The NSW Court of Appeal sheds light on Proportionate Liability & Cross-Claims

Practice Note by Leanne Rich

In a helpful procedural decision on proportionate liability handed down on 2 July 2019, the NSW Court of Appeal has clarified that cross-claims between alleged concurrent wrongdoers are permissible if they seek relief based on independent causes of action as opposed to contribution pursuant to s 5 of the LRMPA.  In the leading judgment, Bell P (with whom Macfarlan JA and Payne JA agreed) held that “a cross-clam for contribution or indemnity pursuant to s 5 of the LRMPA on the basis that the cross-defendant is liable as a concurrent wrongdoer will be liable to summary dismissal”.  However, there is no “general proposition that cross-claims are not or are never permitted where there is said to be an apportionable claim”

On the contrary, cross-claims against an alleged concurrent wrongdoer are permissible where the cross-claim is based upon an independent cause of action against the cross-defendant, such as negligence, breach of contract or misleading conduct.  As Bell P stated at [47] “[t]he proportionate liability regimes in both State and federal legislation were not designed to emasculate such independent substantive rights”.  In a case where there is an independent cause of action, the cross-claim may serve to guard the cross-claimant against the possibility that the cross-defendant is not found to be a concurrent wrongdoer and/or the plaintiff’s claim is not held to be apportionable.

The case is Landpower Australia Pty Ltd v Penske Power Systems Pty Ltd  [2019] NSWCA 161 and can be found here:

© Copyright 2018 Alinea Chambers. Telephone (02) 9165 1400. Level 33, 52 Martin Place, Sydney NSW 2000