Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: CSR Ltd v Wallaby Grip Ltd [2012] NSWCA 154
• Hearing dates: 16 May 2012
• Decision date: 30 May 2012
• Before: Beazley JA at 1; Basten JA at 2; Whealy JA at 47

Decision

(1) Grant the applicant leave to appeal from the orders made in the Dust Diseases Tribunal on 2 August 2011.

(2) Direct that the draft notice of appeal be filed within 7 days.

(3) Dismiss the appeal.

(4) Order the applicant to pay the respondents' costs in this Court.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: DUST DISEASES TRIBUNAL - claims resolution process - apportionment between joint tortfeasors - multiple claims and cross-claims between joint tortfeasors - Dust Diseases Tribunal ordered first tortfeasor to pay second tortfeasor although second tortfeasor had not commenced proceedings against first tortfeasor - whether order properly made - discussion of QBE Insurance (Australia) Ltd v Wallaby Grip Ltd [2007] NSWCA 43; 4 DDCR 331; Power Technologies Pty Ltd v Energy Australia [2010] NSWCA 107; Bradford Insulation Industries Pty Ltd v Babcock Australia Pty Ltd [2011] NSWCA 117 - Dust Diseases Tribunal Regulation 2007 (NSW), Pt 4 Div 6
• Legislation Cited: Dust Diseases Tribunal Amendment (Claims Resolution) Act 2005 (NSW), Sch 2; Dust Diseases Tribunal Regulation 2001 (NSW), Pt 4, cll 40-44; Dust Diseases Tribunal Regulation 2007 (NSW), Pt 4, Div 5; Div 6, cll 13, 14, 19, 47, 48, 49, 51, 52, 53, 54, 55, 57, 58; Law Reform (Miscellaneous Provisions) Act 1946 (NSW), s 5
• Cases Cited: Bradford Insulation Industries Pty Ltd v Babcock Australia Pty Ltd [2011] NSWCA 117; Power Technologies Pty Ltd v Energy Australia [2010] NSWCA 107; QBE Insurance (Australia) Ltd v Wallaby Grip Ltd [2007] NSWCA 43; 4 DDCR 331
• Category: Principal judgment
• Parties: CSR Ltd (Applicant); Wallaby Grip Ltd (First Respondent); Wallaby Grip B.A.E. Pty Ltd (under external administration (Second Respondent)
• Representation: Counsel: T G R Parker SC (Applicant); D J Russell SC (Respondents); Solicitors: Colin Biggers & Paisley (Applicant); Middletons (Respondents)
• File Number(s): CA 2011/277821

Decision under appeal

• Jurisdiction: 9115
• Citation: Wallaby Grip Limited & Anor v Amaca Pty Limited; and Amaca Pty Limited v CSR Limited [2011] NSWDDT 7
• Date of Decision: 2011-08-02 00:00:00
• Before: Kearns DCJ
• File Number(s): DDT 164/2009

HEADNOTE

[This headnote is not to be read as part of the judgment]

Mr Ayres contracted mesothelioma in the course of his employment with the Commonwealth. On 20 May 2008 he commenced proceedings in the Dust Diseases Tribunal for damages against Comcare, representing the Commonwealth. Comcare cross-claimed against Wallaby Grip Ltd and Wallaby Grip (BAE) Pty Ltd (in liq) (jointly, "Wallaby Grip"). On 14 November 2008, an assessor made a determination apportioning 50% of the total liability to Mr Ayres to Wallaby Grip and 50% to Comcare.

On 23 June 2009 Wallaby Grip filed a claim seeking contribution from Amaca Pty Ltd ("Amaca") as a joint tortfeasor. On 31 July 2009 Amaca filed a cross-claim seeking contribution from CSR Ltd ("CSR"). On 13 November 2009, pursuant to the Tribunal's claims resolution process, an assessor determined that Wallaby Grip's liability should be apportioned such that CSR bore 8% of the total liability to Mr Ayres.

On 2 August 2011, on the application of Wallaby Grip, the Tribunal made an order that CSR pay Wallaby Grip the amount corresponding to this 8% liability. CSR sought leave to appeal from that decision to this Court. CSR asserted that, because Wallaby Grip had not brought proceedings against it, Wallaby Grip could not enforce the assessor's determination of its proportionate liability.

The issue for determination on appeal was whether the enforcement order was properly made.

The Court held (per Basten JA, Beazley and Whealy JJA agreeing), granting leave to appeal and dismissing the appeal:

1. Given the terms of Dust Diseases Tribunal Regulation 2007 (NSW), cl 47(2), the effect of a determination must extend to reimbursement of one defendant where payment has been made to the plaintiff in an amount which exceeds that defendant's proportionate liability: [15]

2. If an apportionment had been determined prior to payment to the plaintiff, each defendant or cross-defendant would be liable to contribute to the plaintiff's damages an amount equivalent to its respective proportionate liability for the damages assessed. It is difficult to see why a different conclusion should follow in respect of a post-payment apportionment, except that the liability of a new defendant can only be discharged by recoupment of the expenditure incurred by an original defendant in meeting the plaintiff's claim: [23]

3. The result of an apportionment under the claims resolution process was to identify the proper several contributions of each defendant to payment of the plaintiff's damages. The result is not a final order, because the determination gives rise only to a liability to make an immediate payment, subject to adjustment if the outcome is disputed by one of the parties. The result, at the interim or provisional stage, following the assessor's determination, is thus quite different from the case of a plaintiff suing jointly liable tortfeasors: [40]

Judgment

1 BEAZLEY JA: I agree with Basten JA.

2 BASTEN JA: Mr Barry Ayres ("the plaintiff") contracted mesothelioma as a result of his employment by the Commonwealth at the Garden Island dockyard between 1962 and 1971. On 20 May 2008 he brought proceedings in the Dust Diseases Tribunal against Comcare. On 3 October 2008 Comcare filed a cross-claim seeking contribution from Wallaby Grip Ltd and Wallaby Grip (BAE) Pty Ltd (in liq) (which companies will be jointly referred to as "Wallaby Grip").

3 On 14 November 2008, an assessor made a determination apportioning liability between Comcare and Wallaby Grip equally. On 5 January 2009 the plaintiff's action was settled and judgment was entered in his favour against Comcare and in favour of Comcare against Wallaby Grip for 50% of the settlement sum. Both payments have been made and neither the plaintiff nor Comcare have any on-going interest in the proceedings.

4 On 23 June 2009 Wallaby Grip filed a claim seeking contribution from Amaca Pty Ltd ("Amaca"), as a joint tortfeasor, pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) ("the 1946 Act"). On 31 July 2009 Amaca filed a cross-claim seeking contribution from CSR Ltd ("CSR"). On 13 November 2009 an assessor determined that Wallaby Grip's liability to the plaintiff should be apportioned as between it and the cross-defendants as follows:

(a) Wallaby Grip - 30%

(b) Amaca - 12%

(c) CSR - 8%.

5 Based on that determination, Wallaby Grip sought and was paid, Amaca's proportion of the plaintiff's damages. Wallaby Grip then sought to recover a further 8% of the plaintiff's damages from CSR, unsuccessfully. CSR asserted that, because Wallaby Grip had not brought proceedings against it, Wallaby Grip could not enforce the determination by requiring that it (CSR) pay money to Wallaby Grip. That is the dispute underlying the present appeal.

6 In the Dust Diseases Tribunal, Wallaby Grip filed a notice of motion dated 8 July 2011 seeking the following order:

"Pursuant to s 11(1A) of the Dust Diseases Tribunal Act 1999 and s 90 of the Civil Procedure Act 2005, CSR Ltd ('CSR') pay [Wallaby Grip] the sum of $73,693.18 being the 8% determined liability of CSR under the contribution assessment determination dated 13 November 2009."

The motion also sought interest and costs.

7 On 2 August 2011, Kearns DCJ made the orders sought. He did so on the basis that the case could not be distinguished from Bradford Insulation Industries Pty Ltd v Babcock Australia Pty Ltd [2011] NSWCA 117, in which this Court held that the claims resolution process, pursuant to which the determination was made, operated with respect to contribution proceedings between defendants and cross-defendants, not forming part of the original claim brought by the plaintiff. Although the decision in Bradford Insulation did not expressly determine the point now in issue, the order made by the Tribunal in the present case was correct, for the reasons which follow.

8 As will be noted below, the operation of Pt 4, Div 5 has been considered by this Court in QBE Insurance (Australia) Ltd v Wallaby Grip Ltd [2007] NSWCA 43; 4 DDCR 331 and Power Technologies Pty Ltd v Energy Australia [2010] NSWCA 107, as well as in Bradford Insulation. In Power Technologies the Court held that the claims resolution process operated with respect to both defendants and cross-defendants, but in each case on the limited basis identified in cl 44.

Determination of apportionment claims

9 In 2005 extensive amendments were made to the Dust Diseases Tribunal Act 1989 (NSW) and the Dust Diseases Tribunal Regulation 2001 (NSW) ("the 2001 Regulation") designed to ensure the expeditious determination of claims relating to asbestos-related conditions. In particular, a new "claims resolution process" was introduced as Pt 4 of the 2001 Regulation: Dust Diseases Tribunal Amendment (Claims Resolution) Act 2005 (NSW), Sch 2. On 2 March 2007, the 2001 Regulation was replaced by the Dust Diseases Tribunal Regulation 2007 (NSW) ("the 2007 Regulation"). The 2007 Regulation introduced Div 6 into Pt 4, the terms of which are critical to the present dispute. The primary purpose of Div 6 was to require that the claims resolution process apply in respect of separate contribution proceedings, not forming part of the original claim brought by the plaintiff.

10 Part 4 of the Regulation applies to a claim by a person suffering from an asbestos-related condition and a cross claim by a defendant on such claim: cl 14. Once the claim is filed it is subject to the claims resolution process: cl 18(1). That means that "the parties to the claim must comply with the provisions of [Pt 4]": cl 19(1). In Div 5, dealing with apportionment, a reference "to a defendant includes a reference to a cross-defendant": 2007 Regulation, cl 47(1).

11 Part 4, Division 5 (cll 40-44 of the 2001 Regulation) dealt with questions of apportionment. Subject to the addition of cl 51 (which is of no present relevance) and cl 53 involving cost penalties with respect to maintaining disputes, Div 5 remains in substantially the same terms in the 2007 Regulation, but is found at cll 47-53.

12 Defendants (and cross-defendants) "who are alleged to be liable to contribute to any damages recovered by the plaintiff must agree among themselves as to the contribution that each is liable to make to those damages": cl 48(1). Despite that obligation, it is envisaged that agreement may not be reached within a prescribed period and accordingly separate provision is made for determination of the apportionment dispute by a contributions assessor: cl 49(1). The contributions assessor is required to determine the contribution that each defendant (including a cross-defendant) is liable to make, on the assumption that each is liable: cl 49(4).

13 The primary purpose of the claims resolution process, particularly as it existed before March 2007, was to ensure that disputes between defendants and cross-defendants as to the apportionment of liability did not delay a possible settlement or determination of a claim by a plaintiff. To that end, tight time constraints were imposed on various steps in the process. That required that a distinct claims resolution process might need to be undertaken in respect of different parties, as they were added to the proceedings. Clause 47(2) thus provides:

"47 Application to cross-defendants

...

(2) The settlement or determination of a plaintiff's claim (the original claim) does not affect the continued operation of this Division [5] in relation to a cross-claim on that original claim and the apportionment of liability among cross-defendants on the cross-claim. For that purpose (and despite clause 18) the cross-claim remains subject to the claims resolution process."

14 Clause 52 relevantly provides as follows:

"52 Effect of agreement or determination as to apportionment

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

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

15 It is apparent from cll 47 and 52 that the purpose of the claims resolution process was not exhausted when the plaintiff's claim was settled or determined. It may also be assumed, although the Regulation did not expressly so state, that the purpose of the process was not exhausted when the plaintiff was paid in full. That is because it was at least a secondary purpose of the claims resolution process to reduce legal and administrative costs generally and to encourage early settlement of claims between those liable, as well as between the defendants and the plaintiff: cl 13(b) and (c). Given the terms of cl 47(2), it must also follow that the effect of a determination, said to be binding on the defendants "for the purposes of the settlement ... of the plaintiff's claim and payment of the plaintiff's damages" must extend to reimbursement of one defendant where payment has been made to the plaintiff in an amount which exceeds that defendant's proportionate liability. If that were not so, cl 52 would cease to operate once the plaintiff had been paid.

16 The rationale for this conclusion was explained by Hodgson JA in QBE Insurance, referring to the reasoning of the Tribunal President in that case:

"2 ... The President in his reasons did not take into account the relevant consideration that, if the contribution claims were removed from the claims resolution process on the ground that the object of achieving early resolution of the plaintiff's claim was achieved when the defendants agreed to settle the plaintiff's claim, this could provide a disincentive for defendants to settle in the future and thus tend to reduce the utility of the claims resolution process.

3 One of the objects of the process is to ensure that defendants are not held back from settling claims by plaintiffs on the ground that they cannot be confident of contribution from cross-defendants until they have prosecuted cross-claims to a conclusion. If settlement with a plaintiff justified removal of contribution claims from the claims resolution process, defendants could not settle claims by plaintiffs in the confident expectation of an early provisional resolution of their claims against cross-defendants, so part of the utility of the claims resolution process would be prejudiced."

17 This explanation was adopted by Allsop P in Power Technologies with the following additional proposition at [3]:

"If, however, parties knew that the claims resolution process could continue after settlement with the plaintiff, they could be assured of prompt resolution of the contribution obligations of all parties for the purposes of settlement with the plaintiff, and of obtaining orders for payment of such contribution for that same purpose." [Emphasis in original.]

18 The reasoning of Allsop P (with whom Beazley JA agreed) in Power Technologies and the view expressed by Hodgson JA in QBE Insurance require that the purposes identified in cl 52(1) are not spent upon payment of the plaintiff's damages: see also Handley AJA in QBE Insurance at [30]-[31]. That reasoning is also consistent with cll 54 and 55 in Div 6:

"54 Application and interpretation

(1) This Division applies to a claim for contribution (the new cross-claim) made by a defendant (including a cross-defendant) to a claim (the original claim) when proceedings on the new cross-claim are commenced after the original claim has been settled or determined ....

(2) The plaintiff on the new cross-claim is referred to in this Division as the initiating defendant and a defendant on the new cross-claim is referred to as a new defendant. The defendants (including any cross-defendants) on the original claim are referred to as the original claim defendants.

...

55 New cross-claim subject to claims resolution process

(1) Despite clause 18, a new cross-claim to which this Division applies is subject to the claims resolution process once the claim is filed and until:

(a) the defendants to the claim agree as required by Division 5 to the contribution that each is liable to make to damages recovered by the plaintiff on the original claim, or

(b) failing agreement, a Contributions Assessor has determined under Division 5 the contribution that each defendant is liable to make."

19 The effect of these provisions is to ensure that the claims resolution process provided by Div 5 operates with respect to a subsequent claim for contribution. It is clear that the exercise to be undertaken by the assessor is the same as that undertaken pursuant to Div 5. Accordingly, the assessment to be made requires determination of the proportion by which each defendant and cross-defendant is to contribute to the plaintiff's damages. Two additional issues would, however, arise in respect of an apportionment under Div 6: they are potentially interrelated. The first concerns the effect of a determination in respect of a new cross-claim on any apportionment previously made by an earlier determination. Secondly, there may be a separate issue as to the effect of the further determination.

20 The first issue is expressly identified and resolved. Thus, any party who was a defendant to the original claim is required to elect whether to be subject to the new apportionment: cl 57(3). However, and in any event, the second assessor cannot increase the contribution determined by an earlier assessor: cl 58(1)(e). Again in any event, the assessor is required to determine the contribution of each defendant, including the original claim defendants, whether they have elected to be subject to the new apportionment or not, but is not binding on them unless they have so elected: cl 58(1)(d). (Why an original claim defendant would not wish to be bound by a new apportionment, which can only reduce its responsibility, is unclear: if there is a different construction of these provisions, it does not matter for present purposes.) Failing to elect constitutes an election not to be subject to the new apportionment: cl 57(6).

21 In relation to the second issue, the extent to which the provisions of cl 52, identifying the effect of a determination, are modified or varied, is less clear. The relevant part of cl 58 reads as follows:

"58 New apportionment under Division 5

(1) The provisions of Division 5 apply again in respect of the original claim and the original claim defendants (with the new defendants included as defendants to the claim), subject to the following modifications and clarifications:

...

(d) the Contribution Assessor's determination is to be a determination of the contribution that each defendant is liable to make ...."

22 As already noted, the primary effect of cl 58(1), and in particular paragraph (d), is to identify the consequences for original claim defendants. Although reference is made to new defendants, that which is determined is simply identified as "the contribution that each defendant is liable to make". The limits of the effect of the determination and the purposes for which it is made are not expressly identified. The only tenable conclusion is that they remain those identified in cl 52(1), within Div 5. As the determination identifies the proportion of the plaintiff's damages for which each defendant and cross-defendant is liable, once the plaintiff has been paid in full the only purpose of the determination can be to permit recoupment by one defendant of payments made by it in excess of its determined proportionate liability. That is consistent with the accepted operation of apportionment between defendants to the original claim, where the plaintiff has settled: see [15]-[18] above.

23 If an apportionment had been determined prior to payment to the plaintiff, it was accepted by the parties that each would be liable to contribute to the plaintiff's damages the amount of their respective proportionate liability of the damages assessed. It is difficult to see why a different conclusion should follow in respect of a post-payment apportionment, except that the liability of a new defendant can only be discharged by recoupment of the expenditure incurred by an original defendant in meeting the plaintiff's claim. On that basis, Wallaby Grip would be entitled, in the present case, to recover from each of Amaca and CSR their respective proportionate liabilities. Wallaby Grip would thus recoup so much of the 50% payment it had made in accordance with the first determination, so as to reduce its effective liability to 30%, to reflect the result of the second determination. On that approach, the order of the Tribunal was correctly made.

The appellant's case

24 CSR resisted this conclusion for one principal reason, namely that no proceeding had been brought by Wallaby Grip against it. It followed, according to CSR, that Wallaby Grip could never obtain a final judgment against CSR. That in turn meant that if CSR were to seek to challenge the assessor's determination, it would need to institute proceedings itself against Wallaby Grip to reclaim the money paid. On the other hand, CSR acknowledged that Amaca would have a right to an order against it for payment of the amount of its proportionate liability, a result which it could challenge by resisting Amaca's cross-claim, should Amaca pursue the matter in the Tribunal.

25 CSR sought to support its position by reference to statements made, obiter, by Handley AJA in QBE Insurance. It will be necessary to address these statements, together with the further discussion of the issue in Power Technologies, shortly. Before taking that step, however, it is important to note the context in which the present dispute arises.

26 That exercise should involve reference to the pleadings in the Tribunal, including the claim filed by Wallaby Grip against Amaca, the claim filed by Amaca against CSR and the replies of each party. That material is not before this Court. However, the Court does have the reasons given for the apportionment made on the first determination, as between Comcare and Wallaby Grip; it also has the reasons given for the second determination, allocating responsibility as between Wallaby Grip, Amaca and CSR. In relation to the latter determination, none of the parties was a user of asbestos products: each was a supplier. One aspect of the exercise was to identify the circumstances in which the plaintiff had been exposed to asbestos dust and the asbestos products which were the source of the dust. For example, there was reference to evidence from a lagger with Bells Asbestos which did work at Garden Island in the relevant period. The witness estimated that "75 percent of the new material was Hardies and 25 percent of the material was Bells": Reasons at [14]. On the other hand, the plaintiff had referred to working with various products, including asbestos cloth; Amaca denied manufacturing asbestos cloth: at [18]. For a period, CSR manufactured products in partnership with Amaca, but claimed that there was no evidence that the plaintiff had been exposed to such products.

27 The plaintiff's mesothelioma was, presumably, alleged to be the product of the cumulative exposure to asbestos dust whilst working in the naval dockyards at Garden Island. The operation of those dockyards was the responsibility of the Commonwealth, for which Comcare was found liable. The attribution of liability to the defendants and cross-defendants depended primarily upon the extent to which they were the suppliers of the relevant asbestos products. Thus, although Amaca sought to join CSR, it was not because CSR was required in some way to indemnify Amaca for part of its responsibility, but because CSR was separately liable for the supply of products used at the dockyard. Accordingly, it would not satisfy the assessor's determination if Amaca were to pay 12% of the plaintiff's damages to Wallaby Grip and recoup 8% of the plaintiff's damages from CSR: that would result in Amaca bearing only 4% of the liability for the plaintiff's damages and Wallaby Grip bearing 38%. CSR would thus have borne twice the liability of Amaca, although the assessor identified its liability at two-thirds the extent of Amaca's liability and not as a proportion of Amaca's liability. The assessor's determination could only be given effect by requiring that Amaca on-pay any money received from CSR to Wallaby Grip, in addition to paying Wallaby Grip its own contribution. The same effect would be achieved by requiring CSR to pay its proportion directly to Wallaby Grip. The question is why such an order could not be made.

28 CSR contended that this conclusion was inconsistent with the reasoning of Handley AJA in QBE Insurance who stated at [34], by reference to the language of cl 44 of the Regulation as then in force (now cl 52):

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

29 CSR would extend this reasoning to the conclusion that where a defendant cross-claims against a third party, which in turn cross-claims against a fourth party, the defendant cannot enforce the liability of the fourth party. That logic may be accepted: the question is whether Handley AJA was dealing with the claims resolution process, or ordinary litigation. To answer that question, it is necessary that the passage be read in context. A plaintiff suffering from mesothelioma had brought proceedings against three defendants, "Peerless" and two others which were represented by their insurer, QBE. The first defendant joined the two Wallaby Grip companies as cross-defendants. The time for such joinder appears to have expired the day that QBE was added as a defendant and its entitlement to join Wallaby Grip in the plaintiff's proceedings was thus lost, although it could still bring its cross-claim in separate proceedings. Handley AJA stated at [8]:

"In fact QBE did file cross-claims against [Wallaby Grip] which argued that they were invalid. The President [of the Tribunal] disposed of [Wallaby Grip's] application without ruling on the validity of QBE's cross-claims and this Court can do likewise."

30 The dispute concerned an order made by the Tribunal, on the application of Wallaby Grip, that the contribution claims be removed from the claims resolution process under Pt 4, Div 5 of the Regulation: Handley AJA at [5]. The Tribunal made that order on the basis that the liability of Wallaby Grip was disputed and litigation was inevitable so that a summary determination under Div 5 would only increase costs and possibly cause delay. That ground was said by QBE to involve an irrelevant consideration and, if anything, to provide reasons why the contribution claim should remain within the claims resolution process.

31 Wallaby Grip objected that a summary determination of their contributions would now be futile, the plaintiff's claim having settled and the plaintiff having been paid his damages, because an apportionment conclusively binding "for the purposes ... of ... payment of the plaintiff's damages" could no longer operate: at [27]-[28]. Addressing that submission, Handley AJA stated in the paragraphs leading up to that relied upon:

"32 The reference in cl 44(1) to the apportionment being conclusively binding 'for the purposes ... of ... payment of the plaintiff's damages' does not have the restricted meaning suggested. In the ordinary course a judgment in favour of a plaintiff in a mesothelioma case will be entered against the defendants who are liable for the full amount of the plaintiff's damages without reference to any apportionment between those defendants or any contribution recoverable from cross-defendants: Speirs v Caledonian Collieries Ltd (1956) 57 SR (NSW) 483.

33 If a defendant's contribution claims succeed there will be a verdict for the defendant against the cross-defendants for their contributions but the defendant will not be entitled to enter judgment until the plaintiff's judgment has been satisfied .... In appropriate circumstances an immediately enforceable order can be made in equity although the plaintiff's judgment has not been satisfied, and a cross-defendant can also be ordered to make a payment direct to a plaintiff: Wenkart v Pitman (1998) 46 NSWLR 502."

32 Although the following paragraph, [34], set out at [28] above, referred again to the purpose identified in cl 44, its opening words, "[i]t follows that ..." demonstrates that the reasoning was still referring to the ordinary course of litigation described in the previous two paragraphs. At [35] Handley AJA addressed the requirements for cross-claims to be brought within a specified time and noted that Div 5 "permits contribution to be determined by an Assessor without all defendants having served cross-claims on each other and on all cross-defendants". He concluded at [36]:

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

33 Bearing in mind that, as the case was determined, QBE had no valid cross-claim against Wallaby Grip, the last remarks must mean that the proportionate liability of each defendant (Peerless and QBE) and Wallaby Grip would be binding as between each party, although QBE and Wallaby Grip had no claims or cross-claims between them and Peerless and QBE likewise had no claims or cross-claims between them. Accordingly, properly understood, Handley AJA's reasoning was intended to contrast the situation under the general law with the situation under the claims resolution process and, in [36], provides support for the conclusion that the order made by the Tribunal in the present case was properly made.

34 His Honour then went on to consider the position as between the defendants and cross-defendants, should any party seek to challenge the assessor's determination. He described the position of Wallaby Grip (the cross-defendants) as "unusual": at [37]. He proceeded to consider possible mechanisms by which they might seek to recover moneys paid pursuant to the assessor's determination, noting that the effect might be to reverse the onus of proof and impose on them the onus of demonstrating that the defendants (Peerless and QBE) should have borne a greater, or the whole, responsibility for the plaintiff's damages: at [38]-[40]. As explained by Allsop P in Power Technologies, the latter comments were obiter. Further, Sackville AJA explained (with the agreement of Allsop P and Beazley JA) that a defendant with a cross-claim may have achieved its purpose by obtaining an apportionment determination in the claims resolution process and may have no interest in further pursuing its cross-claim, but that does not mean that the cross-defendant is unable to recover money which it believes it was not liable to pay.

35 Sackville AJA concluded that such a remedy could be available without a reversal of the onus of proof, as that would be a significant consequence of the assessor's determination, not provided by any clause of the 2007 Regulation and inconsistent, at least implicitly, with the terms of cl 52(2). That clause provides that such a determination is not binding for the purposes of a subsequent judgment of the Tribunal in respect of the dispute. Sackville AJA said that if the cross-claimant sought to pursue the cross-claim and failed, there would be power in the Tribunal to order repayment of the amount paid pursuant to the assessor's determination: at [99]-[100]. He continued at [101]:

"If a defendant/cross-claimant, having obtained an order for payment of money in reliance on an apportionment determination, seeks to discontinue or otherwise terminate the cross-claim without any intention to pursue it further, the position is essentially the same. A defendant/cross-claimant who seeks to discontinue the cross-claim or does not wish to proceed to a hearing on the merits, does not intend to establish its entitlement to retain the moneys paid to it under compulsion of law. In such circumstances, the Tribunal has the power to ensure that the defendant/cross-claimant does not retain the moneys previously paid to it by the cross-defendant. Thus there is ample authority for the proposition that the Tribunal's broad discretion to grant (or withhold) leave to a cross-claimant to discontinue the proceedings (UCPR, Pt 12 r 12.1) can be exercised in a manner that avoids injustice to the cross-defendant: .... That power can be exercised so as to grant leave to the defendant to discontinue its cross-claim, but on condition that it repays the moneys to the cross-defendant."

36 That reasoning may provide limited comfort to the cross-defendant if the cross-claimant becomes insolvent, although that may be seen as a commercial risk which does not resolve the question of construction of the Regulation. More importantly, as CSR pointed out in the present case, it assumes that the cross-defendant was required to pay money to the cross-claimant. If the cross-defendant has been required to pay money to the plaintiff, or to a defendant for payment to the plaintiff, and is not party to proceedings with the payee, the reasoning in Power Technologies will not operate. That will not infrequently be the case, because the cross-claimant may not be a guarantor or indemnifier of the liability of another party to the plaintiff and thus entitled to contribution to cover the payment which it has been required to make. In a mesothelioma case, each of the defendants and cross-defendants is likely to be primarily liable to the plaintiff. In any event, and whatever may be said about generalities, CSR is correct to note that in accordance with the order of the Tribunal, it will not pay money to Amaca (its cross-claimant) but to Wallaby Grip (which brought no proceedings against it).

37 The discussion in QBE Insurance, Power Technologies and the present case share a common feature: that is, the uncertainty of the litigious process, where one party is dissatisfied with the outcome of the claims resolution process. There are, however, provisions in the Regulation which seek to discourage a defendant from challenging the assessor's determination made in the course of the claims resolution process. Thus, cl 52(3) states:

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

38 It is not so much the sanction which is relevant for present purposes, but the language in which the Regulation identifies the further proceedings before the Tribunal. First, it does not assume that the further proceedings will arise on a cross-claim in circumstances where the cross-claimant seeks to pursue its claim. Rather, it assumes that one of the defendants or cross-defendants "disputes the contribution" that it is liable to make. The relevant outcome in respect of costs depends on whether that defendant materially improves its position, by reference to the assessor's determination, which becomes the standard. Secondly, it does not assume that there will be two parties to the dispute; it at least anticipates the possibility that there will be several parties, although only one is challenging the assessor's determination. That will be at least a rational assumption, if not necessarily so, because the reduction or removal of liability in respect of one defendant may well have consequential effects for all defendants (or at least some of them) in circumstances where each is liable directly for the loss suffered by the plaintiff, rather than indirectly as guarantor or indemnifier of another party.

39 In the present circumstances, if, in accordance with the Tribunal's order, CSR is required to pay an amount to Wallaby Grip, it may be necessary for CSR to take steps in the Tribunal, whether by notice of motion in the proceedings or otherwise, to recover that amount (or part thereof), to which application Wallaby Grip will be a necessary respondent and Amaca may also be an interested party. It may be, as hypothesised by counsel for CSR, that Amaca no longer has any interest in seeking to maintain the liability of CSR. However, if CSR were to be found not liable, it may be that Amaca's liability would increase: it would therefore have an interest in resisting that outcome, in effect in competition with Wallaby Grip. Again, it might not seek to defend its position, but that would be a matter for it to determine when the occasion arose.

40 It is apparent from the reasoning of the assessor and the general nature of the plaintiff's claim for damages, that Amaca was not seeking to have CSR indemnify it for any part of its liability: it was merely seeking to have CSR joined as a responsible party liable to make a payment to the plaintiff. The result of an apportionment under the claims resolution process was thus to identify the proper several contributions of each defendant to payment of the plaintiff's damages. The result is not a final order, because the determination gives rise only to a liability to make an immediate payment, subject to adjustment if the outcome is disputed by one of the parties. The result, at the interim or provisional stage, following the assessor's determination, is thus quite different from the case of a plaintiff suing jointly liable tortfeasors, where the plaintiff is entitled to a damage for the full amount of his or her loss as against each tortfeasor and, subject to the preclusion of double recovery, seeking to recover the full amount of the damages from either defendant.

41 Because of the long delay since the events giving rise to liability to the plaintiff, there is inevitably a paucity of evidence as to the contribution of various suppliers in the particular circumstances from which the plaintiff's mesothelioma arose. However, whether questions of burden of proof will be critical as between defendants is not self-evident. Nor was it an issue which was raised in the present proceedings. Accordingly, the procedures and principles applicable to recovery of moneys paid by a defendant in circumstances in which it seeks to maintain a lesser or absence of liability do not require further consideration. It is sufficient for present purposes to say that, whatever the uncertainties in that regard, they do not demonstrate that the conclusion reached above, namely that Wallaby Grip is entitled to recover from CSR its proportionate liability for the plaintiff's damages, is erroneous.

Conclusion

42 The order made by the Tribunal was said to follow from the reasoning of this Court in Bradford Insulation. The determination in that case, however, was limited to affirming the operation of Div 6 of Pt 4 in respect of a cross-claim brought in separate proceedings, after settlement of the plaintiff's claim. The precise point in issue in the present case was said to arise in Bradford Insulation because, as a matter of fact and as noted in the judgment of Sackville AJA, the original defendant, Babcock, commenced contribution proceedings against four other parties, including Bradford and Amaca, Amaca joining CSR as a cross-defendant. Each of Bradford, Wallaby Grip, Amaca and CSR were found liable as to 13%, with Babcock being liable as to 48% of the damages paid to the plaintiff. Amaca and Wallaby Grip paid their contributions as assessed; Bradford and CSR resisted payment, but Curtis DCJ ruled, on the application of Babcock, that both should pay their respective contributions as assessed. The challenge to that order was mounted on the basis that the new claims procedure did not apply in respect of claims for contribution brought in separate proceedings and not as cross-claims in the original claim for damages brought by the plaintiff. The challenge was rejected and the appeal dismissed.

43 In those circumstances, it is true that CSR, then in a relevantly identical position to that in which it finds itself in these proceedings, was ordered to make payment to the defendant (Babcock), despite the fact that it was a cross-defendant only to the claim brought by Amaca. However, that aspect of the case not having been challenged in this Court on the ground now raised, it cannot be said that the decision of this Court bound the Tribunal in the present case to reach the same outcome. On the other hand, the Tribunal may have considered that once it was concluded that the claims resolution process operated, that result was inevitable, because it would have been the same result that would have eventuated had the cross-claims arisen in the original proceedings.

44 As the same order has been made in these proceedings, correctly, it does not matter whether the Tribunal was right in thinking that it was dictated by Bradford Insulation.

45 The issues raised with respect to the operation of the 2007 Regulation will no doubt be of significance in other cases. Whilst there appears to have been a degree of uniformity in the approach adopted in the Tribunal to orders appropriate in cases of apportionment under the claims resolution process, it may be said that the approach was not self-evidently correct, given the opacity of the language of the Regulation. Accordingly, this was an appropriate matter to be brought to this Court, albeit by way of appeal from an interlocutory judgment, and warrants a grant of leave to appeal. Nevertheless, the orders were properly made and the appeal should be dismissed.

46 The Court should make the following orders:

(1) Grant the applicant leave to appeal from the orders made in the Dust Diseases Tribunal on 2 August 2011.

(2) Direct that the draft notice of appeal be filed within 7 days.

(3) Dismiss the appeal.

(4) Order the applicant to pay the respondents' costs in this Court.

47 WHEALY JA: I agree with Basten JA.

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Amendments

01 October 2013 - Correcting typographical error - replacing "would reduce" with "as to reduce" in second last sentence.
Amended paragraphs: [23]

Decision last updated: 01 October 2013