Australian Rail Track Corporation Ltd v Leighton Contractors Pty Ltd [2003] VSC 189

Supreme Court of Victoria|2003-06-06|Before: Bongiorno J

Tort - joint and several liability - "building action" - what constitutes - statutory reform - joinder of defendants - RSC r 9.06 - Building Act 1993 ss 3(1) 129, 131, 132

This is an application by Leighton Contractors Pty Ltd ("Leightons") to have a number of other companies, Pike Engineering Pty Ltd, ACN 007 015 965 Pty Ltd (formerly known as Fisher Stewart Pty Ltd), Kealba Engineering Pty Ltd and Sergi Pty Ltd, joined as defendants (where they are not already joined by the plaintiff) in four different proceedings issued by various plaintiffs against Leightons claiming damages consequent upon the collapse of a beam on the Princes Highway overpass over the Geelong-Melbourne railway at Corio on 8 October 2000. The collapse of the beam blocked both the broad gauge (Victorian) and standard gauge (Australian) rail tracks, which run under the overpass, for some eight days. The track itself was not damaged in any way.

The proceedings in which Leightons are already a defendant and in respect of which they seek to have added the parties referred to above are set out on the table annexed to this judgment. As the same considerations apply in each case all the applications were heard together.

Each of these proceedings is an action in which the plaintiff or plaintiffs are companies which claim damages as compensation for loss each of them alleges it suffered by reason of the blockage of the railway track. None of them has any interest in the building of the overpass or in the activities of Leightons or any of the proposed added defendants except insofar as those activities may have been causes of the rail track being unable to be used during the period it was blocked.

Each of the plaintiff's claims against Leightons, although expressed in different ways, includes a claim in negligence. Those negligence claims can be described as claims for compensation caused by interference by Leightons (and such other defendants as are already co-defendants in some of the proceedings) with one or other of the railway tracks thus preventing each of them conducting its business using the track whether as lessee, freight consignor, passenger carrier or train operator. It is not necessary, for the purpose of this judgment, to further explore the network of contractual arrangements pursuant to which each of them relies upon the integrity of the rail track for the purposes of a profit-making enterprise, nor is it necessary to examine other claims against Leightons by some plaintiffs in contract or equity. It is sufficient to note that all of the claims relevant to these applications are claims in tort for pure economic loss.

Leightons seeks the joinder of these extra defendants to the tort claims brought against it by the plaintiffs because it believes that by doing so it can take advantage of Division 2 of Part 9 of the Building Act 1993 which makes significant changes to common law rights and liabilities in tort where claims are made in "building action(s)". That joinder of defendants at the instance of an existing defendant is permitted for the purpose of taking advantage of these provisions is established by Boral Resources Pty Ltd v Robak Engineering and Construction Pty Ltd[1]. Such joinder, the Court of Appeal held, was permitted by RSC r 9.06(b)(ii). However, the Court of Appeal's decision is dependent upon the action brought being a "building action" within the meaning of the Act. If it is not, then Leightons cannot avail itself of the protection conferred by s 131 of the Act and would have to seek any contribution in respect of the plaintiffs' claims by recourse to third party proceedings invoking the indemnity and contribution provisions of the Wrongs Act 1958.

Sections 131 and 132 of the Building Act 1993 which alter the common law (and the effect of the Wrongs Act 1958) as I have described are in the following terms:

"131. Limitations on liability of persons jointly or severally liable (1) After determining an award of damages in a building action, the court must give judgment against each defendant to that action who is found to be jointly or severally liable for damages for such proportion of the total amount of damages as the court considers to be just and equitable having regard to the extent of that defendant's responsibility for the loss or damage. (2) Despite any Act or rule of law to the contrary, the liability for damages of a person found to be jointly or severally liable for damages in a building action is limited to the amount for which judgment is given against that person by the court. 132. Rights to contribution Despite anything to the contrary in the Wrongs Act 1958, a person found to be jointly or severally liable for damages in a building action cannot be required to contribute to the damages apportioned to any other person in the same action or to indemnify any such other person in respect of those damages."

The term "building action" is defined, for the purposes of s 131, as follows:

"'building action' means an action (including a counterclaim) for damages for loss or damage arising out of or concerning defective building work;"

The Act also defines "building work" in ss (3)(1) and 129 which, when read together, provide a definition for the purposes of s 131 in the following terms:

"'building work' means work for or in connection with the construction, demolition or removal of a building[2];" and "... includes the design, inspection and issuing of a permit in respect of building work"[3].

"structure, temporary building, temporary structure and any part of a building or structure. "

Whether s 131 applies to these proceedings depends upon whether, by the proper application of these definitions the proceedings under consideration are properly characterised as "building actions".

There are consequences of such characterisation, not only for Leightons, but also for the plaintiffs. Should s 131 apply they will not be able to recover their losses entirely from Leightons as they could have done in an ordinary action in tort unless they prove that Leightons alone was responsible (to the exclusion of any other defendant) for their losses. Without such proof they will be left to try to recover a portion of such losses from some or all of the added defendants who may or may not be solvent or appropriately insured (notwithstanding s 135 of the Act).[4]

Mr Foxcroft SC, for Leightons, submits not only that the overpass being built by Leightons at the time the beam fell and blocked the railway track was "a building" so as to properly characterise the work it was performing as "building work" but that the plaintiffs' losses "arise out of" defective building work. Thus, he says, the proceedings brought by the plaintiff are "building actions".

In support of the first proposition he says that even if the bridge beam and its temporary supports were not a building within the meaning of the Act they were a "structure" or "temporary structure" so as to bring them within the relevant definition of "building". Thus, he argues, the work being performed by Leightons was building work.

Mr P. Santamaria SC, who put the main argument on behalf of the plaintiffs, disputed this contention. He submitted that the bridge was not a building or a structure or a temporary structure within the meaning of the Act. He argued that if the definition of a "building" simply meant, as Leightons contends, "something that is built" it would have been very easy for Parliament to have defined it in that way. The Act, he says, was designed to ensure that its protections and proscriptions extended to structures not ordinarily readily comprehended by the word "building" but which nevertheless had a purpose of accommodating people. He quoted the Minister for Planning's second reading speech upon the Bill which became the Act:

"Under the Building Bill, places of public entertainment, open air public venues, including non-building venues, and temporary entertainment structures such as circus tents, temporary seating systems, temporary halls and display venues which are currently regulated by the Health Act will be brought under the building regulation legislation..."[5]

He also pointed to the explanatory memorandum accompanying the Building Bill which contained the following statement with respect to cl. 3 (the definition clause):

"Clause 3 provides for the definitions of certain words used in the Act such as `building'. The definition of building is not intended to include structures which are not in the nature of buildings such as railway viaducts and roads."

Recourse to these extrinsic materials is justified in this case by the inherent ambiguity introduced by the use of an inclusive definition of "building". Such recourse put the matter beyond doubt, Mr Santamaria submitted.

If the draftsman of the Bill was content to use railway viaducts and roads as examples of structures which are not intended to be included within the definition of "building" it is difficult to see how a road overpass over railway tracks can be appropriately distinguished so that it does fall within the definition. Indeed it may well be a road which the draftsman specifically intends should be excluded from the definition of building. Even it is isn't a road, it's not a building. It has none of the ordinary attributes or qualities of a building. It does not accommodate people, nor does it have the form or structure of a building whether by application of the ordinary meaning of the word or by application of the extended inclusive definition provided in the Act.

It follows that if the object being constructed by Leightons was not a building within the meaning of the Building Act then, by application of the appropriate statutory definitions, the various proceedings brought by the plaintiffs are not building actions within the meaning of s 129 of the Act. Thus, s 131 does not apply so as to modify the common law as to joint and several liability. There is, therefore, no basis for permitting the joinder of the defendants Leightons now seek to join. The necessary prerequisites for such joinder required by RSC v. 9.06(b)(ii) and the Court of Appeal decision in Boral Resources Pty Ltd v Robak Engineering and Construction Pty Ltd[6] do not exist. This is not to say, of course, that Leightons cannot seek contribution or indemnity pursuant to the Wrongs Act 1958 from any other party it considers responsible or partly responsible for the plaintiffs' losses by joining them as third parties in appropriate cases if they have not already done so in appropriate cases.

Although this conclusion is sufficient to dispose of these applications, should it be later held that I was incorrect in holding that the overpass was not a building within the relevant definitions at the time the beam fell and obstructed the railway track, I should briefly consider an alternative submission put by Mr Santamaria that, even if the overpass is a building none of the proceedings brought by the various plaintiffs is a "building action" within the meaning of s 129 of the Building Act 1993.

A consideration of the purpose of the provisions of the Building Act limiting liability and abolishing the common law concept of joint liability in respect of building actions leads to the conclusion that the definition of building action should not be construed so as to include claims brought by plaintiffs who are but incidentally, accidentally or indirectly affected by what might be described as defective building work.

In the cases under consideration the plaintiffs have pleaded claims in negligence against Leightons. They need not have done so. It would have mattered not had they pleaded those claims in trespass or nuisance. Provided that they are able to prove that Leightons, or someone for whom Leightons was vicariously liable, caused or permitted the beam to fall and block the railway track it would be immaterial whether the falling of the beam was caused by defective building work, by a general lack of care on the part of Leightons or someone for whom it was responsible independent of the building work or, for that matter by a deliberate act on the part of Leightons or someone for whom it was responsible.

The purpose of the limitation of liability provisions of the Building Act was said by the Act itself to be to reform aspects of the law relating to legal liability in relation to building work[7]. Further amplification of the purpose can be gleaned from the Minister's second reading speech where he made it clear that s 131 was intended to protect building practitioners from the consequences of joint and several liability where other building practitioners who might be jointly and severally liable with them were unable to meet their obligations or were not appropriately insured. Nowhere in that speech is there any reference to claims such as those with which these proceedings are concerned where the plaintiffs have no interest in the building work and no interest in the building itself. At one point in the speech the Minister actually defines a plaintiff as a property owner.

The Court of Appeal in Boral Resources Pty Ltd v Robak Engineering and Construction Pty Ltd[8] agreed that the aim of s 131 was to replace joint and several liability with proportionate liability in cases to which it applied so that a building practitioner would be found liable only for his or its proportionate share of a damages award. But such considerations can have no application where the victim of a building practitioner's negligence, nuisance, trespass or other tort is an outside party whose loss and damage is caused by defective building work in only an accidental, incidental or indirect sense.

Mr Foxcroft's argument that the plaintiffs' losses in these cases were caused by defective building work depended upon a close exegesis of the relevant statutory definitions with reference to cases of high authority on phrases such as "arising out of" and "caused by". But this argument ignores the purpose of the statute. It was not to change the general law of tortious liability; it was to regulate liability, inter se, of building owners and building practitioners. To give the statute what Mr Foxcroft submits is its ordinary and grammatical meaning would give it an operation which was obviously not intended. See generally Cooper Brookes (Wollongong) Pty Ltd v FCT[9] particularly per Gibbs, CJ at 304-5.

To give the statutory definition the construction contended for by Mr Foxcroft would render it inconsistent and inharmonious with the rest of the enactment. Further, it would effect changes to the general law which were never intended by Parliament. Such a construction could lead to bizarre and inconsistent results. For example, if Leightons, whilst unloading a truck at the building site, dropped a beam so as to obstruct the rail track, it could not be contended that s 131 had application to claims similar to those made by the plaintiffs in these proceedings. It could not be said that such a case was a "building action". Again, if a Leighton's foreman, for whatever reason, chose to store unused beams on the railway track so as to obstruct it, s 131 could have no application. Or, if a stack of beams stored close to the railway track near the construction site by Leightons was disturbed by a subcontractor such that it toppled, so that one obstructed the railway track, s 131 could have no application. The only difference between these cases and the cases now made by the plaintiffs is that, fortuitously, it might be able to be argued here that defective building work on someone's part was causally linked to the beam's obstruction of the railway track. The statute should not be construed so as to produce such capricious effects.

Finally, it is by no means clear that "defective building work" is a phrase of sufficient width in the context in which it is used to include the collapse of a part of a construction whilst unfinished. Further doubt is cast upon the width of this expression when account is taken of the provisions of some other sections in Division 2 of Part 9 of the Act. For example, the altered limitation provision in s 134 suggests that building actions might indeed be confined to those concerned with defects in buildings as those defects affect building owners. However, whether they are or not need not be answered definitively for the purpose of deciding these applications having regard to the conclusions I have reached on the other questions raised.

Accordingly, even if Leightons was engaged in the construction of a building within the relevant statutory definition at the time the beam fell, the present proceedings brought by various plaintiffs against it are not building actions within the meaning of s 129 of the Building Act 1993 so that s 131 of that Act has no application to them.

In light of the above, there is no basis for the joinder of any of the proposed defendants Leightons seeks to join in these various actions. Its summons in each action filed 9 December 2002 will be dismissed with costs.

Leighton, VRTC and the Director of Public Transport

National Express Group Australia (V/Line Passenger) Pty Ltd

Twentieth Super pace Nominees Pty Ltd (trading as Specialized Container Transport), Toll Rail Holdings Pty Ltd

[4] s 135 Building Act 1993 provides for compulsory insurance of building practitioners, a class of wide definition including builders, architects, engineers etc.

[5] Hansard: Legislative Assembly; 11 November 1993, p. 1693-4.

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