Port of Melbourne Authority v Anshun Pty Ltd

147 CLR 589
36 ALR 3

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(Judgment by: Gibbs C.J., Mason and Aickin JJ. ) Court:

Judges:
Gibbs C.J., Mason J., and Aickin J.Murphy J.
Brennan J.

Judgment date: 1 September 1981

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Judgment by:
Gibbs C.J., Mason and Aickin JJ.

The appellant, Port of Melbourne Authority ("the Authority"), hired a crane to the respondent, Anshun Pty. Ltd. ("Anshun"). While the crane was in use by Anshun on 21 December 1973 at Appleton Dock, Melbourne, for the purpose of handling cargo and other materials for the ship Mount Keira, a load of steel girders handled by the crane struck one Soterales and severely injured him. Soterales sued the Authority and Anshun for damages for personal injury for negligence. Soterales alleged that he was injured as a result of Anshun exposing him to unnecessary risk and/or as a result of the negligence of the servants or agents of Anshun. Further and in the alternative, Soterales alleged that he was injured as a direct result of the negligence or breach of statutory duty of the Authority, its servants or agents. (at p593)

2. The Authority and Anshun claimed contribution from each other pursuant to s. 24 of the Wrongs Act 1958 (Vict.), each defendant serving on the other a notice claiming contribution under O. 16A, r. 16 of the Victorian Supreme Court Rules. The notice served by the Authority claimed contribution, but not an indemnity, notwithstanding the existence of an indemnity given by Anshun in an agreement dated 31 January 1968 between the Authority and Anshun which governed the hiring of the crane. (at p593)

3. The indemnity was contained in cl. 3 (b) of the agreement. It was expressed in these terms:

"The hirer shall indemnify and at all times keep indemnified the Commissioners their servants and agents against all actions, proceedings and claims whatsoever brought against the Commissioners or their servants or their agents in relation to any injury or loss of life whatsoever . . . arising directly or indirectly out of or in any way attributable or incidental to the use of the plant during the period of the hire . . . " (at p593)

4. The expression "the plant" was so defined as to include any wharf crane hired by the Authority to Anshun. The agreement contained a provision excluding the indemnity where the injury or loss of life was caused solely by the negligence of the Authority. (at p593)

5. The action was heard by a judge and jury. The jury found a verdict for Soterales in the amount of $44,629.81. That sum was reduced by $4,346.73 repayable by Soterales to Anshun pursuant to s. 79 (2) of the Workers Compensation Act 1958 (Vict.). The amount to be recovered by Soterales was then increased by $2,400 damages in the nature of interest pursuant to s. 79A of the Supreme Court Act 1958 (Vict.). Judgment was entered in favour of Soterales against both defendants in the sum of $42,638.08, together with costs. (If this amount is correctly transcribed in the appeal book it appears to involve an arithmetical error, the correct figure being $42,683.08.) There were no pleadings in relation to the issue of contribution. It appears that the jury found both defendants liable in negligence to Soterales and that it was just and equitable that Anshun should recover contribution from the Authority to the extent of 90 per cent of Soterales' damages and that the Authority should recover from Anshun contribution to the extent of 10 per cent of the damages. The Authority paid 90 per cent of Soterales' damages and costs and Anshun paid the remaining 10 per cent. (at p594)

6. Subsequently on 24 August 1977 the Authority commenced on action in the Supreme Court against Anshun claiming $53,632.89 by way of indemnity for the amount paid by it to Soterales and for legal costs and disbursements. The claim was based on the indemnity in the agreement. It is common ground that if the Authority is entitled to recover at all, it is entitled to judgment in the amount claimed. (at p594)

7. Anshun's defence to the claim is one of estoppel, the substance of the defence being that the Authority could have raised its claim against Anshun in the Soterales action. (at p594)

8. Anshun issued a summons for summary judgment. This summons came before O'Bryan J. who thought that the point was complex and that it was not clear that the defence would succeed. He dismissed the summons. (at p594)

9. When the action came on for hearing there was no contest as to the facts. Anshun contended that the claim was barred as a matter of law or alternatively that it should be barred as a matter of discretion. The primary judge held that it was not a case of res judicata, that the Authority's claim had not ceased to exist by reason of the judgment in the Soterales action. He also found that it was not a case of issue estoppel. However, he held that the principle of Henderson v. Henderson (1843) 3 Hare 100, at pp 114-115 (67 ER 313, at p 319) applied, and granted a perpetual stay on the ground that the claim was a matter which should have been raised in earlier litigation (1980) VR 321 . The Full Court on appeal agreed that, although it was not a case of issue estoppel, it was a case in which the Henderson v. Henderson principle applied. Whereas the primary judge held that he had a general discretion to grant or refuse a stay, the Full Court concluded that once it was determined that the matter of the agreement properly belonged to the first action and might have been brought forward in that litigation by the exercise of reasonable diligence, the primary judge (1981) VR, at p 89 : "had a discretion only in the sense that, although negligence, inadvertence or even accident would not suffice to excuse, he was required to consider whether special circumstances existed in the sense that justice required the non-application of the general rule". The Full Court went on to consider whether "special circumstances" existed and, having decided that question in the negative, dismissed the appeal (1981) VR 81 . (at p595)

10. The Authority's case is that the indemnity issue was not part of the subject matter of the Soterales action, that it was not determined by the judgment in that litigation and that, accordingly, the Authority cannot now be prevented from litigating the issue by any form of estoppel. In any event the Authority submits that as a matter of discretion the action should not have been stayed. (at p595)

11. Section 24 (2) of the Wrongs Act empowers the court to exempt any person from liability to make contribution and to direct that the contribution to be recovered from any person shall amount to a complete indemnity. There is some ambiguity in the sub-section in so far as it speaks of contribution amounting to a complete indemnity. Nevertheless it is sufficiently clear that the court has power to order that one party shall recover from another on the basis of an indemnity and in our opinion this power may be exercised in a case where an actual indemnity is established. (at p595)

12. Although the right to an indemnity arises on payment of the liability to which it relates and not before, this is not a bar to the litigation as between a defendant and a third party, or as between defendants, of a claim based on an indemnity in respect of a liability in negligence asserted by the plaintiff in his action. It is accepted that under so-called "third party procedures" of the kind provided for by O. 16A, the claim to an indemnity may be litigated in the plaintiff's action, notwithstanding that the payment creating the right to indemnity is not made until after the amount of the plaintiff's verdict is ascertained in that action. It has been repeatedly affirmed that one of the peculiarities of third party procedure is that it enables litigation on the indemnity to take place before there is any liability (Horden-Richmond Ltd. v. Duncan [1947] 1 KB 545 , at p552 ; Bitumen and Oil Refineries (Australia) Ltd. v. Commissioner for Government Transport (1955) 92 CLR 200 ). Consequently, the fact that liability under the indemnity had not arisen was no bar to the Authority asserting its claim to an indemnity in Soterales' action by means of a notice served on Anshun under O. 16A, r. 16. (at p596)

13. At common law the existence of an indemnity is a defence to an action in respect of the liability to which the indemnity relates (Bullen and Leake, 3rd ed. (1868), p. 604; Cutler v. Southern (1667) 1 Wms Saund 113, at p 116 (85 ER 123, at p 125) . Section 24(1)(c) of the Wrongs Act specifically excludes the right of one tortfeasor to recover contribution from another tortfeasor given by the section where the tortfeasor against whom recovery is sought is entitled to be indemnified by the tortfeasor seeking to recover contribution in respect of the liability in question. It follows that the indemnity, had it been pleaded and proved, would have been an answer to Anshun's claim for contribution against the Authority. (at p596)

14. Despite some suggestion to the contrary, there is no reason for thinking that the indemnity issue could not have been determined in the Soterales action. The fact that the indemnity was excluded if the injury was caused solely by the negligence of the Authority is a complication. But there was nothing to prevent determination of the indemnity issue after the determination of the plaintiff's claim against the two defendants involving, as it did, a finding of negligence against each defendant. Moreover, had the indemnity issue been raised and had it been determined in favour of the Authority, the apportionment issue would have disappeared from the case. (at p596)

15. Indeed, by making a claim for contribution the Authority asserted a right which was inconsistent with the right which it asserts in the present action. In the Soterales action it might have asserted a right to indemnity and in the alternative a right to contribution. Instead, for reasons which have not been explained, the Authority confined itself to the claim for contribution. (at p596)

16. The judgment which the Authority seeks to obtain in the present action is one which would contradict the judgment which has been entered in the Soterales action. The judgment in that action was that Anshun should recover contribution from the Authority to the extent of 90 per cent of Soterales' damages and costs and that the Authority should recover from Anshun contribution to the extent of 10 per cent of the damages and costs. The judgment which the Authority now seeks is one whereby the Authority recovers from Anshun the whole of Soterales' damages and costs. It is this inconsistency between the judgment obtained in the first action and the judgment sought to be obtained now that is of importance. (at p596)

17. The distinction between res judicata (in England called "cause of action estoppel") and issue estoppel was expressed by Dixon J. in Blair v. Curran (1939) 62 CLR 464 , at p 532 in these terms: "in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order." (at p597)

18. The distinction was restated by Fullagar J. in his dissenting judgment in Jackson v. Goldsmith (1950) 81 CLR 446 , at p 466 . His Honour expressed the rule as to res judicata by saying: "where an action has been brought and judgment has been entered in that action, no other proceedings can thereafter be maintained on the same cause of action. This rule is not, to my mind, correctly classified under the heading of estoppel at all. It is a broad rule of public policy based on the principles expressed in the maxims 'interest reipublicae ut sit finis litium' and 'nemo debet bis vexari pro eadem cause.'" His Honour went on to discuss issue estoppel, citing the comment of Dixon J. in Blair v. Curran (1939) 62 CLR, at p 531 : "A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies." (at p597)

19. The difference between res judicata (cause of action estoppel) and issue estoppel has been expressed in similar terms in the House of Lords - see Carl Zeiss Stiftung v. Rayner & Keeler Ltd. [1967] 1 AC 853 , at pp 913, 964 et seq . (at p597)

20. Subject to an examination of the application of the principle in Henderson v. Henderson (1843) 3 Hare 100 (67 ER 313) , it is evident from the discussion which has already taken place that this is not a case of res judicata. The rule as to res judicata comes into operation whenever a party attempts in a second proceeding to litigate a cause of action which has merged into judgment in a prior proceeding. Here the indemnity cause of action was not litigated in the Soterales proceedings. The judgment in that case did not deal with that cause of action, though it evidently proceeded on the assumption that the Authority was not entitled to an indemnity. (at p597)

21. For a similar reason this is not a case of issue estoppel in the strict sense. The Full Court was correct in deciding that the existence of an indemnity is a defence to a claim for contribution under s. 24 (1) (c) of the Wrongs Act and that the absence of an indemnity is not an ingredient in the cause of action for contribution. It was not a necessary step to the decision that Anshun was entitled to contribution for the Court to decide that the Authority was not entitled to an indemnity against Anshun: Carl Zeiss (1967) 1 AC, at p 965 . Had the Authority pleaded the indemnity as a defence to Anshun's claim for contribution, a decision on that defence would have been a necessary step to the ultimate decision that Anshun was entitled to contribution. The defence of indemnity not having been raised, the judgment for Anshun did not involve a determination of that issue. (at p598)

22. The critical issue, then, is whether the case falls within the extended principle expressed by Sir James Wigram V.C. in Henderson v. Henderson (1843) 3 Hare, at p 115 (67 ER, at p 319) . The Vice-Chancellor expressed the principle in these terms:

"where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time." (at p598)

23. The existence of the principle has been affirmed by the Judicial Committee on four occasions (Hoysted v. Federal Commissioner of Taxation (1925) 37 CLR 290 , at p 303; (1926) AC 155, at p 170 ; Kok Hoong v. Leong Cheong Kweng Mines Ltd. (1964) AC 993, at pp 1010-1011 ; Yat Tung Investment Co. Ltd. v. Dao Heng Bank Ltd. (1975) AC 581 ; Brisbane City Council v. Attorney-General (Q.) (1979) AC 411, at p 425 ). See also Carl Zeiss (1967) 1 AC, at pp 915-916, 966 ). In two of these cases the principle was applied so as to shut out litigation of an issue which could and should have been litigated in the earlier proceedings. (at p598)

24. Although it has been said that the principle operates so as to extend the doctrines of issue estoppel as well as res judicata, its application to cases of issue estoppel is to be treated with caution. Lord Wilberforce in Carl Zeiss (1967) 1 AC, at p 966 observed that Henderson v. Henderson was an instance of res judicata. Lord Reid in the same case (1967) 1 AC, at p 916 noted that confusion had been introduced by applying to issue estoppel without modification rules designed to deal with res judicata. (at p599)

25. Indeed, for a long time Wigram V.C.'s statement did not express the principle that was applied to a case in which it was contended that a party, whether plaintiff or defendant, was estopped from asserting a matter in a new action by reason of his failure to plead that matter as a defence in an earlier action. As applied to such a case Wigram V.C.'s statement of principle suggests that there will be an estoppel except in special circumstances. The English and United States authorities establish that this was certainly not the law and that it was only an omission to deny by way of a defence a traversable allegation that gave rise to an estoppel. In Howlett v. Tarte (1861) 10 CB (NS) 813, at p 827 (142 ER 673, at p 679) Willes J. went so far as to say: "nobody ever heard of a defendant being precluded from setting up a defence in a second action because he did not avail himself of the opportunity of setting it up in the first action." (at p599)

26. However, it seems that Williams J. in the same case expressed the proposition with greater accuracy when he said (1861) 10 CB (NS), at p 826 (142 ER, at p 678) : "if the defendant attempted to put upon the record a plea which was inconsistent with any traversable allegation in the former declaration, there would be an estoppel." (at p599)

27. In considering whether failure to plead a defence available in an earlier action gives rise to an estoppel in subsequent litigation, early authorities distinguished between failure to traverse an allegation made by the other side and failure to plead affirmative matters which would not have conflicted with any traversable allegation, e.g. a plea by way of confession and avoidance. The general rule was that a general adverse decision imported also a particular adverse decision on any traversable allegation made by the successful party which the unsuccessful party omitted to traverse but did not import an adverse decision as to affirmative matters which, if pleaded, would not have conflicted with any traversable allegation. This appears to have been the basis of the judgment of Williams J. in Howlett v. Tarte. See also Field J. in Cromwell v. County of Sac. (1876) 94 US 351, at pp 356-357 (24 Law Ed 195, at p 199) ; Spencer-Bower and Turner, Res Judicata, 2nd ed. (1969), pp. 165-167 and Halsbury's Laws of England, 4th ed., vol. 16, par. 1533. Thus in Davis v. Hedges (1871) LR 6 QB 687 a plaintiff was not precluded from claiming damages for non-performance and improper performance of work by reason of his failure to raise this claim when earlier sued by the defendant for the price of the work alleged to have been improperly done. (at p600)

28. A similar distinction seems to have been drawn in the United States. 46 American Jurisprudence 2d., Judgements, par. 433 states:

" . . . the general rule is that a judgment in a prior action in which a claim might have been but was not asserted as a setoff, counterclaim, or cross action does not conclude the defendant . . . and is no bar to a subsequent independent action based on the claim . . . "

An Annotation, A.L.R. vol. 8 (1920) 694, at p. 695 says:

"The general rule is that a defendant, having a claim available by way of set-off, counterclaim, or cross petition, has an election so to plead it, or to reserve it for a future independent action, and a prior action in which a claim might have been asserted as a set-off, counterclaim, or cross petition is no bar to a subsequent independent action thereon." (at p600)

29. If a defendant did elect in the first action to raise a plea which did not traverse the allegation of the other party and which could have been pleaded as a counterclaim or set-off he would be bound by a general adverse decision (Davis v. Hedges (1871) LR 6 QB, at p 692 ; in the United States, Brown v. First National Bank of Newton, Kansas (1940) 132 F 450 ). (at p600)

30. There were several reasons why a distinction was drawn between the effect of failure to plead to traversable allegations and failure to raise matters which could be pleaded as a counterclaim or set-off. Some, but not all, are still applicable. The right to plead by way of cross-claim or set-off is a relatively modern development for the benefit of defendants. (See Davis v. Hedges (1871) LR 6 QB, at p 690 , per Hannen J. speaking for Blackburn J. and himself and Merchants Heat and Light Co. v. Clow & Sons (1907) 204 US 286, at pp 289-290 (51 LawEd 488, at pp 489-490) , per Holmes J. delivering the opinion of the Court.) To require that the defendant always raise his cross-claim or set-off at the first available time could cause great inconvenience. Hannen J. in Davis v. Hedges (1871) LR 6 QB, at p 640 noted that an action for the price of goods delivered or work performed may be maintainable before it is possible for a defendant to ascertain the extent to which breach of warranty or breach of contract may afford a defence. (at p601)

31. Other justifications suggested for the distinction such as that consequential damages could not be recovered (Davis v. Hedges (1871) LR 6 QB,at p 691 ) or the old rule against double pleading (Howlett v. Tarte (1868) 10 CB (NS), at p 828 (142 ER, at p 679) ) are no longer relevant to the post Judicature Acts system (see Hoysted (1925) 37 CLR, at p 302; (1926) AC, at pp 168-169 ). (at p601)

32. This may explain why the old distinction between allegations which are traversable and those which are not is not always rigorously applied. Spencer-Bower and Turner (p. 165) notes that "according to the more recent authorities, an allegation may be 'traversable', for the purposes of the rule, not only when it is express and direct, but also when it is reasonably implied." Thus in Humphries v. Humphries [1910] 2 KB 531 in an action upon an agreement for a lease the Court of Appeal held that there is an implied allegation that the agreement is valid so that a defendant could not in subsequent litigation with the plaintiff allege for the first time that it did not conform with s. 4 of the Statute of Frauds. Even so, in the judgment of the Court delivered by Farwell L.J. the decision is expressed to be based on the statement of principle by Williams J. in Howlett v. Tarte. (at p601)

33. That statement of principle became less instructive as the old rules of pleading became obsolete. The remarks of Wigram V.C. did not suffer from this disadvantage: they were not tied to the elements of common law pleading. It is significant that in Hoysted both statements were approved. Subsequently, Viscount Radcliffe in Kok Hoong (1964) AC,at pp 1011-1012 noted that the effect of the judgments in Howlett v. Tarte is that a defendant "is estopped only from asserting something which, if pleaded in the earlier action, would have amounted to a direct traverse of what was there asserted" and that "if what he wishes to set up in the second action would have been matter only for a plea by way of confession and avoidance or, it seems, a special plea in the first action, there is no estoppel." He went on to observe, rightly in our opinion, that this formula, based on an obsolete and complicated system of pleading, was of limited utility in resolving questions of estoppel. For this reason, it was jettisoned in favour of the formulation by Wigram V.C. (at p601)

34. However in Yat Tung (1975) AC 581 the adoption of the principle in Henderson v. Henderson (1843) 3 Hare 100 (67 ER 313) was taken too far. Lord Kilbrandon spoke of it becoming "an abuse of process to raise in subsequent proceedings matters which could and therefore should have been litigated in earlier proceedings" (1975) AC, at p 590 . As we have seen, this statement is not supported by authority. And if we are to discard the traditional statement of principle because it was linked to the rules of common law pleading, there is no reason for rejecting the powerful arguments based on considerations of convenience and justice which were associated with it. (at p602)

35. Lord Kilbrandon's remarks go further than the statement of Somervell L.J. in Greenhalgh v. Mallard [1947] 2 All ER 255 , at p 257 which was recently approved by Lord Wilberforce in Brisbane City Council (1979) AC, at p 425 . Somervell L.J. had said: "res judicata for this purpose is not confined to the issues which the court is actually asked to decide, but . . . it covers issues or facts which are so clearly part of the subject-matter of the litigation and so clearly could have been raised that it would be an abuse of the process of the court to allow a new proceeding to be started in respect of them." Yet, Greenhalgh v. Mallard and Brisbane City Council, unlike Yat Tung, were not cases in which the alleged estoppel arose from a defendant's failure to plead a defence. They were cases in which it was argued that a plaintiff was estopped from bringing a new proceeding by reason of dismissal of an earlier action. (at p602)

36. In these cases in applying the Henderson v. Henderson principle to a plaintiff said to be estopped from bringing a new action by reason of the dismissal of an earlier action, Somervell L.J. and Lord Wilberforce insisted that the issue in question was so clearly part of the subject matter of the initial litigation and so clearly could have been raised that it would be an abuse of process to allow a new proceeding. Even then the abuse of process test is not one of great utility. And its utility is no more evident when it is applied to a plaintiff's new proceeding which is said to be estopped because the plaintiff omitted to plead a defence in an earlier action. (at p602)

37. In this situation we would prefer to say that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding. In this respect, we need to recall that there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings e.g. expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few. See the illustrations given in Cromwell v. County of Sac. (1876) 94 US (24 Law Ed, at p 199) . (at p603)

38. It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment. In this respect the discussion in Brewer v. Brewer (1953) 88 CLR 1 is illuminating. (at p603)

39. There it was held that the wife's omission to plead matters which would have constituted a discretionary bar to her husband's suit for dissolution of marriage on the ground of adultery did not estop her from raising those matters in subsequent proceedings for maintenance. Fullagar J., with whom Dixon C.J. agreed, said (1953) 88 CLR, at p 15 :

"In Hoysted's Case (1925) 37 CLR 290 ; (1926) AC 155 the Commissioner was not merely seeking to raise on the second appeal a point which he might have raised but had omitted to raise on the first appeal. He was seeking to raise a point which could not be decided in his favour consistently with the decision on the first appeal. The point had not been argued on the first appeal, and there was therefore no express decision on the point. But the Commissioner had allowed it to be assumed against him, and the assumption was fundamental to the decision in the sense that, if the assumption had not been made, the decision must have been different. As Somervell L.J. said: - 'He was therefore seeking to obtain an order which was on the face of it and in form in direct conflict with the order which had been made previously' (1949) Ch, at p 360 . The point in question had been 'the groundwork of the decision itself, though not then directly the point at issue' (per Coleridge J. in Reg. v. Township of Hartington (1855) 4 El & Bl 780, at p 794 (119 ER 288, at p 293) )."

This was also the conclusion reached by Williams, Webb and Taylor JJ. (1953) 88 CLR, at p 10 . (at p603)

40. The likelihood that the omission to plead a defence will contribute to the existence of conflicting judgments is obviously an important factor to be taken into account in deciding whether the omission to plead can found an estoppel against the assertion of the same matter as a foundation for a cause of action in a second proceeding. By "conflicting" judgments we include judgments which are contradictory, though they may not be pronounced on the same cause of action. It is enough that they appear to declare rights which are inconsistent in respect of the same transaction. (at p604)

41. It is for this reason that we regard the judgment that the Authority seeks to obtain as one which would conflict with the existing judgment, though the new judgment would be based on a different cause of action, a contractual indemnity. (at p604)

42. Taking into consideration the relevant factors we conclude that the Full Court was right in holding that there was an estoppel. The matter now sought to be raised by the Authority was a defence to Anshun's claim in the first action. It was so closely connected with the subject matter of that action that it was to be expected that it would be relied upon as a defence to that claim and as a basis for recovery by the Authority from Anshun. The third party procedures were introduced to enable this to be done. If successful, the indemnity case would have obviated an inquiry into contribution. If reserved for assertion in a later action, it would increase costs and give rise to a conflicting judgment. (at p604)

43. The Authority did not adduce evidence at the trial to show why it failed to raise the indemnity issue in the first action. Apart from considerations such as the ability to overcome any prejudice to Anshun by orders for costs and the fact that O'Bryan J. refused to strike out the action summarily - matters mainly associated with the conduct of this action - the Authority's case is that the principle in Henderson v. Henderson (1843) 3 Hare 100 (67 ER 313) does not apply. (at p604)

44. There is, however, one other factor which should be mentioned. It is that the defence of an indemnity required to be specially pleaded at common law. It was not covered by a general or particular traverse. Consequently the failure to plead it would not have founded an estoppel under the old law in its strictest formulation. But the evolutionary development of that rule evidenced by the decision in Humphries v. Humphries [1910] 2 KB 531 may well have resulted in releases and indemnities being equated to traversable allegations for the purposes of estoppel. In any event the fact that the defence required to be specially pleaded at common law is not now a material consideration. It does not derogate from the conclusion that it was unreasonable for the Authority to refrain from raising its case of indemnity for disposition in the first action. (at p604)

45. We would dismiss the appeal. (at p604)