Queensland University of Technology Law and Justice Journal
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Dominic O’Brien[*]
It is the purpose of this article to review some arguments as to how
apportionment of liability may still be practically achieved
in cases where
there is alleged concurrent liability in contract and tort on the part of the
defendant and some fault on the part
of the plaintiff. In doing so, it analyses
the decision in Astley v Austrust
Ltd[1] (Astley) and
compartmentalises the reasoning of the majority and Callinan J in dissent with
respect to concurrent liability, apportionment
legislation and policy. This
article then outlines a number of the suggestions mooted by various scholars as
to how apportionment
of liability may be practically achieved. After
considering a number of the proposals put forward by various scholars, the
recent
Queensland Court of Appeal decisions in Wylie v The ANI Corporation
Limited
[2]
(Wylie) and Jones v Persal & Company (a firm)
[3]
(Jones) are examined. In those cases, the Queensland Court of Appeal had
cause to consider some argument in respect of the implications
of Astley
and the means by which apportionment of liability could still be achieved.
Finally, this article analyses the outcomes of Wylie and Jones and
evaluates some of the proposals mooted by various scholars as to how the effects
of Astley may be overcome in light of these recent Queensland Court of
Appeal decisions.
In 1983, Austrust Limited (Austrust) decided to accept appointment as trustee of a trust to be established to develop a piggery on land in northern New South Wales. It was proposed that Austrust would obtain finance from appropriate lenders in order to purchase land for the piggery.
During mid to late 1983, Austrust wrote to Astley who was a
senior partner in a firm of solicitors that had acted for Austrust for
many
years seeking Astley’s advice in relation to the proposed trust deed and
the other issues relating to its role as trustee
of the proposed trust.
Austrust’s instructions to Astley were expressed in very general terms and
required the solicitors
to examine the proposed deed of trust and “let us
have your comments on it in due course”.
Astley subsequently
reviewed the relevant documentation and provided Austrust with his advice. By
late 1984, Austrust had executed
the deed of trust and obtained various
facilities in excess of $1.3 million for its purchase of two properties which it
held upon
trust.
Within three months, it appeared that the trust was
hopelessly insolvent. As neither the trust deed nor the various facilities
limited
Austrust’s liability in the event of insolvency of the trust,
Austrust became personally liable for losses that exceeded the
value of the
trust property. Austrust consequently incurred extensive losses because the
value of the assets fell considerably short
of the outstanding liability to the
various lenders.
Austrust then commenced proceedings against Astley and
his partners in the Supreme Court of South Australia for breach of contract
and
for negligence in carrying out a retainer to give legal advice. Austrust
alleged that Astley and his firm were at fault in failing
to advise Austrust
that it should not have accepted the appointment as trustee without excluding
its personal liability for the losses
of the trust. In response, Astley claimed
that it was not part of his retainer to advise upon the terms and effect of the
various
facilities entered into by Austrust. Astley also asserted that, in any
event, Austrust had been contributorily negligent in that
it failed to properly
investigate the solvency of the proposed trust.
At first instance,
Mullighan J found that Astley and his firm of solicitors had been negligent in
failing to advise Austrust that
it would be personally liable in dealings with
third parties unless it limited its liability to the extent of the trust assets.
Mullighan
J also held that Austrust was contributorily negligent as it failed to
make appropriate enquiries as to the availability of the funds
the trust
required if it was to be viable. As both breach of contract and negligence were
pleaded by Austrust, his Honour reduced
the damages that would otherwise be
payable to Austrust by 50% on the basis that Austrust’s contributory
negligence entitled
Astley to have the damages reduced because the duty of care
was the same in contract and in tort and both causes of actions were
pleaded.
Both Astley and Austrust appealed to the Full
Court[4] of the Supreme Court. The
Full Court allowed Austrust’s appeal against the finding of contributory
negligence and dismissed
Astley’s appeal against the finding that the
issues pertaining to Austrust’s liability to creditors was within the
scope
of the retainer. Their Honours found that there was no basis for
concluding that Austrust, acting reasonably, ought to have known
that it may
have been personally liable in its dealings with third parties unless it limited
its liability to the extent of the trust
assets. Secondly, their Honours also
concluded that the risk of personal liability to which Austrust was exposed was
the very risk
against which Astley should have protected Austrust. Upon these
bases, the Full Court awarded damages and interest thereon in full
to
Austrust.
Astley then sought special leave to appeal to the High Court,
which leave was granted. Astley contended that the Full Court erred
in finding
that Austrust was not guilty of contributory negligence. By notice of
contention, Austrust submitted that Astley was
in breach of an implied term of
the retainer to take reasonable care in giving legal advice and that
Austrust’s contributory
negligence (if any) could not be used to reduce
the damages resulting from Astley’s breach of contract.
The important questions which arose for determination by the High Court were:
whether a plaintiff can be guilty of contributory negligence
where the defendant has contractually agreed to protect the plaintiff
from the
very loss or damage which the plaintiff has suffered as a result of the
defendant’s breach of duty;
whether an award of damages for breach of
contract may be reduced under apportionment of liability legislation arising
from contributory
negligence on the part of the plaintiff where the defendant is
liable concurrently in tort and contract for the breach of a duty
of care;
and
whether it was established on the evidence that Austrust was
contributorily negligent in failing to undertake proper enquiries as
to the
solvency of the trust.
In short, the High Court held that:
(a) a plaintiff can
be found guilty of contributory negligence where the defendant has contractually
agreed to protect the plaintiff
from the very loss or damage which the plaintiff
has suffered as a result of the defendant’s actions;
(b) despite a
plaintiff’s contributory negligence, no award of damages for breach of
contract can be reduced under any apportionment
legislation;
and
(c) Mullighan J was correct in finding that Austrust was contributorily
negligent as its loss was the result of two factors,
namely:
(i) Astley’s failure to advise on and take steps to limit
Austrust’s personal liability; and
(ii) Austrust’s failure to
investigate the solvency and validity of the trust.
It is appropriate to review the decision of the majority and the
dissenting judgment of Callinan J in relation to the following three
issues:
| • | concurrent liability; |
| • | the operation of apportionment legislation; and |
| • | policy issues. |
The majority held that it was open to Austrust to sue in
contract as well as in tort. Their Honours reached this conclusion after
reviewing various conflicting authorities as to the concurrent recognition of a
tortious and contractual duty arising from essentially
the same
facts.
Their Honours examined the reasoning of Deane J in Hawkins v
Clayton[5] (Hawkins) who
suggested that, where a tortious duty to take reasonable care exists, there is
no justification for implying a term of the same
content into the contract.
Deane J consequently asserted that no action for breach of an implied term to
take reasonable care can
arise as the tortious duty to take reasonable care is
imposed by law and should be
preferred.[6]
Their Honours
then examined the decision of the House of Lords in Henderson v Merret
Syndicates Ltd [7]
(Henderson) where the reasoning of Deane J in Hawkins was
rejected. In Henderson, Lord
Gough[8] stated in respect of
concurrent liability in tort and contract:
My own belief is that, in the present context, the common law is not anti-pathetic to concurrent liability and that there is no sound basis for a rule which automatically restricts the claimant to either a tortious or a contractual remedy. The result may be untidy but, given that the tortious duty is imposed by the general law, and the contractual duty is attributable to the will of the parties, I do not find it objectionable that the claimant may be entitled to take advantage of the remedy which is most advantageous to him, subject only to ascertaining whether the tortious duty is so inconsistent with the applicable contract that, in accordance with ordinary principle, the parties must be taken to have agreed that the tortious remedy is to be limited or excluded. [9]
The majority went on to confirm the conclusion of the House of
Lords in Henderson as the correct
view.[10] After outlining the
differing requirements and advantages of a cause of action in a contract
compared to a cause of action in tort,
their Honours concluded that “there
is no justification in recognising the tortious duty to the exclusion of the
contractual
duty.”[11]
Callinan J,
agreed with the majority that the law has evolved to embrace concurrent
liability:
The trend of modern authority has generally, if not unanimously moved in favour of a dual liability certainly in cases of breach of duty by professional advisers and others in what formerly were common callings. To deny a client of a professional adviser, and therefore a person in a contractual relationship, a right of action in tort also, may be to put that client at an unjustifiable disadvantage compared with a person who has received negligent gratuitous advice or services causing damage from a professional or other adviser, and who may in consequence sue in tort. [12]
Although agreeing with the majority in recognising concurrent liability, Callinan J disagreed with the majority as to whether tort should be preferred over contract. His Honour examined a number of cases[13] and preferred the view that tort prevails over contract in situations where there is concurrent liability and the contract does not expressly deal with reasonable care and skill. Callinan J reached this conclusion on a primarily practical basis:
The duties and the relationship between professionals and other providers of services and advice may in practice extend far beyond matters to which the parties would normally turn their minds and, even if they did, would mutually wish, or be prepared to include in their contracts... In this respect the obligations may more aptly be regarded as obligations in tort than in contract, one of the tests of the former being the objective test of reasonable foreseeability rather than what the parties subjectively may have had in mind when the contract was made. [14]
In determining whether apportionment legislation applies to actions brought in contract alone or where there is concurrent liability in contract and tort, the majority examined the intent and meaning of s 27A(3) of the Wrongs Act 1936 (SA). Given that there was conflicting precedent in relation to the operation of apportionment legislation in cases where there is a breach of concurrent and co-extensive contractual and tortious duties of care, their Honours considered that the issue became one of statutory construction of s 27A which was to be resolved by reference to the relevant text, history and purpose of that Act:
The natural and ordinary meaning of s 27A(3), read in light of the definitions contained in the section, indicates that the section is concerned with claims in tort rather than claims in contract. The subsection was designed to remedy the evil that the negligence of a plaintiff, no matter how small, which contributed to the suffering of damage, defeated any action in tort in respect of that damage.[15]
In essence, their Honours considered that the word
“negligence” is connected with the definition of “fault”
in s 27A(1) so that the word “negligence” is qualified by the words
“which gives rise to liability in tort”.
Callinan J, on the
other hand, considered that the word “negligence” is disconnected
from the balance of the definition
of “fault” in s 27A(1):
The expression “fault” as used in s 27A(3) cannot literally mean, for the purposes of contributory negligence, what the definition states “fault” to mean unless the words “which gives rise to a liability in tort” are confined in operation to “other act or omission” and even then the difficulties do not disappear... A plaintiff may be guilty of contributory negligence in circumstances in which no duty is owed by him or her to a defendant or anyone else. By definition “fault” means negligence. The respondent did suffer damage as a result partly of its own negligence and therefore fault, and partly as a result of the appellant’s (albeit that default was breach of contract as well as a tort) and accordingly in my opinion it then fell to the court to apportion liability. [16]
Callinan J’s reading of the legislation meant that there may be “fault” by reason of “negligence” which need not be tortious. Callinan J also outlined various scholarly texts and referred to the “tide of authority”[17] which acknowledged the availability of contributory negligence as a partial defence in cases of a defendant’s dual liability in tort and contract.
In considering the public policy issues which underpin their
decision, the majority outlined the view that the denial of the operation
of
apportionment legislation to contract claims leads to anomalous or unfair
results. This is because it may allow a plaintiff who
has been contributorily
negligent in carrying out the terms of a contract to sue a defendant for its
alleged breach of contract and
recover full damages as no apportionment of
damages could be made in the absence of the operation of apportionment
legislation.
The majority disputed this view and considered that an examination
of the nature of an action in tort for breach of a general duty
of care and the
nature of an action for breach of a contractual term to take reasonable care
reveals that it is by no means evident
that an action by a plaintiff who sues in
contract would lead to an anomalous or unfair result because the
plaintiff’s action
is outside the scope of the apportionment legislation.
Their Honours considered that there was scope for apportionment because of
the
significant difference between tort and contract given that tort obligations are
imposed on parties whereas contractual obligations
are voluntarily
assumed.[18] It is appropriate to
reproduce the relevant paragraphs which elucidate their Honours’
conclusion:
Absent some contractual stipulation to the contrary, there is
no reason of justice or sound legal policy which should prevent the
plaintiff in
a case such as the present recovering for all the damage that is causally
connected to the defendant's breach even if
the plaintiff's conduct has
contributed to the damage which he or she has suffered. By its own voluntary
act, the defendant has
accepted an obligation to take reasonable care and,
subject to remoteness rules, to pay damages for any loss or damage flowing from
a breach of that obligation. If the defendant wishes to reduce its liability in
a situation where the plaintiff's own conduct contributes
to the damage
suffered, it is open to the defendant to make a bargain with the plaintiff to
achieve that end. Of course, the result
of such a bargain may be that the
defendant will have to take a reduced consideration for its promise to take
reasonable care. But
the bargain will be the product of the parties' voluntary
agreement to subject themselves to their respective obligations.
[19]
In an action in tort,
however, the duty of the defendant to take reasonable care and the obligation of
the plaintiff to take reasonable
care for his or her own safety or interests are
imposed on the parties by law. Absent a contractual stipulation varying the
rights
of the parties, it is the general law that defines their rights and
liabilities. It is one thing to apportion the liability for
damage between a
person who has been able to obtain the gratuitous services of a defendant where
the negligence of each has contributed
to the plaintiff's loss. It is another
matter altogether to reduce the damages otherwise payable to a plaintiff who may
have paid
a very large sum to the defendant for a promise of reasonable care
merely because the plaintiff's own conduct has also contributed
to the suffering
of the relevant damage.[20]
Callinan J disagreed with the majority’s assertion that
the terms of the contract between parties allocate responsibility for
the risks
of the parties’ enterprise including the risk that the damage suffered by
one party may arise partly from the failure
of that party to take reasonable
care. Callinan J considered it “rather unlikely that contracting parties
would always be
able in their contracts, express or implied, precisely to define
the relevant scope and extent of their respective
obligations”.[21] In
outlining the policy grounds which supported his view that a plea of
contributory negligence should be available in cases where
there is concurrent
liability for a breach of contractual and tortious duty, Callinan J adopted the
arguments of Porat in his paper
‘Contributory Negligence in Contract Law:
Toward a Principled
Approach’[22] who argued that
the defence of contributory negligence should be available on the following
grounds:
| • | its adoption in contract leads to fair and just results; |
| • | it is consistent with a trend generally considered positive, in unifying the remedies available in both contract and tort; |
| • | it encourages caution, co-operation and solidarity between parties to a contract; and |
| • | it provides incentives towards the fulfilment of contracts and the mitigation of damages arising from the breach. |
Put simply, Callinan J considered that the operation
of apportionment legislation to cases where there is concurrent liability of
the
defendant and where the plaintiff has been contributorily negligent, allows the
court to fulfil its duty which is to arrive at
a just and equitable
apportionment.[23]
Put simply, the effect of Astley is that it now matters how a
plaintiff frames their action in cases where there is alleged concurrent
liability in contract and tort
on the part of the defendant and some fault on
the part of the plaintiff. This is because, following Astley, the extent
of damages recoverable necessarily depends upon whether a contributorily
negligent plaintiff grounds their action in
tort or contract. As is evident by
Astley, apportionment of liability will apply in tort actions but not in
contract actions unless there is a specific contractual provision
which provides
for apportionment.
The implications of Astley are therefore
significant. Consider, for example, a situation where a plaintiff and defendant
are each 50% responsible for the plaintiff’s
loss. In tort, the plaintiff
will only be able to recover 50% of the damages claimed after apportionment of
liability. In contract,
however, provided that the plaintiff establishes that
the defendant caused the plaintiff’s loss and there is no contractual
provision which deals with apportionment, then the plaintiff will be entitled to
recover the full amount of the damages claimed as
there is ordinarily no
apportionment of liability. In such a situation, it is imperative that the
defendant finds alternative means
to practically achieve apportionment and limit
the extent of their liability to the plaintiff for damages.
To this end, various scholars have suggested means by which apportionment of liability may be practically achieved. Masel and Kelly in their article ‘Contributory Negligence and the Provision of Services: A Critique of Astley’[24] examine in detail the decision in Astley. They critically examine the main propositions asserted by the majority and suggest a separate basis on which the High Court might have reached a contrary decision which would nonetheless have been a practical and sound result. It is not the preserve of this paper however, to critique Astley and reiterate the arguments already clearly espoused by Masel and Kelly. Rather, it is to consider the arguments which have been proffered by Masel and Kelly and others such as Legg[25], Swanton[26], Butler[27] and Seddon[28] as to the how apportionment of liability may be achieved in actions where there is alleged concurrent liability in contract and tort on the part of the defendant and some fault on the part of the plaintiff.
The above authors and others have suggested various means by
which apportionment of liability may be achieved in situations not only
where
there is concurrent liability but also where there is liability in contract
alone. These include:
| • | contractual accommodation and implied terms; |
| • | mitigation; |
| • | loss of opportunity; |
| • | legislative intervention; and |
| • | causation and counterclaim. |
It is appropriate to deal with each in
turn.
As is confirmed by the majority in Astley, contractual
obligations are voluntarily assumed and it is up to the parties to determine how
liability is to be limited or
regulated.[29] The drafting and
insertion of an appropriate clause in the contract which regulates the proposed
dealing between the parties would,
as
Seddon[30] suggests, be an immediate
solution. Seddon even proffers an appropriate clause:
If either party is
in breach of this contract and it is necessary to assess damages (whether or not
the contract is terminated), it
is agreed that the damages awarded will be
reduced to the extent that the party suing was responsible for loss suffered by
that party.
In assessing the reduction of damages and deciding responsibility,
regard shall be had to the causes of the losses suffered by the
party suing but
it shall also be legitimate to have regard to comparative fault where
appropriate, in a manner analogous to that
employed to assign fault under the
contributory negligence legislation. The parties may agree to an expert
determination by a third
party for the purpose of assigning comparative
responsibility under this clause, but, in any case, both parties agree that this
clause
shall be the basis for a court assessing damages under this contract.
[31]
The problem with apportionment via contractual accommodation is
that such a provision may not always be included in the contract which
governs
the dealings between parties. This may be because one party has successfully
negotiated the exclusion of such a term. Alternatively,
it may be that the
parties to the contract simply did not turn their minds to the relevant scope
and extent of their respective obligations.
In such a situation, however, all
is not lost as it may be possible to imply a term into the contract either as a
matter of fact[32] or by
law[33].
The implication of a
term into the contract may effectively allow apportionment of liability in cases
where both parties are at fault.
Such a solution while attractive in theory,
may be difficult to achieve in practice, especially in cases where the contract
is for
the provision of professional services. As Callinan J poses:
It
has at times been suggested that any anomaly which might appear to permit a very
negligent plaintiff to recover damages in full
in contract may be able to be
corrected by reference to basic contractual principles: that there should be
implied against a person
engaging a professional, a reciprocal term obliging the
former to take reasonable care in such matters as, for example, the giving
of
instructions and the making of appropriate inquiries. However that approach
does not seem to have any authoritative modern currency
and would not be without
difficulties in its application.
[34]
Thus, in the absence of
an express or implied term which regulated the apportionment of damage in the
event of breach, the exclusion
of a clause which effectively allows for
apportionment of liability would be fatal to a defendant who is responding to an
allegation
of an alleged breach of contractual duty where the plaintiff was
themselves partly responsible for their own loss.
Both Legg[35] and
Swanton[36] assert that the
principle of mitigation may to some degree achieve apportionment in cases where
a plaintiff has acted in a manner
akin to contributory negligence. The doctrine
of mitigation imparts on the party who has suffered loss as a result of
another’s
breach of contract a duty to react in such a manner to ensure
that its loss is minimised.
For example, a plaintiff suffers loss which
was caused by a breach by both the defendant and the plaintiff. Then, after
incurring
the initial loss, the plaintiff acts in a manner which exacerbates its
loss. In such a situation, the doctrine of mitigation will
deny the plaintiff
recovery of that part of its loss which was caused by the plaintiff in
exacerbating its initial loss. While it
seems a short step to apply the logic
and principles associated with the doctrine of mitigation to pre-breach conduct,
the law with
respect to mitigation simply does not allow an examination of
pre-breach conduct.[37] Hence, the
doctrine of mitigation will not extend to apportioning the initial loss caused
by the plaintiff.[38]
The law
relating to mitigation of damages, therefore, should not be regarded as a means
to achieve apportionment per se, but rather
a means by which a plaintiff will,
to some extent, be denied recovery when the plaintiff has exacerbated its
initial loss regardless
of whether that loss was wholly caused by the defendant
or partly by each of the plaintiff and defendant. Thus, the principle of
mitigation is limited in its operation as it only operates post-breach.
Seddon[39] details that loss
of opportunity is “part of the process of adding up the damages”.
The process involves speculating
about hypothetical events which might have had
the effect of reducing or totally limiting the damages which a defendant may be
found
liable to pay to a plaintiff.
Seddon[40] and
Legg[41] detail that the calculation
of damages pursuant to loss of opportunity may overcome the all or nothing
approach which is prevalent
in contract litigation. In essence, the defendant
(presumably the contract breaker) seeks to produce evidence which shows that the
plaintiff’s loss, or part of it, would have happened in any event, whether
or not there was a breach of the contract. The
relevant principle in relation
to assessing damages for loss of opportunity was enumerated by Deane, Gaudron
and McHugh JJ in Malec v JC Hutton Pty Ltd
[42]
(Malec):
When liability has been established and a common law
court has to assess damages, its approach to events that allegedly would have
occurred, but cannot now occur, or that allegedly might occur, is different from
its approach to events which allegedly have occurred.
A common law court
determines on the balance of probabilities whether an event has occurred. If
the probability of the event having
occurred is greater than it not having
occurred, the occurrence of the event is treated as certain; if the probability
of it having
occurred is less than it not having occurred, it is treated as not
having occurred. Hence, in respect of events which have or have
not occurred,
damages are assessed on an all or nothing approach. But in the case of an event
which it is alleged would or would
not have occurred, or might or might yet
occur, the approach of the court is different. If the law is to take account of
future
or hypothetical events in assessing damages, it can only do so in terms
of the degree of probability of those events occurring.
The probability may be
very high – 99.9% - or very low – 0.1%. But unless the chance is so
low as to be regarded as
speculative – say less than 1% - or so high as to
be practically certain – say over 99% - the court will take that chance
into account in assessing the damages. Where proof is necessarily unobtainable,
it would be unfair to treat as certain a prediction
which has a 51% probability
of occurring, but to ignore altogether a prediction which has a 49% probability
of occurring. Thus,
the court assesses the degree of probability that an event
would have occurred or might occur, and adjusts its award of damages to
reflect
the degree of
probability.[43]
The
application of this principle was confirmed by the High Court in Sellars v
Adelaide Petroleum NL[44] which
was concerned with assessment of damages for misrepresentation. In that case
the court held that the loss of a chance resulting
from breach of a contract to
provide a chance is compensable, notwithstanding that, on the balance of
probabilities, it is more likely
than not that the chance would not have come to
fruition.
As Legg[45]
establishes, assessment of damages for loss of chance “is not the same as
apportionment on the basis of fault because it deals
with the quantification of
the loss rather than responsibility for the loss.” Furthermore as is
indicated by the first sentence
of the extract of the decision of Deane, Gaudron
and McHugh JJ in Malec referred to above, the principle only applies to
assessment of damages in relation to events which allegedly would have occurred,
but cannot now occur, or that allegedly might occur. Finally, while the
reasoning in Malec is regularly adopted and used by courts in assessing
damages as part of a claim for loss of opportunity in negligence cases involving
professional negligence, it has not been concluded by the High Court whether the
same arguments apply in cases of personal injury
or medical negligence
generally.[46]
As
Seddon[47] argues, the mechanism for
reducing damages awarded to a plaintiff by assessing damages for loss of
opportunity is not a universal
principle which caters for a wide range of
circumstances when both parties are at fault. Hence, although assessment of
damages for
loss of opportunity pursuant to the principle in Malec is a
back door means by which to achieve apportionment, its operation is limited to
the situations detailed above.
It is the call for legislative reform that has perhaps been the loudest
since the High Court’s decision in Astley. The majority in
Astley asserted that:
Perhaps the apportionment statute should be
imposed on parties to the contract where damages are payable for breach of a
contractual
duty of care. If it should, and we express no view about it, it
will have to be done by amendment to that legislation.
[48]
Callinan J also made
some comment as to whether legislative intervention would resolve the issues
relating to the apportionment of
liability in actions where there is concurrent
liability or simply contractual liability. After examining a number of
difficulties
relating to the application of limitation periods, assessment of
damages and remoteness principles in different fact situations,
his Honour
outlined that “these are matters which in the absence of legislation will
have to be worked out on a case by case
basis”.[49]
Indeed, the
appropriateness of legislative intervention is one of the central themes of many
of the articles written by various scholars.
Before drawing some conclusions
about the appropriateness of legislative intervention, however, it is necessary
to make some comment
about causation principles and then examine in detail the
Queensland Court of Appeal decisions in Wylie and Jones where
further comment was made as to the appropriateness of legislative
intervention.
Much of the focus on the effect of Astley concerns renewed calls
for judicial reformulation of causation principles to allow for apportionment of
liability in all contractual
claims. As is evident from Astley, the
common law favours an all or nothing approach to causation in
contract.[50] The law does not ask
the question: “to what extent is the defendant responsible for the
plaintiff’s loss?” Rather,
in contract cases, the element of
causation will be satisfied if the plaintiff can establish that the
defendant’s breach of
contract was “a” cause of the
plaintiff’s loss.[51] As
detailed above, on the present state of the law, if the plaintiff establishes in
a contract claim that the defendant caused the
plaintiff’s loss, then the
plaintiff is entitled to full damages, even if the plaintiff was partly
responsible for their own
loss.
Legg[52] has suggested
that pursuing counterclaims against the plaintiff in appropriate cases may be an
effective means by which the defendant
may limit their liability for damages and
thereby attempt to achieve some form of apportionment of liability. According
to Legg[53], such counterclaims
could be pursued on the basis that, amongst others:
| (a) | there is an implied term in the contract between the parties that the plaintiff exercise due care and skill in carrying out its obligations; |
| (b) | in professional negligence cases, the plaintiff client owes a common law duty of care to the defendant professional in providing instructions and information; |
| (c) | the plaintiff engaged in misleading and deceptive conduct within the wording of s 52 of the Trade Practices Act or similar state legislation. |
Before
commenting further on the practicality of Legg’s suggestions with respect
to the pursuit of counterclaims, it is appropriate
to make some comment about
judicial reformulation of causation principles and then examine the Queensland
Court of Appeal decisions
in Wylie and Jones where the court in
each case commented upon the appropriateness of allowing a defendant to pursue a
counterclaim against the plaintiff
as a means of attempting to achieve some form
of apportionment of liability.
Various scholars have for some time argued
that causation principles generally should be reformulated so that apportionment
is available
in all causes of action to ensure a uniform
approach.[54] Seddon is a strong
proponent for the application of apportionment principles to all causes of
action.[55] In actions for damages
pursuant to s 82 of the Trade Practices Act, Seddon has argued that the
all or nothing causation approach should be dispensed with and apportionment
principles should be applied.
Seddon considers this possible because the
Trade Practices Act allows the court to adopt a commonsense approach to
causation and adjust the damages accordingly where both parties are at
fault.[56] Indeed, in recent times,
some courts have applied apportionment principles when determining the damages
recoverable pursuant to
s 82 of the Trade Practices Act for that part of
the plaintiffs loss that is attributable to the conduct in breach of s
52.[57] In the realm of contract,
however, it is necessary to first examine the Queensland Court of Appeal
decisions in Wylie and Jones before drawing some conclusions about
the likelihood of judicial reformulation of the approach to causation in
contract.
Wylie was injured at work on a number of occasions and subsequently
brought an action in the District Court against ANI, his employer,
for damages
for personal injuries, alleging both negligence and breach of an implied term in
the contract of employment that ANI
would provide a safe system of
work.
At first instance, the trial judge found that at least one accident
occurred through the fault of ANI as it failed to take reasonable
steps to
provide a safe system of work. This failure constituted both negligence and a
breach of contract. The trial judge, however,
also found that Wylie was 50%
contributory negligent. Given that the action was framed in contract and that
it was established that
ANI breached the contract of employment, the trial judge
awarded full damages to Wylie. Following Astley, the trial judge did not
reduce the damages awarded in contract to take account of Wylie’s
contributory negligence.
Prior to delivering his judgment, the trial
judge circulated his draft reasons to counsel. When the matter was called on
for judgment,
ANI sought to amend its defence by claiming, in essence,
that:
(a) it was an implied term of the contract of employment between
Wylie and ANI that Wylie would carry out his duties with due care
and skill and
in such a fashion as to not to cause injury to any person, including
himself;
(b) in breach of this term, Wylie failed to carry out his duties
with due care and skill;
(c) by reason of Wylie’s breach, ANI suffered
loss and damage in such amount of Wylie’s damages as the court finds were
caused by Wylie’s breaches; and
(d) ANI claimed to set-off the amount
of its loss against such amount of damages for breach of contract, if any, as
may be payable
by Wylie to ANI pursuant to Wylie’s breach.
ANI then
sought to counterclaim against Wylie for damages for breach of
contract.
The trial judge refused to allow the proposed amendments to
ANI’s defence.
ANI sought leave of the Queensland Court of Appeal
to appeal the decision at first instance on a number of grounds. The Queensland
Court of Appeal granted ANI leave to appeal only on the ground of the trial
judge’s refusal to allow the proposed amendment
to ANI’s
defence.
The significant issues which the Queensland Court of Appeal considered
include:
| • | whether there is an implied term in a contract of employment that the employee is to carry out the employment with due care and skill so as to take reasonable care for the employee’s own safety; |
| • | whether an employer is entitled to be indemnified by the employee against its liability for damages caused by the employer’s negligence; and |
| • | the correct test for causation in contract claims. |
McMurdo P, examined the authorities and concluded that “there is
ordinarily an implied term in a contract of employment that
an employee will
carry out the employment with due care and skill; on the [trial] judge’s
findings, the respondents in this
case breached that
duty”.[58] Thomas
JA[59] and Ambrose
J[60] agreed with McMurdo P’s
conclusion.
Upon the amended defence and counterclaim, the court would have had
reason to consider whether an employer is entitled to be indemnified
by the
employee against its liability for damages caused by the employer’s
negligence. This is because, pursuant to the amended
defence and counterclaim,
ANI essentially alleged that:
(a) Wylie breached an implied term in the
contract of employment by failing to carry out his duties with due care and
skill and in
such a fashion as to not to cause injury to any person, including
himself; and
(b) Wylie’s breach entitled ANI to counterclaim for
damages for the amount that would otherwise have been deducted from the
judgement by reason of the finding of contributory negligence.
On the
hearing of the appeal, however, ANI did not seek to support this argument and
dropped the counterclaim. Rather, ANI submitted
that it was Wylie’s
failure to take care, not the breach by ANI, which was, in contract, the cause
of Wylie’s damages.
The issue for the court then became, which breach
caused, in a contractual sense, Wylie’s injuries. This involved
determining
the correct test for causation in contract claims.
Each of their Honours delivered separate judgments in determining this
issue.
McMurdo P examined the authorities in relation to causation and
noted the difficulty where a breach of contract may arise from two
causes, both
of which are co-operating and of equal efficacy in causing loss to the
plaintiff. Her Honour considered that the appropriate
question to be asked is
“was the breach of contract alleged by the plaintiff against the defendant
a cause of the damage?”.[61]
Her Honour concluded that the trial judge’s findings made it clear that
ANI’s breach of contract in maintaining an unsafe
system of work was
certainly “a” cause of Wylie’s
injuries.[62] Accordingly, McMurdo
P found that ANI was liable to Wylie for the damage which he suffered as a
result of his injuries.
Thomas JA also examined the relevant authorities
and concluded that “it is enough in a breach of contract case that a
defendant’s
act be a cause of the
damage”.[63] His Honour was
satisfied that the facts established that ANI’s actions were a cause of
Wylie’s damage and accordingly
found ANI liable in contract for
Wylie’s loss.
Like McMurdo P and Thomas JA, Ambrose J also examined
the relevant authorities. Ambrose J noted that there can be a number of acts
or
omissions which constitute a breach of a
contract.[64] In such situations,
his Honour outlined that it is necessary to evaluate the evidence and determine
whether the alleged breach is
a real and substantial cause of the loss alleged
by the plaintiff.[65] Although
prefacing “cause” with the words “real and substantial”
Ambrose J’s analysis of the test
for causation in breach of contract cases
accords with that of both McMurdo P and Thomas JA as it requires a determination
as to
whether the alleged breach is “a” cause of the
plaintiff’s damage.
Ambrose J considered that despite Wylie’s
failure to take care of himself, the facts indicated that ANI’s failure to
provide
a safe system of work was a real and substantial cause of Wylie’s
injuries sufficient to support a judgment against ANI in
favour of Wylie for
breach of contract.[66]
In 1996, Jones was injured at work when he fell from the bullbar of a
truck onto which he had climbed to assist another worker. Although
a safety
platform was available for the type of work Jones was attempting to undertake,
Jones failed to use the safety platform.
Jones brought a claim for
damages for negligence, breach of contract and breach of statutory duty on the
part of his employer Persal.
At first instance, the trial judge concluded that
Persal was liable to Jones for his damages. Although concluding that Jones had
failed to take reasonable care for his own safety by failing to use the safety
platform, the trial judge held that he was precluded
from reducing the award of
damages as a result of the High Court decision in Astley.
Persal
subsequently appealed against the finding of negligence, or alternatively, the
failure to make a reduction in the award of
damages contending that
Astley does not preclude a finding that the cause of Jones’ injury
and loss on a contractual analysis of the relationship between
the parties was
his own failure to take care. Persal alleged that such a finding would answer
the contractual claim and thus allow
a reduction of Jones’ damages via the
tort claim if it stood.
Similar to the situation in Wylie, Persal
sought leave at the trial to amend its defence and to bring a counterclaim. The
proposed amendment alleged that a term be
implied into the contract of
employment which essentially provided that Jones would carry out his duties with
due care and skill
and in such a fashion as to not cause injury to any person
including himself whilst also taking reasonable care for his own
safety.
Persal contended that Jones breached that term and as a
consequence, Persal suffered loss and damage in such amount of Jones’
damages as the court found was caused by Jones’ breach. Persal then
sought to set-off those damages against any order for
damages made in favour of
Jones. In other words, Persal attempted to bring about a reduction in damages
equivalent to the quantum
of any finding of contributory negligence in tort and
thereby in effect achieve apportionment. The trial judged refused leave to
amend Persal’s defence in this manner because he concluded that the
decision in Astley precluded a finding consistent with the proposed
amendment.
The significant issues which the Queensland Court of Appeal considered
were similar to those in Wylie and include:
| • | the correct test for causation in contract claims; and |
| • | whether the decision in Astley precludes a finding that the cause of Jones’ loss on a contractual analysis of the relationship between the parties was his own failure to take care and therefore the reduction of Jones’ damages on the tort claim could stand. |
Similar to her reasoning in Wylie, McMurdo P stated that:
If a breach of contract is one of two causes, both co-operating
and both of equal efficacy in causing loss to the plaintiff the party
responsible for the breach is liable to the plaintiff for that loss (Wylie at
[27], [50], [92]. See also Simoneous Vischer v Holt
(1979) 2 NSWLR 322, 346;
Heskell v Continental Express Limited [1950] 1 All ER 1033; Alexander v
Cambridge Credit Corporation Limited (1987) 9 NSWLR 310, 315, 357).
[67]
McMurdo P found that the
evidence did indeed establish that Persal failed to provide a safe system of
work and that that failure to
provide a safe system of work was a cause of
Jones’ injuries. Accordingly, Persal was liable in contract to Jones for
his
loss and damage.[68]
In
determining causation, Pincus JA considered that the court must determine
whether the defendant’s act was “the”
cause of the
plaintiff’s loss. His Honour stated:
The conclusion that one cause
or another is “the” cause has in this context rather a special
meaning: Sometimes “real”
or “effective” is added,
perhaps for emphasis. Suppose the employer, inexcusably leaves an open vat of
acid in a position
where a worker moving about in the course of his duties might
well, if a little careless, fall in. Even if the court holds that
the injured
worker would not have fallen in if he had taken proper care, no-one would doubt
that the employer’s breach of contract
would be deemed “the”
cause, despite there being in truth two causes. . . [I]n ascertaining
“the” cause of
the injury the court has to consider the extent to
which carelessness on the part of the plaintiff contributed to the occurrence,
whether or not that carelessness constituted a breach of contract.
[69]
Although using different
terminology to that of McMurdo P, Pincus JA’s reasoning is
essentially the same. For Pincus JA, provided
that if it can be established
that the defendant’s action caused the plaintiff’s loss then the
plaintiff will be entitled
to recover against the defendant for their loss and
damage even if it is also established that the plaintiff also caused part of
their own loss and damage.
Pincus JA, however, found that the evidence
did not establish that Persal failed to provide a safe system of work and was
therefore
neither negligent nor in breach of its employment contract with Jones
or its statutory duty to provide a safe system of
work.[70] Pincus JA therefore
allowed Persal’s appeal and set aside the judgement at first
instance.
In considering the issues relating to causation, White J
commented that:
Different and well-known considerations [compared to
those in tort] apply when the relationship is governed by contract. In that
circumstance courts will find the “real” or “effective”
cause of the damage complained of, Leyland Shipping
Company Ltd v Norwich Union
Fire Insurance Society Limited [1918] AC 350 per Lord Shaw at 370; and Smith
Hogg & Co v Black Sea and Baltic General Insurance Co [1940] AC 997. To
assist in that search the common law applies a commonsense notion of causation,
Monarch Steamship Co Ltd v Karlshamms Oljefabriker
(A/B) [1949] AC 196; Quinn v
Burch Bros (Builders) Ltd [1966] QB 370 (CA); and Alexander v Cambridge Credit
Corporation Ltd (1987) 9 NSWLR 310. If an employer’s breach of contract
was the cause of the damage complained of the employer will carry the liability.
But the
employee will be left to bear his own loss if his own want of care has
been the effective cause of the damage or if he is unable
to prove what damage
flowed from the employer’s breach of contract as distinct from his own
breach of contract.
[71]
White J found that the
evidence did not establish that Persal failed to provide a safe system of work
and was therefore neither negligent
nor in breach of its contractual or
statutory duties to provide a safe system of
work.[72] White J therefore allowed
the appeal, set aside the judgement at first instance and gave judgement for
Persal.
Neither McMurdo P nor Pincus JA directly addressed this issue. As
McMurdo P was satisfied that the facts indicated that Jones’
loss was
caused by Persal’s breach of contract to provide a safe system of work, it
was not necessary for McMurdo P to express
any view on this issue.
As for
Pincus JA, having found that the facts established that Persal was neither
negligent nor in breach of its statutory or contractual
duties which it owed to
Jones, it was also unnecessary for his Honour to express an opinion on this
issue.
White J, however, felt compelled to make some comment given that
counsel for Persal made detailed submissions in respect of the issues
of
causation and the term to be implied into the contract of employment between
Persal and Jones.
Her Honour considered that Astley does not
preclude some form of apportionment of liability in an action for breach of
contract. White J restated the relevant paragraphs
of the majority’s
decision in Astley which establish that apportionment may be achieved if
the parties to the contract have agreed that responsibility for damage is to
be
apportioned on the basis of the respective fault of the
parties.[73] In the absence of a
clear agreement to this effect, however, apportionment will not be possible by
any other means because, in contract
claims, the general rule is that a
plaintiff is entitled to recover full damages as a result of the
defendant’s breach, even
if the plaintiff’s conduct has contributed
to the plaintiff’s damage. Her Honour stressed that the present state of
the law will not entertain an argument that apportionment could in effect be
achieved if a defendant claimed damages for breach of
contract by the plaintiff,
which would, in quantum terms, be the equivalent of the quantum of the
plaintiff’s contributory
negligence.[74]
Both Wylie and Jones clearly establish that the present
state of the law demands that causation in contract remain an all or nothing
approach. In other
words, if the plaintiff establishes that the
defendant’s conduct was a cause of the plaintiff’s loss, then in the
absence
of some other specific provision in the contract which requires a
different conclusion, the plaintiff will be entitled to recover
the full amount
of its loss in damages. Both Wylie and Jones, however, evidence
some important comments as to whether the all or nothing approach is good
law.
Thomas JA in Wylie, for example, considered that, once
established, the duty in tort to take reasonable care is essentially the same as
the duty in
contract (either express or implied) to take reasonable care. His
Honour submitted that it is therefore difficult to see why there
should be any
different test for causation in deciding whether the breach of the duty (whether
in contract or in tort) caused the
damage of which the plaintiff
complains.[75]
Despite
identifying the anomaly of having two separate tests for causation when the duty
which has allegedly been breached is essentially
the same, Thomas JA stated that
the Queensland Court of Appeal lacked the authority to relax the relevant tests
for causation. His
Honour stated that this is because the present state of
authority demands the application of the tests stated in Alexander v
Cambridge Credit Corporation Ltd
[76] and Heskell v
Continental Express Ltd [77]
which, as outlined above, establish that causation will be satisfied if it is
established that the defendant’s act was “a”
cause of the
plaintiff’s damage.[78]
Therefore, until such time as there is judicial reformulation of the relevant
principles by the High Court, causation will remain
an all or nothing approach.
This has significant implications for the practicality of apportionment of
liability via a counterclaim
by a defendant and the desirability of legislative
intervention.
As Legg[79] posits, it is
arguably open to a defendant to counterclaim against a plaintiff in appropriate
circumstances and seek relief against
the plaintiff for breach of a contractual
duty (either express or implied) to not make the defendant liable for economic
loss which
was caused by the plaintiff. Although not raised on the facts in
Wylie, Ambrose J commented upon such a situation:
I can find
nothing in Astley inconsistent with the implication in the contract of
employment between employer and employee in this case a term that the employee
will take reasonable care in the performance of his work not to perform it
negligently and so subject his employer to economic loss
as a consequence. If
such a term be implied in my view it is arguable that his injury, loss and
damage resulted in part from his
own negligence and from his breach of contract
of employment and it would be open to the employer to counterclaim an indemnity
from
the employee which on the facts of this case would be at least to the
extent of the contribution found against him in his action
in tort or perhaps
the whole of its liability to him.
[80]
Ambrose J noted,
however, that a practical and efficient solution might be difficult to achieve
given that causation is determined
on an all or nothing
approach.[81] For example, consider
the situation where the conduct of both the plaintiff and the defendant was a
concurrent cause of the plaintiff’s
injury or loss. If the defendant
successfully counterclaimed against the plaintiff then presumably the
defendant’s loss would
be the same as the amount of the defendant’s
liability to the plaintiff. In effect, therefore, the defendant’s
liability
to the plaintiff would be cancelled out by the plaintiff’s
liability to the defendant. As Ambrose J highlighted, such a situation
is akin
to the position of plaintiff’s in tort prior to the introduction of
apportionment legislation in the 1950s where plaintiffs
were denied recovery if
they were in any way contributorily
negligent.[82]
White J in
Jones also commented upon the effectiveness of allowing a defendant to
counterclaim against the plaintiff. In Jones, White J considered that
the amendment to the pleadings sought by Persal which would have effectively
allowed it to counterclaim
against Jones for an alleged breach of contract by
him which, along with Persal’s breach of contract, caused Jones loss
“was incorrect insofar as it related to damages and tended to confuse
the issues of causation in contract and the existence of the
implied term
[that Jones carry out his work with appropriate care and
skill].[83]
Although
containing some comment as to whether a counterclaim by a defendant against a
plaintiff could in effect achieve apportionment
of liability, both Wylie
and Jones disappoint because in each case it was not necessary for the
court to come to a conclusion on the matter in reaching its decision.
Nonetheless, at this stage the obiter in both Wylie and Jones
indicate that a defendant in appropriate cases may face some problems in
convincing a court that it should reduce the damages payable
by the defendant on
a finding that the plaintiff breached a duty to the defendant to not cause the
defendant economic loss and thereby
effectively apportion liability. This is
especially so if the approach to determining causation in contract cases remains
an all
or nothing approach.
As in Astley, there is a clear call in Wylie and
Jones for legislative intervention. In Wylie, McMurdo P
asserted:
Since Astley, where an employee suffers injury in the
workplace caused by the employer’s breach of contract of employment,
damages will
no longer be able to be reduced because of the employee’s
contributory negligence. The commendable spirit of modern Workplace
Health
& Safety legislation requires that employer and employee co-operatively work
together to develop and maintain a safe workplace.
It is not inconsistent with
that spirit to require workers to be accountable for their own negligence
consistent with their tortious
obligations and apportionment legislation. The
affect of Astley goes well beyond cases involving personal injury in the
course of employment. But is for the legislature, not the courts, to consider
whether the law should be changed to reflect the position generally thought to
exist before Astley.
[84]
McMurdo P made similar
statements in
Jones.[85]
Thomas JA
in Wylie was also clear in his call for legislative reform:
I
agree that there is an urgent need for consideration by the legislature
concerning the vast alterations in liability for damages
and economic
consequences produced by Astley in a range of cases including those
between employer and employee and those involving professional negligence.
[86]
Ambrose J in
Wylie, however, was somewhat reluctant to call for legislative reform as
he considered that, as outlined above, apportionment may be achieved
by a
counterclaim in contract for at least part of the assessed damages to the extent
to which the plaintiff caused the defendant’s
loss. Ambrose J, however,
noted:
It may be that the whole of assessed damages would be recoverable
by the [defendant]; if so, an amendment of the apportionment legislation
might
be required in the interests of negligent plaintiffs who might otherwise find
themselves in the position of plaintiffs before
apportionment legislation was
introduced in the 1950s.
[87]
While attractive and
called for by scholars and members of the judiciary alike, legislative
intervention is not without difficulty.
As a state matter, the timing of
legislative reform and the content of proposed legislation are issues which
would need to be resolved
between the various states and territories in
Australia.[88] If legislative
reform is approached in a haphazard fashion without appropriate consultation
between state and territory governments,
uniformity of response will likely be
lost. In addition, such a situation may present conflict of laws problems.
Depending on the
bargaining strength of the parties to a contract, one party may
seek to include a proper law clause which specifies the law of a
State or
Territory which has or has not (whatever the case may be) legislated to allow
for apportionment of liability in contractual
claims where both parties are, to
some degree, at fault.
Wylie and Jones confirm that resolving the issues arising from Astley
relating to apportionment of liability in contract cases and
the different
approaches to causation in contract and tort is a complex matter with no easy
fix. Whilst the Queensland Court of
Appeal had cause to consider some argument
in respect of the implications of Astley and the means by which apportionment of
liability
could still be achieved, few cogent answers were provided as, for one
reason or another, it was unnecessary for the court in each
case to determine
such argument. At this stage, therefore, the basic principle remains that a
plaintiff will likely avoid any liability
for contribution by reason of his, her
or its own fault if the action is grounded in contract rather than
negligence.
Although various scholars have suggested responses to the
ramifications of Astley and the means by which apportionment may nonetheless
be
achieved, Wylie and Jones both indicate that there are some concerns, at least
at Queensland Court of Appeal level, as to the
viability of some of the proposed
responses. The primary concerns include the likelihood of judicial reform to
the approach to causation,
the practicality and workability of a counterclaim by
a defendant and its effect on the plaintiff’s claim and the timing and
content of legislative intervention. These are significant issues for
plaintiffs and defendants and until such time as they are
resolved by either the
courts or the legislature, both plaintiffs and defendants must carefully
determine which way to jump when
considering how to plead their action and argue
their case.
Postscript: On 7 August 2001, Queensland's Attorney General,
the Honourable Robert Welford, tabled the Law Reform (Contributory Negligence)
Bill in the Queensland Legislative Assembly. The Bill amends the Law
Reform Act 1995. The Bill addresses the impact of the decision of the High Court
in Astley v Austrust by enabling apportionment of liability in a
claim for
damages where the claim is based on grounds other than negligence.
The Bill is retrospective in its operation and thereby seeks to restore
the law to the position that was commonly accepted as applying
in Queensland
before the decision in Astley v Austrust. It should be pointed out,
however, that the proposed amendments are drafted
so that they do not affect the
rights of parties to proceedings that have been commenced or determined or in
cases where a settlement
has been negotiated. Furthermore, it should also
be pointed out that the proposed amendments do not apply to claims under the
Workcover
Queensland Act 1996.
Once passed, the amendments will be taken
to have commenced on 7 August 2001.
As is evident in the Explanatory
Notes to the Bill, the Queensland Parliament has heeded the call by the courts
for legislative reform.
Once the Bill is enacted, the ramifications of the
High Court decision in Astley v Austrust will become part of Queensland's legal
history.
[*] BA, LLB (Hons) (UQ), Lawyer, Allens Arthur Robinson, Brisbane. This article was originally submitted as a Masters paper to the Faculty of Law, QUT.
[1] 73 ALJR 403.
[2] [2000] QCA 314 (4 August 2000).
[3] [2000] QCA 386 (22 September 2000).
[4] Doyle CJ, Olsson and Duggan JJ.
[5] (1988) 78 ALR 69.
[6] Ibid at 102.
[7] [1994] UKHL 5; [1995] 2 AC 145.
[8] with whom Lord Keith, Lord Brown-Wilkinson, Lord Mustill and Lord Nolan agreed.
[9] Henderson v Merret Syndicates Ltd [1994] UKHL 5; [1995] 2 AC 145 at 193-4.
[10] Astley, supra n 1 at [47].
[11] Ibid at [48].
[12] Ibid at [130]; footnotes omitted.
[13] See Ibid at [135] and [136] for Callinan J’s analysis of the decision in Rogers v Whitaker [1992] HCA 58; (1992) 109 ALR 625; Chappel v Hart (1998) 156 ALR 157; Henderson v Merret Syndicates Ltd [1994] UKHL 5; [1995] 2 AC 145; Kaparro Industries Plc v Dickman [1990] UKHL 2; [1990] 2 AC 605; and Sutherland Shire Council v Hayman [1985] HCA 41; (1985) 60 ALR 1.
[14] Astley, supra n 1 at [135].
[15] Ibid at [41].
[16] Ibid at [150-1].
[17] Ibid at [153].
[18] Ibid at [84].
[19] Ibid at [86].
[20] Ibid at [87].
[21] Ibid at [137].
[22] (1994) 28 UBritColLRev 141.
[23] Astley, supra n 1 at [160].
[25] M Legg, ‘The High Court’s Decision on Concurrent Liability and Contributory Negligence in Astley v Austrust Limited’ (1999) 18 ABR 262.
[26] J Swanton, ‘Contributory Negligence is Not a Defence to Actions for Breach of Contract in Australian Law – Astley v Austrust Limited’ (1999) 14 JCL 251.
[27] D Butler, ‘Breach of Contract and Contributory Negligence: A Protracted Debate Finally Resolved’ (2000) 28 ABLR 132.
[28] N Seddon, ‘Contract Damages Where Both Parties are at Fault’ (2000) 15 JCL 207.
[29] Astley, supra n 1 at [84].
[31] Ibid.
[32] See, for example, Hospital Products Ltd v United States Surgical Corp [1984] HCA 64; (1984) 55 ALR 417; Wright v TNT Management Pty Ltd (1989) 15 NSWLR 679; and Byrne v Australian Airlines Ltd (1995) 131 ALR 422 for analyses of the relevant law and procedure relating to the implication of terms into contracts to provide for business efficacy or to give effect to the imputed intentions of the parties.
[33] See, for example, ss 74 and 68 of the Trade Practices Act 1974 (Cth) which together impart on those entities that fit within the scheme of the Act a non-delegable duty to render services with “due care and skill”. See also the various state and territory equivalents, as well as specific legislation applying to service providers such as legal service providers: see, for example, s 48C Queensland Law Society Act 1952 (Qld).
[34] Astley, supra n 1 at [139].
[37] White and Carter (Councils) Ltd v McGregor [1961] UKHL 5; [1962] AC 413; Belous v Willetts [1970] VicRp 5; [1970] VR 45 at 49 per Gillard J, SC(VIC); Richardson v Schultz (1980) 25 SASR 1 at 18-20 per Williams J, SC(SA); and Shevill v Builders Licensing Board [1982] HCA 47; (1982) 42 ALR 305.
[38] Note that Glanville Williams in Joint Torts and Contributory Negligence, Stevens & Sons Ltd London 1951 pp 290-4 argues that the principles behind the doctrine of mitigation should apply to pre-breach conduct so that apportionment of liability may be achieved regardless of when the plaintiff’s conduct occurred.
[40] Ibid.
[42] [1990] HCA 20; (1990) 92 ALR 545.
[43] Ibid at 548-9.
[44] [1994] HCA 4; (1994) 120 ALR 16.
[46] The High Court’s approach to the matter of recovery of damages for loss of opportunity in medical negligence cases was not conclusive in Chappel v Hart (1998) 156 ALR 517. See also the decision of Gaudron J in Naxakis v Western General Hospital [1999] HCA 22; (1999) 162 ALR 540 where her Honour considered that a case involving the failure to properly diagnose was not an appropriate case for the assessment of damages for loss of opportunity. Note, however, that Callinan J would have reached a contrary conclusion in relation to the application of assessment of damages pursuant to loss of opportunity in cases of personal injury or medical negligence generally.
[48] Astley, supra n 1 at [88].
[49] Ibid at [161].
[50] See also Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 92 ALR 545 at 548-9 for an analysis of the common law principles relating to causation and the tendency of contract to produce an all or nothing approach.
[51] Simoneous Vischer v Holt (1979) 2 NSWLR 322, 346; Heskell v Continental Express Limited [1950] 1 All ER 1033; Alexander v Cambridge Credit Corporation Limited (1987) 9 NSWLR 310, 315, 357. See also the analysis below of the Queensland Court of Appeal decisions in Wylie and Jones for comment on the authorities relating to causation principles in contract.
[53] Ibid.
[54] See Legg, supra n 28 at 280; Masel and Kelly, supra n 24 at 323-4; and Swanton, supra n 26 at 259-60.
[55] See for example Seddon, supra n 28 at 216-21 in relation to apportionment under contract law and N Seddon, ‘Misleading Conduct: The case for Proportionality’ (1997) 71 ALJ 146 in relation to apportionment under the Trade Practices Act 1974 (Cth).
[56] Ibid at 150-1.
[57] See for example S & U Constructions Pty Ltd v Westworld Property holdings Pty Ltd (1998) ATPR 40-854 and I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [1999] QSC 320 (22 October 1999). For further analysis of the relevant principles, see J D Heydon, Trade Practices Law: Restrictive Trade Practices; Deceptive Conduct and Consumer Protection, Law Book Company Sydney 1989 at 9351-8.
[58] Wylie, supra n 2 at [13].
[59] Ibid at [50].
[60] Ibid at [77-9].
[61] Ibid at [27].
[62] Ibid at [28].
[63] Ibid at [45].
[64] Ibid at [84-6].
[65] Ibid at [92].
[66] Ibid.
[67] Jones, supra n 3 at [17].
[68] Ibid at [18-19].
[69] Ibid at [25-6].
[70] Ibid at [23].
[71] Ibid at [53].
[72] Ibid at [45].
[73] Astley, supra n 1 at [85-6].
[74] Jones, supra n 3 at [49-50].
[75] Wylie, supra n 2 at [46].
[77] [1951] All ER 1033.
[78] Wylie, supra n 2 at [48].
[80] Wylie, supra n 2 at [79–80].
[81] Ibid at [81].
[82] Ibid.
[83] Jones, supra n 3 at [64].
[84] Ibid at [31].
[85] Jones, supra n 3 at [20].
[86] Wylie, supra n 2 at [52].
[87] Ibid at [81].
[88] Note that Tasmania, Victoria and New South Wales have each already legislated by retrospectively abrogating the decision in Astley. See: Tortfeasors and Contributory Negligence Amendment Act 2000 (Tas) which amends the Wrongs Act 1954 (Tas); Wrongs (Amendment) Act 2000 (Vic) which amends the Wrongs Act 1958 (Vic); and Law Reform (Miscellaneous Provisions) Amendment Act 2000 (NSW) which amends the Law Reform (Miscellaneous Provisions) Act 1965 (NSW).
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