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Queesland University of Technology Law and Justice Journal (QUTLJJ)
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O'Brien, Dominic --- "Concurrent Liability: Which Way to Jump?" [2001] QUTLawJJl 8; (2001) 1(1) Queensland University of Technology Law and Justice Journal 110

Concurrent Liability: Which Way to Jump?

Dominic O’Brien[*]

1. Introduction


It is the purpose of this article to review some arguments as to how apportionment of liability may still be practically achieved in cases where there is alleged concurrent liability in contract and tort on the part of the defendant and some fault on the part of the plaintiff. In doing so, it analyses the decision in Astley v Austrust Ltd[1] (Astley) and compartmentalises the reasoning of the majority and Callinan J in dissent with respect to concurrent liability, apportionment legislation and policy. This article then outlines a number of the suggestions mooted by various scholars as to how apportionment of liability may be practically achieved. After considering a number of the proposals put forward by various scholars, the recent Queensland Court of Appeal decisions in Wylie v The ANI Corporation Limited [2] (Wylie) and Jones v Persal & Company (a firm) [3] (Jones) are examined. In those cases, the Queensland Court of Appeal had cause to consider some argument in respect of the implications of Astley and the means by which apportionment of liability could still be achieved. Finally, this article analyses the outcomes of Wylie and Jones and evaluates some of the proposals mooted by various scholars as to how the effects of Astley may be overcome in light of these recent Queensland Court of Appeal decisions.

2. Astley v Austrust

The Facts

In 1983, Austrust Limited (Austrust) decided to accept appointment as trustee of a trust to be established to develop a piggery on land in northern New South Wales. It was proposed that Austrust would obtain finance from appropriate lenders in order to purchase land for the piggery.

During mid to late 1983, Austrust wrote to Astley who was a senior partner in a firm of solicitors that had acted for Austrust for many years seeking Astley’s advice in relation to the proposed trust deed and the other issues relating to its role as trustee of the proposed trust. Austrust’s instructions to Astley were expressed in very general terms and required the solicitors to examine the proposed deed of trust and “let us have your comments on it in due course”.

Astley subsequently reviewed the relevant documentation and provided Austrust with his advice. By late 1984, Austrust had executed the deed of trust and obtained various facilities in excess of $1.3 million for its purchase of two properties which it held upon trust.

Within three months, it appeared that the trust was hopelessly insolvent. As neither the trust deed nor the various facilities limited Austrust’s liability in the event of insolvency of the trust, Austrust became personally liable for losses that exceeded the value of the trust property. Austrust consequently incurred extensive losses because the value of the assets fell considerably short of the outstanding liability to the various lenders.

Austrust then commenced proceedings against Astley and his partners in the Supreme Court of South Australia for breach of contract and for negligence in carrying out a retainer to give legal advice. Austrust alleged that Astley and his firm were at fault in failing to advise Austrust that it should not have accepted the appointment as trustee without excluding its personal liability for the losses of the trust. In response, Astley claimed that it was not part of his retainer to advise upon the terms and effect of the various facilities entered into by Austrust. Astley also asserted that, in any event, Austrust had been contributorily negligent in that it failed to properly investigate the solvency of the proposed trust.

At first instance, Mullighan J found that Astley and his firm of solicitors had been negligent in failing to advise Austrust that it would be personally liable in dealings with third parties unless it limited its liability to the extent of the trust assets. Mullighan J also held that Austrust was contributorily negligent as it failed to make appropriate enquiries as to the availability of the funds the trust required if it was to be viable. As both breach of contract and negligence were pleaded by Austrust, his Honour reduced the damages that would otherwise be payable to Austrust by 50% on the basis that Austrust’s contributory negligence entitled Astley to have the damages reduced because the duty of care was the same in contract and in tort and both causes of actions were pleaded.

Both Astley and Austrust appealed to the Full Court[4] of the Supreme Court. The Full Court allowed Austrust’s appeal against the finding of contributory negligence and dismissed Astley’s appeal against the finding that the issues pertaining to Austrust’s liability to creditors was within the scope of the retainer. Their Honours found that there was no basis for concluding that Austrust, acting reasonably, ought to have known that it may have been personally liable in its dealings with third parties unless it limited its liability to the extent of the trust assets. Secondly, their Honours also concluded that the risk of personal liability to which Austrust was exposed was the very risk against which Astley should have protected Austrust. Upon these bases, the Full Court awarded damages and interest thereon in full to Austrust.

Astley then sought special leave to appeal to the High Court, which leave was granted. Astley contended that the Full Court erred in finding that Austrust was not guilty of contributory negligence. By notice of contention, Austrust submitted that Astley was in breach of an implied term of the retainer to take reasonable care in giving legal advice and that Austrust’s contributory negligence (if any) could not be used to reduce the damages resulting from Astley’s breach of contract.

The Issues

The important questions which arose for determination by the High Court were:

whether a plaintiff can be guilty of contributory negligence where the defendant has contractually agreed to protect the plaintiff from the very loss or damage which the plaintiff has suffered as a result of the defendant’s breach of duty;
whether an award of damages for breach of contract may be reduced under apportionment of liability legislation arising from contributory negligence on the part of the plaintiff where the defendant is liable concurrently in tort and contract for the breach of a duty of care; and
whether it was established on the evidence that Austrust was contributorily negligent in failing to undertake proper enquiries as to the solvency of the trust.

The Decision

In short, the High Court held that:

(a) a plaintiff can be found guilty of contributory negligence where the defendant has contractually agreed to protect the plaintiff from the very loss or damage which the plaintiff has suffered as a result of the defendant’s actions;
(b) despite a plaintiff’s contributory negligence, no award of damages for breach of contract can be reduced under any apportionment legislation; and
(c) Mullighan J was correct in finding that Austrust was contributorily negligent as its loss was the result of two factors, namely:
(i) Astley’s failure to advise on and take steps to limit Austrust’s personal liability; and
(ii) Austrust’s failure to investigate the solvency and validity of the trust.

Analysis of the Decision of the High Court

It is appropriate to review the decision of the majority and the dissenting judgment of Callinan J in relation to the following three issues:

concurrent liability;
the operation of apportionment legislation; and
policy issues.

Concurrent Liability

The majority held that it was open to Austrust to sue in contract as well as in tort. Their Honours reached this conclusion after reviewing various conflicting authorities as to the concurrent recognition of a tortious and contractual duty arising from essentially the same facts.

Their Honours examined the reasoning of Deane J in Hawkins v Clayton[5] (Hawkins) who suggested that, where a tortious duty to take reasonable care exists, there is no justification for implying a term of the same content into the contract. Deane J consequently asserted that no action for breach of an implied term to take reasonable care can arise as the tortious duty to take reasonable care is imposed by law and should be preferred.[6]

Their Honours then examined the decision of the House of Lords in Henderson v Merret Syndicates Ltd [7] (Henderson) where the reasoning of Deane J in Hawkins was rejected. In Henderson, Lord Gough[8] stated in respect of concurrent liability in tort and contract:

My own belief is that, in the present context, the common law is not anti-pathetic to concurrent liability and that there is no sound basis for a rule which automatically restricts the claimant to either a tortious or a contractual remedy. The result may be untidy but, given that the tortious duty is imposed by the general law, and the contractual duty is attributable to the will of the parties, I do not find it objectionable that the claimant may be entitled to take advantage of the remedy which is most advantageous to him, subject only to ascertaining whether the tortious duty is so inconsistent with the applicable contract that, in accordance with ordinary principle, the parties must be taken to have agreed that the tortious remedy is to be limited or excluded. [9]

The majority went on to confirm the conclusion of the House of Lords in Henderson as the correct view.[10] After outlining the differing requirements and advantages of a cause of action in a contract compared to a cause of action in tort, their Honours concluded that “there is no justification in recognising the tortious duty to the exclusion of the contractual duty.”[11]

Callinan J, agreed with the majority that the law has evolved to embrace concurrent liability:

The trend of modern authority has generally, if not unanimously moved in favour of a dual liability certainly in cases of breach of duty by professional advisers and others in what formerly were common callings. To deny a client of a professional adviser, and therefore a person in a contractual relationship, a right of action in tort also, may be to put that client at an unjustifiable disadvantage compared with a person who has received negligent gratuitous advice or services causing damage from a professional or other adviser, and who may in consequence sue in tort. [12]

Although agreeing with the majority in recognising concurrent liability, Callinan J disagreed with the majority as to whether tort should be preferred over contract. His Honour examined a number of cases[13] and preferred the view that tort prevails over contract in situations where there is concurrent liability and the contract does not expressly deal with reasonable care and skill. Callinan J reached this conclusion on a primarily practical basis:

The duties and the relationship between professionals and other providers of services and advice may in practice extend far beyond matters to which the parties would normally turn their minds and, even if they did, would mutually wish, or be prepared to include in their contracts... In this respect the obligations may more aptly be regarded as obligations in tort than in contract, one of the tests of the former being the objective test of reasonable foreseeability rather than what the parties subjectively may have had in mind when the contract was made. [14]

The Operation of Apportionment Legislation

In determining whether apportionment legislation applies to actions brought in contract alone or where there is concurrent liability in contract and tort, the majority examined the intent and meaning of s 27A(3) of the Wrongs Act 1936 (SA). Given that there was conflicting precedent in relation to the operation of apportionment legislation in cases where there is a breach of concurrent and co-extensive contractual and tortious duties of care, their Honours considered that the issue became one of statutory construction of s 27A which was to be resolved by reference to the relevant text, history and purpose of that Act:

The natural and ordinary meaning of s 27A(3), read in light of the definitions contained in the section, indicates that the section is concerned with claims in tort rather than claims in contract. The subsection was designed to remedy the evil that the negligence of a plaintiff, no matter how small, which contributed to the suffering of damage, defeated any action in tort in respect of that damage.[15]

In essence, their Honours considered that the word “negligence” is connected with the definition of “fault” in s 27A(1) so that the word “negligence” is qualified by the words “which gives rise to liability in tort”.

Callinan J, on the other hand, considered that the word “negligence” is disconnected from the balance of the definition of “fault” in s 27A(1):

The expression “fault” as used in s 27A(3) cannot literally mean, for the purposes of contributory negligence, what the definition states “fault” to mean unless the words “which gives rise to a liability in tort” are confined in operation to “other act or omission” and even then the difficulties do not disappear... A plaintiff may be guilty of contributory negligence in circumstances in which no duty is owed by him or her to a defendant or anyone else. By definition “fault” means negligence. The respondent did suffer damage as a result partly of its own negligence and therefore fault, and partly as a result of the appellant’s (albeit that default was breach of contract as well as a tort) and accordingly in my opinion it then fell to the court to apportion liability. [16]

Callinan J’s reading of the legislation meant that there may be “fault” by reason of “negligence” which need not be tortious. Callinan J also outlined various scholarly texts and referred to the “tide of authority”[17] which acknowledged the availability of contributory negligence as a partial defence in cases of a defendant’s dual liability in tort and contract.

Policy Considerations

In considering the public policy issues which underpin their decision, the majority outlined the view that the denial of the operation of apportionment legislation to contract claims leads to anomalous or unfair results. This is because it may allow a plaintiff who has been contributorily negligent in carrying out the terms of a contract to sue a defendant for its alleged breach of contract and recover full damages as no apportionment of damages could be made in the absence of the operation of apportionment legislation. The majority disputed this view and considered that an examination of the nature of an action in tort for breach of a general duty of care and the nature of an action for breach of a contractual term to take reasonable care reveals that it is by no means evident that an action by a plaintiff who sues in contract would lead to an anomalous or unfair result because the plaintiff’s action is outside the scope of the apportionment legislation. Their Honours considered that there was scope for apportionment because of the significant difference between tort and contract given that tort obligations are imposed on parties whereas contractual obligations are voluntarily assumed.[18] It is appropriate to reproduce the relevant paragraphs which elucidate their Honours’ conclusion:

Absent some contractual stipulation to the contrary, there is no reason of justice or sound legal policy which should prevent the plaintiff in a case such as the present recovering for all the damage that is causally connected to the defendant's breach even if the plaintiff's conduct has contributed to the damage which he or she has suffered. By its own voluntary act, the defendant has accepted an obligation to take reasonable care and, subject to remoteness rules, to pay damages for any loss or damage flowing from a breach of that obligation. If the defendant wishes to reduce its liability in a situation where the plaintiff's own conduct contributes to the damage suffered, it is open to the defendant to make a bargain with the plaintiff to achieve that end. Of course, the result of such a bargain may be that the defendant will have to take a reduced consideration for its promise to take reasonable care. But the bargain will be the product of the parties' voluntary agreement to subject themselves to their respective obligations. [19]

In an action in tort, however, the duty of the defendant to take reasonable care and the obligation of the plaintiff to take reasonable care for his or her own safety or interests are imposed on the parties by law. Absent a contractual stipulation varying the rights of the parties, it is the general law that defines their rights and liabilities. It is one thing to apportion the liability for damage between a person who has been able to obtain the gratuitous services of a defendant where the negligence of each has contributed to the plaintiff's loss. It is another matter altogether to reduce the damages otherwise payable to a plaintiff who may have paid a very large sum to the defendant for a promise of reasonable care merely because the plaintiff's own conduct has also contributed to the suffering of the relevant damage.[20]

Callinan J disagreed with the majority’s assertion that the terms of the contract between parties allocate responsibility for the risks of the parties’ enterprise including the risk that the damage suffered by one party may arise partly from the failure of that party to take reasonable care. Callinan J considered it “rather unlikely that contracting parties would always be able in their contracts, express or implied, precisely to define the relevant scope and extent of their respective obligations”.[21] In outlining the policy grounds which supported his view that a plea of contributory negligence should be available in cases where there is concurrent liability for a breach of contractual and tortious duty, Callinan J adopted the arguments of Porat in his paper ‘Contributory Negligence in Contract Law: Toward a Principled Approach’[22] who argued that the defence of contributory negligence should be available on the following grounds:

its adoption in contract leads to fair and just results;
it is consistent with a trend generally considered positive, in unifying the remedies available in both contract and tort;
it encourages caution, co-operation and solidarity between parties to a contract; and
it provides incentives towards the fulfilment of contracts and the mitigation of damages arising from the breach.


Put simply, Callinan J considered that the operation of apportionment legislation to cases where there is concurrent liability of the defendant and where the plaintiff has been contributorily negligent, allows the court to fulfil its duty which is to arrive at a just and equitable apportionment.[23]

The Implications of Astley and Scholarly Suggestions


Put simply, the effect of Astley is that it now matters how a plaintiff frames their action in cases where there is alleged concurrent liability in contract and tort on the part of the defendant and some fault on the part of the plaintiff. This is because, following Astley, the extent of damages recoverable necessarily depends upon whether a contributorily negligent plaintiff grounds their action in tort or contract. As is evident by Astley, apportionment of liability will apply in tort actions but not in contract actions unless there is a specific contractual provision which provides for apportionment.

The implications of Astley are therefore significant. Consider, for example, a situation where a plaintiff and defendant are each 50% responsible for the plaintiff’s loss. In tort, the plaintiff will only be able to recover 50% of the damages claimed after apportionment of liability. In contract, however, provided that the plaintiff establishes that the defendant caused the plaintiff’s loss and there is no contractual provision which deals with apportionment, then the plaintiff will be entitled to recover the full amount of the damages claimed as there is ordinarily no apportionment of liability. In such a situation, it is imperative that the defendant finds alternative means to practically achieve apportionment and limit the extent of their liability to the plaintiff for damages.

To this end, various scholars have suggested means by which apportionment of liability may be practically achieved. Masel and Kelly in their article ‘Contributory Negligence and the Provision of Services: A Critique of Astley[24] examine in detail the decision in Astley. They critically examine the main propositions asserted by the majority and suggest a separate basis on which the High Court might have reached a contrary decision which would nonetheless have been a practical and sound result. It is not the preserve of this paper however, to critique Astley and reiterate the arguments already clearly espoused by Masel and Kelly. Rather, it is to consider the arguments which have been proffered by Masel and Kelly and others such as Legg[25], Swanton[26], Butler[27] and Seddon[28] as to the how apportionment of liability may be achieved in actions where there is alleged concurrent liability in contract and tort on the part of the defendant and some fault on the part of the plaintiff.

The above authors and others have suggested various means by which apportionment of liability may be achieved in situations not only where there is concurrent liability but also where there is liability in contract alone. These include:

contractual accommodation and implied terms;
mitigation;
loss of opportunity;
legislative intervention; and
causation and counterclaim.


It is appropriate to deal with each in turn.

Contractual Accommodation and Implied Terms

As is confirmed by the majority in Astley, contractual obligations are voluntarily assumed and it is up to the parties to determine how liability is to be limited or regulated.[29] The drafting and insertion of an appropriate clause in the contract which regulates the proposed dealing between the parties would, as Seddon[30] suggests, be an immediate solution. Seddon even proffers an appropriate clause:

If either party is in breach of this contract and it is necessary to assess damages (whether or not the contract is terminated), it is agreed that the damages awarded will be reduced to the extent that the party suing was responsible for loss suffered by that party. In assessing the reduction of damages and deciding responsibility, regard shall be had to the causes of the losses suffered by the party suing but it shall also be legitimate to have regard to comparative fault where appropriate, in a manner analogous to that employed to assign fault under the contributory negligence legislation. The parties may agree to an expert determination by a third party for the purpose of assigning comparative responsibility under this clause, but, in any case, both parties agree that this clause shall be the basis for a court assessing damages under this contract. [31]

The problem with apportionment via contractual accommodation is that such a provision may not always be included in the contract which governs the dealings between parties. This may be because one party has successfully negotiated the exclusion of such a term. Alternatively, it may be that the parties to the contract simply did not turn their minds to the relevant scope and extent of their respective obligations. In such a situation, however, all is not lost as it may be possible to imply a term into the contract either as a matter of fact[32] or by law[33].
The implication of a term into the contract may effectively allow apportionment of liability in cases where both parties are at fault. Such a solution while attractive in theory, may be difficult to achieve in practice, especially in cases where the contract is for the provision of professional services. As Callinan J poses:

It has at times been suggested that any anomaly which might appear to permit a very negligent plaintiff to recover damages in full in contract may be able to be corrected by reference to basic contractual principles: that there should be implied against a person engaging a professional, a reciprocal term obliging the former to take reasonable care in such matters as, for example, the giving of instructions and the making of appropriate inquiries. However that approach does not seem to have any authoritative modern currency and would not be without difficulties in its application. [34]

Thus, in the absence of an express or implied term which regulated the apportionment of damage in the event of breach, the exclusion of a clause which effectively allows for apportionment of liability would be fatal to a defendant who is responding to an allegation of an alleged breach of contractual duty where the plaintiff was themselves partly responsible for their own loss.

Mitigation


Both Legg[35] and Swanton[36] assert that the principle of mitigation may to some degree achieve apportionment in cases where a plaintiff has acted in a manner akin to contributory negligence. The doctrine of mitigation imparts on the party who has suffered loss as a result of another’s breach of contract a duty to react in such a manner to ensure that its loss is minimised.

For example, a plaintiff suffers loss which was caused by a breach by both the defendant and the plaintiff. Then, after incurring the initial loss, the plaintiff acts in a manner which exacerbates its loss. In such a situation, the doctrine of mitigation will deny the plaintiff recovery of that part of its loss which was caused by the plaintiff in exacerbating its initial loss. While it seems a short step to apply the logic and principles associated with the doctrine of mitigation to pre-breach conduct, the law with respect to mitigation simply does not allow an examination of pre-breach conduct.[37] Hence, the doctrine of mitigation will not extend to apportioning the initial loss caused by the plaintiff.[38]

The law relating to mitigation of damages, therefore, should not be regarded as a means to achieve apportionment per se, but rather a means by which a plaintiff will, to some extent, be denied recovery when the plaintiff has exacerbated its initial loss regardless of whether that loss was wholly caused by the defendant or partly by each of the plaintiff and defendant. Thus, the principle of mitigation is limited in its operation as it only operates post-breach.

Loss of Opportunity


Seddon[39] details that loss of opportunity is “part of the process of adding up the damages”. The process involves speculating about hypothetical events which might have had the effect of reducing or totally limiting the damages which a defendant may be found liable to pay to a plaintiff. Seddon[40] and Legg[41] detail that the calculation of damages pursuant to loss of opportunity may overcome the all or nothing approach which is prevalent in contract litigation. In essence, the defendant (presumably the contract breaker) seeks to produce evidence which shows that the plaintiff’s loss, or part of it, would have happened in any event, whether or not there was a breach of the contract. The relevant principle in relation to assessing damages for loss of opportunity was enumerated by Deane, Gaudron and McHugh JJ in Malec v JC Hutton Pty Ltd [42] (Malec):

When liability has been established and a common law court has to assess damages, its approach to events that allegedly would have occurred, but cannot now occur, or that allegedly might occur, is different from its approach to events which allegedly have occurred. A common law court determines on the balance of probabilities whether an event has occurred. If the probability of the event having occurred is greater than it not having occurred, the occurrence of the event is treated as certain; if the probability of it having occurred is less than it not having occurred, it is treated as not having occurred. Hence, in respect of events which have or have not occurred, damages are assessed on an all or nothing approach. But in the case of an event which it is alleged would or would not have occurred, or might or might yet occur, the approach of the court is different. If the law is to take account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. The probability may be very high – 99.9% - or very low – 0.1%. But unless the chance is so low as to be regarded as speculative – say less than 1% - or so high as to be practically certain – say over 99% - the court will take that chance into account in assessing the damages. Where proof is necessarily unobtainable, it would be unfair to treat as certain a prediction which has a 51% probability of occurring, but to ignore altogether a prediction which has a 49% probability of occurring. Thus, the court assesses the degree of probability that an event would have occurred or might occur, and adjusts its award of damages to reflect the degree of probability.[43]

The application of this principle was confirmed by the High Court in Sellars v Adelaide Petroleum NL[44] which was concerned with assessment of damages for misrepresentation. In that case the court held that the loss of a chance resulting from breach of a contract to provide a chance is compensable, notwithstanding that, on the balance of probabilities, it is more likely than not that the chance would not have come to fruition.

As Legg[45] establishes, assessment of damages for loss of chance “is not the same as apportionment on the basis of fault because it deals with the quantification of the loss rather than responsibility for the loss.” Furthermore as is indicated by the first sentence of the extract of the decision of Deane, Gaudron and McHugh JJ in Malec referred to above, the principle only applies to assessment of damages in relation to events which allegedly would have occurred, but cannot now occur, or that allegedly might occur. Finally, while the reasoning in Malec is regularly adopted and used by courts in assessing damages as part of a claim for loss of opportunity in negligence cases involving professional negligence, it has not been concluded by the High Court whether the same arguments apply in cases of personal injury or medical negligence generally.[46]

As Seddon[47] argues, the mechanism for reducing damages awarded to a plaintiff by assessing damages for loss of opportunity is not a universal principle which caters for a wide range of circumstances when both parties are at fault. Hence, although assessment of damages for loss of opportunity pursuant to the principle in Malec is a back door means by which to achieve apportionment, its operation is limited to the situations detailed above.

Legislative Reform


It is the call for legislative reform that has perhaps been the loudest since the High Court’s decision in Astley. The majority in Astley asserted that:

Perhaps the apportionment statute should be imposed on parties to the contract where damages are payable for breach of a contractual duty of care. If it should, and we express no view about it, it will have to be done by amendment to that legislation. [48]

Callinan J also made some comment as to whether legislative intervention would resolve the issues relating to the apportionment of liability in actions where there is concurrent liability or simply contractual liability. After examining a number of difficulties relating to the application of limitation periods, assessment of damages and remoteness principles in different fact situations, his Honour outlined that “these are matters which in the absence of legislation will have to be worked out on a case by case basis”.[49]

Indeed, the appropriateness of legislative intervention is one of the central themes of many of the articles written by various scholars. Before drawing some conclusions about the appropriateness of legislative intervention, however, it is necessary to make some comment about causation principles and then examine in detail the Queensland Court of Appeal decisions in Wylie and Jones where further comment was made as to the appropriateness of legislative intervention.

Causation and Counterclaim


Much of the focus on the effect of Astley concerns renewed calls for judicial reformulation of causation principles to allow for apportionment of liability in all contractual claims. As is evident from Astley, the common law favours an all or nothing approach to causation in contract.[50] The law does not ask the question: “to what extent is the defendant responsible for the plaintiff’s loss?” Rather, in contract cases, the element of causation will be satisfied if the plaintiff can establish that the defendant’s breach of contract was “a” cause of the plaintiff’s loss.[51] As detailed above, on the present state of the law, if the plaintiff establishes in a contract claim that the defendant caused the plaintiff’s loss, then the plaintiff is entitled to full damages, even if the plaintiff was partly responsible for their own loss.

Legg[52] has suggested that pursuing counterclaims against the plaintiff in appropriate cases may be an effective means by which the defendant may limit their liability for damages and thereby attempt to achieve some form of apportionment of liability. According to Legg[53], such counterclaims could be pursued on the basis that, amongst others:

(a)there is an implied term in the contract between the parties that the plaintiff exercise due care and skill in carrying out its obligations;
(b)in professional negligence cases, the plaintiff client owes a common law duty of care to the defendant professional in providing instructions and information;
(c)the plaintiff engaged in misleading and deceptive conduct within the wording of s 52 of the Trade Practices Act or similar state legislation.


Before commenting further on the practicality of Legg’s suggestions with respect to the pursuit of counterclaims, it is appropriate to make some comment about judicial reformulation of causation principles and then examine the Queensland Court of Appeal decisions in Wylie and Jones where the court in each case commented upon the appropriateness of allowing a defendant to pursue a counterclaim against the plaintiff as a means of attempting to achieve some form of apportionment of liability.

Various scholars have for some time argued that causation principles generally should be reformulated so that apportionment is available in all causes of action to ensure a uniform approach.[54] Seddon is a strong proponent for the application of apportionment principles to all causes of action.[55] In actions for damages pursuant to s 82 of the Trade Practices Act, Seddon has argued that the all or nothing causation approach should be dispensed with and apportionment principles should be applied. Seddon considers this possible because the Trade Practices Act allows the court to adopt a commonsense approach to causation and adjust the damages accordingly where both parties are at fault.[56] Indeed, in recent times, some courts have applied apportionment principles when determining the damages recoverable pursuant to s 82 of the Trade Practices Act for that part of the plaintiffs loss that is attributable to the conduct in breach of s 52.[57] In the realm of contract, however, it is necessary to first examine the Queensland Court of Appeal decisions in Wylie and Jones before drawing some conclusions about the likelihood of judicial reformulation of the approach to causation in contract.

3. Wylie v ANI

The Facts


Wylie was injured at work on a number of occasions and subsequently brought an action in the District Court against ANI, his employer, for damages for personal injuries, alleging both negligence and breach of an implied term in the contract of employment that ANI would provide a safe system of work.

At first instance, the trial judge found that at least one accident occurred through the fault of ANI as it failed to take reasonable steps to provide a safe system of work. This failure constituted both negligence and a breach of contract. The trial judge, however, also found that Wylie was 50% contributory negligent. Given that the action was framed in contract and that it was established that ANI breached the contract of employment, the trial judge awarded full damages to Wylie. Following Astley, the trial judge did not reduce the damages awarded in contract to take account of Wylie’s contributory negligence.

Prior to delivering his judgment, the trial judge circulated his draft reasons to counsel. When the matter was called on for judgment, ANI sought to amend its defence by claiming, in essence, that:

(a) it was an implied term of the contract of employment between Wylie and ANI that Wylie would carry out his duties with due care and skill and in such a fashion as to not to cause injury to any person, including himself;
(b) in breach of this term, Wylie failed to carry out his duties with due care and skill;
(c) by reason of Wylie’s breach, ANI suffered loss and damage in such amount of Wylie’s damages as the court finds were caused by Wylie’s breaches; and
(d) ANI claimed to set-off the amount of its loss against such amount of damages for breach of contract, if any, as may be payable by Wylie to ANI pursuant to Wylie’s breach.

ANI then sought to counterclaim against Wylie for damages for breach of contract.

The trial judge refused to allow the proposed amendments to ANI’s defence.

ANI sought leave of the Queensland Court of Appeal to appeal the decision at first instance on a number of grounds. The Queensland Court of Appeal granted ANI leave to appeal only on the ground of the trial judge’s refusal to allow the proposed amendment to ANI’s defence.

The Issues and Decision


The significant issues which the Queensland Court of Appeal considered include:

whether there is an implied term in a contract of employment that the employee is to carry out the employment with due care and skill so as to take reasonable care for the employee’s own safety;
whether an employer is entitled to be indemnified by the employee against its liability for damages caused by the employer’s negligence; and
the correct test for causation in contract claims.

Whether there is an implied term in a contract of employment that the employee is to carry out the employment with due care and skill so as to take reasonable care for the employee’s only safety?


McMurdo P, examined the authorities and concluded that “there is ordinarily an implied term in a contract of employment that an employee will carry out the employment with due care and skill; on the [trial] judge’s findings, the respondents in this case breached that duty”.[58] Thomas JA[59] and Ambrose J[60] agreed with McMurdo P’s conclusion.

Whether an employer is entitled to be indemnified by the employee against its liability for damages caused by the employer’s negligence?


Upon the amended defence and counterclaim, the court would have had reason to consider whether an employer is entitled to be indemnified by the employee against its liability for damages caused by the employer’s negligence. This is because, pursuant to the amended defence and counterclaim, ANI essentially alleged that:

(a) Wylie breached an implied term in the contract of employment by failing to carry out his duties with due care and skill and in such a fashion as to not to cause injury to any person, including himself; and
(b) Wylie’s breach entitled ANI to counterclaim for damages for the amount that would otherwise have been deducted from the judgement by reason of the finding of contributory negligence.

On the hearing of the appeal, however, ANI did not seek to support this argument and dropped the counterclaim. Rather, ANI submitted that it was Wylie’s failure to take care, not the breach by ANI, which was, in contract, the cause of Wylie’s damages. The issue for the court then became, which breach caused, in a contractual sense, Wylie’s injuries. This involved determining the correct test for causation in contract claims.

The correct test for causation in contract claims


Each of their Honours delivered separate judgments in determining this issue.

McMurdo P examined the authorities in relation to causation and noted the difficulty where a breach of contract may arise from two causes, both of which are co-operating and of equal efficacy in causing loss to the plaintiff. Her Honour considered that the appropriate question to be asked is “was the breach of contract alleged by the plaintiff against the defendant a cause of the damage?”.[61] Her Honour concluded that the trial judge’s findings made it clear that ANI’s breach of contract in maintaining an unsafe system of work was certainly “a” cause of Wylie’s injuries.[62] Accordingly, McMurdo P found that ANI was liable to Wylie for the damage which he suffered as a result of his injuries.

Thomas JA also examined the relevant authorities and concluded that “it is enough in a breach of contract case that a defendant’s act be a cause of the damage”.[63] His Honour was satisfied that the facts established that ANI’s actions were a cause of Wylie’s damage and accordingly found ANI liable in contract for Wylie’s loss.

Like McMurdo P and Thomas JA, Ambrose J also examined the relevant authorities. Ambrose J noted that there can be a number of acts or omissions which constitute a breach of a contract.[64] In such situations, his Honour outlined that it is necessary to evaluate the evidence and determine whether the alleged breach is a real and substantial cause of the loss alleged by the plaintiff.[65] Although prefacing “cause” with the words “real and substantial” Ambrose J’s analysis of the test for causation in breach of contract cases accords with that of both McMurdo P and Thomas JA as it requires a determination as to whether the alleged breach is “a” cause of the plaintiff’s damage.

Ambrose J considered that despite Wylie’s failure to take care of himself, the facts indicated that ANI’s failure to provide a safe system of work was a real and substantial cause of Wylie’s injuries sufficient to support a judgment against ANI in favour of Wylie for breach of contract.[66]

4. Jones v Persal

The Facts


In 1996, Jones was injured at work when he fell from the bullbar of a truck onto which he had climbed to assist another worker. Although a safety platform was available for the type of work Jones was attempting to undertake, Jones failed to use the safety platform.

Jones brought a claim for damages for negligence, breach of contract and breach of statutory duty on the part of his employer Persal. At first instance, the trial judge concluded that Persal was liable to Jones for his damages. Although concluding that Jones had failed to take reasonable care for his own safety by failing to use the safety platform, the trial judge held that he was precluded from reducing the award of damages as a result of the High Court decision in Astley.

Persal subsequently appealed against the finding of negligence, or alternatively, the failure to make a reduction in the award of damages contending that Astley does not preclude a finding that the cause of Jones’ injury and loss on a contractual analysis of the relationship between the parties was his own failure to take care. Persal alleged that such a finding would answer the contractual claim and thus allow a reduction of Jones’ damages via the tort claim if it stood.

Similar to the situation in Wylie, Persal sought leave at the trial to amend its defence and to bring a counterclaim. The proposed amendment alleged that a term be implied into the contract of employment which essentially provided that Jones would carry out his duties with due care and skill and in such a fashion as to not cause injury to any person including himself whilst also taking reasonable care for his own safety.

Persal contended that Jones breached that term and as a consequence, Persal suffered loss and damage in such amount of Jones’ damages as the court found was caused by Jones’ breach. Persal then sought to set-off those damages against any order for damages made in favour of Jones. In other words, Persal attempted to bring about a reduction in damages equivalent to the quantum of any finding of contributory negligence in tort and thereby in effect achieve apportionment. The trial judged refused leave to amend Persal’s defence in this manner because he concluded that the decision in Astley precluded a finding consistent with the proposed amendment.

The Issues and Decision


The significant issues which the Queensland Court of Appeal considered were similar to those in Wylie and include:

the correct test for causation in contract claims; and
whether the decision in Astley precludes a finding that the cause of Jones’ loss on a contractual analysis of the relationship between the parties was his own failure to take care and therefore the reduction of Jones’ damages on the tort claim could stand.

The correct test for causation in contract claims


Similar to her reasoning in Wylie, McMurdo P stated that:

If a breach of contract is one of two causes, both co-operating and both of equal efficacy in causing loss to the plaintiff the party responsible for the breach is liable to the plaintiff for that loss (Wylie at [27], [50], [92]. See also Simoneous Vischer v Holt (1979) 2 NSWLR 322, 346; Heskell v Continental Express Limited [1950] 1 All ER 1033; Alexander v Cambridge Credit Corporation Limited (1987) 9 NSWLR 310, 315, 357). [67]

McMurdo P found that the evidence did indeed establish that Persal failed to provide a safe system of work and that that failure to provide a safe system of work was a cause of Jones’ injuries. Accordingly, Persal was liable in contract to Jones for his loss and damage.[68]

In determining causation, Pincus JA considered that the court must determine whether the defendant’s act was “the” cause of the plaintiff’s loss. His Honour stated:

The conclusion that one cause or another is “the” cause has in this context rather a special meaning: Sometimes “real” or “effective” is added, perhaps for emphasis. Suppose the employer, inexcusably leaves an open vat of acid in a position where a worker moving about in the course of his duties might well, if a little careless, fall in. Even if the court holds that the injured worker would not have fallen in if he had taken proper care, no-one would doubt that the employer’s breach of contract would be deemed “the” cause, despite there being in truth two causes. . . [I]n ascertaining “the” cause of the injury the court has to consider the extent to which carelessness on the part of the plaintiff contributed to the occurrence, whether or not that carelessness constituted a breach of contract. [69]

Although using different terminology to that of McMurdo P, Pincus JA’s reasoning is essentially the same. For Pincus JA, provided that if it can be established that the defendant’s action caused the plaintiff’s loss then the plaintiff will be entitled to recover against the defendant for their loss and damage even if it is also established that the plaintiff also caused part of their own loss and damage.

Pincus JA, however, found that the evidence did not establish that Persal failed to provide a safe system of work and was therefore neither negligent nor in breach of its employment contract with Jones or its statutory duty to provide a safe system of work.[70] Pincus JA therefore allowed Persal’s appeal and set aside the judgement at first instance.

In considering the issues relating to causation, White J commented that:

Different and well-known considerations [compared to those in tort] apply when the relationship is governed by contract. In that circumstance courts will find the “real” or “effective” cause of the damage complained of, Leyland Shipping Company Ltd v Norwich Union Fire Insurance Society Limited [1918] AC 350 per Lord Shaw at 370; and Smith Hogg & Co v Black Sea and Baltic General Insurance Co [1940] AC 997. To assist in that search the common law applies a commonsense notion of causation, Monarch Steamship Co Ltd v Karlshamms Oljefabriker (A/B) [1949] AC 196; Quinn v Burch Bros (Builders) Ltd [1966] QB 370 (CA); and Alexander v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310. If an employer’s breach of contract was the cause of the damage complained of the employer will carry the liability. But the employee will be left to bear his own loss if his own want of care has been the effective cause of the damage or if he is unable to prove what damage flowed from the employer’s breach of contract as distinct from his own breach of contract. [71]

White J found that the evidence did not establish that Persal failed to provide a safe system of work and was therefore neither negligent nor in breach of its contractual or statutory duties to provide a safe system of work.[72] White J therefore allowed the appeal, set aside the judgement at first instance and gave judgement for Persal.

Whether the decision in Astley precludes a finding that the cause of Jones’ loss on a contractual analysis of the relationship between the parties was his own failure to take care and therefore the reduction of Jones’ damages on the tort claim could stand


Neither McMurdo P nor Pincus JA directly addressed this issue. As McMurdo P was satisfied that the facts indicated that Jones’ loss was caused by Persal’s breach of contract to provide a safe system of work, it was not necessary for McMurdo P to express any view on this issue.

As for Pincus JA, having found that the facts established that Persal was neither negligent nor in breach of its statutory or contractual duties which it owed to Jones, it was also unnecessary for his Honour to express an opinion on this issue.

White J, however, felt compelled to make some comment given that counsel for Persal made detailed submissions in respect of the issues of causation and the term to be implied into the contract of employment between Persal and Jones.

Her Honour considered that Astley does not preclude some form of apportionment of liability in an action for breach of contract. White J restated the relevant paragraphs of the majority’s decision in Astley which establish that apportionment may be achieved if the parties to the contract have agreed that responsibility for damage is to be apportioned on the basis of the respective fault of the parties.[73] In the absence of a clear agreement to this effect, however, apportionment will not be possible by any other means because, in contract claims, the general rule is that a plaintiff is entitled to recover full damages as a result of the defendant’s breach, even if the plaintiff’s conduct has contributed to the plaintiff’s damage. Her Honour stressed that the present state of the law will not entertain an argument that apportionment could in effect be achieved if a defendant claimed damages for breach of contract by the plaintiff, which would, in quantum terms, be the equivalent of the quantum of the plaintiff’s contributory negligence.[74]

5. The Outcomes of Wylie and Jones

Causation


Both Wylie and Jones clearly establish that the present state of the law demands that causation in contract remain an all or nothing approach. In other words, if the plaintiff establishes that the defendant’s conduct was a cause of the plaintiff’s loss, then in the absence of some other specific provision in the contract which requires a different conclusion, the plaintiff will be entitled to recover the full amount of its loss in damages. Both Wylie and Jones, however, evidence some important comments as to whether the all or nothing approach is good law.

Thomas JA in Wylie, for example, considered that, once established, the duty in tort to take reasonable care is essentially the same as the duty in contract (either express or implied) to take reasonable care. His Honour submitted that it is therefore difficult to see why there should be any different test for causation in deciding whether the breach of the duty (whether in contract or in tort) caused the damage of which the plaintiff complains.[75]

Despite identifying the anomaly of having two separate tests for causation when the duty which has allegedly been breached is essentially the same, Thomas JA stated that the Queensland Court of Appeal lacked the authority to relax the relevant tests for causation. His Honour stated that this is because the present state of authority demands the application of the tests stated in Alexander v Cambridge Credit Corporation Ltd [76] and Heskell v Continental Express Ltd [77] which, as outlined above, establish that causation will be satisfied if it is established that the defendant’s act was “a” cause of the plaintiff’s damage.[78] Therefore, until such time as there is judicial reformulation of the relevant principles by the High Court, causation will remain an all or nothing approach. This has significant implications for the practicality of apportionment of liability via a counterclaim by a defendant and the desirability of legislative intervention.

Counterclaim


As Legg[79] posits, it is arguably open to a defendant to counterclaim against a plaintiff in appropriate circumstances and seek relief against the plaintiff for breach of a contractual duty (either express or implied) to not make the defendant liable for economic loss which was caused by the plaintiff. Although not raised on the facts in Wylie, Ambrose J commented upon such a situation:

I can find nothing in Astley inconsistent with the implication in the contract of employment between employer and employee in this case a term that the employee will take reasonable care in the performance of his work not to perform it negligently and so subject his employer to economic loss as a consequence. If such a term be implied in my view it is arguable that his injury, loss and damage resulted in part from his own negligence and from his breach of contract of employment and it would be open to the employer to counterclaim an indemnity from the employee which on the facts of this case would be at least to the extent of the contribution found against him in his action in tort or perhaps the whole of its liability to him. [80]

Ambrose J noted, however, that a practical and efficient solution might be difficult to achieve given that causation is determined on an all or nothing approach.[81] For example, consider the situation where the conduct of both the plaintiff and the defendant was a concurrent cause of the plaintiff’s injury or loss. If the defendant successfully counterclaimed against the plaintiff then presumably the defendant’s loss would be the same as the amount of the defendant’s liability to the plaintiff. In effect, therefore, the defendant’s liability to the plaintiff would be cancelled out by the plaintiff’s liability to the defendant. As Ambrose J highlighted, such a situation is akin to the position of plaintiff’s in tort prior to the introduction of apportionment legislation in the 1950s where plaintiffs were denied recovery if they were in any way contributorily negligent.[82]

White J in Jones also commented upon the effectiveness of allowing a defendant to counterclaim against the plaintiff. In Jones, White J considered that the amendment to the pleadings sought by Persal which would have effectively allowed it to counterclaim against Jones for an alleged breach of contract by him which, along with Persal’s breach of contract, caused Jones loss “was incorrect insofar as it related to damages and tended to confuse the issues of causation in contract and the existence of the implied term [that Jones carry out his work with appropriate care and skill].[83]

Although containing some comment as to whether a counterclaim by a defendant against a plaintiff could in effect achieve apportionment of liability, both Wylie and Jones disappoint because in each case it was not necessary for the court to come to a conclusion on the matter in reaching its decision. Nonetheless, at this stage the obiter in both Wylie and Jones indicate that a defendant in appropriate cases may face some problems in convincing a court that it should reduce the damages payable by the defendant on a finding that the plaintiff breached a duty to the defendant to not cause the defendant economic loss and thereby effectively apportion liability. This is especially so if the approach to determining causation in contract cases remains an all or nothing approach.

Legislative Intervention


As in Astley, there is a clear call in Wylie and Jones for legislative intervention. In Wylie, McMurdo P asserted:

Since Astley, where an employee suffers injury in the workplace caused by the employer’s breach of contract of employment, damages will no longer be able to be reduced because of the employee’s contributory negligence. The commendable spirit of modern Workplace Health & Safety legislation requires that employer and employee co-operatively work together to develop and maintain a safe workplace. It is not inconsistent with that spirit to require workers to be accountable for their own negligence consistent with their tortious obligations and apportionment legislation. The affect of Astley goes well beyond cases involving personal injury in the course of employment. But is for the legislature, not the courts, to consider whether the law should be changed to reflect the position generally thought to exist before Astley. [84]

McMurdo P made similar statements in Jones.[85]

Thomas JA in Wylie was also clear in his call for legislative reform:

I agree that there is an urgent need for consideration by the legislature concerning the vast alterations in liability for damages and economic consequences produced by Astley in a range of cases including those between employer and employee and those involving professional negligence. [86]

Ambrose J in Wylie, however, was somewhat reluctant to call for legislative reform as he considered that, as outlined above, apportionment may be achieved by a counterclaim in contract for at least part of the assessed damages to the extent to which the plaintiff caused the defendant’s loss. Ambrose J, however, noted:

It may be that the whole of assessed damages would be recoverable by the [defendant]; if so, an amendment of the apportionment legislation might be required in the interests of negligent plaintiffs who might otherwise find themselves in the position of plaintiffs before apportionment legislation was introduced in the 1950s. [87]

While attractive and called for by scholars and members of the judiciary alike, legislative intervention is not without difficulty. As a state matter, the timing of legislative reform and the content of proposed legislation are issues which would need to be resolved between the various states and territories in Australia.[88] If legislative reform is approached in a haphazard fashion without appropriate consultation between state and territory governments, uniformity of response will likely be lost. In addition, such a situation may present conflict of laws problems. Depending on the bargaining strength of the parties to a contract, one party may seek to include a proper law clause which specifies the law of a State or Territory which has or has not (whatever the case may be) legislated to allow for apportionment of liability in contractual claims where both parties are, to some degree, at fault.

6. Conclusion


Wylie and Jones confirm that resolving the issues arising from Astley relating to apportionment of liability in contract cases and the different approaches to causation in contract and tort is a complex matter with no easy fix. Whilst the Queensland Court of Appeal had cause to consider some argument in respect of the implications of Astley and the means by which apportionment of liability could still be achieved, few cogent answers were provided as, for one reason or another, it was unnecessary for the court in each case to determine such argument. At this stage, therefore, the basic principle remains that a plaintiff will likely avoid any liability for contribution by reason of his, her or its own fault if the action is grounded in contract rather than negligence.

Although various scholars have suggested responses to the ramifications of Astley and the means by which apportionment may nonetheless be achieved, Wylie and Jones both indicate that there are some concerns, at least at Queensland Court of Appeal level, as to the viability of some of the proposed responses. The primary concerns include the likelihood of judicial reform to the approach to causation, the practicality and workability of a counterclaim by a defendant and its effect on the plaintiff’s claim and the timing and content of legislative intervention. These are significant issues for plaintiffs and defendants and until such time as they are resolved by either the courts or the legislature, both plaintiffs and defendants must carefully determine which way to jump when considering how to plead their action and argue their case.

Postscript: On 7 August 2001, Queensland's Attorney General, the Honourable Robert Welford, tabled the Law Reform (Contributory Negligence) Bill in the Queensland Legislative Assembly. The Bill amends the Law Reform Act 1995. The Bill addresses the impact of the decision of the High Court in Astley v Austrust by enabling apportionment of liability in a claim for damages where the claim is based on grounds other than negligence.

The Bill is retrospective in its operation and thereby seeks to restore the law to the position that was commonly accepted as applying in Queensland before the decision in Astley v Austrust. It should be pointed out, however, that the proposed amendments are drafted so that they do not affect the rights of parties to proceedings that have been commenced or determined or in cases where a settlement has been negotiated. Furthermore, it should also be pointed out that the proposed amendments do not apply to claims under the Workcover Queensland Act 1996.

Once passed, the amendments will be taken to have commenced on 7 August 2001.

As is evident in the Explanatory Notes to the Bill, the Queensland Parliament has heeded the call by the courts for legislative reform. Once the Bill is enacted, the ramifications of the High Court decision in Astley v Austrust will become part of Queensland's legal history.


[*] BA, LLB (Hons) (UQ), Lawyer, Allens Arthur Robinson, Brisbane. This article was originally submitted as a Masters paper to the Faculty of Law, QUT.

[1] 73 ALJR 403.

[2] [2000] QCA 314 (4 August 2000).

[3] [2000] QCA 386 (22 September 2000).

[4] Doyle CJ, Olsson and Duggan JJ.

[5] (1988) 78 ALR 69.

[6] Ibid at 102.

[7] [1994] UKHL 5; [1995] 2 AC 145.

[8] with whom Lord Keith, Lord Brown-Wilkinson, Lord Mustill and Lord Nolan agreed.

[9] Henderson v Merret Syndicates Ltd [1994] UKHL 5; [1995] 2 AC 145 at 193-4.

[10] Astley, supra n 1 at [47].

[11] Ibid at [48].

[12] Ibid at [130]; footnotes omitted.

[13] See Ibid at [135] and [136] for Callinan J’s analysis of the decision in Rogers v Whitaker [1992] HCA 58; (1992) 109 ALR 625; Chappel v Hart (1998) 156 ALR 157; Henderson v Merret Syndicates Ltd [1994] UKHL 5; [1995] 2 AC 145; Kaparro Industries Plc v Dickman [1990] UKHL 2; [1990] 2 AC 605; and Sutherland Shire Council v Hayman [1985] HCA 41; (1985) 60 ALR 1.

[14] Astley, supra n 1 at [135].

[15] Ibid at [41].

[16] Ibid at [150-1].

[17] Ibid at [153].

[18] Ibid at [84].

[19] Ibid at [86].

[20] Ibid at [87].

[21] Ibid at [137].

[22] (1994) 28 UBritColLRev 141.

[23] Astley, supra n 1 at [160].

[24] (2000) 74 ALJ 306.

[25] M Legg, ‘The High Court’s Decision on Concurrent Liability and Contributory Negligence in Astley v Austrust Limited’ (1999) 18 ABR 262.

[26] J Swanton, ‘Contributory Negligence is Not a Defence to Actions for Breach of Contract in Australian Law – Astley v Austrust Limited’ (1999) 14 JCL 251.

[27] D Butler, ‘Breach of Contract and Contributory Negligence: A Protracted Debate Finally Resolved’ (2000) 28 ABLR 132.

[28] N Seddon, ‘Contract Damages Where Both Parties are at Fault’ (2000) 15 JCL 207.

[29] Astley, supra n 1 at [84].

[30] Supra n 28 at 226.

[31] Ibid.

[32] See, for example, Hospital Products Ltd v United States Surgical Corp [1984] HCA 64; (1984) 55 ALR 417; Wright v TNT Management Pty Ltd (1989) 15 NSWLR 679; and Byrne v Australian Airlines Ltd (1995) 131 ALR 422 for analyses of the relevant law and procedure relating to the implication of terms into contracts to provide for business efficacy or to give effect to the imputed intentions of the parties.

[33] See, for example, ss 74 and 68 of the Trade Practices Act 1974 (Cth) which together impart on those entities that fit within the scheme of the Act a non-delegable duty to render services with “due care and skill”. See also the various state and territory equivalents, as well as specific legislation applying to service providers such as legal service providers: see, for example, s 48C Queensland Law Society Act 1952 (Qld).

[34] Astley, supra n 1 at [139].

[35] Supra n 25 at 274.

[36] Supra n 26 at 259.

[37] White and Carter (Councils) Ltd v McGregor [1961] UKHL 5; [1962] AC 413; Belous v Willetts [1970] VicRp 5; [1970] VR 45 at 49 per Gillard J, SC(VIC); Richardson v Schultz (1980) 25 SASR 1 at 18-20 per Williams J, SC(SA); and Shevill v Builders Licensing Board [1982] HCA 47; (1982) 42 ALR 305.

[38] Note that Glanville Williams in Joint Torts and Contributory Negligence, Stevens & Sons Ltd London 1951 pp 290-4 argues that the principles behind the doctrine of mitigation should apply to pre-breach conduct so that apportionment of liability may be achieved regardless of when the plaintiff’s conduct occurred.

[39] Supra n 28 at 212.

[40] Ibid.

[41] Supra n 25 at 274.

[42] [1990] HCA 20; (1990) 92 ALR 545.

[43] Ibid at 548-9.

[44] [1994] HCA 4; (1994) 120 ALR 16.

[45] Supra n 25 at 274.

[46] The High Court’s approach to the matter of recovery of damages for loss of opportunity in medical negligence cases was not conclusive in Chappel v Hart (1998) 156 ALR 517. See also the decision of Gaudron J in Naxakis v Western General Hospital [1999] HCA 22; (1999) 162 ALR 540 where her Honour considered that a case involving the failure to properly diagnose was not an appropriate case for the assessment of damages for loss of opportunity. Note, however, that Callinan J would have reached a contrary conclusion in relation to the application of assessment of damages pursuant to loss of opportunity in cases of personal injury or medical negligence generally.

[47] Supra n 28 at 214.

[48] Astley, supra n 1 at [88].

[49] Ibid at [161].

[50] See also Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 92 ALR 545 at 548-9 for an analysis of the common law principles relating to causation and the tendency of contract to produce an all or nothing approach.

[51] Simoneous Vischer v Holt (1979) 2 NSWLR 322, 346; Heskell v Continental Express Limited [1950] 1 All ER 1033; Alexander v Cambridge Credit Corporation Limited (1987) 9 NSWLR 310, 315, 357. See also the analysis below of the Queensland Court of Appeal decisions in Wylie and Jones for comment on the authorities relating to causation principles in contract.

[52] Supra n 28 at 279-81.

[53] Ibid.

[54] See Legg, supra n 28 at 280; Masel and Kelly, supra n 24 at 323-4; and Swanton, supra n 26 at 259-60.

[55] See for example Seddon, supra n 28 at 216-21 in relation to apportionment under contract law and N Seddon, ‘Misleading Conduct: The case for Proportionality’ (1997) 71 ALJ 146 in relation to apportionment under the Trade Practices Act 1974 (Cth).

[56] Ibid at 150-1.

[57] See for example S & U Constructions Pty Ltd v Westworld Property holdings Pty Ltd (1998) ATPR 40-854 and I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [1999] QSC 320 (22 October 1999). For further analysis of the relevant principles, see J D Heydon, Trade Practices Law: Restrictive Trade Practices; Deceptive Conduct and Consumer Protection, Law Book Company Sydney 1989 at 9351-8.

[58] Wylie, supra n 2 at [13].

[59] Ibid at [50].

[60] Ibid at [77-9].

[61] Ibid at [27].

[62] Ibid at [28].

[63] Ibid at [45].

[64] Ibid at [84-6].

[65] Ibid at [92].

[66] Ibid.

[67] Jones, supra n 3 at [17].

[68] Ibid at [18-19].

[69] Ibid at [25-6].

[70] Ibid at [23].

[71] Ibid at [53].

[72] Ibid at [45].

[73] Astley, supra n 1 at [85-6].

[74] Jones, supra n 3 at [49-50].

[75] Wylie, supra n 2 at [46].

[76] (1987) 9 NSWLR 310.

[77] [1951] All ER 1033.

[78] Wylie, supra n 2 at [48].

[79] Supra n 25 at 279-81.

[80] Wylie, supra n 2 at [79–80].

[81] Ibid at [81].

[82] Ibid.

[83] Jones, supra n 3 at [64].

[84] Ibid at [31].

[85] Jones, supra n 3 at [20].

[86] Wylie, supra n 2 at [52].

[87] Ibid at [81].

[88] Note that Tasmania, Victoria and New South Wales have each already legislated by retrospectively abrogating the decision in Astley. See: Tortfeasors and Contributory Negligence Amendment Act 2000 (Tas) which amends the Wrongs Act 1954 (Tas); Wrongs (Amendment) Act 2000 (Vic) which amends the Wrongs Act 1958 (Vic); and Law Reform (Miscellaneous Provisions) Amendment Act 2000 (NSW) which amends the Law Reform (Miscellaneous Provisions) Act 1965 (NSW).


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