Judgment date: 12 May 2011. The Owners Strata Plan No. 62660 v Jacksons Landing Development Pty Limited [2011] NSWSC 415. Supreme Court of New South Wales1
In Brief
- Section 36 of the Civil Liability Act 2002 (CLA) bars claims for contribution by one concurrent wrongdoer against another. A person is only a concurrent wrongdoer when found to be so by a court.
- Section 36 of the CLA does not bar a claim for contribution where a consent judgment has been entered and no determination has been made by the court.
Background
The plaintiff sued a number of defendants in relation to the allegedly defective design and construction of a sewage system forming part of a development at Pyrmont. Various companies in the Lend Lease Group (Lend Lease) were sued as the developer and promoter of the development.
Harris Page & Associates Pty Limited (Harris Page) was the engineer engaged to design the hydraulic systems including the hydraulic components of the sewage system.
The Court entered consent judgments in favour of the Plaintiff against:
- Lend Lease in the sum of $750,000 on 13 November 2008; and
- Harris Page in the sum of $350,000 on 23 February 2011.
Supreme Court of New South Wales
This case involved an application by Harris Page to dismiss claims for contribution brought against it by Lend Lease.
Harris Page submitted that the consent judgments were judgments for the purpose of s 36 of the CLA and the claims for contribution brought by were not maintainable.
Section 36 of the CLA provides that a defendant against whom judgment is given under the CLA as a concurrent wrongdoer in an apportionable claim cannot be required to contribute to any damages or contribution recovered from another concurrent wrongdoer in respect of the same claim.
Harris Page sought summary dismissal of the claims for contribution on the basis that no reasonable cause of action was disclosed.
The Court said 3 conditions must be satisfied in order for s 36 to bar a claim for contribution:
- The claim for contribution must be against a defendant against whom judgment is given;
- The judgment must be given under Part 4 of the CLA as a concurrent wrongdoer; and
- The judgment must be given in relation to an apportionable claim.
Ball J found the first and third conditions had been satisfied. The second condition was the real question to be determined.
Section 34(2) of the CLA defines a concurrent wrongdoer as a:
Section 35(1) of the CLA states that in any proceedings involving an apportionable claim:
(b) the court may give judgment against the defendant for not more than that amount."
After noting authority finding that "a person is only a concurrent wrongdoer when found to be so by the Court"2, Ball J said it was reasonably arguable the consent judgment against Harris Page was not a judgment given under Part 4 and it was not obtained against Harris Page as a concurrent wrongdoer.
Harris Page submitted that the consent judgment clearly indicated it was sued as a concurrent wrongdoer, the claim in respect of which it was sued met the requirements of an apportionable claim, and that claim resulted in a judgment against it.
The Court, however, said it was at least arguable that the reference to a judgment "under this Part" in s 36 was a reference to a judgment given by the Court against the defendant.
A "judgment" could only be given once the Court determined the damage or loss attributable to the concurrent wrongdoer.
His Honour held that s 36 did not bar a claim for contribution where no determination was made by the Court of the amount that was a just contribution to the plaintiff's loss having regard to the extent of the defendant's responsibility for that damage or loss.
The application to dismiss the claims for contribution was dismissed with costs.
Implications
Section 36 of the CLA does not bar claims for contribution between defendants unless there has been a determination by a court on the relative proportion of liability of a concurrent wrongdoer. A consent judgment is not sufficient to prevent a claim for apportionment being made.
Defendants should be aware that if they choose to settle with a plaintiff without resolving issues of contribution or proportionate liability with other potential or current defendants, they run the risk of a subsequent claim for contribution or indemnity by that other defendant.
1. Ball J
2. Reinhold v New South Wales Lotteries Corporation (No 2) [2008] NSWSC 187
Ranked No 1 - Australia's fastest growing law firm' (Legal Partnership Survey, The Australian July 2010)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
