(1935) 9 ALJR 127
Debonair Nominees Pty Limited v J & K Berry Nominees Pty Limited (2000) 77 SASR 261
[2000] SASC 244
Teller Home Furnishers Pty Limited (in liq)
Source
Original judgment source is linked above.
Catchwords
[1964] HCA 69
Cox v Journeaux (No. 2) (1935) 62 CLR 713[1935] HCA 48(1935) 9 ALJR 127
Debonair Nominees Pty Limited v J & K Berry Nominees Pty Limited (2000) 77 SASR 261[2000] SASC 244
Teller Home Furnishers Pty Limited (in liq)
Judgment (2 paragraphs)
[1]
Judgment - ex tempore (revised)
The plaintiff in these proceedings has brought a number of actions following an incident on 2 January 2014 in which she alleges that she tripped and fell on a set of stairs in premises within the Darling Harbour precinct, as a consequence of which she suffered injury.
On 19 December 2015 the plaintiff filed a statement of claim (in what I will refer to as the "175 proceedings") in which four defendants were named: Lend Lease Darling Park One Pty Limited as the first defendant, Nomura Darling Park One Pty Limited as the second defendant, Toyo Real Estate Darling Park One Pty Limited as the third defendant and Perpetual Trustee Company Limited as the fourth defendant.
On 4 August 2016 the plaintiff filed a second statement of claim (in proceedings 2016/235156) naming two further defendants, Sydney Harbour Foreshore Authority as the first defendant and Property New South Wales as the second defendant.
On 9 May 2017 a third statement of claim was filed by the plaintiff (in proceedings 2017/138487). That named three new defendants: DPPT Operator Pty Limited as the first defendant, DPT Operator Pty Limited as the second defendant and Cockle Bay Food Service Pty Limited as the third defendant.
It follows that as matters presently stand there have been three separate sets of proceedings commenced over a period of approximately 18 months, all arising out of the one incident, naming no less than nine separate defendants. Any comment about the unsatisfactory nature of that approach would be superfluous. It is one which, in my view, is at odds with facilitating the just, quick and cheap resolution of proceedings to which s. 56 of the Civil Procedure Act 2005 (NSW) refers.
There are presently a number of motions before the Court. This judgment deals with a motion filed on 30 June 2017 by the first defendant in the 175 proceedings, Lend Lease Darling Park One Pty Limited, seeking orders in the following terms:
1. An order pursuant to rule 6.29 of the Uniform Civil Procedure Rules 2005 (NSW) ('the Rules') that the first defendant be removed as a party to the proceedings.
2. In the alternative to order 1, an order pursuant to rule 13.4(1)(b) of the Rules that the plaintiff's claim be dismissed is in so far as it seeks relief, or makes any claims against, the first defendant.
3. In the alternative to orders 1 and 2, an order pursuant to rule 14.28(1)(a) of the Rules that the plaintiff's claim be struck out in so far as it seeks relief, or makes any claims against, the first defendant.
4. An order pursuant to s. 98 of the Civil Procedure Act 2005 (NSW) ('the Act') that the plaintiff pay the first defendant's costs on an indemnity basis or on such other basis that the Court deems fit.
5. An order pursuant to s. 98 of the Act that the plaintiff pays the first defendant's costs of the notice of motion on an indemnity basis or such other basis as the Court may think fit.
6. An order pursuant to rule 42.7(2) of the Rules that orders 4 and 5 be in effect enforceable forthwith.
In support of that notice of motion an affidavit of Nicholas Daniel Riordan of 14 July 2017, together with the exhibit to that affidavit, were relied upon. In opposing the orders sought the plaintiff relied upon an affidavit of Stephen Morgan of 10 August 2017.
In order to consider the issue which arises on the motion it is necessary for me to briefly set out what I understand to be the plaintiff's case.
The plaintiff alleges in the 175 proceedings that the first defendant was the "owner, occupier or manager" of the area in which she fell and that as a consequence, the first defendant owed her a duty (inter alia) to take precautions against any foreseeable risk or risks of harm. It should be noted that the plaintiff also appears to advance a claim against the first defendant based upon a breach of contract. However, on the hearing of the present motion before me counsel for the plaintiff accepted that such a cause of action would be doomed to fail, although he did submit that any breach(es) of contract informed the duty of care which the plaintiff maintains was owed to her by the first defendant. In these circumstances this motion has proceeded on the understanding that the plaintiff's case against the first defendant is based upon the fundamental proposition that at the time that the plaintiff fell and suffered injury, the first defendant was the, or an, owner, occupier or manager of the area in which she fell.
The affidavit of Mr Riordan stated the following at paragraph 17:
"On 6 December 1996 (the first defendant) and others entered into a lease with Darling Harbour Authority. A copy of the registered lease dealing, which I obtained from the on-line records held by Land and Property Information, without the enclosed lease, is at page 74."
Mr Riordan's affidavit went on to deal with the various lots in two specific deposited plans over which the lease to which he referred was taken. There is no issue before me that the lease to which Mr Riordan referred, the first two pages of which appear at pages 74 and 75 of the exhibit to his affidavit, was the lease covering the area in which the plaintiff fell. A copy of the entire lease is annexed to the affidavit of Mr Morgan.
At paragraph 18 of his affidavit, Mr Riordan stated the following:
"On 15 June 2000 (the first defendant) disposed of its interest in the lease by executing and registering a transfer of lease in favour of DPPT Operator Pty Limited. A copy of the registered transfer of lease which I obtained from the on-line records held by Land and Property Information is at page 76."
Mr Riordan's affidavit was read without objection. The matters to which he has deposed are therefore unchallenged. DPPT Operator Pty Limited is now named as the first defendant in the proceedings commenced on 9 May 2017.
The effect of Mr Riordan's affidavit is that there is undisputed evidence that, as at the day on which the plaintiff fell and is said to have injured herself, the first defendant was neither the owner, nor the occupier of the area of land on which that fall occurred.
In those circumstances, and bearing in mind the pleadings as I have outlined them, counsel for the plaintiff articulated a case against the first defendant based upon what is said to have been its management of the relevant area. In support of that proposition, I was taken by counsel for the plaintiff to various parts of the lease annexed to the affidavit of Mr Morgan. The effect of the submissions made by counsel for the plaintiff, by reference to those parts of the lease, was that even though the lease had been transferred by the first defendant in 2000 (that is to say, some 14 years or thereabouts before the plaintiff fell and sustained injury) the first defendant continued to occupy a managerial position over the area on which the plaintiff fell, and that such managerial position gave rise to an ongoing duty of care owed by it to the plaintiff. If follows that the plaintiff's case must be that the first defendant continued to be the manager of an area of land, in respect of which it had no legal interest, for a period of 14 years after it had ceased to be the owner or occupier. How this was said to have arisen was not explained.
I have made reference to the provisions of the Rules pursuant to which the first defendant's current motion is brought. For present purposes it seems to me that two provisions assume particular significance. The first is r. 6.29 which is in the following terms:
6.29 Removal of parties by order
The court may order that a person:
(a) who has been improperly or unnecessarily joined, or
(b) who has ceased to be a proper or necessary party,
be removed as a party.
The second is r. 13.4 which is in the following terms:
13.4 Frivolous and vexatious proceedings
(1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings:
(a) the proceedings are frivolous or vexatious, or
(b) no reasonable cause of action is disclosed, or
(c) the proceedings are an abuse of the process of the court,
the court may order that the proceedings be dismissed generally or in relation to that claim.
(2) The court may receive evidence on the hearing of an application for an order under subrule (1).
Both of these provisions confer power to remove a defendant, or to dismiss proceedings against a defendant, at an interlocutory stage of proceedings. That power must only be exercised where the plaintiff's claim is so clearly deficient that it would be inappropriate to allow the proceedings to continue: General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125; [1964] HCA 69 at 129-130 and Cox v Journeaux (No. 2) (1935) 62 CLR 713; (1935) 9 ALJR 127 at 720.
I have made reference to the fact that in the course of submissions I was taken to various provisions of the lease. In my view none of those provisions establish, even at a prima facie level, that the first defendant had any ongoing managerial responsibility in respect of the premises of which it had once been the lessee. Without dealing with each and every one of the provisions to which I was taken, it is relevant to note that in the case of clauses 5.1(a), 5.2(a) and 5.4, there were obligations imposed upon the lessee "during the term" i.e., the term of the lease. As I have pointed out the term of this particular lease, at least as it involved the first defendant, came to an end 14 years before the incident that gives rise to the proceedings.
I was also taken to clause 7.1 of the lease which makes reference to its assignment or transfer. It provided, amongst other things, that the lessee would not, during the continuance of the lease, assign, transfer, part with possession of or otherwise deal with its interest, subject to the lessor waiving such conduct in certain circumstances. Significantly, the transfer of the lease, a copy of which appears at page 76 of the exhibit to Mr Riordan's affidavit, was registered. It is to be inferred in those circumstances that despite cl 7.1, the lessor raised no objection to the transfer.
It is also relevant to observe that upon the creation of a valid lease there is both privity of contract, and privity of estate between lessor and lessee. The former arises from the existence of a contract between the parties. The latter arises from the tenure between the parties. Upon an assignment of the lease that tenure is broken, but the privity of contract remains. Any continuing liability of the original lessee is for breaches of covenants throughout the term of the lease. This is so even after assignment, because the privity of contract remains: Debonair Nominees Pty Limited v J & K Berry Nominees Pty Limited (2000) 77 SASR 261 at 265 and Teller Home Furnishers Pty Limited; Electronic Industries v Horsburgh [1967] VR 313 at 319-230.
The plaintiff in the present case does not, of course, articulate a case based on a breach of any covenant. The plaintiff's case as put before me is that the first defendant had an ongoing managerial responsibility over the area in which the plaintiff fell, notwithstanding that it had transferred the lease some 14 years' earlier. In my view such a proposition is untenable on the evidence and the test for the exercise of the powers upon which the first defendant relies is met. In those circumstances the motion brought by the first defendant should succeed.
The first defendant has sought an order for indemnity costs in respect of the motion as well as the costs of the proceedings. In support of that application counsel for the first defendant has taken me to correspondence with those acting for the plaintiff, in which his instructing solicitors set out their views as to why it was that the first defendant could not be held liable to the plaintiff in any circumstances. What was contained in that correspondence was essentially the basis of the first defendant's position as articulated on the notice of motion before me. Counsel for the plaintiff, with his customary candour, accepted the force of these submissions advanced on behalf of the first defendant.
There is no doubt that the first defendant should have its costs, and that at least some, or perhaps, all of those costs should be awarded on an indemnity basis. There is however a separate question, namely who should pay any such costs which are awarded.
I have already referred to the circumstances in which this litigation has been approached by the plaintiff's solicitor. Without going into further detail at this stage, the correspondence to which counsel for the first defendant took me in the course of making the application for costs indicates that when the matters which ultimately formed the basis of the first defendant's motion were drawn to the attention of the plaintiff's solicitor, they were largely ignored.
I reach no conclusion, in the absence of further evidence, as to whether the provisions of s. 99 of the Civil Procedure Act 2005 (NSW) ought to be invoked. However, on the evidence which has been placed before me today, there is at least the appearance that costs have been incurred by the serious neglect, or perhaps the serious incompetence, of the plaintiff's solicitor. The evidence also gives the appearance that costs may have been incurred improperly, in circumstances for which the plaintiff's solicitor may be responsible. I put it no higher than that without giving the plaintiff's solicitor an opportunity to be heard.
In those circumstances, I will make the following orders:
1. In proceedings 2016/380175, the plaintiff's claim is dismissed pursuant to rule 13.4(1)(b) of the Uniform Civil Procedure Rules 2005 (NSW) insofar as it seeks relief or makes any claims against the first defendant.
2. Pursuant to section 99(2) of the Civil Procedure Act 2005 (NSW) I direct the plaintiff's solicitor to file such affidavit material as he may wish to do so in respect of the question of whether the costs payable to the first defendant in these proceedings have been caused by his serious neglect or serious incompetence, or whether such costs have been incurred improperly or without reasonable cause.
3. Any affidavits pursuant to order (2) are to be filed with my Associate and served on the solicitors for the first defendant by 5:00pm on 31 October 2017.
4. I stand the matter over for further argument as to costs on 7 November 2017 at 10.00am.
5. I note that as between the plaintiff and the fourth defendant the proceedings 2016/00380175 have settled.
6. I order that terms of settlement in respect of order (5) be filed by the plaintiff in the registry within seven days.
7. The plaintiff is to file and serve a consolidated statement of claim against all remaining defendants by 5:00pm on 31 October 2017.
8. In proceedings 380175/2016 I order the plaintiff to file any notices of discontinuance as against the second and third defendants in those proceedings within 14 days.
9. I stand all matters over for further directions before me on 7 November 2017 at 10.00am.
10. In proceedings 138487 I stand over the third defendant's notice of motion for directions only to the same date.
11. I reserve all other questions of costs until further order.
[2]
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Decision last updated: 13 November 2017