Professional Liability Guide

CHAPTER 3 – DEFENCES

However, the agent for the negligent German manufacturer, which had been sued in contract and tort, argued that the claim against it in tort could not be maintained. It argued that as the duty of care imposed upon it arose solely from the contract, the claim was not an ‘apportionable claim’ because it did not arise from a breach of duty of care.

Justice Palmer of the New South Wales Supreme Court disagreed. He held:

‘The contract imposed an obligation on MAN Australia (the agent for the German manufacturer) to ensure that the work was done properly. It “omitted” to perform a contractual duty which, if performed, would have prevented the loss. In my opinion, a breach of contractual duty to ensure that work is done properly by others, whether employees, agents or independent contractors, is an “omission” within section 34(2) CLA such as may make a contract breaker a concurrent wrongdoer within the operation of Pt IV CLA.’ 228

[our emphasis]

How, then, was the loss to be divided between the negligent repairer and the agent for the negligent manufacturer? Palmer J observed:

‘The court must exercise a large discretionary judgment founded upon the facts proved in each particular case. The principles upon which the court will exercise this discretionary judgment will come to be developed on a case by case basis. However, it seems clear enough that the policy of part 4 is that a wrongdoer who is, in a real and pragmatic sense, more to blame for the loss than another wrongdoer should bear more of the liability. This calls for the exercise of the same kind of judgment as the Court exercises in apportioning responsibility as between a defendant sued in tort for negligence and a plaintiff who, by his or her own negligence, has been partly responsible for the injury.’ 229 Justice Palmer concluded that the repairer was ‘more actively engaged, if not solely engaged, in the physical activity which caused Mr Yates’ (the plaintiff’s) loss’, but that the agent was not in a position where it was unable to prevent the loss from occurring (that is, to turn the double negative around, it was in a position to prevent the loss from occurring). Therefore, the agent ‘could not disregard its responsibility under the contract to ensure that Mobile Marine had carried out the work properly’. Accordingly, each was found equally liable for the loss. Effect of settlement by one concurrent wrongdoer The authorities emphasise the importance of the courts determining who is a concurrent wrongdoer or not and, if so, the extent of each concurrent wrongdoer’s liability for loss, determined by the yardstick of what is ‘ just and equitable ’. They have concluded that a party who settles a claim with a plaintiff cannot invoke the proportionate liability regime, thereby avoiding a court determination as to the key issues concerning the applicability of the proportionate liability regime. In this regard, the judgment of the Victorian Court of Appeal in Godfrey Spowers (Victoria) Pty Ltd v Lincolne Scott Australia Pty Ltd 230 is instructive.

228 Ibid [98]. 229 Ibid [94]. 230 (2008) 21 VR 84.

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