A New South Wales court has told an insurer it can't lock in a favourable settlement yet - because a co-defendant still has rights to protect.
The plaintiff, traffic controller Kerrie Thomson, says she tripped on a sunken, uneven section of footpath on Smith Street, Parramatta, on May 2, 2020, while working, and was injured. The contractor she originally sued, Excel Galaxy Technology Services, had been deregistered, so in August 2024 Thomson was allowed to sue its public liability insurer, Liberty, directly.
Liberty settled. It offered on November 27, 2025, to resolve the claim on terms that judgment be entered in its favour with no order as to costs. Thomson accepted on December 23, 2025, after her engineering expert revised his opinion on who did the footpath work, and her solicitor signed a consent judgment on January 5, 2026.
Liberty then asked the court to enter that judgment. The City of Parramatta Council, the second defendant, objected - because entering judgment for Liberty would foreclose any future claim for statutory contribution against it.
That reflects settled law. As Justice Chen noted, the High Court's James Hardie decision confirmed that entering judgment for a defendant, even by consent, is a final determination of no liability, which ends a co-defendant's right of contribution because that defendant is no longer a tortfeasor "who is... liable in respect of the same damage."
Liberty argued its situation differed: no cross-claim had been filed against it, the proceedings were "in their infancy," and deferral would mean the plaintiff was forced to keep prosecuting her claim and Liberty forced to keep defending "at a considerable cost." Chen J rejected each point, finding the early stage of the case favoured the Council, and that the agreement to end the claim stood regardless of when judgment was entered.
He dismissed Liberty's motion and deferred the judgment until the main proceedings are resolved. He also granted the plaintiff leave to file an amended claim adding two defendants - her employer, Civforce Traffic Management, and Corrigan Traffic Signals, which the plaintiff alleges did the relevant trenching and footpath reinstatement, and alleges did it negligently. Those allegations are untested and the amended claim had not yet been filed at the time of the ruling. Liberty was ordered to pay the plaintiff's and Council's costs of both motions.
The lesson for claims teams: a signed settlement isn't the finish line when co-defendants are involved. A court can hold a defendant's win in reserve - here, with any trial unlikely before the end of 2027 - to protect another party's right to seek contribution.
