Colagrossi v Transport for NSW

Amended Defence

1. Only certain parts of the proposed Amended Defence are relevant to the issues on this Motion. It is convenient to summarise them here.
2. At paragraph 21U of the Amended Defence, in answer to the whole of the plaintiff's claim, the defendant called in aid the provisions of s 43A of the Civil Liability Act 2002. It pleaded that in undertaking the works which are the subject of the plaintiff's claim, it was exercising a special statutory power (as that term is defined in s 43A) and says, in reliance on that section, that: "The carrying out, authorising or permitting of the works is and was not so unreasonable that no authority having the special statutory power could properly consider any act or omission by the defendant alleged by the plaintiff to have caused damage to be a reasonable exercise or failure to exercise that power."
3. Further, at paragraphs 22 to 34 (inclusive) of the Amended Defence, the defendant pleads that the plaintiff's claim of private nuisance set out in paragraphs 15 to 17 of the Amended Statement of Claim, and the claim of public nuisance set out in paragraphs 18 to 21 of the Amended Statement of Claim, are each an apportionable claim within the meaning of Pt 4 of the Civil Liability Act: "…as a claim for economic loss in an action for damages arising from the defendant's alleged failure to take reasonable care (which is denied) …".
4. Based on that assertion, although it denies the substance of the plaintiff's claim against it, or that it is liable to the plaintiff, the defendant pleads that, notwithstanding those denials and non-admissions, each of ALTRAC and Acciona is a "concurrent wrongdoer" within the meaning of Pt 4 of the Civil Liability Act in respect of both the private and public nuisance claims. It then pleads that its liability for either of the private nuisance and public nuisance claims: "…should be reduced to nil or limited to such other amount that the Court considers just, or just and equitable, having regard to the extent of the defendant's responsibility for the loss or damage (if any) suffered by the plaintiff … and the Court may not give judgment against the defendant for more than that amount."
5. In this way, the defendant pleads that, if at all, it is only proportionally liable for any loss or damage to the plaintiff (and other group members).

The Plaintiff's Submissions

1. The plaintiff submitted that the Court would not confirm the filing of the Amended Defence insofar as it includes a pleading of proportionate liability, being the material pleaded in paragraphs 22 to 34 (inclusive).
2. The essence of the plaintiff's submission in opposition to the order sought in the Motion is that the plaintiff's claims in private and public nuisance are not capable, as a matter of law, of constituting apportionable claims because a failure to take reasonable care is not an essential element of either of the two causes of action. As well, the plaintiff submitted that as the liability of the defendant, if proved, is strict, such liability cannot constitute an apportionate claim.
3. The plaintiff submitted that by including the pleading of proportionate liability, insofar as it does so, the Amended Defence does not disclose a reasonable defence. Upon this basis, that the defence ought not be permitted to stand in its current form.
4. In support of this conclusion, the plaintiff submitted that it is appropriate for this matter to be determined as an interlocutory matter because the defence, if allowed to proceed in its current form, has significant potential consequences for the plaintiff and group members. This is particularly so because the plaintiff and group members would be confronted with a decision as to whether to join ALTRAC and/or Acciona to the proceedings as additional defendants. Such a joinder by the plaintiff would, she submitted, add to the size, scope, complexity and cost of the proceedings and it would delay the progress of the proceedings whilst the pleadings were amended, and the additional defendants fully included in the plaintiff and group member claims.
5. The plaintiff further submitted that her opposition to this part of the defence raises a discrete question of law which does not depend on any evidence, and therefore the Court would find it preferable to determine it at this stage of the proceedings.
6. In support of her principal submission, the plaintiff drew attention to the definition of an apportionable claim in s 34(1)(a) of the Civil Liability Act, which is in the following terms: "(a) a claim for economic loss or damage to property in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care, but not including any claim arising out of personal injury."
7. In light of the inclusion of the phrase "…arising from a failure to take reasonable care", the plaintiff submitted that the correct interpretation of this section is to be found in the decision of Macfarlan JA in Perpetual Trustee Company Ltd v CTC Group Pty Ltd (No.2) [2013] NSWCA 58 at [22], where his Honour said: "22 For a successful action for damages to have arisen from a failure to take reasonable care, it is in my view necessary that the absence of reasonable care was an element of the, or a, cause of action upon which the plaintiff succeeded. As observed by Professors McDonald and Carter in "The Lottery of Contractual Risk Allocation and Proportionate Liability" (2009) 26 Journal of Contract Law 1 at 18, the contrary view would produce the absurd result that a party to a contract who failed to perform a strict contractual obligation would benefit from being found to have acted negligently rather than "innocently". If claims could be apportioned where negligence is not an element of the successful cause of action, but merely arises from the facts, a plaintiff could lose his or her contractual right to full damages from a party whose breach of a contractual provision of strict liability happened to stem from a failure to take reasonable care." (emphasis added)
8. In short, the plaintiff submitted that it is essential that the absence of reasonable care was an element of the cause of action upon which the plaintiff relied before the claim can be an apportionable claim. The plaintiff submitted that a failure to take reasonable care is not an essential element of the causes of action for public nuisance and private nuisance which she has pleaded, and is not an essential element of nuisance.
9. The plaintiff acknowledged the contrary view of Barrett J in Reinhold v NSW Lotteries Corporation (No.2) [2008] NSWSC 187; (2008) 82 NSWLR 762, and his judgment in Perpetual where he reaffirmed his approach at [37]-[43].
10. However, the plaintiff submitted that the approach of Macfarlan JA is correct and ought to be preferred because it better accords with the language used in s 34 of the Civil Liability Act and the purpose of the legislation.
11. As well, the plaintiff pointed to academic writings including Fleming's Law of Torts (10th Edition, 2011) at [11.100] p 316, which endorses the conclusions of Macfarlan JA, and further supportive remarks by the author of Annotated Civil Liability Act 2002 (NSW) (3rd Edition, 2018) at pp 495-496.
12. The plaintiff submitted that liability for nuisance does not depend upon a failure to take reasonable care and that one can be liable in nuisance even if reasonable care has been taken by the permanent tortfeasor. It is upon this basis that the plaintiff embraces the description of the tort of nuisance as being one of strict liability, a proposition endorsed in Fleming's at p 509.

Defendant's Submissions

1. The defendant submitted that the Court ought approach the issue by considering whether, analogously to a summary judgment application, the proposed proportionate liability defence was "so obviously untenable that it cannot possibly succeed" or else that it discloses a case which the Court is satisfied cannot succeed.
2. In considering that test, of course, it is necessary for the case to be clear, and that the Court has a high degree of certainty about the ultimate outcome of the proceedings: see General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129-130; Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 at [57]; Batistatos v Roads and Traffic Authority of NSW [2006] HCA 27; (2006) 226 CLR 256 at [46].
3. The defendant submitted that if Barrett JA's construction of s 34(1)(a) of the Civil Liability Act in Perpetual is correct, then it would not be open to the Court to refuse to permit the proportionate liability defence to be pleaded at this stage of the proceedings. Rather, the Court would need to leave the determination of the proportionate liability defence to the final hearing. The defendant submitted that the resolution of the claims for either private nuisance or public nuisance might well involve a finding that Transport for NSW or an agent of Transport for NSW failed to take reasonable care, with the result that the claimed loss or damage may well have arisen from that failure to take reasonable care.
4. Alternatively, the defendant submitted, even if the Court were persuaded that Macfarlan JA's approach should be followed then the Court ought be persuaded that a failure to take reasonable care is, or else can be, an element of the tort of nuisance, and is like to prove so in this case.
5. The defendant noted that the relationship between nuisance and negligence was not straight forward, and that whilst they are acknowledged as separate torts, there are some cases where proof of a failure to take reasonable care will be an essential or necessary step to making out liability in nuisance. It was submitted that in those circumstances, even if the Court were to accept the plaintiff's submissions that Macfarlan JA's approach in Perpetual Trustee was to be preferred, there would nevertheless be good reason to allow the proportionate liability defence to be filed.
6. The defendant submitted that the Court ought prefer the approach of Barrett JA. However, it noted that it would not be necessary for the Court to determine the issue one way or the other at this stage. Rather, the Amended Defence ought be permitted to be filed because it could not be said to be unarguable.
7. In this respect, the defendant called in aid what it was submitted was an analogous decision of Kunc J in ASF Resources Ltd v Clark [2014] NSWSC 252.
8. In addition to its previous submissions, the defendant drew attention to its defence pursuant to s 43A of the Civil Liability Act and noted that an essential feature of that defence was that the plaintiff would need to demonstrate that the conduct of the defendant in the exercise of its special statutory power was so unreasonable that no authority in similar circumstances could properly have considered the act or omission to be a reasonable one. The defendant submitted that this defence necessarily called up as an element in the proceedings, the question of whether or not it took reasonable care in what it did, and if it did not, whether the plaintiff's loss and damage (together with that of the group members) flowed from that lack of reasonable care.

Discernment

1. Tempting though it may be to undertake the intellectual exercise of resolving the differences of opinion in Perpetual Trustees between Macfarlan JA and Barrett JA with respect to the proper application of s 34(1)(a), a task which I note that Meagher JA eschewed, to do so would be an inappropriate task at this stage of these proceedings.
2. Before the Court would refuse to make the order sought by the defendant, it would have to be persuaded that the proposed proportionate liability defence had no prospect of succeeding. The differing views expressed in Perpetual Trustees make it clear that there are equally arguable views on this question which ought only be resolved when it becomes necessary.
3. As with Kunc J in ASF Resources, I take the view that the reasons for judgment in Perpetual Trustees demonstrate that there is an arguable, serious and difficult question of statutory construction to be determined about the meaning and effect of s 34910(a) of the Civil Liability Act which may ultimately depend upon the facts which are proved in the proceedings.
4. Given that the defendant is proceeding with its cross-claims against ALTRAC and Acciona, the behaviour and conduct of all three of those parties will need to be the subject of evidence put before the Court, and where that evidence is in conflict, there will need to be a resolution of it by the ordinary processes of fact finding in the trial.
5. Having regard to the way in which the cross-claims are pleaded, it is highly likely, in my assessment, that the question of the reasonableness of the conduct of each of those three parties will be the subject of evidence, and findings, in the proceedings.
6. In those circumstances, the addition of the proportionate liability defence to the proceedings does not, contrary to the submissions of the plaintiff, make the case any more complex than it already is; nor does it make it any lengthier than it will otherwise be. In my view, the proportionate liability defence will not add to the complexity or length of the proceedings.
7. I accept that there is a potential, if the plaintiff takes the decision to join ALTRAC and Acciona as defendants, for the plaintiff to be exposed to an order for payment of their legal costs, if the claim against them does not succeed. However, that potential risk is a matter to be balanced by the plaintiff, with the assistance of her legal advisers, in considering whether she wishes to join those two cross-defendants as defendants or not. This is a not unusual decision which falls to be made from time to time either before litigation is commenced or else during its conduct.
8. It will be apparent from my earlier remarks that the high degree of certainty required for the Court to reach a conclusion as to the statutory construction issue, is absent here.
9. As experience dictates, the resolution of statutory construction is generally informed by the factual context in which the construction is to be determined. This further weighs in favour of not coming to a concluded decision at this stage of the proceedings.
10. Finally, even if I was persuaded to the correctness of the views of Macfarlan JA, having regard to the provisions of s 56 of the Civil Procedure Act, the order which best promotes the resolution of the real issues in the proceedings is that for which the defendant contends.

Conclusion

1. Because the proposed proportionate liability defence raises a complex, difficult and substantial question of law, I am satisfied that it is inappropriate for that to be determined to finality at this stage of these proceedings.
2. It is appropriate to allow the defence to be pleaded, and for the proceedings to include the proportionate liability defence as an issue to be determined in the course of the final hearings.
3. For these reasons, I determined that it is appropriate for the orders sought in the defendant's Motion to be made.

Costs

1. The defendant sought its costs. The plaintiff opposed an order for costs, submitting that the appropriate order was that the costs be the defendant's costs in the cause.
2. The plaintiff does note, correctly, that she is entitled to an order for the costs of, and occasioned by, the amendment to the Statement of Defence.
3. In my view, there was a contested interlocutory question as to whether the order sought in the Notice of Motion ought be made. The defendant succeeded on its Motion. There was no reason why costs should not follow the event.
4. It is for these reasons that the Court made the following orders on 29 April 2019: 1. Order that the Amended Defence filed on 5 April 2019 be confirmed. 2. Plaintiff to pay the defendant's costs of the Motion.

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