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LAW REFORM (CONTRIBUTORY NEGLIGENCE AND APPORTIONMENT OF LIABILITY) (PROPORTIONATE LIABILITY) AMENDMENT ACT 2005 (NO 32 OF 2005) - SECT 11

11—Substitution of sections 8 and 9

Sections 8 and 9—delete the sections and substitute:

Part 3—Apportionable liability

8—Limitation of defendant's liability in cases of apportionable liability

        (1)         If a defendant's liability on a claim for damages is apportionable, the liability is limited under this section.

        (2)         If the limitation applies, the defendant's liability is limited to a percentage of the plaintiff's notional damages that is fair and equitable having regard to—

            (a)         the extent of the defendant's responsibility for the harm; and

            (b)         the extent of the responsibility of other wrongdoers (including wrongdoers who are not party to the proceedings) whose acts or omissions caused or contributed to the harm.

        (3)         For the purpose of subsection (2)—

            (a)         2 or more wrongdoers who are members of the same group are to be treated as a single wrongdoer; and

            (b)         if the plaintiff was guilty of contributory negligence, that contributory negligence will be brought into account as wrongdoing and a percentage assigned to it; and

            (c)         if 2 or more wrongdoers are each entitled to the benefit of a limitation of liability under this section (for some reason other than that they are members of the same group), the aggregate percentage assigned to them cannot exceed—

                  (i)         if there is no contributory negligence on the plaintiff's part—100%; or

                  (ii)         if there is contributory negligence on the plaintiff's part—100% less a percentage representing the extent of the plaintiff's responsibility for his or her harm.

        (4)         In a case involving apportionable liability, the court must proceed as follows:

            (a)         the court first determines the plaintiff's notional damages;

            (b)         the court gives judgment against any defendant whose liability is not subject to limitation under this section for damages calculated without regard to this Part;

            (c)         the court determines, in relation to each defendant whose liability is limited under this section, a proportion of the plaintiff's notional damages equivalent to the percentage representing the extent of that defendant's liability;

            (d)         the court then gives judgment against each such defendant based on the assessment made under paragraph (c) (but in doing so must give effect to any special limitation of liability to which any of them may be entitled).

Example—

A Ltd (which runs a forestry business) has engaged B (an independent contractor) to protect its forest from fire. C (an arsonist) sets the forest on fire. B is negligent in failing to detect and stop C's malicious act. A Ltd sues B and C for damages. In this case, B would be entitled to a limitation of liability under this section but C would not. In working out the amounts for which judgment should be given, the court would determine first the amount of damages necessary to cover the damage caused by the fire. Judgment for that amount would be given against C. In determining the amount for which judgment should be given against B, responsibility for the damage would be divided between B and C on essentially the same basis as would formerly have been applicable to an action for contribution between them. Judgment would be given against B for an amount reflecting the proportionate responsibility assigned to B on that basis.

        (5)         The plaintiff is not entitled to recover, by way of damages under the judgment, more than the amount fixed as the plaintiff's notional damages.

Example—

Suppose that A has suffered a loss of $1 000 for which B, C and D are liable. The liability of B and C is limited to 20% and 30% respectively, but D's liability is not limited. Judgment is therefore given against B for $200, against C for $300 and against D for $1 000. In this case, the court would fix $1 000 as the plaintiff's notional damages—thus limiting the damages that the plaintiff is entitled to recover under the judgment to that amount. If A proceeded first to recover in full against B and C, recovery against D would be limited to $500. Conversely, recovery in full against D would preclude recovery against B and C. But rights of contribution may arise—see section 9.

        (6)         However, this section does not affect the award of exemplary damages and, if such damages are awarded, they may be recovered in the ordinary way from a defendant against whom they were awarded.

9—Contribution

In a case in which the liability of one or more wrongdoers is limited under this Part, the provisions of Part 2 regarding contribution apply but subject to the following qualifications:

            (a)         no order for contribution between wrongdoers whose liability is limited may be made;

Exception—

Contribution will be allowed between wrongdoers who are members of the same group, in respect of the liability of the group, in the same way (and subject to the same exceptions) as apply under Part 2.

            (b)         no order for contribution may be made in favour of a wrongdoer whose liability is limited against a wrongdoer whose liability is not limited;

            (c)         no order for contribution may be made in favour of a wrongdoer whose liability is not limited ("A") against a wrongdoer ("B") whose liability is limited unless A has fully satisfied the judgment debt, and, if such an order is made, the amount of contribution awarded against B cannot exceed the amount of B's liability for damages under the judgment.

10—Procedural provision

        (1)         If a defendant entitled to a limitation of liability under this Part has reasonable grounds to believe that a person who is not a party to the action may be liable on the plaintiff's claim, the defendant must, as soon as practicable, provide the plaintiff with information that is in the defendant's possession, or reasonably available to the defendant (and not equally available to the plaintiff), about—

            (a)         the other person's identity and whereabouts; and

            (b)         the circumstances giving rise to the other person's liability.

        (2)         If a defendant fails to comply with its obligation under this section, a court may order the defendant to pay costs incurred in proceedings that could have been avoided if the obligation had been carried out.

        (3)         A court may order that costs payable under this section be assessed on the basis of an indemnity.

11—Separate proceedings

If a plaintiff brings separate actions for the same harm against wrongdoers who are entitled to a limitation of liability under this Part, the judgment first given (or that judgment as varied on appeal) determines for the purpose of all other actions—

            (a)         the amount of the plaintiff's notional damages; and

            (b)         the proportionate liability of each wrongdoer who was a party to the action in which the judgment was given; and

            (c)         whether the plaintiff was guilty of contributory negligence and, if so, the extent of that negligence.

Part 4—General provision



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