Boral Resources Pty Ltd v Robak Engineering & Construction Pty Ltd & Anor; FCH Consulting Pty Ltd v Wimmera-Mallee Rural Water Authority & Anor [1999] VSCA 66

Robak Engineering & Construction Pty Ltd./Wimmera-Mallee Rural Water Authority

No appearances for the secondnamed respondent in each proceeding.

2. Having had the benefit of studying drafts of the reasons of the other members of the Court, I agree that the learned primary judge's application of the relevant provisions of the Building Act 1993 was correct. I do not wish to add to what their Honours have said on that aspect of the appeals.

5. I agree also that in each case the application under Rule 9.06(b)(ii) for an order adding the third party as a defendant should have been acceded to below, and that each appeal should therefore be allowed. Since we are differing from the judge on this question, I wish to express shortly in my own words my understanding of the scope of Rule 9.06(b)(ii) in the context of these cases; and I shall do so without rehearsing the facts or the terms of the Act or the rule, all of which have been set out by Chernov, J.A.

8. In each case a sole plaintiff (P) has sued a single defendant (D) for damages in a "building action" within the meaning of s.129 of the Building Act 1993. With a view to relying on s.131 of that Act, D in each case wishes to raise, as between D and another - whom I shall for convenience call X - and to have determined in the action, the question of their individual liabilities (if any) to P for P's alleged damage having regard to their respective responsibilities for its cause. D, applying in reliance on Rule 9.06(b)(ii) for an order that X be added as a defendant, has contended that this question both (a) arises out of or relates to or is connected with P's claim against D and (b) is one that it is just and convenient to determine as between D and X as well as between D and P. That question between D and X is, as I read the pleadings**,** not one that happens to be raised between D and P in either of these actions; and, save for the operation of s.131, it will not affect P in either of them. I do not understand, however, that it is a necessary prerequisite to the making of an order pursuant to Rule 9.06(b)(ii) that the question to which the rule refers should have arisen between existing parties to the proceeding. What D is required to show in the application made under Rule 9.06(b)(ii) is that there may exist between D and X a question which (a) arises out of or relates to or is connected with any claim made in the proceeding; and (b) it is just and convenient to determine "as between" D and X "as well as between" D and P. These are the expressed prerequisites for an order under the rule; and I discern neither need nor justification, as a matter of interpretation or of policy, to erect any another. The words last italicised mean, in my view, that it is just and convenient to determine the question, not only as between D and X but also as between D and P, in the action that has been commenced by P.

11. The question that D seeks to have determined as between D and X appears to me in each of these cases to be one which at least arises out of the claim by P against D in the sense that it would not have arisen at all had P not sued D. Moreover, it appears to me to be just and convenient in each case that the question of any liability of D and X respectively to P should be determined in P's action not only as between D and X but also as between P and D.

14. A cardinal object of Rule 9.06 is the avoidance of multiplicity of proceedings: cf. Byrne v. Brown (1889) 22 Q.B.D. 657, at 666-7; Montgomery v. Foy Morgan & Co. [1895]2 Q.B. 321, at 324-5 and 326; Bentley Motors (1931) Ltd. v. Lagonda Ltd. [1945] 2 All E.R. 211, at 212-3; pace Amon v. Raphael Tuck & Sons Ltd. [1956] 1 Q.B. 357, at 378, per Devlin, J., whose view of the scope of the rule under consideration was, however, disapproved by the Court of Appeal in Gurtner v. Circuit [1968] 2 Q.B. 587, at 595, per Lord Denning, M.R. and at 601-2, per Diplock, L.J. These authorities were decided by reference to what were in effect provisions equivalent to the forerunners of paragraphs (a) and (b)(i) of Rule 9.06; but the philosophy behind them should surely apply also to paragraph (b)(ii), which evidently intends to enlarge the power to order that a person not a party to an existing proceeding be added as a party. When one considers that object, the question (in each of the cases with which we are dealing) that D seeks to have determined as between D and X may be seen not only to arise out of P's claim against D but also to be one "relating to" or "connected with" P's claim. If it be assumed that the only parties to the proceeding were P and D, and that P were to obtain judgment against D for damages, it would be open to D to sue X in a fresh proceeding, alleging that X was partly responsible for causing P's compensable damage and claiming contribution from X in respect of D's established liability to P in respect of that damage. D's right of contribution from X (if X were proved to have been partly responsible for P's damage) would prima facie exist, subject of course to any valid defence, independently of s.131 of the Building Act 1993: the right would not be affected by s.132 of that Act, which applies only to deny rights of contribution and indemnity between persons found jointly or severally liable in the same action. The availability to D, under Part 4 of the Wrongs Act 1958, of a right of contribution from X would be expressly preserved by s.133 of the Building Act.

17. The evident policy of s.131 is to ensure that damages to be borne by a defendant in a building action (as defined in s. 129) are no more than proportionate to that defendant's responsibility for the loss or damage for which compensatory damages are awarded against all defendants in that action. Naturally, a single defendant to a building action must necessarily bear the whole of any award of damages made in favour of the plaintiff in that action. If it came to the point, however, D would be entitled, as I have indicated, independently of s. 131, to an appropriate award of contribution against X in a separate proceeding. Given that Rule 9.06 is intended to prevent multiplicity of proceedings, it seems plain enough that an order under the rule should be available in an appropriate case with a view to enabling D to accomplish in a proceeding commenced against D by P what might be achieved as a result of a separate subsequent proceeding commenced by D against X.

20. Before making an order under Rule 9.06(b)(ii) the court ought, no doubt, to be satisfied that there is substance to D's contention that "there may exist a question" such as is contemplated by the rule (as to which see Spelling Goldberg Productions Inc. v B.P.C. Publishing Ltd**.** [1981] R.P.C. 280, for a reference to which I am obliged to Batt, J.A.). Even then, there will be room for the exercise of a discretion in determining an application made under the rule. When, however, the purpose of such an application is to enable a person in the position of D to resort to s. 131 of the Building Act, a potential inconvenience or detriment to P will ordinarily deserve little if any weight, given the evident policy driving s.131.

23. In each of the cases now under consideration there could be no doubt that the necessary prerequisites to the making of an order under Rule 9.06(b)(ii) were satisfied. The judge was in each case dissuaded from making an order under the rule only out of consideration for P. That, in the circumstances, should not have been a sufficient dissuasion.

28. I have had the benefit of reading in draft the reasons for judgment of Chernov, J.A. I agree with his Honour's conclusion on each of the two issues raised by the appeal and with his reasons, and merely add some supplementary remarks. In doing so I gratefully adopt his Honour's statement of the facts and the text of the statutory provisions and rule of Court that fall for consideration.

31. As to the first issue with which Chernov, J.A. deals, it is in short, in my view, clear on the true construction of s.131(1) in its context that "each defendant to that action" means only the defendant or defendants to a claim of the plaintiff or (by application of the definition of "building action" in s.129) of a counterclaiming defendant or, possibly, a counterclaiming third or subsequent party, provided that the counterclaims are for damages for loss or damage arising out of or concerning defective building work. In particular, the words in s.131(2), "a person found to be jointly or severally liable for damages in a building action", is simply a reference to a "defendant to that action who is found to be jointly or severally liable for damages" in sub-s.(1). Section 72 of the South Australian Development Act 1993 is quite different from s.131. I would only add the observation that the opening words of s.131(1), "After determining an award of damages in a building action", cannot be a reference to the judgment for recovery of damages, for there cannot be a judgment in the air or against the world and the judgment against defendants liable is referred to later. The expression, which, though found in legislation of other jurisdictions, is not in the ordinary idiom of legal procedure, must be understood as referring to determining upon an award of damages and its total amount.

34. The second issue for determination is much more difficult, principally because Parliament has not made it clear how far its reform of joint and several liability in the building industry extends. The primary judge refused to add the third parties as defendants because he considered that the requirement in Rule 9.06(b)(ii) ("sub-paragraph (ii)") that it be just was not satisfied and because, even if it were, he would not exercise his discretion favourably to the applications. Notwithstanding the force of several of the considerations that were, or may be, adduced in support of both grounds of decision, I have concluded, like Chernov, J.A., that the primary judge erred in his first ground of decision and that his exercise of discretion miscarried accordingly.

37. To my mind, s.131 is drafted on the presupposition that, except where there is only one potential defendant, the plaintiff in a building action will sue a plurality of defendants. (For simplicity I disregard counterclaimants.) It appears to me that the policy behind ss.131 and 132 is that no building practitioner should be liable for damages exceeding the amount proportionate to that practitioner's responsibility for the loss or damage of the plaintiff. Whilst not decisive, s.4(g) supports that view; cf. also the remarks of Kirby, J. in his dissenting judgment in James Hardie & Coy. Pty. Ltd. v. Seltsam Pty. Ltd. (1998) 73 A.L.J.R. 238 at [72] and [73]. In my view, the primary judge's decision as to what was just erred, and his discretion miscarried, in that he failed to give any weight to the consideration that the policy behind ss.131 and 132 would not or might not be effectuated without the joinder of the third parties as defendants. If the plaintiff's selection of the defendant (or defendants) to a building action is not open to alteration by way of addition, then the person (or persons) selected may bear the whole of the damages despite taking third party proceedings against others, because those others may be impecunious and (unusually, it may be conceded) uninsured. Premiums will not be "smoothed" over all building practitioners and indeed insurers may decline to insure persons in the building industry, an attitude which was the mischief that prompted the legislation now under consideration.

40. As I have already indicated, I recognise the strength of some at least of the considerations that point or may point in favour of the primary judge's decision, but they do not, even in combination, persuade me to uphold it. To show why, I must comment on them. In doing so I bear in mind that in the written and oral submissions for the respondents it was acknowledged that they chose to structure their claims so as to avoid the possible application of s.131. Even without the submissions, the material before the judge raised an inference to like effect. It is significant that neither respondent sued the person with which it contracted for construction work. I should also state, with regard to the question of the strength or weakness of Robak's case against Foster Hall, that when addition is under consideration it is sufficient on this matter that there be shown a case that is not hopeless. Frequently that is done by hearsay evidence. Here the affidavit material was quite sufficient.

43. As regards a suggested consideration that Robak would be forced by the addition of Foster Hall to pursue a case which it did not wish to pursue, I am of the view that Robak would not have to pursue a case against the new defendant. That could be left to Boral. The Court would only dismiss Foster Hall from the action if Boral did not pursue it by its defence.

46. It is true, to take another consideration, that, as things stand, Boral has no rights under s.131(1). It seeks to acquire a potential limitation of liability, which the Act would give it if it also were a defendant. In the circumstances of this legislation at least, who becomes a defendant is left to the Rules of Court. Dr. Pannam Q.C., for the respondents, said, I think, correctly, if colourfully, that the question is whether, given that s.131(1) is limited to a "defendant" in the strict sense, a defendant can by accessing a discretionary rule invade the plaintiff's rights. Rules of Court, of course, are meant to subserve, not impede, the attainment of justice so far as that is attainable. Nevertheless, if the rule in question is otherwise applicable, in my view, Dr. Pannam's question may properly be answered in the affirmative. That view is, I consider, supported by, amongst other things, Amon v. Raphael Tuck & Sons Ltd. [1956] 1 Q.B. 357 at 386 (a case on sub-paragraph (i) of the English rule), notwithstanding the submission of Dr. Pannam Q.C. to the contrary.

49. It is true too that the Act does not in terms require the plaintiff in a building action to sue any particular person or persons as defendant or defendants. But, insofar as it leaves to the plaintiff the choice of defendant, that, as I have said, is subject to any subsequent operation of the Rules of Court, and in that regard a significant consideration is that s.131(1) is, in my view, as I have also said already, drafted on the presupposition that there will ordinarily be a plurality of defendants to a building action.

52. If under sub-paragraph (ii) a defendant can have a third party added as a defendant to a building action, there would, in my view, still be some scope for s.133 to operate. For example, a defendant could claim indemnity from a person not jointly or severally liable for the damages, such as an insurer. It is not necessary, in order for s.133 to have scope to operate, that Part IV of the Wrongs Act 1958 have full operation.

55. Finally, as regards the suggested reductio ad absurdum arising from the successive addition of third parties as defendants at the instance of immediately preceding added defendants, the conduct of the trial in that case would be substantially similar to the trial of a building action with one defendant where the sole defendant took third party proceedings against all other potential defendants and they, under s.133, then claimed contribution between themselves, and where the third party proceedings and contribution proceedings were heard at the same time as the plaintiff's claim. Of course the plaintiff would, by hypothesis, be able to look to its selected defendant for all its proved loss. I do not consider it correct that Boral would be able to protect its legal and economic interests through the third party proceeding if a judgment in the third party proceeding would be fruitless in whole or in part.

58. The object of this Division of the Act being to abolish the effect of joint and several liability in building cases, that object is contrary to the interests of persons who wish to sue and is in the interests of persons who may be sued. Consequently it cannot accord with the policy of the Division for the wishes of the person suing to be a significant factor on an application for joinder of a person as a defendant. The ultimate question is whether there is to be autonomy on the part of a plaintiff or whether effect is to be given to the policy of the Division. In my view, the policy must prevail. Otherwise the Division will be a dead letter.

61. I have, however, been concerned, as I shall explain, whether the applications for joinder, satisfy sub-paragraph (ii). In the proceeding brought by the Authority the question between the defendant and the third party is not at present in issue between the plaintiff and the defendant. In other words, the addition, if allowed, will bring the question into issue between the two groups of persons referred to in sub-paragraph (ii). It is true that para.35 of the defence of FCH, before it was struck out, alleged that others were also responsible for the plaintiff's loss and damage. But that plea raised a false issue, for it was not a true confession and avoidance since the fact that there was only one defendant meant that there was no limitation upon the defendant's liability, assuming that it was liable at all. The question referred to in the defence was therefore not in issue between the plaintiff and the defendant. The same remarks apply to the defence of Boral in the proceeding brought by Robak. But in para.21 of its amended statement of claim Robak alleges that Foster Hall was in breach of its contractual obligations and Boral has denied that. However, the allegation is only introductory or incidental in Robak's claim against Boral. It does not lead to any allegation as to responsibility as between Boral and Foster Hall for any damages suffered by Robak. I have therefore concluded that the question existing between Foster Hall and Boral is not in issue between the present parties to the proceeding.

64. The question, then, arises whether addition pursuant to sub-rule (ii) is available to FCH and Boral because the question existing between each of them and the respective third party is not at present in issue between the plaintiff and the defendant. Now, the sub-paragraph requires that the relevant question be just and convenient to determine as between the proposed additional defendant and a party (in these appeals the existing defendant, rather than the plaintiff) as well as between the parties to the proceeding (being the plaintiff and the defendant). The sub-paragraph does not speak of the question's being just and convenient to determine both between the proposed additional defendant and the party and between the parties to the proceeding, but uses the expression "as well as". That might be said to suggest that, in the contemplation of the sub-paragraph, the question is already in issue between the parties to the proceeding (here, the plaintiff and the existing defendant). Otherwise, it might be said, since a party is seeking to add a defendant to the existing proceeding, one would expect that the sub-paragraph would require that the question be just and convenient to determine between the parties to the proceeding as well as between the proposed additional defendant and the party: that would be the natural order in which to express the members of the sentence. Compare Rule 11.01(c) in relation to third party proceedings, where, however, the members are in the reverse order because "not only ... but also ..." is used. The similarity of the corresponding two English Rules is discussed in The Supreme Court Practice 1999, para.15/6/8. The view of sub-paragraph (ii) which I am discussing might be supported by passing observations by Phillips, J.A. (with whom Tadgell, J.A. and, on this, Ormiston, J.A. agreed) in C.E. Heath Casualty & General Insurance Ltd. v. Pyramid Building Society (in liq.) ]1997] 2 V.R. 256 at 293 and 294. A wider view of sub-paragraph (ii) was taken in TSB Private Bank International SA v. Chabra [1992] 1 W.L.R. 231, at 238E, but the point I am considering was not adverted to. It may be observed that in Telstra Corporation Ltd. v. Australian Telecommunication Authority (unreported, Hayne, J., 7 October 1993) and in Tatterson v. Wirtanen [1998] VSC 88 the question between the existing party and the proposed additional defendant was already in issue between the plaintiff and existing defendant. That is also true of In re Vandervell's Trusts [1971] A.C. 912. I mention that case because the decision of the House of Lords in it led to the making of the English rule from which sub-paragraph (ii) derives, O**.**15 r.6(2)(b)(ii), and the words in that rule and in the sub-paragraph, "just and convenient", appear to be taken from Lord Denning M.R.'s judgment in the Court of Appeal in that case as reported in [1970] Ch. 44 at 56.

67. Notwithstanding the linguistic argument in favour of a narrower construction of sub-paragraph (ii) which I have set out in the preceding paragraph, I have in the end concluded for several reasons that it is not necessary that the question existing between the proposed additional defendant and the party applying for addition should already exist in the proceeding between the plaintiff and the defendant. First, such a construction would undesirably fetter the operation of a provision, sub-paragraph (ii), which, as its history shows, was obviously intended to liberalise the Court's power to add parties. A mechanism for any control considered necessary is to be found in the concepts of justice and convenience on which the operation of the sub-paragraph pivots. Secondly, I have found no case in which the construction under consideration was adopted. As I have already indicated, the observations of Phillips, J.A. were obiter. The fact that the question was already in issue between plaintiff and defendant in Telstra Corporation Ltd. v. Australian Telecommunication Authority and Tatterson v. Wirtanen was accidental rather than essential. It may be thought surprising, if the anterior existence of the question in the proceeding is necessary, that that requirement has not been exposed by judicial decision when the rule has been in existence for more than a quarter of a century in England and over a decade in Victoria and when countless applications under it must have been heard by Masters and, on appeal, judges over those years. Thirdly, and most significantly, the fact that the question is specified as one "arising out of or relating to or connected with any claim in the proceeding" demonstrates, I consider, that the question need not exist in the proceeding as constituted at the time of the application for addition. It is, for instance, sufficient that it be "connected with a claim" in the proceeding as so constituted. Questions of that kind are not limited to questions already in issue between the plaintiff and the defendant. If the interpretation under consideration were correct, one would have expected to find the question described as a question "arising in the proceeding" simply.

70. Having also had the benefit of reading in draft the reasons for judgment of Tadgell, J.A., I would particularly agree in paragraphs 5 and 6 of those reasons, which to my mind furnish further, if not independent, reason for allowing the appeals as regards addition of defendants.

73. For the foregoing reasons, I consider that both appeals should be allowed and that there should be orders that Foster Hall be added as a defendant in the proceeding brought by Robak and that R&L be added as a defendant in the proceeding brought by the Authority.

78. There are two appeals from a judge of the Trial Division before the court. They raise a number of common questions of practical importance, particularly to the building industry, the resolution of which involves at least in part, the construction of s.131(1) of the Building Act 1993 ("the Act"). It also involves the ability of a defendant in a "building action" as defined in the Act, to add as defendant, a third party in that proceeding against the wishes of the plaintiff, pursuant to Rule 9.06(b)(ii) of the General Rules of Procedure in Civil Proceedings 1996 ("the rules"). In general terms, the questions arise out of what is probably a frequent situation in a building dispute in which the plaintiff claims damages against one or only some of the possible defendants.

82. I mention by way of an overview, that before the Act came into operation, the liability of defendants to the plaintiff in a proceeding which now falls within the definition of "building action", was often joint and several. In such circumstances, if one or more of them was or were not able to meet the judgment, the insured defendant, or one with assets (known as the "deep pocket" defendant), would be required to do so, often without any real prospect of obtaining contribution from other relevant parties due to their impecuniosity or lack of insurance cover. Similarly, because of its capacity to pay, it was not unusual for a "deep pocket" defendant to be the only one sued from amongst those who may have been responsible for the plaintiff's loss. As a result, prospective "deep pocket" defendants were regarded by insurers as being of high risk and this meant that insurance cover was either not available to them or, if available, was provided at very high rates.

85. Division 2 of Part 9 of the Act, which is concerned with "building actions", has abolished the effect of the doctrine of joint and several liability and has introduced the concept of proportionate liability so that each defendant's liability for damages is to be confined to the amount which reflects its responsibility for the plaintiff's loss. By s.131(1), if the court determines to award damages to a plaintiff in such a proceeding, it is required to apportion them between each defendant according to its responsibility for the loss and to give judgment against each defendant for the appropriate amount. Thus, if there are three defendants in such a proceeding, and the court finds that the plaintiff is entitled to an award of damages in the sum of $90,000 and that each of the three defendants was equally responsible for that loss, it is required to enter judgment in favour of the plaintiff against each defendant in the sum of $30,000. If one defendant does not pay the amount of the judgment entered against it, the others are not obliged, directly or indirectly, to make up the shortfall. Moreover, the Act precludes the defendants from claiming contribution from one another (s.132). That issue is, in effect, subsumed in the resolution of the responsibility of each defendant for the plaintiff's loss. In the example used, the maximum liability of each defendant to the plaintiff and as against the other defendants, would be fixed at $30,000. But the right of such defendants to claim contribution or indemnity against other persons under Part IV of the Wrongs Act 1958, is preserved under s.133. As will be seen later, s.131(1) has no operation if there is only one defendant in a building action.

88. Before discussing the issues in these appeals, it is necessary to describe briefly the circumstances in which they arise.

92. In the first proceeding, the first respondent, Robak Engineering & Construction Pty. Ltd. ("Robak"), was the head contractor in relation to building works which were concerned with the re-development of the North Melbourne swimming pool and its surrounds. In about May 1995, it sub-contracted part of the concrete work to the second respondent, Foster Hall Pty. Ltd. ("Foster Hall"), which, in turn, obtained the required concrete for the project from the appellant, Boral Resources (Vic) Pty. Ltd. ("Boral"), in accordance with its concrete mix specifications which were approved by the architect under the head contract. It is alleged by Robak that some or all of the batches of concrete supplied by Boral in relation to the project were defective and/or failed to comply with "the Boral Concrete Specification and/or the terms and conditions of the contract between it and Foster Hall." The defective concrete was applied in the course of the project and after its inadequacy was discovered, it had to be removed and replaced, by reason of which Robak suffered loss and damage. In June 1997, it brought this proceeding (which is a "building action") against Boral, claiming over $770,000 by way of damages alleging that Boral was negligent in the provision of the concrete and had breached s.52 and/or s.53(a) of the Trade Practices Act 1974 (Cth).

95. In its defence, Boral denied Robak's allegations and pleaded that if it had any liability to Robak, other persons, namely, Foster Hall, the project architect and the project engineer, were also responsible for the loss and damage claimed by Robak. Boral also claimed that Robak had failed to mitigate its loss. As his Honour pointed out, it is not stated in the defence what is supposed to follow from the allegation that others were also responsible for the loss and damage. These assertions by Boral are left hanging in the air (as are some of its other allegations such as the alleged misleading and deceptive conduct by Robak). By a third party notice dated 27 August 1997, Boral joined Foster Hall as a third party to the proceeding, claiming an indemnity or contribution from it on the basis, inter alia, that it was negligent in the performance of the works and in the provision of information to Boral in respect of the supply of concrete.

98. Because of doubts about the financial position of Foster Hall, if the plaintiff's proceeding were to remain as it is currently structured, Boral would run the risk that it would ultimately have to bear the whole of the damages that might be awarded to the plaintiff. In order to avoid that situation and avail itself of the benefit of s.131(1), it applied to the Court for an order under Rule 9.06(b)(ii) that Foster Hall be added as defendant in that proceeding. If such an order were made and the Court found that Boral and Foster Hall were responsible for the plaintiff's loss, the Court would be required to apportion damages between them pursuant to the above provision, thereby fixing the liability of Boral to the plaintiff, obviously in an amount less than the total amount of damages awarded to the plaintiff. Boral has accepted for the purposes of the application, that while Foster Hall remains merely a third party to the proceeding, it is not a "defendant" within the meaning of s.131(1) with the result that it is not able to take the benefit of that provision. In order to do so, Boral must obtain an order adding Foster Hall as defendant. The material shows that although Foster Hall was given notice of the application, it did not appear at the hearing of it. On 30 April 1998, the primary judge dismissed Boral's application on the sole basis that in the circumstances, it would not be "just" within the meaning of the rule to have the relevant question determined between Boral and Foster Hall as well as between Robak and Boral. I will refer later to his Honour's reasons for rejecting Boral's application.

101. By summons of 12 May 1998, Boral sought (and later obtained) leave to appeal against his Honour's decision. The only issue on appeal is whether his Honour erred in refusing to order that Foster Hall be added as a defendant in the proceeding.

105. In March 1996, the first respondent, Wimmera-Mallee Rural Water Authority ("the Authority"), engaged the appellant, FCH Consulting Pty. Ltd. ("FCH"), to provide it with contract administration and design checking services in respect of the then-proposed construction of an elevated water storage tank ("tank"). One of the obligations of FCH under the contract was to evaluate tenders submitted to the Authority and recommend which of them should be accepted. The duties of FCH also included the checking of the accuracy of the structural design submitted by the successful tenderer. The price payable by the Authority to FCH for that work was to be $10,500.

108. The contractor chosen to design and construct the tank was the second respondent, R & L Tank Fabrications Pty. Ltd. ("R&L"). Its tender, at the price of $145,000, was accepted by the Authority on the recommendation of FCH. R&L designed, constructed and installed the tank, but it collapsed not long after its installation. It was damaged beyond repair and it is claimed that the cost of producing another tank would be in the vicinity of $281,000.

35 On 4 February 1998, the Authority issued the proceeding against FCH for damages arising out of the collapse of the tank, alleging breaches of its retainer and negligence. By its defence, FCH denied any breach of duty to the Authority and pleaded contributory negligence and estoppel as against it. Its defence contained paragraph 35, which is in the following terms:

"Further, and in the alternative, if the Plaintiff's alleged loss or damage arose from the negligence of the Defendant (which is denied) then such alleged loss or damage arose also from the wrongful act or default of R&L Tank Fabrications which is jointly and severally liable for such loss or damage for the purposes of section 131 of the Building Act 1993."

(Particulars of the alleged negligence are then set out under that paragraph.)

114. On 9 April 1998, FCH joined R&L as a third party claiming from it indemnity or contribution under the Wrongs Act 1958 on the basis of its alleged negligence which caused or contributed to the collapse of the tank. FCH claims that because of this joinder, R&L is a party to the proceeding and consequently, a "defendant" for the purposes of s.131(1), so that if the plaintiff succeeds against FCH and it is shown that R&L was also responsible for the plaintiff's loss, the damages would be apportioned between FCH and R&L. The position so adopted by FCH is reflected in paragraph 35 of its defence.

117. The Authority applied (orally) to his Honour under Rule 23.02(c) to strike out paragraph 35 of the defence. The principal issue that arose for determination on that application was whether the third party, R&L, was a "defendant" within the meaning of s.131(1) of the Act. It was accepted by FCH, correctly in my view, that s.131(1) operates only if there is more than one defendant in a building action. On 3 June 1998, his Honour held that a third party was not a defendant within the meaning of s.131(1). Having also decided that s.131(1) has no application unless there is more than one defendant in the building action, his Honour struck out paragraph 35 of the defence.

120. In case its argument in relation to paragraph 35 of the defence failed on appeal, FCH applied on 24 June 1998, to have R&L added as a defendant in the proceeding pursuant to Rule 9.06(b)(ii). On 26 June 1998, FCH obtained leave to appeal against the decision of his Honour of 3 June 1998 and to amend its notice of appeal if his Honour refused to order that R&L be added as defendant. On the same day, his Honour dismissed the FCH application to add R&L as defendant for reasons he had expressed in his decision in Boral and gave leave to appeal.

124. The appeals, therefore, raise the following issues:

(a) Is the person who has been joined by the defendant as a third party to a building action, a "defendant" for the purposes of s.131(1)?

(b) Taking the Boral proceeding by way of example, whether in the circumstances applicable to that proceeding, it is just and convenient within the meaning of Rule 9.06(b)(ii) to determine the relevant question (which is defined later) between Boral and Foster Hall as well as between Robak and Boral?

131. It is convenient to set out at this point, the relevant provisions of the Act.

"129 Definitions In this Division- "building action" means an action (including a counter-claim) for damages for loss or damage arising out of or concerning defective building work; "building work" includes the design, inspection and issuing of a permit in respect of building work. 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. (3) In this section - "court" includes the Victorian Civil and Administrative Tribunal. 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. 133 Operation of Wrongs Act 1958 Except as provided in section 132, nothing in this Division affects the operation of Part IV of the Wrongs Act 1958."

135. For reasons which will become apparent, it is also desirable to set out passages from Hansard which record the relevant parts of the debates relating to this legislation when it was before Parliament. During the Second Reading Speech, the Minister responsible for the introduction of the legislation, The Hon. R.R. Maclellan, in outlining the liability provisions of the Bill to the Legislative Assembly on 11 November 1993, said that save for exceptions which are not relevant for present purposes, "building practitioners" would be required to carry professional indemnity cover in order to guarantee financially their "professional obligations". The Minister then turned to the liability reforms contained in the Bill and said this:

"The construction industry, local government and interested members of the public alike are on record as welcoming the liability reforms contained in the Bill. Abolition of the unfair doctrine of joint and several liability, or the deep-pocket syndrome, will introduce a far more equitable and responsible allocation of risk. No defendant will be liable for more than his individual apportionment. This means that architects, engineers, local government officers and building surveyors will not have to assume liability for the mistakes of other defendants. Traditionally, a large part of the costs of insurance premiums has resulted from the risk that an insured practitioner has had to accept for awards involving insolvent defendants. The reforms will diminish the risk to insurers which in turn will restrain insurance premiums. This reform is one of the major factors that will give insurers the incentive to stay in the construction industry. Together with the new compulsory insurance requirement, the measures will establish a fair and responsible liability regime."

(Hansard Debates, Legislative Assembly, 11 November 1993, 1691)

140. In the Legislative Council, the Hon. R.I. Knowles repeated the Minister's statements in respect of the liability reforms that were contained in the Bill (Hansard Debates, Legislative Council, 30 November 1993, 1348-9).

143. On the following day, the Hon. R.H. Bowden, a member of the Bills Committee, stated in the Legislative Council in the course of his support of the Bill that:

**"**The government and the Minister deserve credit for the well-reasoned and practical way in which the liability insurance reforms have been addressed in the Bill. The Bill will allow for courts to determine the individual apportionment of liability so that all of the participants will not be liable. If the court determines that it is in the province of one particular profession or area the decision can be made and costs awarded. The individual apportionment provision is a new, exciting and practical improvement in the ability of the owner to receive proper redress concerning aspects of liability for buildings. It is a tremendous idea."

(Hansard Debates, Legislative Council, 1 December 1993, 1498).

Presumably, the end of the second sentence quoted was intended to mean "so that none of the participants will be severally liable for all the damages."

149. The reference by the Minister and Mr. Knowles to the "new compulsory insurance requirement", was a reference to Division 3 of Part 9 of the Act which provides for a scheme of compulsory insurance of "building practitioners" and others involved in the building industry, consequent upon an order that is made by the Minister requiring those persons to have insurance cover for specified amounts. After the appeals were heard, we were provided with material by the solicitors for FCH (copies of which they provided to the other parties), which shows that since 21 July 1994, a number of Ministerial orders were made pursuant to s.135, requiring persons specified in the order to be covered by certain categories of insurance for the minimum amounts stipulated by the Minister. The provisions of Division 3 and their operation are not relevant to the determination of the issue now under consideration. They were mentioned briefly for completeness and in order to put in context, the above part of the Minister's speech.

152. It will be recalled that the issue of whether "defendant" in s.131(1) encompasses a third party in a building action, arose in the context of a strike out application by the Authority in respect of paragraph 35 of the defence of FCH. In order to succeed in such an application, the Authority would have had to establish that the assertion of FCH contained in that paragraph, was manifestly hopeless (see Dey v. Victorian Railways Commissioners [1949] HCA 1; (1949) 78 C.L.R. 62, 91; General Steel Industries Inc. v. Commissioner for Railways (N.S.W.) [1964] HCA 69; (1964) 112 C.L.R. 125). But on appeal and before the primary judge, this issue was argued on a different basis. Mr. Digby Q.C., who appeared with Mr. J.M. Forrest for FCH, accepted, I think correctly, that if he could not establish that as a matter of proper construction of s.131(1), a third party fell within the word "defendant" in that sub-section, paragraph 35 of the defence could not stand. He did not dispute that s.131(1) operates only in relation to a building action with two or more defendants. So far as is relevant, his Honour concluded that the word "defendant" in sub-s.(1) does not include a third party to the proceeding and that in the circumstances, paragraph 35 of the defence disclosed no defence known to law and should be struck out. Thus, the question on appeal is whether his Honour was correct in deciding that "defendant" in s.131(1) does not include a third party to the proceeding.

155. It was submitted on behalf of FCH that, on a proper construction of s.131(1), "defendant" includes not only the defendant, but also any party to a building action, such as a third or fourth party. This was said to follow from the wording of the relevant provisions and to be consistent with the purpose of the legislation, as disclosed by the Act and the extrinsic materials mentioned earlier. A principal purpose of the legislation, so it was contended, was to eliminate to the extent possible, the situation where the insured defendant ended up being liable to meet the whole of the judgment, either because it was the only party that was sued (due to its financial or insurance position) or because of the impecuniosity of the co-defendants and others who were also responsible for the plaintiff's loss, such as third parties. It was said that the provisions were introduced to deal with that situation by limiting the liability of those who were responsible for causing the damages claimed by a plaintiff in a building action, to an amount which reflected their individual responsibility for it. Upon an award of damages being made in favour of the plaintiff, the court would so apportion them amongst those responsible, irrespective of whether they were defendants or third parties. Thus, the word "defendant" in s.131(1) was to be read as including such other parties. Hence, the risk that the insured or asset-rich defendants in a building action would have to bear the whole of the plaintiff's damages would be materially reduced. This, in turn, would make it easier for such building practitioners to obtain insurance cover in relation to building projects and to do so at competitive rates.

158. The more specific submissions made on behalf of FCH may be summarised as follows.

(a) The objects of the legislation set out in s.4 of the Act and the use of "persons" in the heading to s.131 and "person" in s.131(2) and s.132, show that "defendant" in s.131(1) was intended to encompass parties other than merely a defendant, named as such in the plaintiff's building action. It was claimed that if "defendant" in s.131(1) meant only the party sued by the plaintiff, it is unlikely that the word "person" and "persons" would have been used in the provisions associated with s.131(1).

(b) The underlying purpose of the legislation would not be achieved if "defendant" was limited to persons who are respondents to the plaintiff's claim. If that were the case, a plaintiff could avoid the operation of the section by merely suing one defendant. That would run counter to the aims of the legislation.

(c) The wider reading of the section was supported, so it was said, by the interpretation placed on the provisions by Mr. Bowden, who referred to "participants" as those amongst whom the liability would be apportioned. This showed that it was intended that "defendant" in s.131(1) would be given a wide meaning. The use of the word "participants" by Mr. Bowden was consistent with "persons", namely, those who were parties to a building action either as defendants or third parties or other like parties.

(d) The courts have often read "defendant" as including a third party where the circumstances warranted such an interpretation, as has been recognised by McGarvie, J. in USP Needham Australia Pty. Ltd. v. Victorian Arts Centre Building Committee [1983] VicRp 8; [1983] 1 V.R. 79, 83. In that case, his Honour held that for some purposes, "defendant" (in the rules) can include a third party.

(e) A narrow construction of the provision would create injustice and practical problems in the hearing of building actions.

166. I agree with his Honour's conclusion that the terms of the Act are sufficiently clear to warrant giving the word "defendant" in s.131(1) its normal and usual meaning, namely, a party which is named as such in the building action or, put another way, a respondent to the plaintiff's claim in that proceeding (or, in the case of a counterclaim, a respondent to the defendant's counterclaim: see the definition of "building action" in s.129). In my view, a third party is not such a "defendant"; it is a respondent to the defendant's claim against it as expressed in the third party notice. Such a party could be properly described as a "party to the proceeding (or action)", but not as a "defendant to that action" in that proceeding.

169. This conclusion is supported by matters which point against interpreting "defendant" as including a party such as a third party. First, the person responsible for drafting the legislation, having used the word "person" in s.131(2), obviously could have used it in conjunction with other appropriate words in place of "defendant" where it first appears in s.131(1), so as to encompass third and subsequent parties joined by the defendant. It must have been obvious to the draftsperson that "defendant" normally means the respondent to the plaintiff's claim, yet an alternative expression which has a wider meaning, was not used. Next, the court can only give judgment for the plaintiff against persons who are defendants. It cannot give judgment for the plaintiff against persons who are, say, third parties in the proceeding. If the construction of s.131(1) favoured by FCH were accepted, FCH would have to go on to argue that in building actions involving third parties, the court may be required to give judgment (for the plaintiff) against mere third parties in the proceeding. There is nothing in the Act (or in the Parliamentary Debates) which would support that this was intended by the legislation. Moreover, given that the court is to give judgment "against each defendant who is found to be jointly and severally liable for damages", it is unlikely that "defendant" was intended to mean anything but a person whom the plaintiff joined as a respondent to its claim. Thirdly, as was pointed out by Dr. Pannam Q.C., who appeared with Mr. Tiernan for the Authority and Robak, s.133 leaves intact the operation of Part IV of the Wrongs Act 1958 (subject to s.132). There would be no point to having s.133 if all the third and subsequent parties would be automatically treated as defendants in the plaintiff's proceeding. Further, if reference to Parliamentary Debates is permissible, the speech of the Minister and Mr. Knowles, who had the carriage of the Bill, show that they used the word "defendant" in relation to the operation of the liability provisions in its ordinary and usual sense.

172. It is also my view, that there is no substance in the submissions made on behalf of FCH, which I have previously summarised. First, the objects of the Act as stated in s.4 do not support a wider reading of "defendant" as contended for by Mr. Digby. These objects are stated in the most general language and do not support the contention that they evince an intention that "defendant" should be given a wider meaning so as to encompass third parties. Similarly, the use of the word "person" rather than "defendant" in s.131(2) and s.132, does not take the matter any further. When so used, "person" is clearly a reference to "defendant" in s.131(1). Moreover, for reasons mentioned earlier, the deliberate use in s.131(1) of the word "defendant" rather than "person" (in conjunction with other appropriate words), indicates that there was no intention on the part of the draftsperson to give "defendant" the wide meaning contended for by Mr. Digby.

175. Secondly, such an interpretation will not necessarily enable the plaintiff to avoid the operation of the relevant provisions in respect of building actions by the device of suing only one defendant. For reasons given later when I analyse the joinder issue, a defendant in such a case may be able to add a third party as additional defendant, in which case ss.131-133 will apply to such a proceeding. In my view, Mr. Uren Q.C. who appeared for Boral, was correct when he submitted that Parliament left it to the Rules of Court to provide a procedure for persons to be joined as or become defendants (either by being sued, or by later addition).

178. Next, what Mr. Bowden said during the Parliamentary Debates does not, in my view, warrant construing "defendant" as contended for by FCH. His use of the word "participants" in place of defendants shows that he probably appreciated that s.131(1) operates only where there is more than one party to the proceeding. But it does not necessarily follow that he used that expression to encompass third parties. In any event, if one looks at the three speeches, there is no support for the view that "defendant" in s.131(1) is to be read as including parties beyond those named in the proceeding as defendants. If anything, that material supports the opposite conclusion. As I have mentioned earlier, the relevant speakers who had the carriage of the Bill, namely, the Minister and Mr. Knowles, when dealing with its liability provisions, did not use the word "defendant" otherwise than in the normal sense of that term, namely, as a person named as a defendant in the proceeding. It should be borne in mind that Mr. Bowden, although a member of the Bills Committee, was merely a participant in the debates so that caution must be exercised in adopting what he said as somehow reflecting the collective intention of Parliament (see Wilcox, J. in Commissioner of Australian Federal Police v. Curran (1984) 3 F.C.R. 240, 250). Furthermore, as Dr. Pannam observed in his submissions, lofty statements of intention expressed in general terms by a member of Parliament may not assist in the determination of what Parliament intended to attribute to particular words of an Act.

181. As to Mr. Digby's reliance on the expanded definition of "defendant" in the context of the Supreme Court Act 1986 and of the rules, for reasons given by Gillard, J., it is not useful (assuming it were permissible) to look at those provisions when seeking to determine the meaning of that word in s.131(1). In relation to the construction of the rules by McGarvie, J. in USP Needham Australia Pty. Ltd. v. Victorian Arts Centre Building Committee so as to enlarge the meaning of "defendant" to embrace a third party, the short answer to Mr. Digby's submission is that in that case, the third party did not become a defendant to the plaintiff's action, notwithstanding that it was to be regarded as such the purpose of certain procedural steps. A third party is not a defendant with respect to the plaintiff notwithstanding that for some procedural purposes, it is to be treated as a defendant (Eden v. Weardale Iron & Coal Company (1887) 35 Ch.D. 287, 291, 293; Edison & Swan United Electric Light Company v. Holland (1889) 41 Ch.D. 28; Commonwealth of Australia v. Temple (1949) 49 S.R. (N.S.W.) 373, 375-7).

184. Although Mr. Digby submitted that a definition of "defendant" which did not include third parties would make the new provisions unworkable or would be productive of injustice, he was not able to point to any particular circumstance where that might occur. In my view, that is unlikely to be the case. The potential liability of third parties to the defendant will remain notwithstanding my preferred interpretation of s.131(1). This is made clear by s.133. And the working out of the third party procedure will be no more complicated and no less just than was the situation prior to the Act.

187. For these reasons, it is my view that his Honour was correct in his decision that in the circumstances before him, R&L could not be regarded as "defendant" within the meaning of s.131(1). Since it is common ground that the provision operates only if there is more than one defendant to the plaintiff's suit in a building action and that here, FCH is the only defendant that is sued, his Honour was correct in striking out paragraph 35 of the defence.

192. It has already been mentioned that each defendant in the two proceedings sought an order pursuant to Rule 9.06(b)(ii) that the respective third party be added as a defendant. His Honour rejected these applications for the reasons set out in his judgment in Boral. Having regard to the submissions made by counsel for Boral as to the basis of his Honour's findings, it will be necessary to set out briefly his Honour's analysis of the matter before him and how he reached his conclusion in that case. Before doing so, however, it is convenient to set out the relevant parts of the rule. Rule 9.06(b) reads as follows:

"9.06 Addition, removal, substitution of party At any stage of a proceeding the Court may order that - (a) ... (b) any of the following persons be added as a party, namely- (i) a person who ought to have been joined as a party or whose presence before the Court is necessary to ensure that all questions in the proceeding are effectually and completely determined and adjudicated upon; or (ii) a person between whom and any party to the proceeding there may exist a question arising out of or relating to or connected with any claim in the proceeding which it is just and convenient to determine as between that person and that party as well as between the parties to the proceeding. (c) ..."

196. In his reasons for judgment, his Honour first analysed the history of Rule 9.06(b)(ii) ("sub-paragraph (ii)"), as to which I will say more later. His Honour then examined the jurisdictional requirements of sub-paragraph (ii) and noted that even if they were established, the court nevertheless retained a discretion whether or not to order the joinder sought. His Honour said:

"In deciding whether or not it is 'just and convenient' regard must be had to the right of a plaintiff to join who(m) he wishes as a defendant. As a general rule the plaintiff decides which cause of action he wishes to proceed on and against which legal person. As a general proposition he cannot be compelled to proceed against any person whom he does not wish to sue."

(At another point in his judgment, his Honour concluded that the plaintiff's right to sue whom "it wishes must be recognised and given effect.")

201. His Honour next referred to a number of authorities which deal with the issue of what weight is to be given to a plaintiff's opposition to an application for joinder made under Rule 9.06(b)(i) ("sub-paragraph (i)") and at that point in his judgment, concluded that the approach undertaken by those cases should be applied in respect of applications for joinder under sub-paragraph (ii). His Honour said:

"It is clearly a factor and indeed a weighty factor that a plaintiff should not be forced to sue a defendant he does not wish to proceed against but nevertheless in some circumstances it may be necessary to require him to proceed against another defendant."

205. His Honour then adopted what was said by Denman, J. in Norris v. Beazley (1877) 2 C.P.D. 80, 85, namely, that the court ought not to add a person as a defendant against whom the plaintiff does not desire to proceed unless a very strong case is made out showing that justice cannot be done without that person being added as defendant. His Honour had earlier referred to a similar observation by Wynn-Parry, J. in Dollfus Mieg et Compagnie SA v. Bank of England [1951] Ch. 33, 38.

208. As to the jurisdictional requirements of sub-paragraph (ii), his Honour concluded that each of them was satisfied other than the requirement that it be "just" to have the question determined between both sets of parties. In other words, his Honour was satisfied that for the purposes of the rule, there may exist a question as between Foster Hall and Boral ("the relevant question") arising out of or relating to or connected with any claim in the proceeding and that it would be convenient to have it determined as between those parties as well as between Robak and Boral. These findings are not challenged. Although his Honour did not identify what the relevant question was, no doubt it was primarily concerned with the respective liabilities of Boral and Foster Hall for any damage that may have been suffered by Robak.

211. His Honour concluded that, primarily because Robak should not be forced to proceed against a defendant it does not wish to sue, the requirement of sub-paragraph (ii) that it be "just", was not satisfied. In the course of reaching his conclusion, his Honour also took into account that the Act did not require a plaintiff in a building action to sue all potential defendants and that Boral would in any event be able to protect its legal and economic interests through the third party proceeding.

214. His Honour's conclusion that it would not be "just" to have the relevant question determined between the two sets of parties as contemplated by sub-paragraph (ii), was driven primarily by his view that a plaintiff should not be forced to proceed against a defendant whom it did not wish to sue. In coming to that view, his Honour relied on, or was at least influenced by, what was said in the judgments to which I have referred earlier and which were, as I have said, concerned with applications for joinder under a provision equivalent to sub-paragraph (i). It is true that his Honour also had regard to other matters to which I have referred, but in relative terms, they were not the primary reason why he rejected the application.

217. I mention for completeness that his Honour also exercised his discretion against the applicant and in so doing, he had regard to the matters that he took into account in determining the jurisdictional question.

220. Under the rules, the plaintiff is generally entitled, in the first instance, to sue such person or persons as it may choose. Consequently, the plaintiff's right to choose the defendant and not have one forced upon it, must be a relevant factor to be taken into account in determining the issue of whether the "just" requirement of sub-paragraph (ii) has been made out. In my view, however, it is but a factor to be considered in the context of such an application and what weight is to be given to it, must depend on all the relevant circumstances.

223. As I have mentioned previously, in giving the plaintiff's opposition to the application the weight that he did, his Honour had regard to what was said in the cases which dealt with applications under sub-paragraph (i). In my view, however, it is at least doubtful that the cases lay down the general rule that prima facie, the plaintiff's opposition to the application on the sole ground that it does not wish to proceed against the proposed defendant, is determinative or almost determinative of such an application. It is not necessary to examine those cases here because in Amon v. Raphael Tuck & Sons Ltd. [1956] 1 Q.B. 357, Devlin, J., who "comprehensively reviewed the many reported cases [including those relied on by the primary trial judge as mentioned earlier] in which [the sub-paragraph (i)] has been examined" (see Viscount Dilhorne in In re Vandervell's Trusts [1971] A.C. 912, at 935), did not suggest that the wishes of the plaintiff in respect of such applications were paramount. On the contrary, his Lordship said, at 366, that the authorities which were binding on him "show conclusively that a party can be joined as defendant even though the plaintiff does not think he has a cause of action against him." On the same page, his Lordship referred to Norris v. Beazley, noting that it was criticised by Lord Esher in Montgomery v. Foy, Morgan & Co. [1895] 2 Q.B. 321, 325, being a criticism with which Devlin, J. did not disagree.

226. The object of sub-paragraph (i) was analysed by the Privy Council in Pegang Mining Co. Ltd. v. Choong Sam [No.1] (1969) 2 P.C.C. 593. Lord Diplock, speaking for the Privy Council, recognised, at 602, that a principal object of the rule was to enable the court to prevent injustice being done to a person whose rights will be affected by its judgment by proceeding to adjudicate upon the matter in dispute in the action without his being given an opportunity to be heard. His Lordship said that one way of expressing the test to be applied in determining if a person should be added as defendant under sub-paragraph (i), was to ask:

"Will the [other person's] rights against or liabilities to any party to the action in respect of the subject matter of the action be directly affected by any order which may be made in the action?"

This test appears to have found favour with the Full Court of the Federal Court of Australia in News Ltd. v. Australian Rugby Football League Ltd. [1996] FCA 870; (1996) 64 F.C.R. 410, 524-5 in the context of the relevant Federal Court rule which is equivalent to the rule in sub-paragraph (i) (there being no Federal Court rule which corresponds to the rule in sub-paragraph (ii)).

231. In my view, it would not be consistent with this stated object of the rule if the mere fact that the plaintiff does not wish to proceed against the proposed defendant, were to be prima facie determinative of the application. There was nothing said in either of those cases to suggest that that should be so.

234. But even if the relevant authorities establish a general rule in respect of applications under sub-paragraph (i) as has been suggested by his Honour, they lay down no such principle in relation to the operation of sub-paragraph (ii). They were decided before that rule was introduced and they do not discuss the considerations that the court should take into account when determining where the justice of the situation lies. It is plain that the rule in sub-paragraph (ii) is to have a wide construction. That can be deduced from its words and from the circumstances in which the rule was introduced. As his Honour noted, the rule, which came into force on 1 January 1987, widened considerably the court's power to order that a person be added as defendant. Prior to its introduction, the relevant Victorian rule (Order 16 Rule 11) was essentially in the form of the present Rule 9.06(b)(i). The new provision was taken from Order 15 Rule 6(2)(b)(ii) of the English Rules which was introduced following the decision of the House of Lords in Vandervell. That case was concerned with an application to join the Inland Revenue as a defendant under the rule which, for present purposes, was identical to Rule 9.06(b)(i). In the Court of Appeal ([1970] Ch. 44) Lord Denning M.R. said, at 56, that the language of the rule was wide enough to enable the court to add a person as defendant whenever it saw it just and convenient to do so. The House of Lords rejected this approach. In the course of his speech, Viscount Dilhorne said, at 935-6, in respect of the rule which was being considered:

"I cannot construe the language of the rule as meaning that a party can be added whenever it is just or convenient to do so. That could have been simply stated if the rule was intended to mean that. However wide an interpretation is given, it must be an interpretation of the language used. The rule does not give power to add a party whenever it is just or convenient to do so. It gives power to do so only if he ought to have been joined as a party or if his presence is necessary for the effectual and complete determination and adjudication upon all matters in dispute in the cause or matter."

238. Thus, sub-paragraph (ii) of Order 15 Rule 6(2)(b) was introduced to overcome the deficiency recognised by the House of Lords. As his Honour pointed out in his judgment, it is substantially broader than the rule in sub-paragraph (i). There is nothing in its wording, however, to warrant the conclusion that it would be "unjust" to make an order for joinder of a person as defendant merely because the plaintiff does not wish to sue that person or that the plaintiff's attitude is to be given any particular weight. It may be that in certain cases, it would not be "just" to have the relevant question determined between the two sets of parties if to do so, would force the plaintiff to proceed against the person it does not wish to sue. But whether that is so, would depend on the circumstances of the particular case.

241. Where the application for addition of a person as defendant is made under sub-paragraph (ii) in the context of a building action in which the plaintiff has sued only one defendant in order to avoid the operation of ss.131-133, or simply because it saw no utility in suing any other prospective defendants, to reject the application merely because the plaintiff does not wish to proceed against that person, would be to disregard other relevant considerations such as the intended operation of those provisions, the policy which underlies them and the risk that the policy might be frustrated if the application is refused. These matters are, in my view, relevant to the determination of the question of what is "just" for the purposes of sub-paragraph (ii).

244. It has already been mentioned that where they are applicable, the provisions in question replace the effect of joint and several liability in building actions with proportionate liability. They clearly intend to confer on a party in the position of Boral, the benefit of limited liability in a building action, providing at least one other person was a defendant. The legislative purpose or policy behind the provisions was to avoid the mischief which was perceived to exist at the time of their introduction. Because a "deep pocket" defendant was often required to bear the whole of the damages that were awarded to the plaintiff in building cases notwithstanding that others were also responsible for them, insurers regarded such a defendant as being in a high risk category and, therefore, they either declined to provide insurance cover, or if they made it available, they did so only at very high premiums. This increased significantly the overhead of such building practitioners and made it difficult for them to compete with those who were not subjected to such disadvantage. The introduction of proportionate liability was aimed at encouraging insurers to provide indemnity to all building practitioners and to reduce and level out, premiums charged to them.

247. It is obvious that the provisions in question and hence, the concept of proportionate liability, can only operate in relation to a building action if there is more than one defendant in the proceeding. Since a plaintiff is free to sue only one defendant, it follows that if it were to do so, the new provisions would not operate and the underlying policy of the legislation would be at risk. In my view, they are important factors which should be taken into consideration in determining whether it is "just" for the relevant question to be determined between the two sets of parties as contemplated by sub-paragraph (ii).

250. If Foster Hall were joined as defendant, the provisions of s.131(1) would operate to raise as between Robak and Boral, the extent of Foster Hall's responsibility for the plaintiff's damage. The same question, of course, already exists as between Boral and Foster Hall. Given the matters to which I have just referred and bearing in mind that Robak did not claim that it would be prejudiced in the conduct of its case if Foster Hall were joined as defendant, in my view, it would be "just" that the relevant question be determined between the two sets of parties as contemplated by sub-paragraph (ii). In reaching this conclusion I have taken into account the plaintiff's right to sue the defendant of its choice, or put another way, not to have forced upon it a defendant it does not wish to sue. In my opinion, his Honour, in considering this issue, did not give sufficient consideration to the matters relating to the legislation to which I have referred.

253. As I have mentioned earlier, there were other, but relatively less significant, factors that his Honour also took into account in rejecting the application. They included the view that, in effect, Boral would be able to protect its legal and economic rights by way of third party proceedings. I doubt, however, that Boral would be able to gain adequate protection if the proceeding were to remain as it is now structured. Without Foster Hall being made a defendant, Boral will not be in a position to avail itself of the benefit of s.131 and therefore, its claim by way of third party procedure would not afford it full "protection". Also, the fact that the Act does not compel a plaintiff in a building action to proceed against all potential defendants, being a matter which his Honour also took into account, does not really bear on the question of whether in the present case, it would be "just" for the purposes of sub-paragraph (ii), to add Foster Hall as defendant. It is nearly always the case that a plaintiff is not required, in the first instance to sue any particular party. But where it is sought to join another person as defendant, it is always a question of whether it is appropriate under the relevant rule to make the order sought.

256. There were other matters that were put on behalf of Robak as to why Foster Hall should not be added as defendant, but in my view they do not justify a rejection of the application. For example, Dr. Pannam pointed out that there are practical difficulties that may arise if persons whom the plaintiff does not wish to sue, are made defendants. Some of them are mentioned by Devlin, J. in Amon, 365. Dr. Pannam also warned that there is a risk that proceedings might become unmanageable if Boral's argument on the joinder application were taken to its logical conclusion. If for example, Foster Hall were joined as defendant, it might claim that the project architect was at least in part responsible for any loss that the plaintiff might have suffered. If that were so, in order to avail itself of the opportunity of taking the benefit of ss.131-133, Foster Hall might seek to add the architect as defendant. The same sequence could be repeated with the architect seeking to make the project engineer a defendant and so on, so that in the end, the plaintiff, who started off by suing one defendant, would be facing the prospect of having to proceed against a number of them in circumstances where its case against some might be doubtful.

259. In my view, however, the Court has always been faced with difficulties of this nature and worse, but so far, has successfully managed to deal with them. It is used to dealing with proceedings which involve numerous parties, including third and fourth parties. In many ways, the conduct of a building action with a number of defendants who are added by the original defendant, would be no different from the conduct of a proceedings where the same persons are third and fourth parties. The Court will no doubt have to be vigilant to ensure that the applicant has made out on proper material, a basis for its contention that the person sought to be added is at least in part responsible for the damages claimed by the plaintiff. But this and other like requirements would have to be worked out by the Court in order to accommodate the requirements of particular cases. It will not, however, be a novel experience for the Court.

262. Dr. Pannam also submitted that if a defendant in a building action could readily add as defendant, an actual or prospective third party, there would be little scope for the operation of s.133 which clearly contemplates, inter alia, the preservation of third party proceedings in a building action. It is true that if a third party is made a defendant in a building action, the third party proceeding is likely to fall away since the issue raised in it will be determined in the context of the principal proceeding. But it does not follow that there will be no building actions where third party proceedings will not be relevant.

265. In all the circumstances, therefore, his Honour should have held that it would be "just" to have the relevant question determined as between Boral and Foster Hall as well as between Robak and Boral. In those circumstances, the conclusion would follow that the jurisdictional requirements of sub-paragraph (ii) have been made out, and that the order sought by Boral ought to have been made. For like reasons, I come to the same conclusion in relation to the application by FCH to add R&L as defendant.

269. In my view, for the above reasons, both appeals should be allowed and the Court should order that each of Foster Hall and R&L be added as defendant in the relevant proceeding.