Skinner v Redmond Family Holdings Pty Ltd [2017] NSWCA 329

6. Apportionment

[152]  Ground 17 asserts that his Honour erred in finding, for the purposes of s 1041N of the Corporations Act, that it was just for Mr Skinner to be held 50 percent liable for Holdings’ loss.

[153]  Mr Foley submitted that the roles performed by Mr Stone and Mr Skinner were entirely different. In advancing this ground, Mr Foley acknowledged the inherent tension between the appellants’ separate interests, while submitting that cost considerations prohibited the appellants obtaining separate representation on the appeal.

[154]  Relevant legislative provisions.

[155]  Division 2A of Pt 7.10 of the Corporations Act provides for a defence of proportionate liability with respect to an “apportionable claim”, where a claim for damages is made under 1041I(4), for economic loss or property damage caused by conduct that was done in contravention of s 1041H: s 1041L(1).

[156]  Corporations Act, s 1041N(1) provides:

  • (1)In any proceedings involving an apportionable claim:
    • (a)the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant’s responsibility for the damage or loss; and
    • (b)the court may give judgment against the defendant for not more than that amount.

[157]  A “concurrent wrongdoer” in relation to a claim is a person who is one of two or more persons whose acts or omissions (or act or omission) caused, independently of each other, or jointly, the damage or loss that is the subject of the claim: s 1041L(3). It does not matter that a concurrent wrongdoer is insolvent, is being wound up or has ceased to exist or died: s 1041L(5).

[158]  The scope of corresponding provisions in the Civil Liability Act was considered by the High Court in Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2012) 247 CLR 613 at [16], where the plurality said:

The evident purpose of [the provisions] is to give effect to a legislative policy that, in respect of certain claims such as those for economic loss or property damage, a defendant should be liable only to the extent of his or her responsibility. The court has the task of apportioning that responsibility where the defendant can show that he or she is a “concurrent wrongdoer”, which is to say that there are others whose acts or omissions can be said to have caused the damage the plaintiff claims, whether jointly with the defendant’s acts or independently of them. If there are other wrongdoers they, together with the defendant, are all concurrent wrongdoers.

[159]  The plurality noted (at [19]) that the definition of “concurrent wrongdoer” raises two questions, namely what is the damage or loss that is the subject of the claim, and is there a person, other than the defendant, whose acts or omissions also caused that damage or loss. The plurality emphasised (at [24]) that the damage or loss that is the subject of the claim is not to be equated with the amount ultimately awarded as “damages”. Rather, the injury and other foreseeable consequences suffered by a plaintiff constitutes the damage or loss that is the subject of the claim and, “[i]n the context of economic loss, loss or damage may be understood as the harm suffered to a plaintiff’s economic interests.” The plurality rejected (at [41]) any requirement of causation, that is, that one wrongdoer contribute to the wrongful actions of the other in order to cause the damage. A wrongdoer’s acts may be independent of those of another wrongdoer yet cause the same damage.

[160]  The principles governing appellate review of a trial judge’s contribution findings are well-established and involve the same principles as apply in respect of an assessment of contributory negligence. In Podrebersek v Australian Iron & Steel Pty Ltd (1985) 59 ALJR 492, the High Court (Gibbs CJ, Mason, Wilson, Brennan and Deane JJ) said (at 493):

A finding on a question of apportionment is a finding upon a ‘question, not of principle or of positive findings of fact or law, but of proportion, of balance and relative emphasis, and of weighing different considerations. It involves an individual choice or discretion, as to which there may well be differences of opinion by different minds’: British Fame (Owners) v MacGregor (Owners) [1943] AC 197 at 201. Such a finding, if made by a judge, is not lightly reviewed.

[161]  The High Court continued in Podrebersek explaining the nature of the apportionment task (at 494):

The making of an apportionment as between a plaintiff and a defendant of their respective shares in the responsibility for the damage involves a comparison both of culpability, ie of the degree of departure from the standard of care of the reasonable man (Pennington v Norris (1956) 96 CLR 10 at 16) and of the relative importance of the acts of the parties in causing the damage: Stapley v Gypsum Mines Ltd(1953) AC 663 at 682; Smith v McIntyre (1958) Tas SR 36 at 42–49 and Broadhurst v Millman (1976) VR 208 at 219 and cases there cited. It is the whole conduct of each negligent party in relation to the circumstances of the accident which must be subjected to comparative examination. The significance of the various elements involved in such an examination will vary from case to case; for example, the circumstances of some cases may be such that a comparison of the relative importance of the acts of the parties in causing the damage will be of little, if any, importance.

[162]  The approach in Podrebersek was generally approved by this Court with some qualifications in Mitchell Morgan Nominees Pty Ltd v Vella[2011] NSWCA 390 at [83]–[84] (Giles JA, Bathurst CJ, Campbell JA, Macfarlan JA, Sackville AJA agreeing) in relation to Civil Liability Act, s 35(1)(a) (which is in similar terms to Corporations Act, s 1041N(1)(a)):

  • [83]The terms of s 35(1)(a), “that the court considers just having regard to the extent of the defendant’s responsibility for the damage or loss”, reflect the terms of s 5(2) of the 1946 Act, “as may be found by the court to be just and equitable having regard to the extent of that person’s responsibility for the damage”. The accepted application of the latter terms “involves a comparison both of culpability, ie of the degree of departure from the standard of care of the reasonable man … and of the relative importance of the acts of the parties in causing the damage … “, and there must be a comparative examination of “the whole conduct of each negligent party in relation to the circumstances of the accident”: Podrebersek v Australian Iron & Steel Pty Ltd at 494 (citations omitted); see also (for example) Wynbergen v Hoyts Corporation Pty Ltd (1997) 72 ALJR 65 and Vinidex Tubemakers Pty Ltd v Thiess Contractors Pty Ltd [2000] NSWCA 67.
  • [84]The approach to s 5(2) of the 1946 Act may need to be modified for s 35 of the Civil Liability Act, first because of s 35(3) and secondly because there may not be occasion for comparison of culpability in the sense of departure from the standard of care of the reasonable man — as in the present case, where Messrs Caradonna and Flammia were fraudulent rather than negligent. Comparison of culpability in the sense of negligence is not meaningful. Comparison of culpability in the sense of moral delinquency invites a non-legal standard, but the statutory standard of “responsibility” permits regard to the nature of the relevant conduct. Once one goes beyond comparative negligence the field is greatly widened and the circumstances can be very varied, but where there is an intentional wrong the responsibility of the wrongdoer for the damage or loss deliberately brought about will be likely to exceed that of the negligent wrongdoer.

[163]  The correctness of this approach was not doubted by the High Court when allowing the appeal in Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd. Nor did the parties in this case suggest that any different approach should be taken to Corporations Act, s 1014N. It was common ground in this Court that the proportionate liability provisions in Div 2A, Pt 7.10 of the Corporations Act applied in the present case.