Bradford Insulation Industries Pty Limited & Anor v Babcock Australia Pty Limited & Ors  NSWCA 117
The validity and scope of Division 6 'new cross claims' under the Claims Resolution Procedure in the Dust Diseases Tribunal of NSW ('DDT') were upheld in this recent NSW Court of Appeal judgment. Moray & Agnew acted for the successful respondent.
Claims for asbestos related injuries brought in the DDT must proceed through the Claims Resolution Procedure ('CRP') under Part 4 Dust Diseases Tribunal Regulation 2007 ('the Regulation').
The CRP involves information exchange between the parties, mediation, and a 'rough and ready' non binding determination of apportionment of liability amongst the defendants and cross-defendants. That determination of apportionment is undertaken by a Contribution Assessor based upon certain presumptions about the parties' responsibility and culpability for a plaintiff's asbestos exposure.
The defendants and cross-defendants are required to pay the plaintiff's settlement or judgment in accordance with their apportioned shares and a defendant is entitled to seek orders requiring a cross defendant to pay its interim apportionment pursuant to clause 52 of the Regulation. The defendants / cross-defendants remain entitled to dispute the apportionment of liability under the CRP by continuing to litigate the issue in the DDT after the plaintiff's claim has been settled or determined, subject to potential cost penalties.
Following the Review of the Dust Diseases Claims Resolution Process (January 2007), the CRP was amended by the introduction of Division 6 to Part 4 of the Regulation to permit a defendant / cross-defendant to issue a separate proceeding (referred to as a 'new cross claim') seeking contribution from other parties after settlement or determination of the plaintiff's claim. That new cross claim was then subject to a further apportionment determination under the CRP involving the existing defendants / cross-defendants and any parties joined by the new cross claim.
Following judgment being entered against it in favour of a plaintiff in the DDT, Babcock Australia issued a statement of claim seeking contribution from other parties, including Bradford Insulation Pty Limited and CSR Limited. That statement of claim was subject to the CRP as a new cross claim under Division 6.
Under the CRP, the parties to Babcock Australia's claim had liability apportioned amongst them in accordance with a Contribution Assessor's determination. CSR and Bradford Insulation refused to pay their apportioned shares to Babcock Australia under clause 52 on the grounds that the Regulation did not require payment, that Babcock Australia's statement of claim was not properly a Division 6 new cross claim, and / or the Regulation was not valid. At first instance, Curtis J (consistent with the decision in Re Millard) determined that CSR and Bradford Insulation were each liable to Babcock Australia under clause 52. CSR and Bradford Insulation appealed.
Sackville AJA delivered the lead judgment (with Hodgson JA and MacFarlan JA agreeing) dismissing CSR and Bradford Insulation's appeal.
On a review of the DDT Regulation, Sackville AJA considered it clear that Division 6 was intended to allow a modified form of the CRP when an original defendant brought a claim for contribution in separate proceedings. Further, clause 58 made it clear that Division 6 cross claims for contribution were properly brought by way of a 'statement of claim' rather than a cross claim. He stated: 'It is difficult to see how the recommendation could have been expressed more clearly. If there were any ambiguity in the language of Division 6, the fact that Division 6 is intended to give effect to the Review's recommendations would suggest that the ambiguity would be resolved against the appellants' construction.'
Sackville AJA nonetheless considered CSR / Bradford Insulation's submissions that Division 6 should be limited to applying to a cross claim brought in the original plaintiff proceeding as:
- It was doubtful whether s32H(1)(b) Dust Diseases Tribunal Act authorised regulations applying the CRP to separate contribution proceedings
- Clause 24 of the Regulation suggested that Part 4 (which Division 6 is within) should only to apply to a cross claim made in the original proceeding
- Reference to 'new cross claims' in Clause 54 indicated that Division 6 was only intended to apply to cross claims, rather than separate proceedings.
Sackville AJA was not persuaded by the first argument as he considered the power under s32H broad enough to apply to either the original proceeding or the separate proceeding for contribution and there was no justification for reading it as being limited to the original proceeding.
In relation to the second argument, Sackville AJA observed that clause 14 did not state that Part 4 applied only to a cross claim on the original claim. Further, as the Regulation must be read as a whole, and given the clear intent of Division 6, clause 14 must yield to that intent.
In relation to the third argument, Sackville AJA considered the references in the Regulation to 'new cross claim' to merely be a shorthand expression for separate proceedings for contribution and should not limit the intended extension of the CRP to separate proceedings for contribution.
Whilst Hodgson JA agreed with Sackville AJA, he also considered whether there was any force to CSR / Bradford Insulation's submission that the absence of an express limitation period for issuing a Division 6 cross claim suggested that it was necessary to issue that claim as a cross claim in the original proceeding.
Given the 'rough and ready' procedure of the CRP, Hodgson JA considered it arguable that the entitlement to issue a Division 6 cross claim may not be available for as long as the two year limitation period for contribution under s26 Limitation Act 1969. Whilst that argument did not displace the considerations of Sackville AJA, Hodgson JA did comment that 'In order that a person seeking contribution in separate proceedings be able to rely on the determination as binding ... it would appear that the person has to show that the determination has such a connection with the settlement or determination of the plaintiff's claim that it can be founded to be "for the purposes of" that settlement or determination, and it may be very difficult for this to be shown unless the new proceedings are commenced very promptly'.
The NSW Court of Appeal has maintained the clear intent of the 2007 Review to allow separate proceedings for contribution to be subject to a modified form of the CRP. Had the Court of Appeal decided otherwise, it would have rendered Division 6 essentially ineffective and probably resulted in legislative intervention. Following this judgment, defendants in the DDT can continue to issue Division 6 cross claims at the conclusion of a plaintiff's claim, although Hodgson's J comments suggest they should do so promptly and not simply rely upon the two year limitation period to seek contribution. For further
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.