Should the relevant proportionate liability defences be struck out?
44As I have said, Sanderson seeks to strike out the defences on 2 grounds. One is that they are not properly pleaded. The other - available only in the case of Sanderson Motors - is that InterHannover and QBE should not be permitted to raise the defences at this late stage of the proceedings.
45Mr Dawson, who appeared for QBE, submitted that the present case should not simply be seen as a case where InterHannover and QBE seek to raise a defence based on the existence of other concurrent wrongdoers. Rather, in his submission, the proportionate liability regime makes a fundamental change to the way in which liability is determined in the case of apportionable claims. An aspect of that change is said to be that the plaintiff is required to do everything it can to get all relevant concurrent wrongdoers into the one action. Consequently, in Mr Dawson's submission, normal case management principles do not apply to dealing with apportionable claims. Those principles must give way to the overall objective that all concurrent wrongdoers be joined in the one proceeding, and the responsibility is primarily on the plaintiff to bring that about.
46I do not accept that submission. As I have said, Pt 4 sets out the legal framework that is applicable to apportionable claims. However, it does not provide a mechanism for identifying all potential concurrent wrongdoers and for joining them to the proceedings. It contemplates the possibility that, for whatever reason, potential concurrent wrongdoers will not be joined in the proceedings. It does not place any obligation on the plaintiff to join potential concurrent wrongdoers. The issues of apportionment that need to be resolved by the court will be defined by the pleadings. For the reasons I have given, in many cases, it will be a defendant who seeks to establish that another person is a concurrent wrongdoer since that provides a mechanism for reducing the defendant's liability.
47Whether a defendant should be permitted to raise a defence that there are other concurrent wrongdoers raises the same issues as any other amendment sought to be made by a defendant. The relevant principles are set out in s 58 of the Civil Procedure Act 2005 (NSW), which provides:
(1) In deciding:
(a) whether to make any order or direction for the management of proceedings, including:
(i) any order for the amendment of a document, and
(ii) any order granting an adjournment or stay of proceedings, and
(iii) any other order of a procedural nature, and
(iv) any direction under Division 2, and
(b) the terms in which any such order or direction is to be made,
the court must seek to act in accordance with the dictates of justice.
(2) For the purpose of determining what are the dictates of justice in a particular case, the court:
(a) must have regard to the provisions of sections 56 and 57, and
(b) may have regard to the following matters to the extent to which it considers them relevant:
(i) the degree of difficulty or complexity to which the issues in the proceedings give rise,
(ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities,
(iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties,
(iv) the degree to which the respective parties have fulfilled their duties under section 56(3),
(v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings,
(vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction,
(vii) such other matters as the court considers relevant in the circumstances of the case.
48Section 56 sets out the overriding purpose of the Act and the rules - namely, to facilitate the just, quick and cheap resolution of the real issues in the proceedings. Section 57 provides that, for the purpose of furthering the overriding purpose, proceedings are to be managed having regard to the following objects:
(a) the just determination of the proceedings,
(b) the efficient disposal of the business of the court,
(c) the efficient use of available judicial and administrative resources,
(d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties.
49In the present case, InterHannover and QBE were joined as parties to the proceedings on 31 May 2013. It is not entirely clear when they first became aware of the roles played by Mann, Bradshaw and Frankipile. However, InterHannover and QBE submit that it was apparent from expert reports obtained by Sanderson Motors that each of them was involved in the building project and that each of them carried out activities that caused vibrations that may have contributed to the damage suffered by Sanderson. Those expert reports were largely obtained in February and March 2013 and were served on InterHannover and QBE in connection with the application to join them as defendants. Consequently, by the time InterHannover and QBE were joined as parties, they largely knew as much as Sanderson Motors about the possible causes of the damage that it suffered and, in particular, the role of Mann, Bradshaw and Frankipile. Indeed, as I have said, QBE gave notice under s 35A of the CL Act that Frankipile was a potential concurrent wrongdoer before it was joined as a party, although the particulars given at that time hardly provided a sufficient basis on which to join Frankipile as a concurrent wrongdoer. It is apparent that Sanderson Motors elected not to join any of those parties as defendants on the basis of the information it had. That, however, did not relieve InterHannover and QBE of the duty to act promptly if they wanted to raise as a defence that those entities were concurrent wrongdoers.
50Neither InterHannover nor QBE gave evidence of the investigations they undertook to determine whether there were other concurrent wrongdoers. Ms Williams, who is one of the solicitors acting for QBE, gave extensive evidence of the steps that she took to prepare the case for trial. Those steps were appropriate having regard to the complexity of the issues involved and the time it took Sanderson Motors to prepare its own evidence. Ms Williams took the approach that it was appropriate to marshall all the relevant material before preparing a brief for the expert that had been retained by QBE. That that took some time is not surprising having regard to the nature of the case. But Ms Williams' conduct is to be measured by reference to the task that she was undertaking, which was to prepare a pleaded case for trial. Ms Williams does not suggest that QBE, having filed its defence and identified the entities that it believed were concurrent wrongdoers, was still investigating whether other parties should be named in the defence as concurrent wrongdoers. If that is what QBE wanted to do, it is to be expected that it would give that task priority since the identification of the issues in the case would affect preparation by all the parties involved. It would also affect the allocation of a hearing date since, in the normal course of events, the case would not be set down for hearing until the issues had been defined and the evidence largely prepared. That is because it is not until that time that the parties and the court are able to make a proper assessment of the expected length of the case and the court can be confident that the hearing date will not have to be vacated because the parties are not ready for a trial.
51Even before it was joined, QBE did identify Frankipile as a potential concurrent wrongdoer. However, it was not possible to make an assessment of the strength of the case against Frankipile so as to make an informed judgment about whether it should be joined, nor to plead a proper case against Frankipile, from the circumstances identified by QBE. The effect of the notice given by QBE was that Frankipile had been responsible for drilling close to the boundary of the Sanderson Property. But that, without more, does not establish that Frankipile breached a duty of care that it owed Sanderson Motors. It might be inferred from the fact that QBE chose not to plead that Frankipile was a concurrent wrongdoer that it had itself concluded that there was insufficient evidence, at least at the time it filed its defence, to justify a claim against it.
52The position of InterHannover is no different. Like QBE, it faced difficulties in preparing the case for hearing because of the nature of the case and the fact that its insured was in external administration. However, it is apparent from the affidavit evidence of Mr Toogood, the solicitor for InterHannover, that it did not conduct any particular investigations into whether additional parties should be named in its defence as concurrent wrongdoers. It decided to name Mann and Bradshaw as concurrent wrongdoers after it had read the report obtained by QBE from Mr Mostyn.
53It is difficult to make any assessment of the strength of the cases against Mann, Bradshaw and Frankipile. In each case, the material facts alleged to give rise to their liability are not pleaded. Instead, all that is pleaded is that a duty of care was owed, that it was breached and that it caused the damage in respect of which Sanderson claim. However, the nature of the duty that Sanderson was owed and how it was breached and how it caused the relevant loss are not pleaded. As I understand it, InterHannover and QBE's case is that it became apparent from Mr Mostyn's report that vibration must have been caused by the activities of Mann and Bradshaw since vibration was detected on days when they were working and the contractor performing the sheet piling work was not. Mr Mostyn also expresses the opinion that the installation of the footing piles by Frankipile could have been a cause of any damage that was caused to the Sanderson Property. But the fact that Mann, Bradshaw and Frankipile carried out work that caused vibration does not itself establish that they breached a duty of care they owed Sanderson. That would depend on a range of matters, including whether there were other means of carrying out the work that they did, whether they should have appreciated the possibility of damage to the neighbouring property, whether and what measures could have been taken to prevent that damage and whether they were responsible for taking those measures.
54There can be little doubt that Sanderson Motors will suffer prejudice if the amendments are permitted. The significance of that prejudice will depend on the strength of the claim that Mann, Bradshaw and Frankipile are concurrent wrongdoers. If that claim is weak, the prejudice will be small, but so too, in that event, will the prejudice suffered by InterHannover and QBE if they are not permitted to raise the defence that Mann, Bradshaw and (in the case of QBE) Frankipile are concurrent wrongdoers. On the other hand, if the claim is strong, Sanderson Motors runs a substantial risk that its claim for damages will be reduced because Mann and Bradshaw, and, in the case of the claim against QBE, Frankipile, are found to be concurrent wrongdoers in circumstances where it has now lost the opportunity to join those parties as defendants. It is true that Sanderson Motors did not join Dickson after it had been named as a concurrent wrongdoer. But the fact that Sanderson Motors did not pursue one opportunity does not mean that it will not be prejudiced if it is deprived of the opportunity to pursue another.
55On the other hand, in my opinion, InterHannover and QBE will not suffer a corresponding prejudice if the relevant defences are struck out. To the extent that they are liable to Sanderson Motors, that liability will reduce the liability of their respective insureds. If they are liable, they will be subrogated to their insureds' rights. To the extent that their or their insureds' liability has not been reduced to take account of the concurrent liability of Mann, Bradshaw and Frankipile, for the reasons I have given, their insureds will retain a right of contribution to which they will be subrogated. The limitation period in respect of that claim is governed by s 26 of the Limitations Act 1969 (NSW). Under that section, the limitation period in respect of a claim for contribution under s 5 of the Reform Act does not expire until the earlier of (a) a limitation period of two years running from the date on which the cause of action for contribution first accrues; and (b) a limitation period of four years running from the date of the expiration of the limitation period for the principal cause of action. The limitation period in respect of a cause of action for contribution does not start to run until judgment is given in the proceedings in respect of which the claim for contribution is made, or the proceedings are settled: see s 26(2); Gallagher Bassett Services NSW Pty Ltd v Murdock [2013] NSWCA 386 at [36]ff per Barrett JA (with whom Leeming and Gleeson JJA agreed). It is apparent, therefore, that the limitation period in respect of a claim for contribution has not expired and will not do so for some time yet. It would, of course, be necessary for InterHannover and QBE to bring separate proceedings to enforce their insureds' rights of contribution. But the prejudice they suffer will be the inconvenience of additional proceedings and irrecoverable legal costs. That prejudice cannot be equated to the prejudice that Sanderson Motors will suffer if the defences are permitted.
56It follows from what I have said that the amendments should be struck out against Sanderson Motors on the basis that it is not in the interests of justice to permit them. There is a real question whether the defences InterHannover and QBE seek to raise by those amendments have substance. But if they do, Sanderson Motors will suffer substantial prejudice because it has lost the opportunity to join the relevant parties as defendants in circumstances where InterHannover and QBE had adequate time to consider whether there were other concurrent wrongdoers but chose not to consider that question independently of the preparation of the case for trial. It appears they made that choice because that was a convenient way for them to proceed and it was principally for Sanderson Motors to join all concurrent wrongdoers. For the reasons I have explained, I do not consider that that is the effect of Pt 4 of the CL Act, and, in my opinion, if InterHannover and QBE wanted to raise defences based on Pt 4, it was incumbent on them to do so promptly, particularly in circumstances where the limitation period in respect of the relevant claims was close to expiring.
57It also follows from what I have said that the amendments should be struck out against both Sanderson Motors and Sanderson Eastern on the ground that they fail adequately to plead and to particularise the material facts on which the defences depend. In each case, the relevant pleading does no more than assert bare conclusions concerning the existence of a duty, breach and damage. The material facts which would justify those allegations are not pleaded. The fact that Sanderson Motors failed to object to an inadequate pleading that Dickson was a concurrent wrongdoer is not a reason for permitting InterHannover and QBE to maintain inadequate pleadings to which objection is taken.
58It is open to InterHannover and QBE to seek leave to file amended List Responses to the claim by Sanderson Eastern raising the defence that Mann, Bradshaw and Frankipile are concurrent wrongdoers. But those claims must be properly pleaded. It is not appropriate to give leave in advance to InterHannover and QBE to file amended List Responses. Whether leave should be granted will depend on the form of the amended List Responses that InterHannover and QBE seek to advance.
59Finally, with respect to Sanderson's application that they be provided with particulars of the claim that Dickson is a concurrent wrongdoer, in my opinion, it is not appropriate to order that InterHannover and QBE provide particulars of that claim in the abstract. InterHannover and QBE have now filed their evidence. To the extent that the nature of the allegation cannot be determined from that evidence, Sanderson should identify the particulars they require and seek them. It is open to Sanderson to make an application for particulars if any response they receive is inadequate.