Milne v SDN Children’s Services and BRC Recruitment Pty Ltd (No. 3)

On 4 April 2025, the Court published Milne v SDN Children’s Services and BRC Recruitment Pty Ltd (No. 2) [2025] NSWSC 310 (“Milne No 2”) as to various matters concerning damages, interest, cross-claims and costs and the following direction was made:

On 14 April 2025, [1] the Court received a communication from the second defendant enclosing submissions which were as follows (the “April 2025 submission”):

On 29 April 2025, Consent Orders were received from the parties, which proceeded on the assumption that “the second defendant’s further submissions seeking the reinstatement of the cross claims are accepted” by the Court.

The proposed Consent Orders were:

The parties assumption, as to the Court’s acceptance of the April 2025 submission of the second defendant, is well foundered. What appears below are short reasons for the Court adopting that position.

The starting point is the relevant aspects of the respective cross-claims. The second defendant’s cross-claim, filed on 8 March 2023, sought, inter alia, the following relief:

The first defendant’s amended second cross-claim, filed on 15 February 2024, sought, inter alia, the following relief:

In Milne No 2, the Court adopted the submission advanced by the second defendant on the disposal of the cross-claims. Paragraphs 106 to 108 of Milne No 2 were as follows:

In the result, the Court's conclusion, regarding the cross-claims, was as follows (Milne No 2, [127(11)]):

The Court’s acceptance of the second defendant’s submission to dismiss the first defendant’s cross-claim was evidently based upon the Court having already made an apportionment of damages, namely 70% liability of the first defendant and 30% liability of the second defendant. The first defendant’s cross-claim sought a “complete indemnity” or a “contribution” pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) to the plaintiff’s claim. Thus, the second defendant’s submission that the cross-claim “had no work to do” was attractive.

Nonetheless, the second defendant made a submission contradicting its earlier contention upon a proposition of law rather than merit. It was contended that it was necessary to reinstate the first defendant’s cross-claim to allow the first defendant to succeed on part of its cross-claim against the second defendant.

In support of the second defendant’s proposition that “paragraphs 17 and 18 of its written Submissions of the 6th of February 2025 were incorrect and contrary to law and have thereby led His Honour into error (by dismissing the cross claims of the First and Second Defendant)”, reliance was placed upon [69] – [76] of Value Constructions Pty Ltd v Badra [2024] NSWCA 181 (“Value Constructions CA”).

Notwithstanding that the basis for the second defendant’s reliance upon Value Constructions CA is unclear, the judgment does lend weight to the further submission by the second defendant. That is because Value Constructions CA stands for the proposition that where a third-party tortfeasor [2] and an employer are held liable for a plaintiff’s injury and there is a ruling on apportionment between the defendants, the third-party tortfeasor is entitled to succeed on its cross-claim against the employer (Value Constructions CA at [70] - [75]).

When the following consideration is brought into focus, there is a proper basis demonstrated for the Court to depart from its earlier ruling as a matter of law. The apportionment of damages between third-party tortfeasors and employers cannot simply be effected by a split of the overall damages awarded to the plaintiff. That is because the limitations imposed on the award of damages against employers under the Workers Compensation Act are greater than the damages that can be awarded against third-party tortfeasors under the Civil Liability Act 2002 (NSW): Value Constructions CA at [73]; Badra v Value Constructions Pty Ltd & Ors (No 2) [2023] NSWSC 1655 at [7]. The success of the third-party tortfeasor on its cross-claim facilitates the ruling of apportionment by the Court.

I propose to adopt a consistent approach with respect to reinstating the second defendant’s cross-claim, particularly in the light of the consent position of the parties.

The second defendant, in its April 2025 submission, requested that the Court amend Milne No 2 and delete par 127(11). That approach does not seem to have been reflected in the Consent Orders and otherwise appears unnecessary, if not inappropriate (the earlier judgment being a record of the Court’s decision-making process). This judgment will have the effect of amending the findings in Milne No 2 regarding the cross-claims and the orders made below vary the orders made in Milne No 2 concerning the cross-claim.

In the result, the following Consent orders are made by the Court: