L & A Fazzini Pty Ltd v Amaca Pty Ltd (NSWCA 2021)

Link to Decision

Is a party entitled to recoup from a co-defendant money paid to a plaintiff, without itself proving that it had no liability to the plaintiff?

Key Takeaways

The NSWCA (White JA, Payne and McCallum JJA agreeing) accepted that if a defendant to a claim in the Dust Diseases Tribunal (Tribunal) joins a cross-defendant, then in any claim by the defendant for restitution, the defendant would have had the onus of proving the cross-defendant’s liability. The onus of proof in a claim like the present, where both parties were original defendants, is no different.

Brief Facts

The appellant, L & A Fazzini Pty Ltd (Fazzini) and Amaca Pty Ltd (Amaca) were defendants to a claim brought in the Tribunal by the plaintiff. The plaintiff had contracted mesothelioma as a result of being exposed to asbestos. Both Fazzini and Amaca denied liability.

In the Tribunal, both parties consented to judgment in favour of the plaintiff without admitting liability. Apportionment was assessed by way of a Contributions Assessment Determination (CAD) between Fazzini and Amaca at 60/40 respectively. Both parties paid the settlement sum.

Fazzini commenced proceedings against Amaca claiming contribution or indemnity pursuant to s5 of the Law Reform (Miscellaneous Provisions) Act 1946 (LRMPA). At no point did Fazzini admit that it was a tortfeasor liable to which is required by s5 of LRMPA. Amaca denied liability primarily on the basis that absent an admission by Fazzini that it was a tortfeasor liable, there would be no cause of action for contribution or indemnity available against Amaca.

Fazzini later filed a second cross-claim against Amaca seeking restitution for the portion of the judgment sum that it had paid to the plaintiff. Fazzini contended that in order for Amaca to retain the benefit of the monies paid by Fazzini in accordance with the CAD, it was necessary for Amaca to pursue its own claim for contribution against it. This was disputed by Amaca who contended that for Fazzini to establish an entitlement to restitution, it was necessary for Fazzini to demonstrate that it had no liability to the plaintiff.

Scotting DCJ rejected Fazzini’s claim on the basis that, although Amaca had gained a benefit at Fazzini’s expense (which assumed Fazzini was not liable), it was for Fazzini to make out some ‘injustice’ entitling it to restitution. Ultimately, Fazzini had failed to show that it had suffered any injustice so as to establish an entitlement to restitution.

The essential issue was who bore the onus of proof in any claim for contribution.

Would Fazzini be in the same position had it not been sued by the plaintiff as an original defendant, but only joined as a cross-defendant by Amaca? If the answer is yes, then the reasoning in Power Technologies Pty Ltd v Energy Australia (NSWCA 2010) (Power Tech) would apply. Consequently, given Amaca now admits it was liable as tortfeasor to the plaintiff (and would have been liable for the full amount of damages) and given that Amaca also admits it did not allege that Fazzini was also a tortfeasor, Fazzini would be entitled to restitution from Amaca of the monies it had paid to the plaintiff.

The issue is whether Fazzini’s denial that it was a tortfeasor, and Amaca’s ultimate admission that it was a tortfeasor, means that Fazzini is entitled to restitution of the monies it paid to the plaintiff, where Fazzini does not allege and does not seek to prove its innocence.

Judgment

Appeal dismissed with costs.

The Court observed that to the extent Power Tech applied to the present facts, this decision affirms the principle that he who asserts must prove. His Honour Justice White observed that in order for Fazzini to succeed in its cross-claim, it either had to prove that it was not a tortfeasor liable to the plaintiff or successfully establish that Amaca bore the onus of proving that it was so liable. Finding that Fazzini had not sought to establish the former and failed to establish the latter, his Honour dismissed the appeal.

Implications

His Honour Justice Payne observed that to uphold Fazzini’s contention would affect the coherence of the scheme comprising the Dust Diseases Tribunal Act 1989 (NSW) and the Dust Diseases Tribunal Regulation 2013 (NSW). It is accepted that if a defendant to a claim in the Tribunal joins a cross-defendant, then in any claim by the defendant for restitution, the defendant would have had the onus of proving the cross-defendant’s liability. The onus of proof in a claim like the present, where both parties were original defendants, should be no different.

Authorities in the NSWCA, in particular in Power Tech, make clear that the purpose of the CAD process is to encourage settlement with the plaintiff. To require a defendant to contest liability to the plaintiff at the outset, rather than in a later cross-claim against another defendant or cross-defendant following payment of the settlement sum, would be contrary to the scheme.

This conclusion has a potentially undesirable consequence, namely that there is an incentive for a defendant in the position of Fazzini to have ‘required the plaintiff to run his claim against it’, as Amaca submitted it should have done.