The scope of the proportionate liability regimes in Div. 2A of Pt. 7.10 of the Corporations Act 2001 (Cth) and in Pt VIA of the Competition and Consumer Act 2010 (Cth) has recently been confirmed by the High Court and NSW Court of Appeal respectively.

The decisions in Selig v Wealthsure Pty Ltd [2015] HCA 18 and Williams v Pisano [2015] NSWCA 177 confirm that the respective regimes:

  1.  only apply to claims for damages caused by misleading or deceptive conduct contravening s1041H of the Corporations Act or s18 of the Australian Consumer Law; and
  2. do not apply to claims for damages brought on other bases (including other contraventions of these Acts),

even where such additional claims are brought in parallel to a misleading or deceptive conduct claim and relate to the same conduct causing the same loss or damage.

Selig v Wealthsure: Proportionate Liability under Div 2A of Pt 7.10 of the Corporations Act

In a significant decision for financial service providers and others who deal in financial services or products, the High Court held that a defendant whose conduct renders it liable for contravening s1041H and liable on another basis, may be liable for the whole of the plaintiff’s loss caused by that conduct, notwithstanding the application of the proportionate liability regime to the s1041H claim.  While the regime allows the apportionment of the defendant’s liability for contravening s1041H, it does not enable the apportionment of the defendant’s other liability because this other claim is not an “apportionable claim” within the meaning of s1041L.  This is so even where liability on both counts is based on the same conduct causing the same loss.  However, in limited cases, the defendant’s other liability may also be apportionable because it is subject to a different proportionate liability regime, such as that set out in theCivil Liability Act 2002 (NSW). 

This decision clarifies the limits of the proportionate liability regime in Div 2A of Pt 7.10 following conflicting judgments on this point delivered by differently constituted Full Federal Courts during 2014.  The High Court’s reasoning also applies to equivalent proportionate liability provisions in the ASIC Actand to the contributory negligence defence in s1041I(1B) of the Corporations Act

Williams v Pisano: Proportionate Liability under Pt VIA of the Competition and Consumer Act

In a judgment delivered on 29 June 2015, the NSWCA applied the High Court’s reasoning in Selig to the proportionate liability regime in Pt VIA of the Competition and Consumer Act, stating that where a respondent is liable for contravening both of ss18 and 30 of the Australian Consumer Law, the respondent’s liability under s30 is not apportionable because the regime only applies to liability under s18.  While these statements were obiter, they signal the Court’s approach to Pt VIA in light of the High Court’s ruling in Selig.

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