June 19, 2011

The line of authorities that demonstrates how plaintiffs might recover double damages against joint tortfeasors was bolstered on Thursday by a Supreme Court ruling that dismissed* an abuse-of-process strike out attempt from construction giant John Holland.
Corey Morgan – a labourer employed by HHH Contractors deployed on labour hire – had his right leg crushed and lumbar spine injured during a truck loading accident at a John Holland location in September 2007. His lawyers – Trilby Misso – delivered notices of claim under the Workers’ Compensation and Rehabilitation Act and the Personal Injuries Proceedings Act (PIPA) in September 2008 and after the matter failed to settle at a compulsory conference, filed claims in the Supreme Court in September 2009.

WorkCover as an insurer for HHH – having been unsuccessful at enlisting support from the second (PIPA) defendant John Holland to make a joint offer to settle – delivered a solo offer which is explained as being “for an amount which we think is above the amount a court would apportion against the First Defendant”.

Morgan accepted WorkCover’s offer and signed a release in which both parties were meticulous in their specification that it pertained only to the liability of the first (WorkCover) defendant. The lawsuit against John Holland continued on slowly. In November 2010 Holland’s lawyers filed an application for the plaintiff’s claim to “be dismissed or otherwise struck out by virtue of the Release and Discharge …… whereby the maintenance of the action is both frivolous and vexatious and constitutes an abuse of process of the court.”

The application – in which Holland contended that a release in favour of one joint tortfeasor was a release in favour of all – was heard in January. The court accepted that the position contended for by Holland had once been the law but concluded that s 6 of the Law Reform Act 1995 had altered the position:-

(1) Where damage is suffered by any person as a result of a tort (whether a crime or not) the following apply –

(a) judgment recovered against any tortfeasor 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 tortfeasor in respect of the same damage;

This provision specified exactly the contrary to what Holland asserted and was – so held the court – a complete answer to its contentions. The strikeout application was dismissed and the plaintiff will be entitled to proceed with the PIPA lawsuit.

But what damages will the plaintiff be able to recover? Must they be reduced for the amount already received in the earlier settlement? Section 6(b) will no doubt play an important role in this determination:-

(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 tortfeasors liable in respect of the damage (whether as joint tortfeasors 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.

To the likely chagrin of the defendant, the New South Wales equivalent of s 6(b) has been ruled NOT to restrict the award of damages against a joint tortfeasor where a prior settlement, as opposed to judgment, has been reached with a co-injurer**. See September 2010 post.

Adding briquets to the bonfire, the plaintiff’s statement of claim – “somewhat idiosyncratically” – pleaded that the WorkCover defendant was liable only in respect of the leg injury, not the lumbar spine injury. Why the claim was pleaded in this way is a mystery but the peculiarity will nonetheless prove relevant in the ultimate assessment of windfall or damages – whatever it turns out to be. See also March 15 post.

Morgan v Trevor Edward and Karen Margaret Howell t/as HHH Contractors & Anor [2011] QSC 165

Daubney J, published 16/06/2011

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

Categories: Personal Injury , Litigation & Law Practice

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