore, in relation to each of the cross claims where contribution is sought the question must first be asked whether the liability in respect of which contribution is sought is one arising because of a tort at common law or whether it is a liability in respect of which equity may recognise a right to contribution. If it is the former, then equity will have no role to play and the right to contribution is no more or less than the statute confers. If it is the latter then a question of whether or not there may be contribution will depend upon equitable doctrines as explained in Burke v LFOT Pty Ltd (supra).
235In this latter respect equitable principles now cover the field: Burke v LFOT Pty Ltd (supra) per McHugh J at [38] and Armstrong v Commissioner of Stamp Duties (1967) 69 SR (NSW) 38 at 48. For equitable contribution to be available there needs to be a 'co‑ordinate liability' namely one that depends on a common interest and a common burden: Dering v Earl of Winchelsea (1787) 1 Cox Eq Cas 318 at 322; 29 ER 1184 at 1186. Differences between the causes of action pursuant to which two or more parties claiming contribution are liable will not preclude an order for contribution between them - Burke v LFOT Pty Ltd (supra) at [49] and BP Petroleum Development Ltd v Esso Petroleum Co Ltd [1987] SLT 345, provided that the liability of each is of the same nature and to the same extent, but the right to contribution still depends on the claimant discharging a common obligation, that is to say, an obligation of the same nature and extent owed by the claimant and the defendant. (emphasis added)
[137] Fico v O'Leary [234] ‑ [235].
His Honour found that there was no scope for an order for contribution under the Contribution Act because none of the defendants had been found liable to the plaintiff in negligence or in respect of any other liability in tort.[138]
[138] Fico v O'Leary [236].
His Honour turned to the claims in equity. His Honour said that the first, second and third defendants were liable to the plaintiff for breaches of s 51A and s 52 of the Trade Practices Act and that the fourth defendant was liable for misleading or deceptive conduct contrary to s 10 of the Fair Trading Act. His Honour said that those liabilities derived somewhat differently for the several defendants.[139] Nevertheless, his Honour considered that the liabilities were co‑ordinate.[140]
[139] Fico v O'Leary [237].
[140] Fico v O'Leary [242].
His Honour also found that the first and second defendants had breached their fiduciary duty and that that liability was co‑ordinate with the liabilities of the third and fourth defendants for misleading or deceptive conduct. He found that the first and second defendants were entitled to recover contribution from the other defendants for the breach of fiduciary duty.[141]
[141] Fico v O'Leary [241] ‑ [243].
In relation to the misleading or deceptive conduct claim, his Honour found that the plaintiff's loss was the purchase price of $200,000 and consequential losses of about $100,000.[142]
[142] Fico v O'Leary [244], [246].
His Honour did not order contribution in relation to the purchase price loss as to do so would, in effect, allow the defendant to benefit from her misleading or deceptive conduct.[143]
[143] Fico v O'Leary [245].
His Honour noted that the liability of the defendants to the plaintiffs for the consequential losses suffered by the plaintiff was different because they were losses which the plaintiff sustained but which produced no corresponding benefit to any of the defendants.[144]
[144] Fico v O'Leary [246].
His Honour then said, in the paragraph relied upon by Western Power:[145]
247Contribution in equity is not based upon the comparative culpability of the defendants found liable to pay the damages or compensation awarded to the claimant. Because the parties are equally liable for the same obligations contribution can only be apportioned between them equally in equity as distinct from the different approach which applies under the Law Reform (Contributory Negligence and Joint Tortfeasors' Contribution) Act 1947 - Leigh Mardon Pty Ltd v Wawn (1995) 17 ACSR 741 at 752; Glenmont Investments Pty Ltd v O'Loughlin (No 3) (2001) 79 SASR 288 at [18]. The exception to this rule that there may be a variation from the principle of equal contribution between co sureties where that reflects the common intention of the sureties - Morgan Equipment Company v Rodgers (1993) 32 NSWLR 467 - has no possible application to the facts of this case. (emphasis added)
[145] Fico v O'Leary [247].
His Honour concluded that there should be contribution equally between all four defendants.[146]
[146] Fico v O'Leary [248].
Both Ventia and Mrs Campbell submit that Fico v O'Leary is distinguishable as it was not dealing with contribution in relation to a joint and several costs order as between tortfeasors.[147] Mrs Campbell also submits that EM Heenan J was not seeking to determine an underlying principle. Mrs Campbell further submits that, if EM Heenan J was distinguishing between equitable contribution and statutory contribution, this would be inconsistent with what was said in James Hardie v Seltsam and would be wrong.[148]
[147] ts 186 (Mrs Campbell) and ts 189 (Ventia).
[148] Mrs Campbell's Reply Submissions [7].
I accept that EM Heenan J was not dealing with contribution in relation to a joint and several costs order as between tortfeasors. I do not accept, however, that Fico v O'Leary is materially distinguishable. EM Heenan J was considering claims of contribution against another party said to be involved in misleading or deceptive conduct. His Honour was also dealing with a claim of contribution against an alleged concurrent tortfeasor. His Honour considered contribution in equity and under the Contribution Act. His Honour considered the circumstances in which equity was excluded (tortfeasors), where the only right to contribution was as conferred by the Act. His Honour expressly noted the distinction between contribution in equity and contribution under the Contribution Act.
Even if I am wrong to consider that the case is not distinguishable, his Honour's reasons are nevertheless persuasive. I do not accept that James Hardie v Seltsam is inconsistent with anything said by EM Heenan J.[149]
[149] See the discussion of this case under the heading 'Further written submissions'.
I accept that EM Heenan J was not seeking to determine an underlying principle. Nevertheless, Fico v O'Leary provides yet further confirmation that equitable contribution among those under co‑ordinate liabilities in respect of the same loss and who are liable in the same amount must be equal (unless the common intention exception applies).
In addition, as noted earlier, Fico v O'Leary was one of two cases cited in On Equity (P Young, C Croft and M Smith) for the following proposition:[150]
The fact that one party may be at greater fault is not a ground for ordering contribution in unequal amounts; contribution is not founded upon comparative culpability.
[150] Young P, Croft C and Smith M, On Equity (2009) [12.430].
The other case cited in that text was a case I mentioned earlier, Sky Channel Pty Ltd v Tszyu (No 2).[151] Sky Channel was also cited in footnote 37 in Michael Wilson. I will discuss Sky Channel and another case cited in that footnote, Leigh‑Mardon Pty Ltd v Wawn,[152] next.
Authorities cited in Michael Wilson
[151] Sky Channel [7] ‑ [9] (Young J).
[152] Leigh-Mardon (752) (Hodgson J).
In Leigh-Mardon Pty Ltd v Wawn, Hodgson J said:[153]
[T]here is no general discretion to adjust contributions by reason of some perceived difference in responsibility of the debtors for the incurring of the debt: that is, there is nothing like the apportionment discretion that applies in cases of contribution between tortfeasors or in cases of contributory negligence.
[153] Leigh‑Mardon (752) (Hodgson J).
In Sky Channel,[154] Young J said:
7Almost all the textbook writers make it clear that the basis of the principle of contribution other than that which flows out of the [NSW Law Reform Act] is the maxim 'equality is equity'. As Goff and Jones, Law of Restitution, 5th edition (Sweet & Maxwell, London, 1998) say at p 397:
'Consequently, the equitable and not the statutory principles governing contribution claims apply if the liability of debtor is in solidum; the co‑obligors, being aequali jure must bear any loss equally.'
8This principle very clearly comes out in the cases where a loss has occurred to a trust where one trustee is a professional person who was left with virtual control of the trust and the other trustee is unskilled. In some cases the unskilled trustee will be entitled to an indemnity against the other but, unless the right of indemnity can be established, contribution is equal. …
[154] Sky Channel [7] ‑ [8].
His Honour then referred to the common intention exception, noting that there are 'some situations where equal contribution will not apply, but those situations do not depend on fault'.[155]
[155] Sky Channel [9].
Young J noted that the appellant submitted that the respondent's culpability for the damages far exceeded his own and that 'equality is equity' means equality so far as people paying what is their fair share of the co‑ordinate liability because of their respective culpability.[156] His Honour then said:
12The answer is, I think, in the words of Mr Wood for the respondent in his written submissions, that the authorities are 'dead against the concept of apportionment sought to be propounded by the Appellant. Both authority and principle negate the Appellant's argument …'
13It may be that the law one day will develop to the stage where 'fairness' in the legal sense of the term as used in Mr Aldridge SC's argument can be accepted. However the fact that in other places such as England and Victoria statutes have been passed to cover the situation tends to show that the law will not develop quite so far as the appellant would have it in this case.
14… If there is to be contribution it must be equal ….
[156] Sky Channel [10] ‑ [11].
Footnote 37 in Michael Wilson also referred to Meagher, Gummow & Lehane's Equity: Doctrines & Remedies.[157] In the cited paragraph, the authors said:
The fact that parties must be equally liable for co‑ordinate obligations also underlies the inability to apportion liability between them other than equally (contrary to cases of contribution between tortfeasors pursuant to statute).
[157] Equity Doctrines and Remedies, 404 [10‑090].
Conclusion
For these reasons, I consider that it is established law that equitable contribution among those under co‑ordinate liabilities and who are liable in the same amount can only be in equal shares (subject to a common intention to the contrary). This is so regardless of any difference in the parties' culpability for the loss.
For completeness, I note that Kunc J in AMP Bank Limited v Brown and Kavanagh[158] appeared to reach the same view. This case was not cited by any of the parties. However, as I have not relied on it in reaching my conclusion, I did not consider it necessary to give the parties the opportunity to comment on it.
[158] AMP Bank Limited v Brown and Kavanagh [2017] NSWSC 313. Although dealing with co-sureties, his Honour considered the question of unequal contribution more generally.
Accordingly, if equitable contribution were ordered in this case, it could only be in equal shares.
I will hear from the parties as to costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
NL
Associate to the Hon Justice Archer
21 MAY 2024
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