Professional Liability Guide

CHAPTER 3 – DEFENCES

It is, therefore, generally the case that a party who is actively responsible for causing a loss will be apportioned a greater share of responsibility than a party who simply failed to stop it from occurring or continuing. On appeal, the plaintiffs’ award of damages was reduced by 30% on account of contributory negligence; however, the reasoning in relation to proportionate liability was upheld. 219 This general principle was the basis on which the solicitors in Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd 220 successfully argued for their apportionment of liability to be limited to 12.5%. In that case, the fraudsters were more actively engaged in causing the plaintiff’s loss, with the Court assessing their liability at 87.5%. Reinhold v New South Wales Lotteries Corporation and Reinhold v New South Wales Lotteries Corporation (No 2) 221 further illustrate how a court will apportion liability between concurrent wrongdoers. Mr Reinhold went to his local newsagency to buy an Oz Lotto ticket. The prizes for that week totalled $2 million. The first ticket he was given, printed out from the newsagency’s ticket machine, was incomplete (ticket A). Therefore, the newsagency staff generated another ticket for Mr Reinhold (ticket B). This ticket was complete, constituting a valid ticket issued by the New South Wales Lotteries Corporation, which ran the Oz Lotto. Mr Reinhold left the newsagency with ticket B, which was fully printed and for which he had paid. The newsagency staff were left holding the incomplete ticket A and sought advice from the helpline of the New South Wales Lottery office as to what they should do with it. The advice was that the ticket had to be properly cancelled under the rules of Oz Lotto. Through error, ticket B was cancelled instead of ticket A. Ticket B was the winning ticket in the New South Wales State Lottery for that week, and Mr Reinhold attempted to claim his $2 million cash prize. He was informed that his winning ticket had been cancelled. He subsequently brought a claim against the New South Wales State Lottery and his local newsagent, alleging breach of contract and negligence. The Court found that the financial strength or profitability of a defendant is irrelevant to assessing contribution or apportionment. 222 What is relevant is which of the wrongdoers was ‘more actively engaged’ in the activity causing the loss and which was more able to prevent the loss from happening in the first place. 223 Justice Barrett considered it significant that, for the newsagents, printing a partially completed lottery ticket was an unusual occurrence but not so for the New South Wales State Lottery. In fact, the New South Wales State Lottery had anticipated this occurrence by promulgating a policy about how to deal with this problem and had published that policy to all the newsagents that sold its tickets. Accordingly, once the newsagency employees contacted the New South Wales State Lottery helpline to ask them what to do, the helpline, supposedly more experienced in dealing with these matters than the newsagency, assumed a greater degree of responsibility for the loss. The Court was asked to determine (amongst other things) how the liability should be divided between the local newsagency and the New South Wales State Lottery.

219 Metzke and Allen v Sali [2010] VSCA 267. 220 (2013) 247 CLR 613. 221 [2008] NSWSC 5 and (2008) 82 NSWLR 762 respectively. 222 Reinhold v New South Wales Lotteries Corporation (No 2) (2008) 82 NSWLR 762 [57]. 223 Ibid [58].

39

© Carter Newell 2023