The Owners Strata Plan No. 62660 v Jacksons Landing Development Pty Limited

Judgment 1This is an application by the fourth defendant, Harris Page & Associates Pty Ltd, to dismiss cross-claims for contribution under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 brought against it by the first to third defendants, who are three companies in the Lend Lease Group. 2The plaintiff in the proceedings is the Owners Corporation for the Regatta Wharf Strata Scheme, which is part of the Jacksons Landing community title development on the former CSR sugar refinery site at Pyrmont. The Owners Corporation sued the parties to the current application, among others, in relation to what it says was the defective design and construction of the sewage system of Regatta Wharf. Each of the three companies in the Lend Lease Group was sued as a developer and promoter of Regatta Wharf. The Owners Corporation alleged that they each breached duties of care owed to it by negligently specifying the construction of the sewage system. Harris Page was the engineer who was engaged by Bovis Lend Lease Pty Limited, one of the three Lend Lease Group companies, to design the Regatta Wharf hydraulic systems including the hydraulic components of the sewage system. The Owners Corporation also alleged that that Harris Page breached a duty of care it owed by negligently designing or specifying the sewage system. 3On 13 November 2008, the court entered consent judgment against the three Lend Lease Group companies in favour of the Owners Corporation for $750,000. 4On 23 February 2011, the court entered consent judgment against Harris Page in favour of the Owners Corporation for the sum of $350,000. 5Harris Page submits that, as the result of those two judgments and by reason of s 36 of the Civil Liability Act 2002, the claim for contribution brought by the Lend Lease Group companies is not maintainable. Section 36 of the Civil Liability Act provides: A defendant against whom judgment is given under this Part as a concurrent wrongdoer in relation to an apportionable claim: (a) cannot be required to contribute to any damages or contribution recovered from another concurrent wrongdoer in respect of the apportionable claim (whether or not the damages or contribution are recovered in the same proceedings in which judgment is given against the defendant), and (b) cannot be required to indemnify any such wrongdoer. 6UCPR r 13.4(1)(b) provides: 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) ... (b) no reasonable cause of action is disclosed, or (c) ... the court may order that the proceedings be dismissed generally or in relation to the claim. 7Summary dismissal under this provision should only be granted where it is clear that no reasonable cause of action is disclosed: General Steel Industries Inc v Commission for Railways (NSW) (1964) 112 CLR 125 at 129. As Dixon J said in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91, quoted with approval by Mason CJ, Deane and Dawson JJ in Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598 at 602: The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceedings amount to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process. UCPR rule 13.4(1)(b) is not expressed in terms of an abuse of process or one which is frivolous or vexatious. However, the point made by Dixon J applies equally to a case where it is submitted that the claim discloses no reasonable cause of action. Certainly, Mason CJ, Deane and Dawson JJ in Webster v Lampard treated his Honour's comments as applying to the exercise of any power to order summary judgment. 8The question, then, is whether it is clear that s 36 of the Civil Liability Act operates as a bar to a claim for contribution. 9In order for s 36 to have that effect, three conditions must be satisfied. First, the claim for contribution must be a claim against "a defendant against whom judgment is given". Second, the judgment must be "given under this Part [that is part 4 of the Civil Liability Act ] as a concurrent wrongdoer". Third, the judgment must be given "in relation to an apportionable claim". 10In my opinion, it is clear that the first requirement is satisfied. Judgment has been given against Harris Page and the claim for contribution is a claim against it. In my opinion, nothing turns on the fact that the judgment was one which was obtained by consent: see Isaacs v Ocean Accident & Guarantee Corporation Ltd (1957) 58 SR (NSW) 69 at 75 per Street CJ and Roper CJ in Eq; Maximova v Goodin [2010] VSC 84 at [21]-[22] per Davies J; Erujin Pty Limited v WA Planning Commission [2010] WASC 326 at [53]-[54] per Allanson J. 11In my opinion, it is also clear that the third requirement is satisfied. "Apportionable claims" is relevantly defined in s 34(1) of the Civil Liability Act in these terms: This Part applies to the following claims ( apportionable claims ): (a) a claim for economic loss or damage to property in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care, but not including any claim arising out of personal injury; (b) .... The claim brought by the Owners Corporation against Harris Page clearly falls within this definition. That claim resulted in a judgment against Harris Page and, again, the fact that that judgment was by consent does not alter its consequences. 12However, in my opinion, there is a "real question to be determined" (to use the words of Dixon J) in relation to the question whether the consent judgment given against Harris Page was given under Part 4 of the Act as a concurrent wrongdoer. 13"Concurrent wrongdoer" is defined in s 34(2) of the Civil Liability Act in these terms: In this Part, a concurrent wrongdoer , in relation to a claim, is a person who is one of two or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim. 14Section 35(1) is also relevant. That section provides: In any proceedings involving an apportionable claim: (a) the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss, and (b) the court may give judgment against the defendant for not more than that amount. 15In Reinhold v New South Wales Lotteries Corporation (No 2) [2008] NSWSC 187, Barrett J held that the references to "claims" in Part 4 are references to "determined or decided claims that have been established as sources of liability" and that a person is only a "concurrent wrongdoer" when found to be so by the court (at [18]). As his Honour said at [19]: It seems to me clear that a person will be a "concurrent wrongdoer" only if the court makes findings about the existence of "loss or damage" and about which acts or omissions "caused" the loss or damage. It is only when those findings are made that it is possible to identify, as contemplated by s 34(2), each person whose acts or omissions, as found, "caused" the "loss or damage", as found. At that point, and not before, a person could be seen to be a "concurrent wrongdoer". 16In my opinion, it is reasonably arguable that the judgment obtained against Harris Page was not a judgment "given under this Part" and that it was not obtained against Harris Page as a "concurrent wrongdoer". 17Mr Simpkins, who appeared for Harris Page, submitted that it was sufficient for a judgment to be a judgment "under this Part" within the meaning of s 36 if the judgment could be characterised as one which was against it as a concurrent wrongdoer in respect of an apportionable claim. The consent judgment obtained by the Owners Corporation against Harris Page satisfied that description because Harris Page was sued as a concurrent wrongdoer, the claim in respect of which it was sued met the requirements of an apportionable claim and that claim resulted in a judgment against it. However, it seems to me at least arguable that the reference in s 36 to a judgment "under this Part" is a reference back to a judgment given by the court under s 35(1)(b). A judgment under that section can only be given once the court makes a determination of the amount referred to in s 35(1)(a). No determination of that type has been made in this case. 18Mr Simpkins submitted that the court should reject this alternative construction of the words "under this Part" because it would lead to the unsatisfactory consequence that a defendant could never settle with the plaintiff and be confident that, by doing so, it would be out of the case altogether. On the alternative construction, it would always be possible for another defendant to seek contribution from the defendant who had settled. That could not have been what the legislature intended. I accept that the point made by Mr Simpkins may be one reason for interpreting s 36 in the way that he submits. But the point, even if it has merit, cannot be decisive. The issue raises an important question concerning the scope of the reforms intended to be effected by Part 4 of the Civil Liability Act . On Mr Simpkins' submission, one consequence of those reforms was to permit individual defendants who were liable to a claim for contribution to settle the claims against it completely by settling with the plaintiff. However, it might be argued that the reforms were not that far reaching. Rather, the purpose of s 36 was simply to make it clear that, once the court had decided on an appropriate apportionment between defendants in an action brought by the plaintiff against one or more of them, then that decision was binding for all purposes. The purpose of the section was not to prevent a claim for contribution if a defendant settled with the plaintiff (even if the settlement involved a judgment) if there was no determination by the court of an amount that was a just contribution to the plaintiff's loss having regard to the extent of the defendant's responsibility for the damage or loss suffered by the plaintiff. 19As to the question whether Harris Page and the Lend Lease Group companies were concurrent wrongdoers for the purposes of s 36 of the Civil Procedure Act , Mr Simpkins put his submission in two ways. First, he submitted that there were judgments against each of Harris Page and Lend Lease Group companies, that those judgments were in respect of the claim brought by the Owners Corporation for damages suffered by it as a consequence of their negligence in connection with the design or construction of the sewage system, and that issue estoppels arose as a consequence of those judgments, with the result that there had been a determination of the factual issues relevant to the question whether the Harris Page and Lend Lease Group companies were concurrent wrongdoers. Alternatively, Mr Simpkins submitted that, on the face of the facts pleaded by the Owners Corporation in its List Statement, Harris Page and the Lend Lease Group companies must be regarded as concurrent wrongdoers because the claim against each of them was a claim for damages for negligence in connection with the design and construction of the sewage system. In relation to the second way in which he put his argument, Mr Simpkins sought to distinguish the decision of Barrett J on the basis that that decision was not concerned with s 36 of the Civil Liability Act. However, as Mr Simpkins acknowledged, the approach taken by Barrett J was also taken by the Victorian Court of Appeal in Godfrey Spowers (Victoria) Pty Ltd v Lincolne Scott Australia Pty Ltd [2008] VSCA 208 in relation to s 24AJ of the Wrongs Act 1958 (Vic), which is in the same terms as s 36 of the Civil Liability Act. Mr Simpkins sought to distinguish that decision on the basis that no judgment was entered in that case as part of the settlements said to have triggered the operation of s 24AJ. However, in doing so, Mr Simpkins effectively conceded (properly, in my view) that he could not succeed on the second way in which he put his argument and that what was critical in this case was the fact that judgments had been entered against both Harris Page and the Lend Lease Group companies. 20In my view there is at least a reasonable argument that the fact that judgments were entered against Harris Page and the Lend Lease Group companies does not alter the position. No issue estoppel arising from the consent judgments can operate in relation to the Lend Lease Group companies' claim for contribution. That is because the parties to that claim were not "in controversy" in respect of the claims which were the subject of the judgments. As Fisher J (with whom Ryan J agreed) pointed out in Taylor v Ansett Transport Industries Ltd (1987) 18 FCR 342 at 358: It seems clear to me that issue estoppel can only be raised by or applied against parties who were in "controversy" at the time when the issue was first determined, either in their favour or adversely to them. If a party was not involved in the litigation of that issue, either because it was not an issue between him and another party to the proceedings, or because he was not a party at all to the proceedings at the time of resolution, then he is not affected by nor can he raise an estoppel. 21It follows that an issue estoppel arising from a consent judgment cannot operate to bind those who were not a party to the consent judgment. Consequently, although it is true that, as between the Owners Corporation and Harris Page, an issue estoppel operates in relation to the question whether Harris Page breached a duty of care owed by it in relation to the construction of the sewage system, and the amount that the Owners Corporation should recover in respect of that breach, and although the same can be said of the judgment obtained against the Lend Lease Group companies, it does not follow from that that an issue estoppel operates in relation to those matters as between Harris Page and the Lend Lease Group companies. It is therefore at least reasonably arguable that the question whether Harris Page and the Lend Lease Group companies are concurrent wrongdoers is an open one. The court should not attempt to resolve that question on an application for summary dismissal of the claim. 22Harris Page's notice of motion dated 16 March 2011 should be dismissed with costs.