Nau v Kemp & Associates [2010] NSWCA164
In this case the NSW Court of Appeal had to deal with the difficulties created with multiple claims and tortfeasors and whether settlement of some of the claims prejudiced the right to continue with the remainder of the claims as against other tortfeasors.
Background
The appellant alleged in December 1999, whilst working for the Department of Education & Training ('DEAT'), she sustained injury. Between August 2002 and December 2002 she was sent to a rehabilitation provider which devised and supervised the particular exercises which the appellant undertook. The appellant commenced an action against the rehabilitation provider (first and second respondents) in 2005, in which she alleged that the exercises that the respondents required her to do were inappropriate and caused her to suffer an injury to her shoulder and shock. The appellant further alleged that in the period between March 2004 and August 2004, whilst carrying out work at a school for DEAT, she was again given inappropriate work to do which brought about an injury to the right shoulder. In 2007 the appellant commenced an action claiming damages for the negligent acts of DEAT in December 1999 and in the period from March to August 2004; and further that DEAT was also liable for the treatment imposed upon the appellant by the respondents between August and December 2002.
Both matters were listed to be heard together. Shortly after a mediation the appellant and DEAT reached a settlement. There was no settlement in relation to the action against the rehabilitation provider. Following payment in full of the 2007 action pursuant to the settlement, the respondents applied to dismiss the 2005 action.
Robison DCJ dismissed the 2005 action on the basis that the appellant had already recovered damages from another tortfeasor for the injury that was the subject of the action. It had been held that section s5(1)(b) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) prevented her from receiving any greater sum as a consequence of the 2005 action and thus continuance of the 2005 action was an abuse of process.
Section 5(1)(b) Law Reform (Miscellaneous Provisions) Act 1946 (NSW) is replicated in the Law Reform (Contributory Negligence and Tortfeasor's Contribution) Act 1947 (WA), Law Reform (Miscellaneous Provisions) Act 1956 (NT), Law Reform Act 1995 (QLD) and Civil Law (Wrongs) Act 2020 (ACT) and provides:
- Where damage is suffered by any person as a result of a tort
- If more than one action is brought in respect of that damage by the person against tortfeasors liable in respect of the damage (whether as joint tortfeasors or otherwise), the sums recoverable under the judgments given in those actions by way of damages shall not in the aggregate exceed the amount of the damages awarded by the judgment first given.
NSW Court of Appeal
The NSW Court of Appeal set aside the dismissal by Robison DCJ.
The Court of Appeal emphasised the distinction between various kinds of tortfeasors. A distinction had to be made between joint tortfeasors and several tortfeasors. A characteristic of a joint tort was that only one breach had occurred of a legal duty that was owed to the plaintiff.
By contrast, if two or more people each separately breached a duty that he or she owed to a plaintiff, and caused damage to that plaintiff, each of those persons was regarded as having committed his or her own wrong to the plaintiff. Such people being several tortfeasors.
Several tortfeasors who had each caused the same damage to the plaintiff, were several concurrent tortfeasors.
It was noted that the rehabilitation provider and 'DEAT' were several tortfeasors.
It was held that Robison DCJ was in error to apply s5(1)(b). The third element of the section was any 'amount of the damages awarded by the judgment first given'. The NSW Court of Appeal held that requirement meant 'damages awarded' applied only if a court had assessed the quantum of those damages. A settlement with the entry of a consent judgment did not suffice. Therefore the settlement of the 2007 action did not enliven the restrictions called for in s5(1)(b).
The NSW Court of Appeal went further to discuss some of the effects of s5(1)(b) in circumstances where it would apply. The ability of a party to maintain successive actions is qualified by whether or not it is the same harm that is the subject matter of each action. It does not matter that there are different causes of action for the same loss or that there is a statutory limitation on the damages recoverable for one of those causes of action. The effect of s5(1)(b) is such that the amount of damages awarded in the first judgment limits the total of the sums recoverable under all judgments for the one damage regardless of the manner in which the amount of damages awarded by the first judgment might have been calculated.
Practical application
Section 5(1)(b) applies and operates as a significant disincentive to plaintiffs to pursue to a court determined judgment against one tortfeasor and then pursue further litigation as against another tortfeasor. Therefore it would be in the plaintiff's interest to ensure that s5(1)(b) does not come into play. Campbell JA left open the question as to whether the listing of the separate actions for hearing together was sufficient to make them one 'action' within the meaning of s5(1)(b).
If such a listing order were to do so, then s5(1)(b) may have no part to play. Therefore care must be taken as to the terms and orders made in respect of listing together by a plaintiff multiple causes of actions.
Whilst s5(1)(b) would appear to have limited operation for the benefit of tortfeasors, the NSW Court of Appeal was at pains to point out that settlement of one of the actions does not allow a plaintiff to pursue the remaining tortfeasors actions for unfettered damages. The NSW Court of Appeal reaffirmed the principles to prevent 'double dipping', as was discussed by the High Court in Baxter v Obacelo Pty Limited (2001) 205CLR635.
Therefore a tortfeasor involved in proceedings with other tortfeasors in relation to a plaintiff's claims covering the same damage must monitor the settlement discussions which may take place independently between the plaintiff and any other tortfeaser. Settlement between the plaintiff and another tortfeasor may not necessarily result in disposal of proceedings favourable to the remaining tortfeasors. As best as can be possible, it would be preferable to keep all tortfeasors "within the tent" in relation to all settlement discussions with a plaintiff.
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