The Seligs had appealed the majority decision of the Full
Federal Court that the legislative intention of Division 2A of the
Corporations Act 2001 (Cth) ("the Act") was that the
proportionate liability provisions are enlivened, so long as one
successful cause of action is apportionable notwithstanding the
balance are not. The only pre-requisite is that the loss and damage
for each cause of action be the same. It was also found to be
irrelevant that the apportionable claim for the purpose of section
1041L fell outside section 1041H.
We noted that the Respondent's submissions to the High Court
as to the intended regime of Division 2A were far reaching and, if
accepted, would significantly widen the scope currently afforded.
Specifically, if the Respondent's submissions were accepted by
the High Court, the position was likely to be that so long as a
plaintiff commenced proceedings seeking damages under or by
reference to section 1041I of the Corporations Act 2001 (Cth)
("the Act"), then any claim in that proceeding made under
a counterpart State or Territory statute and any common law claim
(for example in negligence or for breach of contract), may be
deemed to be a "single apportionable claim", and subject
to the operation of Division 2A if the claims have resulted in the
same economic loss or damage to property. The Applicant's
contended that the language of section 1041L was clear and only a
claim for economic loss or damage to property caused by conduct by
the defendant in contravention of section1041H was
Today the High Court constituted by French CJ,
Kiefel, Bell, Gageler and Keane JJ handed down its decision. The
High Court allowed the Selig's appeal and determined:
That the application of Division 2A of Pt 7.10 of the Act is
limited to claims for contravention of section 1041H of the
In doing so the High Court found that contrary to the
submissions of the Respondent, it is not necessary to resort to
legislative purpose to explain the selection of only s 1041H. The
High Court accepted that the terms of the relevant provisions of
Div 2A are clear. An "apportionable claim" for the
purposes of Div 2A is, relevantly, a claim based upon a
contravention of s 1041H. The term does not extend to claims based
upon conduct of a different kind.
That s1041L(1B), which provides for the reduction of an award
for damages by reason of the claimant's contributory
negligence, also applies only in respect of a claim brought in
relation to conduct done in contravention of s1041H.
Neither section 1041I(1B) or Division 2A operate to reduce
civil liability imposed for contravention of s1041I(1) for
contravention of s1041E,s1041F or s1041G.
What this means in practice is that a Respondent is only able to
take advantage of the proportionate liability or contributory
negligence provisions of the Act for a claim made by an Applicant
under or by reference to section 1041I for loss or damage arising
from a for a breach of s1041H of the Act.
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.
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