Baxter v Obacelo Pty Ltd v Anor S10/2001 [2001] HCATrans 256 (20 June 2001)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S10 of 2001

B e t w e e n -

PHILLIP JULIUS BAXTER

Appellant

and

OBACELO PTY LIMITED

RICHARD THOMAS MOON

Respondents

GLEESON CJ

GUMMOW J

KIRBY J

HAYNE J

CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 20 JUNE 2001, AT 10.16 AM

Copyright in the High Court of Australia

MR D.F. JACKSON, QC: If the Court pleases, I appear with my learned friend, MR D.P. ROBINSON, for the appellant. (instructed by Baker & McKenzie)

MR A.J. SULLIVAN, QC: May it please the Court, I appear with my learned friend, MR D.T. MILLER, for the respondents. (instructed by Moray & Agnew)

GLEESON CJ: Yes, Mr Jackson.

MR JACKSON: Your Honour, as is apparent from the written submissions, the appeal is concerned with two questions arising in consequence of a settlement of proceedings and the consequent judgment against one of two joint tortfeasors. The underlying facts are set out in paragraph 3 of our written submissions, and may I state them very, very shortly.

The appellant was an employed solicitor employed by Mr Whitehead. The claim against the appellant not yet resolved is that he was negligent in his conduct of a conveyancing transaction for the respondents 18 years ago. The respondents sued both the appellant and his employer, Mr Whitehead, in the Supreme Court of New South Wales and sued them in the one proceeding. A settlement of the claim took place between the respondents and the employer in 1988. The deed of release appears at pages 59 to 60 in the reasons of Justice Giles in the Court of Appeal and your Honours will see it goes from the bottom of page 59 to the top of page 60.

GLEESON CJ: $250,000 seems like a nice round figure. I suppose it is theoretically possible that it is the amount of damages that would have been awarded.

MR JACKSON: Yes. I will come to the material in just a moment. There was evidence which is adverted to by the Master in her reasons at page 27, lines 20 to 35, that the value, if I can put it that way, of the respondents' claim was in toto, on the evidence before her, in excess of $250,000. We accept that was the evidence before her.

Now, your Honours, the other thing I was going to say was this, that there was an annexure B to the deed of release which is referred to at the top of page 60 and it contained some terms of settlement and one of the provisions of it can be seen at page 20, about line 16.

KIRBY J: Mr Whitehead had had no involvement in the transaction, it was simply performed by the appellant, is that correct, except as he was the principal of the firm?

MR JACKSON: Well, your Honour, that was the case ultimately made or ultimately contended for by the present respondents against Mr Whitehead. I need to go back just a little to say this: the case as initially framed was one on the assumption that Mr Whitehead and the appellant were partners.

KIRBY J: Yes, I saw that.

MR JACKSON: In fact, the appellant was an employed solicitor. There is a question which will arise, if the matter goes further, as between ourselves and Mr Whitehead about whether there might be contribution from Mr Whitehead on the basis that he was, in fact, participating in the transaction personally, but as the matter stands and as the matter has been conducted, it is purely on the basis that it is a joint tort, his liability being a liability because of the relationship of employer and employee.

KIRBY J: If the respondent can recover against you, would you not be entitled to be indemnified as a servant of Mr Whitehead?

MR JACKSON: Your Honour, my hesitation in answering - - -

GLEESON CJ: It works the opposite way, does it not?

MR JACKSON: Your Honour, it does. Broadly speaking, if we are the ones liable for it - if we are the ones that caused the loss, then subject to statutory provision to the contrary, we would have a liability to indemnify Mr Whitehead, Lister v Romford Ice and that line of country.

GLEESON CJ: Yes. The liability is on the employee, not the employer.

MR JACKSON: Yes. However, your Honours, there is in - and the issue has not been necessary to go into for present purposes. There is a question whether statutory provisions in New South Wales have taken away that obligation of the employee but there may again be another question: whether the conduct that is involved took place in Queensland or in New South Wales.

CALLINAN J: Mr Jackson, it has often occurred to me that in relation to Lister v Romford Ice that it might be arguable in some employer/employee relationships that there was clearly an implied term that the employee would not be burdened with any liability, for example, in respect of which the employer has insurance or might insure.

MR JACKSON: Your Honour, that is an issue that may arise in the future, in particular, in circumstances where there is a policy expressed to cover both of them, and other circumstances.

CALLINAN J: Yes, but it might not even be necessary that there in fact be an insurance policy in existence.

MR JACKSON: No, your Honour.

CALLINAN J: There might be an expectation that there would be, and it might not even turn upon a question whether there was an expectation of an insurance policy. It might just arise out of a modern view of the employer/employee relationship.

MR JACKSON: Yes. Well, your Honour, Lister v Romford Ice even at its time, one suspects, was thought to be somewhat Draconian in so far as employees are concerned and it may be that in an appropriate case the issue would have to be considered by the Court.

KIRBY J: Well, it is honoured in the breach in Australia, it is a very, very rare thing that an employer will seek to recover from an employee.

MR JACKSON: Yes. Your Honour, could I just say this: the nature of employment, if I could put it in very broad terms, has changed somewhat in recent years in the sense that there are more people who are, in a sense, independent contractors rather than employees, and one sees from time to time discussions about people working from home and their - - -

GLEESON CJ: Mr Whitehead might have been insured by HIH and Mr Baxter might have just won the lottery. We do not know.

MR JACKSON: That is so.

GLEESON CJ: Am I right in thinking that the arguments in the present case would be precisely the same if the settlement had been with Mr Baxter and the action had continued against Mr Whitehead?

MR JACKSON: Yes, your Honour. I do not dispute that. It is liability upon which the proceedings were proceeded were a joint liability. Now, your Honours, what I was going to say was this, that your Honours will see at page 20 in paragraph (7) of the reasons of the Master there set out that one of the terms of settlement was:

That there be verdict and judgment against -

Mr Whitehead -

in the sum of $250,000.

Now, your Honours, I mentioned before there was evidence that the value of the claim at the time the Master heard it was somewhat more than that. Your Honours, that gave rise to two issues as the matter was before the Master. They are set out in her reasons at page 22.

GUMMOW J: What was before the Master?

MR JACKSON: Your Honour, an application to strike out the proceedings. Your Honour will see that set out at page 18, the commencement of her reasons, the proceedings "be dismissed". The power to dismiss is contained in the rule that your Honour will see set out at the bottom of page 20, top of page 21, and the bases upon which that was sought to be achieved appear at page 22, at the bottom of the page in the last paragraph. The contentions were two, as your Honours will there see. First, that the "action should be struck out because" there had been "full satisfaction" and, secondly, that in any event there could not be recovery for more than the 250,000 which had already been paid and the proceedings were thus futile.

KIRBY J: Was there any evidence about the dealings between the solicitors for the parties at the time of the settlement because, thinking back to my time as a solicitor, if you had settled in a case of this kind, one would ordinarily, I think, assume that that was the end of it. I mean, unless there was some reservation of your intention to proceed separately. one would think that the subject matter of the claim had been disposed of. That may not be what the law provides but one would have thought that.

MR JACKSON: Well, your Honour, all of the material that was before the Master is not in the book, but as I understand the position, what one had was that the terms of settlement, the settlement was reduced to writing, the writing being contained in the document which was the deed of release together with the two documents which were annexed to it. Now, your Honour, no doubt we can have those provided to the Court if necessary, but the document that was potentially relevant was B, which was the one containing the provision and as to obtaining judgment. Now, your Honour, there was also a document A attached to the deed of settlement which was the proposed amended statement of claim which was filed straight away, in effect.

GLEESON CJ: But these proceedings with which we are now concerned, although they changed their form, ultimately, commenced life as a strike-out application on the basis that by reason of incontrovertible facts the plaintiff's claim was hopeless. That application was brought on the basis that there was no occasion for the Court to investigate the factual circumstances that on the face of things, including the deed of settlement in the judgment, the claim was bound to fail.

MR JACKSON: Your Honour, may I come to the provisions of the statute in just a moment? Before doing that, could I say that when the case came before the Court of Appeal there was a modification of the form of it so that a question was stated. Your Honours will see that at page 65, paragraphs 21 to 22.

KIRBY J: Was that by request of the parties or consent of the parties?

MR JACKSON: Your Honour, it is a question of - - -

KIRBY J: You can be frank with us.

MR JACKSON: Your Honour, what I am endeavouring to say is that I think it is right to say the suggestion first came from the court. My learned friend adopted it and in - I am sorry, I misled the Court. My learned friend filed a motion seeking the determination of a question in the Court of Appeal and in the end - - -

GUMMOW J: In the Court of Appeal?

MR JACKSON: Yes, your Honour.

GUMMOW J: What was the subject matter the Court of Appeal was seized of in the first place?

MR JACKSON: In the first place, the Court of Appeal was seized of our application for, I think, leave to appeal, your Honour.

GUMMOW J: Exactly.

MR JACKSON: Your Honour will see that set out at page 58, paragraph 3.

GLEESON CJ: No doubt it was prompted, that is, the request for a question was prompted by the consideration that if the matter simply went off on the General Steel's basis, it would have to be relitigated.

MR JACKSON: Yes, your Honour. Your Honour, that was adverted to.

GLEESON CJ: And it was because everybody was agreed that the facts relevant to this argument were incontrovertible and were all before the court, that the possibility of a question arose.

MR JACKSON: Yes, your Honour.

GUMMOW J: The Court of Appeal was doing something that was not open to the Master to have done.

MR JACKSON: Yes, your Honour.

GUMMOW J: It is an odd sort of appeal.

MR JACKSON: Well, your Honour, the Court of Appeal no doubt - I can no doubt chase the provision through, if your Honour wishes me to, but no doubt the Court of Appeal had power to dispose of the matter in the way that seemed - - -

GUMMOW J: The matter was whether the Master was right on the strike-out application under Part 13 rule 5.

MR JACKSON: Yes.

GUMMOW J: That was the question.

HAYNE J: Is that so? There was an intervening appeal, was there not, to a single judge?

MR JACKSON: Yes, your Honour.

HAYNE J: Was that an appeal by way of rehearing de novo? Appeals from masters to single judges are, in Victoria, appeals by way of rehearing de novo.

GUMMOW J: That just means the judge is doing what the Master is doing.

HAYNE J: But thus could the judge have, on that rehearing, framed the question?

GUMMOW J: Yes, that is right. But he did not.

GLEESON CJ: But the matter could have been commenced in the Court of Appeal, technically, could it not?

MR JACKSON: Yes, your Honour.

GLEESON CJ: And it could have been commenced in the Court of Appeal by way of an application for a question and an answer to a question.

MR JACKSON: Your Honour, that in the end, I think, was my learned friend's motion. That is how the - - -

KIRBY J: And you do not raise any objection to this cause?

MR JACKSON: Not at all.

KIRBY J: The Court of Appeal is seized with the full powers of the Supreme Court of New South Wales and it decided to separate the question, and you do not raise any technical question that that did not properly arise in the application for leave to appeal from Justice Hulme's judgment?

MR JACKSON: No, your Honour, we accept this.

GUMMOW J: The Court of Appeal seems to be exercising original jurisdiction, that is what I am trying to find out.

MR JACKSON: Yes.

GUMMOW J: They do not seem always appreciate these distinctions, but they were exercising original jurisdiction. Nothing wrong with it, maybe, but that is what they were doing.

MR JACKSON: Yes, your Honour, I do not dispute that, but that being so, the question to which they adverted appears at page 65, paragraph 20.

GUMMOW J: Now, before you go to that, Mr Jackson, do these terms of settlement produce a court order?

MR JACKSON: Yes, your Honour. Your Honour will see - - -

GUMMOW J: Was that ever taken out?

MR JACKSON: Well, your Honour, can I say this. There is not a court order in the material, and your Honour will see that the way in which the matter was dealt with was that the question, your Honour will see at paragraph 20 at page 65, was whether the matters of defence in paragraph 16 to 22 of the defence provided a defence. Now, those paragraphs, your Honours, are set out at page 62, and you will see in paragraph 20 on page 62 of that statement of claim:

On or about 11 February 1988 the Supreme Court entered judgment for the Plaintiffs against Whitehead . . . in the sum of $250,000.

So, your Honours, the facts in 16 to 22 were assumed for the purpose of the proceedings. So, your Honours, to put it shortly, judgment was entered against Whitehead and the amount of the judgment has been satisfied. Now, your Honours, that gives rise to the two issues which have been before the courts below.

Could I just say one thing before coming to the terms of the statute, and it is this. The judgment, of course, was a judgment that was entered by consent of the parties to it, but, your Honours, a judgment by consent is as effective to bring a cause of action to an end as is a judgment given after a contested hearing. Could I give your Honours two references in that regard. The first is James Hardie & Coy Pty Ltd v Seltsam Pty Ltd (1998) 196 CLR 53, first at page 69 in paragraphs 40 and 41 - - -

GUMMOW J: There is a reference to Chamberlain there.

MR JACKSON: Yes, your Honour, that is so. Then at page 96, paragraph 127, your Honour Justice Callinan, again, the reference to Chamberlain, and we have given your Honours Chamberlain's Case, Chamberlain v the Deputy Commissioner of Taxation[1988] HCA 21; , 164 CLR 502. The relevant passages, your Honours, commence at page 508 and go through to page 510. Could I refer particularly to page 508, the third new paragraph on the page. It is right to say that at that point the members of the Court are recording a submission, but they are recording it, your Honours, to see whether the facts fit it, and then at the bottom of that page, last paragraph:

The fact that a judgment is entered by consent may on occasion make it hard to say what was necessarily decided -

and then their Honours say at page 510 about three-quarters of the way down the page:

He -

meaning the Commissioner of Taxation -

obtained a judgment of the Court in which the cause of action upon which he relied merged, thereby destroying its independent existence so long as that judgment stood.

The judgment having been obtained by consent.

Your Honours, could I come then to the relevant statutory provision. That is section 5(1) of the Law Reform (Miscellaneous Provisions) Act 1946 . Could I mention in passing this is a provision which derives from an earlier United Kingdom provision and a provision in the same terms is current in South Australia, Queensland and Western Australia. There is a different provision in Victoria. I cannot give your Honours an answer to the Tasmanian provision just at the moment, and the ACT provision is similar but somewhat differently expressed.

GUMMOW J: It derives from the Law Revision Committee in 1934, does it not?

MR JACKSON: Indeed, your Honour. Your Honours will see, if I could go to section 5(1), that it consists of three paragraphs, the first two of which are immediately relevant. Your Honours will see that paragraph (a) says:

5. (1) Where damage is suffered by any person as a result of a tort . . .

(a) judgment recovered against any tort-feasor liable in respect of that damage shall not be a bar to an action against any other person who would, if sued, have been liable as a joint tort-feasor in respect of the same damage -

If I could just pause at that point, your Honours will see that it abolishes the principle that in respect of joint tortfeasors, the mere obtaining of a judgment against one of them is a bar to an action against another joint tortfeasor. There was a bar by the obtaining of a judgment against one of a number of joint tortfeasors even if the judgment had not been satisfied. That was commonly called the rule in Brinsmead v Harrison.

Now, your Honours, remaining with paragraph (a), could I say this? Your Honours will see that the language used in paragraph (a) is that it speaks of a judgment not being "a bar to" and then it uses the words "an action against any other person" et cetera. Your Honours, the language, if one simply looks at it uninstructed by any decisions on it, suggests that it is speaking of a separate legal proceeding, that is, the judgment against one shall not be a bar to an action against someone else.

KIRBY J: Where do you get the adjective "separate"?

MR JACKSON: Well, your Honour, I am simply looking at the terms of it in the sense of saying it speaks of an action and it speaks of a judgment. Your Honour, I do not suggest that is the right interpretation but it is an interpretation which seems to have been carried over into paragraph (b) and could I just say, your Honours, that the point I will be ultimately seeking to make is that it has been held in the Privy Council, the United Kingdom Court of Appeal, and, following those, in this Court that paragraph (a) refers not merely to two separate actions, but also to claims against defendants in the one action.

GLEESON CJ: There is a good reason for that in addition to the one that you have just mentioned. You would also have to imply into 5(1)(a), would you not, a bar to a separate and new or separate and further action?

MR JACKSON: Yes. Now, your Honour, the point I will be seeking to make is that when one goes on then to paragraph (b), if one makes the assumption that paragraph (a) is perfectly apposite to apply to cases where there is one action against two defendants, there is no reason why the same situation should not obtain in relation to paragraph (b).

Your Honours, the decisions that paragraph (a) applies to claims in the one legal proceeding are - and if I could do them, your Honours, in order of time as briefly as I may - first of all by the Privy Council in Wah Tat Bank Ltd v Chan [1975] AC 507. Now, your Honours will see, if I can go to page 518, the result arrived at by the judicial committee appears at page 518E, where it said:

This would follow whether in the actual action A were sued jointly with B (as in the present case) or whether the action against A had been instituted before or after the action against B.

The way in which the Privy Council arrived at its conclusion appears - I will not take your Honours to the whole lot of it, but your Honours will see it commences, really, at the top of page 518 and goes through that page.

The essence of the reasoning, I suppose, commences between letters B and C on page 518. Now, your Honours, that decision was relatively shortly before a decision of the United Kingdom Court of Appeal in Bryanston Finance Ltd v de Vries [1975] 1 QB 703. It was a case where Lord Diplock was sitting as a member of the Court of Appeal - when also a member of the House of Lords I meant to..... Your Honours, the relevant passages are at page 721 under the heading "The effect of taking a judgment", where your Honours will see in the first part of - between letters E and G, a discussion of the Brinsmead v Harrison rule and then, your Honours, the last paragraph on the page:

That rule was applied, not only to successive actions, but also to a single action.

Your Honours will then see that is discussed through the remainder of that page and to the top of the first few lines on page 722. Your Honours will then see in the following two paragraphs that Lord Denning adopts the view, and I am referring particularly to the second new paragraphs on page 722, he said:

That statute does not, in terms, apply to a single action against two joint tortfeasors. But I have no doubt it should be taken to do so. If the plaintiff takes judgment against one of the defendants, for an ascertained sum, and it is satisfied, it is a barrier to his going on against the other. But if that judgment is not satisfied -

et cetera. Your Honours, that must be, in our submission, a reference to section 5(1)(b) because it is the provision that deals with that aspect of it. I have to say, your Honours - and I will come to this in just a moment - that his Lordship there refers to Wah Tat Bank v Chan as supporting that proposition. Your Honours, Lord Denning's brush was sometimes perhaps a little broad and I do not think - sometimes resulting perhaps in a palimpsest more than a picture. So far as it relates to paragraph (b), I cannot say, your Honour, that Wah Tat actually supports that part of it. But, no doubt, it supports it in relation to paragraph (a).

The second passage to which I wish to go is at page 730. Your Honours will see in the first new paragraph on that page a discussion by Lord Diplock of the Brinsmead v Harrison rule and then at the bottom of the page a reference to section 6, and then at page 731 the paragraph commencing between C and D:

The evident intention of paragraph (a) is to abolish the common law doctrine that the cause of action against all joint tortfeasors, to which a joint tort gives rises, merges in the first judgment obtained in an action brought against any of them; and this, I think, what the paragraph succeeds in doing.

Your Honours will see the similarity in his approach to that in the Privy Council going through to the bottom of that page. Then he says at the bottom of the page:

Since the postulated suit is purely hypothetical and the hypothesis also requires one to assume that no judgment has been recovered against any other joint tortfeasor separately, neither the form taken by the actual proceedings against the particular joint tortfeasor whose liability falls to be determined nor the form taken by the actual proceedings in which judgment has been previously recovered against his joint tortfeasor is, in my view, relevant to the question whether he falls within the description.

Your Honours will then see in the next two paragraphs he arrives at the conclusion and - - -

GLEESON CJ: What about the first sentence in the last paragraph on the page? He talks about:

the fact that paragraph (b) deals only with cases where the judgments in respect of the same damage have been recovered in separate actions - - -

MR JACKSON: Your Honour, I was going to come to that, if I may, as a one of a number of passages, in a sense, that one sees going both ways. May I come to that in just a moment. Remaining at page 732, one sees the view which his Lordship adopted in relation to paragraph (a) in the paragraph commencing between C and D, saying that it applied to both claims - claims in both ways, if I can put it that way. Your Honours, at page 738 through to page 739, commencing between the last paragraph on page 738 through to about letter C on page 739, Lord Justice Lawton took the same view about 6(1)(a) saying:

The possibility of an injustice of this kind arising has driven me to the conclusion that section 6(1)(a) should be construed so as to apply to both a single action and successive actions.

Now, I will come back, if I may, in a moment to what was said about section 6(1)(b) by Lord Diplock, but in this Court - and this is the last reference I wish to give in relation to 5(1)(a) - in XL Petroleum (NSW) Pty Ltd v Caltex Oil [1985] HCA 12; (1985) 155 CLR 448, to put it shortly, your Honours will see that Chief Justice Gibbs, who wrote the principal judgment, discussed at page 457 the Wah Tat Bank Case and then Bryanston Finance and then at the bottom of page 458 said that:

Although the words of the sub-section are elliptical and somewhat obscure I respectfully agree with the result reached by the Judicial Committee and the English Court of Appeal. Neither court expressly dealt with the question whether the section affected the common law rule that only one sum can be awarded in a single proceeding for the one tort committed by joint tortfeasors.

He then went on to deal with that issue. Your Honours, that is section 5(1)(a).

Could I go then first to the words of section 5(1)(b). Your Honours will see that section 5(1)(b) commences by using language in a sense similar to that of 5(1)(a). It says:

if more than one action -

your Honours have seen that word in 5(1)(a) already -

is brought in respect of that damage by or on behalf of the person by whom it was suffered -

your Honours, could I leave out for the moment the intervening words, and one then goes down a few lines:

the sums recoverable under the judgments given in those actions by way of damages shall not in the aggregate exceed the amount of the damages awarded by the judgment first given;

Now, your Honours, there are several features which emerge, of course, from the terms of section 5(1)(b). First of all, the words that are in brackets in the part that I did not read, "whether as joint tort-feasors or otherwise", indicate that the provision has an application to cases of several tortfeasors as well as persons who are joint tortfeasors. The second thing, your Honours, is this, that the provision does not speak in terms of there being a bar to either instituting proceedings or a bar to obtaining judgment in proceedings. Rather, it speaks of the amount which may be "recoverable" under judgments given in the several proceedings.

GLEESON CJ: Mr Jackson, if the case against Mr Whitehead and Mr Baxter had been fought out and proceeded to a conclusion favourable to the plaintiff, would there have been one judgment or more than one judgment?

MR JACKSON: In terms of amount, your Honour, or - - -

GLEESON CJ: In terms of section 5(1)(b).

MR JACKSON: Your Honour, the form, I expect, would have been judgment against the defendants in the sum of X dollars. Your Honour, that is in form one judgment, in operation it operates the judgment against each and each would be liable to pay the amount, and once that is satisfied, then subject to any question of contribution one to the other, it has been satisfied.

But, your Honour, it would have the two aspects to it: one, in form; two, in substance.

HAYNE J: But the substance to which you refer is the substance of execution and enforcement, is it not?

MR JACKSON: Yes. The other thing I was going to say about paragraph (b) is this, that your Honours will see that it does not only apply to proceedings which may be brought by the person who was the plaintiff who has the benefit of the earlier judgment. Your Honours will see that the proceedings to which it applies are proceedings which are brought:

for the benefit of the estate, or of the wife, husband, brother . . . against tort-feasors liable -

and that would seem to prevent, for example, a Lord Campbell's Act claim being brought. I am sorry, I am putting that badly. It would seem to provide for the maximum liability in relation to payment of damages contemplated by the provision.

GUMMOW J: There would be no bar to the Lord Campbell's action itself.

MR JACKSON: No.

GUMMOW J: It is just a question of what can be recovered on judgment.

MR JACKSON: Indeed, your Honour, and 5(1)(b) is not a bar to proceedings. It limits the quantum of recovery and in some circumstances, of course, will be a factual bar to further recovery.

HAYNE J: It may be more convenient to deal with this presently rather than immediately, but how would 5(1)(b) be engaged in a single action brought against two several tortfeasors against whom, therefore, separate amounts, different amounts, could be assessed.

MR JACKSON: There are several aspects to it, your Honour. Your Honour will see the opening words of (b) speak of an action being brought "in respect of that damage" and when it speaks of "that damage", that seems to be a reference back to the same damage.

GLEESON CJ: But that is a reference to "damage", not "damages".

MR JACKSON: Yes, your Honour, but - - -

GLEESON CJ: In the example given by Justice Hayne, if the second defendant was liable for exemplary damages and the first defendant was not, then a question arises how this would operate.

MR JACKSON: Well, in Thompson, in this Court -- I will give your Honours the reference in just a moment - what was held in that case was that the damage or damages - I suppose it does not matter for what I am saying at the moment - that there was nothing to prevent by 5(1)(b), or otherwise, there being a separate award in respect of exemplary damages. A different position would obtain in relation to the same compensatory damages but a different position in relation to exemplary damages.

Now, your Honours, exemplary damages is the only instance given, I think, in that case where that might occur and one can see how that might obtain in relation to a tort which was there a joint tort. But, your Honours, one could imagine there being circumstances in the case of several torts where different amounts of compensatory damages could be awarded. What I mean by that, your Honours, is this. In respect of some types of accidents, for example, those suffered in employment or those suffered in motor accidents in at least some jurisdictions, whilst there is an ability to obtain damages, it may be that the quantum of damages for a particular head of damages is limited in respect of one cause of action but not in respect of another.

What I mean by that is that it may be that if there was a limitation on damages where something was a motor accident but not where it was an industrial accident, it may be that the same circumstances would be, so far as one of the tortfeasors was concerned, not subject to the limitation, so far as the other one was concerned, was subject to the limitation. In those circumstances, your Honours, it may well be that one could say Thompson would apply so that different amounts could be awarded in respect of the damages.

GLEESON CJ: But "damage" in the first line of paragraph (b), at the risk of sounding old fashioned, means "injuria", does it not?

MR JACKSON: Yes, your Honour, that is right, yes.

GLEESON CJ: As distinct from a money sum?

MR JACKSON: Yes, your Honour. One sees the term change to the money sum a little further through the paragraph where it speaks of:

the sums recoverable under the judgments given in those actions - - -

GLEESON CJ: It uses the expression "amount of the damages awarded" later on.

MR JACKSON: Yes, and I was looking at a couple of lines above that, your Honour, too:

the sums recoverable under the judgments given in those actions by way of damages -

But, your Honours, what we are seeking to submit is that if one looks at the provisions of section 5(1)(a) and 5(1)(b) together, it is, in our submission, a rather curious result, if it be the result, that section 5(1)(a) does, but section 5(1)(b) does not, apply to claims made in the one proceeding. Now, your Honours, the observations in the cases go, in a sense, both ways on this point. Your Honours, if I could go back then to the Wah Tat Bank Case in [1975] AC 518, your Honours will see there is a reference in the last paragraph on the page to paragraph (b), where it said:

It has been rightly pointed out -

and it is pointed out in argument by, I think, Mr Le Quesne at page 512 -

that paragraph (b) does not contemplate a single action, but only a number of actions; moreover it - - -

GLEESON CJ: Pausing there for a moment, that is the point on which this case went against you.

MR JACKSON: Yes, yes. Your Honour, that is at the heart of it. Now, your Honours will see in the paragraph commencing in the passage to which I just referred and going over to the top of the next page, there is the dictum by the Privy Council. Your Honours, I will not read out the paragraph, but your Honours will see that the essence of it appears in the last three lines on page 518 and it is:

devised merely to discourage the multiplicity of actions which the old rule was designed to prevent.

Well, your Honours, that, with respect, is part only of the basis of section 5(1)(b).

GUMMOW J: What is the basis for the statement, "It has been rightly pointed out"?

MR JACKSON: Your Honour, it seems to be a reference back to the - - -

GUMMOW J: Back to submissions, back to Mr La Quesne's submissions.

MR JACKSON: Yes, your Honour, yes, page 512 and I think it is at the end of his submissions in reply, I think, your Honour.

GUMMOW J: He seems to have been relying on the Law Revision Committee's report?

MR JACKSON: Yes, your Honour, and undoubtedly - I mean, that says one of the reasons for this is to prevent "multiplicity of actions". Well, undoubtedly, that is a reason. But, your Honours, to describe section 5(1)(b) as having only that effect is really not to give effect to the terms of it. Now, your Honours, it is concerned, of course, with several as well as joint tortfeasors.

HAYNE J: Again, if I may just come back to that and what, if any, significance is to be attached to that damage which introduces paragraph (b) and derives from the covering clause of 5(1). If you have an identity of damage, a singular damage, does that suggest where 5(1)(b) is directed not to how many actions you may bring, but to the sum recoverable, that it is concerned with capping the damages, whatever the form of proceeding that may have occurred?

MR JACKSON: Yes, it does, your Honour. Could I just say that the damage to which the opening words of (b) are referring seem to be not the damage referred to in (a) but the damage referred in the opening words of 5(1).

HAYNE J: Yes. Sorry, it was to that I was intending to refer, if I did not.

MR JACKSON: Your Honour, that is because of paragraph (c) as well as everything else.

GLEESON CJ: Damage means harm.

MR JACKSON: Yes, your Honour. It is saying where a person has, in effect, suffered a tort.

GLEESON CJ: But if you are right, it attaches or may attach considerable importance to the order in which defendants are named in the originating process, because if you are right when you said, in answer to an earlier question I asked, that there is more than one judgment given in such a case, and if for some reason the amounts that can be awarded against the defendants are different, for example, because there is an entitlement to exemplary damages or because there is a cap of some other kind, then a lot turns on who is the first defendant.

MR JACKSON: Well, your Honour, I accept that. One would expect in those cases that the judgment is given at the same time and the judgment would, depending on the rules of particular courts, would either take effect at the time it was entered or take effect at the time it was given and, your Honour, if there were any doubt about it, then no doubt a judge could say, "These judgments are to take effect simultaneously", and in the ordinary course of events one would expect that to be so.

GUMMOW J: The trouble is it does not say, "shall not exceed the amount of the damages awarded and recoverable", you see what I mean? The mere chance of who is first, quite apart from what the actual yield is in the hand of enforcement, can have capricious results, can it not?

MR JACKSON: Well, your Honour, the provision of its very nature is one that speaks of there being actions in which there is a - I am sorry, it is one that brings about limitations on the quantum recoverable by reference to the first judgment which is given.

GLEESON CJ: Suppose the first defendant in an action against joint tortfeasors has the benefit of a limitation of liability clause.

MR JACKSON: Well, your Honour, I suppose there are two possibilities in relation to that. One is that that applies, and if that applies, the judgment is first given, that is the end of the matter. The other is that it would be treated in the same way as the position was treated in an equivalent way, the way in which exemplary damages was treated in Thompson.

GLEESON CJ: But to make 5(1)(b) operate in this way you have to treat the judgments as given sequentially, have you not? Why are judgments given sequentially in an action against a number of defendants when the plaintiff succeeds against them all?

MR JACKSON: They may not be, your Honour. If one has a situation where there are judgments given for different amounts in the case of several tortfeasors, then the sums recoverable under those judgments will not, one would expect, exceed the amount of the damages awarded by one of those judgments. They are all given at the same time; the issue does not arise. The situation where 5(1)(b) will arise will be if for some reason there are separate actions or if there are judgments given at different times in one proceeding.

What I was going to say was that section 5(1)(b) has an operation going beyond a mere multiplicity of actions in terms of joint torts. Your Honours have seen that it is concerned with several as well as joint tortfeasors and it also goes to causes of action which were not causes of action that the person who may have obtained the first judgment may have had. I referred your Honours earlier to, for example, the Lord Campbell's Act type of claim.

In Bryanston v de Vries [1975] QB 703, one sees the passage in Lord Denning's reasons, to which I adverted earlier, and that is the paragraph commencing just after letter C on page 722. We accept, as I said before, that Wah Tat Bank does not support what his Lordship said if he was there treating it as applying to paragraph (b), but his own view in that paragraph seems clearly enough to have been that:

If the plaintiff takes judgment against one of the defendants for an ascertained sum, and it is satisfied, it is a barrier to his going on against the other. But if that judgment is not satisfied, the plaintiff is able to go on . . . but he cannot get more in total than against the first.

That seems to be a paraphrase of paragraph (b).

If one goes then to Lord Diplock at page 732E, your Honours will see what he says is simply:

I do not think that support for giving any more restricted effect to paragraph (a) is to be derived from the fact that paragraph (b) deals only with cases where the judgments in respect of the same damage have been recovered in separate actions, and omits to deal with cases where separate judgments are recovered in the same action.

Your Honours will see that prima facie view he discusses through the remainder of that paragraph, and then, your Honours, at page 733 - and the passage, your Honours, goes through to about between letters C and D on the - - -

GLEESON CJ: Just before you go to 733, Mr Jackson, is what is being referred to at letter G on 732 this case?

MR JACKSON: It is very similar. Yes, your Honour, it raises the same possibility.

GLEESON CJ: Well then, in the next sentence he says, "the draftsman of the Act overlooked this possibility".

MR JACKSON: Your Honour, he is in a sense knocking down a proposition, the proposition being that paragraph (b), because it has one prima facie meaning, affects paragraph (a). If one goes on, your Honour, in his Lordship's reasons, over to the bottom of page 732 and the top of page 733, what your Honours will see after that sentence to which your Honour just referred is that he says:

Its continued prevalence -

That is, of the Tomlin order -

has been demonstrated by the fact that in the 40 years since the Act was passed the instant case provides the first example in this country of a separate judgment being entered by consent against one joint tortfeasor in an action which was still proceeding against another joint tortfeasor. Now that it is for the first time confronted with the casus omissus this court must deal with it by applying to it by analogy those principles that can be discerned as underlying the express provisions of section 6 of the Act.

And then your Honours will see that he says:

First, it would be usurpation of the proper function of the judge or jury in assessing disputed damages against one defendant that the assessing court should be bound to adopt as its assessment whatever amount had been inserted in the consent judgment as the result of a previous agreement between the plaintiff and some other defendant. Section 6(1)(b) preserves the liberty of each court to make its own assessment of the damages to be awarded by the judgments in separate actions. The only limit which it imposes is not upon the court's assessment of the damages but upon the aggregate amount that the plaintiff can recover by execution under any of the judgments. That limit is the amount of damages awarded by the judgment first given, even though it was a judgment by consent; but if the court itself assesses the damages at a lower figure and gives judgment against another joint tortfeasor for this sum, the lower figure is the maximum that the plaintiff can recover against him.

Your Honours, in speaking of dealing with it by way of analogy, what his Lordship appears to be saying is to say: if it be the correct view of paragraph (b) that there is a case omitted, then the way in which the statute should be interpreted is, in effect, not to treat that case as having been omitted but to treat the principle of the statute as covering it in the same way as paragraph (a) is treated in the other parts of the judgment. Could I, your Honours - - -

GLEESON CJ: Before you leave that case, could I ask you about the paragraph on the bottom of 733.

MR JACKSON: 733?

GLEESON CJ: 733, at line G.

MR JACKSON: Yes, your Honour.

GLEESON CJ: I am not sure I understand the facts of Bryanston well enough, but that seemed to me to help you.

MR JACKSON: Yes, your Honour. I was going to come to that later; indeed, the second aspect of our case - the question of double satisfaction, but if I could take your Honours to it now, what he said was: had this in fact been true, namely, satisfaction of the consent judgment, it would have been a good defence to the claim to recover damages against de Vries, but we know it was not true. Now, to the same effect, your Honours, was Lord Justice Lawton at page 739, about letter D, where he said:

By the time the trial started before O'Connor J., Mr de Vries did not know whether the consent judgment had been satisfied despite his efforts to find out; and during the trial the judge was never told.

Your Honours will - - -

GLEESON CJ: Was that a separate action against Mr de Vries?

MR JACKSON: No, it is the same action, your Honour. Your Honours will then see, between letters F and G:

He was very much concerned with the question whether the consent judgment had been satisfied because if it had, no judgment could be entered against Mr de Vries. The plaintiffs would have had their remedy; they would get no more.

He discusses then how one deals with situations of that kind in a passage that goes through to page 740, about letter E.

Now, your Honours, some reference was made to the interpretation to be placed on paragraph (b) in terms of the one action, more than one action, situation in XL Petroleum 155 CLR in the reasons, first, of Chief Justice Gibbs at page 457, about point 9, where discussing the Wah Tat Case and reciting, in effect, the course of it, he referred, the last few lines on the page to what had been done in the Singapore courts. He said:

This conclusion was, they -

speaking of those courts -

strengthened by the fact that par. (b) clearly contemplates a number of actions and not a single action. However on appeal the Judicial Committee -

et cetera. Now, that was what was said by Chief Justice Gibbs. Justice Brennan, at page 466, at about point 3 on the page, said:

In the ordinary case, however, s. 5(1)(a) and (b) appear merely to provide machinery which preserves the common law liability of joint tortfeasors while removing the bar to enforcement which arose when a judgment was given against one tortfeasor. When damages are awarded only in respect of the damage actually suffered by the plaintiff . . . the damages assessed in each action or against the respective defendants in a single action are likely to be assessed in the same amount. If the evidence in successive actions were to lead to differing awards of compensatory damages, s. 5(1)(b) would prevent the judgment creditor from receiving an amount -

et cetera. He does not seem to be placing any particular emphasis on dividing up the proceedings into one action or separate actions.

Your Honours, at page 467, about point 9 on the page, and going over to the next page, he said:

The quantum of an award depends on the circumstances of the individual case, though the satisfaction of multiple judgments in successive actions is subject to the provisions of s. 5(1)(b).

But when one comes to page 469, speaking more directly about paragraph (b), he says, your Honours, about point 6 or 7 on the page:

The purpose of s. 5(1)(b) is to prevent excessive recovery by a plaintiff consequential on the creation of multiple causes of action against tortfeasors.

Now, your Honours, our submission is that to draw the distinction that was drawn by the Court of Appeal in this case really is to allow the form of proceedings to dominate the substance which is being contemplated both by paragraphs (a) and (b) of section 5(1). That is the argument I seek to advance on the first of the two issues in the proceedings. Could I come then, your Honours, to a reflection of it, a reflection of the other side of it, in a sense, and that is the question of double satisfaction.

Now, your Honours, one of the consequences of putting joint tortfeasors in the position of, in effect, several tortfeasors, was, in our submission, that the double satisfaction rule was capable of application. That rule was referred to by your Honour Justice Gummow in Thompson [1996] HCA 38; 186 CLR 574 at 608 where your Honour said:

The principle given expression by these rules is to be distinguished from that against double satisfaction. Where the wrongdoers were concurrent rather than joint tortfeasors, the entry of judgment in an action against one was no bar to other actions against those tortfeasors because the plaintiff had a distinct cause of action against each of them. However, even here, once the plaintiff had fully recouped the loss, of necessity the plaintiff could not thereafter pursue any other remedy the plaintiff might have or which the plaintiff might earlier have pursued.

GLEESON CJ: Now, just pausing there, we are not dealing with this matter on the factual assumption that the plaintiff has fully recouped for loss, are we?

MR JACKSON: Well, your Honour, it depends on what is meant by that concept, of course. What we would seek to say is that the loss has been determined by the judgment and the amount of the judgment is the amount of the loss. May I come to that aspect of it in just a moment? But, speaking more generally, I accepted at the start of our submissions that the evidence before the Master indicated that if the plaintiff's case proceeded, in the way in which they sought to have it do, the award of judgment would be for a sum in excess of $250,000.

GLEESON CJ: So, the Master appears to have found as a fact that the sum of 250,000 involved a compromise on liability, presumably?

MR JACKSON: Well, your Honour, that may be one way of regarding it but - - -

GLEESON CJ: It could have been a compromise on any number of things. It could have been a compromise related to the solvency of the defendant, for all we know.

MR JACKSON: Yes. For a number of things, your Honour, it may have been. But, in any event, it was a sum which Whitehead was prepared to pay and the respondents prepared to accept and, as your Honours have seen, in respect of the cause of action that they had against Whitehead which, of course, was the same cause of action as the one they had against us.

GLEESON CJ: But unless you can make good the proposition which you have foreshadowed that for relevant purposes in the application of that principle the loss is now quantified by the judgment, this is not the case where the loss has been fully recouped.

MR JACKSON: Well, that is so, your Honour, yes, I accept that. Your Honours, could I go next to the decision of the New South Wales Court of Appeal in Castellan v Electric Power Transmission Pty Ltd [1968] 1 NSWLR 268.

GUMMOW J: It is in 69 SR(NSW) too, 159.

MR JACKSON: I am sorry, your Honour, I had not appreciated that your Honours had a different version of it from mine. What I wanted to refer to, your Honours, was in the reasons for judgment of Justice Asprey and it is the - - -

GLEESON CJ: This is now why paragraphs have numbers.

MR JACKSON: Yes. Your Honours will see shortly into his reasons there is a paragraph that has (1) in brackets by the side of it and - - -

GLEESON CJ: Is that a number or a word?

MR JACKSON: Your Honours, under that heading, as it were, the last paragraph under (1) is a paragraph starting:

Paragraphs (a) and (b) of s. 5(1) in Pt. III of the Act - - -

HAYNE J: Page 181.

MR JACKSON: He says they:

are concerned with removing the operation of the common-law rule that the recovery of judgment against one of several joint tortfeasors liable in respect of the same damage worked the discharge of the liability of the other joint tortfeasors -

and your Honours will then see a reference to Genders. He then said:

I should not think that the doctrine against double satisfaction, well established in the common law and embedded in equitable principles, should be regarded as abrogated by the statute without clear words or necessary implication. There are no such words and I can gather no such implication from sections which are plainly directed at other branches of the law . . . the principle of the common law that satisfaction by one concurrent tortfeasor discharges the liability to the plaintiff of another person alleged to be a concurrent tortfeasor would appear to be quite unaffected. As I have pointed out at the commencement of my consideration of this first question, the plaintiff's appeal against BHP, its solution must be approached quite apart from such problems as may arise in dealing with the rights of the defendants inter se in the third party procedure . . . It follows, in my opinion, that, inasmuch as the verdict which the plaintiff obtained by consent against EPT has been fully satisfied by EPT, this Court would not order a new trial of the claim of the plaintiff against BHP whilst the verdict and the satisfaction thereof remains, as it does, unimpugned because there would be no answer to a plea which could be filed by BHP prior to the new trial that its liability (if any) to the plaintiff has been completely discharged by full satisfaction of the damage in respect of which the plaintiff is suing it.

Now, your Honours, that is a case in which there was a judgment by consent. I have taken your Honours already to Bryanston v de Vries and the two passages in that in which the principle is treated as applicable to the case of joint tortfeasors. In the Court of Appeal in this case, Justice Giles - and if I could take your Honours to page 88 of the record - referred to a number of passages, commencing in paragraph 65 of his reasons, he quoted a number of passages from the speech of Lord Hope in Jameson in the House of Lords. Your Honours will see the reference on the preceding page. Your Honours will see in particular at page 88 about line 20:

It would seem to follow, as a matter of principle, that once the plaintiff's claim has been satisfied by any one of several tortfeasors, his cause of action for damages is extinguished against all of them.

Then, your Honours, at line 35, again, quoting:

It remains unliquidated until the amount has been fixed either by the judgment of the court or by an agreement as to the amount which must be paid to satisfy the claim. It cannot be doubted that, once the amount of the damages has been fixed by a judgment against any one of several concurrent tortfeasors, full satisfaction will have been achieved when the judgment is satisfied.

Your Honours, will then see in paragraph 67 on page 89 that Justice Giles appears to have accepted that if the judgment had been for an amount assessed by the court, the principle would be applicable, but at paragraph 68 in the first few lines found that it was not applicable when the damages were not assessed by the court.

Your Honours, what that seems to leave out of account, in our submission, is that the cause of action merged in the judgment. I took your Honours earlier to the passage from Chamberlain 164 CLR at 508 to 510, and your Honours will have seen a reference to that. The judgment, in our submission, where there has been the merger of the cause of action - the particular reference was page 510 - the independent existence was destroyed so long as the judgment stood. Your Honours, in our submission, the judgment quantifies the liability, the cause of action merges in the judgment and there is not any difference between the judgment obtained by consent or the judgment obtained by a decision of the court.

GLEESON CJ: Is the merger of the cause of action and the judgment unaffected by section 5(1)(a)?

MR JACKSON: Yes, your Honour. Yes, it is.

HAYNE J: That is relevantly the merger is a merger of the cause of action against the party against whom judgment is obtained.

MR JACKSON: That is so, your Honour.

HAYNE J: What is the significance then that you are attaching to merger? I do not understand at the moment, I am sorry.

MR JACKSON: I am sorry, your Honour. Well, it seems apparent enough, and if I could just say this, that the court's decision - I am sorry, I will start again, your Honour. If one looked at the ordinary case of double satisfaction where there had been a judgment. Now, the judgment is, in effect, ex hypothesi, a judgment against one of the persons involved and that judgment, prima facie, is a judgment which applies as between those two persons. But the principle against double satisfaction is one of the occasions when a judgment does not have potential effect only as between the persons who are parties to it. Another example, your Honours, is that which was decided by the Court in James Hardie & Coy v Seltsam in relation to section 5(1)(c) where there had been a settlement resulting in the judgment as between judgment in favour of a person claiming to be a tortfeasor.

GLEESON CJ: But section 5(1)(a) tells us in terms, does it not, that if there are two tortfeasors "liable in respect of" given damage, judgment recovered against one of them does not produce the result that the cause of action against the other merges in that judgment?

MR JACKSON: No, I do not suggest it does, your Honour. I am sorry, I do not suggest the judgment against the one not party to the judgment - I am sorry, I do not suggest that the cause of action of the one who is not party to the judgment has merged in that judgment. What I am saying though, your Honours, is that it is a case where, whether it be a judgment that is given after a hearing or a judgment given because of consent, the same effect follows, and that is that it fixes the amount and the amount is attributable of a cause of action more so, one would think, in the case of joint tortfeasors than several ones because one is speaking about the same conduct and the same damage.

CALLINAN J: Mr Jackson, that raises a question that concerns me. We do not have the original statement of claim.

MR JACKSON: No, your Honour.

CALLINAN J: We really should have that, should we not, to see precisely how the action was formulated against both and what form the subject of the settlement? It is only by looking at that that we can know that.

GLEESON CJ: It is the amended statement of claim we would need, is it not? Did they not amend the statement of claim when they found out that these people were not partners?

MR JACKSON: Yes, your Honour.

CALLINAN J: It was amended before the settlement, was it?

MR JACKSON: Your Honour, I think the answer is, no. I need to check that. What happened, your Honour, as seems to be recorded in the reasons, is, first, that the cause of action pleaded were as partners.

CALLINAN J: I think what you have said is right because the document we have, which is plainly the document that was brought into existence after the settlement, is described, I think, as the first amended statement of claim - - -

GUMMOW J: Further amended statement of claim.

CALLINAN J: I am sorry, further amended statement of claim, yes.

MR JACKSON: Your Honour, the history of it is referred to in the Court of Appeal, including the fact that after the action appeared to be moribund for years we brought the application to strike it out for want of prosecution which brought about, I think, the new statement of claim.

GLEESON CJ: Would it make any difference to your argument if, in truth, if your client had been Mr Whitehead's partner rather than his employee?

MR JACKSON: In the particular case, no, your Honour.

GLEESON CJ: No. I think it follows from the fact that you said earlier it would not have made any difference to your case if in fact Mr Whitehead had been Mr Baxter's employee.

MR JACKSON: That is so, your Honour, yes.

CALLINAN J: I still would have liked to have seen the original statement of claim. There is no reason why we cannot see that - - -

MR JACKSON: No, your Honour. I will endeavour to get that to your Honour.

GLEESON CJ: We ought to have them all, should we not?

MR JACKSON: I am sorry?

GLEESON CJ: Should not we have them all?

MR JACKSON: Your Honour, I will do that. I will get those for you.

GLEESON CJ: Well, perhaps the original and the final version of it, at least.

KIRBY J: Were these before the Court of Appeal?

MR JACKSON: I cannot tell your Honour whether the original one was.

KIRBY J: I would not like to receive any evidence or everything evidentiary - - -

GLEESON CJ: I was not suggesting that it was evidence. We are dealing here, are we not, with documents filed as of record in this action?

MR JACKSON: Yes, your Honour.

CALLINAN J: They are part of the Court file, are they not?

MR JACKSON: Well, your Honour, I accept that. I am perfectly happy to give the documents to the Court.

GLEESON CJ: You were not proposing to tender them, however?

MR JACKSON: No, I was proposing to tender them, your Honour.

CALLINAN J: To complete the record.

MR JACKSON: They are part of the proceedings before the Court.

Your Honours, what I was seeking to say was this that in the case of a tort which is a joint tort, as in the present case, the judgment against one of them is a judgment about, in effect, the same, and precisely the same damage as would be the case against the other - different defendants, of course, but the same cause of action. Your Honours, we would submit that if one is speaking about a question of policy, the policy of the law should be to reflect what is provided for by section 5(1)(b) if it is not otherwise applicable and that this argument proceeds on the basis that it may not be, but if section 5(1)(b) is not otherwise applicable and if one is looking to see should the double satisfaction principle apply and what is its ambit then the clearest indication of what its ambit should be, in our submission, is to be found in section 5(1)(b).

GLEESON CJ: But when a person sues a number of joint or concurrent tortfeasors there might be any one of a number of reasons why that person would choose to settle differentially - if I can use that expression - and the principle that we establish in this case is going to have to apply to all those reasons, is it not?

MR JACKSON: Yes, your Honour. And, your Honour, in the ordinary course of events, a person who wants to preserve rights against other defendants should seek to do it in such a way that the rights are not lost by the way in which the settlement takes place.

GLEESON CJ: Do you mean that by an agreement between the plaintiff and the first defendant the plaintiff's rights against the second defendant could have been preserved?

MR JACKSON: Yes, your Honour. That is the - you will see the reference to the Tomlin's orders in Bryanston's Case and I think a copy of the form of Tomlin order is attached to our written submissions. The approach taken in the Court of Appeal was, in essence, to adopt what had been said by Lord Hope in Jameson. Your Honours will see that at pages 97 and 98 and particularly in paragraph 83 on page 97. Now, in relation to that, however, the approach taken by the House of Lords appears at pages 93 to 96 in the appeal book and your Honours will see, particularly - if I can take your Honours to page 96, commencing at the top of the page, quoting from Lord Hope where he endeavours to set out what the task would be in examining whether there had been a satisfactory full settlement, as it were. He said:

"I think that these cases demonstrate the limits of the inquiry which the judge may undertake in the event of a subsequent action . . . He may examine the statement of claim in the first action and the terms of the settlement in order to identify the subject matter of the claim and the extent to which the causes of action which were comprised in it have been included within the settlement. The purpose of doing so will be to see that all the plaintiff's claims were included in the settlement and that nothing was excluded from it which could properly form the basis for a further claim for damages against the other tortfeasors . . .

What the judge may not do is allow the plaintiff to open up the question whether the amount which he has agreed to accept from the first concurrent tortfeasor under the settlement represents full value for what has been claimed.

If I could just pause at that point to say that this is a case where the plaintiff might have got 433 but took 250 is to do just that thing. His Lordship then says:

That kind of inquiry . . . could lead to endless litigation as one concurrent tortfeasor after another was sued on the basis that the sums received . . . were open to review by a judge in order to see whether or not the plaintiff had yet received full satisfaction for his loss.

Then he discusses that through the remainder of that paragraph and then in the next paragraph said:

The question therefore is, as Mr McLaren QC for the CEGB put it, not whether the plaintiff has received the full value of his claim but whether the sum which he has received in settlement of it was intended to be in full satisfaction of the tort.

If one applies that - - -

GLEESON CJ: Intended by whom?

MR JACKSON: His Lordship earlier had referred at about line 15 or 16 on the same page to there being a question of "the objective meaning of the words used" in the context in which they were found as giving rise to the intention of - - -

GLEESON CJ: So he is talking about the objective intention of the parties to the settlement?

MR JACKSON: Yes. Your Honour will see at line 15 on the same page:

The intention of the parties is to be found in the words of the settlement.

We would simply pause to say this, that if one is looking to, for example, the present case, what you had was a joint tort. So far as the plaintiffs in the proceedings were concerned and so far as Whitehead was concerned, the terms of the settlement - I have taken your Honours to them already - were a complete settlement of that tort. The tort is the same tort as that in respect of which the claim is made against us.

GLEESON CJ: What page is that again, Mr Jackson?

MR JACKSON: I am sorry, your Honour. I had been referring, your Honour, mainly to page 96.

GLEESON CJ: 59 and 60, I think.

MR JACKSON: Then 96. But your Honour wanted the terms of settlement?

GLEESON CJ: Yes. 59 and 60, I think.

MR JACKSON: Yes. So what there is, your Honour, is the deed of release at page 59 and 60, then the terms of the - - -

GLEESON CJ: I do not quite see the part that you just referred to.

MR JACKSON: I am sorry, your Honour. What I was saying was this. If one looks at the terms of settlement, what one can see, in our submission, is that it was a case where there was a claim made by the present respondents against Whitehead that was a claim in respect of a joint tort. Now, the claim is one which is settled completely as against him by the terms of settlement.

GLEESON CJ: As against him?

MR JACKSON: As against him, your Honour. But the point I am seeking to make is that if one leaves aside the question of the number of dollars involved, then one sees that there is a situation where the whole tort - and one is, after all, speaking about the one tort - in so far as he is concerned and the other parties to it are concerned, has been - it is not a case where there is some other aspect of it that has been left out.

GUMMOW J: When we talk about the "whole tort", what are we saying? We are talking about the same harm, are we? The same physical harm?

MR JACKSON: Your Honour, what it is speaking about - - -

GUMMOW J: I am just wondering about the level of abstraction at which this debate occurs. It seems to be mysterious. I am not blaming you. It is what has been said in the cases.

MR JACKSON: I think I have said "well, your Honour" three times already, but may I say this, that, your Honour, we - and this really was the next thing I was going to say, that the approach taken in the House of Lords, in our submission, is one that is really productive of some difficulty, and it is productive of some difficulty because whatever one is contemplating by, for example, the expression "the whole tort" - and I will endeavour to come to that in a moment - it would seem to be of its very nature a claim by the plaintiff against a person who has a potential liability and, leaving aside unusual cases, what is settled is the whole of that person's liability.

GLEESON CJ: But the one thing we know for certain here is that they did not settle with Mr Baxter.

MR JACKSON: Of course, your Honour, yes.

GLEESON CJ: To put it another way, they manifestly kept the action against Mr Baxter alive. He was not made a party to the settlement.

MR JACKSON: Of course, your Honour.

GLEESON CJ: We do not know why, I suppose.

MR JACKSON: It does not appear why, no. But, your Honour, accepting what your Honour says about that, we do not suggest that that cannot be done, in the sense that there is nothing in, for example, section 5 that says you cannot maintain the action against the other tortfeasor. We do not suggest that the action could not be brought. But the point is, your Honour, once there has been the judgment obtained, that has the effect of limiting the amount that can be recovered, whether one does that by virtue of section 5(1)(b) or whether one does it by saying the amount that has been paid satisfies the amount of that judgment

GLEESON CJ: But if the test is Lord Hope's test - and I realise you say there are difficulties about it - a guide to the intention of the parties, considered objectively, is the fact that the plaintiff did not settle with Mr Baxter.

MR JACKSON: Your Honour, what that would demonstrate is that the plaintiff proposed to seek to proceed against Baxter. Now, it does not really take one much beyond that. The legal consequences to be attached to seeking to proceed against us follow either from the Act or from the general law. Once the matter had gone to judgment and the amount of the judgment had been paid, then, in our submission, what follows from that follows as a matter of the application of the law, independent of the intention of the parties.

GUMMOW J: What does this rule against double satisfaction mean? Common law lawyers tend to talk about things assuming everyone knows what they mean. What does it mean?

MR JACKSON: What it seems to mean, and, your Honour - - -

GUMMOW J: It seems to come from the idea that you could get an injunction restraining execution on a second judgment by reason of some circumstances, and that seems to have been copied by the common law into a point that could be pleaded.

MR JACKSON: Yes. What it seems to be, your Honour, is to say that one can plead by way of a defence to a claim and the precise classification of the type of defence may be a matter of debate, the fact that the plaintiff's claim has already been satisfied. Now, it has been satisfied because the plaintiff in satisfaction of that claim has been paid the amount payable by another defendant or another person who has been or could have been a defendant, and, indeed, your Honour, the principle has been taken further in some cases to the effect that it has been paid by some other person, either on behalf of or in the interest of that other person. I do not know that I can really advance it beyond that.

GLEESON CJ: Is it based on some concept of unconscionability?

MR JACKSON: Well, your Honour, in modern terms I suspect that is so, your Honour, in the sense of saying it is unconscionable for someone to recover more than the amount to which they are otherwise entitled. That raises with it a number of questions, of course.

GUMMOW J: Well, there is an idea of unjust enrichment running around here underneath the surface.

MR JACKSON: Yes, your Honour, that is so, but, of course, it was an issue - - -

GUMMOW J: Or, at least, an unconscientious use of one legal right when you already have what you should be left with under the other legal right.

MR JACKSON: It did not, of course, or could not have, really, an application in relation to joint torts until there was the abolition of the Beinsmead v Harrison rule because the issue would not arise in those cases.

GUMMOW J: It would certainly arise with concurrent tortfeasors.

MR JACKSON: Yes, and arose absent judgments.

GLEESON CJ: So if a company failed and some litigious people sued the directors and the auditors and the managers, the lawyers, and everybody thought they have an insurance policy or not, the total amount of loss suffered by the company might far exceed the assets or the value of the insurance policies of the individual defendants who are lined up. If your argument is right, that would either preclude differential settlement at different times in different amounts with individual defendants, but the problem could be solved by making it a term of the settlement that it was not to be taken in full satisfaction of the plaintiff's rights. Is that the way it would work in practice?

MR JACKSON: Well, it could, your Honour. That is a possibility, yes. But that would - your Honour, I say that with a degree of hesitation, a degree of hesitation brought about by the fact that it would need to be clear that that was the fact as distinct from being simply a way of disposing of the - - -

GLEESON CJ: Well, what would the fact be?

MR JACKSON: Well, the fact would have to be, your Honour, that the settlement was in full satisfaction of the cause of action in relation to which there was a similar or the same cause of action against other - - -

GLEESON CJ: But is it a fact relating to the intention of the parties to the settlement or is it a fact relating to the extent of the harm that was suffered by the plaintiff? Lord Hope would seem to say it has to be the former.

MR JACKSON: Yes, your Honour, yes. It concentrates on the - so far as it is put in the House of Lords, it seems to look at the intention of those parties.

GUMMOW J: Can you just find again the particular passage for me where he says that?

MR JACKSON: Yes, your Honour. The part I was looking at - page 96, your Honour, of the appeal book and it commences at the top of the page in the first paragraph, I think. It is in [2000] 1 AC 476 at the top of the page.

GLEESON CJ: What is the meaning of the word "properly" at line B on page 476?

MR JACKSON: Well, your Honour, it seems to be referring to, perhaps, claims of damages, claims for particular types of damage, perhaps, that might be brought against the other party but could not have been brought against the first party with whom there has been the settlement. But, your Honour, I have to say it is a trifle Delphic, but what his Lordship seems to be referring to is that one has to see that all the claims that are the subject of, in effect, the second proceeding, as it were.

GLEESON CJ: What is it that is binding the conscience of the plaintiff here? Is it the agreement that he has made by way of settlement with one of the tortfeasors or is it the fact that if he pursues the second action successfully he will end up getting more than he actually lost when you add in the amount that he has payable through the settlement?

MR JACKSON: Well, I suppose, your Honour, on the basis that there is a number of tortfeasors and he has been prepared to settle with one and take the money - of course, taking the money is the essential thing because, if I could just interpolate, your Honour, there seems to be some suggestion that it is a bit like giving a cheque and the debt revives if the cheque is not honoured, so whilst the settlement may be effective, it is really the payment of the money that is the significant thing. So the payment of the money, your Honour, the money having been accepted and taken against one of the defendants in respect of the same cause of action, to put it shortly.

GLEESON CJ: Suppose that in the present case it appeared as a fact that both the defendants were partners - as you have said, it would not make any difference - and the basis of the settlement with Mr Whitehead was that Mr Whitehead went along to the plaintiff and said, "Look, I own my own home and that is the only asset I have. Your claim against us is for $10 million. I have here a house worth $X. I have no other assets. I am willing to sell my house and pay you the proceeds of sale, provided you agree you will not pursue me to bankruptcy", and the plaintiff says, "I am happy to do that".

MR JACKSON: Well, if the plaintiff, no doubt represented, should see a solicitor who would say, "Well, you cannot do that unless you are prepared to let the other bloke out as well", put shortly.

HAYNE J: Because such forms of settlement were not unknown in Victoria following the collapse of a particular building society and the terms would commonly contain an explicit representation of the asset position of the party who was giving up the last cufflink to, in that case it was a lender, rather than a person damaged by a tort, and commonly the terms provided not simply for payment, but for entry of judgment as well. You see, have we not got several ideas running around: settlement, settlement on terms that there will be judgment entered, as well as notions about the way in which the amount agreed is arrived at.

MR JACKSON: Your Honour, undoubtedly, there is a number of strands and, undoubtedly, it is right to say the existence of the notion which does seem to have quite a degree of history behind it, the existence of the notion, it is not as well known as perhaps it should be and perhaps reliance is not placed on it in circumstances where it might have been placed on it, as, indeed, sometimes is the case in relation to section 5(1)(b) and its - - -

GLEESON CJ: But the strong policy of the law ought to be to encourage that, should it not?

MR JACKSON: Your Honour, the policy would be to encourage bringing litigation to an end. How that comes about may depend on the circumstances and one can accept that as being the policy, but part of the policy of the law as well, in our submission, is that there is the notion of double satisfaction.

CALLINAN J: There may be a policy consideration, too, that it is wrong to exclude one joint tortfeasor from an opportunity of participating in what is otherwise a secret settlement.

MR JACKSON: Well, your Honour, underlying, perhaps many of the historical motions, is the fact that tort was thought to involve an intentional wrong at an earlier time and that may well be an underlying basis.

CALLINAN J: Mr Jackson, can I suggest another strand to you? The action against Mr Whitehead would have been in both contract and tort.

MR JACKSON: Yes.

CALLINAN J: And he would not have been able to rely upon contributory negligence.

MR JACKSON: No.

CALLINAN J: That would not be so in relation to your client, would it, because there is no contract? He might be able to set up contributory negligence. Does he do that in the defence, by the way?

MR JACKSON: Yes, he does, your Honour, yes.

CALLINAN J: That certainly gives rise to different considerations as to the possible outcome against either, does it not? That is, against either Mr Whitehead or your client.

MR JACKSON: Yes, although, your Honour, the settlement by Mr Whitehead was, I think, thirteen years ago, and that was before - - -

CALLINAN J: I do not know before Astley, but, in fact, the law was - - -

GLEESON CJ: Do you rely on that argument? If you do, it is inconsistent with your concession that the outcome of this case will be no different either if Mr Whitehead was the employee of Mr Baxter or if Mr Baxter and Mr Whitehead were actually partners.

MR JACKSON: Well, I am talking about, your Honour, the outcome of the case before the Court now. It may be that, as I submitted at the start of our submissions, the actual proceedings have not been tried. It may be that in those proceedings, a different result in terms of money would be arrived at.

CALLINAN J: I must say I was concerned at that concession and what Lord Hope had said at page 476 has enlarged my concern because, as his Lordship points out, an examination of "the statement of claim in the first action and the terms of the settlement" are, in effect, necessary "in order to identify the subject matter of the claim and the extent to which the causes of action" were "comprised in it". Now, I would regard that statement as being sufficiently wide to embrace other possible outcomes, that is, having regard to the possibility of contributory negligence to which I just put to you. In a sense, one really needs to see, perhaps not only the original statement of claim, but also the original defence or defences. I do not know whether they were filed. They may not have been by that stage.

MR JACKSON: I cannot give your Honour an answer to that this minute.

CALLINAN J: That is why I do not know whether that concession is entirely wise, perhaps.

MR JACKSON: Well, your Honour, may I endeavour to clarify what I am seeking to say about it, and it is simply this, that - - -

CALLINAN J: You could put things in the alternative, perhaps, Mr Jackson.

MR JACKSON: I may, perhaps, put a number of alternatives. But what I am seeking to say, your Honour, is that so far as the proceedings are presently concerned, I was speaking in the context of a joint liability, and so far as joint liability was concerned, the case would not seem to differ relevantly depending on whether one had settled and the other not settled or, I suppose, whether the liability was brought about because they were both partners. Your Honours, we have accepted, both below and here, that the evidence before the Master demonstrated that the amount that the plaintiff might recover was in excess of the amount of the settlement.

GLEESON CJ: But the fact that Mr Whitehead was the employer and Mr Baxter is the employee simply happens to explain, historically, how they both came to be sued as joint tortfeasors. It does not affect your argument either about the construction of section 5(1)(b) or about the principle of double satisfaction, does it?

MR JACKSON: Well, I do not think it does, your Honour.

GLEESON CJ: No.

MR JACKSON: All I am saying is that if one came to a hearing about the matter and it became necessary to examine what the situation was, in detail, that there may be a different result but the fact of the matter is that the case has been dealt with, so far, on a narrow and fairly precise basis.

GLEESON CJ: If one were to reject the approach taken by Lord Hope to double satisfaction, another possibility - and I am not suggesting this is right, but another possibility would be that one would need to investigate the circumstances surrounding the settlement between the plaintiff and Mr Whitehead. Lord Hope seems anxious to avoid an inquiry of that kind.

MR JACKSON: Yes.

GLEESON CJ: But, if this is a principle of conscience and if you reject the approach taken by Lord Hope it may be you would get into that factual area which obviously was not before the Court of Appeal.

MR JACKSON: No, well, that is so, your Honour, yes.

GLEESON CJ: Is that left open as a possibility by the way the case stands at the moment?

MR JACKSON: Well, it is, your Honour. What has happened in the case is that your Honour has seen the paragraphs of the statement of claim are paragraphs of the defence that were adverted to, paragraphs 16 to 22. The question which is set out in - which invites the court to raise and to determine that issue and only that issue is decided against us. It simply means that those paragraphs, by themselves, do not provide a defence to the claim.

HAYNE J: Can I just go back again to Jameson and Lord Hope and just ask your assistance in what his Lordship is there saying. At 476F his Lordship says that:

I would hold that the terms of his settlement with Babcock extinguished his claim of damages against the other tortfeasors.

His Lordship therefore seems to contemplate that if a settlement was reached in which the promise to pay, as opposed to payment itself, was accepted in satisfaction of the claim made against the party with whom settlement is being effected, that the acceptance of that promise extinguished the claim for damages against the other tortfeasors.

MR JACKSON: Yes, your Honour.

HAYNE J: Is that a conclusion that can stand with the English equivalent of 5(1)(a) in this sense that 5(1)(a) says judgment recovered is not a bar. His Lordship seems to be saying that settlement can be a bar. Is there some tension between that conclusion and the legislative requirement of 5(1)(a) or am I simply starting at shadows?

MR JACKSON: Your Honour, could I say these things. First of all, it is really right to say that his Lordship says settlement is it. The next section of the reasons under the heading "Was the effect of settlement suspended until payment?" deals with a matter to which I adverted in passing a moment ago and that is that settlement is, in effect, treated as conditional until the payment. You will see that dealt with in the last paragraph of his reasons.

HAYNE J: Yes, but undoubtedly you can settle along terms that the promise is sufficient.

MR JACKSON: Yes. As to the second part, your Honour, we would submit not. It is not inconsistent with what is contemplated by 5(1)(a), because 5(1)(a) is really getting rid of the notion that judgment against one joint tortfeasor, whether satisfied or not, is enough - is a bar to an action against any other joint tortfeasor. That is really what, and in one sense all, that 5(1)(a) is doing. Now, 5(1)(a) has gone - one goes a little further than that, because of the decision of the Court in Thompson, which says that the notion that a release of one joint tortfeasor releases all the others, and we would adopt what was said, in effect, by I think your Honour Justice Gummow in Thompson, and also in the Castellan Case, that the double satisfaction notion is not taken away. It is a separate notion not taken away by these provisions. Your Honours, those are our submissions.

GLEESON CJ: Thank you, Mr Jackson. Yes, Mr Sullivan.

MR SULLIVAN: In respect to the two matters raised by my learned friend, your Honours, our approach primarily is that the judgment of the Court of Appeal, particularly that of Mr Justice Giles, was correct in all respects. I will take your Honours to passages in support of that general submission in due course. May I first summarise our contention in respect of the interpretation of section 5(1)(b), in the light of my friend's typically candid approach to the matter.

GUMMOW J: Was anyone taken, in the Court of Appeal, by counsel to the Law Revision Committee report?

MR SULLIVAN: The Law Revision Committee report was not expressly referred to the Court of Appeal, your Honour, no.

GUMMOW J: Well, paragraphs 11 and 12 thereof indicate the mischief that was sought to be dealt with.

MR SULLIVAN: Paragraphs 11 and 12, indeed - - -

GUMMOW J: It may help you.

MR SULLIVAN: Your Honour, indeed. Just for the benefit of my learned friends and the other members of the Bench, we do have copies of the Law Revision report here, if that would be - - -

GUMMOW J: So have we.

MR SULLIVAN: I am sorry. Thank you, your Honour.

GUMMOW J: We learn to be forearmed in these matters.

MR SULLIVAN: The notable thing about the Law Revision Committee Report, your Honours, is that it is a report of some just over eight pages and virtually seven of them all dealt with the contribution issue. Then sections 5(1)(a) and (b), or the reasons for them, are dealt with - - -

GUMMOW J: The committee included people like Lord Wright; it was not just people who wandered off the street.

MR SULLIVAN: Your Honour, with great respect, I am not criticising the eminence of the committee. But what is plain and what has been said by this Court and, indeed, by the Privy Council in Wah Tat is that the purpose of the English equivalent of section 5(1)(a) was to abolish, in all its aspects, or "in its entirety" is the expression which is used in Wah Tat and accepted by this Court in XL - - -

GUMMOW J: It seems to come to this: what is a situation where the statute that is then enacted upon its proper construction happens to go beyond remedying the mischief? Mr Jackson says, "Well, so be it; you construe the statute". If that is what it means, that is what it means. You do not read it down. You might read it up by looking to the mischief, but you want to read it down.

MR SULLIVAN: With great respect, not, your Honour. We do not want to read the statute down. We would respectfully submit - and we have dealt with this in our submission - that the words "if more than one action", which are the opening words to section 5(1)(b), limit the circumstances in which section 5(1)(b) applies.

GLEESON CJ: Is one of your submissions that if you look at the Law Revision Committee Report and you look at the mischief that was intended to be remedied, that explains why the text is in the language that it uses.

MR SULLIVAN: Precisely, your Honour. We say this in answer to Justice Gummow. Literally section 5(1)(b) has a meaning we contend for. If, as this Court has instructed us in a number of cases - and, indeed, as touched upon by your Honour Justice Kirby in the James Hardie v Seltsam Case - the purposive approach to interpretation is to be adopted, looking at the purpose - - -

KIRBY J: I think I was dissenting in that case.

MR SULLIVAN: But the purposive approach your Honour referred to in Seltsam to decisions of this Court in Bropho v Western Australia, which was a joint judgment of the Court - - -

GUMMOW J: We know the purpose.

MR SULLIVAN: What we are saying, your Honour, is to confirm what the Chief Justice, with great respect, just mentioned, that the purpose, indeed, supports the literal reading as opposed to detracts from it. The purpose of the Law Revision Committee we say is this: Brinsmead v Harrison was an unsatisfactory rule. In Wah Tat the Privy Council expressly said it. It had two justifications according to the judgments in Brinsmead v Harrison: first, to avoid a multiplicity of proceedings; secondly - and this is the days of jury trials - because of the risk that separate juries hearing separate cases may come to a different result about damages in the same case.

So the Law Revision Committee, in the paragraphs your Honour Justice Gummow has mentioned, was endeavouring, firstly, to abolish the rule in Brinsmead v Harrison, but, secondly, to endeavour to at the same time preserve its efficacy in respect of its mischief, namely, the multiplicity of proceedings.

GUMMOW J: Yes, but then the trouble is that in cases like XL v Caltex, paragraph (a) has gone beyond the literal words.

MR SULLIVAN: Paragraph (a) has gone beyond literal words but, with great respect - - -

GUMMOW J: Gone beyond the literal words, what, with a view to fulfilling the purpose or with a view to meeting something that the purpose fell short of understanding needed remedying?

MR SULLIVAN: We would adopt what fell from his Honour the Chief Justice, that when you go to paragraph (a) of the section, you have to read in not only the words "in a single proceeding", you also have read in the words "in separate proceedings". It is silent as to both. In subparagraph (b) it is not. There is an express reference to in more than one action. So that, in effect, your Honour, whilst there is a policy reason which is identified in XL for reading the words the way they do, and that is that what is the mischief being avoided was in respect of the same damage and, arguably - and I say this with respect, arguably - exemplary damages are not in respect of the same damage; it is a special damage, which is not common because of the conduct involved.

So in our respectful submission and for the reasons, first of all, advanced by the judgment of Justice Giles in the Court of Appeal, as we have tried to articulate in our written submissions, the construction issue is really one which my learned friend cannot possibly succeed upon, either on the literal approach, the mischief rule, or upon the approach of the purposive approach, which section 33 of the Interpretation Act and the decisions of this Court say must be adopted.

Now, your Honours, in that respect your Honour Justice Gummow has referred to the Law Revision Committee Report. Your Honours will be aware, of course, that the English equivalent of sections 5(1)(a) and (b) are now being amended or replaced.

GUMMOW J: Yes.

MR SULLIVAN: And your Honour Justice Gummow in your Honour's joint judgment with Justice Gaudron in the Seltsam Case refers to that.

GUMMOW J: They thought it was a piece of law reform in need of law reform.

MR SULLIVAN: As your Honours did in James Hardie v Seltsam. In any event, that report, which we have copies of also if your Honours regard it as relevant, confirms in paragraph 41 what that latter committee, in any event, thought was the purpose or mischief which the original provision was designed to achieve. It is in the same terms as we have put to your Honours and with which your Honours, with respect, have identified in the discussion with my learned friend.

KIRBY J: I would like a copy of that second report.

MR SULLIVAN: Yes. Might we hand that up to your Honours and I might just refer your Honours to it.

GUMMOW J: Now, I have an idea that in either Ontario or British Columbia there was a very thorough examination of this whole question about 15 years ago - - -

MR SULLIVAN: I apologise to your Honour of not being able to assist you at the moment with that.

GUMMOW J: - - - by their law reform people. It might be useful if someone could find that in due course.

MR SULLIVAN: Thank you, your Honour. May I refer your Honours, first of all, to paragraph 41 of this document, 6(1)(b), the reference there, of course, is to our equivalent 5(1)(b):

We doubt whether the sanction as to damages contained in section 6(1)(b) of the 1935 Act can be justified today. One of the main reasons for introducing it was that juries could not be relied on to assess damages in the same way. Whatever merit this argument may once have had has largely gone now that jury trial has ceased to be the normal method of trying civil actions. The other main reason for introducing section 6(1)(b) was to prevent multiplicity of proceedings but we think that this consideration is sufficiently covered by the special provision on costs, which we support and would like to see extended. We accordingly recommend that the limits set by section 6(1)(b) on the sum recoverable by execution in separate or successive actions should be removed. This does not, of course, mean that the plaintiff should be allowed to enforce judgments twice over for the same damages -

There is a reference there, your Honours will see, to a case. Morris v Perrot and Bolton is a double satisfaction case in equity.

KIRBY J: What type of case is it?

MR SULLIVAN: Double satisfaction on the equitable principle. It follows Morris v Robinson.

KIRBY J: But, presumably, that is based on evidence as to the extent to which there is double satisfaction?

MR SULLIVAN: Yes, your Honour, and, indeed, when we come to that part of the argument, we will be referring your Honour to authorities which make it quite plain, in our respectful submission, that what Justice Gummow said as to the origins of the common law rule about double satisfaction is correct. It started off as an equitable principle. The common law adopted - - -

GUMMOW J: It was not me, it Mr Justice Walsh in Castellan, I think.

MR SULLIVAN: Yes, he refers to Morris v Robinson as the basis of that which is, indeed, a basis for saying that. That, therefore, is a rule which must be one which reflects upon the conscience of the person who is seeking the compensation.

GUMMOW J: It then becomes bound up with the particular circumstances which one does not know here.

MR SULLIVAN: Well, your Honour, it does or does not - - -

GUMMOW J: One does not know yet, I should say.

MR SULLIVAN: Yes. May I say this, your Honour, in respect of that - and I am jumping away for a moment from the logical sequence of my submissions in respect of the statutory interpretation point - but we would respectfully submit in response to a question your Honour the Chief Justice asked of my learned friend, Mr Jackson, that the conscience of a person can be relevantly bound for the purpose of the rule of double satisfaction at least in one of two ways: one, where the person has agreed that the amount he is to receive is in full satisfaction of all his claims against all possible people because that is not much different to someone, for whatever reasons, if you like, suing someone but deciding for reasons best known to themselves to limit the amount of money, maybe because it is easier to be proved. If they sue for $100 when they might be owed $150 because they can easily prove $100, it goes to a judgment and it is assessed and they get paid that amount, there would be no question that they could not, therefore recover more. Indeed, that is the case of Chamberlain, which has been referred to by my learned friend.

The second way in which the conscience would be bound would be if, in fact, the recovery of the second amount would be to receive more than is the proper full compensation - to use the language your Honour Justice Gummow used in Thompson, where it can be shown that it is a matter of fact, the loss has been fully recouped. Now, either way, equity would say, in our respectful submission, this is unfair, you are being overcompensated and the principles of double compensation would come into play.

GLEESON CJ: Lord Hope seemed to want to reject the second of those two alternatives, did he not?

MR SULLIVAN: He did, your Honour.

GLEESON CJ: Yes.

MR SULLIVAN: He did, in our respectful submission, for pragmatic policy reasons, namely, that you would have a hearing within a hearing, effectively, each time as to whether or not there had been full satisfaction. But may I say he did not refer to a number of cases, which we can refer your Honours to and which we have copied over the luncheon break where it appears that this doctrine has been - - -

GUMMOW J: Are they in your written submissions?

MR SULLIVAN: No, they are not, your Honour. Well, Morris v Robinson is but that is - but, your Honours, may I then, well, I will come to the double compensation point because what - let me just sum up my advance summary of that point. Here, in our respectful submission, if you have either made it clear that you are reserving your rights against another joint tortfeasor, or it is clear that you have not received the full amount of your claim, there cannot be any application of the rule of double satisfaction. Here, there has been an express reservation of the proceedings against Mr Baxter - - -

GLEESON CJ: Where is that? I did not notice that.

MR SULLIVAN: Your Honour, not only by virtue of the fact that the proceedings have been maintained, but also a passage which my friend referred your Honours to but did not actually read out, I think. At page 20 of the appeal book, in the judgment of Master Harrison, your Honours will see at line 25 that paragraph 4 of the terms of settlement stated:

That the first defendant undertakes to the plaintiff to take no further part in these proceedings except as he may be required to by law.

The proceedings were against the two joint tortfeasors. The clearest possible indication of an intention to continue to press the claim in respect of a joint tort can.....the other tortfeasor.

KIRBY J: I know we are being asked to deal with it on this rather abbreviated set of facts, but if one is looking to what conscious requires, it is a very abbreviated foundation for doing so. One might have thought there were discussions between the parties or between the solicitors, and all sorts of dealings between them at the time of the settlement. That would normally be the case.

MR SULLIVAN: Yes. Your Honour, might I just, in response to your Honour, take your Honour to appeal book page 18, line 35. There were, in fact, two affidavits relied upon which dealt with those circumstances, that is, Mr Connellan and Ms Lindsay. They were before the Court of Appeal - - -

GUMMOW J: They are not reproduced, I see.

MR SULLIVAN: They are not reproduced, your Honours. Again, we have them here and we can make them available to the Court.

GLEESON CJ: Well, once again, this is not a question of evidence, we - - -

MR SULLIVAN: They are part of the record, your Honour.

GLEESON CJ: But I am right in thinking, am I not, that the decision of the Court of Appeal leaves open the capacity of Mr Jackson to rely on any additional facts? All the Court of Appeal decided is that the bare facts stated in certain paragraphs of the defence do not defeat your claim.

MR SULLIVAN: Yes, your Honour. Your Honour is correct.

CALLINAN J: And that you have to bring into account the amount of money that you have recovered.

MR SULLIVAN: Yes, your Honour, and indeed, that last point your Honour Justice Callinan raises is an important feature when your Honour Chief Justice Gleeson posed the question to my learned friend, "On what does the conscience bite?" The two possibilities your Honour mentioned. The second was, is it on the fact that you may receive, by suing twice or settling once and recovering another judgment, more than you are entitled to?

GUMMOW J: Now, how does that stand with Lord Hope on the second point?

MR SULLIVAN: The second point does not stand with Lord Hope - - -

GUMMOW J: I am not saying it is a bad point.

MR SULLIVAN: No. But the second point also, if I might respectfully say so, cannot, as a matter of practice, arise, for the reason just mentioned by Justice Callinan, because the theory of the law is that if damages are assessed by a judge and awarded, then that is the full compensation because, irrespective of what is claimed, the court has said, "This is your full verdict".

If you get that verdict and you have to offset from it the amount you have already received by way of a settlement sum, by definition you cannot be receiving more than the full amount of what you are entitled to. So, we respectfully submit that that really overcomes the notion that there is some possibility of double compensation by way of a settlement if you are allowed to proceed to judgment in the second proceeding.

CALLINAN J: I think you made the concession, Mr Sullivan, is that not right?

MR SULLIVAN: That is unlike me, your Honour.

CALLINAN J: I am sorry?

MR SULLIVAN: I was being flippant, your Honour. I said it was unlike me for making the concession, but I am sorry, I - - -

CALLINAN J: I think you did. I think Justice Giles records that in the reasons, does he not?

MR SULLIVAN: I think I made a concession to the effect - I certainly do not disagree with anything that is in Justice Giles' judgment. I made a concession that we would treat this as judgments having been entered, your Honour, yes.

CALLINAN J: I think I am right about that. Assume I am for present purposes.

MR SULLIVAN: Yes, your Honour.

CALLINAN J: Was it a concession that did no more than reflect your legal obligation?

MR SULLIVAN: Your Honour, in our respectful submission, that is the case. We have an obligation. To have the case argued the way we sought to have it argued as a final determination, for the very reason your Honour the Chief Justice anticipated, we had to admit the truth of the pleading to raise the issue as not a hypothetical question.

CALLINAN J: It is at paragraph 86 on page 99:

As they acknowledged, the opponents will have to give credit for the $250,000 - - -

MR SULLIVAN: Yes, your Honour. That is, with respect, quite clear, and indeed it is quite clear and we can take your Honour to the cases on it and they are referred to by Justice Giles, in any event, in his judgment as to the obligation to give credit.

GLEESON CJ: But it is one thing to argue the case on the common ground that the facts alleged in the defence are true - and that has been done and you have won on that point - but that leaves open the possibility that there are additional facts that could be alleged in an amended defence which, when added to the facts that are already there, would give Mr Jackson another argument on double satisfaction.

MR SULLIVAN: It does leave open that situation, your Honour, as it does virtually in any litigation, with great respect, the power to amend. This Court, of course, in the JL Holdings Case has said that subject to questions of irreparable prejudice one can amend at any time.

GLEESON CJ: But what has been established in the Court of Appeal, rightly or wrongly, is that those paragraphs in the defence do not operate as a knockout punch against your case.

MR SULLIVAN: Yes, your Honour, that has been established, in our respectful submission, and it is a point of importance for the reasons that have exercised your Honours' minds, as indicated by the discussions with my learned friend and me to date.

GUMMOW J: The law reform authorities, Mr Sullivan, are mentioned in footnote (196) in Thompson.

MR SULLIVAN: I am obliged to your Honour. Thank you. Your Honours, may I resume in respect of responding to my learned friend's submissions and first of all responding to what my learned friend has said about the interpretation issue, apart from the general and broad submission I have just made to your Honours about that.

My learned friends rely, and have to rely, very heavily on what was said by various members of the English Court of Appeal in Bryanston. For the reasons - again, with respect - articulated by Justice Giles, we respectfully would submit that that is a very insecure foundation. But there are a number of features we would like to draw your Honours' attention to in those judgments, which, in our respectful submission, would mean that your Honours would not regard that as a satisfactory basis at all for construing section 5(1)(b) the way my learned friend would wish you to.

May I first take your Honours to the judgment of Lord Denning and note - this is only a small point, but that Lord Denning and Lord Justice Lawton both decided the case on the qualified privilege question, so that what they said in respect of section 5 or section 6 of the Law Reform (Miscellaneous Provisions) Act 1970 was obiter. They decided that Mr de Vries could not be liable in respect of the alleged defamation because there was a situation of qualified privilege. And they then went on to deal with the matter by way of obiter, that if that had been a different result - now, that appears quite plainly from the judgment of Lord Denning at page 721, between lines C and D. That is, the discussion upon the assumption that the occasion was not privileged.

That is the first matter but, in our respectful submission, there are a number of other features of this judgment which demand attention. First, Lord Denning, in the passage my learned friend referred to at page 722, letters C to D, talks in terms of the statute providing a bar or a barrier to judgment if the first judgment is satisfied. My learned friend very properly - and again, as one expects from him - conceded that the assertion that Wah Tat Bank stood for that proposition was unfounded, but additionally, on no reading of section 5(1)(b) or its English equivalent could that statement of Lord Denning's be regarded as being correct. But again, my learned friend conceded it.

Section 5(1)(b) on any reading of it does not bar the taking of further proceedings or going on against someone else or obtaining a judgment against someone else. What it does is to bar arguably recoverability in respect of any second judgment so obtained. So that, with great respect, that broad brush comment is one which is not on any view of it justified by the language of section 5(1)(b) whether read literally or purposively or if there is a difference by having regard to the mischief.

HAYNE J: It also deals with a costs consequence, and I wonder whether that has any significance in construing it. Section 5(1)(b) says that the plaintiff:

in any of those actions, other than that in which judgment is first given . . . shall not be entitled to costs -

et cetera. How is that to be applied in a case, if 5(1)(b) applies to such a case, of action against two joint or several tortfeasors?

MR SULLIVAN: In the one proceedings does your Honour mean?

HAYNE J: Yes.

MR SULLIVAN: In our respectful submission, the words your Honour indicate are another strong reason for indicating that the section is talking about successive proceedings, because it would be, with respect, very difficult in the example postulated by your Honour to know how one could apply it where there is a single action. To take the example given by Justice Callinan again where one party may have a defence of contributory negligence, so that you have arguably two judgments, one against the person liable in contract but who is a joint tortfeasor also for a full amount and a discounted amount because of contributory negligence against the employee who could only be liable in tort. The case is run, not settled, against both parties in one proceeding.

At the end of the day, it would seem that, somehow or other, in respect of one of those actions, if this be right, there is a prima facie non-entitlement to costs. That cannot be right, with great respect. We say that those words, in other words, in answer to your Honour Justice Hayne, are another strong clue to the fact that section 6(1)(b) was concerned with a multiplicity of proceedings of the costs involved and, indeed, that is what Brinsmead v Harrison says. That was one of the mischiefs that an unscrupulous attorney may go and bring, separate proceedings against separate defendants all the time, just to rack up costs. It appears that that sort of mischief was perceived as far back as that. So those words, we say, are inserted expressly in the context of being a separate proceedings and another factor in the construction of it.

Your Honours, the next feature of Lord Denning's judgment that we would specifically draw your Honours' attention to is his curious approach, with great respect to his Lordship, as to how much can be recovered where there is a judgment which reflects a settlement. Your Honours may be forgiven from listening to my learned friend that Lord Denning's view was that section 5(1)(b) meant that you could recover no more in respect of a second action than was awarded to you or you had agreed to accept in the first proceeding. But Lord Denning did not conclude that at all.

His reasoning, indeed, in that regard is set out from page 722G to 723M, and what he does there, in our respectful submission, again casts doubts about the reliability of the reasoning in this judgment. His Lordship refers to a rule in Heydon's Case and Broome v Cassell, which is long established and has been referred to by your Honours in Thompson's Case, then having done that, turns to consider the proposition - I am sorry, I withdraw that. At page 722E he discusses the second proposition:

It is this: in every joint tort, there is only one damage. No matter whether the wrongdoers are sued in successive actions or in a single action, the damage done to the plaintiff is one and the same damage. Once that damage is assessed by the court in an ascertained sum, the court cannot assess it at a different sum either in the same or later proceedings.

His Honour goes on to quote cases including Broome v Cassell. That Broome v Cassell, of course, was expressly not followed by this Court in this regard in XL, but then his Honour goes on to say:

This second proposition was considered by Lord Porter's Committee on Defamation (1948 Cmnd 7536). But only in regard to payment into court. A problem had arisen when one of the two defendants, who were joint tortfeasors, paid money into court. The committee made recommendations (in paragraph 122) which have been made law by RSC Ord 82, r 4. The law now is that the plaintiff can take the money out in satisfaction of his claim against the defendant, and continue with the action against the other. Even after the money is taken out, however, there is to be only one assessment of damages. If the damages are assessed at more than the sum paid into court, the plaintiff only gets the excess. If the damages are assessed at less, the plaintiff gets nothing and will have to pay the costs.

Now, that is a proposition which I remind your Honours, with great respect, results from a rule of court made subsequent to 1948. His Honour then says:

In the present case, the question that arises is this: suppose that the plaintiff settles with one of the wrongdoers before judgment by accepting a sum in settlement; or suppose that by consent an order is made by which the plaintiff accepts an agreed sum from the one tortfeasor and discontinues against him, but goes on against the other. I believe this to be a new point. It should be solved the same way as the payment into court was solved. If the plaintiff gets judgment against the remaining tortfeasor for a sum which is more than the sum already recovered . . . he is entitled to enforce it for the excess over which he has already recovered. But, if he gets judgment for less than he has already recovered, then he recovers nothing against the remaining tortfeasor and should pay the costs. I do not think that it should depend on whether the sum was paid under a covenant not to sue, or a release, such as were discussed in Duck v Mayeu . . . That is an arid and technical distinction without any merits. It is a trap into which the unwary fall but which the clever avoid. It should be discarded now that we have statutory provision for contribution between joint wrongdoers. The right solution nowadays is for any sum paid by the one wrongdoer under the settlement to be taken into account when assessing damages against the other wrongdoer. If the plaintiff recovers more, he gets the extra. If he recovers less, he loses and has to pay the costs. And as between the joint wrongdoers themselves, there can be contribution according to what is just and equitable; see section 6(1)(c) and (2) -

Now, his Honour appears to be saying that that is the construction you apply to section 5(1)(b) of the Act.

In other words, that you can proceed in second proceedings, and by reference to this analogy to this 1948 rule, you can, in fact, recover more but you have to make a provision for the surplus. He is getting confused, in my respectful submission, between the rule against double satisfaction in section 5(1)(b).

GLEESON CJ: I notice that in argument in that case reference was made to the 13th edition of Clerk & Lindsell on Torts and at page 338 in a footnote to paragraph 637, footnote 85, there is an assertion as to the operation of the corresponding English provision that appears to be in line with your argument. It says, "Formally, if two joint tortfeasors were sued together and the plaintiff proceeded to final judgment against one in default of defence before the trial of the case against the other, the right of action against the other was barred. Section 6(1)(a) removes that bar but the limit prescribed by section 6(1)(b) does not appear to apply as only one action has been brought."

MR SULLIVAN: Yes, your Honour. Well, we would respectfully submit that that is the clear law, the clear interpretation.

HAYNE J: While we are on that subject, so much seems to be, perhaps, the view of the Law Commission Report No 79, see particularly paragraphs 18 and 37.

MR SULLIVAN: Yes, and also paragraph 36 of the same one, I think, your Honour. Yes, we respectfully agree with that. If I might just revert to the point I was making about Lord Denning's judgment. With great respect, on no view of it, not even on the most optimistic view of it from my learned friend's point of view, can section 5(1)(b) be interpreted the way that Lord Denning would have it in the passage I have just taken your Honours to. But what it can be, with great respect, what that passage is relevant to, is a principle of double compensation, double satisfaction. That is how Justice Giles, of course - when he said in his judgment that when you analyse Bryanston, what their Lordships, with respect, appear to be doing is barely articulated principles of double satisfaction.

Now, your Honours, the next point we wish to make about Lord Denning's judgment, with great respect - I am sorry, the other point, of course, is that that approach to construction of section 5(1)(b) is just untenable, with great respect. You cannot construe a statute which was enacted in 1934 or thereabouts by reference to what rules of the Supreme Court were made in 1948. If one is searching for the intention of the legislature as at 1934, you cannot use - - -

GLEESON CJ: You would have to say that the statute changed its meaning in 1944.

MR SULLIVAN: Yes, your Honour, which could not, in our respectful submission, be done. It could not be suggested, with great respect, that there was an implied repeal of the statute by reason of delegated legislation, which rules of court are, in 1944.

The next point we would make, with great respect, about Lord Denning's judgment is that having eschewed "arid and technical" distinctions that if section 5(1)(b) is to be interpreted the way he would apparently have it, then it will be a situation where "arid and technical" distinctions will prevail because one can settle proceedings by way of obtaining a release and get a sum of money and then proceed against another person and get a larger sum of money and section 5(1)(b) would have no application.

So the mere fact of judgment pursuant to a settlement would be an "arid and technical distinction" of the very kind which he, in our respectful submission, eschews and, of course, in our respectful submission, that would not be an interpretation which the court would rush to adopt.

GLEESON CJ: Is that a convenient time, Mr Sullivan?

MR SULLIVAN: It is, your Honour.

GLEESON CJ: We will adjourn till 2.15.

AT 12.45 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.17 PM:

GLEESON CJ: Yes, Mr Sullivan.

MR SULLIVAN: Thank you, your Honour. Your Honours, I was dealing with Bryanston and the matters which we would respectfully put before the Court as to why the judgment of Lord Denning should be treated with some reservation. Indeed, we would respectfully submit the Court should not adopt The reasoning of his Lordship. Likewise, we would submit that the reasoning of Lord Justice Diplock, as his Lordship then was, is fraught with a number of difficulties.

First, may we indicate this, that at page 730A of Lord Denning's judgment he makes the same - - -

GLEESON CJ: Just a minute, you say that Lord Diplock's judgment is fraught with difficulties?

MR SULLIVAN: Yes, Lord Justice Diplock's - - -

GLEESON CJ: Lord Diplock, actually.

MR SULLIVAN: At the time, it think it was - I am sorry, I apologise, your Honour, yes.

GLEESON CJ: Yes?

MR SULLIVAN: Your Honours, my learned friend, Mr Jackson rightly acknowledged Lord Denning had attributed support for his reasoning from Wah Tat incorrectly. The same is true, in our respectful submission, of Lord Diplock. Lord Diplock at the foot of page 729H says:

But the actual publication of the two clerical employees was a joint tort only, in respect of which Mr de Vries and Lord Carbery were tortfeasors. I had found the question whether the cause of action in respect of it against Mr de Vries survived the judgment against Lord Carbery a difficult one; and had written this part of my judgment before the decision of the Privy Council in Wah Tat . . . Although that judgment is not binding upon this court but is persuasive only, I gain reassurance from the fact that their Lordships reach the same conclusion as I had and that their reasoning is substantially the same as mine.

Now, to the extent, in our respectful submission, that, if at all, Lord Diplock is seeking to draw comfort as to what he says about the statute generally in subparagraph (b) from what is said in Wah Tat, in our respectful submission, support is not gained from Wah Tat for the reasons acknowledged by my learned friend, Mr Jackson.

GLEESON CJ: Judgment in Wah Tat was given on 27 January, and judgment in Bryanston was given on 14 February.

MR SULLIVAN: Yes, your Honour. And I am not being, with great respect, to a judge such as a great jurist as Lord Diplock - I am not being capriciously critical, I just wish to point that out.

KIRBY J: Lord Justice Lawton was not very impressed with Wah Tat, at 738.

MR SULLIVAN: No, indeed. His Honour curiously - and I will come to that in one moment, your Honour - appears to apply a rule of construction which is novel, that he would interpret in a particular way because it prevents what he perceives to be an injustice, and that is - - -

GLEESON CJ: Wah Tat could not have been referred to in argument in Bryanston, which finished on 25 November of the previous year.

MR SULLIVAN: No, your Honour.

GLEESON CJ: In fact, Wah Tat was argued later than Bryanston was argued.

MR SULLIVAN: I am indebted to your Honour. Your Honours, the next thing we would respectfully draw your attention to in respect of Lord Diplock's judgment, is that, on his interpretation, the effect of the statute was not to abolish the rule in Brinsmead v Harrison in respect of a release. Of course, this Court, in Thompson's Case [1996] HCA 38; (1996) 186 CLR 574, expressly disapproved that reasoning of Lord Diplock in the joint judgment that occurs at pages 583 to 584, where their Honours, after discussing it in full - their Honours the Chief Justice, Justice Sir Gerard Brennan, Justices Dawson and Toohey, having quoted from Lord Diplock's judgment at page 732, lines B to C, then at page 584 expressly disapprove that statement of opinion.

Likewise, your Honour Justice Gummow, at page 615, about halfway down the page, of Thompson, was of like view in respect of Lord Diplock's expression of opinion. The next point we would say about Lord Diplock's judgment is that we respectfully adopt what was said by the Court of Appeal in Justice Giles judgment at page 82 of the appeal book at paragraph 54, namely, that Lord Diplock, although apparently seeing a casus omissus in respect of section 5(1)(b), "did not", as his Honour notes there:

extend the ambit of section 5(1)(b) in relation to recovery in order to deal with it -

as Justice Giles says -

In fact the occasion to do so did not arise.

In our respectful submission, when one looks at that part of the judgment of Lord Diplock, he does not deal with it at all.

The last point we would make, with great respect, in respect of Lord Diplock's judgment is that no recognised approach to construction appears to justify the interpretation. As with Lord Denning's judgment, with great respect, it does not seem to be a literal interpretation. It does not appear to address the purpose of section 5(1)(b) nor the mischief to which it is addressed. In our respectful submission, it therefore does not appeal as an approach which should be adopted by this Court.

Lord Justice Lawton does not deal at all, in our respectful submission, with the proper interpretation of paragraph (b). Indeed, his reasoning, if I may summarise without doing his Lordship any disservice, appears to be that, although grammatically and literally section 5(1)(a) does not achieve the result that the Privy Council stated it did in Wah Tat, nevertheless, for reasons of justice it should extend. By parity of reasoning, for reasons of justice in the present case, we respectfully submit it should not extend to paragraph 5(1)(b).

The final point we wish to make about section 5(1)(b), the construction, is this, your Honours. This Court recognised in Thompson that a release from cause of action does not preclude one from suing another joint tortfeasor in Thompson's Case.

Quite plainly, if one obtained a release, one could sue another joint tortfeasor without running the risk under section 5(1)(b) because the release would not in any shape or form be an action or a judgment. So that section 5(1)(b) would not apply where the first matter is settled by way of release but without any judgment. It is an artificiality and a triumph of form over substance, in our respectful submission, if a similar result is not achieved where the settlement is reflected in a consent judgment. Indeed, to use some language from the joint judgment of Justice Gaudron and your Honour Justice Gummow in Seltsam, the only way my learned friend's construction of section 5(1)(b) can be sustained is to ignore the literal interpretation, to distort the language.

In our respectful submission, to distort the language of section 5(1)(b) in the present case would not be to avoid a capricious result but to create one because you would have the capricious result created that a consent judgment would give rise to 5(1)(b) but a release would not. As a matter of policy, we would think that that should not be adopted. Equally, we would submit, as a matter of policy the Court should encourage people if it is available as a matter of construction to obtain a consent judgment as opposed to a mere release, for this reason.

If a consent judgment is obtained, then in the usual course of things, the court will not have to be troubled again. If for some reason or other the judgment is not satisfied, the court processes of execution can be used officially, whereas, of course, if there is a non-performance of an agreement settlement comprised of the release, then the court's officers have to be invoked to enforce the agreement. So another matter of policy, in our respectful submission, is in favour of encouraging parties to obtain consent judgments when their proceedings have settled as opposed to merely seeking a release. For those reasons we would respectfully submit that the Court of Appeal's judgment in respect of the first point, the statutory interpretation point, was correct.

HAYNE J: Just before you depart from that, can I understand one aspect of your contentions about construction. If we confine attention for the moment to the legislation from which this is derived, that is if we confine attention to the UK, the word "action" was a word used with a defined meaning in the Judicature Acts and in the rules of court and was used in contradistinction to cause of action, claim and other such matters which were regulated by rules. As I would understand it, your contention is that "action" used in these provisions should be understood in the sense in which it was defined in those sources as being a civil proceeding commenced by writ or other kind of process contemplated by the rules, but is that right?

MR SULLIVAN: Yes, your Honour. In practical purposes it makes no difference, if I might say so, for this reason, that when we were talking about joint tortfeasors, when the concept of "action" is raised, the common law said you either sue them together in one proceeding and that is one action, or you sue them separately and that is a separate action. So by definition a separate action, that circumstance, is a separate proceeding commenced by a separate writ.

HAYNE J: But construction of these provisions might be understood against a background where they have sensible operation to do in the case of joint torts. There are still some difficulties about the way in which you deal with 5(1)(b) even in the case of joint torts but the problems become particularly acute in applying 5(1)(b) to concurrent tortfeasors and applying 5(1)(b) other than to successive proceedings in the court.

MR SULLIVAN: We would respectfully accept and adopt what your Honour says and it is a reason for, in our respectful submission, the very deliberate use of language by the draftsman of the provision by starting off "if more than one action". We do not see it as a casus omissus, with great respect, as Lord Diplock did at all. We say it was an intentioned matter for the problems that are adverted to by your Honour.

HAYNE J: I am not quite sure what his Lordship meant by a casus omissus in this case. The hypothesis for the argument is that the statute is engaged, in this paragraph, by there being more than one proceeding. What the omission is, is not, at the moment, self-evident to me.

MR SULLIVAN: Your Honour, with great respect, I may well be wrong, but I have read Lord Diplock's judgment as intending that the casus omissus is the failure of subparagraph (b) to make it explicit that it applied to a single action as well as more than one action. If that is the case, and for the reasons I have indicated, we would not accept it.

HAYNE J: But is there any difficulty for you presented by the fact that this is a New South Wales statute, true it is based on English statute? Can one trace the genealogy of the term "action" in this context as one could in the UK?

MR SULLIVAN: Well, your Honour, yes, one may. First of all, we would say that, for the reasons we have given in our written submissions and the cases, the word "action" at common law has the same meaning and the common law of New South Wales is the same. Secondly, in section 11 of the Limitation Act of New South Wales, "action" is defined very much in the way that it is defined in England - - -

GLEESON CJ: What is the year of that Act?

MR SULLIVAN: Your Honour, it is 1969.

GLEESON CJ: How does that aid the construction of an Act of 1946?

MR SULLIVAN: Your Honour is perfectly correct, but I think, if I my memory serves me right, I cannot assist your Honour directly. Its preceding Act had a similar provision.

GLEESON CJ: I thought you might have been on stronger ground in pointing out that in 1946 New South Wales was pre-Judicature Act - - -

MR SULLIVAN: I am grateful to your Honour.

GLEESON CJ: - - - and the forms of causes of action and pleading that we had in New South Wales in 1946 were the old style English procedures that might give added weight to a suggested meaning of action.

MR SULLIVAN: Yes.

HAYNE J: Would they and, if so, how?

GUMMOW J: You would have to look in the Common Law Procedure Act of 1899, would you not?

MR SULLIVAN: Yes, well, I have not, unfortunately, done that.

HAYNE J: I think what you refer to as the common law meaning of "action", if you track it back hard enough and far enough, may stop at 1873 with the Judicature Act in the UK. What is now understood as the common law meaning of "action" may be, in truth, a statutory definition for that limited purpose.

MR SULLIVAN: Your Honour, I think I might be able to help in that regard in one respect. As I understand the English forms of action, a form of action was one which had to be commenced by a particular writ, so that the forms of action pre-Judicature Act you had to have a writ - I will not try the Latin tags - but writ of trespass, and so on, that was an action, and that the various forms of action identified by Maitland, for instance, there was a specific writ that you had to institute - - -

GLEESON CJ: Yes, in 1946 you would have commenced a proceeding in the common law in the Supreme Court of New South Wales by a writ which would be specially endorsed if you were claiming a liquidated sum, or not specially endorsed if you were claiming an unliquidated sum, and then you proceeded by a declaration which set out your cause of action.

MR SULLIVAN: For that reason, therefore, each "action" had to be commenced by a separate writ, in our - - -

HAYNE J: You may be entirely right, of course, Mr Sullivan. All I am saying is I would be assisted by some demonstration of how you are right, rather than the - - -

MR SULLIVAN: Thank you, your Honour.

GLEESON CJ: You would have to go to the Common Law Procedure Act, I should think.

MR SULLIVAN: I would have to go to the Common Law Procedure Act on that. Your Honour - - -

GLEESON CJ: And Mr Rath's book on "Principles and Practice of Pleading", which is pre-Judicature Acts.

MR SULLIVAN: Well, if we may have leave to look at that and to put in a very short - - -

GLEESON CJ: Do you know the volume I am speaking of, it is in a green volume?

MR SULLIVAN: I do know Mr Rath's - it is a little blue book, I think, your Honour, is it not?

GUMMOW: Green.

MR SULLIVAN: Green, yes. I do know that book, and if we may have leave, then, to look at that and put in some very short written submissions appropriately.

GLEESON CJ: Thank you.

MR SULLIVAN: May I say this, if I could hand up to your Honours a case we refer to on our list of authorities being "The Koursk", there is a discussion of what is meant by the term "action" in England; this is, however, post-Judicature Acts in England because it was a 1924 decision. I intended to refer your Honours to this case also on the principle of double satisfaction, but if I may for the moment confine myself to how it discusses the concept of action, may I just give you a very brief summary of the facts. This was a collision between three ships in convoy in World War I and, unfortunately, one ship was hit by two other ships successively and it is the seminal case which discusses the distinction between concurrent torts and joint torts and, indeed, is heavily relied upon, with respect, by this Court in Thompson's Case. However, in "The Koursk" there is a statement in the leading judgment of Lord Justice Bankes at page 155 as to the concept of actions. I am sorry, I might have had the wrong page there.

KIRBY J: The top of 162.

MR SULLIVAN: I am sorry, your Honours, my note is wrong on this and I do apologise. Yes, if I might take your Honours to page 155, the judgment of Lord Justice Scrutton, his Honour discusses the concept of the merger of cause of action in respect to the maxim "transivit in rem judicatam," and then says this, that maxim:

which was a bar, partly on positive decision, and partly on the ground of public policy, that there should be an end to litigation, and that there should not be a vexatious succession of suits for the same cause of action.

Now, this pre-Judicature Acts, the rules discussed.

The basis of the judgment was than an action against one on a joint contract was an action on the same cause of action as that in an action against another of the joint contractors, or in an action against all the joint contractors on the same contract.

So there were three "actions" there where there were two joint contracts. One action against one joint tortfeasor would be one action and one against another would be two, or you could have a third action of a different sort, would one against both. They are all basically the same cause of action, but because they needed different writs, in our respectful submission, they are all actions, separate actions. But I will look up the matters which your Honour has referred me to.

May I then turn to the principle of double satisfaction relied upon by my learned friend, and, first of all, we respectfully would take your Honours or refer your Honours very briefly to what your Honour Justice Gummow said at page 608 of Thompson's Case. Namely, that the principle of double satisfaction works, to our respectful submission, upon the premise of a full recoupment of the loss. It is necessary, in our respectful submission, to identify the origins of the principle, and when those are identified, in our respectful submission, it is seen that it is equitable in nature, and the principle does operate on someone being, in effect, unjustly enriched by getting more than he or she should have got, and that, in fact, it does not operate or should not be regarded as operating where, say, there is a settlement for less than someone is entitled and that could be shown. The case which most conveniently illustrates that is the case of Morris v Robinson, which we refer to in our list of authorities, your Honours, and we hand copies of that to your Honours now.

Your Honours, the facts in Morris v Robinson can be shortly summarised. There was a ship carrying a cargo of indigo, which I understand was a form of blue dye obtained from India from a plant called an indigo plant, I assume. The ship was damaged by the perils of the sea, and the master of the ship stopped at a particular port and sold the indigo and was, therefore, sued for conversion. Under the terms of the contract between the charter party, the limit of liability was the extent for any claim of tort against the master or the owner of the ship was the extent of the value of the ship and her freight, and that appears from the English reports from the foot of page 708 where it is said, the last four lines:

the plaintiffs have obtained a verdict against the said owners in that action, under which they will be entitled to recover from the owners to the extent of the value of the ship and her freight; but it is admitted that the sum which they will receive therefrom will not exceed 1500l, and the 72 chests mentioned in the first bill of lading, were of the value of 7000l and upwards.

So there was a shortfall of some [sterling]5,500.

What the plaintiffs did then was to sue the purchasers of the indigo, which had been sold by the master of the ship, for the balance. An argument was that you could not do that; you have already sued the master - it is limited liability. Two reasons were given for rejecting the claim. If I could take your Honours to the English Report at page 710, in the judgment of Justice Bayley. He sets out the principles in respect of which the master may sell the cargo and concludes that indeed, in these circumstances, they were not able to sell the cargo, so it was an unlawful sale. Then, about halfway down the page, Mr Justice Bayley says as follows:

Then as to the seventy-two chests, the facts stand thus: the plaintiffs brought an action against the owners for the breach of their duty as carriers, with a count in trover. The jury might, on that count, have given the full value of the goods in damages, but their power on the special counts was restricted to a certain amount, and the verdict was restricted to that amount. No judgment has been entered up, and therefore there has been no actual satisfaction. It is argued that the plaintiffs had merely an election to sue the owners for misconduct of the captain or the defendant for the value of the goods. But independently of the 53 G 3, c 159, the jury were not bound to make the full value of the goods the measure of the damages in the former action. They might reasonably give small damages, on the ground that an action would lie against the purchasers. If concurrent actions had been brought, that against the owners could not have barred the other; why then should it have that effect because they have been brought at different times? If indeed the plaintiffs were to recover the full value of the goods in each action, a Court of Equity would interfere to prevent them from having a double satisfaction -

That, we respectfully submit, is the nub or the start of the rule of double satisfaction -

but there is nothing in the former action which can, in a Court of Law, prevent the recovery in this.

Mr Justice Holroyd said:

I am of opinion that all the questions that have been raised must be decided in favor of the plaintiffs. Freeman v East India Company, and Reid v Darby, shew that the captain has not any authority to sell the cargo, unless in cases of absolute necessity, even although the sale be sanctioned by a Vice-Admiralty Court. With respect to the action against the owners, the verdict recovered in that is not in law sufficient to bar or diminish the plaintiffs' claim in this proceeding. The very ground of that action was, that the sale was wrongful; it cannot therefore be a ratification. But where in trover the full value of the article has been recovered, it has been held, that the property is changed by judgment and satisfaction of the damages. Unless the full amount is recovered, it would not bar even other actions in trover. Here it is plain that the full value had not been recovered on the count in trover; the value of the goods mentioned in that action was 7000l, the verdict 1500l, to which sum the verdict on the other counts was necessarily limited. The probability of a recovery in an action against this defendant might keep down -

Mr Justice Littledale at page 711 was of the same opinion.

CALLINAN J: The second part of section 5(1)(b) really enacts the equitable rule, does it?

MR SULLIVAN: No, your Honour, in our respectful submission, because the equitable rule of double satisfaction was looked at: was there full compensation being awarded?

CALLINAN J: But does not the second part of paragraph (b) say that:

damages shall not in the aggregate exceed the amount of the damages awarded by the judgment first given - - -

MR SULLIVAN: Yes. Your Honour, if that was confined to a judgment given after an assessment of damages by a court in law, yes, it would reflect the common law but it does not in respect of a settlement, we would respectfully submit, because a settlement may well - - -

CALLINAN J: You would still need the equitable rule for a settlement?

MR SULLIVAN: Yes, your Honour.

CALLINAN J: It only deals with judgment?

MR SULLIVAN: Yes, your Honour, judgments after assessment for full hearing.

GLEESON CJ: How would 5(1)(b) apply to a case in which the facts were identical with Morris v Robinson?

MR SULLIVAN: They are not joint tortfeasors, your Honour, for a start, but that does not matter of course. In 5(1)(b) it would be a separate action and 5(1)(b) would apply, it would seem, so that in the second action the plaintiff would be limited.

GLEESON CJ: So 5(1)(b) would reverse the decision in Morris v Robinson?

MR SULLIVAN: Yes, your Honour, it would seem to.

HAYNE J: That is the difficulty from extending, as they did in 5(1)(b), its operation to several tortfeasors.

MR SULLIVAN: And it is a reason, in our respectful submission, for not extending beyond the necessary limits the scope of section 5(1)(b).

HAYNE J: Is it the case that with joint tortfeasors there could be circumstances in which the damages assessed against each may differ?

MR SULLIVAN: Your Honour, only subject to the suggestion by Justice Callinan about contributory negligence and the availability of it. I cannot think of another - - -

HAYNE J: But if they are joint tortfeasors.....should be available against both.

MR SULLIVAN: Yes, your Honour is perfectly correct.

GUMMOW J: That is by virtue of statute.

MR SULLIVAN: By virtue of statute.

GUMMOW J: Not common law.

MR SULLIVAN: That is right, your Honour, yes.

GUMMOW J: So you would not get that problem at common law.

MR SULLIVAN: No, your Honour, you would not at common law. Your Honours, in my respectful submission, no, because both the damage and the tort have to be the same for there to be a joint cause of action, so it is hard to see how you get different amounts - - -

HAYNE J: The only circumstance I can think of is the contractually stipulated limitation on liability of one but not of the others.

MR SULLIVAN: Other than exemplary damages, your Honours, that must be right.

HAYNE J: But for the great run of the mill, the run of cases of joint liability, there will be a single amount of damages even if damages are difficult to assess.

MR SULLIVAN: Yes, your Honour. Your Honour is correct, and I cannot, I must say, with great respect, off the top of my head, think of any other situation.

CALLINAN J: The Judicature Acts defined "action" as a civil proceeding commenced by writ or in such other manner as may be prescribed by rules of court and shall not include a criminal proceeding.

MR SULLIVAN: Yes. Well, my very rusty knowledge of legal history would accord with the definition of "action" prior to the Judicature Act, your Honour, as indicated by Maitland.

GUMMOW J: But it had to encompass all sorts of things. It had to encompass Ecclesiastical proceedings where you started by a libel, did you not? You did in Admiralty, too, did you not?

MR SULLIVAN: Yes, your Honour, but whether it be Ecclesiastical proceedings, which I am not familiar with, with great respect, or Admiralty proceedings, an action had to be commenced by a separate and individual procedure or writ, or some other form of originating process.

HAYNE J: But when the UK Act was first enacted and used the term "action", it was using a term then in common use by then in the 1925 Judicature Act, section 225, which had come from section 100 of the 1873 Act and found reflection in the rules, of course.

MR SULLIVAN: Yes, and in our respectful submission - and I will not labour the point again, your Honour - it was not any materially different to the pre-Judicature Act meaning of the word.

HAYNE J: Well, it is that that you may well be right about but I would be assisted by demonstration.

MR SULLIVAN: Your Honour, can I hand up one - - -

KIRBY J: What is the principle when one country like Australia or a jurisdiction like New South Wales picks up an English Act drafted in the context of England along the lines Justice Hayne has been saying but then enacts it as an Act of New South Wales? Would one not, in principle, interpret it as having meaning in the context of New South Wales not bringing, necessarily, all of the baggage from England?

MR SULLIVAN: Your Honour would interpret it that way, in our respectful submission, if there was any substantial difference between the two. Prima facie, one would think that if an Act is adopted in virtually identical terms in Australia as to the United Kingdom that would indicate, on the part of the draftsman, anyway, a view that there was no material difference which would justify or departs from the language used or the - - -

KIRBY J: I think that is a fiction. The draftsman may just not have thought about this problem.

MR SULLIVAN: It may be a fiction, your Honour, but it is a respectable legal fiction, in our submission, but it may well be, but might I seek to partially answer again Justice Hayne's concern by reference to yet another case. This is the case which is referred to in the Law Commission's 1977 report of Morris v Perrott [1945] 1 All ER 567. May we hand up copies of that.

GLEESON CJ: Thank you.

MR SULLIVAN: It is a judgment of the English Court of Appeal. The facts probably are not all that relevant now, but may I take your Honours to the joint judgment at page 570A. There is a reference to Morris v Robinson at the foot of the page. It follows Morris v Robinson then their Lordships go on:

That case and Isaacs v Salbstein also dispose of the matter that was much argued on this appeal. It was objected that this judgment allows the plaintiff to recover in all [sterling]10,379 and not only [sterling]5,379. The answer is, as pointed out by Bayley, J, in Morris's case, that equity would interfere to prevent a double satisfaction, and Bankes, LJ, in Isaacs' case, at p 155, said:

It is said that, if this is the rule of law, a person may recover a number of judgments against different persons for the same sum of money. I see no great objection to this, having regard to the fact that a plaintiff cannot receive the amount claimed more than once.

Then their Lordships continue, and this may be the part that helps your Honour Justice Hayne:

Before the Judicature Act it would not have been possible to sue in one action two defendants against whom there were different causes of action though in respect of the same subject matter, nor indeed until Ord XVI was in its present form. Successive actions would have had to be brought and separate judgments taken: now the two defendants can be sued in one action and judgment can be given against them according to their several liabilities and the principles which applied - - -

HAYNE J: But that is the point, that when the term is used in the English Act it carries with it a lot of baggage about what can be joined in the one action, who can be sued in the one action. Now, how do we translate that from the UK to New South Wales at the time in which this action was enacted? What baggage came with it? It is that on which your later note will, no doubt, give me much assistance.

MR SULLIVAN: Thank you, your Honour. If I may, without trying to pre-empt what I want to say in the later note, then turn back to double satisfaction. Your Honours will recall my learned friend, Mr Jackson, took your Honours to Castellan v Electric Power Transmission Pty Limited 69 SR(NSW) 159 and the passage my learned friend appeared to rely upon in this context was the passage which appears at page 182 of the judgment of Mr Justice Asprey at about three-tenths of the way down the page where his Honour says:

It follows, in my opinion, that, inasmuch as the verdict which the plaintiff obtained by consent against EPT has been fully satisfied by EPT, this Court would not order a new trial of the claim of the plaintiff against BHP whilst the verdict and the satisfaction thereof remains, as it does, unimpugned because there would be no answer to a plea which could be filed by BHP prior to the new trial that its liability (if any) to the plaintiff has been completely discharged by full satisfaction of the damage in respect of which the plaintiff is suing -

Now, the case he gives to compare by way of comparison, or one of the two cases, Morris v Robinson, for the reasons we have respectfully put already, Morris v Robinson indicates that the double satisfaction rule does not apply unless you can see that there is full value and so that per se a consent judgment does not show there is full value for the claim.

Now, your Honours, the equitable basis for the rule is also touched upon by your Honour Justice Gummow in Thompson's Case and it is also conveniently discussed in Prosser and Keeton, the American textbook on the law of torts, at page 330, if I may take your Honours briefly to that. Prosser and Keeton is the fifth edition 1984. There is a very recent edition, your Honours, which has come out in January 2001, but neither the High Court Library nor anyone else has got a copy of it yet.

HAYNE J: We are saving up for it, Mr Sullivan.

MR SULLIVAN: It is $US53, your Honours. The authors of this work quote the English common law position after 1935. In the first column at page 330, the authors observe:

The English rule, until it was altered by statute in 1935, was that the plaintiff could obtain but one judgment on a joint tort. Since the act of each tortfeasor was the act of all, it was considered that there was only one cause of action , which was "reduced to certainty" or merged in the judgment, and judgment against one alone, even though unsatisfied, barred any later action against another. But if the defendants had not acted in concert, the tort was not joint, there were two or more causes of action, and an unsatisfied judgment against one did not prevent a later action against the others. At the same time the courts developed a quite distinct principle that the plaintiff was entitled to but one compensation for the loss, and that satisfaction of the claim, even by a stranger to the action, would prevent its further enforcement. It is obvious that this rule is equitable in its nature -

and it quotes Morris v Robinson -

and that its purpose is to prevent unjust enrichment. It is equally obvious that it applies not only to concerted wrongdoers, but also to concurrent tortfeasors not acting in concert, or even to payments made by parties who have no connection with the tort at all.

We respectfully submit that that is a correct statement of the common law principle.

GUMMOW J: In Jameson, [2000] 1 AC 455 which you took us to earlier, at 459G there is a reference to Bird v Randall and you note in response to Justice Hayne you might consider that, too. That is a judgment of Lord Mansfield.

MR SULLIVAN: Yes, your Honour, I will. I did note that, indeed, when I was - - -

GUMMOW J: It may have attempted, at any rate, to introduce these ideas into the common law at an early date.

MR SULLIVAN: Yes. Your Honour indeed, I think, may be right on that, with great respect. May I hand up in that regard a further authority which we found during the luncheon adjournment in this regard of Kohnke v Karger [1951] 2 KB 670 and the relevant part is at page 675. Your Honours, briefly the facts in this case were that a judgment was obtained in France in respect of some injuries that a lady suffered and then proceedings were brought in England in respect of the same injuries, albeit on different causes of action against a different person. The question was whether the amount assessed in the French court, which had been paid, meant that she could not recover more in England on the principles of double satisfaction. Mr Justice Lynskey discussed the matter and, indeed, specifically based his decision on the case your Honour has just referred me to, Bird v Randall. If I could take your Honours to page 675 of his Lordship's judgment at about point 2:

Counsel for the defendant did not here suggest that he could rely on a plea of res judicata. His submission was that where one damnum was caused by separate injuriae for which two or more persons were responsible a satisfied judgment by a court of competent jurisdiction for that damnum was a bar to any further action in respect of any injuria which caused that damnum, or, put more shortly, that a satisfied judgment for a single damnum was a bar to another action for the same damnum based on any other injuria causing that damnum. If a person suffers damage as a result of the independent wrongs of two others and recovers, whether as a result of the judgment or otherwise, the whole of his damage from one of them, then apart from any question of subrogation he cannot claim any of that damage a second time from the other of the wrongdoers -

And he quotes Bird v Randall and Morris v Robinson -

He cannot obtain double satisfaction. Where the judgment which is satisfied is that of a court of competent jurisdiction in this country and is in respect of the same damage although resulting from different wrongs, the old courts of equity, and now the High Court, exercising its equitable jurisdiction, would interfere to prevent such double satisfaction.

That would be, in our respectful submission, again on the principle that if there is a judgment of a court after a hearing, that is full compensation.

GLEESON CJ: Before you pass away from Jameson finally, could I take you back to the dissenting speech of Lord Lloyd on page 466F.

MR SULLIVAN: Line H, your Honour, is it not?

GLEESON CJ: Line F. Page 466, a short paragraph commencing at line F. And then the idea is followed through on page 467 in the second paragraph: an example he gives of an everyday occurrence in personal injury litigation, where a plaintiff has sued two defendants, has a strong case against one and a weak case against the second, accepts a payment into court made by the second, and continues against the first. Then he goes on to say:

Exactly the same applies where judgment has been entered in respect of the amount paid into court (as happened in Townsend v. Stone Toms), or where a claim is settled without any payment into court -

Now that is, as he says, an everyday example of a situation in which you might want to compromise - to use a neutral term - with one defendant and continue an action against the other. What is the difference between those examples and the present case?

MR SULLIVAN: We would submit none, your Honour.

KIRBY J: From the point of view of equitable principle, an unjust enrichment. It would depend a bit on the evidence - - -

MR SULLIVAN: It depends on the evidence, your Honour.

KIRBY J: - - - which is something which remains in the future, as far as the orders of the Court of Appeal are concerned.

MR SULLIVAN: Yes, your Honour. It does depend on the circumstances. As your Honours will recall - in answer to your Honour the Chief Justice - that this point of the English rules about payment into court was considered by Lord Denning in Bryanston. And by analogy with that, he said that because of the English Rules of Court, you can pay in and you can accept that amount in satisfaction of a claim, and proceed for the additional amount and recover the excess of what you claim. So that that is a recognition, if you like, of the full compensation principle. You cannot double up, so to speak.

GLEESON CJ: The simplest example I can think of, in the case of alleged joint tortfeasors, is if you sue two defendants on the basis that defendant A is alleged to vicariously liable for defendant B. Might be an employment relationship, whatever. Assuming the assertion of vicarious liability is based upon an allegation of employment, you might have a weak case against the alleged employer because you might have trouble proving the employment, and that might be a motive for compromising, accepting a payment into court or otherwise settling with the first defendant.

MR SULLIVAN: Yes.

GLEESON CJ: But it might be thought in those circumstances the principles that would determine how much you could recover against the second defendant would be related, as I think you earlier said, either to an intention that the first settlement should be in full satisfaction of all claims against anybody, in which case it would unconscionable to pursue the second defendant, or to a case where it could shown that to recover even one dollar extra against the second defendant would result in over compensation.

That has to be the case against you here. It has to be said against you here that to get even one dollar against Mr Jackson's client would result in over compensation, or an unconscionable form of double satisfaction.

MR SULLIVAN: Indeed, the case against us, as I understand, is put in more highly than that, your Honour. It is put that irrespective of whether we have been fully compensated, not the fact that we have been paid the agreed amount, is satisfaction.

GLEESON CJ: That is right. But what he has to say is that the judge hearing your claim against his client could not award you anything.

MR SULLIVAN: Yes, he has to say that, with great respect. The position your Honour has just articulated is the position in America. It is either intention or showing that you would receive more. That, again, is summarised in Prosser, and there is a very instructive judgment in one of the American District Court of Appeals, which I will refer your Honour to, but I take you first to Prosser. It is a passage which is, in fact, quoted by Justice Giles in the Court of Appeal judgment. It appears at page 335 in the first column. Do your Honours have that page of Prosser? We could hand it up.

GLEESON CJ: No, we finish at 332.

MR SULLIVAN: Your Honours, the passage I am about to read comes in the first column of page 335, and it is quoted by his Honour Justice Giles in the Court of Appeal at the foot of page 98 and over the top of the page 99 of the judgment in the appeal book. What is there stated by the authors of Prosser, says:

The only desirable rule would seem to be that a plaintiff should never be deprived of a cause of action against any wrongdoer when the plaintiff has neither intentionally surrendered the cause of action nor received substantially full compensation. If the statutes are taken into account, this is now the rule actually applied in most American jurisdictions. Where there has been such full satisfaction, or where it is agreed that the amount paid under the release is so received, no claim should remain as to any other tortfeasor; but these are questions of fact, and normally to be determined by the jury, where the amount of the claim is unliquidated.

Now, your Honours will note at footnote 35 the authors refer to the "excellent opinion of Rutledge, J, in McKenna v Austin". If I might just hand that up to your Honours and take you to it. This is a case dealing with releases and Associate Justice Rutledge delivered the majority judgment in the United States Court of Appeals in the District of Columbia. His Honour discusses the principles and the various policy considerations and then, if I could read to your Honours from page 664, points 2 and 3. At the first column of the paragraph [2,3]:

Nor has it basis ordinarily without that in the fact of single injury. It is no defense for wrongdoers that others aided in causing the harm. Each is responsible for the whole. But that does not mean the injured person may have more than full satisfaction, except as punitive damages. He has no right to make profit from his harm because several share in causing it. Accordingly when one makes full reparation for all the loss, the others are discharged from liability to the injured person, though not, under our recent ruling in George's Radio, Inc, v Capital Transit Co, from liability to each other for contribution. Where contribution cannot be had between "joint" tortfeasors, they are relieved from further liability of any kind. The second premise therefore supplies a basis for the rule, but does this only when the facts support its application, that is, when the settlement is a complete indemnity.

[4] The difficulty is in how it shall be determined whether full indemnity has been received. This will vary with circumstances. Facts and intentions, rather than presumptions from the mere fact of settlement, should control. When damage to property is measurable with fair accuracy and has reasonable relation to the damage shown, the amount paid may be conclusive. With personal and other injuries less readily reduced to cash value, the difficulty may be greater. Ordinarily the claimant will not secure complete indemnity from one or less than all, unless the others are judgment proof. Such a settlement usually would not be advantageous to the settling wrongdoer. The presumption of fact therefore generally would be against full satisfaction and discharge. It would seem conclusive when rights against those not released are reserved explicitly or intention otherwise appears to keep these claims alive -

we say that is here; the fact that Mr Whitehead has said he is forbade from taking any further part in these proceedings, that indicates an intention to keep the claims alive -

Whether the settlement is made and accepted as full satisfaction or merely as the best obtainable compromise for the settler's liability is the crucial issue, and ordinarily one of fact. If however the agreement's terms leave no room for doubt, the decision should be made as a matter of law.

[5] In summary, there is no support for the rule of unitary discharge in the notion of entirety of obligation among joint tortfeasors. There is foundation in singleness of the injury, when complete indemnity has been made. We adhere to the rule in that circumstance. We repudiate it in others. Whether or not the settlement amounts to full reparation is to be determined, not merely from the fact of settlement, but as the facts of the particular situation dictate. Partial satisfaction taken in compromise and release of liability of one or some of the wrongdoers does not discharge the others. In the present case, the agreement with Independent expressly reserved the plaintiff's rights against the defendant. He therefore was not discharged.

KIRBY J: I can understand that principle in a case where, say, you have an action against joint tortfeasors whose wrongs are different - for example, a motor vehicle driver and a repairer who has failed properly to repair the vehicle before it is put on the road.

MR SULLIVAN: Concurrent tortfeasors your Honour means rather than joint?

KIRBY J: Yes. But here in this case Mr Whitehead's liability was only that of the negligence of the appellant, and therefore they completely overlap and they are but one. Therefore, the notion that Mr Whitehead has some separate liability is more difficult to establish, it seems to me.

MR SULLIVAN: Any joint liability is always a joint and several liability. That is why one can sue them in separate proceedings. But leaving that point aside, your Honour - - -

KIRBY J: There was no suggestion of a separate liability to Mr Whitehead, was there, that he had failed to supervise or - - -

MR SULLIVAN: No, there is no question at all of that. It is the acts of the employee for which Mr Whitehead was said to be vicariously liable - indeed, as originally pleaded, was said to be jointly liable because he was a partner of the wrongdoer. Either way it is a question of joint liability by reason of the fact of wrongdoing by someone who was regarded as being "in concert" for the purpose of the law with that wrongdoer. In answer to your Honour Justice Kirby's question, this principle does not depend on the damage being the same or not. There are very many reasons why a person will settle with one or two joint tortfeasors. Some of them have been touched upon by questions from the Bench today, but impecuniosity is an obvious example. Why do you wish to keep somebody in a long piece of litigation when at the end of the day you are not going to recover against that person a sum of money? That is an obvious one.

In our respectful submission, the American approach, which conforms with what your Honour the Chief Justice articulated, is the correct one. It differs from the approach of the House of Lords in Jameson and from the approach adopted by Justice Giles in two respects and two respects alone. One, it acknowledges that there are two different ways you could have full satisfaction, either by agreement to it or by in fact getting more; secondly, the onus is different. In the American situation, the Americans start in the presumption that there is not full satisfaction on a settlement.

GLEESON CJ: Could I ask how Lord Hope's approach would apply in practice in a case of the kind referred to by Lord Lloyd in dissent, that is, just acceptance of an amount of money paid into court by one defendant? There are no terms of settlement, there is no release. You just accept the money paid into court.

MR SULLIVAN: And there is nothing in the rules of the court which would indicate one way or the other how it is to be treated?

GLEESON CJ: Yes.

MR SULLIVAN: Lord Lloyd's approach would be that that would be a release.

GLEESON CJ: Of the other defendant?

MR SULLIVAN: Yes.

GLEESON CJ: On what basis?

MR SULLIVAN: On the basis that you have not expressly or by implication indicated you intend to keep the action alive against other people.

GUMMOW J: What are you supposed to do?

HAYNE J: I am not quite sure why that is not so.

MR SULLIVAN: Sorry. As I understand the example which is given is where two joint tortfeasors, one is paid an amount into court.

GLEESON CJ: Suppose in the present case Mr Whitehead paid $250,000 into court. There was no deed of release, no terms of settlement; your client just accepted that money, and, presumably there is some rule of court that deals with that.

MR SULLIVAN: Yes, there is, your Honour.

GLEESON CJ: In the absence of a rule of court.

MR SULLIVAN: In the absence of a rule of court, according to the majority speech in the House of Lords in Jameson, you would have a situation where accepting that sum of money in full discharge of the liability of the person who paid in court - - -

GLEESON CJ: You uttered those words. I just said an amount of money was paid in and was accepted.

MR SULLIVAN: But the consequence of that, your Honour, would be of payment into court. This is why, with great respect, it is hard to answer the question without looking at the rules to see what the provisions of the rules is as to the consequences of accepting or not accepting a payment into court.

KIRBY J: But what do the rules of the New South Wales Supreme Court say? They simply say, "discharge liability of that particular defendant"?

MR SULLIVAN: Your Honour, I do not have them with me, and I cannot recall. I do believe if you accept them that discharges that person from liability.

KIRBY J: Well, that would be the logic.

MR SULLIVAN: Yes, and I do believe also it is similar to the English position that expressly does not discharge your right to proceed against other tortfeasors because it is reflective of a policy, one would think.

GLEESON CJ: There is, is there not, a form of notice of acceptance of payment into court?

MR SULLIVAN: There is, your Honour, I think there is.

GLEESON CJ: Presumably that form provides for you to say the basis on which you are accepting it.

MR SULLIVAN: Your Honour, I would only be guessing. If I could add that to my little list of tasks.

GLEESON CJ: Thank you.

KIRBY J: As you say, the policy would seem to support being able to that because you might or might not go on with the other litigation, and the policy would be to favour disposing so much of the litigation as you can and reserving your rights against other but maybe not pursuing those rights.

MR SULLIVAN: Yes, and it is not only a policy, your Honour, in favour or to the advantage of the plaintiff, it is also a policy to the advantage of the person who wants to compromise, does not want to have to stay through the whole proceedings, wants to pay some money now and not be - - -

KIRBY J: You might not be so much in favour of a person who was the defendant who does not secure the discharge and who has not been aware of a secret negotiations and settlement between other parties who might have their own reasons for trying to lump things into the lap of the other defendants. That does happen sometimes.

MR SULLIVAN: It does happen, your Honour, but there is one thing which also does happen is that although the discussions for settlement may be secret to start with, at least by the time judgment is obtained, the results of the settlement cannot be secret from the person who pursues litigation because the amount involved has to be taken into account in any judgment, so at that stage, at least, that person is aware of that matter.

KIRBY J: And the defendants may have contributions as between each other.

MR SULLIVAN: Of course, that is right.

CALLINAN J: Mr Sullivan, another everyday occurrence is that one defendant may be utterly recalcitrant about entering into a reasonable settlement proposed by the other defendant.

MR SULLIVAN: Yes, your Honour.

KIRBY J: The solicitor for railways used to enter into nothing in the old days; I am sure it has changed now.

MR SULLIVAN: Yes, and, indeed, we know that there can be litigation by attrition - - -

CALLINAN J: We have all experienced that. But Lord Hope in Jameson's Case seems to have reached the conclusion his Lordship did by really giving the defendant, who was not a party to the contract for settlement, the benefit of a term in the settlement agreement.

MR SULLIVAN: Yes.

CALLINAN J: It seems to be clear from page 473. His Lordship said you look at the cause of action, you then look at the actual terms of the settlement, and if it says "in full and final settlement", you treat it as in full and final settlement of all claims against everybody.

MR SULLIVAN: He does appear to do that, your Honour, and may I say this, that it is puzzling in one respect because of the reasons your Honour articulates. No estoppel could arise because no person has acted to their detriment or changed their position. The remaining tortfeasor has not resiled or changed the position as a result of any representation or the like made.

CALLINAN J: No, one cannot help speculating that perhaps his Lordship was concerned that this was really a different cause of action from the cause of action that the deceased breadwinner had had and had settled and that, for that reason, there might not be any obligation on the part of the widow to account. Indeed, his Lordship points out that because it was a benefit she obtained, that is, of the damages, the [sterling]80,000 damages as a result of his death, it was excluded as an item to be brought into account. I think his Lordship says that at page 471.

MR SULLIVAN: Your Honour, in our respectful submission, the approach adopted by his Lordship was one which was dictated by a pragmatic fear of - - -

CALLINAN J: Of double satisfaction and not being able to prevent that, make provision for it.

MR SULLIVAN: No, of having a limit so that you did not have endless litigation to prove whether or not the same full compensation had been obtained.

CALLINAN J: But you have a look at page 471, his Lordship says expressly that that is a feature of the case, that the [sterling]80,000 will not be brought into account in reduction of any Lord Campbell's damages.

MR SULLIVAN: Yes, your Honour, it cannot be taken into account because of its - - -

CALLINAN J: Yes, exactly, which is another way of saying it is a pragmatic approach perhaps.

MR SULLIVAN: But, your Honour, we respectfully submit that a problem with the Jameson approach could be overcome by adopting the American approach which differs, as I said, in two respects, one which I have discussed; and the second is that whereas Jameson proceeds from the basis that unless you show in the judgment or the terms of settlement that you intended to reserve your rights you are deemed to have given them up, the Americans proceed from the opposite premise that you presume there is no intention to give your rights up unless it is made clear in the settling documents. That would produce certainty and it would then be up to a defendant to show that, in fact, there has been an agreement to forego the legal rights.

HAYNE J: Mr Sullivan, just again to bear in mind in preparing this note, it would seem to me at first blush that the sections with which we are concerned are practical sections intended to operate against a known and identifiable procedural background. The example given to you by the Chief Justice about payment into court, for example, is one which may - it may not - have to take account of the fact that, at least as I read the rules as in force in England in 1960, if one of several defendants paid in and the plaintiff took it, the whole action was at an end, that was an end of it. But it is perhaps simply an example of the fact that these rules which we are debating at a level of abstraction are rules that will find part of their content, perhaps much of their content, from the particular procedural background against which they are to be applied: what can be joined in one action, what cannot be? Who can be sued in the one action, who cannot be?

MR SULLIVAN: Your Honour, I respectfully agree with what your Honour says. In Australia as opposed to England, of course, there is one problem which is adverted to I think by this Court in the legal professional privileges case, Esso v The Commissioner of Taxation, that we have a federation and so that when we are talking about a common law rule such as the rule against double satisfaction and there has been one common law of Australia to determine what that rule was in Australia by reference to the legislation we would need to have to look at all the legislation in all the States to see that it was consistent or not, otherwise, as I understand the Court's decision in Esso, it is not appropriate to look at - unless there is such universality or uniformity of legislation throughout Australia, it would not be appropriate to look at that in order to determine what the common law position was or is. But, subject to that, your Honour, with respect, I would agree.

If I may continue and try to finish as quickly as I can, your Honours. We would respectfully submit that all of the cases I show and identify that the underlying concept of the rule against double satisfaction is an equitable principle designed against unjust enrichment. There is no unjust enrichment, in our respectful submission, where it is plain either that full compensation has not been achieved or it is plain that someone has reserved their rights and it is no unjust enrichment because if the person goes on to pursue the second judgment he has to give account for what he has received already so he will never receive more than he is entitled to.

That means, in our respectful submission, for those reasons and the express reasons put by the trial judge, that the principles of double satisfaction do not apply here so as to provide the defence pleaded by my learned friends. Your Honours will recall the way they plead the defence, which they claim as a defence, is dependent merely upon payment. If one goes to the appeal book at page 62, after having pleaded paragraphs 16, 17 and 18 pleading that the facts giving rise to a joint tort, paragraph 19 pleads the fact of the release and paragraph 20 the entry of the judgment and paragraph 21 the payment of the judgment. Then they say that by reason of that, that that provides a defence.

So, in other words, my learned friend's proposition amounts to the fact that payment, in all circumstances of a judgment, confounds the rule against double satisfaction. We respectfully submit that that is not so at all and for the reasons we have given and those identified by Justice Giles it should not be accepted. There is one final matter which I should deal with specifically in respect of my learned friend Mr Jackson's submissions. My learned friend seemed to say that - - -

KIRBY J: We are to approach the question restricted to the facts upon which it is accepted that the matter should be dealt with as set out on pages 61 and 62. We are not to approach the matter on the basis of the affidavits that were before the Master elaborating in more detail the dealings between the parties. The proposition of the appellant is that those facts alone are enough to raise the defence, so-called defence.

MR SULLIVAN: That is the proposition of the appellant.

GLEESON CJ: The question formulated by the Court of Appeal was whether those facts set out in those paragraphs provide a complete defence to the action.

MR SULLIVAN: Yes, your Honour.

GUMMOW J: Now, assuming we said they do not, that would produce the result that the Court of Appeal had not fully disposed of the application for leave to appeal against the strike-out application, would it not?

KIRBY J: They purported to - - -

MR SULLIVAN: They purported to give leave and dismiss it, your Honour, as I recall.

GUMMOW J: I know they did.

GLEESON CJ: But the strike-out application was the defendant's strike-out application against the plaintiff.

MR SULLIVAN: It was, your Honour.

GLEESON CJ: How the defendant came in a strike-out application to be relying on allegations in the defendant's defence is itself an interesting question.

MR SULLIVAN: It is, your Honour, yes.

GLEESON CJ: That is perhaps why the affidavits were there. But what the Court of Appeal said was, "This is not a knockout blow to the plaintiff's action and so we dismiss the application for leave to appeal against the earlier decision".

KIRBY J: The logic of that was that the matter would go back to pleading and trial where at trial, by reason of additional facts, there may or may not be some basis on which to suggest that this was an attempt at double satisfaction.

MR SULLIVAN: That may well be the case, your Honour. Indeed, it is conceivable that could happen but one would think that there would have to be an amendment to the pleading first because at the moment the pleadings is the only way to double satisfaction is by payment of the judgment sum.

GLEESON CJ: In any event, if they demonstrated at trial that your claim was never worth more than $250,000, they would win because $250,000 is going to come off whatever verdict you get.

MR SULLIVAN: Exactly, your Honour. That is why there cannot be any unjust enrichment, in our respectful submission. Your Honours, the one point I would like to deal with if I may is Mr Jackson's point based on Chamberlain and on James Hardie v Seltsam to the effect that Justice Giles, on the equitable doctrine of double satisfaction, overlooked the merger of actions. In our respectful submission, that is not an appropriate rule to consider when we are talking about joint tortfeasors.

As observed by Sir Gerard Brennan in the XL Case at the last sentence on page 466, the effect of the abolition of the rule in Brinsmead v Harrison is that there are as many causes of action as there are joint tortfeasors. So that where you have a situation of judgment against Mr Whitehead, that does not in any way touch upon or extinguish the cause of action which is available against the other joint tortfeasor, being the appellant in this case.

When one is coming to consider the equitable principle or the principle based on equitable notions of double satisfaction, in our respectful submission, the test is whether or not proceeding upon that other cause of action against Mr Baxter would result in unjust enrichment so as to amount to double compensation. In our respectful submission, the answer to that is no. Then the rule against double satisfaction has no application. For those reasons, but subject to the matters I will put in my hopefully short notes, your Honours, we respectfully submit the appeal should be dismissed.

GLEESON CJ: Thank you. Yes, Mr Jackson.

MR JACKSON: Thank you, your Honours. May I deal with a number of matters concerning section 5(1)(b). Your Honour Justice Hayne raised the question of the provision at the end of 5(1)(b) concerning costs. Your Honours, where there is one proceeding against numerous tortfeasors, it would be very unusual, in our submission, for there not to be, to use the words of the provision, reasonable ground for bringing the action against several of the various tortfeasors.

Your Honours, one sees, of course, that there are provisions such as section 63 of the Supreme Court Act in New South Wales which require that there be avoided a multiplicity of proceedings and also that there are provisions in the Supreme Court Rules. Your Honours, we have given the Court a bundle of them that take out the various parts of the Rules dealing with the joinder of parties and the propriety of joining various parties in the one proceeding.

Your Honours, speaking about the ambit of section 5(1)(b), the fact of the matter is that it is only in relatively recent times that the precise ambit of the provisions has fallen to be considered. No doubt those who were responsible for law reform reports and comments upon them had particular reasons for having a provision like section 5(1)(b), but the provision is now there, whatever the initial reasons for inserting it may have been. Your Honours, it has to be interpreted in its own right, bearing in mind that it goes beyond joint torts and does include derivative claims.

Your Honours, one also sees, speaking about the use of the word "action", that if one goes to the place that is closest to section 5(1)(b) that uses the term "action", that is to be seen in section 5(1)(a), where it has been held in this Court, in the Privy Council, and in the Court of Appeal in the United Kingdom, that where it is speaking of "action", it is not just speaking of completely separate proceedings. To adopt the view that we have submitted in relation to section 5(1)(b) does not produce any inconsistency with section 5(1)(c) because, as Seltsam demonstrates, section 5 does contemplate cases where the conduct of A and B together, independently of another party to the same proceedings, can affect the rights of that other party.

GLEESON CJ: Mr Jackson, we are going to get a note from Mr Sullivan on this and you will have an opportunity to answer it within seven days. We will give him seven days to put in his note. But may I ask you now - and you may not know the answer to this off the cuff - if in the present case $250,000 had been paid into court by Mr Whitehead and accepted by the plaintiff, what would have been the consequences of that in terms of the future of this action against your client?

MR JACKSON: Well, your Honour, I cannot give your Honour an answer to the position as at the past, at the time when the $250,000 was actually paid in whatever way it was paid in the particular case. However, the position now would be that under Part 22 rule 9 of the Supreme Court Rules of New South Wales, one would not be permitted to make an offer of compromise which did not offer to compromise from one side or the other the whole case against all defendants.

KIRBY J: Not permitted?

MR JACKSON: Yes, your Honour. Part 22 rule 9.

KIRBY J: That seems curious, because there would be many cases where it is in the interests of parties to get rid of one defendant.

MR JACKSON: I am sorry, your Honour. What I was seeking to say was this, that there is provision now in the rules - it was under Part 52A - for there to be offers of compromise made by one party to another in court - I was dealing with proceedings in the court - offers of compromise, but the particular provision of Part 22 rule 9 says that those provisions do not apply in cases where the claim is one in respect of a joint or joint and several liability where there is a right of contribution or a potential right of contribution as between the various parties unless the offer is made in the case of an offer by the plaintiff to all defendants, in the case of an offer by a defendant in effect to settle the whole matter. We can give your Honours copies of those provisions, but that is the current position.

GLEESON CJ: Has that offer of compromise procedure replaced the old system of payment into court?

MR JACKSON: Your Honour, I think that is the answer. May we check that and respond with our learned friend.?

GLEESON CJ: Thank you.

HAYNE J: The provision is made, I take it, for the position of defendants inter se by them being able to offer as between themselves, "I will contribute X per cent of whatever the plaintiff is entitled to".

MR JACKSON: Yes.

HAYNE J: So that the defendants can squeeze other defendants into making what becomes effectively a joint offer.

MR JACKSON: Yes, designed, your Honour, to prevent cases like this, I suppose.

HAYNE J: Yes.

KIRBY J: But we have all known some defendants who are not squeezable. The Commonwealth, for example, is sometimes a little resistant to squeezing and it is in a position it can just say, "Well, we are not going to do it".

HAYNE J: And suffer the cost consequences when it does.

MR JACKSON: Yes, of course.

KIRBY J: Anyway, we will look at the rule when you send in your note, and 52A is the rule about costs, is it not, penalties as to costs, if you do not compromise?

MR JACKSON: Yes. Your Honour, there are many people, rich/poor, corporate/non-corporate, governmental, who have particular views about litigation and your Honours will be aware not everyone who participates in litigation acts entirely rationally.

GLEESON CJ: At any level.

MR JACKSON: It makes for appeals, your Honours, except when one can go no further. Your Honours, could I say three other things? First of all, our learned friend referred to Prosser and Keeton. Could we give your Honours a reference also to page 331 in Prosser and Keeton, an extract our learned friends gave your Honours? It is the left column. There is a paragraph commencing on the preceding page and then about six lines into it says:

It has been held, however, that full satisfaction of a lesser judgment will extinguish a greater one, apparently on the ground - - -

HAYNE J: This is where the authors are speaking about how confused things have become in the United States.

MR JACKSON: Yes. It is discussing the position. It is not a complete uniformity is what I am seeking to say, your Honour. The second thing, your Honours, your Honour Justice Hayne asked about the position where there might be different levels of damage. In fact, there is a recent decision of the Full Court in South Australia, State of South Australia v Mountford [2001] SASC 85.

Now, your Honours, that was a case where there were several tortfeasors but the plaintiff sued first of all, and sued to judgment and a judgment which was satisfied, one of the tortfeasors who was his employer. Because of the provisions of the workers' compensation or other relevant legislation in South Australia, there were limitations on the types of damage that could be recovered and, in particular, your Honours, there was one head of damage which one could not recover so the damages were less than might be obtained in the ordinary action.

That being so, after that had happened, he then sued the other defendant and it was held in the case that the equivalent of section 5(1)(b) operated so that he could not recover, in the later action, any amount because the lower original judgment had been satisfied.

GLEESON CJ: That was a separate action?

MR JACKSON: Yes, your Honour.

GLEESON CJ: That could easily happen with capping of damages now.

MR JACKSON: Yes, your Honour. I think I adverted to the possibility in my submissions in-chief but that is an example where that took place. Your Honours, the other thing I was going to say - - -

GUMMOW J: We should be supplied with a copy of that, I think.

MR JACKSON: We will give your Honours a copy.

GUMMOW J: Is it the Full Court?

MR JACKSON: Yes. Justice Williams and the other members of the court agreed. Your Honours, the other thing I should say is that in New Zealand, the Court of Appeal in New Zealand in Allison v KPMG Peat Marwick [2000] 1 NZLR 560 declined to follow Jameson - I express the view, your Honours, in passing, that it might well not be followed here - but declined to follow it, appearing to take the view that - if I can put it shortly and perhaps slightly inexactly - that the settlement was res inter alios acta, as it were, and did not affect the position except as to giving credit.

GLEESON CJ: That sounds like the Lord Lloyd view.

MR JACKSON: Yes. Lord Lloyd's view was preferred, or his reasoning was preferred to that of the other members of the House of Lords. I will give your Honours a copy of that. Your Honours, those are our submissions.

GLEESON CJ: Thank you, Mr Jackson. We will reserve our decision in this matter.

AT 3.48 PM THE MATTER WAS ADJOURNED