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Written by Peter Carter

September 24, 2010

A plaintiff can bring separate actions against different defendants arising out of the same incident. This can occur whether or not the causes of action are different. But how are damages assessed in each case?

A recent NSW case shows that in some circumstances the plaintiff might actually be able to recover for the same heads of damages twice! It was a teacher who sustained injuries in December 1999 and between March and August, 2004 was undergoing a rehabilitation program operated by K Pty Ltd that K devised relating to those injuries.

In 2005 N issued a lawsuit against K alleging that the exercise program was inappropriate and was the source of further injuries. In 2007 she commenced a separate lawsuit against the state of New South Wales as her employer for all of the injuries.

The matters were listed to be tried together. Before hearing, a mediation occurred between all parties from which the claim against the state was settled. A judicial registrar made orders giving effect to the settlement including entering by consent, a judgment in N’s favour for $220,000 and relieving her of liability to repay workers’ compensation payments she had received.

The claim against K Pty Ltd did not resolve and it did not contribute to the settlement.

After payment had been made by the state to N, K applied to the court have the claim against it dismissed.

K relied upon the provisions of section 5 of the NSW Law Reform Act 1946; which states in relation to “proceedingsagainst and contribution between joint and several tort-feasors”:
 (1) Where damage is suffered by any person as a result of a tort (whether a crime or not):

(a) judgment recovered against any tort-feasor liable in respect of that damage shall not be a bar to an action against any other person who would, if sued, have been liable as a joint tort-feasor in respect of the same damage,

(b) if more than one action is brought in respect of that damage by or on behalf of the person by whom it was suffered… against tort-feasors liable in respect of the damage (whether as joint tort-feasors 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; …”

These provisions are identical to the Queensland provisions in section 6 of the Law Reform Act 1995. The trial judge granted the application and dismissed N’s lawsuit because pursuant to section 5, she had recovered damages “from another tortfeasor for the injury that was the subject of the claim”.  She held the furtherance of the second lawsuit was an “abuse of process”.

On appeal, all three judges were of the view that the consent judgment was not one under which “damages [were] awarded” by a “judgment first given” within the meaning of s 5(1)(b).

The consent was also expressed to be “without admission of liability” and thus did not establish that party with whom the settlement had been reached (the state) was a tortfeasor “liable” for the purposes of s.5 (1) (b).

Thus they held, the consent judgment and settlement did not prevent the plaintiff’s claim continuing against the other defendant in the “second” lawsuit and s 5 did not apply.

This decision may open opportunities for plaintiffs in circumstances that are generally considered problematical: where a settlement is reached with one defendant and another remains recalcitrant.

It should be noted that the plaintiff’s lawyers clearly specified in the first release that it applied to “the subject proceedings only and is without prejudice to other claims the plaintiff has against the defendants in proceedings No: 4603 of 2005.”

Litigators should carefully consider the implications of  this decision.

* Nau v Kemp & Associates [2010] NSWCA 164 (12 July 2010)

Categories: Personal Injury , Litigation & Law Practice

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