Newcrest Mining Limited v Michael Emery Thornton – Traps where there are multiple wrongdoers

The recent High Court decision of Newcrest Mining Limited v Michael Emery Thornton [2012] HCA 60 illustrates the complexity of the claims made against joint or concurrent tortfeasors and highlights several important issues to be considered by the parties, whether they are potential plaintiffs or defendants.  The consequence of misunderstanding what is required may prove to be costly.

Background

Michael Emery Thornton (Thornton) sustained an injury during the course of his employment at Simon Engineering (Australia) Pty Ltd (employer) and sought workers compensation and common law damages.  A settlement was entered into by the employer and its insurer, Allianz Australia Insurance Ltd.  The settlement required a writ of summons to be issued and the filing of a consent to judgment.  Subsequent to the settlement, Thornton commenced proceedings against Newcrest Mining Limited (Newcrest) in respect of the injuries arising out of the same incident for which he had sued his employer.  Newcrest was sued as a several concurrent tortfeasor for failing to provide a safe workplace.  The appeal arose from a series of interlocutory judgments where Newcrest sought to strike out the proceedings based on the previous consent to judgment entered into by Thornton and his employer.  Had Newcrest succeeded, Thornton would have been precluded from bringing a claim he qualified at over $1.75 million.

Issues

Careful consideration must be given to the structure of settlement of claims in circumstances where there is a potential for multiple tortfeasors.  The main issue of contention in this case arises from the interpretation of section 7(1)(b) of Law Reform (Contributory Negligence and Tortfeasors’ Contribution) Act 1947 (WA) where there is a statutory limitation on recovering damages on a subsequent claim brought against a different concurrent tortfeasor.

The decision and its effects

The appeal was dismissed with the High Court spilt three to two.  The complexity surrounding this area of law is demonstrated by the fact that the court delivered four separate judgments.  The majority concluded that a consent judgment is not caught by section 7(1)(b) of the Law Reform (Contributory Negligence and Tortfeasors’ Contribution) Act 1947 (WA).  The position is different where there has been a judgment after trial.  Had Thornton proceeded to trial, the claim against Newcrest may have been dismissed summarily resulting in a substantially different outcome for both parties.

Parties need to give careful thought to how they pursue or defend claims and to how they resolve disputes.  The consequences may be expensive and irreversible if they fall foul of some very old and technical rules.