Detheridge as executrix of the estate of the late Wells v Chubb Fire Safety Limited and Anor [2013] ACTSC 75

Supreme Court of the ACT|2013-04-29

1. the contribution claim by each defendant against the other be dismissed with no order as to costs.

1. The second defendant in this action seeks an order for costs against the first defendant.

2. The action was listed for hearing on 20 February 2012. On that date I was informed that both defendants had settled with the plaintiff, and that the question of costs between defendants was the only remaining issue to be resolved. I entered judgment by consent in favour of each of the defendants against the plaintiff with no order as to costs.

3. The action was commenced in March 2009 by the plaintiff as the executrix of the estate of her late brother, who had suffered personal injury in the course of his employment when a battery exploded while he was working in the sprinkler valve room at the Bullocks Flat railway station between Jindabyne and Thredbo, New South Wales.

4. The plaintiff commenced the action against the first defendant only, claiming damages for breach of contract of employment. The plaintiff's case was that the deceased's employer operated a security and fire safety business, employing him as a fire safety mechanic. Part of his job involved attending the Perisher Blue Ski Resort, which included the Bullocks Flat station, once a month, for maintenance of the fire sprinkler system. Part of this task involved starting a diesel engine, the starter motor being powered by a battery. As the deceased started the engine, the battery exploded causing him injury. The plaintiff's case was based upon breach of a term of the contract of employment with the deceased to take reasonable precautions for his safety, and not to expose him to a risk of injury of which it should have known. A breach of the obligation to provide him with a safe system of work was also asserted.

5. In May 2009 the first defendant joined the second defendant as a third party. The third party claim was framed in contract and in negligence. The claim asserted an agreement to provide fire safety services, including services in the sprinkler valve room. It was asserted that the third party owned, controlled and occupied the sprinkler valve room, and the diesel engine and battery. The claim was that the second defendant had failed to inspect the battery and ensure that it was not liable to explode.

6. The third party filed a defence, saying that it was the first defendant which was responsible for inspection and maintenance of the battery and reporting of any defects, and that it was the first defendant rather than the third party which was responsible for the instruction and supervision of the deceased.

7. In November 2009 the plaintiff applied to join the third party as a defendant. An order to that effect was made in December 2009. In January 2010 the plaintiff filed an amended originating claim and statement of claim, effectively pleading against the second defendant the same assertions made against it by the first defendant in the third party claim.

8. In April 2010 the second defendant filed a notice claiming contribution from the first defendant, asserting that the injury to the deceased had been caused by the first defendant's negligence, particulars of which corresponded to the plaintiff's particulars of breach of contract in the statement of claim. The notice relied additionally on breach by the first defendant of its contractual obligation to maintain the second defendant's fire protections systems, specifically the batteries and chargers.

9. In November 2010 the first defendant amended its claim for contribution against the second defendant, adding further particulars of negligence and breach of contract.

10. Neither defendant was able to find the original written contract between the defendants which set out precisely what each party had agreed to do in relation to the fire safety services. It is clear that there was such a contract entered in early 1995, but at trial its terms would have had to be gleaned from a combination of some documentation and the oral evidence of employees or former employees of each of the companies about discussions and happenings many years earlier.

11. A certificate of readiness, signed by the solicitors for each of the three parties, was filed in January 2011. One of the items in the certificate requiring a response was item 10: Expert reports on liability have been served (yes/no). Each of the parties completed this item in the negative.

12. Rule 1241 of the Court Procedures Rules 2006 requires a plaintiff to serve expert reports intended to be relied upon at least twenty-eight days before the filing of the certificate of readiness. Defendants are required to serve expert reports to be relied on within fourteen days of service of an expert report by the plaintiff. If expert reports are not served in that timeframe, their contents are not admissible other than by consent or by leave, which may be granted only in exceptional circumstances.

13. It was thus apparent to the defendants by January 2011 that the plaintiff would not be relying on expert evidence at trial, although it must be said that the defendants had no way of knowing what factual evidence might be called in the plaintiff's case.

14. On 5 December 2011 the solicitors for the first defendant served a report by an expert, Mr Holland. I was informed by senior counsel for the first defendant that Mr Holland's opinion was focused on the issues between the defendants. I have not been informed of Mr Holland's qualifications or field of expertise.

15. This prompted the solicitors for the second defendant to qualify two experts, Messrs Swarts and McIvor, whose reports were served on 15 February 2012, a few days before the date fixed for the commencement of the hearing. I have not seen any of the expert reports and am unaware of the qualifications or fields of expertise of Mr Swarts and Mr McIvor.

16. I was informed by counsel that it was service of the defendants' expert reports which led to the settlement with the plaintiff. I assume from this that the opinion of the experts was that there was nothing untoward about the battery prior to its explosion which was known to either defendant or could or should have been detected by either of them in advance, so that the plaintiff was not going to be able to establish negligence, or, in the case of the first defendant employer, breach of contract. It will remain unknown what might have been the course of the matter if the first defendant had not qualified an expert and obtained a report, or if the defendants, having done so, had decided not to serve their reports.

17. Counsel for the second defendant was critical of the late service of its expert report by the first defendant. I am not persuaded that the criticism is justified. The first defendant would have been in difficulty if the hearing had proceeded and it had sought to tender the report, but that did not occur and the report seems to have served a useful practical purpose, perhaps in conjunction with the reports served by the second defendant.

18. The first defendant's position is that no order should be made as to costs between the defendants. The second defendant seeks an order that its costs of the claim against it by the first defendant for contribution be paid by the first defendant.

19. The argument on behalf of the second defendant, in brief, is that the first defendant should never have joined it as a third party, and that the claim against it was doomed to failure. Further, counsel for the second defendant submits that the effect of the settlement with the plaintiff was that the contribution claim against his client was discontinued without consent or leave. He further submits that the expert reports served by the first defendant did not support the claim for contribution against the second defendant. That is not something I am in a position to determine, not having seen any of the expert reports.

20. I am not persuaded that the discontinuance analogy is accurate. Both defendants settled with the plaintiff, on what has been called a walk-away basis, within a day or so of each other. Following the settlement, the first defendant had no claim for contribution to pursue any longer.

21. The question of whether it was reasonable for the first defendant to join the second defendant as a third party must be examined at the date of joinder. The third party notice was filed in May 2009, only two months after the institution of proceedings. The first defendant had been sued as employer. The injury had taken place at the premises of the second defendant and had been caused by the explosion of a battery owned by the second defendant. It seems to me that the decision of those advising the first defendant to join the second defendant as a third party initially was a reasonable one. It may have been unreasonable to continue with the claim for contribution if it became clear to the first defendant that the claim must fail, for example following discovery or service of an expert report. However, in November 2009 the plaintiff applied to join the third party as a defendant, and in December 2009 that order was made. Thereafter, the third party became what I may describe as a principal party to the proceedings. It ceased to be open to the first defendant to release the third party unilaterally from the proceedings.

22. I take account of the fact that it was not until the completion by the plaintiff's solicitors of the certificate of readiness that it became apparent to the first defendant that the plaintiff was not relying on expert opinion evidence. Until then, it would not have been unreasonable for those advising the first defendant to assume that they would be served with an expert report by the plaintiff which would support the plaintiff's claims against both defendants. Both defendants were also unaware of what lay evidence might be called in the plaintiff's case at trial: it was conceivable that the plaintiff might have been able to make out a case against one or both defendants without expert evidence.

23. In summary, I am not persuaded that there was anything unreasonable about the conduct of the first defendant in joining the second defendant as a third party, or that anything happened prior to the joinder of the third party as a defendant, or indeed prior to the receipt of the expert reports, which made it unreasonable to continue with the claim for contribution. It follows that I am not persuaded that the second defendant has made out its case for an order for costs against the first defendant. It is inappropriate that there be any order as to the costs of the contribution claim of either defendant against the other.

24. I have given some consideration to whether there should be any order in respect of the costs of the proceedings about costs on 21 February 2012. It seems to me that the submissions on both sides were reasonably put before the Court, and that I needed to hear them to determine whether any orders as to costs should be made. I am accordingly not persuaded that there should be any order as to the costs of the argument on that date.

25. The claims for contribution by each defendant against the other will be dismissed, with no order as to costs.

I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.

Procedures Rules 2006

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