Proportionate Liability in Victoria: Apportionable Claims and Joining Concurrent Wrongdoers Under Part IVAA 

Under Part IVAA of the Wrongs Act 1958 (Vic), a defendant’s liability for an apportionable claim is limited to the share of loss reflecting its responsibility. Other concurrent wrongdoers need to be joined to the proceeding for their responsibility to be considered. 

For Victorian business owners and directors, a failed transaction may involve advice or representations from several professionals and counterparties. When their conduct contributes to the same loss, deciding whom to sue affects both the conduct of the proceeding and the amount that may be recovered. 

The rules governing proportionate liability under the Wrongs Act in Victoria require attention to the legal basis of each claim. Part IVAA covers specified economic loss and property damage claims arising from a failure to take reasonable care, as well as misleading conduct claims under section 18 of the Australian Consumer Law (Victoria). Several parties being involved does not, by itself, establish that the regime applies. 

Joinder requires particular care. Section 24AI(3) prevents the court from considering a non-party’s comparative responsibility, with exceptions for deceased individuals and corporations that have been wound up. For plaintiffs and professional negligence defendants, identifying other alleged wrongdoers and addressing joinder early can materially affect recovery, liability, and settlement decisions. 

Which Claims Are Apportionable Under Part IVAA of the Wrongs Act in Victoria? 

Part IVAA of the Wrongs Act 1958 (Vic) governs proportionate liability under the Wrongs Act in Victoria. Section 24AE defines an apportionable claim by reference to the Part’s application. Section 24AF covers economic loss or property damage arising from a failure to take reasonable care, whether claimed in contract, tort, under statute or otherwise. It also covers misleading conduct claims for damages under section 18 of the Australian Consumer Law (Victoria). Personal injury claims are excluded. 

A concurrent wrongdoer under section 24AH is one of two or more people whose conduct caused the loss claimed, independently or jointly. In Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10; (2013) 247 CLR 613, the High Court majority held that negligent solicitors and fraudsters contributed to the same loss: the lender’s inability to recover money advanced. Different conduct and different causes of action did not necessarily mean different losses. Although decided under New South Wales legislation, the judgment informs the same-loss analysis under Victoria’s similarly worded definition. The inquiry concerns the damage suffered, rather than merely comparing each party’s conduct. 

Section 24AI limits a concurrent wrongdoer’s liability to the proportion the court considers just, having regard to responsibility. However, section 24AI(3) requires non-parties’ comparative responsibility to be disregarded. Exceptions apply where the person is absent because they have died or the corporation has been wound up. Section 24AL permits joinder of concurrent wrongdoers. 

Section 24AJ protects a defendant against whom judgment is given under Part IVAA from contribution or indemnity claims by other concurrent wrongdoers in the same proceeding for that apportionable claim. Settlement requires separate analysis. 

In Godfrey Spowers (Victoria) Pty Ltd v Lincolne Scott Australia Pty Ltd [2008] VSCA 208; (2008) 21 VR 84, the Victorian Court of Appeal held that Part IVAA did not prevent a settling defendant from pursuing contribution under Part IV. The Court allowed the contribution proceeding to continue; it did not establish an automatic entitlement to recover a particular amount. The settlement’s terms, its effect on other parties’ liabilities and their respective responsibility remained relevant. For professional negligence defendants, resolving the plaintiff’s claim therefore does not necessarily resolve every claim between defendants. 

How Do Courts Assess Proportionate Liability Under the Wrongs Act in Victoria? 

Does each claim fall within section 24AF? 

Courts examine the obligation relied upon and the claim actually advanced. An apportionable claim under section 24AF may arise in contract as well as negligence, but not every contractual breach involves a failure to take reasonable care. Misleading conduct claims require identification of the applicable statutory regime, particularly where Commonwealth provisions are pleaded. If a proceeding combines apportionable and non-apportionable claims, section 24AI(2) preserves the separate rules governing the latter. An apportionment defence therefore needs to address each claim, rather than treating the entire dispute as one category. 

Did the alleged wrongdoers cause the same loss? 

The court identifies the loss before comparing the alleged wrongdoers. Hunt & Hunt demonstrates that different acts can contribute to the same economic harm even where the legal duties differ. Conversely, involvement in the same transaction does not establish concurrent wrongdoing. A defendant using section 24AH must link another person’s conduct to the loss claimed. For professional negligence defendants, this calls for evidence of the other adviser’s role, the relevant advice or omission, and its causal effect. 

How does the court determine each defendant’s share? 

Under section 24AI, the allocation must reflect responsibility for the loss. The assessment is not an equal division by headcount, nor is it determined by which defendant has insurance or the strongest balance sheet. Retainers, instructions, correspondence, and expert evidence may help establish what each participant undertook and how the loss occurred. A proposed percentage needs a reasoned evidentiary basis. For plaintiffs, another wrongdoer’s inability to pay can leave a recovery shortfall despite a successful judgment. 

Must every alleged concurrent wrongdoer be joined? 

A person must be a party before their comparative responsibility can reduce another defendant’s share. With non-parties disregarded under section 24AI(3), subject to its death and winding-up exceptions, merely naming someone in a defence is insufficient. Section 24AL permits joinder but does not make allegations self-proving. Parties should address the factual basis for joinder, procedural requirements, and limitation issues early. Insolvency alone is different from a corporation having been wound up and does not trigger that exception. 

Can a contract exclude proportionate liability in Victoria? 

Part IVAA neither expressly permits nor expressly prohibits contracting out. This contracting out uncertainty means an indemnity or exclusion clause should not be assumed to displace the statutory regime. Assess the clause’s wording, the governing law, and the liability it purports to allocate. Contract interpretation and statutory effectiveness are separate questions: clear wording does not itself resolve whether the law permits that allocation. Businesses should assess these provisions before relying on them in litigation or settlement negotiations. 

Where Do Proportionate Liability Disputes Arise in Victorian Commercial Litigation? 

Disputes about proportionate liability under the Wrongs Act in Victoria often concern the gap between proving a defendant’s breach and recovering the whole loss. Lending fraud and construction litigation show why identifying other responsible parties, and settling with them, can materially change the result. 

In Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10, fraudsters induced a lender to advance money, while the lender’s solicitors negligently drafted a mortgage that secured no enforceable debt. The fraudsters were bankrupt by the trial. The High Court majority restored the apportionment limiting the solicitors’ liability to 12.5 per cent. Although the case arose under New South Wales legislation, it exposes a practical recovery problem: establishing professional negligence does not necessarily make the adviser responsible for the entire financial consequence of a fraudulent transaction. 

For a lender or investor assessing proceedings, the implication is to investigate recoverability alongside liability. The strength of the case against an adviser cannot substitute for identifying everyone whose conduct caused the loss. For professional negligence defendants, allegations against another participant need supporting transaction records and a clear causal explanation. 

Construction disputes add overlapping retainers and settlement terms. In Godfrey Spowers (Victoria) Pty Ltd v Lincolne Scott Australia Pty Ltd [2008] VSCA 208, the architect faced claims concerning a Carlton development and pursued an engineer and building surveyors. It agreed to pay AUD 3.9 million, inclusive of costs, to settle the plaintiffs’ claim against it. The deed also allowed the architect to require releases of third parties. Further litigation followed over whether contribution remained available. 

The Court of Appeal permitted the contribution claim to proceed. The practical issue was therefore more than the settlement figure: whose liability was being released, what rights survived, and whether the payment justified recovery from others. 

Victoria’s joinder rule creates further pressure. With non-parties disregarded under section 24AI(3), subject to the statutory exceptions, correspondence blaming an absent adviser does not secure apportionment. Before settlement, the parties should check the defendants actually joined, the claims made against them and the limitation periods affecting any additional claims. 

What Should Parties Establish Before Pursuing or Defending a Proportionate Liability Claim in Victoria? 

Before pursuing or defending an apportionable claim under section 24AF, prepare a separate assessment for each proposed defendant. Identify the obligation, alleged breach, loss claimed and evidence connecting that conduct to the loss. Distinguish established facts from allegations requiring expert or documentary support. This helps expose a claim that is strong on breach but weak on causation or recovery. 

Preserve complete transaction records: executed agreements, retainers, instructions, advice, valuation material, payment records, and contemporaneous correspondence. For professional negligence defendants, the scope of the retainer and information available when advice was given may be central. Expert instructions should address the relevant professional standard and how the alleged failure affected the outcome, rather than assume that an adverse result establishes negligence. 

Treat joinder as an early strategic decision. Check each entity’s correct identity, corporate status, potential liability, and applicable limitation period. Because section 24AI(3) excludes an absent wrongdoer’s comparative responsibility, identifying another participant without addressing their procedural position may leave the apportionment defence ineffective. Equally, adding parties without a supported case can increase costs and complicate resolution. 

Before mediation, model recovery and exposure under different findings about responsibility, allowing for insolvency, disputed insurance cover and enforcement costs. A percentage allocation is useful only when connected to realistic payment prospects. 

Finally, review proposed settlement deeds for the claims and parties released, contribution rights, indemnities and remaining proceedings. Godfrey Spowers demonstrates why settling the plaintiff’s claim does not necessarily resolve liability between defendants. Any contracting out uncertainty should be assessed separately rather than treated as settled by the deed’s wording. 

Frequently Asked Questions 

How Can You Protect Your Position in a Victorian Proportionate Liability Dispute? 

Assessing proportionate liability under the Wrongs Act in Victoria requires identifying which claims are apportionable, who caused the same loss and which parties must be joined. Those decisions affect potential recovery, defence exposure, and the value of any settlement. Contractual indemnities and releases also require careful review, particularly where contribution rights or contracting out remain disputed. 

For business owners, directors and professionals, an early assessment should connect the legal position with the evidence and each party’s capacity to meet a judgment. Pentana Stanton Lawyers’ commercial litigation team can assess the claims, joinder issues and settlement options arising from a dispute involving multiple parties. Book a consultation to discuss your position before commencing proceedings, responding to a claim or agreeing to settlement terms. 

This article is general information only and not legal advice. For advice specific to your circumstances, please contact our team.