Contribution Claims

Abstract

It is trite law that if a person (B) is liable to any damage suffered by another person (A), B may recover contribution from a third person (C) if C is liable in respect of the same damage. Broadly speaking, two approaches have surfaced in the application of this rule. The first one is a narrow approach, requiring that B and C are subject to a common liability to A before a contribution claim arises. Under this approach, the liabilities of B and C need to be “of the same nature and extent so as to be coordinate and amenable to a contribution award”. The second approach is a broad approach, the only requirement being that B and C are liable for the same damage without any additional overlay. The battle of these two approaches has given rise to some sharply divided judgments, the most recent example being Hotchin v New Zealand Guardian Trust Co Ltd, a decision of the New Zealand Supreme Court. In Hotchin, Glazebrook J, Elias CJ and William Young J preferred the broad approach, whilst Arnold and O’Regan JJ favoured the narrow approach.

Keywords: Contribution Claim, Same Damage, Common Liability

JEL Classification: K10