Orcher v Bowcliff Pty Ltd

Judgment 1HIS HONOUR : Mr Orcher seeks further to amend his statement of claim so as to raise an allegation that the third defendant Mr Keough is vicariously liable for the actions of the second defendant Mr Paseka, who caused loss and damage to Mr Orcher when he assaulted him. The pleadings currently allege that the first defendant Bowcliff Pty Ltd, which employed Mr Paseka, is vicariously liable for his actions. 2When Mr Orcher's earlier application to amend the then current pleading in order to join Mr Keough as the third defendant was being considered on 7 October 2010, the following discussion took place between me and senior counsel for Mr Orcher and Bowcliff: "HIS HONOUR: If Mr Keough is joined, the proceedings will have to go over, will they not? SEXTON: No. Because the case is no different against Mr Keough. HIS HONOUR: If he is joined, the statement of claim will have to be amended to join him and to plead particulars allocated to him individually. SEXTON: No. They will not be any different. The older cases on the liability of an occupier of licensed premises proceeded on the basis that it was the licensee, because the licensee had statutory obligations which gave rise to and informed the scope of the duty of care. More recently, there have been cases in which both the licensee and either a corporate or a proprietary entity conducting a business on licensed premises have been joined. The duty is the same. The scope is the same. Adeels Palace makes plain that the licensee is not the correct defendant, nor necessarily a necessary defendant, because the duty arises where somebody is carrying on a business pursuant to a licence. The only point that we make I make it quite frankly arises because we do not want any men of straw involved here. Mr Keough personally will be liable on precisely the same basis. There is no possibility of one or the other being liable but not both. That is the basis on which the amendment is being sought. Where that takes those who are advising the first defendant, bearing in mind, as I understand it, that Mr Keough is the sole director I may be wrong about that of the first defendant, who has been clearly giving instructions about all of those matters to the first defendant, where that goes and what it leads to procedurally in terms of how your Honour may permit the case to be conducted, if there are separate counsel representing precisely the same interest, in a practical sense, we do not know because it has not been raised, but it does not follow it may well be that that is the result that this case will have to go away for a long period of time. That will depend upon, firstly, what your Honour rules in relation to the applications. Secondly, what attitude is then taken on the other side of the Bar table. SHELDON: Two things. The first is I do not think, on my present understanding of the matter, the joinder of Mr Keough could lead to a situation in which one of the present first defendant or Mr Keough would be liable and the other not. That is because Mr Keough, I think, on any view of the case as is sought to be put, was not the employer of Mr Paseka at any time. SEXTON: There is absolutely no doubt. There is no claim against Mr Keough for vicarious liability. Those remarks were directed to the claim in negligence, not on a vicarious basis. There is no doubt about that. SHELDON: I do not think Mr Keough is the only director but I am not sure about that. I do not have instructions to appear for Mr Keough, nor do my solicitors. I do not know whether that will change or not. HIS HONOUR: What occurs, if the application to join Mr Keough is successful, simply has to await the outcome of that application. SHELDON: Yes." 3In the course of my reasons for judgment published later the same day, I said this: "The plaintiff has also sought to join Mr Keough as a further defendant to the proceedings. I am informed - and there appears to be no controversy about it - that Mr Keough is associated or connected in a formal sense with the first defendant. Mr Sheldon has no instructions to appear for him and, in the circumstances, has not become and did not seek to be a contradictor of the present application. The claim foreshadowed against Mr Keough with appropriate amendments will be the same, as I understand it, as the claim that is currently on foot against the first defendant; with the exception that no allegation will be made against Mr Keough that he was or became in any circumstances vicariously liable for the conduct of the second defendant in the events that occurred. Clearly enough, Mr Keough will need to be given notice of any successful application to join him to the proceedings and it would be necessary, if he were joined, for me to receive submissions about the further conduct of the proceedings, either generally, having regard to the fact that evidence has already been given, or particularly, having regard to the fact that he would need to make arrangements to secure appropriate representation and take advice in the normal way." 4The application to amend alleging that Mr Keough is vicariously liable is made upon the understanding that Mr Orcher will call no further evidence in his case in chief. Mr Sheldon also concedes that Mr Keough suffers no prejudice other than presumptively as the result of the late amendment. 5Underpinning the present application is Mr Sexton's suggestion that some doubt attends the question of whether or not more than one person can be vicariously liable for the same tortious acts of another. See Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd [1986] HCA 34; (1986) 160 CLR 626 and Fleming's The Law of Torts, 10 th ed (2011) at 449 stating that "[r]ecent jurisprudence indicates a shift in the view that liability can only be allocated to one employer". Mr Sexton was concerned to ensure that Mr Orcher's position is wholly protected in the event that Mr Keough's potential liability is ultimately determined to be as extensive as he asserts it to be. 6The application is made as one falling under s 64 of the Civil Procedure Act 2005 . That section provides as follows: " 64 Amendment of documents generally (1) At any stage of proceedings, the court may order: (a) that any document in the proceedings be amended, or (b) that leave be granted to a party to amend any document in the proceedings. (2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings. (3) An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to section 65, taken to be the date on which the amendment is made. (4) If there has been a mistake in the name of a party, this section applies to the person intended to be made a party as if he or she were a party. (5) This section does not apply to the amendment of a judgment, order or certificate." 7The importance of the obligations imposed upon licensees arising under the Liquor Act 1982 were said to be at the heart of the present application. Mr Sexton drew attention, in an analogous context, to what was said by the High Court in Adeels Palace Pty Ltd v Moubarak [2009] HCA 48; (2009) 239 CLR 420 at [19] - [22] as follows: "[19] Section 125 of the Liquor Act regulated conduct on licensed premises. Section 125(1)(b) obliged a licensee not to permit on his or her licensed premises "any indecent, violent or quarrelsome conduct". Contravention of the provision was an offence. Section 103(1) of the Liquor Act permitted a licensee, or his or her employee, to "refuse to admit to the licensed premises" or to "turn out, or cause to be turned out, of the licensed premises any person ... who is then ... violent, quarrelsome or disorderly" or "whose presence on the licensed premises renders the licensee liable to a penalty" under the Act. Section 103(3A) permitted the use of "such reasonable degree of force as may be necessary ... to turn a person out" of the premises. Section 103(4) obliged a member of the police force, asked by the licensee or an employee to turn out or assist in turning out a person whom the licensee is entitled to turn out, to comply with the request and provided that the member of the police force may, for that purpose, use such reasonable degree of force as may be necessary. [20] It is next important to recognise that the particular provisions made in the Liquor Act for controlling violent, quarrelsome or disorderly conduct on licensed premises take their place in a context set by two considerations. First, sale of liquor is controlled because it is well recognised that misuse and abuse of liquor causes harm, including what the Liquor Act refers to as "violent, quarrelsome or disorderly" conduct. Section 2A of the Liquor Act provided: 'Liquor harm minimisation is a primary object of this Act A primary object of this Act is liquor harm minimisation, that is, the minimisation of harm associated with misuse and abuse of liquor (such as harm arising from violence and other anti-social behaviour). The court, the Board, the Director, the Commissioner of Police and all other persons having functions under this Act are required to have due regard to the need for liquor harm minimisation when exercising functions under this Act. In particular, due regard is to be had to the need for liquor harm minimisation when considering for the purposes of this Act what is or is not in the public interest.' The second and related point to make is that the duties cast upon those responsible for the service of liquor on licensed premises can be understood as a part of the price that is exacted for the statutory permission granted under the Liquor Act. The permission granted is to do what otherwise the Act forbids - sell liquor - and to do that on premises to which members of the public may resort only in accordance with the conditions on which the licence is granted. [21] In considering whether a common law duty of care should be held to exist in these cases, it is important to recognise that the provisions of the Liquor Act that have been mentioned have close analogies in other States and Territories. Though variously expressed, all States and Territories make provision for a licensee of licensed premises to remove from, or prevent the entry to, licensed premises of violent or quarrelsome persons. All State and Territory liquor legislation forbids the sale of liquor without a licence. All State and Territory liquor legislation provides for the licensing of premises on which liquor may be sold and consumed, and not only regulates the sale and service of liquor in such places, but also (as already noted) directly or indirectly regulates the conduct of persons who are on the premises. [22] It is against this statutory background that the question of duty of care must be considered, not for the purpose of developing the common law by analogy with statute law, but to ensure that the imposition of a common law duty of reasonable care of the kind now in question would not run counter to the statutory requirements imposed on licensees in all Australian jurisdictions." 8Mr Sexton emphasised that Mr Keough is already a party to the proceedings. The question of his liability in any capacity is to be determined by reference to the evidence in Mr Orcher's case as it now stands. The argument upon which Mr Keough relies in opposition to the application is one largely, if not entirely, directed to the futility of the pleading as a matter of law or legal analysis. The determination of that matter can in his submission conveniently await the finalisation of the proceedings without any consequent interference with or disruption of the further conduct of the hearing or prejudice to Mr Keough. 9I was again referred to Fleming's The Law of Torts at [19.10] and to a series of other cases including Colonial Mutual Life Assurance Society Limited v The Producers and Citizens Co-operative Assurance Company of Australia Limited [1931] HCA 53; (1931) 46 CLR 41 and Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19; (2006) 226 CLR 161. Mr Sexton emphasised or contended that the jurisprudential analysis of the concept of vicarious liability had not yet finally been settled upon a uniformly constant or reoccurring basis. For example, the following appears in the judgment of the majority in Sweeney v Boylan Nominees at [20]: "[20] Rather, the conclusions that have been reached about the ambit of vicarious liability may best be understood as ultimately influenced by, even derived from, medieval notions of headship of a household[20] which in turn depended upon the application of analogies drawn from Roman law. Responsibility for the acts of a servant is, as Holmes said[21]: 'easily explained, if we remember, that it originated when a servant was a slave, whom the master was obliged to keep in order as he was his cattle, and it is then manifest why it should be corresponds to a free man in ancient Rome, who had a separate legal existence, and was, therefore, responsible in propria persona." 10According to Mr Sexton, the limitation of such liability in the way emphasised by Mr Keough (see below) could not be accepted without qualification. My attention was drawn to the passage from Colonial Mutual at 46 as follows: "The nature of Ridley's employment, however, gave the defendant a good deal more power of controlling and directing his action than was conceded by the argument addressed to us. Nothing in the agreement or the position of the parties denied the right of the plaintiff to control and direct Ridley when, where and whom he should canvass. In our opinion the judgment of the Judicial Committee in Citizens' Life Assurance Co v Brown really concludes the present case. But if it does not, still we apprehend that one is liable for another's tortious act "if he expressly directs him to do it or if he employs that other person as his agent and the act complained of is within the scope of the agent's authority." It is not necessary that the particular act should have been authorized: it is enough that the agent should have been put in a position to do the class of acts complained of (Barwick v English Joint Stock Bank; Lloyd v Grace Smith & Co)." 11I was also referred to the following passage from the same case at 48 in the judgment of Dixon J, in particular having regard to the emphasis which Mr Sexton was keen to promote: "In most cases in which a tort is committed in the course of the performance of work for the benefit of another person, he cannot be vicariously responsible if the actual tortfeasor is not his servant and he has not directly authorized the doing of the act which amounts to a tort. The work, although done at his request and for his benefit, is considered as the independent function of the person who undertakes it, and not as something which the person obtaining the benefit does by his representative standing in his place and, therefore, identified with him for the purpose of liability arising in the course of its performance. The independent contractor carries out his work, not as a representative but as a principal. But a difficulty arises when the function entrusted is that of representing the person who requests its performance in a transaction with others, so that the very service to be performed consists in standing in his place and assuming to act in his right and not in an independent capacity." (Emphasis added) 12Mr Sheldon in contrast contended that this application had nothing at all to do with s 64(2) of the Act. He emphasised that the law relating to vicarious liability makes it clear that it does not and cannot apply beyond the relationship of employer and employee or, at the very widest, the relationship of principal and independent contractor. 13In the present case, there was no relationship at law between Mr Paseka and Mr Keough: there was no agreement of any kind, there was no relationship of employment and there was no relationship of agency. In Colonial Mutual the defamer was in a contractual relationship with the defendant whose products he was selling and was therefore at least the defendant's agent. The passage from Fleming's Law of Torts at [19.10] upon which Mr Orcher placed reliance is concerned only with the relationship of master and servant. Mr Paseka was employed by Bowcliff and not by Mr Keough. 14Mr Sheldon therefore contended that the amendment was futile and that the application failed at the threshold as the proposed new case was untenable and could not meet the well known test adumbrated most famously in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129 as follows: "It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; "so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow them" (the pleadings) "to stand would involve useless expense". At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or "so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument"; "so to speak apparent at a glance"." 15This argument proceeded in detail by reference to the case that Mr Orcher now seeks to propound and to the particulars as they appear in paragraph 9A of the proposed third amended statement of claim. The amended paragraph and the proposed amended particulars are as follows: "9A Further and in the alternative, the said assault by the second defendant was an act within the scope of the duties of the second defendant as an employee of the first defendant, or alternatively was an act incidental to the scope of those duties such that the third defendant and/or the first defendant is vicariously liable for the loss and damage suffered by the plaintiff as a result of the said assault. PARTICULARS OF VICARIOUS LIABILITY OF THIRD DEFENDANT (i) In 2007, including 24 and 25 November 2007, employees at law of the first defendant working at the Bridge Hotel, including the second defendant, were under the day to day orders and control and supervision of the third defendant. (ii) Statutory permission for conduct otherwise prohibited by statute, namely sale of liquor, is given to the licensee or an agent or servant of the licensee, not to the employer at law of the natural person engaging in that conduct: Liquor Act 1982 s 122 and s 4 "person authorised to sell liquor". (iii) Unless the employer at law of a natural person who engages in the sale of liquor is an agent or servant of the licensee, that natural person selling liquor would breach s 122. (iv) Statutory obligations associated with or related to that statutory permission are imposed on the licensee, not on either (a) the agent or the servant of the licensee within the meaning of s 122 or (b) the employer at law of natural persons engaging in conduct which is or is related to the sale of liquor: Liquor Act 1982 s 125(1)(b). (v) Accordingly, conduct by natural persons relevant to the performance or satisfaction of statutory obligations imposed on the licensee, including pursuant to s 125(1)(b), is conduct in compliance by the licensee of the licensee's statutory obligations. (vi) Further, conduct by natural persons relevant to the performance or satisfaction of undertakings given by the licensee in relation to the licence, is conduct in furtherance of the commercial interests of the licensee in the licence. (vii) The conduct of the second defendant in punching the plaintiff was in furtherance of the interests of the third defendant in respect of (a) the third defendant's obligations as licensee pursuant to s 125(1)(b) and (b) the third defendant's commercial interests as holder of [the] licence relating to the Bridge Hotel." 16Mr Sheldon contended that the proposed pleading was bad. Without descending into the detail of his particular analysis, it is a fair summary of it to record that the provisions of the Liquor Act upon which Mr Orcher wished to place emphasis do not lead to any available conclusion that Mr Paseka could be vicariously liable for the acts or neglects of the licensee in the absence of a relationship of employer and employee, or something that equated to a relationship of agency. He contended that Sweeney v Boylan Nominees was fatal to the present application. In particular, he drew attention to what was said at [12] and [13] in that case as follows: "[12] Nonetheless, as the decisions in Scott , Hollis and Lepore show, there are some basic propositions that can be identified as central to this body of law. For present purposes, there are two to which it will be necessary to give principal attention. First, there is the distinction between employees (for whose conduct the employer will generally be vicariously liable) and independent contractors (for whose conduct the person engaging the contractor will generally not be vicariously liable) . Secondly, there is the importance which is attached to the course of employment. Whether, as has recently been suggested, these, or other, considerations would yield a compelling and unifying justification for the doctrine of vicarious liability need not be decided in this matter. In particular, whether, as suggested, the justification for the doctrine of vicarious liability is found in an employer's promise in the contract of employment to indemnify the employee for legal liability suffered by the employee in the conduct of the employer's business is a large question which is better examined in the light of full argument. [13] Whatever may be the justification for the doctrine, it is necessary always to recall that much more often than not, questions of vicarious liability fall to be considered in a context where one person has engaged another (for whose conduct the first is said to be vicariously liable) to do something that is of advantage to, and for the purposes of, that first person . Yet it is clear that the bare fact that the second person's actions were intended to benefit the first or were undertaken to advance some purpose of the first person does not suffice to demonstrate that the first is vicariously liable for the conduct of the second. The whole of the law that has developed on the distinction between employees and independent contractors denies that benefit or advantage to the one will suffice to establish vicarious liability for the conduct of the second . But there is an important, albeit distracting, consequence that follows from the observation that the first person seeks to gain benefit or advantage from engaging the second to perform a task. It is that the relationship is one which invites the application of terms like "representative", "delegate" or "agent". The use of those or other similar expressions must not be permitted to obscure the need to examine what exactly are the relationships between the various actors." (Emphasis added) 17Unsurprisingly in this context, Mr Sheldon also drew attention to the following matters from the majority judgment in Sweeney v Boylan Nominees at [21] - [24]: "[21]Colonial Mutual Life must be understood against the background of the development of this area of law by the assertion and application of conclusions whose ultimate roots are found in analogies which are no longer apt (if they ever were). But whatever may now be seen to be the imperfections in the ultimate roots of this area of the law, the conclusion reached in Colonial Mutual Life fits entirely within the explanation of vicarious liability identified by Pollock[24] and reflected in the subsequent decisions of this Court culminating in Scott, Hollis and Lepore. [22] Colonial Mutual Life establishes that if an independent contractor is engaged to solicit the bringing about of legal relations between the principal who engages the contractor and third parties, the principal will be held liable for slanders uttered to persuade the third party to make an agreement with the principal. It is a conclusion that depends directly upon the identification of the independent contractor as the principal's agent (properly so called) and the recognition that the conduct of which complaint is made was conduct undertaken in the course of, and for the purpose of, executing that agency. [23] Pollock identified the element common to cases of vicarious liability as being that "a man has for his own convenience brought about or maintained some state of things which in the ordinary course of nature may work mischief to his neighbours"[25]. Pollock further concluded that where an employer conducted a business, and for that purpose employed staff, the employer brought about a state of things in which, if care was not taken, mischief would be done. But the liability to be imposed on the employer was liability for the way in which the business (that is, the employer's business) was conducted. Conduct of the business and the employee's actions in the course of employment in that business were the only state of things which the employer created and for which the employer would be responsible. Thus for Pollock[26], course of employment was not a limitation or an otherwise more general liability of the employer; it was a necessary element of the definition of the extent of liability. [24] The conclusion reached in Colonial Mutual Life, that the party engaging an agent (albeit as an independent contractor) to solicit for the creation of legal relationships between that party and others is liable for the slanders uttered in the course of soliciting proposals, stands wholly within the bounds of the explanations proffered by Pollock for the liability of a master for the tortious acts of a servant. It stands within those bounds because of the closeness of the connection between the principal's business and the conduct of the independent contractor for which it is sought to make the principal liable. The relevant connection is established by the combination of the engagement of the contractor as the agent of the principal to bring about legal relations between the principal and third parties, and the slander being uttered in the course of attempting to induce a third party to enter legal relations with the principal." 18Mr Sheldon also referred to the judgment of Dixon J in Colonial Mutual and to the same passage at 48 referred to above. He discounted the word "most" emphasised by Mr Sexton so that the passage had a broader application and effect. He also cited the following from Dixon J's judgment at 50: " If the view be right which I have already expressed, that the "agent" represented the Company in soliciting proposals so that he was acting in right of the Company with its authority, it follows that the Company in confiding to his judgment, within the limits of relevance and of reasonableness, the choice of inducements and arguments, authorized him on its behalf to address to prospective proponents such observations as appeared to him appropriate. The undertaking contained in his contract not to disparage other institutions is not a limitation of his authority but a promise as to the manner of its exercise. In these circumstances, I do not think it is any extension of principle to hold the Company liable for the slanders which he thought proper to include in his apparatus of persuasion." (Emphasis added) 19Finally, but nonetheless still importantly, there was also the now almost inevitable reference to Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 at [111] - [114] and [133] as follows: "[111] An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. Statements in J L Holdings which suggest only a limited application for case management do not rest upon a principle which has been carefully worked out in a significant succession of cases[176]. On the contrary, the statements are not consonant with this Court's earlier recognition of the effects of delay, not only upon the parties to the proceedings in question, but upon the court and other litigants. Such statements should not be applied in the future. [112] A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate. [113] In the past it has been left largely to the parties to prepare for trial and to seek the court's assistance as required. Those times are long gone. The allocation of power, between litigants and the courts arises from tradition and from principle and policy[177]. It is recognised by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings. [114] Rule 21 of the Court Procedures Rules recognises the purposes of case management by the courts. It recognises that delay and costs are undesirable and that delay has deleterious effects, not only upon the party to the proceedings in question, but to other litigants. The Rule's objectives, as to the timely disposal of cases and the limitation of cost, were to be applied in considering ANU's application for amendment. It was significant that the effect of its delay in applying would be that a trial was lost and litigation substantially recommenced. It would impact upon other litigants seeking a resolution of their cases. What was a "just resolution" of ANU's claim required serious consideration of these matters, and not merely whether it had an arguable claim to put forward. A just resolution of its claim necessarily had to have regard to the position of Aon in defending it. An assumption that costs will always be a sufficient compensation for the prejudice caused by amendment is not reflected in r 21. Critically, the matters relevant to a just resolution of ANU's claim required ANU to provide some explanation for its delay in seeking the amendment if the discretion under r 502(1) was to be exercised in its favour and to the disadvantage of Aon. None was provided.