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[2016] VSC 99
Supreme Court of Victoria
2016-03-16
JOHN DIXON J
Original judgment source is linked above.
For the reasons already stated, that observation about procedure is not of great utility on an application under s 24AL of the Act.[44]
66 Woods v De Gabriele[45] concerned claims arising out of an investment made by the plaintiff on the advice of De Gabriele. Two other defendants, being De Gabriele's employer or principal, applied to join another company SPM, then in liquidation, which was also alleged to have been De Gabriele's employer or principal at the relevant time. The application was to join SPM for proportionate liability purposes. The applicant defendants relied on an affidavit stating that during the relevant period De Gabriele was employed as a financial planner by the proposed defendant. The plaintiff produced some evidence to the contrary. Hollingworth J, after referring to the evidence on the application, concluded:[46]
No doubt the precise nature of the relationship between de Gabriele and SPM will need to be examined at trial, on all the evidence. If the defendants are unable to satisfy the trial judge that the relevant employment or agency relationship existed at the relevant times, that may well have significant costs consequences for them. But for the purposes of these applications, it cannot be said (as the plaintiff asserts) that there is no evidentiary basis for allowing Chimaera and Pyxus to plead that De Gabriele was employed by, or an agent of, SPM.
67 The plaintiffs submitted that whether De Gabriele was employed by SPM was said to be an essential element in the claim that SPM was a concurrent wrongdoer, and the effect of this passage was that Hollingworth J was requiring evidence in support of the allegation to be made against SPM for the purpose of the amendment and joinder applications. I do not accept this submission. The plaintiff put in issue whether the allegation about De Gabriele's employment could be established at trial and it was in that context that her Honour disposed of the evidentiary dispute. Read as a whole, her Honour's reasons apply the traditional pleading test.[47] Further, her Honour identified that the need for joinder of the additional defendant arose because of s 24AI(3) and the court's power to give leave for such joinder was found in s 24AL.
68 In Atkins v Interprac Financial Planning Pty Ltd (No 2),[48] Hargrave J concluded that joinder should be determined by application of the traditional pleading test, stating:
Having reconsidered the matter, I am now of the view that the proposed pleadings by the defendants against PIR do not raise a case which is so hopeless that it does not admit of argument. Issues such as whether a duty of care is owed, the class of persons to whom a duty of care is owed and whether an arguably misleading statement was the cause of loss to persons relying upon it are all questions to be resolved on the basis of the evidence presented at trial. On an application such as this, the defendants need only establish that the proposed pleadings contain factual allegations which, if established at trial, could arguably found one or more of the causes of action alleged. If the Court is satisfied that such an arguable case has been put forward, joinder should be allowed.
69 In Godfrey Spowers (Victoria) Pty Ltd v Lincolne Scott Australia Pty Ltd,[49] Ashley JA stated that a defendant seeking joinder under s 24AL is only required to put forward an arguable pleading that the party is a concurrent wrongdoer. Ashley JA (with Nettle and Neave JJA agreeing) said:
It was contended by counsel for the engineer that s 24AL(1) stood against a conclusion that a concurrent wrongdoer was only identifiable once a court had made findings. But I am not persuaded that this is so. Use of the present tense of the verb "to be" should be regarded, on a consideration of the tenor of Pt IVAA, as being anticipatory; or in a practical sense, as requiring only that a defendant:
... put forward a pleading which raises an arguable case that the party is a concurrent wrongdoer ... that ... the defendant need only plead a case which is "not hopeless".[50]
70 In Main Road Property Group Pty Ltd v Pelligra & Sons Pty Ltd,[51] Croft J noted that it was plainly necessary for the applicants to establish an arguable case for the amendments they sought. Although Croft J referred to and considered evidence supporting the pleaded allegations,[52] he granted leave for the amendments by applying the traditional pleadings test.[53]
71 Utility Services Corporation Ltd v SPI Electricity Pty Ltd & Others[54] similarly does not assist the plaintiffs. The plaintiff's contention that evidence was required in support of the amendments was rejected by J Forrest J at first instance when put to him in that case,[55] and was not pursued on appeal.
72 In Latteria Holdings Pty Ltd v Corcoran Parker Pty Ltd & Anor,[56] Mortimer J refused an application to join additional defendants under s 24AL of the Wrongs Act for three reasons. First, that section was inapplicable by operation of either s 79 or s 80 of the Judiciary Act 1903 (Cth). It is an express aspect of the federal scheme for proportionate liability that other concurrent wrongdoers need not be a party to a proceeding in which a court apportions responsibility for the plaintiff's loss. Secondly, there was no admissible evidence about the conduct of the party to be added and, in a point of difference from this case, the applicant made no allegations against him that would permit a conclusion that he was a concurrent wrongdoer.[57] Thirdly, joinder was not appropriate pursuant to r 9.05 of the Federal Court Rules 2011 on discretionary grounds. Given the significantly different issues raised by this case, I am not assisted by it.
73 The claim by the plaintiffs in each proceeding against DTM is plainly a claim for economic loss or damage to property in an action arising from an alleged failure to take reasonable care and may, for present purposes, be accepted to be an 'apportionable claim' within the meaning of s 24AL of the Wrongs Act. If DTM establishes its proposed pleaded case, each of the proposed added defendants is a concurrent wrongdoer in relation to the plaintiffs' claim because he or it is a person who is one of two or more persons whose acts or omissions caused, independently of each other or jointly, the loss or damage which is the subject of the claim within the meaning of s 24AH of the Wrongs Act. Given that the plaintiffs' claims are for damage to property and not pure economic loss, it is not necessary to plead the usual indicia of a duty of care in cases of pure economic loss such as vulnerability, power or control.[58] As I have noted, the plaintiffs did not submit that the proposed amendments failed the traditional pleading test.
74 The primary judge erred in holding that where a defendant applies to add other persons on the basis that they are concurrent wrongdoers with the defendant under Part IVAA of the Wrongs Act so as to limit their liability to the plaintiffs, there is a positive requirement to lead some evidence showing that there is substance to the claims proposed to be raised and that the claims are not hopeless. There is no such requirement.
75 It is sufficient for a defendant to establish that the proposed pleadings contain facts or allegations which, if established at trial, could arguably found one or more of the causes of action alleged and that if the Court is satisfied such an arguable case has been put forward, joinder should be allowed.
76 The appeal is allowed. The decision of the primary judge will be set aside. I will make the following orders.
(a) The appeal is allowed and paragraphs 1 and 2 of the order of the Honourable Associate Justice Derham made 5 October 2015 are set aside.
(b) Leave is granted to the second defendant in each proceeding to file and serve a further amended defence substantially in the form of the proposed further amended defence exhibited to the affidavit of Miranda Ellen Bordignon affirmed 15 December 2014.
(c) Leave is granted to the second defendant to join Howard Craig Owen, John Henry Neate, Lettieri Constructions Pty Ltd, Philip John Marks, and Peter J Larkin to each proceeding as sixth, seventh, eighth, ninth and tenth defendants respectively and the title of each proceeding shall be amended accordingly.
77 I will hear from counsel as to the precise form of orders, further directions, and in respect of costs.
[4] Relying on Main Road Property Group Pty Ltd & Ors v Pelligra & Sons Pty Ltd & Ors [2010] VSC 5, Wimmera-Mallee Rural Water Authority v FCH Consulting Pty Ltd [2000] VSC 102, Woods v De Gabriele & Ors [2007] VSC 177 and Latteria Holdings Pty Ltd v Corcoran Parker Pty Ltd & Anor [2014] FCA 880; (2014) 224 FCR 519.
[5] [2015] VSC 434, 17-20 [42]-[50].
[6] Atkins v Interprac Financial Planning Pty Ltd & Anor (No. 2) [2008] VSC 99, [12]; Suncorp Metway Ltd v Panagiotidis [2009] VSC 126, 9 [43], [44] and 10 [49]; Main Road Property Group Pty Ltd v Pelligra & Sons Pty Ltd & Ors [2010] VSC 5, 5 [14]; Coastal Seafarms Holdings Pty Ltd v Port of Portland Pty Ltd [2010] VSC 167, [9]; Braham and Anor v ACN 101 482 580 Pty Ltd [2014] VSC 171, 18 [64] and 19 [68]; Utility Services Corporation Ltd v SPI Electricity Pty Ltd & Ors [2012] VSCA 158; (2012) 35 VR 628.
[7] This policy approach of requiring concurrent wrongdoers to be parties to the proceeding for the assessment of comparative responsibility is peculiar to Victoria. Proportionate liability legislation federally and in other states is not uniform, and particular care must be exercised when referring to cases in other jurisdictions in this respect.
[8] Unless an exception applied, for example were they deceased or wound up.
[9] [1999] VSCA 66; [1999] 2 VR 507, 525 [66] (citations omitted).
[12] Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355, 381-382 [69]-[71]; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27, 47-48 [51]; Independent Commission Against Corruption v Cunneen and Ors [2015] HCA 14; (2015) 318 ALR 391, 487-489 [57], [62].
[13] Whether the added party should have the right to be heard is a separate question, particularly when the plaintiff does not add that party to its claim and seek relief from it.
[15] [2010] VSC 5, 7 [19]
[16] Such as where an amendment that necessarily implies that there was no proper basis for the pleading prior to its amendment is sought late in a proceeding resulting in a significant recasting of the issues in dispute.
[17] (1877) 5 Ch D 1, 10.
[18] Bullen & Leake & Jacobs, Precedents of Pleadings, 12th Ed, Sweet & Maxwell, 27.
[20] Section 16 of the Act.
[21] See, generally, Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No 5) [2014] VSC 400.
[25] LexisNexis Butterworths, Civil Procedure Victoria, vol 1 [I23.02.5] and the cases there cited.
[26] AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, in particular 181-182 [4]-[6], 189 [24], 192 [30] (French CJ), 212-213 [94]-[98], 217-218 [111]-114] (Gummow, Hayne, Crennan, Kiefel and Bell JJ).
[27] For example Carborundum Realty Pty Ltd v RAIA Archicentre Pty Ltd (Unreported, Supreme Court of Victoria, Harper J, 2 June 1992).
[36] [2015] VSC 434, [49].
[37] [1999] VSCA 66; [1999] 2 VR 507, 510 [7] (Tadgell JA), at 511 [13] (Batt JA) and at 527-528 [76] (Chernov JA).
[42] The evidence was contained in the affidavit of Mark John Attard sworn 31 March 1998, but there was no attempt to verify the particulars to [34.5] of the defence or the corresponding particulars to [9] of the third party notice.
[43] The material facts that must be pleaded to establish a viable proportionate liability defence were discussed by the Court of Appeal in Utility Services Corporation Ltd v SPI Electricity Pty Ltd & Ors [2012] VSCA 158; (2012) 35 VR 628, 635 [24].
[44] See also TNT Australia Pty Ltd v CMW Design & Construction Pty Ltd & Ors [2003] VSC 338.
[48] [2008] VSC 99, [12].
[49] [2008] VSCA 208; (2008) 21 VR 84, 106 [112].
[50] Ashley JA then referenced Woods v De Gabriele [2007] VSC 177, [9] and Atkins v Interprac Financial Planning Pty Ltd [2007] VSC 445, [10].
[51] [2010] VSC 5, 6-7 [16]-[17].
[52] Ibid, 6-7 [16]. It can be seen that Croft J's comments at [13] were in the context where evidence was put forward of relevant facts. Reference was made to the decision of Hargrave J in Atkins v Interprac Financial Planning Pty Ltd [2008] VSC 99.
[55] Matthews v SPI Electricity Pty Ltd (Ruling No 6) [2012] VSC 70, [43]-[44].
[58] See, for example, Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; (2004) 216 CLR 515 and Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 [2014] HCA 36; (2014) 254 CLR 185.
Fabfloor (Vic) Pty Ltd & Ors
BNY Trust Company of Australia Limited & Ors [2016] VSC 99
(2014) 224 FCR 519
(2012) 35 VR 628
(1998) 194 CLR 355
(2009) 239 CLR 27
(2015) 318 ALR 391
(1990) 170 CLR 394
(2009) 239 CLR 175
(2008) 21 VR 84
(2004) 216 CLR 515
(2014) 254 CLR 185