Australia: Lady Luck Shines Light On Proportionate Liability

Key Points

  • Contract claims can be apportionable claims (despite an apportionable claim being one which arises "from a failure to take reasonable care").
  • Relative culpability will not always determine liability – considerations about which defendant stands to benefit from the failure to take reasonable care, if any, will be critical.

Although the proportionate liability regime has been in force in NSW since 2004 and exists in some form at Commonwealth level as well as in every state and territory of Australia , there is a dearth of case law applying the regime. This means there are many uncertainties about the operation of proportionate liability which, in turn, produce commercial uncertainty about the allocation of risk.

The recent decision of the NSW Supreme Court in Reinhold v New South Wales Lotteries Corporation [2008] NSWSC 187 sheds some light on some of the key issues and questions about the regime which have been vexing the profession, including when the regime will apply. More importantly and perhaps surprisingly, however, Reinhold suggests that when apportioning liability between defendants, their relative culpability will not always be the defining consideration.

The lucky lottery ticket

  • Mr Reinhold purchased a ticket in an Oz Lotto draw (Ticket A) which had been printed incorrectly. A new replacement ticket (Ticket B) was issued to Mr Reinhold.
  • Ticket B was mistakenly cancelled (rather than Ticket A). It was cancelled without satisfying the Oz Lotto Rules which allow for a ticket to be cancelled only if it was returned to the place of purchase the day the ticket was purchased at the request of the purchaser.
  • Ticket B won $2,000,000 in the Oz Lotto draw.
  • Mr Reinhold successfully sued the Newsagents and Lotteries for negligence and breach of contract (see Reinhold v New South Wales Lotteries Corporation (No 1) [2008] NSWSC 5).

Matters for consideration by the Court in Reinhold

The relevant question which arose in Reinhold was the way in which liability for damages should be allocated between the two defendants under the proportionate liability regime (in this case found in Part 4 of the Civil Liability Act 2003 (NSW).

The Court considered:

  • Whether this was a case to which proportionate liability applied; and
  • If so, how liability should be apportioned.

When does a court decide what is a "concurrent wrongdoer" and an "apportionable claim"?

Proportionate liability applies only to "apportionable claims", a term defined in the Act, in respect of which there are two or more "concurrent wrongdoers", also defined in the Act.

There are several elements which must be satisfied in order for a claim to be an apportionable claim. In Mr Reinhold's case there were unquestionably claims "for economic loss" in "an action for damages".

The first important point decided by the Court was that the reference to "claims" (as opposed to liability) means decided or determined claims, not what may be pleaded in an initiating process or points of claim,. A "claim" must be a claim for which the findings loss or damage and causation have already been determined and so it must be a litigated claim, not a pending or foreshadowed claim.

For this reason, the Court held that a person will only be a "concurrent wrongdoer" where the court has made findings about the existence of "loss or damage" and determined that a persons' acts or omissions "caused" the loss of damage. Only then is it possible to identify each person whose acts and omissions caused the loss or damage as found and identify a person as a concurrent wrongdoer.

This would appear to preclude a court from determining whether the proportionate liability regime applies as an interlocutory matter (such as was the case in Shrimp v Landmark Operations Limited [2007] FCA 1468 and Woods v de Gabrielle [2007] VSC 177). It can hardly assist the early resolution of litigation.

Contract claims can be apportionable claims despite the words "arising from a failure to take reasonable care"

It follows from what is said above that the Court held that the categorisation of a claim as an "apportionable claim" is determined on the basis of the Court's findings and not what is pleaded.

In order for a claim in contract or negligence to be an apportionable claim it must "arise from a failure to take reasonable care". The meaning of those words is clear in the context of negligence, but not so clear in contract.

Mr Reinhold's claim for breach of contract was found involve a failure to take reasonable care on the part of the defendants.

Mr Reinhold had argued that a contract claim is only within section 34(1)(a) where there is breach of an expressed or implied term requiring that reasonable care be taken. The Court held however that a breach of contract may involve a failure to take reasonable care. This is a logical consequence of the Court's finding that it is findings of fact and not allegations which determine whether a claim is "apportionable".

The apportionment process

Section 35 of the Act specifies that the liability of each defendant should be restricted to what is "just", having regard to the respective responsibility of the wrongdoers. In circumstances where there is no contributory negligence, the Court held that the amounts separately determined must equal the plaintiff's established entitlements.

It was determined, as a matter of principle, that the approach to be taken by the Court when applying section 35 of the Act should follow the approach taken by appellate courts to contribution amongst tortfeasors, namely that apportionment of liability should be undertaken by reference to:

  • the degree of departure form the standard of care of a reasonable man; and
  • the relative importance of these acts in causing the economic loss suffered by Mr Reinhold while comparing the conduct as a whole in relation to the circumstances in which the loss was sustained.

Based on the above principles and the facts of the case, it might be expected that the Newsagents, which cancelled the wrong ticket (in breach of Lotteries' policy), would have a significantly greater degree of culpability than Lotteries. However, the Court found that there was a significantly greater degree of culpability of the Lotteries and a more significant causative force in the Lotteries conduct. Therefore the Court apportioned the loss as 90 percent Lotteries and 10 percent Newsagents.

In doing so, the Court relied upon English authority that it was relevant to take into account whether one wrongdoer has profited to a greater extent from the wrongdoing. Clearly the fact that Lotteries would, but for the error, have had to pay the $2,000,000 to Mr Reinhold weighed heavily.

With respect to the Court, this introduces a new concept into the Australian law of contribution. It also however illustrates well that in contract cases involving a failure to take reasonable care the considerations may well by different from those which typically apply in negligence cases.


While Reinhold has shone some light on the proportionate liability regime, it has also raised some concerns about the way the courts will apportion liability between defendants. What is clear is that a defendant cannot be assured that they will be safe from bearing the burden of any finding of liability even when their conduct was not the immediate or primary cause of the loss or damage.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.