Western Australia Supreme Court Justice Rene Le Miere on Thursday rejected a bid by a group of plaintiffs for a freezing order on the assets of an elderly landowner found partially liable for the Parkerville bushfire, allowing for the distribution of her assets to plaintiffs who have resolved their claims against her, and leaving nothing left for hold-out plaintiffs, who claim to be owed more than $75 million in damages.

The ruling comes a year after the judge largely found for the plaintiffs on the question of liability, ruling that the bushfire, which was sparked by a termite-infested electrical pole and destroyed 57 homes, was the fault of sub-contractor Thiess Services and the 85-year-old owner of the land on which the pole stood, Noreen Campbell. Western Power, which contracted with Thiess to do maintenance on the damaged power pole, was found not liable.

In his Thursday ruling, Justice Le Miere found that while the plaintiff group had satisfied the jurisdictional requirements for a freezing order, he would not exercise his discretion to grant their application. Paying the settling plaintiffs was not an inappropriate disposal of assets, he said, and the parties had not entered settlement for the purposes of defeating any judgments.

“On the face of it, it is not irregular, inappropriate or unjustifiable for Mrs Campbell to pay to the [settling] plaintiffs the debts arising from the settlement deeds, and the court should not exercise its discretion to make a freezing order restraining her from making those payments,” the judge said.

More than 400 residents and landowners brought the four collective actions alleging Western Power, Thiess and Campbell were responsible for the bushfire, which spread over 400 hectares in Parkerville, Stoneville and Mount Helena in eastern Perth.

The actions were case-managed together and an initial trial found that Thiess was 70 per cent liable and Campbell 30 per cent liable to plaintiffs. The judge ruled two test-case plaintiffs, Gary and Sandra Elwood, were entitled to receive over $770,000 in compensation, more than $300,000 of which he ordered to be paid by Campbell. He also ordered that the damages of the other plaintiffs be assessed.

Both Thiess and Campbell have appealed the liability ruling but their challenges have not been determined.

The plaintiffs who sought the freezing order were members of the first case, referred to as the Herridge proceeding, brought in 2015 against Campbell, Thiess and Western Power. The following three cases were filed in 2016 against the defendants by Allianz, IAG and RAC, the insurers of three other groups of plaintiffs.

The insurance cases brought on behalf of plaintiffs by Allianz and IAG settled with Campbell for more than $3.35 million, and the 189 settling plaintiffs argued they were entitled to be paid the proceeds despite the settlements potentially reducing to nothing the recoveries from Campbell for the remaining plaintiffs.

The Herridge plaintiffs sought a freezing order on Campbell’s assets — her property valued at $850,000 and a home and contents insurance policy from Westpac with a $20 million coverage limit — to prevent the settlement funds being paid out.

Counsel for Campbell, Jeremy Giles SC, argued that his client and the other plaintiffs’ groups would lose out as a result of a freezing order, in the interest accruing on damages ultimately determined to be owed the Herridge plaintiffs and her legal costs. Campbell also loses the chance of settling on more favourable than a damages judgment, Giles said.

Justice Le Miere ruled Thursday that he was satisfied there was a danger that Campbell’s right to indemnity from Westpac would be insufficient to pay the whole of the prospective damages judgments for the remaining Herridge plaintiffs after payment of the settlements.

But the court should not exercise its discretion to make a freezing order restraining Campbell from making those payments, he said, because there was no evidence she reached the settlements to avoid paying damages to the Herridge plaintiffs or that the settlements were an “irregular, inappropriate or unjustifiable” disposal of her assets.

“In the absence of a statutory regime of apportionment, the historic ‘first past the post’ principle applies on enforcement of judgments or settlements, and the effect of a judgment or settlement is that it gives priority over other claimants who have not yet obtained a judgment, award or settlement. It is no part of the court’s function or jurisdiction to impose on the parties some form of informal insolvency regime,” Justice Le Miere said.

The judge rejected the Herridge plaintiffs arguments that this was an exceptional case warranting a freezing order.

Barrister for the plaintiffs Lachlan Armstrong QC had argued it would be unfair for the settling plaintiffs to “steal a march” on another so that their recoveries were unjustifiably greater.

Armstrong also argued that the order in which judgments or settlements were obtained by plaintiffs should not determine priorities in recovering under Campbell’s insurance policy because this was contrary to the court’s management plan for the four cases. The court should exercise its discretion to preserve the integrity of its processes, he said.

The integrity of multi‑plaintiff proceedings, and any class action procedure, would be seriously undermined if there were an “unseemly rush” to be first past the post after judgement on liability, Armstrong said.

The judge said he was not persuaded by the arguments “notwithstanding their legal coherence and appeals to fairness and equity”.

“There is, in effect, one pot of money with numerous claimants, not all of whom, in view of the insurance policy limit, may have their claims fully satisfied. Satisfying the claims on a global pro rata basis is not necessarily fairer than on a claim by claim basis according to chronological priority,” he said.

“The ordinary rule of chronological priority involves hardship for plaintiffs who are not at the front of the queue. That may involve a degree of unfairness where the result does not reflect the relative degree of diligence demonstrated by the claimants in pursuing their claims. On the other hand, not following the chronological approach may involve a degree of unfairness to those who have obtained judgment or settlement who are precluded from accessing the fruits of their judgment or settlement until all claims are determined. Furthermore, encouraging settlement may be thwarted by a pro rata system that depends on the determination of all claims before a payout.”

MinterEllison represented Campbell. Slater and Gordon represented Herridge.

The case is Daniel Herridge & Ors v Electricity Networks Corporation & Ors.