Bingo Holdings Pty Ltd v GC Group Company Pty Ltd

Consideration

At the outset of the application for leave to appeal Mr P W Larkin SC, who appeared with Mr T To and Mr A L Jucha for Bingo, accepted that the only apportionable claim made by GC Group was the claim made under s 18 of the Australian Consumer Law. That is, Bingo accepted that the contract claim and the consumer guarantee claim were not apportionable claims. This means that the question of apportionment would only arise if GC Group were to fail on its contract and consumer guarantee claims, yet succeed on its misleading and deceptive conduct claim.
In relation to the claim under s 18 of the Australian Consumer Law, Mr Larkin SC also accepted that as GC Group's claim was made under Commonwealth law, the question of proportionate liability was governed by Part VIA of the Competition and Consumer Act, and not by the Civil Liability Act. This was not, however, the basis upon which the proposed amended Technology and Construction List Response had been drafted, nor the way both parties had addressed the issue before the primary judge. In each case it had been asserted that the claim under s 18 of the Australian Consumer Law was apportionable under the Civil Liability Act.
It follows that the basis upon which the primary judge had been asked to consider the proposed amendment to the Technology and Construction List Response to add an apportionable claim proceeded on a misapprehension about the relevant law. There was no proportionate liability defence available under s 34 of the Civil Liability Act. The proposed pleading the subject of the application for leave to appeal did not refer to Part VIA of the Competition and Consumer Act. It followed that the application for leave to appeal to this Court should be dismissed for that reason alone.
We consider, however, that as a matter of principle Bingo's argument is not correct, and for that additional reason the application for leave to appeal should be dismissed. Bingo's essential point, made in relation to s 34 of the Civil Lability Act and repeated in relation to Part VIA of the Competition and Consumer Act, was that if it is liable to GC Group, then it is a "concurrent wrongdoer" for the purposes of s 87CB(3), because it is one of two or more persons whose acts or omissions have caused the damage of which GC Group complains. It was submitted that the definition was satisfied notwithstanding that Bingo could not identify individually or at all (and not even as a member of a closed class of persons each of whom had caused such damage) any another person who had caused, or was alleged to have caused, the damage of which GC Group complains. As the primary judge explained, the consequences of Bingo's contention are as follows: "[30] If Bingo is correct, it can name 'persons' within a closed class (that is, WRBS [Wollongong Recycling and Building Supplies Pty Ltd] or one or more of the Customers) as concurrent wrongdoers and seek to have its liability limited accordingly under s 35(2) [or under Part VIA]; and yet because the particular 'persons' cannot be identified, GC Group is left unable to obtain redress by joining them as defendants."
We have concluded that Bingo's construction of s 34 of the Civil Lability Act and repeated in relation to Part VIA of the Competition and Consumer Act is not correct. The effect of Part 4 of the Civil Liability Act and Part VIA of the Competition and Consumer Act is to place the risk of a concurrent wrongdoer's insolvency upon the plaintiff. An identified concurrent wrongdoer does not need to be joined to the proceedings. The provisions do not, however, permit a defendant to limit their liability in respect of alleged concurrent wrongdoers who cannot be identified.
Proportionate liability provisions were not originally included in the Civil Liability Act but were informed by a report by Professor J L R Davis, Inquiry into the Law of Joint and Several Liability (Report of Stage Two), (January 1995). Whilst the report provides important context, it does not support the construction advanced by Bingo. Professor Davis said: "The Court of Appeal of British Columbia, in Reekie v Messervey (1989) 59 DLR (4th) 481 at 491, summed up the law in that Province by saying: 'Under the Negligence Act, RSBC 1979, c298, the liability of a defendant is [proportionate] if the plaintiff is contributorily negligent and joint and several if the plaintiff is not contributorily negligent.' The proportionate liability of a defendant derives from ss 1 and 2(c) of that statute, which are in the following terms. '1. Where by the fault of 2 or more persons damage or loss is caused to one or more of them, the liability to make good the damage or loss shall be in proportion to the degree in which each person was at fault, except that: (a) if, having regard to all the circumstances of the case, it is not possible to establish different degrees of fault, the liability shall be apportioned equally; and (b) nothing in this section shall operate so as to render a person liable for damage or loss to which his fault has not been contributed. 2. The awarding of damage or loss in every action to which section 1 applies shall be governed by the following provisions: ... (c) as between each person who has sustained damage or loss and each other person who is liable to make good the damage or loss, the person sustaining the damage or loss shall be entitled to recover from that other person the percentage of the damage or loss sustained as corresponds to the degree of fault of that other person;' Those provisions were interpreted as providing for proportionate liability when the plaintiff is contributorily negligent by the Court of Appeal in the Province in Comenco Ltd v Canadian General Electric Co Ltd (1983) 4 DLR (4th) 186, a decision which was confirmed by a Bench of five Justices in Leischner v West Kootenay Power and Light Co Ltd (1986) 24 DLR (4th) 641. That interpretation has been applied to cases of physical injury and, in Hongkong Bank of Canada v Touche Ross & Co (1989) 36 BCLR (2d) 381, has been applied to a claim for purely economic loss. It has also been decided by the Court of Appeal, in Wells v McBrine (1989) 54 DLR (4th) 708, that it is a concomitant of those decisions that when a plaintiff is contributorily negligent, the court should decide on the apportionment of liability among all those who are found to have been at fault, whether they are parties to the action or not. While judgment can only be entered against a party to the proceedings, it is considered necessary for those who are before the court to show who all the possible wrongdoers may be, and the degree of fault attributable to each."
We are unable to accept the suggestion that in referring to economic loss caused by another person, even if that other person is not a party, or is insolvent or "untraceable", Professor Davis was contemplating that a concurrent wrongdoer could be a person who had not caused the loss claimed by the plaintiff; but merely a person who might have caused the loss. In context, Professor Davis' report, and the Canadian authorities to which Bingo referred, go no further than suggesting that a court should decide on the apportionment of liability among all those who are found to have been at fault, whether they are parties to the action or not. Even in Wells v McBrine (1988) 54 DLR (4th) 708; (1988) CanLII 3087 (BC CA), the British Columbia case referred to by Bingo as the high point of their argument, all of the wrongdoers were identified.
The introduction of the proportionate liability regime into the Civil Liability Act in place of the solidary regime of the common law effectively shifted the risk of another concurrent wrongdoer's insolvency from the defendant to the plaintiff: Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) 247 CLR 613; [2013] HCA 10 at [10], [16]-[17] (French CJ, Hayne and Kiefel JJ). The provisions nevertheless require the identification of an alleged wrongdoer, not merely an alleged potential wrongdoer.
It is clear that the primary judge's construction of the provisions of the Civil Liability Act was consistent with the intention of the Minister expressed in the Second Reading Speech (New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 23 October 2002 at 5766): "Proportionate liability will also be introduced for claims for economic loss or property damage, other than in personal injury claims. This means that a person jointly responsible with some other person or persons will be liable only to the extent of their responsibility."
It is long settled that Part 4 of the Civil Liability Act requires that the acts or omissions of a particular person who caused the same loss as that claimed by the plaintiff be identified. In Ucak v Avante Developments Pty Ltd [2007] NSWSC 367, Hammerschlag J explained that a defendant had to take particular care to identify a particular person as a concurrent wrongdoer to maintain that defence: "[34] In order for a person to be a concurrent wrongdoer he must be one whose acts or omissions caused the damage or loss that is the subject of the claim. [35] It follows in my view, that for a defendant to assert that there is a person who is a [concurrent] wrongdoer the defendant must plead the necessary elements which result in the asserted conclusion. Those elements are: a the existence of a particular person; b the occurrence of an act or omission by that particular person; and c a causal connection between that occurrence and the loss that is the subject of the claim."
Whilst it is correct that the particular pleading being considered in Ucak was fundamentally deficient, Bingo's attempts to distinguish the decision were unpersuasive. On the presently relevant question, the need to identify a particular concurrent wrongdoer, Ukak has been consistently followed for well over a decade: see for example HSD Co Pty Ltd v Masu Financial Management Pty Ltd [2008] NSWSC 1279 at [18] (Rothman J); Permanent Custodians Limited v King [2010] NSWSC 509 at [17]-[19] (Schmidt J); The Owners Strata Plan v Brookfield Multiplex Limited [2010] NSWSC 360 at [3]-[4] (McDougall J); Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd (2007) 164 FCR 450; [2007] FCA 1216 at [31] (Middleton J). In The Owners - Strata Plan No 87265 v Saaib [2021] NSWSC 150, Henry J said: "[514] As has been said, an obvious precondition to limiting liability on the basis that others are also responsible for the damage is that it is necessary to prove that those others have caused the damage and are legally responsible for it. If the provisions are to operate appropriately, it is essential that any defendant be required to plead the proportionate liability defence in a manner that discloses the cause of action and damage in at least as detailed a manner as would be required for any initiating process for a cause of action: Ucak v Avante Developments Pty Ltd [2007] NSWSC 367 at [35]-[42]; H S D Co Pty Limited v Masu Financial Management Pty Limited [2008] NSWSC 1279 at [18]."
Part VIA was added to the Competition and Consumer Act (which at that time was the Trade Practices Act 1974 (Cth)) by the Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 (Cth). The Explanatory Memorandum to the Bill explained: "5.346 The Bill will amend the ASIC Act, the Corporations Act and the Trade Practices Act 1974 (Trade Practices Act) to ensure that proportionate liability applies to claims for damages for economic loss or property damage arising from misleading or deceptive conduct. … 5.348 The introduction of proportionate liability is one of the key measures on which all governments in Australia have agreed in order to improve the availability and affordability of professional indemnity insurance. … 5.351 Commonwealth, State and Territory governments have agreed to introduce proportionate liability for economic loss and property damage so that it operates, as far as possible, on a nationally consistent basis. The Commonwealth has agreed to amend the ASIC Act, the Corporations Act and the Trade Practices Act to ensure that proportionate liability for economic loss or property damage applies in both State and Federal jurisdictions.
As this Court explained in Johnson v Mackinnon [2021] NSWCA 152 (Brereton JA, Macfarlan JA and Simpson AJA agreeing), citing Ucak with approval. "[280] At least for all present purposes, the provisions are not materially different. Both CLA, s 35(1), and CCA, s 87CD(1), are expressed in mandatory terms, in stipulating that 'the liability of a defendant … is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss' (emphasis added); and that 'the court may give judgment against the defendant for not more than that amount' (emphasis added). However it is well established, by the authorities to which the primary judge referred, that it must be pleaded. In this respect, it is analogous to a Limitation Act defence. The appellant's contention that his Honour was bound to apply it regardless of it not being pleaded is not correct." (Footnote omitted.)
Part VIA of the Competition and Consumer Act provides, relevantly: 87CB Application of Part (1) This Part applies to a claim (an apportionable claim) if the claim is a claim for damages made under section 236 of the Australian Consumer Law for: (a) economic loss; or (b) damage to property; caused by conduct that was done in a contravention of section 18 of the Australian Consumer Law. (2) For the purposes of this Part, there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action (whether or not of the same or a different kind). (3) In this Part, a concurrent wrongdoer, in relation to a claim, is a person who is one of 2 or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim. (4) For the purposes of this Part, apportionable claims are limited to those claims specified in subsection (1). (5) For the purposes of this Part, it does not matter that a concurrent wrongdoer is insolvent, is being wound up or has ceased to exist or died. … 87CD Proportionate liability for apportionable claims (1) In any proceedings involving an apportionable claim: (a) the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss; and (b) the court may give judgment against the defendant for not more than that amount. (2) If the proceedings involve both an apportionable claim and a claim that is not an apportionable claim: (a) liability for the apportionable claim is to be determined in accordance with the provisions of this Part; and (b) liability for the other claim is to be determined in accordance with the legal rules, if any, that (apart from this Part) are relevant. (3) In apportioning responsibility between defendants in the proceedings: (a) the court is to exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent under any relevant law; and (b) the court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings. (4) This section applies in proceedings involving an apportionable claim whether or not all concurrent wrongdoers are parties to the proceedings. (5) A reference in this Part to a defendant in proceedings includes any person joined as a defendant or other party in the proceedings (except as a plaintiff) whether joined under this Part, under rules of court or otherwise. 87CE Defendant to notify plaintiff of concurrent wrongdoer of whom defendant aware (1) If: (a) a defendant in proceedings involving an apportionable claim has reasonable grounds to believe that a particular person (the other person) may be a concurrent wrongdoer in relation to the claim; and (b) the defendant fails to give the plaintiff, as soon as practicable, written notice of the information that the defendant has about: (i) the identity of the other person; and (ii) the circumstances that may make the other person a concurrent wrongdoer in relation to the claim; and (c) the plaintiff unnecessarily incurs costs in the proceedings because the plaintiff was not aware that the other person may be a concurrent wrongdoer in relation to the claim; the court hearing the proceedings may order that the defendant pay all or any of those costs of the plaintiff. (2) The court may order that the costs to be paid by the defendant be assessed on an indemnity basis or otherwise.
A defendant seeking to rely upon a proportionate liability limitation of recovery under Part VIA of the Competition and Consumer Act must identify each particular alleged concurrent wrongdoer. Part VIA does not allow a defendant to describe a population of individuals and assert that within that class there may be one or more concurrent wrongdoers. Bingo's construction, if correct, would make the concurrent wrongdoer provisions incoherent. Dealing first with the text, s 87CB(3) defines "concurrent wrongdoer" as: … a person who is one of 2 or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim.
The critical integers of "concurrent wrongdoer" are the identification of a person whose acts or omissions caused the loss or damage the subject of the claim. The satisfaction of all three integers (acts or omissions, cause and damage or loss the subject of the claim) by a particular person is required to meet the statutory description. Each must be pleaded. The word "is", in identifying a person with those characteristics, suggests that the concurrent wrongdoer defence requires a defendant to plead and establish that there is one or more other persons who caused the damage or loss the subject of the plaintiff's claim.
Section 87CD is the section which, where the defendant is a concurrent wrongdoer, restricts the ability of a court to award damages for loss claimed by a plaintiff to no more than the amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss. The gateway to the calculation is a finding that, in relation to any damage or loss claimed, there are "concurrent wrongdoers". This harks back to an identification of the three elements to which we have referred in relation to a person as a "concurrent wrongdoer": 1. acts or omissions; 2. which caused; 3. the damage or loss the subject of the claim.
This conclusion accords with the construction of the same or equivalent provisions by the Federal Court and the Victorian Court of Appeal: see for example F.Y.D. Investments Pty Ltd v Promptair Pty Ltd (No 2) [2019] FCA 419 (White J) where his Honour said: "[404] It is, however, important to note that s 87CD and its counterparts operate only in respect of wrongdoers, namely, persons who are themselves liable to the applicant: Shrimp v Landmark Operations Ltd [2007] FCA 1468, (2007) 163 FCR 510 at [59]; St George Bank Ltd v Quinerts Pty Ltd [2009] VSCA 245 at [59]; Latteria Holdings Pty Ltd v Corcoran Parker Pty Ltd [2014] FCA 880, (2014) 224 FCR 519 at [16]. In the last of these cases, Mortimer J referred to Hunt & Hunt in which, at [91], Bell and Gageler JJ said: 'To answer the description of "a person … whose acts or omissions (or act or omission) caused" that damage or loss or harm, C (in common with B) must be (or have been) legally liable to A for the damage or loss that is the subject of the claim. The reference in the definition to "acts or omissions (or act or omission)" is to one or more legally actionable acts or omissions. The reference in the definition to acts or omissions having "caused … the damage or loss that is the subject of the claim" is not, as has correctly been held, merely to causation in fact. "Questions of causation are not answered in a legal vacuum" but "are answered in the legal framework in which they arise". The reference here is to causation that results, or would result, in legal liability.' (Emphasis in the original and citations omitted) [405] The authorities also indicate the importance of a proper pleading of a claim of proportionate liability. See, for example, Ucak v Avante Developments Pty Ltd [2007] NSWSC 367 at [35]; Hart v JGC Accounting & Financial Services Pty Ltd [2015] WASCA 22, (2015) 47 WAR 582 at [25]-[26]."
It is also consistent with decisions of this Court construing the provisions in the Civil Liability Act. In Woodhouse v Fitzgerald [2021] NSWCA 54, Basten JA said (Meagher and Payne JJA agreeing) that: "[94] Thirdly, subsequent authority supports the continuation of the construction of the legislation which requires that the concurrent wrongdoer has at some stage been legally liable, even if no longer subject to a possible suit. [95] In this Court, Perpetual Trustee Company Ltd v Milanex Pty Ltd (in liq) [[2011] NSWCA 367 at [94] (Macfarlan JA, Campbell JA and Young JA agreeing)] held that concurrent wrongdoers 'are people who are, or at least were, liable to a plaintiff (who is advancing an apportionable claim) in respect of the same loss suffered by that plaintiff'. Milanex, it is true, was decided before Hunt & Hunt and followed St George Bank. However, subsequently, following the decision in Hunt & Hunt, this Court in Trajkovski v Simpson reaffirmed the view that '[i]t is inherent in the notion of "concurrent wrongdoer" that the plaintiff has, or had, a good - albeit not necessarily recoverable - cause of action sounding in damages against the alleged concurrent wrongdoer.'"
Text and context requires that a defendant seeking to rely on a proportionate liability defence must plead that claim with the same degree of particularity as if bringing a cross-claim against the alleged concurrent wrongdoer, setting out the relevant material facts. It is not sufficient merely to identify a class of persons one or more of whom may be a concurrent wrongdoer or wrongdoers.
Bingo's suggested construction is not correct. For these additional reasons the application for leave to appeal to this Court was dismissed.
Although strictly unnecessary to decide, we also doubt that it could ever be established that the class of Bingo's so-called customers (or any identified customer) owed a duty of care to third parties, such as GC Group, supplied with recycled material by Bingo. Resolution of this question should await a case where the issue needs to be determined.

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