Origin Energy LPG Ltd & Ors v Bestcare Foods Ltd & Anor

SPIGELMAN CJ : I will ask Handley AJA to give the first judgment.

HANDLEY AJA : On 25 January 2003, an explosion occurred at the pet food factory operated by Bestcare at Gunnedah. On 9 November 2005, It commenced proceedings in the Supreme Court against the present appellant, Origin. In those proceedings, Bestcare alleges that Origin is responsible for the explosion which occurred because of its conduct in relation to a particular gas installation. Origin denies that it is responsible for the explosion, but if it is it argues that it is not the only party to blame and suggests the existence of other parties who might also be responsible.

Part 4 of the Civil Liability Act 2002 (the Act) inserted by the Civil Liability Amendment (Personal Responsibility) Act No 92 of 2002 (the Amending Act) by s 35(1) amended the common law rule that a concurrent tortfeasor who was only partially to blame for an accident was liable for the whole of the plaintiff’s damages and the concurrent fault of others was only relevant to his claims for contribution: Caledonian Collieries Limited v Speirs 57 SR NSW 483. Pt 4 of the act came into force on 1 December 2004 before Bestcare commenced proceedings against Origin. Schedule 1 of the Act as amended contains savings and transitional provisions. The provisions consequent on the enactment of the Amending Act are included in Pt 3. Cl 6(1) provides The amendments to this Act made by the 2002 amending Act extend to civil liability arising before the commencement of the amendments, but do not apply to or in respect of proceedings commenced in a court before that commencement.

Thus prima facie Pt 4 inserted by the Amending Act applies to any liability that Origin may have for the explosion at Bestcare because its proceedings were not commenced until after the commencement of Pt 4 on 1 December 2004. However, s 3B(3) of the Act, also inserted by the Amending Act, relevantly provides The regulations may exclude a specified class or classes of civil liability (and awards of damages in those proceedings) from the operation of all or any specified provisions of this Act. Any such regulation may make transitional provision with respect to claims for acts or omissions before the commencement of the regulation.

Cl 3 of the Civil Liability Regulation 2003 inserted by the Civil Liability Amendment (Proportionate Liability) Regulation 2004 also came into force on 1 December 2004 and provides Any civil liability to which Part 4 of the Act would have applied but for this clause is excluded from the operation of that Part, and from the operation of clauses 6 and 13 of Schedule 1 to the Act in their application to that Part, if the liability arose before 26 July 2004.

This clause, if valid, would displace the operation of cl 6(1) of Pt 3 of Schedule 1 and cl 13 of Pt 4 of that Schedule and preserve the common law liability of Origin if it is a concurrent tortfeasor liable for that damage. Origin contends that cl 3 of the Regulation is invalid.

An order was made in the proceedings brought by Bestcare for the separate determination of the question “Is regulation 3 of the Civil Liability Regulation 2003 (NSW) invalid”. In a second set of proceedings Origin sued Bestcare for a declaration that the regulation was invalid and joined the Attorney General of New South Wales as a second defendant. The proceedings were heard by Hammerschlag J who held that the regulation was supported by s 3B(3). He answered the question accordingly and dismissed Origin's summons for declaratory relief. Origin has sought leave to appeal from the order answering the question for separate determination and has appealed as of right from the dismissal of its proceedings for declaratory relief.

In my opinion leave ought to be granted so that the question can be finally determined by this Court.

The relevant power to make Regulations under the Act is conferred by s 4(2) with para 1.1 of Schedule 1 (herein cl 1(1)) and s 3B(3). S 4(2) provides: Regulations The Governor may make regulations, not inconsistent with this Act, for or with respect to any matter that by this Act is required or permitted to be prescribed or that is necessary or convenient to be prescribed for carrying out or giving effect to this Act.

Section 4(4) provides that Schedule 1 has effect and cl 1(1) provides so far as relevant that the Regulations may contain provisions of a savings or transitional nature consequent inter alia on the enactment of the Amending Act.

Thus the power to make Regulations, so far as relevant, is conferred by s 4(2) and the function of cl 1(1) and of s 3B(3) is to specify matters that the Act requires or permits to be prescribed within the language of s 4(2).

The Attorney General has only relied on s 3B(3) and Miss Perry QC for Bestcare was content for the Court to accept the decision of Hammerschlag J that the regulation could not be supported under cl 1(1).

The power of the Governor under s 4(2) is limited to making regulations which are “not inconsistent with this Act”. Clause 6(1) of Pt 3 of Sch 1, which forms part of the Act, ( AG v Lamplough (1878) 3 Ex D 214 CA, 229) provides that Pt 4 extends to civil liability arising before its commencement but not to proceedings commenced in a court before that date. The effect of this provision without more would make Pt 4 apply to the proceedings pending against Origin with retrospective effect. The Regulation, if valid, would displace that operation and leave the substantive rights of the parties to be determined in accordance with the general law in force on 25 January 2003.

On its face, s 3B(3) authorises Regulations which would be inconsistent with the Act. It provides in terms that the Regulations may exclude a specified class or classes of civil liability from the operation of all or any specified provisions of the Act. A Regulation having that effect is necessarily inconsistent with those provisions of the Act.

Since such a Regulation is authorised in express terms by s 3B(3), the Regulation making power in s 4(2) which is limited to making Regulations not inconsistent with the Act, is not exceeded. The Regulation is not inconsistent with the Act because it is expressly authorised by the Act. It would only be inconsistent with the Act if it was not otherwise expressly authorised by s 3B(3).

Mr Gageler SC in his careful submissions in support of the appeal relied on three propositions. The first was that the reference in s 3B(3) to a class of liability was a reference to a class of substantive liability. The second was that the power conferred by s 3B(3) does not extend to making a transitional provision. That subject matter is covered by cl 1(1) which is a special provision that is not cut down by 3B(3). The third proposition was that the power conferred by s 3B(3) was limited by s 4(2) to making regulations which are not inconsistent with the Act.

The first submission turns upon the meaning of the phrase “class of civil liability” in s 3B(3). In my judgment this argument fails because the Regulation defines a class of substantive liability. But for the Regulation, the substantive liability of the parties to the underlying proceedings would have been retrospectively changed by the commencement of Pt 4 of the Act on 1 December 2004.

Substantive civil liability to which Pt 4 would have applied where the cause of action arose before 26 July 2004 is a class of civil liability defined partly by reference to the terms of Pt 4 and partly by reference to time. There is no difficulty with the concept of class in such a context. In cases dealing with wills, which seldom come before courts these days, a class was frequently defined by reference to its relationship to the testator and by reference to time considerations such as birth before a certain date or event. In my judgment a class of civil liability may be defined partly by reference to substantive considerations and partly by reference to time.

I therefore reject the first submission.

The second submission was that the power conferred by s 3B(3) does not extend to making a transitional provision, that matter being covered exclusively by cl 1(1). The Regulation in question can be characterised as a transitional provision consequent upon the enactment or commencement of Pt 4 of the Act within the meaning of cl 1(1).

The fact that it can be so characterised does not prevent it from also being characterised as a Regulation which excludes a specified class of civil liability from the operation of relevant provisions of the Act. There is no requirement in this context for an exclusive characterisation test to be adopted when determining the validity of a Regulation.

If the principle of statutory construction applied in Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1, 7 is relevant the special power would be that conferred by s 3B(3) and the general power would be that conferred by cl 1(1) and I would not read down the special power by reference to the general power.

The final submission, which was effectively abandoned by Mr Gageler in argument, is that the power conferred by s 3B(3) is limited by s 4(2) to making Regulations which are not inconsistent with the Act. That submission contradicts the plain language of s 3B(3) and was appropriately abandoned.

For those reasons I would propose that leave to appeal be granted in matter 40296 of 2007, I would direct that the notice of appeal be filed within 7 days, and that this appeal and the appeal in matter 40270 of 2007 be dismissed with costs.

SPIGELMAN CJ : I agree.

MCCOLL JA : I agree.

SPIGELMAN CJ : The orders of the court are as indicated by Handley AJA.